Photo of Glen C. Hansen

Glen C. Hansen of Abbott & Kindermann, Inc., will present an update on recent developments in resolving easement, boundary, and implied public dedication disputes in California. This is an advanced class aimed primarily at land surveyors, civil engineers, attorneys, and property owners. This intense, three-hour class examines recent case law about:

  • Creating, Interpreting, and Terminating Easements
  • Accommodating Neighbors vs. Creating Prescriptive Easements
  • Establishing Equitable Easements
  • When Implied Dedications of Public Easements Exist, and When They Don’t.

MCLE and American Planning Association continuing education credits offered. (Pending)

MCLE 3.0       CM 3.0

Glen C. Hansen is Senior Counsel at Abbott & Kindermann, Inc., and a long-time practitioner in real estate and land use law.

Cost $85.00

Location and Time

Roseville – October 13, 2017, 8:00 a.m.-11:45 a.m.  (To Register CLICK HERE)

Holiday Inn Express – Roseville, 1398 East Roseville Parkway, Roseville, CA 95661

Registration:   8:00 a.m.

Class:              8:30 a.m. – 11:45 a.m.

Break:             10:00 a.m. – 10:15 a.m.

Glen C. Hansen of Abbott & Kindermann, Inc., will present an update on recent developments in resolving easement, boundary, and implied public dedication disputes in California. This is an advanced class aimed primarily at land surveyors, civil engineers, attorneys, and property owners. This intense, three-hour class examines recent case law about:

  • Creating, Interpreting, and Terminating Easements
  • Accommodating Neighbors vs. Creating Prescriptive Easements
  • Establishing Equitable Easements
  • When Implied Dedications of Public Easements Exist, and When They Don’t.

MCLE and American Planning Association continuing education credits offered. (Pending)

MCLE 3.0       CM 3.0

Glen C. Hansen is Senior Counsel at Abbott & Kindermann, Inc., and a long-time practitioner in real estate and land use law.

Cost $85.00

Location and Time

Roseville – October 13, 2017, 8:00 a.m.-11:45 a.m.  (To Register CLICK HERE)

Holiday Inn Express – Roseville, 1398 East Roseville Parkway, Roseville, CA 95661

Registration:   8:00 a.m.

Class:              8:30 a.m. – 11:45 a.m.

Break:             10:00 a.m. – 10:15 a.m.

PRIVATE LAND USE SETTLEMENTS: The potential fallout when a private side settlement agreement fails to settle your legal woes.

In 2010, the County of San Benito granted a conditional use permit for a solar project to the Panoche Valley Solar, LLC.  The project was a 3,200 acre, 399-megawatt solar electric generation facility involving up to 4 million solar panels in the Panoche Valley, a semiarid open space and range land west of Interstate 5 in San Benito County.  The approved project would have become one of the largest solar farms in the world and could have powered over 100,000 homes.  The project would have given the County $5.4 million in sales tax from the purchase of the solar panels.  In August 2011, the San Benito County Superior Court denied a legal challenge under the California Environmental Quality Act and the Williamson Act.  The trial court’s judgment was affirmed by the Court of Appeal (Save Panoche Valley v. San Benito County (2013) 217 Cal.App.4th 503.)

In 2014, the project applicant sought to modify the conditional use permit.  The revised project was for a 2,506-acre, 247-megawatt solar generation facility, including an additional 24,176 acres for habitat conservation (which is more than the original project.)  The County expected to receive approximately $2.5 million in sales tax revenue from that revised project.  The County approved a revised use permit and certified the Final Supplemental Environmental Impact Report (SEIR) in 2015.  The SEIR addressed the project’s impact and mitigation measures for the certain animal and plant species, including the San Joaquin kit fox, giant kangaroo rat, and blunt-nosed leopard lizard, and numerous bird species.  However, the Sierra Club and Santa Clara Valley Audubon Society again filed a writ of mandate action and challenged the Final SEIR. The trial court rejected that challenge as well.  This year, in an unpublished opinion, the Court of Appeal for the Sixth District affirmed the trial court’s judgment.  (Sierra Club v. County of San Benito (March 22, 2017, case no. H042915), unreported decision, 2017 Cal.App.Unpub.LEXIS 1987.)

The project construction already began in the Fall of 2016 and is scheduled to be completed in 2018.  But those two fully litigated lawsuits, and that ongoing construction, are not the end of the story.

In a special public hearing about the project’s statute before the County Board of Supervisors on April 18, 2017 (less than a month after they prevailed on the second appeal), one Supervisor asked if the rumor that the project was being downsized was true.  An official of ConEdison Development, the company that acquired the project admitted that the office of Governor Brown wanted to reduce the size of the project.  However, the ConEdison official also stated:  “We have all of our permits for the project signed and we are building 100 percent of the Panoche Valley Solar project at this time.”  That led one County resident to exclaim to the Board of Supervisors: “…the rat people went to the governor to cut the project in half. If you guys take that sitting down you’re idiots because it affects every project in this county.”

But the rumor proved true.  In July 2017, ConEdison reached an agreement with Sierra Club, Santa Clara Valley Audubon Society, Defenders of Wildlife and the California State Department of Fish and Wildlife that dramatically reduced the project to 130 megawatts, about 1/3 the size of the original project.  According to a ConEdison official, the company signed the agreement because, even though the environmental groups had repeatedly lost in court, they purportedly still had cases they could appeal that could have slowed or killed the project.  The environmental groups are hailing the agreement as a “win-win.”  A Sierra Club spokesperson stated:  “As we work toward lowering carbon pollution, it’s critical that new clean energy development is not done at the expense of endangered animals and their habitat.”

The agreement essentially shifts 100-117 megawatts of the Panoche Valley project to another ConEdison solar project that is proposed for Imperial County in Southern California.  Not surprisingly, the environmental groups have indicated that they will not oppose that other project.  The Sierra Club announced: “Initially, 247 MW of solar generation was planned for development in the Panoche Valley, but now approximately 100 MW is instead proposed for development at a site in Imperial County, California. Development at the Imperial County site will have less impact on threatened and endangered species and their habitat. The relocation of that portion of the project is subject to approval by Southern California Edison (SCE) and the California Public Utilities Commission (CPUC). The settlement will also resolve several legal challenges commenced against the project by the Environmental Groups.”

The County Board of Supervisors, which approved the original and then the modified project, and which was the prevailing party in both lawsuits, was never included in those settlement talks or made a party to that agreement.  The Supervisors are furious because the County will lose out on millions of dollars in taxes that they were promised by the project developer.  According to the County’s clerk-auditor-recorder, the County will not be receiving any sales tax from the project now because ConEdison had purchased the panels in a way that made San Francisco the recipient of the sales tax rather than San Benito County. One Supervisor said:  “I can barely speak because I’m so angry.  This would have generated much-needed revenue. All you have to do is drive down there and see the conditions of our roads. We have minimal amounts of public safety. This was going to be a big thing, but the rug was pulled out from under us. And it was all done in secret.”  Another Supervisor exclaimed:  “[the developer] basically raped and pillaged us.”

The County is now considering filing a lawsuit against ConEdison, on the grounds that the company violated the project’s original 2010 development agreement with the county.  An official with PV2 Energy, the company that owned the project from 2011 to 2015, and then sold the project to ConEdison, said:  “By diverting half of the project’s value to a different project outside the county, ConEdison is clearly violating their commitments to the county and to PV2 Energy.” As to the sale tax issue, a ConEdison official said:  “We’re looking into that.  We understand we have obligations under the development agreement. We’re going to live up to them.” In short, there are still unresolved legal issues, even as the project is being built.

So here is an interesting legal question:  If the new settlement agreement constitutes a breach of the original development agreement, could the State of California be liable to the County of San Benito for the torts of intentional interference with contractual relations or intentional interference with prospective economic advantage?  The Director of DFW appears to concede such involvement:  “Con Edison Development’s leadership and the environmental groups deserve a lot of credit for opening a dialogue with the Department and asking whether it was better to negotiate and collaborate than litigate.”

This cautionary tale is not over yet.

Glen Hansen is a Senior Counsel at Abbott & Kindermann, Inc.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

Glen C. Hansen of Abbott & Kindermann, Inc., will present an update on recent developments in resolving easement, boundary, and implied public dedication disputes in California. This is an advanced class aimed primarily at land surveyors, civil engineers, attorneys, and property owners. This intense, three-hour class examines recent case law about:

  • Creating, Interpreting, and Terminating Easements
  • Accommodating Neighbors vs. Creating Prescriptive Easements
  • Establishing Equitable Easements
  • When Implied Dedications of Public Easements Exist, and When They Don’t.

MCLE and American Planning Association continuing education credits offered. (Pending)

MCLE 3.0       CM 3.0

Glen C. Hansen is Senior Counsel at Abbott & Kindermann, Inc., and a long-time practitioner in real estate and land use law.

Cost $85.00

Location and Time

Roseville – October 13, 2017, 8:00 a.m.-11:45 a.m.  (To Register CLICK HERE)

Holiday Inn Express – Roseville, 1398 East Roseville Parkway, Roseville, CA 95661

Registration:   8:00 a.m.

Class:              8:30 a.m. – 11:45 a.m.

Break:             10:00 a.m. – 10:15 a.m.

In Murr v. Wisconsin, U.S., 137 S.Ct. 1933 (2017), the U.S. Supreme Court established a multi-factored test to determine what is the proper unit of property against which to assess whether a challenged governmental action constitutes a regulatory taking for which just compensation is owed under the U.S. Constitution. Because the test for a regulatory taking involves a comparison of the value that has been taken from the property with the value that remains in the property, the multi-factored test defines “the unit of property ‘whose value is to furnish the denominator of the fraction.’”

In Murr, Petitioners owned two adjacent lots–Lot E and Lot F–along the lower portion of a river in Wisconsin that is protected under local state and federal law. State and local regulations prevented the use or sale of adjacent lots as separate building sites unless they have at least one acre of land suitable for development. Both lots were over one acre in size, but each had less than one acre suitable for development due to their topography. The unification of the lots under the Petitioners’ common ownership implicated the rules barring their separate sale or development. Petitioners considered selling Lot E as part of an improvement plan for the lots, and sought variances from the existing regulations from a local agency. However, that agency denied the variance request and the state courts affirmed on the ground that the regulations effectively merged the lots for sale or development purposes.

Petitioners filed suit in state court against the State of Wisconsin on the ground that the merger regulations were a taking under the U.S. Constitution because the regulations deprived Petitioners of all, or practically all of the use of Lot E since the lot cannot be sold or developed as a separate lot under the regulations. The trial court granted summary judgment to the State on the ground that Petitioners had other options to enjoy and use their properties. The trial court also found that Petitioners had not been deprived of all economic value of their property because the decrease in market value of the unified lots was less than 10 percent. The Wisconsin Court of Appeals affirmed summary judgment. The U.S. Supreme Court granted certiorari and affirmed.

Writing for the 5-3 majority, Justice Kennedy described the key legal question in the case as follows:

What is the proper unit of property against which to assess the effect of the challenged governmental action? Put another way, “[b]ecause our test for regulatory taking requires us to compare the value that has been taken from the property with the value that remains in the property, one of the critical questions is determining how to define the unit of property ‘whose value is to furnish the denominator of the fraction.’” [Citations omitted.]

The majority rejected each of the formalistic rules advocated by the State and Petitioners because “the question of the proper parcel in regulatory takings cases cannot be solved by any simple test.” Justice Kennedy stated that no single consideration can supply the exclusive test for determining the denominator. That is because of the competing constitutional principles underlying the Takings Clause. Justice Kennedy explained:

A central dynamic of the Court’s regulatory takings jurisprudence, then, is its flexibility. This has been and remains a means to reconcile two competing objectives central to regulatory takings doctrine. One is the individual’s right to retain the interests and exercise the freedoms at the core of private property ownership. Property rights are necessary to preserve freedom, for property ownership empowers persons to shape and to plan their own destiny in a world where governments are always eager to do so for them.

The other persisting interest is the government’s well-established power to “adjus[t] rights for the public good.” In adjudicating regulatory takings cases a proper balancing of these principles requires a careful inquiry informed by the specifics of the case. In all instances, the analysis must be driven “by the purpose of the Takings Clause, which is to prevent the government from ‘forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.’”.

In light of those countervailing public policies, Justice Kennedy stated that courts must consider a number of factors in making the “denominator” determination:

[W]hether reasonable expectations about property ownership would lead a landowner to anticipate that his holdings would be treated as one parcel, or, instead, as separate tracts. The inquiry is objective, and the reasonable expectations at issue derive from background customs and the whole of our legal tradition.

The majority held that the factors to be considered in such an analysis are the following.

First, courts should give substantial weight to the treatment of the land, in particular how it is bounded or divided, under state and local law. This factor recognizes that “reasonable expectations of an acquirer of land must acknowledge legitimate restrictions affecting his or her subsequent use and dispensation of the property.” Therefore, a reasonable restriction that predates a landowner’s acquisition can be one of the objective factors that most landowners would reasonably consider in forming fair expectations about their property.

Second, courts must look to the physical characteristics of the landowner’s property. Such characteristics include the physical relationship of any distinguishable tracts, the parcel’s topography, and the surrounding human and ecological environment. For example, the property’s location in an area that is subject to, or likely to become subject to, environmental or other regulation is a relevant consideration.

Third, courts should assess the value of the property under the challenged regulation, with special attention to the effect of burdened land on the value of other holdings. Though a use restriction may decrease the market value of the property, the effect may be tempered if the regulated land adds value to the remaining property, such as by increasing privacy, expanding recreational space, or preserving surrounding natural beauty.

Applying that multifactor standard, the majority held in this case that Petitioners’ property should be evaluated as a single parcel consisting of Lots E and F together. The Court reasoned that (1) The treatment of the property under state law indicates petitioners’ property should be treated as one when considering the effects of the restrictions; (2) the physical characteristics of the property support its treatment as a unified parcel; (3) the prospective value that Lot E brings to Lot F supports considering the two as one parcel for purposes of determining if there is a regulatory taking; and (4) the special relationship of the lots is shown by their combined valuation. Therefore, the Court held that the Wisconsin Court of Appeals was correct in analyzing petitioners’ property as a single unit.

The Court further held that, by considering Petitioners’ property as a whole, the state court was correct to conclude that petitioners cannot establish a compensable taking in these circumstances. Petitioners had not been deprived of all economically beneficial or productive use of their property (Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992)), and they failed to establish that they suffered a taking under the more general test of Penn Central Trans. Co. v. New York City (1978) 438 U.S. 104.

In dissent, Chief Justice Roberts advocated sticking with “our traditional approach,” under which “[s]tate law defines the boundaries of distinct parcels of land, and those boundaries should determine the ‘private property’ at issue in regulatory takings cases.” Justice Roberts complained that the majority decision “knocks the definition of ‘private property’ loose from its foundation on stable state law rules and throws it into the maelstrom of multiple factors that come into play at the second step of the takings analysis.” In short, the dissent believed that the new framework established by the majority “compromises the Takings Clause as a barrier between individuals and the press of the public interest.”

Glen Hansen is a Senior Counsel at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc., at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

 

By Glen Hansen

The California Supreme Court held in Lynch v. California Coastal Commission (2017) 3 Cal.5th 470, that plaintiff property owners forfeited their challenge to conditions attached to a permit to rebuild a seawall and beach access stairway because the plaintiffs accepted the benefits the permit conferred, even though they simultaneously filed an action challenging the conditions.

In Lynch, plaintiffs owned homes that sit on a coastal bluff that cascades steeply down to the beach and Pacific Ocean. Since 1986, the properties have been protected by a shared seawall at the base of the bluff and a mid-bluff erosion control structure. A shared stairway provided the only access from the bluff-top to the beach below. Plaintiffs applied to the City of Encinitas (“City”) for authorization to replace the wooden seawall and mid-bluff structure and rebuild the lower portion of the stairway. The City approved the project, but final approval required a coastal development permit from the California Coastal Commission (“Commission”). A heavy winter storm then caused part of the bluff to collapse and destroyed part of the seawall, the mid-bluff structure, and the stairway. Plaintiffs sought a new permit to rebuild the damaged structures. The Commission approved a permit that allowed seawall reconstruction and mid-bluff protection, but with special conditions, including the following: (1) reconstruction of the lower stairway is prohibited; (2) the seawall permit will expire in 20 years and prohibits future bluff-top redevelopment from relying on the seawall; and (3) before expiration of the 20-year period, plaintiffs must apply for a new permit to remove the seawall, change its size or configuration, or extend the authorization period. Plaintiffs submitted written objections to those conditions during the review process. But, then plaintiffs complied with the permit requirements and recorded deed restrictions stating that the special conditions of the permit were covenants, conditions and restrictions on the use and enjoyment of their properties. Plaintiffs also filed a petition for writ of administrative mandate challenging the 20-year expiration conditions and the condition prohibiting reconstruction of the lower stairway. While the mandate action was pending, however, plaintiffs satisfied all other conditions, obtained the permit, and built the seawall.

The trial court issued a writ directing the Commission to remove the challenged conditions and held that “by proceeding with the repairs,” plaintiffs “have not necessarily accepted the conditions in question. No action has been taken as to the twenty year condition[,] which can be removed after review of the instant petition.” The Court of Appeal reversed in a split decision. The California Supreme Court granted review and affirmed the Court of Appeal’s decision.

The Supreme Court held that “plaintiffs forfeited their right to challenge the permit’s conditions by complying with all pre-issuance requirements, accepting the permit, and building the seawall. The Court relied on the general rule in the land use context that “a landowner may not challenge a permit condition if he has acquiesced to it either by specific agreement, or by failure to challenge the condition while accepting the benefits afforded by the permit. Generally, challenges to allegedly unlawful conditions must be litigated in administrative mandate proceedings.” That general rule stems from the equitable concept that permit holders are obliged to accept the burdens of a permit along with its benefits. The general rule also serves the public purpose of “promptly alerting the [agency] that its decision is being questioned and allows the government to mitigate potential damages.” In this case, plaintiffs obtained all the benefits of their permit when they built the seawall and “[t]hey cannot now be heard to complain of its burdens.” The Court refused to create a new exception to that general forfeiture rule which would allow landowners to accept the benefits of a permit under protest if the challenged restrictions can be severed from the project’s construction.

The Court recognized that there is a “narrow exception” to the general rule for challenges to permit conditions imposing a fee or similar exaction. The Mitigation Fee Act (Govt. Code, §66000 et seq.) (“MFA”) contains a procedure by which developers may proceed with a project and still protest the imposition of “fees, dedications, reservations, or other exactions.” If a developer tenders payment of the disputed fee and gives written notice of the grounds for protest, local agencies cannot withhold project approval during litigation of the dispute, and local agencies must refund the fee if the challenge is successful. But that MFA procedure does not govern the type of land use restrictions that were imposed by the Commission on the project in this case.

Thus, the plaintiffs in Lynch forfeited their objections by constructing the project. The Court concluded:  “Without an express agreement with the agency providing otherwise, landowners who object to permit conditions not covered by the Mitigation Fee Act must litigate their objections in an administrative mandate proceeding before constructing the permitted project. Landowners who proceed with a project before the merits of their claims have been decided risk a finding that their objections were forfeited.”

Glen Hansen is Senior Counsel at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc., at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

Glen C. Hansen of Abbott & Kindermann, Inc., will present an update on recent developments in resolving easement, boundary, and implied public dedication disputes in California. This is an advanced class aimed primarily at land surveyors, civil engineers, attorneys, and property owners. This intense, three-hour class examines recent case law about:

  • Creating, Interpreting, and Terminating Easements
  • Accommodating Neighbors vs. Creating Prescriptive Easements
  • Establishing Equitable Easements
  • When Implied Dedications of Public Easements Exist, and When They Don’t.

MCLE and American Planning Association continuing education credits offered, pending approval.

MCLE 3.0       CM 3.0

Glen C. Hansen is Senior Counsel at Abbott & Kindermann, Inc., and a long-time practitioner in real estate and land use law.

Cost $85.00

Location and Time

Roseville – October 13, 2017, 8:00 a.m.-11:45 a.m.  (To Register CLICK HERE)

Holiday Inn Express – Roseville, 1398 East Roseville Parkway, Roseville, CA 95661

Registration:   8:00 a.m.

Class:              8:30 a.m. – 11:45 a.m.

Break:             10:00 a.m. – 10:15 a.m.

On September 19, 2016, California Governor Jerry Brown signed Senate Bill 1383 (Lara, 2016 Stats., ch. 395), which is designed to address short-lived climate pollutants (“SLCPs”), including methane gas. In SB 1383, the Legislature found that (1) SLCPs are “powerful climate forcers that have a dramatic and detrimental effect on air quality, public health, and climate change”; (2) that SLCPs create “a warming influence on the climate that is many times more potent than that of carbon dioxide”; and (3) that reducing emissions of SLCPs “can have an immediate beneficial impact on climate change and on public health.” SB 1383 requires the State Air Resources Board (“ARB”) to approve and begin implementing a comprehensive strategy to reduce emissions of SLCPs. That includes a reduction in methane by 40% below 2013 levels by 2030. The reduction target for methane under SB 1383 can be summarized in the following chart:

Methane Inventory

(2013)

Methane Forecast

(2030)

Methane Target

(2030)

Percent Reduction From 2013 Levels
118 117 71

40%

Note: Emission levels are listed in MMTCO2e.

The Short-Lived Climate Pollutant Reduction Strategy Targets Dairy Operations.

The comprehensive strategy described in SB 1383 is the “Short-Lived Climate Pollutant Reduction Strategy” (“SLCP Strategy”) that was released by ARB on March 23, 2017. Senate Bill 605 (Lara, 2014 Stats., ch. 395) directed ARB to begin drafting that strategy, and SB 1383 ordered the ARB to complete that strategy and begin implementing it by January 1, 2018. The SLCP Strategy will inform and will be integrated into the 2017 Climate Change Scoping Plan Update. The SLCP Strategy explains that “an increase in the global average temperature of 2°C (3.6°F) above pre-industrial levels, which is only 1.1°C (2.0°F) above present levels, poses severe risks to natural systems and human health and well-being,” and that “[d]eploying existing technologies and resource management strategies globally to reduce SLCP emissions can cut the expected rate of global warming in half and keep average warming below the dangerous 2°C threshold at least through 2050.”

Scientists have estimated that methane is responsible for about 20 percent of current net climate forcing globally. Manure is responsible for 25 percent of California’s methane emissions. Therefore, the SLCP Strategy is designed to outline the goals, regulations, incentives and other efforts that would, among other things, “[s]ignificantly cut methane emissions from dairy and livestock operations while providing farmers with new, potentially lucrative revenue streams ….”

The State Envisions Collaborative Efforts With Dairies Before Regulations Are Implemented.

SB 1383 requires ARB to adopt regulations to reduce methane emissions from livestock manure management operations and dairy manure management operations. Such regulations would take effect on or after January 1, 2024, if ARB, in consultation with the Department of Food and Agriculture, makes certain determinations.

The SLCP Strategy provides that, before ARB regulates dairy manure emissions pursuant to SB 1383, state agencies will “encourage and support near-term actions by dairies to reduce manure emissions through financial incentives, collaboration to overcome barriers, development of policies to encourage renewable natural gas production, and other market support.” ARB expects a collaborative effort to reduce methane emissions, in which the dairies are active participants. The SLCP Strategy states:

Strong market support and broad collaboration among State agencies, industry, and other stakeholders will be necessary to reduce landfill and manure methane emissions by putting organic waste streams to beneficial use. The State will support early action to build infrastructure capacity and reduce emissions through existing incentives and accelerated efforts to overcome barriers and foster markets. Government agencies and stakeholders will work to foster market conditions to support private sector investment in expanded or new infrastructure, including building markets for compost, soil amendments, and low carbon transportation fuels; overcoming barriers to pipeline injection of biomethane, grid connection for electricity or another best-use alternative; and identifying effective financing mechanisms and levels to reach the goals in this SLCP Strategy.

Ultimately, a combination of incentives, State and private sector collaboration and investment, and regulations will be necessary to capture the value in organic waste streams and ensure lasting emission reductions in order to achieve an economy-wide 40 percent reduction in methane.

However, the state will still create a regulatory environment to force methane reductions at dairies, despite such collaborative efforts. The SLCP Strategy explains:

In coordination with CDFA and local air quality and water quality agencies, ARB will initiate a rulemaking process to reduce manure methane emissions from the dairy sector consistent with the objectives in this SLCP Strategy. As noted earlier, the rulemaking process will involve extensive stakeholder engagement and consideration of multiple factors. The regulations are to be implemented on or after January 1, 2024.

Pursuant to SB 1383, ARB, in consultation with CDFA, will analyze the progress dairies are making in achieving the goals in the Strategy by July 1, 2020, and may make adjustments to those goals if sufficient progress has not been made.

The rulemaking process will first focus on developing measures to require regulated parties to both report and maintain records covering the parameters that affect GHG emissions at California dairies and other livestock operations. Reported information will be used to refine inventory quantification, evaluate policy effectiveness, assess methane reduction progress, and aid in future policy planning and regulatory development. ARB will work with other State agencies and industry groups to improve outreach on new reporting requirements, as well as merge reporting activities with current forms and requirements to avoid duplicative reporting wherever feasible.

Emission control regulations will be designed to support and complement existing programs. In particular, regulatory requirements to achieve large emission reductions from the sector will affect incentives for methane reduction projects, such as the availability and amount of credits under the Cap-and-Trade Program and LCFS.

The Suggested Efforts To Reduce Methane Emissions From Manure Are Not Yet Cost-Effective Or Viable At This Time.

ARB believes that such efforts can even create “economic value in farming communities.” The SLCP Strategy suggests:

If markets are fully enabled, efforts to reduce methane from manure management at California dairies could lead to billions of dollars of investment and thousands of new jobs, concentrated in the Central Valley. Depending on the strategies pursued to reduce emissions, individual dairies may be able to reduce emissions while generating new revenue streams, and the industry as a whole may be able to meet the targets established in this SLCP Strategy at little or no net cost.

However, ARB recognizes such economic benefits are not a certainty. The SLCP Strategy points out that “revenues in some cases are highly dependent on environmental credit and energy markets, as well as on improving access to the common carrier natural gas pipeline system.” But the state’s regulation of methane emissions will not wait for, or be dependent upon, the achievement of such hypothetical economic benefits. The SLCP Strategy explains that “strategies at dairies that may not include energy production and associated revenues can still reduce emissions at low cost, and may deliver other environmental benefits, as well.” Thus, even if there are no offsetting economic benefits to dairies, the State will pursue the methane reduction plans anyway.

The SLCP Strategy suggests the following manure management changes to reduce methane emissions:

  • “[S]witching from flush water open lagoon systems to anaerobic digesters or other systems such as solid manure management practices.” However, “[s]witching to systems such as solid manure management may lead to air or water quality challenges, however, which need to be fully considered.
  • “[P]asture-based systems may be a viable option, but tradeoffs can limit their feasibility. … For larger dairies and those in the Central Valley, pasturage would require using significantly more irrigated land, may require supplemental feed, and (in the case of Central Valley dairies) may require construction of shade structures and other infrastructure to alleviate heat exposure-related impacts on animal welfare. Pasture dairies may face potential nutrient management and water quality issues, and are required to maintain the capacity to store liquids from milking parlor operations (chilling milk, cleaning facilities, etc.) for a 100-year stormwater event. Additionally, milk production and feed efficiencies are lower in pasture systems, requiring more cows to produce the same amount of milk. Pasture systems also limit the ability to manage manure as a valuable organic waste resource.”
  • “[C]apturing and utilizing manure methane by installing an anaerobic digestion system is more advantageous than avoiding methane emissions through conversion to practices such as a pasture-based dairy model, providing the current barriers can be sufficiently addressed. Captured biogas from dairy manure can be used to power farm trucks and equipment, upgraded for injection into natural gas pipelines, used as a transportation fuel, or used to generate on-site renewable electricity and heat. However, tapping into this resource in California has been complicated in part due to air quality constraints, especially in the Central Valley and Southern California. … [M]anure-management conversions that produce electricity and vehicle fuel are potentially profitable; however, most require significant up-front capital investment.”

Such technologies do not yet exist. The SLCP Strategy recognizes that “some potentially effective strategies are still in the development stage.” Also, ARB recognizes many of these manure management strategies are not cost-effective at this time. The SCLP Strategy explains:

In many cases, converting to solid manure management systems or installing anaerobic digesters at dairies may not yet be cost-effective if the only marketable products are renewable electricity and/or renewable natural gas. If these revenue streams can be augmented with revenues from compost or other soil amendment products, and from environmental credits, these conversions may offer attractive rates of return for farmers and investors. However, markets for these other products need further support before they can offer returns that are reliable enough to help secure project financing.

Strategies to Reduce Emissions From Dairy Cow Burping Are Not Yet Available.

Nearly 20% of the State’s methane emissions come from enteric fermentation (mostly belching) of dairy cows. Such methane is created by microorganisms involved in the digestive processes in the stomachs of dairy cows. While the SLCP Strategy suggests that it is “important to explore strategies to reduce emissions from these sources to meet the State’s 40% economy-wide methane emission reduction target,” the ARB also recognizes that “development of effective control measures face a unique set of challenges.” In fact, “cost-effective and scientifically validated methods for reducing enteric emissions” are not even available at this time. Therefore, the state will “support and monitor research and explore voluntary, incentive-based approaches to reduce enteric fermentation emissions from dairy and non-dairy livestock sectors until cost-effective and scientifically-proven methods to reducing these emissions are available and regulatory actions can be evaluated.”

The Dairy Industry Views The Methane Emission Reduction Strategy As An Existential Threat.

It is not known how the methane reduction that is mandated by SB 1383 will be met. As one agribusiness professor at Cal Poly San Luis Obispo commented: “I really don’t know how they will go about reducing methane emissions by 40 percent.” The general manager of an agricultural trade group concluded that the ARB’s methane plan “threatens the future of the California dairy industry,” and the 40% reduction means “[w]e’re just going to see less dairy in this state”. As one farmer in Sacramento County noted: “In the dairy business, the margins are so slim that something like this will force us out of state.” Dairy farmers complain that the new law, and the money and equipment needed to comply with it, could have a severe economic impact in conjunction with low milk prices, rising labor costs and drought. Methane digesters cost several hundred thousand dollars or more; and although the state has set aside $50 million to help dairies set up digesters, farming groups note that this sum is not nearly enough to equip the state’s roughly 1,500 dairies. Also, digesters require considerable upkeep, and they emit other pollutants like nitrogen oxide and particulate matters, which environmental groups are also targeting for reduction. Thus, as the Wall Street Journal points out: “[T]he regulators acknowledge that most ideas involve environmental trade-offs and are not cost-effective without substantial government subsidies and regulatory credits that can be sold to fossil-fuel producers.” An official with Western United Dairymen concluded that the methane reduction requirements “just makes it more challenging. We’re continuing to lose dairies. Dairies are moving out of state to places where the costs don’t exist.”

Glen Hansen is Senior Counsel at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

In 2016, U.S. Supreme Court Justice Clarence Thomas issued this warning about legislative exactions: “Until we decide this issue, property owners and local governments are left uncertain about what legal standard governs legislative ordinances and whether cities can legislatively impose exactions that would not pass muster if done administratively.” He stated there are “compelling reasons for resolving this conflict at the earliest practicable opportunity.” Abbott & Kindermann Inc.’s Senior Counsel, Glen Hansen, proposes a resolution to that conflict in his recently-published article, Let’s Be Reasonable: Why Neither Nollan/Dolan nor Penn Central Should Govern Generally-Applied Legislative Exactions After Koontz, 34 Pace Envtl. L. Rev. 237 (2017).

In that article, Mr. Hansen explains why the level of constitutional scrutiny that was developed by the U.S. Supreme Court in Nollan v. California Coastal Commission, and Dolan v. City of Tigard, should not apply to legislatively imposed exactions, provided that such exactions satisfy two key criteria: (1) The exaction is generally-applied; and (2) the exaction is applied based on a set legislative formula without any meaningful administrative discretion in that application. He argues that legislative exactions that fail to meet those two criteria should be governed by the Nollan/Dolan standard of review in the same manner as the ad hoc adjudicative exaction in Koontz v. St. Johns River Water Management District. Mr. Hansen then argues that legislative exactions that satisfy those two criteria also should not be governed by the ad hoc factored analysis in Penn Central Transportation Co. v. New York City. Instead, Mr. Hansen argues, a “reasonable relationship” test should be applied to legislative exactions that satisfy those two criteria.

The issue addressed in the article is timely and in need of resolution by the courts. In early 2016, Supreme Court Justice Clarence Thomas explained: “For at least two decades, however, lower courts have divided over whether the Nollan/Dolan test applies in cases where the alleged taking arises from a legislatively imposed condition rather than an administrative one. That division shows no signs of abating.” Justice Elena Kagan similarly opined that, following the Koontz decision, there is now a “cloud on every decision by every local government” that requires a person seeking a permit to pay or spend money. Mr. Hansen’s article offers a practical resolution of that constitutional conflict based on the majority and dissenting opinions in Koontz, as well as the various rationales presented in lower court decisions that have squarely addressed the issue.

Mr. Hansen’s article can be found online at http://digitalcommons.pace.edu/cgi/viewcontent.cgi?article=1803&context=pelr .

Glen Hansen is Senior Counsel at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.

Alaska Oil & Gas Assn. v. Pritzker, ___ F.3d. ___, 2016 U.S. App. LEXIS 19084 (9th Cir., case nos. 14-35806, 14-35811, Oct. 24, 2016).

By Glen Hansen

In 2008, the Center for Biological Diversity (“CBD”) filed a petition requesting that the U.S. Secretary of Commerce list three “sea ice seal” species as endangered or threatened under the federal Endangered Species Act (“ESA”), 16 U.S.C. §§ 1531-44. The National Marine Fisheries Service (“NMFS”) concluded that the Okhotsk and Beringia distinct population segments (“DPS”) of the Pacific bearded seal subspecies were “likely to become . . . endangered species within the foreseeable future throughout . . . a significant portion of [their] range.” Plaintiffs Alaska Oil and Gas Association (“AOGA”), the State of Alaska, and North Slope Borough (collectively, “Plaintiffs”) filed separate lawsuits in the United States District Court for the District of Alaska challenging the listing decision. Plaintiffs alleged that the listing decision was not based on the “best scientific and commercial data available” in violation of 16 U.S.C. § 1533(b)(1)(A); that the population of bearded seals was plentiful; that a lack of reliable population data made it impossible to determine an extinction threshold; that NMFS’s use of predictive climate projections beyond 2050 were speculative; that NMFS had unreasonably “changed tack” from its previous Arctic sea-ice listing decisions; and that NMFS had failed to demonstrate a causal connection between the loss of sea ice and the impact of that loss to the Okhotsk and Beringia DPS’s viability.

The District Court granted summary judgment to Plaintiffs on their challenge to NMFS’s decision to list the Beringia DPS as a threatened species because NMFS’s long-term climate projections were volatile and the agency lacked data on the bearded seal’s adaptability and population trends, including “a specified time” at which the seal would reach an extinction threshold.  (Alaska Oil & Gas Ass’n v. Pritzker, No. 4:13-cv-18-RRB, 2014 U.S. Dist. LEXIS 101446 (D. Alaska, July 25, 2014).)  The District Court pointed out that “NMFS acknowledged that it lacks sufficient data on the resilience of bearded seals to cope with climatic changes; or to define an extinction threshold for bearded seals and assessing the probability of reaching that threshold within a specified time; and that, because the existing body of information regarding bearded seal population and trends was limited, additional studies were needed to understand the population dynamics and habitat of the bearded seal.” The District court added:

Troubling to this Court is that it does not appear from the Listing Rule that any serious threat of a reduction in the population of the Beringia DPS, let alone extinction, exists prior to the end of the 21st century.  Indeed, the Listing Rule itself concedes that, at least through mid-21st century, there will be sufficient sea-ice to sustain the Beringia DPS at or near its current population levels.  Indeed, with respect to the second half of the century it appears that no significant threat to the Beringia DPS is contemplated before 2090.  Even as to that date, NMFS acknowledges that it lacks any reliable data as to the actual impact on the bearded seal population as a result of the loss of sea-ice. Under the facts in this case, forecasting more than 50 years into the future is simply too speculative and remote to support a determination that the bearded seal is in danger of becoming extinct.

NMFS and CBD appealed the District Court decision. The Ninth Circuit reversed.

The Court of Appeals described the key issue on appeal as follows: “When NMFS determines that a species that is not presently endangered will lose its habitat due to climate change by the end of the century, may NMFS list that species as threatened under the Endangered Species Act?” The standard of review that the court applied in this case was significant because it required a “high threshold for setting aside agency action.” Specifically, the court stated that it “will affirm that action ‘so long as the agency “considered the relevant factors and articulated a rational connection between the facts found and the choices made.”’” The court ultimately held that, “[i]n light of the robustness of NMFS’s rulemaking process, as well as our highly deferential standard of review, we hold that NMFS’s final rule listing the Beringia DPS as threatened was not arbitrary or capricious, and its listing decision was supported by substantial evidence.”

The court described that “rulemaking process” and the “substantial evidence” in support of NMFS’ decision as follows:

NMFS established a Biological Review Team of eight marine mammal biologists, a fishery biologist, a marine chemist, and a climate scientist to review the status of the “best scientific and commercial data available” regarding bearded seals. NMFS solicited four scientists to conduct independent peer reviews of the Review Team’s report. … The review concluded that bearded seals generally prefer to hunt organisms found on the ocean floor. As a result, the seals prefer to congregate where non-contiguous sea ice floes appear over shallow water between 50 to 200 meters deep, and the seals avoid “unbroken, heavy, drifting ice or large areas of multi-year ice” located over deeper waters. The seals use ice floes to give birth (whelp) and to nurse their pups; to allow mothers close access to food sources while nursing; to enable their pups to gain experience with diving, swimming, and hunting away from their predators; to provide a location for males to attempt to attract females; and to provide a platform where male seals can rest while molting.  [¶] Using observational and predictive data from the Intergovernmental Panel on Climate Change’s (“IPCC”) Fourth Assessment Report, NMFS used six climate models to determine when the Beringia DPS’s sea ice habitat would degrade to such an extent that it would render the Beringia DPS endangered, and it made available for public review its methodology and data. … [¶] After considering thousands of comments to the proposed rule, NMFS extended the review period and sought additional independent peer reviews of the sections of the status review report that generated the greatest disagreement among peer reviewers–the timing and magnitude of climate change effects on the availability of sea ice in the Bering Sea. NMFS additionally updated its climate predictions to include studies published after the Proposed Listing Rule. NMFS also held public hearings in Anchorage, Barrow, and Nome to solicit comments.

The court continued:

Having concluded that the availability of sea ice in shallow water was crucial to the Beringia DPS’s viability, NMFS evaluated several climate models to determine the magnitude and timing of climate change’s impact on the availability of sea ice in areas inhabited by the Beringia DPS.  … [¶][¶] …The IPCC’s climate models for 2050 to 2100, showed greater volatility, and thus less reliable predictive value, in the Arctic. And so NMFS used two models considered to be particularly reliable with respect to Arctic sea ice, and it used “medium” and “high” emissions scenarios to project monthly sea ice concentrations between March and July for each decade, beginning in 2025 and ending in 2095. After confirming the models’ accuracy, NMFS applied each to the areas occupied by the Beringia DPS to determine the range of temperatures per month from 2050 to 2100, and used those temperature projections to determine the impact of local warming on sea ice melt. NMFS’s projections demonstrated that by May and June 2050, there would be no sea ice in the Bering Strait, the East Siberian Shelf, or the Barents or Bering Seas.  By July 2050, sea ice would recede to less than 20% of the mean or disappear entirely from the Beaufort, Chukchi, and East Siberian seas. Most dramatically, by the time NMFS sought a second round of public comment on its climate projections, sea ice scientists published research indicating there would be “[a] nearly sea ice free summer Arctic by mid-century.”

Plaintiffs argued that NMFS used climate models that cannot reliably predict the degree of global warming beyond 2050 or the effect of that warming on a subregion, such as the Arctic.  However, the court explained that in earlier cases “we adopted the D.C. Circuit’s holding that the IPCC climate models constituted the ‘best available science’ and reasonably supported the determination that a species reliant on sea ice likely would become endangered in the foreseeable future.”  Here, the court explained, “NMFS provided ample evidence of significant sea ice loss from 2007 to 2050, a period in which specific data supports the IPCC climate projections. Those projections indicate that during months in which bearded seals used that ice for ‘critical life events’ such as mating, birthing, and nursing, most Beringia DPS habitats will have lost most, if not all, of their sea ice. … NMFS’s projections for the second-half of the century are also reasonable, scientifically sound, and supported by evidence.”

In response to the District Court’s conclusion about agency speculation, the Ninth Circuit stated that the ESA “does not require NMFS to base its decision on ironclad evidence when it determines that a species is likely to become endangered in the foreseeable future; it simply requires the agency to consider the best and most reliable scientific and commercial data and to identify the limits of that data when making a listing determination.”  The appellate panel rejected what it called the District Court’s “request for unobtainable, highly specified data would require NMFS to wait until it had quantitative data reflecting a species’ decline, its population tipping point, and the exact year in which that tipping point would occur before it could adopt conservation policies to prevent that species’ decline.”  The court explained that “the ESA does not require an agency to quantify population losses, the magnitude of risk, or a projected ‘extinction date’ or ‘extinction threshold’ to determine whether a species is ‘more likely than not’ to become endangered in the foreseeable future.”  In this case, the court concluded, “NMFS has demonstrated that it ‘considered the relevant factors and articulated a rational connection between the facts found and the choices made.’ That is all the ESA requires.”  Accordingly, the Ninth Circuit reversed the District Court’s grant of summary judgment in favor of Plaintiffs.

Comment:

The case could have far-reaching results. Using unequivocal – but politically controversial – language to describe climate change issues, the Court of Appeal stated:  “There is no debate that temperatures will continue to increase over the remainder of the century and that the effects will be particularly acute in the Arctic. The current scientific consensus is that Arctic sea ice will continue to recede through 2100, and NMFS considered the best available research to reach that conclusion.” (Emphasis added.) An attorney for the state of Alaska noted: “If this opinion stands, [NMFS] would list a species that is abundant and in good health based on the claim that climate change will impact habitat over the next 100 years and may cause harm.”

Like the District Court in this case, numerous other courts and judges have deemed long-range climate change projections as too speculative. (See e.g., Coalition for Responsible Regulation, Inc. v. EPA, 2012 U.S. App. LEXIS 25997 at *42, den. reh’g en banc (D.C.Cir., case no. 09-1322, Dec. 20, 2011)(J. Brown, dissenting) [“any harm to human health and welfare flowing from  climate change comes at the end of a long speculative chain”]; Center for Biological Diversity v. U.S. Dept. of the Interior, 563 F.3d 466, 478, (D.C. Cir. 2009) (holding that the plaintiffs’ concern that “significant adverse effects of climate change ‘may’ occur at some point in the future” was insufficient to constitute an “actual, imminent, or ‘certainly impending injury’ required to establish standing”);  Oceana, Inc. v. Pritzker, 125 F.Supp.3d 232, 351 (D.D.C. 2015) [as to impacts on a population of sea turtles, NMFS admitted that “[l]onger-term effects of the fishery and climate change . . . are speculative and difficult to extrapolate beyond ten years”]; Alliance for the Wild Rockies v. Austin, 55 F.Supp.3d 1294, 1309 (D.Mont. 2014) [“Very generally, the Fish & Wildlife Service determined that the potential effects of climate change on the North American wolverine population are too speculative at this time to warrant listing pursuant to the factors in 16 U.S.C. § 1533(a)(1)(A)-(E)”].)  However, the Ninth Circuit now appears to have changed that analysis with this declaration in this case:  “The fact that climate projections for 2050 through 2100 may be volatile does not deprive those projections of value in the rulemaking process.”  As a staff attorney for CBD stated, “This legal victory is likely to have major implications for many other climate-threatened species.”  The implications of the Ninth Circuit’s position for future agency decisions in the areas of environmental, land use and natural resources law could be significant.

Glen Hansen is Senior Counsel at Abbott & Kindermann, LLP.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, LLP at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, LLP, or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.