By Diane Kindermann and Jessica Melms

Stanford Vina Ranch Irrigation Co. v. State of California (2020) 50 Cal.App.5th 976

On June 18, 2020, the Third Appellate District upheld the State Water Resources Control Board’s (“SWRCB”) authority to curtail unreasonable use of pre-1914 appropriative and riparian water rights through emergency regulations. Historically, post-1914 appropriative rights were afforded less protection in shortages compared to riparian and pre-1914 water rights. On top of these principles, the reasonable use doctrine limits the right to use all water rights enjoyed or asserted in the state only to the extent that “reasonably required for beneficial use to be served.”

The spring-run Chinook salmon and steelhead trout are both threatened fish under the California and federal Endangered Species Acts (“CESA” and “ESA”, respectively). Each year, some of these anadromous fish species journey from the ocean to Deer Creek within the Lassen National Forest. The California Department of Fish and Wildlife (“CDFW”) identifies the creek as a high priority stream, and during years of drought or low water flow, water diversions can prevent adult salmon and trout from reaching spawning habitat. Two irrigation companies, Stanford Vina Ranch Irrigation and Deer Creek Irrigation, divert water for agricultural use from Deer Creek. By virtue of a judicial decree entered in 1923, Stanford Vina is entitled to roughly 66 percent of Deer Creek’s flow based on its senior riparian and pre-1914 water rights.

In May 2014, during the peak of one of California’s most severe droughts, Governor Brown declared a state of emergency. In response, SWRCB began the process of promulgating emergency regulations implementing in-stream flow requirements for Deer Creek and two other creeks. SWRCB adopted the emergency regulations, providing that continued diversions would threaten to cause flows to dip beneath the drought emergency minimum flow requirements, and therefore constituted a waste and unreasonable use under Article X, section 2 of the California Constitution. Diversions were labeled unreasonable per se, and SWRCB was authorized to issue curtailment orders without a noticed hearing to ensure adequate water supply for the threatened species. Both irrigation companies were subjected to four total curtailment orders and were banned from diverting water from Deer Creek for several years.

Stanford Vina Ranch sued the SWRCB challenging its discretion in the issuance and implementation of certain temporary emergency regulations in 2014 and 2015 and claiming that the orders violated due process requirements and amounted to a taking without just compensation. Specifically, Stanford Vina asserted causes of action for inverse condemnation and declaratory relief, claiming that the curtailment order and emergency regulations amounted to a taking of their vested water rights for public “fishery enhancement purposes” without just compensation. Additionally, Stanford Vina sought writs of mandate and injunctive relief ordering SWRCB to rescind the regulations and curtailment orders, and to refrain from adopting further orders without first complying with statutory and constitutional requirements of due process and reasonable compensation. The trial court bifurcated the condemnation and declaratory relief causes of action and upheld SWRCB’s adoption of the emergency regulations limiting water diversions to protect fish migration. Stanford Vina appealed.

The Court of Appeal affirmed, holding that SWRCB acted within its broad authority to prevent unreasonable use of water under Article X, section 2 of the California Constitution. SWRCB’s enabling statute “grants it the power to ‘exercise the adjudicatory and regulatory functions of the state in the field of water resources’ and in that role, the Board is granted ‘any powers that may be necessary or convenient for the exercise of these duties.’” Specifically, SWRCB has the authority to take all appropriate actions to prevent waste, unreasonable use, or unreasonable method of diversion of water in California. The Court held that fish survival is an appropriate consideration in determining what is or is not an “unreasonable use, unreasonable method of use, or unreasonable method of diversion of water in the state.”

Stanford Vina argued that the requirement for a hearing stemmed from the federal and California Constitutions. However, even though the “determination of reasonableness would necessarily have been determined ad hoc, adjudicatively, this does not mean due process requires the Board to hold an evidentiary hearing before engaging in promulgating a regulation.” Consistent with this constitutional provision, the Legislature may enact per se rules of unreasonable use without a hearing. Therefore, the Court held that SWRCB did not act arbitrarily, capriciously, or contrary to procedure, and it was not required to hold an evidentiary hearing.

Additionally, the curtailment orders were valid because substantial evidence supported findings that the diversions would have violated the regulations, and senior water rights holders are not exempt. Stanford Vina did not challenge the sufficiency of the evidence supporting SWRCB’s conclusion. Nor could they point to any purported errors relating to the issuance of the curtailment orders themselves. Lastly, the takings claim failed because Stanford Vina did not possess a vested right to divert water from Deer Creek in contravention of the emergency regulations.

Diane Kindermann is a shareholder and Jessica Melms is a law clerk 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.

Golden Door Properties, LLC v. Superior Court, 2020 Cal. App. LEXIS 710

In Golden Door Properties, LLC v. Superior Court, the Fourth Appellate District addressed several key issues involving the scope of a CEQA record of proceedings, including the question of what is the obligation of a lead agency to retain emails, and possibly even internal notes and other non-electronic documentation, which are otherwise routinely deleted or discarded pursuant to agency policy or common practice.

The litigation backdrop to this decision is equivalent to the United States involvement in Afghanistan: It is a conflict with no apparent ending in sight. The petitioner (“Golden Door”) is a resort property located in San Diego County that vigorously opposed the potential development of nearby property. This conflict generated Golden Door litigation against the water district, a Public Records Act (“PRA”) lawsuit against the County, and a separate CEQA lawsuit against the County following project approval. The combined litigation involved extensive discovery disputes in the trial court, multiple writs filed with the Court of Appeal and one to the California Supreme Court. The general plan amendment, which was part of the project approval, was the subject of a referendum and was defeated by the voters.

The heart of this most recent decision involved the consequences of the County’s policy of routinely deleting emails after 60 days. This issue presented itself in both the PRA litigation and the CEQA challenge to the project approval. Petitioner elected to prepare the record of proceedings in the CEQA challenge but was provided only a limited number of emails. The County advised the petitioners of its policy providing for automatic deletion of emails after 60 days, a practice then challenged by the petitioners. The appellate decision is lengthy at 50-plus pages and provides an extensive discussion of the various discovery disputes (involving not only the County, but the EIR consultants as well) and the litigation. The key holdings¹ can be distilled down to the following:

1. The County’s policy of routinely deleting emails conflicted with CEQA’s definition of the record of proceedings (Public Resources Code §21167.6). Although CEQA contains no express requirement that emails be retained, the Court relied on Section 21167.6, subdivision (e)(7) (“All written evidence or correspondence submitted to, or transferred from, the respondent public agency with respect to compliance with this division or with respect to the project”), to conclude that the lead agency was obligated to retain emails as official records.

2. The trial court utilized a discovery referee who ultimately sided with the County on many of the discovery disputes. The referee erroneously considered the petitioners’ demands for documents as requests for extra record evidence and this formed a basis for the referee ruling for the County. In fact, the petitioners’ discovery efforts concerning emails and other materials was a dispute over obtaining a complete record of proceedings and should not have been viewed as extra record evidence as was considered in Western States Petroleum Association v. Superior Court (1995) 9 Cal.4th 559.

3. The County violated its own policy on record retention. In interpreting the County code, the appellate court concluded that because CEQA considers emails as documents to be retained, these emails became records required by law to be kept under the County’s own record retention rules.

4. The Civil Discovery Act applies in CEQA cases. [Note: This opens the door for petitioners to subpoena relevant documents from the lead agency, other agencies, and agency consultants. To the extent that the applicant has communicated with agencies, those communications may be relevant to the CEQA litigation and may be subject to subpoena.]

5. The cost of email retention is immaterial. The County argued that it would cost $76,000 per month to store the emails. While the appellate court noted the cost, it did not alter the court’s position as to the obligation of the agency to preserve emails. The court noted that emails not relevant to the project or with the agency’s compliance with CEQA could be deleted. [Note: This puts the lead agency in the unenviable and unworkable position of screening the content of every email before deleting, risking an accidental deletion. In these authors’ assessment, the agency would be better off to save all emails than to spend the time, money, and risk of parsing out some emails.]

6. In its efforts to create the record of proceedings, the petitioners could subpoena the business records of the consultants hired by the County in an effort to recreate the emails and documents deleted by the County.

7. Because of the ongoing multiple cases filed against the project, the developer and County could enter into an agreement permitting confidential document exchange through respective legal counsel. Absent that fact pattern, the appellate court concurred in the decision of Citizens for Ceres v. Superior Court (2013) 217 Cal.App.4th 889, holding that there is no legal basis during application processing for a common interest exemption from disclosure.

8. The referee improperly upheld the non-disclosure of 1,900 documents based upon the preliminary draft exemption and the deliberative process exemption. While that might have been an appropriate basis to not disclose, the record before the referee was insufficient. The privilege log must contain “reasonably specific detail.” The County’s supporting declaration lacked sufficient information and was too broadly framed to support the non-disclosure. [Note: The court did not directly address other non-email documents such as staff notes, sticky notes, or even fax confirmations, some of which may benefit from these exemptions. It did, however, affirm a broad principle that only documents “that do not provide insight into the project or the agency’s CEQA compliance with respect to the project” can be discarded. This raises the prospect that these other types of written documents could also come under the same scrutiny and suggests it could be prudent to hold on to these documents as well, at least until the record has been agreed to by the parties and certified.]

Commentary: The practical effect of this decision is to make CEQA processing and litigation more difficult and expensive for all concerned. For major projects we can look forward to the time and expense of locating, vetting, and indexing even more documents never to be cited in any brief or legal argument, hardly a value-added exercise. Unfortunately, as the court notes in its holding, the consequences for failing to secure these records can be substantial, as the court has the power to rule in favor of petitioners and vacate project approvals for that reason alone. It is worth noting that this is not a problem caused by the courts, but the failure of the Legislature to provide meaningful bookends to CEQA litigation.


¹The appellate opinion includes a number of other email/CEQA/PRA rulings. This blog highlights the rulings that have the broadest potential application.

William Abbott is Of Counsel and Daniel Cucchi is Senior Associate 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 William W. Abbott, Diane Kindermann, Glen Hansen, and Daniel S. Cucchi

Welcome to Abbott & Kindermann, Inc.’s July Environmental Action News – Part 2. This summary provides brief updates on recent environmental cases, legislation, and administrative actions in 2020.

PREVIOUS MONTH’S UPDATE

To read the July 2020 Environmental Action News- Part 1 post, click here:

https://blog.aklandlaw.com/2020/07/articles/july-environmental-action-news-part-1/

CASES PENDING AT THE CALIFORNIA SUPREME COURT

There is one case pending at the California Supreme Court. The case and the Court’s summary are as follows:

County of Butte v. Department of Water Resources, S258574. (C071785; 39 Cal.App.5th 708; Yolo County Superior Court; CVCV091258.) Petition for review after the Court of Appeal dismissed an appeal in an action for writ of administrative mandate.  This case presents the following issues: (1) To what extent does the Federal Power Act (16 U.S.C. § 791a et seq.) preempt application of the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) when the state is acting on its own behalf and exercising its discretion in deciding to pursue licensing for a hydroelectric dam project?  (2) Does the Federal Power Act preempt state court challenges to an environmental impact report prepared under the California Environmental Quality Act in order to comply with the federal water quality certification under the federal Clean Water Act?

Protecting Our Water & Environmental Resources v. Stanislaus County, S251709.  (F073634; nonpublished opinion; Stanislaus County Superior Court; 2006153.)  Petition for review after the Court of Appeal reversed the judgment in a civil action.  This case presents the following issue:  Is the issuance of a well permit pursuant to state groundwater well-drilling standards a discretionary decision subject to review under the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) or a ministerial action not subject to review?

Wilde v. City of Dunsmuir, S252915.  (C082664; 29 Cal.App.5th 158; Siskiyou County Superior Court; SCCVPT16549.)  Petition for review after the Court of Appeal granted a peremptory writ of mandate, reversed and remanded with directions in a civil action.  This case presents the following issue:  Can the electorate use the referendum power (Cal. Const., art. II, § 9) to challenge a city’s resolution increasing water fees or is such a challenge expressly limited to the power of initiative (Cal. Const., arts. XIII C & XIII D, § 6 (Proposition 218))?

UPDATE

CALIFORNIA WATER RIGHTS AND SUPPLY

  1. Abatti v. Imperial Irrigation Dist., 2020 Cal.App.LEXIS 663 (July 16, 2020).

The Court of Appeal affirmed in part and reversed in part the lower court’s ruling finding that Abatti had right to service and not a water right, and also that Imperial Irrigation District (“District”) arbitrarily curtailed service to farmers without proper justification. The Court held that ancestral use of water does not constitute a water right, but rather a right to service under the California water laws and the State’s constitution. The Court agreed with the trial court’s determination that farmers had a right to service but overturned the trial court’s determination that there is a pre-1914 water right. The Court held that although the farmers are afforded certain benefits because of their right to water service, those benefits did not constitute a pre-1914 right to water. The Court further held that the District’s discretion to prioritize water users was not made properly and as such, the District’s actions were arbitrary and needed further modification. The Court affirmed the trial court’s determination as to prioritizing the water apportionment, but overturned all other claims holding as follows: “1) granting the petition on the sole ground that the District’s failure to provide for equitable apportionment among categories or water users constitutes an abuse of discretion, and 2) denying the petition on all other grounds, including as to discretionary relief.”

WATER QUALITY

  1. Earth Island Inst. v. Wheeler, 2020 U.S. Dist. LEXIS 96724 (N.D. Cal. June 2, 2020).

The district court denied the Environmental Protection Agency’s (“EPA”) motion to dismiss finding that the EPA was obligated to update the National Contingency Plan (“NCP”), which is responsible for responding to oil and hazardous substances contamination under the Clean Water Act. District Court Judge William Orrick held that Earth Island Institute had a viable claim against the EPA for a violation of the CWA. Under the Court’s reasoning the EPA had a nondiscretionary duty to create and enforce the NCP and chose not to perform that duty. The Court further stated that EPA had no authority to interpret their duty as discretionary and that the duty of the EPA is clear-cut. In light of the Court’s determination, Judge Orrick denied the EPA’s motion to dismiss and the case will move forward on the merits.

WETLANDS

  1. California Proposes A Broad Migratory Bird Protection Act On The Heels Of Federal Limitations On Clean Water Act And Migratory Bird Treaty Act

Under the newly adopted California Migratory Bird Protection Act and the Waters of the State Rule, California will use enforcement measures to protect smaller wetlands and seasonal waterways which are critical habitat for migratory birds. State elected officials stated that the expanded Waters of the State Rule needed implementation because the federal definition cut protections to 90% of ecologically sensitive wetlands in the state. The California Migratory Bird Act passed to ensure that more than 40% of California’s rare and endangered species had stable shelter and food in conjunction with the Waters of the State Rule. State regulators hope that the newly implemented law and regulations will stop gap future harms to wetlands and bird populations until there is an opportunity to work in conjunction with the federal government for species protection once more.

For more information see:

https://calmatters.org/environment/2020/06/california-regulations-wetlands-birds/

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB454

https://www.waterboards.ca.gov/water_issues/programs/cwa401/wrapp.html

AIR QUALITY AND CLIMATE CHANGE

  1. Citizens for Pa’s. Future v. Wheeler, 2020 U.S. Dist. LEXIS 112503, ____ F. Supp.3d ______ (N.D. Cal. June 26, 2020).

In a shocking ruling, Judge Chhabria in the U.S. District Court for the Northern District declined to rule on cross motions for summary judgment until the EPA completed a 30 month rulemaking process on the “technology-based standards” list under the Clean Air Act. Judge Chhabria held that EPA was under a statutory obligation to revise its technology-based standards for a hazardous pollution source. The Court declined to grant either motion because courts may not interpret statutes unless there is a clear and unequivocal duty under the statute. As Judge Chhabria stated, the duties of the EPA to formulate the “technology-based standards” list are vague and leave substantial room for interpretation. Although the Court acknowledged it could grant EPA’s motion for summary judgment, it declined to do so since EPA admitted the agency was in the middle of the 30-month review period for finalizing the “technology-based standards” list. The Court ruled that rather than rule on either motion for summary judgment, the case would be stayed pending the completion of the 30-month review period and further briefing by both parties.

  1. CARB Reports San Joaquin County Too Generous With Cap and Trade Credits.

California Air Resources Board released a June study stating that the San Joaquin Valley Air Pollution Control District (“District”) overestimated Cap and Trade credits from businesses in the district for years. The District stated that the rules set by CARB were interpretive but agreed to modify its practices to create more transparency and likely higher costs to businesses applying for permission to vent exhaust in the San Joaquin Valley. In CARB’s report, the agency identified several discrepancies primarily in the way the District calculated the pollution-cutting benefits when businesses move from diesel-burning tractors to electrical. CARB found that the District was too generous in allocated value and credit values to this business practice. The District did not dispute the overall findings by CARB and agreed to make modifications to its Cap and Trade policies for the 2020 year and beyond.

For more information see:

https://www.bakersfield.com/news/state-says-local-air-district-too-generous-with-emission-credits/article_cdbee210-af44-11ea-a6bd-7701f3f3bb50.html

ENDANGERED SPECIES

  1. California Fish & Game Commission Begins The Process For A Potential Listing Of The Pacific Leatherback Sea Turtle.

As the largest turtle species in the world and fourth largest living marine reptile, the Fish and Game Commission’s consideration of a petition to list the Pacific Leatherback sea turtle likely would save the species from further decline. The species has seen an 80 percent decline in populations over the last thirty years and could potentially see a 96 percent decline by 2040 if no listing action occurs. The Commission acknowledged in its comments on the petition that data supporting the petition for listing proves a substantial decline in the population and is reliable data compiled by National Marine Fisheries Service (“NMFS”). The Commission will release its listing determination at its August 19-20 meetings in Fortuna, CA.

For more information see:

https://www.thelog.com/newsletter/will-california-declare-the-pacific-leatherback-sea-turtle-as-endangered/

https://www.marinij.com/2020/07/03/olema-groups-petition-to-list-sea-turtles-as-endangered-earns-state-review/

 

NATIONAL ENVIRONMENTAL POLICY ACT (“NEPA”)

  1. Whitewater Draw Nat. Res. Conservation Dist. v. United States Dep’t of Homeland Sec., 2020 U.S. Dist. LEXIS 96483 (S.D. Cal. June 1, 2020).

In cross motions for summary judgment, the U.S. District Court granted defendant’s motion stating that Plaintiffs failed to offer sufficient proof of impropriety when the department issued a “Finding of No Significant Impact” (“FONSI”) for the construction of a housing facility for illegal border crossers. Plaintiffs filed suit against defendant for the issuance of a FONSI, as part of the NEPA process, resulting from defendant’s attempt to construct a new housing facility for illegal immigrants crossing the Mexico-California border. The Court held that plaintiffs failed to show that defendant’s exemption from NEPA caused an environmental injury. The Court acknowledged potential harm to those housed in the fully constructed facility, but stated that (i) injury must be personal; and (ii) plaintiffs lacked standing since they failed to prove personal injury. Lastly, the Court held that plaintiffs claim to look at the environmental harm in its totality was overly broad since plaintiffs failed to prove specific injury resulting from the specific facility under construction. The Court reiterated that plaintiffs failed to provide sufficient and particular evidence to raise genuine issues of material fact under NEPA or the APA. As such, the Court granted defendant’s motion for summary judgment and denied plaintiffs motion for summary judgment.

ENVIRONMENTAL ENFORCEMENT

  1. CarMax Settles Enforcement Action With California Attorney General For Illegal Dumping Of Hazardous Materials In Dumpsters.

Sixteen District Attorneys and the California Attorney General’s Office settled an environmental enforcement suit for $1.6 million resulting from CarMax illegally dumping remnants of hazardous materials in the dumpsters of its car lots. The District Attorneys alleged that CarMax violated multiple hazardous materials and hazardous waste laws between the periods of 2014 and 2020. The settlement included $1 million in civil penalties, $300,000 for investigative costs, and $60,000 directly to the San Diego District Attorney’s Office. CarMax must also pay an additional $300,000 to fund supplemental environmental projects in the state of California and commit to mandatory training, reporting, and compliance requirements on handling hazardous materials. Implementation of the new training requirements will occur at all CarMax locations in the state of California.

For more information see:

https://www.kpbs.org/news/2020/jun/16/carmax-settles-environmental-lawsuit-16-das-office/

  1. CDFW Served Search Warrant For Illegal Marijuana Grow Farm In Tehama County.

The California Department of Fish and Wildlife (“CDFW”) issued a warrant for an illegal marijuana grow farm on a remote parcel of property 30 miles west of Red Bluff, CA. Tehama County banned the growing of cannabis in the County limits. The action was triggered by neighbors calling in a complaint to the County after the owners of the parcel brandished firearms at neighbors to prevent entry to the property. CDFW found 28,733 illegal cannabis plants on the property and destroyed 165 lbs. of processed cannabis. The officers further found at least 10 poached animal carcasses and seized two unregistered weapons. The officers arrested four suspects on felony cannabis and other charges. The State Water Resources Control Board and California Department of Food and Agriculture further filed additional charges against the suspects for other code enforcement violations.

For more information see:

https://cdfgnews.wordpress.com/2020/06/29/numerous-environmental-crimes-discovered-at-illegal-cannabis-grow-in-tehama-county/

  1. Navistar Settles Air Quality Enforcement Action For $2 Million.

The truck manufacturer, Navistar Inc., paid over $2 million in allegations for altering the engines of its heavy-duty vehicle engines leading to the potential excess emissions of diesel and negative air quality impacts. The manufacturer modified the vehicle models without notifying the California Air Resources Board (“CARB”) of changes which are required under state law. CARB discovered the violations of air resource compliance during a routine inspection of engine testing. Navistar agreed to pay $1,013,400 to the Air Pollution Control Fund supporting air quality research with the remaining portion to be distributed to the South Coast Air Quality Management District for the disparate impact Navistar’s violations had on neighboring disadvantaged communities.

For more information see:

https://www.greencarcongress.com/2020/06/20200630-navistar.html

William Abbott, Diane Kindermann, Glen Hansen, and Daniel Cucchi are attorneys 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.

 

Welcome to Abbott & Kindermann, Inc.’s July Real Estate Law Action News. This summary provides brief updates on recent environmental cases, legislation, and administrative actions in 2020. The case names of the newest decisions start with Section 3 and are denoted by bold italic fonts.

  1. PREVIOUS MONTH’S UPDATE

To read the June 2020 Environmental Action News post, click here: https://blog.aklandlaw.com/2020/06/articles/ak-news/land-use-law-blog-june-monthly-real-estate-law-action-news/.

  1. CASES PENDING AT THE CALIFORNIA SUPREME COURT

There is one case pending at the California Supreme Court. The case and the Court’s summary are as follows:

Weiss v. People ex rel. Dept. of Transportation, S248141.  (G052735; 20 Cal.App.5th 1156; Orange County Superior Court; 30-2012-00605637.)  Petition for review after the Court of Appeal reversed the judgment in a civil action.  This case presents the following issue:  Can the procedure permitted by Code of Civil Procedure section 1260.040 be used in an inverse condemnation action to determine in advance of a bench trial whether a taking or damaging of private property has occurred?

  1. UPDATE

 A. TAKINGS

  1. Bridge Aina Le’a, LLC v. State Land Use Comm’n (9th Cir. 2020) 950 F.3d 610.

In 2011, the State of Hawaii’s Land Use Commission reverted 1,060 acres on the Big Island of Hawaii from a conditional urban land use classification to the prior agricultural use classification. Plaintiff Bridge Aina Le’a, LLC, a landowner at the time of reversion, challenged the reversion’s legality and constitutionality in a state agency appeal, later filing suit in federal district court. After the trial, the jury decided that there was a unconstitutional regulatory taking of the plaintiff’s property pursuant to Lucas and Penn Central. The district court entered a judgment for the plaintiff, awarded $1 million in nominal damages, and denied the State’s renewed motion for judgment as a matter of law (“JMOL”). The state appealed the denial of the JMOL.

The Ninth Circuit held that the district court erred in denying the State’s renewed JMOL because plaintiff’s evidence did not establish a taking under Lucas or Penn Central. The conditions for the Lucas test were not met because the land retained substantial residual value in its agricultural use classification which still allowed the plaintiff to use the land in economically beneficial ways. The Court concluded that the State was entitled to judgment as a matter of law under Lucas.

Applying the Penn Central factors, the Court concluded that the jury could not reasonably find for the plaintiff. The Court held that the valuation evidence weighed strongly against a taking pursuant to the first factor which considers the extent of the economic loss suffered by the landowner as a result of the action, usually measured by diminution in market value, and rejected the plaintiff’s assertion that the disruption of a land sales agreement showed economic impact. The Commission’s reversion order did not interfere with the plaintiff’s reasonable investment backed expectations at the time of acquisition because the plaintiff had committed to build 385 housing units and had failed to complete them. Hawaii law expressly authorized the Commission to impose this condition. The Court held that plaintiff’s own evidence established a diminution in value that was too small, and the reversion did not interfere with the plaintiff’s reasonable investment-backed expectations for the land. The Court then reversed the district court’s denial of the State’s renewed JMOL motion on the Penn Central test as well.

  1. Ruiz v. County of San Diego (2020) 47 Cal.App.5th 504

The Court of Appeal reversed the trial court’s determination that a homeowner could claim redress by inverse condemnation against a county if their private drainage system allowed for flow of public water. The Court of Appeal considered whether privately owned drainage on private property allows for homeowner remedies by inverse condemnation if the water in the private pipeline is for public use. Plaintiff/Appellee Ruiz (“Ruiz”), claimed that because the developer offered the County of San Diego (“County”) a dedicated easement to allow for public drainage in 1959 and the County turned down the easement, Ruiz could recover for water damage as a result in the pipeline leaking on Ruiz’s property. Ruiz claimed that the County’s use of the drainage system as part of the Valley drainage system constituted an acceptance of the drainage easement offered in 1959. The Court of Appeal, citing Locklin v. City of Lafayette, 7Cal.4th 327 (1994),  held that the County’s use of the Ruiz pipe did not meet the requirements for inverse condemnation since the County needed to exert minimal control and maintenance over the watercourse near the Ruiz property since the County would be liable for damage caused by streamflow. The Court of Appeal found Ruiz’s arguments unpersuasive since the County did not control continually nor own any portion of the private pipeline. The Court stated the Ruiz lacked substantial evidence to prove that the County had taken their private property for a public use. The Court reversed the award of attorney’s fees to Ruiz and held that each party should bear their own attorney’s fees on appeal.

B. GENERAL REAL ESTATE

  1. Constellation-F, LLC v. World Trading 23, Inc. (2020) 45 Cal.App.5th 22

A commercial lease set rent to increase 150 percent if the tenant stayed past a certain date. The date passed but the tenant refused to pay the increased rent. Plaintiffs, a commercial landlord (“Constellation”), filed a breach of contract action against defendants  corporations (“World Trading” and “World Tech Toys”) seeking damages for past due rent, late fees, interest, failure to maintain and repair, costs for not being able to use the premises, and holdover rent. Constellation alleged that World Tech Toys was an alter ego of World Trading. The trial court rejected the theory of alter ego liability and held the defendants liable for all damages except the holdover rent, finding it to be an unenforceable penalty. World Trading and World Tech Toys were held liable to Constellation and its successors for $27.196.74. Constellation appealed and defendants cross appealed.

The Court of Appeal reversed the judgement denying Constellation holdover rent.  The court held that the holdover rent was not an unlawful penalty.  The court affirmed the remainder of the judgment, including the trial rejection of alter ego liability. The Court of Appeal explained that holdover rent, or “a graduated rental provision”, in commercial provisions are enforceable even if the increased rent is much greater than the base. To qualify as an unenforceable penalty, defendants must prove that the provision amounted to an illegal liquidation of damages. Here, the defendants failed to show that Constellation had market power to set the rate, and the defendants could have easily avoided higher rent by leaving the premise. Therefore, the trial court should have enforced the holdover agreement.

Further, the defendants argued that the penalty could be avoided under section 1671 of the Civil Code.  However, the Court of Appeal held that section 1671 was inapplicable because the case did not involve a question of penalty or liquidated damages. While the evidence showed unity of interest and ownership, which is required to invoke the alter ego doctrine, there was insufficient evidence to prove that treating defendants as separate entities would promote injustice. The court dismissed the defendant’s cross-appeal and appeal from the order after judgement.

The dissenting Justice argued that the liquidated damages provision, which established the holdover rent at 150 percent of base rent, was an unenforceable penalty. The Dissent argued that the majority’s new test allows contracting parties to bypass tethering a liquidated damages provision to estimated anticipated loss, and instead requires a challenger to analyze each contracting party’s respective market power and persuade a court that there was enough of an imbalance between parties to invalidate the damages provision.

  1. Matson v. S.B.S. Trust Deed Network (2020) 46 Cal.App.5th 33

Plaintiffs Matthew Matson and Matson SDRE Group, LLC (“Matson”) contested the deed of trust purchased in a foreclosure auction after learning the lien was second in position with a lower fair market value than the auction price. Matson’s complaint alleged that the terms of sale were unconscionable, and they relied on a mistake of fact when purchasing the deed of trust. The trial court granted summary judgment to defendants, S.B.S. Trust Deed Network (“SBS”) stating that there was no irregularity, unfairness, or fraud during the acquisition. The trial court further reasoned that a judicial remedy was not appropriate where plaintiff failed to read through a title report to discover the value and position in the chain of title. Plaintiffs appealed.  The Court of Appeal affirmed.

The court reasoned that plaintiffs were not entitled to relief because there was no unilateral mistake allowing for a remedy since plaintiffs bore the risk of their mistake not to fully read the title report. The transaction was complete when plaintiffs accepted the final bid at auction and there was no legal effect of rejecting the title after plaintiffs learned the deed of trust was second in priority to another deed. For this reason, the court held that plaintiffs failed to produce evidence to warrant judicial remedy by rescission. Also, the court reasoned that because plaintiffs were aware of the risks they bared through the complete title report, they were not entitled to relief.

  1. Jeppson v. Ley (2020) 44 Cal.App.5th 845

Among one of the more colorful neighbor disputes in 2020, the Court of Appeal affirmed the trial court’s decision to deny redress to Appellant, Jeppson, since there was no issue of “public interest” involved in a neighborhood feud where appellant’s cat was killed by appellee’s dog. The Court evaluated whether Jeppson’s claims arose from protected activity and then measured the likelihood of success on each claim as part of Jeppson’s summary judgment motion. A protective activity would grant relief to plaintiff in connection with an issue within the public interest. § 425.16, subd. (e)(3). The Court evaluated six criteria outlined in Rand Resources, LLC v. City of Carson (2019) 6.Cal.5th 610; Rivero v. American Federation of State, County and Municipal Employees, AFL-CIO (2003) 105 Cal.App.4th 913; Weinberg v. Feisel (2003) 110 Cal.App.4th 1122; Workman v. Colichman (2019) 33 Cal.App.5th 1039; Abuemeira v. Stephens (2016) 246 Cal.App.4th 1291; FilmOn.com Inc. v. DoubleVerify Inc. (2019) 7 Cal.5th 133, to determine if the Jeppson’s claims were in fact within the “public interest.” The criteria were as follows:

  • Statements or conduct concerning a person or entity in the public eye,
  • Conduct that could directly affect a large number of people,
  • A topic of widespread public interest,
  • Whether the issues affect only those directly involved,
  • Gathering ammunition for a private controversy, and
  • Where issues are too remotely connected to the public conversation to assert the issue within the public interest.

The Court reasoned that the claims at issue between Jeppson and Ley did not meet the criteria outlined in any of the above categories, thus the Jeppson claims did not constituted issues of public interest. The Court stated, “Feuds can metastasize into the Hatfields and McCoys or the Montagues and Capulets. This tiff, though bitter, remained strictly local: a private affair and not a matter of “public interest.” The Court affirmed the trial court’s ruling in favor of Lay and awarded costs on appeal to Jeppson.

  1. Kelly v. House (2020) 2020 Cal.App.LEXIS 277 (modified for partial publication, April 1, 2020)

The Court of Appeal awarded statutory attorney’s fees to Appellant for the trespass and conversion on to Appellant’s agricultural property because the damaged land resulted in loss of organic certification status and prevention of prospective buyers. Plaintiffs, the Houses, appealed the decision of the trial court on their claims for attorney’s fees against the Fosses for trespass and conversion of their property. The Court of Appeal considered whether the Fosses entering the Houses property and spraying pesticide jeopardized the fragile organic farming certification held by the Houses and whether such claims gave rise to an award of attorney’s fees for both claims. Statute Section 1021.9 provides: “In any action to recover damages to personal or real property resulting from trespassing on lands either under cultivation or intended or used for the raising of livestock, the prevailing plaintiff shall be entitled to reasonable attorney’s fees in addition to other costs, and in addition to any liability for damages imposed by law.” The Court held that the Houses could recover attorney’s fees under the statute because the statute was intended to protect farmers from illegal trespasses to their land. Defendant claimed that the Houses could not recover under Section 1021.9 for attorney’s fees because the majority of their fees related back claims other than the trespass claims. The Court remanded the case to the trial court to determine the amount of reasonableness of the Houses attorney’s fees under Section 1021.9 as it relates to the trespass claim only.

C. COMMON INTEREST DEVELOPMENTS

  1. Coley v. Eskaton, 2020 Cal.App. LEXIS 629 (June 11, 2020), certified for partial publication

The trial court held that (i) directors of a homeowners association breached their fiduciary duties when they apportioned costs while acting under a conflict of interest, precluding the use of the best business judgement rule, and (ii) that the directors were not liable in their personal capacities.  The Court of Appeal affirmed in part, reversed in part, and remanded. Since the directors did not engage in transactions with the association, the common law standard of inherent fairness was more appropriate than the statutory standard of a just and reasonable transaction. However, requiring the directors to show that the transaction was just and reasonable was not an error because this standard closely resembles the common-law standard. It also held that the trial court erred by not finding the directors liable in their personal capacities because they breached their fiduciary duties by apportioning costs and expenses which were inconsistent with their governing duties and resulted in damages.

2. Aldea Dos Vientos v. CalAtlantic Group, Inc. (2020) 44 Cal.App.5th 1073

In a construction defect case before the Court of Appeal, the Court reversed the trial court’s confirmation of the arbitrator’s award for a condominium association (‘association”). The Court of Appeal concluded that the association’s governing documents require a majority vote of members to bind arbitration, and that the arbitrator failed to obtain a vote of the association constituting an “unreasonable servitude” under the statute. As the Court reasoned, the arbitrator’s award violated the plain language of the statute. The Court reversed the trial court’s decision and awarded costs to the appellant.

D. REAL ESTATE CONTRACTS & TRANSACTIONS

  1. Harris v. University Village Thousand Oaks, CCRC, LLC (2020) 49 Cal.App.5th 847.

The Court of Appeal reversed a trial court decision stating that residents of a continuing care retirement community were protected under the continuing care contracts entered into by the retirement community. Residents of a retirement community appealed an arbitrator’s award denying statutory protections to elders. Defendant argued that the basic protections did not apply to the residents since the award was made in arbitration and not in litigation. The Court of Appeal reversed, holding that the plain language of Civil Code sections 1940 and 1953 applies to all continuing care contracts regardless of the stage in litigation or related court proceedings. As the Court stated, because residents paid fees to be protected by the terms of their living agreement the residents were entitled to receive the benefits of the fully executed residential contract.

The Court acknowledged that although retirement community contracts have fundamental differences from a standard residential unit contract, the protections received under both types of contract are no different. The Court reasoned that when fees are paid to confer benefits to all residents and as long as an exchange of money occurs allowing for benefits to be conferred to tenants, then the facility is obligated to honor those benefits under the landlord’s duty of care. Lastly, the Court held that the “the legislative purposes of both the landlord-tenant laws and the continuing care contract laws are best served by applying the arbitration prohibition to the housing component of continuing care contracts.” The Court remanded the case to the trial court with instructions.

  1. Moore v. Teed (2020) 48 Cal.App.5th 280.

The Court of Appeal affirmed the holding of the trial court for allowing “benefit-of-the-bargain” damages to plaintiff for all detrimental actions taken by defendant resulting from plaintiffs botched remodel. Plaintiff (“Moore”) brought suit against defendant (“Teed”) when Teed advised Moore to purchase a $4.8 million home in San Francisco with significant structural and foundation issues. Teed further agreed to act as the intermediary between the contractors restoring the home and directed Moore to pay him directly rather than the contractors. The home repairs were not made properly, and Moore paid Teed a significant amount of money before ultimately filing a complaint against Teed. At trial, an expert witness testified that the home repairs would have cost $4.477 million with at least $620,000 to be spent, specifically on the foundation. A jury found for Moore stating that Teed had fraudulently induced Moore into purchasing and restoring the home while falsely claiming repairs would only amount to $900,000. The jury granted a damages award of $2,144,434 plus $104,498 in “benefit-of-the-bargain” damages. Teed conceded to the claims against him for fraudulent inducement but appealed on the “benefit-of-the-bargain” damages.

The Court of Appeal held first that the trial court did not err in instructing the jury to award alternative damages to Moore since false misrepresentation allowed for multiple means of recovery. The Court stated, “a ‘broader’ measure of damages may be awarded than simply ‘out-of-pocket’ losses.” Second, the Court held that the “benefit-of-the-bargain” damages could be awarded in real property transactions. As the Court held, a person who was defrauded out of the financial benefit of real property can collect broader damages including “benefit-of-the-bargain” damages. Third, The Court held that the damages award was not speculative because tort damages fully compensate an injured party and the jury would have determined the same jury award regardless of using “benefit-of the-bargain” as a measure for damages. Fourth, the Court pointed out that the award was not duplicative because the jury issued a jury award significantly lower than the $3,842,160 requested by Moore. The Court affirmed the ruling of the trial court and awarded attorney fees on appeal to Moore.

  1. Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337.

On appeal, the Court of Appeal reversed the lower court’s denial of Appellant, Jaman Properties 8 LLC (“Jaman”), moving papers for arbitration under the Federal Arbitration Act (“FAA”). Victrola 89, LLC (“Victrola”) brought suit Jaman in superior court alleging undisclosed and unrepaired defects in a real property transaction. Under the real estate purchase agreement between parties, Jaman moved for arbitration under the Federal Arbitration, which the trial court denied finding that the California Arbitration Act (“CAA”) controls arbitration between the parties. The Court held that the FAA preempts procedural provisions otherwise controlled by the CAA if the purchase agreement between the parties incorporates FAA on its face. The real estate purchase agreement between the parties on its face specified that the FAA would control. The Court held that Victrola’s piecemeal arguments of which sections of the CAA should control and which of the FAA should control in arbitration were unpersuasive. The Court reasoned that the lack of specificity in the contract for which claims should be arbitrated under the CAA and under the FAA is immaterial since the FAA controls over all claims by federal preemption. Lastly, the Court held that Victrola must arbitrate its claims under the FAA unless Jaman is estopped by the trial court from doing so. The Court overturned the trial court’s decision and remanded the case back to the trial court to determine whether Jaman is estopped from arbitration under the FAA.

E. EASEMENTS, ADVERSE POSSESSION, DEDICATIONS, & BOUNDARY DISPUTES

  1. Gamerberg v. 3000 E. 11th St., LLC (2020) 44 Cal.App.5th 424

The Court of Appeal reversed a trial court ruling holding that irrevocable licenses tied to a 1950 parking affidavit do not survive transfers of the property to different owners without notice. The dispute between parties arose when it became unclear who had a right to eight parking spaces on lot between two commercial business owners. Plaintiff, Gamerberg, filed a complaint in the trial court alleging that he held an irrevocable license over eight spaces in the lot based on a 1950 parking affidavit grandfathering his use of the spaces between owners. The Court examined whether the 1950 affidavit created an irrevocable license binding on subsequent purchasers who had no notice of the affidavit. The Court determined that the lack of recordation of the 1950 affidavit meant that the document did not bind subsequent purchasers who had no actual notice of the provisions in the document. Since the prior owners failed to record the parking affidavit, binding subsequent purchasers to the affidavit was irrelevant. The Court reversed the trial court’s ruling and awarded costs to 3000 E. 11st St., LLC.

  1. Madani v. Rabinowitz (2020) 45 Cal.App.5th 602

In a suit based on claims of trespass and negligence when defendant, Rabinowitz, erected a fence on plaintiff, Madani’s, property and continually parked inoperable cars in Madani’s property, the Court of Appeal affirmed that the fence and parked cars were continuing encroachments. The Court held that since the fence and parked cars were a continuing encroachment that the statute of limitations did not apply, and the Court could review the case subject to independent review of the facts. The Court agreed with the lower court that costs to move the fence were not sufficient to warrant leaving the fence as a permanent structure. The Court noted that Rabinowitz replaced the fence in 2015 and could move the fence for a modest cost. The Court further held that Madani could not recover costs because they did not present sufficient evidence to justify a damages award. The Court reasoned that the trial court granted injunctive relief, and that was sufficient to deny an award of monetary damages. The Court affirmed the trial court’s ruling and ruled both parties shall split costs.

William Abbott, Diane Kindermann, Glen Hansen, and Daniel Cucchi are attorneys 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 William Abbott and Jessica Melms

Redondo Beach Waterfront, LLC v. City of Redondo Beach (July 9, 2020) 2020 Cal.App.LEXIS 634.

In 2010, residents of Redondo Beach passed an initiative allowing the City to establish a public-private partnership for development of the Redondo Beach King Harbor Pier waterfront area. The initiative (“Measure G”) sought to amend the City’s local coastal program (“LCP”) to improve the waterfront area and authorized the renovation of 150,000 square feet of existing building area and added 400,000 square feet of new development on the waterfront (the “Project”).

After the Coastal Commission certified the LCP amendment, the new ordinances went into effect. In response, Respondent, Redondo Beach Waterfront, LLC (the “Developer”), worked with the City and spent over $14 million in Project related costs. On June 23, 2016, the City notified the Developer that its application for the vesting tentative tract map was “deemed complete.”

On June 28, 2016, five days after the City deemed the vesting map application as complete, residents submitted a notice of intent to circulate an initiative (“Measure C”) which would substantially curtail the Project. Proponents of the initiative represented that Measure C would prevent increased traffic and blocked ocean views that would result from the Project. Substantively, Measure C proposed amendments to two City ordinances that had last been changed by Measure G in 2010. It would modify the cumulative development cap to include space devoted to parking facilities and required any expansion on requirements to preserve harbor views.

In early August 2016, the Harbor Commission certified the EIR and approved the coastal development permit, conditional use permit, design review, and the map for the project, but these decisions were appealed to the City Council.  The City Council granted final approval of the waterfront entitlements on October 19, 2016. The Council approvals noted that the City’s approval of the tentative map conferred a vested right to proceed with development under Gov. Code section 66474.2.

City voters passed Measure C on March 7, 2017.  The City certified the vote and submitted the measure to the Coastal Commission which approved the amendments to the City’s local coastal program. The City then notified the Developer that the measure triggered the agreement’s force majeure clause thereby delaying the Project. The Developer responded by filing a writ of mandate, a complaint for declaratory relief, as well as injunctive relief against the City, on the grounds that Measure C was invalid.  The trial court held that the Developer obtained vested rights for the Project before the residents passed Measure C. The residents appealed.

In the published section of the opinion, the Court addressed whether the Developer had obtained statutory vested rights regarding the Project as against the City, and if so, whether those rights vested before or after the passage of Measure C. Since the vested tentative tract map was approved before Measure C, the Developer contended that it obtained vested rights under Government Code section 66498.1 (providing that approval of a vesting tentative map gives the developer the right to proceed with development in substantial compliance with the standards in place when map application was deemed complete.) The Developer also relied on the text of Measure C which expressly exempted any project as to which development rights had vested.

The residents argued that the Developer’s rights had not vested because all necessary permits and approvals had not yet been obtained to complete the Project. Residents further contended that Gov. Code section 66498.1 does not apply to any development situated in whole or in part within a designated coastal zone because that code section is superseded by the Coastal Act.

The Court, however, rejected the residents’ arguments. The City had deemed the vesting tentative tract map for the Project complete well before Measure C was passed in the following year. In addition, the Developer had expended $14 million in Project-related costs during this period. Because the Developer’s rights vested in mid-2016 and the Developer committed significant resources to the Project, it was reasonable for them to rely upon their approved vesting tentative tract map.

Next, the Court addressed the remainder of the resident’s arguments, including, that the Coastal Act renders Gov. Code section 66498.1(b), inapplicable when a development includes an area of designated coastal zone.   The court concluded that while the Coastal Commission’s authority is not limited by the vesting provisions of section 66498.1 (a point not disputed by the developer), the City’s actions were constrained by the vesting law.

Commentary: The court got it right. The purpose of the VTM law is very clear: It entitles the developer with a vested right to complete the project (not just to record a final map) in accordance with the standards in effect when its map application was deemed complete.  The vesting map law does not rely upon the “all permits” requirement of common law. This underscores the importance to a subdivider to achieving deemed complete status at the earliest time.   The vested right created by a VTM is not absolute in every situation (see Government Code section 66498.1(c),) but it is very broad in application.

William Abbott is Of Counsel at Abbott & Kindermann, Inc. Jessica Melms is a law clerk at Abbott and 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 William Abbott, Diane Kindermann, Glen Hansen, and Daniel Cucchi

Welcome to Abbott & Kindermann, Inc.’s July Environmental Action News – Part 1. This summary provides brief updates on recent environmental cases, legislation, and administrative actions in 2020.

1. PREVIOUS MONTH’S UPDATE

To read the June 2020 Environmental Action News post, click here: https://blog.aklandlaw.com/2020/06/articles/ak-news/land-use-law-blog-june-environmental-action-news/

2. CASES PENDING AT THE CALIFORNIA SUPREME COURT

There is one case pending at the California Supreme Court. The case and the Court’s summary are as follows:

County of Butte v. Department of Water Resources, S258574. (C071785; 39 Cal.App.5th 708; Yolo County Superior Court; CVCV091258.) Petition for review after the Court of Appeal dismissed an appeal in an action for writ of administrative mandate. This case presents the following issues: (1) To what extent does the Federal Power Act (16 U.S.C. § 791a et seq.) preempt application of the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) when the state is acting on its own behalf and exercising its discretion in deciding to pursue licensing for a hydroelectric dam project? (2) Does the Federal Power Act preempt state court challenges to an environmental impact report prepared under the California Environmental Quality Act in order to comply with the federal water quality certification under the federal Clean Water Act?

3. UPDATE

A. CALIFORNIA WATER RIGHTS AND SUPPLY

1. Modesto Irrigation Dist. v. Tanaka (2020) 48 Cal.App.5th 898.

The California Court of Appeal held that a farm retained riparian rights even though it was no longer contiguous to the river. Riparian rights can continue when land is subdivided, creating parcels that are no longer contiguous to the water. When determining intent to retain riparian rights for land severed from the stream, courts must consider whether the parties intended the grantee to receive riparian rights at the time of the sale. The Court reasoned that when the owner’s grandfather purchased the subdivided parcel that had been part of a larger riparian tract in 1890, the parties would have understood that riparian rights were encompassed by the broad language of the deed.

B. WATER QUALITY

1. The State Water Resources Control Board Releases Proposed Rule Modifying The General Permit For Suction Dredge Miners.

In June 2020, the State Water Resources Control Board (“SWRCB”) released a proposed rule modifying the NPDES Suction Dredge Mining General Permit. Public comments on the modification are due by August 24, 2020. Suction dredge miners are required to obtain a NPDES permit under Section 402 of the Clean Water Act (“CWA”). Under the modifications to the permit, a party must pay a fee of $2,572 to the SWRCB, further implement best practices so as not to harm the existing environment where possible, and refrain from discharging specific effluent materials during mining procedures. The modifications further limit areas where miners are able to dredge year round. SWRCB relies on the list provided in Section 303d of the CWA and states that under the modified permit a miner is prohibited from dredging areas where any of the 303d metals are found in a watershed. SWRCB will take public comments on the modified permit until June 29, 2020 and release a finalized permit in late 2020 or early 2021.

For more information see:
https://www.waterboards.ca.gov/resources/covid-19_https://goldrushcam.com/sierrasuntimes/index.php/news/local-news/24065-state-water-resources-control-board-water-board-has-released-the-proposed-npdes-suction-dredge-mining-general-permit-for-public-comments-rural-county-representatives-of-california-reports
https://www.waterboards.ca.gov/water_issues/programs/npdes/suction_dredge_mining.html updates/index.htm

2. San Diego Unified Port District v. Monsanto, 2020 U.S. Dist. LEXIS 52699 (S.D. Cal., March 26, 2020).

The honorable Judge William Hayes granted Monsanto’s motion to dismiss the suit against them brought by San Diego Unified Port District (“the District”). The District brought suit against Monsanto for the corporation’s alleged continuing public nuisance contamination of San Diego Bay and the City of San Diego’s municipal stormwater system. The District and City alleged that Monsanto was responsible to pay damages pursuant to the City’s public nuisance ordinance for violations of CWA and CERCLA resulting from Monsanto discharging polychlorinated biphenyl (“PCB”) chemicals known to be cancerous by the EPA. In Monsanto’s motion to dismiss, the company alleged that the District failed to prove where Monsanto was obligated to respond or monitor for PCBs under its Stormwater Permit and where the District has been injured as a result of the alleged release of PCBs into San Diego Bay. On the first cause of action, Judge Hayes held that the District had demonstrated the existence of PCB chemicals in the waterways around San Diego but failed to prove where Monsanto was obligated to mitigate for PCBs under their stormwater permit. On the second cause of action, Judge Hayes held that the District failed to prove injury allowing for redress. As such, the court granted Monsanto’s motion to dismiss.

C. WETLANDS

1. Marin County Wetlands Receive Funding For Much Needed Restoration.

In June, the California Coastal Conservancy backed the Novato Wetlands restoration with an allocation of more than $1.4 million from Proposition 68 funds. This new habitat project is part of the larger Hamilton Wetlands Restoration Project and intends to create workforce training and education for Marin County residents. The program aims to restore 177 acres of wetland and tideland marsh habitat by focusing on invasive plant removal and performing adaptive management of seasonal wetlands.

For more information see:
https://www.estormwater.com/funding/california-allots-14-million-novato-wetlands-restoration

D. AIR QUALITY AND CLIMATE CHANGE

1. California Mandates Zero-Exhaust Big Rig Delivery Trucks Beginning in 2030 While Federal Government Prepares To Increase Zero-Exhaust Fleet Nationwide.

As California mandates a zero-exhaust big rig fleet for industrial transportation, the House Committee unveiled in its new Green Deal a plan to include a $500 billion benchmark for nationwide zero-exhaust fleets. Among auto manufacturers, there would be a total of 24 different options of long-haul truck models in the next three years. At the federal level, the House Committee on Transportation stated long haul GHG emissions accounts for 24 percent of total GHG emissions and a plan to decarbonize this industry supports statewide RPS planning as well as reduces nationwide climate concerns. Under the California mandate, 300,000 EV or hydrogen powered trucks must be road bound by 2035 and 100,000 by 2030. Many California residents in opposition to the mandate point out the lack of battery charging locations and the length of time necessary to fully charge an EV truck. Meanwhile other states nationwide are looking to California as a model for adoption of similar mandates in the future.

For more information see:
https://www.greenbiz.com/article/we-should-be-talking-about-charging-infrastructure-heavy-duty-trucks
http://blogs.edf.org/energyexchange/2020/06/22/now-is-not-the-time-to-pump-the-brakes-on-fleet-electrification/

2. CPUC Finalizes Penalties Against PG&E For Liability In 2017 and 2018 Fires.

In May 2020, CPUC fined PG&E $1.937 billion in penalties resulting from the 2017 and 2018 wildfires that swept across much of PG&E’s territory. In addition to the penalty, the settlement agreement included a return of any shareholder incentives during the affected years to be returned as a credit to ratepayers, which is estimated to amount to $425 million in additional penalties. As part of CPUC’s investigation, the agency unveiled numerous counts of negligent practices by the utility causally escalating the wildfires during the 2017 and 2018 fire season. In addition to the CPUC’s investigation, PG&E pleaded guilty to 84 counts of involuntary manslaughter for the deaths associated with the Camp Fire. The Attorney General continues to prosecute the utility for criminal negligence.

For more information see:
https://yubanet.com/california/cpuc-penalizes-pge-2-billion-for-2017-and-2018-wildfires/
https://www.utilitydive.com/news/cpuc-approves-pge-reorganization-plan-paving-way-for-bankruptcy-exit/578817/
https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M336/K236/336236538.pdf

3. Coalition for an Equitable Westlake v. City of Los Angeles (2020) 47 Cal.App.5th 368.

A complete analysis of this recent decision is posted to Abbott and Kindermann’s blog located here: https://blog.aklandlaw.com/2020/04/articles/ceqa/an-nod-filed-following-approval-of-a-vesting-tentative-map-runs-the-ceqa-statute-of-limitations-for-later-project-related-approvals/

4. Golden Door Properties LLC v. County of San Diego (2020) 50 Cal.App.5th 467

A complete analysis of this recent decision is posted to Abbott and Kindermann’s blog located here: https://blog.aklandlaw.com/2020/06/articles/ak-news/2020-ceqa-2nd-quarter-review/

E. RENEWABLE ENERGY

1. California Outlines A Roadmap For Renewable Hydrogen Production.

The Advanced Power Energy Program (APEP) recently completed a roadmap for the build-out of renewable hydrogen production in California to serve a broad range of applications in the energy and transportation sectors. This roadmap confirms the critical role that self-sustaining renewable hydrogen plays in decarbonization, and projects that California can reach this goal by the mid-2020s. The expansion of California’s hydroelectric capacity bolsters new construction of key infrastructure relevant to land use development. It also furthers the state’s aggressive 2030 RPS deadline to shift at least 60% of all energy consumption in the state to renewable resources.

For more information see:
https://www.investorideas.com/news/2020/renewable-energy/06235California-RenewableHydrogen.asp

2. CPUC Deploys Microgrid to Handle Wildfires.

With wildfire season looming, the CPUC has ordered large electric investor-owned utilities to deploy microgrids and resiliency projects meant to minimize the impact of power outages. This decision aims to ensure that utilities expedite deployment of back-up power for their customers if the utility calls for a public safety power shutoff. Under this decision, utilities must standardize the application processes for project approvals, expedite sign-offs on installed projects, speed interconnection through increased staffing, alter tariffs to higher value resilience, and amplify collaboration with local and tribal governments.

For more information see:
https://dailyenergyinsider.com/news/25953-california-puc-orders-large-electric-utilities-to-hasten-microgrid-resiliency-projects-as-wildfire-season-looms/

3. Uber Technologies Pricing Cases (2020) 46 Cal.App.5th 963.

Several taxi companies and taxi medallion owners filed suit against Uber Technologies, Inc., alleging violation of the Unfair Practices Act’s (UPA) prohibition against below-cost sales and, in turn, violation of the unfair competition law (UCL). The UPA makes it unlawful for any business to sell a product at less than the cost to the vendor, but does not apply to any service for which rates are established under the CPUC, or sold by a public utility corporation. Here, the CPUC had jurisdiction over Uber and conducted extensive regulatory proceedings with the company’s services. The court held that the exemption applies when the CPUC has jurisdiction to set rates, regardless of whether it has yet done so. Because the CPUC had rate-setting jurisdiction over the company, the court required dismissal of the below-cost sales claim, as well as the UCL claim which was derivative of the failed UPA claim.

F. ENDANGERED SPECIES

1. Pac. Coast Fed’n of Fishermen’s Ass’ns v. Ross, 2020 U.S. Dist. LEXIS 111732 (E.D. Cal., June 24, 2020).

The District Court denied petitioners Pacific Coast Federation of Fisherman’s Association’s (“Pacific Coast”) motion for preliminary injunction for the Shasta Dam operations. Pacific Coast sought a preliminary injunction against the U.S. Fish and Wildlife Service (“FWS”) and National Marine Fisheries Service (“NMFS”) for the pair of biological opinions issued examining the impacts to fish species associated with the long term operations of the Central Valley Project (“CVP”) and the State Water Project (“SWP”). Pacific Coast argued that the increased height to the Shasta and Keswick Dams violated species protections for affected salmonids under the ESA. After carefully reviewing the record, the Court denied the Pacific Coast’s motion for preliminary injunction. The Court reasoned that Pacific Coast failed to demonstrate there was a conclusive causal connection between the harm to protected species and the modifications to the dam. As the Court established, Pacific Coast and closely related case Cal. Natural Res. Agency v. Ross, 2020 U.S. Dist. LEXIS 72051, will have an opportunity to prove error in the biological opinions on the merits, but found that a preliminary injunction was not necessary.

2. California Fish And Game Commission Votes To Move Forward With Listing Two Subspecies of California Mountain Lion.

In April 2020, the Fish and Game Commission unanimously voted to move forward with listing the Central Coast and Southern California Mountain Lion species as endangered on the California Endangered Species List. The Center for Biological Diversity petitioned the Commission in June 2019 to list both subspecies of Mountain Lion because of their declining numbers and encroachment on critical habitat. The Commission recommended a listing of the species in February 2020. April’s vote triggered a 12-month review process to determine whether to list the species, though the species will benefit from protections under the California Endangered Species Act while being evaluated for final species status assessment. The Commission is currently evaluating the species for viability but stated early on that decline in the population as a result of car strike is perhaps the greatest threat to both subspecies.

For more information see:
https://losangeles.cbslocal.com/2020/04/16/commission-considers-whether-socal-mountain-lions-should-be-declared-endangered-species/
http://www.hidesertstar.com/opinion/letters_to_editor/article_786cbc46-7926-11ea-85d3-43a99d8e4f67.html
https://www.natlawreview.com/article/epa-issues-revised-method-conducting-biological-evaluations-pesticides-under
https://syvnews.com/news/local/state-and-regional/scientists-say-joshua-trees-may-warrant-listing-as-a-threatened-species/article_edd0f043-1d25-5142-8050-bdecd6ed50ed.html
https://calmatters.org/commentary/its-time-to-protect-californias-mountain-lions/

G. NATIONAL ENVIRONMENTAL POLICY ACT (“NEPA”)

1. Bark v. United States Forest Serv., 958 F.3d 865 (9th Cir., 2020).

The Ninth Circuit reversed and remanded a suit between Bark et. al and the United States Forest Service (“USFS”) holding that the district court improperly granted summary judgment in favor of USFS. USFS determined an environmental impact statement on the Crystal Clear Restoration Project pursuant to NEPA was not necessary, leading Bark et. al to file suit challenging USFS’ decision. The Ninth Circuit panel held that the actions of USFS were arbitrary and capricious because the effects of the project were highly controversial triggering a mandate to perform an EIS, and USFS failed to provide a meaningful justification for the cumulative impacts of the project. As such, the Court remanded the case back to USFS to conduct an EIS with instructions.

H. MINING, OIL, AND GAS

1. Mission Linen Supply v. City of Visalia, 2020 U.S. App. LEXIS 17441 (9th Cir., June 3, 2020).

The Ninth Circuit affirmed the district court’s equal allocation of future recovery costs between the City of Visalia and Mission Linen Supply in a CERCLA action. The court held that district court did not abuse its “broad discretion.” Instead, it concluded that the district court permissibly focused on the factor of geographic distribution and attributed most responsibility for on-site pollution to Mission and most responsibility for off-site pollution to the City. The court had discretion to determine what factors to consider when allocating costs and responsibility.

2. Atlantic Richfield Co. v. Christian, 140 S.Ct. 1335 (2020).

In Atlantic Richfield Co. v. Christian, the United States Supreme Court addressed the EPA’s authority under CERCLA and private tort actions seeking relief beyond the EPA’s adopted CERCLA remedy. The opinion resulted in two key consequences for businesses liable for cleanup under the act and “innocent landowners.” First, Section 113 of CERCLA does not bar state courts from hearing landowner claims arising under state common-law doctrines (e.g. trespass, nuisance, strict liability), even if the alleged common-law claim requires the defendant to fund more or different work than required under the CERCLA remedy. Second, under Section122(e)(6) of CERCLA, all potentially responsible parties, including “innocent landowners” and parties who have not been sued within CERCLA’s limitation period, must receive EPA approval before conducting additional remedial activities on privately-owned property currently listed as a federal Superfund site.

I. FOREST RESOURCES

1. Trump Administration Halts Control Burns On Public Lands During COVID-19 Pandemic.

Contrary to fire prevention measures, the Trump Administration issued an order halting control burns on public lands throughout the state of California citing coronavirus as the reason. The action by the Trump Administration comes weeks after an extensive Forest Service report unveiled that California is under another above average fire risk year in 2020. The U.S. Forest Service controls roughly sixty percent of all rangeland in the state and the Administration gave no indication of when controlled burns will resume. Cal Fire continues to execute control burns throughout the state on state rangeland stating that fire risk is an essential service during the pandemic since the protection of forest lands is equally as health critical as pandemic spread.

For more information see:
https://www.reuters.com/article/us-health-coronavirus-usa-wildfires/trump-administration-halts-wildfire-prevention-tool-in-california-over-coronavirus-idUSKCN21X1HD

J. CULTURAL RESOURCE MANAGEMENT

1. Save the Agoura Cornell Knoll v. City of Agoura Hills (2020) 46 Cal.App.5th 665.

A complete analysis of this recent decision is posted to Abbott and Kindermann’s blog located here: https://blog.aklandlaw.com/2020/03/articles/ceqa/court-of-appeal-affirms-judgment-setting-aside-a-negative-declaration-based-upon-the-fair-argument-test-and-imposing-personal-liability-on-developer-for-an-award-of-fees-and-costs-pursuant-to-the-cali/

K. ENVIRONMENTAL ENFORCEMENT

1. State Water Resources Control Board v. Baldwin & Sons, Inc. (2020) 45 Cal.App.5th 40.

Baldwin & Sons, Inc., and others appealed from an order compelling compliance with investigative subpoenas issued by the State Water Resources Control Board (“State Board”) for allegedly being involved in violations of the CWA and California’s Porter Cologne Water Quality Control Board at a construction site. In connection with its investigation, the State Board issued subpoenas seeking Appellants’ financial records. Appellants contended: (1) their financial records were not reasonably relevant to the State Board’s investigation; (2) compelling production of their financial records violated their right to privacy; and (3) the protective order did not adequately protect against disclosure of their private financial information to third parties. The Court of Appeal rejected these arguments and instead held that the trial court properly issued the investigative subpoenas for financial records, because the subpoenas were sufficiently definite and the information sought was reasonably relevant to an authorized investigation of water quality violations. Next, the Court held that the appellants privacy interests were sufficiently protected because Government Code section 11183 prohibited unauthorized disclosure and a protective order was not shown to be inadequate. Finally, the Court held that a certificate of interested entities or persons could not be filed under seal, because the rights of public to access records under Code of Civil Procedure section 124, encompassed financial information.

2. Nat’l Ass’n of Wheat Growers v. Becerra, 2020 U.S. Dist. LEXIS 108926 (E.D. Cal., June 22, 2020).

Prop 65 requires the Governor to publish a list, determined by California EPA and U.S. EPA, of chemicals known to the state to cause cancer. Failure to comply results in fees and the potential for an enforcement action to be brought by the California Attorney General, district attorneys, city attorneys, and city prosecutors. In this case, a third party watchdog group categorized glyphosate as “probably carcinogenic” to humans based on “sufficient evidence” despite the EPA and several other organizations deciding that there is insufficient or no evidence to make that determination. As a result, the EPA sought an injunction for the labeling and refused to approve herbicide labels with a Prop 65 warning for containing glyphosate, arguing this would be false and misleading. The Court ruled in favor of the plaintiffs on their First Amendment claim and met the requirements for an injunction stating that there was sufficient evidence to list glyphosate as a carcinogenic chemical warranting Prop 65 listing. The Court enjoined the warning requirements of California Health & Safety Code § 25249.6 as to glyphosate.

3. EPA Set To Restore Enforcement Actions Starting August 31.

In late March, the EPA announced they would be suspending a number of environmental enforcement actions during the novel coronavirus pandemic. The EPA’s reasoning for suspending enforcement stated industries were likely to experience difficulty complying with enforcement measures as a result of travel and social distancing restrictions. Many regional agencies throughout California have halted non-essential inspections and reporting requirements. However, the same agencies continue to enforce critical land use enforcement as well as appropriately respond to hazardous materials incidents. Among those industries requesting relaxation of reporting and compliance standards was the oil and gas industry citing staffing problems from illness and a lack of social distance assurances. EPA Administrator Andrew Wheeler stated the order was open ended and backdated to March 13th. The order further stated that the industries must take reasonable practical compliance measures and where businesses cannot comply with enforcement actions, they must demonstrate where there was an attempt to reduce the harm as well as tie the violations back to coronavirus impacts. The Agency also expects public water systems not to relax any water standards to ensure that public water supply remains at potable standards for consumption. EPA further stated that superfund and other hazardous and solid waste management reporting requirements are not exempt since enforcement in these areas is of critical importance.

In May, Administrator Wheeler appeared before the Senate Environmental and Public Works Committee and defended the decision by the administration. During his time before the Senate, Administrator Wheeler also spoke of what he considered an “impressive list of more than 60 deregulatory actions” taken by the EPA during the Trump Administration. When pressed by various Senate Democrats as to why the agency did not seek additional information as to why industry stakeholders could not comply with enforcement during the pandemic, Administrator Wheeler stated that the action simply allows companies to cite the pandemic if they are unable to comply but does not allow for increased pollution. Prior to the hearing in the Senate Committee, ranking member Thomas Carper of Delaware released a report emphasizing the connection between air pollution, the COVID-19 infection and death rates and lower income and minority communities. At the conclusion of the hearing, Administrator Wheeler stated the EPA would further look into the connection between air pollution and the pandemic.

Since then, several states, led by New York, have challenged the rollbacks by the EPA. These states argue that the policy exceeds the EPA’s statutory authority, is arbitrary and capricious, and was issued without complying with legal notice and comment requirements. Additionally, some U.S. Senators have expressed concerns about the Agency’s regulatory rollbacks in air and climate policy.

For more information see:
https://www.jdsupra.com/legalnews/a-challenge-to-epa-s-enforcement-and-76531/

William Abbott, Diane Kindermann, Glen Hansen, and Daniel Cucchi are attorneys 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 William W. Abbott, Diane Kindermann, Glen Hansen, and Daniel S. Cucchi

Welcome to Abbott & Kindermann’s 2020 2nd Quarter cumulative CEQA update. This summary provides links to more in-depth case write-ups on the firm’s blog. The case names of the newest decisions start with Section 3 and are denoted by bold italic fonts.

1. 2019 CEQA UPDATE

To read the 2019 cumulative CEQA review, click here: https://blog.aklandlaw.com/2020/01/articles/ceqa/2019-ceqa-4th-quarter-review/

2. CASES PENDING AT THE CALIFORNIA SUPREME COURT

There are two CEQA case pending at the California Supreme Court. The cases and the Court’s summaries are as follows:

Protecting Our Water & Environmental Resources v. Stanislaus County, S251709. (F073634; nonpublished opinion; Stanislaus County Superior Court; 2006153.) Petition for review after the Court of Appeal reversed the judgment in a civil action. This case presents the following issue: Is the issuance of a well permit pursuant to state groundwater well-drilling standards a discretionary decision subject to review under the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) or a ministerial action not subject to review?

County of Butte v. Department of Water Resources, S258574. (C071785; 39 Cal.App.5th 708; Yolo County Superior Court; CVCV091258.) Petition for review after the Court of Appeal dismissed an appeal in an action for writ of administrative mandate. This case presents the following issues: (1) To what extent does the Federal Power Act (16 U.S.C. § 791a et seq.) preempt application of the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) when the state is acting on its own behalf and exercising its discretion in deciding to pursue licensing for a hydroelectric dam project? (2) Does the Federal Power Act preempt state court challenges to an environmental impact report prepared under the California Environmental Quality Act in order to comply with the federal water quality certification under the federal Clean Water Act?

3. UPDATE

A. Exemptions

Citizens for a Responsible Caltrans Decision v. Department of Transportation (2020) 46 Cal.App.5th 1103.

Petitioners challenged the CEQA exemption determination by Caltrans for an Interstate 5/State Route 56 interchange project in San Diego County as part of its North Coastal Corridor (“NCC”) project to improve vehicle and railroad transportation in the 27-mile La Jolla-Oceanside Corridor. After previously issuing a Draft EIR in 2012, and a Final EIR in 2017 for a 30-day review period which stated “After the [FEIR] is circulated, if Caltrans decides to approve the [p]roject, a [NOD] will be published in compliance with CEQA by Caltrans . . . ,” Caltrans filed a Notice of Exemption (“NOE”) on June 30, 2017, prior to the close of the FEIR review period. In the NOE, Caltrans asserted that the project was statutorily exempt from CEQA pursuant to Streets & Highways Code section 103 and Public Resources Code sections 21080.5(c) and 21080.9. Caltrans further relied on the position that the project’s impacts were analyzed consistent with the California Coastal Commission’s certified regulatory program.

Petitioners first became aware of the NOE on September 28, 2017 and requested Caltrans rescind the NOE or agree to a 180-day statute of limitations for challenging the decision. Caltrans refused and petitioners filed suit on November 1, 2017, alleging (i) that Caltrans improperly relied on section 103, (ii) that the department is estopped from relying on the 35-day statute of limitations period, and (iii) additional claims on the merits of the adequacy of the FEIR for the project. Caltrans demurred and the trial court sustained the demurrer without leave to amend. Petitioners appealed.

The Court of Appeal reversed and remanded the case for further proceedings. It held that Caltrans improperly relied on section 103 as a statutory exemption, because its plain language was limited to the approval of a public works plan (such as the NCC project) by the Coastal Commission, not for the approval of a specific individual project by Caltrans. The Court also held that petitioners had adequately alleged facts sufficient to support the estoppel claim. It reasoned that Caltrans public statements of its intent to issue a NOD for the project after the FEIR review period were enough to establish a disputed question of fact as to whether the elements of estoppel could be met.

B. Negative Declarations

Save the Agoura Cornell Knoll v. City of Agoura Hills (2020) 46 Cal.App.5th 665.

The familiar story in this blog is that of the fair argument standard, and the difficulty faced by a lead agency when defending a negative declaration or mitigated negative declaration. The facts involve a relatively small project on 8.2 acres, and the developer’s plan was to consolidate 24 parcels into two lots, with a mixed-use project on 6.23 acres and the balance of 1.98 acres as an open space lot. Most of the site was covered by a specific plan adopted in 2008, the balance noted as a Significant Ecological Area. The City Council approved the project based upon a negative declaration following an appeal from the planning commission approval. The trial court ruled against the lead agency and developer (Gelfand) based upon CEQA claims and violation of the City’s oak tree ordinance. The Court of Appeal in a very detailed decision covering several substantive and procedural issues, affirmed the trial court’s judgment.

Tribal Cultural Resources. In prior studies, a portion of the project site had been identified as a significant heritage resource, and prior consultants believed that the site met the requirements for inclusion in the California Register of Historic Resources. The negative declaration included three mitigation measures to reduce impacts to less-than-significant levels: (i) CS-CR-1 (monitoring during construction with an action plan to be developed based upon resources which are discovered), (ii) CS-CR-2 (notification steps if human remains discovered), and (iii) CS-CR-3 (excavation program if the site cannot be avoided). On appeal, the issues were (1) whether the City properly consulted with the Tribe with respect to tribal cultural resources (“TCRs”), and (2) the sufficiency of CS-CR-3. (The appellate decision does not address the consultation issue any further than to note that there had been exhaustion of administrative remedies.)

As to the merits of the mitigation measures, the appellate court faulted the City because (1) the extent of the resource site had never been established, (2) the response plan if resources were discovered was improperly deferred and was not tied to a performance standard, and (3) there was competent evidence of a fair argument by an expert that the project would destroy the cultural resource. In response to the same expert’s conclusion that the data recovery program would be expensive, the Court ventured into unchartered waters concluding that the negative declaration failed to assess the feasibility of the data recovery program required as part of Mitigation Measure CS-CR-3. (In this author’s opinion, this evaluation is not required.) All of these facts undermined the conclusion that impacts would be mitigated to a less than significant level.

Sensitive Plant Species. The negative declaration included mitigation for impacts on sensitive plant species. CS-Bio-1 required surveys for two species in advance of grading and replanting requirements. The appellate court concluded that there was substantial evidence of a fair argument of potential impacts because (1) a letter from California Department of Fish and Wildlife (“CDFW”) indicated that the studies relied upon were “outdated,” and (2) the most recent study was during a drought period, and CDFW recommended additional studies. The appellate court concluded that there was no substantial evidence that the additional studies could not have been performed. Additionally, CDFW also questioned the success of restoration planting for the two species, and a previous study noted that most of the attempts to re-establish the plants had failed. The Court also concluded that there was improper deferral as there was no standard identified to determine if avoidance was infeasible and that there was no detail about what the maintenance plan actions would entail.

As to a third plant, a special status species, the appellate court also found that the administrative record contained sufficient evidence to support a fair argument that mitigation through onsite preservation or offsite restoration may not succeed, and therefore there may be a significant impact.

CS-Bio-2 dealt with the location of the key plants in areas of firebreaks. However, the mitigation strategy was only crafted to address plant protection initially during construction, and not long term. The CDFW letter expressed concern for the disruption of the plant species (although not in very emphatic terms) and this letter was sufficient to provide the required evidence in support of a fair argument.

Oaks. The site included a number of oak trees and scrub oak habitat, and the project would require significant oak and habitat removal. The appellate court concluded that the mitigation measures were insufficient, and that there was substantial evidence of a fair argument as to potential impacts. As to the oaks retained on site, there was testimony that site grading could have an adverse effect on the subsurface water flow to the oaks, jeopardizing the trees according to the appellant’s consultant, a point also confirmed by the City’s own consultant. Additionally, there was substantial evidence of a fair argument that replanting, as one of the mitigation options, had not been demonstrated as successful in recreating oak woodlands. Finally, allowed mitigation included payment into an in-lieu fund. The Court rejected this mitigation option as the negative declaration did not specify the fees to be paid, the number of trees to be planted offsite or any analysis of the feasibility of an offsite mitigation program. (It appears that the City’s fee program had not gone through its own CEQA review.)

Exhaustion of Administrative Remedies. On appeal, the City and developer vigorously argued that the issues raised in court had not been raised during the administrative proceeding, leading to a defense of failure to exhaust administrative remedies. This is a fact intense inquiry, but for each argument, the Court of Appeal found record of sufficient objections during the project review process to satisfy the exhaustion requirement.

Standing. On appeal, the City and developer argued that there was no evidence that the petitioner, or a member of the organization had objected to the project, and that the amended pleading which added California Native Plant Society as a petitioner occurred after the expiration of the statute of limitations. Thus, argued the City/developer, the case should be dismissed. However, this defense was not raised at the trial court, but only included in the developer’s reply brief. In these circumstances, the argument was considered to be waived.

Attorney’s Fees (Code of Civil Procedure §1021.5). The trial court awarded the opponents $142,148 in fees and costs (the opponents sought nearly $340,000) and allocated one half of the liability to the City and the balance to the developer (personally) and the partnership, jointly and severally. On appeal, the appellants argued that the petitioners were not entitled to any award on the basis that a copy of the petition had not been timely served on the California Attorney General. (See Public Resources Code §21167.7.) A prior decision had reached that conclusion. (Schwartz v. City of Rosemead (1984) 155 Cal.App.3d 547.) However, this court found the facts to be distinguishable (in Schwartz, the service was not accomplished until right before the hearing on the merits. Here, the service was well in advance of the court hearing, leaving the Attorney General ample time to participate in the litigation.)

The Court of Appeal also affirmed the developer’s personal liability. The developer, Gelfand, was an officer of the corporation which served as the general partner in the limited partnership. Gelfand had been listed as the applicant in the notice of determination as did the resolutions of approval. Additionally, there was evidence that Gelfand had more of an interest in the property than just serving as a corporate officer, supporting the conclusion that Gelfand had a personal interest in the project and outcome and that he was holding himself out as “a property owner and/or project applicant.” In these circumstances, the trial court did not err in finding Gelfand and the corporation’s general partner as jointly and severally liable for one half of the award. (Obviously, applicants would do well to follow more disciplined communication practices when communicating with the City or County as part of the application process.)

C. Environmental Impact Reports

Golden Door Properties. v. County of San Diego, 2020 Cal.App.LEXIS 529.

In the third round before the Fourth District Court of Appeal, the court again set aside the County of San Diego’s adoption of its Climate Action Plan and the County’s certification of a supplemental environmental impact report (“SEIR”) on both land use and CEQA grounds, largely the result of a flawed mitigation measure designed to allow for the purchase of carbon offset credits for GHG emissions for General Plan Amendment (“GPA”) projects—M-GHG-1. The Court of Appeal addressed several CEQA-related issues and found as follows:

M-GHG-1. The mitigation measure contained unenforceable performance standards and improperly deferred mitigation to the County Director of Planning & Development Services. The court noted that although the measure required carbon offsets to be purchased from CARB-approved registries, or to otherwise meet the Cap-and-Trade program’s statutory requirements, it failed to require the carbon offsets to be in compliance with CARB’s offset protocols. As a result, the failure to require compliance with the protocols meant the offsets could not be assumed to be in compliance with AB 32 and could allow the purchase of offsets anywhere in the world, including countries that do not have the same monitoring and reporting requirements as CARB requires. Regarding improper deferral to the Director, the court reasoned that the measure failed to provide objective standards upon which the Director could determine whether the proposed offsets were in compliance and, thus, left the determination up to the Director’s subjective discretion.

Cumulative Analysis. The court held that the County’s SEIR was required to consider the cumulative effects of certain projects that were under consideration by the County at the time the SEIR was being prepared. The County had argued this was not required because (i) the projects would be required to comply with M-GHG-1 which addressed GHG emissions, and (ii) the related impacts, such as air quality and VMT, were speculative because the projects were too early in their respective processing stages and subject to change. The court reasoned that these projects were sufficiently detailed, including their type, general scope, and location to make reasonable assumptions for the purpose of a cumulative analysis. Thus, it held that the County was required to account for other in-county impacts. It further noted that this obligation was only heightened by the fact that M-GHG-1 could authorize offsets to be purchased outside the County meaning some of the related local impacts (i.e. air quality, VMT, etc.) could go unmitigated by a GHG offset program.

Consistency with Regional Transportation Plan. As a result of the flaws identified in M-GHG-1, the court also held that the SEIR’s finding of consistency with the County’s Regional Transportation Plan (“RTP”) was not supported by substantial evidence because the measure’s failure to ensure the full mitigation of GHG impacts from future GPAs meant that the SEIR’s finding of consistency that relied on the net zero emissions as a result of M-GHG-1 was unsubstantiated.

Range of Alternatives. The court held that the SEIR failed to analyze a reasonable range of alternatives. It reasoned that the County’s rejection of petitioner’s proposed smart-growth alternative which was focused on reducing VMT was improper, because the SEIR’s range did not include an alternative focused on reducing VMT or transportation-related GHG emissions, which is one of the largest sources of GHG emissions impacts.

Responses to Comments. The court held that certain responses to comments on the Draft SEIR were adequate. It found that the subject responses directly address the question posed in the comments, relied on factual assertions, were not simply conclusory statements, and explained the disagreement when it addressed the objections in the comments. The court also reiterated that no response was necessary when a comment is nothing more than an “exhortation to comply with the law.”

Communities for a Better Environment v. South Coast Air Quality Management Dist., 2020 Cal. App. LEXIS 373

Tesoro, a major operator in the fuel industry now known as Andeavor, sought approval for its Los Angeles Refinery Integration and Compliance Project (the “Project”). The controversy over the Project centered on the means of reducing the pollutant emissions of the heater unit at the Wilmington facility. Tesoro sought to revise the permit to: (1) impose a new air pollution limitation that assumed the heater would never be operated above the 252 heat rate, and (2) raise the thermal operating limit to coincide with the heater’s existing heating capability. This change would allow Tesoro to either process a heavier blend of crude or increase its throughput by 6,000 barrels per day, but not both.

After the South Coast Air Quality Management District (the “District”) certified the EIR and approved the permit, Communities for a Better Environment (“CBE”) filed suit, arguing the EIR was inadequate in four respects: (1) the EIR used the wrong baseline to evaluate the impacts of the Project; (2) the District failed to obtain sufficient information about the pre- and post-project crude oil composition to explain the implications on pollutant emissions; (3) the EIR included no explanation of how the “6,000 barrel” figure was calculated; and (4) the EIR failed to disclose the existing volume of crude oil processed at the facility, nor its unused capacity. The trial court rejected the claims and CBE appealed. The Second District Court of Appeal rejected each of the four claims raised by CBE and affirmed the trial court decision:

  • The court held that the peak baseline selected by the District was proper, rejecting the assertion that the District should have used an “average-value” baseline. It reasoned that the District’s selection, which focused on the impact of peak emissions on the most vulnerable populations, was a rational choice that was supported by substantial evidence. The court pointed to the District’s consistency with the practice of the federal Environmental Protection Agency, and it noted that: (i) the federal and state regulatory purposes were in sync—to protect public health and welfare; (ii) the federal use of the peak baseline was based on data of the existing conditions on the 15 worst days in the 730-day review period; (iii) while not necessarily required, the District always has the option to rely on similar federal efforts that achieve the same goals and purposes; and (iv) CBE’s claim that use of an average is “normal” for baseline ignores the fact that there is no such thing as “normal” when it comes to averages.
  • The court held that there was no need for the District to obtain detailed information on pre-project v. post-project crude oil composition, reasoning that such information was irrelevant due to the District’s reliance on the refinery’s “crude oil operating envelope” (defined as the facility’s range of acceptable blends that are within an identified range of weight and sulfur content). This was because operating with any crude that does not fit within the existing operating envelope would require substantial physical changes to other parts of the refinery equipment which were not proposed for the Project. Thus, any increased air emissions that could result from using heavier crude could only be due to the need to burn more fuel to operate the refinery’s burners, which was precisely what the EIR had analyzed.
  • The court held that CBE had forfeited its claim regarding the “6,000 barrels” calculation. It reasoned that the claim was not raised during the administrative process and, thus, CBE failed to exhaust its administrative remedies. The court noted that throughout the 1,716 pages of comments provided by CBE and another law firm, the only comment identified by CBE in the record that discussed an increase of 6,000 barrels per day did not raise questions about how the 6,000 figure was calculated; rather, it broadly focused on purported inconsistencies between post-Project capacity and information submitted to the Securities and Exchange Commission on the refinery’s capacity. This, the court held, was insufficient to allow CBE to rely on a broadly applicable comment to support a much more specific claim, even though it could arguably be encompassed in that broader comment.
  • Applying the abuse of discretion standard, the court held that the District did not have an obligation to disclose either the existing volume of crude oil processing or the refinery’s unused capacity. CBE had argued that the existing volume information was necessary to verify that the “actual post-project increase in capacity would not exceed the 6,000 barrels per day” assumption. But the court rejected this argument, reasoning that the “6,000 barrels” figure was adequately supported by the EIR’s analysis of the “crude oil operating envelope” which noted that any increase in overall refinery output would require other physical changes to be made to the refinery. As for the unused capacity data, the court rejected the claim as nothing more that “a variant of [CBE’s] preceding [existing volume of crude oil processing] argument.” Furthermore, the court concluded that the data was not needed, because the EIR’s analysis was already otherwise supported by substantial evidence.

Environmental Council of Sacramento v. County of Sacramento (2020) 45 Cal.App.5th 1020.

The County of Sacramento approved a master planned community, a feature of which was a proposed university. Opponents filed a CEQA challenge arguing: (1) the uncertainty over whether the university would be constructed invalidated the project description and impact analyses for traffic, air quality and climate change; (2) the project was inconsistent with the local Sustainable Communities Strategy; and (3) the agency’s failure to adopt feasible mitigation measures. The trial court and Court of Appeal upheld the master plan approval, addressing several issues:

Project Description. The appellants argued that uncertainty regarding the university resulted in an improper project description. The original development application reflected a California State University as the future education facility, but the Board of Trustees withdrew. The project was approved without an educational commitment. The project was conditioned to freeze the university campus site for 30 years, and the developer was required to fund a university escrow account. The administrative proceedings included communications speaking to the need for additional educational facilities and the desirability of this location for this purpose. Based upon these facts, the Court held that it was not unreasonable for the County to include the university as part of the project description. Stated another way, it was not reasonably foreseeable that a substitute land use would occur in lieu of the university, and an EIR is only required to evaluate reasonably foreseeable activities. Thus, the opponents failed to present “credible and substantial evidence” that the university was an illusory land use.

Air Quality. The appellants made a related argument that as the university was illusory, certain impact analyses and conclusions were necessarily erroneous. Regarding air quality, the mitigation measures had been revised to achieve the same air quality mitigation levels even in the event of a change in land use for the university, thus there was no substantial increase in impact levels (and no recirculation required). Moreover, the project impact was already determined to significantly exceed the threshold of significance levels that a reduction in mitigation would not ultimately lead to a substantial increase in severity of the impact. Finally, the Court noted that in any case the resultant reduction in the level of mitigation is not equivalent to an increase in impacts for recirculation purposes.

Climate Change. As with air quality, the planning documents were amended to carry forward the metric tons per capita limit for GHG emissions, with or without the university. Thus, the environmental document remained valid even in the absence of the university component.

Traffic. Appellants also challenged the traffic analysis in the event the university was not developed. However, the Court held that this was adequately addressed in the FEIR as a response to comment which noted that non-automotive trips associated with the university had only limited effect on overall mode share and that elimination of the university would reduce daily trips by approximately 9,000.

Sustainable Community Strategies. The appellate court rejected the inconsistency argument on the basis that appellants failed to exhaust administrative remedies and nothing in SB 375 required consistency review as part of the CEQA process.

Feasible Mitigation Measures. Appellants argued that phasing the project would be a feasible mitigation measure. This was interpreted by the trial court as not building some, or all of the project until a university was built. The Board had adopted findings that suggested mitigation measures not incorporated into the project were rejected in part because the measures would interfere with attaining the economic, social and other benefits of the project which the “Board finds outweighs the unmitigated impacts of the Project.” The appellate court concluded that the appellants had failed to meet their burden of demonstration the feasibility of the phasing mitigation measure.

King & Gardiner Farms, LLC v. County of Kern (2020) 45 Cal.App.5th 814.

In a long and detailed opinion from the Fifth District Court of Appeal, the appellate court considered a multitude of CEQA claims over the County’s environmental impact report adoption in support of an ordinance establishing streamlined processing procedures for eligible oil and gas exploration and production activities in Kern County. The trial court ruled in favor of petitioners, finding deficiencies in the EIR related to agricultural impacts and impacts of road paving as mitigation for dust and air quality. Plaintiffs appealed.

The ordinance had already spawned a separate bifurcated decision on land use claims alleging the ordinance violated the equal protection and due process clauses of the California and U.S. Constitutions. The decision rejecting those challenges was issued in November 2019 in Vaquero Energy, Inc. v. County of Kern (2019) 42 Cal.App.5th 312 (See p. 44 of CEQA/Land Use Update). While only “CERTIFIED FOR PARTIAL PUBLICATION,” the published portion of the King & Gardiner Farms decision still addressed numerous topics that CEQA practitioners should consider when preparing EIRs, many of which could have broad applicability. The most noteworthy holdings addressed (1) conservation easements as agricultural mitigation; and (2) the evidence required to support the use of mitigation that requires an action to be taken “to the extent feasible.” As to the former, the Court concluded that the less than significant impact conclusion for the loss of agricultural land was unsupported, reasoning that conservation easements do not actually reduce the amount of agricultural land lost due to the project. As for the latter, the Court found that “to the extent feasible” was more of a goal statement than a commitment to mitigation and that agencies have a duty to demonstrate the mitigation will have at least some reduction of the impact to be deemed mitigation. The Court explained that the agency’s finding that the mitigation “‘could’ [reduce water supply impacts] suggests the possibility of reductions without eliminating the possibility there might not be any reductions.”

D. Subsequent Environmental Review

Willow Glen Trestle Conservancy v. City of San Jose (2020) 49 Cal.App.5th 127.

In a follow up case to the Friends of Willow Glen Trestle v. City of San Jose (2016) 2 Cal.App.5th 457 (“Friends”), petitioners challenged the City’s action seeking a new Streambed Alteration Agreement (“SAA”) from the Department of Fish & Wildlife (“DFW”) after the original one had expired. Petitioners challenged the City’s determination that no further CEQA analysis was required arguing that merely seeking and accepting the SAA was itself a discretionary action, because the City always “‘retain[s] discretion to reconsider or alter’ the project.” Thus, under this theory, the decision to seek another SAA was a subsequent discretionary decision to re-approve the project. Relying on the subsequent review principles set forth by the California Supreme Court in Friends of College of San Mateo Gardens v. San Mateo County Community College Dist. (2016) 1 Cal.5th 937, and CEQA Guidelines section 15162, the court held that the City’s action to seek a new SAA did not trigger new subsequent environmental review. It reasoned that petitioners’ argument was counter to the public policy of favoring finality and efficiency that is embodied in the CEQA Guidelines. (Id. §15162(c) [“Information appearing after an approval does not require reopening of that approval.”].) And because the original approval contemplated the need for the City to acquire an SAA in order to complete the project, the court concluded that the City’s action to seek a new SAA was nothing more than “simply implementing the project that it had already approved in 2014.” (emphasis in original.)

Save Berkeley’s Neighborhoods v. Regents of the University of California, 2020 Cal.App. LEXIS 587.

In 2005, the University of California Regents (“UC Regents”) adopted a comprehensive, long-range development plan to guide future development and projected enrollment for the UC Berkeley campus and the related program environmental impact report (“2005 EIR”). For over a decade beginning in 2007, the UC Regents continuously approved increasing levels of projected enrollment for the UC Berkeley campus without updating the 2005 EIR, citing Public Resources Code section 21080.09 to conclude that such enrollment increases do not require additional CEQA review, absent an amendment to the long range development plan which involve changes to the physical development and land uses it proposed. The trial court sustained the UC Regent’s demurrer. The appellate court reversed. It held that the trial court misinterpreted section 21080.09 as not triggering CEQA compliance requirements for enrollment increases without concurrent changes to the development plan. It reasoned that the role of enrollment levels is inextricably linked to the physical development of the campus, and thus, enrollment increases alone must still be evaluated under CEQA as an amendment to the log range development plan.

E. CEQA Litigation

Coalition for an Equitable Westlake/MacArthur Park v. City of Los Angeles (2020) 47 Cal.App.5th 368.

On March 3, 2017, the Director of Planning, serving as the “advisory agency” pursuant to the Subdivision Map Act, approved a negative declaration and vesting tentative map for a mixed use project consisting of a 220 room hotel, 41 story residential tower and a 70,000 square foot learning, cultural and performing arts center. The Director’s decision included notice of a 10-day appeal period. On March 15th, the City filed a Notice of Determination (“NOD”). Seven months later, the Planning Commission approved conditional use permits and other related project approvals, determining that the project had been analyzed in the previously approved negative declaration for the vesting tentative map. Tenants in an existing building on the project site filed appeals. On appeal, the City Council denied the appeals and approved general plan amendments associated with the project. Project opponents then filed a petition for writ of mandate, challenging the City’s approval of the negative declaration. The City and developer filed a demurrer asserting that the statute of limitations had expired following the filing of the Notice of Determination in March. The trial court sustained the demurrer without leave to amend, concluding the litigation. The project opponents appealed.

The Court of Appeal affirmed the dismissal. The appellate court recognized that either of two procedural errors would preclude the running of the statute of limitations and allow the case to proceed: (1) the filing of an NOD which contains erroneous information (e.g. approval date)(Sierra Club v. City of Orange (2008) 163 Cal.App.4th 523, 532); or (2) an NOD filed before the decision making body approves the project (County of Amador v. El Dorado County Water Agency (1999) 76 Cal.App.4th 931, 963). In this case, the appellate court determined that the March NOD “included an accurate identification and description of the Project” and detailed findings and information regarding the project. There was no debate that the NOD was filed after the approval of the tract map. Although the opponents asserted procedural errors (e.g. was the Director authorized to approve the CEQA document) with the actions of the Director, those claims were part of the CEQA approval covered by the original NOD.

Canyon Crest Conservancy v. County of Los Angeles (2020) 46 Cal.App.5th 398.

A non-profit organization petitioner, established by the immediate neighbors to the project site, filed suit challenging the County’s decision approving a minor conditional use permit and an oak tree permit for development on a steep hillside and the removal of a protected coastal oak tree to allow the development of a 1,436 square foot single family home on an undeveloped 1-acre lot in Los Angeles County. After the trial court granted a stay of the permit approvals, the project proponent requested the County vacate the approvals, stating that he could not afford the litigation. The County complied, the case was dismissed, and the petitioner filed a motion for attorney fees pursuant to Code of Civil Procedure section 1021.5. The trial court denied the motion and petitioner appealed.

The appellate court affirmed. Applying the abuse of discretion standard of review, it held that petitioner failed to establish two of the prongs necessary to support an award of attorney fees, including (1) the enforcement of an important right affecting the public interest; or (2) conferring a significant benefit on the general public or a large class of persons. On the first, the Court reasoned that petitioner had not actually achieved the goal of additional environmental review as the stay was not based upon the merits of the case, and there was no evidence that the County would do anything differently if the applicant or anyone else reapplied. As for the second, it reasoned that although the enforcement of a statutory obligation always confers a benefit on the public, there was no significant benefit to the public because the project only involved a small home, there was no evidence that the county would actually change any of its practices, and there was no evidence that the lawsuit would lead to additional opportunities for public input which were lacking in the disputed approval process.

William Abbott, Diane Kindermann, Glen Hansen, and Daniel Cucchi are attorneys 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 William Abbott and Jessica Melms

North Murrieta Community LLC v. City of Murrieta, 2020 Cal.App.LEXIS 496 (Cal.App.4th Dist. June 8, 2020).

Developers acquire protection from changing land use laws through vesting tentative maps or development agreements. In many situations, a development project may include vesting maps and a development agreement, and occasionally, these vesting tools may conflict with each other. The most recent vesting law case resolves the conflict between these two forms of protection in favor of the development agreement.

In July 1999, North Murrieta Community LLC, the Petitioner and master developer of a large development project called the Golden City Project (“the Project”), obtained approval for a vesting tentative map for a portion of the Project. The map locked in place fees the City could charge the developer until the vesting tentative map expired two years later. In March 2001, four months before the vesting tentative map expired, North Murrieta and the City entered into a Development Agreement covering the entire Project. Among other things, the Development Agreement extended the life of the tentative vesting map and extended most but not all of the benefits through the life of the vesting tentative map; maps which generally expire within 24 months of approval.

The agreement locked in place regulations and fees that the City could enforce against the developer for the term of the development agreement, but also allowed the City to impose new generally applicable fees on North Murrieta to mitigate the effects of development. In passing the Development Agreement, the City Council found that the agreement was “in the best interest of the City because it provides the construction of infrastructure needed to serve development in the area; allows the City to collect fees for operational costs for police and fire services…and allows the City to impose future mitigation fees on the Project if said fees are applied throughout the City.” Soon thereafter, the City passed the Western Riverside County Transportation Uniform Mitigation Fee Program Ordinance (“TUMF Ordinance”), which was designed to impose fees that would address effects not fully mitigated by fees or exactions in place when development projects were approved.

In 2017, a subsequent purchaser and developer of a portion of the Project made $541,497 in TUMF payments between July and October. A majority of these funds were transferred to the respondent, Western Riverside Council of Governments (WRCOG), with the city keeping only $244 in administrative fees. The master developer and North Murrieta protested the fees and North Murrieta brought a petition for writ of mandate on behalf of both parties. Petitioner requested that the trial court order a return of the payments, issue a declaration halting the TUMF fees until the vesting tentative map’s new extension expired in 2019, and issue a declaratory judgement that the fees could not be imposed on any lots within the Project until the Development Agreement expired in 2021.

The trial court denied the petition on the ground that the Development Agreement controlled and allowed the City to require TUMF payments on lots within the Project. Specifically, the Development Agreement provided that the City may impose new fees for development impact, provided that the fees apply citywide, are not enacted discriminatorily to apply to the subject development, and mitigate impacts that were not fully mitigated by the fees in existence at the time the Development Agreement was approved by the City. Petitioner did not deny the plain reading of the Development Agreement and it was undisputed that the TUMF was effective Citywide and did not discriminately apply to the developer. Since the City determined that it needed to impose additional mitigation fees, and those fees were in compliance with what the Development Agreement allowed, the trial court entered a judgement in favor of the City and WRCOG.

North Murrieta appealed, waiving the recovery of the City’s $244 in fees and sought recovery on the fees collected by WRCOG. Petitioner argued that the trial court erred by concluding the Development Agreement governed the rights of the parties and that instead, the vesting tentative map statutes provide a way of securing a developer’s rights beyond the reach of any development agreement.

When a local agency approves a vesting tentative map or enters into a development agreement, the builder is entitled to proceed on the project under the local rules, regulations, and ordinances in effect at the time of approval. Thus, obtaining a tentative vesting map or entering into an agreement allows a builder to rely on regulations that exist during the planning state when completing a long-term development project regardless of intervening changes in local regulation. Here, however, the City approved a vesting tentative map in 1999, and entered into the Development Agreement in 2001 affecting the same property.

When North Murrieta argued that the City was required to give force to the limits and fees conveyed through the vesting tentative map, all the way through March 2019, the Court held that they misstated the situation. Instead, the Court looked to whether a subsequent development agreement can alter the builder’s vested rights under the vesting tentative map. A tentative vesting map expires 24 months after its initial proposal unless extended by local ordinance up to an additional 12 months. This means that the map and North Murrieta’s rights were set to expire in July 2001, 24 months after the vesting tentative map’s approval in July 1999. Without the Development Agreement which extended the vesting tentative map for 15 years, North Murrieta was four months away from losing all of the rights conferred through the vesting tentative map.

In other words, Petitioner was able to retain at least some of the rights that were originally conferred in 1999 through the vesting tentative map for an additional 15-20 years, but only through the extension granted in the Development Agreement. The Agreement clearly stated that the City did not extend all the rights originally conveyed by the vesting tentative map. Instead both parties made concessions, including allowing the City to impose new mitigation fees under certain conditions.

In rejecting North Murrieta’s argument, the appellate court noted that North Murrieta offered no authority for thinking that vesting tentative maps have special rights which cannot be negotiated away. Nor did Appellant offer any reason for thinking development agreements should be treated differently than other contractual agreements. Accordingly, the Court of Appeal affirmed, ruling in favor of the city and WRCOG that the Development Agreement controlled, and the vesting tentative map had limited rights beneath it.

William Abbott is Of Counsel at Abbott & Kindermann, Inc. Jessica Melms is a law clerk at Abbott and 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.

Welcome to Abbott & Kindermann, Inc.’s June Environmental Action News. This summary provides brief updates on recent environmental cases, legislation, and administrative actions in 2020.

  1. PREVIOUS MONTH’S UPDATE

To read the May 2020 Environmental Action News post, click here: https://blog.aklandlaw.com/2020/05/articles/land-use-law-blog-may-environmental-action-news/

  1. CASES PENDING AT THE CALIFORNIA SUPREME COURT

There is one case pending at the California Supreme Court. The case and the Court’s summary are as follows:

County of Butte v. Department of Water Resources, S258574. (C071785; 39 Cal.App.5th 708; Yolo County Superior Court; CVCV091258.) Petition for review after the Court of Appeal dismissed an appeal in an action for writ of administrative mandate.  This case presents the following issues: (1) To what extent does the Federal Power Act (16 U.S.C. § 791a et seq.) preempt application of the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) when the state is acting on its own behalf and exercising its discretion in deciding to pursue licensing for a hydroelectric dam project?  (2) Does the Federal Power Act preempt state court challenges to an environmental impact report prepared under the California Environmental Quality Act in order to comply with the federal water quality certification under the federal Clean Water Act?

  1. UPDATE

A. CALIFORNIA WATER RIGHTS AND SUPPLY 

  1. Under SGMA, Budget Cuts In The Wake Of The Novel Coronavirus Could Hurt Farmers Later

In May, Governor Newsom announced a revised budget in the wake of the response to the novel coronavirus. The governor mapped out the state’s plans to cover the $54.3 billion budget deficit as a result of the impacts from the coronavirus. As outlined, the proposed budget cuts across many industries and as many have argued, disproportionately affects communities below the poverty line. Of those industries affected, the budget cuts will hit all of California’s proposed water and climate change initiatives. In January, Governor Newsom touted the creation of a $1 billion climate catalyst fund including support for SGMA, water supply infrastructure development and public environmental projects. As the governor stated in his May press conference, these initiatives have been put on hold. The Governor also cut a $4.75 billion ballot measure to support localized climate adaptation including water storage projects. Still, as budgets cuts may scrap preexisting projects in the state, the Governor has assured Californians that water enforcement actions as well as all other environmental enforcement actions will remain during and after the pandemic. Further, SGMA compliance must continue as local water agencies implement water plans through 2020. While the State and Governor Newsom grapple with how to self-correct the many budget cuts affecting future adaptation and capacity problems, Governor Newsom implored the federal government to provide additional funding to the state to backfill the cuts faced by the state in 2020-2021. The Governor is waiting on a response from the federal government.

For more information see:

https://www.agri-pulse.com/articles/13771-budget-cuts-for-sgma-funding-could-hurt-farmers-later

https://timesofsandiego.com/politics/2020/05/17/california-environmental-projects-on-hold-as-coronavirus-guts-state-budget/

B. WATER QUALITY

  1. The State Water Resources Control Board Continues Enforcement Actions During COVID-19 Pandemic

The State Water Resources Control Board (“SWRCB”) issued public statements in March and May stating that all organizations subject to enforcement actions and reporting requirements shall continue to report and comply with SWRCB orders prior to the COVID-19 pandemic. The SWRCB stated that these compliance and reporting requirements are to be treated as essential functions during the pandemic. The Board further stated that although compliance is important to ensure public health and safety, the Board will consider case by case exceptions where organizations are unable to reach compliance orders that conflict with County stay-at-home orders. The Board further emphasized that where entities could not comply, they were required to contact the Board immediately. The shift of the Board to ensure compliance efforts continue juxtaposes the order issued by the USEPA which stated that EPA would hold off on all enforcement actions through the remainder of the pandemic. The EPA is allowing states to continue enforcement actions within the state, but further confused how enforcement would continue when state orders conflict with federal relaxation of enforcement.

For more information see:

https://www.waterboards.ca.gov/resources/covid-19_updates/index.html

C. WETLANDS

  1. California Finalized and Implements A State Wetland Definition

Since adopting Resolution No. 2008-0026, the State has been pressing forward on the development of a policy and program to protect Waters of the State. Nine years and several draft revisions later, on April 2, 2019, the State Water Resources Control Board (“Board”) adopted a State Wetland Definition and Procedures for Discharges of Dredged or Fill Material to Waters of the State (“Procedures”) formerly known as the “Wetland Riparian Area Protection Policy.” Those Procedures will be included in the Water Quality Control Plan for Inland Surface Waters and Enclosed Bays and Estuaries and Ocean Waters of California. The Procedures consist of four major elements: (1) a wetland definition; (2) a framework for determining if a feature that meets the wetland delineation is a water of the state; (3) wetland delineation procedures; and (4) procedures for application submittal, and the review and approval of Water Quality Certifications and Waste Discharge Requirements for dredged or fill activities. The Board stated that it developed the Procedures because “[t]here is a need to strengthen protection of waters of the state that are no longer protected under the Clean Water Act (“CWA”) due to U.S. Supreme Court decisions, since the Water Boards have historically relied on CWA protections in dredged or fill discharge permitting practices.” The Board also pointed out that there are inconsistencies across the Water Boards in California in the requirements for discharges of dredged or fill material into waters of the state, including wetlands, because there is no single accepted definition of wetlands at the state level. Furthermore, the Board believed that “current regulations have not been adequate to prevent losses in the quantity and quality of wetlands in California, where there have been especially profound historical losses of wetlands.”

The impact may be particularly substantial for the agricultural industry and large-scale infrastructure projects in California that will almost certainly be subjected to additional permitting obligations and exposed to additional third-party litigation.

The Board’s Procedures constitute “regulations” within the meaning of the Administrative Procedure Act and were required to be reviewed and approved by the Office of Administrative Law (“OAL”) before they became effective.  The OAL finalized and approved the rule in September 2019. The rule became operative May 28, 2020.

For more information see:

https://mavensnotebook.com/2020/05/29/notice-state-wetland-definition-and-procedures-for-the-discharges-of-dredged-or-fill-material-to-waters-of-the-state/

https://www.waterboards.ca.gov/water_issues/programs/cwa401/

D. AIR QUALITY AND CLIMATE CHANGE

  1. City of Oakland v. BP PLC, 960 F.3d 570 (9th 2020).

The Ninth Circuit issued an opinion in the City of Oakland v. BP PLC et al., further separating climate litigation cases from the federal court system by holding that the nuisance claims in climate litigation shall be heard in state courts and not federal. The opinion mirrors similar holdings in the Fourth Circuit Court of Appeals limiting climate tort cases to state courts rather than federal. Should the remaining federal appellate courts split decisions on whether federal tort claims are permissible, it likely will result in an appealable issue for the Supreme Court to settle. The Ninth Circuit rejected District Court judge William Alsup’s conclusion that nuisance claims for climate change are born out of federal law since they are largely greenhouse gas emissions based and entangle with the Clean Air Act. The Circuit further expanded on the discussion of federal preemption giving greater space to state courts to consider broader nuisance claims by stating that the Clean Air Act did not preempt any consideration of state law nuisance claims and litigants could try nuisance claims in state court. The Ninth Circuit’s opinion opens up the floodgates for state courts to hear tort based climate change suits and closes the loophole allowing for nationwide corporations to avoid liability via federal preemption under the Clean Air Act. 

E. RENEWABLE ENERGY

  1. Waste To Energy Project In Santa Barbara County Reaches Phase 2 With The Funding And Support Of The CEC

An innovative joint waste-to-energy project launched in Goleta, CA in 2020. Funded by a mix of private enterprise and state, local, and university support, the project is part of the California Energy Commission’s (“CEC”) 2017 Electric Program Investment Charge (“EPIC”) program. The project uses a large scale biodigester to convert source-separate organic food waste from the University of California, Santa Barbara campus into a clean burning energy source for the campus. The operations manager believes the project can be successfully scaled up as a green energy solution for full scale commercial use throughout California. CEC granted a portion of the funds used to jumpstart the project and stated that the type of energy created by biogas digestion would qualify as sourced energy for California Cap-and-Trade and RPS compliance. The second phase of the project will continue throughout 2020 where the project operations team will coordinate with Goleta Sanitary District to optimize biogas yield and increase energy generation and look toward a path for reducing dependency on carbon-based energy.

For more information see:

https://www.waterworld.com/wastewater/reuse-recycling/article/14176942/goleta-sanitary-district-ucsanta-barbara-and-california-energy-commission-partner-on-wastetoenergy-project

F. ENDANGERED SPECIES

  1. Joshua Trees Recommended For Endangered Species Listing

In April 2020, California Department of Fish and Wildlife recommended the listing of the Joshua Tree under the California Endangered Species Act. There are two species of Joshua Tree and the species proposed for listing are the western Joshua Tree. U.S. Fish and Wildlife denied a petition to list the Joshua Tree under the U.S. Endangered Species Act. The state listing recommendation collected public comments from April to early June. The Fish and Game Commission provided its recommendation to the Department of Fish and Wildlife and a vote on the matter will occur in late June or July. Once the recommendation is accepted, the Joshua Tree will be placed on the candidate list for a year to determine the species status and decide whether listing is appropriate. After the one year period, a second recommendation is made and a vote occurs to determine whether final protection is necessary. The Joshua Tree and Joshua Tree National Park generate roughly $150 million in revenue for communities living around or indirectly supported by the health of the Joshua Tree species. Public comments on the listing recommendation largely addressed concerns from the surrounding community about how listing the species would affect development in the surrounding areas when the species recovery plan and sensitive habitat zones are established. The concern over survival of the western Joshua Tree is particularly tenuous because much of the range habitat in California is on private and state land. This creates development problems for private landowners but would go a long way to support species survival and the longevity of the economy dependent upon the Joshua Tree.

For more information see:

https://www.desertsun.com/story/news/environment/2020/04/13/joshua-trees-endangered-species-listing-california/2983642001/

https://www.taftmidwaydriller.com/opinion/20200416/commentary-californias-plan-to-save-joshua-trees-is-good-for-more-than-just-u2-fans

https://syvnews.com/news/local/state-and-regional/scientists-say-joshua-trees-may-warrant-listing-as-a-threatened-species/article_edd0f043-1d25-5142-8050-bdecd6ed50ed.html

G. NATIONAL ENVIRONMENTAL POLICY ACT (“NEPA”)

  1. Citizen’s for Responsible CalTrans Decisions v. DOT (2020) 46 Cal.App.5th 1103.

 A complete analysis of this recent decision is posted to Abbott and Kindermann’s blog located here: https://blog.aklandlaw.com/2020/04/uncategorized/2020-ceqa-1st-quarter-review/ .

H. MINING, OIL, AND GAS

  1. Coal Production States File Suit Against The State Of California To Force Port Cities To Ship Exports

Coastal communities on the west coast is taking a stand against climate change and are citing health concerns and pollution risks to block their ports from exporting coal. In the wake of an already declining coal industry, producers have filed suit against these states claiming that the cities are interfering with interstate commerce.

For more information see:

https://www.latimes.com/environment/story/2020-02-26/interior-states-are-using-lawsuits-against-the-west-coast-to-prop-up-the-dying-coal-industry

I. FOREST RESOURCES

  1. Natural Desert Ass’n v. United States Forest Serv., 957 F.3d 1024 (9th Cir. 2020).

The Ninth Circuit affirmed a summary judgment motion in favor of the United States Forest Service (“USFS”) finding that the actions of USFS were not arbitrary and capricious. USFS was required to prove consistency between the National Forest Management Act (“NFMA”) and Inland Native Fish Strategy (“INFS”) and in a contemporaneous document, the Service met its burden of proof by thoroughly analyzing its efforts to protect bull trout species and issue livestock grazing permits in Oregon. USFS issued livestock grazing permits between 2006-2015 in the Malheur National Forest consistent with the Forest Management Plan and Endangered Species Act. In 1995, the Service adopted the INFS to protect, among other species, the bull trout. Petitioner Oregon Natural Desert Association (“ONDA”) alleged that the INFS and issuance of livestock grazing permits were inconsistent and arbitrary and capricious without considering the bull trout species. The Ninth Circuit did not find ONDA’s argument compelling, holding that USFS included measures to protect species embedded in each grazing permit issued. The Court further held that it was not within the Court’s jurisdiction to force USFS to deny grazing permits until the bull trout populations recover.  

J. STREAMBED ALTERATION AGREEMENTS

  1. Willow Glen Trestle Conservancy v. City of San Jose (2020) 49 Cal.App.5th 127.

A complete analysis of this recent decision is posted to Abbott and Kindermann’s blog located here: https://blog.aklandlaw.com/2020/06/articles/ceqa/subsequent-review-process-further-clarified-to-promote-ceqa-finality-for-implementation-decisions/ . 

K. CULTURAL RESOURCE MANAGEMENT

  1. Center for Biological Diversity v. Esper, 958 F.3d 895 (9th 2020).

The Ninth Circuit affirmed a summary judgment motion in favor of the Department of Defense finding that the actions of the Department were not arbitrary and capricious under the National Historic Preservation Act (“NHPA”). The Center for Biological Diversity (“CBD”) filed suit against the Department of Defense citing violations of NHPA when the Department found there was “no adverse impact” to foreign property at the site of a new military base in Japan. Under Section 402 of NHPA, the Department is required to “take into account” the effect that construction of a new military base would have on the historic and foreign property in the region. The finding of the Department must not be “arbitrary and capricious” where the Department finds little to no adverse effect resulting from construction. CBD alleged that the Department’s analysis of the adverse effects of construction on the culturally significant dugong was arbitrary and capricious.  A dugong is a close relative of the manatee and endemic to South East Asia and the Indian Ocean. The district court and Ninth Circuit affirmed the Department’s position that there need not be consideration for the World Heritage List when determining whether or not the Department was complying with NHPA. As the Ninth Circuit held, Section 402 does not have specific guidelines requiring the agency to consider world heritage considerations when making an impact determination. The Court further held that the Department properly followed the procedural steps required by Section 402 and consulted with the appropriate outside parties when making its determination that a new military base would not have an “adverse effect” on the dugong.

William Abbott, Diane Kindermann, Glen Hansen, and Dan Cucchi are attorneys 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.

Welcome to Abbott & Kindermann, Inc.’s June Real Estate Law Action News. This summary provides brief updates on recent environmental cases, legislation, and administrative actions in 2020. The case names of the newest decisions start with Section 3 and are denoted by bold italic fonts.

  1. PREVIOUS MONTH’S UPDATE

 To read the May 2020 Environmental Action News post, click here: https://blog.aklandlaw.com/2020/05/articles/real-estate/land-use-law-blog-may-monthly-real-estate-law-action-news/ .

  1. CASES PENDING AT THE CALIFORNIA SUPREME COURT

There is one case pending at the California Supreme Court. The case and the Court’s summary are as follows:

 Weiss v. People ex rel. Dept. of Transportation, S248141.  (G052735; 20 Cal.App.5th 1156; Orange County Superior Court; 30-2012-00605637.)  Petition for review after the Court of Appeal reversed the judgment in a civil action.  This case presents the following issue:  Can the procedure permitted by Code of Civil Procedure section 1260.040 be used in an inverse condemnation action to determine in advance of a bench trial whether a taking or damaging of private property has occurred?

  1. UPDATE

A. TAKINGS

  1. Ruiz v. County of San Diego (2020) 47 Cal.App.5th 504

The Court of Appeal reversed the trial court’s determination that a homeowner could claim redress by inverse condemnation against a county if their private drainage system allowed for flow of public water. The Court of Appeal considered whether privately owned drainage on private property allows for homeowner remedies by inverse condemnation if the water in the private pipeline is for public use. Plaintiff/Appellee Ruiz (“Ruiz”), claimed that because the developer offered the County of San Diego (“County”) a dedicated easement to allow for public drainage in 1959 and the County turned down the easement, Ruiz could recover for water damage as a result in the pipeline leaking on Ruiz’s property. Ruiz claimed that the County’s use of the drainage system as part of the Valley drainage system constituted an acceptance of the drainage easement offered in 1959. The Court of Appeal, citing Locklin v. City of Lafayette, 7Cal.4th 327 (1994),  held that the County’s use of the Ruiz pipe did not meet the requirements for inverse condemnation since the County needed to exert minimal control and maintenance over the watercourse near the Ruiz property since the County would be liable for damage caused by streamflow. The Court of Appeal found Ruiz’s arguments unpersuasive since the County did not control continually nor own any portion of the private pipeline. The Court stated the Ruiz lacked substantial evidence to prove that the County had taken their private property for a public use. The Court reversed the award of attorney’s fees to Ruiz and held that each party should bear their own attorneys fees on appeal.

B. GENERAL REAL ESTATE

  1. Constellation-F, LLC v. World Trading 23, Inc. (2020) 45 Cal.App.5th 22

A commercial lease set rent to increase 150 percent if the tenant stayed past a certain date. The date passed but the tenant refused to pay the increased rent. Plaintiffs, a commercial landlord (“Constellation”), filed a breach of contract action against defendants  corporations (“World Trading” and “World Tech Toys”) seeking damages for past due rent, late fees, interest, failure to maintain and repair, costs for not being able to use the premises, and holdover rent. Constellation alleged that World Tech Toys was an alter ego of World Trading. The trial court rejected the theory of alter ego liability and held the defendants liable for all damages except the holdover rent, finding it to be an unenforceable penalty. World Trading and World Tech Toys were held liable to Constellation and its successors for $27.196.74. Constellation appealed and defendants cross appealed.

The Court of Appeal reversed the judgement denying Constellation holdover rent.  The court held that the holdover rent was not an unlawful penalty.  The court affirmed the remainder of the judgment, including the trial rejection of alter ego liability. The Court of Appeal explained that holdover rent, or “a graduated rental provision”, in commercial provisions are enforceable even if the increased rent is much greater than the base. To qualify as an unenforceable penalty, defendants must prove that the provision amounted to an illegal liquidation of damages. Here, the defendants failed to show that Constellation had market power to set the rate, and the defendants could have easily avoided higher rent by leaving the premise. Therefore, the trial court should have enforced the holdover agreement.

Further, the defendants argued that the penalty could be avoided under section 1671 of the Civil Code.  However, the Court of Appeal held that section 1671 was inapplicable because the case did not involve a question of penalty or liquidated damages. While the evidence showed unity of interest and ownership, which is required to invoke the alter ego doctrine, there was insufficient evidence to prove that treating defendants as separate entities would promote injustice. The court dismissed the defendant’s cross-appeal and appeal from the order after judgement.

The dissenting Justice argued that the liquidated damages provision, which established the holdover rent at 150 percent of base rent, was an unenforceable penalty. The Dissent argued that the majority’s new test allows contracting parties to bypass tethering a liquidated damages provision to estimated anticipated loss, and instead requires a challenger to analyze each contracting party’s respective market power and persuade a court that there was enough of an imbalance between parties to invalidate the damages provision.

  1. Matson v. S.B.S. Trust Deed Network (2020) 46 Cal.App.5th 33

Plaintiffs Matthew Matson and Matson SDRE Group, LLC (“Matson”) contested the deed of trust purchased in a foreclosure auction after learning the lien was second in position with a lower fair market value than the auction price. Matson’s complaint alleged that the terms of sale were unconscionable and they relied on a mistake of fact when purchasing the deed of trust. The trial court granted summary judgment to defendants, S.B.S. Trust Deed Network (“SBS”) stating that there was no irregularity, unfairness or fraud during the acquisition. The trial court further reasoned that a judicial remedy was not appropriate where plaintiff failed to read through a title report to discover the value and position in the chain of title. Plaintiffs appealed.  The Court of Appeal affirmed.

The court reasoned that plaintiffs were not entitled to relief because there was no unilateral mistake allowing for a remedy since plaintiffs bore the risk of their mistake not to fully read the title report. The transaction was complete when plaintiffs accepted the final bid at auction and there was no legal effect of rejecting the title after plaintiffs learned the deed of trust was second in priority to another deed. For this reason, the court held that plaintiffs failed to produce evidence to warrant judicial remedy by rescission. Also, the court reasoned that because plaintiffs were aware of the risks they bared through the complete title report, they were not entitled to relief.

  1. Jeppson v. Ley (2020) 44 Cal.App.5th 845

Among one of the more colorful neighbor disputes in 2020, the Court of Appeal affirmed the trial court’s decision to deny redress to Appellant, Jeppson, since there was no issue of “public interest” involved in a neighborhood feud where appellant’s cat was killed by appellee’s dog. The Court evaluated whether Jeppson’s claims arose from protected activity and then measured the likelihood of success on each claim as part of Jeppson’s summary judgment motion. A protective activity would grant relief to plaintiff in connection with an issue within the public interest. § 425.16, subd. (e)(3). The Court evaluated six criteria outlined in Rand Resources, LLC v. City of Carson (2019) 6.Cal.5th 610; Rivero v. American Federation of State, County and Municipal Employees, AFL-CIO (2003) 105 Cal.App.4th 913; Weinberg v. Feisel (2003) 110 Cal.App.4th 1122; Workman v. Colichman (2019) 33 Cal.App.5th 1039; Abuemeira v. Stephens (2016) 246 Cal.App.4th 1291; FilmOn.com Inc. v. DoubleVerify Inc. (2019) 7 Cal.5th 133, to determine if the Jeppson’s claims were in fact within the “public interest.” The criteria were as follows:

  • Statements or conduct concerning a person or entity in the public eye,
  • Conduct that could directly affect a large number of people,
  • A topic of widespread public interest,
  • Whether the issues affect only those directly involved,
  • Gathering ammunition for a private controversy, and
  • Where issues are too remotely connected to the public conversation to assert the issue within the public interest.

The Court reasoned that the claims at issue between Jeppson and Ley did not meet the criteria outlined in any of the above categories, thus the Jeppson claims did not constituted issues of public interest. The Court stated, “Feuds can metastasize into the Hatfields and McCoys or the Montagues and Capulets. This tiff, though bitter, remained strictly local: a private affair and not a matter of “public interest.” The Court affirmed the trial court’s ruling in favor of Lay and awarded costs on appeal to Jeppson.

  1. Kelly v. House (2020) 2020 Cal.App.LEXIS 277 (modified for partial publication, April 1, 2020)

The Court of Appeal awarded statutory attorneys fees to Appellant for the trespass and conversion on to Appellant’s agricultural property because the damaged land resulted in loss of organic certification status and prevention of prospective buyers. Plaintiffs, the Houses, appealed the decision of the trial court on their claims for attorney’s fees against the Fosses for trespass and conversion of their property. The Court of Appeal considered whether the Fosses entering the Houses property and spraying pesticide jeopardized the fragile organic farming certification held by the Houses and whether such claims gave rise to an award of attorney’s fees for both claims. Statute Section 1021.9 provides: “In any action to recover damages to personal or real property resulting from trespassing on lands either under cultivation or intended or used for the raising of livestock, the prevailing plaintiff shall be entitled to reasonable attorney’s fees in addition to other costs, and in addition to any liability for damages imposed by law.” The Court held that the Houses could recover attorneys fees under the statute because the statute was intended to protect farmers from illegal trespasses to their land. Defendant claimed that the Houses could not recover under Section 1021.9 for attorneys fees because the majority of their fees related back claims other than the trespass claims. The Court remanded the case to the trial court to determine the amount of reasonableness of the Houses attorneys fees under Section 1021.9 as it relates to the trespass claim only.

C. COMMON INTEREST DEVELOPMENTS

  1. Aldea Dos Vientos v. CalAtlantic Group, Inc. (2020) 44 Cal.App.5th 1073

In a construction defect case before the Court of Appeal, the Court reversed the trial court’s confirmation of the arbitrator’s award for a condominium association (‘association”). The Court of Appeal concluded that the association’s governing documents require a majority vote of members to bind arbitration, and that the arbitrator failed to obtain a vote of the association constituting an “unreasonable servitude” under the statute. As the Court reasoned, the arbitrator’s award violated the plain language of the statute. The Court reversed the trial court’s decision and awarded costs to the appellant.

D. REAL ESTATE CONTRACTS & TRANSACTIONS

  1. Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337

On appeal, the Court of Appeal reversed the lower court’s denial of Appellant, Jaman Properties 8 LLC (“Jaman”), moving papers for arbitration under the Federal Arbitration Act (“FAA”). Victrola 89, LLC (“Victrola”) brought suit Jaman in superior court alleging undisclosed and unrepaired defects in a real property transaction. Under the real estate purchase agreement between parties, Jaman moved for arbitration under the Federal Arbitration, which the trial court denied finding that the California Arbitration Act (“CAA”) controls arbitration between the parties. The Court held that the FAA preempts procedural provisions otherwise controlled by the CAA if the purchase agreement between the parties incorporates FAA on its face. The real estate purchase agreement between the parties on its face specified that the FAA would control. The Court held that Victrola’s piecemeal arguments of which sections of the CAA should control and which of the FAA should control in arbitration were unpersuasive. The Court reasoned that the lack of specificity in the contract for which claims should be arbitrated under the CAA and under the FAA is immaterial since the FAA controls over all claims by federal preemption. Lastly, the Court held that Victrola must arbitrate its claims under the FAA unless Jaman is estopped by the trial court from doing so. The Court overturned the trial court’s decision and remanded the case back to the trial court to determine whether Jaman is estopped from arbitration under the FAA.

E. EASEMENTS, ADVERSE POSSESSION, DEDICATIONS, & BOUNDARY DISPUTES

  1. Gamerberg v. 3000 E. 11th St., LLC (2020) 44 Cal.App.5th 424

The Court of Appeal reversed a trial court ruling holding that irrevocable licenses tied to a 1950 parking affidavit do not survive transfers of the property to different owners without notice. The dispute between parties arose when it became unclear who had a right to eight parking spaces on lot between two commercial business owners. Plaintiff, Gamerberg, filed a complaint in the trial court alleging that he held an irrevocable license over eight spaces in the lot based on a 1950 parking affidavit grandfathering his use of the spaces between owners. The Court examined whether the 1950 affidavit created an irrevocable license binding on subsequent purchasers who had no notice of the affidavit. The Court determined that the lack of recordation of the 1950 affidavit meant that the document did not bind subsequent purchasers who had no actual notice of the provisions in the document. Since the prior owners failed to record the parking affidavit, binding subsequent purchasers to the affidavit was irrelevant. The Court reversed the trial court’s ruling and awarded costs to 3000 E. 11st St., LLC.

  1. Madani v. Rabinowitz (2020) 45 Cal.App.5th 602

In a suit based on claims of trespass and negligence when defendant, Rabinowitz, erected a fence on plaintiff, Madani’s, property and continually parked inoperable cars in Madani’s property, the Court of Appeal affirmed that the fence and parked cars were continuing encroachments. The Court held that since the fence and parked cars were a continuing encroachment that the statute of limitations did not apply and the Court could review the case subject to independent review of the facts. The Court agreed with the lower court that costs to move the fence were not sufficient to warrant leaving the fence as a permanent structure. The Court noted that Rabinowitz replaced the fence in 2015 and could move the fence for a modest cost. The Court further held that Madani could not recover costs because they did not present sufficient evidence to justify a damages award. The Court reasoned that the trial court granted injunctive relief, and that was sufficient to deny an award of monetary damages. The Court affirmed the trial court’s ruling and ruled both parties shall split costs.

William Abbott, Diane Kindermann, Glen Hansen, and Dan Cucchi are attorneys 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.