For all of you who were able to attend, thank you for your participation in Abbott & Kindermann’s 20th Annual Land Use Law Conference. We appreciate your time, attention, and patience as we virtually came together this year.

On January 21st, 22nd and 25th of this year, A&K presented the live sessions for its 20th annual educational program for clients and colleagues interested in current land use, environmental, and real estate issues affecting commercial and residential development, agriculture, real estate transactions, easements, mining, and the construction materials production industry. A&K’s attorneys also provided several pre-recorded lecture videos located on our firm’s YouTube Channel, along with six handouts outlining the materials discussed in each video session. Participants were able to obtain AICP and MCLE credit for participating in this year’s virtual conference.

We welcome continued feedback as we look toward next year’s conference. Next year, we aim to look at a variety of virtual platforms that will be most compatible with participants’ security firewalls. Our goal is to host a combination of both in-person and virtual live sessions in 2022, as we heard many of you appreciated the ease of access to our conference from the safety and comfort of your homes. We further aim to provide participants with our handout materials ahead of the live sessions so participants can prepare questions and absorb materials ahead of time.  We also look forward to providing more video blogs throughout the year as part of A&K’s continuing education offerings. Please keep an eye out at our blog for more details on this project.

We look forward to seeing you hopefully in-person in 2022. We hope you are all healthy and taking care. Thank again for your time and patience and for participating in our 2021 annual conference.

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.

Daniel Cucchi, Matthew Gray, and Garrett Colli will teach a joint virtual course on March 12, 2021 (Pre-recorded lectures available from March 11th through March 15th), titled, “Annual Land Use Law Review and Update.The seminar is hosted by UC Davis Extension.

Class Description:

Stay up-to-date on recent developments in California law affecting land use, planning and environmental compliance. Experts from the field provide succinct and practical analysis on recent case law and significant legislative and administrative changes that took effect this year.

Topics include:

  • General Plans, Specific Plans and Zoning
  • The Subdivision Map Act
  • CEQA
  • Affordable Housing
  • Takings, Exactions and Dedications
  • Greenhouse Gas Regulation and Environmental Analysis
  • School Fees
  • Wetlands and Protected Species
  • Land Use Litigation

Participate in discussions and get answers to your questions. Take home the most recent edition of California Land Use and Planning Law, co-authored by Cecily Barclay and Matthew Gray, and a legal syllabus of cases discussed and prepared by the law firm of Perkins Coie, LLP.

When: Friday, March 12, 2021 (Live Session) (Pre-recorded lectures available from March 11th through March 15th)

Where: Online Class

Cost: $360

Register with the following link: https://cpe.ucdavis.edu/section/annual-land-use-law-review-and-update

Questions, please contact UC Davis Extension at 530-757-8777 or cpeinfo@ucdavis.edu   

 

Daniel S. Cucchi is a 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.

Reserve your spot for our virtual conference taking place January 21-25, 2021.

From January 21 to 25, 2021 Abbott & Kindermann, Inc. will present its 20th annual educational program for clients and colleagues interested in current land use, environmental, and real estate issues affecting commercial and residential development, agriculture, real estate transactions, easements, mining and the construction materials production industry. Abbott & Kindermann’s conference will be entirely virtual this year and will continue to cover the same vital information as in years past!

A summary of 2020 case law and legislative updates includes the following hot topics:

  • CALIFORNIA WATER RIGHTS AND SUPPLY
  • WATER QUALITY
  • WETLANDS
  • AIR QUALITY & CLIMATE CHANGE
  • RENEWABLE ENERGY
  • ENDANGERED SPECIES
  • HAZARDOUS MATERIALS & REMEDIATION
  • NATIONAL ENVIRONMENTAL POLICY ACT (“NEPA”)
  • MINING, OIL AND GAS
  • STREAMBED ALTERATION AGREEMENTS
  • FOREST RESOURCES
  • CULTURAL RESOURCES PROTECTION
  • ENVIRONMENTAL ENFORCEMENT
  • GENERAL REAL ESTATE
  • COMMON INTEREST DEVELOPMENTS
  • REAL ESTATE CONTRACTS & TRANSACTIONS
  • EASEMENTS, ADVERSE POSSESSION, DEDICATIONS, & BOUNDARY DISPUTES
  • FEES, TAKINGS, AND EXACTIONS
  • CALIFORNIA ENVIRONMENTAL QUALITY ACT (“CEQA”)
  • PLANNING, DEVELOPMENT AND THE SUBDIVISION MAP ACT
  • LOCAL GOVERNMENT AND LOCAL GOVERNMENT ORGANIZATION

Abbott & Kindermann, Inc. will present its annual program virtually in 2021, with a mix of conveniently available pre-recorded content and a live session component.  Details for the live sessions portion of the program are below.

Conference Format: 100% virtual event

  • Three pre-recorded sessions made available two weeks prior to the live sessions and held open a week after the live sessions end
    • Registrants receive an email with a link to pre-recorded sessions two weeks before live sessions
  • Three live sessions where each attorney will be part of a Q&A live panel session to answer all your questions
    • Registrants receive an email with password to live Zoom two days prior to chosen live session

Materials Included: available electronically in PDF format two weeks prior to event

  • Downloadable outline of case law and legislation for all topics in 2020
  • Downloadable quick reference cards of practice tips and case law
  • Upcoming classes list
  • Pre-recorded video sessions available for three weeks for review at your convenience

Registration Information:

Please register early to reserve your spot. MCLE and AICP CM credits are available (approval pending). We hope you can join us and we look forward to engaging with you in one of our live sessions.

Please call (916) 456-9595 with any questions.

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’s 2020 4th 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.

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/

CASES PENDING AT THE CALIFORNIA SUPREME COURT

There are one CEQA case pending at the California Supreme Court. The case and the Court’s summary is 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?

UPDATE

Ministerial v. Discretionary

Protecting Our Water & Environmental Resources v. County of Stanislaus (2020) 10 Cal.5th 479.

The California Supreme Court struck down the County’s practice of categorically determining that the issuance of all well permits that do not require a variance is ministerial. In Protecting Our Water & Environmental Resources v. County of Stanislaus, the County established a well construction permit ordinance that relied on state well development standards promulgated by the Department of Water Resources. DWR’s standards at issue include requirements that all wells: (1) “be located an adequate horizontal distance” from sources of contamination, including suggested distances for certain common types of sources; (2) “where possible…be located up the groundwater gradient from sources of contamination”; (3) “if possible…located outside areas of flooding; and (4) “annular space” is “effectively sealed” and establishes minimum surface seal depths.

Rejecting the appellate court’s holding that all well permits were discretionary based on its reading of the “horizontal distance” requirement, the California Supreme Court took on a more nuanced view which deferred to the agency to make such determinations on a case-by-case basis. Relying on the “functional test” set forth in a line of cases distinguishing discretionary decisions from ministerial ones (e.g., Mountain Lion Foundation v. Fish & Game Commission (1997) 16 Cal.4th 105; Health First v. March Joint Powers Authority (2009) 174 Cal.App.4th 1135; Friends of Juana Briones House v. City of Palo Alto (2010) 190 Cal.App.4th 286), the Court considered whether “the agency is empowered to disapprove or condition approval of a project based on environmental concerns that might be uncovered by CEQA review…,” and found that at least in some circumstances the County has such discretion. For instance, the Court in evaluating the “horizontal distance” requirement noted that while the determination of the proper distance from a source of contamination involved considerable discretion, instances where there are no known sources of contamination involved would properly eliminate that discretion. Thus, it reasoned, establishing a categorical determination that all such well construction permits were ministerial was improper.

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) Caltrans improperly relied on section 103, (ii) 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.

Negative Declarations

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

This is a familiar story 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. (Ed. Note – We do not believe this evaluation is 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 intensive 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.)

Environmental Impact Reports

Santa Clara Valley Water Dist. v. San Francisco Bay Reg’l Water Quality Control Bd., (December 29, 2020) 2020 Cal. App. LEXIS 1236.

Petitioner, Santa Clara Valley Water District (“District”), filed suit challenging the San Francisco Bay Regional Water Quality Board’s (the “Board”) addition of new mitigation requirements when issuing an order adopting Waste Discharge Requirements (“WDRs”) for the District’s flood control project. The District argued the Board’s action was unlawful, because the District had already completed CEQA review with its approval, and the Board had been an active participant as a responsible agency. As a responsible agency, the District argued CEQA Guidelines section 15096, subdivision (e), required the Board to either accept the adequacy of the EIR as-is, or take one of three actions: (i) file suit challenging the EIR, (ii) prepare a subsequent EIR, if allowed under CEQA Guidelines section 15162, or (iii) assume the lead agency role of the original EIR. The First District Court of Appeal upheld the Board’s imposition of additional mitigation requirements under the WDR. It reasoned that despite the limitations imposed on responsible agencies under CEQA Guidelines section 15096, the Savings Clause in Public Resources Code section 21174 (“No provision of this division is a limitation or restriction on the power or authority of any public agency in the enforcement or administration of any provision of law which it is specifically permitted or required to enforce or administer….”), supported its conclusion that “nothing in CEQA, including CEQA Guidelines section 15096, subdivision (e), or the statutes on which it is based, bars the Board from fulfilling its independent obligation to enforce the Porter-Cologne Act.”

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

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-1The 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 AnalysisThe 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 PlanAs 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 AlternativesThe 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 CommentsThe court held that certain responses to comments on the Draft SEIR were adequate. It found that the subject responses directly addressed 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 comment. 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 AQMD (2020) 47 Cal.App.5th 588.

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 DescriptionThe 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 QualityThe 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 ChangeAs 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.

TrafficAppellants 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 StrategiesThe 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 MeasuresAppellants 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. 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 impact reduction value 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.”

Subsequent Environmental Review

Martis Camp Community Association v. County of Placer (2020) 53 Cal.App.5th 569.

Petitioners challenged the County’s decision to abandon a roadway connecting two residential subdivisions, the Martis Camp project (“Martis Camp”) and the Retreat at NorthStar project (“Retreat”), near Lake Tahoe in eastern Placer County on several claims, including the California Environmental Quality Act (“CEQA”). The road was originally intended to serve as access for emergency vehicles and transit and was described as such in both EIRs for the two projects.  Over time the road was frequently used by Martis Camp residents as a convenient shortcut to the NorthStar Village area through Retreat. To comply with CEQA, the County relied on an addendum to a previously certified environmental impact report for Martis Camp (“Martis Camp EIR”). The petitioners argued that the County: (1) improperly used an addendum to the Martis Camp EIR; (2) used the wrong baseline to evaluate the impacts of the abandonment; and (3) failed to prepare a subsequent or supplemental EIR. The trial court denied the CEQA petition, and petitioners appealed.

The appellate court reversed. The County argued the Martis Camp EIR was the most appropriate document to rely on because the effects of the abandonment would be focused on changed traffic patterns of residents at Martis Camp and would not impact the Retreat residents. The Court agreed with petitioners that the County’s reliance on the Martis Camp EIR was improper because the abandonment of the roadway was not a modification of the Martis Camp project. It noted that an addendum is only proper to consider proposed changes to a previously approved project and EIR. Applying this standard, the Court reasoned that since there were no subsequent discretionary approvals needed to modify the Martis Camp project, the subsequent review procedures in CEQA Guidelines section 15162 were not applicable to the Martis Camp EIR. The Court further noted that the roadway was actually proposed and analyzed in the Retreat EIR and held that the County failed to evaluate whether the abandonment would require major revisions to the Retreat EIR. As a result, the Court concluded that the County abused its discretion in finding that no subsequent or supplemental EIR is required because the County relied on the wrong EIR to make that finding. As for the improper baseline claim, the Court remanded the issue to allow for the County to make its own determination of whether or not the existing use of the roadway by Martis Camp residents is a “changed circumstance” from the Retreat EIR and determine the proper CEQA review process in light of the decision.

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) 51 Cal.App.5th 226.

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. UC Regents cited 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 long-range development plan.

CEQA Litigation

Sierra Club v. County of Fresno (2020) 57 Cal.App.5th 979.

Defendants challenged the trial court’s decision following remand from the California Supreme Court in Sierra Club v. County of Fresno (2018) 6 Cal.5th 502, arguing that the court’s remedy vacating the project approvals and decertifying the EIR was overly broad and violated section 21168.9 of the Public Resources Code. Instead, the defendants argued partial decertification was the appropriate remedy, citing Center for Biological Diversity v. Department of Fish & Wildlife (2017) 17 Cal.App.5th 1245, which concluded that section 21168.9 “clearly allows a court to order partial decertification of an EIR following a trial, hearing, or remand.” In the published portion of the decision, the Fifth District Court of Appeal rejected defendant’s interpretation of section 21168.9 and held that partial certification is not an available remedy. It reasoned that partially decertifying an EIR renders as surplusage an agency’s duty set forth in sections 21100 and 21151 of the Public Resources Code, as well as CEQA Guidelines section 15090, to certify “the completion of” an EIR. In addition, the Court held that even if partial decertification were authorized, the circumstances of the case were inappropriate for such a remedy because the court had already determined that severance was improper in the unpublished portion of the opinion.

Parkford Owners for a Better Community v. County of Placer (2020) 54 Cal.App.5th 714. 

Petitioners filed suit under CEQA and the Planning and Zoning Law challenging the County’s approval of a building permit for a new 28,240 square-foot building and associated utilities which expanded an existing self-storage facility. The storage facility was originally constructed in 1998 and was expanded two additional times in the years prior to the current dispute. Petitioners, whose suit was filed approximately four months after the permit was issued and construction was underway, sought a temporary restraining order and a preliminary injunction. The trial court denied both interim relief requests holding that because the status of project construction was well underway and substantial progress had already been made, petitioners could not establish the necessary “irreparable harm,” or that the “balance of interim harm” sufficiently favored petitioners, to issue a TRO, or an injunction, respectively. The parties then moved to the trial on the merits where the trial court held that (1) the County did not violate CEQA because the building permit was ministerial; and (2) the Planning and Zoning Law claim was time-barred. Petitioners appealed.

On appeal, the County argued that petitioners’ claims were now moot, given that the expansion project building was now fully constructed. The Third District Court of Appeal agreed, holding that the court could not grant petitioners any effectual relief and dismissed the appeal. It reasoned that completion of a challenged project normally ends any actual controversy over an approving resolution or an EIR, absent indications that the real parties in interest acted “in bad faith or in an attempt to evade the requirements of CEQA or the Planning and Zoning Law.” Here, the court noted that construction commenced and was substantially underway months before petitioners ever filed the litigation or the requests for preliminary relief, distinguishing the present case from Woodward Park Homeowners Association v. Garreks, Inc. (2000) 77 Cal.App.4th 880, where “the developer ‘proceeded with construction and completion of the project after [the homeowners association] filed its mandamus petition’ and ‘despite the trial court’s order mandating the preparation of an EIR….’”

Golden Door Properties, LLC v. Superior Court (2020) 53 Cal.App.5th 733.

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: 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 holdings 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 the 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.]

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 with the actions of the Director (e.g., was the Director authorized to approve the CEQA document), 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 (i) the project only involved a small home, (ii) there was no evidence that the county would actually change any of its practices, and (iii) 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.

 

Reserve your spot for our virtual conference taking place January 21-25, 2021.

From January 21 to 25, 2021 Abbott & Kindermann, Inc. will present its 20th annual educational program for clients and colleagues interested in current land use, environmental, and real estate issues affecting commercial and residential development, agriculture, real estate transactions, easements, mining and the construction materials production industry. Abbott & Kindermann’s conference will be entirely virtual this year and will continue to cover the same vital information as in years past!

A summary of 2020 case law and legislative updates includes the following hot topics:

  • CALIFORNIA WATER RIGHTS AND SUPPLY
  • WATER QUALITY
  • WETLANDS
  • AIR QUALITY & CLIMATE CHANGE
  • RENEWABLE ENERGY
  • ENDANGERED SPECIES
  • HAZARDOUS MATERIALS & REMEDIATION
  • NATIONAL ENVIRONMENTAL POLICY ACT (“NEPA”)
  • MINING, OIL AND GAS
  • STREAMBED ALTERATION AGREEMENTS
  • FOREST RESOURCES
  • CULTURAL RESOURCES PROTECTION
  • ENVIRONMENTAL ENFORCEMENT
  • GENERAL REAL ESTATE
  • COMMON INTEREST DEVELOPMENTS
  • REAL ESTATE CONTRACTS & TRANSACTIONS
  • EASEMENTS, ADVERSE POSSESSION, DEDICATIONS, & BOUNDARY DISPUTES
  • FEES, TAKINGS, AND EXACTIONS
  • CALIFORNIA ENVIRONMENTAL QUALITY ACT (“CEQA”)
  • PLANNING, DEVELOPMENT AND THE SUBDIVISION MAP ACT
  • LOCAL GOVERNMENT AND LOCAL GOVERNMENT ORGANIZATION

Abbott & Kindermann, Inc. will present its annual program virtually in 2021, with a mix of conveniently available pre-recorded content and a live session component.  Details for the live sessions portion of the program are below.

Conference Format: 100% virtual event

  • Three pre-recorded sessions made available two weeks prior to the live sessions and held open a week after the live sessions end
    • Registrants receive an email with a link to pre-recorded sessions two weeks before live sessions
  • Three live sessions where each attorney will be part of a Q&A live panel session to answer all your questions
    • Registrants receive an email with password to live Zoom two days prior to chosen live session

Materials Included: available electronically in PDF format two weeks prior to event

  • Downloadable outline of case law and legislation for all topics in 2020
  • Downloadable quick reference cards of practice tips and case law
  • Upcoming classes list
  • Pre-recorded video sessions available for three weeks for review at your convenience

Registration Information:

Please register early to reserve your spot. MCLE and AICP CM credits are available (approval pending). We hope you can join us and we look forward to engaging with you in one of our live sessions.

Please call (916) 456-9595 with any questions.

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.

Reserve your spot for our virtual conference taking place January 21-25, 2021.

From January 21 to 25, 2021 Abbott & Kindermann, Inc. will present its 20th annual educational program for clients and colleagues interested in current land use, environmental, and real estate issues affecting commercial and residential development, agriculture, real estate transactions, easements, mining and the construction materials production industry. Abbott & Kindermann’s conference will be entirely virtual this year and will continue to cover the same vital information as in years past!

A summary of 2020 case law and legislative updates includes the following hot topics:

  • CALIFORNIA WATER RIGHTS AND SUPPLY
  • WATER QUALITY
  • WETLANDS
  • AIR QUALITY & CLIMATE CHANGE
  • RENEWABLE ENERGY
  • ENDANGERED SPECIES
  • HAZARDOUS MATERIALS & REMEDIATION
  • NATIONAL ENVIRONMENTAL POLICY ACT (“NEPA”)
  • MINING, OIL AND GAS
  • STREAMBED ALTERATION AGREEMENTS
  • FOREST RESOURCES
  • CULTURAL RESOURCES PROTECTION
  • ENVIRONMENTAL ENFORCEMENT
  • GENERAL REAL ESTATE
  • COMMON INTEREST DEVELOPMENTS
  • REAL ESTATE CONTRACTS & TRANSACTIONS
  • EASEMENTS, ADVERSE POSSESSION, DEDICATIONS, & BOUNDARY DISPUTES
  • FEES, TAKINGS, AND EXACTIONS
  • CALIFORNIA ENVIRONMENTAL QUALITY ACT (“CEQA”)
  • PLANNING, DEVELOPMENT AND THE SUBDIVISION MAP ACT
  • LOCAL GOVERNMENT AND LOCAL GOVERNMENT ORGANIZATION

Abbott & Kindermann, Inc. will present its annual program virtually in 2021, with a mix of conveniently available pre-recorded content and a live session component.  Details for the live sessions portion of the program are below.

Conference Format: 100% virtual event

  • Three pre-recorded sessions made available two weeks prior to the live sessions and held open a week after the live sessions end
    • Registrants receive an email with a link to pre-recorded sessions two weeks before live sessions
  • Three live sessions where each attorney will be part of a Q&A live panel session to answer all your questions
    • Registrants receive an email with password to live Zoom two days prior to chosen live session

Materials Included: available electronically in PDF format two weeks prior to event

  • Downloadable outline of case law and legislation for all topics in 2020
  • Downloadable quick reference cards of practice tips and case law
  • Upcoming classes list
  • Pre-recorded video sessions available for three weeks for review at your convenience

Registration Information:

Please register early to reserve your spot. MCLE and AICP CM credits are available (approval pending). We hope you can join us and we look forward to engaging with you in one of our live sessions.

Please call (916) 456-9595 with any questions.

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.

Monthly Review and Thank You!

We wanted to thank each of you for continuing to read our blog and keeping our firm in mind for your land use, environmental, and real estate legal matters. We recognize this has been an unprecedented year for so many reasons, and we are grateful for your time. All of us at Abbott & Kindermann, Inc., wish all of you a happy, healthy, and fruitful 2021. We would like to ring in this last day of 2020 by welcoming you to Abbott & Kindermann, Inc.’s December Environmental Action News. This summary provides brief updates on recent environmental cases, legislation, and administrative actions in 2020.

PREVIOUS MONTH’S UPDATE

To read the November 2020 Environmental Action News post, click here:

https://blog.aklandlaw.com/2020/12/articles/november-environmental-action-news/

SUPREME COURT

There is one case pending at the California Supreme Court. The case and the Court’s summary is 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?

UPDATE

 WATER RIGHTS AND SUPPLY

  1. Antelope Valley Groundwater Cases v. California Water Services Company (December 9, 2020) 2020 Cal. App. LEXIS 1166.

The Court of Appeal affirmed a trial court decision, holding that a water district did not acquire appropriative rights by pumping water for municipal purposes in declaration of water for the public. The Court held that appropriative rights cannot be claimed by municipal supplies to acquire a corollary right that does not exist. The Court points to Water Code Section 103, and states that the legislature did not intend for municipalities to be allowed to withdraw water for general public use in an aquifer. The Court further held that the current case law affirmed the legislative intent and held that there is no acquisition of appropriative rights merely by constructing a facility and diverting water for public use.

WATER QUALITY

  1. Malaga County Water Dist. v. Cent. Valley Reg’l Water Quality Control Bd. (December 10, 2020) 2020 Cal. App. LEXIS 1171.

The Court of Appeal reversed and remanded a suit brought by a county water district holding that an increase in permissible water flow from a waste discharge plan is a matter of broad public interest and not moot. The Court looked at whether the verification process included in Malaga’s permit was an improper delegation of authority from the Water Quality Board to its executive officer. The Court found that it was an improper delegation of authority. The Appellate panel held that the NPDES permit that the Water Quality Board issued improperly modified the terms of an effluent discharge limitation and exceeded the authority of the Board to determine its own effluent discharge limit. The Court concluded that a determination increasing the permissible water flow constituted a modification under Water Code section 13223. They further specified that the authority granted to the Water Quality Board at best could grant an officer of the Board the ability to review the increase request and provide a recommendation. The Court reversed the case and remanded the matter to the trial court for further proceedings.

  1. Malaga County Water Dist. v. State Water Res. Control Bd. (December 10, 2020) 2020 Cal. App. LEXIS 1170.

The Court of Appeal affirmed in part, reversed in part, and remanded a case brought by Malaga County Water District that denied the district’s petition for a writ of administrative mandamus challenging the SWRCB’s imposition of penalties for violating the water discharge requirements.  The Court concluded that the Water Quality Board wrongly found that the equitable defense of laches was unavailable to Malaga, and that they could assert laches as a defense to the SWRCB’s imposition of penalties on the discharge. Further, the Court noted that any claims where the Water Quality Board could be said to have known of the violation more than three years before the enforcement action was initiated are subject to the burden shifting presumption that the delay in initiating an action was unreasonable and prejudicial. Substantial evidence review applied because Water Code section 13263, subsection (g), and section 13330, subsection (e), indicated there is no independent review after a Section 13323 decision or order which took place here. Lastly, the hearing procedure was an underground regulation because it used a general template and Government Code section 11425.10 did not justify its use.

 WETLANDS

  1. United States v. Sweeney, 2020 U.S. Dist. LEXIS 159417 (E.D. Cal. September 1, 2020).

U.S. District Court Judge Kimberly Mueller held that Defendants, John Sweeney and Point Buckler Club violated sections 301 and 404 of the Clean Water Act for unlawfully constructing a levee and other structures on Point Buckner Island in the San Francisco Bay Delta. Defendants constructed a levee, multiple structures, and other activities that added pollutants to the Delta. The actions of Defendants violated multiple parts of the CWA including unlawful dredged or fill material, point source discharge, and disruption of Waters of the United States (“WOTUS”). As a result of defendant’s actions, the United States estimated nearly 30 acres of tidal waters and wetlands were lost affecting the Delta’s chemical, physical, and biological functions. Plaintiffs requested declaratory relief while defendants denied liability and offered several affirmative defenses.

The Court held that a preponderance of the evidence existed to show that defendants purchased Point Buckley Island, built a boat ramp without seeking proper permitting, erected structures on the island without seeking permitting, and added specific discharge pollutants to the surrounding waterway in violation of the Clean Water Act. As the Court explained, Point Buckley Island’s location lies directly within a tidal channel and marsh land as defined under the Waters of the United States (“WOTUS Rule”). The Court further described how the aerial photographs admitted into evidence showed where defendants had discharged pollutants in violation of the CWA and WOTUS Rule and rejected all the affirmative defenses offered by defendants. The Court then issued a declaratory judgment for the United States, directing that defendants restore and maintain the chemical, physical, and biological integrity of the waterways and permanently protect the waterways.

AIR QUALITY AND CLIMATE CHANGE

  1. Communities for a Better Environment v. Energy Resources Conservation & Development Com. (2020) 57 Cal.App.5th 786.

Several nonprofit environmental groups filed a complaint for declaratory and injunctive relief against the State Energy Resources Conservation and Development Commission (“Energy Commission”). Plaintiffs challenged the constitutionality of Public Resources Code section 25531, which limits judicial review of decisions by the State Energy Commission on the siting of a thermal powerplant. The trial court found that Section 25531(a) is an unconstitutional legislative abridgement of the court’s jurisdiction, and that Section 25531(b) unconstitutionally abridges the court’s essential power to review agency findings.

The Court of Appeal affirmed the finding that the constitutional grant of original jurisdiction in Article VI of the California Constitution includes the superior courts and the Courts of Appeal and may not be circumscribed by statute absent some other provision empowering the legislature to take such action. Further, the legislative amendments to Section 25531 have “broken the once-tight link between the regulatory authority of the Public Utilities Commission (PUC) and powerplant siting decisions of the Energy Commission, such that the plenary power Article XII grants the Legislature over activities of the PUC no longer authorizes § 25531 (a).” Lastly, the Court concluded that Section 25531(b) violates the judicial powers clause by preventing courts from reviewing whether substantial evidence supports the Energy Commission’s factual findings.

  1. Gantner v. PG&E Corp. (In re PG&E Corp.), 2020 Bankr. LEXIS 894 (N.D. Cal. March 30, 2020).

The U.S. Bankruptcy Court dismissed a class action lawsuit against PG&E corporation for the planned blackouts between October and November 2019. The planned blackouts were enacted to reduce the risk of wildfire danger. The court held that the plaintiff’s claims were preempted by California law and fell exclusively within the authority of the CPUC. In a single claim complaint, plaintiff and a class alleged that PG&E was negligent in maintaining the power grid and requested injunctive relief requiring PG&E to maintain the transmission system. In the complaint, the class specifies that the case was “not about whether the shutoffs were appropriate or how PG&E handled them, it is about why they had to be done in the first place.” The Court looked to the CPUC and Public Utilities Code to determine whether the actions alleged against PG&E presented a justiciable question as to negligent actions by the utility. The Court found that PG&E filed a Wildfire Safety Plan as specified by CPUC. The Court determined that CPUC has exclusive regulatory powers to adjudicate matters related to planned blackouts. As such, the Court dismissed the case and stated the request for relief was too remote for the Court to fashion a proper remedy for the class.

 HAZARDOUS MATERIALS AND REMEDIATION

  1. Clarke v. PG&E Co., 2020 U.S. Dist. LEXIS 218241 (N.D. Cal. November 20, 2020).

 Plaintiff Dan Clarke alleged that roughly one hundred years ago, defendants Pacific Gas and Electric Company and PG&E Corporation (collectively “PG&E”) left behind hazardous waste created by its manufactured gas plants (“MGPs”) along the northern waterfront of San Francisco. Clarke plausibly alleged standing based on his recreational and aesthetic interests, and PG&E sought to dismiss causes of action for violations of the Resource Conservation and Recovery Act (“RCRA”), the Clean Water Act (“CWA”), and state strict liability and negligence law. Specifically, PG&E requested the Court dismiss the RCRA claim for lack of redressability because injunctive relief may require access to property owned by non-parties.

The Court held that PG&E’s claim in response to the RCRA violation may have merit after discovery but is premature at the current stage. Further, the Court held that Clarke’s remaining claims were insufficiently pleaded. Clarke claimed that the CWA violation was ongoing and continuous, but his first claim accrued outside of the five-year statute of limitations. Clarke also failed to plead cognizable damages for his strict liability and negligence claims, or to describe an inherently dangerous activity to demonstrate the strict liability claim had merit. In turn, PG&E’s motion to dismiss the RCRA claim was denied, and its motion to dismiss the CWA, strict liability, and negligence claims were granted with leave to amend.

 NATIONAL ENVIRONMENTAL POLICY ACT (NEPA)

  1. Institute for Fisheries Res. v. United States FDA, 2020 U.S. Dist. LEXIS 207492 (N.D. Cal. November 5, 2020). 

The plaintiff, Institute for Fisheries Resources, filed this suit challenging a decision by the Food and Drug Administration (“FDA”) that allowed a company to create and farm genetically engineered salmon. The plaintiff alleged that the FDA failed to adequately assess the harm that would be caused if the engineered salmon would escape from captivity and adversely affect normal salmon, including endangered species, in violation of NEPA. The Court agreed. It held that though this scenario was unlikely, the FDA did not adequately assess the risk of harm before finding no significant impact. This was particularly important because the FDA knew that the company’s salmon operations would expand, with additional facilities used for farming, and the impact conclusions made in this study would be used to analyze the future additional facilities. The plaintiffs established that the FDA violated the ESA by falling to consult with the National Marine Fisheries Service and the Fish and Wildlife Service as required.  As a result, the agency was ordered to go back and complete the analysis.

  1. California v. BLM, 2020 U.S. Dist. LEXIS 53958 (N.D. Cal. March 27, 2020).

Before the Federal District Court were cross-motions for partial summary judgment in two related cases. In both cases, the plaintiffs challenged the Federal defendants’ promulgation of a final rule that repealed a previous rule regulating hydraulic fracturing operations on federal and tribal lands. Plaintiffs asserted that the issuance of the final rule violated the Administrative Procedure Act (“APA”), National Environmental Policy Act (“NEPA”), and the Endangered Species Act (“ESA”).  The Court found that California had standing for all its claims and that the citizen group plaintiffs had standing under the ESA and NEPA, but not under the APA. On the merits, the Court concluded that the change in policy was not arbitrary and capricious under the APA because BLM gave a reasoned explanation of the change. The court rejected California’s main arguments that BLM’s determination that the 2015 rule was duplicative of state and tribal regulation was negated by BLM’s earlier conclusion that BLM ignored foregone benefits of the Obama-era rule in its cost-benefits analysis. The Court declined to address whether BLM had authority to issue the 2015 rule and agreed with defendants that NEPA did not apply since the 2015 rule was never in effect and the “environmental status quo” was never altered. Lastly, on the ESA issue, the Court found that there was a rational connection between BLM’s final position that the repeal would have no effect on threatened species on BLM lands.

  1. Bair v. California State Department of Transportation (N.D. Cal. 2019) 385 F.Supp.3d 878; Bair v. California State Department of Transportation, 2020 U.S. App. LEXIS 37604 (9th Cir. December 2, 2020).

The Ninth Circuit overturned the Northern District’s ruling blocking an attempt by the U.S. Department of Transportation (“DOT”) to widen Highway 101 through Richardson Grove State Park. In the district court case, DOT defended the project by stating the project would allow for safer passage of extra-long trucks which have been banned from use on Highway 101. As part of the draft EIS/EA under NEPA, DOT issued a “finding of no significant impact” or FONSI. Petitioners objected to the FONSI arguing that the record submitted to the district court proved that studies relied upon by DOT showed a significant impact to the environment as a result of the project. The district court agreed with plaintiffs, finding that the studies relied upon by DOT proved the following would have a significant impact on the environment: “1) Pavement over half or more of the root zone, 2) construction in the structural root zone, 3) public enjoyment of the park, and 5) damage from ‘STAA heavies’ colliding with redwoods.” The district court dismissed Plaintiffs’ fifth claim that the construction would incrementally risk the leaning or toppling of trees as a result of disturbing the root beds on the grounds that the claim was moot. The Court then called for supplemental briefing from the parties to determine whether DOT should be permitted to conduct a new EA/FONSI.

In the current litigation, the Ninth Circuit reconsidered the EA/FONSI to determine whether Caltrans adequately considered: “1) whether redwoods would suffocate when more than half of their root zones were covered by pavement, 2) construction in a redwood’s structural root zone would cause root disease, 3) traffic noise would increase because of the larger size of the STAA trucks and 4) redwoods would suffer more frequent and severe damage as a result of strikes by STAA trucks.” The Ninth Circuit concluded that Caltrans adequately considered that the Project would not create extreme stress in the redwoods. They further held that the record sufficiently shows where Caltrans appropriately considered that the construction activity would only occur in the specified areas and avoid protected trees’ structural root zone. The Court further stated that widening the roadway would not increase the number of STAA trucks that use that route. As such, the Court held that the traffic volume and noise considerations were adequate. The Court held that there was no arbitrary or capricious analysis with regard to the frequency of collisions with the trees. It noted that the litigation between parties had been ongoing for ten years. The court reversed and vacated the judgment by the district court and stated that they expected the district court to quickly dispose of any remaining issues so that the Project could move forward.

MINING, OIL, AND GAS

  1. Valero Refining Co. – California v. Bay Area Air Quality Management District Hearing Bd. (2020) 49 Cal.App.5th 618.

Plaintiff, an oil refinery, sought approval from a regional air quality management district to bank its emissions reductions. Plaintiff was denied a significant portion of the requested credits—first by the agency official charged with deciding the issue, and then by the hearing board to which it appealed. Plaintiff then filed a petition for writ of mandate. In issuing a writ of mandate, the superior court ruled the hearing board did not apply the correct standard of review in deciding plaintiff’s appeal, because the hearing board erroneously declined to consider evidence that denial of plaintiff’s banking application was “unfair” under the circumstances.

The Appellate Court reversed. It held that the air quality management district hearing board’s standard of review neither required nor empowered the air district board to consider whether applying the regulation to the particular case before it was in some broad sense—fair. Instead, it was limited to a quasi-judicial inquiry entailing the exercise of its independent judgement to determine if the agency’s official interpretation of the regulation was correct. The superior court erred in construing the hearing board’s standard of review to permit, and indeed require, the hearing board to consider some other, more amorphous concept of “fairness.” Furthermore, the Court held that the hearing board applied the correct standard of review, therefore the superior court erred in granting a writ of mandate on the plaintiff’s first cause of action that alleged the board failed to apply the proper standard of review.

CULTURAL RESOURCE MANAGEMENT

  1. Wishtoyo Foundation v. United States Fish & Wildlife Serv., 2020 U.S. Dist. LEXIS 228306 (C.D. Cal. December 4, 2020).

The district court granted USFWS’s motion for summary judgment holding that there was no question that USFWS adequately “took into account” the effects the Tehachapi Uplands Multiple Species Habitat Conservation Plan would have on the California condor population. Plaintiffs alleged that the California condor was a “traditional cultural property” as defined under NHPA and that the USFWS did not adequately evaluate impacts and mitigation to the condor population. USFWS determined that the condor was not a traditional cultural property under NHPA and as such did not require additional mitigation analysis. NHPA defines a traditional cultural property as “any district, site, building, structure or object included on or eligible for inclusion on the National Registry.” (54 U.S.C. §300308.) The Court held that the condor’s habitat may be eligible, but that the condor itself was not eligible for NHPA protections. The Court stated that to be eligible for consideration on the National Register, the area must have “geographical boundaries” that are “based upon a shared relationship among the properties constituting the district.” (Pueblo of Sandia v. United States, 50 F.3d 856, 860-61 (10th Cir. 1995).) The Court held that because plaintiffs failed to provide sufficient evidence to show that the condor or condor habitat were eligible for NHPA protections, it granted defendants motion for summary judgment.

FOREST RESOURCES

  1. Envtl. Prot. Info. Ctr. v. Carlson, 968 F.3d 985 (9th Cir. 2020).

The Court of Appeal reversed the district court’s order denying Environmental Protection Information Center’s (“EPIC”) request for a preliminary injunction, challenging the United States Forest Service’s approval of the Ranch Fire Roadside Hazard Tree Project in Northern California. The project authorized the Forest Service to solicit bids from private logging companies for the right to fell and remove large fire-damaged trees up to 200 feet from either side of roads in the Mendocino National Forest. Instead of preparing an Environmental Assessment or an Environmental Impact Statement for the Project under the National Environmental Policy Act, the Forest Service relied on a categorical exclusion (“CE”) for road repair and maintenance.

The Court held that the district court erred in denying the preliminary injunction and in finding that the Forest Service’s tree project qualified for a CE. While felling a dangerous dead or dying tree right next to the road falls within the scope of the “repair and maintenance” exemption, under “no reasonable interpretation of its language” did the project come within the CE for “repair and maintenance” of roads. The Court further reasoned that the Forest Service did not show that fulfilling its obligation to prepare an environmental impact statement under 42 U.S.C.S. § 4332(2)(C) or an environmental assessment was inconsistent with the goal of public safety.

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.

 

Reserve your spot for our virtual conference taking place January 21-25, 2021.

From January 21 to 25, 2021 Abbott & Kindermann, Inc. will present its 20th annual educational program for clients and colleagues interested in current land use, environmental, and real estate issues affecting commercial and residential development, agriculture, real estate transactions, easements, mining and the construction materials production industry. Abbott & Kindermann’s conference will be entirely virtual this year and will continue to cover the same vital information as in years past!

A summary of 2020 case law and legislative updates includes the following hot topics:

  • CALIFORNIA WATER RIGHTS AND SUPPLY
  • WATER QUALITY
  • WETLANDS
  • AIR QUALITY & CLIMATE CHANGE
  • RENEWABLE ENERGY
  • ENDANGERED SPECIES
  • HAZARDOUS MATERIALS & REMEDIATION
  • NATIONAL ENVIRONMENTAL POLICY ACT (“NEPA”)
  • MINING, OIL AND GAS
  • STREAMBED ALTERATION AGREEMENTS
  • FOREST RESOURCES
  • CULTURAL RESOURCES PROTECTION
  • ENVIRONMENTAL ENFORCEMENT
  • GENERAL REAL ESTATE
  • COMMON INTEREST DEVELOPMENTS
  • REAL ESTATE CONTRACTS & TRANSACTIONS
  • EASEMENTS, ADVERSE POSSESSION, DEDICATIONS, & BOUNDARY DISPUTES
  • FEES, TAKINGS, AND EXACTIONS
  • CALIFORNIA ENVIRONMENTAL QUALITY ACT (“CEQA”)
  • PLANNING, DEVELOPMENT AND THE SUBDIVISION MAP ACT
  • LOCAL GOVERNMENT AND LOCAL GOVERNMENT ORGANIZATION

Abbott & Kindermann, Inc. will present its annual program virtually in 2021, with a mix of conveniently available pre-recorded content and a live session component.  Details for the live sessions portion of the program are below.

Conference Format: 100% virtual event

  • Three pre-recorded sessions made available two weeks prior to the live sessions and held open a week after the live sessions end
    • Registrants receive an email with a link to pre-recorded sessions two weeks before live sessions
  • Three live sessions where each attorney will be part of a Q&A live panel session to answer all your questions
    • Registrants receive an email with password to live Zoom two days prior to chosen live session

Materials Included: available electronically in PDF format two weeks prior to event

  • Downloadable outline of case law and legislation for all topics in 2020
  • Downloadable quick reference cards of practice tips and case law
  • Upcoming classes list
  • Pre-recorded video sessions available for three weeks for review at your convenience

Registration Information:

Please register early to reserve your spot. MCLE and AICP CM credits are available (approval pending). We hope you can join us and we look forward to engaging with you in one of our live sessions.

Please call (916) 456-9595 with any questions.

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.

Reserve your spot for our virtual conference taking place January 21-25, 2021.

From January 21 to 25, 2021 Abbott & Kindermann, Inc. will present its 20th annual educational program for clients and colleagues interested in current land use, environmental, and real estate issues affecting commercial and residential development, agriculture, real estate transactions, easements, mining and the construction materials production industry. Abbott & Kindermann’s conference will be entirely virtual this year and will continue to cover the same vital information as in years past!

A summary of 2020 case law and legislative updates includes the following hot topics:

  • CALIFORNIA WATER RIGHTS AND SUPPLY
  • WATER QUALITY
  • WETLANDS
  • AIR QUALITY & CLIMATE CHANGE
  • RENEWABLE ENERGY
  • ENDANGERED SPECIES
  • HAZARDOUS MATERIALS & REMEDIATION
  • NATIONAL ENVIRONMENTAL POLICY ACT (“NEPA”)
  • MINING, OIL AND GAS
  • STREAMBED ALTERATION AGREEMENTS
  • FOREST RESOURCES
  • CULTURAL RESOURCES PROTECTION
  • ENVIRONMENTAL ENFORCEMENT
  • GENERAL REAL ESTATE
  • COMMON INTEREST DEVELOPMENTS
  • REAL ESTATE CONTRACTS & TRANSACTIONS
  • EASEMENTS, ADVERSE POSSESSION, DEDICATIONS, & BOUNDARY DISPUTES
  • FEES, TAKINGS, AND EXACTIONS
  • CALIFORNIA ENVIRONMENTAL QUALITY ACT (“CEQA”)
  • PLANNING, DEVELOPMENT AND THE SUBDIVISION MAP ACT
  • LOCAL GOVERNMENT AND LOCAL GOVERNMENT ORGANIZATION

Abbott & Kindermann, Inc. will present its annual program virtually in 2021, with a mix of conveniently available pre-recorded content and a live session component.  Details for the live sessions portion of the program are below.

Conference Format: 100% virtual event

  • Three pre-recorded sessions made available two weeks prior to the live sessions and held open a week after the live sessions end
    • Registrants receive an email with a link to pre-recorded sessions two weeks before live sessions
  • Three live sessions where each attorney will be part of a Q&A live panel session to answer all your questions
    • Registrants receive an email with password to live Zoom two days prior to chosen live session

Materials Included: available electronically in PDF format two weeks prior to event

  • Downloadable outline of case law and legislation for all topics in 2020
  • Downloadable quick reference cards of practice tips and case law
  • Upcoming classes list
  • Pre-recorded video sessions available for three weeks for review at your convenience

Registration Information:

Please register early to reserve your spot. MCLE and AICP CM credits are available (approval pending). We hope you can join us and we look forward to engaging with you in one of our live sessions.

Please call (916) 456-9595 with any questions.

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 December 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 November 2020 Environmental Action News post, click here:  November Monthly Real Estate Law Action News | Land Use Law Blog (aklandlaw.com) .

  1. CASES PENDING AT THE CALIFORNIA SUPREME COURT

There are no cases pending at the California Supreme Court at this time.

  1. UPDATE

A. TAKINGS

  1. Wells Fargo Bank, N.A. v. Mahogany Meadows Ave. Trust (9th Cir. 2020) 979 F.3d 1209.

The Ninth Circuit Court of Appeals affirmed the district court’s judgement dismissing, for failure to state a claim, Wells Fargo Bank, N.A.’s quiet title action against the purchaser of real property at a foreclosure sale, an HOA, and the HOA’s agent. Wells Fargo sought a declaration that the foreclosure sale was invalid, and that Wells Fargo’s deed of trust continued as a valid encumbrance against the real property in Las Vegas.

The panel held that Wells Fargo did not suffer an uncompensated taking under the Takings Clause of the U.S. Constitution. The foreclosure proceeding itself was not a taking because the Takings Clause governs the conduct of the government, not private actors, and the foreclosing HOA was not an arm of the State of Nevada. The Court also rejected Wells Fargo’s contention that the enactment section of Nevada Revised Statute Section 116.3116, which grants an HOA a lien on its member’s residence for certain unpaid assessments and charges – rendering that portion superior to all other liens, a taking. Furthermore, Section 116.3116 predated the creation of Wells Fargo’s lien on the property; therefore, Wells Fargo could not establish that it suffered an uncompensated taking. The Court also held that when Wells Fargo received actual notice of the foreclosure sale, that notice was constitutionally adequate.

  1. Pakdel v. City & Cty. of San Francisco (9th Cir. 2020) 952 F.3d 1157.

The Ninth Circuit affirmed the district court’s determination that a regulatory takings case was not yet ripe for litigation and dismissed the suit in favor of the City and County of San Francisco. The actions between parties centered on the Expedited Conversion Program implemented by the City and County of San Francisco to allow property owners to convert their tenancy-in-common properties into condominiums. The suit arose when plaintiffs purchased a tenancy-in-common property prior to the implementation of the program and rented it out. When San Francisco’s program began, plaintiffs had the option of requesting an exemption from the lifetime lease requirement but failed to do so. The trial court held that plaintiffs waived their rights to contest the implementation of the program because they previously failed to express objections to it.

Among their objections, Plaintiffs brought a regulatory takings claim to the federal lawsuit, alleging that they were owed compensation from defendants because their property was no longer profitable due to the imposed regulation. The district court dismissed these claims stating that the alleged taking had not sought compensation in the earlier state court proceedings as required by Williamson County Regional Planning Commission v. Hamilton Bank of Johnson City, (1985) 105 S.Ct. 3108 (“Williamson County”). The Ninth Circuit overturned the district court’s ruling holding instead that the state court requirement was overturned in the Knick v. Township of Scott (2019) 139 S. Ct. 139. Nevertheless, the Court dismissed the case specifically because plaintiffs did not timely object to the program or request an exemption. The Ninth Circuit further clarified that the Williamson County decision established a finality requirement that survived Knick. This requirement was not met by plaintiffs and as such, the regulatory takings claims could not be further pursued. In its final disposition, the Court rejected all of plaintiffs subsequent arguments and dismissed the case in full.

  1. Lifschultz v. City of San Juan Capistrano, 2020 U.S. Dist. LEXIS 194740 (C.D. Cal. October 13, 2020).

Defendants, the City of San Juan Capistrano and Alejandra Molina, successfully dismissed plaintiffs claims of an alleged regulatory taking of a property resulting from alleged selective code enforcement by defendants. Plaintiffs alleged that defendants harassed plaintiffs and targeted a newly improved property causing the loss of two tenants and amounting to a regulatory taking. Plaintiffs claim a regulatory taking occurred because the two tenants terminated their leases, and Plaintiffs are suffering the loss of future income from prospective tenants who are dissuaded from renting from Plaintiffs by a cloud of harassment over the property. As such, plaintiffs alleged that the property is uneconomical to operate and defendants’ actions amount to a regulatory taking.

The Court disagreed with plaintiff’s takings claim and dismissed in favor of defendants. The Court held that the Plaintiff’s allegations failed because they did not sufficiently show proof of the defendants’ actions destroying a major portion of the property value. The Court specifically held that plaintiffs could not tie significant loss in value of the property to the code enforcement actions by defendants. The Court examined the actions of defendants and found that nothing in the facts provided by plaintiffs evidenced that the defendants’ code enforcement actions were selective or harassing in nature. The Court further dismissed two other claims not related to the takings claim and stated that because plaintiffs had three other opportunities to amend their complaint and bring viable claims and failed to do so, the Court would dismiss this case and bar further suit against defendants.

  1. Tan Phu Cuong Investment, LLC et al. v. King County, 2020 U.S. App. LEXIS 32367 (9th Cir. October 9, 2020).

The Ninth Circuit upheld the ruling of the district court when it dismissed property owners’ (Tan Phu Cuong Investments, LLC, referred herein as “Appellants”) claims against King County for an alleged physical taking, regulatory taking, and Clean Water Act violation. The suit between parties arose when Appellants purchased low-lying properties prone to standing water and groundwater percolation issues. Shortly after, Appellants sued King County for a host of environmental and takings claim. The district court granted summary judgment and Appellants appealed. The Ninth Circuit affirmed the district court’s determination finding Appellants did not suffer a physical taking because the pooling predated the Appellants purchase of the property thus barring inverse condemnation claims. The Ninth Circuit further held that Appellant failed to address the Penn Central factors allowing them relief for a regulatory taking and failed to seek available variances making their claims not ripe for review. Lastly, the Court held that Appellants could not bring claims under the citizen suit provisions of the Clean Water Act since Appellants failed to provide proper notice to King County requiring compliance for the groundwater percolation on the property.

  1. Weiss v. People ex rel. Dept. of Transportation (2020) 9 Cal.5th 840.

The California Supreme Court denied defendants’ request to apply the laws and procedures governing Eminent Domain law into inverse condemnation claims. The defendants recognized that their defenses were grounded purely in inapplicable eminent domain laws, but asked that the Court apply eminent domain law and process to inverse condemnation because the Court has discretion to interpret and apply borrowed procedures from other bodies of law in other circumstances. Defendants argued that a similar approach could apply here, because the Legislature allowed the judicial branch to develop the application of inverse condemnation actions to various statutes and rules. The Court was unconvinced and held that the eminent domain statutes do not apply in inverse condemnation cases. It reasoned that the eminent domain statutes were narrowly construed by the Legislature and tailored specially to only eminent domain actions. It further reasoned that eminent domain has a particular set of statutory procedures that are inapplicable in inverse condemnation actions. The Court, thus, concluded that the adoption and amendment of statewide rules governing inverse condemnation statutes should be left to the Legislature or Judicial Council.  As such, it affirmed the judgment of the Court of Appeal and denied defendants’ request to import eminent domain statutory authority into inverse condemnation procedure.

  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 an 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, 7 Cal.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. Auburn Woods I Homeowners Ass’n v. State Farm Gen. Ins. Co. (2020) 56 Cal.App.5th 717, certified for partial publication.

An HOA and its property manager sued an insurer and its agent for breach of contract and breach of the implied covenant of good faith and fair dealing after the insurer refused to defend an association member’s first lawsuit against the association. The Superior Court of Placer County entered judgement for the insurer, finding the proposed Code Civil Procedure section 998 settlement offer was invalid, and denied a motion to tax expert witness fees. The association and manager appealed.

The Third District Court of Appeal affirmed, holding that the insurer did not have the duty to defend plaintiffs against the first lawsuit. It reasoned that the new cause of action did not give rise to a potential for coverage under the agreement and the insurer did not have a duty to defend. The Appellate Court reversed the trial court as to the rejection of expert witness fees, holding that the settlement offer to compromise complied with Section 998’s requirement that an offer must specify the manner in which it is to be accepted and provide for written acceptance to be signed by the offeree or its counsel. Further, the Court held that the proposed settlement agreement was attached to the Section 998 offer, and thus the agreement and release were not overbroad or ambiguous.

  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) 47 Cal.App.5th 384, certified for partial publication.

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) 51 Cal.App.5th 943, 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) 44Cal.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. Texcell Inc. v. STS Hydropower Ltd., 2020 U.S. Dist. LEXIS 158192 (E.D. Cal., August 31, 2020).

A federal judge granted summary judgment for defendants, two renewable energy companies, over a contract dispute on long term lease terms. The parties agreed to a long-term lease of thirty years where defendants (STS Hydropower ltd., later acquired by Eagle Creek Renewable Energy), planned to construct a hydroelectric facility. Defendants were unable to pay the costs and expenses related to operation of the facility out of revenue and considered lease termination. In 2017, the Ponderosa Wildlife destroyed the facility leaving the terms of the contract in question. Plaintiff demanded defendants rebuild the facility and continue operation of the lease and in response defendants moved to terminate the lease in writing. Plaintiffs filed suit against defendants alleging: 1) breach of contract, 2) breach of good faith and fair dealing, and 3) declaratory relief. Defendants filed a summary judgment motion on all three claims leaving the court to order the partial summary judgment.

The court granted summary judgment to defendants on the breach of contract claim. Plaintiff argued that Eagle Creek was the alter ego of STS and whatever actions were taken by STS should constitute an action taken by Eagle Creek. Plaintiff further alleged that the terms of the contract obligated STS to rebuild the facility and resume the terms of the lease after the fire. The court was unconvinced. The court held that since plaintiff failed to provide material evidence that STS was obligated to rebuild the facility and that Eagle Creek was its alter ago, summary judgment was granted in defendants favor on the breach of contract claim. On the breach of good faith and fair dealing claim, the court held that even viewing the facts in a way most favorable to the plaintiffs, the court could not find that defendants acted in bad faith by exercising their right to terminate the contract. The court granted defendants summary judgment motion on the good faith and fair dealing claim as well. Since the court could find no grounds for awarding declaratory relief to plaintiffs, the court denied plaintiff’s request for declaratory judgment.

  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. Tiburon/Belvedere Residents United v. Martha Co. (2020) 56 Cal.App.5th 461. 

The First District Court of Appeal upheld a trial court ruling that trails not sufficiently used by the public cannot establish a recreational easement under the doctrine of implied dedication. The appellate court reasoned that there was no evidence that a public entity maintained the trails or any associated facilities. The Court further found that there was substantial evidence that the owner of the property where there was a manmade access trail regularly repaired the fence and posted no trespassing signs. It further held that users could clearly see that access was not permissible since they needed to duck through openings and around barbed wire fence near “no trespassing” signs to access the trails. The Court noted that a private landowner may transfer an interest in land to the public for no compensation either by express or implied dedication. An implied dedication occurs when there is proof that the owner consented to the dedication and the public has used the land openly and continuously as if the users believed the public has a right to do so. The Court first found that there was no evidence of an express dedication of the property because there was no direct evidence of the owner gifting the property to the public. Next, it held that there was no implied dedication of the property because there was insufficient evidence of long-continued adverse use. The Court reasoned that the members could prove use by neighbors and residents of the community, but the contact with the property was infrequently used by the public. As such, it held that plaintiffs did not meet their burden to support a finding that the trails should be accessed by the general public through implied dedication. The Court further pointed to evidence of signage, fencing, and prohibitive structures directly impeding the public access as evidence that an implied dedication did not exist.

  1. Riverside County Transportation Commission v. Southern California Gas Company (2020) 53 Cal.App.5th 1003, certified for partial publication.

The Fourth District Court of Appeal affirmed PUC’s authority to demand defendant to relocate its pipeline operations at the cost of the company. The court further found that after the PUC terminates a company’s licenses for pipeline operation, the company can be held liable for trespass if operations continue. Plaintiff (Riverside County Transportation Commission) pursued plans to extend Metrolink commuter rail in across defendant’s (Southern California Gas Company) pipelines. Plaintiff terminated the licenses held by defendant to operate its pipelines and demanded that defendant move the pipelines at defendant’s own expense. Defendant agreed to move the pipelines, but at the expense of plaintiff. In the trial court, plaintiff won a determination that defendant was obligated to move pipelines at its own expense but failed to win its claim that defendant had been trespassing after plaintiff terminated the pipeline licenses.

On appeal, the Court of Appeal affirmed the trial court’s holding that plaintiff had the authority to require defendants to relocate its pipelines at their expense. The Court reasoned that the licenses contained specifically language granting plaintiff the authority to terminate the lease and that expenses should be left to defendant. The Court concluded that plaintiff was entitled to enforce the contract for the pipelines entered into by both parties. The Court reversed the trespass ruling by the trial court holding that defendant could not apply any alternative easement theories to circumvent its trespass on plaintiff’s property once plaintiff terminated the licenses allowing the pipelines in the public right-of-way. The Court held that defendant needed the permission of the public entity in order to maintain operations and failed to do so. In short, the Court held that defendant trespassed on plaintiff’s property when they failed to abandon operations after plaintiff terminated the operational licenses. The Court reiterated that public easement cases were frequent, and the publication of this case was intended to provide clear instruction on the easement rights of public agencies and private licensures.

  1. Martis Camp Community Association v. County of Placer (2020) 53 Cal.App.5th 569.

The Court of Appeal held that the County’s decision to abandon a road while reserving rights to easements on other sections of that road was reasonable, since the road itself was unnecessary and merely a residential convenience rather than a necessity. Defendant, the County of Placer partially abandoned a public easement right for a road connecting two subdivisions. The road’s intended use was supposed to be as an emergency services road and closed off to private use. However, sometime around 2010, residents in the two subdivisions began privately using the access road leading county officials to request the County Board of Supervisors to abandon the public rights to use and retain rights to use for emergency and transit services. Plaintiffs argued that the trial court erred in denying that the County had a right to abandon a public road. Other causes of action included violations of the Brown Act, violations of CEQA when deciding to abandon the road easement, and the trial court improperly sustaining a demurrer on an inverse condemnation claim.

The Court of Appeal affirmed the trial court’s determination that the County did not violate the statutory requirement for abandoning a public road. The Court agreed with the Board of Supervisor’s determination that the road was never intended to be used as part of the public transportation network. The Court held that the actions of the County were reasonable and supported by substantial evidence because use of the road by the public was convenient but also unauthorized since the road was not planned, designed, or approved to accommodate use in the public road system. Plaintiffs further acknowledged that the County had the right to abandon the road, but that it could only abandon the road in full or approve it for complete use, not reserve some right of access to the road. The Court dismissed this argument, holding that Plaintiffs failed to point to any authority supporting their argument and the Court could not find any case law stating that the County had to abandon the entire road without reserving some easement rights. The Court further held that the County did not violate the Brown Act and dismissed the inverse condemnation claim by plaintiffs. Lastly, the Court held that plaintiffs were entitled to relief on the CEQA claims and remanded the case with instructions to order the issuance of a writ of mandate and require proper compliance with CEQA.

  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.