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

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

1. 2019 CEQA UPDATE

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

2. CASES PENDING AT THE CALIFORNIA SUPREME COURT

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

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

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

3. UPDATE

A. Exemptions

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

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

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

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

B. Negative Declarations

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

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

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

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

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

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

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

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

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

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

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

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

C. Environmental Impact Reports

Golden Door Properties. v. County of San Diego, 2020 Cal.App.5th 665.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

D. Subsequent Environmental Review

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

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

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

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

E. CEQA Litigation

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

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

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

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

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

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

William Abbott, Diane Kindermann, Glen Hansen, and Daniel Cucchi are attorneys at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

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

By William Abbott and Jessica Melms

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  1. PREVIOUS MONTH’S UPDATE

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

  1. CASES PENDING AT THE CALIFORNIA SUPREME COURT

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

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

  1. UPDATE

A. CALIFORNIA WATER RIGHTS AND SUPPLY 

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

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

For more information see:

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

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

B. WATER QUALITY

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

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

For more information see:

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

C. WETLANDS

  1. California Finalized and Implements A State Wetland Definition

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

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

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

For more information see:

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

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

D. AIR QUALITY AND CLIMATE CHANGE

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

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

E. RENEWABLE ENERGY

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

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

For more information see:

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

F. ENDANGERED SPECIES

  1. Joshua Trees Recommended For Endangered Species Listing

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

For more information see:

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

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

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

G. NATIONAL ENVIRONMENTAL POLICY ACT (“NEPA”)

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

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

H. MINING, OIL, AND GAS

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

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

For more information see:

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

I. FOREST RESOURCES

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

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

J. STREAMBED ALTERATION AGREEMENTS

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

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

K. CULTURAL RESOURCE MANAGEMENT

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

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

William Abbott, Diane Kindermann, Glen Hansen, and Dan Cucchi are attorneys at Abbott & Kindermann, Inc.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

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

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

  1. PREVIOUS MONTH’S UPDATE

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

  1. CASES PENDING AT THE CALIFORNIA SUPREME COURT

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

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

  1. UPDATE

A. TAKINGS

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

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

B. GENERAL REAL ESTATE

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

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

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

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

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

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

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

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

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

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

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

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

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

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

C. COMMON INTEREST DEVELOPMENTS

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

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

D. REAL ESTATE CONTRACTS & TRANSACTIONS

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

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

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

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

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

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

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

William Abbott, Diane Kindermann, Glen Hansen, and Dan Cucchi are attorneys at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

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

Spaces are still available! William Abbott and Harriet Steiner will teach a joint virtual course on June 26, 2020 titled, “Vested Rights, Vesting Maps and Development Agreements.” The seminar is hosted by UC Davis Extension.

Class Description:

Development agreements are an effective avenue for a community and developer to come together and process a project. Both sides of the table need to carefully consider the terms of these contracts and explore questions of content and performance before completing such an agreement. Learn the legislative and judicial aspects of development agreements.

Examine the legal basis for development agreements and the overlap between agreements and vesting subdivision maps. Participants will learn the negotiation process, identify, and discuss the range of options available when negotiating a development agreement, and review the theoretically possible agreement. Consider the key points of an agreement, learn ways to assist in understanding the needs of the other side and select the players to conduct the negotiation.

Topics include:

  • Common law vested rights
  • Legal review
  • Development agreements vs. vested maps
  • The Development Agreement Statute
  • Key terms and alternative approaches
  • Considerations in negotiating the agreement
  • Contents of an agreement
  • Testing the waters
  • Paper control: who drafts the document
  • Enforceability
  • How to implement agreements
  • What happens following the expiration of an agreement

The instructors will also address the 2019 housing legislation which establishes forms of vesting impacting housing projects.

When: Friday, June 26, 2020

Where: Online Class

Cost: $360

Register with the following link: https://extension.ucdavis.edu/section/vested-rights-vesting-maps-and-development-agreements

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

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

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

Willow Glen Trestle Conservancy v. City of San Jose, 2020 Cal.App. LEXIS 423 (May 18, 2020)

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. In Friends, the City successfully defended its mitigated negative declaration (“MND”) adopted in support of the City’s trails plan which proposed to demolish the nearly 100 year-old wooden railroad trestle (see AK Blog https://blog.aklandlaw.com/2016/08/articles/ceqa/agencys-historical-resource-determinations-subject-to-deferential-substantial-evidence-review-standard/ ). The primary issue was whether the City had properly determined that the trestle, which was not listed on the California Register of Historical Resources (the “State Register”), was not a historical resource that would require additional environmental review.

A year after the appellate court decision was issued, the California State Historical Resources Commission approved the listing of the trestle on the State Register. That same year, the City’s original SAA approved for the project had expired, and the City now had to submit a new request to DFW. The City submitted the required Notification of Lake or Streambed Alteration for the project in early 2018, and the final SAA was issued in August 2018. Petitioners filed suit seeking an injunction to prevent the demolition of the trestle, arguing the City’s action was a new discretionary approval requiring additional environmental review under CEQA, which by necessity would require the City to now consider the trestle’s existence on the State Register. The trial court denied the petition and the petitioners appealed.

The appellate court affirmed. Petitioners argued 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 (see AK Blog https://blog.aklandlaw.com/2017/06/articles/ceqa/ceqa-better-second-time-around/), 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.)

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

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

William Abbott and Harriet Steiner will teach a joint virtual course on June 26, 2020 titled, “Vested Rights, Vesting Maps and Development Agreements.” The seminar is hosted by UC Davis Extension.

Class Description:

Development agreements are an effective avenue for a community and developer to come together and process a project. Both sides of the table need to carefully consider the terms of these contracts and explore questions of content and performance before completing such an agreement. Learn the legislative and judicial aspects of development agreements.

Examine the legal basis for development agreements and the overlap between agreements and vesting subdivision maps. Participants will learn the negotiation process, identify, and discuss the range of options available when negotiating a development agreement, and review the theoretically possible agreement. Consider the key points of an agreement, learn ways to assist in understanding the needs of the other side and select the players to conduct the negotiation.

Topics include:

  • Common law vested rights
  • Legal review
  • Development agreements vs. vested maps
  • The Development Agreement Statute
  • Key terms and alternative approaches
  • Considerations in negotiating the agreement
  • Contents of an agreement
  • Testing the waters
  • Paper control: who drafts the document
  • Enforceability
  • How to implement agreements
  • What happens following the expiration of an agreement

The instructors will also address the 2019 housing legislation which establishes forms of vesting impacting housing projects.

When: Friday, June 26, 2020

Where: Online Class

Cost: $360

Register with the following link: https://extension.ucdavis.edu/section/vested-rights-vesting-maps-and-development-agreements

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

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

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

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

1. PREVIOUS MONTH’S UPDATE

To read the April 2020 Environmental Action News post, click here: https://blog.aklandlaw.com/2020/04/articles/ak-news/land-use-law-blog-april-environmental-action-news/ .

2. CASES PENDING AT THE CALIFORNIA SUPREME COURT

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

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

3. UPDATE

A. CALIFORNIA WATER RIGHTS AND SUPPLY

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

The trial court determined that an EIR under the California Environmental Quality Act for a permit ordinance for oil and gas wells was adequate in some respects and deficient in others. The Court of Appeal reversed and remanded. Instead, finding that an EIR for a permit ordinance for oil and gas wells lacked sufficient mitigation because it improperly deferred and delayed mitigation as to water supply, inadequately discussed uncertain impacts, and did not ensure conversion of agricultural land would be offset. Response to the public comments were lacking on the mitigation issue because there was insufficient reasoned analysis. A complete analysis of this issue was posted to the Abbott and Kindermann blog and located here: https://blog.aklandlaw.com/2020/03/articles/ceqa/rethinking-the-use-of-ag-conservation-easements-to-the-extent-feasible-phrases-as-mitigation-after-sprawling-fifth-district-ceqa-opinion-on-kern-county-oil-gas-ordinance/ .

2. Coronavirus highlights link between health and clean water.

Even as the novel Coronavirus pandemic emerged, the first bit of advice was to wash your hands. But several studies since have come out highlighting the link between clean water, or lack thereof, and health. Over 40% of the world’s population face constant water scarcity, and everyday nearly 1,000 children die from preventable water/sanitation related diseases. That being said, taking up the first line of defense against COVID-19, washing your hands, has been a challenge in many developing countries. Even with increased efforts in many countries to improve access to water, access to clean water remains inadequate.

For more information see:
http://theconversation.com/coronavirus-spotlights-the-link-between-clean-water-and-health-132731
https://www.un.org/sustainabledevelopment/water-and-sanitation/
https://www.bbc.com/news/world-51929598

B. WATER QUALITY

1. CA requiring stormwater runoff licenses for certain businesses.

Effective January 1, 2020, businesses are required to provide proof of coverage for operations where a stormwater permit is necessary. Any business that does not have the necessary stormwater permit will need to obtain a temporary license until it obtains full coverage before a standard business license will be granted. A temporary license lasts 90-days and business owners are expected to obtain the stormwater permit during the 90-day period. Businesses subject to a stormwater permit are those mentioned in the standard classification system in the government code. The State Water Resources Control Board implemented a series of resources aimed at guiding business owners through the permitting process.

For more information see:
https://www.northbaybusinessjournal.com/opinion/10808196-181/opinion-california-storm-water-permit-law
https://www.waterboards.ca.gov/water_issues/programs/stormwater/sb_205_business_license_requirements.html

2. Delta Stewardship Council Cases (2020) 2020 Cal.App.LEXIS 402.

An unpublished opinion in the Court of Appeal for the Third Appellate District affirmed the resource plan for the Sacramento-San Joaquin Delta on twelve of thirteen causes of action alleged by plaintiffs. The Court held that the only argument that required further agency action was where the Delta Plan failed to promote options for new and improved infrastructure relating to water conveyance, storage systems, and operations. The Court remanded the case to the trial court to further evaluate whether a revised Delta Plan corrected the errors identified. The Court further held that the fees for prevailing parties under CCP Section 1021.5 required specific guidance. A complete analysis of the implications of this holding are posted to Abbott and Kindermann’s blog located here: https://blog.aklandlaw.com/2020/05/articles/ak-news/i-lost-92-of-my-case-can-i-still-get-ccp-1021-5-attorneys-fees-a-case-study-from-the-third-appellate-district/ .

3. County of Maui v. Wildlife Fund, 139 S.Ct. 1164 (2020).

A complete analysis of this recent SCOTUS decision is posted to Abbott and Kindermann’s blog located here: https://blog.aklandlaw.com/2020/05/articles/point-source-pollution-definition-further-expanded-by-u-s-supreme-court/ .

C. WETLANDS

1. Trump Administration’s New “Waters of the United States” Rule Published In The Federal Register On April 21, 2020.

On December 11, 2018, the U.S. Environmental Protection Agency and the Army Corps of Engineers under the Trump Administration proposed a new definition of the “Waters of the United States.” Under the new “WOTUS” rule, the agencies exempt water features such as 1) seasonal ephemeral water features, 2) groundwater, 3) ditches, 4) roadside or farm ditches, 5) prior converted cropland, 6) stormwater control features, and waste treatment systems from that definition and, therefore, from U.S. jurisdiction. The agencies cite state and tribal definitions that adequately cover other waters not listed as a justification for creating so many exemptions. The Trump Administration’s WOTUS rule directs the federal government, states, and tribes to create a database to list bodies of water under the rule’s jurisdiction. Nearly every environmental organization and several states expressed their outrage for the proposed rule citing several sections where the rule does not comport with the Clean Water Act and the Endangered Species Act. President Trump’s WOTUS rule will replace the 2015 rule, and a final rule was published on April 21, 2020 with full implementation to occur on June 22, 2020.

For more information see:
https://www.epa.gov/wotus-rule
https://thehill.com/policy/energy-environment/420308-epa-to-re-write-definition-to-shrink-pollution-protections-on
https://www.politico.com/newsletters/morning-energy/2018/12/11/its-wotus-day-449593
https://www.natlawreview.com/article/long-awaited-wotus-rule-addresses-uncertainty-may-face-litigation-ahead
https://www.feedstuffs.com/news/epa-proposes-new-wotus-rule

2. Trump Administration Takes Executive Action On Federal Central Valley Water Allocations.

A complete analysis of the Trump Administration’s memorandum seeking additional water for the Central Valley Project was posted to the Abbott and Kindermann blog, and located here: https://blog.aklandlaw.com/2020/04/articles/water-quality-wetlands-clean-water-act/trump-administration-takes-executive-action-on-federal-central-valley-water-allocations/ .

D. AIR QUALITY AND CLIMATE CHANGE

1. Trump’s Administration on Clean Car Rollback.

On March 31, 2020, the EPA finalized the Safe Affordable Fuel-Efficient Vehicles (SAFE) rule. The rule completes a two-part rollback of the Obama-Era clean car standards, which mandates a fuel economy increase by 5% annually. The SAFE rule mandates the automakers increase fuel standards by 1.5%. The first part of the SAFE rule removed California’s waiver of clean air emission standards, which allowed the state to set more stringent tailpipe pollution rules on all automobiles sold within the state. The second part of the SAFE rule implements the 1.5% increase in fuel economy for future auto manufacturing. The action by the Trump administration and EPA resulted in an immediate legal challenge by the State of California and several environmental groups nationwide.

For more information see:
https://www.eenews.net/stories/1062750601
https://www.theguardian.com/environment/2020/mar/31/trump-epa-obama-clean-car-rules-climate-change
https://www.forbes.com/sites/margooge/2020/03/31/trumps-clean-cars-rollback-a-first-test-of-our-post-coronavirus-society/#79918d567591
https://slate.com/news-and-politics/2020/04/trumps-epa-clean-car-standards-rollback-lies.html

2. Communities for a Better Environment v. South Coast Air Quality Management District (2020) 47 Cal.App.5th 588.

A complete analysis of this opinion related to approval of an EIR related to pollution emissions was posted to the Abbott and Kindermann blog, and located here: https://blog.aklandlaw.com/2020/04/articles/ceqa/second-district-court-of-appeal-upholds-eir-for-revisions-to-operating-permit-of-oil-refinery-facility-finding-1-districts-consistency-with-federal-peak-baseline-was-sup/ .

3. United States v. California, 2020 U.S. Dist. LEXIS 43422 (E.D. Cal., March 12, 2020).

A complete analysis of this opinion related California’s win in a partial summary judgment over California-Quebec’s Cap-and-Trade Program was posted to the Abbott and Kindermann blog, and located here: https://blog.aklandlaw.com/2020/03/articles/ak-news/california-wins-partial-summary-judgment-over-california-quebecs-cap-and-trade-agreement-buoying-californias-landmark-greenhouse-gas-emissions-reduction-program/ .

E. RENEWABLE ENERGY

1. California solar mandate not required.

California’s solar mandate, effective January 1, 2020, required most new single family homes or low-rise apartments to install solar panels on the rooftops. Seven weeks later, the California Energy Commission (“CEC”) approved an application to allow an off-site “community solar” project to power single family homes. The approval essentially cancels out the need for builders to install solar on each new house and provides developers with a larger array of options to meet the solar mandate.

For more information see:
https://www.usnews.com/news/best-states/california/articles/2020-02-19/californias-solar-mandate-may-not-require-one-on-every-roof
https://www.archlighting.com/news/california-loosens-solar-panel-mandate-to-allow-off-site-installations_s
https://www.tdworld.com/grid-innovations/generation-and-renewables/article/20971261/california-becomes-first-state-to-order-solar-on-new-homes

F. ENDANGERED SPECIES

1. CDFW issues take permits for the endangered Delta Smelt.

As the Delta Smelt enters is second life cycle with zero reported sightings, California Department of Fish and Wildlife (CDFW) issued an incidental take permit (take permit) for operations related to the State Water Project. The take permit covers four species of endangered fish including: Delta smelt, Longfin smelt, Winter-run Chinook salmon, and spring-run Chinook salmon. The Delta smelt is arguably one of the most controversial fish species on the ESA list. In a public statement, the CDFW stated that issuance of a take permit would strike a balance between the health of the Delta and necessary infrastructure projects. CDFW further stated that the permit provides an adaptive water management program where if the ecosystem is in jeopardy CDFW can adjust the strategy for infrastructure development.

For more information see:
https://www.indybay.org/newsitems/2020/04/01/18832051.php

G. HAZARDOUS MATERIALS AND REMEDIATION

1. Where is all the wastewater going?

The solar power industry has experienced significant growth between 2015 and 2020, sparked by favorable incentives with the renewable portfolio standard targets and tax credits. Now, California is facing the rapid increase of end-of-life solar panels, despite SB 489’s passage which helps facilitate collection and processing of these materials. Part of the issue stems from an ambiguity in the law, making it uncertain whether photovoltaic panels are considered hazardous waste. Stakeholders are pushing for more definitive legal action and language to help them find means for disposing, recycling, or reusing older solar panel material.

For more information see:
https://www.waste360.com/solar/what-s-happening-growing-volume-wasted-solar-panels
https://www.waste360.com/solar/california-pushes-solar-panel-waste-policy
https://www.ibisworld.com/united-states/market-research-reports/solar-power-industry/

H. NATIONAL ENVIRONMENTAL POLICY ACT (“NEPA”)

1. CEQ submits modifications to NEPA.

In January 2020, The Council on Environmental Quality (“CEQ”) issued a notice of proposed rulemaking with extensive changes to the National Environmental Policy Act (“NEPA”). The changes include a new timeline for NEPA review, increased coordination between stakeholders and relevant agencies, and redefining the scope of NEPA. Comments on the proposed rulemaking were accepted until March 10, 2020. Significant changes to the act include: 1) redefining what constitutes a “major federal action” initiating NEPA review, 2) minimizing the range of alternatives a project needs to consider before deciding on the most technically and economically feasible option, 3) limiting identification of effects of a project to only direct effects on the environment from a project potentially excluding all climate change analysis, 4) provides vague guidance in defining mitigation as part of a complete mitigation plan, 5) adds page limits to environmental assessments and environmental impact statements, 6) shortens the timeframe for NEPA review from project implementation to approval, and 7) provides a series of exemptions for projects non-federal in nature or covered by other statutes among other things. The proposed rule also seeks to codify a series of documents including judicial interpretations, presidential directives, guidance documents, and non-active legislation. CEQ must now take the comments provided by the public, address them, and then codify a finalized rule.

For more information see:
https://www.whitehouse.gov/ceq/nepa-modernization/
https://www.lexology.com/library/detail.aspx?g=31c9dab3-87fb-4a83-8abd-4bdd7bcd7468
https://www.natlawreview.com/article/trump-administration-proposes-sweeping-reforms-to-national-environmental-policy-act
https://www.natlawreview.com/article/trump-administration-proposes-unprecedented-and-comprehensive-revisions-to-nepa
https://www.natlawreview.com/article/revisions-to-nepa-proposed-to-unlock-american-investment

I. MINING, OIL, AND GAS

1. Swinomish Indian Tribal Community v. BNSF Railway. Inc., 951 F.3d 1142 (9th Cir. Mar. 4, 2020).

In 2011, the Swinomish Indian Tribe learned that BNSF Railway Co. (“BNSF”) was violating a right-of-way agreement, issued to BNSF under the Indian Right of Way Act. The right-of-way incorporated terms of an easement agreement between the parties, which BNSF was violating by running more trains and cars across the reservation than permitted by its terms. BNSF also had failed to submit the required annual cargo reports to the Tribe, and as a result, the Swinomish brought suit in district court. The court of appeals granted interlocutory review and affirmed the district court’s holding, finding that summary judgement was properly granted to the Tribe in its action to enforce an easement. It reasoned that the Interstate Commerce commission Termination Act did not repeal the Indian Right of Way Act and did not defeat the Tribe’s right to enforce conditions in a right-of-way easement.

J. ENVIRONMENTAL ENFORCEMENT

1. EPA suspends all enforcement actions during COVID pandemic.

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

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

For more information see:
https://www.latimes.com/environment/story/2020-03-27/epa-suspends-enforcement-amid-coronavirus
https://www.cnn.com/2020/03/26/politics/epa-coronavirus-pandemic/index.html
https://thehill.com/policy/energy-environment/489753-epa-suspends-enforcement-of-environmental-laws-amid-coronavirus
https://www.rollcall.com/2020/05/20/epas-wheeler-defends-pandemic-moves-as-markey-demands-apology/ 

William Abbott, Diane Kindermann, Glen Hansen, and Dan Cucchi are attorneys at Abbott & Kindermann, Inc. For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

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

The Supreme Court further expanded the scope of permitting requirements for point source pollution under the Clean Water Act (“CWA”) in a case involving discharge liability to the County of Maui, Hawaii. The County operated four water treatment wells at the Lahaina Wastewater Reclamation Facility and used the wells as groundwater injection locations for treated effluent wastewater. The County operates all four wells at a treatment rate of 2 to 5 million gallons of treated effluent wastewater per day. The County admitted that at least two of its injection wells had a known release of treated effluent wastewater. The County further concurred that if the groundwater treatment wells were connected to a Water of the United States (“WOTUS”), a National Pollutant Discharge Elimination System (“NPDES”) permit would be required to discharge it into the ocean, because discharge of pollutants from one-point source into a navigable WOTUS requires a NPDES permit under the CWA. However, the County failed to obtain a NPDES permit for the four wells. In the County’s opinion, because the treated wastewater filtered through an alleged series of indirect channels and pathways before reaching the ocean, there would be no discharge liability under the CWA.

The U.S. District Court held that under the CWA the County: (1) indirectly discharged into the ocean through a groundwater conduit; (2) the groundwater is a point source under the CWA; and (3) the groundwater is a navigable water under the CWA. The Court of Appeal affirmed the District Court’s adoption of the plurality view of the “Waters of the United States” in Rapanos v. United States, 547 U.S. 715 (2006). Justice Scalia in Rapanos stated the CWA does not discern between direct and indirect point sources, and liability for both is clear under the statute. The justices of the Supreme Court unanimously affirmed Scalia’s interpretation of liability for both indirect and direct point sources.

In the case at issue, the Ninth Circuit held that the County may not build an ocean outfall for an indirect point source without obtaining a NPDES permit to avoid CWA liability. “The appeals court wrote that a permit is required when ‘the pollutants are fairly traceable from the point source to a navigable water such that the discharge is the functional equivalent of a discharge into the navigable water.’” Hawai’i Wildlife Fund v. County of Maui, 886 F.3d 737, 749 (2018) (emphasis added).

On February 19, 2019, the U.S. Supreme Court granted limited review of the case. The Court agreed only to hear the first cause of action: whether the County indirectly discharged into the ocean through a groundwater conduit. Oral argument took place on November 6, 2019, and the Court took arguments under submission. The Court considered competing arguments over whether the Ninth Circuit’s “fairly traceable” standard should apply before a point source reaches a navigable water or whether there is a “bright-line test” where one non-point source severs the continual connection to a navigable water. In a 6-3 opinion, the Court reasoned that a middle ground existed between the parties’ arguments. The statutory language allowed for a narrower interpretation than the Ninth Circuit’s ruling which is also significantly broader than “total exclusion of all discharges through groundwater.”

The opinion, written by Justice Breyer, likened the middle ground for regulating a discharge into groundwater that flows into a navigable water as a “functional equivalent of a direct discharge.” Under this reasoning, the Court held that a party who discharges pollutants into a groundwater table that directly flows into a navigable water needs to obtain a NPDES permit as outlined in the CWA. The Court’s expansion of the regulation of groundwater discharge was issued on the heels of the EPA’s finalized WOTUS rule which limited the definition of navigable waters to only surface waters and connected, free flowing streams, rivers, and tributaries that flow to the ocean. EPA clearly articulated its desire to exclude groundwater from the WOTUS rule. The County of Maui further argued this point to the Court to no avail. As the majority of the justices stated, allowing a limited scope for permitting discharge pollutants only connected by surface water would leave considerable backchannels for polluters to avoid liability not directly releasing into surface water. Justice Breyer left flexibility for the states to implement and regulate the issuance of permits under their authority.

As Justice Roberts articulated, the “functional equivalency” test requires further clarification to guide lower courts. As such, the Court remanded the case to the Ninth Circuit to further consider the parameters for a “functional equivalency” test and further executive branch rulemaking may follow. The Court’s decision upends the newly adopted WOTUS rule and definition, and now requires the Ninth Circuit to redefine the “functional equivalency” test to avoid a barrage of fact specific cases in the federal courts.

Diane Kindermann Henderson is a shareholder 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.

 

Cty. of Maui v. Haw. Wildlife Fund_ 206 L. Ed. 2d 640

Delta Stewardship Council Cases (Cal.Ct.App., April 10, 2020, cases nos. C082944, C086199) 2020 Cal.App.Unpub.LEXIS 2279.

In an unpublished decision, the Court of Appeal for the Third Appellate District affirmed the trial court’s ruling that reduced the amount in attorney’s fees a plaintiff could collect under Code of Civil Procedure section 1021.5 after prevailing on only 1 out of 13 issues presented by the plaintiff to the trial court. The unpublished case is instructive in that it addresses an issue that frequently occurs in writ of mandamus cases: How does a court consider and resolve the attorney’s fees request of a plaintiff that prevails on only a portion of the claims presented and argued?

The case concerned the management and resource availability of the Sacramento-San Joaquin Delta (“Delta”). As part of the case on the merits, the trial court rejected 12 of the 13 causes of action Plaintiff C-WIN alleged against Defendant The Delta Stewardship Council (“Council”) claiming that the Delta Plan was deficient. The only argument not rejected by the Court was that the Delta Plan failed to promote options for new and improved infrastructure relating to the water conveyance in the Delta, storage systems, and for the operation of both. The trial court stated that the Council could satisfy the requirements of Water Code section 85304 by either adopting regulations or recommendations.

After judgment was entered, C-WIN filed a motion under section 1021.5, seeking $1,440,713.00 in fees and costs, which included a request to apply a 2.0 multiplier to the lodestar. Council opposed the motion on the ground that C-WIN did not achieve its litigation objectives, as it was unsuccessful on 12 of its 13 arguments claiming the Delta Plan was deficient and only won a de minimis victory on its water conveyance claim. The Council also argued that a multiplier was not warranted, that C-WIN requested an unreasonable hourly rate of $600 per hour for two attorneys, that C-WIN was not entitled to recover fees for time spent on CEQA issues, and that C-WIN was improperly attempting to “qualify for fees” by claiming credit for work performed by other petitioners on a certain issue (the Council argued that C-WIN incorporated by reference the arguments made by other petitioners and did not contribute anything of substance to that issue). The trial court held that C-WIN was entitled to recovery under 1021.5, but that recovery was reduced to only those claims/arguments that C-WIN was successful on. The trial court agreed with the Council that the requested fee award should be reduced by 12/13ths to reflect that C-WIN was unsuccessful on the majority of its “arguments/claims.” The trial court further found that $600 an hour for two of C-WIN’s attorneys was unreasonable and because the court did not reach the merits of a single CEQA cause of action. Lastly, the trial court held that the multiplier was too excessive and reasoned that a 1.5 multiplier to the lodestar was more appropriate. In total, the trial court awarded C-WIN $94,698.33.

On appeal, C-WIN argued that the trial court erred in the fee award as several of its arguments were so “intertwined and intimately related” that it achieved “full success” on its objective to invalidate the Delta Plan. In counter to C-WIN’s argument, the Council argued that C-WIN achieved only a “technical win” since the ultimate objective for C-WIN was to require the Council to adopt a new plan and this objective was not met. The Council cross-appealed on the ground that the trial court erred in applying a 1.5 multiplier to the lodestar in calculating the fee award. The Court of Appeal found no error in the trial court’s ruling on the attorneys’ fees.

Under §1021.5, a party may be awarded attorney’s fees on claims of “public interest if: (a) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons, (b) the necessity and financial burden of private enforcement . . . are such as to make the award appropriate, and (c) such fees should not in the interest of justice be paid out of the recovery, if any.” The lodestar and multiplier are reflective of the reasonable value of the representation and results obtained. The party seeking fees has the burden of proving what is a reasonable value.

On appeal, C-WIN argued that the trial court’s reduction of the award by 12/13ths was inconsistent with the substantive law of section 1021.5, and an abuse of discretion. The Court of Appeal disagreed. The appellate court recognized that the degree or extent of the prevailing party’s success in obtaining the results sought by that party “must be taken into consideration” in determining the extent of attorney’s fees which it would be reasonable for that party to recover.  The Court of Appeal applied a two-part analysis to assess whether a partial victory was reasonably consistent with the trial court’s recovery award. The first step includes evaluating what claims relate to party’s success and if there is “a common core of facts or are based on related legal theories.” If successful and unsuccessful claims are related, the court proceeds to the second step, which requires the trial court to evaluate the degree of significance of the overall relief obtained by the plaintiff in relation to the hours reasonably expended on the litigation. A court may identify specific hours that should be eliminated or simply reduce the award to account for the limited success of a claimant.

In applying this two-part process, the Court of Appeal determined that C-WIN failed to prove that the trial court erred in reducing the requested fee award based on limited success. The appellate court rejected C-WIN’s contention that its unsuccessful arguments for setting aside the Delta Plan were related to its successful argument. “The unsuccessful arguments were not merely different legal theories attempting to achieve the same result as the successful argument. Rather, the unsuccessful arguments intended to remedy alleged deficiencies in the Delta Plan entirely distinct and separate from the deficiency on which its successful argument was premised.” The Court also noted how C-WIN shifted in what it considered to be the “central objective” of its lawsuit. Also, the Court pointed out that “C-WIN devoted 34 pages of its merits brief to arguing that the Delta Plan was deficient,” and “[f]our of those pages discuss the issue of water conveyance, and nothing in the brief suggests that this issue was more important than any of the other 12 arguments claiming the Delta Plan was deficient. The Court was not persuaded by C-WIN’s contention that the trial court abused its discretion by failing to consider the litigation objectives disclosed in C-WIN’s petition.

The Council requested the Court of Appeal reject the multiplier to the lodestar since the trial court failed to “state a rational basis” for it. The Court rejected this argument since the Council did not raise the issue when the trial court released its tentative opinion. The court stated that the record established that the parties were aware of the factors the trial court used to justify the 1.5 multiplier and failed to object to the tentative opinion.

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

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