Welcome to Abbott & Kindermann’s 2018 3rd Quarter 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. 2017 CEQA UPDATE

To read the 2017 cumulative CEQA review, click here: 

2. CASES PENDING AT THE CALIFORNIA SUPREME COURT

There are 2 CEQA cases pending at the California Supreme Court. The cases, listed newest to oldest, and the Court’s summaries are as follows:

Union of Medical Marijuana Patients, Inc. v. City of San Diego, S238563. (D068185; 4  Cal.App.5th 103; San Diego County Superior Court; 37-2014-00013481- CU-TT-CTL.) Petition for review after the Court of Appeal affirmed the judgment in an action for administrative mandate. This case presents the following issues: (1) Is the enactment of a zoning ordinance categorically a “project” within the meaning of the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.)? (2) Is the enactment of a zoning ordinance allowing the operation of medical marijuana cooperatives in certain areas the type of activity that may cause a reasonably foreseeable indirect physical change to the environment?

Sierra Club v. County of Fresno, S219783. (F066798, 226 Cal.App.4th 704; Fresno County Superior Court; 11CECG00706, 11CECG00709, 11CECG00726.) Petition for review after the court of appeal reversed the judgment in an action for writ of administrative mandate. This case presents issues concerning the standard and scope of judicial review under the California Environmental Quality Act. (CEQA; Pub. Resources Code, § 21000 et seq.)

3. UPDATE

A. Thresholds of Significance

Golden Door Properties, LLC v. County of San Diego (September 28, 2018, case no. D072406 and D072433) ___ Cal.App.5th ___.

In response to an earlier writ of mandate to address deficiencies with the County’s 2012 adoption of a Climate Action Plan (“CAP”) and 2013 adoption of its Guidelines for Determining Significance for Climate Change required under the County’s general plan, the County published revised 2016 CEQA greenhouse gas (“GHG”) significance guidelines. The revised 2016 Guidelines established an efficiency metric as “the recommended method by which a project may make significance determinations,” but did not require that all projects use that threshold of significance. Both Sierra Club and Golden Door Properties, LLC, filed a petition for writ of mandate and an injunction, and the cases were consolidated. The trial court granted the writ of mandate and injunction, finding review of the 2016 adoption was ripe, and that (1) the County violated CEQA Guidelines section 15064.7, subdivision b; and (2) piecemealed environmental review, when it published the GHG significance guidelines separately from the CAP. The County appealed, arguing that: (1) the suit was not ripe; (2) the guidelines did not establish a threshold of significance; and (3) the separate action to publish the 2016 Guidelines was consistent with the earlier writ to revise the CAP and 2013 Guidelines and did not amount to piecemealing. The appellate court affirmed.

The appellate court first held the suit was ripe for review, rejecting the County’s claim that “the controversy does not apply to a specific set of facts” as required in Pacific Legal Foundation v. California Coastal Comm. (1982) 33 Cal.3d 158. It reasoned that the County’s 2016 Guidelines were analogous to the Bay Area Air Quality Management District’s CEQA Guidelines in California Building Industry Assn. v. Bay Area AQMD (2016) 2 Cal.App.5th 1067, which also did not require the use of the threshold, but recognized that the thresholds “were to be used routinely to determine environmental effects of a project.” 

Moving to the substantive claims, the appellate court held that the County violated CEQA because the 2016 Guidelines established a GHG threshold of significance without following the required adoption procedures. It reasoned that even though no project is required to use the threshold, the 2016 Guidelines established a “recommended” efficiency threshold that was an identifiable and quantitative level of GHG emissions effects where “non-compliance…will normally be determined to be significant by the agency…,” consistent with the threshold of significance definition under CEQA. (CEQA Guidelines §15064(a).) The court next held that because the 2016 Guidelines established a threshold of significance, the County violated CEQA when it published the 2016 Guidelines without a public review process or formal adoption by ordinance, rule, resolution, or regulation as required under CEQA Guidelines section 15064.7, subdivision (b). It further held that the County’s action was unsupported by substantial evidence because the efficiency metric threshold relied on statewide standards for GHG emissions reductions and did not provide sufficient evidence explaining why this metric was appropriate for use by projects in the County, specifically, as required by Center for Biological Diversity v. California Dept. of Fish & Wildlife (2015) 62 Cal.4th 204. Finally, the court held that publishing the 2016 Guidelines separate from adoption of the CAP improperly piecemealed environmental review, because the prior writ had already concluded that the CAP and the 2013 Guidelines were a single project under CEQA and, thus, by taking this action separately from the CAP the County violated both the prior writ and CEQA requirements not to piecemeal review of related policies.

B. Exempt From CEQA Review

Bottini v. City of San Diego (September 18, 2018, case no. D071670) ___ Cal.App.5th ___.

Petitioners sought approval from the City Council to demolish an existing dilapidated 19th century cottage on a residential lot. The Council approved of the request finding that the cottage was a public nuisance due to its unsafe condition and voted against designating the cottage a historical resource. After the cottage was demolished, Petitioners requested approval of a Coastal Development Permit (“CDP”) to construct a new single family home on the now vacant lot. Staff determined the project was exempt from environmental review. The Council reversed that determination concluding that full environmental review was necessary because demolition of the “historic” cottage must be considered as part of the project description, and that potential impacts to “historical resources” and the unusual circumstances exception precluded use of the CEQA exemption. Petitioners filed suit, seeking to compel the City to set aside the Council’s CEQA decision and for damages resulting from violations of the takings, due process and equal protection clauses of the California Constitution. As for the CEQA-related claim, the trial court granted the petition to set aside the decision and the City appealed. The appellate court affirmed.

Relying on CREED-21 v. City of San Diego (2015) 234 Cal.App.4th 488, the court held that the Council’s attempt to expand the project definition and set the CEQA baseline to include the condition of the property prior to demolition of the cottage was improper, because the decision to authorize demolition was final and not a subject of the current litigation. Thus, the consideration of the CDP for a new single-family home was a separate and distinct project from the demolition because the City’s approval of the demolition permit was an intervening event that went unchallenged and reset the baseline conditions for the CDP. The court then rejected the City’s exception to the CEQA exemption claims, reasoning that the only evidence in the record supporting the claims of impacts to a historical resource and unusual circumstances were premised on the same flawed premise that the project description must include the original demolition.

California Water Impact Network v. County of San Luis Obispo (2018) 25 Cal.App.5th 666.

Petitioners challenged the County’s approval of well construction permits without complying with CEQA review requirements, arguing the County had broad discretion to address potential impacts on groundwater supply that result from the projects. The County argued the permits were ministerial. The County further argued that the only issues that could be addressed were water quality and groundwater contamination that could result from the well construction process if an applicant fails to comply with specified technical requirements. The trial court held the County did not have discretion to shape a project to address environmental concerns, and the appellate court affirmed. It reasoned that the County’s incorporation by reference of the Department of Water Resources’ “minimum standards of well construction” intended to protect water quality, coupled with language in the local ordinance stating that well permits “shall be issued” if state and County standards are met, precluded the kind of discretion necessary to require compliance with CEQA. The court further concluded that to the extent the state standards provide the County with some amount of discretion as argued by Petitioner, such discretion was limited to addressing groundwater quality and did not provide the County with the ability or authority to mitigate potential environmental impacts on water supply. 

World Business Academy v. California State Lands Commission (2018) 24 Cal.App.5th 476.

In 2015, PG&E sought an extension of a lease from the State Lands Commission to continue operating the Diablo Canyon Nuclear Power Plant until 2025 when it is planned for decommission at the conclusion of its FERC-issued operating license term. The Commission approved the extended lease, citing to the Existing Facilities exemption (CEQA Guidelines §15301), to comply with CEQA. Petitioners filed suit, arguing that the project was not eligible for the categorical exemption due to: (1) the significant impacts on the environment that are inherent from the nuclear power plant’s operation; and (2) from the unusual circumstances of the plant’s location and operation. Petitioner also claimed that the approval violated the Public Trust Doctrine. The trial court rejected Petitioner’s claims and Petitioner appealed. The appellate court first admonished the parties for failure to lodge the full administrative record and citing only to excerpts in a jointly filed appendix of pertinent administrative records. It ultimately chose not to exercise its discretion to rule against Petitioner for that failure because the Petitioner belatedly filed the record with the court. 

Moving to the substantive claims, the court first rejected Petitioner’s claim that the plant was not eligible for the existing facilities exemption due to the inherent risks associated with a nuclear power plant. Relying on CEQA Guidelines section 15301, subdivision (b), it reasoned that the plant fit squarely into the “investor and publicly-owned utilities used to provide electric power…” category contemplated by the exemption, and that the record confirmed that there would be no expansion of the plant’s operational capacity. The court then rejected Petitioner’s unusual circumstances claims. Assuming for the purposes of the analysis that the project presents unusual circumstances, the court nonetheless found that there was no substantial evidence supporting a fair argument that a significant effect on the environment would result. 

Relying on the existing baseline of a fully-operational plant in accordance with North Coast Rivers Alliance v. Westlands Water Dist. (2014) 227 Cal.App.4th 832, the court reasoned that: 

  1. Petitioner could point to no evidence in the record to identify an environmental impact that would result from the size of the plant, its location, health effects on populations near the site, or impacts on marine life in light of the existing conditions; 
  2. The Commission was not obligated to follow a hyperlink in a comment letter to identify purported evidence supporting its claim that the extension would lead to an enhanced risk of reactor failure to “embrittlement” and no other evidence was in the record to support the claim; 
  3. Petitioner submitted no evidence supporting its claims that the extension would: (i) increase risk of fuel rod storage which is already occurring at the site;           (ii) heighten any seismic risk from its existing location near fault lines; or         (iii) make the plant more likely to be a terrorist target than currently exists; and
  4. Petitioner failed to demonstrate how its claims that the plant will be the sole remaining plant in the state and that PG&E was convicted of “safety-related and agency obstruction felony counts” would have an effect on the environment.

County of Ventura v. City of Moorpark (2018) 24 Cal.App.5th 377.

Petitioners challenged the City’s settlement agreement with the Broad Beach Geologic Hazard Abatement District (“GHAD”) to address haul routes for trucks used for a beach and sand dune erosion restoration project at Broad Beach, and the City’s determination that the agreement, and the related project activities it contemplated, as a single project were statutorily exempt from CEQA as an activity “to prevent or mitigate an emergency.” (Public Resources Code §§26601 and 21080(b)(4). Petitioners argued the actions were improper under several theories, including: (1) the City’s interpretation of the statute to find the action exempt is inconsistent with the purpose of CEQA; (2) the approval of the agreement and the contemplated activities were discrete actions under CEQA; (3) the traffic restrictions on trucks outlined in the agreement were preempted by state law; (4) the traffic restrictions constituted an illegal attempt to regulate traffic outside city limits; and (5) GHAD improperly abdicated its police power when granting the City the power to dictate sand hauling routes to be used by GHAD contractors. The trial court rejected all of Petitioners’ claims, except for the abdication of the police power, holding that such portions of the agreement that prohibited GHAD from modifying hauling routes in response to changed circumstances were void. The appellate court reversed in part, affirmed in part and remanded.

The appellate court held that the agreement and the contemplated activities were not distinct actions and were exempt from CEQA, as they represented the “whole of the project” and that a plain reading of the statutes grant this exemption to the proposed actions. As for preemption, the court found that Petitioners’ citation to Vehicle Code section 21 was inapplicable, because it did not apply to contracts, only to ordinance’s or resolutions. The court also rejected the claim of extraterritorial regulation by the City, reasoning that the hauling route limitations in the agreement were voluntarily agreed to by GHAD and the remedies under the agreement are limited to effects only within the city limits. Regarding Petitioners’ claim that GHAD abdicated its police power, the appellate court agreed with the trial court that one section improperly prohibited GHAD from adjusting hauling routes in the future, but went further to void additional portions of the agreement that limited future route options that may be chosen by GHAD as a result of future changed circumstances.

Aptos Residents Assn. v. County of Santa Cruz (2018) 20 Cal.App.5th 1039.

Petitioners challenged the County’s approval of a distributed antenna system for wireless cellphone coverage which included 13 microcell transmitters placed on utility poles in the Day Valley area in Aptos. The microcells are two-foot by one-foot antennas mounted on an extender pole and attached to a utility pole. The applicant filed individual permits for each microcell and the County had found that the project, both individually and as a whole, was exempt from CEQA, pursuant to the small structures exemption (14 C.C.R. §15303). Petitioners argued that: (1) the County improperly segmented its analysis of the project; (2) there was a cumulative impact resulting from the whole of the project, as well as Petitioner’s assertion that AT&T was likely to file for its own distributed system in the area soon; (3) the project fell under a “location exception” for a “mapped protective designation”; and (4) that there were unusual circumstances that precluded use of the exemption. The trial court denied petitioners’ claims and petitioners appealed.

The court of appeal affirmed. The court found the County did not improperly segment the project, nor fail to consider the cumulative impacts of the project. It reasoned that despite the fact that the applicant filed for separate permits for each microcell, the record was clear that the County had always treated the microcells together as one project which was authorized under the terms of the Section 15303 exemption which uses the plural when describing the number and type of structures eligible for the exemption. The court next rejected the claim that the County had an obligation to consider the potential AT&T project finding it to be speculative since it was nothing more than a rumor based upon hearsay. Next, the appellate court rejected petitioners’ “location exception” claim, finding that petitioners could cite to no evidence of an impact on an area “designated” as an “environmental resource of hazardous or critical concern.” Finally, the court found that there was nothing unusual about the use of several small structures to be used to provide utility extensions in a rural area.

Don’t Cell Our Parks v. City of San Diego (2018) 21 Cal.App.5th 338.

Real party in interest, Verizon Wireless, sought the approval of a wireless telecommunications facility to be constructed in a dedicated city park. Prior to the project approval process, City staff first made the determination that the project was eligible for a CEQA exemption under Section 15303 (“small facilities exemption”), and consistent with the City’s administrative rules, the Petitioners filed an appeal of the CEQA determination which was ultimately rejected by the city council. Moving next to consideration of the merits of the project, the city hearing officer held a public hearing and approved the development and use permits for the project. Petitioners filed an administrative appeal of this decision, though no grounds challenging the city’s CEQA determination were raised in this appeal, and the City rejected the appeal and upheld the permit approvals. Petitioner filed suit, arguing: (1) the permit approvals violated the terms of the city charter which required voter approval; (2) the project did not fit the terms of the Section 15303 exemption; (3) even if it did apply, both the unusual circumstances exception and the location exception precluded use of the exemption. The trial court rejected the claims and Petitioner appealed. The court of appeal affirmed.

As to the CEQA claims, the court first considered and rejected the City’s defense that Petitioner failed to exhaust its administrative remedies regarding CEQA when they failed to appeal the CEQA determination when Petitioner appealed the permit approvals. It reasoned that because the City never held a public hearing or provided an opportunity to make objections prior to making its staff-level CEQA determination, the exception to the exhaustion requirements under Public Resources Code Section 21177, subdivision (e), applied to Petitioner’s CEQA claims. On the merits of Petitioner’s CEQA claims, the court found that the project was eligible under the small facilities exemption, reasoning that the size of the project (534 sq. ft.) was smaller than “a single-family residence, store, motel, office or restaurants,” which are expressly allowed under the exemption. The court also rejected the applicability of the unusual circumstances exception, reasoning that even if petitioner’s claim that the location within a park was an unusual circumstance, the biological resources report prepared in support of the project provided substantial evidence that the project would not have a significant effect on the environment as a result. Moving to petitioner’s location exception claim, the court found no such exception applied, because petitioner presented no evidence that the park was “designated” as an “environmental resource of hazardous or critical” as required under the regulation. As for the non-CEQA claims, the appellate court found that approval of the project did not require voter approval when changing the use of a public park as required by the city charter.  It reasoned that the “faux tree” design of the project, as well as its very small footprint in relation to the size of the park was consistent with the existing park use and, thus, did not change the use or purpose of the park.

C. Negative Declarations

Friends of Riverside’s Hills v. City of Riverside (2018) 26 Cal.App.5th 1137.

Petitioners challenged the City’s approval of a six-home subdivision on 11 acres in an environmentally-sensitive area on both land use and CEQA grounds claiming that an EIR was required, rather than the negative declaration that was adopted, because of the project’s inconsistency with the City’s special land use regulations for the area. Specifically, Petitioners challenged the City’s finding that the project would not have an “adverse impact on aesthetics or biological resources and would not conflict with any land use or zoning provisions that had been ‘adopted for the purpose of avoiding or mitigating an environmental effect’,” due to the project’s (1) failure to cluster lots as required; (2) excessive grading; and (3) failure to receive approval of a variance for lots less than 2 acres in size. The trial court rejected Petitioners’ claims and Petitioners appealed. The appellate court affirmed.

While the court agreed with Petitioners’ premise that a conflict with these applicable regulations designed to protect the environmentally sensitive area would constitute an environmental impact, it held that Petitioners had failed to point to any substantial evidence in the record to support the claim that there was a conflict. It reasoned that the claims amounted to speculation of conflicts that might occur in the future if certain conditions were violated at the final map stage when compliance with those conditions would be confirmed. Lastly, the court held that the variance requirements were inapplicable to projects under the special land use regulations, because despite some vagueness in its language the City’s ordinance describing the minimum lot standards is reasonably read to allow ½-acre minimum lots without a variance under its clustering provision.

Protect Niles v. City of Fremont (2018) 25 Cal.App.5th 1129.

The First District Court of Appeal affirmed the lower court’s holding that the City of Fremont needs to prepare a full EIR before approving a redevelopment project to the Niles historic district. The City of Fremont adopted a mitigated negative declaration in support of its approval of a residential and retail development project. Petitioners, Protect Niles, filed a writ of mandamus demanding the court overturn the project’s approval, require preparation of an EIR. The trial court held that the record supported a finding of significant “aesthetic/land use impacts, traffic impacts, hazardous material impacts, and impacts on the Alameda Creek Regional Trail,” and vacated the City’s project approvals and directed the City to prepare an EIR before considering whether to re-approve the project. 

The First District Court of Appeal affirmed the trial court’s judgment on the merits of aesthetic impacts and the traffic impacts of the projects. The Court reasoned that though public disfavor or controversy does not automatically trigger environmental review, where there is a substantial evidence of a fair argument that the project may result in significant impacts when reviewing a negative declaration, the Court resolves doubts in favor of more environmental review. Regarding potential impacts on historical resources, the court found that testimony from members of the architectural review board and documents written by the public agencies were substantial evidence of a potentially significant effect on the historic aesthetic in the Niles District. The court also held that despite the inclusion of a traffic study in the record which found the impacts would be less than significant on nearby roads and intersections when compared to the threshold of significance, testimony from residents in the area on the traffic conditions of Niles Boulevard and the Niles & Mission Boulevard intersection constituted substantial evidence in support of a fair argument of a potentially significant traffic impact warranting the preparation of an EIR. 

Jensen v. City of Santa Rosa (2018) 23 Cal.App.5th 877.

The facts in Jensen involved the approval of a rezoning, conditional use permit, and design review for a young adult center which included housing, counseling, education, and job training. Neighbors challenged the city’s reliance upon a negative declaration which included a noise study prepared by the applicant’s acoustic engineer. The trial court denied relief, and the neighbors appealed, focusing on potential noise impacts. The appellate court affirmed the decision of the trial court. The appellate court’s first task was to interpret the city’s noise ordinance. The court found that while the ordinance included stated noise levels in residential and non-residential districts, the noise levels were not maximum noise exposure levels; rather, the court found the ordinance reflected “standard or normally acceptable noise levels for the zones and times indicated.” These levels were not adopted as thresholds of significance. The noise ordinance also included specific limits for commercial and industrial activities. However, these levels did not apply to land uses such as the young adult center which was only subject to the ordinance’s generalized nuisance type language.

The applicant’s noise study considered the noise ordinance and included sound measurements and discussed noise impacts in terms of day/night differences and the normally acceptable tolerances. The consultant concluded, based on CEQA Guidelines Appendix G, that the noise impacts would not be significant. The appellants’ first criticism was that the noise study should have employed Leq calculations rather than Ldn, pointing to another study performed by the same consultant for a commercial project elsewhere in the same city which used Leq.

Appellants also argued noise impacts associated with the Project’s parking lot. While the appellate court’s analysis reads as intuitive and not necessarily based upon the administrative record, the court ultimately concluded there were too many differences between the 24/7 commercial use and that of the young adult center to permit reliance upon a noise impact analysis generated for the commercial project. That, coupled with appellants’ speculation and conflicting interpretation of the municipal code, led the appellate court to conclude that the substantial evidence in support of the appellant’s argument was lacking.

Appellants’ final argument concerned noise from exterior activities including basketball, pottery making, and gardening, all of which were evaluated in the noise study. From the appellate court’s perspective, appellant’s noise level analysis lacked credibility and was unsupported by expert opinion. Once again, substantial evidence was lacking.

John R. Lawson Rock & Oil, Inc. v. State Air Resources Bd. (2018) 20 Cal.App.5th 77.

In 2008, the State of California adopted air quality regulations which had the effect of requiring existing trucking operators to retrofit truck fleets with expensive air quality improvements.  In 2013, the state issued a regulatory advisory which created a safe harbor for operators seeking to come into compliance. Operators were also allowed to take advantage of regulatory changes expected to be adopted in 2014. The Air Resources Board engaged in the formal rule adoption process in 2014 and was sued by a fleet operator and trucking association arguing CEQA violations and failure to comply with the economic considerations part of the state APA. The Board operates under the “functional equivalent” provisions of CEQA, and in this case, relied upon the equivalent of a negative declaration. The trial court ruled for the petitioners and the court of appeal affirmed although on narrower grounds. The issues on appeal included: (1) had the ARB improperly committed itself to a project in advance of CEQA compliance, (2) what was the appropriate baseline for evaluating impacts, (3) fair argument and (4) had the ARB correctly evaluated the economic considerations required by the state APA.

First, applying the California Supreme Court’s decision in Save Tara, the appellate court found that the Board had sufficiently committed itself to a course of action, going beyond just expressing interest in an idea, and thus violated CEQA’s timing requirements. The court of appeal agreed that invalidation was an appropriate remedy, but did not require the functional equivalent of an EIR, leaving to the agency to determine the proper environmental document in response to the court decision. Anticipating the Board would implement the regulatory changes or something similar, the court concluded that there was substantial evidence to support the Board’s established baseline as not including the continuing effect of the existing regulations. The court then rejected the Board’s evaluation of impacts. Pointing to evidence in the record that the project could result in short to medium-term impacts involving various pollutants, the appellate court agreed that for purposes of the Board’s initial evaluation, compliance with the state’s long term plan might support a no-impact conclusion. When faced with the evidence of short to mid-term impacts, however, an EIR type document was required. Lastly, the appellate court evaluated the APA claims and held that the Board violated the APA when it failed to properly respond to comments on potential intra-state competition issues in its economic analysis.

Covina Residents for Responsible Development v. City of Covina (2018) 21 Cal.App.5th 712.

Petitioners challenged the City’s approval of a mixed-use, infill project with 68 residential units, approximately 8,000 square feet of retail and administrative office space, and 4,000 square feet of gallery space. The 3.4 acre site was a former car dealership and is located within one-quarter mile of a commuter rail station. The City adopted a mitigated negative declaration (MND) that tiered from an environmental impact report for the Town Center Specific Plan (TCSP EIR) which governs the area. The project as first designed had a shortfall of 84 parking spaces, but several last-minute revisions reduced the shortfall to only 19 spaces. Petitioners’ claims largely relied upon impacts purportedly caused by the shortage of parking spaces, arguing that the City: (1) improperly tiered the MND from the TCSP EIR; and (2) violated the Subdivision Map Act (SMA) by failing to adopt adequate findings. The trial court denied the petition, and Petitioners appealed.

The appellate court affirmed. The court first rejected the CEQA claim holding that the primary impacts associated with parking for the project were exempt from CEQA. It reasoned that despite the consideration of the impacts in the MND, the enactment of Public Resources Code section 21099 under SB 743 prior to the City’s approval of the project eliminated any need to consider such impacts under CEQA. As for the improper tiering claim, the court held that Petitioners cited to no evidence in the record to identify any deficiencies in the traffic analysis prepared for the project specific impacts that were not contemplated in the TCSP EIR. The appellate court also rejected the SMA claims that the project did not meet the parking requirements in the TCSP and was inconsistent with transportation policies in the TCSP, finding that Petitioners’ arguments amounted to speculation, rather than evidence, and that they cited to no evidence contradicting the City’s determination that the project complied with the TCSP’s multi-modal transportation policies.

Clews Land & Livestock, LLC v. City of San Diego (2017) 19 Cal.App.5th 161.

Petitioners challenged to the City of San Diego’s (“City”) approval of a small high school on previously developed, open-space designated lands adjacent to a commercial equestrian facility. The project included a one-building, three-classroom, 5,340-square foot high school on a previously developed one-acre site, with a 24-stall parking lot and associated landscaping. The project was located in the coastal zone at the end of a private access driveway shared with an adjacent equestrian facility. It included an historical farmhouse, currently used as an administrative office, along with several older outbuildings. Owners of the adjacent equestrian facility (“Petitioner”) opposed the project and the related draft Mitigated Negative Declaration (“MND”) prepared by the City, contending an EIR was required to study potentially significant historical resources, fire hazard, noise, and transportation/traffic impacts, and that the project threatened the Ranch’s economic viability as a business.

In reliance on the City’s misleading statements in the public notice, Petitioner appealed the hearing officer’s decision approving the project and associated MND to the Planning Commission, checking that box on the City’s standard appeal form and not checking the box for “Environmental Determination – Appeal to City Council.” While the appeal forms identified both CEQA and non-CEQA grounds for its appeal, City Staff advised Petitioner and the Planning Commission that Petitioner’s failure to appeal to the Council within 10 days of the hearing officer’s decision waived all CEQA and MND issues.  The Commission heard and ultimately voted 4-2 to deny the appeal and to grant the project permits. The City rejected as untimely Petitioner’s subsequent attempt to appeal the project approval and MND to the City Council. Petitioner filed suit on both CEQA and Planning and Zoning grounds. The trial court denied Petitioner’s writ petition on all asserted grounds, finding that Petitioner failed to exhaust administrative remedies on the CEQA claims by failing to properly administratively appeal the hearing officer’s environmental determination. Petitioner appealed and the appellate court affirmed.

The appellate court first rejected Petitioner’s claim that the City’s bifurcated appeal procedures were not in compliance with CEQA’s appeal requirements. It reasoned that because the project was approved by an unelected decision maker (the hearing officer), the City’s appeal procedures correctly included an option to appeal the environmental determination to the agency’s elected decision making body (the city council), which Petitioner failed to do when it appealed the project to the Planning Commission. As for Petitioner’s claim that it made the procedural error in reliance on erroneous statements made by the city in its public hearing notice, the appellate court held that Petitioner’s argument involving improper notice was inapplicable because there was no claim that the notice defect involved an inaccurate project description. Rather, it reasoned, the notice accurately provided notice of the public hearing but misstated the applicable appeal procedures. Instead, the court reasoned it was more appropriately a claim of equitable estoppel which was considered and rejected by the trial court and was not raised in its appeal. Finally, the court rejected the substantive claims of CEQA noncompliance regarding the potential fire risks resulting from development of the project in a high fire hazard severity zone, relying on the California Supreme Court’s decision in CBIA v. BAAQMD, 62 Cal.4th 369 (2015), to conclude that Petitioner’s fire safety expert improperly focused his analysis on existing environmental hazards not caused by the project, rather than the project’s impacts on the existing environment.

D. Environmental Impact Reports

San Franciscans for Livable Neighborhoods v. City and County of San Francisco (2018) 26 Cal.App.5th 596.

The City adopted an EIR in support of its approval of the City’s 2009 General Plan Housing Element in 2011. Petitioners, an association of more than a dozen neighborhood organizations, filed suit to challenge the EIR on CEQA grounds. The trial court denied the claims. Petitioners appealed arguing the City: (1) used an improper baseline for specified impact analyses; (2) failed to disclose potentially significant impacts on traffic, water supplies, land use and visual resources; (3) was required to recirculate the EIR for additional public review for an updated water supply availability assessment; (4) prepared a flawed analysis of the alternatives; and (5) improperly rejected proposed mitigation measures. The appellate court affirmed, holding that:

  1. The City’s use of a 2025 baseline when analyzing traffic and 2030 baseline when analyzing water impacts instead of the existing conditions was based on substantial evidence and not an abuse of discretion, as the EIR analyses were premised on the same growth-accommodating principle, rather than growth-inducing, which assumes the Housing Element is not the generator of new growth to evaluate the impacts of housing policies on traffic and water resources; 
  2. Petitioners challenge to the land use and visual resources impacts analyses based upon the claim that the baseline of maximum allowable density and height requirements, rather than the existing conditions, fails to account for the City’s reliance on a prior Program EIR to tier the analyses for the 2009 Housing Element. Under this tiering scheme, the City was entitled to analyze only those impacts that could result from the change in the prior project to the extent they created a new or more severe impact than what was previously analyzed; 
  3. The City was entitled to deference for its conclusions regarding the less than significant impacts to land use, visual resources, traffic and water supplies, because the determinations were based upon substantial evidence;
  4. The City was not required to recirculate the EIR as the result of the disclosure of an updated Water Supply Availability Study (“WSAS”) that indicated a water deficit could come much sooner than previously assumed after the release of the Final EIR, but before certification, because Petitioners disagreement with the City staff’s analysis was insufficient to disturb the conclusion that the change would trigger slightly increased rationing over that presumed in the original WSAS and did not create any new environmental impacts;
  5. The EIR fully analyzed three alternatives and rejected three others during the scoping phases. Petitioners argued that two of the three alternatives were sufficiently similar that the range amounted only to a No Project alternative and one other that “was not designed to reduce significant impacts.” The court reasoned this was insufficient for Petitioners to meet their burden to show that the EIR did not include a reasonable range of alternatives, because no set minimum number is required and Petitioners failed to demonstrate why the range precluded decisionmakers and the public from receiving the information needed to evaluate the project and its impacts; and
  6. Petitioners’ proposed mitigation measures to address impacts on transit services were properly rejected as infeasible by the City because the mitigation measures were premised on the availability of funding which is uncertain and cannot be guaranteed.

Citizens Coalition Los Angeles v. City of Los Angeles (2018) 26 Cal.App.5th 561.

In response to litigation over the City’s approval of a Target Superstore which upheld the adequacy of an EIR for the project, but that several of the variances approved to allow its construction were not supported by substantial evidence, the City adopted a new zoning district for the subject parcel that eliminated the need for variances. In support of this new zone, the City prepared an addendum to the prior EIR. Petitioners filed suit, arguing that a subsequent EIR was required, rather than an addendum, because the rezone was a new project, and that the rezone constituted an illegal “spot-zone.” The trial court ruled in favor of Petitioners on the CEQA grounds, reasoning that the new “entitlements vehicle” was a changed circumstance that warranted new CEQA review, but did not reach the spot-zoning issue. Both parties filed cross-appeals. The appellate court reversed.

The appellate court first considered the question of whether the rezone constituted a separate and distinct project from the project considered in the original EIR. It concluded that consistent with the California Supreme Court holding in Friends of College of San Mateo Gardens v. San Mateo County Community College District (2016) 1 Cal.5th 937, the question is “whether an initial environmental document remains relevant despite changed plans or circumstances.” Applying this standard, the court held that subsequent review was appropriate because the prior EIR’s review of the impacts of the proposed Target Superstore was still relevant and upheld the City’s use of an addendum. It reasoned that substantial evidence supported the City’s determination that the only reasonably foreseeable impacts of the rezone were related to construction of the superstore which were already thoroughly analyzed in the prior EIR. As for the land-use claim, the court agreed that the rezone met the definition of “spot-zoning” but held that it was permissible. It reasoned that there was a reasonable basis in the record that the City’s decision “has substantial relation to the public health, safety, morals or general welfare,” and Petitioners failed to meet their burden of showing that the rezone was not in the public interest.

Rodeo Citizens Assn. v. County of Contra Costa (2018) 22 Cal.App.5th 214.

Rodeo Citizens Association filed suit against the County of Contra Costa for improperly certifying the final EIR for an oil refinery in violation of CEQA. The County certified the EIR and granted a permit to Philips 66 Corporation to modify an existing facility on the refinery’s property and add new facilities for butane and propane. The trial court held that the project description and analysis of GHG emissions complied with Philips’ and the County’s obligations under CEQA. The court of appeal affirmed. The court of appeal held that since the amount of downstream GHG emissions from the combustion of propane and butane sold to downstream users was speculative, no further analysis was necessary. The court also rejected the Association’s claim that evaluation of the risk from hazardous materials was improper. It reasoned that the Final EIR properly applied the moderate to high consequence threshold against potential hazardous materials risks from the project and determined that none of the potential impacts exceeded that threshold. As such, the court held the County’s analysis was proper under CEQA.

Visalia Retail, LP v. City of Visalia (2018) 20 Cal.App.5th 1.

The City of Visalia amended its general plan pertaining to neighborhood commercial districts, adding a limitation that no tenant could occupy more than 40,000 square feet and set minimum separation requirements for neighborhood centers. The City adopted an environmental impact report in support of the decision. A shopping center owner submitted expert testimony regarding the potential for urban decay by a broker who opined that most grocers would not build less than 40,000 square feet, and that smaller stores had gone out of business. The broker also argued that substitution of less successful, lower volume tenants would eventually lead to physical decay in centers as a result of reduced investment, and complained of the reduction in commercial designation for one commercial center site. The trial court held it was insufficient to demonstrate that the limitation may have a significant environmental effect as a result of urban decay.

The appellate court affirmed, finding that none of the evidence offered by the property owner was substantial in character. It reasoned that the fact that some grocery stores would not build at 40,000 square feet or less was not evidence that no grocery store would be constructed. The evidence that one grocer was unsuccessful (building in the 10,000 to 20,000 foot range), did not foreclose that another grocer could build a larger store that meets the 40,000 square-foot requirement (additional evidence showed that Walmart had recently constructed a 38,000 square-foot store in Visalia). Further, the court held that there was a lack of evidence that urban decay would occur, just speculation.

City of Long Beach v. City of Los Angeles (2018) 19 Cal.App.5th 465.

The City of Long Beach and the California Attorney General as intervener (“Petitioners”) challenged the City of Los Angeles’ (“City”) approval of a new near-dock intermodal rail facility that would manage the transport cargo containers coming from the port. One of the effects of the new near-dock railyard would be to substitute four-mile trips on surface streets for many existing 24-mile trips via freeway to and from other existing off-dock railyards. Petitioner challenged the CEQA analysis citing concerns about the impacts of this shift in port truck traffic and filed suit, arguing: (1) the project description did not accurately describe indirect impacts resulting from the project; and (2) the air quality analysis inadequately addressed both direct and indirect impacts of the project.

First, the court considered and rejected the City’s exhaustion defense against clams raised for the first time by the California Attorney General after the conclusion of the administrative proceedings, finding that the Attorney General is exempt from CEQA’s exhaustion requirements consistent with “the Attorney General’s unique authority to protect the environment of the State of California.” The court next held that the City’s decision to perform only a single modeling run with a 50-year analysis range the EIR was inadequate to estimate how frequently or for what length of time the level of particulate air pollution in the area surrounding the new railyard would exceed the EIR’s standard of significance. The court also concluded that the EIR’s cumulative analysis was inadequate because it did not adequately focus on the combined impacts of the proposed project and another large railyard expansion proposed by Union Pacific adjacent to the proposed project.

The court also held that crucial information regarding air quality was omitted from the EIR. It reasoned that though the EIR showed that as a result of the trip length reduction total particulate matter emissions from trucks would be reduced by the project compared to the no project alternative, the EIR did not adequately explain that in the vicinity of the proposed new railyard, air quality would be substantially worse with the railyard than without it, and that the vicinity included homes and schools. Finally, the court rejected Petitioners’ claims that the EIR was required to account for truck trips to and from the Hobart railyard that would result from its new excess capacity. It reasoned that the record supported the EIR’s conclusion that a predicted level of economic growth would occur over the decades with or without the near-dock rail project, and that the project was not necessary to enable the operator to service anticipated growth at the Hobart facility and was, thus, not an indirect impact of the project.

E. Litigation

The Inland Oversight Committee v. City of San Bernardino (September 14, 2018, case no. E064836) ___ Cal.App.5th ___.

Petitioners, Inland Oversight Committee (“IOC”), CREED-21 and Highland Hills Homeowners Association (“HOA”), challenged the City’s approval of what the City determined to be a minor modification to an existing project claiming violations of CEQA and the Water Code. The Fourth District Court of Appeal affirmed the trial court ruling holding that a prior lawsuit filed by the HOA on different but similar grounds barred the new claims as res judicata. It reasoned that the HOA’s new claims are barred because they arise out of the same set of facts and transaction that was resolved in the prior suit, namely the purported invalidity of the approval of a minor modification and related violations of CEQA. The court similarly rejected the claims by IOC and CREED-21 as barred, because these petitioners are in privity with the HOA, reasoning that IOC and CREED-21 failed to articulate how their stated purpose of “advocating on behalf of the public” was not aligned with the HOA’s purpose of “protecting their property values.” It further held that there was no violation of the Water Code as no water supply assessment was required when the project is no subject to CEQA. 

LandWatch San Luis Obispo County v. Cambria Community Services Dist. (2018) 25 Cal.App.5th 638.

The Second District Court of Appeal affirmed the trial court award of $18,230.35 to the Cambria Community Services District for preparation of the administrative record, despite the fact that LandWatch had elected to prepare the record pursuant to Public Resources Code section 21167.6, subdivision (b)(2). It held that LandWatch had unreasonably delayed preparation of the record and forfeit its right to prepare the record, when LandWatch failed to prepare a complete administrative record within the required 60 days. The court reasoned that the District was within its right to complete preparation and certification of the record, and entitled to recover its costs, after the District: (1) warned LandWatch that its initial draft record submitted to the District was substantially inadequate; and (2) gave LandWatch a specific deadline to rectify the inadequacies or the District would take over preparation of the record, and LandWatch failed to respond until more than a week after the deadline. 

Heron Bay Homeowners Assn. v. City of San Leandro (2018) 19 Cal.App.5th 376.

Petitioners successfully challenged the City’s approval of a proposed wind turbine project under the California Environmental Quality Act (“CEQA”). The trial court concluded that the City’s decision to adopt a mitigated negative declaration was in error and, instead, was required to prepare an EIR. Post-trial, the trial court awarded petitioners a partial attorney fees award under the private attorney general statute in Public Resources Code Section 1021.5. The City and the real-party-in-interest (“Respondents”) filed an appeal on the fee award, arguing that the trial court erred when finding that, despite the “very close call” over whether Petitioners had a personal financial interest that was sufficient to outweigh the burden of bringing suit, a fee award could be apportioned to address the balancing of responsibilities. Respondents reasoned that the court could only consider apportionment of the fee award, after concluding that the petitioner’s interest did not disqualify it from the fee award. The appellate court rejected respondent’s claim finding that record for the trial court’s determination showed that it had impliedly found that Petitioners had a sufficient financial interests to incur some, but not all, of the costs of litigation. Thus, the trial court’s apportionment was a reflection of this implied determination that is required under the statute.

If you have any questions about these court decisions, contact William Abbott, Diane Kindermann, Glen Hansen or Daniel Cucchi. The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc. nor 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.

Center for Community Action & Environmental Justice v. City of Moreno Valley (Aug. 23, 2018, case no. D073451) ___ Cal.App.5th ___.

The right of initiative and referendum is embedded in the California Constitution as a result of the nationwide progressive political reform movement that began at the end of the 19th century. In fact, Hiram Johnson rode this political reform issue into the winner’s circle when running for governor in 1910. As a result of its constitutional foundation, the rights of initiative and referendum are closely guarded by the courts. Over time, California courts have generally concluded that citizen voters are co-equal with locally adopted legislative bodies when acting upon legislative matters, including the field of legislative actions involving land use matters. As the most recent case demonstrates, there are state legislative limits on selected land use enactments.

In the City of Moreno Valley, a significant development project was engulfed in litigation challenging the land use approvals, including a development agreement and a CEQA document. The local voters, with the backing of the developer, then qualified an initiative measure repealing the City Council approved development agreement and approving a substantially similar development agreement. Pursuant to the elections code, the City Council faced the option of approving the development agreement as submitted or submitting the measure to the voters for approval. The City Council elected to adopt the measure.

A new round of litigation followed seeking to overturn the re-approved development agreement on several grounds, including the argument that approval of a development agreement was reserved solely to the city council or board of supervisors. This argument was predicated in part on the fact that the development agreement statute expressly allows for referendum of an ordinance approving a development agreement, but is silent with respect to use of the initiative to approve a development agreement and was based on an earlier California Supreme Court decision in Committee of Seven Thousand v. Superior Court (1988) 45 Cal.3d 491, in which the California Supreme Court concluded that implementation of special legislation concerning transportation facility funding in Orange was reserved exclusively to city councils and board of supervisors, not the voters.   

The court of appeal reached a similar conclusion with respect to development agreements. The appellate decision was influenced by the legislative recitals in the development agreement statute as to the need and benefits of stability in the planning and development process evidencing a compelling state interest. The appellate court also recognized as another argument in support of exclusive authority that the development agreement statute contemplates that a development agreement is a negotiated agreement, and that the initiative process is not conducive to negotiation. Because the power of referendum is expressly incorporated into the development agreement statute, the voters still have a protected legislative interest, just one which is less comprehensive in scope when compared to other land use matters.

William Abbott 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, LLP 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.

Hansen v. Sandridge Partners, L.P. (2018) 22 Cal.App.5th 1020

A.  An Equitable Easement Is Often Sought Where A Prescriptive Easement And Adverse Possession Are Not Available.

An oft-repeated scenario in boundary disputes goes like this:  A property owner encroaches upon a neighbor’s land and then uses that land in a manner that is akin to owning the land. It could be fencing off the neighbor’s land and then possessing that land as if it actually was the owner’s property. It could be building on, planting or otherwise using the neighbor’s land in a manner that dispossesses the neighbor from the land, or prevents the neighbor from using the land for any practical purpose, or even prevents the neighbor from determining how her land will be used. The encroacher’s usual next step is to allege that he is entitled to a court judgment for either a prescriptive easement or for adverse possession in order to maintain the encroachment or to maintain the use on the neighbor’s land. However, prescriptive easements are generally not available in that scenario because the use that the property owner seeks to make of the neighbor’s land is exclusive or “so comprehensive as to supply the equivalent of an estate.”  (Raab v. Casper (1975) 51 Cal.Ap.3d 866, 876-877.)  Having failed to obtain a prescriptive easement, the property owner alternatively seeks an award of adverse possession, which would allow for such exclusive use and possessory interest. However, that alternative litigation tactic often fails because adverse possession requires the payment of property taxes that are “assessed upon the land for the period of five years during which the land has been occupied and claimed” (Code Civ. Proc. §325, subd. (b)), and because the property owner almost never pays such property taxes. Thus, the property owner invariably pursues yet another litigation strategy, an equitable easement.

B.  The Mindset Of The Encroacher Can Determine Whether An Equitable Easement Is Granted.

The Court of Appeal of California recently issued several opinions that addressed the mindset of the encroaching property owner in order to determine whether that owner is entitled to an equitable easement. For a trial court to exercise its discretion to grant an equitable easement, three factors must be present.

“First, the [encroacher] must be innocent. That is, his or her encroachment must not be willful or negligent. The court should consider the parties’ conduct to determine who is responsible for the dispute. Second, unless the rights of the public would be harmed, the court should [stop the encroachment] if the [burdened landowner] ‘will suffer irreparable injury … regardless of the injury to [the encroacher].’ Third, the hardship to the [encroacher] from [ordering removal of the encroachment] [‘]must be greatly disproportionate to the hardship caused plaintiff by the continuance of the encroachment and this fact must clearly appear in the evidence and must be proved by the defendant.’”  “Unless all three prerequisites are established, a court lacks the discretion to grant an equitable easement.”‘” [Hansen v. Sandridge Partners, L.P. (2018) 22 Cal.App.5th 1020, 1027-1028 (citations omitted) (emphasis added).]

While all three elements of an equitable easement are necessary, the “willful or negligent” element is “paramount.” (Hirshfield v. Schwartz (2001) 91 Cal.App.4th 749, 769.)  Recently, the Court of Appeal has addressed that element in three different factual contexts. Collectively, those cases illustrate that the mindset of the encroacher often determines whether a court will grant an equitable easement.

C.  No Equitable Easement For The “Willful” Encroacher.

In Nellie Gail Ranch Owners Assn. v. McMullin (2016) 4 Cal.App.5th 982, the Court of Appeal affirmed a trial court judgment that denied property owners’ (“McMullins”) request for an equitable easement to maintain a retaining wall and other improvements that the property owners constructed over more than 6,000 square feet of adjacent common area owned by the neighborhood homeowners’ association (“HOA”).

The HOA’s CC&R’s and its architectural review committee guidelines required homeowners to obtain written approval from the architectural review committee (“Review Committee”) before constructing or making significant alterations to any improvements on their property. In January 2008, the McMullins applied to the Review Committee to replaster their swimming pool, redo the pool deck, construct a bar area near the pool, install a solar heater for the pool, replace the wrought iron fence with an eight-foot retaining wall, backfill behind that new wall, install a large patio slab or sports court and garden in the flat area created, and build a staircase from the pool area down to the flat area behind a new retaining wall. The application included a site plan Mr. McMullin prepared which showed the location of the proposed improvements, including a new retaining wall to be constructed in the same location as the existing wrought iron fence that was on the property line between the McMullins’ property and the adjacent HOA common area. The plan identified the property lines between the McMullins’ property and their neighbors on either side, but did not identify the rear property line between the McMullins’ property and the HOA common area. The plan included two dashed lines that extended from the existing six-foot retaining wall that surrounded the backyard to the side property lines, but did not explain what those lines represented. The HOA later discovered these unlabeled dashed lines reflected the rear property line’s location.

In February 2008, the Review Committee sent the McMullins a letter denying their application and explaining how it failed to comply with the CC&R’s and the committee’s guidelines. The letter also informed the McMullins that “a fully dimensioned site plan showing property lines, easement areas, setbacks and fully-defined landscaping and drainage will be needed [for any future applications].”

Two weeks later, Mr. McMullin prepared and submitted a new application with a revised, more detailed site plan. That plan again represented the new retaining wall would be constructed in the same location as the existing wrought iron fence, and also identified the property lines between the McMullins’ property and their neighbors, but not the property line between the McMullins’ property and the HOA’s common area. The plan also included the same dashed lines extending from the end of the existing six-foot retaining wall without explaining what those lines represented. In March 2008, the Review Committee sent the McMullins a letter denying the revised application and explaining the reasons for the denial. This letter again notified the McMullins that any future application must be accompanied by “a fully dimensioned site plan showing property lines” and other necessary information “from a licensed Civil Engineer.” The committee’s letter also suggested the McMullins submit a new application limited to just the pool-related improvements if they wanted to get started on their project.

The McMullins followed the Review Committee’s suggestion and submitted a new application limited to the pool-related improvements only, which included a staircase from the pool area down to the slope behind the existing six-foot retaining wall. In April 2008, the Review Committee sent the McMullins a letter approving this application subject to a few conditions, including one that prohibited the McMullins from modifying the grade on the slope behind their existing retaining wall.

Almost a year later, Mrs. McMullin went to the Review Committee’s office to submit a new application and plans for the retaining wall and sports court. She spoke with the Review Committee’s community relations person. Mrs. McMullin testified that the relations person said the plans were not necessary because the McMullins’ application already was approved. The McMullins did not obtain written confirmation of this conversation or the Review Committee’s alleged approval of the retaining wall.

In May 2009, the McMullins obtained a building permit for the retaining wall from the City of Laguna Hills and began construction. By the time the HOA discovered the unauthorized construction work, it was nearly completed. In October 2009, the Review Committee sent the McMullins a letter denying their application for the retaining wall as constructed. The letter explained why the application was denied and what additional information the committee needed from the McMullins before it would approve the wall, including a dimensioned site plan by a licensed surveyor. The McMullins therefore hired a surveyor to conduct a survey and prepare a plan showing the relationship between the horse trail and the retaining wall. Mr. McMullin told the surveyor not to include the rear property line on this plan. The McMullins submitted this plan to the HOA, which tried to work things out with the McMullins.

However, in July 2010, the city sent a letter to both the McMullins and the HOA explaining the retaining wall was constructed entirely on the HOA property and did not fully comply with the city’s requirements regarding the wall’s height and the slope adjacent to the wall. The city further informed the parties the wall could not remain in its current condition. In March 2011 a formal survey determined that the new retaining wall and improvements were built almost entirely on HOA property, which increased the total size of the McMullins’ lot from approximately 16,400 square feet to more than 22,500 square feet. Contrary to the McMullins’ repeated representations in their applications, the surveyor determined that the retaining wall was built well outside the location of the original wrought iron fence on the property line and enclosed more than 2,000 square feet of the HOA common area.

Litigation eventually ensued. The trial court entered judgment that declared that the McMullins breached the CC&R’s by failing to accurately depict their property lines on the plans they submitted to the Review Committee, they constructed the retaining wall and other improvements without the Review Committee’s approval or the city’s permission, and they constructed the retaining wall and improvements on the HOA’s property. Among other things, the judgment also held that the McMullins failed to establish the requisite elements of an equitable easement. The Court of Appeal agreed. In its general analysis of the equitable easement claim, the court recognized that “‘“doubtful cases should be decided in favor of the plaintiff,”‘” “‘courts approach the issuance of equitable easements with “[a]n abundance of caution,”‘” and “[w]hen courts compare the hardships or conveniences, the scales ‘being tipped in favor of the property owner [over whom the easement is sought] due to the owner’s substantial interest in exclusive use of her property arising solely from her ownership of her land.’” (4 Cal.App.5th at p. 1004.)  In this case, substantial evidence supported the trial court’s finding that the McMullins were not innocent in constructing the wall on the HOA property, and therefore did not satisfy the first of the three requirements for an equitable easement claim. One of the factual issues that the trial court had to consider in support of that judgment was the extent of the parties’ knowledge about the location of the McMullins’ rear property line, and whether the McMullins deliberately failed to identify their rear property line on their submissions to the HOA. The trial court found the McMullins were not “innocent” in their construction of the wall because:  (1) they intentionally failed to identify their rear property line in each of the many plans they submitted despite HOA’s repeated request for them to identify property lines; (2) they knew where the property line was located because all of their plans included an unlabeled, dashed line that approximated the rear property line’s location; and (3) they started construction based on an ambiguous oral statement from an HOA employee about the approval of their plans when they knew written approval from the Review Committee was required before construction could begin. In short, substantial evidence supported the trial court’s conclusion that the McMullins were not innocent encroachers and therefore the trial court properly denied the equitable easement claim.  The trial court properly granted the HOA an injunction that authorized the HOA to do the following at the McMullins’ expense:  (1) remove the sports court; (2) cut down and remove the retaining wall to the existing grade in a manner that meets the city’s approval; and (3) address the grade of the ground on the entirety of the HOA common area in order to restore the area to a gradual open space slope and to restore the plantings on the HOA common area to native California vegetation.

Thus, the Nellie Gail case provides an example of a “willful” encroacher who should be denied an equitable easement.

D.  No Equitable Easement For The “Negligent” Encroacher.

In Hansen v. Sandridge Partners, L.P., supra, Erik Hansen and his relatives (the “Hansens” and “Hansen Ranches”)[1] were owners of farmland in Tulare County. In 2011, they found out that the owners of an adjacent parcel of farmland (the “Valovs”) were about to sell the adjacent parcel to Sandridge Partners, L.P. (“Sandridge”). Erik’s father “remembered that there was a lot line adjustment issue” with the adjacent parcel and “explained that there was a discrepancy in the line in what we have been farming” and that “we need to talk to Valov and make sure we straighten out the line before they close.” Erik’s father did not explain why Hansen Ranches was farming on approximately 10 acres of the Valov’s adjacent property (the “Disputed Land”). Erik’s “assumption is that’s just the way it was done … for the whole time.” Erik contacted Valov. Valov had a “vague recollection” of the lot line issue but did not discuss specifics. Erik “asked him what stage of the game his deal is, and that we need to straighten out any discrepancies in the lot line before they close.” Valov said he thought they would be able to resolve the issue before closing. Valov and Erik made arrangements to speak again later. However, Valov eventually stopped returning Erik’s calls.

At some point “prior to planting [the pistachio trees] and prior to putting a drip system in” Erik spoke with an employee of Sandridge. The “outcome” of the conversation “was that we would take care of this [lot line issue] some way, if it didn’t get handled prior to closing through Valovs.”

In the spring of 2012, the Hansens took several steps to prepare 160 acres of land—including the Disputed Land—for pistachio trees, including deep ripping the land and installing a drip irrigation system. When the irrigation system was installed, Erik knew from his father “that a lot line adjustment needed to happen” but still claims he did not know “the specifics” of the issue. Nonetheless, the Hansens planted the pistachio trees in June 2012. Erik did not receive any complaints from any neighbors concerning the installation of the irrigation system or the planting of the pistachio trees. Valov’s sale to Sandridge closed in December 2012.

Erik finally spoke with Valov again after the sale closed. Erik said he wished they could have fixed the lot line issue before the close of the sale. Valov apologized, said his father was dying and “that he thought it might have created a problem for dealing with his dad’s estate.” Sandridge, the Hansens, and their representatives negotiated to potentially resolve the Disputed Land issue, but those negotiations were unsuccessful, and litigation ensued.

The trial court denied the Hansen’s request for a prescriptive easement. The Court of Appeal agreed with that ruling. The Hansens had sought a prescriptive easement establishing their right to farm the Disputed Land “to the exclusion of Defendants and all other persons,” which the Court of Appeal described as “the practical equivalent of an estate” and “functionally equivalent to ownership.”  Since the Hansens essentially sought adverse possession, without having met the requirement of adverse possession that taxes be paid on the Disputed Land, “the Hansens cannot obtain the exclusive prescriptive easement they seek.”

Alternatively, the trial court granted the Hansens an equitable easement for such use of the Disputed Land. The Court of Appeal reversed that portion of the judgment because the Hansens’ conduct was negligent, which precluded an equitable easement.  The court explained:

Given that Erik knew there was a lot line issue at least by early/mid-2011, it strains credulity that he still did not know the “specifics” of the lot issue by the time the irrigation system was installed in the Spring of 2012. But, we must indulge every inference in favor of the judgment. Under that standard, Erik’s claim he did not know the “specifics” of the lot line issue in 2012 supports the trial court’s finding the Hansens did not knowingly and intentionally plant the pistachio trees on Sandridge’s land.

However, even accepting Erik’s version of events and the favorable inferences arising therefrom, we conclude it was undoubtedly negligent to plant trees on the land without first learning the location of a known, unspecified lot line issue. Indeed, if that conduct does not constitute a negligent encroachment, it is hard to imagine what would. While growers do not have a general duty to survey or otherwise confirm boundaries before planting, it is negligent to plant permanent crops on a swath of land, knowing that some unspecified part of that land is in need of a “lot line adjustment.” Moreover, a contrary rule would encourage trespassers who are aware of an unspecified boundary issue to quickly build or plant something that is difficult to remove, rather than act responsibly and learn more about the issue. In equity, such willful ignorance should not be condoned, and certainly not rewarded.

The Hansens insist that “‘innocent’ does not mean literally at no fault whatsoever.” We agree. And if the Hansens had no reason to doubt they owned all of what they thought was [their own] parcel, it likely would not have been negligent to rely on factors like the purported lack of objection from Valov—or visual cues like the irrigation ditch. But by early to mid‑2011, the Hansens did have reason to doubt their prior assumptions were wrong. Nonetheless, they planted the pistachio trees in the area after becoming aware that there was a lot line issue concerning the border between their parcel and Valov’s.

The Hansens insist that Erik did not know the lot line issue involved the Disputed Land. That factor suggests the encroachment was not intentional, but it does not settle the issue of negligence. To the contrary, the fact that Erik did not know where the lot line adjustment was needed, is precisely why it was negligent to plant a permanent crop in the area without determining where the correct lot line was located.

Accordingly, the Court of Appeal held that an equitable easement was not available because “the Hansens’ encroachment on Sandridge’s land was negligent as a matter of law.”

E.  Equitable Easement Granted To The “Innocent” Encroacher.

In Hinrichs v. Melton (2017) 11 Cal.App.5th 516, the Court of Appeal affirmed a trial court’s grant of an equitable easement for a property owner who had innocently created a landlocked parcel. In 1993, Leslie Witherspoon Hinrichs inherited two contiguous parcels of real property from his mother. The southern parcel is improved with a residence. The northern parcel is unimproved. When he was growing up, Hinrichs lived in the residence on the southern parcel, but has lived in Alaska since the 1980s. In 1999, Hinrichs sold the southern parcel to the Asquith Family Limited Partnership (Asquith). Hinrichs reserved an easement over the Asquith parcel in the 1999 deed. The easement was intended to connect with an “historic trail” consisting of an unpaved path over neighboring parcels that Hinrichs claims was documented in a federal survey map as far back as 1868. But Hinrichs actually had no easement over those neighboring parcels, and so the 1999 conveyance left the northern parcel landlocked. The trial court rejected Hinrichs’s claim of an easement as appurtenant to a federal patent over the historic trail. The trial court found that if Hinrichs ever had an easement over the trail as it crosses the neighboring parcel, it had been extinguished by adverse possession. The trial court granted Hinrichs an easement by necessity over the Asquith parcel and an equitable easement over a small portion of another neighboring parcel under the doctrine of balancing of the hardships.

The Court of Appeal agreed and explained that, among other criteria, a court should “consider whether the need for the easement is the result of the willful act of the party seeking the easement.” After rejecting the neighboring property owners’ argument that a “preexisting use” or a “long-standing encroachment” is an element of an equitable easement, the court also rejected the additional argument that Hinrichs was not innocent or nonnegligent. “‘The question whether the defendant’s conduct is so egregious as to be willful or whether the quantum of the defendant’s negligence is so great as to justify an injunction is a matter best left to the sound discretion of the trial court.’” (112 Cal.App.5th at p. 523 (citation omitted).) Here, “the trial court found that Hinrichs is innocent because he believed long after the Asquith parcel was sold that he had a right of way over the trail. The court did not abuse its discretion in determining Hinrichs’s actions do not bar equitable relief.” (Ibid.)

In summary, recent case law illustrates that the “willful or negligent” element is often “the most important” factor that will determine whether a court will grant an equitable easement. (Hansen v. Sandridge Partners, supra, 22 Cal.App.5th at p. 1028.)

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.

[1] No relation to the author.

September 19, 2018 – 11am to 1pm

Presenter: Daniel S. Cucchi, Esq., Abbott & Kindermann, Inc.

The pace of new court rulings affecting land use professionals can be difficult to keep up with. But each one could have a significant impact on a land use professional’s day-to-day activities. If you want to catch up on the latest legal news that will help you implement best practices in your office, this session is for you. Dan will review select cases from 2017 & 2018 and facilitate a discussion about their relevance on employing high-quality land use practice techniques in your office.

When: Wednesday, September 19th

Where: AECOM – Coastal Conference Room 2020 L Street Suite 400 Sacramento, CA 95811

Time: 11AM-1PM

Cost: $20 (Lunch will be provided.)

Approved for 1.5 AICP Law Credits

Deadline to register is Tuesday, September 18 at Noon.

Register now!

Questions, please contact Dan Cucchi at 916.456.9595 or dcucchi@aklandlaw.com

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

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

 

By Kristen Kortick

AB 734 (Bonta)

Since the 2003 publication of the book, Moneyball: The Art of Winning an Unfair Game, by Michael Lewis, the A’s franchise made a name for itself as a franchise utilizing creative tactics to keep fans in the stands and the players in the dugout. Enter construction of the new A’s stadium and the California Environmental Quality Act (“CEQA”) review process and that creativity is now looking rather pedestrian. When undertaking construction of a new stadium, the A’s have instead looked to other examples of utilizing CEQA exemptions for construction of new stadiums throughout California rather than forge a new path. The Los Angeles Rams (2009 [City of Industry stadium that never materialized]), Sacramento Kings (2013), Golden State Warriors (2015), and Los Angeles Clippers (2017), all received Legislature approved exemptions from the full CEQA process for construction of new stadium or arena projects, and the A’s now hope to receive the same.

In February 2018, the A’s franchise asked lawmakers to pass a similar bill shielding the organization from elongated environmental suits while streamlining the CEQA process to construct their new stadium. Under Assembly Bill 734, the new A’s stadium needs a completed and certified environmental impact report (“EIR”) or a mitigated negative declaration outlining how the finalized project poses the least harmful impacts to the environment.  The bill further outlines administrative and judicial review procedures including limiting appeals of the project to 270 days from the filing of the certified record to completed Court opinion. All contested cases for the project would bypass the superior court and move straight to appellate review. Costs to the court and lead agencies brought into court for litigation would be subsumed by the project applicant. The project requires LEED certification for all new construction and sets out express benchmarks for projects approvals, public comments, and the timeline for judicial review.

The project has yet to finalize a site, but the organization has narrowed the search to the location of the pre-existing stadium or nearby to Jack London Square in Oakland. The Ballpark is earmarked to open in 2023. Opponents to the CEQA legislation have concerns that various CEQA safeguards would be gravely overlooked by fast tracking the project. In response, the President of the A’s has alleged that the bill asks for the same exemption as its predecessors, such as the Warriors’ San Francisco arena and the Kings’ Sacramento arena and entertainment complex.

Many California residents and concerned environmental advocacy organizations throughout the state have expressed concern over CEQA exemptions for these large scale development projects. These CEQA exemptions, initially championed by Governor Schwarzenegger and continued under Governor Brown, have seen no shortage of opposition. A group of California residents have traveled throughout the state to litigate cases utilizing similar exemptions from CEQA for sports arenas. Although the provisions of past CEQA exemptions contain varied mitigation protocols, the procedures and judicial review of each project remain consistent in each of the prior versions of such legislation. For example, the Kings stadium obtained the CEQA exemption in 2013 for the construction of Golden One Center Arena. The legislative approval of the project included mitigation measures for traffic mitigation and air quality impacts differing from the bill proposed for the A’s stadium. Consistent with the A’s stadium, the Kings arena implemented a 270 day judicial appeal timeline, LEED certification, and schedule for completion of the project’s planning and construction. The Los Angeles Clippers arena in Inglewood also included similar CEQA benchmarks. However, the Clippers arena also included language to fast track needed public transportation infrastructure in furtherance of the 2028 Olympic Games set to take place in Los Angeles.

These CEQA exemptions pose a unique set of hurdles and some would argue a weakening of CEQA law. First, although these exemptions have not allowed for bare bones EIRs or CEQA review, they shorten the comment periods and judicial review of large ticket items. Many opponents to these CEQA exemptions allege the approval allows deep pocket projects to pay their way through environmental protections in the state. So far, Courts have held that past projects with these CEQA exemptions consistently met the commitments under CEQA without needing to implement additional mitigation measures. (See our link to the Court’s opinion in Saltonstall v. City of Sacramento.) Second, the CEQA exemption prioritizes challenges to exemption projects in the courts thus pushing other cases on the court’s docket lower. As one of the most litigation heavy states in the United States, California court dockets are already at full capacity averaging one-and-a-half to two years from filing to finalized opinions. While the exemption may speed up the process of judicial review for a stadium, it is at the cost of all other docketed civil cases on the jurisdictional court’s calendar. Though this has not likely had a tangible burden on the court calendar overall so far (this would be only the fifth of these CEQA exemptions in the last ten years), if this approach were to expand to cover other large-scale projects the courts could see more CEQA cases impacting the appellate court’s docket in the future.

Currently, AB 734 sits in the Senate Appropriations Committee. Voting from the Assembly Floor and Committees would suggest the project is likely to pass and proceed to the Governor’s desk for signature by end of August. Time will tell whether Governor Brown is ready to sign it.

Bill Abbott, the firm’s resident curmudgeon noted: “It is reassuring that CEQA reform exists for the financial upper crust. Perhaps the Legislature will throw a few crumbs to us commoners.

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

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

Diane G. Kindermann (2015-2018) and William W. Abbott (2004-2018) were again selected for the Northern California Super Lawyers List in the practice areas of Land Use and Zoning law. More information is available at http://www.superlawyers.com/california-northern/. The firm is pleased to continue to serve private and public clients in Northern California on land use, environmental and real estate matters for more than 20 years.

Welcome to Abbott & Kindermann’s 2018 2nd Quarter 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. 2017 CEQA UPDATE

To read the 2017 cumulative CEQA review, click here:

  1. CASES PENDING AT THE CALIFORNIA SUPREME COURT

There are 2 CEQA cases pending at the California Supreme Court. The cases, listed newest to oldest, and the Court’s summaries are as follows:

Union of Medical Marijuana Patients, Inc. v. City of San Diego, S238563. (D068185; 4 Cal.App.5th 103; San Diego County Superior Court; 37-2014-00013481- CU-TT-CTL.) Petition for review after the Court of Appeal affirmed the judgment in an action for administrative mandate. This case presents the following issues: (1) Is the enactment of a zoning ordinance categorically a “project” within the meaning of the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.)? (2) Is the enactment of a zoning ordinance allowing the operation of medical marijuana cooperatives in certain areas the type of activity that may cause a reasonably foreseeable indirect physical change to the environment?

Sierra Club v. County of Fresno, S219783. (F066798, 226 Cal.App.4th 704; Fresno County Superior Court; 11CECG00706, 11CECG00709, 11CECG00726.) Petition for review after the court of appeal reversed the judgment in an action for writ of administrative mandate. This case presents issues concerning the standard and scope of judicial review under the California Environmental Quality Act. (CEQA; Pub. Resources Code, § 21000 et seq.)

3.  UPDATE

A.  Exempt From CEQA Review

World Business Academy v. California State Lands Commission (June 13, 2018, case no. B284300) ___ Cal.App.5th ___.

In 2015, PG&E sought an extension of a lease from the State Lands Commission to continue operating the Diablo Canyon Nuclear Power Plant until 2025 when it is planned for decommission at the conclusion of its FERC-issued operating license term. The Commission approved the extended lease, citing to the Existing Facilities exemption (CEQA Guidelines §15301), to comply with CEQA. Petitioners filed suit, arguing that the project was not eligible for the categorical exemption due to: (1) the significant impacts on the environment that are inherent from the nuclear power plant’s operation; and (2) from the unusual circumstances of the plant’s location and operation. Petitioner also claimed that the approval violated the Public Trust Doctrine. The trial court rejected Petitioner’s claims and Petitioner appealed. The appellate court first admonished the parties for failure to lodge the full administrative record and citing only to excerpts in a jointly filed appendix of pertinent administrative records. It ultimately chose not to exercise its discretion to rule against Petitioner for that failure because the Petitioner belatedly filed the record with the court.

Moving to the substantive claims, the court first rejected Petitioner’s claim that the plant was not eligible for the existing facilities exemption due to the inherent risks associated with a nuclear power plant. Relying on CEQA Guidelines section 15301, subdivision (b), it reasoned that the plant fit squarely into the “investor and publicly-owned utilities used to provide electric power…” category contemplated by the exemption, and that the record confirmed that there would be no expansion of the plant’s operational capacity. The court then rejected Petitioner’s unusual circumstances claims. Assuming for the purposes of the analysis that the project presents unusual circumstances, the court nonetheless found that there was no substantial evidence supporting a fair argument that a significant effect on the environment would result.

Relying on the existing baseline of a fully-operational plant in accordance with North Coast Rivers Alliance v. Westlands Water Dist. (2014) 227 Cal.App.4th 832, the court reasoned that:

  1. Petitioner could point to no evidence in the record to identify an environmental impact that would result from the size of the plant, its location, health effects on populations near the site, or impacts on marine life in light of the existing conditions;
  2. The Commission was not obligated to follow a hyperlink in a comment letter to identify purported evidence supporting its claim that the extension would lead to an enhanced risk of reactor failure to “embrittlement” and no other evidence was in the record to support the claim;
  3. Petitioner submitted no evidence supporting its claims that the extension would: (i) increase risk of fuel rod storage which is already occurring at the site; (ii) heighten any seismic risk from its existing location near fault lines; or (iii) make the plant more likely to be a terrorist target than currently exists; and
  4. Petitioner failed to demonstrate how its claims that the plant will be the sole remaining plant in the state and that PG&E was convicted of “safety-related and agency obstruction felony counts” would have an effect on the environment.

County of Ventura v. City of Moorpark (June 12, 2018, case no. B282466) ___ Cal.App.5th ___.

Petitioners challenged the City’s settlement agreement with the Broad Beach Geologic Hazard Abatement District (“GHAD”) to address haul routes for trucks used for a beach and sand dune erosion restoration project at Broad Beach, and the City’s determination that the agreement, and the related project activities it contemplated, as a single project were statutorily exempt from CEQA as an activity “to prevent or mitigate an emergency.” (Public Resources Code §§26601 and 21080(b)(4). Petitioners argued the actions were improper under several theories, including: (1) the City’s interpretation of the statute to find the action exempt is inconsistent with the purpose of CEQA; (2) the approval of the agreement and the contemplated activities were discrete actions under CEQA; (3) the traffic restrictions on trucks outlined in the agreement were preempted by state law; (4) the traffic restrictions constituted an illegal attempt to regulate traffic outside city limits; and (5) GHAD improperly abdicated its police power when granting the City the power to dictate sand hauling routes to be used by GHAD contractors. The trial court rejected all of Petitioners’ claims, except for the abdication of the police power, holding that such portions of the agreement that prohibited GHAD from modifying hauling routes in response to changed circumstances were void. The appellate court reversed in part, affirmed in part and remanded.

The appellate court held that the agreement and the contemplated activities were not distinct actions and were exempt from CEQA, as they represented the “whole of the project” and that a plain reading of the statutes grant this exemption to the proposed actions. As for preemption, the court found that Petitioners’ citation to Vehicle Code section 21 was inapplicable, because it did not apply to contracts, only to ordinance’s or resolutions. The court also rejected the claim of extraterritorial regulation by the City, reasoning that the hauling route limitations in the agreement were voluntarily agreed to by GHAD and the remedies under the agreement are limited to effects only within the city limits. Regarding Petitioners’ claim that GHAD abdicated its police power, the appellate court agreed with the trial court that one section improperly prohibited GHAD from adjusting hauling routes in the future, but went further to void additional portions of the agreement that limited future route options that may be chosen by GHAD as a result of future changed circumstances.

Aptos Residents Assn. v. County of Santa Cruz (2018) 20 Cal.App.5th 1039.

Petitioners challenged the County’s approval of a distributed antenna system for wireless cellphone coverage which included 13 microcell transmitters placed on utility poles in the Day Valley area in Aptos. The microcells are two-foot by one-foot antennas mounted on an extender pole and attached to a utility pole. The applicant filed individual permits for each microcell and the County had found that the project, both individually and as a whole, was exempt from CEQA, pursuant to the small structures exemption (14 C.C.R. §15303). Petitioners argued that: (1) the County improperly segmented its analysis of the project; (2) there was a cumulative impact resulting from the whole of the project, as well as Petitioner’s assertion that AT&T was likely to file for its own distributed system in the area soon; (3) the project fell under a “location exception” for a “mapped protective designation”; and (4) that there were unusual circumstances that precluded use of the exemption. The trial court denied petitioners’ claims and petitioners appealed.

The court of appeal affirmed. The court found the County did not improperly segment the project, nor fail to consider the cumulative impacts of the project. It reasoned that despite the fact that the applicant filed for separate permits for each microcell, the record was clear that the County had always treated the microcells together as one project which was authorized under the terms of the Section 15303 exemption which uses the plural when describing the number and type of structures eligible for the exemption. The court next rejected the claim that the County had an obligation to consider the potential AT&T project finding it to be speculative since it was nothing more than a rumor based upon hearsay. Next, the appellate court rejected petitioners’ “location exception” claim, finding that petitioners could cite to no evidence of an impact on an area “designated” as an “environmental resource of hazardous or critical concern.” Finally, the court found that there was nothing unusual about the use of several small structures to be used to provide utility extensions in a rural area.

Don’t Cell Our Parks v. City of San Diego (2018) 21 Cal.App.5th 338.

Real party in interest, Verizon Wireless, sought the approval of a wireless telecommunications facility to be constructed in a dedicated city park. Prior to the project approval process, City staff first made the determination that the project was eligible for a CEQA exemption under Section 15303 (“small facilities exemption”), and consistent with the City’s administrative rules, the Petitioners filed an appeal of the CEQA determination which was ultimately rejected by the city council. Moving next to consideration of the merits of the project, the city hearing officer held a public hearing and approved the development and use permits for the project. Petitioners filed an administrative appeal of this decision, though no grounds challenging the city’s CEQA determination were raised in this appeal, and the City rejected the appeal and upheld the permit approvals. Petitioner filed suit, arguing: (1) the permit approvals violated the terms of the city charter which required voter approval; (2) the project did not fit the terms of the Section 15303 exemption; (3) even if it did apply, both the unusual circumstances exception and the location exception precluded use of the exemption. The trial court rejected the claims and Petitioner appealed. The court of appeal affirmed.

As to the CEQA claims, the court first considered and rejected the City’s defense that Petitioner failed to exhaust its administrative remedies regarding CEQA when they failed to appeal the CEQA determination when Petitioner appealed the permit approvals. It reasoned that because the City never held a public hearing or provided an opportunity to make objections prior to making its staff-level CEQA determination, the exception to the exhaustion requirements under Public Resources Code Section 21177, subdivision (e), applied to Petitioner’s CEQA claims. On the merits of Petitioner’s CEQA claims, the court found that the project was eligible under the small facilities exemption, reasoning that the size of the project (534 sq. ft.) was smaller than “a single-family residence, store, motel, office or restaurants,” which are expressly allowed under the exemption. The court also rejected the applicability of the unusual circumstances exception, reasoning that even if petitioner’s claim that the location within a park was an unusual circumstance, the biological resources report prepared in support of the project provided substantial evidence that the project would not have a significant effect on the environment as a result. Moving to petitioner’s location exception claim, the court found no such exception applied, because petitioner presented no evidence that the park was “designated” as an “environmental resource of hazardous or critical” as required under the regulation. As for the non-CEQA claims, the appellate court found that approval of the project did not require voter approval when changing the use of a public park as required by the city charter.  It reasoned that the “faux tree” design of the project, as well as its very small footprint in relation to the size of the park was consistent with the existing park use and, thus, did not change the use or purpose of the park.

B.  Negative Declarations

Jensen v. City of Santa Rosa (2018) 23 Cal.App.5th 877.

The facts in Jensen involved the approval of a rezoning, conditional use permit, and design review for a young adult center which included housing, counseling, education, and job training. Neighbors challenged the city’s reliance upon a negative declaration which included a noise study prepared by the applicant’s acoustic engineer. The trial court denied relief, and the neighbors appealed, focusing on potential noise impacts. The appellate court affirmed the decision of the trial court. The appellate court’s first task was to interpret the city’s noise ordinance. The court found that while the ordinance included stated noise levels in residential and non-residential districts, the noise levels were not maximum noise exposure levels; rather, the court found the ordinance reflected “standard or normally acceptable noise levels for the zones and times indicated.” These levels were not adopted as thresholds of significance. The noise ordinance also included specific limits for commercial and industrial activities. However, these levels did not apply to land uses such as the young adult center which was only subject to the ordinance’s generalized nuisance type language.

The applicant’s noise study considered the noise ordinance and included sound measurements and discussed noise impacts in terms of day/night differences and the normally acceptable tolerances. The consultant concluded, based on CEQA Guidelines Appendix G, that the noise impacts would not be significant. The appellants’ first criticism was that the noise study should have employed Leq calculations rather than Ldn, pointing to another study performed by the same consultant for a commercial project elsewhere in the same city which used Leq.

Appellants also argued noise impacts associated with the Project’s parking lot. While the appellate court’s analysis reads as intuitive and not necessarily based upon the administrative record, the court ultimately concluded there were too many differences between the 24/7 commercial use and that of the young adult center to permit reliance upon a noise impact analysis generated for the commercial project. That, coupled with appellants’ speculation and conflicting interpretation of the municipal code, led the appellate court to conclude that the substantial evidence in support of the appellant’s argument was lacking.

Appellants’ final argument concerned noise from exterior activities including basketball, pottery making, and gardening, all of which were evaluated in the noise study. From the appellate court’s perspective, appellant’s noise level analysis lacked credibility and was unsupported by expert opinion. Once again, substantial evidence was lacking.

John R. Lawson Rock & Oil, Inc. v. State Air Resources Bd. (2018) 20 Cal.App.5th 77.

In 2008, the State of California adopted air quality regulations which had the effect of requiring existing trucking operators to retrofit truck fleets with expensive air quality improvements.  In 2013, the state issued a regulatory advisory which created a safe harbor for operators seeking to come into compliance. Operators were also allowed to take advantage of regulatory changes expected to be adopted in 2014. The Air Resources Board engaged in the formal rule adoption process in 2014 and was sued by a fleet operator and trucking association arguing CEQA violations and failure to comply with the economic considerations part of the state APA. The Board operates under the “functional equivalent” provisions of CEQA, and in this case, relied upon the equivalent of a negative declaration. The trial court ruled for the petitioners and the court of appeal affirmed although on narrower grounds. The issues on appeal included: (1) had the ARB improperly committed itself to a project in advance of CEQA compliance, (2) what was the appropriate baseline for evaluating impacts, (3) fair argument and (4) had the ARB correctly evaluated the economic considerations required by the state APA.

First, applying the California Supreme Court’s decision in Save Tara, the appellate court found that the Board had sufficiently committed itself to a course of action, going beyond just expressing interest in an idea, and thus violated CEQA’s timing requirements. The court of appeal agreed that invalidation was an appropriate remedy, but did not require the functional equivalent of an EIR, leaving to the agency to determine the proper environmental document in response to the court decision. Anticipating the Board would implement the regulatory changes or something similar, the court concluded that there was substantial evidence to support the Board’s established baseline as not including the continuing effect of the existing regulations. The court then rejected the Board’s evaluation of impacts. Pointing to evidence in the record that the project could result in short to medium-term impacts involving various pollutants, the appellate court agreed that for purposes of the Board’s initial evaluation, compliance with the state’s long term plan might support a no-impact conclusion. When faced with the evidence of short to mid-term impacts, however, an EIR type document was required. Lastly, the appellate court evaluated the APA claims and held that the Board violated the APA when it failed to properly respond to comments on potential intra-state competition issues in its economic analysis.

Covina Residents for Responsible Development v. City of Covina (2018) 21 Cal.App.5th 712.

Petitioners challenged the City’s approval of a mixed-use, infill project with 68 residential units, approximately 8,000 square feet of retail and administrative office space, and 4,000 square feet of gallery space. The 3.4 acre site was a former car dealership and is located within one-quarter mile of a commuter rail station. The City adopted a mitigated negative declaration (MND) that tiered from an environmental impact report for the Town Center Specific Plan (TCSP EIR) which governs the area. The project as first designed had a shortfall of 84 parking spaces, but several last-minute revisions reduced the shortfall to only 19 spaces. Petitioners’ claims largely relied upon impacts purportedly caused by the shortage of parking spaces, arguing that the City: (1) improperly tiered the MND from the TCSP EIR; and (2) violated the Subdivision Map Act (SMA) by failing to adopt adequate findings. The trial court denied the petition, and Petitioners appealed.

The appellate court affirmed. The court first rejected the CEQA claim holding that the primary impacts associated with parking for the project were exempt from CEQA. It reasoned that despite the consideration of the impacts in the MND, the enactment of Public Resources Code section 21099 under SB 743 prior to the City’s approval of the project eliminated any need to consider such impacts under CEQA. As for the improper tiering claim, the court held that Petitioners cited to no evidence in the record to identify any deficiencies in the traffic analysis prepared for the project specific impacts that were not contemplated in the TCSP EIR. The appellate court also rejected the SMA claims that the project did not meet the parking requirements in the TCSP and was inconsistent with transportation policies in the TCSP, finding that Petitioners’ arguments amounted to speculation, rather than evidence, and that they cited to no evidence contradicting the City’s determination that the project complied with the TCSP’s multi-modal transportation policies.

Clews Land & Livestock, LLC v. City of San Diego (2017) 19 Cal.App.5th 161.

Petitioners challenged to the City of San Diego’s (“City”) approval of a small high school on previously developed, open-space designated lands adjacent to a commercial equestrian facility. The project included a one-building, three-classroom, 5,340-square foot high school on a previously developed one-acre site, with a 24-stall parking lot and associated landscaping. The project was located in the coastal zone at the end of a private access driveway shared with an adjacent equestrian facility. It included an historical farmhouse, currently used as an administrative office, along with several older outbuildings. Owners of the adjacent equestrian facility (“Petitioner”) opposed the project and the related draft Mitigated Negative Declaration (“MND”) prepared by the City, contending an EIR was required to study potentially significant historical resources, fire hazard, noise, and transportation/traffic impacts, and that the project threatened the Ranch’s economic viability as a business.

In reliance on the City’s misleading statements in the public notice, Petitioner appealed the hearing officer’s decision approving the project and associated MND to the Planning Commission, checking that box on the City’s standard appeal form and not checking the box for “Environmental Determination – Appeal to City Council.” While the appeal forms identified both CEQA and non-CEQA grounds for its appeal, City Staff advised Petitioner and the Planning Commission that Petitioner’s failure to appeal to the Council within 10 days of the hearing officer’s decision waived all CEQA and MND issues.  The Commission heard and ultimately voted 4-2 to deny the appeal and to grant the project permits. The City rejected as untimely Petitioner’s subsequent attempt to appeal the project approval and MND to the City Council. Petitioner filed suit on both CEQA and Planning and Zoning grounds. The trial court denied Petitioner’s writ petition on all asserted grounds, finding that Petitioner failed to exhaust administrative remedies on the CEQA claims by failing to properly administratively appeal the hearing officer’s environmental determination. Petitioner appealed and the appellate court affirmed.

The appellate court first rejected Petitioner’s claim that the City’s bifurcated appeal procedures were not in compliance with CEQA’s appeal requirements. It reasoned that because the project was approved by an unelected decision maker (the hearing officer), the City’s appeal procedures correctly included an option to appeal the environmental determination to the agency’s elected decision making body (the city council), which Petitioner failed to do when it appealed the project to the Planning Commission. As for Petitioner’s claim that it made the procedural error in reliance on erroneous statements made by the city in its public hearing notice, the appellate court held that Petitioner’s argument involving improper notice was inapplicable because there was no claim that the notice defect involved an inaccurate project description. Rather, it reasoned, the notice accurately provided notice of the public hearing but misstated the applicable appeal procedures. Instead, the court reasoned it was more appropriately a claim of equitable estoppel which was considered and rejected by the trial court and was not raised in its appeal. Finally, the court rejected the substantive claims of CEQA noncompliance regarding the potential fire risks resulting from development of the project in a high fire hazard severity zone, relying on the California Supreme Court’s decision in CBIA v. BAAQMD, 62 Cal.4th 369 (2015), to conclude that Petitioner’s fire safety expert improperly focused his analysis on existing environmental hazards not caused by the project, rather than the project’s impacts on the existing environment.

C.  Environmental Impact Reports

Rodeo Citizens Assn. v. County of Contra Costa (2018) 22 Cal.App.5th 214.

Rodeo Citizens Association filed suit against the County of Contra Costa for improperly certifying the final EIR for an oil refinery in violation of CEQA. The County certified the EIR and granted a permit to Philips 66 Corporation to modify an existing facility on the refinery’s property and add new facilities for butane and propane. The trial court held that the project description and analysis of GHG emissions complied with Philips’ and the County’s obligations under CEQA. The court of appeal affirmed. The court of appeal held that since the amount of downstream GHG emissions from the combustion of propane and butane sold to downstream users was speculative, no further analysis was necessary. The court also rejected the Association’s claim that evaluation of the risk from hazardous materials was improper. It reasoned that the Final EIR properly applied the moderate to high consequence threshold against potential hazardous materials risks from the project and determined that none of the potential impacts exceeded that threshold. As such, the court held the County’s analysis was proper under CEQA.

Visalia Retail, LP v. City of Visalia (2018) 20 Cal.App.5th 1.

The City of Visalia amended its general plan pertaining to neighborhood commercial districts, adding a limitation that no tenant could occupy more than 40,000 square feet and set minimum separation requirements for neighborhood centers. The City adopted an environmental impact report in support of the decision. A shopping center owner submitted expert testimony regarding the potential for urban decay by a broker who opined that most grocers would not build less than 40,000 square feet, and that smaller stores had gone out of business. The broker also argued that substitution of less successful, lower volume tenants would eventually lead to physical decay in centers as a result of reduced investment, and complained of the reduction in commercial designation for one commercial center site. The trial court held it was insufficient to demonstrate that the limitation may have a significant environmental effect as a result of urban decay.

The appellate court affirmed, finding that none of the evidence offered by the property owner was substantial in character. It reasoned that the fact that some grocery stores would not build at 40,000 square feet or less was not evidence that no grocery store would be constructed. The evidence that one grocer was unsuccessful (building in the 10,000 to 20,000 foot range), did not foreclose that another grocer could build a larger store that meets the 40,000 square-foot requirement (additional evidence showed that Walmart had recently constructed a 38,000 square-foot store in Visalia). Further, the court held that there was a lack of evidence that urban decay would occur, just speculation.

City of Long Beach v. City of Los Angeles (2018) 19 Cal.App.5th 465.

The City of Long Beach and the California Attorney General as intervener (“Petitioners”) challenged the City of Los Angeles’ (“City”) approval of a new near-dock intermodal rail facility that would manage the transport cargo containers coming from the port. One of the effects of the new near-dock railyard would be to substitute four-mile trips on surface streets for many existing 24-mile trips via freeway to and from other existing off-dock railyards. Petitioner challenged the CEQA analysis citing concerns about the impacts of this shift in port truck traffic and filed suit, arguing: (1) the project description did not accurately describe indirect impacts resulting from the project; and (2) the air quality analysis inadequately addressed both direct and indirect impacts of the project.

First, the court considered and rejected the City’s exhaustion defense against clams raised for the first time by the California Attorney General after the conclusion of the administrative proceedings, finding that the Attorney General is exempt from CEQA’s exhaustion requirements consistent with “the Attorney General’s unique authority to protect the environment of the State of California.” The court next held that the City’s decision to perform only a single modeling run with a 50-year analysis range the EIR was inadequate to estimate how frequently or for what length of time the level of particulate air pollution in the area surrounding the new railyard would exceed the EIR’s standard of significance. The court also concluded that the EIR’s cumulative analysis was inadequate because it did not adequately focus on the combined impacts of the proposed project and another large railyard expansion proposed by Union Pacific adjacent to the proposed project.

The court also held that crucial information regarding air quality was omitted from the EIR. It reasoned that though the EIR showed that as a result of the trip length reduction total particulate matter emissions from trucks would be reduced by the project compared to the no project alternative, the EIR did not adequately explain that in the vicinity of the proposed new railyard, air quality would be substantially worse with the railyard than without it, and that the vicinity included homes and schools. Finally, the court rejected Petitioners’ claims that the EIR was required to account for truck trips to and from the Hobart railyard that would result from its new excess capacity. It reasoned that the record supported the EIR’s conclusion that a predicted level of economic growth would occur over the decades with or without the near-dock rail project, and that the project was not necessary to enable the operator to service anticipated growth at the Hobart facility and was, thus, not an indirect impact of the project.

D.  Litigation

Heron Bay Homeowners Assn. v. City of San Leandro (2018) 19 Cal.App.5th 376.

Petitioners successfully challenged the City’s approval of a proposed wind turbine project under the California Environmental Quality Act (“CEQA”). The trial court concluded that the City’s decision to adopt a mitigated negative declaration was in error and, instead, was required to prepare an EIR. Post-trial, the trial court awarded petitioners a partial attorney fees award under the private attorney general statute in Public Resources Code Section 1021.5. The City and the real-party-in-interest (“Respondents”) filed an appeal on the fee award, arguing that the trial court erred when finding that, despite the “very close call” over whether Petitioners had a personal financial interest that was sufficient to outweigh the burden of bringing suit, a fee award could be apportioned to address the balancing of responsibilities. Respondents reasoned that the court could only consider apportionment of the fee award, after concluding that the petitioner’s interest did not disqualify it from the fee award. The appellate court rejected respondent’s claim finding that record for the trial court’s determination showed that it had impliedly found that Petitioners had a sufficient financial interest to incur some, but not all, of the costs of litigation. Thus, the trial court’s apportionment was a reflection of this implied determination that is required under the statute.

If you have any questions about these court decisions, contact William Abbott, Diane Kindermann or Daniel Cucchi. The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc. nor 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.

 

 

 

County of Ventura v. City of Moorpark (June 12, 2018, case no. B282466) ___ Cal.App.5th ___.

Courts have frequently reminded lead agencies of the obligation to examine the whole of the project, thereby expanding the scope of CEQA analysis. The recent decision of County of Ventura v. City of Moorpark also examines the issue of the whole of the project, but in reverse. If GHAD activity is exempt (Public Resources code sections 26559, 26601), does the exemption apply to the whole of the activity or just the abatement activity?

The State of California formed the Broad Beach Geologic Hazard Abatement District for the purpose of restoring a 46 acre stretch of Broad Beach in the City of Malibu. The restoration project initially called for deposits of 300,000 cubic yards (“CY”) of sand, and periodic replenishment of similar amounts. Each of the periodic replenishments required 44,000 one-way truck trips, and the likely material sources were quarries located between Fillmore and Moorpark, more than 40 miles away. The restoration project was approved for a twenty-year time period.

Concerned about the impacts of the hauling operations and following discussions with the lead agency, the City of Moorpark entered into a settlement agreement. Key terms included restrictions on trucks parking or staging in Moorpark and directions for trucks to use certain state routes. Essentially, the settlement agreement shifted the truck traffic out of Moorpark to elsewhere. The terms of the settlement agreement were incorporated into the beach restoration project, and the Coastal Commission approved a coastal development permit for the project. Two public entities affected by the change in traffic patterns, the County of Ventura and the City of Fillmore, filed suit challenging the CEQA exemption and the settlement agreement on multiple grounds.

GHADs enjoy statutory exemptions for both the formation and implementation of actions “necessary to prevent or mitigate an emergency” (Public Resources Code §§26559 and 26601), rendering those actions exempt from CEQA. (Public Resources Code §21080(b)(4).) As to the CEQA exemption, the appellate court recognized that the settlement agreement had been incorporated into the project itself, rendering it part and parcel of implementing the beach restoration project. Reviewing the geologic hazard abatement district law, the court then concluded that the settlement agreement constituted an improvement and was, thus, an action “necessary to prevent or mitigate an emergency” and therefore exempt from CEQA.

Appellants also challenged the settlement agreement as pre-empted by the Vehicle Code, arguing that the City unlawfully established a local traffic control ordinance in contravention of Vehicle Code section 21. The appellate court rejected this argument, concluding that a decision by the lead agency and its contractors as to appropriate and otherwise lawful haul routes did not violate state law and as a contract the Vehicle Code provisions were inapplicable.  The appellate court also rejected the claim that the City of Moorpark was exercising its legislative powers outside of its municipal boundaries when designating haul routes for the restoration project trucks.  The court concluded that Moorpark was not exercising its legislative powers but its contractual powers, and such exercise was not prohibited.

Appellants also argued that entire agreement was void, because the terms of the agreement prohibited the District from later exercising its police power. The agreement terms in question limited the discretion of the District in the future to alter haul routes, effectively transferring that power to Moorpark. On this issue, the appellate court agreed that the District had unlawfully surrendered its police power to change haul routes when there were changed circumstances warranting revision of those routes. The final issue for the court was that in light of its determination that the District had improperly surrendered its police power, was the court required to invalidate the entire agreement. On this point, the court found that the settlement agreement still retained valid purposes, and that only the offensive provisions need be struck.

William W. Abbott 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.

By William W. Abbott

Jensen v. City of Santa Rosa (May 1, 2018, A144782) ___ Cal.App.5th ___.

Negative declarations are notoriously at risk as a result of the fair argument standard of review. As the recent decision in Jensen v. City of Santa Rosa (May 1, 2018, A144782) ___ Cal.App.5th ___, illustrates, the successful defense of a challenge will likely require a critical examination of the opposition evidence.

The facts in Jensen involved the approval of a rezoning, conditional use permit and design review for a young adult center which included housing, counseling, education and job training. Neighbors challenged the city’s reliance upon a negative declaration which included a noise study prepared by the applicant’s acoustic engineer. The trial court denied relief, and the neighbors appealed, focusing on potential noise impacts. The appellate court affirmed the decision of the trial court. The appellate court’s first task was to interpret the city’s noise ordinance. The court found that while the ordinance included stated noise levels in residential and non-residential districts, the noise levels were not maximum noise exposure levels; rather, the court found the ordinance reflected “standard or normally acceptable noise levels for the zones and times indicated.” These levels were not adopted as thresholds of significance. The noise ordinance also included specific limits for commercial and industrial activities. However, these levels did not apply to land uses such as the young adult center which was only subject to the ordinance’s generalized nuisance type language.

The applicant’s noise study considered the noise ordinance and included sound measurements and discussed noise impacts in terms of day/night differences and the normally acceptable tolerances. The consultant concluded, based on CEQA Guidelines Appendix G, that the noise impacts would not be significant. The appellants’ first criticism was that the noise study should have employed Leq calculations rather than Ldn, pointing to another study performed by the same consultant for a commercial project elsewhere in the same city which used Leq. The opponents went on to create calculations of maximum exposures, however, the appellate court ultimately concluded that the calculations and conclusions were “opinions by non-experts”, and did not rise to the level of substantial evidence.

Appellants also argued noise impacts associated with the Project’s parking lot. While the appellate court’s analysis reads as intuitive and not necessarily based upon the administrative record, the court ultimately concluded that there were too many differences between the 24/7 commercial use and that of the young adult center to permit reliance upon noise impact analysis generated for the commercial project. That, coupled with appellants’ speculation and conflicting interpretation of the municipal code, led the appellate court to conclude that the substantial evidence in support of the appellant’s argument was lacking.

Appellants’ final argument concerned noise from exterior activities including basketball, pottery making and gardening, all of which were evaluated in the noise study. From the appellate court’s perspective, appellant’s noise level analysis lacked credibility and was unsupported by expert opinion. Once again, substantial evidence was lacking.

One last thought – While lay members of the community are capable of providing substantial evidence on a number of matters, it is reassuring to see the courts apply a critical eye to evidence which crosses over into scientific matters.

William W. Abbott 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.

1901 First Street Owner, LLC v. Tustin Unified School Dist. (2018) 21 Cal.App.5th 1186

The methodology for imposing local impact fees is largely left to the discretion of the local agency adopting the impact fees. (AB 1600; Gov. Code §66000, et seq.; the “Mitigation Fee Act”.) As long as there is a reasonable basis for the methodology, a reviewing court should uphold the enacting agency’s approach (e.g., gross building area v. net building area, bedrooms, or EDUs). The notable exception to this involves school impact fees wherein the Legislature set forth the methodology which uses the interior square footage with listed exceptions. Petitioner 1901 First Street Owner, LLC (“First Street”), the developer of a multi-family project, challenged how the methodology was applied to its project. First Street argued that non-inhabited areas such as an interior gym, hallways, and meeting rooms (“interior common areas”) should not be included in the calculation. Initially, the City had agreed with First Street’s opinion and calculated the fee excluding interior common areas. When challenged by the school district, however, the City reversed itself, recalculating the fee to include the interior common areas. As a result, an additional 70,000 square feet were included in the recalculation, which translated to a $238,549.86 increase in the school impact fees. First Street sued and lost at the trial court.

As the interpretation of the statute is purely a legal question, the appellate court applied its independent judgment in interpreting the statute, ultimately agreeing with the City, the school district and the trial court. It found that though detached homes do not include interior common area, this fact was not a basis for reaching a contrary conclusion to that of the City. First Street also argued that it had a vested right based upon a vesting map it processed in conjunction with its entitlements, and as such, the City could only apply its former fee calculation methodology. Citing Government Code section 66498.6, the appellate court noted that the vesting map law does not vest rights as to misinterpretation of state law.

Commentary:  In circumstances involving non-school impact fees, First Street may well have had a winning argument with respect to the effect of the vesting map. As school impact fees are based upon a state-crafted formula, the local agency did not have the discretion to misapply state law.

William W. Abbott 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.