King & Gardiner Farms, LLC v. County of Kern (2020) 2020 Cal.App. LEXIS 161

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

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

  • Water Supply
    • Applying the substantial evidence standard of review, the court upheld the agency’s analysis of water supply impacts based on three large subareas of the county as supported by substantial evidence, rejecting the more localized units approach pushed by petitioner as speculative in light of the state of affairs in the SGMA process as of the time of the EIR was released.
  • Drought Conditions Impact on Water Supply
    • Finding the issue a question of law, the court held that the discussion of drought impacts on water supply in the WSA “adequately facilitated informed agency decisionmaking and informed public participation.” It reasoned that the discussion adequately described the drought’s impact on water supplies and overdraft conditions, the increased effect on future supply and demand, and the uncertainty of projections.
  • Environmental Setting
    • The court held the EIR did not violate CEQA Guidelines sections 15064 or 15125, because the EIR used the information available as of the date of the release of the NOP (August 30, 2013) to describe the water supply conditions, including drought information.
  • Recirculation
    • The court held that updated drought information post-NOP release did not constitute significant new information requiring recirculation.
  • Adequacy of CEQA Findings
    • Applying the substantial evidence test, the court held that Petitioners failed to carry its burden to establish a finding is not supported by substantial evidence, and affirmed that the public had a meaningful opportunity to comment on the project’s potential impact on water supply.
  • Mitigation Measures for Water Supply
    • The court rejected several mitigation measures as improperly deferred mitigation for failure to adequately commit to implementation and a lack of performance measures.
  • MM4.17-2 – Part 1 of the measure required applicants to “increase or maximize the reuse of produced water and reduce or minimize the use of municipal and industrial (“M&I”) water to the extent feasible.” The court held that county had committed to a mitigation goal, but that a goal is not a performance standard. It reasoned that the phrase “to the extent feasible” only “addresses whether a measure would be employed, but does not address the performance of the measure.”
  • MM4.17-2 – Part 2 of the measure required the “five biggest oil industry users of M&I water” to work together to implement “a plan identifying new measures to reduce municipal and industrial water use by 2020.” The court held that the county failed to commit to implementation of the measures included in the “plan” which assumed that the oil industry users would work together or even be able to come to an agreement. The court also held that the measure was defective “delayed implementation,” because the project was approved in 2015, but the plan would not be ready, if at all, until 2020.
  • MM4.17-2 – The court rejected petitioner’s argument that the measure “did not identify who will test and monitor compliance,” reasoning that the MMRP clearly identified that the applicant would be the responsible party with verification by county staff.
  • MM4.17-3 – The measure required applicants to “work with the County to integrate best practices in the oil and gas industry to encourage the reuse of produced water from oil and gas fields” for other uses such as agricultural irrigation and groundwater recharge in the basin’s Groundwater Sustainability Plan. It also set a water reuse goal of 30,000 acre-feet per year. The court held the mitigation was defective “delayed implementation” because it relied on a GSP that was not proposed to be completed until 2020. It further held that setting a goal of 30,000 acre-feet per year of water reuse was laudable, but not an enforceable commitment.
  • MM4.17-4 – This measure required the applicant to “work with the county on the GSP” to increase use of reclaimed water and reduce use of M&I water. The court held that this measure suffered from similar defects regarding the failure to establish a performance standard, as well as delayed implementation due to the timeline for completion of the GSP.
  • CEQA Mitigation Findings
    • The court rejected County’s argument that there was no CEQA violation because the mitigation measures were recognized as having uncertain effectiveness, and the county ultimately concluded that the impacts were significant and unavoidable. The court noted that the California Supreme Court in Sierra Club v. County of Fresno established that mitigation measures “must be at least partially effective, even if they cannot mitigate significant impacts to a less than significant level.” Applying this principle under the substantial evidence standard, the court held that the Board’s findings were ambiguous as to whether the measures were at least partially effective, because the finding described how the county would encourage the increased use of produced water and the reduction of M&I water, but acknowledged that the extent of any increase or decrease “is uncertain.” The court also pointed to a separate finding that stated that implementation “could reduce water supply impacts, but…complex water variables that fall outside the scope of the County’s jurisdiction or control under CEQA,” which the court reasoned had suggested the possibility of a reduction, but failed to eliminate that one possibility was no reduction.
    • The court held that the findings could be reasonably interpreted to affirm that the county properly found that all feasible mitigation measures had been adopted.
  • Statement of Overriding Considerations
    • The court rejected the County’s argument that the adoption of a statement of overriding considerations redressed the problems associated with the uncertain mitigation measures. It reasoned that the mitigation measures rendered the EIR as an inadequate informational document, and a statement of overriding considerations can only be adopted to address significant and unavoidable impacts identified in an adequate EIR. 
  • Mitigation Measure for Agricultural Impacts
    • The court upheld petitioner’s argument that a mitigation measure that provided four options for an applicant to mitigate for agricultural land lost due to the project did not support the conclusion that the impacts were reduced to a less than significant level. It reasoned that even though one option would actually offset the loss of agricultural land, the restoration of agricultural lands through removal of legacy oil and gas production equipment, the other measures would not actually offset anything, including (i) conservation easements, (ii) mitigation banks where there is no evidence of their current existence, or (iii) the reliance on a mitigation program adopted by the County which does not exist.
    • The court held that the EIR finding that the mitigation would reduce the impacts on agricultural land to less than significant was not supported by substantial evidence, because the mitigation included options, selected by the applicant, which could not demonstrate an actual offset for the loss of agricultural land due to the project, including the use of conservation easements.
    • The court held that the county failed to consider the proposal to use clustering of oil and gas infrastructure as mitigation in its responses to comments, because the response only considered it in relation to General Plan policies and a rejected alternative which considered the potential for clustering, and the response failed to provide a reasoned analysis of why clustering as a potential mitigation measure was infeasible.
  • Noise Impact Thresholds
    • Applying the principles in Berkeley Jets and Keep Our Mountains Quiet, the court held that the county’s use of compliance with the General Plan’s maximum noise standard as a threshold of significance was improper, because it fails to provide a complete and reasonable method of evaluating whether a noise increase is considered substantial even when the cumulative noise falls below the General Plan standard.
  • Remedies
    • The court rejected the County’s request to leave the ordinance in effect while addressing the CEQA issues, finding that the case before the court was not “extraordinary,” because unlike the California Air Resources Board’s Low Carbon Fuel Standard regulations in POET, where the purpose of the program was to protect the environment, the purpose of the ordinance was the acceleration of oil and gas development including its economic benefits.
  • Baseline for Revised EIR
    • The court held that the baseline for evaluating water supply issues must be brought up to date, given that many of the uncertainties that existed at the time the Draft EIR was issued could be lessened due to the amount of new information that is now available.

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

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