Client Alert

CEQA Update: 2004 Legislation, Guideline Amendments and Court Decisions


In This Article:

2004 CEQA Guideline Amendments

In the summer of 2004, the Office of Administrative Law approved several revisions to the CEQA Guidelines. The revised Guidelines are now in effect. One of the most important of these changes confirms that project proponents may "mitigate out" of preparing an EIR by agreeing to mitigation that avoids the impact in question. The amendments also allow project proponents to demonstrate that biological impacts can be avoided through compliance with an adopted habitat plan, provided certain conditions are met. Finally, the amendments expand the project location information that must be included in certain CEQA notices, including notices of exemption.

A complete listing of the Guidelines can be found on the state's CEQA website ( The primary highlights of the Guidelines revisions are described below.

"Mitigating Out" of the mandatory findings of significance
CEQA Guideline 15065 sets forth "mandatory findings of significance" requiring an EIR when a project may result in one of the identified impacts. These mandatory findings may apply if a project has species or habitat impacts, or if there are "considerable" cumulative impacts resulting from a project. These mandatory findings are reflected in the CEQA checklist form of initial study, and they are often one of the bases on which agencies decide that an EIR is required.

The various mandatory findings have been renumbered as subsections (a)(1) to (a) (4). A new subsection (b) has been added to allow projects in appropriate circumstances to "mitigate out" of the mandatory EIR requirements. If a project proponent agrees to mitigation measures that either avoid the impact or clearly mitigate it, a lead agency does not need to prepare an EIR solely because those impacts would have been significant without the mitigation.

In addition, there is a specific provision governing mitigation of biology impacts. A lead agency may determine that an impact will not be significant, and that an EIR is not required, if the project proponent is bound by mitigation requirements of a habitat conservation plan or natural community conservation plan, provided that an EIR (or EIS) was prepared for the plan, and further provided that the mitigation meets effectiveness standards set forth in section 15065(b).

Notices of exemption must identify project location
CEQA Guideline 15062 allows notices of exemption to be posted when an agency determines that a project is exempt. This Guideline has been revised to require the notice to more specifically identify the location of the project. This must be done either by listing the street address and cross-street if the project is located in an urbanized area, or by attaching a specific map. The Guideline amendments state that this map "preferably" should be a US Geological Survey topographical map identified by quadrangle name.

Notices of determination must identify project location
CEQA Guideline 15082 has been revised to require that notices of determination, which are prepared and posted when a lead agency approves a project following preparation of an EIR or negative declaration, must also identify the project, either by street address and cross-street if the project is located in an urban area in an urban area, or by attaching a specific map. The Guideline amendments state that this map "preferably" should be a US Geological Survey topographical map identified by quadrangle name.

Archeological curation allowed as a mitigation measure
CEQA Guideline 15126.4(b), governing mitigation of impacts to archeological resources, has been amended to specify that if an artifact must be removed during project excavation, curation of the artifact may be an appropriate mitigation measure.

Preservation for park purposes added to Class 25 categorical exemption (transfers of land to preserve natural conditions)
CEQA Guideline 15325 has been revised to include an additional example of the types of projects covered by the Class 25 exemption for transfer of ownership of interest in land to preserve open space, habitat, or historical resources. This exemption now also applies to the acquisition, sale, or other transfer to preserve open space or lands for park purposes.

New categorical exemption for small habitat restoration projects
CEQA Guideline 15333 establishes a new categorical exemption that exempts from CEQA review small habitat restoration projects. These are projects of up to five acres in size to enhance or restore resources such as wetlands, stream or riverbank habitat, and native vegetation.

2004 CEQA Legislation

There were a few important changes to CEQA adopted by the Legislature in 2004. The following is a summary some of the most significant bills that were enacted.

Requirement to name Real Party in Interest clarified
Assembly Bill 2814 clears up one of two ambiguities in Public Resources Code section 21167.6.5. This statute was originally enacted in 2003 at the request of environmental groups, who were concerned that CEQA lawsuits were being dismissed on the basis that project opponents had not named all the necessary parties. As originally enacted, section 21167.6.5 specified that a petitioner had to name, as a real party in interest, "any recipient of an approval" that is the subject of the action. This provision has caused (and may continue to cause) some confusion because CEQA does not include any definition of a "recipient" of an approval.

As originally enacted, the bill also stated that a CEQA lawsuit could not be dismissed for failure to name real parties other than such approval recipients and responsible and trustee agencies. This was an attempt to create a "safe harbor" for CEQA petitioners, but it created ambiguity because there is no affirmative requirement to name responsible and trustee agencies. AB 2814 clears up this ambiguity by making it clear that only "recipients of an approval" need to be named as real parties.

Sacred Sites Bill Morphs from CEQA to Planning Law Provisions
Senate Bill 18, the Native American sacred sites bill, attracted a great deal of attention when it was introduced in 2003, and the bill was put over into the 2004 session. It began as bill that would have put the protection of sacred sites and consultation extensively into the CEQA process in a manner that many stakeholders, including public agencies, thought would be unduly burdensome. After the bill failed passage in 2003, it was modified in 2004 so that it to primarily amends provisions of the Government Code dealing with general plans.

As passed, the bill includes recognized California Native American tribes among the entities that can acquire and hold conservation easements. This bill also direct the Office of Planning and Research to include in the General Plan Guidelines advice for consulting with California tribes for the preservation of, or mitigation of impacts to, specified Native American places, features, and objects. The bill also requires local agencies to consult with tribes that are located in (or have traditional lands in) the local agency's jurisdiction, before the agency may adopt or amend a general plan. The Native American Heritage Commission will maintain contact lists for such consultations.

Mitigated Negative Declaration May Be Used for Follow-up Approvals Based on Master EIR
Assembly Bill 2922 expands a lead agency's ability to use a mitigated negative declaration as a follow-up document after a master environmental impact report has been prepared. Under current law, a mitigated negative declaration can be used within 5 years after a master EIR is certified, provided certain findings are made. This bill allows a mitigated negative declaration to be used as a follow-up document after 5 years, provided that certain specific findings are made.

Counties must consider oak woodland impacts and mitigation
Senate Bill 1334 enacts a new CEQA provision, Public Resources Code section 21083.4, that requires counties acting as lead agencies to consider the possible impacts of oak woodland conversion as part of the CEQA review for all projects. The new law states that, in determining whether an EIR, mitigated negative declaration or negative declaration is required for a project, counties must determine whether the project "may result in a conversion of oak woodlands that will have a significant effect on the environment." The statute does not establish or direct any particular threshold to be applied in making this determination, but it does require this category of impact to be evaluated in some way. As a practical matter, the likely impact of this change is that counties will add a new question to their initial study checklist forms.

In addition, if the county finds that a project may have a significant effect resulting from conversion of oak woodlands, then the county "shall require" one or more mitigation measures. These mitigation measures are conserving oak woodlands through conservation easements, planting and maintaining oaks, contributing funds to the Oak Woodland Conservation Fund, or "other mitigation measures developed by the county." The statute also specifies that CEQA's regular provisions governing findings apply, so after imposing at least one of the required mitigation measures, the county can (depending on the facts of the particular case) find that the impact is mitigated, or if the impact cannot be mitigated to a less than significant level, the county can adopt a statement of overriding considerations.

Projects within certain Natural Community Conservation Plans, certain affordable housing projects for low income households, and conversion of oak woodland on agricultural land that includes land used for commercial production, are exempt from the provisions of this new statute.

Defining "trustee agency"
Senate Bill 1889 simply places into the statute the definition of "trustee agency" as a state agency that has jurisdiction by law over natural resources affected by a project that are held in trust for the people of California. Various code sections are then amended to use the defined term "trustee agency".

Lead agencies Must Retain NODs for 12 Months
Senate Bill 647 imposes a new time requirement for lead agency retention of a notice of determination that has already been posted and filed. Previously, when a notice of determination was sent to the clerk's office for posting and filing, the clerk would return it to the lead agency and the lead agency would retain it for 9 months. Public Resources Code 21108 has been amended to specify that the lead agency must retain the notice for 12 months.

2004 CEQA Cases

The following discussion summarizes the key points of the CEQA court decisions published in 2004. Some of the decisions, particularly the decisions evaluating EIRs, include rulings in addition to what is summarized here. Practitioners involved in preparing and defending EIRS should review these EIR cases in detail.

Court Decisions Relating to CEQA Exemptions and the Definition of a Project

Association for a Cleaner Environment v. Yosemite Community College Dist., 116 Cal.App.4th 629 (2004). Relocation of shooting range was a "project" subject to CEQA.
A citizens association brought suit against a community college district and its board of trustees for failure to perform an initial environmental study in connection with its decision to close and remove a campus shooting range and transfer certain classes to another range off-campus. The trail court denied the petition for mandate and the association appealed.

On appeal, the community college argued that there was no "project" subject to CEQA, and that if a project did exist, it was exempt from CEQA. The Court of Appeal reversed. Under CEQA's definition of "project" as set forth in Guideline 15378(a) , one of the questions to evaluate is whether the activity had the potential to result in either a direct physical change in the environment or a reasonably foreseeable indirect physical change in the environment. Because the removal of the range had the potential to spread lead contamination, the court concluded that it was a "project" for CEQA purposes and should have been the subject of an initial environmental study. Exemptions for changes to the interior of a training structure and for minor cleanup actions did not apply because the activity was more extensive than covered by those categorical exemptions.

Native American Sacred Site & Environmental Protection Assn. v. City of San Juan Capistrano, 120 Cal.App.4th 961 (2004). Council adoption of voter-sponsored initiative measure exempt from CEQA.

Following Friends of Friends of Sierra v. City of Sierra Madre, 25 Cal.4th 165 (2001) and subsequent amendments to the CEQA Guidelines on ballot measures, most of the rules governing ballot measures were clear. City councils and boards of supervisors are subject to CEQA, and CEQA review must be completed before the council or board places a council-sponsored or board-sponsored measure on the ballot. The voters, however, are not subject to CEQA, and a council or board decision to place a voter-sponsored measure on the ballot is not subject to CEQA (and voter adoption of an initiative measure is not subject to CEQA).

What was not clear was how CEQA applies when the council decides to adopt a voter measure, as it has the power to do under the Elections Code, rather than to place it on the ballot. This case resolved that uncertainty, holding that the City Council has a ministerial duty to either adopt the measure or place it on the ballot, and a city council decision to adopt a voter circulated a voter-circulated initiative measure is also exempt from CEQA.

Plastic Pipe and Fittings Association v. California Building Standards Commission (124 Cal.App.4th 1390 (2004) - CEQA Applies to Addition of PEX Plastic Piping to California Building Code.

This is the first appellate decision holding that the addition of a material to the uniform building codes is subject to CEQA. In this case, the court upheld the decision by the Building Standards Commission that it could not add "PEX" plastic pipe to the code without conducting some level of CEQA review to evaluate claims that the use of this pipe has adverse environmental impacts. An industry association argued that the addition of a material to the uniform code is not a project because the causal link between the addition to the building code and the occurrence of physical impacts from the use of the pipe is too remote, but the court rejected these arguments.

Court Decisions Relating to Negative Declarations and the Fair Argument Standard

Ocean View Estates Homeowners Assn., Inc. v. Montecito Water District, 116 Cal.App. 4th 396 (2004). Fair argument that a project placing an aluminum cover over a reservoir might have a significant negative aesthetic impact when the cover would be seen from both public and private views.

This case addresses the emerging issue of aesthetic impacts on public and private views. Unlike the court in Bowman v. City of Berkeley, (see below), which was decided after this case, the court here required an EIR due in part to aesthetic impacts. Specifically, the Montecito Water District sought to place an aluminum cover over an existing four-acre reservoir, and adopted a mitigated negative declaration. A homeowners association challenged the mitigated negative declaration, arguing that the mitigation measures to prevent downstream flooding would have a significant environmental impact, and that the reservoir cover would have a significant negative aesthetic impact.

The Court of Appeal held that substantial evidence supported a fair argument that the project may have a significant negative aesthetic impact. The cover would be fifteen feet tall at its highest point, and over time would oxidize to a dull grey color visible from public trails and above the dam face. The court noted that an aesthetic concern raised by only one or two people would not be a significant impact. However, the evidence showed that the cover would be seen from both public and private viewpoints.

The court also held that there was substantial evidence to support the argument that the mitigation measures employed to prevent downstream flooding would have a significant environmental impact.

Bowman v. City of Berkeley, 122 Cal.App.4th 572 (2004) (request for publication pending). Mitigated negative declaration for infill housing project upheld against aesthetic impact challenge.

This decision upholds a mitigated negative declaration for an urban infill housing development against claims that aesthetic impacts and hazard risks required an EIR. Specifically, the court found that "purely aesthetic" impacts generally are not significant for projects in developed areas, and held that lead agencies have discretion to discount non-expert testimony on complex scientific issues.

In this case, an existing building was to be demolished and replaced with a new four-story senior housing development adjacent to a busy street. Project opponents argued that the project could have a significant visual impact and could cause exposure to contamination from nearby leaking underground storage tanks, and thus that an EIR was required.

The court upheld the City's conclusion regarding aesthetics because any impact on neighboring residents was limited to a few individuals, and was too small in scope to be significant. Thus, there was no substantial evidence to support a fair argument that aesthetic impacts were significant. As the project was being constructed in a "flat urban neighborhood," the only view that would be partially diminished was that of the Berkeley hills. However, the scope of the impact was limited because relatively few would actually be affected due to the location and context of the building. The court also distinguished this infill project in a developed setting from a project being developed near sensitive environmental resources.

In addition, the court rejected claims that contamination risks required preparation of an EIR. On a technical issue such as environmental contamination, the substantial evidence to support a fair argument that an EIR is required must be based on some relevant expertise. A lay opinion is insufficient. There was a technical report confirming that there was no contamination on the site, but only lay testimony in response to that opinion. Thus the required fair argument was not supported by any substantial evidence.

Note: As of January 31, 2005, requests to depublish this opinion are pending before the California Supreme Court (an opinion is no longer citable as legal precedent if it is depublished). Morrison & Foerster has filed a letter opposing these depublication requests, on behalf of the Bay Area Council as well as a non-profit housing coalition.


Architectural Heritage Assn. et al v. County of Monterey, 122 Cal.App. 4th 1095 (2004). Documentation of a historic building is not sufficient mitigation for its demolition.

An architectural association challenged Monterey County's certification of a mitigated negative declaration for the proposed demolition of an old County jail. The Court of Appeal held that substantial evidence supported a fair argument that the jail was a historic resource, the proposed demolition of which required an EIR.

This case involved the old County jail, constructed in 1931, and in which Cesar Chavez was imprisoned for a time in 1970. After a period of non-use, Monterey County authorized staff to proceed with demolition. Although County staff initially believed the issuance of a demolition permit was exempt from CEQA, they prepared an initial study out of an "abundance of caution." The County retained a consultant who determined the property was potentially eligible for the state and national historical registers. The consultant suggested several mitigation measures for demolition of the building. Based on those reports, the initial study concluded that the property was a significant historical resource. The initial study also recommended the consultant's mitigation, which included photo-documentation of the building, use of elements from the jail building in other buildings, preparing a historic monograph (a paper on the building), and lodging complete architectural blueprints with the local historical society. The initial study concluded that with the recommended mitigation measures, the impact could be less than significant.

Once the initial study was complete, the County's historic review board recommended that an EIR be prepared. The County declined to do so, and that decision was appealed to the Board of Supervisors. The Board affirmed the decision to prepare a mitigated negative declaration rather than an EIR. The local architectural heritage association sued, and the trial court upheld the mitigated negative declaration.

On appeal, the court reversed. The court stated that all three issues presented - whether the resource was historic, whether there was a significant impact, and whether that impact was mitigated - are reviewed under the fair argument standard. Based on the studies that were in the record, petitioners had presented a fair argument that the structure was historic, and petitioners had also presented a fair argument that documentation of the building did not reduce the impact of demolition to a less-than-significant level. Petitioners made a rather striking argument that "drawing a chalk mark around a dead body is not mitigation". The case largely repeats the legal holdings in the familiar case of League For Protection Of Oakland's Architectural And Historic Resources v. City of Oakland (1997) 52 Cal.App.4th 896, where the court held that similar mitigation measures did not reduce the impact of demolition to a less-than-significant level.

El Dorado County Taxpayers for Quality Growth v. County of El Dorado, 122 Cal.App.4th 1591 (2004). Petitioners failed to distinguish between environmental impacts from mining activity and environmental impacts from reclamation plan activity.

The County found that a reclamation plan for a mining operation would not have a significant effect on the environment and therefore approved the plan based on a negative declaration. Petitioners claimed that the project required an EIR rather than a negative declaration. Specifically, they argued that the project description failed to describe the whole project, the negative declaration improperly analyzed only the reclamation aspect of the project and not the mining aspect, and the County violated CEQA by failing to prepare an EIR and failing to recirculate the negative declaration after substantially revising it.

The court of appeal rejected petitioner's claim, finding that project description was appropriately limited only to reclamation, and need not also describe mining activity that was not part of the reclamation plan approval. The description set forth the general nature of the project, as well as specifics such as the type of mining disturbance, the size of the project, the actions that would comprise the reclamation, and the environmental and other goals of those actions.

The court also rejected Petitioners' argument that the County failed to evaluate significant environmental impacts from potential and past landslides and blasting and excavation. The initial study did evaluate the landslides, and the blasting and excavation impacts were the result of previously approved mining and not the result of the reclamation plan.

The Pocket Protectors v. City of Sacramento, 124 Cal.App.4th 903 (2004) (petition for review pending). Court Requires EIR Based on Fair Argument that Project is Not Consistent with Governing PUD Regulations.

In a decision with troubling ramifications for infill development projects, the court rejected a negative declaration for a 20-acre in-fill project within an area planned and zoned for development pursuant to a 1985 planned unit development (PUD) approval. The court applied the fair argument standard to the city's determination that the project was consistent with the PUD regulations, and found that project opponents had presented evidence to support a fair argument that the project was inconsistent with those regulations. The court stated "if substantial evidence supports a fair argument that the proposed project conflicts with the policies of the PUD, this constitutes grounds for requiring an EIR."

Note: A petition for review of this decision was filed with the California Supreme Court on January 18, and is currently pending. The authors understand that a separate request for depublication of this decision will also be filed. Morrison & Foerster will be filing an amicus letter in support of the petitions for review and depublication, on behalf of the California Building Industry Association, the San Francisco Housing Action Coalition, and the Bay Area Council. In the author's view, this case is extremely troubling from the perspective of defending in-fill projects, and also legally incorrect. The court confuses land use consistency issues with CEQA standards, and as a result, applies CEQA's "fair argument" standard to a land use consistency determination rather than to a CEQA determination. Local agencies under a long line of case law are entitled to deference in judicial review of their determinations as to what is consistent with governing land use plans and regulations. Consistency with land use plans is not an environmental impact, it is a legal status and a legal conclusion. Such inconsistency may be evidence of an environmental impact, and standards in land use plans (such as traffic levels of service) are often used to measure whether an impact is significant. While this distinction may appear to be a technical one, this distinction is tremendously important to local governments (and project applicants) because of the different standards of judicial review that apply. Environmental determinations in a negative declaration are reviewed under the fair argument standard, but determinations of land use consistency are reviewed under the traditional, deferential substantial evidence test.

Court Decisions Relating to Environmental Impact Reports

Protect the Historic Amador Waterways v. Amador Water Agency, 116 Cal.App. 4th 1099 (2004). EIR failed to explain why a pipeline project did not have significant effect on the environment.

The court held that the evidence in an EIR was insufficient to support its conclusion that a water pipeline would not have a significant effect on the environment. Petitioners challenged a county water agency's EIR for a project to replace a 130-year-old, mostly unlined canal with a pipeline. The agency acknowledged that leakage from the canal contributed to the surface flow of water in local streams and that conveying the water by pipeline instead of using the canal would reduce the summer flows in those streams. However, the agency concluded that this reduction in stream flow would not constitute a significant effect on the environment. The court rejected this aspect of the EIR because the EIR did not include a supporting explanation for this conclusion. Public Resources Code section 21100(c) requires an EIR to include a statement briefly indicating the reasons why an impact is not significant. The court held that a bare conclusion of insignificance did not comply with this requirement to provide "reasons" supporting the conclusion.

Mira Mar Mobile Community v. City of Oceanside, 119 Cal.App. 4th 477 (2004). EIR upheld against challenges to its analysis of aesthetics, habitat mitigation and alternatives.

The court of appeal upheld an EIR for a condominium development against challenges based on aesthetics, habitat mitigation, adequacy of the alternatives analysis and sufficiency of findings. The most significant holdings deal with aesthetic issues. The court upheld the city's conclusion that aesthetic impacts would be less than significant, in part because there was no impact on public views, and also because local coastal program included goals to protect public views without mention of private views. The court repeated the holding from prior cases that, under CEQA, "the question is whether a project will affect the environment and persons in general, not whether a project will affect particular persons." and rejecting challenges to the EIR based on claims about views from particular private properties. The court also stated it is appropriate for lead agencies to look to local planning thresholds, such as statements in a local coastal program, when determining whether impacts are significant.

The court also rejected arguments that mitigation for habitat loss was inadequate. Even though there was some net loss of coastal sage scrub habitat even with replacement habitat mitigation, the court found that substantial evidence supported the city's determination the project would not have a significant impact. There has recently been a substantial debate about whether replacement habitat can be acceptable mitigation (although this debate has been taking place primarily in unpublished appellate opinions). This decision indicates that providing replacement habitat is an acceptable mitigation measure provided the record indicates in the particular case supports that conclusion.

Finally, the decision includes several important holdings on alternatives. Petitioners challenged the alternatives analysis in the EIR on the basis that the analyzed alternatives were ultimately rejected as infeasible. The court rejected this challenge stating that alternatives included in an EIR are first determined to be "potentially feasible" and thus included in the EIR's analysis and comparison of alternatives. Then when the agency decision-makers consider whether to approve the project, the decision-makers make a second and separate determination of feasibility, based on the whole record. This is an important distinction, because petitioners commonly argue that, once alternatives are included in an EIR, they must be considered feasible for purposes of the ultimate project approval decision by the city council or board of supervisors. This case confirms that this is not correct.

Also, consistent with prior case law, the court found the EIR was not required to address offsite alternatives, the proposed project was consistent with the city's plans and zoning. Finally, although the alternatives analysis included one alternative that would not reduce environmental impacts, the court held that including one such overall alternative analysis was not prejudicial error.

Defend the Bay v. City of Irvine, 119 Cal. App. 4th 1261 (2004). Planning level EIR upheld against claims based on jobs/housing balance and agricultural impacts.

The Fourth District Court of Appeal upheld a planning level EIR for a 7700 acre development. First, citing prior case law, the court reiterated an important and helpful holding regarding the standard of review to be applied in CEQA cases where an EIR is challenged and the substantial evidence test applies. The court confirmed that a petitioner's task is to demonstrate that there is no substantial evidence supporting a lead agency's position. The court stated as follows:

"As with all substantial evidence challenges, an appellant challenging an EIR for insufficient evidence must lay out the evidence favorable to the other side and show why it is lacking. Failure to do so is fatal. A reviewing court will not independently review the record to make up for appellant's failure to carry his burden."

Applying this standard, the court rejected several challenges to the EIR. Proponents first argued that the project will exacerbate an existing housing shortage, but the court found that substantial evidence supported the EIR's conclusions. The project would add housing in an existing job reach area, and to the extent that the project generated additional housing demand, be provided both by the project as well as by planned housing and adjacent communities.

Petitioners also challenged the EIR's conclusion that mitigation for the loss of agricultural land was not feasible. The EIR concluded that on-site agricultural uses were not economically feasible and the court held economic factors may be taken into consideration in making this feasibility determination. The court also found that the negative economics of long-term agricultural and conflicts with the general plan were sufficient evidence to support the EIR's conclusion that off-site mitigation for agricultural impacts was not feasible.

Finally, the court upheld mitigation measures for habitat impacts. Generally, these mitigation measures required the developer to consult with wildlife agencies and obtain permits and adopt some specific avoidance measures in coordination with those wildlife agencies. Based on Sacramento Old City Association v. City Council, 29 Cal.App.3rd 1011 (1991), the court rejected arguments that this was an improper deferral of mitigation, because there was a specific commitment to mitigate impacts.

Maintain Our Desert Environment v. Town of Apple Valley, 120 Cal.App. 4th 396 (2004). EIR project description and notice not required to disclose end user of a project.

In this case, an environmental group (joined by the Attorney General's office) was essentially seeking to establish new CEQA case law requiring the disclosure of the end user of a project in both EIR project descriptions and CEQA notices. The project at issue was a distribution center which was revealed late in the process to be proposed for use by Wal-Mart. In the most significant ruling in the case, the court held that CEQA does not require a project end user to be listed in the EIR project description or in the notice of availability of the draft EIR. The court also held that a brief listing of the potentially significant environmental impacts in this notice was sufficient. In addition, in a series of fact-based analyses, the court upheld the EIR against challenges to its analysis of impacts on traffic, land use, noise, air quality, and the Mojave ground squirrel.

Sierra Club v. County of Napa, et al., 121 Cal.App.4th 1490 (2004). CEQA does not require an EIR to evaluate economic feasibility.

This case is important because it is the latest in the continuing battle over whether economic information must be included in EIRs. The court held that, when agency decision-makers decide whether to approve a project, the decision-makers are entitled to weigh economic information about the feasibility of alternatives and mitigation measures that is noted anywhere in the record, and such information is not required to be included in the EIR. Consistent with the earlier case of San Franciscans Upholding the Downtown Plan v. City and County of San Francisco, the court allowed economic feasibility determinations to be based on the entire record.

This case also affirms, as in the Mira Mar decision, that an EIR evaluates alternatives that are initially determined to be "potentially feasible". Later on, when the project comes before the decision-makers, the ultimate determination of what is feasible is based on the entire record, and decision-makers may reject as infeasible alternatives that were earlier determined to be potentially feasible.

In addition, the project opponents objected in this case to a letter discussing the feasibility of alternatives which was submitted by the applicant at the end of the process evidence. The court rejected arguments that this deprived the public of an opportunity to review the information because it is the decision makers, not the public, who must review the final record for the project and make the ultimate the decision on feasibility.

Note: This case also includes important holdings on the required consistency of a project with a governing specific plan, essentially concluding that specific plans, like general plans, balance a variety of competing factors, thus what is required for specific plan consistency (as for general plan consistency) is overall compatibility with the policies of the plan.

El Morro Community Assn. v. Cal Dept Parks & Rec., 122 Cal.App.4th 1341 (2004). Court upholds an EIR for conversion of a beachfront mobile home park into a public park, campground, and parking area.

Mobile home challenged an EIR prepared by the California Department of Parks and Recreation for the conversion of a mobile home park into a public park, campground, and parking area. The project was approved by the deputy director of the Department as the decision-maker. The court rejected claims that the State Parks Commission, as the Department's appointed governing body, was required to approve the EIR. The "decisionmaker" that certifies the EIR need not be the legislative body if the decision authority is at staff level. Also, the CEQA requirement that EIR certification be appealable to an elected body applies only to local agencies, not to the state (and it also applies only to local agencies with elected decision making bodies).

The court also held that the Department was not required to include a more detailed discussion of the technical reports referenced in the EIR. The court explained that although maybe better practice to do so, an EIR need not include a detailed discussion of all technical studies which are cited in the EIR. The court also rejected the claim that cited documents were required to be available at a library or other location. The court noted this requirement applies only to documents that are formally incorporated by reference into the EIR, and not to documents merely cited in an EIR.

Central Delta Water Agency v. State Water Resources Control Board, 124 Cal.App. 4th 245 (2004). Failure to consider impacts associated with the ultimate use of stored water violated CEQA, and was not too speculative to evaluate.

This recent case adds to the body of CEQA case law addressing what is (and is not) too speculative to be considered in an EIR. Here, the State Water Resources Control Board issued permits for the appropriation of water for the "Delta Wetlands" project. The project was intended to divert water from the San Francisco Bay and Sacramento-San Joaquin Delta Estuary into reservoirs to be constructed on two Delta islands, for later rediversion and sale to potential, unknown purchasers in amounts yet to be determined.

The CEQA ruling in this case is highly dependent on the water law ruling. As a matter of water law, the court held that an application for an appropriate water right must specify an actual intended beneficial use. Given that there must be a more specific delineation of the ultimate use of the water in the permit, the court held that the CEQA review must include environmental analysis of the end uses of the water as would be specified in the revised permits and permit applications.

Bakersfield Citizens for Local Control v. City of Bakersfield, 124 Cal.App.4th 1184 (2004). Two EIRs for "Supercenter" Retail Projects Rejected for Failure to Consider Project-Specific and Cumulative "Decay" Impacts That Could Result from Store Closures.

The City of Bakersfield prepared EIRs for two shopping centers located 3.6 miles apart. Both shopping centers are to contain Wal-Mart Supercenters plus a variety of other large and small anchors.

The most important holding in the case is the court's rejection of the EIRs for failure to evaluate potential urban decay impacts. The court stated that a proposed new shopping center does not trigger a presumption that decay will occur as a result of other business being closed. However, evidence (including a professional report) had been introduced suggesting that the economic impact of the shopping center would trigger the environmental impacts of urban decay. The court held that when such evidence is introduced an EIR needs to evaluate that issue. In this case, the EIR concluded that the project opponents had raised only economic issues, but the EIR did not include even a short statement indicating why decay impacts would be less than significant.

The court also distinguished this case from the issues presented in Maintain Our Desert Environment v. Town of Apple Valley, discussed above. In that case, the court held that the end user of a project does not need to be identified in the EIR project description and notices. Here, the court stated that, when a particular type of retail business presents unique impacts, the disclosure of the type of business is necessary to evaluate those impacts.

The court also rejected the cumulative impact analysis in the two EIRs, because neither one considered the other project. Also, the court rejected the EIR's air quality analysis, holding that the EIRs must disclose the health impacts that will result from project-related emissions, in addition to evaluating and disclosing the emissions themselves.

The court also made several important rulings regarding CEQA litigation. The court held that the case was not moot, even though much of the construction had been completed. The court also rejected a claim that the project opponents lacked standing because they were motivated by economic issues.

Note: Practitioners should carefully evaluate the statement in this decision that an air quality analysis must include a corollary discussion of the health impacts related to project emissions. The court rejected the EIR's air quality analysis because it did not include any acknowledgment or analysis of the well-known connection between reduction in air quality and increases in specific respiratory conditions and illnesses. Significantly, the decision arises out of the Central Valley with its substantial air quality problems, and it is based on EIRs that find unavoidable air quality impacts. Even in that context, however, this decision appears to break new ground in CEQA practice.

Court Decisions Relating to CEQA Litigation

Association for Sensible Development at Northstar, Inc. et al. v. Placer County, 122 Cal.App.4th 1289 (2004). Filing a request for a hearing is enough to satisfy the requirements of Public Resources Code section 21167.4 and avoid dismissal.

This is the first of several cases evaluating the requirement that petitioners request a hearing on the merits of a CEQA case within 90 days after the lawsuit is filed. Public Resources Code section 21167.4. Prior case law established a requirement that the petitioners both request a hearing, and actually set a hearing date with the court, or the case would be subject to dismissal. In this case, the court of appeal held that a request for a hearing alone is sufficient to meet the statutory requirement.

According to the court, the seminal case on the requirements of section 21167.4, McCormick v. Board of Supervisors (1988) 198 Cal.App.3d 352, was decided prior to the 1994 amendments to the statue, Based on the wording of these amendments, the requirement that the petitioner do something more than filing a request for hearing is no longer good law. Under the 1994 amendments, once petitioners request a hearing, either the petitioner or the respondent can ask the trial court to set a hearing by filing an "application" for a hearing date . Therefore, the only step specifically required of the petitioner is to file a request for hearing.

Leavitt v. County of Madera, 123 Cal.App.4th 1502 (2004). Filing a request for hearing is sufficient, and dismissal is not a sanction for delay in preparing the record.

As in the Northstar case above, the court here holds that, based on 1994 amendments to Public Resources Code 21167.4, a petitioner need only request a hearing in order to avoid dismissal.

In addition, the trial court in this case had dismissed both on the ground that a hearing had not been requested, and on the basis of delays by petitioner in preparing the administrative record. The court rejected this second basis for dismissal, holding that there was no statutory authority for dismissing a case based upon delays in preparing the administrative record.

Nacimiento Regional Water Management Advisory Committee v. Monterey County Water Resources Agency, 122 Cal.App.4th 961 (2004). Relief from mandatory dismissal was not available for attorney's neglect.

In this important procedural ruling, the court holds that when a petitioner fails to request a hearing within 90 days due to inexcusable attorney neglect, dismissal is mandatory and there is no relief under Code of Civil Procedure section 473.

The Court of Appeal held that section 473(b) relief for inexcusable mistake was not available following a mandatory dismissal under section 21167.4(a). The court explained that the broadly stated provision granting relief for attorney-caused dismissals had been construed to reconcile it with the many statutes authorizing dismissal. However, nearly every section 21167.4 dismissal for failing to request a hearing on alleged CEQA violations was caused by the mistake, inadvertence, or neglect of a plaintiff's attorney. Therefore, few dismissals would be final if mandatory relief were applied to such dismissals. The CEQA dismissal statute would effectively be nullified, and the legislative intent that CEQA challenges be promptly resolved and diligently prosecuted would be defeated.

Court Decisions Relating to Partially Exempt Certified Regulatory Programs

Coalition For Reasonable Regulation Of Naturally Occurring Substances v. California Air Resources Board, 122 Cal.App.4th 1249 (2004). Court rejects CEQA challenge to new regulation restricting asbestos-containing rock.

In this case, the court upheld an Air Resources Board regulation barring the sale and supply of asbestos containing rock for surfacing of unpaved roads. Industry groups challenged the regulation under the Tanner Act, which regulates toxic air contaminants, as well as CEQA. The court upheld the regulation and the required supporting statement of reasons both under the Tanner Act as well as CEQA.

With respect to the CEQA claims, because the Air Board was proceeding under a certified regulatory program, the court noted that the agency's supporting statement of reasons was required to prepared consistent with CEQA principles, but most of CEQA's requirements do not apply and an EIR is not required. The only apparent CEQA issue raised by the industry group was an argument that the Air Board did not contact specific quarries to evaluate potential environmental impacts resulting from trucks that will carry substitute materials in place of those prohibited by the regulation. The court found there was substantial evidence that any such impact was speculative because Board staff had identified and contacted quarries and determined that only a few of them were producing any significant quantity of asbestos containing materials.

Ebbetts Pass Forest Watch v. Department of Forestry and Fire Protection, 123 Cal.App.4th 1331 (2004). EIR equivalent documents for large timber harvest plans upheld against cumulative impact challenge.

The court upheld six timber harvesting plans (which are prepared as EIR equivalent documents pursuant to a certified program) against cumulative impact claims based upon the scope of the area to be evaluated for cumulative impacts. As stated in the court's opinion, each timber harvesting plan included a general description of the biological assessment area, and these assessment areas were all substantially larger than the timber harvesting acreage (ranging from an 8,743 acre assessment area for a 600 acre plan to a 20,773 acre assessment area for a 488 acre plan). Based on a number of documents in the administrative record revealing discussions about the appropriate assessment area, as well as federal case law arising in a similar context, the court held that the agency's choice of an assessment area was appropriate. The court also found that the agency had considered a variety of federal studies which petitioners argued required a larger assessment area, and that the agency had adequately responded to comments on that point.

Santa Barbara County Flower & Nursery Growers Assn. v. Santa Barbara County, 121 Cal.App.4th 864 (2004). Even if an agency prepares an EIR on an action that is exempt from CEQA, the agency can successfully defend against a lawsuit on the grounds that the action was exempt.

This case holds that even if an agency prepares an EIR on an action that is exempt from CEQA, the agency can still win the lawsuit by arguing the exemption. The Growers Association challenged the adequacy of an EIR which the County had submitted to the Coastal Commission in support of a proposed local coastal plan amendment concerning greenhouse development.

As a defense to the lawsuit, the County asserted that preparation of an amendment to the Coastal Plan was exempt from the EIR requirement because it was done pursuant to a certified regulatory program. The Court of Appeal agreed, holding that the County did not waive its ability to assert the EIR exemption by submitting an EIR to Coastal Commission.

City of Morgan Hill v. Bay Area Air Quality Management District, 118 Cal.App. 4th 861 (2004). Court upholds power plant permit issued under energy crisis regulations; Energy Commission staff report was only CEQA-equivalent review required.

This case upholds a decision by the Bay Area Quality Management District to issue a permit for the construction of a power plant in San Jose. The City of Morgan Hill argued that the District's decision to allow construction of the power plant violated both federal and state law, including CEQA. Although many holdings in the case are based on federal and state law grounds that no longer apply, the decision nonetheless highlights the tremendous complications and potential pitfalls associated with the approval process for California energy projects, which involve an interconnected set of federal, state and regional agency approvals. And some aspects of the decision discussing the primary role of the California Energy Commission continue to apply.

In April 1999, Calpine sought permission from the California Energy Commission to construct and operate the Metcalf Energy Center, a 600-megawatt natural gas-fired power plant. In May 1999, Calpine also sought a "prevention of significant deterioration" ("PSD") permit from the District to establish that the power plant satisfied federal Clean Air Act standards intended to prevent significant deterioration of air quality. In October 2000, the Commission issued its final staff assessment for Calpine's application for a power plant certificate. Based on the staff assessment, the Energy Commission approved the project and the Air District approved the PSD permit.

Morgan Hill filed an administrative appeal of the Air District's decision to issue the PSD permit with the District's Board, arguing that the District failed to comply with CEQA. Morgan Hill also filed an appeal with the federal Environmental Appeals Board ("EAB"). The EAB declined to review the District's decision to issue the PSD permit, and specifically held that it had no jurisdiction to review the District's decision for compliance with CEQA (and this EAB decision was upheld in the federal courts). Later, the District's board dismissed the City's appeal, finding that it had no subject matter jurisdiction over any PSD permit issues because federal law required PSD issues to be resolved by the EAB, and under state energy laws, the Air District has no authority to review, override or overturn conditions imposed on a project by the Energy Commission.

In the litigation, Morgan Hill argued that the District's decision to issue a PSD permit violated federal law. The PSD permit program is a federal program required by the Clean Air Act, and the District was acting under a formal delegation from the EPA to issue PSD permits. Morgan Hill argued that the federal delegation agreement requires compliance with the District's CEQA regulations, and thus Morgan Hill's CEQA claim also established a no violation of federal law. The Court of Appeal rejected this rather creative argument. The Court first pointed out that the delegation agreement itself specifically provides that the District's PSD permit decisions are subject to review only before the federal Environmental Appeals Board. Also, the EAB had specifically held that issues pertaining to CEQA are state law requirements separate from federal PSD review. Thus, the federal delegation agreement did not provide a basis for Morgan Hill's CEQA claims.

Morgan Hill also asserted that the Air District, as a responsible agency, was required to wait until the Energy Commission as lead agency had approved the project and the CEQA-equivalent final staff assessment. The Court acknowledged that "in other times, the City might prevail" with this argument. However, when the approvals were issued, Governor Davis' executive orders for the energy crisis were in effect. One of those orders provided that any agency making a CEQA decision for a proposed power plant should use the final staff assessment prepared by Energy Commission staff during the Commission's approval process, unless the Commission determined another document would be more appropriate. To the extent CEQA regulations were inconsistent with the Governor's order, the order controlled. Based on this order, the Court rejected Morgan Hill's argument that the District had to wait for the Commission's project approval decision. Instead, the District could proceed once the Final Staff Assessment was complete.

Finally, the Court concluded that the District's reliance on the staff assessment was sufficient. The Commission had exclusive power to approve this type and size of new power plant, and the Commission's Final Staff Assessment constituted the environmental document needed before the District could issue its PSD permit.




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