CEQA Update: Three New Court of Appeal Decisions Issued; Key Supreme Court Rulings Expected (and the Sacramento Kings are on a Roll)

2015 is shaping up to be another active year for CEQA judicial review. After taking an extended holiday break, the Courts of Appeal have recently published three decisions, two of which reinforce existing case law on how to set the baseline for CEQA impacts analysis, and a third which clears the way for a new Sacramento Kings arena. In addition, the California Supreme Court is expected to issue rulings in several key CEQA cases.

Center for Biological Diversity v. Department of Fish and Wildlife (February 10, 2015, 3d DCA Case Nos. C072486, C072790, and C073011) involved three challenges to the California Department of Fish and Wildlife’s (Department) adoption of a program EIR for its fish hatchery and stocking enterprise, which has been in operation since the late 1800s. Two of the challenges focused on alleged CEQA violations. The program EIR evaluated three alternatives: (1) continue the existing enterprise without change (“no project alternative”); (2) continue the enterprise with mitigation measures (the “preferred alternative”); and (3) operate the enterprise with certain limitations. The EIR used the then existing, ongoing operations (specifically, those between 2004 and 2008) as the environmental baseline for its environmental impacts analysis. The Department ultimately selected the second alternative, certified the EIR, and adopted a statement of overriding considerations.

The Court of Appeal rejected all of petitioners’ CEQA claims. It held that the EIR contained a sufficient level of analysis for a program EIR and did not impermissibly defer formulation of mitigation measures. The Court also held that the Department’s baseline was correct because, under CEQA, the baseline for a continuing project is the current environmental condition including the project, even if the project has not undergone prior environmental review and even if the current condition includes unauthorized and even environmentally harmful conditions. For this reason, the EIR also appropriately identified the continuation of the ongoing operation as the “no project alternative.” (Note that although the court found no CEQA violations, it ruled that the Department did violate the Administrative Procedure Act (APA) because certain mitigation actually constituted “underground regulation” adopted without complying with the APA’s notice and hearing requirements.)

CREED-21 v. City of San Diego (filed January 29, 2015, Certified for Publication February 18, 2015, 4th DCA Case No. D064186) addressed another CEQA baseline issue. The case involved an emergency storm drainage repair project on a steep hillside in La Jolla and the subsequent revegetation of the site. The City completed the emergency repair pursuant to CEQA’s statutory exemption for “emergency repairs to publicly or privately owned service facilities necessary to maintain service essential to the public health, safety or welfare” (Pub. Res. Code Section 15269(b)). The emergency permit issued by the City included a condition that, within 60 days, the City’s engineering department would apply for a regular coastal permit for the already completed emergency work. Consistent with this permit condition, and following completion of the emergency repair work, the City filed an application for a coastal development permit and site development permit, which included a revegetation/restoration planting plan for the site. The City described the “project” as including the already completed emergency repair work along with the proposed revegetation plan. The City issued a Notice of Exemption for this “project” pursuant to CEQA Guidelines Section 15061(b)(3) for activities “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment”-- the so-called “common sense” CEQA exemption.

The Court of Appeal agreed with the City’s conclusion that the proper environmental baseline for review of the revegetation project consisted of the site conditions as they existed following completion of the emergency storm repair work, not before. The court concluded that the emergency repair work “was, in effect, an intervening and superseding event that changed the physical environment without any requirement for CEQA review of that work for a significant effect on the environment.” Therefore -- and apparently notwithstanding  the City’s description of the “project” in its Notice of Exemption -- “after the 2010 emergency work was completed, the only activity to be performed, or the ‘project’ for purposes of CEQA, was the implementation of the revegetation plan. Therefore, the CEQA baseline for the revegetation project must be set after the 2010 emergency work was completed and any qualification for a CEQA exemption and/or significant environmental effect of that project must be considered based on the postemergency work physical environmental of the site.” The court also concluded that substantial evidence supported the City’s determination that the “common sense” exemption applied to the revegetation project because the plan “indisputably would improve the site’s physical conditions compared to its 2011 physical conditions” and therefore, “would not result in any adverse change in its physical conditions.”

Finally, in Saltonstall et al. v. City of Sacramento (February 18, 2015, 3d DCA Case No. C077772), the proposed Sacramento Kings basketball arena cleared another hurdle when the Third Appellate District upheld the EIR for the new downtown entertainment and sports center. The court rejected all of appellants’ CEQA claims, including claims that the EIR failed to (1) consider remodeling the existing Sleep Train Arena as a feasible alternative to building the new arena, (2) adequately evaluate the effects of the project on interstate traffic on Interstate Highway 5 (I-5), and (3) account for safety issues associated with large crowds expected to congregate outside the arena during events. Of greatest note, the court rejected the claim that the City improperly “approved” the project prior to completing its CEQA review when it took certain preliminary steps, including exercising its eminent domain power to acquire property for the arena and entering into a preliminary, nonbinding term sheet allowing negotiation with a private investor group, which provided that the City retained the discretion to mitigate adverse environmental effects and reject the project entirely.

These three decisions will likely be followed by a significant number of other Court of Appeal decisions this year. In addition, we expect the California Supreme Court to issue decisions in several key cases, including the following:

• In Friends of Eel River v. North Coast Railroad Authority (Northwestern Pacific Railroad Company) (SC Case No. S222472), the Court will consider whether the Interstate Commerce Commission Termination Act (ICCTA) preempts CEQA in the context of a state agency’s actions with respect to a state-owned and funded rail line, and whether the ICCTA preempts a state agency’s voluntary commitment to comply with CEQA as a condition of receiving state funds related to such a project.
• Berkeley Hillside Preservation v. City of Berkeley (SC Case No. S201116) will consider the proper procedure and standard of review applicable to the “unusual circumstances exception" to CEQA’s categorical exemptions, found in 14 CCR § 15300.2(c).
• In Center for Biological Diversity v. Department of Fish & Wildlife (SC Case No. S217763), the Court will consider issues relating to the California Endangered Species Act in the context of CEQA, whether judicial review is limited to the claims presented to an agency prior to the close of the comment period for a draft EIR, and the proper baseline for evaluation of impacts relating to a project’s greenhouse gas emissions.
• Friends of the College of San Mateo Gardens v. San Mateo County Community College Dist. (SC Case No. S214061) will address the standard of review applicable to a lead agency’s decision to prepare a subsequent EIR, Negative Declaration, or addendum.
• The Court’s long-awaited decision in California Building Industry Assn. v. Bay Area Air Quality Management Dist. (SC Case No. S213478) will address under what circumstances CEQA requires an analysis of how existing environmental conditions will impact future residents or users of a proposed project.
• Finally, City of San Diego v. Trustees of the California State University (SC Case No. S199557) will address requirements relating to certain types of “fair-share” payments proposed by a state agency as mitigation for off-site impacts.  

All in all, it should be a very interesting year.

-- Don Sobelman and Nicole Martin

For more information, contact Don Sobelman at (415) 228-5456 or des@bcltlaw.com, or Nicole Martin at (415) 228-5435 or nmm@bcltlaw.com.