CEQA News You Can Use - November 2024 - Volume 9, Issue 3
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CEQA News You Can Use - November 2024 - Volume 9, Issue 3

Brownstein Client Alert, Nov. 4, 2024

 Welcome to “CEQA News You Can Use,” a quarterly production of Brownstein Hyatt Farber Schreck, LLP’s Natural Resources lawyers. This publication provides quick, useful bites of CEQA news, which we hope can be a resource to your real-time business decisions. That said, it is not and cannot be construed to be legal advice. Enjoy!


LA City Planning Commission properly certified EIR

When can an unelected city planning commission act as a decision-making body under CEQA and certify an EIR? According to the Second District Court of Appeal in Westside Los Angeles Neighbors Network v. City of Los Angeles (2024) 104 Cal.App.5th 223, an eligible “decision-making body” under CEQA is “any person or group of people within a public agency permitted by law to commit an agency to a definite course of action for a project.” The Los Angeles City Planning Commission certified an EIR that analyzed updates to transportation assessment fees (Fee Program Updates). An associated streetscape plan, which suggested improvements that could be funded by the fee program updates, was approved through the use of a categorical exemption. Petitioner challenged the decision, arguing the planning commission was not authorized to certify the EIR as it only has the authority under city code to adopt the streetscape plan but not the fee program updates. The court rejected petitioner’s argument that the decision-making body must have authority to adopt the part of the project causing the primary source of the impacts. Instead, the relevant inquiry was whether the decision-making body could commit the lead agency to a definite course of action with respect to the whole project, even if the project was subject to multiple discretionary approvals. Given the intertwined nature of the streetscape plan and fee program updates, the planning commission’s adoption of the Streetscape Plan committed the city to a definite course of action, and therefore the planning commission was a proper body to certify the EIR. The court also upheld the use of the categorical exemption for the streetscape plan, found the EIR’s analysis of growth inducing impacts was adequate and determined that there was substantial evidence that certain transportation-related mitigation measures would be funded for implementation. There is a pending petition for review by the California Supreme Court, so stay tuned.


Numeric GHG significance threshold survives judicial scrutiny

In Upland Community First v. City of Upland (2024) 105 Cal.App.5th 1, the Fourth District Court of Appeal found that the City of Upland’s use of a 3,000 metric tons of carbon dioxide equivalent per year (MTCO2e/yr) as a greenhouse gas (GHG) threshold for a warehouse/parcel delivery building was supported by substantial evidence. Upland Community First had argued, and the trial court found, that the city’s threshold was not supported by substantial evidence. On appeal, however, the appellate court determined that the city’s GHG analysis and its adopted threshold were sufficiently supported by substantial evidence, including but not limited to a methodology for mixed-use projects recommended by the South Coast Air Quality Management District (SCAQMD) in 2010 and comments filed by a college professor recommending the 3,000 MTCO2e/year threshold.


Clean cars collide: zero-emission vehicle regulation properly rejects low-emission alternatives

In March 2021, the California Air Resources Board (CARB) issued a final regulation requiring the sale of trucks in California to increasingly be “zero-emission” (i.e., fully electric). Arguing that “low-NOx” natural gas vehicles should be included in the regulation, particularly to address the potential air quality effects associated with constructing new electric-vehicle infrastructure, the California Natural Gas Vehicle Coalition challenged CARB’s decision to reject “low-NOx” alternatives and to omit “low-NOx” vehicle credits as mitigation. The Fifth District Court of Appeal upheld the regulation in California Natural Gas Vehicle Coalition v. State Air Resources Board (2024) 105 Cal.App.5th 304. First, the court concluded that CARB properly rejected “low-NOx” alternatives because they fundamentally contradicted the regulation’s stated objectives: supporting the transition to zero-emission vehicles. Although “low-NOx” alternatives may help decrease overall pollution resulting from the transition to zero-emission vehicles, the court noted that CARB could “reject the low-NOx alternative in the same way an agency could reject inland building sites as an alternative option for a planned oceanfront development.” CARB thus satisfied CEQA by limiting its consideration to only those alternatives that were within the stated scope of the regulation. Second, the court concluded that CARB was not required to discuss “low-NOx” vehicle credits as potential mitigation because the credits were “infeasible” based on the stated scope of the regulation. Although CARB erred by failing to respond to comments proposing the vehicle credits, this error was “harmless” and thus not a basis for reversal, because the proposal was contrary to the nature of the project.


Third time’s the charm for State Capitol Annex project

Finding its office building inadequate, the California State Legislature decided to demolish and reconstruct the State Capitol Annex and add an underground visitor’s center and parking garage. An environmental impact report (EIR) for the project was challenged in court by two petitioners—Save the Trees and Save Our Capitol! In Save Our Capitol! (SOC!I, the Third District Court of Appeal held that the Capitol EIR was flawed and granted the writ petition. After the EIR was revised and re-approved, the trial court discharged the writ. In SOC! II, the Third District agreed with Save the Trees that the trial court should not have discharged the writ without finding that the revised EIR complied with the opinion in SOC! I (See CEQA News, August 2024, Volume 9, Issue 1). Separately, Save Our Capitol! filed a new writ petition challenging the revised EIR, which the trial court denied. In Save Our Capitol! v. Department of General Services (2024) 2024 WL 4432046 (SOC! III), however, the Third District finally sided with the state. In 2024, the legislature passed Senate Bill 174 to exempt the project from CEQA review and to appropriate funds for the project. Because SB 174 expressly requires that the funds be used consistent with the California Constitution, the Third District held that SB 174 is constitutional and denied SOC!’s writ petition.


Sunflower case illuminates the meaning of “negligible” under the frequently used Class 1 “existing facilities” categorical exemption

In Sunflower Alliance v. California Department of Conservation (2024) 104 Cal.App.5th 1135, as modified on denial of rehearing (Oct. 7, 2024), the First District Court of Appeal upheld the Department of Conservation’s Division of Geologic Energy Management’s (CalGEM) use of the Class 1 “Existing Facilities” categorical exemption for the conversion of an oil well into an injection well because the conversion resulted in “negligible” environmental risk. Under the Class 1 categorical exemption, CalGEM found the well conversion project would only involve a “minor alteration” to an existing well involving “negligible or no expansion” of the well’s former use. Sunflower Alliance challenged this determination arguing that any new use of the well prevented CalGEM from relying on the Class 1 categorical exemption. The Sunflower court disagreed, interpreting the categorical exemption as allowing new uses “if the risk of environmental harm from the new use is negligible.” Applying this standard, the court found that substantial evidence supported CalGEM’s determination that the conversion of the oil well into an injection well posed negligible environmental risk when operated in accordance with regulatory requirements.


Electing to prepare the administrative record? Be prepared to pay if you lose. 

Yolo Land and Water Defense (YLWD) found itself on the losing side of a CEQA lawsuit and then received a hefty bill from Yolo County to recoup costs for providing documents so that YLWD could prepare the administrative record. YLWD protested the bill, and in the published portion of Yolo Land and Water Defense v. County of Yolo (2024) ___ Cal.App.5th ___, 2024 WL 4379842, the Third District Court of Appeal held that the County of Yolo was entitled to reimbursement even though YLWD had elected to prepare the record pursuant to Public Resources Code Section 21167.6(b)(2). The court reasoned that section 21167.6 and Code of Civil Procedure sections 1032 and 1094.5 require YLWD to pay any reasonable costs that the county incurred associated with the preparation of the administrative record. In the unpublished portions of the case, the court also rejected YLWD’s arguments on the county’s CEQA compliance for the project at issue.


Legislative wrap-up on 2024 CEQA bills

This year’s legislative session once again reflected lawmakers’ and the governor’s piecemeal approach to reforming CEQA for favored developments and projects, particularly in areas where delays could hinder progress on prioritized socio-economic and environmental challenges they seek to address. These new laws, some of which build on previously-enacted legislation or respond to specific actions taken by the courts, aim to reduce regulatory barriers and streamline approval processes for infrastructure, housing, public recreation and energy projects. Their purpose is to address urgent needs like housing shortages and homelessness, as well as advancing energy projects (i.e., hydrogen production and energy storage). Specific to housing and homelessness, CEQA bills include SB 1395 (additional exemptions to certain actions regarding homeless shelters), SB 312 (relaxation of conditions for existing exemptions of public university housing projects), SB 393 (shifting the burden of proof in actions challenging certain low-or moderate income housing projects) and SB 768 (mandating an impact study for existing transportation metrics on housing developments). With respect to energy, CEQA bills include SB 1342 and SB 1420, which provide expedited judicial review for energy storage and hydrogen projects, respectively.


Legislative wrap-up on 2024 CEQA bills

This year’s legislative session once again reflected lawmakers’ and the governor’s piecemeal approach to reforming CEQA for favored developments and projects, particularly in areas where delays could hinder progress on prioritized socio-economic and environmental challenges they seek to address. These new laws, some of which build on previously-enacted legislation or respond to specific actions taken by the courts, aim to reduce regulatory barriers and streamline approval processes for infrastructure, housing, public recreation and energy projects. Their purpose is to address urgent needs like housing shortages and homelessness, as well as advancing energy projects (i.e., hydrogen production and energy storage). Specific to housing and homelessness, CEQA bills include SB 1395 (additional exemptions to certain actions regarding homeless shelters), SB 312 (relaxation of conditions for existing exemptions of public university housing projects), SB 393 (shifting the burden of proof in actions challenging certain low-or moderate income housing projects) and SB 768 (mandating an impact study for existing transportation metrics on housing developments). With respect to energy, CEQA bills include SB 1342 and SB 1420, which provide expedited judicial review for energy storage and hydrogen projects, respectively.


SB 1053 targets end of reusable plastic bags by 2026

Starting Jan. 1, 2026, SB 1053 will prohibit a store from providing, distributing or selling a carryout bag—meaning a bag made of plastic, paper or other material but is not a recycled paper bag—to a customer at the point of sale, with limited exceptions. Instead, only recycled paper bags may be offered at the point of sale and the bill requires such bags to be made from a minimum of 50% post-consumer recycled materials by Jan. 1, 2028. SB 1053 appears to end the era of the plastic shopping bag, which has had its own CEQA moment. Although single-use bag bans had popped up around California for decades, the Save the Plastic Bag Coalition used CEQA in attempt to block the City of Manhattan Beach’s ban in Save the Plastic Bag Coalition vCity of Manhattan Beach (2010) 181 Cal.App.4th 521. The case eventually made it all the way to the California Supreme Court [(2011) 52 Cal.4th 155], where the coalition succeeded in achieving procedural “standing” required to bring a suit by demonstrating that, although it was not a customary “citizen,” it was bringing a “citizen suit” under CEQA to protect the environment, but lost as to the scope of potential environmental impacts associated with using paper instead of plastic bags. Subsequent suits against the plastic bag bans by Marin County [Save the Plastic Bag Coalition v. County of Marin (2013) 218 Cal.App.4th 209] and the City and County of San Francisco [Save the Plastic Bag Coalition v. City and County of San Francisco (2013) 222 Cal.App.4th 863] unsuccessfully challenged the use Class 7 and 8 CEQA categorical exemptions concerning actions by a regulatory agency to protect the environment to exempt the bans from CEQA. Then SB 270 was enacted in 2015, banning single use plastic grocery bags, but allowing the sale of reusable plastic bags. With SB 1053’s passage, however, it may appear that the plastic grocery bag has its end—but not so fast! If you’re like us, you have at least several hundred reusable plastic bags accumulated in drawers, closets and cars, which should keep us comfortably stocked up on plastic for the foreseeable future. The plastic bag lives on!


When CEQA met RICO, and it wasn’t love at first sight

In 2018 and 2019, several federal lawsuits were filed under the Racketeer Influenced and Corrupt Organizations Act (RICO) alleging that the defendants—including labor unions and business competitors—illegally used CEQA to achieve their strategic aims. (See Evans Hotels, LLC v. Unite Here! Local 30, S.D. Cal., Dec. 7, 2018, 18-CV-02763-H-KSC; The Icon at Panorama, LLC v. Southwest Reg. Council of Carpenters, C.D. Cal., Jan. 9, 2019, 19-CV-00181; and Relevant Group, LLC v. Nourmand et al., C.D. Cal., June 1, 2019, 19-cv-05019). So, was it love at first sight when CEQA met RICO? Not quite. In Relevant Group, LLC v. Nourmand et al., 116 F.4th 917 (9th Cir. 2024), the Ninth Circuit recently affirmed the district court’s ruling on summary judgment that defendant’s CEQA suits against four of plaintiff’s hotel projects did not run afoul of RICO because they were covered by the Noerr-Pennington doctrine, which protects petitioning activity under the First Amendment. The decision hinged on whether four CEQA suits filed against plaintiff’s projects was enough to qualify as a policy of using the courts to further anti-competitive practices, which the Ninth Circuit affirmed was not enough. Generally, the Ninth Circuit seemed wholly uninterested in allowing the federal courts to become a new front in the CEQA war, noting that if a plaintiff “is concerned about the CEQA process being abused (as many persons and entities have claimed has occurred since its enactment), its recourse is to bring this to the attention of the state legislature and the governor, not to try to squash the process altogether in federal court.” CEQA and RICO got along no better in the other two RICO cases mentioned above. The parties in The Icon case settled, and the RICO cause of action in Evans Hotels was dismissed on Noerr-Pennington grounds on a motion to dismiss, although the case is now before the Ninth Circuit on other grounds.


This document is intended to provide you with general information regarding CEQA-related updates. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.

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