CEQA Action Seeking to Avoid LAFCO Annexation and SOI Change Approvals is Dismissed for Failure to Comply with Procedural Requirements for Reverse Validation Actions

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The lessons taught by the Fifth District Court of Appeal in its recently-published decision in Protect Agricultural Land v. Stanislaus County Local Agency Formation Commission (City of Ceres, RPI), ___ Cal.App.4th ___, 2014 WL 308137, are rather simple: (1) the validity of final LAFCO approvals may only be challenged through compliance with the validation action procedures of Code of Civil Procedure sections 860 et seq. (Gov. Code, § 56103); and (2) a plaintiff should do its legal research before bringing a CEQA action to ascertain if any special procedural requirements outside of CEQA apply to the particular type of land use approvals it seeks to set aside.

The core facts of the case, too, are simple, and not atypical. A growing California Central Valley city, Ceres, conducts environmental review under CEQA, certifies an EIR, conditionally approves a 960-acre specific plan – the West Landing Specific Plan – and files an NOD. The plan requires an expansion of Ceres’ boundaries and would convert agricultural land beyond its borders to urban uses. The City’s EIR finds the project will result in significant unavoidable environmental impacts, including the ag land impacts, which cannot feasibly be mitigated to insignificance. The City therefore adopts findings of overriding considerations that specific economic, legal, social, technological and other project benefits outweigh the impacts. A modification of the City’s sphere of influence (SOI) and annexation of the 960 acres into the City is required to implement the specific plan approvals. Accordingly, the City seeks and obtains the necessary quasi-legislative approvals from the County’s Local Agency Formation Commission (Stanislaus LAFCO), the responsible agency charged with such matters under the Reorganization Act (formerly the Cortese-Knox Local Government Reorganization Act of 1985) (Gov. Code, §§ 56000, et seq.). After Stanislaus LAFCO grants City’s petition for the SOI and annexation approvals, it files its own NOD, and its actions become final.

At this point, the facts become less typical.  After the time has run under CEQA (and the Planning and Zoning Law, it could be added) to challenge the City’s EIR and conditional approvals for the project, a plaintiff calling itself Protect Agricultural Land (PAL) files an action under both CEQA and the Reorganization Act challenging and seeking to set aside the SOI change and annexation approvals. PAL’s action, inter alia, alleges in skeletal terms tracking certain language of the CEQA Guidelines that Stanislaus LAFCO failed to comply with its obligations as a responsible agency under CEQA.

While PAL’s litigation strategies as to the timing of its CEQA challenge, choice of defendant, and legal theories for seeking relief would appear to pose interesting questions, its action never got out of the starting blocks before being dismissed by the superior court on procedural grounds, a result affirmed by the Court of Appeal.

The reason, as explained by the Fifth District, is also simple: Government Code section 56103 provides that any “action to determine the validity of any change of organization, reorganization, or sphere of influence determination completed pursuant this division [i.e., the provisions of the Reorganization Act] shall be brought pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure.” CCP § 860, in turn, provides a public agency may test the legal validity of its own specified actions through an in rem proceeding – a “validation” action – filed within 60 days. If it does not do so, then under CCP § 863 any interested person may likewise challenge the validity of the public agency’s actions through a “reverse validation” action brought within 60 days. The well-established procedural requirements for such actions include that a summons, in prescribed form and “directed to all persons interested in the matter and to the public agency,” be “published for the period and in the manner required by statute.” If the reverse validation action plaintiff fails to complete such published service and file proof thereof within 60 days after filing the complaint or petition, the action shall be dismissed “unless good cause for such failure is shown by the interested person.”

Because PAL’s CEQA action (as is typical) sought to “set aside and void” – i.e., invalidate Stanislaus LAFCO’s SOI change and annexation approvals – it was clearly a challenge to their validity falling within and requiring compliance with the validation statutes. (The Court of Appeal expressly did not reach the issue whether this result would still obtain had PAL’s petition sought a lesser CEQA remedy not challenging the approvals’ validity.) Because PAL failed to comply with the procedures prescribed by the validation statutes, and failed to show good cause for its noncompliance, its action was required to be dismissed.

With respect to this case’s “do your homework” lesson, the Court of Appeal held PAL’s proffered reason for noncompliance – inadequate legal research by its counsel – was properly found by the trial court not to constitute “good cause” for noncompliance under Government Code § 863, which is governed by the same legal standard as the test for relief from default under CCP § 473, i.e., “good cause” equals “excusable neglect.” Under the “abuse of discretion” standard of review applicable to review of the trial court’s decision in this regard, the Court of Appeal cited Supreme Court precedent treating “the question of good cause relating to a mistake of law as presenting a question of fact” and affirmed the trial court’s ruling as supported by substantial evidence. While the Court took several pages to make the point, the bottom line is that both case law and readily-accessible secondary authorities – including the leading CEQA treatise published by CEB – make abundantly clear that CEQA actions (like other legal challenges) must comply with the requirements of the validation action statutes when challenging a LAFCO’s SOI and annexation approvals.

While it seems unusual that a serious CEQA plaintiff would allow the time for challenging the lead agency’s EIR to expire and then later bring an action directly against only a responsible agency and its approvals – particularly in light of the responsible agency’s comparatively limited and circumscribed role in the CEQA process (see, e.g., 14 Cal. Code Regs., § 15096, and particularly subdivision (e)) – the Court’s legal holdings are unsurprising and simply apply well-settled law to the facts presented.

The case also serves as another pointed reminder to land use litigation practitioners that the law is a “seamless web,” and that CEQA law is not a self-contained universe residing wholly within Public Resources Code § 21000, et seq. As the Courts have given us occasion to observe in many published CEQA opinions over the years, a plaintiff’s failure to comply with mandatory requirements imposed by other laws can be fatal to a CEQA action.