CEQA Alert: California Supreme Court Holds No CEQA Review is Required for Adoption of Voter-Sponsored Initiatives

On August 7, the California Supreme Court filled the last gap in the interpretation of CEQA in the context of land use initiatives. Previously, the courts had determined that (1) CEQA compliance is required for land use initiatives proposed by a city council, prior to placing the initiative on the ballot, but (2) CEQA compliance is not required for land use initiatives proposed by voters and adopted at an election.

In Tuolumne Jobs & Small Business Alliance v. Superior Court of Tuolumne County, et al., the Court addressed a final permutation: must a city council comply with CEQA before adopting a voter-sponsored land use initiative? The answer is “no.”

At the heart of the dispute was the proposed expansion of a Wal-Mart store in the City of Sonora into a “Supercenter.” The City initially prepared and circulated for public review a draft environmental impact report (EIR) for the proposed expansion project pursuant to CEQA. Prior to the City Council’s vote on the EIR, it was served with a notice of intent to circulate a petition called the “Wal-Mart Initiative,” proposing an ordinance adopting a specific plan for the expansion, aimed at streamlining project approvals. Over 20% of the City’s registered voters signed the petition. The City Council then postponed the vote on the EIR and ordered preparation of a report, pursuant to California Elections Code § 9212, to evaluate the initiative’s consistency with previous planning commission approvals for the proposed expansion. After considering the report, the City Council adopted the ordinance.

The Tuolumne Jobs & Small Business Alliance challenged the City’s adoption of the ordinance for failure to conduct environmental review pursuant to CEQA. On demurrer by the City, Wal-Mart, and the initiative’s proponent, the trial court dismissed petitioner’s claims without leave to amend. However, the court of appeal ruled that CEQA review must be completed whenever a city council chooses to adopt a land use ordinance proposed by voter initiative, rather than submit it to a special election. The Supreme Court disagreed and reversed.

The Court based its decision on an interpretation of the Election Code that took into account the need for judicial deference to the constitutional power of initiative that is reserved to the people of California. When a local legislative body receives a municipal ordinance initiative that has been signed by at least 15% of the city’s registered voters, such as the Wal-Mart Initiative, it must do one of the following: (a) adopt the ordinance, without alteration, within 10 days after the certification of the petition is presented to the legislative body; (b) immediately order a special election where the ordinance, without alteration, will be presented to the voters of the city; or (c) order a report pursuant to Section 9212, which may consider the proposed ordinance’s effects on land use, infrastructure, and “[a]ny other matters the legislative body requests.” Within 10 days of receiving the report, which must be produced within 30 days of certification of the petition, the legislative body must either adopt the ordinance or order a special election pursuant to subsection (b). Cal. Elec. Code §§ 9212, 9214.

The Court considered it “well established” that CEQA compliance is not required when a local initiative is submitted to voters pursuant to Section 9214(b). Tuolumne Jobs extends the rule to voter initiatives directly adopted by the local legislative body under Section 9214(a). The Court recognized that, as a matter of statutory interpretation, requiring CEQA review prior to direct adoption would be inconsistent with, and would effectively nullify, the mandatory deadlines provided by the applicable Election Code provisions, and there was no evidence that the Legislature intended CEQA to supersede these provisions.

Moreover, even if CEQA review could theoretically be completed within these deadlines, the legislative body would be powerless to reject, or require alterations to, a proposed project, given the constraints of Section 9214. According to the Court, requiring CEQA review prior to the direct adoption of voter initiatives would run counter to legislative intent. Finally, the Court held that public policy did not dictate a different outcome.

A link to the petition can be found here.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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