Noting that CEQA itself includes provisions encouraging post-litigation settlement, the Court found that longstanding public policy favoring settlement also applies to validate pre-litigation tolling agreements in CEQA disputes, reasoning:
If all parties directly involved in a controversy concerning the adequacy of an EIR or compliance with other provisions of CEQA are disposed to seek a mutually acceptable means of resolving the controversy and agree to toll the period for commencing litigation, the interests of both those parties and the public are promoted by permitting the settlement discussions to proceed without the distraction of litigation. If those challenging compliance with CEQA must file suit within the short 30-day deadline or lose their right to do so, time and effort that otherwise could be devoted to the search for common ground would be devoted to the demands of litigation – from preparing the pleadings to complying with the accelerated schedule required of CEQA litigation…. Too often this would be unnecessarily time-consuming and costly to all concerned and would severely limit efforts to resolve differences in a mutually acceptable manner.
The parties and amici advised the Court that pre-litigation tolling agreements conserve scarce agency resources and are a commonly-used and vital tool aiding in the prompt resolution of land use disputes without time-consuming and costly litigation, which not uncommonly consumes two to three years, or more, in the trial and appellate courts before a final decision is reached. For these very types of reasons, the validity of agreements tolling non-CEQA limitations period has long been recognized, and according to the Court “[a]lthough the time period for filing a CEQA action may be shorter than in most other contexts, the reasons for permitting the affected parties to extend those time limits are no less compelling.”
Observing that “the principal reason for seeking the prompt resolution of a CEQA dispute is to minimize the inevitable costs of delaying a project while the validity of the project’s approval is litigated,” the Court provided additional guidance by noting that project approval recipients are real parties in interest who must be named as such in CEQA challenges under Public Resources Code § 21167.6.5, and that such real parties must concur in any agreement to toll the limitation period in order for it to be valid. It noted that the case before it “differs from the prototypical CEQA controversy concerning the approval of a site-specific project in that the project for which an EIR was prepared here is an amendment to a countywide plan, involving no individual project proponent.” Because the intervenors were landowners only incidentally and indirectly affected by the County-initiated general plan update, and not site-specific development project proponents themselves, they were not real parties and “their approval is unnecessary to the entry of an agreement to toll the running of the limitations period.”
Further, assuming without deciding its applicability to the CEQA action before it, the Court held that nothing in Civil Code § 3513 or any other law precluded the parties from agreeing to toll the 90-day limitations periods in Government Code, § 65009 (part of the State Planning and Zoning Law).
The Court’s decision will be welcomed by CEQA litigators and their clients as a highly practical one, based on sound legal and public policy considerations, and providing CEQA combatants with the legal tools and flexibility needed to best resolve disputes. It also further underscores the importance of recent legislation discussed in an earlier post amending Public Resources Code § 21167.6.5 to revise CEQA’s definition of real parties in interest to include only those named in the Notice of Determination or Notice of Exemption for the project at issue. (“New Law Requires CEQA Lead Agencies To Identify Real Parties In Notices,” by Arthur F. Coon, posted October 11, 2011.) The lesson here is that site-specific project proponents desiring to have a meaningful say in the conduct of actual or potential litigation disputes must take steps to ensure they are named as approval recipients in these key CEQA notices.