Fourth District Rejects CEQA Challenge to College District’s Entry into Land Acquisition Agreement Prior to Preparing EIR Due to Plaintiffs’ Failure to Exhaust and Based on Merits

by Miller Starr Regalia
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In a published decision filed August 8, 2017, the Fourth District Court of Appeal affirmed the trial Court’s judgment dismissing a CEQA action brought by two individuals (“Appellants”) against the Mt. San Jacinto Community College District (“District”).  Bridges v. Mt. San Jacinto Community College District (Riverside County Regional Park & Open- Space District, Real Party in Interest) (4th Dist. 2017) ___ Cal.App.5th ___.  Appellants challenged the District’s entry into a purchase agreement to buy from a regional park district a plot of vacant land for potential future use as a new campus, alleging this action violated CEQA because the District had not yet prepared an EIR for the potential new campus project.  (The District was in the process of preparing an EIR, during the pendency of other litigation over an earlier option agreement on the property, but it “paused” that process due to the other litigation while determining it would complete the EIR before entering into escrow on the property.)  Appellants also claimed the District violated CEQA by failing to adopt local CEQA implementing guidelines.

The Court of Appeal held Appellants failed to exhaust their administrative remedies prior to filing suit or to demonstrate any excuse for not doing so; alternatively, it held that their claims lacked substantive merit.

Key Points

Key takeaways from the Court’s 28-page opinion include:

  • “Exhaustion of administrative remedies is a jurisdictional prerequisite to maintenance of a CEQA action.” (Quoting California Native Plant Society v. City of Rancho Cordova (2009) 172 Cal.App.4th 603, 615, quotation marks omitted.)  Per the Court: “The purpose of the exhaustion doctrine is to ensure public agencies are given the opportunity to decide matters within their expertise, respond to objections, and correct any errors before the courts intervene.”  Even where the available administrative remedy may not resolve all issues or provide the precise relief requested, “the exhaustion doctrine is still viewed with favor ‘because it facilitates the development of a complete record that draws on administrative expertise,” serves as a “sifting process” prior to judicial review, and “promotes judicial efficiency.”
  • CEQA’s exhaustion provisions (see Resources Code, § 21177 (a), (b)) preclude parties from raising CEQA claims for the first time in court, and require the claims to be timely raised orally or in writing at the administrative level unless “there was no public hearing or other opportunity for members of the public to raise those objections orally or in writing prior to approval of the project, or if the public agency failed to give the notice required by law.” (§ 21177 (e), emph. Court’s.)
  • The required notice of the agency’s action can be constructive; it need not be actual. In this case, the relevant “notice required by law” was the Brown Act’s requirement that the District “post [its] meeting agendas at least 72 hours in advance in a publicly accessible location, which includes the college’s website.”  (Citing Gov. Code, § 54954.2(a).)
  • The Court conducted de novo review of the record to resolve the legal question whether the exhaustion doctrine applied in this case. It held the May 8, 2014 meeting of the District’s board of trustees, at which it considered and authorized the purchase agreement, “was a regularly scheduled meeting of the college’s board of trustees that was open to the public” and therefore “trigger[ed] CEQA’s exhaustion requirements[,]” notwithstanding that it “was not a public hearing held under CEQA[.]”  “The meeting agenda listed the purchase agreement as an action item, informed to public it could comment on any agenda items during the meeting’s public comment segment, and attached a purchase agreement memo providing relevant background.  Per the Court:  “It is undisputed appellants did not offer any comments at this meeting, or submit an objection in any other form before the college approved the motion authorizing the purchase agreement.  If appellants were concerned about the college’s timing of EIR preparation, the May 8 meeting was the time for them to voice these concerns.”
  • The exhaustion issue in this case thus boiled down to whether the relevant agenda was properly posted under the Brown Act; on that score, Appellants failed to carry their burden to support their conclusory allegation that notice was improper, and the Court therefore presumed on a “silent record” that “official duty has been regularly performed.” (Citing Evid. Code, § 664.)  (While a document on the District’s website contained a posting that showed notice was timely, the Court did not consider it because it was outside the record, no one had moved to augment the record with it, and, per the Court, it was “not the type of agency action we may judicially notice.”)
  • Alternatively, the Court held on the merits that in any event the District’s actions had not yet triggered the duty to prepare an EIR. The issue was one of timing.  The District did not dispute it would need to prepare an EIR prior to any decision approving a campus development project on the property, and it represented it would prepare an EIR before it closed escrow.  The Court rejected Appellant’s contrary position that an EIR had to be prepared before even executing the purchase agreement, holding “[t]he college is well within CEQA compliance if it completes the EIR before it buys the property.  The purchase agreement obligates the college to do just that (by conditioning escrow on CEQA compliance) and the college has represented it is in the process of satisfying that obligation.”
  • While CEQA Guidelines § 15004(b)(1) requires an agency purchasing land for a public project to prepare an EIR before it acquires the land, § 15004(b)(2)(A) allows an agency to “designate a preferred site for CEQA review and … enter into land acquisition agreements” if it “has conditioned [its] future use of the site on CEQA compliance,” so long as it has not already approved “proceed[ing] with the use of [the] site for facilities which would require CEQA review.” (Citing also Saltonstall v. City of Sacramento (2015) 234 Cal.App.4th 549, 570 [“CEQA provides an exception to the prohibition on commitment to a project before environmental review for purposes of land acquisition”].)
  • Under the relevant case law, the critical question is whether the agency has as a practical matter committed itself to the project or any component of it so as to effectively preclude its consideration of alternatives or mitigation measures – including “no project” – otherwise required by CEQA. (Citing, inter alia, Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116, 132-134; Cedar Fair, L.P. v. City of Santa Clara (2011) 194 Cal.App.4th 1150, 1170.)  Per the Court:  “Here, the college has entered into a land acquisition agreement that conditions the opening of escrow on CEQA compliance.  What CEQA compliance entails in this context is completion of an EIR before the college buys the property.  [Citation]  And, because nothing in the purchase agreement (or in any of the college’s resolutions) commits the college to any type of construction plan, the college has in no way precluded its consideration of alternatives.  [Citation]  We therefore conclude the purchase agreement did not trigger the duty to prepare an EIR.”  Distinguishing the case before it from Save Tara, the Court found that “the record contains nothing to suggest the college has committed itself to a definite campus development.”
  • The Court further rejected Appellants’ contention that the purchase agreement itself was a CEQA “project.” Analyzing relevant case law, it reasoned:  “Even though it is reasonably foreseeable the college may someday approve plans to build campus facilities on the … property, nothing in the purchase agreement commits the college to a definite course of development and there were no development plans in existence when it signed the agreement.  As a result, the purchase agreement is not a CEQA project and its execution does not trigger the duty to prepare an EIR.”
  • Further, Public Resources Code § 21080.09 did not apply and require an EIR because the District had not selected a campus site and approved a long range development plan. Applicable law (see Educ. Code, §§ 81031, 81033) allows college districts to acquire property for potential future development prior to selecting it as a college site through the requisite formal process – which is exactly what occurred here.
  • Finally, the Court rejected Appellants’ argument that the District violated CEQA by failing to adopt local implementing guidelines. While CEQA does impose this requirement (Pub. Resources Code, § 21082), an agency can comply by incorporating the State CEQA Guidelines by reference and tailoring them as needed to fit the agency’s specific operations.  (CEQA Guidelines, § 15022(d).)  Further, “school districts are exempt from the requirement to adopt local guidelines if they “utilize” the guidelines of another public agency whose boundaries are coterminous with, or entirely encompass, the school district.”  (Citing Pub. Resources Code, § 21082 and Guidelines, § 15022(b).)  Here, according to its president’s declaration, the District (like Riverside County, in which it is entirely located) “utilizes” – even though it has not formally adopted – the State CEQA Guidelines and it is thus exempt from the requirement to adopt local guidelines.

Conclusions and Implications

The Court of Appeal’s opinion helpfully confirms and clarifies the substantive and procedural rules governing the exhaustion of administrative remedies doctrine – and its exceptions, which the Court found to be inapplicable because adequate notice under the Brown Act was given for the relevant meeting here.  More specifically, the Court held that notice sufficient under the Brown Act for action taken at a public meeting is also sufficient to trigger the obligation imposed on would-be CEQA petitioners to exhaust administrative remedies at or prior to that meeting with respect to their CEQA challenges to such action.

The Court also helpfully clarified and applied CEQA’s special rules for EIR timing and CEQA compliance in the context of an agency’s entry into an agreement to acquire real property for a prospective future development project – and, more precisely, the rules applicable when the lead agency is a college district aiming to acquire a potential new campus site.

Finally, the Court interpreted and confirmed the plain statutory language of Public Resources Code § 21082 as allowing an agency, without formal “adoption,” to “utilize” another agency’s local CEQA guidelines as long as the other agency’s geographic boundaries are the same as or fully encompass those of the “utilizing” agency – and it also, apparently, admitted extra-record evidence in the form of a declaration to establish that such “utilization” in fact existed.

The obvious lesson to CEQA petitioners, in general, is to be vigilant in reviewing public notices and exhausting any available administrative remedies; however, a lack of vigilance didn’t really hurt Appellants here because they also lost on the merits of their CEQA challenges, which the Court essentially held were premature.  Accordingly, the Appellants will, legally speaking, “live to fight another day”, i.e., if they are vigilant and exhaust administrative remedies, they will still be able to challenge the campus development project EIR that is ultimately prepared by the District if they believe it is legally inadequate.

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