California Courts of Appeal recently issued two cases addressing the strict statute of limitations applicable to agency action under CEQA.

Citizens for a Responsible Caltrans Decision v. Department of Transportation –  (March 24, 2020, D074374) __ Cal.5th__

The Fourth District in Citizens for a Responsible Caltrans Decision v. Department of Transportation overturned a lower court’s dismissal of a citizen group’s challenge to an exemption issued by California Department of Transportation (“Caltrans”) for a highway interchange project in San Diego, finding that the Petitioner had pled facts sufficient to allow the lower court to find that the action was timely, and finding as a matter of first impression that the Project was not exempt from CEQA.  This case is a good reminder that courts will strictly scrutinize agency action that appears designed to deceive the public, even if well-intended.

Caltrans prepared and circulated an Environmental Impact Report (EIR) for a Project involving two freeway interchange ramps off of Interstate 5 in San Diego.  Caltrans issued a Final EIR that specifically stated that the agency would certify the EIR and issue a Notice of Determination (NOD) for the Project; however, before the public comment period on the Final EIR commenced, Caltrans changed course, approving the Project pursuant to Streets and Highways Code section 103, finding the Project exempt from CEQA under that provision and filing a Notice of Exemption (NOE).

Petitioner did not become aware of the NOE until after the 35-day statute of limitations period had run, but nevertheless filed a petition for writ of mandate, arguing that the Project was not exempt and that Caltrans should be estopped from relying on the statute of limitations.  Caltrans demurred on the grounds that the causes of action were barred by the statute of limitations and that the Project was exempt from CEQA. The trial court sustained the demurrer, finding the action untimely, and entered a judgment of dismissal.

The Court of Appeal reversed the judgment on two grounds.  First the Court held that the Petitioner effectively pled equitable estoppel as a basis for relief from the 35-day statute of limitations, because Caltrans had publicly stated its intention to prepare an EIR (and NOD) for the Project before changing course and finding it exempt.  The doctrine of equitable estoppel precludes a defendant from relying on the statute of limitations when the defendant’s conduct misleads the plaintiff into refraining from bringing a timely action.  Petitioner alleged that Caltrans assured the public in its DEIR and FEIR that it would file an NOD if the decision were made to approve the Project, and provided no notice that it intended to change course and file an NOE instead. Caltrans argued that it was not estopped because it complied with public noticing requirements by filing the NOE with OPR, OPR posted the notice of exemption, and the FEIR stated in several places that Caltrans viewed the Project as exempt.  Ultimately, the Court rejected these arguments, finding that the petition adequately pled equitable estoppel, and should not have been dismissed on demurrer.

Second, as a matter of first impression, the Court of Appeal evaluated the merits of Caltrans’ exemption finding, holding that the Project was not exempt under Streets and Highways Code section 103.  The Court determined that Section 103’s CEQA exemption only applies to approval of projects by the California Coastal Commission as part of its Public Works Plan, and subject to the Coastal Commission’s certified regulatory program.  Ultimately, the Court found that the statutory language did not express any intent to exempt Caltrans—which, critically, does not have its own certified regulatory program—from the requirements of CEQA for its own projects.

Coalition for an Equitable Westlake/ Macarthur Park v. City of Los Angeles (April 2, 2020, B293327)

In a contemporaneous case, the Second District upheld the trial court’s dismissal of a CEQA Petition on statute of limitation grounds.  At issue was a mitigated negative declaration (MND) for a mixed-use project involving a hotel, a residential tower, and a multi-purpose center with a theatre. The City Deputy Advisory Agency adopted a mitigated negative declaration for the Project on March 3, 2017, and filed a notice of determination (NOD) on March 15, 2017.  On October 12, 2017, the Planning Commission approved permits for the Project, finding the Project was assessed in the March 3, 2017 MND, and no additional CEQA review was required under Public Resources Code section 21166.  The Project was appealed to the City Council, but the City Council denied the appeal and approved general plan amendments connected with the Project on January 31, 2018.  The Petitioner filed a CEQA challenge on March 2, 2018, and the superior court sustained the City and Real Party’s demurrer on the grounds that the Petitioner’s claims were time-barred.

In a much more typical outcome for a statute-of-limitations case, the Court of Appeal upheld the superior court’s dismissal.  CEQA specifically requires that any lawsuit alleging CEQA noncompliance must be filed within 30 days after a facially valid NOD is filed.  There are only two circumstances where an NOD does not trigger the statute of limitations (1) if the NOD is invalid on its face because information required by the Guidelines is missing or incorrect; or (2) if the NOD is filed before the decision-making body has approved the project. The Court held that the Petitioner had failed to adequately allege that either exception applied.

The Petitioner argued that the statute of limitations should not have run from the time the City Deputy Advisory Agency adopted the MND, alleging that the agency did not have authority to approve the Project or make CEQA findings, and that the City improperly divorced the CEQA approval (adoption of the MND) from the Project approvals that occurred later.  The Court rejected those arguments, holding that they were relevant to the merits of the lawsuit—not the statute of limitations—and could be made as part of a lawsuit if it were timely filed.  This case underscores the policy behind the strict statute of limitations applicable to CEQA, a good reminder that a lawsuit challenging a CEQA action must be filed immediately after public notice is given, even if the underlying CEQA determination is flawed.

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