UPDATE: Exhaustion-Of-Administrative-Remedies Requirement Applies If There Is A Public Hearing Before An Agency Determines A Project Is Categorically Exempt From CEQA

The California Supreme Court recently held that the exhaustion-of-administrative-remedies requirement found in Public Resources Code § 21177, subdivision (a), applies where a public agency determines that a proposed project is categorically exempt from compliance with the California Environmental Quality Act (CEQA) as long as (1) the agency gives notice of the ground for its determination that the project is exempt, and (2) the agency’s “determination of exemption is preceded by public hearings at which members of the public had the opportunity to raise any concerns or objections to the proposed project.”  (Tomlinson v. County of Alameda, (--- P.3d ----, Cal., June 14, 2012). 

Facts

Y.T. Wong and SMI Construction, Inc. (collectively, “Wong”), submitted an application to the Alameda County Planning Department to develop a single-family housing subdivision in an unincorporated part of the county.  Wong sought to merge two parcels of land into one parcel, subdivide the resulting parcel into 11 lots, and develop the lots with single-family homes.  The planning department gave written notice of Wong’s proposed development to interested parties, neighbors, and a number of agencies.  The notice described the proposed project, solicited comments, and stated the project is exempt from CEQA compliance based on the existing conditions of the site and the proposed project’s conformance to existing zoning.  Wong mailed neighbors of the proposed housing division a notice of public hearing to address a preliminary plan by the planning commission. 

The planning commission preliminary plan review and the notice mailed by Wong both stated the proposed development was exempt from CEQA compliance pursuant to the in-fill exemption because the project will be located in an established urban area, it will not significantly impact traffic, noise, air or water quality, and it will be served by required utilities and services.  The notice also stated, “If you challenge the decision of the Commission in court, you may be limited to raising only those issues you or someone else raised at the public hearing described in this notice, or in written correspondence delivered to the Planning Commission at or prior to the public hearing.”

At the hearing, area residents expressed concerns regarding insufficient parking, increased traffic, loss of views, and incompatibility with the neighborhood.  The planning commission continued the matter to an unspecified date.  In an e-mail message sent to the planning commission the month after the hearing, and a letter sent approximately three months later that was signed by more than 80 residents, Fred and D’Arcy Tomlinson expressed concerns about the development.  The planning commission approved the proposed development and found it is categorically exempt from CEQA compliance as in-fill development.  The Tomlinsons appealed that decision to the county board of supervisors, but the county denied their appeal. 

The Tomlinsons then filed a petition with the Alameda County Superior Court for a writ of mandate to set aside County’s approval of the proposed development.  The superior court denied the petition.  One of the violations alleged in the Tomlinsons’ petition was that CEQA’s in-fill exemption does not apply to this project because the project is located in an unincorporated area of county and therefore does not meet the requirement that the project be located within city limits. 

The trial court held the Tomlinsons failed to exhaust their administrative remedies on their claim that the project failed to meet the requirements to qualify as in-fill development.  The court of appeal reversed the trial court’s decision because it concluded that the exhaustion-of-administrative-remedies requirement does not apply when a petitioner challenges in court a public agency’s decision that a project is exempt from CEQA compliance. 

Decision

Public Resources Code section 21177, subdivision (a) provides “that a court action alleging a public agency’s failure to comply with CEQA may be brought only if ‘the alleged grounds for noncompliance with [CEQA] were presented to the public agency orally or in writing by any person during the public comment period provided by this division or prior to the close of the public hearing on the project before the issuance of the notice of determination.’”  Section 21177, subdivision (e), provides “that the statute’s exhaustion-of-administrative-remedies requirement ‘does not apply to any alleged grounds for noncompliance with [CEQA] for which there was no public hearing or other opportunity for members of the public to raise those objections orally or in writing prior to the approval of the project.’”  Wong alleged that the trial court erred in holding that the exhaustion-of administrative-remedies requirement does not apply where a public agency decides that a project is categorically exempt from CEQA compliance.  The Supreme Court agreed with Wong. 

The court of appeal concluded the public hearing provision in subdivision (a) of section 21177 does not apply if no notice of determination is filed.  The Supreme Court disagreed.  When a “notice of determination is filed, the public hearing provision requires a party wishing to challenge the project in court to raise the party’s objection to the project at a public hearing held before the notice of determination is filed.”  The Supreme Court concluded that even if no notice is filed, the public hearing provision still applies.  The party challenging the proposed project “is still required to exhaust its administrative remedies by presenting its objections to the project to the pertinent agency, so long as it is given the opportunity” to present his or her objections at a public hearing that is held before the project is approved.  If the party is given the opportunity to present his or her objections at such a public hearing, and he or she fails to raise a particular objection, the party “may not raise that objection in court, because it has not satisfied the exhaustion requirement of section 21177’s subdivision (a).” 

The Supreme Court found that “[t]he absence of a notice of determination does not render improper the agency’s approval of the proposed project based on an exemption finding” but instead only extends the time within which to initiate a lawsuit to challenge a decision of the public agency.  The Court stated, “Under section 21177's subdivision (e) the exhaustion requirement’s application is conditioned upon the holding of public hearings to present any objections to or concerns about the proposed project, thus confirming that what matters is the opportunity for comment at such public hearings, not the filing of a notice of determination.”

Accordingly, the Supreme Court held that section 21177, subdivision (a)’s exhaustion-of-administrative-remedies requirement applies to a decision by a public agency that a proposed project is categorically exempt from compliance with CEQA “as long as the public agency gives notice of the ground for its exemption determination, and that determination is preceded by public hearings at which members of the public had the opportunity to raise any concerns or objections to the proposed project.”

The Supreme Court remanded the case back to the court of appeal so the court could address the Tomlinson’s remaining contentions. 

Questions

If you have any questions concerning the content of this Legal Alert, please contact the following from our office, or the attorney with whom you normally consult.

Jeffrey L. Massey, Daniel J. O’Hanlon or Leslie Z. Walker | 916.321.4500

Jon E. Goetz | 805.786.4302