Supreme Court Opens Escape Path From CEQA Via Citizens Initiative – Tuolumne Jobs & Small Business Alliance v. Superior Court

by Manatt, Phelps & Phillips, LLP
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Why it matters: Project proponents may avoid CEQA altogether by gathering sufficient voter signatures and then having the local City Council approve the proposed project, without submitting the measure to a vote of the people.

Facts: Wal-Mart sought to expand one of its stores in the City of Sonora into a Supercenter. After the City prepared and circulated a draft environmental impact report, Wal-Mart obtained a recommendation of approval from the planning commission and apparently expected City Council approval as well. Before the City Council acted, however, Wal-Mart proposed to adopt a specific plan for the 27,000-square foot expansion and collected sufficient voter signatures on an initiative petition for the project. When presented with the initiative petition, the City Council adopted the specific plan by ordinance, without certifying the environmental impact report. The Court of Appeal held that the City Council could not avoid CEQA compliance in this manner.

The Decision: On August 7, the Supreme Court reversed the Court of Appeal, holding that CEQA compliance is not required when the City Council adopts a voter-sponsored initiative without submitting it to a vote.

The Supreme Court had previously held that City Council-generated initiatives must comply with CEQA. And it had also held that voter-sponsored initiatives that were submitted to a vote of the people were exempt from CEQA. This case dealt with the hybrid situation of direct adoption by a City Council of a voter-sponsored initiative.

Under Elections Code Section 9214, when a City Council is presented with an initiative that has been certified as containing the required number of voter signatures, it must take one of three actions: (1) adopt the initiative, without alteration, within 10 days; (2) order that the initiative be submitted to the voters at the next election; or (3) order a report on the proposed initiative. When a report is ordered, it must be presented to the City Council within 30 days, and the City Council then has 10 days to adopt the initiative or order the election.

The Supreme Court held that the tight timetable provided in the Elections Code prevailed over the far more lengthy environmental processes that apply under CEQA.

Practice Pointers:

  • CEQA litigation can create serious project delays. The Supreme Court decision approves a path for developers to avoid CEQA entirely, along with its accompanying risks and delays.
  • Especially in smaller cities – where the cost of signature-gathering is not too onerous – a project proponent may choose to gather 10% of the registered voter signatures and then ask the City Council to adopt the initiative directly, without submitting it to the voters. The cost and time associated with the gathering of signatures may be far less than the cost and time of complying with CEQA and facing CEQA litigation. By this procedure, the project proponent avoids CEQA altogether.
  • The Supreme Court was quick to point out, however, that the initiative “process itself is neutral.” It may also be used to preclude development. Moreover, voters have statutory remedies if direct adoption of an initiative results in the enactment of an undesirable law. Ultimately, “the possibility that interested parties may attempt to use initiatives to advance their own aims is part of the democratic process.”
  • Only legislative actions (General Plan amendments, zone changes, specific plan adoption or amendment) are subject to adoption by initiative, so projects requiring nonlegislative approvals, such as conditional use permits or tentative maps, could not use this option or must structure the project to include a legislative approval, such as a specific plan.

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