Appeals Court Reaffirms That Non-Prejudicial Planning And Zoning Code And CEQA Errors Cannot Serve As Basis For Overturning City Approval

by Sheppard Mullin Richter & Hampton LLP

Rialto Citizens for Responsible Growth v. City of Rialto ___ Cal.App. ___ (July 31, 2012, No. E052253)

[author: Phillip Tate]

On July 31, 2012, the California Court of Appeal for the Fourth District held that the trial court erred in invalidating the City of Rialto’s (the “City”) approval of a 230,000 square foot commercial retail center to be anchored by a 24-hour Wal-Mart “Supercenter,” despite numerous procedural errors in the approval process because the plaintiff made no attempt to show, and the trial court did not find, that those errors resulted in prejudice or substantial injury, or that a different result was probable absent the errors.

The City approved the project on July 15, 2008. The project is located on 25.18 acres of vacant land within the Gateway Specific Plan Area of the City. The project, as approved, consists of an approximately 230,000 square foot commercial retail center anchored by a 24-hour Wal-Mart Supercenter with 197,639 square feet of retail floor space. The Supercenter will sell general merchandise, groceries and liquor and will include a pharmacy with a two lane drive-thru, a vision and hearing center, food service center, photographic studio and photographic finishing center, banking center, garden center, tire and lube facilities and outdoor sales facilities. In addition to the Supercenter, the project also consists of four commercial outparcels, a gas station and a stormwater detention/retention basin.

The EIR concluded that the project would have significant impacts on traffic, noise, and air quality despite mitigation measures to reduce these impacts. The EIR stated that the project’s impacts on greenhouse gas emissions and global climate changed were too speculative to evaluate, and that a conclusion on the significance of the environmental impact of climate change could not be reached.

As part of the project’s approval, the City approved resolutions certifying the final EIR, amending the City’s General Plan, and amending the Gateway Specific Plan. The City also approved a development agreement between the City and Wal-Mart Real Estate Business Trust, Inc. While the City did not require the development agreement, Wal-Mart indicated that it would only proceed with the project if the City provided it with the certainty of a development agreement. The general and specific plan amendments changed the permitted land use on the project site from office to general commercial, and from office park to retail commercial, respectively.

The trial court had struck down the City’s approvals of the project on the basis that the City had violated multiple provisions of the California Planning and Zoning Law (Gov. Code, § 65000 et seq.) and the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.). Specifically, the trial court found the following procedural errors: (1) the notice of the public hearing before the City Council violated Gov. Code § 65094 because it failed to include the planning commission’s recommendation; (2) the City Council violated Gov. Code § 65867.5 by approving the development agreement without making a finding that it was consistent with the General Plan and the Gateway Specific Plan; (3) the EIR failed to identify the development agreement as an approval required to implement the project; (4) the EIR failed to adequately analyze the project’s cumulative impacts on traffic; (5) the EIR failed to adequately analyze the project’s cumulative impacts on air quality; (6) the EIR improperly dismissed the cumulative impacts of greenhouse gas emissions and climate change impacts because of an inability to analyze the individual impacts of the project; (7) the EIR failed to separately list greenhouse gas emissions among the significant impacts of the project; (8) the EIR improperly deferred mitigations to reduce biological impacts; and (9) the City improperly rejected the reduced density alternative as infeasible.

The appeals court overturned the trial court’s ruling and reinstated the project approvals. The court agreed that the City had made significant procedural errors – namely that the public notice was flawed, there was no finding of consistency when the development agreement was approved and the EIR failed to identify the development agreement as an approval required to implement the project. However, the court emphasized that the plaintiff made no attempt to show, and the trial court did not find, that those errors resulted in prejudice or substantial injury, or that a different result was probable absent the errors. The court held that since there was no prejudice, substantial injury or probability of a different result absent the errors, there was no basis for overturning the City’s approvals.

One notable aspect of the opinion was the court’s finding that the development agreement was an approval that was “required” to implement the project even though the approval was required by Wal-Mart and not the City. The court concluded that because the City knew that Wal-Mart would not proceed without the development agreement, it should have been included on the EIR’s list of approvals required to implement the project.

In an unpublished portion of the opinion, the court explained why it did not agree with the trial court’s conclusions regarding the analysis of cumulative traffic, air quality impacts and greenhouse gas emissions, the listing of greenhouse gas emissions among the list of significant impacts, the deferral of biological mitigation measures or feasibility of the reduced density alternative.

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