On April 19, 2023 the California Supreme Court denied the petition for review of the Save Livermore Downtown v. City of Livermore decision issued by the California First District Court of Appeal, which was filed by opponents of an affordable housing project in the City of Livermore.

In that lawsuit, the project opponents (the petitioner) claimed, among other things, that the City violated the California Environmental Quality Act (CEQA) and Planning and Zoning laws. The Court of Appeal disagreed and reiterated that:

• A high threshold must be met for “new information” to trigger a subsequent or supplemental Environmental Impact Report (EIR) under CEQA’s subsequent review procedures; and
• The Housing Accountability Act (HAA) has “changed the legal landscape” for considering challenges to consistency findings and deems a qualifying housing project consistent with objective development standards “if there is substantial evidence that would allow a reasonable person to conclude” it is consistent. See our prior legal alert for more information about the HAA and other recent case law.

The Court of Appeal also upheld the trial court’s requirement that the petitioner post a $500,000 bond to cover the developer’s costs and damages that may occur due to delays caused by the petitioner’s lawsuit.

CEQA CHALLENGE

The City prepared and certified a subsequent EIR in 2009 for an amendment to its Downtown Specific Plan that would increase the development allowed in the Specific Plan area, including the project site. Among other potential impacts, the EIR analyzed the potential presence of hazardous materials on the project site due to the historic railroad, automotive, and dry-cleaning uses at or adjacent to the project site. The EIR concluded that development on the project site could expose construction workers and occupants to hazardous concentrations of contaminants from soil and groundwater and imposed a mitigation measure requiring a licensed professional to prepare a soil and groundwater investigation work plan to evaluate potential hazardous materials.

In 2021, the Regional Water Quality Control Board (RWQCB) informed the City that it had identified certain metals and Volatile Organic Compounds (VOC) in the soil and groundwater on the project site. In response, the City hired a consultant to prepare an assessment to confirm the presence of the metals and VOCs on the project site and recommend remediation strategies. Shortly thereafter, the City issued a CEQA exemption for the project pursuant CEQA Guidelines section 15182(c) (Residential Projects Implementing Specific Plans), noting that the project was consistent with the Specific Plan and that no major revisions to the EIR would be required.

The petitioner argued that (i) the reports prepared by the RWQCB and the City’s consultant after the City certified the EIR constituted “new information,” which necessitate major revisions to the EIR and thus require the City to prepare a new subsequent or supplement EIR for the project and (ii) the aforementioned CEQA exemption should not apply because the EIR was a programmatic EIR that contained only a cursory analysis of the hazardous materials on the project site.

The Court of Appeal disagreed. The Court explained that the subsequent reports were not “new information” that was not or could not have been known when the EIR was certified because the EIR included information about previous uses on the project site, the contaminants that could have resulted from those uses, and the potential effect of those contaminants on future occupants. The Court also rejected petitioner’s suggestion that the aforementioned CEQA exemption does not apply because a programmatic EIR instead of a project-specific EIR was prepared for the Specific Plan. The Court noted that the EIR contains sufficient information and there is no support for a blanket prohibition against using that CEQA exemption when a programmatic EIR has been prepared for a specific plan.

PLANNING AND ZONING CHALLENGE

The petitioner also challenged the City’s determination that the project is consistent with the Specific Plan. Among other things, the petitioner argued that project would not provide the requisite amount of private open space since there would be no physical barriers to prevent the general public from accessing the on-site open space. The Court of Appeal rejected that and other claims because (i) the HAA only requires compliance with objective development standards based on the reasonable person standard; (ii) it is not the Court’s role to “micromanage” development decisions; (iii) “it is enough that a project is compatible with the plan’s objectives, policies, general land uses, and programs”; and (iv) although “the findings are relatively brief, we have had no difficulty discerning the basis of the City’s conclusions.”

BOND REQUIREMENTS

The developer asked the trial court to require the petitioner to furnish a bond to cover the costs and damages that the developer may incur as a result of the delay caused by the lawsuit. To require such a bond, a court must find that: (i) “the action was brought in bad faith, vexatiously, for the purpose of delay, or to thwart the low- or moderate-income nature of the housing development project” and (ii) “the plaintiff will not suffer undue economic hardship by filing the undertaking.”

In requiring the maximum statutory bond amount of $500,000, the trial court considered the following: (i) although there was no evidence to show that the lawsuit was brought in bad faith, it had the effect of slowing the development; (ii) the preponderance of the evidence showed that the petitioner filed the lawsuit to delay the project; (iii) the lawsuit was filed on the very last day of the statute of limitations and the petitioner allowed two months to elapse before starting to prepare the administrative record; and (iv) the petitioner failed to show that it would suffer undue economic hardship.

The Court of Appeal concluded that the trial court had not abused its discretion in requiring the petitioner to furnish the bond.

[View source.]