CEQA News You Can Use - Vol. 4, Issue 4

Brownstein Hyatt Farber Schreck

Welcome to CEQA News You Can Use, a quarterly production of Brownstein Hyatt Farber Schreck, LLP’s Natural Resources lawyers. This publication provides quick, useful bites of CEQA news, which we hope can be a resource to your real-time business decisions. That said, it is not and cannot be construed to be legal advice. Enjoy!


Orville Dam: Another chapter in the story of field preemption, FERC, and the Federal Power Act

More than a decade ago, Butte and Plumas counties filed suit against the Department of Water Resources (DWR), et al., claiming that DWR failed to comply with CEQA when DWR applied to the Federal Energy Regulatory Commission (FERC) to extend its license to operate the Oroville Dam and related facilities. In 2018, the Third District Court of Appeal held that its authority to review DWR's EIR was preempted by the Federal Power Act (FPA). The counties then petitioned the California Supreme Court, which transferred the matter back to the Court of Appeal with these directions: reconsider your 2018 decision in light of Friends of the Eel River v. North Coast Rail Authority (2017) 3 Cal.5th 677, which held that the Interstate Commerce Commission Termination Act (ICCTA) did not preempt the application of CEQA in certain circumstances. In Butte County v. Cal. Dept. of Water Resources (2019) 39 Cal.App.5th 708, the appellate court took another look at the preemption puzzle, but its answer remained the same—with the exception of the state’s authority to impose more stringent water quality conditions on a license than federally required under Section 401 of the Clean Water Act, the FPA occupies the field of hydroelectric dam licensing, barring CEQA review in state court. Eel River did not change the equation because the ICCTA, with its “deregulatory purpose,” was materially distinguishable from the FPA.

*Petition for review and depublication pending – S258574


Decision to “check out” of repairing deteriorating hotel not a project under CEQA

In Lake Norconian Club Found. v. Cal. Dept. of Corrections and Rehab. (2019) 39 Cal.App.5th 1044, the Lake Norconian Club Foundation (Foundation) sought to compel the California Department of Corrections and Rehabilitation (Department) to prepare an EIR in connection with the Department’s decision to not repair or maintain the Lake Norconian Club, a now derelict but former landmark hotel owned by the Department. The Foundation alleged that the Department’s failure to maintain the hotel and protect it from further damage was equivalent to a decision to demolish the building, an action the Foundation contended constituted a project under CEQA. The Court of Appeal disagreed, holding that the agency’s “failure to act does not constitute a ‘project,’ either in common parlance or as the term is used in CEQA,” and moreover, that the Department had no duty to maintain the former hotel.

*Petition for review and depublication pending – S258740


Capital Records Building redevelopment scratched—project description too vague

In StoptheMilleniumHollywood.com v. City of Los Angeles (2019) 39 Cal.App.5th 1, the court rejected an attempt to describe and analyze a “development envelope,” finding that CEQA demands more specificity in a project description. In 2008, Millennium filed an application for a master land use permit for mixed-use development totaling approximately 1,200,000 square feet with approximately 492 residential units, 200 luxury hotel rooms, 100,000 square feet of office space, a sports club and spa, and other commercial and food and beverage space. This application specifically described the towers and structures. A revised application submitted in 2011 included minimal detail about what it would look like and the uses that would be built. Instead, the project described “an impact ‘envelope’ within which a range of development scenarios can occur,” and did not include drawings or renderings of the proposed buildings, the number of buildings, their shape and size, their location, or their uses. Rejecting this project description as too vague, the court concluded that “CEQA’s purposes go beyond an evaluation of theoretical environmental impacts.” Contrasting Citizens for a Sustainable Treasure Island v. City and County of San Francisco (2014) 227 Cal.App.4th 1036, where the Court of Appeal approved a flexible project description due to site contamination, the court here noted that there was no contamination on the Hollywood property that stopped the developer from making a firm commitment as to whether development would be possible and, if so, what type.


Loss of “close and convenient shopping” is not a significant environmental impact

After an initial rejection in 2009, Walmart proposed, and the City of Chico approved, a slightly smaller Walmart expansion to add ~64,000 square feet, an eight-pump gas station, and 5.2 acres of outparcels for future commercial development. In Chico Advocates for a Responsible Economy v. City of Chico (2019) 40 Cal.App.5th 839 (CARE), the court rejected CARE’s challenge to the EIR for failing to consider “the potential loss of close and convenient shopping” as a significant impact in its urban decay analysis. The court reasoned that loss of convenience is merely an example of the social problems that could result from urban decay. In upholding Chico’s “robust” 43-page urban decay analysis, the court explained that without an accompanying physical change to the environment, CEQA does not require analyses of “social and economic changes” alone.


MND for new winery upheld despite submission of expert reports

When a project opponent submits expert reports critiquing a mitigated negative declaration (MND), that evidence is often sufficient to raise a fair argument of a potentially significant environmental impact and to trigger the need to prepare an environmental impact report (EIR). In Maacama Watershed Alliance v. County of Sonoma (2019) 40 Cal.App.5th 1007, however, iterative revisions to an MND fully mitigated a project’s adverse impacts and overcame the submission of expert reports. Maacama Watershed Alliance (Alliance) challenged a use permit for a new two-story winery with an adjoining wine cave, wastewater treatment, and storage facilities on a 2.4-acre portion of an existing vineyard. The county revised the MND several times in response to comments and imposed conditions on the project to address alleged impacts. On appeal, the MND revisions were sufficient to withstand Alliance's expert opinions on slope stability, erosion and groundwater impacts, and added conditions adequately addressed alleged visual impacts and increased wildfire risk.


CEQA meets RICO: a status update on antitrust suits with CEQA roots

In December 2018, a San Diego hotel developer filed a lawsuit against a labor union and trade association, claiming, among other things, the entities violated antitrust law and the Racketeer Influenced and Corrupt Organizations Act (RICO) by baselessly using CEQA processes to secure union labor for development projects. (See Evans Hotels, LLC v. Unite Here! Local 30, S.D. Cal., Dec. 7, 2018, 18-CV-02763-H-KSC.) In 2019, two other developers filed RICO suits, one filing suit against unions and consultants who opposed its project (see The Icon at Panorama, LLC v. Southwest Reg. Council of Carpenters, C.D. Cal., Jan. 9, 2019, 19-CV-00181) and another filing against a competing developer that allegedly used CEQA to extract a $5.5 million payment (see Relevant Group, LLC v. Nourmand et al., C.D. Cal., June 1, 2019, 19-cv-05019). These CEQA-meets-RICO cases are still in their initial stages, but much progress is expected over the next six to 12 months. Check back here for further status updates.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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