First District Court of Appeal Finds CEQA Claim Time-Barred Due to Insufficient Tolling Agreement

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On June 30, 2021, in Save Lafayette Trees, et. al v. East Bay Regional Park District (Pacific Gas and Electric Company, Real Party in Interest), the First District Court of Appeal upheld the dismissal of a CEQA claim as time-barred because it found that PG&E, a necessary and indispensable party, was not bound to an agreement to toll the CEQA statute of limitations because it was not a signatory. Additionally, the Court upheld the dismissal for failure to state a viable cause of action to all other claims.

Appellants filed an action against East Bay Regional Park District (EBRPD), naming PG&E as a real party, challenging the approval of an MOU between EBRPD and PG&E for restoration and maintenance at two EBRPD-owned properties, Briones Regional Park and Lafayette-Moraga Regional Trail. As part of that agreement, PG&E determined that in order to ensure access to gas pipelines in the event of an emergency, 245 trees near gas transmission pipelines on EBRPD property would need to be removed. PG&E agreed to pay $1,000 for each of those trees, along with providing replacements for 31 trees owned by EBRPD within the City of Lafayette, in accordance with the City’s ordinance.

EBRPD filed a Notice of Exemption (NOE) under CEQA on June 27, 2017, and on July 31, 2017, Save Lafayette Trees and EBRPD entered into a tolling agreement to toll the applicable statute of limitations for 60 days. PG&E, despite being named as a real party in the lawsuit, was not a signatory to the tolling agreement. On September 29, 2017, Appellants filed suit for failure to comply with CEQA, the City of Lafayette’s Tree Protection Ordinance, EBRPD’s Ordinance No. 38, and state constitutional due process rights by failing to provide adequate public notice of the removal of the trees. The filing was within the 60-day tolling period, but outside of CEQA’s maximum 180-day statute of limitations period, which started on the date of the MOU approval decision, and was also outside of the 35-day limitations period triggered by the NOE filing.

The trial court dismissed the case and sustained without leave PG&E’s demurrer to the CEQA cause of action because it was time-barred by both statute of limitations periods. The trial court also sustained without leave EBRPD’s demurrer to the other causes of action. The Court of Appeal found the trial court properly dismissed the CEQA claim as barred by the 180-day limitations period—which is the lengthiest limitations period that could possibly apply—and thus, did not address whether the claim was barred by the 35-day limitations period.

Tolling agreements are not statutorily authorized under CEQA, but instead are private agreements between parties that have no effect on parties not in privity. The court found that because PG&E was a necessary and indispensable party, it was required to be a party to the tolling agreement and was entitled to assert or waive the statute of limitations defense. The Court explained, citing to Salmon Protection & Watershed Network v. County of Marin (“SPAWN”) (2012) 205 Cal.App.4th 195, that CEQA allows for tolling agreements to extend the statute of limitations period, but the agreements must include the recipient of the approval, the public agency, and the would-be petitioner. Here, because PG&E was not a signatory, it was not bound to the agreement.

Appellants also argued the statute of limitations was never triggered because the agenda notice description for the March 21, 2017 EBRPD Board meeting did not explicitly state trees would be removed, and thus did not provide adequate notice. The Court rejected this argument and found constructive notice was given because public records showed the MOU was formally approved and its execution was directed by the March 21, 2017 decision, and the subsequently executed MOU was consistent with the approval resolution and project as described in the staff report submitted to the EBRPD’s Board. Thus, the Court held the 180-day statute of limitations period began on March 21, 2017 and expired on September 18, 2017, eleven days before Appellants filed suit on September 29, 2017, and the dismissal of the case was upheld.

While tolling agreements are a common tool in CEQA litigation and were explicitly upheld in SPAWN, this case serves as a reminder of the key role of real parties in interest and provides a detailed and helpful discussion and analysis of tolling agreements and CEQA’s statute of limitations.

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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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