Will the California Supreme Court Close the Door to a CEQA Exemption the Legislature Has Refused to Close?

by Stoel Rives LLP

The California Supreme Court recently heard oral argument in Tuolumne Jobs & Small Business Alliance v. Superior Court, No. S207173 (case submitted May 28, 2014), a case that gives the Justices the opportunity to determine whether a City Council’s adoption of a voter-sponsored initiative measure, without submitting that measure to a popular vote, was a discretionary act that required CEQA review prior to approval.  The Court of Appeal held that the City Council’s act was subject to CEQA and that the City Council should have conducted environmental review. (See Tuolomne Jobs & Small Business Alliance v. Sup. Ct. (2012) 210 Cal.App.4th 1006, cert. granted, No. S207173.)

It is established that the California Environmental Quality Act (CEQA) does not apply to a project approved by ballot initiative, where the initiative was placed on the ballot by the voters and adopted by the voters in an election. (14 Cal. Code Regs. § 15378(b); DeVita v. County of Napa (1995) 9 Cal.4th 763, 794.) 

In Tuolumne, however, the Appellants Wal-Mart and James Grinnell (jointly, Appellants) took a different approach in seeking to expand an existing Wal-Mart store to a Wal-Mart Supercenter in the City of Sonora.  The Appellants submitted a petition supported by the signatures of more than 20 percent of the City of Sonora’s 2,489 registered voters to expand the Wal-Mart.  The City Council then chose not to submit the measure to an election, and instead, adopted the initiative as an ordinance on its own authority under California Elections Code section 9214(a).  Although an EIR was prepared in advance, it was never certified by the City Council.

Under California Elections Code section 9214, when a project applicant submits a voter-sponsored initiative petition to the legislative body of a public agency, signed by at least 15 percent of registered voters, with a request that the ordinance be immediately submitted to a special vote, that body must either:  (a) adopt the ordinance, without alteration; (b) immediately order a special election and place the measure on the ballot for popular vote; or (c) order a report pursuant to Elections Code section 9212, which allows for abbreviated environmental review. 

The Justices seemed particularly interested in understanding the legislative policy behind the Elections Code’s apparent conflict with CEQA and closely questioned the parties at the hearing packed with interested parties.

The Justices questioned the Appellants’ position that the plain meaning of Elections Code section 9214 allowed the City Council to immediately adopt the initiative, with no requirement to undergo CEQA review. Justice Liu asked whether the Elections Code was a way for applicants to avoid CEQA review, but the Appellants argued that a constitutional right is not a loophole, and that Elections Code section 9214(c) plainly allows for an optional report that identifies impacts, meaning environmental review under CEQA was never meant to apply to decisions under Elections Code section 9214(a). Otherwise, the Appellants argued, the Elections Code would be redundant and have no meaning. Justice Chin questioned if a remedy would be available to a petitioner if section 9214 were used to avoid CEQA. Appellants explained that the Legislature has grappled with whether to require CEQA under Elections Code section 9214, and the compromise was the expedited process under subsection (c).

According to the Tuolomne Jobs & Small Business Alliance (Appellee), the fundamental question before the Court was whether a local initiative can override state law. The Justices seemed unconvinced by the Appellee’s argument that CEQA and the Elections Code were meant to be reconciled and a local legislative body does not have the ministerial authority to pass an initiative if it conflicts with CEQA. The Justices questioned whether this would nullify the ministerial authority granted to the local legislative body under Elections Code section 9214(a). Chief Justice Cantil-Sakauye seemed particularly unconvinced by the Appellee’s assumption that CEQA controls simply because it was enacted after the Elections Code, and questioned whether the Appellee believed that the Legislature does not have the authority to amend the statute. She questioned why the Appellee did not rely simply on the plain meaning of the Elections Code, which would allow a project applicant to avoid CEQA review if it was able to gain sufficient signatures pursuant to Elections Code section 9214.

The Appellee made a strong effort to convince the Justices that its argument was not really about the conflict between CEQA and the Elections Code, but rather a local initiative conflicting with state law but Justice Liu wondered if the Appellee’s argument was actually a preemption argument, a question more fitting for the Legislature. If, as the Appellee argued, this was a conflict between a local initiative and state law, Justice Werdegar questioned what would result, if for example, a state law does not allow uzi guns but a local ordinance allows BB guns. The Appellee argued that this is the exact type of conflict created by the City of Sonora’s initiative and the Elections Code and could potentially create a “wild wild west,” scenario, giving the local legislative body unregulated authority to approve local initiatives without compliance with state law.

Amicus curiae briefs in support of the Real Parties in Interest were filed by Pacific Legal Foundation, League of California Cities, and Citizens in Charge. Each amicus curiae advocated for the Supreme Court to reverse the appellate court’s decision and retain the local legislative body’s ministerial authority to bypass environmental review under the Elections Code. It was particularly important for each of the amicus curiae parties that if the appellate court’s decision was not reversed, the local legislative body would be limited to calling a special election under Elections Code section 9214(b), which would have to occur between 83 and 103 days after the election was called. Under this time table, environmental review under CEQA could not be sufficiently prepared, and even then, identifying any reasonable alternatives to the initiative ordinance would be “nonsensical” as the local legislative body would still be able to adopt an ordinance without change under section 9214(a).

This case has far-reaching implications because it may establish a new way to exempt a project from CEQA. The Elections Code has allowed local governments to avoid costly special elections when the electorate indicates that a measure is supported and should be adopted. (Cal. Elections Code §§ 9200, et seq.) Because the mandatory timelines in Election Code section 9214 are too short to allow for CEQA review, if the Supreme Court affirms the lower court’s decision, legislative bodies will no longer be able to adopt an ordinance without submitting it to a special election or preparing an abbreviated environmental review.

The case was taken under submission on May 28, 2014, and a decision is expected within 90 days.


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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