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California Supreme Court Narrowly Interprets a CEQA Statute of Limitations in Favor of Public Agencies April 13, 2010 by Brian D. Poulsen bpoulsen@somachlaw.com |
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On April 1, 2010, the California Supreme Court narrowly interpreted a statute of limitations under the California Environmental Quality Act (CEQA) in Stockton Citizens for Sensible Planning v. City of Stockton, Calif. Supreme Court Case No. S159690 (2010 Cal.LEXIS 2358, April 1, 2010) (Stockton Citizens). In that case, the Supreme Court unanimously overturned both the trial court and the Third District Court of Appeal, holding that the filing of a Notice of Exemption (NOE) begins the 35-day statute of limitations for challenging the validity of an agency’s approval of a project deemed exempt from CEQA’s environmental review requirements. Background In 1989, after completion of staged and supplemental environmental impact reports (EIR), as required by CEQA, the City of Stockton approved a plan for the development of a 1,239-acre tract of land in northwest Stockton that envisioned a mix of residential, commercial, recreational, and open-space uses. In 2001, due to changes in market conditions, the developer proposed revisions to a portion of the plan. One change placed a business park portion of the plan into a mixed use zone, intended to encourage the multiple-use development of large tracts, including high density residential, business, professional, and retail. The developer submitted these proposed changes, in the form of a revised development plan, to the City Council for approval. In 2002, the City certified a supplemental EIR and approved the revised development plan. One important aspect of the development plan, along with provisions of the City’s zoning ordinance, was that it delegated to the Director of the Design Review Board the authority to approve specific projects within the business park, on the City’s behalf, as long as the projects were consistent with the development plan’s criteria, goals, and purpose. In 2003, the Director approved a proposal to build a Wal-Mart Supercenter in the business park, as consistent with the development plan. In February 2004, the City filed an NOE for the project, claiming that the project was exempt from CEQA requirements because its approval was a ministerial action. In July 2004, Petitioners filed for a petition for a writ of mandate alleging that the City failed to comply with CEQA by proceeding with the Wal-Mart project without obtaining a new EIR to assess its environmental effects. Petitioners asserted that under the development plan, only high-density residential development could occur on the parcels on which Wal-Mart proposed to build. The Wal-Mart project, Petitioners argued, constituted a significant deviation from the design goals, and purposes of the development plan. Consequently, Petitioners asserted, the Director lacked authority to approve the project. The City demurred to these assertions, claiming that CEQA’s 35-day statute of limitations had run. The trial court rejected the City’s statute of limitations defense, holding that the NOE could start the running of the statute of limitations only if the NOE gave notice that the City had “approved” a project it deemed exempt from CEQA. The trial court held that the Director’s approval was invalid, and therefore the City had not approved the project. As a consequence, the 35-day statute had not commenced. The Third District Court of Appeal agreed with the trial court’s rationale, and upheld the ruling. Analysis In analyzing Petitioners’ claim, the Supreme Court first set forth the general CEQA principles and statutes governing the issue. CEQA generally provides that, before a public agency carries out or approves any discretionary project, i.e., any activity that requires the exercise of agency judgment or deliberation and foreseeably may cause physical damage to the environment, the agency must first assess the project’s potential environmental effects. (Pub. Resources Code, §§ 21065, 21080(a), 21100, 21151; Cal. Code Regs., tit. 14, § 15357 (“CEQA Guidelines”).) CEQA expressly exempts, however, certain projects from the requirement to assess a project’s potential environmental effects. Among these are “[m]inisterial projects” (Pub. Resources Code, § 21080(b)(1)), whose approval or implementation “involv[es] little or no personal judgment by the public official as to the wisdom or manner of carrying out the project.” (CEQA Guidelines, § 15369.) If a local agency determines that a project is exempt under section 21080(b), “and the ... agency approves or determines to carry out the project,” the agency “may file [an NOE] with the county clerk of each county in which the project will be located.” (Pub. Resources Code, § 21152(b).) Any “action or proceeding alleging that a public agency has improperly determined that a project [is exempt from CEQA] pursuant to [section 21080(b)] ... shall be commenced within 35 days from the date of the filing ... of the [NOE] ....” (Pub. Resources Code, § 21167(d); CEQA Guidelines, § 15112(c)(2).) Petitioners asserted that an agency may file an NOE only after it “approves” a project, and in this instance the City never validly approved the Wal-Mart project. According to the Petitioners, the Director did not have authority to approve a project so significantly different than what the development plan envisioned. Thus, Petitioners reasoned that because the approval was invalid, the 35-day statute of limitations never ensued. The Supreme Court disagreed with Petitioners’ and the lower courts’ rationale. The Court analyzed the statutory language, CEQA’s legislative history, and the policy reasons embodied in CEQA’s statute of limitations provisions. It held that section 21167(d) “strongly confirms that litigation challenging the validity of an agency’s determination to allow a project to proceed under a CEQA exemption must be timely, and that the shortest applicable period of timeliness is measured from the date on which an NOE setting forth that determination is filed.” (2010 Cal.LEXIS 2358, at *37, emphasis in original.) It further held that “claims of impropriety in the agency’s exemption determination may only be addressed in lawsuits commenced within 35 days after the agency properly files a notification of that determination, i.e., an NOE.” (Id. at *38.) Under CEQA, “approval” of a project is “the decision by a public agency which commits the agency to a definite course of action in regard to a project intended to be carried out by any person.” (CEQA Guidelines, § 15352(a).) In this case, neither party disputed that the City intended the Director’s approval of the project to constitute the agency’s commitment to a definite course of action. The Director acted, the Court noted, “under the ostensible authority of the zoning ordinance and development plan.” (2010 Cal.LEXIS 2358, at *47.) “Right or wrong, [the approval’s] purpose was to commit City to a definite course of action in regard to Wal-Mart’s application to build the store. The filing of an NOE with regard to this approval thus caused the 35-day limitations period to begin.” (Id. at *52.) Conclusions and Implications The Court’s ultimate ruling in the case establishes that when a properly filed NOE complies in form and content with CEQA requirements and declares that the agency has taken an action that would constitute final approval of a project under a CEQA exemption, the 35-day period for challenging the validity of the approved project under CEQA begins to run. While this issue is narrow and seemingly technical, the Court’s holding in Stockton Citizens emphasizes how the Supreme Court strictly interprets CEQA’s statutes of limitations in favor of limiting exposure to public agencies. The Court’s decision in Stockton Citizens is available at http://www.courtinfo.ca.gov/opinions/documents/S159690.PDF. For more information, please contact Brian Poulsen at bpoulsen@somachlaw.com. Somach Simmons & Dunn provides the information in its Environmental Law & Policy Alerts and on its website for informational purposes only. 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