In a 68-page published opinion filed September 27, 2019, the Fourth District Court of Appeal (Div. One) affirmed the trial court’s judgment rejecting a plaintiff group’s numerous challenges to the California Coastal Commission’s (CCC) certification of a port master plan amendment by the San Diego Unified Port District (Port).  The amendment allows expansion of the San Diego Convention Center by the City of San Diego (City) and of the adjacent Hilton San Diego Bayfront hotel by One Park Boulevard, LLC (One Park).  San Diego Navy Broadway Complex Coalition v. California Coastal Commission, et al. (City of San Diego, et al., Interveners and Appellants) (2019) ___ Cal.App.5th ___.  While the trial court had rejected the statute of limitations defense of indispensable parties/interveners City and One Park and ruled against plaintiff’s Coastal Act and CEQA-based challenges to the CCC’s findings on the merits, the Court of Appeal disagreed with the statute of limitations ruling, and based its affirmance on the primary ground that the claims were time-barred by the Coastal Act’s applicable 60-day statute of limitations because interveners were not timely joined within that limitations period.  It also held plaintiff’s claims lacked substantive merit in any event.

The court’s lengthy opinion (which includes some 35 footnotes) addresses factually and procedurally complex litigation and legal issues, but its essence can be conveyed in fairly simple terms.  Plaintiff did not directly challenge the project EIR under CEQA, but challenged the CCC’s required certification of the port plan amendment (and related Coastal Act and CEQA findings) in a procedural context where the Port was the lead agency and the CCC was a responsible agency for CEQA purposes, and the City and One Park were real and indispensable parties as developers of the convention center and hotel expansion projects that would be allowed by the port plan amendment.  Even though it ruled against plaintiff on the merits, the trial court rejected the statute of limitations defenses of the City and One Park (who were conceded to be indispensable parties) and accepted plaintiff’s “Doe substitution” and “relation back” arguments, which in turn depended on plaintiff’s “genuine ignorance” of the City’s and One Park’s identifies and roles as project developers at the time the action was filed.  The trial court also accepted plaintiff’s argument of “equitable tolling” of the statute of limitations, which theory required plaintiff to have acted in good faith and reasonably and therefore likewise required it to establish such “genuine ignorance.”  Further, the trial court accepted and found plaintiff was “genuinely ignorant” of the City’s and One Park’s identities and role as project developers when it filed its lawsuit despite defendants’ and intervenors’ presentation of what the trial court admitted was “impressive” evidence of plaintiff’s knowledge of those identities and roles as disclosed by record documents and proceedings.  Its finding was essentially premised on the CCC’s “judicial admission” in its answer that the Port was the project proponent, even though the Port denied that allegation in its own answer.

While reaching the same ultimate result in affirming the judgment, the Court of Appeal saw things quite differently, completely rejecting the trial court’s ruling and reasoning on what turned out to be the dispositive statute of limitations issue.  It held plaintiff’s claims were barred by the Coastal Act’s 60-day statute of limitations, which was triggered by the CCC’s decision certifying the port plan amendment, a decision that was final when made notwithstanding that the CCC made revised post-decision findings reflecting the action taken at its certification hearing.  Additionally, “in the interests of completeness and finality[,]” the Court of Appeal went on to reject all of plaintiff’s legal challenges on their substantive merits, holding that the CCC (1) did not improperly negotiate changes to the port plan amendment, (2) correctly found the Convention Center expansion was not appealable to it (meaning it need not conform to Chapter 3 of the Coastal Act), and (3) made sufficient and supported Coastal Act and CEQA findings.

Applying the substantial evidence standard of review, the Court of Appeal’s primary holding affirming the judgment on statute of limitations grounds rejected the trial court’s application of relation back and equitable tolling concepts because there was no substantial evidence in the record from which a reasonable finder of fact could conclude plaintiff was genuinely ignorant of the real parties’ identities and developer roles when its action was filed.  Addressing the “central issue” of genuine ignorance, the court noted numerous sources of evidence of the indispensable parties’ identities in the form of multiple record documents identifying the City and Park One as project applicants (e.g., the DEIR, the FEIR, the Port’s resolution certifying the FEIR, the Port’s findings and statement of overriding considerations, and the CEQA NOD), and also that plaintiff’s own pre-certification hearing letter opposing the project referenced numerous exhibits containing such information.  Code of Civil Procedure Section 474 authorizes Doe pleading practice “[w]hen the plaintiff is ignorant of the name of a defendant,” which phrase has been “broadly interpreted to mean not only ignorant of the defendant’s identity but also ignorant of the facts giving rise to a cause of action against that defendant” and “the relevant inquiry when the plaintiff seeks to substitute a real defendant for one sued fictitiously is what facts the plaintiff actually knew at the time the original complaint was filed.”  (Quoting Fuller v. Tucker (2000) 84 Cal.App.4th 1163, 1170, internal quotation marks omitted.)

Observing that the trial court’s rejection of defendants’ statute of limitations defense rested on “its factual finding that [plaintiff] was genuinely ignorant of the City’s and One Park’s involvement [with the project,]” the court reviewed that finding for substantial evidence (Fuller, at 1170) and found it lacking in support, even under that deferential standard of review, because “[a]t the time [plaintiff] filed suit, it possessed information reflecting that the City and One Park were the developers for the Project.”  Per the Court:  “The Amendment indicated that coastal development permits would be issued and the City would be receiving one.  [Two of plaintiff’s board members] participated in the planning process and witnessed and/or commented on the City’s involvement.  Multiple documents identified the City and One Park, and/or their anticipated roles as the project developers, including the EIR and the 2012 Port resolutions.  [Plaintiff] attached some of those documents to its opposition letter, which [one of its board members] testified [plaintiff] authorized and to which [a plaintiff board member] contributed.  [Plaintiff’s] petition … referenced the EIR and Port resolutions, and expressly sought to block issuance of the coastal development permits.  Finally, the Port denied the allegation that it was the Project proponent, raising questions about the [CC&C’s] admission and warranting further inquiry.”  Based on this evidence, the Court held:  “On this record, no reasonable trier of fact could find [plaintiff] Navy Broadway was genuinely ignorant of the City and Park One and their roles here.”  (Citing Kuhn v. Department of General Services (1994) 22 Cal.App.4th 1627, 1633 [“ultimate determination” in substantial evidence review is “whether a reasonable trier of fact could have found for the respondent based on the whole record”].)

The Court also found “instructive” Beresford Neighborhood Assn. v. City of San Mateo (1989) 207 Cal.App.3d 1180, 1185, 1190, which involved a complaint challenging a housing project that named only the city and fictitious defendants, but included city council minutes that disclosed the developer; the Court of Appeal there affirmed a judgment entered after a demurrer was sustained on statute of limitations grounds for failure to timely name the developer, explaining that “[s]ince appellants were not ignorant of the developer’s true name, they cannot take advantage of Code of Civil Procedure section 474.”  The Court also rejected plaintiff’s arguments that the interveners were not prejudiced by their late joinder as irrelevant, noting in a footnote that if the genuine ignorance requirement is not met, a new defendant cannot be added “even if [it] cannot establish prejudice resulting from the delay.”  (Quoting Woo v. Superior Court (1999) 75 Cal.App.4th 169, 1977.)

The Court further held the trial court’s equitable tolling “ruling turned on the unsupported genuine ignorance finding, and was deficient for the same reasons.”  The three “core” elements of the doctrine of equitable tolling, which suspends or extends a statute of limitations as needed to “ensure fundamental practicality and fairness,” are “(1) timely notice to the defendant in filing the first claim; (2) lack of prejudice to the defendant in gathering evidence to defend against the second claim; and, (3) good faith and reasonable conduct by the plaintiff in filing the second claim.”  (Quoting Collier v. City of Pasadena (1983) 142 Cal.App.3d 917, 924.)  The Court found that it did not need to reach the first two elements as the third could not be met because there was “insufficient evidence that [plaintiff] was genuinely ignorant” and thus “a lack of evidence to support the good faith finding” required for equitable tolling to apply.

For CEQA and land use writ litigation generally, key practical “takeaways” from the Court of Appeal’s opinion on the statute of limitations issues include:

  • The statute of limitations generally begins running, and the plaintiff’s claim accrues, when the challenged agency decision is made regardless of when it subsequently becomes effective or when formal findings supporting and “capturing” it are issued – although the court noted an exception to this general rule whereby the 90-day statute of limitations of Government Code § 65009(c)(1)(B) for challenging zoning ordinances and amendments runs from the challenged enactment’s effective date.
  • “In general, a developer is an indispensable party to a lawsuit challenging a decision regarding whether its project can proceed” (citing Sierra Club, Inc. v. California Coastal Commission (1979) 95 Cal.App.3d 495, 502), and must therefore be joined within the applicable limitations period for the action to proceed.
  • “Genuine ignorance” of the developer’s identity and role (on the part of plaintiff at the time the action is filed) is necessary to invoke Doe pleading procedure under CCP § 474 or equitable tolling so as to avoid a statute of limitations defense for failure to timely name that indispensable party.
  • The trial court’s factual finding on the issue of the plaintiff’s genuine ignorance is reviewed under a deferential substantial evidence standard, but where the developer’s identity and role are disclosed in record documents known to plaintiff and at administrative hearings in which plaintiff participated, a reasonable finder of fact will be unable to make a supportable finding of genuine ignorance.
  • Actual prejudice to the indispensable party developer from late joinder is unnecessary and irrelevant to establishing a statute of limitations defense.

With respect to that portion of the opinion containing its alternative holding that the CCC’s CEQA findings were legally sufficient, key takeaways include:

  • Coastal Act regulations require the CCC to make any findings required by CEQA in approving port plan amendments (14 Cal. Code Regs., § 13632), and CEQA requires certain findings under Public Resources Code § 21081 where the project EIR (here prepared by the Port as lead agency) identifies one or more significant effects of the project on the environment.
  • A responsible agency (like the CCC in this case) is not required to consider the feasibility of environmentally superior alternatives identified in the EIR if described mitigation measures will reduce impacts to acceptable levels.
  • Responsible agency duties regarding mitigation do not differ materially from those under Public Resources Code § 21081 or require separate analysis. (CEQA Guidelines, § 15096(g)(2).)  The CCC’s CEQA findings as to mitigation, which were sufficient under § 21081, were also sufficient under 14 Cal.Code Regs., § 13632.
  • Findings of mitigation to a “level of insignificance” are not required as projects with significant effects can sometimes be approved, i.e., where no feasible mitigation would substantially lessen effects and with a statement of overriding considerations. (Citing San Franciscans for Reasonable Growth v. City and County of San Francisco (1989) 209 Cal.App.3d 1502, 1519; Gilroy Citizens for Responsible Planning v. City of Gilroy (2006) 140 Cal.App.4th 911, 935.)
  • While the finding was not required in light of the existence of other measures effectively mitigating coastal access impacts, substantial evidence nonetheless supported the CCC’s finding that a pedestrian bridge proposed to enhance access was both economically ($42 million cost estimate) and jurisdictionally (portion within City’s as well as Port’s jurisdiction) infeasible.

 

Questions? Please contact Arthur F. Coon of Miller Starr Regalia. Miller Starr Regalia has had a well-established reputation as a leading real estate law firm for more than fifty years. For nearly all that time, the firm also has written Miller & Starr, California Real Estate 4th, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. The firm has expertise in all real property matters, including full-service litigation and dispute resolution services, transactions, acquisitions, dispositions, leasing, financing, common interest development, construction, management, eminent domain and inverse condemnation, title insurance, environmental law and land use. For more information, visit www.msrlegal.com.