In an opinion filed on April 12, and later ordered published on May 11, 2022, the Third District Court of Appeal reversed a judgment that had denied a CEQA writ petition challenging the City of Mount Shasta’s issuance of a wastewater permit for the Crystal Geyser Water Company’s bottling plant project.  We Advocate Through Environmental Review, et al v. City of Mount Shasta, et al (Crystal Geyser Water Company, Real Party in Interest) (2022) 78 Cal.App.5th 629.

Siskiyou County was the lead agency for the project and, as such, had prepared an EIR identifying potentially significant effects associated with all required governmental approvals, including the City’s issuance of a wastewater permit acting in its role as a CEQA responsible agency.  (The Court noted that Appellants had challenged the adequacy of that EIR in a separate lawsuit against the County, which raised distinct issues outside the scope of the instant appeal.)

The County’s EIR found the proposed discharge of wastewater into the City’s sewer system could have several potentially significant environmental effects, including exceedance of the sewer system’s capacity and adverse impacts on fishery and cultural resources and endangered species from installation of pipelines, and it discussed several mitigation measures to address these impacts.  When the City approved the permit it apparently included conditions requiring Crystal Geyser to comply with the project EIR, but it failed to make findings specifically addressing the significant effects and mitigation measures identified in the EIR, and instead made a “blanket finding” in its approval resolution stating:  “The City Council has considered the Environmental Impact Report prepared by the County of Siskiyou for the Crystal Geyser Bottling Plant and finds no unmitigated adverse environmental impacts relating to the alternate waste disposal methods.”

The Court of Appeal held the City’s failure to make findings with respect to each identified effect, as required by Public Resources Code § 21081(a), accompanied by brief explanations of its rationale for each finding (CEQA Guidelines, § 15091(a)), constituted a failure to comply with basic procedural requirements of CEQA.  It explained that the roles of lead and responsible agencies are “markedly different” in some ways, i.e., the lead agency has responsibility to consider all environmental impacts of a project, while a responsible agency has more limited responsibility to consider and mitigate for only the effects of those parts of the project over which it exercises approval authority.  (Pub. Resources Code, § 21002.1(d); CEQA Guidelines, § 15096(g)(1).)  But, as relevant to this case, lead and responsible agencies both have an obligation to make the findings required by Public Resources Code § 21081 before they approve or carry out a project.  That statute requires agencies to make one or more of the following findings with respect to each significant effect identified in the EIR:  (1) changes or alterations to the project have been required which mitigate or avoid the effect; (2) changes or alterations are within the responsibility and jurisdiction of another agency and have been, or can and should be, adopted by that agency; (3) the mitigation measures or alternatives identified in the EIR are infeasible for specific economic, legal, social, technological, or other considerations.

The Court rejected the City’s argument and trial court’s reasoning that section 21081 findings are not required unless the EIR identifies significant effects that will not be mitigated.  Rather, the Court explained that where an EIR finds that imposed mitigation measures would reduce otherwise significant effects to a less-than-significant level, the required agency’s finding in that case is that “[c]hanges or alterations have been required in, or incorporated into, the project which mitigate or avoid the significant effects.”  (Pub. Resources Code, § 21081(a)(1).)  Per the Court, the City prejudicially erred by failing to make the findings required by law, and also by failing to “provide the required ‘brief explanation of the rationale’ for its nonexistent findings.”  (Citing CEQA Guidelines, § 15091(a); Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376, 404.)

Apart from its main holding, the Court rejected or declined to reach several other contentions of Appellants.  It found no reversible error based on Appellants’ argument that the trial court erred in refusing to judicially notice two comment letters they inadvertently omitted from the administrative record they prepared, since Appellants did not show exclusion of the letters was prejudicial or even dispute City’s claim that they were irrelevant.  It refused to prematurely address and resolve the issue whether the County or the City should adopt and monitor the sewer improvement mitigation measures identified in the EIR; it noted only that, should the City again approve the project after remand, it could legally disclaim responsibility for mitigating the effects on the ground that they were within another agency’s (i.e., County’s) responsibility “only when the other agency said to have responsibility has exclusive responsibility.”  (Citing City of Marina v. Board of Trustees of California State University (2006) 39 Cal.4th 341, 366; CEQA Guidelines, § 15091(c).)  Finally, it rejected Appellants’ argument that the City should have performed additional CEQA review to address the revised version of the wastewater permit that it approved, which added two new waste streams not addressed in the EIR.  Not only did Appellants overstate the facts regarding the nature of the waste streams, but they failed to identify any law that the City violated and their action against the City acting as a responsible agency was not the appropriate forum to challenge the informational adequacy of lead agency County’s EIR.  (Citing Friends of Outlet Creek v. Mendocino County Air Quality Management Dist. (2017) 11 Cal.App.5th 1235, 1243, my June 1, 2017 post on which can be found here.)

The basic lesson of this case is simple:  responsible agencies are not exempt from the findings requirement of Public Resources Code § 21081, and failure to make the required findings is a CEQA procedural violation, which constitutes prejudicial error because it is a failure to proceed in the manner required by law.


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