In an opinion originally filed on July 31, and belatedly ordered published on August 22, 2019, the Second District Court of Appeal (Division 3) affirmed a judgment granting a CEQA writ petition invalidating the final EIR and project entitlements for the Millennium Project, a controversial proposed mixed-use development on a 4.47-acre parcel straddling Vine Street and surrounding the historic Capital Records Building in Hollywood.  Stopthemillenniumhollywood.com, et al. v. City of Los Angeles, et al. (Millennium Hollywood LLC, Real Party in Interest) (2019) ___ Cal.App.5th ___.  The Court upheld the trial court’s finding that the EIR violated CEQA’s requirement for a stable and finite project description as a matter of law.  Reasoning that “the project description is at the heart of the EIR process in this case,” the Court found it “not necessary to reach appellants’ [the City and developer Millennium]” challenges to several other grounds upon which the trial court issued its writ, including findings that the EIR’s transportation analysis improperly failed to use responsible agency Caltrans’ methodology, that its analysis of cumulative traffic impacts was unsupported by substantial evidence, and that a condition of approval improperly expanded the approved project uses beyond those actually analyzed in the EIR.  It also declined to address plaintiff/cross-appellant’s claim that the City failed to notice and consult with the California Geological Survey regarding potential seismic hazards.

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Background

A long time ago, in a legal galaxy far, far away, Emperor Reagan signed the California Environmental Quality Act (“CEQA”) into law.  For many years, the “dark forces” that had wrought the adverse environmental impacts giving rise to CEQA – land developers and the public agencies granting their approvals – labored under its ever-expanding yoke.  Many litigation battles were fought, and many won by the heroic Jedi of the environmental plaintiffs’ bar and their NGO clients, firmly establishing the preeminence and vast reach of CEQA’s seemingly beneficent empire into the far-flung corners of the legal universe.  CEQA’s “force” was such that no project with the potential to effect a physical change in the environment, unless granted legislative or magisterial exemption, escaped its watchful eye and mitigating powers.


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A lawsuit filed June 10, 2019, in the U.S. District Court for California’s Central District, and conspicuously reported on last month in Law360, takes dead aim at defendants who are alleged to have filed and threatened frivolous CEQA suits for the sole purpose of extorting monetary settlements – in this case, from plaintiffs alleging they are economically vulnerable Hollywood hotel project developers who were forced to capitulate to defendants’ extortionate demands.

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In a 38-page opinion filed on May 16, and belatedly ordered published on June 14, 2019, the Third District Court of Appeal affirmed the trial court’s judgment rejecting all of plaintiff/appellant Center for Biological Diversity’s (“CBD”) CEQA and statutory challenges to the EIR that the California Department of Conservation, Division of Oil, Gas and Geothermal Resources (“DOGGR”) was required by S.B. 4 (Stats. 2013, ch. 13, § 2) to prepare “pursuant to [CEQA], to provide the public with detailed information regarding any potential environmental impacts of well stimulation in the state.”  (Pub. Resources Code, § 3161(b)(3)(A).)  The Court’s opinion addresses and disposes of CBD’s CEQA and other challenges in a highly unusual, and even unprecedented, context – that of a statutorily required program EIR addressing the statewide impacts of oil and gas well-stimulation treatments (including the controversial treatment known as hydraulic fracturing or “fracking”) prepared in the absence of any “project” being approved or undertaken by the ostensible “lead agency” (DOGGR).  Center for Biological Diversity v. California Department of Conservation, Division of Oil, Gas and Geothermal Resources, et al. (3d Dist. 2019) 36 Cal.App.5th 210.

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Successfully navigating CEQA litigation has been compared to walking a tightrope – myriad issues challenging an EIR can be (and often are) raised, and a “misstep” as to even a single one typically results in the court’s issuance of a writ decertifying the entire EIR and vacating the project approvals pending future CEQA compliance.  Fortunately, however, CEQA litigation can also be like a funnel, with its beginning at the top and its end at the bottom:  while many issues and challenges to an agency’s EIR can initially be raised, their subsequent final adjudication on the merits through a limited peremptory writ of mandate – one granting in part and denying in part a writ petition – serves to progressively eliminate and narrow the issues at play in any future litigation.  This is a result of the doctrine of res judicata (or claim preclusion), and a textbook example of that doctrine’s application in the CEQA litigation context can be found in the Third District’s recent partially published opinion in Ione Valley Land, Air, and Water Defense Alliance, LLC v. County of Amador (Newman Minerals, LLC, et al., Real Parties in Interest) (2019) 33 Cal.App.5th 165.  (The opinion was filed February 26, but later modified and certified for partial publication on March 20, 2019.)

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On March 13, 2019, at the losing Petitioner/Appellant’s request, the California Supreme Court ordered depublication of the Sixth District’s partially published opinion in Alliance of Concerned Citizens Organized for Responsible Development v. City of San Juan Bautista (2018) 29 Cal.App.5th 424 (No. S253725); my December 3, 2018 post on the case can be found here.  Review of the decision was not sought or granted, so its result stands unaffected by the high court’s action.  The main takeaway from this decision was that the nature of a final judgment is determined by its substance and effect in resolving the claims raised in the action on their merits, rather than by any label the court attaches to it.  The grant of depublication means only that, subject to very limited exceptions, the opinion “must not be cited or relied on by a court or a party in any other action.”  (Cal. Rules of Ct., Rule 8.1115(a).)

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Most real estate developers would likely agree that, even when correctly applied and complied with, CEQA can be an onerous law which can significantly complicate, delay, increase the cost of, and in some cases (particularly where CEQA litigation is involved) even preclude projects.  But what recourse does a project applicant have under the law when CEQA is misapplied – and blatantly so – by a local agency which denies approval of a project that is clearly exempt from CEQA on the meritless basis that extensive (and expensive) CEQA review is required?  When the developer’s only recourse is time-consuming and expensive litigation to obtain a writ of mandate setting aside the agency’s illegal action subjecting the project to CEQA, can the developer who succeeds in obtaining the writ recover from the public agency compensation and damages resulting from the temporary “taking” of all reasonable economic use of its property?

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The Federal Energy Regulatory Commission (“FERC”) issues licenses needed to construct and operate hydroelectric dams pursuant to the Federal Power Act (“FPA”; 16 U.S.C. § 791a, et seq).  Under long-standing law, and with the limited exception of state-issued water quality certifications, the FPA “occupies the field” of licensing a hydroelectric dam, and bars environmental review of the federal licensing procedure in state courts; this preemption is necessary because recognizing a “dual final authority” for such projects would be “unworkable.”  (First Iowa Hydro-Electric Cooperative v. Federal Power Com. (1946) 328 U.S. 152.)  States have limited authority under the Clean Water Act (33 U.S.C. § 1341) to impose stricter water quality conditions than are federally required on a FERC license, through the section 401 water quality certification process, but must act on a project applicant’s certification request within one year or certification is deemed waived.  (33 U.S.C. § 401(a)(1); Alcoa Power Generating Inc. v. FERC (D.C. Cir. 2011) 643 F.3d 963, 972.)  Further, any disputes concerning the Federal licensing process or the adequacy of “required studies” for that process (including “environmental studies” serving as the predicate for the state’s water quality certification conditions) are subject to FERC’s review.  (18 C.F.R. part 4, 34(i)(b)(vii) (2003).)

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“What’s in a name? That which we call a rose by any other name would smell as sweet;” – William Shakespeare, Romeo and Juliet, Act II, Scene II, ll. 47-48.

In a partially published 40-page opinion filed on November 26, 2018, the Sixth District Court of Appeal affirmed the trial court’s post-judgment order determining that respondents’ (City of San Juan Bautista and its city council) supplemental return complied with a previously issued peremptory writ and CEQA as directed.  But the opinion’s most valuable message to those toiling in the garden of the law – a profession where using the correct words is of paramount importance – is a simple Shakespearean one, to wit:  a final judgment by any other name is still a final judgment.  Alliance of Concerned Citizens Organized For Responsible Development v. City of San Juan Bautista (Harbhajan Dadwal, Real Party in Interest) (2018) 29 Cal.App.5th 424.


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On April 30, 2018, the United States Supreme Court denied the petition for writ of certiorari filed in North Coast Railroad Authority v. Friends of the Eel River, U.S. Supreme Ct. Case No. 17-915, which presented this issue:  “Whether citizen suits that seek to enforce state environmental approval requirements against a state-owned railroad by enjoining activities subject to the [Surface Transportation Board]’s exclusive jurisdiction are categorically preempted by [the Interstate Commerce Commission Termination Act of 1995].”  The high court’s denial of review left undisturbed the California Supreme Court’s novel decision holding state public entity NCRA’s railroad project on its own line was subject to CEQA (and also onerous and delay-producing CEQA litigation) as an act of “self-governance”, whereas private rail carriers are exempt from these “regulatory” burdens by virtue of federal preemption under ICCTA.  (My post on the California Supreme Court’s decision can be found here.)

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