In Save Our Capitol! v. Department of General Services (2024) ___ Cal.App.5th ___, the Third District Court of Appeal held that the Capitol Annex Project was statutorily exempt from CEQA pursuant to recent legislation.

Background

Pursuant to the State Capitol Building Annex Act of 2016 (Annex Act), the Joint Rules Committee and the Department of General Services (together, DGS) prepared and certified an EIR for the Capitol Annex Project. In its first published opinion regarding the Project, the Third District held that the EIR violated CEQA and directed the trial court to issue a peremptory writ of mandate.

After the first appeal, DGS prepared a revised EIR and reapproved the Project, and the trial court discharged the writ. In its second published opinion regarding the Project, the Third District held that the trial court prematurely discharged the writ before finding that the revised EIR complied with the writ.

In separate litigation alleging that the revised EIR did not comply with CEQA, the trial court upheld the revised EIR. Petitioner Save Our Capitol! appealed. While this third appeal was pending, the Legislature passed SB 174 to exempt the Project from further CEQA review and to make various appropriations related to the budget bill, effective immediately.

The Court of Appeal’s Decision

The court affirmed the trial court’s decision, holding that SB 174 exempted the Project from CEQA’s requirements. As an initial matter, the court clarified that SB 174 did not moot the case. The court explained that SB 174 did not simply prevent the court from granting effective relief if it decided in favor of Petitioner; rather, SB 174 conclusively established that Petitioner was not entitled to any relief because it could not prevail on the merits.

In so holding, the court rejected Petitioner’s argument that SB 174 violated article IV, section 28 of the California Constitution, which prohibits the Legislature from appropriating funds for various types of alterations to the Capitol via urgency statute. While the court acknowledged some uncertainty about the scope of article IV, section 28, it explained that, regardless, SB 174 specifically prohibited the use of funds in any manner inconsistent with that provision. In response to Petitioner’s suggestion that DGS might nevertheless use the funds in a prohibited manner, the court pointed out that the suggestion merely indicated a hypothetical concern that DGS might violate SB 174 in the future; it did not indicate that SB 174 inherently violates article IV, section 28.

– Blaine R. Dyas