The Fifth District Court of Appeal in Tuolumne Jobs & Small Business Alliance v. Superior Court (2012) 210 Cal.App.4th 1006, has held that a city council’s decision to approve a development project under Elections Code section 9412, subdivision (a), is not a ministerial decision and does not exempt the project from the California Environmental Quality Act (CEQA). Where a lead agency approves a project by adopting the text of a voter initiative as an ordinance instead of holding a special election under Elections Code section 9412, subdivision (b), CEQA review is necessary. The court acknowledged creating a split of authority because it did not follow Native American Sacred Site & Environmental Protection Assn. v. City of San Juan Capistrano (2004) 120 Cal.App.4th 961, and certified the relevant portion of the case for partial publication.

Background

Wal-Mart sought to expand an existing store in Sonora and make it into a Wal-Mart Supercenter. The city prepared an environmental impact report (EIR), but postponed its vote on the EIR when it received notice of an initiative petition seeking to approve the construction and operation of the supercenter. On October 18, 2010, the city council held a public hearing to consider the Wal-Mart initiative. After the public hearing, the city council voted to adopt the text of the initiative as an ordinance even though the EIR had not been certified.

Tuolumne Jobs & Small Business Alliance filed a writ of mandate in trial court alleging a violation of CEQA. The trial court sustained a demurrer filed by Wal-Mart with respect to three of the four causes of action. Petitioner then filed a writ of mandate with the appellate court seeking to vacate the superior court’s order sustaining the demurrer. The Fifth District Court of Appeal stayed the trial court proceedings while it considered the petition.

The Court of Appeal’s Decision

As a preliminary matter, the court discussed the grounds for writ relief and the standard of review for demurrers. Then the court turned to the main question of law before it: whether CEQA review is required when a lead agency approves a project by adopting as an ordinance the text of a voter initiative with signatures of at least 15 percent of the jurisdiction’s registered voters.

First, the court noted that “the prerogatives of the electorate when exercising its right of initiative must not be thwarted by procedural constraints” in CEQA or other state laws. Furthermore, the voters’ power to approve an initiative in an election is protected by the California Constitution and cannot be undermined by state laws without clear legislative intent to preempt that power. The court thus framed its interpretation of the statutory language in Elections Code section 9214 as an exercise in selecting a construction that most closely achieves legislative intent.

Second, the court laid out the legal implications of the holding in Friends of Sierra Madre v. City of Sierra Madre (2001) 25 Cal.4th 165, that CEQA review is required even if an election is held where a public agency was the entity that chose to put the initiative on the ballot. The court quoted CEQA Guidelines section 15378, subdivision (b)(3), which was amended after the  Friends of Sierra Madre decision to establish that submittals of voter initiatives not sponsored by a public agency are not “projects” as defined by CEQA, but CEQA review is required for those initiatives that are sponsored by a public agency. The court used section 15378 and the holding in Friends of Sierra Madre to conclude that CEQA clearly applies when a city council approves a project without an election after a “mere 15 percent of voters” expressed support of the initiative.

The court then dismissed arguments that the voters’ constitutional power of initiative or the ministerial-projects exemption would support finding the project was excused from CEQA review. The court found that the city’s decision not to submit the initiative to the voters was a policy decision and an exercise of agency discretion that deprived the voters of the opportunity to make the final decision.

Finally, the court discussed why it chose not to follow Native American Sacred Site & Environmental Protection Assn. v. City of San Juan Capistrano. The court in Native American Sacred Site had held that an agency’s decision to approve a project via adoption of an initiative without holding an election is ministerial because the city was bound by Elections Code section 9414 to either adopt a qualified voter-sponsored initiative or to place it on the ballot. The Fifth District Court of Appeal disagreed, concluding that an agency’s policy decision between two choices is discretionary, even if the agency has a mandatory duty to make a choice. Moreover, it found a crucial distinction between the situation where a city is being compelled to hold an election because it failed to act on a petition and the situation where the city chooses to adopt the initiative without submitting it to the voters in an election. Therefore, the court held that CEQA review is required where a lead agency chooses to approve a project submitted to it by voter initiative under Elections Code section 9214, subdivision (a).