Tag: Notice of Determination

In a Procedurally-Dense Opinion, First District Court of Appeal Clarifies that Real Parties in CEQA Cases Are Not Always Indispensable Parties

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In Save Berkeley’s Neighborhoods v. Regents of the University of California (2021) 70 Cal.App.5th 705, the First District Court of Appeal upheld a trial court’s determination that the developer and operator of a proposed campus expansion project were not indispensable parties to a lawsuit challenging the Regents of the University of California’s (Regent’s) approval of that project. In doing so, the court held that Assembly Bill No. 320 (AB 320) (2011–2012 Reg. Sess.)—which amended CEQA to require agencies to identify the recipients of project approvals on a project’s notice of determination (NOD) and to require CEQA petitioners to name and serve those persons or entities listed on the NOD—did not alter the court’s analysis of whether a party is “indispensable” to the lawsuit under Code of Civil Procedure section 389, subdivision (b) (CCP section 389(b)).

Background

The Regents approved a project to demolish an existing parking structure, construct student housing above a new parking structure, and develop a new academic building adjacent to the new residential building (project). The Regents prepared and certified a supplemental environmental impact report (SEIR) for the project. On May 17, 2019, the Regents filed an NOD, which identified American Campus Communities (ACC) and Collegiate Housing Foundation (CHF) as the parties undertaking the project. ACC is the developer for the project, and CHF is the ground lessee and borrower for the housing component of the project.

On June 13, 2019, petitioner Save Berkeley’s Neighborhoods filed a petition for writ of mandate seeking to vacate the Regents’ certification of the SEIR on the ground that the Regents violated CEQA. The petition named the Regents as a respondent, but did not name ACC or CHF as parties. Nor did petitioner serve ACC and CHF. On September 18, 2019, petitioner filed a first amended petition, which added ACC and CHF as real parties in interest. The amended petition acknowledged that ACC and CHF were listed as parties undertaking the project in the NOD, and thus were being named pursuant to Public Resources Code section 21167.6.5, subdivision (a), which requires the entities identified as recipients of project approvals on an NOD to be named as real parties in interest.

ACC and CHF filed demurrers to the first amended petition, asserting that petitioner failed to name them as parties within the applicable statute of limitations and that they are necessary and indispensable parties to the litigation, so the entire action should be dismissed. The trial court sustained the demurrers without leave to amend, but did not dismiss the lawsuit. The court held that ACC and CHF should have been named as real parties because they were listed on the NOD as the parties undertaking the project. Because petitioner had failed to amend its petition to name them as parties within 30 days after the Regents filed the NOD, petitioner’s challenge against ACC and CHF was time-barred under Public Resources Code section 21167. The court held, however, that the failure to timely name ACC and CHF as real parties did not justify dismissing the case because ACC and CHF were not indispensable parties under CCP 389(b).

ACC and CHF appealed, arguing that the trial court erred in concluding they were not indispensable parties. Petitioner filed a cross-appeal, arguing that the trial court erred in applying CEQA’s 30-day statute of limitations to the lawsuit because, according to petitioner, the Regents’ NOD for the project – the filing of which triggered the 30-day statute of limitations – was defective. The Court of Appeal affirmed the trial court’s order sustaining the demurrer.

Discussion

Appealability

As a threshold matter, the appellate court considered whether the trial court’s order sustaining the demurrer was appealable. Petitioner argued that it was not because the appeal arose from an interlocutory (non-final) order and thus violated the “one final judgment” rule. Furthermore, petitioner argued, the issue of whether AOC and CHF are indispensable parties remained in the underlying action because that issue was also raised by the Regents, who remained a party to the action, so the court should not consider that issue yet. The court rejected these arguments. The court explained that in actions involving multiple parties, an order fully disposing all of the issues as to one party is appealable, even if those same issues remain as to the other parties. Accordingly, the appeal was proper.

Necessary and Indispensable Parties

The court next considered whether the trial court erred in determining that CHF and ACC were not indispensable parties. If CHF and ACC were indispensable parties, the lawsuit must be dismissed in full. If they were not indispensable, then petitioner’s lawsuit against the Regents could move forward. The Court of Appeal agreed with the trial court that CHF and ACC were not indispensable parties.

Assembly Bill 320 Did Not Alter a Court’s Analysis of Whether a Real Party is “Indispensable”

CEQA currently requires petitioners to name, as a real party in interest, any person or entity identified on an NOD as a recipient of the project’s approval. Prior to 2012, however, CEQA did not require the recipients of the project approvals to be identified on the NOD. CEQA did, however, require any recipient of a project approval to be named as a real party in interest. The phrase “any recipient of an approval” was not defined by the statute, leading to confusion in the courts.

In 2011, the Legislature passed AB 320, which amended CEQA to require agencies to identify the recipient of a project’s approval on the project’s NOD. (Pub. Resources Code, § 21108.) It also amended CEQA to require petitioners to name the entities identified on the NOD as real parties in interest and to serve the petition on those entities. (Pub. Resources Code, § 21167.6.5, subd. (a)). The AB 320 amendments also provided that the “failure to name potential persons, other than those real parties in interest described in Public Resources Code, § 21167.6.5, subdivision (a), is not a ground for dismissal pursuant to Section 389 of the Code of Civil Procedure.” (Pub. Resources Code, § 21167.6.5, subd. (d).)

ACC and CHF argued that AB 320 was intended to provide “finality and certainty” as to who must be joined in a CEQA action and, therefore, CCP 389(b), which provides an equitable balancing test for determining who constitutes an indispensable party, does not apply. The court rejected this argument, holding that the AB 320 did not alter judicial analysis of whether a party is indispensable.

ACC and CHF argued that the express language of Public Resources Code section 21167.6.5, as amended by AB 320, demonstrates that CCP 389(b) does not apply. Specially, subdivision (d) of that statute states: “Failure to name potential persons, other than those real parties in interests described in subdivision (a), is not grounds for dismissal pursuant to Section 389 of the Code of Civil Procedure.” (Italics added.) The court disagreed that this language indicates that CCP 389(b)’s equitable balancing test does not apply when the petition fails to name a real party. As the court explained, the statute does not explicitly state that CCP 389(b) cannot be applied in CEQA actions in which the real party has not been properly named and served. Rather, that statute only suggests that the failure to name a real party in interest may be grounds for dismissal, depending on the equitable factors set forth in CCP 389(b).

Turning to the Legislative intent, the court found that in enacting AB 320, the Legislature did not intend to prevent application of CCP 389(b). Rather, the bill was only meant to clarify who constitutes a real party in interest, as there had been confusion on that issue in the courts. Moreover, AB 320’s Legislative history suggests that rather than intending to limit CEQA actions, AB 320 was intended to “prevent the dismissal of important and meritorious CEQA cases.” Applying a blanket rule that the failure to timely name a real party in interest constitutes a ground for mandatory dismissal of a CEQA case would frustrate that intent.

Application of CCP 389(b)’s Equitable Factors

The court next considered whether the trial court erred in holding that ACC and HCF were not indispensable parties. Under CCP 389(b), if a necessary party cannot be joined, “the court shall determine whether in equity and good conscious the action should proceed among the parties before it, or should be dismissed without prejudice, the absent person being thus regarded as indispensable. The factors to be considered by the court include: (1) to what extent a judgment rendered in the person’s absence might be prejudicial to him or those already parties; (2) the extent to which, by protective provisions in the judgment, by the shaping of relief, or other measures, the prejudice can be lessened or avoided; (3) whether a judgment rendered in the person’s absence will be adequate; (4) whether the plaintiff or cross-complainant will have an adequate remedy if the action is dismissed for nonjoinder.” (Code Civ. Proc., § 389, subd. (b).)

Applying these factors, the trial court held that ACC and CHF were not indispensable parties. Among other things, ACC and CHF’s interests were closely aligned to that of Regents because ACC and CHF were undertaking the project for the Regents’ own use and benefit. Moreover, petitioner would have no way of challenging the SEIR if the case was dismissed. On the other hand, ACC and CHF were parties in a related case challenging the same SEIR and were thus unlikely to be harmed by a settlement.

On appeal, ACC and CHF argued that they had fundamentally different interests in the project than the Regents. The Regents’ interest was to add housing and academic space to the campus, whereas ACC and CHF’s interest was to develop and operate the project. The court disagreed, explaining that the Regents, like ACC and CHF, had a strong interest in moving forward with the project; the fact that the Regents might have different motivations for doing so was immaterial. Further, contrary to ACC and CHF’s assertion, the Regents had a strong economic interest in the project because the Regents would manage and operate the new parking structure and the new academic building and the Regents would regain ownerships of the project once the project’s debt was repaid. ACC and CHF had failed to cite any evidence that they had unique financial interests or would be more harmed by an adverse judgment than the Regents. Accordingly, the trial court properly concluded that ACC and CHF were not indispensable parties.

Petitioner’s Cross Appeal – Did the Trial Court Err in Applying CEQA’s 30-Day Statute of Limitations?

Turning to the cross appeal, the court held that the trial court properly applied CEQA’s 30-day statute of limitations to the first amended petition. Petitioner argued that the statute of limitations should not apply because the Regents’ NOD for the project failed to accurately describe the project. In particular, the NOD did not explain that the project would result in an increase in student enrollment. The court disagreed that such information was required, holding that an increase in student enrollment was not a material component of the project. To the contrary, the NOD and SEIR indicated that the project was intended to accommodate the existing student body and planned growth, not necessarily to increase enrollment. Although it is possible that the project could result in an increase in enrollment, the record did not suggest that increasing enrollment was a component of project. Therefore, the trial court correctly held that the Regents’ filing of the NOD triggered CEQA’s 30-day statute of limitations.

Implications

The Court of Appeal was unwilling to interpret AB 320’s amendments to CEQA as modifying judicial analysis of whether a party is indispensable in a CEQA case. Although Public Resources Code 21167.6.5, as amended, could be interpreted as implying that the failure to name a real party in interest is a ground for dismissal under CCP 389(b), as the court noted, the statute does not explicitly require such a result. Thus, where a CEQA petitioner fails to name all parties listed as approval recipients on an NOD (or a notice of exemption (NOE)), case law decided under the former statute is still relevant to the question of whether a party is indispensable. The case also clarifies that although a project might result in changes to the existing baseline (e.g., an increase in student enrollment), that change need not be described as a component of the proposed project in the NOD or NOE.

Second District Court of Appeal Upholds Dismissal of CEQA Action as Untimely

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On April 2, 2020, the Court of Appeal for the Second Appellate District in Coalition for an Equitable Westlake/Macarthur Park v. City of Los Angeles (2020) 7 Cal.App.5th 368 affirmed the trial court’s decision sustaining a demurrer without leave to amend because the petitioner’s claims were barred by the famously short statute of limitations for actions brought under CEQA. (Pub. Resources Code, § 21000 et seq.)

On March 3, 2017, after holding a public hearing, the advisory agency for the City of Los Angeles approved a vesting tentative tract map for the Lake on Wilshire Project, a mixed-use project consisting of a hotel, a residential tower, and a multi-purpose center with a theater. Prior to approving the tentative map, the advisory agency adopted a mitigated negative declaration. The city filed a notice of determination (NOD) on March 15, 2017.

Subsequently, on October 12, 2017, the planning commission approved conditional use permits for the project—finding that no subsequent review was required. Two tenants of an existing building on the project site appealed the planning commission’s decision. The city council denied the appeals on January 31, 2018, and further adopted a resolution approving general plan amendments in connection with the project.

On March 2, 2018, the petitioner filed a petition for writ of mandamus challenging the approval of the MND as violating CEQA. The city and real parties in interest filed a demurrer. The trial court sustained the demurrer without leave to amend on the grounds that the petitioner’s claims were time-barred under CEQA for failure to seek relief within 30 days after the NOD was filed on March 15, 2017.

In holding that the petitioner’s suit was untimely, the court found that application of the statute of limitations bar to the petitioner’s challenge was straightforward. The petitioner did not bring the CEQA action until March 2, 2018, nearly a year after the city approved the tentative map and posted the NOD. The court explained that there were only two situations where the filing of a NOD would not trigger CEQA’s statute of limitations—if the NOD is invalid on its face because the information required by the CEQA Guidelines is missing or incorrect, or where the NOD is filed before a decision-making body has approved the project. The court found neither of those circumstances existed.

Rather, the petitioner had attacked the validity of the NOD based on the advisory agency’s authority to make CEQA finding, including that: (1) the planning commission (not the advisory agency) was responsible for initial project approval and CEQA review; (2) the advisory agency lacked authority under the municipal code to make CEQA findings; (3) the advisory agency’s CEQA decisions were not properly appealable to an elected body; and (4) the authority to approve the project was improperly bifurcated from the authority for CEQA approval. In rejecting this argument, the court, quoting the California Supreme Court’s decision in Stockton Citizens for Sensible Planning v. City of Stockton (2010) 48 Cal.4th 481, 499, stated that the petitioner ‘confuses the timeliness of a lawsuit with its merits.’” To the extent a petitioner wished to challenge the advisory agency’s authority to make the initial project approval or adopt the MND, the court held that those arguments needed to be made within the applicable statute of limitations period. Because they were not, the petitioner was precluded from raising such arguments.

Fourth District Upholds EIR for Master-Planned Community and Concludes That County Not Required to Recirculate

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On March 15, 2017 the Fourth District certified for publication its February 4, 2017 decision in Residents Against Specific Plan 380 v. County of Riverside (2017) 9 Cal.App.5th 941, upholding the EIR for a master- planned community (project). A citizens group challenged the sufficiency of the EIR and the county’s approval process on six grounds. The court found for the county and real party in interest, Hanna Marital Trust (applicant), on every count.

The project proposes a master-planned community with seven planning areas containing medium-density residential housing, mixed uses, commercial retail, and dedicated open space on 200 acres of undeveloped land in Riverside County. Planning area 6, the mixed use area, was analyzed as potentially providing for the development of a Continuing Care Retirement Community (CCRC) for seniors.

On July 28, 2011, the County Planning Department released a Draft EIR (DEIR). The DEIR stated that mitigation measures would reduce the environmental impacts to a below significant level, except for air quality and noise. During the public comment period, the South Coast Air Quality Management District (SCAQMD) and the City of Temecula raised concerns about the project’s air quality impacts. The final EIR (FEIR) was released in January 2012 and included responses to SCAQMD’s and Temecula’s comments. The FEIR reflected changes in the location of some project elements, but was “in its basics identical” with the project as described in the DEIR.

The Planning Commission reviewed the FEIR in April 2012 and suggested revisions, which were subsequently presented to the Commission in October 2012. The Commission recommended approval of the FEIR and the Project to the Board of Supervisors. The Board reviewed the FEIR at its December 11, 2012 meeting, where it considered some modifications to the project and Residents Against Specific Plan 380 (petitioners) suggested additional noise mitigation measures. At its December 18, 2012 meeting, the Board tentatively approved the FEIR, contingent on finalization of the modifications. On November 5, 2013, the Board approved the finalized FEIR, general plan amendment, zone change, and Specific Plan 380. The EIR resolution included findings of fact, a mitigation monitoring and reporting plan, and a statement of overriding considerations. The same day, the county clerk posted a Notice of Determination (NOD) that erroneously used an out-of-date project description.

On November 18, 2013, petitioners filed a petition for a writ of mandate, which was denied by the trial court. This appeal followed.

First, the Fourth District concluded that the Board did not substantially modify the EIR after approving it. Because the Board only tentatively approved the project in December 2012, the final approval in November 2013 reflected the Plan’s modifications. Similarly, the court disagreed with the petitioners’ argument that the findings, statement of overriding considerations, and mitigation plan were not timely and concurrently approved.

Second, the court concluded that the NOD substantially complied with the informational requirements of CEQA, despite its project description errors. The court also noted that the petitioners could not show that the errors were prejudicial because they filed the suit well before the statute of limitations had run.

Third, the court held that the changes made by the Commission and Board were not significant enough to require recirculation of the EIR. In reaching its determination, the court relied on CEQA Guidelines § 15088.5, subd. (a), stating that a lead agency must recirculate an EIR when significant new information is added that reveals a substantially new or increased impact. The court rejected the petitioners’ argument of increased traffic impacts, holding that only traffic patterns would be affected, not intensity. The court also rejected the petitioners’ contention that increased biological impacts would result from moving the mixed-use area further north, as the open space region was already adjacent to it. Petitioners’ argument of increased noise impacts was contradicted by the county’s expert. Finally, the petitioners failed to substantiate their claim of potential land use inconsistencies. Therefore, the County had an adequate basis for not recirculating the EIR. Petitioners’ reliance on Vineyard Area Citizens for Responsible Growth v. City of Rancho Cordova (2007) 40 Cal.4th 412 and Save our Peninsula Committee v. Monterey County Board of Supervisors (2001) 87 Cal.App.4th 99 were inapposite, as the EIR did not reveal facially significant new impacts nor areas necessitating further factual development.

Fourth, the court concluded that the EIR adequately analyzed the impacts of the mixed-use area under the rubric of a proposed CCRC. Petitioners alleged that by analyzing only a CCRC, and not other potentially higher impact uses, the EIR’s analysis of the mixed-use planning area was improperly narrow in scope. The court rejected this argument because substantial evidence supported the County’s decision to limit the scope of the analysis to a CCRC. Even if the applicant did not build a CCRC, the project plan restricted the applicant to other permitted uses in the planning area, and only if they would not incur additional environmental impacts. Nor, the court stated, does CEQA require the county to analyze what are merely possible development schemes.

Finally, the court ruled that the EIR adequately considered the specific suggestions for mitigating the project’s air quality and noise impacts from SCAQMD, Temecula, and the petitioners. Regarding mitigation for air emission impacts proposed by SCAQMD and Temecula, the county could justify why the measures were not adopted, why they were infeasible given the project’s timeline and parameters, or why they were duplicative with measures already adopted. SCAQMD’s proposal to utilize lower emission vehicles did not reflect the construction equipment anticipated to be reasonably available. Temecula’s suggestion of applying the 2010 Energy Code was duplicative of the requirement to exceed the 2008 Code emission standards by 15%, and the code in force at the time of construction would control in any event. Furthermore, the county was not required to adopt the specific prescriptive emission reduction measures in the Green Building Standards Code, but could opt for performance-based standards that are less likely to incur enforcement and enforceability issues. With respect to the additional noise mitigation measures proposed by the petitioners, these were found to be untimely raised more than a year after the comment period had closed. Therefore, the county was not obligated to respond. Moreover, the county was justified in not adopting these noise mitigation measures because they require electric construction equipment that may not be available or may duplicate existing requirements.