Real Estate and Land Use

December 01, 2015

Newhall Ranch Project Dealt Supreme Court Setback

Center for Biological Diversity v. California Department of Fish and Wildlife

The California Supreme Court released its long-awaited opinion in Center for Biological Diversity v. California Department of Fish and Wildlife on Monday, November 30. The case presented issues regarding the adequacy of an environmental impact report (EIR) prepared by the California Department of Fish and Wildlife for two natural resource plans related to Newhall Ranch, a large-scale residential development project in northern Los Angeles County.

The Court's opinion focused on three central issues: (1) whether the EIR appropriately determined that the project would not significantly impact the environment through greenhouse gas (GHG) emissions; (2) whether a mitigation measure that authorized the take of a protected species was appropriate under the Endangered Species Act and California Environmental Quality Act (CEQA); and (3) whether comments made during the National Environmental Policy Act (NEPA) comment period were sufficient to exhaust administrative remedies under CEQA. The Court held that the EIR's GHG threshold of significance was appropriate, but that the project's GHG analysis was inadequate. On the second issue, the Court held that the take of a protected species was not allowed under the law and therefore could not be used as mitigation. Finally, the Court held that comments made after the close of the CEQA public review period were still timely.

Five justices signed the majority decision authored by Justice Werdegar, with Justice Corrigan issuing a concurring and dissenting opinion (she felt that the EIR's GHG analysis was adequate) and Justice Chin dissenting. Justice Chin was highly critical of the long delays that this project has experienced and the additional delays the Court's decision imposes predicting that "Given the glacial pace of litigation, this [remedying the EIR's defects] will easily take years.... Delay can become its own reward for project opponents." In a somewhat unusual back and forth, the majority opinion concluded with a comment on Justice Chin's dissent noting that "Even if Newhall Ranch offered the environmentally best means of housing this part of California's growing population, CEQA's requirements for informing the public and decision makers of adverse impacts and for imposition of valid, feasible mitigation measures, would still need to be enforced."

Greenhouse Gas Analysis: The EIR utilized compliance with the GHG reduction goals of Assembly Bill 32 (AB 32), otherwise known as the Global Warming Solutions Act, as a threshold of significance. AB 32, through a scoping plan adopted by the California Air Resources Board, seeks to reduce GHG emissions to "1990 levels by cutting approximately 30 percent from business-as-usual emissions levels projected for 2020…." The Center for Biological Diversity argued that the "compliance with AB 32" threshold was inappropriate under CEQA. The Supreme Court disagreed, and ultimately endorsed the use of the reduction goals contained in AB 32 stating: "Using consistency with AB 32's statewide goal for greenhouse gas emissions, rather than a specific numerical threshold, as a significance criterion is also consistent with the broad guidance provided by section 15064.4 of the CEQA Guidelines."

After concluding that the threshold was appropriate, the Supreme Court looked closely at the GHG analysis contained in the EIR, particularly the "business-as-usual" analysis. Here, the Supreme Court concluded that analysis was inappropriate and constituted an abuse of discretion. Specifically, the Supreme Court found the assumption that the project's project-specific GHG reduction (31%) was consistent with the statewide reduction goal (29%) to be without support. "[N]othing DFW or Newhall have cited in the administrative record indicates the required percentage reduction from business as usual is the same for an individual project as for the entire state population and economy." Therefore, lacking evidentiary support, the EIR "makes an unsupported assumption regarding statewide density averages used in the Scoping Plan, an assumption that if incorrect could result in a misleading business-as-usual comparison."

Mitigating Impacts to Protected Species: The second issue addressed by the Supreme Court was whether an agency could authorize a take of a protected species (here, the threespine stickleback fish) as a means of mitigating a project's impacts. Concluding that such measures were not authorized under CEQA, the Supreme Court looked at the express language of Fish and Game Code Section 5515 which permits the taking of a fully protected species for "scientific research," but explicitly states that "scientific research" does not include "any actions taken as part of specified mitigation for a project" as defined in CEQA. The Supreme Court read this language as allowing the trapping and transplantation of a fully protected fish species as part of a species recovery program, but not as project mitigation.

Exhaustion of Administrative Remedies: Finally, the Court assessed whether specific comments made after the draft EIR CEQA comment period, but during the NEPA comment period, were sufficient to exhaust administrative remedies. Pursuant to Section 21177 of CEQA, an alleged ground of noncompliance with CEQA may be challenged in court only if it was first presented to the public agency orally or in writing during the public comment period provided for in CEQA or prior to the close of the public hearing on the project. Here, no public hearing was held on final project approval and the comments were submitted after the close of the CEQA comment period.

The Supreme Court nevertheless found that the comments were sufficient to comply with CEQA's exhaustion requirement because DFW treated the "federal comment period … as an opportunity to receive additional comments on CEQA issues as well and has responded to those comments and included the responses in its final decision document…." Under such circumstances, the Supreme Court held, "the lead agency has effectively treated the federal comment period as an optional comment period on the final EIR" and therefore the issues were timely presented to support the legal challenge.