Environmental Group Failed To Exhaust its Administrative Remedies Before Bringing Suit Against City of San Diego

In Citizens for Responsible Equitable Environmental Development v. City of San Diego, (— Cal.Rptr.3d —-, Cal.App. 4 Dist., May 19, 2011), a court of appeal considered whether (1) the city followed the proper procedure under the water code and CEQA in adopting a water supply assessment, and (2) a supplemental environmental impact report was required due to new information on drought and the effect of greenhouse gas emissions on climate. The court of appeal held the group opposing the certification of the environmental impact report had failed to exhaust its administrative remedies and even if it had not failed in that regard, it could not prevail on the merits of its claims against the city.

Facts

In 1994, the City of San Diego (“City”) certified a final environmental impact report (“FEIR”) for a “precise plan, a 664.8-acre mixed-use development within the Otay Mesa Community Plan area” anticipating construction of more than 4,000 dwelling units. In 2008, Pardee Homes (“Pardee”) applied to the City for approval of a planned development. The City’s water department prepared a water supply assessment (“WSA”) which concluded water supplies would be sufficient for the development’s needs.

The City’s development services department “prepared an addendum to the 1994 FEIR, which discusses and incorporates the WSA.” The department also concluded a supplemental environmental impact report (“SEIR”) was not necessary because there were “no new significant environmental impacts considered in the previous [F]EIR,” “[n]o substantial changes have occurred with respect to the circumstances under which the project is undertaken,” and “[t]here is no new information of substantial importance to the project.” After giving the requisite public notice on the FEIR, the City planning commission suggested the City approve the project during a public hearing.

In a written letter, Citizens for Responsible Equitable Environmental Development (“CREED”) requested that the City not approve the project because the WSA “was not subject to public review” and the project would “cause direct and indirect greenhouse-gas emissions.” CREED also sent the City a DVD containing over 4,000 pages of data and documents but did not offer any explanation as to what the DVD contained and how it was related to the project. Although CREED did not appear at the public hearing to further elaborate, it again submitted a “cursory letter to the City clerk that briefly outlined objections to the project.” The City certified the FEIR addendum and approved the project.

CREED filed a petition against the City alleging violations of the California Environmental Quality Act (“CEQA”) for relying on the addendum to the 1994 FEIR instead of issuing an SEIR. CREED contends an SEIR is necessary because “there are changed circumstances and new information pertaining to water supply and the effect of greenhouse gas emissions on climate.” CREED also argued the City failed to adopt the WSA pursuant to Water Code procedure. The trial court found the “City’s certification of the addendum to the 1994 FEIR, which incorporated the WSA, was equivalent to approval of the WSA.” The trial court further found that CREED failed to exhaust its administrative remedies as to drought and climate change and in the alternative failed to meet its burden by establishing new information or changed circumstances that would warrant an SEIR.

Decision

The court of appeal first looked at whether the City’s approval of the WSA complied with Water Code section 10910, subdivision (g)(1). CREED argues the City Council’s certification of the addendum to the 1994 FEIR is not sufficient because it fails to specifically state the WSA was approved. The court of appeal agreed with the trial court’s findings that because the addendum incorporated the WSA, the “City’s certification of the addendum was equivalent to approval of the WSA.”

Moreover, the appellate court neither agreed with CREED’s argument that the WSA should be approved early in the process before the document is considered for certification and the project is considered for approval nor did it find CREED’s supporting caselaw applicable. The court of appeal found that the statute did not require early approval of the WSA when “the water supplier and lead agency are the same entity (the City) and are governed by the same entity (the City [C]ouncil).” Thus, the appellate court found the statute did not require the City Council to approve the WSA “before it was submitted to the City for inclusion in the 1994 FEIR.” The court of appeal further found no merit in CREED’s contention that the City’s method in its adoption of the WSA deprived the public of the opportunity “to weigh in on the impacts of a major water-consuming development” because CREED failed to cite to any authority requiring a reference to the WSA in the CEQA notices of hearing. The information contained in the public notices that referenced the proposed draft addendum to the FEIR made the matter “open and transparent, and there is no suggestion a different procedure would have further assisted the public.”

The court of appeal next addressed CREED’s argument that an SEIR was required instead of an addendum to the 1994 FEIR. CREED has the burden in this instance to demonstrate that the City’s decision to approve the planned development with an addendum to the 1994 FEIR, “rather than to require an SEIR, is not supported by substantial evidence and was thus improper.” CREED argues the City’s reliance on an addendum is without evidentiary support because it submitted “substantial evidence” that “[w]e are now in a drought.”

The appellate court found CREED failed to meet its burden because it did not exhaust its administrative remedies on this issue by making specific objections on the issue. A challenge to CEQA is not preserved “unless the alleged grounds for noncompliance with [CEQA] were presented to the public agency orally or in writing by any person during the public comment period provided by this division or prior to the close of the public hearing.” The exhaustion doctrine mandates the specific issue to have been presented to the administrative agency in order to promote the purpose of the exhaustion doctrine. In other words, CREED’s letters which contain only general objections to environmental issues will not suffice.

The appellate court further found CREED did not exhaust its administrative remedies by citing to documents buried among thousands of documents contained on the DVD. The City should not be expected to go through thousands of documents to find support for CREED’s arguments. Likewise, the court of appeal found no merit in CREED’s argument it satisfied the exhaustion requirement because “at the February 17, 2009 CEQA hearing former Councilmember Frye objected to the project on the ground that the addendum to the 1994 FEIR did not expressly address drought.” The appellate court pointed out “the issue she raised and the issue on appeal are not exactly the same.” The City was not provided an opportunity to consider whether an SEIR was necessary before CREED commenced litigation.

The court of appeal found that even if the councilmember’s comments were enough to satisfy the exhaustion doctrine, it would still find against CREED for violating a “fundamental principle of appellate practice by not setting forth the evidence supporting the City’s approval of the project.” Although the City Council received substantial evidence before approving the project, CREED’s briefs either ignore or unfairly portray the evidence. Finally, the court of appeal found that the councilmember’s comments are not evidence supporting the requirement of an SEIR. The appellate court concluded that CREED did not meet its burden “of showing the City’s decision to adopt an addendum to the 1994 FEIR, rather than requiring an SEIR, lacks evidentiary support.”

CREED also asserts the trial court’s order should be reversed because “new information on the nexus between greenhouse gas emissions and climate change require an SEIR.” The court of appeal found that CREED failed to exhaust its administrative remedies on this issue as well because it relied on information contained in the DVD which, as previously discussed, CREED did not fairly present to the City. Furthermore, the letter accompanying the DVD made only general objections that do not satisfy the exhaustion doctrine. Even if the exhaustion requirement had been satisfied, the court of appeal held that an SEIR is not required absent new information. Because information on the “effect of greenhouse gas emissions on climate was known long before the City approved the 1994 FEIR,” an SEIR was not required. CREED provided no competent evidence of new information and thus failed to meet its burden of establishing the City’s “reliance on an addendum to the 1994 FEIR is unsupported by substantial evidence.” Accordingly, the court of appeal affirmed the trial court’s order.

Questions

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Jeffrey L. Massey or Daniel J. O’Hanlon | 916.321.4500

Jon E. Goetz | 805.786.4302