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CEQA Exemption Is 'Common Sense,' Says High Court

The California Supreme Court has ruled that an airport land use compatibility plan qualifies for a "common sense" exemption from the California Environmental Quality Act.

Perhaps more importantly, the court opened the door for the first time to the idea that displacement of development often an arguable consequence of a plan that favors one type of development over another might be an issue that should be analyzed under CEQA.

Because the Travis Air Force Base Land Use Compatibility Plan (TALUP) merely incorporated existing county and city general plan and zoning policies, it created no new impacts and therefore need not receive environmental scrutiny, the unanimous state high court ruled.

However, the ruling was not exactly straightforward. First, the court found that the Solano County Airport Land Use Commission made a number of errors. The Commission incorrectly concluded the plan was not a "project" for CEQA purposes, the court found. Yet the Commission did file a notice of exemption, even though no such notice is required for non-projects. But the notice claiming a common sense exemption cited no evidence.

Second, the common sense exemption was a subject that had not been debated in any detail at the trial court and appellate court levels. Neither side mentioned the common sense exemption in briefs for the state Supreme Court, although justices did ask several questions about it during oral arguments (see CP&DR Legal Digest, May 2007).

In addition, the court applied the "substantial evidence test" for the exemption, even though the CEQA Guidelines and previous cases suggest that an exemption is not appropriate if an argument can be made that a project may have a significant effect on the environment.

The case could turn out to be significant for a different reason, however. The court made clear that an agency must consider during environmental review the potential for a project to displace development to other locations.

"[N]othing inherent in the notion of displaced development places such development, when it can reasonably be anticipated, categorically outside the concern of CEQA," Justice Kathryn Werdegar wrote for the court.

That statement marks the first time that a court has recognized that the unintended consequence of displacing development is a potential CEQA impact, said Richard Jacobs, the attorney for property owners who lost the case.

Deputy County Counsel James Laughlin said the court's stance on displaced development presents difficulties. Any zoning, whether it be agricultural, industrial, or residential, potentially displaces some other form of development, said Laughlin, who argued the case for the airport panel.

"It's a good result for the Commission but it's an interesting opinion," Laughlin said.

"We always argued it was not a project. The court went off on a tangent," Laughlin added in reference to the common sense exception.

Development around Travis Air Force Base in Fairfield has long been controversial. Although some adjacent areas are heavily developed, much of the territory around the base is pastureland or open space. Some locals fear that additional urban encroachment would force Travis, the county's largest employer, to close (see CP&DR Elections, December 2003; Local Watch, September 2003). Still, housing pressures are substantial.

In 2002, the Airport Land Use Commission adopted the Travis plan. Under the State Aeronautics Act, city and county general plans must conform with airport land use compatibility plans unless the city or county can make specific findings that the discrepancies are consistent with the act. The TALUP sets forth compatibility factors for six geographic zones. At issue here was "zone C," which covers locations exposed to an average of at least 60 decibels of noise over a 24-hour period (known as the 60 db CNEL standard) or to rare concentrations of low-level flights. Zone C covers more than 600 square miles of unincorporated Solano County and four cities. The airport plan called for freezing existing general plan and zoning designations for zone C, the majority of which is unincorporated land designated for agriculture.

Muzzy Ranch Company, which owns about 5,000 acres inside and outside of zone C, sued because the Commission performed no environmental review of the plan and, according to the landowner, used the wrong noise standard. Solano County Superior Court Judge Donald Fretz ruled for the Commission, but the First District Court of Appeal overturned the decision because the plan could force needed housing development to move elsewhere, and "housing displacement is a physical change that may require discussion in an EIR."

The state Supreme Court agreed with the appellate panel to a point but ultimately reversed the decision.

The Commission argued that the plan is not a project because the TALUP merely advises jurisdictions and the Commission had no duty to consider displaced development because such displacement was too speculative. The court rejected both arguments.

An airport land use plan is more than nonbinding advice, the court noted. The TALUP states that it shall be the basis for local general plan, zoning and land use policies, and state law binds the cities and counties to comply with the plan or at least the aeronautics act. "As Muzzy Ranch observes, under these statutes an airport land use compatibility plan can operate like a multi-jurisdictional general plan to trump the land use planning authority that affected jurisdictions might otherwise exercise," Werdegar wrote.

On the issue of displaced development, the court cited Fullerton Joint Union High School Dist. v. State Bd. of Education, (1982) 32 Cal.3d 779, in which the court rejected the argument that dividing a school district could not be a project simply because other decisions would have to be made before environmental effects were realized.

"Depending on the circumstances, a government agency may reasonably anticipate that its placing a ban on development in one area of a jurisdiction may have the consequence, notwithstanding existing zoning or land use planning, of displacing development to other areas of the jurisdiction," Werdegar wrote, later stating "geographically distant environmental impacts" must also be considered.

As for the common sense exemption, the Commission cited no evidence in support. No matter, the court ruled. "Determining whether a project qualifies for the common sense exemption need not necessarily be preceded by detailed or extensive fact-finding. Substantial evidence appropriate to the CEQA stage in issue is all that is required."

Jacobs, the landowner's attorney, said he felt as if he "lost the war but won all the battles" in that the court found that the Commission made numerous errors, but they did not matter in the end.

Arthur Coons, an attorney at Miller, Starr & Regalia in Walnut Creek who did not participate in the case, agreed that the court's reasoning was "odd." But the decision is important, he said, because the court "recognized displaced development as cognizable under CEQA" and made clear that impacts are not limited by jurisdictional boundaries. Those are important factors when a city or county is considering downzoning, urban growth boundaries or other development limitations, Coons said.

Ellen Garber, of Shute, Mihaly & Weinberger and also not a participant in the litigation, said that although the court raised the issue of "displacement of things that don't exist," the court broke no new ground.

Displacement of development "is not squarely raised in this case," Garber said. "They talk about it, but they don't decide it." Future courts will need to provide a more plain reading of the issue, she said.

Jacobs said he would now press forward in appellate court with Muzzy Ranch's arguments regarding the proper noise contour for the TALUP; however, Laughlin noted the state Supreme Court did not remand the case for more proceedings.

"I think the implication is this is the end of the line," Laughlin said of the decision.

The Case:
Muzzy Ranch Co. v. Solano County Airport Land Use Commission, No. S131484, 07 C.D.O.S. 7166, 2007 DJDAR 9275. Filed June 21, 2007.
The Lawyers:
For Muzzy Ranch: Richard C. Jacobs, Howard, Rice, Nemerovski, Canady, Falk & Rabin, (415) 434-1600.
For the Commission: James W. Laughlin, Solano County counsel's office, (707) 784-6140.

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