The Fourth District Court of Appeal has upheld the City of Newport Beach's decision to "approve" a development project on Banning Ranch, saying that the city complied with both the California Environmental Quality Act and its own general plan. A trial judge had ruled that the city complied with CEQA but violated its own general plan. 

The project is still pending before the Coastal Commission.

It was the second time in less than three years that the Fourth District upheld Newport Beach's action on the Banning Ranch project. In December 2012, the court ruled that the city's EIR had properly analyzed the impact of the project on adjacent parks. 

Banning Ranch is a 400-acre parcel of land located on a coastal bluff above the Pacific Ocean in Newport Beach that was formerly the site of oil drilling. The development plans calls for remediation of the oil drilling's damage, as well as construction of 1,375 residences, 75,000 square feet of retail space and a boutique hotel to be built on approximately one-quarter of the property. A local conservancy has opposed the development project and advocated for public purchase of the entire property. 

Newport Beach's coastal land use plan, or CLUP, was approved by the Coastal Commission in 2005. However, the city has never submitted an implementation plan to the Coastal Commission, so even though the city reviews development projects in the coastal zone, the commission still must approve all permits. Furthermore, the coastal land use plan specifically excludes Banning Ranch, categorizing it as a "deferred certification area" – a strategy that was apparently intended to ensure that controversy over Banning Ranch did not hold up certification of the CLUP. Thus, any action on Banning Ranch must include not just permit approval but approval of the coastal land use plan for the Banning Ranch property.

The general plan's land use element calls on the city to "coordinate with state and federal agencies" – more specifically to "work with appropriate state and federal agencies to identify wetlands and habitats to be preserved and/or restored and those on which development will be permitted."  The coastal land use plan, which is part of the general plan, calls on the city to identify environmentally sensitive habitat areas, or ESHAs, in reviewing any coastal project. 

In challenging the city's "approval" of the Banning Ranch project, the Banning Ranch conservancy argued that the city violated the general plan by not identifying and mitigating for the loss of wetlands and other environmentally sensitive lands prior to project approval; and that the city violated CEQA by not identifying ESHAs in the environmental impact report.

Orange County Superior Court Judge Robert Louis Becking ruled that the city complied with CEQA but violated the general plan. A three-judge panel of the Fourth District affirmed Becking on the CEQA issue but overturned him on the general plan issue, effectively upholding the city's final action. 

Upholding Becking on the CEQA issue was a relatively straightforward matter for the appellate court. The court agreed that the CLUP states that the city must identify ESHAs in reviewing any project in the coastal zone. However, the court pointed out that the CLUP specifically excludes Banning Ranch, which will be subject to a separate land use plan that will require separate certification from the Coastal Commission.

The court's reasoning on the general plan issue required a much longer and more closely reasoned argument, which turned on the question of what constitutes "coordination" under the general plan.

In arguing that the city violated the general plan, the Banning Ranch Conservancy relied heavily on California Native Plant Society v. City of Rancho Cordova (2009) 172 Cal.App.4th 603. In that case, the Third District Court of Appeal ruled that the City of Rancho Cordova, outside of Sacramento, did not sufficiently coordinate with state and federal agencies in designing mitigation for lost wetlands, as called for in its own general plan.

Judge Becking bought the argument. But the Third District did not. Referring to specific provisions in the Rancho Cordova and Newport Beach general plans, Justice Raymond Ikola wrote: "… [T]he City's LU 6.5.6 is not as clear as Rancho Cordova's NR 1.7.1.  In the context of discussing the substantive requirements for mitigation, NR 1.7.1 issues a specific command to Rancho Cordova to coordinate with a specific agency (‘Mitigation shall be designed by the City in coordination with the . . . Service') to accomplish a specific task (i.e., the design of the mitigation measures). … The mitigation at issue pertained to a biological resources evaluation that had to occur ‘prior to project approval.'

"In contrast," he added, "LU 6.5.6 (entitled "Coordination with State and Federal Agencies") does not compel coordination with the Coastal Commission prior to approval of the Project: ‘Work with appropriate state and federal agencies to identify wetlands and habitats to be preserved and/or restored and those on which development will be permitted.' The Coastal Commission is not mentioned in the text or in the referenced implementation actions.  There is no indication in LU 6.5.6 that this ‘work' must be completed before the City approves the Project."  

Justice Ikola criticized Judge Becking sharply for the way he interpreted the city's general plan. Ikola acknowledged that in the Rancho Cordova case, the general plan required "something in between consultation and capitulation". He added: "The appellate court declined to dictate the terms of the writ of mandate, leaving it to the trial court."

In the Banning Ranch case, however, Judge Becking went much further, even though the general plan language required less. Justice Ikola took Becking to task for what he characterized as judicial activism: "The court does not explain what it means, in practical terms, to coordinate and work with the Coastal Commission prior to project approval. Presumably, it is something in between consultation and capitulation.  But the lack of specific guidance in the general plan indicates to us that it is unreasonable to find the City's view of LU 6.5.6 to be arbitrary.  

He added: "It is improper for courts to micromanage these sorts of finely tuned questions of policy and strategy that are left unanswered by the general plan.  Cities are free to include clear, substantive requirements in their general plans, which will be enforced by the courts.  But courts should not invent obligations out of thin air."

The Case:

Banning Ranch Conservancy v. City of Newport Beach, No. G049691 (May 20, 2015) 

The Lawyers:

For Banning Ranch Conservancy (Plaintiffs and Appellants): John G. McClendon, Leibold McClendon & Mann,

For City of Newport Beach (Defendants and Appellants): Whitman F. Manley, Remy, Moose & Manley,

For Newport Banning Ranch LLC (Real Party in Interest): Susan K. Hori, Manatt, Phelps & Phillips,

For Coastal Commission (Amicus Curiae): Jamee Jordan Patterson, Deputy Attorney General,