Two recent appellate court rulings appear to have clarified aspects of the California Environmental Quality Act and may have even broken new legal ground.

One case involved the project description in an environmental impact report and in public notices. The court held that the identity of the proposed project’s end user did not have to be disclosed.

The other case contained a lengthy discussion about how to address a proposed project’s impact on a community’s jobs-housing ratio. In that case, the court offered deference the city’s handling of the issue and provided guidance to other jurisdictions that address jobs-housing ratios in environmental studies.

The first case was from the Town of Apple Valley, in San Bernardino County’s high desert. In October 2001, Pluto Development submitted an application for a 1.2-million-square-foot distribution center on 300 acres at the corner of Dale Evans Parkway and Johnson Road. Eight months later, the City Council certified an EIR for the project, adopted a statement of overriding considerations because seven environmental impacts could not be fully mitigated, and approved the project.

In July 2002, a group called Maintain Our Desert Environment (MODE) sued the city for failing to comply with CEQA. San Bernardino Superior Court Judge John Wade halted construction of the project briefly, but ultimately he ruled for the city. MODE appealed, but a unanimous three-judge panel of the Fourth District Court of Appeal, Division Two, upheld the lower court.

Two key issues in the case were tied together: Whether the project opponents had exhausted their administrative remedies, and the adequacy of the project description. The environmental documents did not identify who would use the distribution center. In fact, Pluto Development is simply an arm of Wal-Mart.

MODE and the state attorney general argued that public notices and the EIR’s project description were incomplete and misleading because they did not identify Wal-Mart as the user of the proposed facility. “Not a lot of people knew what was going on until after the fact,” explained Raymond Johnson, MODE’s attorney. He contended that the city hid Wal-Mart’s identity to minimize public comment. And, because fewer issues had been raised during the administrative process, MODE had fewer issues to pursue in court because the group could not litigate over issues that were not part of the administrative review.

But the court ruled that the project description passed muster under CEQA. The statute requires public notices to contain a “brief description of the proposed project.”

“The key word here is ‘brief,’” Presiding Justice Manuel Ramirez wrote for the court. “[I]n choosing to use that word, the Legislature suggested that the project description contained in the public notice need not be as extensive as the description in the EIR itself, but need only be a brief, compact summary without elaboration or detail.”

The attorney general argued that the project description in the EIR itself was inaccurate because it identified Pluto, and not Wal-Mart, as the project proponent.

“That argument fails to note the difference between a project proponent/developer and a project user/tenant,” Ramirez wrote. “If CEQA was to be interpreted as the attorney general suggests, no such projects could ever proceed until all potential users/tenants were identified and subsequently investigated by the lead agency. In addition to being completely impractical, this interpretation finds no support in the sphere of law and regulation encompassed by CEQA.”

Ramirez cited Friends of Davis v. City of Davis, (2000) 83 Cal.App.4th 1004 (see CP&DR Legal Digest, October 2000), in which the court ruled that the identification of Borders bookstore as the tenant of a proposed project was not enough to trigger additional environmental review. “So long as the project is approved, CEQA has no concern about who uses it,” Ramirez wrote.

The attorney general and MODE argued that withholding Wal-Mart’s name resulted in less than the “full disclosure” required by CEQA. But the court held that the full disclosure requirement applies only to environmental impacts. “Therefore, in order to demonstrate that CEQA requires disclosure of the identification of the end user of a project, it is incumbent upon MODE and the attorney general to demonstrate that the identity implicates potential physical environmental impacts,” the court ruled.

But MODE attorney Johnson said the court’s argument is circular: To demonstrate that a specific user will have an environmental impact, the public must know who the user is. If the public does not know, it cannot make a case. Johnson contended that Wal-Mart’s policies for delivery are different from other companies’ and results in large numbers of trucks parking around distribution centers.

Johnson also complained because the court upheld the EIR’s traffic analysis, which was based on traffic at an unnamed “similar facility” and not on the Institute of Transportation Engineers’ figures that are typically used.

“Effectively what the court is saying … is that even though you know who the proponent is, you don’t have to disclose that proponent,” Johnson complained. “And you don’t have to use industry standards for evaluating impacts. You can use another facility owned by the same proponent … with no way of being able to check it.”

But Neal Singer, the city’s attorney, said the project opponents were trying to build too much into the project description requirement. “The administrative record was bad for them,” Singer said. So opponents argued that the project description should excuse them from the normal requirements for getting everything in the administrative record, he said.

“There are all kinds of reasons for submitting projects,” Singer added. “If you had to know the end user every time, it would be pretty cumbersome,”

MODE has asked the state Supreme Court to review the case.

The second case came from the City of Irvine and involved the city’s general plan amendment and zoning change for the 7,743-acre “northern sphere,” near the former El Toro Marine Corps base. The city approved the northern sphere plan and an EIR in June 2002. The environmental group Defend the Bay sued, alleging, among other things, that the project would exacerbate employment-rich Irvine’s jobs-housing imbalance. A trial court ruled for the city. Defend the Bay appealed but the Fourth District, Division Three, upheld the lower court.

The city’s plan called for development that would eventually create 17,667 jobs and 12,350 housing units, for a ratio of about 1.44 to 1. Defend the Bay argued that there was insufficient evidence for the EIR’s conclusion that the project would not worsen Irvine’s housing shortage. The EIR said that the project would actually improve the city’s jobs-housing balance because other projects have jobs-housing ratios of up to 8.2 to 1. Plus, the EIR stated, there is “considerable future housing growth” planned in South Orange County and the area is “expected to remain housing rich through 2025” with overall jobs-housing ratios in different areas of 1.05 to 1 and 1.28 to 1.

“The evidence supports the no-adverse-impact conclusion for the current project,” Justice William Bedsworth wrote for the Fourth District. “Needed housing will be added, the city-wide imbalance of more jobs than housing will be ameliorated, and the shortfall in housing within the city will be made up by plentiful housing in adjacent communities. Whether we would agree that more jobs than housing is an adverse impact is not the question, and it is not our function to second-guess the city’s decision. Rather, our role is to determine if the conclusion reached by the city has support in the record. It does.”

Defend the Bay argued that the project was inconsistent with the city’s general plan, which calls for “balanced residential and nonresidential development throughout the city.” The group also contended the EIR’s alternatives analysis and statement of overriding consideration were inadequate because they did not recognize the project’s housing imbalance. The court rejected these contentions.

“Defend the Bay sees an inconsistency here because the project creates more jobs than housing and adds to the city’s housing shortage,” Bedsworth wrote. “Thus, it says, there is no balance between jobs and housing. This is semantic manipulation. We are not dealing with the assaying of minerals here. Balance does not require equivalence, but rather a weighing of pros and cons to achieve an acceptable mix. The general plan requires the city to ‘strive to improve’ the jobs-housing relationship. This project clearly does so. That Defend the Bay would strike a different balance than the city does not mean the project is inconsistent with the policies at issue.”

Jeffrey Melching, the city’s lawyer, said the decision is useful because it says that blind adherence to a certain jobs-housing ratio is unnecessary. The court also said it was acceptable for the city to consider regional housing conditions.

“I think it’s the first case in California that has a discussion in great detail of the jobs-housing ratio,” Melching said. “It really set out a guideline for how you’re going to look at jobs-housing balance questions.”

Interestingly, Defend the Bay and the Irvine Company (the real party in interest) asked the court to dismiss the case after oral arguments were conducted because they had reached a settlement. The court declined to dismiss the matter, though. “Whether a public entity can approve a development project that creates more jobs than housing is a matter of public interest and likely to recur,” Bedsworth wrote in a footnote.

The city was not a party to the settlement, Melching said. The fact that the city rezoned 227 acres in the northern sphere from a medical and science designation to residential “had nothing to do with the settlement. In fact, it predated the settlement,” he said.

First Case:
Maintain Our Desert Environment v. Town of Apple Valley, No. E033904, 04 C.D.O.S. 6060, 2004 DJDAR 8195. Filed June 10, 2004. Ordered partially published July 2, 2004.
The Lawyers:
For MODE: Raymond M. Johnson, Johnson & Sedlack, (909) 506-9925.
For Apple Valley: M. Neal Singer, Singer & Coffin, (949) 863-1224.
For Pluto Development: Jennifer Guenther, Gresham, Savage, Nolan & Tilden, (909) 684-2171.

Second Case:
Defend the Bay v. City of Irvine, No. G032062, 04 C.D.O.S. 5877, 2004 DJDAR 7965. Filed June 29, 2004.
The Lawyers:
For Defend the Bay: Kevin K. Johnson, Johnson & Hanson, (619) 696-6211.
For the city: Jeffrey Melching, Rutan & Tucker, (714) 641-5100.
For the Irvine Company: Christopher Garrett, Latham & Watkins, (619) 236-1234.