Environmental review can be separated from project approval

A recurring issue in land use litigation is an argument advanced by project opponents that environmental review under the California Environmental Quality Act cannot be "segregated" from the project approval. I have confronted this issue both as a deputy city attorney for the city of San Diego and now in private practice representing developers. While some of these claims are still working their way through the trial courts, at least two are pending before the Court of Appeal and one was recently decided by the 4th District.

The general argument by petitioners is that a public agency cannot "separate," "bifurcate" or "divorce" environmental review (e.g., certifying an environmental impact report, adopting a negative declaration or mitigated negative declaration, or determining a project is exempt) from the project approval (i.e., granting the entitlements necessary for the development to proceed). This theory stems from the following oft-quoted language in POET v. California Air Resources Board, 218 Cal. App. 4th 681, 731 (2013): "For an environmental review document to serve CEQA's basic purpose of informing governmental decision makers about environmental issues, that document must be reviewed and considered by the same person or group of persons who make the decision to approve or disapprove the project at issue." In POET, the court held the agency violated CEQA when it "gave the responsibility for completing the environmental review process" to a director who "did not have the authority to approve or disapprove the project." Particularly concerning was the director's inability to "alter" the project to address the environmental issues. The POET court held this violated CEQA.

Because CEQA does not dictate the procedure by which public agencies conduct their environmental review or entitlement approval, every agency's process is different. And because every permit challenged has its own protocol for approval, the arguments made by petitioners vary. In some instances, petitioners challenge entitlements approved by agency staff without any hearing. In other actions, petitioners challenge entitlements approved by the elected decisionmaking body after notice and public hearing. The corollary environmental challenges also vary as some environmental determinations are made at a low staff level (such as a "within the scope" analysis under a program environmental impact report) while others are decided at higher levels (such as mitigated negative declaration approvals or environmental impact report certifications). To complicate matters further, a petitioner may appeal an environmental determination but not the project approval and vice versa. What ultimately ends up before the court will therefore depend on the public agency's procedures, the entitlements at issue, and what (if anything) was appealed during the administrative process. Within these variables, the segregation theme emerges.

Despite the nuances, the common core of these claims is illustrated in the recent 4th District decision in Clews Land & Livestock, LLC v. City of San Diego, 19 Cal. App. 5th 161 (2018). In Clews, the city of San Diego hearing officer approved the project (coastal development permit and site development permit) and adopted the environmental document (mitigated negative declaration). Petitioner appealed the project approval to the planning commission, but failed to properly appeal the environmental determination. The planning commission denied the project appeal, reaffirming approval of the permits and refusing to hear the environmental challenge. Petitioner challenged the approval by filing a petition for writ of mandate in San Diego County Superior Court, which was denied and appealed. On appeal, petitioner alleged the city was "improperly splitting" the adoption of the mitigated negative declaration from the project approval. Relying on the POET line of cases, petitioner argued the city's "bifurcated appeal procedures" violate CEQA.

Under Public Resources Code Section 21151(c), "If a nonelected decisionmaking body of a local lead agency certifies an environmental impact report, approves a negative declaration or mitigated negative declaration, or determines that a project is not subject to this division, that certification, approval, or determination may be appealed to the agency's elected decisionmaking body, if any." Pursuant to CEQA Guidelines Section 15185(a), an agency may establish its own procedures for environmental appeals. The city's procedures for appeal of environmental determinations is set forth in San Diego Municipal Code Section 112.0520. Pursuant to SDMC Section 112.0520(a), any person may appeal an "environmental determination" not made by the city council. (Pursuant to SDMC Section 113.0103: "Environmental determination means a decision by any non-elected City decisionmaker, to certify an environmental impact report, adopt a negative declaration or mitigated negative declaration, or to determine that a project is exempt from CEQA, under CEQA Guidelines section 15061(b).")

Once a timely environmental appeal is filed, the city council's powers under SDMC Section 112.0520(d) are to: (1) deny the appeal, approving the environmental determination or (2) grant the appeal and set aside the environmental determination. If the city council grants the appeal, the lower decisionmaker's project approvals are "held in abeyance" and the city council retains jurisdiction to act on the revised environmental document and project at a subsequent public hearing. SDMC Section 112.0520(e)(1).

After analyzing the city's procedures, the Clews court rejected petitioner's arguments. The court determined that unlike the POET line of cases, the city hearing officer's adoption of a mitigated negative determination for the project "was procedurally proper, since the hearing officer also had the authority to approve the project." Under the SDMC, the hearing officer was city's decisionmaker for the project. Therefore, unlike POET and its progeny, no improper delegation occurred. The court also rejected petitioner's argument that the city's environmental appeal procedures violated CEQA because the planning commission had "authority over the project approvals but not the environmental determination." The court held, "Neither CEQA nor the Guidelines require that a local agency's elected decisionmaking body accept appeals regarding every project approval, separate and apart from environmental review. They require only that the environmental determination be appealable. (§ 21151, subd. (c); Guidelines, §§ 15061, subd. (e), 15074, subd. (f), 15090, subd. (b).) The City's procedures allow exactly that." Thus, had petitioner properly appealed the environmental determination to the city council, the permit approvals would have been held in abeyance and the project could have been altered (if necessary) in accord with the final environmental document.

In sum, environmental review may indeed be separated from project approval so long as the agency's procedures are followed, CEQA's minimal appeal mandates are observed, and the entitlements are not finally granted before the environmental document is certified or adopted.