California Supreme Court Strictly Interprets State Fully Protected Species Statute and Finds Greenhouse Gas Emissions Analysis Inadequate in Newhall Ranch EIR

December 2, 2015

On Monday, the California Supreme Court issued its third opinion of 2015 interpreting the California Environmental Quality Act (“CEQA”).  In the majority opinion in Center for Biological Diversity v. California Department of Fish and Wildlife – authored by Justice Werdegar and joined by four other justices (including all three of Governor Brown’s appointees) – the Court invalidated the greenhouse gas emissions analysis in an environmental impact report (“EIR”) prepared by the California Department of Fish and Wildlife (“CDFW”) for a major residential development in Southern California.  The Court also determined that the EIR’s mitigation measures related to a fully protected species were invalid under the state Fish and Game Code and rejected CDFW’s argument that petitioners failed to exhaust their administrative remedies on certain other claims.

The EIR at Issue

The EIR was prepared for the proposed Newhall Ranch development in northern Los Angeles County, to the west of Santa Clarita.  The development would consist of over 20,000 dwelling units housing nearly 58,000 residents, and would also include commercial uses, schools, parks, golf courses, and other facilities.  The document was prepared by CDFW in conjunction with the United States Army Corps of Engineers, and it functioned as an environmental impact statement (“EIS”) under the National Environmental Policy Act (“NEPA”), as well as an EIR under CEQA  – i.e., a “joint EIR/EIS” (federal NEPA review was required because the project infrastructure requires permits from federal agencies).

The draft EIR was issued in April 2009, and the final EIR was issued in June 2010.  Among other things, the EIR determined that: (1) taking into account the project’s design and the existing regulatory standards, the project’s greenhouse gas emissions would have a less than significant impact on the global climate; and (2) the project could significantly impact the unarmored threespine stickleback, a fish that is fully protected under the state Fish and Game Code, but mitigation measures adopted by CDFW would avoid or reduce that impact below a level of significance.  CDFW certified the EIR and approved the project in December 2010.  Petitioners challenged the EIR, and the trial court ruled for petitioners on several grounds.  The Court of Appeal reversed, upholding CDFW’s actions under CEQA.

The Supreme Court’s Ruling on Greenhouse Gas Emissions Analysis

On the greenhouse gas (“GHG”) emissions issue, the Supreme Court affirmed that CDFW did not abuse its discretion in adopting consistency with AB 32’s goal – a statewide reduction in GHG emissions to 29 percent below “business as usual” levels” in 2020 – as the criterion for determining the significance of the project’s GHG emissions.  However, the Court agreed with petitioners that CDFW did abuse its discretion in finding that the project’s GHG emissions would have no cumulatively significant impact on the environment, because there was no substantial evidence in the administrative record showing that the project’s project-level reduction (of 31 percent below “business as usual” levels) was consistent with achieving AB 32’s statewide goal of a 29 percent reduction below those levels.  The Court held that this “analytical gap” deprived the EIR of its sufficiency as an informative document, in violation of CEQA, and noted that “a greater degree of reduction may be needed from new land use projects” in order to achieve the statewide goal of 29 percent.

However, the Court did not provide a clear pathway by which CDFW – or any other lead agency preparing an EIR – could cure the defect identified by the Court.  The opinion does state that, “[w]hile the burden of CEQA’s mandate in this context can be substantial, methods for complying with CEQA do exist,” and then offers some “potential options” for CDFW and other lead agencies to consider (e.g., consistency with regional climate action plans or sustainable communities strategies).  Yet before even describing these options, the Court sets forth a serious disclaimer:  “We do not, of course, guarantee that any of these approaches will be found to satisfy CEQA’s demands as to any particular project; what follows is merely a description of potential pathways to compliance, depending on the circumstances of a given project.”

In addition, the Court cast doubt on whether a lead agency preparing an EIR today or in the near future could even rely on the AB 32 significance criterion it blessed in this case:

Nevertheless, over time consistency with year 2020 goals will become a less definitive guide, especially for longterm projects that will not begin operations for several years. An EIR taking a goal-consistency approach to CEQA significance may in the near future need to consider the project‘s effects on meeting longer term emissions reduction targets.

The Court’s Rulings on Fully Protected Species and Exhaustion

On the species issue, the Court strictly interpreted the state’s Fully Protected Species statutes and held that the mitigation measures in the EIR providing for collection and relocation of the three-spined unarmored stickleback during project construction were invalid, because Fish and Game Code section 5515(a)(2) specifically prohibits the “take” of fully protected fish.  Under the Fully Protected Species statutes, which are separate and apart from the California Endangered Species Act, the definition of “take” includes to “pursue,” “catch,” or “capture” fully protected species—here, the stickleback.  The EIR’s mitigation called on the agencies to essentially catch stickleback that might be harmed by construction activities and move them to a location more conducive to their recovery.  CDFW argued that such mitigation did not run afoul of the Fully Protected Species statutes because it promotes “conservation” of the species.  The Court disagreed, providing a literal interpretation of the Code:  to “pursue,” “catch,” or “capture” really means to pursue, catch, or capture, whatever the purpose.

Finally, the Court held that petitioners had, under Public Resources Code section 21177(a), adequately preserved two other challenges to the EIR by raising the disputed issues in letters submitted during a public comment period on the final EIR/EIS noticed by the United States Army Corps of Engineers pursuant to NEPA.  The Court acknowledged that the comments were not made during the earlier CEQA-mandated period for comments on the draft EIR/EIS, and that CEQA does not require a comment period for a final EIR.  However, the record demonstrated that CDFW effectively treated the federal comment period as an opportunity to receive additional comments on CEQA issues, by independently reviewing the comments, helping to draft responses and related EIR/EIS revisions, and including those responses and revisions in the final version of the EIR/EIS that the agency certified.  The Court held that, in these circumstances, the purpose of CEQA’s requirement for exhaustion of administrative remedies had been served.

The Concurring and Dissenting Opinions

The majority opinion garnered significant criticism from the two justices who did not join in it, particularly with respect to the Court’s rejection of the GHG analysis.

Justice Corrigan issued a concurring and dissenting opinion, joining in most of the majority opinion, but finding that the Court’s rejection of CDFW’s GHG analysis was inconsistent with the deferential standard of review applied by courts when reviewing EIRs (the “substantial evidence” standard).

Justice Chin penned a strong dissent, stating that he would affirm the Court of Appeal’s decision.  Expressing concern that “CEQA is not meant to cause paralysis,” the dissent notes that the EIR is “one of the longest ever prepared under CEQA” that “does just what it is supposed to do.  It has fully informed those who are entrusted to make the decisions, as well as the general public, of the project’s environmental impacts.” With respect to the majority’s ruling on CDFW’s analysis of GHG emissions, Justice Chin noted the absence of any expert or regulatory consensus regarding the appropriate methodology, found the majority’s criticism of the analysis to be “unduly hyper technical,” and, like Justice Corrigan, argued that such criticism was inconsistent with substantial evidence review.

Analysis

This marks only the second CEQA decision from the Court since Governor Brown’s two most recent appointees joined the bench (the other being City of San Diego v. Board of Trustees of the California State University).  The new Court invalidated EIRs in both cases, possibly marking a new era of stricter judicial scrutiny over agency actions.  In any event, this decision has broad ramifications for CEQA review of projects, going forward.

Prior to the Court’s decision, there was already significant scientific and legal uncertainty regarding the appropriate analysis of greenhouse gas emissions in an EIR or other CEQA document.  The Court’s ruling only adds to that uncertainty – and the associated litigation risk for projects that are controversial.  Lead agencies and project proponents will need to ensure that the significance criteria considered for use – including the AB 32 threshold – are carefully evaluated for appropriateness, given the nature and timing of the project.  Moreover, the impacts analysis will need to be thoroughly discussed and disclosed in the CEQA document, to avoid a successful claim of an “analytical gap.”  Ultimately, it will take many more appellate decisions before a clearer picture emerges on how to comply with CEQA on this important issue.  Ironically, 2020 will likely arrive before that happens.

Moreover, the Fully Protected Species statutes have previously received little attention from plaintiffs or the courts, despite their breadth.  The Court’s ruling here will increase the scrutiny – and the likelihood of writ litigation – by opponents of projects with impacts on fully protected species.  As a result, CDFW (and perhaps other agencies) will now be required to take a much harder look at possible impacts to such species, to ensure they do not run afoul of the Code’s “take” provisions.