High Court Addresses CEQA

In 2010, the state Supreme Court issued two decisions - Committee for Green Foothills v. Santa Clara County Bd. of Supervisors, (2010) 48 Cal. 4th 32 (2010), and Stockton Citizens for Sensible Planning v. City of Stockton, 48 Cal. 4th 481 (2010) - that emphasized that the filing of a Notice of Determination (NOD) or a Notice of Exemption (NOE), respectively, triggers the short statutes of limitations imposed by the California Environmental Quality Act (CEQA), regardless of the nature of the alleged CEQA violation. In so doing, the Supreme Court reiterated the purpose of CEQA's short limitations periods, which are designed in part to "prevent stale claims, give stability to transactions, protect settled expectations, promote diligence, encourage the prompt enforcement of substantive law, and reduce the volume of litigation." Stockton Citizens at 499.

On Sept. 14, in its decision in Coalition for Clean Air v. City of Visalia, 2012 DJDAR 13043, the 5th District Court of Appeal held that in order for an NOE to trigger CEQA's 35-day statute of limitations, it must be facially valid and properly filed, and an NOE filed before the final approval of a proposed project is invalid and does not trigger CEQA's short statute of limitations.

In Coalition for Clean Air, plaintiffs (a coalition of two nonprofit corporations, an unincorporated association, a local resident and an Oakland-based labor union) challenged the city's approval of a large distribution facility, alleging in part that the approval violated CEQA because the NOE was filed five days before approval of the project. Real party in interest developer filed a demurrer, arguing that the CEQA claims were barred by the 35-day statute of limitations provided in Public Resources Code Section 21167(d). The trial court, citing Stockton Citizens, agreed that the CEQA cause of action was time-barred because it was filed 55 days after the NOE was filed, and sustained the demurrer without leave to amend. Plaintiffs appealed.

In a portion of the opinion certified for publication, the 5th District reversed and remanded the trial court's ruling on the demurrer. The appellate court first recognized that in demurrer proceedings, the complaint's factual allegation that the NOE was filed five days before project approval must be accepted as true; thus, the only issue at this stage was whether an NOE filed before project approval triggered the 35-day statute of limitations. More particularly, the parties agreed that issue on appeal was whether the NOE complied with the requirements set forth in CEQA Guidelines Section 15062, which is a prerequisite to triggering the 35-day limitations period set forth in Section 21167(d). CEQA guidelines, Section 15112(c).

Real party in interest developer argued that an NOE complies with Guidelines Section 15062 if it is "facially valid," based on the state Supreme Court's reference in Stockton Citizens to a "facially valid and properly filed NOE" triggering the 35-day limitations period. Stockton Citizens at 489. The developer argued that an NOE is facially valid if it contains the information required by Guidelines Section 15062, subdivision (a)(1) through (5), while plaintiffs argued that Guidelines Section 15062, subdivisions (a) and (b) require that an NOE be filed after approval of the project.

After analyzing Section 15062, which contains express references to filing NOEs after project approval, the appellate court held: "This mandatory language plainly means that a notice of exemption filed before project approval does not comply with Guidelines section 15062. It follows that filing a notice of exemption before project approval does not begin the running of the 35-day limitations period set forth in section 21167, subdivision (d)."

The appellate court rejected real party developer's argument that County of Amador v. El Dorado County Water Agency, 76 Cal. App. 4th 931 (1990), which also concluded that an NOE cannot be filed before project approval, was overruled by Stockton Citizens. The court explained that references in Stockton Citizens to the requirement that the NOE be "facially valid and properly filed" before triggering the statute of limitations indicated the state Supreme Court's belief that an NOE filed before project approval cannot satisfy this requirement.

The appellate court also cited dicta from Stockton Citizens regarding the impropriety of filing an NOE in advance of project approval: "Nor does this mean that the agency may therefore file an NOE [in advance] of an actual project approval, then proceed unmolested to approve the project at its leisure, free of environmental challenges." Stockton Citizens at 501, n.10. The 5th District regarding this statement as dicta because Stockton Citizens involved an NOE filed after project approval.

It is worth noting that although Coalition for Clean Air addresses NOEs, it cites with approval a widely-used CEQA treatise that applies the same "file after project approval" rule to NODs. Moreover, CEQA Guideline Section 15062's provisions regarding filing an NOE after project approval for NOEs are similar to CEQA Guideline Section 15075 that describes the requirements for NODs.

Therefore, it is imperative for anyone involved in the entitlement process to understand the substantive and procedural filing requirements for NOEs and NODs. The short statutes of limitations created by the proper filing of either of these notices truncate the risk of a CEQA-based lawsuit, but only if the notice is properly filed.