The California Environmental Quality Act (CEQA) requires a lead agency, as defined, to prepare, or cause to be prepared, and certify the completion of, an environmental impact report on a project that it proposes to carry out or approve that may have a significant effect on the environment or to adopt a negative declaration if it finds that the project will not have that effect. CEQA also requires a lead agency to prepare a mitigated negative declaration for a project that may have a significant effect on the environment if revisions in the project would avoid or mitigate that effect and there is no substantial evidence that the project, as revised, would have a significant effect on the environment.

CEQA authorizes specified entities to file and maintain with a court an action or proceeding to attack, review, set aside, void, or annul an act of a public agency on grounds of noncompliance with the requirements of CEQA.

Existing law authorizes a court, upon motion, to award attorneys fees to a successful party in an action that resulted in the enforcement of an important right affecting the public interest under specified conditions.

This bill would require a plaintiff or petitioner, in an action brought pursuant to the provisions of CEQA, to disclose specified information regarding the plaintiff or petitioner in the complaint or petition or in a subsequent notice. The bill would require disclosure of the identity of a person or entity that contributes in excess of $100 dollars, as specified, toward the plaintiffs or petitioners costs of an action. The bill would provide that a failure to provide this disclosure shall be grounds for dismissal of the action by the court or, if the failure occurs during a postjudgment proceeding, the denial of attorneys fees for a successful plaintiff or petitioner. The bill also would require the plaintiff or petitioner to identify any pecuniary or business interest related to the project or issues involved in the action of any person or entity named as a plaintiff or petitioner or that contributes in excess of $100 to the costs of the action, as specified.

SENATE COMMITTEE ON

Senator , Chair

Bill No:

SUBJECT:

ANALYSIS:

Existing law, under the California Environmental Quality Act (CEQA),

1. Requires lead agencies with the principal responsibility for carrying out or approving a proposed discretionary project to prepare a negative declaration, mitigated negative declaration, or environmental impact report (EIR) for this action, unless the project is exempt from CEQA (CEQA includes various statutory exemptions, as well as categorical exemptions in the CEQA Guidelines). (Public Resources Code (PRC) §21000 et seq.)
   
2. Requires litigation under CEQA be handled under specified time limits and criteria. (PRC §21167 et seq.)
   

This bill:

1. Requires a plaintiff or petitioner, in an action brought pursuant to CEQA, to disclose specified information regarding the plaintiff or petitioner in the complaint or petition or in a subsequent notice.
   
2. Requires disclosure of the identity of a person or entity that contributes more than $100, as specified, toward the plaintiff’s or petitioner’s costs of an action.
   
3. Provides that a failure to provide this disclosure is grounds for dismissal of the action by the court or, if the failure occurs during postjudgment proceeding, the denial of attorneys’ fees for a successful plaintiff or petitioner.
   
4. Requires the plaintiff or petitioner to identify any pecuniary or business interest related to the project or issues involved in the action of any person or entity named as a plaintiff or petitioner or that contributes in excess of $100 to the costs of the action, as specified.
   

Background

1. CEQA: Environmental review process.
   
   CEQA provides a process for evaluating the environmental effects of a project, and includes statutory exemptions as well as categorical exemptions in the CEQA guidelines. If a project is not exempt from CEQA, an initial study is prepared to determine whether a project may have a significant effect on the environment. If the initial study shows that there would not be a significant effect on the environment, the lead agency must prepare a negative declaration. If the initial study shows that the project may have a significant effect on the environment, then the lead agency must prepare an Environmental Impact Report (EIR).
   
   Generally, an EIR must accurately describe the proposed project, identify and analyze each significant environmental impact expected to result from the proposed project, identify mitigation measures to reduce those impacts to the extent feasible, and evaluate a range of reasonable alternatives to the proposed project. Prior to approving any project that has received an environmental review, an agency must make certain findings. If mitigation measures are required or incorporated into a project, the agency must adopt a reporting or monitoring program to ensure compliance with those measures.
   
   If a mitigation measure would cause one or more significant effects in addition to those that would be caused by the proposed project, the effects of the mitigation measure must be discussed but in less detail than the significant effects of the proposed project.
2. CEQA litigation: legal enforcement.
   
   CEQA is a self-executing statute. Enforcement of CEQA is primarily through a civil lawsuit challenging a project’s environmental review. Plaintiffs may include private individuals, organizations, and public agencies. In addition, the California Attorney General has the authority to bring a suit for the purpose of enforcing compliance with CEQA.
   
   Examples of CEQA litigation issues include: whether an activity is considered a “project” pursuant to the act if an exemption applies to a project; the type of environmental review that should be required – whether a “fair argument” can be made that a project has potential significant impacts; adequacy of an EIR such as inadequate analysis of an issue area or cumulative impacts; and, procedural compliance like failure to consult with a responsible agency.
   
   In general terms, there are a few remedies available when a court finds a CEQA violation. First, the court may order the defendant agency to comply with the act. Second, the court may void the agency action, or portions thereof. Lastly, the court may suspend all agency and pertinent project actions that could have an environmental impact until CEQA compliance is completed.
   
3. Freedom of association.
   
   Freedom of association is the right to become a member of or depart from a group of a person’s own choosing, and for the group to take collective action to pursue the interests of its members – freedom of association is considered both an individual right and a collective right. The right to associate is not an independent constitutional right but is derived from the First Amendment guarantees of freedom of speech and expression.
   
   Freedom of association as a concept grew out of a series of cases in the 1950s and 1960s in which certain states were attempting to curb the activities of the National Association for the Advancement of Colored People (NAACP). In NAACP v. Alabama ex rel. Patterson, 357 U.S. 449, 78 S.Ct. 1163, 2 L. Ed. 2d 1488 (1958), the U.S. Supreme Court held that a lower court’s order compelling members of the NAACP to disclose records containing the names and addresses of its Alabama members violated the group’s right to associate freely. “It is beyond debate that freedom to engage in association for the advancement of beliefs and ideas is an inseparable aspect of ‘liberty’ assured by the Due Process Clause of the Fourteenth Amendment, which embraces freedom of speech…Of course, it is immaterial whether the beliefs sought to be advanced by association pertain to political, economic religious or cultural matters, and state action which may have the effect of curtailing the freedom to associate is subject to the closest of scrutiny.” (Ibid at 460-461). The Court also held that “[e]ffective advocacy of both public and private points of view, particularly controversial ones, is undeniably enhanced by group association, as the Court has more than once recognized by remarking upon the close nexus between the freedoms of speech and assembly.” (Ibid at 460). The Court recognized freedom of association as an adjunct to the NAACP’s free speech rights and held that the freedom to associate for the advancement of beliefs and ideas is inseparable from the freedom of speech.

Comments

1. Purpose of Bill.
   

According to the author:

Transparency is a hallmark of good government. This bill would prevent those who seek an unfair business competition advantage or have ulterior motives, from improperly hiding behind [CEQA] to block a project through litigation. Simply, this bill would require full disclosure of all participating parties in CEQA litigation and remove anonymity from those who file under the pseudonyms of unincorporated associations. This bill will also require disclosure of any party that has financially contributed to CEQA litigation, as is required in attorney fee motions and amicus filings and similar to campaign finance disclosure laws.

State law allows wide discretion for environmental lawsuits with private-party litigation alleging improper analyses and approval processes. Inasmuch as these kinds of lawsuits may have a legitimate basis, many litigants have non-environmental reasons for suing on a project under CEQA and will sue on projects that are designed to advance California’s rigorous environmental goals.

A recent study showed that about half of CEQA lawsuits are on taxpayer projects with no “business” interests. For CEQA lawsuits targeting construction projects, 80% of them are on infill projects. Plaintiffs who challenge projects under CEQA typically file “kitchen-sink” complaints that include every conceivable legal theory or cause of action that could provide a basis for a judge to set aside a project. In many instances, plaintiffs may organize under an umbrella group to remain anonymous in their litigation as to not be identified in the process.

CEQA was designed to “Ensure that the long-term protection of the environment, consistent with the provision of a decent home and suitable living environment for every Californian, shall be the guiding criterion in public decisions.” It fails when even the smallest of irrelevant lawsuits with ulterior motives can delay or stop the building of homes and businesses in our communities.

1. Fundamental right: Freedom of association: Does this bill conflict?
   
   Almost 60 years ago in NAACP v. Patterson, the U.S. Supreme Court observed how “effective advocacy of both public and private points of view, particularly controversial ones, is undeniably enhanced by group association.” In that case, the Court struck down an effort by the State of Alabama to require the NAACP to disclose its membership lists, noting that it was “hardly a novel perception that compelled disclosure of affiliation with groups engaged in advocacy may constitute [an] effective restraint on freedom of association,” and along with it freedom of speech.
   
   In regards to this bill, questions arise – Would the mandatory disclosure of membership lists by groups who seek redress in the courts similarly undermine the public’s ability to freely take part in the CEQA review process? Would neighbors become fearful of speaking out against projects they opposed if they thought they could be individually identified and subjected to pressure by project proponents? This is a dangerous prospect, and one that should be avoided.
   
2. Does focusing on the “who” take away from the “what”?
   
   Calls by some reformers for “transparency” in the CEQA process want to require parties who file CEQA lawsuits to identify who they are, what their interests are, and attest that they are not using CEQA to advance some ulterior motive. However, this bill could create more problems than it solves by potentially creating an incentive for defendants to spend time and money to pick apart a petitioner’s motives rather than focus on the matter at hand – whether they complied with the law. Also, does this bill create an intimidation tactic to discourage individuals from opposing a project? The committee may wish to consider that although this bill may be well-intentioned, SB 1248 could fundamentally undermine public participation in the review process.
   
3. Basis of this bill.
   
   The author bases this bill on information from a study, In the Name of the Environment, by Holland & Knight law firm. However, concern has been raised that “the report uses questionable methodology to support conclusions that cannot be substantiated.” (Shute, Mihaly & Weinberger, LLP, “Setting the Record Straight on CEQA,” 2016).
   
   For example, the author notes that for CEQA lawsuits targeting construction projects, 80% of them are infill projects. The report defines infill projects as “private and public sector projects located entirely within one of California’s 482 cities, or located immediately adjacent to existing developed areas in an unincorporated county.” Sean Hecht, co-executive director of the Emmett Institute on Climate Change and the Environment, UCLA School of Law, states, “The report’s analysis of CEQA’s impact on infill is thus so flawed as to be useless…[T]his report considers any project, of any type, located within the boundaries of any California city, or next to development outside a city, to be an ‘infill project.’ Under this definition, it is unsurprising that most CEQA cases would involve ‘infill.’ In fact, it would be surprising if any significant number did not!...Unsurprisingly, the definition includes projects that virtually no one would recognize as ‘infill’ under any common definition.” (Sean Hecht, “Anti-CEQA Lobbyists Turn to Empirical Analysis, But Are Their Conclusions Sound?” Legal Planet: Insight & Analysis: Environmental Law and Policy, September 28, 2015).
   
   Professor Hecht further states, “The report assembles a nearly-complete census of virtually all CEQA cases filed in California trial courts during the three-year period 2010 through 2012, and concludes – in heavy-handed rhetoric – that CEQA is typically not used to protect the environment, but actually harms the environment (and the economy). But despite the impressive quantity of data amassed for the report, my major takeaway is that the report’s own dataset…does not support its conclusions. This report should not be used to inform future policy.”
   
4. CEQA litigation.
   
   It is not unusual for certain interests to blame CEQA lawsuits for causing problems to a project. However, it should be noted that the only tool for enforcing CEQA is litigation. Those citing CEQA litigation as a problem do not indicate the result of that litigation. For example, were significant impacts that were not evaluated in the initial document ultimately addressed? What would have been the result if those impacts had not been mitigated (e.g., flooding, exposure of people to hazards, inadequate public services, congestion)?
   
   The total number of CEQA cases filed averages about 200 cases per year statewide and make up approximately 0.02% of 1,100,000 civil cases filed annually in California.
   
   The California Attorney General’s office conducted a case study of CEQA challenges in the City and County of San Francisco from July 2011 through December 2011 and found that 18 lawsuits were filed out of 5,203 projects considered under CEQA.
   
   According to the Natural Resources Defense Council, a review of CEQA challenges in the City of Los Angeles from January 2011 through July 20, 2012, shows that of 1,182 projects reviewed under CEQA, 18 were challenged, which is a litigation rate of 1.5%.
   
   In addition, a question arises as to how prevalent CEQA litigation is among public works projects. For example, the Department of Transportation (Caltrans) provided the following numbers related to Caltrans projects subject to CEQA and CEQA litigation:
   

Number of Caltrans projects subject to CEQA:

• FY 11/12: 643 projects
• FY 12/13: 566 projects
• FY 13/14: 665 projects
• FY 14/15: 725 projects
  

Types of environmental review required for Caltrans projects:

• Exempted from CEQA: 90% of projects
• Negative Declaration(ND)/Mitigated ND: 8% of projects
• EIR: 2% of projects

Number of Caltrans CEQA-related cases:

• FY 11/12: 3 cases
• FY 12/13: 2 cases
• FY 13/14: 4 cases
• FY 14/15: 0 cases
  

Although certain interests believe CEQA litigation to be a swathing impediment to some projects, the numbers above seem to indicate otherwise. And if a project is the subject of litigation, perhaps the cause of action has merit and ensures compliance with the law. The volume of CEQA litigation is low considering the thousands of projects subject to CEQA each year as well as the volume of civil litigation in general statewide.

1. Conclusion.
   
   As noted above, questions arise as to whether this bill infringes on a person’s fundamental right of freedom of association, whether focusing on who is suing takes away from enforcement efforts to comply with the law, and how prevalent CEQA litigation actually is. Considering the issues raised above, the Committee may wish to consider the need for this bill.
   

DOUBLE REFERRAL:

If this measure is approved by the Senate Environmental Quality Committee, the do pass motion must include the action to re-refer the bill to the Senate Judiciary Committee.

SOURCE:

Author

SUPPORT:

California Chamber of Commerce

Civil Justice Association of California

Readymix Concrete, Asphalt & Aggregate

OPPOSITION:

California League of Conservation Voters

Sierra Club California

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