The California Environmental Quality Act, known as 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 provides that a project that may cause a substantial adverse change in the significance of a historical resource is a project that may have a significant effect on the environment.

This bill would make technical, nonsubstantive changes to this provision.

SENATE COMMITTEE ON ENVIRONMENTAL QUALITY

Senator Wieckowski, Chair

2017 - 2018 Regular

Bill No: SB 1052

SUBJECT: California Environmental Quality Act: judicial challenge: identification of parties and contributors

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 post-judgment proceeding, th e 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. SB 1052 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. Stated simply, this measure would require full disclosure on all lawsuits filed for all parties involved. Removing the existing anonymity from those who file nameless ensures transparency for all.”

The author asserts that SB 1052 is a step in the right direction to fending off outsiders who may not necessarily have any stake in a project or be fighting it for true environmental reasons. This bill will ensure names of all entities involved in a CEQA lawsuit are listed to ensure they have nexus to project and are not simply trying to delay a project for non-environmental impact reasons.”

1. Bias the Court. The author states that the intent of this legislation is to “fend off outsiders who may not necessarily have any stake in a project or be fighting it for true environmental reasons by requiring names of all entities involved in a CEQA lawsuit are listed to ensure they have nexus to project and are not simply trying to delay a project for non-environmental impact reasons.”

Presumably this would require the court to make some sort of pre-judgement about the person(s) nexus based on name, affiliation and location and then further determine if that nexus was legitimate to the case. What standard would be applied to determine who has a valid “environmental” nexus to the suit?

Further, to assert that this pre-judgement or potential pre-judgment by the court to determine nexus would “fend off” some from contributing to a lawsuit would necessitate an assumption that the intent is to discourage parties from participating in a CEQA lawsuit because of the potential threat of a decision against the plaintiffs based on this disclosure of identity not the facts of the case. Should the question to the court be “who is filing the suit?” or should it be “was the law violated?”

1. 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 1052 could fundamentally undermine public participation in the review process.
   
2. 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.

It is not clear from the author’s statement how simply knowing the identity of the person(s) providing funding for a lawsuit ensures that that contributor has a nexus with the project and is not suing for “non-environmental impact reasons.” Further, it is not clear how it would “fend off outsiders.”

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.

1. 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.”
   
2. 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%.
   

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. Déjà vu. This bill is identical to SB 1248(Moorlach, 2016), which failed in the Senate Committee on Environmental Quality on a vote of 2 to 5. The committee was not compelled that requiring disclosure of the identity of entities contributing to a CEQA lawsuit would provide the intended benefit of greater transparency and concurred with the assertion that this type of disclosure resulted in an interference with individuals’ constitutionally protected, First Amendment right to freedom of association.
2. Conclusion. What has changed? As noted, this committee previously voted down this policy just two years ago, what is different today that would warrant moving this bill now?

DOUBLE REFERRAL: SB 1052 is also referred to the Senate Committee on Judiciary. If this bill is approved by the committee, the motion shall be a do pass to the Senate Judiciary Committee.

Related/Prior Legislation

SB 1248 (Moorlach, 2016) would have: 1) required 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; 2) would have required disclosure of the identity of a person or entity that contributes in excess of $100 dollars, as specified, toward the plaintiff’s or petitioner’s costs of an action; 3) 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; 4) 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. SB 1248 failed passage in the Senate Environmental Quality Committee on a vote of 2 to 5.

SB 1341 (Glazer, 2018) requires a plaintiff or petitioner, in an action brought pursuant to the act, to disclose the identity of a person or entity that contributes in excess of $1,000, as specified, toward the plaintiff’s or petitioner’s costs of the action. The bill also requires the plaintiff or petitioner to identify any pecuniary or business interest related to the project of any person or entity that contributes in excess of $1,000 to the costs of the action, as specified, provides that a failure to comply with these requirements may be grounds for dismissal of the action by the court and prohibits an action or proceeding from being brought in the court to attack, review, set aside, void, or annul an act of a public agency for housing projects on grounds of noncompliance with the requirements of the act, as specified.

SB 1341 is due to be heard in the Senate Committee on Environmental Quality on April 18, 2018.

SOURCE:

Author

SUPPORT:

Bill Horn, County Supervisor, County of San Diego

California Apartment Association

California Association of Realtors

Engineering Contractors Association

Strata Equity Group

OPPOSITION:

Sierra Club

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