Date of Hearing: April 22, 2019

ASSEMBLY COMMITTEE ON NATURAL RESOURCES

Laura Friedman, Chair

ABPCA Bill Id:AB 1673 (

Author:Salas) – As Amended Ver:April 11, 2019

SUBJECT: California Environmental Quality Act: judicial challenge: litigation transparency: identification of contributors

SUMMARY: Requires plaintiffs in California Environmental Quality Act (CEQA) lawsuits to identify every person or entity who contributed, or committed to contribute, $1,000 or more to support the lawsuit.

EXISTING LAW:

1. Requires lead agencies with the principal responsibility for carrying out or approving a proposed 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).
2. Authorizes judicial review of CEQA actions taken by public agencies, following the agency's decision to carry out or approve the project. Challenges alleging improper determination that a project may have a significant effect on the environment, or alleging an EIR doesn't comply with CEQA, must be filed in the Superior Court within 30 days of filing of the notice of approval. The courts are required to give CEQA actions preference over all other civil actions.
3. Generally prohibits a person from bringing a CEQA lawsuit unless that person objected to the approval of the project orally or in writing during the public comment period or prior to the close of the public hearing on the project before the filing of the notice of determination.
4. Authorizes a court, upon motion, to award attorney's fees to a prevailing party in any action that has resulted in the enforcement of an important right affecting the public interest, if the following conditions are met: (1) a significant benefit, whether pecuniary or nonpecuniary, has been conferred on the general public or a large class of persons; (2) the necessity and financial burden of private enforcement, or of enforcement by one public entity against another public entity, are such as to make the award appropriate; and (3) those fees should not in the interest of justice be paid out of the recovery, if any.
5. Authorizes a court to order a party, the party’s attorney, or both to pay the reasonable expenses, including attorney’s fees, incurred by another party as a result of bad-faith actions or tactics that are frivolous or solely intended to cause unnecessary delay.
   

THIS BILL:

1. Requires the plaintiff or petitioner in a CEQA lawsuit to identify every person or entity who made a monetary contribution of $1,000 or more, or committed to contribute $1,000 or more, for the preparation of the petition and subsequent action or proceeding.
2. Requires the plaintiff or petitioner to continue throughout the course of the proceeding to identify any person or entity that has made a single or multiple contributions or commitments, the sum of which is $1,000 or more, and that were intended to fund the action or proceeding.
3. Requires the above disclosures to also include the identity of any pecuniary or business interest that the person or entity has related to the proposed project.
4. Permits a court to withhold the public disclosure of a contributor if it finds that the public interest in keeping that information confidential clearly outweighs the public interest in disclosure, upon request of a plaintiff or petitioner.
5. Permits a court to take any action necessary to compel compliance with these disclosure requirements, up to and including dismissal of the action or proceeding.
6. Provides that an individual contributing funds to file a CEQA lawsuit in his or her individual capacity, and not as a representative for an organization or association, has the right to limit disclosure of his or her personal information to an in-camera review by the court.
7. Permits a court to use the information disclosed to determine whether the financial burden of private enforcement supports the award of attorneys’ fees.

FISCAL EFFECT: Non-fiscal

COMMENTS:

1. Background. CEQA provides a process for evaluating the environmental effects of applicable projects undertaken or approved by public agencies. If a project is not exempt from CEQA, an initial study is prepared to determine whether the 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, the lead agency must prepare an 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. 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.

CEQA actions taken by public agencies can be challenged in Superior Court once the agency approves or determines to carry out the project. CEQA appeals are subject to unusually short statutes of limitations. Under current law, court challenges of CEQA decisions generally must be filed within 30 to 35 days, depending on the type of decision. The courts are required to give CEQA actions preference over all other civil actions.

1. Author's statement:

At the Legislature’s behest, alterations and exemptions have been made when dealing with certain projects and potential CEQA litigation. However, one issue still persists that illustrates a blatant lack of transparency within our judicial system as it relates to CEQA lawsuits. This problem is the ability for anonymous individuals or groups to file lawsuits under the guise of CEQA.

The ability to anonymously file CEQA lawsuits serves as a tool which enables groups to oppose projects based on interests that are completely unrelated to the environment. While CEQA lawsuits are supposed to be centered on environmental concerns, there is often no way to identify the agenda behind the litigation when they are filed anonymously. According to reports by the Milken Institute and the Legislative Analyst’s Office, CEQA lawsuits can be used to reduce new housing developments and can cause delays of up to two and a half years. The California Department of Housing and Community Development estimates that 180,000 new housing units need to be built a year to keep prices stable.

It is undeniable that CEQA lawsuits have slowed major projects throughout the state. Without transparency surrounding CEQA lawsuits, the ability to file anonymous litigation will continue to serve as an incentive for bad behavior.

1. A fair argument, but no substantial evidence, regarding anonymous lawsuits. The reports cited by the author are not focused directly on the question of anonymous lawsuits and include no data on the prevalence of anonymous lawsuits. The closest thing to evidence the committee could find is a 2014 letter to Judicial Council filed by an ad-hoc group of developer attorneys calling themselves the “CEQA Research Council,” which has served as the foundation for proposed legislation on this subject.

The letter requests the Judicial Council adopt a rule requiring both petitioners and respondents to identify any person or entity who made a monetary contribution to fund the preparation or filing of the complaint, petition, or answer.

The letter states that “CEQA lawsuits…are frequently filed on behalf of unincorporated associations or other loosely formed organizations…As a result, it is often difficult, if not impossible, to identify the ‘real’ plaintiff underwriting a CEQA lawsuit.” Notwithstanding this statement, the letter provides no specific examples of “anonymous” lawsuits. In each of the lawsuits offered to the committee as examples, the identity of the project opponents is known.

1. Amicus disclosure rules serve a different purpose. Amicus curiae are not the same as plaintiffs. Though this bill is based on existing amicus disclosure rules, the primary purpose of those rules is to enable courts to ensure that the amicus process is not being used to circumvent limits on briefing by the parties (i.e., by covertly funding amicus briefs to support their position). And, unlike this bill, the amicus rules apply to both sides.

The amicus disclosure requirement [California Rules of Court 8.200(c)] was adopted in 2008 based on the recommendation of the Judicial Council Appellate Advisory Committee. The Committee's report states:

To help (the United States Supreme Court) ensure that the amicus process is not being used to circumvent limits on briefing by the parties and also to help the court better identify the source of amicus briefs, United States Supreme Court Rules, rule 37.6 provides that:

Except for briefs presented on behalf of amicus curiae listed in Rule 37.4 (i.e., the Solicitor General and certain other government entities) a brief filed under this Rule shall indicate whether counsel for a party authored the brief in whole or in part and whether such counsel or a party made a monetary contribution intended to fund the preparation or submission of the brief, and shall identify every person other than the amicus curiae, its members, or its counsel, who made such a monetary contribution. The disclosure shall be made in the first footnote on the first page of text.

Amending rules 8.200, 8.520, and 8.882 to require that applications to file an amicus brief in a California appellate court to provide this same information will similarly ensure that amicus process in the California courts is not being used to circumvent limits on briefing by the parties and will help the courts better identify the source of amicus briefs.

1. Bill seems inequitable by design. This bill seems inequitable for two reasons. First, it applies disclosure requirements only to plaintiffs and not to respondents and real parties in interest. Second, the bill only applies to plaintiffs who have accepted monetary contributions, in effect exempting self-financed plaintiffs and targeting organizations and individuals who must raise funds to support their advocacy. Adding to this discrepancy, the bill specifically permits a self-financed individual plaintiff to shield his or her personal information from the public.
2. And unnecessary to address the purported problem. The courts have authority under current law to sanction parties who pursue claims in bad faith or for improper purposes. If the identity or motives of a plaintiff are in question, a court can not only compel the party to identify itself, but issue sanctions if the court finds that the party's actions or tactics are frivolous.

For example, in CREED-21 v. City of Wildomar (4th Dist., Div. 2, 2017) 18 Cal.App.5th 690, the state Supreme Court denied a request by San Diego attorney Cory Briggs and his nonprofit client, CREED-21, to unpublish an opinion involving CEQA and a Wal-Mart project in Riverside County. Wal-Mart argued that CREED-21 lacked standing and asked Briggs to produce a client for deposition. Briggs refused and said the group’s membership was irrelevant. The court then ordered CREED-21 to produce a member. Briggs did not comply, so the court issued a sanction that resulted in ending the case.

1. Suggested amendment. If the committee feels that impartial data would help illuminate the need to legislate special disclosure rules for CEQA lawsuits, the author and the committee may wish to consider amending this bill to request Judicial Council conduct a review of CEQA lawsuits to determine the prevalence of “anonymous” lawsuits.
2. Prior legislation. This bill is virtually identical to AB 2026 (Hadley), which failed in this committee by a vote of 3-4 on April 18, 2016. The bill is also very similar to SB 1248 (Moorlach), which failed in the Senate Environmental Quality Committee by a vote of 2-5 on April 20, 2016.
3. Double referral. This bill has been double-referred to the Assembly Judiciary Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

California Apartment Association
California Association of Realtors
California Chamber of Commerce
County of San Diego

Opposition

California Judges Association
California League of Conservation Voters
Planning and Conservation League
Sierra Club California

Analysis Prepared by: Lawrence Lingbloom / NAT. RES. /