Homeowners “Bluffed” Out Of Challenge To Coastal Permit To Rebuild Private Access Stairs

Barbara Lynch et al. v. California Coastal Commission (9/9/14, D064120)

The Court of Appeals for the Fourth Appellate District (Division One) has held that homeowners who accepted the benefit of a coastal development permit (“CDP”) for seawall reconstruction to protect  their bluff-top homes cannot subsequently challenge the terms upon which the CDP was conditioned, even though the homeowners complied with those conditions “under protest.”  The court held that: (1) the homeowners waived their right to challenge the CDP conditions when they voluntarily submitted to those conditions and accepted the benefit of the permit by moving forward with construction, (2) the California Coastal Commission (the “Commission”) lawfully limited the CDP to a 20-year term because the Commission was anticipating the seawall’s long-term impacts in light of the changing landscape of California’s coastline, and (3) the restriction on rebuilding the homeowners’ private beach access stairs was lawful in light of the state-wide phasing-out of private access to beaches over bluffs.  The court’s ruling highlights that, unless circumstances fit into one of two narrow exceptions, a permittee cannot accept a Commission-issued CDP “under protest.” The decision also reinforces the Commission policy disfavoring private access to beaches over bluff tops.

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Level of Detail Adequate in High Speed Rail Authority’s Program EIR for Central Valley to Bay Area Rail Corridor

Town of Atherton v. California High‑Speed Rail Authority (7/24/14, C070877)

The appellate court upheld the California High‑Speed Rail Authority’s Program EIR for the Central Valley to Bay Area portion of the route, concluding that (1) the Authority properly limited its environmental analysis to a program level when it deferred site-specific analysis of the vertical profile options for alignment, (2) the Town’s experts could not show the Authority’s revenue and ridership model was inadequate or unsupported, and (3) the Authority’s Program EIR considered an adequate range of alternatives despite rejecting an alternative proposed by one expert consulting company.

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Mechanics Lien Subordination: Illinois Further Limits Construction Lenders’ Ability To Ensure Priority Against Mechanics Liens

On July 16, 2014, Illinois enacted Public Act 98-764 (Senate Bill 3023) (“SB 3023”), which amends the Illinois Mechanics Lien Act (770 ILCS 60/ et seq.) (the “Act”) to prohibit subordination of mechanics liens on Illinois construction projects, unless such subordination is to a construction mortgage lien made after 50% of the construction loan has been disbursed to fund construction costs.

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No CEQA Review Required For Initiative Measures, Whether Adopted By City Council Or Voters

Tuolumne Jobs & Small Business Alliance v. Wal-Mart Stores, Inc., et al. (8/7/14, S207173)

The Supreme Court of California has held that CEQA review was not required before the Sonora City Council adopted an initiative measure approving a specific plan for expansion of a Wal-Mart store.  The court held that: (1) the Elections Code, which requires at most an abbreviated review, provides the exclusive process regarding voter initiatives, (2) the legislative body does not have to obtain full CEQA review before it can directly adopt a voter initiative, and (3) a full CEQA review would be incompatible with the requirements of the Elections Code.  The court’s conclusion highlights the judiciary’s staunch protection of the initiative process.

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Collateral Estoppel Bars Copy-Cat Environmental Plaintiff in New Case After Judgment

Roberson v. City of Rialto (4th Dist., Div. 2, 5/21/2014, E058187)

The Fourth District Court of Appeal affirmed a judgment denying a petition for writ of mandate to invalidate project approvals for the construction of a large commercial retail center in the City of Rialto (the “City”) to be anchored by a Wal-Mart Supercenter.  The court held that: (1) the appellant had not demonstrated that the trial court committed reversible error by failing to credit the appellant’s “evidence of prejudice,” and (2) appellant’s defective notice claims were barred by res judicata.  The court’s conclusion that the parties were in privity with one another, despite the appellant’s assertion he brought the case in his own interest, demonstrates how defendants may be able to more effectively apply the doctrine of res judicata to bar subsequent claims in litigation under the California Environmental Quality Act.

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Only When a Permit is Required: The Supreme Court Caps the EPA’s Authority to Regulate Greenhouse Gas Emissions from Stationary Sources

Utility Air Regulatory Group v. EPA et al. 573 U.S. ____ (2014)

On June 23, 2014, the United States Supreme Court held that the Environmental Protection Agency (EPA) overstepped its authority under the Clean Air Act when it attempted to regulate greenhouse gas emissions from stationary sources not already subject to a permit controlling emissions of more conventional pollutants.  The Court reasoned the Act’s language did not compel the EPA to regulate greenhouse gas emissions from such sources and, further, that the EPA’s efforts to do so were incompatible with Congress’s intent.  The Court further held, however, that stationary sources that did need a permit for their emissions of conventional pollutants could be subject to further regulation for emitting greenhouse gases.  This holding likely means the greenhouse gas emissions of many hotels, offices, residential buildings, retail establishments, and similar facilities will remain immune to the Clean Air Act’s permit requirements because such sources do not typically emit conventional pollutants at sufficient levels to require a permit.  Conversely, stationary sources that are required to get a permit for emitting conventional pollutants likely will also be subject to EPA regulation regarding their greenhouse gas emissions.

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Principal Architects on Residential Projects Liable for Construction Defects Outside Their Control; Developers and Owners May Pay the Price

Beacon Residential Community Assoc. v. Skidmore, Owings & Merrill, LLP (Cal. Supreme Court., 07/03/2014, S208173)

On July 3, 2014, the California Supreme Court decided the much watched case Beacon Residential Community Assoc. v. Skidmore, Owings & Merrill, LLP.  The court held that the “principal architect” “owes a duty of care to future homeowners in the design of a residential building . . . even when they do not actually build the project or exercise control over construction.”  (Emph. added.)

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Is Your Out-of-State LLC “Doing Business” in California?

Individuals and entities, including those from outside California, who invest in or do business through an out-of-state limited liability company (“LLC”) may be surprised to find out that they have filing obligations and tax liabilities in California as a result of California’s far-reaching rules and interpretations related to when an LLC is treated as “doing business” in California.

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EIR Air Quality Analysis Insufficient: Lack of Specificity Regarding Human Health Impacts, Mitigation Measure Enforceability, and Evidence Supporting Measures’ Effectiveness in Substantially Reducing Air Quality Impacts Blamed

Sierra Club et al. v. County of Fresno et al., (Friant Ranch, L.P.) (5th Dist., 05/27/2014, F066798)

Faced with an appeal of the Superior Court of Fresno’s approval of a controversial Environmental Impact Report, the Fifth District Court of Appeal reversed and found that the challenged EIR violated the California Environmental Quality Act by failing to adequately (1) analyze the health impacts associated with the project’s air quality impacts, (2) explain how proposed mitigation measures would be enforced, and (3) identify the extent to which “substantial” reductions in air quality impacts would be achieved.

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CEQA Class 3 Categorical Exemptions Permitted for AT&T Installations

San Francisco Beautiful v. City & County of San Francisco (1st. Dist., Div. 4, 5/30/2014)

The First District Court of Appeal held that AT&T’s proposed installation of new utility cabinets in the City of San Francisco fell within CEQA’s Class 3 categorical exemption for the “installation of small new equipment and facilities in small structures.”  The court rejected the applicability of any exceptions to the exemption and affirmed the trial court’s denial of the petition.  The court acknowledged the split of authority regarding the applicable standard of proof and standard of review but stated it would reach the same result under either standard.

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