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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California Documentary Transfer Tax: Separate Unrecorded Statement of Tax No Longer Allowed After December 31, 2014

The California Documentary Transfer Tax Act requires the amount of documentary transfer tax due to be shown on the face of the document.  However, if the party submitting the document for recordation requests, then the amount of tax due may be shown on a separate paper affixed to the recorded document.

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Developer-Prepared Cost Comparisons Can Show Economic Infeasibility Under CEQA

SPRAWLDEF et al. v. San Francisco Bay Conservation and Development Commission et al., (Waste Connections, Inc.) (1st Dist., Div. 1, 05/28/2014, A137619)

In a precedent-setting decision, the First District Court of Appeal approved the alternatives analysis used to support a massive 35-year landfill expansion in the Suisun Marsh.  Challengers argued that more evidence was required to reject a reduced-size, shorter-term alternative on the ground of economic infeasibility.  The unanimous three-judge panel held that project alternatives can be rejected as infeasible under the California Environmental Quality Act on the basis of cost comparisons submitted by a developer.

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Trails-to-Rails-to-?: The Brandt Case and its Potential Impact on the Nation’s Trails

A recent Supreme Court case may have a far-reaching impact on many of the United States’ “rails-to-trails” biking and jogging paths.  In March, the Supreme Court held in an 8-1 decision that rights of way granted to railroad companies during the nineteenth century were mere easements without reversionary interests to the United States government, triggering constitutional Takings Clause issues.

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Preexisting Management Plan Not a “Mitigation Measure” for Purposes of CEQA Exemption

A preexisting management plan intended to minimize environmental effects of recurring facility operations and events is not a “proposed mitigation measure” for purposes of determining whether an event qualifies for a CEQA categorical exemption, a state Court of Appeal has held.  In Citizens for Environmental Responsibility v. California, the Court of Appeal upheld the exemption of a rodeo from CEQA review under the “normal operations of existing facilities for public gatherings” exemption established by the CEQA Guidelines.  2014 Cal. App. LEXIS 283, 19 (Cal. App. 3d Dist. Mar. 26, 2014).  The court rejected appellant’s arguments that the host fairgrounds’ Manure Management Plan (MMP), intended to prevent livestock fecal runoff entering a creek, was a proposed mitigation measure that the local agency improperly considered in assessing the effects of the rodeo.  The court focused on the fact that the plan predated the proposal of the rodeo (albeit by only a few months) and would apply to all similar events at the fairground.  The court also clarified the application of the “unusual circumstances” exception to categorical exemptions.

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Bright Line Rule: Collateral Estoppel Precludes Attacks on Quasi-Judicial Permit Decisions (But Stay Tuned: Rehearing Granted on the Court’s Own Motion)

Simply stated: “[a] collateral attack is not a substitute for an appeal” reasoned the Second Appellate District Court in Bowman v. California Coastal Commission (2nd Dist., Div. 6, 03/18/2014, B243015) ___Cal.App.2nd___, 2014).  This is a case where the Coastal Commission and environmental groups found common ground challenging a coastal development permit issued by the County of San Luis Obispo.  The case reiterates the importance of exhausting remedies during – not after – permit approval proceedings.  However, the rationale for the decision—collateral estoppel—because of the issuance of a prior coastal development permit at the same location for a similar project was unusual.  Perhaps too unusual, as the court on April 15, 2014 granted a rehearing on its own motion and indicated it contemplated further briefing.

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