Real Estate, Land Use and Environmental Law Blog - Up-to-date information on Real Estate, Land Use and Environmental Law

Pinnacle Museum Tower Association v. Pinnacle Market Development (US) LLC, No. D055422 (4th Dist. July 30, 2010)

By Michael Wilmar and Aaron Kleven

Homeowners and homeowner associations are not necessarily bound by arbitration provisions in a declaration of covenants, conditions and restrictions, or in a related purchase agreement, where the developer is the initial and only declarant. That is the implication of a July 30th ruling of the Fourth District of the California Court of Appeal. In Pinnacle Museum Tower Association v. Pinnacle Market Development (US) LLC, a homeowner association brought a construction defect suit on behalf of itself and its members for damage to common areas. The developer of the condominium project attempted to block the suit, claiming the plaintiff was bound to an arbitration provision recorded in the project CC&R's. It argued the provision committed the Association to resolve all construction disputes through arbitration and waived the Association’s right to a jury trial. The purchase and sale agreements signed by the individual condominium owners also contained a jury waiver and a provision compelling owners to comply with the arbitration provision in the CC&R's. But the court concluded that the provision in the CC&R’s did not constitute an agreement sufficient to wave the Association's constitutional right to a jury trial. And it found the corresponding provision in the purchase and sale agreement unconscionable and unenforceable against the individual owners.

Hines v. California Coastal Commission, No. A125254 (1st Dist. June 17, 2010)

By Michael Wilmar and Alex Merritt

In Hines v. California Coastal Commission, the First District Court of Appeal upheld the Coastal Commission’s determination that an appeal raised no substantial issue under the California Coastal Act, and went so far as to state in dicta that even if a development were technically inconsistent with a Local Coastal Program ("LCP"), the Commission could still reject an appeal of the approval of that development as not presenting a substantial issue.

California Dep't of Toxic Substances Control v. Hearthside Residential Corp., No. 09-55389 (9th Cir. July 22, 2010)

By Betsy McDaniel and Adam Bailey

On July 22, the Ninth Circuit Court of Appeals held that under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA," commonly referred to as the "Superfund" law), the owner of a contaminated site when cleanup costs are incurred is the "current owner" for liability purposes. The decision will provide clarity to state agencies or other entities that engage in the remediation of contaminated lands. In the event that a landowner refuses to accept responsibility for cleanup, the entity that performed the cleanup can easily determine whom to sue for repayment.

Kern County Water Agency v. Watershed Enforcers, No. A117715 (1st Dist. June 17, 2010)

By Keith Garner and Alex Merritt

Last month the California Court of Appeal for the First District held that the California Endangered Species Act ("CESA") prohibits a state agency from taking threatened or endangered species without proper permit authority. In reaching this conclusion, the court resolved an interesting question of statutory construction, finding that a state agency is a "person" for purposes of CESA. The decision also indicates that courts will construe CESA liberally to promote the Legislature's goal of conserving threatened and endangered species.

City of Santee v. County of San Diego, No. D055310 (4th Dist. June 7, 2010)

By Michael Wilmar and Alex Merritt

Last month the California Court of Appeal for the Fourth District provided important guidance on the issue of when approval of an agreement affecting a development constitutes approval of a “project” that requires review under the California Environmental Quality Act ("CEQA"). In City of Santee v. County of San Diego, the Fourth District held that a siting agreement between the County of San Diego and the California Department of Corrections and Rehabilitation ("DCR") for a state prison facility did not commit the County to a definite course of action, and therefore did not constitute a project approval requiring CEQA review. The court reached this conclusion after noting that the agreement did not preclude any alternatives or mitigation measures, and that implementation of the agreement was contingent on a number of factors, including future environmental review.

Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection, et al., 560 U. S. _(June 17, 2010)

By Michael Wilmar & Aaron Kleven

On June 17, 2010, the Supreme Court unanimously ruled that the State of Florida did not infringe on private property interests by engaging in a beach preservation effort. But though the participating justices agreed on the decision (Justice Stevens did not participate), they disagreed sharply on a point of constitutional law underlying the complaint.

Arizona Cattle Growers' Ass'n v. Salazar, No. 08-15810 (9th Cir. June 4, 2010)

By Robert Uram, James Rusk & Alex Merritt

The Ninth Circuit Court of Appeals this month decided two key issues related to the designation of critical habitat for species protected under the Endangered Species Act ("ESA"): (1) what constitutes an "occupied" area for purposes of designating critical habitat; and (2) the proper approach to analyzing the economic impacts of a critical habitat designation. The Ninth Circuit ruled for the Fish & Wildlife Service (“FWS”) on both issues, deferring to the agency's interpretation of "occupied" and approving the agency's use of the "baseline" approach.

Butte Environmental Council v. United States Army Corps of Engineers, No. 09-15363 (9th Cir. June 1, 2010)

By Robert Uram, Keith Garner & Brenna Moorhead

In Butte Environmental Council v. United States Army Corps of Engineers, No. 09-15363 (9th Cir. June 1, 2010), the Ninth Circuit Court of Appeals affirmed that it is appropriate for the Corps to consider an applicant’s project purpose, and that an area of a species’ critical habitat can be destroyed without appreciably diminishing the value of the species’ critical habitat overall.

Home Builders Ass'n of Tulare/Kings Counties v. City of Lemoore, No. 07C0185 (5th Dist. June 9, 2010)

By David Lanferman

On June 9, 2010, a panel of the Court of Appeal for the Fifth Appellate District rejected challenges by a builders association to six out of seven "development fees" recently adopted by the City of Lemoore. The Mitigation Fee Act (Gov. Code §§ 66000 – 66025) requires that a local agency seeking to establish or impose development fees to finance public facilities must "identify" the new public facilities purportedly justifying the fees. Two justices held that the City had satisfied these statutory requirements by adopting a consultant's report that listed examples of the "types" of new facilities that the City may in the future decide to construct to accommodate growth from new developments, but the third justice wrote separately to question whether such lack of specificity complied with the statute.

Walgreen Co. v. City and County of San Francisco, No. A123891 (June 8, 2010)

By Brenna Moorhead

Walgreen Co. prevailed against the City and County of San Francisco in California court and can proceed with its challenge to San Francisco’s ordinance banning the sale of tobacco products at certain retail establishments that contain a pharmacy. San Francisco defined "pharmacy" as "a retail establishment in which the profession of pharmacy by a [licensed] pharmacist is practiced and where prescription drugs are offered for sale." The prohibition applied to a store as a whole, even if the licensed pharmacy was situated within a larger store selling other merchandise. Thus, the ordinance would have included drugstores, grocery stores, chain stores, supermarkets, and big box stores that contain a pharmacy. However, San Francisco elected to exclude general grocery stores and big box stores.

Beutz v. County of Riverside, No. RIC457351 (4th Dist. May 26, 2010)

By David Lanferman & Michael Cato

In Beutz v. County of Riverside, No. RIC457351 (4th Dist. May 26, 2010), the California Court of Appeal held that a special assessment imposed by the County of Riverside was invalid because the engineer's report commissioned by the County failed to separate and quantify the general and special benefits to be realized from the public parks that were the subject of the special assessment district. By failing to both separate and quantify the general and special benefits, the agency failed to satisfy its two-part constitutional burden.

Stockton Citizens for Sensible Planning v. City of Stockton _____ Cal. ___ (April 1, 2010, No. S159690)

By Phillip Tate

On April 1, 2010, the California Supreme Court unanimously ruled that flaws in the decision making process underlying a facially valid and properly filed Notice of Exemption ("NOE") do not prevent the NOE from triggering a 35-day statute of limitations period for challenging the agency's determination under the California Environmental Quality Act ("CEQA"). The decision ended a lawsuit challenging the approval of a Wal-Mart Supercenter in Stockton, California (the "City"). In overturning the lower courts, the Supreme Court held that when an NOE minimally complies with CEQA, it is sufficient to trigger the 35-day statute of limitations under CEQA. and a plaintiff can not argue the merits of the underlying approval as a means of circumventing the statute of limitations.

Patricia Melom v. City of Madera, __ Cal. App. __ (March, 24, 2010, No. MCV037258)

By Phillip Tate

Retail "supercenters" do not automatically trigger the need to study urban decay effects in an environmental impact report ("EIR"). Rather, the project or the change in the project should be the focus of the inquiry as to whether additional study is needed, and not the type of retail store.

By Claudia Gutierrez

The Alameda County Superior Court recently invalidated the housing cap in a voter-approved measure limiting the number of residences that could be built in the City of Pleasanton, California. The court also noted that the City's planning process, as well as its planning documents, were flawed and inadequate in multiple ways. Continue Reading Questions & comments

By Claudia Gutierrez

Communities for a Better Environment v. South Coast Air Quality Management District et al. ___Cal.__) (March 15, 2010; Case No. S161190)

In this case, the Supreme Court of California held that neither the statute of limitations, the principles of vested rights, nor the CEQA case law on which ConocoPhillips relied, justified employing the maximum capacity allowed under prior equipment permits as an analytical baseline for a new project, rather than the physical conditions actually existing at the time of the analysis. The court therefore concluded that the South Coast Air Quality Management District (District) abused its discretion in determining ConocoPhillips' proposed project would have no significant environmental effects compared to a baseline of maximum permitted capacity. Continue Reading Questions & comments

Committee for Green Foothills v. Santa Clara County Board of Supervisors, __ Cal.4th __ (February 2, 2010, No. S163680)("Green Foothills")

By Robyn Christo

On February 11, 2010, the California Supreme Court unanimously decided that a lead agency's filing of a Notice of Determination ("NOD") sets off the 30-day statute of limitations (found in Public Resources Code section 21167, subdivisions (b), (c) and (e)) for all California Environmental Quality Act ("CEQA") lawsuits brought to challenge the decision announced in the NOD.

Guggenheim v. City of Goleta (9th Circuit, No. 06-56306, 9/28/2009).

By Dave Lanferman and Deborah Rosenthal

According to a panel of the federal Ninth Circuit Court of Appeal, the City of Goleta owes compensation to mobile home park owners for economic losses resulting from the enactment of a mobile home rent control ordinance. In Guggenheim v. City of Goleta, the panel held that, on its face, the rent control ordinance effectuated a “naked transfer” of approximately 90% of the value of the property from the park owner to the tenants. The court declared that “a facial challenge [to an ordinance] exists as a viable legal claim” under the ad hoc, multi-factor standards first described by the U. S. Supreme Court in 1978, in Penn Central v. City of New York (1978) (438 U.S. 104). Based on the unusual circumstances of this case, the court addressed the merits of the claim and found that this severe loss of value was a compensable regulatory “taking,” even though the park owners continued to earn positive annual returns.

Standard Pacific Corporation v. Superior Court of San Bernardino (Garlow) (2009) ___ Cal. App. 4th ____ (Aug. 14, 2009, No. E046844)

By James Pugh

The Fourth District Court of Appeal recently held that construction-defect plaintiffs must provide developers with notice and an opportunity to repair before filing suit. This holding in Standard Pacific Corporation v. Superior Court of San Bernardino (Garlow) confirms the procedural requirement of Senate Bill 800, which is also known as the “Fix It Law.”

Connecticut v. American Electric Power Company Inc., ____F.3d ____, No. 05-5104 (2nd Cir. 2009)

By James Rusk

States and private plaintiffs may sue utility operators under the federal common law of nuisance to abate carbon dioxide ("CO₂") emissions that contribute to global warming, the Second Circuit Court of Appeals held this month. Although the 139-page opinion appears to open a new front in the fight over climate change, its full import is uncertain. The court held only that plaintiffs had standing, that they had stated public nuisance claims under the federal common law and that those claims were justiceable. It did not reach the merits of plaintiffs' claims, and it expressly noted that those common law claims could yet be displaced by federal legislative or rulemaking action. With that in mind, the case could prove more significant as an additional impetus for national greenhouse gas regulation than as a tool for judicial control of emissions.

By Brenna Moorhead

The California Natural Resources Agency (CNRA) led twelve state agencies in preparing the Draft California Climate Adaptation Strategy. The Strategy responds to the mandates of Executive Order S-13-08, which called for development of an adaptation strategy for addressing climate change. Consistent with the Order, the Strategy summarizes the best known science on climate change impacts, assesses the state’s vulnerability to these impacts, and outlines solutions to be implemented by state agencies to promote resiliency.

Weisblat, et al., v. City of San Diego, ___ Cal. App. 4th ____ (Aug. 18, 2009, No. D052787)

By Jeffrey W. Forrest and David P. Lanferman

In 1997, in an attempt to clarify the sometimes blurry distinction between a government “fee” and a government “tax,” the California Supreme Court explained that “taxes are imposed for revenue purposes, rather than in return for a specific benefit conferred or a privilege granted.” (Sinclair Paint Co. v. State Bd. of Equalization (1997) 15 Cal.4^th 866, 874.) Recently, on August 18, 2009, California’s Court of Appeal for the Fourth Appellate District further clarified the distinction in Weisblat, et al., v. City of San Diego (Super. Ct. No. GIC871893). The issue was whether the City of San Diego’s “Tax Collection Fee” charged to landowners to cover the expense of collecting and administering the City’s rental unit business tax was, in fact, a general tax. The court held that it was a general tax because the purpose of the Tax Collection Fee was not to provide a government service to landlords (such as building inspection), but rather to facilitate the City’s general tax collection efforts (processing rental tax applications, answering taxpayer questions, and generating and mailing out billing statements to collect the rental tax). As a general tax, the court voided the Tax Collection Fee because the City Council levied it in 2004 without approval of a majority of qualified voters in the City as required by the California Constitution. The City’s underlying rental unit business tax, which was established in 1942 and generates $11 million annually, was not challenged and remains in effect.

Lin v. City of Pleasanton., ___ Cal. App. 4th ____, No. A121147 (1st App. Dist. 2009)

by James Rusk

A referendum petition challenging the approval of a development plan need not include the text of the plan itself, if the plan was neither attached to the ordinance approving the plan nor explicitly incorporated by reference, the First District Court of Appeal has held.  Although the content of the development plan clearly was relevant to a decision on the referendum, the court in Lin v. City of Pleasanton declined to extend the "text" requirement of Election Code section 9238(b) to require that the petition include the development plan, in addition to the text of the challenged ordinance.  Expanding the text requirement would force citizens to guess at the documents that must be included in a valid referendum petition—a burden the court found unwarranted, absent "extreme circumstances" that otherwise would render the petition "affirmatively misleading."
 

Coeur Alaska, Inc. v. Southeast Alaska Conservation Counsel, et al., 557 U.S. ____ (2009).

By Katharine E. Allen and Robert J. Uram

On June 22, 2009, the United States Supreme Court held that the new source pollution standards in Section 306(b) of the Clean Water Act (the “CWA”) did not apply to discharges of slurry from a rehabilitated “froth-flotation” gold mine into a nearby navigable lake. It did so because these discharges are properly regulated under Section 404 of the CWA governing the discharge of dredge and fill materials, rather than by an NPDES permit under Section 402 of the CWA, and because the new source pollution standard in Section 306(b) does not apply to Section 404 permits. The Supreme Court's decision reversed the Ninth Circuit Court of Appeal's determination that the issuance of a permit for the slurry discharges by the United States Army Corps of Engineers (the “Corps”) under Section 404 of the CWA violated the new source performance standard set forth in Section 306 of the CWA. In the dissenting opinion, Justices Ginsburg, Stevens and Souter disagreed with the majority's holding, emphasizing the potentially weighty implication of the outcome, which they argued effectively allowed the operator of the mine to utilize Section 404 of the CWA to evade the more stringent requirements of the new source performance standard.

Health First v. March Joint Powers Authority (Tesco Stores West, Inc.), ___ Cal. App. 4th ___ (June 10, 2009, No. RIC458367)

By Katharine E. Allen

The California Court of Appeal for the Fourth Appellate District determined that the act of reviewing and approving a design permit application for a warehouse facility by the March Joint Powers Authority (the "Authority") in accordance with the Specific Plan for the March Business Center constituted a ministerial act and thus did not require further environmental review under the California Environmental Quality Act ("CEQA"). In reversing the trial court's holding on this issue, the Court of Appeal emphasized the Authority's use of fixed standards and objectives embodied in a checklist for conformance with certain Design Guidelines established under the Specific Plan and the lack of any discretionary or subjective judgment in granting approval. The Court of Appeals also briefly addressed lesser issues relating to the application of certain mitigation measures called for in the Specific Plan to the development of the facility and the standing of the plaintiff in the trial court.

BIACC v. City of Patterson (2009) 171 Cal.App.4th 886

By David P. Lanferman

On June 17, 2009, the California Supreme Court denied the City of Patterson's petition for review of the Court of Appeals decision invalidating the City of Patterson's "affordable housing in lieu fees" and holding that the City violated a development agreement by demanding the new fees from the approved project. The Fifth Appellate District had initially issued its unanimous decision in January, holding that the City had failed to demonstrate that the amount of its new $22,000 per market-rate home fee was reasonably related to any deleterious impacts on the community's need for affordable housing. The appellate court later denied the City's petition for rehearing, slightly modified the text of its decision, and ordered the decision to be published in March. The Supreme Court's recent ruling means the decision now stands as "final" (at least as to the California judicial system).

California Oak Foundation v. County of Tehama et al. (Del Webb California Corp. et al.), ____ Cal. App. 4th ____ (June 11, 2009, No. CI58258)

By Katharine E. Allen

Four letters sent to the County of Tehama and the Tehama County Board of Supervisors (collectively “Tehama”) and disclosed to real parties in interest by a law firm retained as outside counsel for the purpose of providing advice on compliance with the California Environmental Quality Act (“CEQA”) maintained their privileged status under the attorney-client and work product privileges despite the disclosure and thus did not need to be included in the administrative record. In so holding, the Court of Appeal for the Third Appellate District relied on the common interest doctrine to maintain the privileged status of the letters. The court did, however, reverse the judgment of the Superior Court of Tehama County on a separate issue related to the investigation of the financial feasibility of certain mitigation fees, with directions that the superior court enter a judgment requiring Tehama to reconsider the standard used in determining the economic feasibility of the underlying project.

By Randolph C. Visser, Jeffrey W. Forrest, & Michael Hansen

On May 4, the U.S. Supreme Court handed down its 8 to 1 decision in the much anticipated case of Burlington Northern & Santa Fe Railway Co., et al v. United States et al. (556 U.S.___ (2009)), which challenged the traditional notion of joint and several liability under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA" or "Superfund") and challenged a new, expansive notion of arranger liability under CERCLA. The Supreme Court overturned the Ninth Circuit Court of Appeals' broad interpretation of arranger liability and may have lowered the bar for how Potentially Responsible Parties ("PRPs") can demonstrate apportionment liability, therefore avoiding CERCLA's expansive joint and several liability scheme.

The Fifth Day, LLC v. James P. Bolotin, et al., ___ Cal.App.4th ___(March 27, 2009, No KC047712)

By Jon E. Maki & Bram Hanono

The California Court of Appeal for the Second Appellate District determined that an entity which provided construction management services to a private owner developing commercial real property was not required to be licensed as a contractor pursuant to the Contractors' State License Law ("CSLL") (opinion by Acting Presiding Justice Armstrong, concurrence by Justice Krieger). In a lengthy dissent, Justice Mosk disagreed, highlighting that the intent of the CSLL is to protect consumers from unqualified and unlicensed contractors and predicted that the decision on a case of first impression creates a loophole in the license requirements by allowing unlicensed contractors to call themselves "construction managers."

Entergy Corp. v. Riverkeeper, Inc., 556 U.S. ____, No. 07-1355 (2009)

By Robert J. Uram, Ella Foley-Gannon and James Rusk

On April 1st, the Supreme Court held that the federal Clean Water Act (the “Act”) allows the Environmental Protection Agency (the “EPA”) to use cost-benefit analysis in setting the performance standards that power plants must meet to reduce the impact of cooling water intakes on aquatic organisms. Entergy Corp v. Riverkeeper, Inc., 556 U.S. ____ (2009), reverses a decision of the Second Circuit that held the EPA had unlawfully weighed the costs of environmental remediation measures against their benefits in setting “best technology available” standards for existing facilities. The opinion has major implications because the challenged regulations apply to facilities that account for more than half of the nation’s electricity generating capacity and may allow those facilities to avoid billions of dollars annually in increased compliance costs. The Court’s reasoning also may open the door to use of cost-benefit analysis under the Act in other contexts, such as storm water regulation, where it is not currently considered.

California Native Plant Society v. City of Rancho Cordova, ____ Cal. App. 4th _____ (March 24, 2009, No. C057018)

By Elizabeth S. Anderson

The California Court of Appeal for the Third Appellate District determined that the City of Rancho Cordova did not improperly defer mitigation under the California Environmental Quality Act ("CEQA") when it adopted a mitigation measure that required the applicant to develop (1) a habitat mitigation and monitoring plan for off site mitigation pursuant to standards which would ensure no net loss of habitat as a result of on site construction; and (2) a wetland avoidance/mitigation plan to address the potential impacts of any off-site creation activities contemplated in the habitat mitigation and monitoring plan. In reversing the trial court's holding on this point, the court found that the habitat mitigation and monitoring plan did not need to identify specific off-site locations for mitigation. The court did, however, affirm the trial court's holding that the City's approval of the entitlements was inconsistent with a General Plan policy that required the City to design mitigation "in coordination with" other public agencies because the City merely solicited, considered, and responded to the agencies' comments on the EIR. Although the holding on this latter issue may require public agencies that use this language in their general plan to "cooperate with" the specified agencies, the court upheld the principle that a project need not be in "perfect conformity" with every general plan policy. Rather, a project would be consistent with the general plan if it would "further the objectives and policies of the general plan and not obstruct their attainment."

Summers v. Earth Island Institute,___U.S. ___(March 3, 2009, Case No. 07-463)

By Elizabeth S. Anderson

On March 3, 2009, the United States Supreme Court determined that Respondents, a group of organizations dedicated to protecting the environment, did not have standing to challenge certain United States Forest Service (“Service”) regulations respecting salvage timber sales. In reversing the Ninth Circuit, the Court held that while Respondents’ affidavit of a member’s recreational use was sufficient to establish standing initially, once a settlement was reached, the affidavit was insufficient to provide standing to proceed, even though the trial court proceeded to adjudicate the merits of Respondents’ challenge. The Court also held that Respondents’ affidavit that a member had suffered injury in the past from development on Service land, had visited many National Forests, and had plans to visit several unnamed National Forests in the future was insufficient because it failed to allege that “any particular timber sale or other project claimed to be unlawfully subject to the regulations will impede a specific and concrete plan of [the affiant] to enjoy the National Forests.”

Ohio Valley Environmental Coalition v. U.S. Army Corps of Engineers, No. 07-1355 (4th Cir. 2009)

by Robert J. Uram, Aaron Foxworthy, and James Rusk

The Fourth Circuit Court of Appeals recently reversed a District Court decision and upheld a decision by the Army Corps of Engineers (the "Corps") to prepare Environmental Assessments and mitigated FONSIs under the National Environmental Policy Act ("NEPA") for four Clean Water Act section 404 permits issued for mountaintop removal coal mining projects in West Virginia. In Ohio Valley Environmental Coalition v. U.S. Army Corps of Engineers, No. 07-1355 (4th Cir. 2009), the court held that the Corps did not err in focusing its NEPA review on the impact of the filling of jurisdictional waters of the United States, and excluding from consideration the impacts on surrounding upland areas from associated mining activities. This decision highlights the ability of the Corps to focus its NEPA review of Section 404 permits on the impacts associated with the fill of jurisdictional waters, rather than on the larger project necessitating the permit.

Building Industry Association of Central California v. City of Patterson (2009) __ Cal App. 4th ____

By David P. Lanferman

The Court of Appeal for the Fifth Appellate District certified its decision in Building Industry Association of Central California v. City of Patterson for publication on March 2, 2009. The court had previously issued an opinion on Jan. 30, 2009, holding that the City of Patterson’s “affordable housing in lieu fee” was invalid, because the amount of the fee was not shown to be reasonably related to costs of the City’s affordable housing program attributable to new development, as required by the terms of a statutory development agreement between the City and the developer. (See previous Affordable Housing in Lieu Fees blog article). The City had increased the fee to $20,946 from its previous rate of $734 per new residential building permit. The development agreement with the homebuilder permitted the City to impose increased fees if they were “reasonably justified,” and the City argued that this language permitted the increased fees. The Court of Appeal held that (1) the contractual limitation incorporated the legal standards generally applicable to development impact fees and exactions; (2) the fees in this case were therefore not free from a “meaningful means ends review”; and (3) the City had failed to show that its new fees met those standards.

By David P. Lanferman

“Affordable housing in lieu fees” imposed by the City of Patterson on new residential development projects were invalidated by the California Court of Appeal for the Fifth Appellate District, in an unpublished decision issued on January 30, 2008.  (Building Industry Association of Central California v. City of Patterson).  The court unanimously held that the amount of the City’s housing in lieu fee (nearly $21,000 per home) was not calculated in conformity with “the legal standards generally applicable to development fees,” and that the fees were therefore not “reasonably justified” as required by the terms of a development agreement.  The court invalidated the fee, awarded costs to the plaintiffs, and remanded the case to the lower court with directions to determine an appropriate remedy for the City’s imposition of unjustified and invalid fees. 

By Douglas E. Wance

Espinoza v. Calva, ____ Cal. App.4^th ____

(December 16, 2008, Case No. G040006, Fourth Appellate District, Division Three)

In an unlawful detainer action, the Court of Appeal reversed the trial court's award of past due rent under a lease where the landlord had failed to secure a required certificate of occupancy for the leased premises and the tenants were unaware of the requirement at the time they leased the premises.

The landlord brought the action against the tenants seeking eviction and an award of past due rent.  The tenants claimed the premises were uninhabitable.  They introduced records that no occupancy permit had been issued for the premises and a copy of applicable city ordinances, all which were admitted by the trial court.  The trial court awarded possession of premises to the landlord, and also awarded the landlord $2,350 for rent.

By Olivier F. Theard and Bram Hanono

In a significant step towards achieving required reductions in greenhouse gas (GHG) emissions, the California Air Resources Board (CARB) approved the AB 32 Climate Change Scoping Plan on December 11, 2008 (Res. 08-47).  CARB Chairperson Mary Nichols described the Scoping Plan as "California's prospectus for a more secure and sustainable economy."

Save Tara v City of West Hollywood, ___ Cal. 4th ___ (Oct. 30, 2008, Case No. S151402)

By David Collins

In this case, the California Supreme Court invalidated agreements by the City of West Hollywood (“City”) for a housing project that was conditioned on future environmental review.  The court avoided establishing a bright-line rule that would define CEQA approvals as either entering into any agreement for development of a well-defined project, or the execution of unconditional agreements that irrevocably vest development rights.  Instead it articulated the general principle that before conducting CEQA review, agencies must not take any action that significantly furthers a project in a manner that forecloses alternatives or mitigation measures that would ordinarily be part of CEQA review of the project.  Surrounding circumstances along with the agency’s agreements should be evaluated by the courts when applying this general principle.  To assist in making the determination, the court set forth a two-step approach: (i) whether the agency, in taking action indicates it will perform environmental review before making any further commitment to the project, and if so, whether the agency nevertheless limits its discretion regarding environmental review; and (ii) whether the record shows the agency committed significant resources to shape the project and thereby foreclosed consideration of meaningful alternatives.

By Rafael F. Muilenburg, James E. Pugh, and Michael Hansen

On September 30, 2008, the rules governing regional planning changed dramatically when Governor Schwarzenegger signed Senate Bill No. 375 ("SB 375") into law. SB 375, in its essence, attempts to control greenhouse gas ("GHG") emissions by curbing urban sprawl through the implementation of "sustainable community strategies" in land use and transportation planning, along with various related incentives relating to housing development.

California Coastal Commission, etc., et al. v. Michael A. Allen, ___ Cal. App. 4th ___ (Oct. 1, 2008, Case No. B197974)

By David Collins

In this case, California Court of Appeal affirmed an order for sale of dwelling pursuant to California Code of Civil Procedure section 704.740 (part of the state’s Enforcement of Judgments Law) finding the Coastal Commission's assignee of a $1,469,000 judgment lien had properly secured a valid assignment of the judgment and that the homestead exemption did not apply because the subject dwelling was not owned by a natural person.

Monks et al. v. City of Rancho Palos Verdes, ___ Cal. App. 4th ___ (Oct. 1, 2008, Case No. B201280)

By David Collins

In Monks, the California Court of Appeal found the City of Ranch Palos Verdes (City) had exacted a permanent taking on a group of land owners seeking to build homes on 16 lots in the Palos Verdes coastal peninsula area by establishing insurmountable conditions for development without a valid justification. Since the City could not justify the development conditions under state principles of property or nuisance law, the City was found to have violated the takings clause under California’s Constitution, which states: “Private property may be taken or damaged for public use only when just compensation … has first been paid to…the owner.”  Cal. Const., art. I, § 19.

Stonehouse Homes v. City of Sierra Madre, ___ Cal. App. 4th ___ (Oct. 9, 2008, Case No. B195552)

By David Collins

The California Court of Appeal found developer Stonehouse Homes’ (Stonehouse) challenge to an April 2006 moratorium resolution adopted by the City of Sierra Madre (City) did not present a justiciable controversy.  The moratorium resolution directed staff to prepare recommendations and zoning amendments for consideration by city council and provided notice to the public of such contemplated legislative actions.  The court found Stonehouse’s legal challenge not ripe for litigating because the City had not yet adopted the land use ordinance contemplated by the moratorium resolution.

Fairbanks North Star Borough v. U.S. Army Corps of Engineers (Sept. 12, 2008, 9th Cir. No. 07-35545) ___ F.3d ____

By Stephanie J. Helfrich

In Fairbanks North Star Borough v. USACE, 07-35545, the Ninth Circuit held that an approved jurisdictional determination issued by the Army Corps of Engineers is not a final agency action for purposes of judicial review under the Administrative Procedures Act (APA), 5 U.S.C. §704.

Center for Biological Diversity v. Cal. Fish & Game Comm’n, __ Cal.App. 4^th __ (Sept. 2, 2008, Case No. C055059)

By Robert Uram and Keith Garner

On September 2, 2008, the Third District of the California Court of Appeal decided that the California Fish and Game Commission (“Commission”) erred by rejecting at the threshold a petition to list the California tiger salamander (“CTS”) under the California Endangered Species Act ("CESA").  The Commission had rejected the petition in 2004, finding that it provided insufficient information to indicate that listing “may be warranted,” the standard for the accepting a petition for further evaluation under Fish and Game Code section 2074.2.  The petitioner sued, and the trial court granted the petitioner’s request to overturn the Commission’s decision.  The decision has major implications for the administration of the California Endangered Species Act.

Action Apartment Association v. City of Santa Monica (August 28, 2008, Case No. B201176)  __ Cal.App. 4^th __

By Kyndra Joy Casper

Plaintiff Action Apartment Association (“Action”) argued that an ordinance passed by Defendant City of Santa Monica (“City”), on its face, violated the takings clause of the Fifth Amendment of the United States Constitution and article I, section 19 of the California Constitution.  Action also argued that the ordinance was an amendment to the city’s housing element and thus required approval by the Department of Housing and Community Development (“DHCD”).  The Court of Appeal affirmed the trial court ruling that the Nollan/Dolan test does not apply to a facial challenge of a land use regulation.  The Court further affirmed that the City’s affordable housing ordinance is not a housing element, does not amend the City’s housing element and thus does not require review by the DHCD.

Center for Biological Diversity v. Marina Point Development, (Aug. 6, 2008, 9th Cir. Nos. 06-56193, 07-55243, 07-56574) ___ F.3d ____

By Brenna Moorhead

In Center for Biological Diversity v. Marina Point Development, the Ninth Circuit rejected citizen suits against the Marina Point Development Company and others (“Marina Point”).  The Center for Biological Diversity and other environmental organizations (“Center”) had sued Marina Point for violations of the Clean Water Act under the Act’s citizen suit provision. [1] On appeal, the court vacated the district court’s judgment on the merits and ordered the district court to dismiss for lack of subject matter jurisdiction.  The court held that the four 60-day notices sent by the Center to Marina Point and the U.S. Army Corps of Engineers (“Corps”) were insufficient for lack of specificity or untimely because either the alleged violator or the Corps had already responded to alleged violations.

By Olivier Theard

Summary

Two new rules promulgated by the South Coast Air Quality Management District (AQMD) that were designed to encourage development of newer, cleaner electric power plants by replacing older, more-polluting ones were recently vacated in a case pending in the Superior Court in Los Angeles.  The court decided that, in implementing the rules, the AQMD, which has broad jurisdiction to control air pollution in most of Southern California, violated the California Environmental Quality Act (CEQA) by failing to analyze the rules’ health and environmental impacts prior to their adoption.

Witt Home Ranch, Inc. v. County of Sonoma (July 29, 2008, Case No. A118911 __ Cal.App.4th ___

By Misty Calder

Plaintiff Witt Home Ranch, Inc. (“Ranch”) argued that a 1915 subdivision map qualified under a statutory grandfather provision, section 66499.30(d) of the Government Code, which recognizes antiquated subdivision maps that were recorded in compliance with “[l]aws . . . regulating the design and improvement of subdivisions” in effect at the time of the map’s recordation.  The Ranch also argued that the County’s conduct during the application process violated its constitutional right to due process.  The California Court of Appeal upheld the trial court ruling that the laws governing subdivision maps in 1915 did not regulate the “design and improvement of subdivisions,” as required by the grandfather clause, and that the County did not violate the Ranch’s right to due process.

Northwest Environmental Advocates, et al. v. United States Environmental Protection Agency (July 23, 2008, 9^th Cir. Case Nos. 03-5760, 06-17187, and 06-17188) __ F.3d ___

By Misty Calder

Plaintiffs Northwest Environmental Advocates, San Francisco Baykeepers, and The Ocean Conservancy (“plaintiffs”) challenged a regulation originally promulgated by the Environmental Protection Agency (“EPA”) in 1973 exempting certain marine discharges from the permitting scheme of sections 301(a) and 402 of the Clean Water Act (“CWA”).  That regulation, 40 C.F.R. § 122.3(a), provides that the following vessel discharges into the navigable waters of the United States do not require permits pursuant to the National Pollutant Discharge Elimination System (“NPDES”):  (1) discharge of effluent from properly functioning marine engines; (2) discharge of laundry, shower, and galley sink wastes from vessels; and (3) any other discharge incidental to the normal operation of a vessel, including the discharge of ballast water.  The Ninth Circuit Court of Appeal upheld the ruling of the District Court that the regulation exempting the discharges was invalid.

Environmental Protection and Information Center v. California Department of Forestry and Fire Protection (July 17, 2008, S140547) __ Cal.4 ___.

By James Rusk

The state Incidental Take Permit (the “ITP”) and the Sustained Yield Plan (the “SYP”) approved under the Headwaters Agreement of 1996, which allowed the Pacific Lumber Company (“PLC”) to log old growth redwood forests in Humboldt County, are invalid, the California Supreme Court ruled last week.  The Court held the state ITP invalid because it provided “no surprises” assurances that unlawfully limited PLC’s obligation to fully mitigate its impacts on endangered and threatened species.  The SYP was invalid for two reasons: First, the California Department of Forestry and Fire Protection (“CDF”) never approved an “identifiable final SYP,” as required by California law.  Second, the environmental analysis performed by PLC for the SYP did not examine watershed impacts of logging at a sufficiently detailed level.

By Dave Lanferman

Silicon Valley Taxpayers Ass’n v. Santa Clara County Open Space Authority (July 14, 2006, Case No. S136468) ___ Cal.4^th ___.

The California Supreme Court declared that Proposition 218 “changed the law governing assessments” in this unanimous decision issued on July 14, 2008, and applied the “new law” to invalidate assessments levied by a special district to fund the acquisition of unspecified “open space.” The opinion lays out the new rules for the establishment, and judicial review, of assessments under the new substantive and procedural standards mandated by Proposition 218. Since these new requirements were added to the State constitution (Articles XIII C and D), the Court explained that the determination of the validity of an assessment “is now a constitutional question” subject to a more rigorous “independent judgment” standard of judicial review. The Court held that Prop. 218 shifted the burden of proof to the assessing agency. Then, applying its “independent judgment,” the Court found the agency had not met its burden of proof and these open space assessments were fatally deficient in at least two respects: (a) the assessments did not meet the new requirements that they be limited to “special benefits” enjoyed by the assessed properties; and (b) the assessments did not meet the new requirements that the amounts assessed to parcels be “proportional” to the special benefits conferred on the assessed properties.

Sunset Skyranch Pilots Association v. County of Sacramento (July 2, 2008, C055224) ___ Cal.App.4th ___

By Misty Calder

In this case, Sacramento County (“County”) denied renewal of a conditional use permit (“CUP”) needed for the continued operation of a privately-owned, public-use airport.  The trial court held that (1) denial of the CUP renewal did not constitute a “project” under the California Environmental Quality Act (“CEQA”); and (2) denial of the CUP renewal was not preempted by or violative of the State Aeronautics Act (“SAA”).  The Court of Appeal reversed as to the CEQA claim, holding that denial of the CUP would have the practical effect of closing the airport, and airport closure had the potential to cause significant environmental impacts.  Therefore, notwithstanding section 15270 of the CEQA Guidelines, the closure of the airport was a “project” under CEQA and not exempt from environmental review under CEQA.

Ocean Harbor House Homeowners Association v. California Coastal Commission (May 23, 2008, H031129) 163 Cal.App.4th 215.

By Aaron J. Sobaski

A $2 million mitigation fee based on the present value of lost present and future public shoreline recreational values and imposed by the California Coastal Commission as a condition to the issuance of a development permit for the construction of a sea wall to prevent shoreline erosion is not an unconstitutional taking.

By James Rusk

The Court of Federal Claims this month awarded more than $4.2 million to the estate of Wayne and Jean Hage as compensation for the federal government’s taking of the Hages’ water rights and rangeland improvements.  Hage v. United States, No. 91-1470L (Fed. Cl. June 6, 2008).  Hage V, the latest chapter in the long-running Hage case, affirms the principle that private parties do not have a compensable property interest in federal grazing permits.  But the decision nonetheless recognizes that government actions distinct from the cancellation of grazing permits may, under some circumstances, effect a Fifth Amendment taking of an individual’s vested right to water flowing from federal lands. 

On April 10, 2008, the Army Corps of Engineers ("Corps") and the Environmental Protection Agency ("EPA") issued a final rule governing mitigation requirements for unavoidable impacts to wetlands and other waters of the United States under the section 404 program of the Clean Water Act.  70 Fed. Reg. 19594. This rule is a major change to the Section 404 program.  It was published with nearly 80 pages of preamble in the Federal Register, and the rules itself is more than 30 pages.  It will take some time for the Corps staff and the regulated community to learn the new rule.  The rule is sufficiently complex that it will be many years before the effect of the changes will be fully understood.

Pacific Hills Homeowners Association v. Prun (Mar. 20, 2008, G038244) __ Cal.App.4th __

By S. Keith Garner

The California Court of Appeal for the Fourth District recently held that the five-year statute of limitations in the Code of Civil Procedure (CCP) section 336 for challenges to restrictions on the use of real property applies to a homeowners association's unrecorded rules or guidelines.  The case involved a dispute over the location and height of a fence and gate across a homeowner's driveway.  The homeowners association's CC&Rs, which were recorded, required homeowners to obtain written approval of plans for any improvements, such as fences, from the association's architectural committee before starting construction.  The association's architectural committee also adopted guidelines that imposed setback and height requirements on fences, which were not recorded.  In this case, the homeowner erected the fence and fate in November, 2000, without receiving the architectural committee's approval and in violation of the setback and height restrictions in the unrecorded guidelines.  The association immediately notified the homeowner of the violation, and, over the course of next few years, sporadically attempted to resolve the matter administratively with the homeowner.  After its requests for mediation were rebuffed, the association filed suit against the homeowner more than four years but less than five years after the installation of the gate and fence.  The homeowner argued in part that the action was barred by the four-year statute of limitations in CCP section 337.  The superior court found that the action was timely under CCP section 336(b) and issued an injunction requiring the gate and fence to be lowered or moved outside the setback.

SCOPE v. County of Los Angeles (November 26, 2007, B189116) 157 Cal. App. 4th 149

By Maria Pracher and Misti Schmidt

The California Court of Appeal for the Second District recently issued the first appellate opinion to apply the four principles delineated by the California Supreme Court in Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova, 40 Cal. 4th 412 ("Vineyard").  These principles govern whether the water services discussion in an Environmental Impact Report ("EIR") sufficiently analyzes the availability of future water supplies.  Santa Clarita Organization for Planning the Environment, et al.,  v. County of Los Angeles, 157 Cal. App. 4th 149, Civil No. B189116 at 9 (November 26, 2007) ("SCOPE").  Briefly, the Vineyard principles are:

Douda v. California Coastal Commission (February 6, 2008, B188210) ___ Cal.App.4th ___

By Aaron Foxworthy

The Second Appellate District affirmed a lower court decision that when acting as the issuing agency for a Coastal Development Permit (CDP) application, the California Coastal Commission may designate a portion of the subject property as an Environmentally Sensitive Habitat Area (ESHA) during consideration of the CDP application.  And, the Commission may then reject the CDP application based in part on potential impacts to the newly designated ESHA.  The decision is a cautionary tale for parties seeking to develop – or purchase for development – property in the Coastal Zone, that the Commission retains broad authority to designate ESHAs and restrict development.

Security National Guaranty, Inc. v. California Coastal Commission (January 25, 2008, A114647)  ___ Cal. App.4^th ___

The First Appellate District held that the California Coastal Commission does not have the authority to designate property an "environmentally sensitive habitat area" (ESHA) where a certified Local Coastal Program (LCP) is in place, and the LCP has neither designated the property as an ESHA, nor contains language anticipating later designation of the property as an ESHA through administrative action.  The decision stands to protect developers and local governments by recognizing the LCP as a bulwark against the uncertainty created by potential ESHA determinations rendered by the Coastal Commission in the appeals process.

By James G. Higgins

Prompt payment laws can pose significant risk to owners and contractors.  In S&S Cummins Corp. v. West Bay Builders, Inc. 2008 Cal. App. LEXIS 160, *, a public works general contractor was stung under Public Contract Code section 7107 for delaying retention payments to an electrical subcontractor.

Environmental Defense Project of Sierra County v. County of Sierra, et al. (January 9, 2008, C055448) __Cal. App. 4th

In a victory for public participation advocacy groups and a defeat to efforts to increase efficiency in the planning and development process, the California Court of Appeals for the Third District struck down Sierra County’s “streamlined zoning process,” which had permitted the county to provide notice of a legislative public hearing on a zoning ordinance or zoning ordinance amendment before the legislative body received a planning commission recommendation.  The court held that, under California Government Code sections 65854, 65856, 65090, and 65094, the local agency must give notice of the legislative body’s public hearing on a zoning ordinance or zoning ordinance amendment only after the planning commission has submitted its recommendation to the legislative body, and the public notice must contain the planning commission’s recommendation.

By Michael B. Wilmar and Misti M. Schmidt

With a resounding no, the California Court of Appeal for the Fifth District answered the question of whether a county can permit the use of real property that is not allowed by the zoning ordinance even if the county grants a zoning exception in a development agreement.  Such an exception is invalid where the county has not rezoned the property, amended the text of the zoning ordinance, issued a conditional use permit consistent with the ordinance, or granted a variance.

By Olivier F. Theard and Maria J. Gangemi

I. Introduction

On November 5, California filed suit for an injunction to compel EPA to rule on California's requested waiver from the Clean Air Act's prohibitions of states enforcing their own greenhouse gas emissions standards for automobiles.  Several other states have intervened, seeking to adopt California's standards as well.

Landale-Cameron Court, Inc. v. Ahonen (Oct. 10, 2007, B190309 [2^nd Dist., Div. 2]), ___ Cal. App. 4th ____; http://www.courtinfo.ca.gov/cgi-bin/opinions

By Thomas B. Snyder and Andriana Ledesma

In Landale?Cameron, the homeowner's association of a condominium complex ("HOA"), discovered various water leaks to the building and subsequently sued the builder-developers Arnold and Helen Kaufman ("Kaufman") and Petri Ahonen dba Riteway Decking and Flooring ("Riteway") for negligence and contract causes of action.  Riteway moved for summary judgment on the grounds that the complaint was barred because it was filed after the expiration of the three-year statute of limitations for actions involving injury to real property under California Code of Civil Procedure Section 338.

Lincoln Place Tenants Assoc. v. City of Los Angeles (September 19, 2007, B193235 [2^nd Dist. , Div. 7]) ___ Cal. App. 4^th ____; http://www.courtinfo.ca.gov/cgi-bin/opinions

By Alexis M. Pelosi

In this case, the Second District Court of Appeal confirmed that the Ellis Act does not preempt CEQA and that cities have a continuing obligation to comply with mitigation measures required under CEQA.

People of the State of California v. General Motors Corporation et al. (Sept. 17, 2007, C06-05755) ___Cal.App.4^th ___;

By Maria J. Gangemi

Introduction/Holding:

In a major case brought by the State of California seeking to hold automakers liable for global warming, District Judge Martin Jenkins in San Francisco granted defendants' motion to dismiss the State's nuisance causes of action under federal and state law.  The judge determined that it was a non-justiciable political question.

By Randolph C. Visser and Olivier F. Theard

Pursuant to AB 32 (the Global Warming Solutions Act) the California Air Resources Board (CARB) recently announced that it would go beyond the minimum statutory requirements and has proposed additional “early action measures” designed to help California achieve its statutory goal of reducing greenhouse gas emissions to 1990 levels by the year 2020.  If adopted, the new measures will significantly increase the current list of early action measures which were approved by CARB in June 2007.

Patel v. Liebermensch (Aug. 21, 2007, D048582 [4^th Dist, Div. 2]) __ Cal.App.4^th __; http://www.courtinfo.ca.gov/cgi-bin/opinions

By William M. Flieshhacker

In this case, the Fourth District Court of Appeal of California addressed the issue of the enforceability of an option contract that did not include essential terms regarding the time and manner of payment.  The court held that the evidence showed that the parties continued to negotiate these terms (and terms related to the amount of the deposit, the escrow period, and the payment of escrow expenses) following the tenant’s notice that he was exercising the option.  The court found that these key terms could not be added by the trial court by implication, thus rendering the option contract unenforceable.

By Robert J. Uram and Aaron Foxworthy

In Northern California River Watch v. City of Healdsburg, the Ninth Circuit held that a man-made pond that (a) contains and is largely surrounded by wetlands, (b) is separated from a traditionally navigable water only be a levee, and (c) shares a significant nexus with the adjacent navigable water can be considered a regulable water of the United States.  (Case No. 04-15442, slip op. at 9373, August 6, 2007).  The Healdsburg decision revised the court’s August 2006 opinion in the case.  (Earlier opinion at 457 F.3d 1023).

By Maria Pracher and William Fleishhacker

On August 21, 2007, the California State Legislature ended a 52?day budget stalemate, agreeing to a $145 billion spending plan.  As part of that agreement, the lawmakers passed minor amendments to the California Environmental Quality Act (“CEQA”).  The amendments require the State Office of Planning and Research to develop and prepare guidelines addressing the analysis and feasible mitigation of greenhouse gas emissions, as required by CEQA.  These guidelines must be adopted by the Resources Agency by January 1, 2010.  The amendments also provide an exemption for certain projects from CEQA lawsuits based on claims that the effects of greenhouse gas emissions were not adequately analyzed or mitigated in an Environmental Impact Report (“EIR”) or other CEQA document prepared for the project.  The projects exempted are any transportation or flood protection projects funded by the $25 billion bond measures passed by the voters in 2006.  The CEQA exemptions are temporary, expiring on January 1, 2010.

By William M. Fleishhacker

In Mani Brothers Real Estate Group v. City of Los Angeles, the Second District Court of Appeal of California addressed the issue of whether the City of Los Angeles (the “City”) and the Los Angeles Community Redevelopment Agency (the “CRA”) properly relied on a 2005 Addendum to a 1989 environmental impact report (“EIR”) in approving a modified project. In doing so, the Court specifically rejected the analysis of a 2006 case which held that the initial inquiry should focus on whether the changes amount to a “new project” requiring an EIR.  Rather, under the substantial evidence standard of review, and based on CEQA and the CEQA Guidelines, the Court held that the proper question is whether the changes result in new significant impacts compared to the original project.

U.S. v. Moses, No. 06-30379 (9^th Cir. 2007)

By Stephanie J. Helfrich

In upholding an 18-month prison sentence, plus monetary fines, under the Clean Water Act (CWA) of an eastern Idaho developer who bulldozed a creek bed, the Ninth Circuit held that a seasonally intermittent stream which ultimately empties into a river that is a water of the United States can, itself, be a water of the United States. The Court further held that deposition of materials into the intermittent stream during the 10-month dry season still constituted a discharge of fill into waters of the United States.

Muzzy Ranch Co. v. Solano County Airport Land Use Commission (2007) __ Cal. __

By Arthur J. Friedman, David P. Lanferman and Elizabeth S. Anderson

In Muzzy Ranch Co. v. Solano County Airport Land Use Commission, the California Supreme Court unanimously held that the adoption of the Travis Air Force Base Land Use Plan (the "Plan") by the Solano County Airport Land Use Commission (the "Commission") was a "project" for purposes of CEQA.  In this particular case, however, the Court affirmed the Commission's determination that the adoption of the Plan was exempt from CEQA pursuant to the "common sense" exemption since the Plan simply reiterated existing Solano County General Plan land use policies.  This decision is significant in that the Court: (1) upheld the use of the "common sense" exemption from CEQA review, even though "legitimate questions were raised" about the possible environmental impacts of the adoption of the Plan and the Commission had erred by failing to identify substantial evidence in the record in support of its invocation of the exemption; and (2) also acknowledged that CEQA may require lead agencies to consider the effects of "displaced development" resulting from restrictive land use policies where such development can be reasonably anticipated.

United States v. Atlantic Research Corporation (2007) __ U.S. ___ [http://www.supremecourtus.gov/opinions/06pdf/06-562.pdf].

By Randy Visser and Olivier Theard

In a boon to private parties who undertake to voluntarily clean-up contaminated sites, the Supreme Court in United States v. Atlantic Research Corporation established that parties who undertake clean-up efforts may bring cost recovery actions under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) against potentially responsible parties (PRPs).  Before this decision, there was a split in the circuit courts regarding whether private parties could recover costs of clean-up, or whether their exclusive remedy was a contribution action which could only be brought after they were sued by the government.  The Supreme Court, in a unanimous opinion by Justice Thomas, ruled that a private party may sue for cost recovery even if that party has not been sued or paid a judgment or settlement to the government.

LT-WR, L.L.C. v. California Coastal Commission et al, No. B187666 (Cal. Ct. App., 2d Dist. May 25, 2007)

By Jeffrey W. Forrest

The Second District Court of Appeal of California upheld a trial court decision that the California Coastal Commission (the “Commission”) exceeded its authority when the Commission denied a private landowner a permit for gates and “no trespassing” signs.  The appellate court found that the Commission’s ruling that there was a “potential” to establish prescriptive rights for public use on the property “speculative.”

Like “squatter’s rights”, prescriptive access rights are created when the public openly and repeatedly accesses private property for a sufficient period of time without the landowner’s permission.  The Commission’s denial of the permit in effect decreed the existence of such access rights and was inappropriate because the Coastal Act does not grant the Commission the authority to create prescriptive public access rights.  Only a court has the authority to adjudicate and determine whether prescriptive access rights exist.

By Robert Uram, Ella Foley-Gannon and Aaron Foxworthy

On June 5, 2007, the Army Corps of Engineers (Corps) and the U.S. Environmental Protection Agency (US EPA) published long-awaited guidance on the United States Supreme Court's decisions in Rapanos v. United States and Carabell v. United States Army Corps of Engineers.  Posted on the agencies' respective web sites, the guidance sets out their interpretation of the Rapanos and Carabell decisions, particularly their effects on the agencies' regulatory jurisdiction under Section 404 of the Clean Water Act (CWA Jurisdiction).

By Arthur J. Friedman

On May 22, 2007, the Napa County Superior Court issued its ruling in American Canyon Community United for Responsible Growth et al. v. City of American Canyon et al. (Napa County Superior Court Case No. 26-27462), approving the City’s “addendum” to the previously approved mitigated negative declaration, and thereby authorizing the partially constructed and approved Wal-Mart supercenter in American Canyon to proceed with construction and operations.  The court’s ruling is significant in part because it rejected the petitioners’ novel claim that the City was required to perform “supplemental” environmental review of the project’s potential impacts on climate change in response to the California legislature’s recent enactment of Assembly Bill 32.

Feduniak et al., v. California Coastal Commission (2007) 148 Cal. App. 4th 1346.

By Michael R. Leake

The Sixth District Court of Appeals of California overturned a trial court decision and rejected the claim of a Monterey County coastal property homeowner that the Commission should be estopped from requiring the removal of a three-hole, pitch-and-putt golf course from the property and restoration of the area to its original landscape of native dune vegetation because the Commission failed to take any action regarding the existence of the golf course in violation of restrictions placed on the property by the Commission despite the fact that the golf course was easily visible and had been there for 18 years.

National Wildlife Federation v. National Marine Fisheries Service, No. 06-35011 (9th Cir. 2007)

By Bob Uram and Keith Garner

On April 9, 2007, the Ninth Circuit held that the jeopardy analysis under the Endangered Species Act regulations must consider the effects of an action on a listed species’ chance of recovery in a Section 7 consultation.  The regulations, which were promulgated in 1986, prohibit any agency action “that reasonably would be expected, directly or indirectly, to reduce appreciably the likelihood of both the survival and recovery of a listed species in the wild.”  50 C.F.R. § 402.02.  In a challenge to a biological opinion issued for the proposed operations of the Federal Columbia River Power System dams and related facilities, the National Marine Fisheries Service had argued that the restriction bars only actions that will both reduce the likelihood of survival and recovery of the species.  Because a species may survive without recovering to the point where it is no longer imperiled, the requirement to reduce the species’ chance of both survival and recovery was effectively a survival standard.  The Ninth Circuit upheld a district court’s decision invalidating the biological opinion, noting that the agency’s interpretation “reads ‘and recovery’ entirely out of the text.” The decision also contains important guidance on the definition of discretionary federal actions and rejects the NMFS effort to view the scope of the federal action narrowly.

Shepard v. Edward Mackay Enterprises, Inc., et al., --- Cal. Rptr. 3d ---, No. C052564, 2007 WL 853456 (Cal. Ct. App. Mar. 22, 2007)

While Section 1298.7 of the California Code of Civil Procedure generally allows homebuyers to pursue defect litigation in court regardless of an agreement to arbitrate, the Third District Court of Appeal recently ruled the Federal Arbitration Act preempts California law and binds homebuyers to arbitration provisions when the transaction involves interstate commerce.  Because homes built in California today likely incorporate at least some construction materials originating outside the state and therefore implicate interstate commerce, the court's ruling may effectively preclude homebuyers from relying on this section of the Code of Civil Procedure to avoid arbitration.

Stockton East Water District, et al. v. United States (February 20, 2007)

By Philip Atkins-Pattenson and Katharine Allen

In this action against the United States, the United States Court of Federal Claims held that the Bureau of Reclamation did not breach several 1983 state water contracts with two California water districts when it withheld water from the New Melones Reservoir for fish and wildlife purposes, as required by the Central Valley Project Improvement Act.  The court further found that the reduction in allocable water did not constitute a taking because the Bureau acted in its commercial capacity when it entered into the contracts, which meant that the plaintiffs’ only remedies were contractual.

By Robert Uram and Aaron Foxworthy

In San Francisco Baykeeper v. Cargill Salt Division, the Ninth Circuit Court of Appeals provided further guidance on the limits of Clean Water Act (“CWA”) regulatory authority.  ___ F.3d ___; Case No. 05-15051, slip op. at 2666 (9th Cir., filed March 8, 2007).  Cargill argued that a non?navigable, non?wetland pond does not fall within the Environmental Protection Agency’s definition of jurisdictional water of the United States simply by virtue of its adjacency to a navigable waterway.  The Court of Appeals agreed, holding that pursuant the agency’s CWA regulations, wetlands are the only waterbodies that  fall within CWA regulatory authority based on their adjacency to navigable waters of the United States.  Since the waterbody in question was a diked pond, not a wetland, the adjacency rule did not apply.  Baykeeper argued that the pond was nevertheless subject to regulatory authority because attendant circumstances indicated it had a “significant nexus” to navigable waters.  The court rejected this argument finding no indication in previous case law that the significant nexus test is intended to apply to waterbodies other than wetlands, and that, in any event, the evidence presented by Baykeeper did not indicate that water ever flowed from the pond to adjacent navigable waters.

By Robert J. Uram and Aaron Foxworthy

District courts for the Northern District of California and the District of Connecticut recently applied the Supreme Court’s 2006 Rapanos decision to decide whether certain intermittent and ephemeral streams and adjacent wetlands were subject to Clean Water Act regulatory jurisdiction.  (Please click for further discussion of Rapanos).  In both instances, the courts found that plaintiffs had not presented sufficient evidence that the streams or wetlands in question had a significant effect on downstream navigable waters.

Kristina Dyer v. Exon Martinez et al. (February 23, 2007, G037423) __ Cal.App.4th__; http://www.courtinfo.ca.gov/opinions

By Katharine E. Allen

In this action for specific performance of a contract for the purchase of real property, the Court of Appeals found that the physical recordation of a lis pendens in the county recorder's office was insufficient to provide a prospective purchaser with constructive notice of the claim until the recorder properly indexed the lis pendens in the county real property records because a diligent title search would not reveal the existence of the claim unless it was properly indexed.

Friends Of The Sierra Railroad v. Tuolumne Park and Recreation District  (filed January 12, 2007; certified for publication February 8, 2007, F050117) __ Cal.App.4^th__

By Lori Wider

Introduction

In this case plaintiff Friends of the Sierra Railroad (Friends) challenged the approval and sale of land from Tuolumne Park and Recreation District (District) to Tuolumne Band of Me-Wuk Indians (Real Party).  The land sold contained a portion of an historic railroad right?of?way.  Friends contended that the sale constituted a “project” under CEQA, requiring prior environmental review.  The Court of Appeal held that the transfer of the land was not a “project” under CEQA under the circumstances of this case.  While some development of the property was reasonably foreseeable, review of possible impacts to the historical resource would be premature in the absence of any specific proposal for development.

Uphold Our Heritage v. Town of Woodside  (filed January 10, 2007; certified for publication February 2, 2007, A113376) __ Cal.App.4^th__

By Lori Wider

Introduction

In this case plaintiff Uphold Our Heritage (Heritage) challenged the issuance by the Town of Woodside (Town) of a permit to Steve Jobs (Jobs) to demolish a mansion on his property to enable construction of a new single family residence.  The Court of Appeal held that Town's findings of infeasibility of certain EIR project alternatives involving rehabilitation of the existing structure rather than demolition were not supported by substantial evidence in the record. While the estimated costs of restoration of the mansion were before the Town Council (Council), the record was devoid of any information regarding the likely cost of a new residence (the proposed project). Without the information necessary to compare the restoration costs against the cost of the project, there was insufficient evidence to support the findings of infeasibility of rehabilitation alternatives.

McAllister v.County of Monterey et al.  (January 31, 2007, H028813) __ Cal.App.4^th__

By Lori Wider

Introduction

This case involved a challenge by the plaintiff McAllister to approval of a coastal development permit issued to his neighbors ("Real Parties") for a single family residence on the Big Sur coast.  The primary issues addressed by the court were McAllister's arguments that (1) the County of Monterey's ("County") approval of the permit was null and void since a prior owner's violation of conditions of a previously issued development permit for the same property constituted a violation of the County Code and, therefore, divested the County of jurisdiction to approve the permit; and (2) the County violated CEQA by failing to prepare an EIR rather than a mitigated negative declaration in connection with the permit.

Concerned McCloud Citizens v. McCloud Community Services District et al.  (Filed January 2, 2007; certified for publication January 31, 2007, C050811) __ Cal.App.4^th__

By Lori Wider

Introduction and Background

The California Court of Appeal, Third Appellate District, reversed the decision of the trial court  granting a petition for writ of mandate brought to challenge approval of an agreement between the McCloud Community Facilities District ("District") and Nestle Waters North America, Inc. ("Nestle") for the sale and purchase of spring water.  The lower court determined that the District had violated CEQA by failing to conduct environmental review prior to approving the agreement.  The appellate court disagreed, finding that approval of the agreement did not trigger the requirement for environmental review prior to District approval because (a) the agreement was expressly conditioned on future CEQA compliance; and (b) it did not commit the District to a course of action or commit it to issuance of any permits or other entitlements to Nestle.

Anne Manderville et al. v. PCG&S Group, Inc. et al. (January 24, 2007, D047285) __ Cal.App.4th__; http://www.courtinfo.ca.gov/opinions/

By Katharine E. Allen

In this case, the Court of Appeals determined that exculpatory clauses contained in a purchase contract are against public policy to the extent such clauses exempt any individual from liability for his own fraud and therefore do not preclude a buyer of real property from showing that he justifiably relied on a broker’s intentional misrepresentation about the character of the property.  The court also found that any lack of due diligence by a buyer in investigating zoning and other laws restricting the use of property, even if negligent, does not preclude the buyer from establishing justifiable reliance if (a) there has been an intentional misrepresentation; and (b) the purchase contract only permits, but does not require, the buyer to undertake his or her own due diligence.

National Association of Homebuilders v. U.S. Army Corps of Engineers, 01-274 JR (D. D.C. Jan. 30, 2007)

By Robert J. Uram and Stephanie J. Helfrich

On January 30, 2007, U.S. District Judge James Robertson ruled in favor of several major trade associations when he held that a rule jointly issued by the Army Corps of Engineers and the Environmental Protection Agency defining whether “incidental fallback” that can result from activities such as ditch digging and excavation, and subjecting the activity to Section 404 jurisdiction, was invalid.  Judge Robertson held that the rule does not properly address issues raised by a 1998 D.C. Circuit Court of Appeals Decision (National Mining Association v. United States Army Corps of Engineers, 145 F.3d 1399 (D.C. Cir. 1998)) and that the rule violates the Clean Water Act.  This decision coupled with the Supreme Court’s ruling in the Carabell and Rapanos cases leaves the Section 404 program awash with uncertainty.

California Farm Bureau Federation et al. v. California State Water Resources Control Board, (January 17, 2007, C050289) __ Cal.App.4th__ http://www.courtinfo.ca.gov/opinions

By David P. Lanferman and Ella Foley-Gannon

The Court of Appeals for the Third Appellate District has declared that regulatory fee schedules adopted by the State Water Rights Control Board (“Board”) in 2003, imposing new annual fees on holders of water rights permits and licenses are unconstitutional and invalid. The decision was based largely on the court’s finding that the Board failed to demonstrate the requisite “proportionality” between the costs of the Board’s regulatory program and the fees imposed on the targeted fee payors, and addressed several important issues frequently raised in the implementation and litigation of regulatory fees.

Kemp Bros. Construction, Inc. v. Titan Electric Corp. (2007) Cal.App.4^th

By Thomas B. Snyder

In this case, Kemp was a prime contractor on two public works projects for the Los Angeles Unified School District ("LAUSD").  It subcontracted the electrical work to Titan Electric on both projects.  Partway through performance, Titan began to struggle with its payroll obligations and Kemp agreed to informally advance payments to Titan to assist in completing the work.  When problems continued, Kemp stopped the advance payments and Titan was unable to meet its payroll.  Kemp then retained another electrical subcontractor who completed the work.  Simultaneously, Kemp requested that the LAUSD approve Titan's substitution as the listed subcontractor under Public Contracts Code Section 4107, arguing that Titan was failing and refusing to perform its work and/or delaying or disrupting the progress of the work.  The LAUSD hearing officer agreed that Titan had been disrupting and delaying the work and therefore determined that Kemp had the statutory right to substitute Titan.

Black Hills Investments, Inc. v. Albertson's, Inc. - January 12, 2007

By Thomas B. Snyder

On November 22, 2004, Black Hills entered into a contract to purchase two parcels of real property in a retail shopping center.  At the time of the contract, the two parcels had not yet been created through subdivision of the property.  Black Hills deposited earnest money of $133,000 which was described as non-refundable.  The contracts contained a provision which permitted the seller, Albertson's, to terminate the contract if it failed to obtain the proper governmental approvals for creation of the two parcels.  Black Hills was given no such right.

American Canyon Community United for Responsible Growth v. City of American Canyon et al. (November 17, 2006; certified for partial publication December 18, 2006, A111278) __ Cal.App.4^th__ http://www.courtinfo.ca.gov/opinions

By Lori Wider

In this case, the Court of Appeal determined that the City of American Canyon (“City”) violated CEQA because the City’s determination that project changes would not substantially increase traffic impacts was not supported by substantial evidence and the City failed to proceed in accordance with law by refusing to consider potential extraterritorial urban decay effects of a proposed Wal-Mart supercenter.  The changes would have increased the size of the approved project by 6.5% and added 30 traffic trips.  The Court also determined that the City violated its zoning ordinance by approving the supercenter without approving a major modification application.  Only the CEQA portion of the decision is certified for publication; the last section of the decision, addressing the alleged zoning ordinance violations, is not.

City of Goleta v. Superior Court of Santa Barbara County  (December 21, 2006, S129125) __Cal.App.4th__http://www.courtinfo.ca.gov/opinions

By Maria Pracher

The California Supreme Court has held that the newly incorporated City of Goleta could disapprove a final subdivision map even though the vesting tentative subdivision map had been approved by Santa Barbara County.  Government Code section 66413.5(f), which provides for the mandatory approval of a final map by a newly incorporated city if the vesting tentative map has been approved by a county, did not apply given the facts in this case.  Additionally, the City's adoption of the County codes did not prevent it from denying the map, and nothing in the City's actions with respect to the project estopped it from denying the final map.

Calvert v. County of Yuba (December 5, 2006, C047857)__Cal.App.4^th__ http://www.courtinfo.ca.gov/opinions/

By Lori Wider

The Court of Appeal, Third Appellate District, held that a vested rights determination under the Surface Mining and Reclamation Act ("SMARA") regarding surface mining operations in the diminishing asset context is subject to the procedural due process requirements for reasonable notice and an opportunity to be heard.  The County of Yuba ("County") in this case made a determination that Western Aggregates LLC ("Western") had a vested right to mine aggregate from an area within the Yuba Goldfields.  The County had invited Western and other surface mining operators to apply for a vested rights determination following a decision by a superior court in a prior lawsuit that a zoning authorization was not an adequate substitute for a SMARA permit.  In determining that a public adjudicatory hearing, with reasonable notice and an opportunity to be heard, was required, the Court of Appeal specifically limited its holding to a vested rights claim to conduct a surface mining operation subject to the diminishing asset doctrine.  Therefore, it is not clear whether this decision has any broader application or implication beyond the facts of this case.

Wagner Farms, Inc. v. Modesto Irrigation District (Dec.6, 2006, F049966) __ Cal.App.4th __ http://www.courtinfo.ca.gov/opinions/

By Maria Pracher

In this case, the appellate court reversed an award of costs in favor of the Modesto Irrigation District (the District) granted by the trial court after the plaintiff's petition for a writ of mandate was denied.  The court found the District had failed to provide sufficient justification for the "unusually high" cost per page for preparing the record and to adequately document the time legitimately charged for assembling the record of the proceedings.

Divers’ Environmental Conservation Organization v. State Water Resources Control Board (Nov. 29, 2006, D046112) __ Cal.App.4th __ http://www.courtinfo.ca.gov/opinions

By Ella Foley-Gannon and Julie Austin

The Court of Appeals held that a permitting agency under the Clean Water Act is not required to conduct a numeric analysis of individual pollutants in industrial stormwater discharges in order to comply with federal regulations.  In addition, even if a discharge will cause the receiving body of water to violate State water quality standards, the agency is not required to impose numeric “water-quality based effluent limitations” (WQBELs) in a National Pollutant Discharge Elimination System (NPDES) permit.  Rather, to comply with the regulations, the agency may conduct more general, non-numeric tests of stormwater discharges and, if necessary, impose Best Management Practices (BMPs) on the discharger.  This decision is significant because the environmental community has recently pressured permitting agencies to impose numeric limitations on industrial discharges, which include construction discharges.  These numeric limitations, if required, would have presented a huge challenge and risk to permittees, who could violate their permits despite the fact that stormwater pollutants are highly variable and may be beyond their control.  Thus, this decision helps protect permittees by clarifying that permitting agencies are not required to use numeric limitations to regulate industrial stormwater discharges.

Wolfe v. City of Fremont (Oct. 31, 2006, A112386) __ Cal.App.4^th __ http://www.courtinfo.ca.gov/opinions/

By Julie Austin

This Court of Appeals’ decision under the Brown Act, which prohibits a majority of members of a local legislative body from reaching a “collective concurrence” outside a noticed public meeting, suggests that an improper consensus may be reached inadvertently during the course of individual conversations between members of a local legislative body.  The court found that the plaintiff alleged sufficient facts to demonstrate that an improper “collective concurrence” had occurred through a series of one-on-one conversations among the legislative members.  Specifically, the plaintiff alleged that all city council members expressed support for a policy before a formal public meeting and that at least one council member had been aware of the other members’ views.  The court noted that the city council’s lack of intent to create a consensus was not fatal to the plaintiff’s case because the Brown Act prohibits even unintentional “collective concurrences.”  This case suggests that in the future, while engaging in otherwise permissible one-on-one discussions with other members of a legislative body, local legislators must be careful not to reveal the views of any other members to avoid inadvertently creating an improper “collective concurrence.”

Western Placer Citizens for an Agricultural and Rural Environment v. County of Placer (3^rd Dist. Nov. 9, 2006)

By Maria Pracher and Julie Austin

In this new California Environmental Quality Act (CEQA) case, the Court of Appeal upheld the County's EIR for a sand, gravel, and granite mining and processing project.  The court ruled on two important issues.  First, the County did not violate CEQA by failing to include and analyze a slightly revised project description submitted by the applicant after the final environmental impact report (EIR) had been prepared.  Coupled with this holding, the court found that the County's decision not to prepare additional environmental review of the revised project was supported by substantial evidence in the record.  Second, the court determined that the EIR's water supply analysis was adequate.  The court also found that the plaintiff had exhausted its administrative remedies.

Citizens for Open Government v. City of Lodi (3^rd Dist. Nov. 9, 2006)

By Julie Austin

Two non-profit groups, Citizens for Open Government (Citizens) and Lodi First, opposed the City of Lodi’s certification of a Final Environmental Impact Report (FEIR) and approval of a use permit for a Wal-Mart-anchored shopping center.  The trial court found that Citizens had not exhausted all of its administrative remedies because, even though Lodi First filed an appeal to the City Council, Citizens had not filed its own appeal.  The Court of Appeals reversed this determination and found that Citizens had exhausted its administrative remedies under CEQA and the Municipal Code because Citizens appeared before the City Council to file its own objections and participated in the administrative process.  The court also found that Citizens’ claims were not moot even though a trial court had partially granted Lodi First’s petition and vacated the City Council’s approval of the project.

By John Scheuring

Late in September, the Court of Appeal effectively reversed a judgment against the City of San Diego which, with interest and attorney's fees, was on track to exceed $150 million.  Originally filed in 1995, Border Business Park sued the City on theories of inverse condemnation and breach of contract.  The trial court ruled that the City was liable for (i) publicly announcing that it was considering a proposal for to create an international airport in Otay Mesa (which interfered with sales of property within Border Business Park), and (ii) the City's diversion of truck traffic to a new border crossing with Mexico (which allegedly interfered with access to Border Business Park). The trial court also held the City liable for breach of a development agreement with the Border Business Park (but did grant a motion for new trial on res judicata issues stemming from a previous lawsuit).

By Robert Uram and Keith Garner

Pursuant to its authority under the Clean Water Act, the U.S. Army Corps of Engineers has issued general permits, called Nationwide Permits, for activities that have minimal effect on the environment. Discharges of dredged or fill material in wetlands and other waters of the U.S. are permitted in connection with these activities upon verification by the Corps that an activity qualifies under a Nationwide Permit. The current Nationwide Permits were issued in January of 2002 and are scheduled to expire on March 19, 2007. The Corps has not yet commenced the rulemaking process that is required to reissue Nationwide Permits, and no announcements have been made concerning the Corps' intention or schedule for doing so. Although activities authorized under Nationwide Permits are supposed to finish before the expiration date, verifications are generally issued with a "grandfather" provision that gives activities that have commenced or are under contract to commence before the expiration date an additional year to be completed.

For more information please contact Robert Uram and Keith Garner.  Robert J. Uram is a partner in the Real Estate, Land Use and Environmental Practice Group in the firm's San Francisco office.  Keith Garner, AICP, is an associate in the Real Estate, Land Use and Environmental Practice Group in the firm's San Francisco office.

Bighorn-Desert View Water Agency v. Verjil, (July 24, 2006, S127535) __ Cal.4th __

By Dave Lanferman and Misti Schmidt

On July 24, the California Supreme Court unanimously held that the initiative power reserved to the voters by Article XIII C of the California Constitution permits use of an initiative to reduce or repeal water delivery charges, and suggested that this initiative power extends to all local government levies that are ordinarily understood to be fees or charges. However, the Court also held that XIII C does not permit such initiatives to require voter approval of future increases in those charges, and invalidated the particular initiative proposal on this basis. The Court's decision acknowledged concerns that recognition of the right of local voters to repeal or reduce governmental fees by initiative may result in fiscally irresponsible actions by voters, but invoked the presumption that governing boards and their voters will act reasonably and in good faith to reach financially and legally sound compromises on fee-setting actions.

A Summary of Benson v. California Coastal Commission (2006) 139 Cal. App. 4th 348

By Brenna Moorhead

"Predictions and suggestions from staff may be helpful or misleading to a party with a matter before the Coastal Commission. Therefore a party should take such advice with caution." (Id. at 348.)

John Benson alleged a due process violation by the California Coastal Commission. Benson's project, the expansion of the Baywood Inn in San Luis Obispo County, had been approved by the County's planning commission under a mitigated negative declaration. It was appealed by the Concerned Citizens of Los Osos, first, to the County Board of Supervisors and, upon rejection, to the California Coastal Commission ("Commission"). The Commission sent notice and a copy of the appeal to Benson as well as notice of the hearing date in May 2003. Subsequently, the Commission's staff issued, with a copy sent to Benson, a report on the appeal recommending that that the Commission "open and continue the public hearing to determine whether a substantial issue exists…" (Id. at 351-52.) 

Preciado v. Wilde, California Court of Appeal, Second District, 42 Cal.Rptr.3d 792, 06 Cal. Daily Op. Serv. 3817, 2006 Daily Journal D.A.R. 5563

By Brenna Moorhead

Tenants in common have equal possessory rights in land, therefore more is required to establish title by adverse possession against a cotenant that by adverse possession against a stranger. In Preciado v. Wilde, Plaintiff Preciado and his wife filed an action to quiet title based on adverse possession against Wilde, Preciado's niece. Preciado and Wilde became tenants in common when Wilde inherited interests in two parcels of real property from her father after his death in 1984. 

Establishing title by adverse possession against a stranger requires:

1. actual possession providing reasonable notice to the owner;
2. possession hostile to the owner's title;
3. a claim to the property under color of title or claim of right;
4. five years of continuous, uninterrupted possession; and
5. payment of taxes levied and assessed upon the property during the period. 

Adverse possession against a cotenant requires more with respect to notice of the intent to oust the co-tenant of its interest in the common property. One tenant cannot by mere exclusive possession acquire title of the property.

Wal-Mart Stores, Inc., et al. v. City of Turlock

By Michael Wilmar and Michael Leake

In Wal-Mart Stores, Inc., et al. v. City of Turlock, (2006) 138 Cal.App.4th 273, the California Court of Appeal for the Fifth Appellate District upheld a City of Turlock zoning ordinance which amended the City's general plan to bar the development of “big box” retail stores containing full service grocery departments. Under the ordinance, the City banned the development of “discount superstores,” which it defined as discount stores that exceed 100,000 square fee of gross floor area and devote at least 5 percent of the total sales floor area to the sale of nontaxable merchandise, often in the form of a full-service grocery department. In Wal-Mart's appeal of its earlier Superior Court defeat, it argued that the ordinance was an unconstitutional use of the City's police power and that the ordinance failed to comply with the California Environmental Quality Act (CEQA).

California LLC Fee Unconstitutional

The limited liability company fee imposed under California law recently was held to be unconstitutional according to the court in Northwest Energetic Services, LLC v. California Franchise Tax Board (Super. Ct. San Francisco County, 2006, No. CGC-05-437721). The decision states that the graduated fee imposed on the "total income" of an LLC (meaning gross income plus the cost of goods sold) under Section 17942 of the California Revenue and Taxation Code is illegal for violating the Commerce Clause and the Due Process Clause of the U.S. Constitution. Such fee currently starts at $900 if total income is $250,000 or more but less than $500,000, and ranges upward, topping out at $11,790 if total income is $5,000,000 or more.

By Donna Jones

The California Court of Appeal in Trancas Property Owners Association v. City of Malibu, 2006 WL 802483 (Cal.App. 2 Dist.)), upon a rehearing requested by the California League of Cities as Amicus Curiae, recently re-affirmed its decision (discussed in this blog on October 13, 2005) that the City's adoption of a settlement agreement in a closed session violated the Ralph M. Brown Act, Gov't Code section 54950 et seq. (Brown Act).

By Robert J. Uram and Ella Foley-Gannon

On March 14, 2006, in Center For Biological Diversity v. Bureau of Land Management, et al., 2006 WL 662735 (N.D. Cal.), the United States District Court for the Northern District of California concluded that the U.S. Fish and Wildlife Service (the “Service”) improperly ignored the recovery goal of critical habitat in finding that there were no additional regulatory benefits to be gained by designating critical habitat in areas that were ultimately excluded. Additionally, the Court concluded the Service improperly considered economic impacts of critical habitat designation that are coextensive with restrictions resulting from the listing of milk-vetch in excluding significant areas from the final critical habitat designation.

By Michael Wilmar

In the recent case of Padilla v. Lever, No. 03-56259, 429 F.3d 910 (9th Cir. Nov. 23, 2005), the Ninth Circuit (the "Court") held that Section 203 of the Voting Rights Act of 1965 (the "Act"), which requires voting materials in certain districts to be distributed in specified minority languages, applies to recall petitions circulated pursuant to California law. Specifically, the Court held that recall petitions were "other materials or information relating to the electoral process" and that the Orange County Registration and Elections Department (the "OCRED") "provided" the recall petitions within the meaning of the Act. The decision makes it likely, if not certain, that in every locale where bilingual or trilingual ballots are required, a similar requirement will also apply to initiative petitions.

By Robert J. Uram, Ella Foley-Gannon and S. Keith Garner

On February 6, 2006, in National Ass'n of Homebuilders v. U.S. Army Corps of Engineers, Nos. 04-5221 et al., 36 ELR 20032 (D.C. Cir. Feb. 6, 2006), the United States Court of Appeals for the D.C. Circuit issued a unanimous ruling in favor of several major trade associations, holding that the validity of the Army Corps of Engineers regulation of "incidental fallback" that can result from activities such as ditch digging and excavation is ripe for review, and requiring the lower court to consider the legality of permit requirements for this type of discharge of dredged material into waters of the United States.

By David P. Lanferman

The recent decision of the California Supreme Court in Barratt-American v. City of Rancho Cucamonga(37 Cal.Rptr.3d 149) [covered in an earlier update on this site] raises serious questions as to the way many jurisdictions calculate, collect, and apply fees from developers for building permits and building inspections. Back in 1993, the California Attorney General published an opinion which concluded that fees for building permits and inspections are required to be based on the actual or reasonable costs of providing such services, rather than on the value of the proposed construction or improvements [76 Ops.Cal.Atty.Gen. 4]. Nevertheless, many (perhaps most) cities and counties continue to charge building permit fees which are based on the valuation of the construction, rather than being based on staff time and costs of providing service. To the extent that such valuation-based fees may exceed the reasonable costs of providing those services, recent court decisions may now hold cities and counties accountable for the excess revenues collected.

By David P. Lanferman

In Barratt American, Inc. v. City of Rancho Cucamonga, the California Supreme Court clarified questions of procedure and potential remedies available in actions challenging building permit and inspection fees under the Mitigation Fee Act, California Government Code § 66000 et seq. (the "Act"). Appellant Barratt American had sued the City on the basis that its inspection and permit fees (1) exceeded the City's costs of providing building inspection services; and (2) the City was improperly accumulating excessive fee revenues from its building permit operations. The Court agreed with lower court holdings that, when building inspection and permit fees are at issue, the only statutory relief was an action for invalidation of the resolution pursuant to Gov. Code § 66022. However, the Court disagreed with lower courts that Barratt's action was barred by the 120-day statute of limitations applicable under § 66022, finding instead that the City's reenactment and minor modification of the building permit fee schedule started a new limitations period. Lastly, the Court held that, when building inspection and permit fees are at issue, the appropriate remedy under the Act was not a refund but rather to reduce the fees going forward.

Sierra Club v. United States Army Corps of Engineers, 2005 WL 2090028 (D.N.J. 2005)

By Robert J. Uram and Ella Foley-Gannon

This case involved a challenge to a Corps of Engineers 404 permit to allow the filling of 7.69 acres of wetlands for a redevelopment project within the Meadowlands Sports Complex in New Jersey. The district court denied plaintiff environmental groups' preliminary injunction claim that the Corps had defined the project purpose in improperly narrow terms thereby precluding any practicable alternatives determination. Specifically, plaintiffs contended that the Corps substituted a project description for a basic project purpose.

By Donna D. Jones and Michael B. Wilmar

In County of Alameda v. Superior Court, 133 Cal. App. 4th 558 (2005), the California Court of Appeal, First District, ruled that a developer seeking to bring an inverse condemnation action may not invoke the futility exception to the ripeness doctrine until the developer has submitted a development proposal to land use authorities and had it denied.

The California Court of Appeal, Second District, threw out a jury award of $14,275,237 in damages against Shell Oil Co. in an action by plaintiff Watson Land Company concerning groundwater and soil contamination from a gasoline pipeline leak. The appellate court ruled that the jury erred when it found that Shell derived a $14,275,237 "benefit" from the leak and resulting contamination, and misapplied Civil Code section 3334 in awarding that amount to plaintiff.

By Donna Jones

The California Court of Appeal recently re-affirmed the limits on a city's ability to contract away its police power and placed limits on actions that a government can take in closed session. The Court also re-affirmed development agreements as an appropriate method for a city and an owner-developer to exempt a described development from future changes in zoning and density requirements.

By Michael Wilmar

Former Section 6307 permitted the State Lands Commission to make exchanges of tide and submerged terminating the public trust for commerce, navigation, and fishery in the best interests of the state for the following purposes:

• Improvement of navigation
• Aid in reclamation
• Flood control protection
• To enhance the configuration of the shoreline for the improvement of the water and upland on navigable rivers, sloughs, streams, lakes, bays, estuaries, inlets, or straits

By Michael B. Wilmar

In Endangered Habitats League v. County of Orange, 131 Cal. App. 4th 777 (2005), the California Court of Appeal rejected a development plan in Orange County. The court did so on the grounds that the specific plan approved by the County conflicted with its general plan, and that the County compiled an inadequately detailed environmental impact report (EIR).

By Michael Wilmar

Recently, three separate panels of the California Court of Appeal rendered opinions on the availability of attorneys' fees for plaintiffs who bring CEQA challenges. The decisions make clear that courts have considerable latitude in determining who is the "successful party" and whether there has been a "significant benefit" under the private attorney general statute.

The federal court of the Eastern District of California has published its decision in Kotrous v. Goss-Jewett Co. of Northern California, Inc. (2005 WL 1417152, E.D. Cal. Jun. 16, 2005), concerning whether a potentially responsible party in CERCLA hazardous waste cases may bring a contribution claim.

By Doug Van Gessel

On August 4 the California Supreme Court ruled, in Grafton Partners v. Superior Court (Pricewaterhouse Coopers LLP), 2005 DJDAR 9387 that California contractual provisions in which the parties thereto pre-agree to waive the right to a trial by jury are unenforceable. The unanimous opinion stated that a right to a jury trial is a fundamental constitutional entitlement that cannot be waived in advance of a dispute between the contracting parties unless such a waiver is permitted by statute. Thus, the court has left the door open for the legislature to pass a statute allowing such waivers, and the forum for interests pursuing this debate will likely shift to the legislature now.

Lu v. Grewal
(05 C.D.O.S. 5740, June 28, 2005)

By Mary Hedley

A tenant who abandons a commercial leasehold cannot escape all liability for its breach by taking advantage of the landlord's work in restoring the space and making it profitable. In Lu v. Grewal the tenant abandoned a gas station with almost 3 years left on its lease. When the landlords re took the premises, they found that the gas pumps had been torn out of the ground, gasoline was pooling in holes in the ground, computer controls had been ripped off the walls, the premises were vandalized, and the convenience-store items were missing or broken. The landlords worked around the clock to repair the property and operate the business themselves. They sued the tenant for breach of the lease, including damages for removing fixtures and a claim for the rent that was due following abandonment.

Kelo v. City of New London
05 CDOS 5466 No. 04-108 (U.S. Supreme Court, June 23, 2005)

By Michael B. Wilmar

In a 5-4 decision, the U.S. Supreme Court held that economic development constitutes a valid public purpose within the meaning of the U.S. Constitution Fifth Amendment "public use" clause. Relying heavily on previous U.S. Supreme Court takings cases, Justice Stevens, writing for the majority, found that the City's purpose of economic development fit safely within the Court's broad interpretation of public purpose. Justice O'Connor, writing for the dissent, distinguished past U.S. Supreme Court takings cases as involving harmful precondemnation use of the private property whereas in the present case, the precondemnation use was not harmful. The majority only addressed takings under the U.S. Constitution and noted that states may place greater restrictions on its eminent domain power. The majority also rejected Petitioners' argument that the City's economic development plan would provide only purely economic benefits.

San Remo Hotel v. City and County of San Francisco
05CD05 5313 No. 04-340 (U.S. Supreme Court, June 20, 2005)

By Michael B. Wilmar

In San Remo Hotel v. City and County of San Francisco, the U.S. Supreme Court barred Petitioners from raising federal takings claims in federal court after Petitioners advanced in state court, and the state court decided, federal takings claims congruently with state takings claims. The hotel owned by Petitioners was previously used for various purposes?tourist hotel, long-term rooms, and mixed use. In 1981, San Francisco enacted the Hotel Unit Conversion and Demolition Ordinance that required hotel owners to apply for permits and pay fees before they could convert residential units into tourist units. In 1990 when Petitioners applied to convert all of the rooms in the San Remo Hotel into tourist rooms, the City issued a permit that allowed the conversion but for a $567,000 conversion fee. Petitioners challenged the ordinance and the imposition of a conversion fee as unconstitutional.

Marine Forests Society v. California Coastal Commission
05 CDOS 5501 S113466 (Supreme Court of California, June 23, 2005)

By Michael B. Wilmar

In Marine Forests Society v. California Coastal Commission, the Supreme Court of California unanimously held that the current California Coastal Act (CCA) provisions governing the membership structure of the California Coastal Commission do not violate the California Constitution's separation of powers clause. After the lower courts enjoined the Coastal Commission from performing its functions and pending review of this decision by the Supreme Court, the Legislature passed an emergency measure to amend the challenged provisions of the CCA. Under the amended provisions, a majority of the Commission's voting members were still appointed by the Legislature but members were no longer removable at the pleasure of the Legislature.

Horwitz v. City of Los Angeles (Beglari)
124 Cal. App. 4th 1344 (2d Dist. Dec. 15, 2004) (review filed Jan. 24, 2005)

Trial court properly issued writ commanding the City to revoke all building permits and the certificate of occupancy related to a particular residence where permits were issued in violation of mandatory requirements of zoning ordinance. Los Angeles Planning Commission's ruling in favor of resident - which allowed renovation to the residence to encroach approximately 14 feet into the area of the required front-yard setback - was clearly erroneous because City has no discretion to issue a permit in the absence of compliance with the mandatory set-back requirements.

For more information please contact a member of the Real Estate and Construction Law Blog Editorial Team.