Saturday, November 01, 2008

State Supreme Court: CEQA environmental review must preceed project approval

The vexing question of when a project is approved and compliance required by the California Environemental Quality Act (CEQA) was perhaps definitively answered in Friday's carefully balanced decision by the state Supreme Court in the case of Tara v. City of West Hollywood 2008 WL 4741084.

(Curious, isn't it, that self-proclaimed "progressive" California cities are so willing to throw environmental review overboard when they want something?)

The decision is certain to throw shocks waves into California governments that have grown used to gaming the CEQA environmental review process with talismanic reservation of “final” CEQA approvals. No more. Under Tara, the “all-but-CEQA” method is over.

The case presented an egregious factual situation. West Hollywood had committed millions of dollars to the project, given approvals, delegated any CEQA followup to the City manager, given tenants relocation notices and generally made it known that the historic location would be redeveloped to include 32 low-income units.

The Court used the occasion to incisively set out the factors to be balanced. “This court, like the CEQA Guidelines, has thus recognized two considerations of legislative policy important to the timing of mandated EIR preparation: (1) that CEQA not be interpreted to require an EIR before the project is well enough defined to allow for meaningful environmental evaluation; and (2) that CEQA not be interpreted as allowing an EIR to be delayed beyond the time when it can, as a practical matter, serve its intended function of informing and guiding decision makers.”

The Court left no question of the proper judicial review. An agency’s abuse of discretion can be from “failing to proceed in the manner CEQA provides or by reaching factual conclusions unsupported by substantial evidence.” (Citing CEQA Guideline §21168.5.) Review given the two abuses differs significantly. Improper procedures, the Court held, are reviewed de novo and scrupulously enforced; review of an agency’s substantive factual conclusions on the other hand are given “greater deference.” This part of the Tara decision gives lower courts clear direction and discretion. The question is one of law, not facts. The courts will “scrupulously” and independently decide at one point CEQA review is required—not the agency.

But that discretion involves a balancing which the high court laid out clearly. “The CEQA Guidelines define ‘approval’ as ‘the decision by a public agency which commits the agency to a definite course of action in regard to a project.’” (Citing CEQA Guidelines §15352(a).)

“The problem is to determine when an agency's favoring of and assistance to a project ripens into a ‘commit[ment].’ To be consistent with CEQA's purposes, the line must be drawn neither so early that the burden of environmental review impedes the exploration and formulation of potentially meritorious projects, nor so late that such review loses its power to influence key public decisions about those projects.

The League of California Cities had pushed the Court to allow deferring CEQA review until the stage of “unconditional agreements that irrevocably vest development rights.” The Court said no. ““A CEQA compliance condition can be a legitimate ingredient in a preliminary public-private agreement for exploration of a proposed project, but if the agreement, viewed in light of all the surrounding circumstances, commits the public agency as a practical matter to the project, the simple insertion of a CEQA compliance condition will not save the agreement from being considered an approval requiring prior environmental review.”

Still, local governments were left plenty of opportunity to pick a project before CEQA review is required. The Court recognized that certain development agreements, identification—even purchase—of a project site, exclusive negotiating agreements and the like need not be per se project “approvals” dictating CEQA review. The project can and should be sufficiently defined to be reviewed.

The bottom line: “…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 that public project.’”CEQA Guidelines §15004(b)(2)(B).