General Development, LP v. City of Santa Maria (January 25, 2012)

Cal. Court of Appeal (Second District, Division 6) B228631

The Court of Appeal held that the short 90-day statute of limitations contained in Government Code section 65009 barred a later-filed action by a developer challenging a city decision denying a zoning change. The developer argued the plain meaning of section 65009(c)(1) only barred actions filed after 90 days “To attack, review, set aside, void, or annul the decision of a legislative body to adopt or amend a zoning ordinance.” Because the city had merely denied developer’s request for a zoning change, developer argued such section did not apply.

The Court of Appeal disagreed. Section 65009(b)(1) states the shortened statute of limitation applies to any “action or proceeding to attack, review, set aside, void, or annul a finding, determination or decision of a public agency made pursuant to this title at a properly noticed hearing … .” The Court agreed with the trial court, the California Supreme Court, and a District Court decision that the foregoing language is not limited to only those decisions that adopt or amend a zoning ordinance, but, rather, applies to any decision by a legislative body involving planning or zoning. Further, the legislative intent is to avoid placing any cloud over the property; that is best accomplished by applying the shorter statute of limitations rather than the general three-year statute of limitations applying to real property.

Klein v. Chevron USA, Inc. (2^nd Dist.) B219113 (Jan. 25, 2012)

Class action plaintiffs sued Chevron, alleging that Chevron overcharged California customers for gasoline by failing to adjust the price when selling gas above 60 degrees F. It was uncontested that the wholesale price at which Chevron bought gas is rated at 60 degrees (industry custom) and that gas expands and has less energy when it is sold at a higher temperature, thus making it less valuable to a consumer. Thus, Chevron makes more money when it fails to disclose that less gas is sold above 60 degrees, and the consumer pays slightly more than the advertised price.

In Canada, where temperatures are often well below 60 degrees, the opposite holds true in both respects. There, the oil industry and Chevron have a policy of installing equipment that adjusts the price depending on the temperature so that they do not lose money when selling below 60 degrees. In California, the oil industry and Chevron have the opposite policy and do not install such equipment with the result that they make more money.

Of interest here, plaintiffs sued under the Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA). After initially ruling in favor of some of plaintiffs’ claims over several demurrers, the trial court ultimately ruled in Chevron’s favor in a motion for judgment on the pleadings. The court concluded it should exercise judicial abstention because the California Energy Commission (CEC) had already been asked by the Legislature to look into the cost-benefits of requiring the equipment that adjusts the price depending on the temperature.

CEC concluded in 2009 that if the temperature adjusting equipment were installed at all retail outlets, then consumers would have purchased about 117 million less gallons of gas (because fuel was sold at average of 71.1 degrees F). Nonetheless, CEC believed the costs of installing the equipment would be added to the price of gas, resulting in a net cost for consumers. The court then dismissed the action.

The Court of Appeal reversed in all key respects. The Court started by reviewing several judicial abstention cases and derived the rule that abstention is appropriate where 1) plaintiff’s claims necessarily require the court to resolve complex policy issues and 2) there is an alternative mechanism to resolve plaintiff’s complaints. Such scenarios can occur when a regulatory body has addressed the subject matter of plaintiff’s complaint. Here, however, the Court found CEC had merely done a cost/benefit analysis and had not taken further action to address the issue temperature and price. The fact CEC could address the issue in the future is not a basis for abstention. Also, some of plaintiff’s complaints could not be addressed by CEC, including whether disclosures should be required.

As for specific claims, the Court went on to allow UCL claims for business practices that are “unfair,” “fraudulent,” and “unlawful” as well as the CLRA claim for fraud or deceit.

Center for Sierra Nevada Conservation v. County of El Dorado
Jan. 20, 2012
Cal. Court of Appeal (3rd App. Dist.)  2012 DJDAR
C064875

The Court of Appeal reversed the trial court’s approval of the County’s Negative Declaration in conjunction with an oak woodland plan. The County tried to rely upon a prior program EIR prepared four years earlier when it approved a new general plan. At the time of the general plan approval, the EIR contemplated the need for a future oak woodland management plan and fee program for mitigation purposes. There was no actual guidance provided in that EIR. The EIR also acknowledged that significant impacts would result to the oak woodland habitat by development. The EIR discussed an intended one-to-one on-site mitigation ratio until a plan could be developed and a fee plan adopted that allowed for off-site mitigation.

When the County later tried to rely upon the prior EIR, the Court of Appeal held that to be improper. The County prepared an initial study which should have determined whether the prior EIR had already addressed the environmental issue of concern; here, the consultant and County Counsel advised to prepare a tiered EIR which the County ignored.

The Court found that because the particulars of the fee program and scope of the mitigation were never defined, their effectiveness could not be measured. Similarly, no attempt was made to address or reconcile the general plan requirement to protect various oak and hardwood habitat and ensure connectivity among protected areas. Thus, the County’s attempt to bootstrap the current negative declaration onto the prior EIR failed. A fair argument could be made that the plan and fee program would have a significant impact on the environment, and thus an EIR should have been prepared.

Sierra Club v. U.S. E.P.A.
(9th Cir. 2012)
Jan. 20, 2012
2012 DJDAR 844
10-71457

Environmental organizations challenged the federal EPA’s approval in 2010 of California’s proposed 2004 state implementation plan (SIP) for the San Joaquin Valley’s nonattainment area for the one-hour ozone National Ambient Air Quality Standard, where the degree of danger to human health from ozone was considered extreme.

While California can regulate stationary sources of emissions, it must get first get EPA approval before setting standards from mobile sources such as vehicles.

The Ninth Circuit Court of Appeal had original jurisdiction under the Clean Air Act (CAA) to hear the case. The Court agreed with plaintiffs that the EPA had acted arbitrarily and capriciously by approving the SIP knowing that the emissions inventory upon which it relied were outdated and inaccurate. The CAA requires nonattainment plans to “include a comprehensive, accurate and current inventory of actual emissions from all sources of relevant pollutant or pollutants in such area.” The state based the 2004 SIP on data from 2002. By the time the EPA considered the SIP in 2010, new data from a newer computer modeling tool had become available. Rather than use this data, the EPA relied upon an internal guidance memo that suggested it could use data that was current as of the time the SIP was submitted to the EPA. The Court found the memo (Seitz memo) even questioned reliance on greatly outdated data after much time had elapse.

Another Circuit Court of Appeal had previously approved EPA reliance on the Seitz memo where the EPA ignored new data that became available one year before EPA approval of a SIP. The reasoning was that an agency might not be able to work efficiently if it were forced to stop everything and consider every new piece of information. But here, the EPA had new data for three years before approval. The Court held the EPA could not ignore evidence that showed a nonattainment plan was inadequate while relying on insignificantly outdated data.

The EPA also argued it could ignore the 2007 8-hour ozone emissions data because they were not relevant to the 2004 1-hour data. The Court was unpersuaded and noted the 2007 data showed significantly different and higher NOx emissions which can lead to harmful ground-level ozone. That underscored that the 2004 SIP may have been significantly flawed.

Finally, the Court concluded that EPA’s own failure to address substantively the disparities between the 2007 and 2004 emissions inventories prevented the Court from determining if there were any merit to EPA’s argument. The EPA’s failure to explain its choice of certain data over other data made its approval of the SIP arbitrary and capricious.

O’Neil v. Crane Co., Cal. S177401, Jan. 12, 2012

The California Supreme Court held that manufacturers of valves and pumps, which were integrated into boilers that had asbestos insulation, were not strictly liable for personal injuries resulting from exposure to asbestos because the valves and pumps did not contain asbestos and thus could not have caused any harm.

The Flanders Foundation v. City of Carmel-by-the-Sea Cal.App. , DJDAR 121 (Jan. 4, 2012)

The City of Carmel-by-the-Sea intended to sell an historical piece of real property that was constrained to historical uses. As a result, the city did not consider the possible use for affordable housing in the EIR. The Surplus Lands Act requires agencies to offer properties for affordable housing or park purposes before offering it to the general public.

A foundation sued the city, claiming the EIR had to consider affordable housing. The trial court agreed. The Court of Appeal, however, held the City did not need to consider affordable housing in the EIR because such use was not a reasonably foreseeable use due to its historical nature and limitations in use.

Citizens for East Shores Park v. Cal. State Lands Commission

2012 DJDAR 28. A129896 (December 30, 2011)

A citizen’s group challenged the State Lands Commission’s approval of a lease renewal with Chevron for a bayside terminal, claiming the Commission violated the public trust doctrine and CEQA and failed to impose mitigation requirements on Chevron regarding upslope trails.

The Court of Appeal held the State Lands Commission did not have to consider other possible public trust uses, such as recreation, when it renewed a marine terminal lease with Chevron in San Francisco Bay waters near the Richmond refinery. The Commission originally had approved the use in 1949, and at that time approved one type of use, commerce, permitted by the public trust doctrine. Here, the Commission was simply continuing a long-standing and permissible public use that was also supported by an adequate EIR under CEQA. The Commission did not have a separate and additional obligation to consider public trust options outside of CEQA – compliance with CEQA was sufficient.

The Court further held the Commission used the proper baseline for the EIR, which were the existing conditions presented by an existing marine terminal. The Court disagreed with petitioners that the baseline should exclude consideration of present operations and, instead, focus on conditions preceding the 100 year-old terminal due to the alleged ability of the Commission to “eliminate” current conditions by not renewing the lease.

Finally, the Commission correctly declined to assess the impact of the existing terminal on upland trails because any claimed affects were not due to the project -which was simply a lease renewal. For the same reason, the Commission also did not have to consider mitigation for the trails under CEQA.