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Solimar Research

Insight: Everyone wants to keep leverage under CEQA

William Fulton on
Sep 30, 2014

A few weeks ago I stopped by Bacara for the first time. Bacara is a superfancy resort along the Gaviota Coast, just off Highway 101 west of the UC Santa Barbara campus. With a rack rate of maybe $700 a night for a room, it's far from cheap. And it's beautifully designed a collection of Santa Barbara-style white buildings, two and three stories, tumbling down a hill toward the ocean. It's so beautiful, in fact, that it's easy to forget that Bacara or, more precisely, an earlier proposal for a luxury resort on the site prompted the court case that made the California Environmental Quality Act what it is today.

When you ask experts what the most important case in the 44-year history of CEQA is, usually they'll say Friends of Mammoth v. Board of Supervisors of Mono County, 8 Cal.3d 247 (1972) the case establishing that government approvals of private development projects are subject to environmental review. And there's no question that Friends of Mammoth is a seminal case. But for my money, the defining CEQA case is Citizens of Goleta Valley v. Board of Supervisors, 52 Cal.3d 553, handed down by a much more conservative California Supreme Court on New Year's Eve 1990.

It was Citizens of Goleta Valley that cleared the way for the eventual construction of Bacara. More important, it transformed CEQA from a project-killing mechanism into a mitigation machine. As a result, almost a quarter-century later, all kinds of organizations use CEQA's mitigation power to gain leverage (and that's a polite word) over all kinds of things. And that, more than anything else, is the reason it's impossible to repeal CEQA or even reform it in a truly meaningful way.

Environmental and citizen groups have always used CEQA to gain leverage, of course that's the point of the law. But today, unions, business trade associations, rival local government agencies, and even the building industry all use CEQA to gain leverage over some local political process, and in most cases there's no other way for them to get so much leverage.

That's what Citizens of Goleta Valley changed. At issue was whether the private owner of the Bacara property had to consider alternative locations for the project as part of the alternatives analysis under CEQA. The Supreme Court, which was then newly more conservative thanks to appointments by Gov. George Deukmejian said no. But more than that, the Court in an opinion written by Deukmejian's longtime friend Armand Arabian basically told environmental groups to stop using CEQA to try to kill projects. The purpose of CEQA, Arabian said, was not to re-fight the local general plan's land use decisions in an environmental impact report, which is what the plaintiffs were trying to do. The purpose, he reminded everybody, was to inform the public about the environmental consequences of governmental decisions and mitigate the damage as much as possible.

The switch from killing projects to extracting mitigation meant, essentially, a switch from CEQA as blunt instrument to CEQA as a means to specific ends. Over time, more and more organizations saw that, through CEQA, they could gain unique political leverage via CEQA, whether they had environmental concerns or not.

For example, CEQA has been consistently used by labor unions to try to shut down retail development projects they don't like especially Wal-Marts for reasons that have to do with labor practices, not environmental damage. This has led to many lawsuits. It has also led Wal-Mart to attempt to evade CEQA by trying to get projects approved via ballot initiative a practice that was upheld recently by the state Supreme Court in Tuolomne Jobs & Small Business Alliance v. Superior Court of Tuolomne County.

But it's not just unions. More and more, CEQA has also become a tool that business groups use to try to quash regulation they don't like.

Take the recent city-by-city battle in California over banning single-use plastic bags. Whatever you think of this type of regulatory approach, it's hard to argue that banning plastic bags is bad for the environment. Indeed, when I was working in San Diego, our back-of-the-envelope estimate was that the ban would eliminate the use of 500 million plastic bags per year in the city. My view highly personal but strongly held is that a plastic-bag ban is a slam-dunk exemption under Class 7 and 8.

Still, every time cities or counties proposed such a ban, they had to look over their shoulders for the plastics industry, which was sure to file a lawsuit unless the locality undertook an environmental impact report that used the industry's own studies about the lifecycle cost of plastic versus paper bags. The plastics industry was singularly unsuccessful in this litigation, losing a Supreme Court case from Manhattan Beach and appellate cases from Marin County and San Francisco  (which the Supreme Court declined to take see http://www.cp-dr.com/articles/node-3426.) Even after that, cities and counties still had to watch out for the plastics industry, because the Supreme Court had not laid down a conclusive, all-encompassing ruling. (The recent passage of the state's plastic-bag ban, SB 270, which Governor Jerry Brown has now signed, put this question to rest.)

Developers, who often complain the most about CEQA, frequently invoke the law to sue each other in order to stop development projects and gain a competitive advantage. They also sometimes use CEQA to challenge government policies they don't like as when the California Building Industry Association tried to claim that the creation of significance thresholds under CEQA creates a significant impact that must be analyzed under CEQA. (The appellate court didn't buy the argument see http://www.cp-dr.com/articles/node-3395.) Obviously, if the building industry had won that case, the consequences on all future CEQA analysis would have been profound and the building industry wouldn't have been happy.

(Although that case, CBIA v. BAAQMD, is now before the state Supreme Court see  http://bit.ly/1wOXR9o the high court granted review only on the separate issue of when if ever CEQA may "require an analysis of how existing environmental conditions will impact future residents or users (receptors) of a proposed project".)

Even cities and counties, which also often complain about being hamstrung by CEQA, are skeptical of any change that suggests the possibility of surrendering leverage. The best current example is the local government hand-wringing over taking traffic congestion level of service standards out of CEQA as a result of SB 743. (See http://www.cp-dr.com/articles/node-3571.) It's been so long since traffic engineers used anything other than CEQA to extract traffic improvements from developers that they can't figure out how it can be done without CEQA.

So that's the crux of the problem: CEQA provides a way for anybody who wants anything out of a public agency to get some leverage over the situation whether that's unions, environmentalists, businesses, developers, and even local governments themselves. And no matter how much all these folks say they want CEQA streamlined, they don't want anything to change that will cut into their leverage. Until that equation changes, you won't see much in the way of meaningful CEQA reform.