A city has an obligation to complete an environmental impact report and may not just continually reject an EIR prepared by a developer's consultant, the Fourth District Court of Appeals has ruled. The court also ruled that foot-dragging on an EIR by the City of Redlands gives the developer of a proposed housing complex a right to seek damages under the federal Civil Rights Act, 42 U.S.C. § 1983. The City of Redlands three times rejected a proposed draft EIR prepared by consultants of a housing developer. After the third rejection, the developer, Sunset Drive Corporation, sued. In overturning the decision of San Bernardino Municipal Court Judge W. Robert Fawke, sitting by assignment to the Superior Court, the appellate court said the city was shirking its duty. "[S]imply rejecting a draft EIR proposed by an applicant does not satisfy a lead agency's duty under CEQA. When a project requires an EIR, it is ultimately the responsibility of the lead agency to prepare it," Justice Art McKinster wrote for the unanimous three-judge panel. In what Sunset attorney Gary Garfinkle called the most important part of the ruling, the court decided it can force a city to complete the California Environmental Quality Act process. The EIR's contents remain discretionary. Garfinkle compared the case to Del Monte Dunes v. City of Monterey, 99 C.D.O.S. 3846 (see CP&DR Legal Digest June and July, 1999). In Del Monte, the U.S. Supreme Court upheld a developer's right to a jury trial in a regulatory takings case brought under federal civil rights law, and a $1.45 million award for damages. Monterey had rejected five different housing development applications, each calling for less development than the previous proposal. In both cases, Garfinkle said, the city treated the developer arbitrarily. "The city (Redlands) has gone beyond the line. It's one thing to make a good faith argument against the proposal. It's another thing to jack the party around, which is what the city is doing," he said. Citing Morris v. County of Marin, (1977) 18 Cal.3d 901, Justice McKinster said monetary damages may be available to enforce a procedural requirement, such as the one-year deadline for certifying an EIR in Public Resources Code § 21151.5. Redlands City Attorney Daniel McHugh, however, disputed that any fundamental right had been violated or that the city failed to carry out its duty. He wants the opinion depublished and would like to argue the case before the state Supreme Court if a motion for reconsideration at the appellate level is not granted. The controversy has a long history, as the developer has fought the city over proposals for the property in question since 1988. (A previous case stemming from the controversy, Selinger v. City Council, 216 Cal.App.3d 259, centered on the Permit Streamlining Act.) In November of 1992, Redlands accepted Sunset's application for a housing development. City officials said the project required an EIR, and they identified issues for study in June of 1993. Sunset submitted a proposed draft EIR prepared by its consultants in January 1994. The practice of allowing a developer's consultants to prepare a proposed draft EIR, so long as the local agency independently reviews the document and adopts the study as its own, was upheld in Friends of La Vina v. County of Los Angeles, (1991) 232 Cal.App.3d 1446. After turning in the document, Sunset funded a review of the document by city-hired consultants, who were critical of the EIR. In response, Sunset's consultants revised the proposed draft EIR and submitted a new version in March of 1995. The city's experts again disagreed with the document, so the developer's consultants submitted a third proposal in August of 1995, which the city again declined to certify. In May of 1996, Sunset sought a writ of mandate ordering the city to complete and certify an EIR, and Sunset insisted on payment for damages. Judge Fawke sustained two rounds of demurrers from the city and eventually dismissed the lawsuit. But the appellate court overruled the demurrers, which essentially said that Sunset had no case. The lawsuit now heads back to Superior Court for trial unless the Fourth District, Division Two, ruling is overturned on rehearing or by the Supreme Court. On appeal, the city argued that the court could not order Redlands to take corrective action because the duty to prepare an EIR is discretionary, not ministerial. The city also argued that the one-year limit for certifying an EIR contained in Public Resources Code § 21151.5 is not mandatory, and that the one-year time limit was unenforceable because of delays by Sunset. The city further contended the issue was not ripe because the city had not certified an EIR or made a decision on the land use entitlement. The Fourth District rejected all four contentions. The city is responsible for completing the EIR, the court said. "Sunset is not asking Redlands to approve the draft EIR in its current form, but only to complete a draft EIR in some form," Justice McKinster wrote. "Sunset's focus is on the timing of the completion, not on the contents of the completed document or the nature of the ultimate decision that document is intended to inform." The city could prepare an EIR with its own staff, contract with another entity, or execute a third party contract with the applicant, the court noted. The one-year time limit is directory, rather than mandatory, but may still be enforced by the courts, the panel ruled. State law requires local agencies to establish time limits for completing and certifying EIRs, and Redlands has adopted the maximum of one year from the date an application is made. As for delays, it took the city seven months to identify issues for the EIR, and nine months passed between submission of the third draft EIR and Sunset's filing of the lawsuit, during which the city did not take action, according to the court. Obviously dissatisfied with the ruling, City Attorney McHugh said he will seek amicus support from other cities and counties because the ruling appears to permit lawsuits during the CEQA process. "Does this now allow any concerned party or developer or gadfly, as some people call them, to go in and commence a CEQA lawsuit before there is a decision on the underlying project?" McHugh asked rhetorically. He also questioned how the city is supposed to determine when to take over an EIR that it has allowed the applicant to prepare and still meet the one-year deadline. "The court never addressed the practical implication of this," he said. Sunset is responsible for the lengthy CEQA process in this case, he argued. Fourteen months passed between the application filing and submission of the first proposed draft EIR, and it took another year for the second proposed draft to be completed, he said. Thus, Sunset has effectively waived the one-year time limit, McHugh argued. But Garfinkle, the Sunset attorney, disagreed that the developer had waived the one-year time limit. "The city keeps saying the draft EIR is not good enough. But it's the city's responsibility to prepare the EIR." he said. The Case: Sunset Drive Corporation v. City of Redlands, No. E022234, 99 C.D.O.S. 5304, filed June 30, 1999. The Lawyers: For Sunset: Gary Garfinkle, (925) 932-3737. For Redlands: Daniel McHugh, (909) 798-7595.