Insight: Infill Projects Sued More Often Under CEQA – But Greenfield Projects Lose More Often

 

Everybody always loves to complain about the California Environmental Quality Act, but despite all the complaining we don’t now much about how effective it really is and what all the CEQA activity adds up to.

CEQA has been a favorite whipping boy for decades of Republicans and conservatives, who claim that it’s a red-tape machine that makes California uncompetitive compared to neighboring states – even Oregon, which has much stricter state land-use laws. Recently, even Democrats have taken it on, with Gov. Jerry Brown saying that reforming it constitutes “The Lord’s Work” and extending his predecessor’s idea of giving certain projects a free pass from litigation. Sen. Mike Rubio, D-Shafter, has proposed a ban on lawsuits if a project complies with the standards contained in underlying environmental laws – and he is now the chair of the Senate Committee on Environmental Quality. 

These last two ideas get at the basic fear about CEQA: It’s not so much that doing an environmental review is a big deal (though sometimes it is), but, rather, the idea that you might dragged into a litigation quagmire that without know how much time and money it will take to get emerge. CEQA’s defenders often argue that lawsuits are rare; indeed, fewer than 1% of all CEQA actions are litigated. While true, this statement is kind of beside the point. What matters is not whether you get sued but the fear of getting sued – of the fear of what might happen if you do.

That’s why the recent spate of research by CEQA law firms has been so interesting. For the first time in a long time, they shed light on the question of what actually happens when CEQA lawsuits are filed.

In 2011, Clem Shute – one of the granddaddies of CEQA litigation -- that over a 40-year period, courts had found CEQA EIRs inadequate more than 40% of the time, compared to 0% -- yes, zero – for NEPA compliance by federal agencies. Considering that the two laws were drafted at the same time by the same people with the same intent, that tells you something about how More recently, the Thomas Law Group – the firm of veteran CEQA lawyer Tina Thomas – found that EIRs were successfully challenged about half the time, while Negative Declarations were successfully challenged 60% of the time. A recent study by Holland & Knight using the same database found that 52% of Categorical Exemptions were struck down in court as well.

Now, according to a new analysis by Holland & Knight – this one analyzing 95 challenges to environmental impact reports between 1997 and 2012 – finds that almost 60% of lawsuits challenge environmental review projects in infill locations as opposed to greenfield locations. Mixed-use projects and infrastructure projects were challenged more frequently than any other type of project. Most of the EIRs were challenged on the basis of  water supply, traffic, or air quality.

The study by veteran CEQA hands Jennifer Hernandez and Daniel Golub also concluded that about 70% of the plaintiffs in these cases were local organizations, most frequently environmental or homeowner groups. About two-thirds of the projects were private development projects, while a third were public projects.

Infill projects, mixed-use projects, and public infrastructure get challenged on their EIRs more than other projects. This is exactly the kind of conclusion that lends fuel to the argument made by smart growthers – and, increasingly, the Brown Administration as well – that CEQA gets in the way of responsible urban development. But how do things turn out in the end?

To find out, CP&DR’s Courtney Oustad did further analysis of the Holland & Knight database of 95 cases and found some interesting results. (Holland & Knight published its database on line, enabling our further analysis, and for this we are grateful.) Here are some highlights.

  • EIRs on infill projects may be challenged more often, but EIRs on greenfield projects actually get struck down more often. Yes, 59% of the legal challenges against projects that could be characterized as either infill or greenfield were against infill projects. But only 31% of the infill challenges were successful, while 69% were not. For greenfield projects, 55% of the challenges were successful, while 45% were not.
  • Yes, EIRs on mixed-use projects were among those most likely to be challenged. But, as with infill, the success rate of these challenges was not the highest. Half of all challenges to EIRs on mixed-use projects succeeded. For residential projects, the number was about the same. Perhaps of greatest concern is public infrastruture projects. Two-thirds of EIR challenges against these projects succeeded.
  • Legal challenges against public projects were more successful than legal challenges against private projects, though the difference was small (50% to 44%).
  • Local plaintiffs were more likely to succeed than non-local plaintiffs, though again the difference was small (49% to 41%).
  • The success rate for legal challenges has been dropping steadily since 1997 – from 70% in the 1997-2002 period to only 34% in the 2007-2012 period. 

It’s important to note that this is a small sample of lawsuits involving a particular kind of lawsuits – challenges to EIRs only. Yet these are exactly the kinds of high-profile challenges serve as the foundation of the debate over CEQA. EIRs themselves are extremely expensive and time-consuming to produce. An EIR lawsuit can be a sprawling affair, and the fact of the matter is that many judges are reluctant to let an enormous EIR go scot-free through the litigation process. But what conclusions can we draw from these findings?

First, the original CEQA vision of empowering neighborhood groups – and even nurturing their creation – is alive and well. Most EIR lawsuits are filed by citizen groups. This was a bit of a surprise to me, since I tend to think of CEQA litigation as the main mechanism by which government agencies gain leverage over each other in the project approval process. But the citizens are still driving the litigation bus – just as CEQA intended. 

Second, many citizen groups are using CEQA as a mere stalling tactic against infill projects. A lot of the infill challenges came from citizen groups; and most of them were unsuccessful. Citizen groups often file a sure loser in order to gain emotional satisfaction – zealots like to fall on their swords – but the shrewder ones recognize that even tying up a project in court is going to give them leverage and discourage future infill projects.

Third, the inclination of statewide politicians to limit litigation opportunities against large infrastructure projects is understandable. These projects are often larger and more complicated than private development projects, so it’s understandable that they may be more vulnerable to EIR lawsuits. At the same time, infrastructure projects are often trumpeted as essential to the state’s economic competitiveness and tying them up could put California behind the eight-ball. (No wonder some people in the Brown Administration want to do an all-out CEQA exemption for high-speed rail.) But here’s an interesting fact: Most of the successful infrastructure challenges had to do with water projects. Clearly, the state has to figure out a much cleaner way to deal with real and prospective water shortages than tying big infrastructure projects up in EIR litigation after they have been approved.

Let’s hope all this analysis informs the pending CEQA reform debate in Sacramento by highlighting where the real sticking points are. Like it or not, CEQA does give citizen groups a powerful tool to block or slow down projects. It is used frequently – but mostly unsuccessfully – to try to stall infill projects, providing evidence to support the Brown Administration’s inclination to move toward separate processes and perhaps even separate laws for greenfield and infill projects. And finally, infrastructure projects do get hung up – but not the ones you might think, and not for the reasons you might think. 

CEQA’s definitely got a useful role to play in California planning and development. But it’s probably a good idea to think not only about a more streamlined role, but a more targeted one as well, focused not just on the CEQA process, but the outcomes the state hopes CEQA will bring about.