The Second District Court of Appeal has thrown out the results of an election in the City of Sierra Madre because the city violated the California Environmental Quality Act. In a December 1999 decision, the court invalidated an April 1998 election in which voters approved a city-sponsored measure that removed 29 properties from the city's Register of Historic Landmarks. City officials put the issue on the ballot as a way of avoiding a study of the impacts of delisting the properties. But the court said that the city's scheme was illegal. "The removal of the 29 properties from City's list of historical landmarks is a project which requires an EIR because it may lead to a substantial adverse change in the significance of a historical resource," Presiding Justice Mildred Lillie wrote for the unanimous three-judge panel. Because the city failed to comply with CEQA, the election was "fundamentally unfair," and the results must be set aside, the court ruled. The court distinguished between ballot measures voluntarily placed on the ballot by a City Council — which is a discretionary action by the council — and ballot measures that qualify via voter petitions. The council's discretionary action is subject to environmental review, while a voter-sponsored initiative can be exempted. The decision clarifies an area of law that had been confused, namely the applicability of CEQA to projects decided at the ballot box, said Susan Brandt-Hawley, the attorney for Friends of Sierra Madre, which filed the lawsuit. "It doesn't make any sense for a ballot issue that involves a discretionary action to be exempt from CEQA," she said. The Sierra Madre City Council, however, has filed a petition for hearing with the state Supreme Court. In 1987, Sierra Madre established a Cultural Heritage Commission and a regulatory process for protecting structures of cultural and historic significance. Ten years later, the city repealed its ordinance and made future listings on the city's Register of Historic Landmarks voluntary. Properties listed on the registry up to that point, however, remained on the list. Later in 1997, a group of property owners petitioned the city to remove their properties from the register. City planners said delisting would require an analysis under CEQA, at a cost of about $2,500 per property. The city did not want to pay for such studies, nor did property owners, so city staff members recommended placing the issue on the ballot. "The attractiveness of this idea is that the initiative and/or referendum is not subject to the provisions of CEQA," a staff report said. Over the objections of the Cultural Heritage Commission, the City Council placed Measure I-97-1 on the April 1998 ballot. In February of 1998, after the sample ballot and arguments had been prepared, the City Council adopted another ordinance intended to "clarify" Measure I-97-1. The city then sent a letter from the city administrator explaining the new ordinance, as well as an analysis from the city attorney. Voters in April of that year approved Measure I-97-1 by a two-to-one ratio. Friends of Sierra Madre then filed suit, alleging the city violated the Elections Code by not including in the sample ballot the February amendment to Measure I-97-1, the revised arguments for and against the measure, and a required legend. Friends also argued the city violated CEQA because it failed to certify an EIR on each of the 29 properties. Los Angeles County Superior Court Judge Robert O'Brien rejected the CEQA arguments but ruled for Friends regarding the Election Code violations. The city appealed over the Elections Code decision, while Friends appealed the CEQA ruling. The appellate court overturned O'Brien. The court found no violations of the Elections Code. The city's last-minute letters to voters and the extensive public debate ensured that voters knew what they were deciding, the court ruled. However, the appellate court said the city did violate CEQA. In its detailed opinion, the court first dealt with the status of historical resources. Justice Lillie quoted Public Resources Code §21084.1, "[B]uildings ‘included in a local register of historic resources … ' are presumptively historical resources unless the preponderance of the evidence demonstrates otherwise." Because there was no hearing regarding the 29 delisted properties, they were presumptively historical resources, Lillie reasoned. Delisting the properties would be a change in legal status that "may then lead to a change in the significance of that resource." Lillie wrote. Activities that could change the significance of these historical resources, such as alteration or relocation, require a CEQA review, and city officials knew this, Lillie wrote. "Indeed, it is abundantly clear that City submitted Measure I-97-1 to the voters precisely because it believed that such a course of action would create an exception from the requirements of CEQA." The court then addressed CEQA Guidelines §15378 subdivision (b)(3), formerly subdivision (b)(4). This portion of the Guidelines appears to exempt ballot measures from CEQA. However, the court said that the Guidelines are quite narrow and deal specifically with issues decided in Stein v. City of Santa Monica, (1980) 110 Cal.App.3d 458. In that case, the court ruled that the city's act of placing a citizen-sponsored initiative on the ballot was not subject to CEQA because the city was undertaking a ministerial act, and no discretion was involved. That exemption did not apply for Sierra Madre, the court ruled. "[T]he project here encompassed more than submitting a ballot measure to the voters; City here took essential steps culminating in the de-designation of historical resources. In addition to placing a measure on the ballot, City undertook several discretionary actions which committed it to the de-designation of 29 properties at issue in this case. City thus ‘approved' a project subject to CEQA," Lillie wrote. The City Council resolution placing Measure I-97-1 on the ballot qualified as a "project" subject to CEQA. The city should have conducted environmental review beforehand, the court ruled. In its argument before the court, the city relied heavily on Lee v. City of Lompoc, (1993) 14 Cal.App.4th, 1515. In that case, the court ruled that CEQA did not apply to a special election to amend Lompoc's zoning ordinance to permit shopping center development. The court said CEQA would apply to the ultimate project after zoning changes were made. But the Second District said Lee did not apply in the Sierra Madre case because in Lee, the city had already commissioned an EIR. The Lompoc City Council put the issue to voters only because it was deadlocked over the proposed shopping center. "In this regard, the most that Lee properly can stand for then, is the rather banal proposition that when a project has undergone CEQA review, but final approval of the project is sought by ballot measure, the decision to place the matter on the ballot does not itself trigger another CEQA review," Lillie wrote. The city also argued that CEQA does not authorize the court to invalidate an election. The city suggested that the court order environmental review of the 29 parcels prior to city approval of any alterations, or that the court suspend Measure I-97-1 until the city completes an environmental analysis. However, the court said studying the 29 parcels after the election would be an improper post-hoc review. No authority exists for suspending Measure I-97-1, the court added. "We point out that the invalidation of the election in this case is not a matter of discretion of the trial court or of this court; such invalidation results by operation of law (CEQA)," Lillie wrote. The Case: Friends of Sierra Madre v. City of Sierra Madre, No. B129139, 99 C.D.O.S. 9639, filed December 8, 1999. The Lawyers: For Friends: Susan Brandt-Hawley, Brandt-Hawley & Zoia, (707) 938-3908. For Sierra Madre: Michael Zischke, Landels, Ripley & Diamond, (415) 512-8700.