In supporting the City of Stockton's refusal to accept a lawsuit filed by a citizens group against a proposed big-box store, the California Supreme Court has, for the second time in two months, made clear that if a public agency provides notice of a California Environmental Quality Act decision, legal challenges to that decision may be barred by the shortest statute of limitations, among several that the CEQA statute provides for, applies to legal challenges regardless of the context of the challenge. The April 1 ruling held that a 35-day statute of limitations barred a citizens' lawsuit challenging a proposed Wal-Mart project on the grounds that it violated the California Environmental Quality Act (CEQA). The court abided by the 35-day statute of limitations, articulated in Public Resources Code section 21167 subdivision (d), because the City of Stockton had filed a valid notice of exemption from CEQA and was therefore protected by the shorter statute of limitations rather than by a 180-day statute that the citizen's group believed ought to apply. The decision confirms the protections granted by CEQA to a public agency that adopts a notice of exemption (NOE) and to a project applicant that complies with the NOE's requirements. The ruling is in line with the court's February decision in Committee for Green Foothills v. Santa Clara County Board of Supervisors, in which the court ruled that environmentalists had only 30 days to sue over the county's decision to forego an updated EIR for a recreation trail (see CP&DR Legal Digest, February 15, 2010). The latest case, Stockton Citizens for Sensible Planning v. City of Stockton, involved a project by developer A.G. Spanos. The company had prepared a master development plan for Park West within the larger A.G. Spanos Park in Stockton. As a condition of the city's approval of lower density development elsewhere in A.G. Spanos Park, the city required a density transfer agreement obligating the construction of at least 935 multifamily residential units within Park West. In 2002, the City Council certified an EIR for Park West and approved the master development plan, replete with the separate density transfer agreement. Under the master development plan, the city's Design Review Board and community development director were required to approve proposed projects within the plan area as long as the board and director determined the projects were consistent with the plan's criteria, goals and purposes. Acting on behalf of Wal-Mart Stores, land use consulting firm Doucet & Associates subsequently proposed a 207,000-square-foot retail store to be sited on land in Park West that had been designated for multifamily residential units. The director approved the project subject to five minor amendments in December 2003. The next day, Spanos informed the city it would not construct 627 of the 935 units required by the density transfer agreement. Instead, Spanos offered assurance that the company would build the additional units within 10 years at locations in the city. In February 2004, the city filed an NOE for the project, stating the project was a retail use to be constructed in a first phase of 138,722 square feet and a second phase of 68,888 square feet. The NOE did not name Wal-Mart or identify the project as a Wal-Mart Supercenter. The notice did say that the project was consistent with the master development plan, and that the ministerial determination of consistency was not subject to CEQA review. The 35-day period for challenging the NOE expired on March 23, 2004. Not until July 22, 2004 did the group Stockton Citizens for Sensible Planning file suit, claiming that the project violated CEQA because the city had not prepared an EIR to assess the effects of the Wal-Mart store. They further claimed that that the project deviated substantially from the master development plan because the Wal-Mart would be developed on parcels planned for high-density residential housing. The city, Spanos, Doucet & Associates, and Wal-Mart demurred on the grounds that Stockton Citizens had not commenced the suit within 35 days of the filing of the NOE. The citizens' group argued that the community development director erred in approving the project and that the statute of limitations for a challenge to the NOE should therefore abide by the (Can a statute abide?)180-day period that applies when no NOE has been filed, and not the shorter 35-day period applicable when public notice has been provided by means of an NOE (Public Resources Code, � 21167, subdivision (d); CEQA Guidelines, � 15112, subdivision (d)(2)). Both the San Joaquin County Superior Court and the Third District Court of Appeal rejected the city's and developers' statutes of limitations defense and accepted Stockton Citizens' argument the city had processed and approved the project in error. The state Supreme Court reversed the lower courts' decisions. It found that flaws in the decision-making process underlying a facially valid and properly filed notice of exemption do not prevent the NOE from triggering the 35-day period to file a lawsuit challenging the agency's approval of a CEQA-exempt project. "We harbor no doubt, on these facts, that the 35-day limitations period � had expired before plaintiffs filed their lawsuit," Justice Marvin Baxter wrote for the unanimous court. The court explained that when a properly filed NOE complies in form and content with CEQA requirements and declares the agency has taken an action that would constitute final approval of a project under a CEQA exemption, the 35-day period for challenging the validity the approval begins to run. The statute provides that an NOE must contain a brief description of the project and its location as well as a finding that the project is exempt from CEQA. This finding must contain a citation to the statute or CEQA Guideline on which the agency is relying, and a brief statement of reason to support the exemption (CEQA Guidelines, � 15062 subdivision (b)). The court found that Stockton's NOE was adequate because it stated the project was a retail use consistent with the master development plan, specified the exact location of the project and stated that the project was exempt under Public Resources Code � 21080 subdivision (b)(1) and Guidelines � 15369. According to the court, Public Resources Code � 21167 subdivision (d) requires that an action or proceeding alleging that a public agency has improperly determined that a project is exempt from CEQA pursuant to section 21080 subdivision (b) shall be commenced within 35 days from the NOE filing date. The court ruled that a statute of limitations "operates conclusively across-the-board" and "does so with respect to all causes of action, both those that do not have merit and also those that do." This interpretation, Baxter wrote, aligns with CEQA's process of establishing and emphasizing public notification of an agency's action or decision as the event triggering the shortest applicable limitation periods for lawsuits alleging noncompliance with the statute. The Case: Stockton Citizens for Sensible Planning v. City of Stockton, No. SI59690, 2010 DJDAR S159690. Filed April 1, 2010. The Lawyers: For Stockton Citizens: William D. Kopper, (530) 758-0757. For Wal-Mart: Judy V. Davidoff, Sheppard Mullin Richter & Hampton, (415) 434-9100. For A.G. Spanos: John Briscoe, Briscoe, Ivester & Bazel, (415) 402-2700.