The California Supreme Court has ruled that an initiative is not subject to the California Environmental Quality Act even if it is adopted by a local elected body rather than placed on the ballot.

"Because CEQA review is contrary to the statutory language and legislative history pertaining to voter initiatives," wrote Justice Carol Corrigan for a unanimous court, "and because policy considerations do not compel a different result, such review is not required before adoption of a voter initiative."

The case involved the expansion of a Wal-Mart in the City of Sonora. In 2010, as the city was considering expansion of the Wal-Mart to sell groceries, Wal-Mart supporters circulated an initiative petition to adopt a specific plan to accommodate the proposed expansion. Rather than placing the measure on the ballot, the Sonora City Council adopted the initiative. The Tuolomne Jobs & Small Business Alliance – apparently similar to other labor-oriented groups elsewhere in the state that use CEQA to fight Wal-Marts – sued, claiming the city should have conducted a CEQA review before adopting the initiative. The Court of Appeal ruled in favor of the Jobs & Small Business Alliance, but the Supreme Court reversed.

In so doing, the court reminded the plaintiffs that CEQA is just a law and its procedures must sometimes be balanced against procedures contained in other state laws. The ruling may encourage Wal-Mart to end-run CEQA-based opposition in the future by going to the ballot, at least when project approvals depend on legislative, rather than quasi-judicial, approvals.

In large part, the ruling turned on the Supreme Court's interpretation of Elections Code Section 9214, which lays out the procedure for how local governments must deal with initiatives. Under the code, when presented with a valid set of signature petitions, a city council or county board of supervisors has three options – place the measure on the ballot, adopt it as is, or order a report examining the initiative's impacts, which must be produced within 30 days. This report is typically known as a "9212 Report," after the Elections Code section that lays out this option.

The Supreme Court said that the Elections Code and CEQA conflict, for two reasons. First, CEQA review cannot be conducted in the time frame permitted under the Elections Code. "Direction adoption would be severely curtailed and, for many initiatives, no longer an option, because it would be impossible for cities to comply with both CEQA and the section 9214 deadlines," Corrigan wrote.

Even if the time problem could be solved, Corrigan added, a CEQA review would be pointless becuase 9214 requires that a city or county choosing direct adoption must adopt the initiative "without alteration". "[C]ities would be powerless to reject the proposed project or to require alterations in the project that would lessen its environmental impact, no matter what the review showed."

The court also had to assess whether the Elections Code trumps CEQA, since both are statutes. (The direction-adoption option is not enshrined in the Constitution but was created by the legislature.) Reviewing the history of attempts to subject initiatives to CEQA via legislation – all of which have failed – the Supreme Court concluded that the it is clearly not the legislative intent to subject initiatives to environmental review. In adopting the 9212 report law in 1987, for example, the legislature "enacted the bill that gave local governments the option of obtaining an abbreviated review to be completed within the short time frame required for action on initiatives" and "specifically rejected the bill that would have required CEQA review before a land use initiative could be directly adopted or submitted to voters."

 Finally, the Supreme Court addressed the question of whether direct adoption without CEQA review "offends public policy" – a valid topic for analysis, according to Corrigan, if legislative intent is unclear. The court concluded this interpretation does not offend public policy.

"Appellants warn that developers could potentially use the initiative process to evade CEQA review, and that direction adoption by a friendly city council could be pursued as a way to avoid even the need for an election," Corrigan wrote. Referencing Associated Home Builders etc., Inc., v. City of Livermore, 18 Cal.3d 582 (1976), which found that state housing law trumps a local growth-control initiative, she added; "Of course, the initiative powers may also be used to thwart development. However, these concerns are appropriately addressed by the Legislature. The process itself is neutral." And, she noted, if local voters dislike the direct adoption of an initiative, they can overturn it via initiative.

The Case: Tuolomne Jobs & Small Business Alliance v. Superior Court of Tuolomne County, No. S207173 (filed August 7, 2014), at