A memorandum of understanding (MOU) between the City of Rohnert Park and an Indian tribe planning to build a casino is not a “project” requiring environmental review, the First District Court of Appeal has ruled.

The decision was the second appellate court setback for opponents of the resort casino proposed by the Federated Indians of Graton Rancheria for unincorporated land just west of Rohnert Park. In June, the First District ruled that the MOU was not subject to voter referendum (Worthington v. City Council of the City of Rohnert Park, 2005 DJDAR 8057; see CP&DR Legal Digest, August 2005).

The City Council approved the controversial MOU in October 2003. It calls for the tribe to provide $200 million to the city, schools and nonprofit organizations over 20 years in exchange for the city’s support of the casino project, which is yet to clear federal and state hurdles.

In their litigation, casino opponents argued that the MOU was similar to a municipal services agreement or a development agreement in that the MOU committed the city to a course of action that included the construction of infrastructure and the provision of public services to the proposed casino. Because it committed the city to certain actions, the MOU was a “project” under the California Environmental Quality Act (CEQA), the opponents contended. Sonoma County Superior Court Judge Robert Boyd rejected the argument and ruled for the city and the tribe’s development entity, SC Sonoma Development. A unanimous three-judge panel of the First District upheld the lower court.

Citing Government Code § 65865.2, which specifies the terms of a development agreement, the court distinguished the MOU from a development agreement.

“Our examination of the MOU in this case reveals that it contains none of the necessary provisions of a development agreement,” Presiding Justice James Marchiano wrote for the court. “It does not specify the permitted uses, density or intensity of use, maximum height of buildings or contain provisions for the dedication of land for public purposes. The only topics addressed in the MOU are the ways in which the tribe agrees to mitigate potential impacts of its casino project. In addition, the city is unable to enter into a development agreement for the casino project because it has no authority over the specified county-owned land outside the city’s boundaries, Indian land in general, or Indian gaming.”

The MOU “sets no time for development and does not obligate the city to undertake a specified construction project,” Marchiano wrote.

Instead, the court characterized the MOU as a “funding mechanism” that is not subject to CEQA. The agreement acknowledges that any future infrastructure project related to the casino will require CEQA review, Marchiano noted.

Casino opponents also argued that the doctrine of pre-emption applied because federal and state law regulate Indian casino development. But the First District rejected this notion, finding no conflict between the MOU and federal or state law.

“The MOU does not attempt to regulate any of the matters subject to federal jurisdiction or that may be included in a tribal-state compact, but merely provides for a funding source if the city constructs improvements in the future,” the court ruled.

The Case:
Citizens to Enforce CEQA v. City of Rohnert Park, No. A106592, 05 C.D.O.S. 7514, 2005 DJDAR 10159. Filed July 25, 2005. Ordered published August 19, 2005.

The Lawyers:
For Citizens: James E. Marino, (805) 967-5141.
For the city: Michelle Marchetta, McDonough, Holland & Allen, (510) 273-8780.
For SC Sonoma Development: Judy Davidoff, Steefel, Levitt & Weiss, (415) 788-0900.