Orange County's approval of a controversial housing project in the foothills of the Santa Ana Mountains has been overturned by the Fourth District Court of Appeal.

In a blunt opinion, the unanimous three-judge panel agreed with environmentalists that the Saddle Creek and Saddle Crest housing subdivisions were inconsistent with the county's general plan and that the project's environmental impact report was inadequate.

The court ruled that the county did not use the general plan's prescribed method of measuring traffic impacts, improperly eased development regulations, and did not require compliance with all specific plan requirements. The court ruled that a specific plan amendment approved by the county "gives the developer an unacceptable freebie. In effect, it exempts this project from specific plan regulations on tree preservation, grading and open space, and substitutes new regulations that are less stringent. This, of course, directly contradicts the general plan policy that all new development must comply with all specific plan policies."

For years, environmentalists have fought proposed development in the foothills and rugged canyons between the Cleveland National Forest and the flatlands of urban Orange County, arguing that the territory provides important habitat. The project at hand is a proposed 162-home development by Rutter Development for two adjacent, but non-contiguous sites near Cook's Corner. The project drew the attention of environmentalists, in part because it would involve the removal of hundreds of oak trees.

In January 2003, the Orange County Board of Supervisors certified an EIR for the project, and approved two area plans and an amendment to the Foothill/Trabuco specific plan. The Endangered Habitats League, Sierra Club, Rural Canyons Conservation Society, Sea and Sage Audubon Society, California Native Plant Society and California Oak Foundation responded with litigation that challenged the project's general plan consistency and environmental review. Orange County Superior Court Judge Ronald Bauer ruled for the county and Rutter, a decision that the Fourth District Court of Appeal, Division Three, overturned.

In its decision, the appellate court first dealt with traffic on Santiago Canyon Road. The growth management element of the county general plan sets a traffic policy requiring a level of service (LOS) of D at intersections on Santiago Canyon Road, and a LOS of C on the road. The general plan prescribes the "highway capacity manual" (HCM) as the method for determining the level of service.

The EIR revealed that the project would cause the level of service on Santiago Canyon Road to drop to D/E, and later to E. However, under the "volume/capacity ratio" (V/C) method, the projected level of service was B. The county went with the V/C method.

Environmentalists argued that this change violated the general plan. The court agreed, calling Rutter's argument that the county did use the proper methodology "semantic sleight of hand."

"It is clear the project is inconsistent with the general plan's traffic service level policy," Justice William Bedsworth wrote for the court. "The general plan requires LOS C as determined under the HCM method, and the project does not comply. That it does so under the V/C method is of no import, since the general plan is unambiguous in demanding the evaluation be made by the HCM method."

Rutter argued that two measures — namely, payment into two road improvement fee programs — would mitigate traffic impacts to a service level of C under the HCM method. But the court rejected the argument because there was no evidence of what projects the fees would fund, or of what level of service would be achieved.

The court then turned to the specific plan amendment. Environmentalists argued it allowed an impermissible "balancing" of specific plan requirements and exempted the project from mandatory policies. The court agreed.

The amendment altered tree removal, grading and open space requirements. Rutter argued that the amendment balanced only goals and policies, not development requirements, and that the general plan does not say all policies must be followed. The court did not buy the contention and concluded that the balancing was inconsistent with the general plan. The court also rejected the argument that the amended standards were equivalent or environmentally superior to the specific plan rules.

"If the project does not comply with the general plan, neither we nor the developer can justify its approval on the basis that it appeals to us," Bedsworth wrote.

The court pointed to the amendment's requirement for "permanent open space," compared with the specific plan mandate for "natural open space." Under the amendment, permanent open space may have rock walls, utility easements, remedial grading and landscaping — items that fall outside the definition of "natural," according to the court.

Next, the court considered environmentalists' argument that the EIR used the wrong threshold of significance for impacts to biological resources. California Environmental Quality Act Guidelines § 15065 (a) states that a project has a significant effect if it substantially reduces habitat for fish or wildlife species, causes a fish or wildlife population to drop below self-sustaining levels, threatens to eliminate a plant or animal community, or reduces the number of or restricts the range of an endangered, rare or threatened species. The county, however, defined "substantial effect" to mean loss or harm that "would cause species [or] a native plant or animal community to drop below self-perpetuating levels on a statewide or regional basis, or would cause a species to become threatened or endangered." The court concluded that the county's threshold of significance was "impermissibly lenient."

The environmental groups further argued that the EIR improperly deferred analysis and mitigation of project impacts. The court dismissed all but one of those contentions, concluding that the EIR put off mitigation of construction noise.

After the Fourth District filed its decision, the county and Rutter asked the court to reconsider. The court refused, saying the requests for rehearing were based on analysis, contentions and authorities that should have been raised earlier.


The Case:

Endangered Habitats League v. County of Orange, No. G034416, 05 C.D.O.S. 6710, 2005 DJDAR 9227. Filed June 29, 2005. Order denying rehearing and granting request for publication filed July 29, 2005.

The Lawyers:

For Endangered Habitats League: Raymond W. Johnson, Johnson & Sedlack, (951) 506-9925.

For the county: Jack Golden, deputy county counsel, (714) 834-3300.

For Rutter Development: William D. Ross, (650) 843-8080.