Author: Stephanie Hill

• First, the Court held that CEQA does not require a public agency to retain “every email and preliminary draft.” Elaborating, the Court noted that public agencies are not required to retain the “e-mail equivalent to sticky notes, calendaring faxes, and social hallway conversations—that is, e-mails that do not provide insight into the project or the agency’s CEQA compliance with respect to the project.”
• Second, the Court pointed to CEQA’s short statute of limitations period and reasoned that “the lapse of the applicable limitations period is a relevant consideration” in determining how long a public agency should hold on to administrative record emails. Following this opinion, public agencies should carefully evaluate their document retention policies and document management systems, especially with regards to email communications concerning CEQA review of development proposals. Public agencies should be sure that these policies and systems will retain communications required to be a part of the administrative record, while ensuring that non-record emails are timely destroyed to ease the cost and burdens of both document retention and responses to PRA requests and record preparation requests under CEQA.

Court Rules Discovery is Available Under CEQA to Obtain Components of the Administrative Record

The County sought to defend the referee’s ruling that “discovery is generally not permitted” in a CEQA action relying on the restrictions placed on parties seeking to introduce evidence outside of the administrative record in Western States Petroleum Assn. (1995) 9 Cal.4th 559. The Court quickly dismissed this position, declaring that the County was incorrect and that discovery is allowed under CEQA. This was especially true in Golden Door where plaintiffs were not seeking to introduce extra-record evidence, but rather were seeking to find copies of record documents lost due to the County’s retention policy.

Again, adequate document retention policies and document management systems are keys to avoiding the additional costs of discovery in litigation under CEQA and the PRA. Designing these policies and systems to easily capture and retain communications that should be included in the administrative record will give public agencies the ability to minimize or defeat expensive discovery by citing to the policies and systems as evidence that discovery is not necessary or warranted to complete an administrative record.

Court Did Not Rule on Application of the Common Interest Doctrine in CEQA Cases

The Court recognized, but declined to weigh in on, a split of authority between the Fifth Appellate District and the Third Appellate District regarding whether the common interest doctrine could apply to preserve privileged communications between a public agency and an applicant prior to project approval. The Fifth Appellate District had ruled that, prior to project approval, the parties’ interests were not aligned and, therefore, the common interest doctrine could not apply to pre-approval communications. (Citizens for Ceres v. Superior Court (2013) 217 Cal.App.4th 889) The Third District disagreed, holding that the public agency and the applicant had a common interest in producing a legally adequate EIR and, therefore, the common interest doctrine could apply to such communications. (California Oak Found. v. County of Tehama (2009) 174 Cal.App.4th 1217.)

In Golden Door, however, the Court sidestepped the issue, noting that the plaintiffs had filed two pre-approval lawsuits, thus creating a common interest between the applicant and the agency in defending against these suits. Due to the ongoing split in authority, public agencies and applicants should be wary of sharing confidential information under the common interest doctrine prior to project approvals.

Court Acknowledges Agencies Face “Difficult Task” Establishing Deliberative Process Privilege

Of final note, the Court rejected the County’s evidence supporting its assertion of the deliberative process privilege to more than 1,000 documents withheld during discovery. Despite producing a privilege log, as well as a declaration describing the basis for the County’s assertion of the privilege, the Court held that the County’s evidence amounted to nothing more than a recitation of the public policy behind the deliberative process privilege. The Court did not question the County’s assertion that a free and open exchange of ideas is a necessary component of the administrative process and could form the basis for a privilege. However, the Court held that the claims of privilege must be supported with evidence specific enough to give the requester a meaningful opportunity to contest, the court an opportunity to determine whether the exemption applies, and to show the consequences of disclosing the information. The Court did acknowledge that public agencies have a “difficult task” of justifying the withholding without compromising the information by revealing too much. The deliberative process privilege serves important purposes and should be protected. However, the Court decision places an increasing evidentiary and cost burden on public agencies to justify the reliance on the privilege.

The Council on Environmental Quality (“CEQ”) released a broad overhaul of the regulations governing federal environmental review. The revisions reflect the Trump Administration’s continuing efforts to eliminate environmental and regulatory hurdles that delay or limit development of new infrastructure projects. The CEQ’s Final Rule is the first comprehensive update in over 40 years to the regulations for implementing the National Environmental Policy Act (“NEPA”). If the new rules withstand the inevitable legal challenges, they will impose substantive changes to how federal agencies examine the environmental impacts of their decisions – and may avoid or streamline NEPA review for numerous projects.

The new regulations apply to any NEPA process begun before September 14, 2020, though federal agencies are allowed to apply the new regulations to ongoing activities and environmental documents begun before that date. Thus, the new rules are effectively applicable immediately, including to projects that have already commenced NEPA review. Agencies and developers currently engaged in the NEPA process should review the changes to the CEQ regulations carefully to determine how these changes could impact individual NEPA documents. In addition, project proponents should be aware of the highly likelihood of multiple court challenges to these new regulations, which could impact ongoing and future NEPA reviews.

Key Substantive Changes
The rule changes are truly expansive, affecting nearly every one of the NEPA regulations. A link to a redline of the existing rules can be found here. Agencies and developers working on projects requiring federal approvals or funding should analyze these revisions carefully, including the following substantive changes.

1. Categorical Exclusions
2. Expanded Areas Where NEPA Does Not Apply
3. Increased Streamlining of NEPA Review
4. Changes to the Definitions of Environmental Effects
5. Substantive Changes to NEPA Analysis
6. Procedural Changes
7. Exhaustion Requirements

Categorical Exclusions
Federal agencies are now required to establish categorical exclusions as a part of their NEPA procedures. (§ 1501.4) These categorical exclusions, similar to the categorical exemptions existing under the California Environmental Quality Act, would exclude from NEPA review groups of projects or activities where there is little or no likelihood that the projects or activities would have a significant effect on the environment. This rule change is likely to result in fewer overall NEPA analyses as federal agencies develop groups of projects that would no longer be subject to NEPA.

Expanded Areas Where NEPA Does Not Apply
In a new section, CEQA established “NEPA thresholds” for when NEPA review applies to federal activities, including excluding from NEPA review activities where “NEPA would clearly and fundamentally conflict with the requirements of another statute” or “be inconsistent with Congressional intent expressed in another statute.” (§ 1501.1(a).) There is substantial leeway in this rule for interpretation regarding whether NEPA review of a particular action would fundamentally conflict with another statute or be inconsistent with Congressional intent. As such, reliance on this rule is likely to result in increased litigation over whether NEPA review would truly conflict with other statutes.

Increased Streamlining of NEPA Review
Further additions to the regulations allow federal agencies to rely on previously adopted EAs and categorical exclusions adopted by other agencies. (§ 1506.3(b)(2).) Again, this rule would likely result in fewer overall NEPA analyses as federal agencies look to these streamlining provisions to exempt their actions from NEPA review.

Changes to the Definitions of Environmental Effects
The revised rules eliminate the consideration of “direct” and “indirect” effects in favor of a more generalized analysis of “environmental consequences.” (§ 1502.16.) Similarly, the rules delete the definition of “cumulative impact” in favor of a definition of “effects” or “impacts” that are “reasonably foreseeable and have a reasonably close causal relationship to the proposed action or alternatives, including those effects that occur at the same time and place as the proposed action or alternatives and may include effects that are later in time or farther removed in distance from the proposed action or alternatives.” (§1508.1)

The new regulations further indicate that a “ ‘but for’ causal relationship is insufficient to make an agency responsible for a particular effect under NEPA. Effects should generally not be considered if they are remote in time, geographically remote, or the product of a lengthy causal chain. Effects do not include those effects that the agency has no ability to prevent due to its limited statutory authority or would occur regardless of the proposed action.” The revisions are likely to significantly reduce the scope of NEPA analysis and the types of impacts that future NEPA analyses will identify as significant, especially in the areas where NEPA analyses currently identify cumulative impacts.

Substantive Changes to NEPA Analysis
The CEQ made several substantive changes to the contents of NEPA documents. First, the new rules eliminate the requirement to consider reasonable alternatives not within the jurisdiction of the lead agency. (§ 1502.14.) Second, the new rules now require the inclusion, where applicable, of “economic and technical considerations, including economic benefits of the proposed action.” In addition, an Environmental Impact Statement (EIS) must now include an estimated total cost of the document. (§ 1502.11(g).) The elimination of alternatives not within the jurisdiction of the lead agency is likely the most significant of these changes. This change will significantly limit the scope and types of alternatives that federal agencies would be required to analyze under NEPA.

Procedural Changes
Finally, the CEQ tightened and expanded some of the procedural requirements for NEPA documents.Environmental Assessments (EAs) are now limited to 75 pages and EISs to 150 pages (or 300 pages for proposals with unusual scope or complexity) unless an extension is approved by a senior agency official. (§§ 1501.5(f), 1502.7.) Previously this regulation was a suggestion that was rarely followed. The new rules also mandate that EAs be completed within one year and EISs be completed within two years. (§ 1501.10(b).) These time limits can also only be extended with written approval of a senior agency official. It is unclear at this time how many NEPA analyses will be able to comply with this rule, or whether the approval of extensions by senior agency officials will become routine. However, the rule is in line with the overall intent of the revisions to reduce the burden of NEPA on federal agencies.

Exhaustion Requirements
The new rules codify the requirement that commenters on NEPA documents exhaust any challenges to those documents before bringing an action in court to challenge a federal agency decision. The new rules require that all comments be specific, propose specific changes, and include data sources or methodologies supporting the proposed changes, and further require that all comments be submitted during the noticed public comment period. (§§ 1500.3(b), 1503.3.) This rule is likely to come into play in future litigation regarding NEPA analyses and gives federal agencies stronger arguments to reviewing courts to reject petitioners’ claims based on a failure to comply with the exhaustion requirements.

The 5-4 majority continues to hold as the United States Supreme Court recently denied another request to stay enforcement of restrictions on worship services in Calvary Chapel Dayton Valley v. Sisolak, 2020 WL 4251360 (2020). In the decision issued on July 24, 2020, Chief Justice Roberts, joined by Justices Ginsburg, Kagan, Sotomayor and Breyer, denied the request of Calvary Chapel Dayton Valley for emergency injunctive relief from Nevada’s 50-person limitation on indoor religious services aimed at curbing the spread of COVID-19. The majority’s denial was issued without an opinion while the dissenters issued detailed opinions. As is explained below, it is important to review the Calvary Chapel decision in the context of the Supreme Court’s recent decision in the similar case of South Bay United Pentecostal Church v. Newsom, 140 S.Ct. 1613 (2020) (“South Bay Pentecostal”).

Interplay between South Bay Pentecostal and Calvary Chapel Decisions
The 5-4 split decision in Calvary Chapel follows form of the Supreme Court’s earlier decision on May 29, 2020 in South Bay Pentecostal, where the five Justice majority also rejected a church’s request for emergency injunctive relief from California’s restrictions on worship services.

• Attendance Caps on Comparable Secular Gatherings. In the South Bay Pentecostal case, Chief Justice Roberts authored a two-page opinion explaining that comparable secular gatherings in California such as lectures, concerts, movie showings, spectator sports, and theatrical performances have similar or more severe restrictions than those imposed on worship services. The Nevada restrictions challenged in Calvary Chapel arguably pose a closer First Amendment related question than the regulations at issue in California, as Nevada’s measures do not subject casinos, restaurants, bars and gyms to the same 50-person limit applicable to religious services. Instead, certain secular activities (such as casinos) have a cap of no more than 50% of the total occupancy limit which for casinos and various other businesses would allow hundreds of people to patronize their establishments.
• Deference to Public Health and Safety Decisions. Justice Roberts’ South Bay Pentecostal opinion notes that “especially broad” latitude should be given to the officials entrusted with protecting health and safety during this pandemic and “should not be subject to second-guessing by an unelected federal judiciary, which lacks the background, competence, and expertise to assess public health and is not accountable to the people.” In rejecting the request for injunctive relief in Calvary Chapel, Roberts along with the four liberal Justices continue to defer to the decisions made by state officials regarding the health and safety measures put in place to protect their communities from the virus.

Analysis of Calvary Chapel Decision
While the Supreme Court Justices forming the majority decision in the Calvary Chapel case have not offered a written opinion, it is likely that they are in accord with the District Court’s assessment. By contrast, the dissenting opinions of the Supreme Court Justices make clear that they see no constitutionally sound basis for allowing casinos, restaurants, bars and gyms to operate with larger groups than are allowed for religious services.

• The District Court’s opinion in Calvary Chapel notes that casinos are subject to additional restrictions not applicable to worship services, such as a face mask requirement, and that the church had failed to consider the totality of restrictions placed on casinos and other entities when it did its comparative analysis.
• Given the unfortunate rapid increase in viral infections and the evolving nature of restrictions to address such, the District Court explained that interceding would require courts to potentially engage in daily or weekly decisions about public health measures that have traditionally been left to state and local officials.
• The District Court also explained that secular activities such as concerts, lectures and sporting events, are treated the same or more restrictively as compared to worship services, and that whether a church is more like a casino or more like a concert for purposes of assessing virus transmission risks is the sort of dynamic and fact intensive decision that the courts should refrain from making.

Takeaways
In Calvary Chapel, the Supreme Court has again rejected an attempt by a church to loosen the numerical limits placed on worship services aimed at controlling viral spread during the COVID-19 pandemic. Throughout the U.S., religious institutions continue to challenge various restrictions on their operations with the undeterred goal of ultimately persuading the Supreme Court that restrictions on worship services have gone too far and the evolving circumstances are such that it is time for courts to stop deferring to the decisions of state and local officials regarding public health and safety measures. For example, the South Bay Pentecostal case is now proceeding on a second round of injunctive relief briefing and is likely headed back up the appellate ladder. (Please click here for a Meyers Nave Client Alert about the South Bay Pentecostal decision.)

The recent rise in coronavirus infections is causing numerous cities, counties and states to reassess their reopening plans to try to control the pandemic. Thus, government officials will continue to face the important challenge of ensuring that religious services are not disfavored as compared to secular gatherings as they take action to protect their communities from infections that occur when large numbers of people gather together for extended periods of time.

In a lengthy and wide ranging decision, the Court of Appeal in Golden Door Properties, LLC v. County of San Diego upheld multiple challenges under the California Environmental Quality Act (“CEQA”) to the County of San Diego’s Climate Action Plan (“CAP”), on the grounds that: (1) a greenhouse gas (“GHG”) mitigation measure adopted under the CAP was insufficient; (2) the Supplemental Environmental Impact Report (“SEIR”) inadequately analyzed cumulative impacts; (3) the SEIR’s finding of consistency between the CAP and a Regional Transportation Plan adopted under SB 375 was not supported by substantial evidence; and (4) the SEIR violated CEQA by failing to analyze a smart-growth alternative. The main issue underlying the decision was the Court’s determination that the County’s reliance on carbon “offsets” to mitigate GHG impacts violated CEQA because the offset requirements did not meet the standards required by the State’s cap-and-trade program.

GHG Mitigation Measure Did Not Meet State Cap-and-Trade Requirements
The County adopted the CAP as a part of its General Plan update. In doing so, the County implemented policies that would result in development under the General Plan achieving a less than significant impact from GHGs. The Court agreed with this determination. The County, however, also had a large number of development projects under consideration that would require General Plan amendments, and which, if approved, would cause development under the General Plan to exceed the GHG significance thresholds under the CAP (the “GPA” projects). To address these GPA projects, the County imposed mitigation measure M-GHG-1, requiring GPAs to reduce GHG emissions to a “net zero” value above the GHG emissions for the existing General Plan density, first through on-site mitigation measures and then through the purchase of carbon offsets.

The Court identified multiple problems with M-GHG-1 largely based on the mitigation measure’s failure to meet State standards under the State’s cap and trade program. The cap and trade program requires certain regulated entities to reduce their greenhouse gas emissions below mandated levels. Entities that are successful in reducing their greenhouse gas emissions more than required can sell the extra emissions reductions as carbon credits to entities that find it more economically efficient to purchase such credits than to implement greenhouse gas reduction measures. The Court held that M-GHG-1 violated CEQA because the measure did not require that the carbon offsets meet the State’s offset protocols. These offset protocols, established in California Code of Regulations, title 17, sections 95972 and 95802, and Health and Safety Code section 38562, require that the GHG reductions be “real, permanent, quantifiable, verifiable, enforceable, and additional to any GHG emission reduction otherwise required by law or regulation, and any other GHG emission reduction that otherwise would occur.”

The Court found that M-GHG-1’s requirement that carbon offsets be purchased from offset registries “approved” by the California Air Resources Board (“CARB”) was insufficient because, as CARB has indicated, “CARB-approved” does not mean that CARB has found the protocols used by the registries are compliant with the State’s cap-and-trade protocols. In particular, the Court found that M-GHG-1 did not meet the State requirement that the offsets be “additional.” The Court also found that M-GHG-1 was not “verifiable” or “enforceable” because it allowed for 100 percent of the offsets to come from projects outside of California, where the County has no enforcement authority.

M-GHG-1 was Improperly Deferred Mitigation
Next, the Court found that M-GHG-1 improperly deferred the specifics of mitigation and lacked feasible, enforceable performance standards. A lead agency may properly defer the specific details of mitigations “when it is impracticable or infeasible” to include those details during CEQA review, but only if the agency “(1) commits itself to the mitigation, (2) adopts specific performance standards the mitigation will achieve, and (3) identifies the type(s) of potential action(s) that can feasibly achieve that performance standard and that will be considered, analyzed, and potentially incorporated in the mitigation measure.” The Court found that M-GHG-1 was deficient because it included “only a generalized goal of … net zero GHG emissions” and because it allowed a County staff member “to determine whether any particular offset program is acceptable based on unidentified and subjective criteria.” Thus, the Court found M-GHG-1 lacked necessary performance standards to ensure that mitigation would actually be achieved.

There are a number of takeaways from this part of the opinion. Perhaps most critically, according to the Court, in order to pass muster as a mitigation measure under CEQA, GHG offsets must meet State standards for cap-and-trade carbon credits and be “real, additional, quantifiable, permanent, verifiable, and enforceable.” Next, agencies must use extreme caution in allowing offsets to be purchased outside of California and must ensure that any such out-of-state offsets meet the State requirements. Third, agencies must use caution when deferring the specifics of mitigation measures and ensure that they include specific performance standards based on objective criteria. Finally, agencies will be responsible for ensuring the offsets actually meet the above requirements and must establish in mitigation measures the criteria by which offsets will be evaluated.

SEIR Failed to Account for GPA Projects in Its Cumulative Impact Analysis
The Court found additional deficiencies with the CEQA analysis addressing other core CEQA principles – cumulative impacts analysis. The Court found that the SEIR’s cumulative impact analysis violated CEQA because it failed to take into account the GHG emissions from the reasonably foreseeable GPA projects as well and rejected the County’s contention that it did not need to evaluate these potential project-specific impacts in the programmatic document. The Court emphasized that the type of document was not important to the level of detail that the EIR must include; rather, the critical factor was how reasonable and practical it was for the County to include the information in the EIR. Because the GPA projects were already before the County and information about the proposals were known, the Court concluded the County should have included GHG emissions from the GPA projects in the cumulative impacts analysis.

CAP was Inconsistent with the Regional Transportation Plan and Sustainable Communities Strategy
Next, the Court found that the SEIR did not adequately analyze the consistency of the General Plan update with the adopted Sustainable Communities Strategy, adopted by the regional metropolitan planning organization (San Diego Association of Governments) under SB 375. Through this ruling, the Court confirmed that regional plans adopted under SB 375 are among the “regional plans” with which lead agencies must analyze a project’s consistency under its GHG consistency with plans analysis. In doing so, the Court also highlighted the importance of reducing vehicle miles traveled (“VMT”) a key element of SCS in meeting GHG reduction targets. The fact that the SEIR was released before VMT was a mandated part of CEQA review did not save the analysis because the VMT reduction was a core component of the SCS and required as part of the analysis of the consistency with the SCS.

Court Required the County to Consider an Alternative that would Reduce VMT
The Court invalidated the EIR’s alternatives analysis for failure to examine an alternative that would reduce VMT or transportation-related GHG emissions. Despite examining four alternatives, the no-project alternative and three alternatives that would reduce impacts from the General Plan update, the Court still found that this did not constitute a “reasonable range” of alternatives. It was unreasonable, the Court held, to not examine an alternative that would reduce VMT or transportation-related GHG emissions in light of the “consistently clear mandate” from the State law and California Air Resources Board regulation to “reduce VMT to help achieve target GHG emission reductions.” In addition, because the SEIR found that GHG impacts resulting from transportation were significant and unavoidable, the SEIR was required to address an alternative that would result in VMT reductions. (For more information about SB 743 and VMT, please click here for a recorded Meyers Nave webinar.)

Conclusion
This is an important ruling on CEQA with significant implications. Based on the Court’s ruling, lead agencies and project proponents should exercise additional caution in the areas of GHG offsets as CEQA mitigation, determining the consistency of proposed projects with applicable SCSs, and in the selection and analysis of alternatives to address significant and unavoidable impacts.

In the recent landmark decision of Bostock v. Clayton County, Georgia, the U.S. Supreme Court ruled that an employer who fires an employee merely for being gay or transgender violates Title VII of the Civil Rights Act of 1964, which bars workplace discrimination against individuals with certain protected characteristics, such as race, national origin, religion, and sex. The consequential decision extends protections against workplace discrimination to LGBTQ workers throughout the country. Prior to this decision, fewer than half of the states outlawed employment discrimination against LGBTQ workers.

The three consolidated cases before the Court involved three long-term employees who had been fired by their respective employers after revealing that they were gay or transgender. Accordingly, the Court considered whether or not Title VII’s ban on discrimination “on the basis of sex” should be interpreted to include sexual orientation and gender identity. The 6-3 opinion written by Justice Gorsuch provided that “An employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex.” Accordingly, the Court held, “Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids… An employer who fires an individual merely for being gay or transgender defies the law.”

Impact on California Employers
In California, sexual orientation and gender identity have been considered protected categories for several years. The Fair Employment and Housing Act (FEHA) expressly prohibits employers from discriminating or harassing individuals on the basis of their sexual orientation, gender identity, or gender expression. The Court’s decision will not impact the current protections set in place by FEHA. Instead, it provides greater protections for LGBTQ workers in all 50 states and allows complaints alleging sexual orientation and gender identity discrimination to be brought in federal court.

• FEHA defines gender identity as a person’s “internal understanding of their gender, or the perception of a person’s gender identity, which may include male, female, a combination of male and female, neither male nor female, a gender different from the person’s sex assigned at birth, or transgender.”
• FEHA defines gender expression is defined as a person’s “gender-related appearance or behavior, or the perception of such appearance or behavior, whether or not stereotypically associated with the person’s sex assigned at birth.”

Employers should continue to follow Department of Fair Employment and Housing regulations that ban discrimination or harassment in all aspects of the workplace, including hiring, firing, pay, job assignments, promotions, layoffs, trainings, fringe benefits, and any other term or condition of employment.