Supreme Court Holds Projects Approved By Council-Adopted Initiative Are Exempt From CEQA

The California Supreme Court ruled yesterday in Tuolomne Jobs & Small Business Alliance v. Superior Court (Walmart) that when a city council receives a voter initiative petition to approve a project and decides to adopt the initiative measure without alteration, its decision is not subject to the requirements of the California Environmental Quality Act (“CEQA”), and therefore does not require an Environmental Impact Report or other CEQA document for the action proposed in the initiative measure.

When presented with an initiative petition, a city council is faced with three choices under Elections Code section 9214: It can 1) adopt the initiative without alteration; 2) submit the matter to a special election; or 3) order a brief report prepared pursuant to Elections Code section 9212 before deciding how to act on the initiative.  The Supreme Court had previously ruled in DeVita v. County of Napa (1995) 9 Cal.4th 763 that no CEQA review is required where the council submits an initiative to approve a project to the voters and the voters approve the initiative. 

In Tuolumne Jobs, the City of Sonora City Council was presented with an initiative to approve expansion of an existing Walmart store and the Council decided to adopt the initiative without alteration rather than submit the matter to an election.  Petitioner argued, and the Fifth District of the Court of Appeal agreed, that the City Council’s action improperly circumvented CEQA, and that the Council should have conducted environmental review of the proposed expansion before deciding to adopt the initiative measure.  The Supreme Court disagreed, determining that CEQA review is incompatible with the time limits within which the Council must act under section 9214 and, moreover, that the Council in acting on the initiative measure would have no authority to modify, condition, or deny the expansion proposal regardless of whether CEQA review might have uncovered environmental impacts.  The exclusive means by which the Council may act to gather facts (including environmental facts) about the impact of an initiative, the Court held, is the optional “brief report” specified in Election Code section 9212 and 9214(c).  

It is unlikely that Tuolomne Jobs will substantially alter the practice of CEQA review in the state.  First, as the Court itself noted, although the courts have long held that CEQA does not apply to voter-approved initiatives, instances of development proposals being approved by the ballot box (and thereby avoiding CEQA) are few.  Second, the initiative process can be used to approve only “legislative” proposals, such as general and specific plans, and cannot be used to approve projects that require administrative permits.  Finally, unless a developer is certain that the electorate favors its proposed project, it runs the risk that the electorate may overturn any council adoption of its initiative measure by referendum.