Supreme Court Holds That Requirement To Exhaust Issues Applies To Challenges To Exemptions From CEQA

In Tomlinson v. County of Alameda (June 14, 2012, S188161) __ Cal.4th __, the California Supreme Court affirmed that the “exhaustion doctrine” applies to an agency’s determination that a project is categorically exempt from environmental review under the California Environmental Quality Act (“CEQA”). 

The exhaustion doctrine requires that project opponents raise the specific bases for their objections at the administrative level or else forfeit their right to raise those objections later in court.  The purpose of the doctrine is to prevent project opponents from waiting until after a project has been approved to announce their objections, thereby sandbagging the public agency in court.

The decision holds that the exhaustion requirement applies to an agency’s determination that a project is categorically exempt, so long as an agency (1) gives notice of the ground for its exemption determination, and (2) holds a public hearing that allows interested parties to raise their objections or concerns.  If those conditions are met, the exhaustion doctrine will bar opponents from raising issues in court that were not raised at the administrative level. 

What the decision leaves undecided, however, is the level of detail required for public notice to be sufficient, and whether lower courts will construe the term “public hearing” strictly or loosely in deciding whether the conditions for applying the exhaustion doctrine are met.  The Court also did not address a ruling, by the Court of Appeal below, that CEQA’s exemption for “in-fill development” cannot be used for projects located outside city limits.

Tomlinson concerns a determination, by the County of Alameda, that a residential subdivision project in an unincorporated area was exempt from environmental review under the categorical exemption for in-fill development in an established urban area.  Both the County and the developer had given notice of a public hearing on the project, including a statement that the project was exempt from CEQA.  Project opponents raised objections to the project both at the hearing and in written communications to the County.

Following project approval, the opponents filed a mandamus petition under CEQA.  The trial court rejected the opponents’ claims and denied the petition.  Specifically (in the only holding addressed by the Supreme Court’s ruling), the trial court ruled that an argument that the in-fill exemption could not be used for projects located outside city limits was barred from judicial review, because the petitioners had not raised it prior to the County’s approval.

The Court of Appeal reversed, holding that CEQA does not require exhaustion of issues for challenges to categorical exemption determinations, and further agreeing with the petitioners that the in-fill exemption could not be used for projects in unincorporated areas.

On this point, the Supreme Court overruled the Court of Appeal and agreed with the trial court. The Supreme Court noted that CEQA limits judicial review to issues that were raised (1) during a public comment period provided by law or (2) before the close of the public hearing on the project.  The Supreme Court agreed with the Court of Appeal that CEQA does not provide for a “public comment period” for categorical exemptions, and that therefore there is no requirement to exhaust objections to a categorical exemption during a public comment period.  The Supreme Court also left undisturbed a previous appellate decision which found no requirement to exhaust objections to a categorical exemption where an agency did not hold a public hearing.  However, the Supreme Court observed that in Tomlinson, the County had noticed and conducted a public hearing before approving the project as categorically exempt.  The Court held that, where the agency conducts such a noticed public hearing for a categorical exemption determination, CEQA limits the issues that can be raised in later judicial proceedings to those that were raised before the close of the agency’s public hearing.

Because it held that the exhaustion doctrine applies, the Court did not rule on the petitioners’ argument that the categorical exemption for in-fill development cannot be used for projects outside city limits.  Rather, the Court remanded, for decision by the Court of Appeal, the petitioners’ contentions that their objections during proceedings before the County were sufficient to satisfy the requirement of exhaustion prior to judicial review.