Category Archives: Environmental Law

Environmental Regulation

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Environmental Regulation in California

For California Attorneys: Environmental Regulation

See Global-Warming in this legal reference.

California Environmental Regulation

This section covers California-specific basic information on environmental regulation and related topics. Many of California's laws on environmental regulation are similar to those of other U.S. states, with some differences (in some cases, minor differences). California environmental regulation laws on environmental regulation are created and revised by the actions of lawmakers and the courts. Use the cross-references and topics below to learn more about California statutes and laws on environmental regulation, which is a basic matter in California law.

Resources

See Also

Legal Forms

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Legal Forms in California

Research Guide – California Legal Forms

California Civil Procedure Formbooks

These include:

  • California Affirmative Defenses 2d, Bancroft Whitney, 5 volumes. These forms are for defenses to civil actions. This publication is also available on Westlaw (Formerly, CAAFDEF).
  • California Civil Litigation Forms Manual, Continuing Education of the Bar, 2 volumes. The forms in this practice guide are derived from CEB civil procedure and civil discovery books. Sample forms are including.
  • California Civil Procedure Before Trial, 3rd ed., Continuing Education of the Bar, 3 volumes. This publication is also available on Lexis (formerly, ceb;cebcpt).
  • California Forms of Pleading and Practice, Annotated, Matthew Bender, 55 volumes. This is a very comprehensive and current set of California legal forms. It includes relevant laws and the procedures for using the forms. It is organized by subject. These forms are available on Lexis.
  • California Practice Guide: Alternative Dispute Resolution, Rutter Group. This publication is also available on Westlaw (Formerly, TRG-CAADR).
  • California Practice Guide: Civil Appeals and Writs, Rutter Group, 2 volumes. This publication is also available on Westlaw (Formerly, TRG-CACIVAPP).
  • California Practice Guide: Civil Procedure Before Trial, Rutter Group, 3 volumes. This publication is also available on Westlaw (Formerly, TRG-CACIVP).
  • California Practice Guide: Civil Trials and Evidence, Rutter Group, 3 volumes. This publication is also available on Westlaw (Formerly, TRG-CACIVEV).
  • California Practice Guide: Enforcing Judgments and Debts, Rutter Group, 2 volumes. This publication is also available on Westlaw (Formerly, TRG-CADEBT).
  • Debt Collection Practice in California, Continuing Education of the Bar, 2 volumes.
  • Practicing California Judicial Arbitration, Continuing Education of the Bar.

Judicial Council Forms

These include:

  • California Forms of Pleading and Practice, Annotated, Matthew Bender. A three volume supplement, Judicial Council Forms, contains forms for use in discovery, wage garnishment, family law, juvenile court law, guardianship, civil harassment, and small claims proceedings.
    These forms are available on Lexis.
  • California Judicial Council Forms Manual, Continuing Education of the Bar, 4 volumes. Forms can be removed for copying and are accepted by the California courts. Set includes table of contents, alphabetical list of forms, and table of statutes and rules.
  • West’s California Judicial Council Forms, 4 volumes. For use in conjunction with West’s Annotated California Codes. Forms are effective through current year.

Judicial Council Forms are also available through the California Courts’ Internet homepage.

Jury Instructions and Selection

  • [CACI] California Jury Instructions: Civil, Plain English, This publication is also available on Westlaw (Formerly, CA-CACI) and Lexis (Formerly, cal;cjcjur).
  • [BAJI] California Jury Instructions: Civil, 9th ed., 2 volumes. This publication is also available on Westlaw and Lexis.
  • Bennett’s Guide to Jury Selection and Trial Dynamics:California Civil Litigation, West Publishing Company. Forms for jury selection, including sample questionnaires for different types of trials. These forms are also available on Westlaw (formerly, through the LTG-TP database). Hint: To limit your search to Bennett’s, add “ci (bennett)” to your search.
  • [CALCRIM] California Jury Instructions: Criminal, Plain English, 2 volumes. This publication is also available on Westlaw and Lexis.
  • [CALJIC] California Jury Instructions: Criminal, 6th ed., 2 volumes. This publication is also available on Westlaw and Lexis.
  • Bennett’s Guide to Jury Selection and Trial Dynamics:California Criminal Litigation, West Publishing Company. Forms for jury selection, including sample questionnaires for different types of trials. These forms are also available on Westlaw (formerly, through the LTG-TP database). Hint: To limit your search to Bennett’s, add “CI (bennett)” to your search.
  • California Forms of Jury Instructions, Matthew Bender, 4 volumes. These forms are also available on Lexis.
  • California’s New Civil Jury Instructions are available through the California Courts’ web page at http://www.courtinfo.ca.gov/reference/documents/civiljuryinst.pdf. There is a conversion chart at the end for cross-referencing BAJI numbers with the correct numbers for the new instructions.
  • FORECITE: Latest Developments in California Criminal Jury Instructions. This looseleaf volume supplements and updates CALJIC.

Formbooks Organized by Subject Specialization

Multi-Subject Formbook Sets:

  • California Legal Forms: Transaction Guide, Matthew Bender, 36 volumes. Includes forms for business and nonprofit organizations, real estate transactions, commercial transactions, wills & trusts, contracts & obligations, performance of services, and personal transactions.
    These forms are also available on Lexis.
  • West’s California Code Forms With Practice Commentaries, 46 volumes. For use with West’s Annotated California Codes. Includes volumes devoted to Business and Professions, Civil, Civil Procedure, Commercial, Corporations, Education, Elections, Fish & Game, Food & Agricultural, Insurance, Government, Labor, Probate, Public Utilities, and Revenue & Taxation. This publication is also available on Westlaw.

Attorney’s Fees:

  • California Attorney Fee Awards, 2nd ed., Continuing Education of the Bar. This guide includes forms for recovering attorney’s fees.
  • Fee Agreement Forms Manual, Continuing Education of the Bar. This guide provides a complete and practical guide to planning and drafting attorney-client fee agreements that meet the requirements of the fee agreements statute.

Businesses and Business Entities:

  • Advising California Employers and Employees, 2nd ed., Continuing Education of the Bar, 3 volumes. These forms are available on Lexis.
  • Advising California Partnerships, Continuing Education of the Bar. These forms are also available on Lexis.
  • California Practice Guide: Corporations, The Rutter Group, 2 volumes. These forms are also available on Westlaw.
  • California Corporation Laws, Ballantine & Sterling, 7 volumes. These forms are also available on Lexis.
  • California Transactions Forms : Business Entities, Bancroft-Whitney, 6 volumes. These forms are also available on Westlaw.
  • California Transactions Forms: Business Transactions, Bancroft-Whitney, 6 volumes. These forms are also available on Westlaw.
  • Financing and Protecting California Businesses, Continuing Education of the Bar. Forms for business startups.
  • Drafting Business Contracts: Principles, Techniques & Forms, Continuing Education of the Bar. These forms are also available on Lexis.
  • Forming & Operating California Limited Liability Companies, Continuing Education of the Bar. These forms are also available on Lexis.
  • Selecting & Forming Business Entities, Continuing Education of the Bar, 3 volumes. These forms are also available on Lexis.

Class Actions:

  • Cohelan on California Class Actions, West Group. This publication has forms and samples for filing class actions.

Criminal Law:

  • California Criminal Practice, Motions, Jury Instructions and Sentencing, 3rd ed., Thomson-West, 5 volumes.
  • California Criminal Law Forms Manual, Continuing Education of the Bar.

Family Law:

  • California Family Law: Practice and Procedure, Matthew Bender, 6 volumes. These forms are also available on Lexis. Includes a supplement with Judicial Council Forms.
  • California Family Law Trial Guide, Matthew Bender, 4 volumes. This publication is also available on Lexis.
  • California Marital Settlement and Other Family Law Agreements, 3rd ed., California Continuing Education of the Bar.
  • California Practice Guide: Family Law, Rutter Group, 3 volumes. This publication is also available on Westlaw.
  • California Transaction Forms: Family Law, West Group, 2 volumes. Also available on Westlaw.

Insurance Law:

California Practice Guide: Insurance Litigation, The Rutter Group, 3 volumes.
These forms are also available on Westlaw.

Landlord-Tenant Law:

  • California Eviction Defense Manual, Continuing Education of the Bar, 2 volumes. This publication is also available on Lexis.
  • California Landlord-Tenant Practice, Continuing Education of the Bar, 2 volumes. This publication is also available on Lexis.
  • California Practice Guide: Landlord-Tenant, Rutter Group, 2 volumes. This publication is also available on Westlaw.
  • California Tenants: A Guide to Residential Tenants’ and Landlords’ Rights and Responsibilities, State of California. Available online at http://www.dca.ca.gov/legal/landlordbook/index.html. Published by the California Department of Consumer Affairs.
  • California Tenants’ Rights, Nolo Press.
  • The California Landlord’s Law Book: Rights and Responsibilities, Nolo Press.

Real Property, Financing, and Construction Law:

  • California Practice Guide: Real Property Transactions, Rutter Group, 2 volumes. This publication is also available on Westlaw.
  • California Real Estate Forms,2nd ed., [Miller and Starr] Bancroft-Whitney, 4 volumes. These forms accompany Miller and Starr, California Real Estate 2d, the preeminent treatise on real estate law in California. Volume 1 contains forms pertaining to the purchase and sale of real property; Volume 2 contains forms pertaining to leasing transactions. Also available on Westlaw.
  • California Real Property Practice Forms Manual, Continuing Education of the Bar. This practice guide collects forms from CEB’s most commonly used real property books in one easy-to-use volume. Readers can remove forms for easy photocopying.
  • California Construction Contracts and Disputes, Continuing Education of the Bar. This practice guide has forms for drafting California construction contracts. This publication is also available on Lexis.
  • California Lis Pendens Practice, 2nd ed., Continuing Education of the Bar. This practice guide has forms for filing and perfecting notices of pending actions.
  • California Mechanics Liens and Related Construction Remedies, 3rd ed., Continuing Education of the Bar. This practice guide has forms for statutory remedies on public and private construction projects. This publication is also available on Lexis.
  • Condemnation Practice in California, 3rd ed., Continuing Education of the Bar, 2 volumes. Litigation forms are available in this publication.
  • Financing and Protecting California Businesses, Continuing Education of the Bar, 2 volumes.
  • Forming California Common Interest Developments, Continuing Education of the Bar, 2 volumes. This publication has forms for creating a common interest development.
  • Ground Lease Practice, Continuing Education of the Bar. This practice guide has forms for drafting building leases.
  • Office Leasing: Drafting and Negotiating the Lease, Continuing Education of the Bar, 2 volumes. The practice guide has forms for drafting commercial leases. This publication is also available on Lexis.
  • Real Property Exchanges, Continuing Education of the Bar.

Taxation:

  • Print: For tax forms, looseleaf services with forms are pageable. Also, state tax formbooks for the current year are in the Reference Collection.
  • Internet: California tax forms are available on the Internet at: http://www.ftb.ca.gov/forms/index.html and federal tax forms are available at: http://www.irs.ustreas.gov/formspubs/index.html

Tort Law:

  • California Practice Guide: Personal Injury, Rutter Group, 2 volumes. Also available on Westlaw.
  • California Products Liability Actions, Matthew Bender. Also available on Lexis.

Wills & Trusts and Elder Law:

  • California Elder Law: An Advocate’s Guide, Continuing Education of the Bar, 2 volumes. Also available on Lexis.
  • California Practice Guide: Probate, Rutter Group, 2 volumes. This publication is also available on Westlaw.
  • California Transaction Forms: Estate Planning, 2nd ed., West Group, 4 volumes. This publication is also available on Westlaw.
  • California Will Drafting, Continuing Education of the Bar, 3 volumes. Also available on Lexis.
  • Drafting California Revocable Trusts, Continuing Education of the Bar. This publication is also available on Lexis.
  • Drafting California Irrevocable Trusts, California Continuing Education of the Bar, 2 volumes. This publication is also available on Lexis.
  • California Conservatorship Practice,Continuing Education of the Bar, 2 volumes.
  • This publication is also available on Lexis.

California Forms on the Internet

  • FindLaw California: Legal Forms
  • Judicial Council Legal Forms
  • California Business Portal: http://www.ss.ca.gov/business/corp/corp_formsfees.htm
  • Internet Legal Resource Guide: Legal Forms Archive – http://www.ilrg.com/forms
  • LexisONE provided access to more than 6,000 forms, as well as forms from the extensive Matthew Bender collection. While the forms are free to view, there is a charge to use the interactive forms, and users must register and select a password.
  • The California Superior Court hosts EZLegalFile at http://www.ezlegalfile.org, where interactive forms for family, marriage, divorce, small claims, evictions, guardianship, and domestic violence can be filled out online and printed in a form suitable for filing.

California Forms on Lexis and Westlaw

  • LEXIS: There are many California legal forms on Lexis in the Matthew Bender Treatises and the CEB publications.
  • WESTLAW: There are numerous California legal forms available on Westlaw. To locate the list of forms, go to the online Westlaw directory, select “State Materials”, then select “California”, and then select “Forms, Treatises, CLEs and Other Practice Material”.

Dust

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Dust in California

Dust-control settlement in the Owens Valley

By Laura Impellizzeri:

Dust storms in the Owens Valley have been comparable to the worst of the 1930s Dustbowl or modern Arizona, says Duane Ono, the acting air pollution control officer of the Great Basin Unified Air Pollution Control District. The development the aqueduct enabled was just as epic: “California wouldn’t be what it is today but for the diversion of the Owens River to the city of L.A.,” says Morrison & Foerster partner Peter Hsiao, who has represented Ono’s agency for 16 years. “Addressing impacts of that diversion is what this case is about.”

The Owens River watershed still supplies 34 percent of LADWP water, on average. “This settlement is a victory for L.A.’s ratepayers and for Owens Valley residents,” City Attorney Mike Feuer said in a statement. “By collaborating rather than fighting, we will reduce water usage, contain costs, and improve air quality near Owens Lake.”
The settlement resolves three decades of rulings and appeals under California Health and Safety Code section 42316, which was enacted in 1983 to resolve disputes between LADWP and the air district. (See City of Los Angeles v. Calif. Air Res. Bd., No. 34-2013-80001451 (Sacramento Super. Ct. stipulated judgment filed Dec. 30, 2014).) The statute specifically lets the agency require L.A. to control Owens Valley dust – and lets the city appeal any measures or fees it finds aren’t “reasonable.”

Hsiao applauds the pact for requiring L.A. to finish and permanently maintain dust controls on nearly 49 square miles of lakebed and for letting the air district order controls on another 4.8 square miles if needed. Stipulated control measures include gravel, specially designed planting, and more of the watering the district has done in recent years. Hsiao is especially glad it’s enforceable in court: “There is zero likelihood of appeal.”

Marty Adams, LADWP’s water system manager, hails the pact for letting his agency know what to expect and limiting its responsibility: No amount of dust mitigation had ever seemed to be enough, he says. Adams estimates finishing the dust control project will cost LADWP $100 million to $150 million, and maintaining it will run another $75 million a year to start. In contrast, the litigation cost “in the low millions.” But stay tuned for more controversy: LADWP power system official Mike Webster says the agency has only delayed its plan for a solar farm across from Manzanar.

Safe Drinking Water and Toxic Enforcement Act of 1986

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Safe Drinking Water and Toxic Enforcement Act of 1986 in California

California OEHHA Proposition 65: Law, Regulations and Rulemaking

by Logan Orlando (in July 2014)

Disclosure rules meant to clear the air around Propostition 65 promise to stir up industry.

Proposed new state rules for implementing Proposition 65, slated for release in summer 2014, may end up perpetuating rather than resolving the long-running debate over the controversial chemical-disclosure law.

Prop. 65, which California voters passed in 1986, requires warnings to consumers of the presence of certain levels of 800 listed toxins and carcinogens in drinking water, foods, and other products, as well as in workplaces and public venues (see Cal. Health & Saf. Code §§ 25249.5-25249.13). Many industries have long found the law overbroad and agree with Governor Jerry Brown that lawsuits pursued under the measure often are “frivolous shakedowns.”

AB 227, authored by Assemblymember Mike Gatto (D-Burbank) and signed into law by Brown last year, was the first Prop. 65 reform ever to win the support of two-thirds of the Legislature (as required to modify ballot measures). But it only made small changes; some businesses can now avoid costly litigation and penalties by correcting minor violations and paying a fine within 14 days of notification.

Consumer activists, plaintiffs, environmentalists, and Brown all believe consumers have the right to know more about how products might expose them to potentially toxic levels of certain ingredients. James Wheaton, legal director of the Environmental Law Foundation in Oakland, says the proposed new rules will achieve that as well as modernize the law. Wheaton says Prop. 65’s greatest value lies in motivating companies to eliminate toxic ingredients so they can avoid posting warnings.

In the draft rules, the state Office of Environmental Health Hazard Assessment (OEHHA) highlights twelve of the listed chemicals that businesses would have to identify when a product or venue causes significant exposure to them. Among other changes, the rules also would require companies to post exposure data on OEHHA’s website.
Leslie T. Krasney, a partner at Keller and Heckman in San Francisco who specializes in regulatory and administrative law, expects continuing pushback from the industry. For one, it’s challenging to determine whether a product actually causes exposure to a listed ingredient. Krasney also questions OEHHA’s methodology in choosing the chemicals. The rules are likely to be finalized in about a year.

CEQA

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California Environmental Quality Act (CEQA)

The California Environmental Quality Act is also known as CEQA.

Aas politicians debate the merits of some 20 CEQA reform bills now making their way through the state Legislature, the fates of three game-changing endeavors hang in the balance: high-speed rail, fracking, and the twin tunnels water project, which would redirect massive amounts of water from the Sacramento-San Joaquin River Delta to Southern California.

When, as governor, Ronald Reagan signed CEQA into law in 1970, it was widely hailed as a groundbreaking bill, designed to mitigate the harmful environmental effects of development by establishing statewide protocols for both public disclosure and analysis. In recent years, though, developers have increasingly complained that CEQA has become something of a monster. Rather than being used to improve projects, they say, the law is all too often wielded to render them undoable.

The California’s high-speed rail project – a bullet train that, as envisioned, will whisk passengers from San Francisco to Los Angeles in less than three hours. Supporters argue that it makes environmental as well as economic sense. But they warn that the cost of litigating the project’s environmental impacts and mitigation measures could sink it.

Some thinks thta, left unaltered, CEQA poses a serious threat to other major projects, including the fracking of Monterey shale deposits and the water tunnels Governor Jerry Brown wants to build in the delta.

CEQA and the high-speed rail project

By Glen Martin, a freelance environmental writer based in Santa Rosa.

California’s ambitious high-speed rail project. The proposed route would plow a broad right-of-way through the county’s cropland, ultimately permitting trains that reach speeds up to 220 miles per hour to shuttle nearly 25 million people a year between Los Angeles and San Francisco.

“It will utterly change our way of life here, and not for the better,” says Anja Raudabaugh, the executive director of the Madera County Farm Bureau. Raudabaugh hardly looks the part of a ramrod for the local growers. Tall, blond, and city-smart, she spent seven years in Washington, D.C., as an agricultural adviser – including three years as a legislative assistant to former Rep. Douglas Ose (R-Sacramento) and two at the Office of Management and Budget. But her rural street cred is impeccable: She grew up just east of Madera on an 8,000-acre ranch homesteaded by her ancestors in 1856.

“I met my husband in Washington, and at a certain point, we were ready to get out,” she says. “Coming back here was natural. We recently had a baby. This is where I want him to grow up.”

Raudabaugh took the farm bureau job in 2011 and quickly came to blows with the California High-Speed Rail Authority (HSRA), established in 1996 to direct the project’s development. In order to secure federal funding, the authority was required to begin construction in the Central Valley. So in 2010, flush with a $3.5 billion federal grant and $9 billion in state bonds, HSRA announced plans to build the first 65-mile leg of the system from Merced to Fresno.

According to Raudabaugh, the authority has compelling reasons to build such a “railroad to nowhere.” First, the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5) requires all federal project funds to be spent by the end of September 2017 – a deadline that couldn’t be met if construction were to start in densely populated urban areas. Second, land is cheap in the Central Valley. Dollar for dollar, more momentum could be generated for the project there than at the urban ends of the line. But the clock is running on project completion – and HSRA is acutely aware of every tick.

“The authority also figured there wouldn’t be any legal issues,” Raudabaugh adds. “In L.A. or the Bay Area, they knew they’d be hit with lawsuits. I don’t think they expected much trouble here.”

How wrong they were. Last June, plaintiffs – including Madera and Merced counties, their local farm bureaus, the City of Chowchilla, four corporate property owners, and several highly irritated individual farmers – filed a trio of lawsuits against HSRA. (County of Madera v. Cal. High Speed Rail Auth., No. 34-2012-80001165 (Sacramento Super. Ct., filed June 1, 2012); City of Chowchilla v. Cal. High Speed Rail Auth., No. 2012-80001166 (Sacramento Super. Ct., filed June 1, 2012); and Timeless Inv. Inc. v. Cal. High Speed Rail Auth., No. 2012-80001168 (Sacramento Super. Ct., filed June 4, 2012).)

The Madera plaintiffs alleged that a significant portion of the project would “deviate from existing transportation corridors,” resulting in the destruction of or interference with “thousands of acres of farmland, wildlife habitat, hundreds of homes, many businesses, commercial properties and industrial facilities, existing roads and water delivery facilities.”

The plaintiffs further alleged that the final environmental impact report (EIR) for the first phase was faulty, and improperly defers analysis and mitigation. The suit was filed under provisions of the California Environmental Quality Act (CEQA), enacted by the Legislature in 1970. (Cal. Pub. Res. Code §§ 21000-21189.3) A state analogue to the National Environmental Policy Act (NEPA) (42 U.S.C. §§ 4321-4370h), CEQA is the more comprehensive statute, applying not only to public projects but also to private projects that require sanction from state or local agencies.

There’s a certain irony here, Raudabaugh acknowledges. Typically, farmers and ranchers loathe CEQA, viewing it as a hobble to efficient, profitable enterprises. But she says the growers’ experience with CEQA taught them that the statute “provided rights and opportunities” – and perhaps a chance to sidetrack high-speed rail before the first train leaves the station.

Late last year Sacramento Superior Court Judge Timothy Frawley consolidated the three CEQA cases against HSRA, but he refused to impose a preliminary injunction to halt all work on the Merced-Fresno section. In February the property owners withdrew their suit, and the Chowchilla plaintiffs settled with the agency for a promise to consider alternative routes and $300,000 in attorneys fees. That left the Madera case, which was scheduled for a hearing on the merits in April.

“At this point, we need all the help we can get,” Raudabaugh says. “The route will destroy many farms outright because the line will bisect properties, making it impossible to maintain functional operations. It will close 56 overpasses over Highway 99 in Madera County alone – and that will shut down many of our rural school districts. If the buses can’t get the kids to the school, the schools lose their public funding.”

From a broader standpoint, she continues, Madera’s bucolic way of life will collapse. High-speed rail will make it possible for people to commute from Fresno to San Francisco in an hour and 20 minutes. The short ride, Raudabaugh says, “will spur massive residential and commercial growth around here. Even discounting the impacts to water, air, carbon emissions, and traffic, that kind of development is incompatible with commercial agriculture.”

If that sounds like a public policy argument, Raudabaugh isn’t shy about declaring her intent. “We’ve never made it a secret that delaying construction was part of our strategy,” she says. “We don’t have a lot of money, and we had to retain a Cadillac law firm to fight this. We want to win.”

That Cadillac firm is Fitzgerald Abbott & Beardsley, based in Oakland. Lead plaintiffs counsel Barry H. Epstein acknowledges that he has represented developers battling CEQA more often than citizens groups invoking the act to fight a project.

“The fundamental objections my clients have are all about the routing,” Epstein says. “As the route stands, it will devastate agriculture and communities. Not all CEQA cases can be settled for additional mitigation.” Epstein took that argument all the way to the courthouse steps.

To proponents of high-speed rail, Madera County’s CEQA challenge was just the latest example of invoking the statute to frustrate economic development.

“High-speed rail is the kind of project California really needs,” says Gary L. Toebben, president and CEO of the Los Angeles Area Chamber of Commerce. “CEQA has an impact on thousands of projects in the state each year,” he continues. “Much of the impact is positive, but there are far too many cases where businesses are using CEQA to block competition, and neighbors are using it to block transit and affordable housing. These suits run up the costs of projects astronomically and impose time delays that are measured in years – or even decades.”

High-speed rail advocates in the Legislature anticipated CEQA suits from the project’s opponents and sought to preempt them. Last June, then-state Senator Michael Rubio (D-Shafter) introduced SB 317 to exempt the first phase of the project from CEQA mandates. But Rubio’s bill met with fierce opposition and was quickly shelved.

“It basically would’ve gutted CEQA,” says Tom Adams, the former board president of the California League of Conservation Voters. “Even the proponents of the bill now acknowledge it was poorly drafted, and that withdrawing it was the only reasonable course. The problems facing high-speed rail have more to do with poor decisions by agency managers than any putative burdens imposed by CEQA.”

California Senate President pro tem Darrell Steinberg (D-Sacramento) admits SB 317 wasn’t ready for prime time. “Senator Rubio agreed with me that the proposal, with wide-ranging implications and little time for careful deliberation, wasn’t ready to be introduced in bill form,” Steinberg responded by email. “I said at the time that CEQA is too important a law to rewrite hastily in the final days of the legislative session.”

Steinberg adds, “I also said that we need to be open to looking at ways to improve the law without undermining its fundamental purposes of public transparency and participation, feasible mitigation, and environmental protection.”
At the opening of its 2013-14 session, the Legislature was poised for Rubio to introduce a modified version of last year’s bill. But in February he abruptly resigned to take a governmental affairs job with Chevron Corporation, leaving a pro-development coalition called the CEQA Working Group in limbo.

Steinberg himself quickly introduced a less drastic measure (SB 731) that promised to “expedite” CEQA review for transportation and alternative energy projects, set new thresholds for environmental impacts, and simplify the process for resolving disputes that fall under the act.

But whatever plan there had been to promote the bill evaporated as lawmakers from both parties introduced more than two dozen competing measures by the end of the filing deadline for new legislation. Many of these aim to strengthen CEQA rather than streamline or curtail it. Senator Noreen Evans (D-Santa Rosa), for instance, proposes tougher environmental reviews (SB 617) and, in a companion measure (SB 754), more aggressive enforcement of mitigation measures. Other bills viewed favorably by CEQA originalists include SB 436, SB 633, and AB 823.

Opposing bills take their lead from Rubio’s withdrawn measure. Senator Tom Berryhill (R-Modesto) introduced a near facsimile of it (SB 787); Senator Cathleen Galgiani (D-Stockton) would exempt high-speed rail and light-rail projects from CEQA review altogether (SB 525); and Assemblyman Jeff Gorell (R-Camarillo) seeks a similar exemption for landfills that use organic waste to generate green energy (AB 794).

Two bills propose methods for speeding CEQA challenges through the courts. Assemblyman Roger Dickinson (D-Sacramento) suggests creating special CEQA courts with limited appellate review (AB 515); Senator Ellen Corbett (D-San Leandro) would create an environmental division within the superior courts (SB 123). But the Judicial Council – which objects to specialty courts on policy grounds – quickly voted to oppose both bills.

The flurry of proposed legislation promises a free-for-all over changes to CEQA that could facilitate or stymie such major statewide projects as high-speed rail, huge tunnels drilled into the Sacramento River Delta for transporting water to the Southland, and fracking operations in the San Joaquin basin.

The central charge leveled against CEQA by its diverse critics is that it has succumbed to mission creep. Though they disagree about proposed changes, they share a belief that the statute has expanded well beyond its purview of reviewing projects, and proposing either mitigation or alternatives to environmental impacts. Now, they say, CEQA too often is used to stop development – solar and wind farms, for example, along with new freeways and strip malls.
Jennifer L. Hernandez, a partner in the San Francisco office of Holland & Knight and co-chair of the firm’s national environmental practice, says case law is replete with examples of CEQA abuse. She cites the petition for a writ of mandate filed by opponents of a transportation plan that regional governments in San Diego had proposed. (Cleveland Nat’l Forest Found. v. San Diego Ass’n of Gov’ts (SANDAG), No. 37-2011-00101593 (San Diego Super. Ct. filed Nov. 28, 2011).)

The plaintiffs in that case contended that SANDAG’s plan for meeting state carbon emission targets in 2020 and 2035 – required by an air quality measure known as SB 375 – was inadequate because it didn’t project emissions beyond 2035. In December, Superior Court Judge Timothy B. Taylor set aside the EIR, finding that SANDAG had engaged in a prejudicial abuse of discretion in preparing the report.

“The problem here is that SANDAG met its targets as required, and was still sued,” says Hernandez, who represented the defendants. “Now [the San Diego region] has a great emission reduction plan, but billions of dollars in transportation matching funds are at risk for no legitimate reason. The fact is, we can’t establish carbon reduction targets beyond 2035 because we have no way to accurately forecast growth past that point. Any ‘plan’ would be guesswork.”

Hernandez says she conducted an in-house study of all published opinions for the past 15 years in which CEQA plaintiffs appealed adverse EIR rulings. Despite claims that the statute is used to fight industrial pollution, her report concluded that less than 11 percent of the appellate cases involved industrial development. Most cases concerned infrastructure and mixed-use projects, followed by residential and commercial development.

“Twenty or thirty years ago, if you got your EIR you knew you’d survive in court – assuming you told the truth,” Hernandez says. “The point was to take a hard look, provide disclosure, determine mitigation; then you were done. Now, it has all been upended. Things have expanded to the point that ‘environmental view-sheds’ – what you see from your kitchen window, for example – can be grounds for a CEQA suit against environmentally sound in-fill development. People will sue simply because they don’t like the way a project looks. That wasn’t the original intention of the act.”

Hernandez adds that even good projects that fully comply with CEQA run a significant risk of losing court challenges. She noted in her report that E. Clement Shute Jr. – a leading plaintiffs lawyer and founding partner at San Francisco’s Shute, Mihaly & Weinberger – asserted at a recent law school conference that CEQA compliance challenges had succeeded in 43 percent of appellate cases published in the 40-some years since the law was enacted. That figure, Hernandez wrote in her study, “is a remarkable statistical anomaly in administrative law litigation. … In lawsuits pursued [under NEPA], the national equivalent and model for CEQA, the United States Supreme Court has upheld the adequacy of agency NEPA compliance in 100 percent of cases, nearly all the time in unanimous rulings.”

But Rachel B. Hooper, managing partner of Shute Mihaly and lead plaintiffs counsel in the SANDAG case, disputes Hernandez’s figures. “Over the past decade, the rate of CEQA litigation has essentially stayed the same – about 200 cases a year,” Hooper says. “Of all the state projects subject to CEQA, only about 1 percent end up in court. Hernandez based her report on the published CEQA decisions; she didn’t look at the vast majority of trial court decisions that were never appealed, and therefore not published.”

Other CEQA critics agree that the statute has become a weapon for plaintiffs with hidden agendas. “We see a great law being abused for purposes that have nothing to do with the environment,” says Carl Guardino, president and CEO of the Silicon Valley Leadership Group in San Jose and co-chair of the CEQA Working Group. “Our organization is hardly resistant to progressive environmental policies,” he says. “We’ve led the transit sales tax measure for Silicon Valley, and we supported the 16-mile BART extension to the region.”

Guardino claims he’s witnessed particularly egregious examples of CEQA abuse while working on the BART light rail extension. “The project had [labor unions] suing the contracted developer of the Milpitas Station under CEQA over project labor agreements,” he says. “It had nothing to do with environmental quality and everything to do with economic advantage. Months and months were lost because of that suit, and it increased project costs dramatically.”
Hernandez at Holland & Knight adds, “We’ve seen a landfill company sue a competitor under CEQA to stop it from getting a contract. Again, the motivating factor had nothing to do with the impacts of the landfill project. It was a matter of gaining economic advantage, not environmental concern.”

Conservation activist Adams, however, feels that allegations of greenmail are spurious, based more on sour grapes than on actual misuse of the statute. He cites San Francisco’s Center for Biological Diversity as an undeserving target of CEQA critics who condemn some of the center’s high-profile settlements in cases filed to protect endangered species and their habitats.

“The center is a real environmental group, not a shell organization with a hidden agenda,” Adams says. “Those settlements are approved by the courts, and the center’s assets are irrevocably dedicated to charitable purposes, as enforced by the state Attorney General. The business community has a problem with the center because it wins cases.”

Parsing through the competing CEQA bills before the Legislature, a few central themes emerge. Rubio and his pro-development successors favor a “standards” approach to ameliorate what they consider the statute’s weaknesses. In short, they contend that if a project satisfies rigorous environmental statutes and local zoning regulations, it should be spared the ruinous rounds of EIR challenges that could ultimately kill it.

“In the years since CEQA, we’ve passed a great many laws that have been very effective in protecting the environment,” Rubio says. “Think of the federal and California Clean Water Acts, the federal Clean Air Act, the federal and state Endangered Species Act, AB 32 [stipulating dramatically reduced atmospheric carbon emissions], and SB 375 [requiring regional land use and transportation plans to meet AB 32’s goals]. The problem is that a project – including truly green projects like high-speed rail, solar, and wind farms – must satisfy these statutes, and then they’re still subject to CEQA litigation.”

Rubio posits an example. “Say you have a plan that reduces parking, thereby encouraging mass transit. This helps meet required AB 32 and SB 375 goals. But the plan can still be challenged under CEQA because plaintiffs can claim drivers will keep circling for parking places – thereby increasing emissions.

“So under the existing statute,” he concludes, “there is no security, no safe harbor, no way to reconcile conflicts. By allowing projects to proceed if they meet relevant and existing standards, we’ll be able to protect our environment, build sustainable projects, and avoid a great deal of judicial gridlock.”

Steinberg’s bill, SB 731, doesn’t stipulate a standards mechanism, but it does establish thresholds for specific categories of environmental impacts. Still, those thresholds, says Shute Mihaly’s Hooper, could eventually translate into a de facto standards approach. She worries that replacing CEQA with a standards process would give developers a means to ram through destructive projects.

Citing the defendants’ argument in SANDAG, Hooper notes that their regional transportation plan proposed to meet SB 375’s greenhouse gas standards by constructing new freeways to reduce congestion and idling traffic on surface streets. “But we showed that emissions thereafter would have skyrocketed, because of growth induced by freeway expansion,” she says. “The trial court ruled in our favor. Under a standards approach, the project would have gone forward.”

But some environmental lawyers say the real issue isn’t standards, but how they are applied. Nicholas C. Yost – a partner in the San Francisco office of SNR Denton, lead drafter of NEPA, and a lead drafter of CEQA – takes a generally positive view of the standards approach. “Every CEQA and NEPA case either ditches a project or allows it with extensive mitigation,” Yost says. “If the Legislature decides to impose standards in lieu of mitigation, I see nothing inherently obnoxious about it. But at that point, the terms of the standards and mitigations are the critical issue.”

Yost notes that CEQA has been amended many times, and that its reach has expanded through case law. “The people who are now saying CEQA is cumbersome have a point,” he says. “But at the same time, we must remember CEQA and NEPA are strong laws that have served the public exceedingly well.”

The CEQA Working Group, Guardino says, is determined to graft a standards approach onto the statute. And he wants well-conceived local and regional land use plans to be given more credence in environmental reviews. “If you have a plan that has been updated to satisfy SB 375, for example, that has to mean something,” he says. “As it stands, you can have a great plan, the project meets all the requirements, and in the final analysis it counts for nothing.”
Guardino also feels that CEQA should require greater transparency from organizations filing suit. Presently, the act assures anonymity to many plaintiffs. Unincorporated associations, for instance, are not required to reveal their memberships. “We keep seeing these ‘Friends of …’ groups filing suits, and we have no idea who they are or what their real motives might be,” he says. “The irony here is that CEQA was designed to improve transparency in the courts and government – and it’s had the opposite effect.”

Guardino claims he just wants to return CEQA to its original purpose: determining and reviewing impacts, and providing for mitigation. “It was never meant to kill projects, and that’s often what it’s used for today,” he says. “This isn’t a matter of developers versus environmentalists – the argument can’t be framed that way anymore.”
Hooper, however, is adamant that CEQA doesn’t need an overhaul – at least not to the degree Guardino’s group wants. “My colleagues and I are open to revisions that would help the law work better,” she says. “But we don’t want to see it dismantled – and that’s what’s being proposed.”

She adds, “There is absolutely no evidence that CEQA is harming the economy. CEQA has existed through both good and bad economic cycles. The ‘evidence’ of harm our opponents are dredging up is anecdotal and ultimately fallacious.”
As for the demand for increased transparency, Hooper views it as disingenuous – and ultimately dangerous. Motivation for filing a suit, she observes, has no legal bearing on access to the courts; what matters is whether a statute has been violated. “Demanding ‘more transparency’ could have a very chilling effect on citizen lawsuits. And I think that’s a legitimate fear.”

Hooper maintains that most of the revisions proposed for CEQA would cut out the statute’s core justification: citizen access to the levers of power. “There is no state bureaucracy tasked with enforcing CEQA,” she says. “It’s designed to be enforced by citizens through the courts. We have to protect that.”

Clearly, Governor Jerry Brown and many state legislators want to revamp CEQA – but in different ways and for different reasons. “One thing that strikes me as you look at the debate over CEQA is that both [developers and environmentalists] could use more certainty” about what is permissible, observes Michael H. Zischke, a partner at the San Francisco office of Cox, Castle & Nicholson and author of a leading treatise on CEQA practice.

“It’s true that one person’s NIMBY is another person’s cause-of-the-day,” he says. “But California has the most ambiguous rules of any state. There were times and places where CEQA has gone astray. When you have a project with obvious environmental benefits – such as high-speed rail – the object shouldn’t be to block it. It should be to disclose impacts, identify appropriate mitigation, and make the process predictable.”

Two days before the Madera hearing date last month, the plaintiffs reached a settlement with the High Speed Rail Authority. In a major concession, the authority agreed to add 25-foot buffer strips on each side of the right-of-way, allowing farmers turn-around areas for the behemoth machinery used in commercial agriculture. “It may seem like a technicality, but it’s not a small thing,” says Raudabaugh. “If you can’t maneuver your machinery, you can’t farm.” (County of Madera v. Cal. High Speed Rail Auth., No. 34-2012-80001165 (stipulated judgment entered April 18, 2013).)

The authority also agreed to purchase remnant parcels created by the alignment. These relatively small plots will be offered to farmers with adjoining acreage, or will be employed as agricultural mitigation banks – basically, permanent agricultural preserves.

In addition, the pact gives the farm bureau and its four partners in the lawsuit $5 million to establish agricultural mitigation banks. And HSRA will cover nearly $1 million in attorneys fees and costs for Epstein’s firm.

On the face of it, the settlement seems like a pretty good deal for farmers. But Raudabaugh isn’t celebrating. If the railway goes through Madera County, its impacts will still be profound – buffer strips and mitigation banks notwithstanding. Development will most certainly burgeon all along the corridor, and that will make farming problematic. No matter how you cut it, she says, it’s going to be tough for Madera farmers when the trains start running.

“We were willing to take a swing and a miss on this thing because our backs were against the wall, but we also realized that even under the best-case scenario, the most we could expect would be a rewrite of the EIR,” she says.
The litigants were also mindful of Governor Brown’s determination to see the project through. “The governor is so invested in this,” Raudabaugh observes. “In this kind of political environment, we were in danger of being run over by the train – literally. We just concluded we couldn’t stop it with this suit.”

In recent weeks, however, the governor’s expectations for quickly changing CEQA seem diminished. “The appetite for CEQA reform is much stronger outside the state Capitol than it is inside,” he told reporters accompanying him on a trade mission to China. “This is not something you get done in a year.”

Could the Madera settlement thus encourage opponents of high-speed rail to use CEQA for leverage? Epstein is certain that the statute will continue to be invoked to challenge every leg and phase of the project.
“When you have a linear project like this, the potential for wreaking havoc and upsetting lives is tremendous,” he says. “This was just Madera County. There have already been challenges in the Bay Area, and there’ll be more, not to mention Los Angeles and the Fresno-Bakersfield corridor. This is by no means the end.”

What we really have here are two competing visions of California’s future. On one side people are saying we need to pursue these big projects to keep California competitive in the 21st century. And on the other, people are saying that the negative consequences of these Stalin-scale projects have yet to be fully determined.

Water Supply

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Water Supply in California

Water Supply System

By Bill Blum. He is a freelance writer and former administrative law judge based in Los Angeles (2011)

Known as Central Delta I (a companion case has been stayed), a litigation aims to overturn the legal framework and entitlement contracts that control the massive State Water Project, a labyrinthine system of dams, pumping stations, reservoirs, aqueducts, and canals that transports water from the Sacramento-San Joaquin River Delta to Southern California – irrigating about 120,000 acres of Paramount Farming’s nut and fruit trees in Kern County along the way. (Cent. Delta Water Agency v. California Dep’t of Water Res., No. 34-2010-80000561 (Sac. Super. Ct. filed June 3, 2010), Cent. Delta Water Agency v. Kern Cnty. Water Agency, No. S-1500-CV-270965 (Kern Super. Ct. filed July 2, 2010) (transferred to Sacramento County and stayed).)

Legally, Central Delta I raises myriad complexities, both procedural and substantive, under the state constitution, water and government codes, the California Environmental Quality Act (CEQA) (Cal. Pub. Res. Code §§ 2100021177), and related regulations (see Cal. Code Regs., tit. 14, §§ 15000-15387). Broadly, it seeks to invalidate major project modifications executed in 1995 after secret meetings between the state Department of Water Resources (DWR) and a handful of water contractors. Among other changes, the so-called Monterey Agreement transferred state ownership of the Kern Water Bank – an immense underground aquifer occupying 32 square miles in Kern County – to a local joint powers authority controlled in part by Resnick’s companies. The water bank is capable of storing about 1.5 million acre-feet of water, making it the largest such facility in the world.

The transfer was immediately challenged by a coalition of environmental groups under both CEQA and a rarely used “reverse validation” proceeding (see Cal. Code Civ. Proc. § 863). But that case finally settled in 2003 (Planning and Conservation League v. Dept. Water Res., No. 95CS03216 (Sac. Super. Ct. filed Dec. 27, 1995)).

Now, Adam Keats (who is senior counsel at the Tucson-based Center for Biological Diversity or CBD, one of the nation’s most aggressive and uncompromising environmental rights organizations) insists, CBD’s Central Delta I reopens questions about the backroom deal that enabled what he calls a “cabal” of agricultural barons – including Resnick – to gain control of a significant portion of California’s water supply. Since the Monterey Agreement was implemented, Keats contends, it has produced an environmental nightmare, depleting fresh water in the Bay-Delta region; contributing to overirrigation, groundwater depletion, and the buildup of selenium in the soils of the San Joaquin Valley; and threatening the habitats of endangered fish and wildlife.

Nonsense, say defense lawyers in Central Delta I. Clifford W. Schulz, a senior attorney in the Sacramento office of Kronick Moskovitz Tiedemann & Girard who represents the Kern County Water Agency, maintains that CBD’s complaint has no merit. Not only are the disputed transactions legal, he says, but “they’ve furthered the public interest – helping to bring California into the 21st century, promoting business, employment, and economic growth, and actually advanc[ing] conservation values.”

Resnick is an entrepreneur with a UCLA law degree and a personal fortune estimated at $2 billion. His Los Angeles-based holding company, Roll Global, manages a portfolio of companies that includes Teleflora, Pom Wonderful, Fiji Water, and Paramount Farming Co. – the world’s largest producer of pistachios and almonds.

Resnick’s counsel at his in-house Roll Law Group declined interview requests for this article. But in November 2010 Resnick told Bloomberg Businessweek that he regarded Central Delta I as “a nuisance,” commenting, “If I think I’m right, I don’t care what people say. It’s their problem.”

The grand sweep of Central Delta I is evident from the list of defendants. In addition to the DWR and Resnick’s Roll Global (formerly Roll International), the real parties in interest include the Tejon Ranch Co. (which owns the state’s largest contiguous expanse of land) and all 29 of the State Water Project’s contractors – the regional public agencies that connect the project canals to local delivery systems. The defense counsel roster spans the state – including, according to Keats, “virtually every big firm that’s ever handled an important water case.”
By contrast, the plaintiffs are a ragtag collection of two Bay-Delta water districts and a handful of sport-fishing and environmental groups. CBD, the lead plaintiff, grew out of the direct-action philosophy of the Earth First movement. It has since evolved into a formidable litigation force with offices in about a half dozen states, an annual budget of about $7 million, and 22 lawyers on staff, mostly in San Francisco. “We’re not just trying to get a seat at the table to negotiate with the powers that be,” Keats explains. “The planet is under attack by polluters and developers, and we’re prepared to take all necessary legal steps to stop them.”

Keats says his interest in the Kern Water Bank grew from CBD’s 2009 challenge to the environmental impact report for Tejon Ranch’s Mountain Village – a planned gated resort of 3,450 luxury homes, hotels, shopping centers, and golf courses located in Kern County nesting ground for the endangered California condor [see “Showdown at Tejon Ranch,” California Lawyer, June 2007]. In reviewing the EIR, Keats noticed that the project was slated to get its water from three sources: the State Water Project, recycled water, and the Kern Water Bank.

At first, Keats says, he didn’t understand the implications of what he’d found. “I had never heard of the Kern Water Bank before.” So he started to look around, first at the DWR and then at the earlier case that had settled. “We followed the bread crumbs and clues,” he says, “and decided we had to challenge the bank transfer.”
CBD was a relative latecomer to California water litigation. Peter Galvin, the center’s cofounder and Keats’s boss, says the Tejon Ranch case was an eye-opener. “We realized that water had to be a central focus for us,” he says. “Most bad things that happen to the environment can’t happen without water.”

CBD’s decision to file the Central Delta suits started Keats on a journey of discovery about the state’s water delivery system. Authorized by the Legislature and approved by ballot initiative in November 1960, the State Water Project was designed to promote the public interest and help end California’s perennial water wars. An elaborate system of dams and conveyances would be built to carry an annual total of 4.23 million acre-feet of water down the western spine of the San Joaquin Valley. The DWR was created to build the project and sign agreements with local water-district contractors – the 29 designated regional carriers who would receive specified amounts of water, called entitlements, for delivery to end users.

But for a variety of political and economic reasons, many of the dams and canals were never built. As a result, actual deliveries through the water project from 1980 to 1993 averaged only about 2 million acre-feet – less than half the volume promised to the contractors. The difference is called “paper water” – entitlements the regional contractors paid for but rarely received – which produced “an aura of unreality surrounding the debate,” according to the appellate court in the first challenge to the Monterey Agreement.

Among the facilities that the DWR failed to develop was a depleted underground aquifer called the Kern Fan Element. The department had planned to ring the aquifer with recharge basins, extraction wells, and conduits to turn it into a subsurface reservoir that could be refilled in wet years and drawn down by surrounding districts during droughts. But after spending $74 million on the project, the state couldn’t muster the funds to finish the job.

In the early 1990s a seven-year drought set urban and rural water contractors at odds over their entitlements. The scarcity of supplies was worsened by recent federal court rulings that protected threatened fish species in the Bay-Delta region. Amid increasing tensions, several urban contractors held secret strategy meetings. All sides threatened litigation.

So in late 1994 representatives from the DWR met in Monterey with five water contractors to determine the most equitable way to allocate supplies during times of shortage. The confidential meetings culminated in the Monterey Agreement, a statement of 14 principles signed by the participants on December 1, 1994.

Under the agreement, agricultural contractors gave up an annual entitlement of 130,000 acre-feet of water in return for an end to the “urban preference” during droughts. The deal also eased restrictions on the use of “surplus water” for economic development, and authorized permanent sales of water by and between State Water Project contractors – creating a new private water market.

“The original State Water Project,” says Keats, “was a masterpiece of balance, taking into account the needs of agriculture, cities, and the environment. The new agreement subverted that balance.”

In a final provision, the DWR agreed to transfer ownership of the partially developed Kern Water Bank to the Kern County Water Agency, which had participated in the Monterey meetings. As consideration, the agency and another Kern County contractor – the Dudley Ridge Water District – agreed to retire their rights to a further annual 45,000 acre-feet of water. The water bank owners estimate the entitlement today would be worth approximately $5,800 per acre-foot, or more than $260 million. But according to Keats, that consideration was illusory – a promise of paper water that would be delivered only in wet years or if additional facilities were built.

The Monterey Agreement was executed on December 13, 1995. The very next day, ownership of the water bank was retransferred to the newly created Kern Water Bank Authority, a joint powers agency established under the Joint Exercise of Powers Act (Cal. Gov. Code §§ 6500-6599.3). The KWBA’s “base shares” – defined as its members’ allocation of costs and benefits in the bank – are split six ways, between five water districts and the Westside Mutual Water Co., a private entity wholly owned by Resnick’s Paramount Farming.

According to KWBA documents, Westside Mutual holds 48.06 percent of the base shares. Another 9.62 percent are held by the Dudley Ridge district – which is overseen by a Paramount Farming executive – and another 24.03 percent belong to a water district that Tejon Ranch controls. In effect, Resnick, along with Tejon Ranch, was in position to control millions of acre-feet of water through KWBA transactions.

Roughly three weeks after the double transfer of ownership, the Sacramento-based Planning and Conservation League filed a CEQA and reverse validation challenge to the Monterey Agreement. But after the trial court dismissed all claims, the Third Appellate District found that, under CEQA, the Water Department had improperly relinquished its responsibility for preparing an Environmental Impact Report (EIR) and ordered a new report. It also reinstated the reverse validation cause of action (Planning and Conservation League v. Dept. Water Res., 83 Cal. App. 4th 892 (2000)).

As news of the appeals court ruling spread, national environmental and consumer groups began referring to the Monterey Agreement as “a bloodless coup.” In 2003, Public Citizen in Washington, D.C., published a 38-page exposé entitled, “Water Heist: How Corporations Are Cashing In On California’s Water.”

Later that year, however, the plaintiffs agreed to settle the case for $5.5 million plus costs and attorneys fees if a new EIR were produced (Planning and Conservation League v. Dept. Water Res., No. 95CS03216 (Sac. Super. Ct. order regarding Monterey Agreement filed Jun. 6, 2003)). Years of intense negotiations followed. Finally, in May 2010 the DWR certified the new EIR and the “Monterey Plus Amendments” it embodied. The following month, the plaintiffs agreed to discharge their writ petition.

“This is one of the most carefully crafted EIRs I have ever seen,” says Schulz of Kronick Moskovitz. “It embodies unprecedented input from the environmental community. I just don’t understand what the [current] plaintiffs want.”
What CBD wants is an order directing the Department of Water Resources to vacate its approval of the revised EIR. The center also has initiated a reverse validation proceeding to declare the original 1995 Kern Water Bank transfer invalid (Cent. Delta Water Agency v. Dept. Water Res., No. 35-2010-80000561 (Sacramento Super. Ct. filed June 4, 2010)). Even 16 years after the Monterey Agreement, Keats contends the complaint is timely because the state Water Department’s authorization wasn’t complete until May 2010.

Whether Resnick or any of his companies had a direct hand in the original negotiations or in the water bank transfer remains a matter of speculation. Katherine Spanos, senior staff counsel at the DWR, stated by email that to her knowledge, Resnick’s Westside Mutual company was not involved in the Monterey Agreement meetings. Frederic A. Fudacz, a Nossaman partner in the Los Angeles office who represents Paramount Farming, says his client wasn’t involved in the 1994 meetings, although he acknowledged his role in setting up the Kern Water Bank Authority on its behalf a year later.

However, a 2001 report on Central Valley water banking prepared by the Natural Heritage Institute, a San Francisco-based nonprofit group, states that the Kern Water Bank project was “initiated” in August 1994 when staff from the DWR, the Kern County Water Agency, and Westside Mutual “met to discuss the potential for transferring the [water bank] from DWR to Kern County interests” in exchange for annual water entitlements.

Gregory Thomas, the institute’s president, says he did not prepare that section of the report and could not recall its contents. But he touted the professionalism of his staff and expressed confidence in its accuracy.
Evidence that Westside Mutual was involved in the Monterey Agreement, Keats says, would support a claim that the participants illegally transferred a public asset. He acknowledges that the National Heritage Institute report isn’t a smoking gun, but says it unquestionably moves the center’s case forward. “It shows that DWR knew at the outset that the water bank would be privatized,” he argues. “It shows that we’re dealing with powerful interests and particularly bad actors who don’t want their secrets revealed.”

Since the transfer of ownership, members of the Kern Water Bank Authority have invested about $35 million in infrastructure and improvements, including wells, canals, pump stations, and pipelines. But Keats asserts that the authority is reaping huge profits at the public’s expense by selling California’s water in the secondary market. From 1995 to 2005, for instance, DWR records show that the water bank’s members withdrew about 138,000 acre-feet of water from the aquifer for their own use, while selling more than 423,000 acre-feet either back to the state or to other interests. Keats estimates that resales to the state have run into the millions of dollars.

“All this,” Keats says, sounding a lot like Jake Gittes in the 1974 movie Chinatown, “to serve the god of profit rather than the public good.”

The defendants in Central Delta I react to such charges with puzzlement. Spanos scoffs at Keats’s implication that the DWR is captive to corporate interests. “We’re independent,” she says. “We follow the law.”

Kronick Moskovitz’s Schulz, who represents the Kern County Water Agency, expresses a mix of shock and disbelief. “We were very surprised there was such an uproar” from the Central Delta I plaintiffs, he says. “You have to go back to the crisis facing the State Water Project in the early ’90s. We had gone through a historic drought that the unfinished project could not adequately handle. The Monterey Agreement was good water policy.”

As Spanos and Schulz see it, the water bank transfer contract and the new KWBA’s ownership structure are perfectly legal under Government Code section 6525, which provides that a private mutual water company may enter into a joint powers agreement with a public agency. Indeed, even before that section was enacted, state courts had recognized the right of mutual water companies to form joint power authorities with public agencies for any purpose deemed proper under the Public Utilities Code. (See City of Oakland v. Williams, 15 Cal. 2d 542 (1940).)

Spanos concedes that by today’s open meetings standards it may seem strange that the Monterey Agreement was negotiated privately. But she says, “There was never any question back then that meetings of this type would take place in public. You got together a core group of agencies to discuss a critical issue, and as soon as an agreement was finalized it was made available to the public.”

Stephen N. Roberts, a Nossaman partner who represents Roll Global, Westside Mutual, Paramount Farming, and Tejon Ranch, says, “There was nothing sinister behind the amendment.” Emphasizing the water bank’s importance to California’s economy, he points out that Roll Global employs more than 4,000 people through its various subsidiaries.

“[Westside Mutual has] invested millions to create a working water bank that DWR had failed to complete,” Roberts says. “We took a big risk and should not be penalized for it. And contrary to the claims of some environmentalists, the land atop the water bank is filled with birds and wildlife that would be far more threatened by other forms of development.”

In November 2010 Sacramento Superior Court Judge Timothy M. Frawley overruled an extensive set of demurrers in Central Delta I that had asserted the complaint should be dismissed as time-barred because all the relevant Kern Water Bank contracts were formed no later than 1996.

Last August defense lawyers responded to the demurrers’ defeat with a motion for judgment on the pleadings as to the CEQA cause of action based on court approval in 2010 of the Planning and Conservation League settlement. “The Plaintiffs in this case stood by and watched for many years, never claiming any separate interest in the outcome of the PCL litigation, never attempting to secure a separate ‘place at the table’ during the EIR negotiations, and waiting until the parties to the PCL litigation had completed many, many years of negotiation and work on the 2010 EIR,” Roberts wrote in court pleadings. “The case is barred by res judicata.”

Keats countered that the Planning and Conservation League, by settling, had abandoned its position as representative of the public interest and also that the current complaint challenged a new EIR and had to be examined on its own merits.

In October, Frawley handed CBD a victory, ruling that its complaint indeed constituted a new and separate cause of action and that the Planning and Conservation League plaintiffs had “expressly disavowed and abandoned their role as public agent.” A determination of privity, he wrote, “depends upon the fairness of binding one party with the result obtained in an earlier proceeding in which it did not participate.” At least at the pleading stage, Frawley concluded, fairness required the case to proceed.

Since jury trials are unavailable in both CEQA and validation actions, Keats now looks forward to a bench trial. “Once we get past the preliminaries and reach the merits, there’s no way we can’t win because the new EIR contains all the defects of the original.”

Environmental law experts say Central Delta I has blockbuster potential. “There are still valid and unanswered questions with the State Water Project over the concept of paper water and the allocations between agricultural and urban users,” says Paul Kibel, a professor at Golden Gate University School of Law in San Francisco.

The allocation of privatized water is also at issue. Ali Amin of Primex Farms, one of Resnick’s rival agricultural processors in Kern County, has sued Westside Mutual Water Co. for allegedly selling water supplies to nonmembers in violation of the Public Utilities Code. In addition, a water district adjacent to the Kern Water Bank Authority has challenged the final EIR, alleging that water bank operations have lowered the local groundwater table, made wells go dry, and caused land subsidence (Rosedale-Rio Bravo Water Storage District v. California Dept. of Water Res., No. S-1500-CV-270635 (Kern Super. Ct. filed June 9, 2010; transferred to Sacramento Super. Ct., No. 34-2010-80000703). And Sandridge Partners – which produces cotton, wheat, and peanuts in Kern County and also participates in private water sales – has filed a public comment on the final EIR, calling for a return to pubic agency control of the water bank.

But could a single superior court judge – or even the state Supreme Court on subsequent review – really reverse 16 years of state water policy that’s been the basis for millions of dollars in KWBA investments, infrastructure, and contracts? Like it or not, Tejon Ranch and Paramount Farming have made the Kern Water Bank into a profitable operation where the state Department of Water Resources had failed.

“Judges are indeed cognizant of the real-world consequences of their decisions,” says Daniel Selmi, a professor at Loyola Law School in Los Angeles who specializes in land use and environmental law. “But if the requirements of CEQA have been violated, courts have discretion to kill the project – no matter how big – and order another EIR, or do something else.”

Exactly what that something else might be is a mystery. Some water experts advocate yet another legislative fix. In February, for instance, the San Francisco-based Public Policy Institute of California released a study that called for reorganizing the DWR and treating water as a public commodity, much like electricity. Toward that end, the institute recommended relaxing legal standards to permit even more water market transfers and water banking – and it cited the Kern Water Bank Authority as a positive illustration of both processes.

Meanwhile, the parties in Central Delta I are locked in a war of words. Nossaman’s Roberts acknowledges that Keats and other activists “have done a good job sending out press releases and personalizing the case” against his clients, reacting to news stories that he says have falsely depicted Tejon Ranch as an enemy of the environment and Stewart and Lynda Resnick as billionaires behaving badly.

Resnick is adamant that he won’t return the Kern Water Bank to public control. “We paid for it, we built the infrastructure,” he told Bloomberg Businessweek last year. “I don’t know how we could lose it. We bought it. We own it.”

Keats replies that Central Delta I isn’t about personalities. “I’m sure these people are basically decent folks,” he says of the Resnicks. “This case is about a legal and economic paradigm that allows a few well-placed individuals to take advantage of the rest of us. The paradigm needs to change.”

Sale of Central Valley water

Senator Diane Feinstein inserted two sentences in 1,221-page spending bill signed by President Obama in December 2011, easing the sale of Central Valley water.

Feinstein said her action was a sensible way to move water around the state, but opponents saw it as helping the Kern Water Bank, Westlands Water District, and some well-connected agricultural interests, reported the Miami Herald.

The earmark lifts several environmental restrictions on the transfer of the federal Central Valley Project (CVP) water, which is provided at subsidized rates via a network of dams and canals stretching from Redding to Bakersfield.

The Central Valley Project Act of 1992 limited the sale of subsidized water by irrigation districts in order to prevent speculation.

As a result of Feinstein’s action, customers like the Kern Water Bank could now buy federally subsidized CVP water and then sell it at a profit to urban consumers and developers in Southern California, charged the Restore the Delta Newsletter.

Feinstein argued that she wanted “more flexibility” in water distribution, but opponents like the Sierra Club said her measure would seriously worsen conflict over California water use.

Global Warming Solutions Act

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Global Warming Solutions Act in California

Global Warming Solutions Act of 2006(AB 32) Summary

Global Warming Solutions Act of 2006(AB 32) Cap and Trade

California applied or put cap-and-trade regulations into effect in January 2012, making it the first state in the nation to use such a scheme to reduce greenhouse gas emissions. The regulations were a central part of the state’s much-debated 2006 Global Warming Solutions Act (AB 32). Already they faced a legal threat based on a little-known constitutional amendment passed by voters in 2010.

That amendment – which appeared as Proposition 26 on the ballot – required a two-thirds supermajority vote by the Legislature for any new fees, levies, or taxes enacted in California. Opponents of cap and trade argue that putting a price on carbon dioxide amounts to a new fee and should be subject to supermajority approval.

In October 2011, the Southern California branch of the Committee for a Constructive Tomorrow, a nonprofit libertarian lobbying group, called for plaintiffs in a potential lawsuit against cap and trade. CFACT’s branch leaders, Warren and Pam Duffy of Orange County, are seeking small-business owners in industries that will be affected by the new regulations in 2012. They reportedly have retained counsel; Pam Duffy declined to comment.

The call for plaintiffs has been circulated by Eric Eisenhammer, the founder of the Roseville-based Coalition of Energy Users, which advocates for “affordable energy.” He stressed that the lawsuit was still under development, but he acknowledged that Prop. 26 is a point of contention.

“They’re imposing costs, and there’s no legislative approval for the costs,” says Eisenhammer, who also directs marketing at the Howard Jarvis Taxpayers Association. The association was a significant supporter of efforts to promote Prop. 26’s passage.

AB 32’s cap-and-trade scheme establishes financial markets to try to drive down the state’s greenhouse gas emissions to 1990 levels by 2020. Carbon dioxideintensive industries are given an emissions allowance; if they stay below it they can sell the difference to other entities in a market set up by the California Air Resources Board (CARB). Those that go over will have to buy “allowances” in the market or directly from the state, and the number of allowances decreases each year. Businesses can also buy offsets by investing in projects that reduce emissions.
The key question in any challenge to AB 32 based on Prop. 26 would be whether the 2010 ballot measure applies retroactively to a law that was passed four years earlier, according to Cara Horowitz, executive director of the Emmett Center on Climate Change and the Environment at UCLA School of Law. Typically, California courts rule that it wouldn’t. “There’s no evidence that voters intended to change that default rule that propositions don’t have retroactive reach,” she says.

Environmental lawyer Kevin T. Haroff, a partner at Shook, Hardy & Bacon, agrees, noting that AB 32 opponents may attempt to show that fees set by CARB after the constitutional amendment passed are statutory rather than regulatory.

But Robert Lawrence, a partner in the San Francisco office of Marten Law, which represents various industries that will be affected by the regulations, questioned the significance of retroactivity. He says that the CARB is imposing a fee on emissions that is not expressly authorized by AB 32. “[It] is exactly the kind of regulatory fee that Prop. 26 is aimed at,” he says. “It’s imposed by the state, and the revenues collected by the state would be applied for energy investments or other government purposes. So it is an effective tax.”

At least three other suits have been filed citing Prop. 26’s supermajority requirement. In November the Shasta Superior Court heard arguments on Citizens for Fair REU Rates v. City of Redding (Shasta Cnty. Super. Ct. No. SC RD CV 11-0171377) challenging energy rate increases. Pending is Schmeer v. County of Los Angeles (Los Angeles Cnty. Super. Ct. No. BC 470705), which seeks to invalidate a law that bans plastic shopping bags and requires retailers to charge customers a fee for paper bags. A third case filed in August, City of San Buenaventura v. United Water Conservation Dist. (Ventura Cnty. Super. Ct. No. 56-2011-004017-CU-WM-VTA), alleges that disproportionate water rate hikes violate Prop. 26.

Arnold Schwarzenegger Global Warming Solutions Act of 2006(AB 32) in California

Polanco Redevelopment Act

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Polanco Redevelopment Act in California

Clean Up: Polanco Redevelopment Act Overview

By Jason F. Meyer and Ana R. Hartman. The first is a partner and the second is an associate in the San Diego office of Gordon & Rees. Meyer directs the firm’s Southern California environmental and toxic tort practice group, and Hartman practices with the environmental group (2010)

Approximately 90,000 properties around the state sit idle or are underutilized because of real or perceived environmental contamination. To deal with this problem, the California Legislature in 1990 enacted a measure to encourage private parties to develop such properties. The statute, commonly known as the Polanco Redevelopment Act, accomplishes this by alleviating most of the legal risks associated with cleanup (Cal. Health & Saf. Code §§ 33459-33459.8).

Although this law has had the intended effect of getting polluted property cleaned up and redeveloped, it is rife with perils for unsuspecting owners. Local and regional redevelopment agencies can operate like mini-EPAs, issuing cleanup orders for sites they do not own (§ 33459.1(a)(1)), or acquiring property through eminent domain and then funding cleanup with money recovered from the owners and potentially responsible parties (PRPs) (§ 33459.1(a)(1)).

The Polanco Act prescribes the processes for cleaning up polluted properties in redevelopment areas, while providing immunity to agencies and subsequent property purchasers who clean up sites under an approved plan. Redevelopment agencies have broad authority over cleanup activities; the law states that they may take “any actions” they deem necessary to remedy or remove a release of pollutants, whether the agency owns the property or not (§ 33459.1(a)(1)).

Scrap yards, vacant lots, defunct gas stations, and abandoned warehouses are the properties most often targeted. Owners of such properties should know the likelihood that hazardous substances are present, as well as the potential for use of the Polanco Act to clean them up.

The statute defines a “responsible party” extremely broadly – including any current owner and operator of the subject facility; owners or operators of the facility at the time of disposal of any hazardous substance; any person who arranged for disposal or treatment of any hazardous substances; and any person who accepts hazardous substances for transport to disposal or treatment facilities (see § 33459(h)).

If there are no PRPs, the current owner may shoulder all responsibility (§ 33459.4(a)). Therefore, anyone considering a property acquisition should conduct a thorough investigation into historical uses of the site to gauge the potential risk of hazardous substances.

After a redevelopment agency receives cleanup guidelines from the Department of Toxic Substances Control (DTSC) or one of the state’s regional water quality control boards, it must submit a remedial action plan to the DTSC or water board for approval before proceeding with the work. Although a redevelopment agency must provide notice to both the relevant administrative body and the PRP, the act requires only one notice to the PRP. If a PRP fails to respond within the specified time frame, the agency need not provide further notice, even if new hazardous substances are found or if additional remediation measures are deemed necessary.

A remediation plan can be costly to prepare. A PRP that becomes aware of a contamination problem can either draft and submit a plan for approval within 60 days, or allow the redevelopment agency to prepare the plan.

The defenses under the Act are specific and hard to prove. A responsible party can challenge liability by showing that it acquired the property after disposal or placement of the hazardous substance occurred; that the party was unaware (and had no reason to know) that hazardous substances had been disposed of; or that the property in question was acquired by inheritance or bequest.

Additionally, an otherwise responsible party can challenge liability by demonstrating that the release of hazardous substances was caused by an act of God, war, or by the act or omission of a third party. The PRP must establish that it exercised due care with respect to the subject hazardous substance and took precautions against foreseeable acts or omissions of any third party and the resulting foreseeable consequences.

A lawyer counseling a potentially responsible party should ensure that the appropriate governmental agencies follow statutory procedures to guarantee the property owner’s due process rights. And if remediation costs are assessed, the lawyer should make certain that they are calculated fairly and correctly.

Global-Warming

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Global-Warming in California

For California Attorneys: California’s Global-Warming Battle

( July 2007 ) California has long been in the vanguard of environmental regulation and litigation. One recent high-profile battle being fought in the state’s legislature and courts—a battle with significant impact far beyond California’s borders—concerns the aggressive attempt to regulate emissions of greenhouse gases, particularly those caused by automobiles. This multipronged attack on global warming has already spawned a spate of litigation, and much more is likely to follow.Federal Regulation Attempts Although it is receiving much media attention lately, global warming is hardly a new issue. As recently set forth in elegant detail in the U.S. Supreme Court’s opinion in Massachusetts v. EPA (127 S. Ct. 1438 (2007)), the federal government has been investigating the impact of human-produced carbon-dioxide emissions on climate change for decades. In 1978, Congress passed the National Climate Program Act. (92 Stat. § 601.) Following that act’s edict to establish a program to “assist the nation and the world” to respond to “man-induced climate processes,” President Carter charged the National Research Council with investigating global warming. The council responded with alarm, specifically targeting carbon dioxide as a greenhouse gas: “If carbon dioxide continues to increase, the study group finds no reason to doubt that climate changes will result and no reason to believe that these changes will be negligible. … A wait-and-see policy may mean waiting until it is too late.” (National Academy of Sciences, Climate Research Board, Carbon Dioxide and Climate: A Scientific Assessment, p. vii, Washington, D.C. (1979).) In 1987, the Global Climate Protection Act was enacted, directing the Environmental Protection Agency (EPA) to propose to Congress a “coordinated national policy on global climate change.” (101 Stat. 1407, § 1103(b).)The United States was not alone in recognizing the potential dangers. In 1992, 153 other nations joined in signing the United Nations Framework Convention on Climate Change (UNFCCC), a nonbinding agreement to reduce greenhouse gases. (See S. Treaty Doc. No. 102—38, Art. 2, p. 5 (1992).) The U.S. Senate unanimously ratified the treaty. Five years later, the UNFCCC signatories met again in Kyoto, Japan, and formulated the Kyoto Protocol, which established mandatory targets for industrialized nations to reduce greenhouse-gas emissions but exempted heavy-polluting developing nations such as China and India from meeting those targets. This disparity had already prompted a unanimous Senate resolution that the United States should not enter into the Kyoto Protocol—and following that, President Clinton never offered the Kyoto Protocol for ratification. (See S. Res. 98, 105th Cong., 1st Sess. (July 25, 1997).) To date, the federal government has not developed any regulation mandating reductions in greenhouse-gas emissions, preferring voluntary measures and cooperative agreements.

More about Global-Warming for Lawyers

California’s Regulatory Reaction Facing both a perception that the federal government is not adequately addressing global warming and its potentially devastating impact on the state, California passed legislation mandating reductions in greenhouse gases and filed nuisance lawsuits against the auto industry, which it perceived as one of the biggest greenhouse-gas emitters. In a highly unusual move, Gov. Arnold Schwarzenegger and British prime minister Tony Blair signed an agreement in 2006 committing their governments to coordinate their efforts at reducing greenhouse-gas emissions. In the words of the media-savvy Schwarzenegger: “California will not wait for our federal government to take strong action on global warming. … California has a responsibility and a profound role to play to protect not only our environment, but to be a world leader on this issue as well.” (See Gov. Schwarzenegger Press Release, July 31, 2006, at gov.ca.gov/index. php/press-release/2770.) However, that agreement is a symbolic statement and not a binding legal promise.Recent studies document that California’s worries about global warming may be well founded. In August 2006, Schwarzenegger’s Climate Action Team, made up of representatives from several state agencies, released a report summarizing 17 scientific studies that examined the impact of climate change on California. (California Climate Change Center, “Our Changing Climate: Assessing the Risks to California,” July 2006.) The report examined the consequences of three scenarios: low, medium, and high emissions. It predicted that, at the higher emissions levels, the Sierra snowpack could decrease by up to 90 percent and sea levels could rise 22 to 35 inches.In response, the California Legislature stepped up to the plate and swung for the fences, passing the Global Warming Solutions Act of 2006. (Cal. Health &. Safety Code §§ 38500—599.) This legislation authorized the California Air Resources Board (CARB) to establish standards for reducing the state’s greenhouse-gas emissions 25 percent by 2020. The “market-based” program allows sources emitting fewer greenhouse gases than permitted under their individual emissions caps to sell their excess emissions credits to sources emitting excessive greenhouse gases. It was not California’s first time at bat against global warming. In 2002, the state passed legislation to regulate greenhouse-gas emissions from automobiles and trucks. The Pavley Law, otherwise known as the California Climate Law or the Global Warming Rule, authorized CARB to promulgate regulations to reduce greenhouse-gas emissions from passenger cars and light trucks sold in the state. (See Cal. Health & Safety Code § 43018.5.) In 2004, CARB responded by adopting regulations that require cars built in 2009 or later to achieve declining greenhouse-gas emissions. (See 13 Cal. Code Regs. § 1961; California Air Resources Board, Climate Change Emission Control Regulations, Fact Sheet (December 10, 2004).)The California Climate Law and the corresponding CARB regulations setting tailpipe-emissions standards have their fans. In fact, several other states—including Connecticut, Massachusetts, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington—have either adopted or plan to adopt similar regulations. (See Justin R. Pidot, “Global Warming in the Courts: An Overview of Current Litigation and Common Legal Issues,” Georgetown Environmental Law & Policy Institute (2006).)All Those Opposed Not surprisingly, however, California’s tailpipe-emission regulations also have critics. For example, a number of car dealers and manufacturers recently sued to restrain CARB from enforcing the regulations. They argue that federal regulation under the Clean Air Act and the Energy Policy and Conservation Act (EPCA) preempt these regulations. (Central Valley Chrysler-Jeep v. Witherspoon, 2007 U.S. Dist. LEXIS 3002.)The Clean Air Act generally preempts state regulation of motor vehicle emissions. Section 209(a) states: “No State or any political subdivision thereof shall adopt or attempt to enforce any standard relating to the control of emissions from new motor vehicles or new motor vehicle engines subject to this part.” (42 U.S.C. § 7543(a); see also, Engine Mfrs. Ass’n v. South Coast Air Quality Mgmt. Dist., 541 U.S. 246, 253 (2004).)However, California is currently unique among the states with respect to the legislation’s application. It alone has the right to request and be granted a waiver by the EPA to impose standards more stringent than those imposed by the Clean Air Act if certain enumerated criteria are met. (See 42 U.S.C. § 7543(b); 72 Fed. Reg. 21260—61 (April 30, 2007).)By letter dated December 21, 2005, California exercised its right and requested a waiver, which the EPA originally did not grant, perhaps in part because the agency had concluded that it did not have authority to regulate greenhouse gases from automobiles under the Clean Air Act. However, the U.S. Supreme Court in Massachusetts rejected that reasoning. On April 30, 2007, the EPA announced the opportunity for public hearing and written comment on CARB’s request for a waiver of preemption as to its tailpipe-emission regulations.A bit of background on Massachusetts: On October 20, 1999, a group of 19 private organizations filed a rulemaking petition requesting that the EPA regulate greenhouse-gas emissions from new motor vehicles under the Clean Air Act. On September 8, 2003, the EPA denied the petition, concluding that it did not have the authority to regulate motor vehicle emissions of carbon dioxide and other greenhouse gases under the act. (68 Fed. Reg. 52922.) The petitioners, joined by various cities, territories, and states—including California—disagreed and filed a lawsuit against the EPA. The D.C. Circuit, without deciding the issue of authority, held that, assuming the EPA did have authority under the Clean Air Act, it had properly exercised its discretion under section 202(a)(1) in denying the petition. (415 F.3d 50 (2005).)After deciding that at least Massachusetts had standing to bring the case, the U.S. Supreme Court held, in a 54 opinion, that the EPA does have the power pursuant to the federal Clean Air Act to regulate carbon dioxide and other greenhouse-gas emissions from new motor vehicles, and that the agency improperly considered factors outside the scope of the statute in denying the rulemaking petition. In short, the Court found that the EPA must ground its reasons for action or inaction in the statute, not on “impermissible considerations.” (127 S. Ct. at 1460—61.)Thus, if the EPA grants the waiver to California, the Clean Air Act may provide no further impediment to implementing the state’s tailpipe-emission regulations. Shortly after the Supreme Court issued the Massachusetts holding, Governor Schwarzenegger announced that California planned to sue the federal government within six months if the state was not allowed to implement its emission regulations.

Development of Global-Warming for Attorneys

Additional Preemption Claims The Clean Air Act is only one piece of the preemption puzzle. Opponents of state regulation of greenhouse-gas emissions argue that California’s legislation regulating such emissions from cars is also preempted by federal fuel economy standards for new vehicles issued exclusively by the Department of Transportation (DOT) under the EPCA and by the federal government’s right to enter into foreign policy regarding greenhouse-gas regulation.Although the U.S. Supreme Court noted an overlap between the DOT’s enforcement of the EPCA and the EPA’s enforcement of the Clean Air Act, it nevertheless found that the EPA could not “shirk its environmental responsibilities” merely because “DOT sets mileage standards.” The Court further found that “there is no reason to think the two agencies cannot both administer their obligations and yet avoid inconsistency.” However, the Court did not foreclose the possibility that the EPA might promulgate a particular regulation that poses an “irreconcilable conflict” with the EPCA’s regulatory scheme. In fact, the Court noted that state regulation might well be preempted. (127 S. Ct. at 1462.)As for any preemption argument based on foreign policy—that California’s regulation of greenhouse-gas emissions encroaches on the federal government’s powers to make policy with foreign governments—the Massachusetts v. EPA decision did not clearly rule on the issue. The opinion provides that: “while the President has broad authority in foreign affairs, that authority does not extend to the refusal to execute domestic laws.” (127 S. Ct. at 1463.) However, the decision also provides: “When a State enters the Union, it surrenders certain sovereign prerogatives. Massachusetts cannot invade Rhode Island to force reductions in greenhouse-gas emissions, it cannot negotiate an emissions treaty with China or India, and in some circumstances the exercise of its police powers to reduce in-state motor-vehicle emissions might well be pre-empted. … These sovereign prerogatives are now lodged in the Federal Government.” (127 S. Ct. at 1454.) Preemption and other arguments are also at issue in another action making its way through the California courts—a nuisance suit filed by the state against six motor vehicle manufacturers for contributing to global warning, including Chrysler, Ford, General Motors, Honda North American, Nissan North America, and Toyota North America. (California v. General Motors Corp., No. C06-05755 (2006).) California alleges that it should be compensated for past and future global warming—related damages associated with the 289 million metric tons of carbon dioxide allegedly released annually by the vehicles the defendants produce. Interestingly, both sides hailed the Massachusetts decision as dispositive of the claims at issue—in their favor. Yet another series of global-warming lawsuits centers on the National Environmental Policy Act (NEPA) and California’s “little NEPA,” the California Environmental Quality Act (CEQA). In these actions, the claimants argue that the federal government (referencing NEPA) and state governments (referencing CEQA) have failed to evaluate and publicly disclose the effect on global warming of their actions as required. In Natural Resources Defense Council v. Reclamation Board (No. C06-01228 (August 18, 2006)), four environmental organizations filed suit against the California Reclamation Board for its approval of a residential development that would require constructing new levees in the San Joaquin Delta. The plaintiffs contend that the Environmental Impact Report prepared by the board fails to comply with CEQA because the report does not consider the future effect of global warming on the project’s environmental impact.Unless the federal government identifies a comprehensive national strategy for addressing global warming, lawsuits seeking clarification will be wending through the lower courts and courts of appeal for the foreseeable future. Indeed, without a comprehensive national strategy, American industry can look forward to additional global-warming lawsuits from multiple quarters (such as the Mississippi suit by Katrina victims against oil and coal companies for their alleged contributions to global warming) and a patchwork quilt of regulations. This piecemeal approach will create legal inconsistencies and, worse, may not result in meaningful greenhouse-gas reductions. Perhaps for these reasons, several big businesses joined with environmental groups to form the U.S. Climate Action Partnership, which in January 2007 urged Congress to require limits on greenhouse gases tied to global warming. The Bush administration took a step in that direction on May 14, 2007, issuing an executive order directing federal agencies “to take the first steps toward regulations that would cut gasoline consumption and greenhouse-gas emissions from motor vehicles” and to “complete this process by the end of 2008.” (May 14, 2007, Fact Sheet, “Twenty in Ten: Strengthening Energy Security and Addressing Climate Change,” p. 1.)

For California Attorneys: Global Warming: Are You Covered?

( July 2008 ) Is it hot today? Maybe it’s too hot. And maybe all that extra heat is causing other problems, like powerful hurricanes, melting ice caps, and rising tides, to name a few.As the controversy rages over climate change and its consequences, state and federal authorities are responding to calls to regulate the greenhouse-gas emissions that contribute to global warming.Greenhouse gases can be released through natural occurrences such as a volcanic eruption. They also are produced by humans, for example, by the burning of fossil fuels for energy. Carbon dioxide (CO2) is the most prevalent human-produced greenhouse gas. But whatever their source, greenhouse gases come with a consequence: They trap the sun’s energy in the atmosphere, thereby causing temperatures around the world to rise.While temperatures rise, laws are being passed and lawsuits filed, all with one goal in mind: to curb greenhouse-gas emissions. As a result, greenhouse-gas emitters, ranging from energy companies to toy makers, face liability. To counter such exposure, emitters are tendering claims to their comprehensive general liability (CGL) insurers. And with that, the “global warming insurance claim” has arrived.TYPICAL CLAIMS Global-warming insurance claims typically stem from two problems: the cost of regulatory compliance, and the specter of damages to be assessed by a judge or jury. When tort cases are asserted, they generally allege a variety of theories, including personal injury, damage to real property, public nuisance, trespass, and unjust enrichment.The individual and corporate targets of global-warming regulations and lawsuits submit claims to their insurers in an effort to defray the costs of compliance and remediation. Whether such claims are covered depends on two things: first, the wording of the “pollution exclusion” in the CGL policy; and second, whether carbon dioxide, the main greenhouse gas emitted by human activity, is determined to be a pollutant.THE ABSOLUTE POLLUTION EXCLUSION A typical CGL policy obligates an insurance company to pay all sums the insured becomes legally obligated to pay as damages caused by bodily injury, property damage, or personal injury, subject to exclusions. In the 1970s, the standard pollution language excluded coverage for losses resulting from the discharge of contaminants or pollutants-unless the loss was sudden and accidental, or occurred over an extended period of time.Later, in the mid-1980s, the insurance industry broadened that exclusion by eliminating the “sudden and accidental” exception. The revised version of the exclusion is known as the “absolute pollution exclusion” (APE). The APE is found in most CGL policies today. Thus, there generally is no coverage for the release of pollutants into the environment. The question then becomes what, exactly, constitutes a “pollutant”?The definition of pollutant in a typical CGL policy usually includes certain irritants and contaminants. The APE typically excludes losses arising from the discharge of pollutants that are not sudden and accidental, clean-up costs, and government lawsuits pertaining to such pollutants. As we shall see, however, courts have taken more than one approach in interpreting the APE.

More about Global Warming for Lawyers

CALIFORNIA AND THE APE Nationwide, there are two lines of authority interpreting the APE. In MacKinnon v. Truck Ins. Exchange (31 Cal. 4th 635 (2003)), the California Supreme Court explained that most states apply the exclusion to “traditional environmental pollution” but not to negligence claims arising from the use of toxic substances in normal business operations. Courts adopting this interpretation have focused on the common meaning of the phrase “discharge, dispersal, release or escape” and have excluded coverage for the release of a pollutant over a vast area. The policyholder may have a better argument when the case concerns a localized incident, such as the negligent spraying of insecticides, leaks of carbon monoxide from furnaces, or the ingestion of paint chips.In contrast, a minority of jurisdictions, relying on the “plain” language of the exclusion, hold that the APE is unambiguous and applies to all manner of negligent acts involving toxic substances, even outside the scope of “traditional” environmental pollution (MacKinnon at 64647).Those courts applying this narrow interpretation of the APE invoke the “reasonable expectations” doctrine when the policy language is ambiguous. (See La Jolla Beach & Tennis Club Inc. v. Industrial Indemnity Co., 9 Cal. 4th 27 (1994); Bank of the West v. Superior Court, 2 Cal. 4th 1254 (1992); and Reserve Insurance Co. v. Pisciotta, 30 Cal. 3d 800 (1982).) Courts apply the APE differently depending on the context of the case. While the MacKinnon court found the APE to be ambiguous in the context of its application to pesticides, other courts found that the APE was not ambiguous in the context of other loss-triggering events such as contamination by silica, petroleum, and the emission of noxious odors. But a common theme among the cases is the application of the reasonable-expectations doctrine in deciding whether a loss is excluded under the APE. The following decisions should provide guidance in assessing how global-warming insurance claims will be decided.In the MacKinnon case discussed above, a tenant died as a result of a pesticides spray, leading to a negligence suit against the landlord and a pest-control company. The landlord submitted a claim, which the insurer denied under the APE. The court found coverage, explaining that under the reasonable-expectations doctrine, negligently spraying pesticides around an apartment building is not what is commonly thought of as “dispersal of a pollutant.” The court also explained that defining pollutant to include any irritant or contaminant was inconsistent with what a reasonable policyholder would understand it to mean. The court raised the example of carbon monoxide, stating that a reasonable person would view it as a pollutant if it is emitted in an industrial or environmental setting, but not if it is emitted from a malfunctioning home heater. In conclusion, the court found in favor of coverage, explaining that “it is unlikely a reasonable policyholder would think of the act of spraying pesticides under these circumstances as an act of pollution” and that the pollution exclusion did not plainly exclude the loss (MacKinnon at 655656).In a subsequent case, Garamendi v. Golden Eagle Ins. Co. (127 Cal. App. 4th 480 (2005)), the insurer, applying the APE, denied coverage to a policyholder who was sued by workers for silica-related injuries. The workers alleged that a sandblasting operation dispersed silica-containing dust, causing injury. The court ruled that the APE applied, and therefore the insurer had no duty to defend its insured in relation to the silica-related injuries. Applying MacKinnon, the court explained that silica dust comes within the broad definition of “any solid, liquid, gaseous, or thermal irritant or contaminant”; federal regulations identify silica dust as an air contaminant; and the widespread dissemination of silica dust as an incidental by-product of industrial sandblasting is what is commonly thought of as pollution and environmental pollution.In another case, the Ortega Rock Quarry placed fill dirt along a washed-out access road after heavy rainfall. After getting sued by the Environmental Protection Agency (EPA) for allegedly damaging a creek and surrounding property, Ortega submitted a claim to its insurers. The insurers denied coverage, asserting that rocks and dirt were excluded pollutants. The trial court granted the insurers’ motions for summary judgment and the appeal court affirmed, holding that the APE applied and was not ambiguous. The court rejected Ortega’s assertion that dirt and rocks are not pollutants because they are naturally occurring, noting that dirt and rocks were considered pollutants within the meaning of the Clean Water Act (33 U.S.C. § 1311). (Ortega Rock Quarry v. Golden Eagle Ins. Corp., 141 Cal. App. 4th 969 (2006).)Plaintiffs in a 1995 case owned property that was used as a petroleum bulk plant that may have caused underground contamination of the water supplies of neighbors. A government agency required monitoring. The plaintiffs tendered a claim to their insurer, and the claim was denied under the APE. The plaintiffs sued and the trial court granted summary judgment in favor of the insurer, concluding that it had no duty to defend or provide indemnification. The court of appeal affirmed, explaining that pollutants include any liquid irritant or contaminant, and that an insured could not have reasonably expected coverage for property damage caused by petroleum contamination. (Legarra v. Federated Mutual Ins. Co., 35 Cal. App. 4th 1472.)Last year the court of appeal addressed whether the APE applies to odors. Cold Creek, the insured, operated a composting facility. The company was sued by neighbors for nuisance because of noise and injurious, noxious odors emitted from its facility. Cold Creek lost at trial, and then submitted a claim for defense costs and indemnity under its commercial liability policies. After the insurance company denied coverage, Cold Creek filed a bad faith lawsuit. Affirming judgment for the carrier, the court of appeal held that “[t]he widespread dissemination of offensive and injurious compost odors as occurred in this case is environmental pollution, which is clearly and plainly excluded from coverage by the words of the pollution exclusion understood in their ordinary and popular sense.” (Cold Creek Compost, Inc. v. State Farm Fire and Cas. Co., 156 Cal. App. 4th 1469 (2007).)

Development of Global Warming for Attorneys

CO2 AND THE FUTURE What about CO2? As noted, it is the most common greenhouse gas produced by human activity. None of the above cases, however, addressed the APE in the context of CO2 emissions. As a result, at least with respect to insurance coverage, there appears to be a gaping hole in the legal atmosphere, and a substantial question looms: How will courts analyze a claim for coverage involving CO2?A recent U.S. Supreme Court case, while not involving insurance, may shed light on the issue. In Massachusetts v. Environmental Protection Agency (549 U.S. 1438 (2007)), the nation’s high court addressed the phenomenon of global warming for the first time. The Court acknowledged “respected scientific opinion that a well-documented rise in global temperatures and attendant climatological and environmental changes have resulted from a significant increase in the atmospheric concentration of ‘greenhouse gases.’ ” The Court also observed that “[t]he harms associated with climate change are serious and well recognized” (549 U.S. at 1442). Given this reality, the Court noted, many states and organizations are seeking to force the EPA to begin regulating greenhouse-gas emissions under the Clean Air Act (42 U.S.C. § 7521) (549 U.S. at 1440).Among the issues decided by the Supreme Court was whether the EPA’s decision not to regulate carbon dioxide emissions under the Clean Air Act was arbitrary and capricious. In resolving that question, the Court addressed whether pollution includes greenhouse-gas emissions.For its part, the EPA acknowledged in the litigation that, under the Clean Air Act, it is required to regulate emissions of “air pollutants” that endanger the public health and welfare. But the EPA claimed that carbon dioxide is not an air pollutant. In a 54 decision, the Supreme Court rejected that argument and held that greenhouse gases, including CO2, are indeed air pollutants within the meaning of the Clean Air Act. As a result, the EPA “has statutory authority to regulate emission of such gases” (549 U.S. at 1443). Consequently, the Court concluded that the EPA’s refusal to promulgate regulations was based on “impermissible considerations” and was therefore “arbitrary and capricious” (549 U.S. at 1443).The Court remanded the case, giving the EPA a small window through which it could avoid regulating emissions-either by determining that greenhouse gases do not contribute to climate change, or by providing a reasonable explanation as to why it could not or would not exercise its discretion to determine whether they do. But because the EPA has conceded that there is a causal connection between man-made greenhouse-gas emissions, global warming, and harmful consequences, it is difficult to imagine how, under the circumstances, the agency can avoid regulating carbon dioxide emissions.IMPACT ON GLOBAL – WARMING CLAIMS Does Massachusetts v. EPA mean that CO2 emissions are in fact a pollutant under the APE? Only time-and new litigation-will tell. However, it is safe to assume that an insurance company disputing coverage under a CGL policy will answer that question in the affirmative based on what the nation’s highest court has concluded under the Clean Air Act.What about policyholders? California case law provides guidance in predicting how the courts will decide the issue of coverage for a global-warming claim based on CO2 emissions.Policyholders will probably contend that the APE does not preclude coverage because carbon dioxide is not “traditional” environmental pollution and is “not commonly thought of as pollution” (applying MacKinnon). They will also assert there is a reasonable expectation of coverage for liabilities arising out of normal business operations (which include emissions of greenhouse gases), and note that the EPA has never regulated greenhouse-gas emissions. Finally, insureds will contend that the insurance companies never contemplated CO2 emissions in drafting the APE.The insurance carriers disputing coverage will take a different position. In addition to relying on Massachusetts v. EPA and policy language to argue that greenhouse-gas emissions are pollutants, the carriers will point out that they are man-made emissions that cause environmental harm and, under MacKinnon, the APE’s intent was to “address the enormous potential liability resulting from anti-pollution laws enacted between 1966 and 1980” (31 Cal. 4th at 653). In addition, the insurance companies will point out that the EPA has not regulated CO2 emissions, because it took the position that such regulations were within the purview of the Department of Transportation.It will be interesting to see how California’s courts treat Massachusetts v. EPA. Some may invoke the case to support a conclusion that CO2 is an excluded pollutant under the APE. On the other hand, courts may distinguish the case on the basis that the definition of pollutant under the Clean Air Act differs from the definition under a CGL policy, and the reasonable-expectations doctrine requires a different analysis. Whether greenhouse gases will be considered pollutants excluded under a CGL policy remains to be seen. In the meantime, insurance claims are on the rise, as the energy, auto, and manufacturing industries face regulations and lawsuits aimed at curbing their greenhouse-gas emissions, for which they will incur substantial costs. As those industries seek to shift these costs to their insurers, an era of global-warming insurance claims is on the horizon.