APPEAL from a judgment of the Superior Court of Sacramento County, Patrick Marlette, Judge. Reversed. (Super. Ct. No. 06CS01311).
The opinion of the court was delivered by: Robie, J.
CERTIFIED FOR PUBLICATION
In this mandamus action brought by plaintiff California Native Plant Society (the Society), the trial court directed defendants City of Rancho Cordova and Rancho Cordova City Council (jointly the City) to set aside two resolutions and two ordinances relating to a residential and commercial development project known as the Preserve at Sunridge (the Project). The trial court found the City's certification of the environmental impact report (EIR) for the Project and approval of the Project violated the California Environmental Quality Act (CEQA; Pub. Resources Code,*fn1 § 21000 et seq.): (1) "by improperly deferring mitigation of impacts on vernal pool and wetland habitat and associated animal species"; (2) because the "findings [in the EIR] that impacts on vernal pool and wetland habitat and associated animal species had been mitigated to less than significant levels [we]re not supported by substantial evidence"; and (3) "because the EIR failed to disclose the potentially significant impact of the water supply plans for the project on fish migration in the Cosumnes River." The trial court also found the approval of the Project violated the Planning and Zoning Law (Gov. Code, § 65000 et seq.) because the Project was "not consistent with, and d[id] not comply with, mandatory requirements of [the City]'s General Plan regarding interconnection of preserved habitat areas that support special- status plant and animal species, and regarding mitigation on such species to ensure that the project does not contribute to the decline of the affected species population."
On the appeal by the City and real party in interest Jaeger Road 530 LLC (Jaeger) and the cross-appeal by the Society, we will conclude the trial court did not err in finding the approval of the Project violated the Planning and Zoning Law because, as we will explain, the City's general plan required the City to design mitigation for impacts of the Project on special-status species in coordination with the United States Fish and Wildlife Service (the Service), which the City did not do. The trial court did err, however, in finding the City violated CEQA in preparing the EIR and approving the Project. Accordingly, we will reverse the judgment and instruct the trial court to enter a new and different judgment consistent with our decision.
FACTUAL AND PROCEDURAL BACKGROUND
The Project involves the development of an approximately 530-acre site in the southeastern portion of the City that is to include "single-family residential, multi-family residential, commercial and office uses, a neighborhood park, an elementary school, detention/water quality basins, an open space/wetland preserve, pedestrian facilities, bikeways, parkways, and drainage corridors." The Project site lies in the center of a master planned community known as Sunrise Douglas, which was the subject of a community plan (the Sunrise Douglas Community Plan) approved by Sacramento County. (See Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007) 40 Cal.4th 412, 421-422 (Vineyard).)
The Project site "is located within the Laguna Formation Geological Formation in the Southeastern Sacramento Valley Vernal Pool Region." Vernal pools are "seasonally inundated shallow depressions underlain by an impermeable layer of soil, generally hardpan or bedrock . . . . The pools are inundated with water for various periods of times [sic] depending on the depression depth, extent and duration of rainfall, and ambient temperatures." "The vernal pools on the site are classified as northern hardpan vernal pools" and they "support a variety of invertebrate species that are adapted to seasonal inundation and climatic regime associated by this habitat . . . ."
A large "unnamed ephemeral drainage" that is "a headwater tributary to Morrison Creek" runs through the Project site.*fn2
"This drainage typically functions in the collection and transport of stormwater and convey flows during and immediately after storm events." "Depressional areas occur within the reach of the drainage where water pools and remains after the primary channel is dried. These depressional areas support vernal pool and seasonal wetland vegetation in the spring" and provide habitats for two species of vernal pool crustaceans -- vernal pool fairy shrimp and vernal pool tadpole shrimp -- that are listed as threatened and endangered (respectively) under the federal Endangered Species Act.*fn3 Vernal pool tadpole shrimp were actually "observed in some of the deeper on-site pools during . . . surveys" in 2002 and 2005, and vernal pool fairy shrimp "have been documented within vernal pools in the immediate project vicinity."
The Federal Agencies' "Conceptual-Level Strategy"
In the spring of 2004, three federal agencies -- the Service, the U.S. Environmental Protection Agency (USEPA), and the U.S. Army Corps of Engineers (the Corps) -- "met to formulate a conceptual-level strategy for avoiding, minimizing, and preserving aquatic resource habitat in the Sunrise-Douglas Community Plan Area." According to the agencies' strategy document, these meetings resulted in the identification of "preserve areas" within the Sunrise Douglas Community Plan area that were "predicated on ten principles and standards that would be followed by developers and planners as each element of the overall development proceeds." Further, the agencies' strategy document provided that "[t]he mapped boundaries [of these preserve areas were] the smallest that would be acceptable to the Agencies . . . ." The document also provided as follows: "The conceptual level strategy should be used by developers and planners to design and plan projects in the [Sunrise Douglas Community Plan area]. The Agencies will use the strategy to aid in the review of proposed development and evaluate the probable individual and cumulative effects on aquatic resources and sensitive species."*fn4
The Notices Of Preparation And Initial Comments
In September 2004, the City issued notice of its intent to prepare an EIR for the Project. In response, the Service submitted a comment letter. The Service referred extensively to the conceptual-level strategy document it had developed earlier that year in conjunction with USEPA and the Corps, then stated as follows: "Based on our review of the proposal submitted by the project proponent, the project design for the [Project] is not consistent with our conceptual-level strategy document and the map. The proposal would result in significant impacts to, and loss of, vernal pool tadpole shrimp [and] vernal pool fairy shrimp . . . and the habitats they depend on (grasslands, wetlands and vernal pools). In addition, the proposal would result in the realignment of Morrison Creek for much of its length in the project site. This action will result in significant changes and impacts to the overall hydrology of the area which will, in turn, adversely impact endangered species habitat. We strongly recommend that the . . . [P]roject, and all future projects, in the [Sunrise Douglas Community Plan area] be designed consistent with the strategy discussed here."
The City released the draft EIR for comment in October 2005. In its assessment of impacts on biological resources, the draft EIR noted the Project would "result in the direct loss of 14.1 acres of vernal pool fairy shrimp habitat" and "15.65 acres of vernal pool tadpole shrimp habitat."*fn5 The draft EIR deemed the loss of this habitat significant. The draft EIR further provided that these direct impacts would be mitigated "in such a manner that there will be no net loss of habitat (acreage and function) for these species in the Laguna Formation following implementation of the project." To achieve this and thereby reduce the impact of the Project to less than significant, the applicant would be required to "complete and implement a habitat mitigation and monitoring plan that will compensate for the loss of acreage, function and value of the impacted resources." (This mitigation requirement is referred to as mitigation measure 4.9.1b.) Generally, the plan would require the applicant to preserve two acres of existing habitat or create one acre of new habitat for each acre of habitat impacted by the Project. The plan would have to include "[t]arget areas for creation, restoration and preservation," "[a] complete biological assessment of the existing resources on the target areas," "[s]pecific creation and restoration plans for each target area," and "[p]erformance standards for success that will illustrate that the compensation ratios are met."
In addition to noting the direct loss of habitat for both species of vernal pool shrimp, the draft EIR also noted the Project would have indirect adverse effects on the habitat for these species, both "in the on-site preserve and adjacent off-site habitat areas," which would be significant.*fn6 Specifically, "Alternation of current inundation and desiccation regimes due to altered hydrology [resulting from the creation of impervious surfaces and the redirection of stormwater flows] could substantially alter the characteristics of vernal pool habitat, resulting in [the] loss or degradation of [that] habitat." To mitigate these indirect effects, the applicant would be required (among other things) to adhere to the same 2-1/1-1 preservation/creation requirement under the same mitigation and monitoring plan imposed to mitigate the direct loss of habitat from the Project. (This mitigation requirement is referred to as mitigation measure 4.9.2a.)
The draft EIR noted the Project would result in a significant impact to the northern hardpan vernal pool community, consisting of a direct loss of 10.46 acres of such pools as well as indirect effects on such pools. The draft EIR noted that implementation of several already-identified mitigation measures, including 4.9.1b and 4.9.2a, would reduce the impact to less than significant.
The draft EIR also noted the Project would result in a significant impact due to the loss of 15.65 acres of "waters of the US."*fn7 This impact was to be mitigated by "plans for the creation of jurisdictional waters at a mitigation ratio no less than 1:1 acres of created waters to each acre filled." This mitigation measure (4.9.5a) could be satisfied by the vernal pool and seasonal wetland mitigation pursuant to mitigation measure 4.9.1b.
Comments On The Draft EIR
The Service submitted a comment letter on the draft EIR directing the City's attention back to the Service's letter of October 2004 in response to the notice of preparation of the EIR. The Service noted that with respect to the vernal pool fairy and tadpole shrimp (and two special-status species of grass), "we cannot discern any changes to the proposal which would reduce impacts to these species, thus our previous comments are pertinent."
In its own comment letter on the draft EIR, the Society asserted the mitigation and monitoring plan proposed as mitigation measure 4.9.1b would "also have environmental impacts but these are not addressed in the DEIR. Additionally, committing to the preparation of a document does not constitute mitigation. In order for the public to be fully informed of the environmental consequences (both positive and negative) of this proposed project, the DEIR should identify the proposed mitigation site and discuss the environmental impacts associated with the proposed mitigation and monitoring plan." The Society also asserted its belief "that creation of artificial vernal pools within an existing intact vernal pool grassland ecosystem is actually a negative environmental impact upon that natural system. Additionally, we are concerned that creation or restoration of mitigation vernal pools could have significant negative impacts upon the ecosystem as a whole." The Society offered a similar comment to mitigation measure 4.9.5a.
The Final EIR And Approval Of The Project
In response to the Society's comments, the City added a new mitigation measure (4.9.2c) in the final EIR. The purpose of this new measure was to "address the potential impacts of the proposed off-site creation activities" so as to "ensure that the biological impacts are reduced to less than significant." Among other things, this new measure required the applicant to submit a wetland "Avoidance/Mitigation Plan," which would include "[t]he location of the proposed vernal pool and seasonal wetland habitat site(s) . . . to be created to ensure no net loss in wetland habitat acreage, values and functions," "a monitoring plan to assess whether the compensation wetlands are functioning as intended," and "a maintenance plan for the wetland preservation/mitigation areas describing the measures to be implemented to assure that they are maintained as wetland habitat in perpetuity."
In July 2006, the City adopted resolutions certifying the EIR for the Project and approving an amendment to certain mitigation measures in the Sunrise Douglas Community Plan. The City specifically found the Project was consistent with its new general plan.
In August 2006, the City adopted a resolution approving a tentative subdivision map for the Project, an ordinance amending the zoning for the area of the Project, and an ordinance approving the development agreement between the City and Jaeger. The City specifically found the tentative map, the rezoning, and the development agreement were consistent with the City's general plan.
Proceedings In The Trial Court
In September 2006, the Society filed a petition for writ of mandate alleging violation of CEQA. In November, the Society filed an amended petition alleging violations of CEQA and the Planning and Zoning Law. Later, the Society filed a second amended petition that contained four causes of action asserting violations of CEQA and one cause of action asserting violation of the Planning and Zoning Law.
The Society's arguments in support of its petition, and the City's responses to those arguments, will be described in detail in the discussion to come. For now, suffice it to say that while the trial court rejected some of the Society's arguments and found some were not preserved for review by the exhaustion of administrative remedies, the court nonetheless granted judgment in favor of the Society, finding that the City's approval of the Project and certification of the EIR violated CEQA and that the approval of the Project also violated the Planning and Zoning Law. The City and Jaeger filed a timely appeal, and the Society filed a timely cross-appeal.*fn8
A. Standard And Scope Of Review
In CEQA cases a court decides whether "the agency has not proceeded in a manner required by law" and "the act or decision is supported by substantial evidence in the light of the whole record." (CEQA, §§ 21168, 21168.5; see Neighbors of Cavitt Ranch v. County of Placer (2003) 106 Cal.App.4th 1092, 1099-1100.) "The agency is the finder of fact and we must indulge all reasonable inferences from the evidence that would support the agency's determinations and resolve all conflicts in the evidence in favor of the agency's decision." (Save Our Peninsula Committee v. Monterey County Bd. of Supervisors (2001) 87 Cal.App.4th 99, 117.) Accordingly, the burden is on the challenger. (Barthelemy v. Chino Basin Mun. Water Dist. (1995) 38 Cal.App.4th 1609, 1617.) "The appellate court reviews the agency's action, not the trial court's decision; in that sense appellate judicial review under CEQA is de novo." (Vineyard, supra, 40 Cal.4th at p. 427.)
In the trial court, the Society argued the EIR violated CEQA because it "failed to describe . . . where off-site vernal pool and wetland creation may occur, or how such activities may affect these undescribed off-site environments." The Society contended that by failing to identify where the off-site mitigation might occur, the EIR: (1) failed to establish an accurate, stable, and finite description of the Project; and (2) failed to describe the environment that might be affected by the off-site mitigation. The Society also contended the new mitigation measure (4.9.2c) added in the final EIR "unlawfully segments, or 'piecemeals,' environmental review for the 'whole' of the . . . project." In addition, the Society contended the City had "unlawfully deferred development and adoption of mitigation measures until after project approval" by failing to describe where the off-site mitigation might occur and failing to analyze or disclose the impacts of that mitigation. Finally, the Society contended the City had violated CEQA by failing to recirculate the draft EIR after adding the new mitigation measure.
The Society also argued the City's finding that the vernal pool and seasonal wetland mitigation measures provided for in the EIR would reduce the impact of the Project on these habitats to less than significant was not supported by the evidence.
In its opposition, the City argued (among other things) that the Society had failed to exhaust its administrative remedies because it had failed to raise any of these arguments in the administrative proceedings.
The trial court determined the Society's letter commenting on the draft EIR was sufficient to exhaust administrative remedies on two of the arguments relating to off-site mitigation: (1) "whether mitigation of impacts on vernal pools, wetlands, and associated animal species, improperly [were] deferred" and (2) "whether the finding that proposed off-site mitigation measures would reduce the impacts on vernal pools to a 'less than significant level' was supported by substantial evidence." The court further concluded, however, that administrative remedies had not been exhausted on the issues of whether the City was required to recirculate the draft EIR after adding the new mitigation measure and whether the City's "handling of proposed off-site mitigation made the EIR deficient in its description of the project, in its description of the environmental background of the project, or in the sense that the project was being improperly 'piecemealed.'"
On the merits of the issues the trial court found were properly raised, the court agreed with the Society. The court concluded "the proposed mitigation plan for addressing the loss of vernal pool and wetlands habitat on the project site . . . suffers from flaws in two areas which prevent it from complying with the rules for acceptable deferred mitigation." First, "the mitigation plan does not identify any particular locations in the Laguna Formation Area at which replacement vernal pools and wetlands may be constructed, or give any reasonable assurance, or even expectation, that such locations can and will be acquired and used for such purposes." Second, "the mitigation plan lacks appropriate standards and criteria applicable to its goal of replacing lost habitat with functioning new vernal pools and wetlands. . . . The mitigation plan as it stands thus lacks the kind of specific performance criteria that are necessary for proper deferred mitigation." As a consequence of its finding of improper deferred mitigation measures, the trial court also concluded the City's "findings that impacts have been reduced to the level of 'less than significant' based on those measures are not supported by substantial evidence."
On appeal, the City and Jaeger contend the trial court erred in concluding the City improperly deferred mitigation and that substantial evidence does not support the City's finding that off-site mitigation will reduce the impact of the Project on the vernal pool and seasonal wetland habitats to less than significant.
In its cross-appeal, the Society asserts the trial court erred in concluding administrative remedies were not exhausted on the Society's four other ...