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Las Lomas Land Co., LLC v. City of Los Angeles

September 17, 2009

LAS LOMAS LAND COMPANY, LLC, PLAINTIFF AND APPELLANT,
v.
CITY OF LOS ANGELES, DEFENDANT AND RESPONDENT.



APPEAL from a judgment of the Superior Court of Los Angeles County, David P. Yaffe, Judge. Affirmed. (Los Angeles County Super. Ct. No. BS115358).

The opinion of the court was delivered by: Croskey, J.

CERTIFIED FOR PUBLICATION

Las Lomas Land Company, LLC (Las Lomas), appeals a judgment dismissing its petition for writ of mandate and complaint against the City of Los Angeles (city) after the sustaining of a demurrer without leave to amend. The city terminated its environmental review of a proposed development project and rejected the project before the completion of a draft environmental impact report (EIR), after Las Lomas allegedly spent millions of dollars in an effort to comply with the city‟s requirements. Las Lomas contends the city had a mandatory duty under the California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.) to complete and consider an EIR before rejecting the project. We disagree. We also conclude that the pleading fails to adequately allege due process and equal protection violations, and that the sustaining of the demurrer was proper. We conclude further that having expressly declined an opportunity to amend its pleading in the trial court, Las Lomas cannot seek leave to amend for the first time on appeal. We therefore affirm the judgment.

FACTUAL AND PROCEDURAL BACKGROUND

1. Factual Background

The city commenced efforts to expand its "sphere of influence" boundaries in November 2000 so as to encompass large areas north of the city and south of the City of Santa Clarita.*fn1 The city‟s planning director notified the City of Santa Clarita in January 2003 that the city intended to annex the areas. The city council approved expanding the city‟s sphere of influence boundaries in May 2005, and the local agency formation commission approved the expansion of those boundaries in December 2006.

Las Lomas submitted an Environmental Assessment Form to the city‟s Department of Planning in May 2002, as a preliminary application for development of a 555-acre site in an unincorporated area north of the city and south of the City of Santa Clarita. A large part of the proposed project site was within the city‟s newly expanded sphere of influence boundaries. The proposed project included approximately 5,800 dwelling units, 2.3 million square feet of office space, 250,000 square feet of community serving facilities, 250,000 square feet of retail space, a 300-room hotel, and 285 acres of open space. The Department of Planning issued a notice of preparation in June 2002, stating that the city would be the lead agency under CEQA and would prepare an EIR for the project. The notice of preparation stated that the requested authorizations included annexation of the site, approval of a specific plan, zoning, and development entitlements.

Las Lomas prepared and submitted a draft specific plan, preliminary draft environmental studies, and other materials to the city. Las Lomas met with the city‟s Department of Planning, Department of Transportation, Department of Water and Power, Department of Public Works, and other city departments on numerous occasions in the several years following the submission of its initial application. Las Lomas modified its proposal, including a reduction of the number of dwelling units from 5,800 to 5,553. It paid all funds requested by the city for environmental review, including tens of thousands of dollars in permit fees and other service fees. It also paid millions of dollars to consultants and others to prepare environmental studies and planning documents and to meet with city officials. Las Lomas provided the city with all requested information and complied with all of the city‟s requirements for environmental review.

Las Lomas offered to enter into an agreement with the city in mid-2007 to prepay the city‟s anticipated expenses for processing the EIR and requested project approvals. Two city council members, Richard Alarcon and Bernard Parks, introduced a motion in the city council to approve such a supplemental fee agreement, and the city council‟s Planning and Land Use Management Committee recommended approval of the motion. Several project opponents objected that it was premature to enter into a supplemental fee agreement before the time that Las Lomas had filed its formal application for development entitlements. In response, the Department of Planning advised Las Lomas to file a formal application for entitlements. Accordingly, Las Lomas filed its Master Land Use Permit Application in September 2007, requesting approval of a development agreement, a specific plan, including a prezone ordinance, and development entitlements. The proposed project included approximately 5,553 dwelling units, 2.3 million square feet of office space, 250,000 square feet of retail space, a 300-room hotel, other facilities, and 285 acres of open space. The Department of Planning notified Las Lomas in December 2007 that the application was incomplete because it was missing a final EIR.

Councilmember Greig Smith opposed the proposed project and, Las Lomas alleges, made public statements exaggerating the environmental impacts of the project and making other misrepresentations. He allegedly asked several city departments to cease or delay their work in connection with environmental review of the project. Councilmember Parks requested a legal opinion by the city attorney regarding the city‟s legal obligations under CEQA. The city attorney provided an opinion letter in December 2007, stating that " "a court would likely determine that the City initiated the Specific Plan and that the City [is] legally obligated to process the Las Lomas EIR and the Specific Plan.‟ " The letter stated further, " "a lead agency is obligated to continue processing and complete an EIR required for a project as long as the project applicant continues to cooperate by paying required fees and submitting necessary information.‟ "

Councilmember Smith introduced a motion in the city council in February 2008 to suspend the environmental review process until the city council had made " "a policy decision‟ " to resume the process. The city council‟s Budget and Finance Committee recommended approval of the motion. The Planning and Land Use Commission, in contrast, voted against the motion and again endorsed the competing motion by Councilmembers Alarcon and Parks. The city council considered both motions in March 2008, and approved a modified motion by Councilmember Smith for the city to "cease all work" on the proposed project, "not pre-zone beyond the current prezone R1-1," "not enter into a Supplemental Fee Agreement" with Las Lomas, "not assume the role of Lead Agency," "not process an EIR," and return to Las Lomas all materials associated with the project.*fn2 The city council denied the motion by Councilmembers Alarcon and Parks.

2. Trial Court Proceedings

Las Lomas filed a combined petition for writ of mandate and complaint against the city in June 2008, alleging that Councilmember Smith misrepresented the facts concerning the proposed project and exaggerated its environmental impacts in an effort to stop the project. Las Lomas alleged that the city had no rational basis to stop processing the project application before completing its environmental review of the proposed project, and that the decision was based on "irrational, arbitrary, discriminatory and illegitimate reasons." Las Lomas further alleged that, after commencing the environmental review process, the city had a mandatory duty under CEQA to complete its environmental review before making any decision to approve or reject the project. Las Lomas also alleged that the city‟s termination of its environmental review and rejection of the project before the completion of an EIR was unprecedented, that it denied procedural and substantive due process and equal protection, and that the city denied procedural due process by allowing Councilmember Smith to substitute a new motion for his original motion without prior notice and by not affording Las Lomas an opportunity to respond to new evidence.

Las Lomas alleged counts for (1) violation of CEQA; (2) denial of procedural due process under the United States Constitution, pursuant to title 42 United States Code section 1983 (section 1983); (3) denial of procedural due process under the California Constitution; (4) denial of substantive due process under the United States Constitution, pursuant to section 1983; (5) denial of substantive due process under the California Constitution; (6) denial of equal protection under the United States Constitution, pursuant to section 1983; and (7) denial of equal protection under the California Constitution. Las Lomas sought an ordinary writ of mandate on all counts compelling the city to complete the EIR for the proposed project before making any decision on the project, and also sought compensatory damages in excess of $100 million on the second, fourth, and sixth counts.

The city generally demurred to the complaint, arguing that CEQA applies only to projects that a public agency intends to carry out or approve. The city argued that it had rejected the project and therefore had no obligation under CEQA to complete an EIR for the project. The city also argued that its decision against annexation and prezoning the property was a legislative act to which procedural due process protections did not apply, that Las Lomas was not deprived of any constitutionally protected property interest, and that the petition and complaint failed to allege any irrational or arbitrary action. The city requested judicial notice of the motion by Councilmember Smith approved by city council, a record of the city council proceedings, and other items. Las Lomas opposed the city‟s demurrer and requested judicial notice of (1) materials prepared by the Resources Agency in connection with amendments to the CEQA Guidelines (Cal. Code Regs., Tit. 14, § 15000 et seq.), (2) the city‟s CEQA Guidelines, and (3) the motion by Councilmember Smith approved by city council.

The trial court stated at the conclusion of the hearing on the demurrer that it would sustain the demurrer on all counts. The court asked whether Las Lomas was requesting leave to amend the petition and complaint to allege a count based on misrepresentation "or leading you on and making you spend all this money." Counsel for Las Lomas responded "No," and, stated that "we don‟t need to plead promissory estoppel in terms of a separate cause of action."*fn3

The trial court filed a minute order stating that CEQA "does not require a public agency to prepare and consider an EIR before it disapproves a project," citing Main San Gabriel Basin Watermaster v. State Water Resources Control Bd. (1993) 12 Cal.App.4th 1371 (Watermaster). The order stated that the petition and complaint prayed for a writ of mandate on all counts yet failed to "identify any source other than CEQA for the alleged duty to proceed with the preparation of an EIR despite the public agency‟s decision not to go forward with the project." The court therefore sustained the demurrer without leave to amend on all counts and did not separately address counts two through seven. The court granted the request for judicial notice by Las Lomas and denied the requests by the city.

The court entered a judgment of dismissal on January 7, 2009. Las Lomas timely appealed the judgment. Las Lomas filed a motion in this court seeking leave to amend its petition and complaint and leave to move the trial court for relief under Code of Civil Procedure section 473, subdivision (b). We deferred ruling on the motion until the filing of this opinion.*fn4

CONTENTIONS

Las Lomas contends (1) the city had a mandatory duty under CEQA to complete and consider an EIR before rejecting the project; (2) the complaint adequately alleged the denial of procedural and substantive due process, both based on and independent of the alleged CEQA violation; (3) the city denied equal protection by intentionally treating Las Lomas differently from other similarly situated applicants with no rational basis for the difference in treatment; and (4) this court should order leave to amend to allow Las Lomas to allege counts for promissory estoppel and inverse condemnation based on a regulatory taking, and additional facts supporting the constitutional counts.

DISCUSSION

1. Standard of ...


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