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Citizens For East Shore Parks, et al v. California State Lands Commission

December 30, 2011

CITIZENS FOR EAST SHORE PARKS, ET AL., PLAINTIFFS AND APPELLANTS,
v.
CALIFORNIA STATE LANDS COMMISSION, DEFENDANT AND RESPONDENT; CHEVRON U.S.A., ET AL., REAL PARTIES IN INTEREST AND RESPONDENTS.



Trial Judge: Honorable Frank Roesch Trial Court: Alameda County Superior Court (Alameda County Super. Ct. No. RG-09439704)

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

CERTIFIED FOR PUBLICATION

(Alameda County Super. Ct. No. RG-09439704)

Defendant and respondent California State Lands Commission (Lands Commission) approved a 30-year lease renewal allowing real party in interest and respondent Chevron U.S.A. Inc. (Chevron) to continue operating a marine terminal in San Francisco Bay waters, near the company's refinery in Richmond, California. Plaintiffs and Appellants Citizens for East Shore Parks and Daniel P. Doellstedt contend that in approving the lease renewal, the Lands Commission failed to comply with the California Environmental Quality Act (CEQA) and also violated the public trust doctrine. The trial court denied their petition for writ of mandate and complaint for declaratory relief. We affirm.

I. BACKGROUND

The Long Wharf marine terminal and nearby Richmond refinery have been in existence since 1902. Standard Oil, Chevron's predecessor, bought the refinery and began operating it and the terminal in 1905.

The marine terminal is a T-shaped, concrete docking structure approximately 3,440 feet long. Ships can dock at four deep-water outer berths and several inner berths. Ships off-load crude oil at the terminal for processing at the refinery and take on refined products which they transport to national and international markets. The marine terminal has been modified over the years. In 1946, the original wooden structure gave way to the present concrete one. Alterations in 1974 allowed for larger vessels. Since then, Chevron has added new platforms, breasting dolphins, and a vapor control system. In 2000 and 2004, the company completed a major seismic upgrade and electrical system revamp.

While Chevron's refinery sits on private land beyond tidal reach, the marine terminal sits in the San Francisco Bay on submerged land owned by the state and subject to a public trust servitude and the control of the Lands Commission. The refinery and terminal are linked by a causeway which supports a pipeline system that transfers oil and petroleum products between the two facilities. The causeway largely stands atop private land, most of which is submerged or partially submerged and therefore is also subject to a public trust servitude.*fn1 One stretch of the land underlying the causeway, namely the "upland" area, is above tidal reach and not subject to such servitude.

In August 1947, the Lands Commission granted Standard Oil a 50-year lease for the marine terminal. Chevron assumed the lease in 1976, and the lease expired in 1997. Since then, Chevron has operated the terminal on a holdover basis, until the Lands Commission approved the 30-year renewal on January 29, 2009.

Before the Lands Commission approved the lease renewal, it considered what actions it needed to take to comply with CEQA. The 1902 terminal predates CEQA by nearly 70 years. Thus, no CEQA study examined its construction or ensuing operation. The Lands Commission concluded future oil spills constituted a potentially significant environmental impact, requiring analysis in an environmental impact report (EIR).*fn2 The Commission accordingly commissioned a draft EIR, solicited and responded to public comments, and issued a final EIR. Although the reports focus on the impact of potential oil spills, they also discuss other impacts, such as those to water quality and recreation. The EIR process took nearly nine years from the Commission's notice of preparation of a draft EIR, dated November 1998, to completion of the final EIR, dated March 2007.

In 1999, at the beginning of the review process, the Lands Commission determined the EIR should assess environmental impacts of the lease renewal against a baseline that assumed no terminal operations but the terminal structure remaining physically intact. Over the years, the Lands Commission changed its view as to the appropriate baseline. Accordingly, the draft and final EIRs defined the lease renewal project as allowing Chevron to "continue its existing Long Wharf operations" and used the existing, actual condition of the marine terminal, which included off-loading and on-loading operations, as the baseline by which to assess potential environmental impacts. Using this baseline, the EIRs concluded the lease renewal could result in significant environmental impacts due to potential oil spills.

The Lands Commission held public hearings on December 3, 2008, and January 29, 2009, at which it discussed and ultimately approved the final EIR. Plaintiffs appeared at the hearings and challenged the sufficiency of the EIR, claiming it omitted consideration of other significant impacts of the terminal's operation, especially in conjunction with the refinery, causeway, and pipelines. In approving the final EIR on January 29, 2009, the Lands Commission adopted a statement of overriding consideration that the lease should be renewed despite the fact oil spill risks could not be wholly mitigated.

During the review process there was also discussion about how lease renewal would affect recreational activities on not only the submerged and tidal lands over which the terminal and part of the causeway sit, but also on the "upland" area where plaintiffs want a portion of the Bay Trail (a hiking and biking trail that will encircle San Francisco Bay) constructed. Chevron met with proponents of the trail and officials of the City of Richmond and entered into a Community Benefits Agreement with the city. This agreement, dated July 31, 2008, obligates Chevron to pay money and provide other consideration to the city if it issues permits for certain projects at the refinery. Chevron's commitment included specific resources for the Bay Trail, including an easement through its "upland" property and $2 million for any security measures necessary to keep trail users out of sensitive refinery areas.

Although prepared to vote on the lease renewal at the December 3, 2008, hearing, the Lands Commission postponed the vote until January 29, 2009, to provide Chevron and interested government agencies a further opportunity to discuss additional resources for the Bay Trail and make progress on several other issues of public concern. By the January 29 meeting, Chevron agreed to provide a second mile-long easement on its "upland" property for the trail, and also agreed to a plan to reduce nighttime glare from terminal lighting and to report on ship air emissions, which may be subject to future regulation. Plaintiffs wanted Chevron to provide an additional $5 million to actually build the trail. The Lands Commission declined to impose such a condition or to delay the review process further, and approved the final EIR and the lease renewal.

On March 5, 2009, plaintiffs filed a combined petition for writ of mandate (under Code of Civil Procedure sections 1085 and 1094.5 and Public Resources Code sections 21168 and 21168.5) and complaint for declaratory relief. They filed an amended petition and complaint on March 27, alleging two causes of action against the Lands Commission: one for violation of CEQA and one for violation of the public trust doctrine. Plaintiffs sought a writ directing the Lands Commission to decertify the EIR and vacate its approval of the lease renewal, and a declaration the Commission had violated CEQA and the public trust doctrine. The trial court denied the plaintiffs' writ petition and dismissed their complaint for associated declaratory relief on July 19, 2010, and entered judgment in favor of the Lands Commission on September 8, 2010.

II. DISCUSSION

A. CEQA

1. Standard of Review

On appeal from a writ of administrative mandate in a CEQA case, this court, just as the trial court, reviews the administrative record for "a prejudicial abuse of discretion." (Pub. Resources Code, § 21168.5*fn3 ; Sunnyvale West Neighborhood Assn. v. City of Sunnyvale City Council (2010) 190 Cal.App.4th 1351, 1371 [119 Cal.Rptr.3d 481].) "Abuse of discretion is established if the agency has not proceeded in a manner required by law or if the determination or decision is not supported by substantial evidence." (§ 21168.5; Sunnyvale, supra, 190 Cal.App.4th at p. 1371.) "Judicial review of these two types of error differs significantly . . . ." (Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007) 40 Cal.4th 412, 435 [53 Cal.Rptr.3d 821, 150 P.3d 709] (Vineyard).) While we determine de novo whether the agency employed the correct procedures or properly interpreted CEQA's requirements, "we accord greater deference to the agency's substantive factual conclusions." (Ibid.; Fat v. County of Sacramento (2002) 97 Cal.App.4th 1270, 1277 [119 Cal.Rptr.2d 402] (Fat).) "In reviewing for substantial evidence, the reviewing court 'may not set aside an agency's approval of an EIR on the ground that an opposite conclusion would have been equally or more reasonable,' for, on factual questions, our task 'is not to weigh conflicting evidence and determine who has the better argument.' " (Vineyard, supra, at p. 435.)

2. The Baseline

CEQA "requires a public agency to prepare an [EIR] only on projects that may have significant environmental effects." (Communities for a Better Environment v. South Coast Air Quality Management Dist. (2010) 48 Cal.4th 310, 315 [106 Cal.Rptr.3d 502, 226 P.3d 985] (Communities).) "To decide whether a given project's environmental effects are likely to be significant, the agency must use some measure of the environment's state absent the project, a measure sometimes referred to as the 'baseline' for environmental analysis." (Ibid.) Thus, an inappropriate baseline may skew the environmental analysis flowing from it, resulting in an EIR that fails to comply with CEQA. (See Cadiz Land Co. v. Rail Cycle (2000) 83 Cal.App.4th 74, 87 [99 Cal.Rptr.2d 378].)

As we have discussed, the Lands Commission initially indicated the appropriate baseline should exclude current operations at the marine terminal and consider only its physical structure. However, ultimately, the Lands Commission concluded the baseline should reflect the current, operative condition of the terminal. Plaintiffs contend the Lands Commission had it right initially, and the baseline should have excluded any operational use of the terminal. They assert the Lands Commission's chosen baseline was contrary to law and, alternatively, unsupported by the evidence. The Lands Commission and Chevron maintain the California Supreme Court has made it clear the baseline for a CEQA analysis must reflect current conditions at a project site, and the baseline selected by the Commission was both legally proper and supported by substantial evidence. We agree with the Lands Commission and Chevron.

a. The Baseline Is Not Contrary to Law

The Supreme Court addressed the selection of CEQA baselines at length in Communities, supra, 48 Cal.4th 310. In that case, ConocoPhillips sought permits to modify or replace existing refinery equipment in order to produce a new, low-sulfur diesel fuel. (Id. at p. 317.) Although the modified or new equipment would release more NOx gas than was currently being released at the site, the heightened emission level would still be within that allowed by existing permits. (Id. at p. 318.) The air quality district therefore treated the permitted emission level as part of the baseline, even though the actual emissions at the site had not reached that level. (Ibid.) Measured against this baseline, the district concluded the low-sulfur fuel project would not have significant environmental impacts and did not prepare an EIR. (Ibid.) The Court of Appeal reversed. The Supreme Court affirmed the appellate court, holding the baseline did not reflect "a realistic description of the existing conditions without the Diesel Project." (Id. at p. 322.)

"By comparing the proposed project to what could happen, rather than to what was actually happening, the District set the baseline not according to 'established levels of a particular use,' but by 'merely hypothetical conditions allowable' under the permits." (Communities, supra, 48 Cal.4th at p. 322, quoting San Joaquin Raptor Rescue Center v. County of Merced (2007) 149 Cal.App.4th 645, 658 [57 Cal.Rptr.3d 663] (San Joaquin Raptor).) However, to afford meaningful environmental review of a proposed project's impact, a CEQA baseline must reflect "the 'existing physical conditions in the affected area' [citation], that is the ' "real conditions on the ground" ' [citation], rather than the level of development or activity that could or should have been present according to a plan or regulation." (Communities, at pp. 320-321.)

The Supreme Court observed the CEQA Guidelines provide: " 'An EIR must include a description of the physical environmental conditions in the vicinity of the project, as they exist at the time the notice of preparation is published, or if no notice of preparation is published, at the time environmental analysis is commenced, from both a local and regional perspective. This environmental setting will normally constitute the baseline physical conditions by which a lead agency determines whether an impact is significant.' " (Communities, supra, 48 Cal.4th at p. 320, quoting Cal. Code Regs., tit. 14, § 15125, subd. (a) (hereafter CEQA Guidelines).) Accordingly, the "normal" rule is that the baseline must reflect the "physical conditions existing at the time [the] environmental analysis" begins. (Communities, at pp. 320, 323; see also In re Bay-Delta Programmatic Environmental Impact Report Coordinated Proceedings (2008) 43 Cal.4th 1143, 1167-1168 [77 Cal.Rptr.3d 578, 184 P.3d 709] (In re Bay-Delta) [pre-existing environmental problems in the Bay Delta were part of the baseline conditions against which the potential impacts of the proposed project were to be measured]; Woodward Park Homeowners Assn. v. City of Fresno (2007) 150 Cal.App.4th 683, 693 [58 Cal.Rptr.3d 102] [citing the "normal" rule and holding potential impacts of proposed development had to be measured against current undeveloped condition of the property, not development permissible under existing zoning].)

The court further observed a "long line of Court of Appeal decisions holds, in similar terms [to the Guidelines], that the impacts of a proposed project are ordinarily to be compared to the actual environmental conditions existing at the time of CEQA analysis, rather than to allowable conditions defined by a plan or regulatory framework." (Communities, supra, 48 Cal.4th at p. 321.) Moreover, these cases reached this result even when the actual conditions were in violation of current regulatory provisions. (Ibid. & fn. 7.)

For example, in Riverwatch v. County of San Diego (1999) 76 Cal.App.4th 1428 [91 Cal.Rptr.2d 322] (Riverwatch), the appellate court rejected the county's chosen baseline which did not include illegal development that had occurred at a mining operation seeking a use permit. The county could not, said the court, essentially turn back the clock and use a baseline that excluded existing conditions. (Id. at pp. 1452-1453.) How present conditions come to exist may interest enforcement agencies, but that is irrelevant to CEQA baseline determinations--even if it means pre-existing development will escape environmental review under CEQA. (Ibid.) In Fat, supra, 97 Cal.App.4th 1270, the appellate court upheld the county's choice of a baseline reflecting present-day conditions to evaluate the impact of a proposed airport expansion. Even though "the Airport developed over a period of nearly 30 years without County authorization, there was evidence of environmental damage during that period, and the Airport had been the subject of at least two zoning enforcement actions," the county acted within its discretion using current airport operations as the baseline for CEQA review. (Id. at pp. 1280-1281.) Similarly, in Eureka Citizens for Responsible Government v. City of Eureka (2007) 147 Cal.App.4th 357 [54 Cal.Rptr.3d 485], the Court of Appeal upheld a project description for CEQA purposes that took into account an existing playground built contrary to code. "While any alleged code violations in the construction of the playground may have been relevant to the City's consideration of the variance requested, it was not a CEQA consideration." (Id. at p. 371, italics omitted; see also Fairview Neighbors v. County of Ventura (1999) 70 Cal.App.4th 238, 242-243 [82 Cal.Rptr.2d 436] [EIR prepared in conjunction for application to expand mining operation "properly discussed the existing physical condition of the affected area as including the long-operating mine"]; Bloom v. McGurk (1994) 26 Cal.App.4th 1307, 1312-1316 [31 Cal.Rptr.2d 914] (Bloom) ["existing facility" for categorical exemption purposes means a facility "as it exists at the time of the agency's determination, rather than . . . at the time CEQA was enacted"; this is consistent "with cases that have required potential impacts to be examined in light of the environment as it exists when a project is approved"].)

Accordingly, in Communities, the Supreme Court affirmed the Court of Appeal's directive that writ relief be granted and the matter be sent back to the air quality district to identify an appropriate baseline and reassess the environmental impacts of the proposed low-sulfur fuel project. (Communities, supra, 48 Cal.4th at pp. 327-329.)

As Communities requires, the baseline used by the Lands Commission here reflected "what was actually happening" at the site of the proposed project (Communities, supra, 48 Cal.4th at p. 322)--that is, an operating marine terminal. (See also In re Bay-Delta, supra, 43 Cal.4th at pp. 1167-1168; Fat, supra, 97 Cal.App.4th at pp. 1277-1278, 1280; Riverwatch, supra, 76 Cal.App.4th at p. 1453.) Indeed, we note that in Riverwatch and Fat, the appellate courts held even unlawful prior development and activity was properly included within the CEQA baselines for evaluation of proposed projects. Here, in contrast, the " ' "real . . . on the ground" ' " terminal operations (Communities, supra, 48 Cal.4th at p. 321) included in the baseline were entirely lawful.

Despite the foregoing authorities, plaintiffs assert the baseline for a renewal project must exclude current conditions because the approving agency can eliminate them by refusing the renewal. Thus, plaintiffs maintain the baseline here should exclude, at a minimum, use of the marine terminal and, possibly, the physical structure, itself.*fn4 In other words, plaintiffs claim the baseline here should reflect conditions that have not existed at the locale for more than a century.*fn5 This is so, say plaintiffs, because if the ...


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