ORIGINAL PROCEEDINGS in mandate. James A. Boscoe, Judge. Petition granted in part. (Super. Ct. No. CV56309)
The opinion of the court was delivered by: Wiseman, J.
CERTIFIED FOR PARTIAL PUBLICATION*fn1
It is settled that when a development project is approved by means of a ballot initiative placed on the ballot by voters and adopted by them in an election, the project is exempt from environmental review under the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) (CEQA). (See CEQA Guidelines, § 15378 (b)*fn2 .) In this case, real parties in interest Wal-Mart Stores, Inc., and the City of Sonora contend that CEQA compliance also can be avoided when a developer's supporters gather signatures of 15 percent of the registered voters on an initiative petition to approve the development, and the lead agency chooses to forgo the election and adopt the initiative directly as an ordinance, pursuant to Elections Code section 9214. We disagree. Environmental review can be avoided when the voters choose to bypass it, not when the lead agency chooses to bypass the voters. We grant the writ relief requested on this issue by petitioner Tuolumne Jobs & Small Business Alliance (TJSBA). We publish the portion of our opinion dealing with this issue because it creates a split of authority, as we respectfully decline to follow Native American Sacred Site & Environmental Protection Assn. v. City of San Juan Capistrano (2004) 120 Cal.App.4th 961 (Native American Sacred Site). In the unpublished portion of the opinion, we reject TJSBA's arguments on two other points.
FACTUAL AND PROCEDURAL HISTORIES
The essential facts are undisputed. There is a 130,000-square-foot Wal-Mart store in Sonora (the city). Wal-Mart wants to expand it and make it a Wal-Mart Supercenter, which would be larger, would sell groceries, and would be open 24 hours a day, seven days a week.
Wal-Mart submitted an application to the city for the approvals necessary for the expansion. The city prepared an environmental impact report (EIR) on the proposed project and circulated it for public comment. The city planning commission held a public hearing on Wal-Mart's application and voted to recommend approval.
On June 28, 2010, before the city council voted on whether to certify the EIR and approve the project, real party in interest James Grinnell served the city with a notice of intent to circulate an initiative petition. The city referred to this initiative as the "Walmart Initiative." It postponed its vote on the EIR and Wal-Mart's application while it considered the initiative.
Signatures were gathered and submitted to the registrar of voters. Out of 651 signatures submitted, the registrar found 541 valid and concluded that this was more than 15 percent of the city's 2,489 registered voters.
The city council held a public hearing on the initiative on September 20, 2010. The city administrator and a representative of Wal-Mart both explained that the purpose of the initiative was to approve Wal-Mart's construction and operation of the Supercenter, and that it was a procedural alternative to city approval of Wal-Mart's original application, having the same effect.
The city council considered the "Walmart Initiative" at its meeting on October 18, 2010. A Wal-Mart representative again explained that Wal-Mart had put "'the planning commission's recommendation [to approve the project] into the form of an initiative ....'" The city considered the courses of action open to it under Elections Code section 9214, which provides:
"If the initiative petition is signed by not less than 15 percent of the voters of the city ... or, in a city with 1,000 or less registered voters, by 25 percent of the voters or 100 voters of the city, whichever is the lesser number, and contains a request that the ordinance be submitted immediately to a vote of the people at a special election, the legislative body shall do one of the following:
"(a) Adopt the ordinance, without alteration, at a regular meeting at which the certification of the petition is presented, or within 10 days after it is presented.
"(b) Immediately order a special election, ... at which the ordinance, without alteration, shall be submitted to a vote of the voters of the city.
"(c) Order a report pursuant to Section 9212, at the regular meeting at which the certification of the petition is presented. When the report is presented to the legislative body, the legislative body shall either adopt the ordinance within 10 days or order an election pursuant to subdivision (b)."
Elections Code section 9212, describing the report the city can order, provides that the report is to be provided by city agencies; it lists specific topics the report can address and sets a maximum of 30 days for presentation of the report to the city council.
After a public hearing at the October 18, 2010, meeting, the city council voted to adopt the initiative as Ordinance No. 796 and to forgo the special election. In this manner, the Wal-Mart expansion was approved by the city even though the EIR was never certified and CEQA review was never completed.
TJSBA filed a petition for a writ of mandate in the superior court, alleging four causes of action: (1) the city's action violated CEQA because, unlike voter approval of an initiative via a special election pursuant to Elections Code section 9214, subdivision (b), city approval of the same initiative under subdivision (a) requires environmental review; (2) the initiative is invalid because it conflicts with the Sonora General Plan; (3) the initiative includes provisions that would improperly limit the city's legislative power in the future; and (4) the initiative is administrative in character, not legislative, and is therefore not a proper subject for the initiative process.
Wal-Mart filed a demurrer, arguing that the petition failed to state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10, subd. (e).) The city and Grinnell joined in the demurrer. Grinnell also filed a separate demurrer asserting that he was not a proper real party in interest. The court sustained Wal-Mart's demurrer with respect to the first, third, and fourth causes of action and overruled it with respect to the second cause of action. It also overruled Grinnell's separate demurrer. The court denied leave to amend.
TJSBA filed a petition for a writ of mandate in this court, requesting that we order the superior court to vacate its order sustaining the demurrer as to the three causes of action. The petition also requested that we stay the proceedings in the superior court. We ordered real parties to file an informal response and then issued an order to show cause why relief should not be granted. We also stayed the trial, pending determination of the petition. Wal-Mart and the city filed returns on March 1, 2012. TJSBA filed a traverse on April 3, 2012.
I. Grounds for writ relief
The situation here is similar to the one in Campbell v. Superior Court (1996) 44 Cal.App.4th 1308, 1314-1315:
"Even though the lawsuit is still in the pleading stage, review through a petition for extraordinary relief is appropriate. Where a demurrer is sustained without leave to amend with respect to less than all of the causes of action, 'mandamus will lie when it appears that the trial court has deprived a party of an opportunity to plead his cause of action ... and when that extraordinary relief may prevent a needless and expensive trial and reversal [citation].' [Citation.] Because the primary issue raised by the parties' pleadings, the trial court's ruling, and Campbell's petition is the novel and important question of whether an insured may sue its insurer for breach of the implied covenant of good faith and fair dealing based solely upon the insurer's unjustified refusal to defend, we stayed further proceedings in the trial court and issued an alternative writ of mandate to allow us to consider that specific question. [Citation.]"
Writ relief in this case will avoid a situation in which the superior court enters judgment for Wal-Mart and the city based on an error of law, an error that will have to be reversed on appeal after much time has elapsed and money has been spent needlessly. Further, the legal issue is important and calls for speedy resolution. Developers' strategy of obtaining project approvals without environmental review and without elections threatens both to defeat CEQA's important statutory objectives and to subvert the constitutional goals of the initiative process.
In arguing against writ relief, Wal-Mart and the city point out that the superior court had set the trial for March and had scheduled a mere one-hour hearing. They say this shows that going to trial would have involved minimal expense and any error could easily have been corrected on appeal. Even a one-hour trial has costs for the parties, however, costs that are needless where the trial court has erred in sustaining a demurrer on a meritorious cause of action and a reversal on appeal will necessitate another trial.
There are other consequences besides the wasted one-hour trial. An appeal can take well over a year, and the loss of time is itself an unnecessary cost under these circumstances. In the meantime, Wal-Mart might decide, on the strength of a win in the superior court, to proceed with building the project, possibly leading to a later order requiring the project to be removed at great cost. (See Woodward Park Homeowners Assn. v. Garreks, Inc. (2000) 77 Cal.App.4th 880, 888-889.)
Wal-Mart and the city also point out that we are not dealing with an issue of first impression in this case, since the Court of Appeal addressed the same issue in Native American Sacred Site, supra, 120 Cal.App.4th 961. After careful consideration, we have concluded that we disagree with Native American Sacred Site, which is the only authority squarely on point.
For all these reasons, we conclude that writ relief is appropriate in this case.
II. Standard of review for demurrer
If this were an appeal, we would be reviewing a judgment entered after the demurrer was sustained. Here, of course, there has been no judgment, but we apply the same standard of review to the court's order sustaining the demurrer. This standard is well established:
"In an appeal from a judgment dismissing an action after a general demurrer is sustained without leave to amend, our Supreme Court has imposed the following standard of review. 'The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. [Citations.] The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.] The judgment must be affirmed "if any one of the several grounds of demurrer is well taken. [Citations.]" [Citation.] However, it is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. [Citation.] And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment. [Citation.]' [Citations.]" (Genesis Environmental Services v. San Joaquin Valley Unified Air Pollution Control Dist. (2003) 113 Cal.App.4th 597, 603.)
In this case, the only question on the first cause of action is whether, as a matter of law, CEQA review is unnecessary when a city approves a project by adopting as an ordinance the text of an initiative presented to it under Elections Code section 9214 with certified signatures of 15 percent of the city's registered voters, thereby avoiding the need for an election on the initiative. There is no dispute but that if this is a valid way of approving a project without CEQA review, the demurrer was sustained correctly on this cause of action, and that if it is not, then the demurrer must be overruled. The order sustaining the demurrer on the third and fourth causes of action similarly involves only questions of law. It is undisputed that if the law is as claimed by TJSBA, then the facts TJSBA pleaded are sufficient, and that if the law is as claimed by real parties, then the pleading is insufficient and cannot be cured by amendment.
III. CEQA compliance required before city can approve project without election
The main issue in this case, arising from the first cause of action, is an issue of statutory construction. Specifically, how should we construe the provision of Elections Code section 9214 that allows cities to adopt initiatives without elections in light of CEQA? On the one hand, CEQA generally prohibits governmental agencies from approving projects that have significant impacts on the environment without first completing the environmental review process and either mitigating those impacts or finding mitigation to be infeasible and the impacts to be justified by overriding considerations. (Pub. Resources Code, §§ 21002, 21002.1, 21006, 21081.) On the other hand, our Supreme Court has held that the prerogatives of the electorate when exercising its right of initiative must not be thwarted by procedural constraints arising from other provisions of state law:
"[S]tatutory procedural requirements imposed on the local legislative body generally neither apply to the electorate nor are taken as evidence that the initiative or referendum is barred. The rule is a corollary to the basic presumption in favor of the electorate's power of initiative and referendum. When the Legislature enacts a statute pertaining to local government, it does so against the background of the electorate's right of local initiative, and the procedures it prescribes for the local governing body are presumed to parallel, rather than prohibit, the initiative process, absent clear indications to the contrary." (DeVita v. County of Napa (1995) 9 Cal.4th 763, 786 (DeVita).)
The court also stated that local voters' power to approve an initiative at an election is guaranteed by article II, section 11, of the California Constitution "absent the clear indication that the Legislature intended to preempt that power pursuant to a statewide purpose." (DeVita, supra, 9 Cal.4th at p. 795.)*fn3
This doctrine conforms with the more general remarks the Supreme Court made about the initiative and referendum processes earlier in Associated Home Builders Etc., Inc. v. City of Livermore (1976) 18 Cal.3d 582, 591 (Associated Home Builders):
"The amendment of the California Constitution in 1911 to provide for the initiative and referendum signifies one of the outstanding achievements of the progressive movement of the early 1900's. Drafted in light of the theory that all power of government ultimately resides in the people, the amendment speaks of the initiative and referendum, not as a right granted the people, but as a power reserved by them. Declaring it 'the duty of the courts to jealously guard this right of the people' [citation], the courts have described the initiative and referendum as articulating 'one of the most precious rights of our democratic process' [citation]. '[I]t has long been our judicial policy to apply a liberal construction to this power whenever it is challenged in order that the right be not improperly annulled. If doubts can reasonably be resolved in favor of the use of this reserve power, courts will preserve it.' [Citations.] [Fns. omitted.]"
These holdings indicate that, when there is an actual election, procedures that would restrain the voters' power to enact their will must give way. But what are the consequences for CEQA when the lead agency chooses not to have an election but to adopt the initiative through its own action?
We apply standards of statutory construction to answer this question. In interpreting a statute, our objective is "to ascertain and effectuate legislative intent." (People v. Woodhead (1987) 43 Cal.3d 1002, 1007.) To the extent the language in the statute may be unclear, we look to legislative history and the statutory scheme of which the statute is a part. (People v. Bartlett (1990) 226 Cal.App.3d 244, 250.) We look to the entire statutory scheme in interpreting particular provisions "so that the whole may be harmonized and retain effectiveness." (Clean Air Constituency v. California State Air Resources Bd. (1974) 11 Cal.3d 801, 814.) "In the end, we '"must select the construction that comports most closely with the apparent intent of the Legislature, with a view to promoting rather ...