California Court of Appeals, Fourth District, Second Division
[As modified July 17, 2015]
APPEAL from the Superior Court of Riverside County No. RIC1203353, Daniel A. Ottolia, Judge.
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Susan Nash for Plaintiff and Appellant.
Best Best & Krieger, Michelle Ouellette, Charity Schiller and Lucas I. Quass for Defendant and Respondent.
Allen Matkins Leek Gamble Mallory & Natsis, K. Erik Friess and Nicholas S. Shantar for Real Party in Interest and Respondent.
Plaintiff and appellant Albert Thomas Paulek petitioned the trial court for a writ of mandate. In the petition, Paulek alleged defendant and respondent Western Riverside County Regional Conservation Authority (the Agency) erred by concluding (1) a particular activity is not a project under the California Environmental Quality Act (CEQA; Pub. Resources Code, § 21000 et seq.) and (2) that, if it were a project, then it was exempt from CEQA. The activity at issue involved removing a conservation designation from one parcel of land, and placing the designation on two other parcels of land. The trial court found Paulek had standing and the moving of the conservation designation qualified as a “project” under CEQA. The trial court denied the writ petition because it found the project fell within a CEQA exemption. Paulek contends (1) he has standing; (2) the moving of the restrictions is a CEQA project; and (3) the project does not fall within the identified CEQA exemptions. We reverse the judgment.
FACTUAL AND PROCEDURAL HISTORY
A. Multiple Species Habitat Conservation Plan
The Multiple Species Habitat Conservation Plan (MSHCP) is a plan to maintain open spaces in the western portion of Riverside County (the County). The goal of the MSHCP is to maintain biological diversity in open space areas, while allowing future economic growth. The MSHCP caused conservation areas to be created in the western portion of the County. The conservation areas totalled 500, 000 acres of land. The 500, 000 acres included 347, 000 acres of existing public or quasi-public lands and approximately 153, 000 acres of “Additional Reserve Land.”
The 153, 000 acres needed to be acquired at the time the MSHCP was created in 2003. The exact locations of the 153, 000 acres were not identified in the MSHCP. Instead, the MSHCP identified a “criteria area” that was “significantly larger” than 153, 000 acres; the criteria area was approximately 340, 000 acres. The criteria area was broken into cells. Each cell was approximately 160 acres in size. The cells were to be evaluated to determine what portions of the criteria area to include in the conservation area.
The MSHCP provided “criteria” about the different cells. The “criteria” included information about (1) the features of the land in the cell; (2) the particular species that could be conserved on the land in the cell; (3) how the land in the cell was configured; and (4) the geographic location of the cell.
The MSHCP accounted for the possibility that the criteria information for the cells could change. Examples of possible changes included: (1) new biological information could be discovered, (2) updated land use information could be obtained, e.g. development information, and (3) new topographic or engineering information could be discovered. Changing the criteria information in the MSHCP required a procedure known as the “Criteria Refinement Process.” The Criteria Refinement Process required written notification, inclusion on the Agency’s agenda, and a 60-day review and response period.
If, as a result of the criteria changing, the land (cell) would no longer be part of the criteria area, then (1) the MSHCP must be amended, or (2) other property must be acquired to replace the land that would be lost. The replacement land must be biologically equivalent or superior to the land that was being lost. The equivalent or superior land determination was made through a process known as an “equivalency analysis.” If the result of the equivalency analysis was that the replacement land was biologically equivalent or superior then that change was an “acceptable refinement to the MSHCP.” If the replacement land was found to not be biologically equivalent or superior, then that would be an “unacceptable deviation from the MSHCP Criteria and an amendment to the MSHCP would be required prior to approval.......The Agency was responsible for carrying out the MSHCP’s requirements. The Agency was a joint powers authority. (Gov. Code, §§ 6500-6536.)
B. Eminent Domain Case
Real party in interest and respondent Anheuser-Bush, LLC (Anheuser) owned a 964.21-acre parcel known as the Warm Springs Ranch (the Ranch). The Ranch was located in an unincorporated area of the County, immediately northeast of the City of Murrieta. The Ranch was “largely surrounded by existing or approved [suburban] development.” The Ranch was part of the MSHCP criteria area. There were six MSHCP “cells” on the Ranch.
In 2002, the County informed Anheuser that development would be prohibited on the Ranch because the Ranch would be part of the conservation area. In other words, a conservation overlay had been placed upon the Ranch. The MSHCP was approved in June 2003. In October 2003, the County changed the zoning for the Ranch from “ ‘Rural’ and ‘Future Urban’ ” to
“ ‘Rural Residential.’ ” This meant the development possibilities changed from (a) 2.5 to 3.0 dwelling units for every acre to (b) one dwelling unit for every five acres.
In order to develop land within the MSHCP criteria area, i.e., land subject to a conservation overlay, the property owner must go through the habitat evaluation and acquisition negotiation strategy (HANS) process. Under the HANS process, to develop the Ranch property, Anheuser would need to submit an application for the proposed development project. An initial review would examine whether all or part of the property was needed for the MSHCP conservation area. If the initial review reflected all or part of the property was needed for the conservation area, then the parties begin negotiating for conveyance of all or part of the property. If it is determined that the property is not needed for the conservation area, “then the proposed project may proceed through the normal project planning and design process.”
In December 2005, Anheuser submitted applications to develop the Ranch. Anheuser submitted a general plan amendment, an application for a zoning change, and a specific plan for the Ranch, which contemplated residential development. In February 2007, presumably after conducting the HANS process, the County informed Anheuser that all but 71 acres of the Ranch would be acquired for conservation under the MSHCP.
The County, the Agency, and Anheuser negotiated. They discussed the possibility of a “land swap.” In the land swap, the County/Agency would (1) acquire a portion of the Ranch, (2) provide “MSHCP clearance” for the remainder of the Ranch that Anheuser continued to own, and (3) convey other County land to Anheuser for Anheuser to develop. “[T]hird parties” objected to the land swap and the County and Agency “walked away” from the land swap negotiations.
In 2009, the County sued Anheuser in eminent domain. The County sought to take a portion of the Ranch in order to widen and extend Clinton Keith Road. Anheuser filed a cross-complaint for inverse condemnation. The Agency was not named as a party in the complaint or cross-complaint.
In 2011, Anheuser and the County reached a settlement. The Agency was also a party to the “Settlement Agreement.” It appears the Agency became involved because Anheuser alleged the application of the MSHCP criteria
constituted a taking. In the Settlement Agreement, Anheuser, the County, and the Agency agreed (1) to dismiss their lawsuits, and (2) the Agency would purchase the Ranch from Anheuser. The Agency and Anheuser, but not the County, executed a separate “Purchase and Sale Agreement” regarding the Agency’s purchase of the Ranch.
The Purchase and Sale Agreement reflected the Agency planned to purchase the Ranch in nine different phases. For example, phase 1 consisted of 250.18 acres and would cost $10, 000, 000, while phase 2 consisted of 73.41 acres and would cost $3, 000, 000. The different phases would be purchased over a period of eight years. The phases were scheduled to be purchased each year, in succession. So, phase 1 would be purchased immediately, in January 2012; then the phase 2 purchase would be completed by the first anniversary of the phase 1 purchase, in January 2013; the phase 3 purchase would be completed by the second anniversary of the phase 1 purchase, in January 2014; and so forth. The phase 9 purchase would be the final purchase, by the eighth anniversary of the phase 1 purchase, in January 2020. The phase 9 property is a 200-acre area and will cost $11, 000, 000.
The phase 9 property had conditions as part of the Purchase and Sale Agreement: The Agency was to use its best efforts to complete a “criteria refinement” process for the phase 9 property before March 2012, which would eliminate the cells on the phase 9 property, cause it to no longer be described as conservation land, and would relieve the land from being subject to the HANS process. The Agency also agreed to make the phase 9 property a separate legal parcel.
In order to remove the MSHCP conservation overlay from the phase 9 property, the Agency had to (1) amend the MSHCP, or (2) refine the MSHCP by replacing the lost land with biologically equivalent or superior replacement land. The removal of the MSHCP conservation overlay would permit development to possibly occur in the future on the 200-acre phase 9 site, if the Agency failed to make the $11, 000, 000 purchase. The Agency explained that, if it failed to make the purchase, then the phase 9 property would likely be developed into a university or used for residential and retail purposes.
Since the MSHCP conservation overlay would be removed from the phase 9 property, the Agency considered replacing the 200-acre phase 9 site with two sites that aggregated to 1, 064 acres. The first site was the Reynolds property, which consisted of 606 acres (Reynolds property). The second site was the Winchester-Tule Peak property, which totaled 458 acres (Peak property). In conducting the equivalency analysis, biologists found portions of the Ranch burned in a 2011 wildfire, the Ranch had manure spread on it, many of the plants on the Ranch were not native species, and people
trespassed on the Ranch with dirt bikes. However, biologists also found (1) there were species on the phase 9 property, such as the California Horned Lark and the Southern California Rufous-crowned Sparrow, that were not present on the two proposed replacement properties; and (2) future development on the phase 9 property could disturb a neighboring conservation area.
In regard to the Reynolds property, biologists found it was primarily coastal sage scrub. The Peak property was predominately Chaparral. The Reynolds and Peak properties were better for species such as the Gnatcatcher and Quino Checkerspot Butterfly, than the phase 9 property.
On February 6, 2012, the Agency held a public hearing to consider the criteria refinement, i.e., whether the MSHCP conservation overlay should be removed from the phase 9 property and placed upon the Reynolds and Peak properties. Paulek spoke at the meeting. Paulek asserted the Agency erred by proposing to exempt the MSHCP conservation overlay swap from CEQA review. Paulek contended that by removing the MSHCP conservation overlay, the Agency was creating the possibility that the site could be developed into a university or residential and retail area, which would adversely impact the neighboring conservation area. Paulek requested the Agency consider how removal of the MSHCP conservation overlay would impact the environment when combined with the potential for future development on the phase 9 site and the extension of Clinton Keith Road.
Paulek’s attorney also spoke at the meeting. Paulek’s attorney questioned why the Agency would be purchasing land and removing the conservation overlay, since the Agency was created to conserve land. Paulek’s attorney also questioned whether the change in the conservation overlay related to litigation with Anheuser because it was unclear from reading the Agency’s report whether litigation was somehow involved.
The Agency’s attorney said the phase 9 purchase and removal of the conservation overlay were related to a settlement with Anheuser. An employee of the company that created the Agency’s criteria refinement report explained the phase 9 property “could be conserved or developed.” An Agency board member asked, “Where’s the analysis that shows that we have a high probability that we will have the money to buy [the phase 9 property]?” The Agency’s attorney responded that the criteria refinement had to be completed as part of the settlement with Anheuser.
On February 6, 2012, the Agency passed a resolution refining the criteria for the phase 9 property, i.e., removing the conservation overlay. The resolution was resolution No. 12-002 (Resolution No. 12-2002). The resolution reflected the criteria refinement (1) was not a project (Cal. Code Regs., tit.
14, § 15378); (2) was a project, but was exempt because it assured the maintenance or enhancement of a natural resource (Class 7 exemption) (Cal. Code Regs., tit. 14, § 15307); and (3) was a project, but was exempt because it assured the maintenance or enhancement of the environment (Class 8 exemption) (Cal. Code Regs., tit. 14, § 15308).
Paulek filed a petition for writ of mandate and complaint for injunctive relief against the Agency, with Anheuser listed as the real party in interest. Paulek requested (1) a writ of mandate directing the Agency to vacate and set aside its approval of the criteria refinement; (2) alternative and peremptory writs of mandate directing the Agency to comply with CEQA; and (3) a stay and injunction preventing the Agency and Anheuser from implementing the criteria refinement until CEQA requirements had been met. Paulek asserted the criteria refinement, i.e., removal of the conservation overlay, was a “project” within the meaning of CEQA and that the project did not fall within the Class 7 and Class 8 CEQA exemptions that were identified in the Agency’s resolution.
The Agency demurred to Paulek’s petition and complaint. Anheuser joined in the demurrer. In the demurrer, the Agency asserted (1) Paulek lacked standing, and (2) Paulek failed to join a necessary and indispensible party. In order for a person to have standing in a CEQA lawsuit, the person must first have objected to the project prior to the public hearing period closing. (Pub. Resources Code, § 21177, subd. (a).)
In the demurrer, the Agency asserted Paulek’s lawsuit was brought in his individual capacity, while his comments during the public hearing period were brought in his capacity as the conservation chair for the Friends of the Northern San Jacinto Valley (the Friends). The Agency asserted Paulek’s attorney’s comments during the public comment period were also brought on behalf of the Friends. The Agency argued Paulek lacked standing to bring the lawsuit in his individual capacity because, during the public comment period, he did not object as an individual.
The Agency also asserted Paulek’s lawsuit was deficient because he failed to include the County as a defendant. The Agency asserted the County was a necessary and indispensible party because vacating the approval of the criteria refinement would affect the County’s Settlement Agreement with Anheuser. The Agency asserted the standing and joinder issues could not be remedied because the statute of limitations for amending the complaint and petition had passed. Therefore, the Agency contended the demurrer must be sustained.
Paulek opposed the demurrer. Paulek asserted there was no legal authority for the proposition that he ceased to be an individual due to his membership in an organization for purposes of standing under section 21177. Paulek contended the County was not a necessary or indispensible party because the County was not a signatory to the Purchase and Sale Agreement in which the Agency agreed to purchase the phase 9 property and remove the MSHCP restrictions. Paulek argued there was nothing indicating the Settlement Agreement would be affected by temporarily halting implementation of the criteria refinement during a CEQA compliance period. The trial court overruled the demurrer.
The Agency and Anheuser filed answers to Paulek’s petition and complaint. Paulek filed an opening brief in the trial court. First, Paulek contended the Agency erred by combining two procedural steps. Paulek explained that the Agency was required to determine if the removal of MSHCP restrictions would impact the environment, and then, if it did not have an impact, a CEQA exemption would apply, but it if did have an impact, mitigation measures must be considered. Paulek asserted the Agency erred by combining these steps. Paulek asserted the Agency incorrectly determined the removal of the MSHCP conservation overlay would not have an impact on the environment due to the mitigation measures. In other words, Paulek asserted the Agency should have considered whether removing the MSHCP conservation overlay from the phase 9 property would have an environmental impact, without consideration to any mitigation involving the Reynolds and Peak properties.
Second, Paulek contended possible development on the phase 9 property had the potential to affect wildlife by reducing habitat. Paulek explained there were endangered, rare, and threatened species on the phase 9 property and future development of the site could impact those species.
The Agency filed points and authorities in opposition to Paulek’s opening brief. First, the Agency asserted Paulek’s petition was time barred because Paulek was challenging the Settlement Agreement from the Anheuser lawsuit, and the time to challenge the Settlement Agreement had passed. Second, the Agency asserted Paulek’s petition failed because he did not join a necessary and indispensible party-the County. The Agency asserted the County was a necessary and indispensible party because Paulek was challenging the Settlement Agreement. Third, the Agency asserted Paulek lacked standing because, during the public comment period, Paulek did not object in his capacity as an individual.
The Agency asserted the February 2012 criteria refinement “was merely [the Agency’s] implementation of one of the terms of the Settlement Agreement.” In connection with this argument, the Agency faulted Paulek’s assertion that the Agency had authorized development of the phase 9 property. The Agency asserted the criteria refinement did not approve development of the phase 9 property.
Fourth, the Agency asserted it did not combine procedural steps when analyzing the potential for an environmental impact. The Agency explained that the Criteria Refinement Process requires an exchange of land, so the moving of the MSHCP conservation overlay from the phase 9 property to the Reynolds and Peak properties was not mitigation; rather, it was the project. The Agency asserted that if the land exchange were deemed mitigation, then it was unclear what the “project” would be.
Fifth, the Agency asserted criteria refinement was not a project under CEQA. The Agency contended the purpose of the criteria refinement was to protect 1, 064 acres of land. Since 1, 064 acres would be protected as open space, CEQA does not apply. The Agency asserted the phase 9 property was “highly disturbed and represents [a] degraded habitat.” Therefore, the Agency reasoned, the action would result in more and better land being protected, so the action was not a CEQA “project.”
Anheuser also filed an opposition. Anheuser joined in the Agency’s arguments. Anheuser also asserted Paulek’s petition was untimely because Paulek was challenging the Settlement Agreement, and the time to challenge that agreement had passed prior to Paulek filing his petition and complaint. Anheuser also asserted Paulek’s petition and ...