Court Invalidates EIR For Failing To Disclose Legal Uncertainty Affecting Availability Of Water To Serve Development Project

Where the United States questions whether a federal water supply contract may be used to serve a proposed urban development project, that project’s environmental impact report (“EIR”) must disclose the government’s position and address the resulting uncertainty in the project’s water supply. 

The Fifth District Court of Appeal reached that holding in a September 13, 2011, opinion in Madera Oversight Coalition v. County of Madera (App.Case No. F059153).  The opinion affirms a Superior Court judgment setting aside the EIR for a 5,200-unit mixed-use development project located in unincorporated Madera County.

The Court of Appeal addressed several recurring CEQA issues, including: (1) preparation of CEQA administrative records and challenges to trial court rulings on record augmentation motions; (2) compliance with CEQA’s requirements for analyzing and mitigating effects to cultural, historical, and archaeological resources; (3) use of the existing environmental conditions versus projected future conditions as the baseline for assessing the significance of project impacts; (4) cumulative impact analysis; and (5) analysis of water supply availability.

Of particular interest is the appellate holding that the water supply adequacy determination in Madera County’s EIR violated CEQA’s mandate for full disclosure and informed decisionmaking by failing to disclose key factors affecting the availability of a federal “holding contract” water supply that the project’s SB 610 Water Supply Assessment (“WSA”) and EIR identified to serve the proposed project.  Although the WSA and EIR determinations were based on a legal opinion concluding that the holding contract water may be used to serve the proposed project, neither that opinion, the WSA nor the EIR disclosed and addressed evidence indicating that the holding contract supply might not be available to serve the project absent a contract amendment.

The EIR process failed to disclose and address a letter by the U.S. Bureau of Reclamation questioning whether the water available under the holding contract could be used to serve commercial, industrial and other urban uses approved as part of the new development project.  The EIR process also failed to disclose and address a recent superior court ruling, arising from separate litigation, that questioned the availability of water supplies to serve a different development project under a different, but similar, federal holding contract.

The Court of Appeal rejected arguments that the WSA and EIR determination of water supply adequacy should be upheld as supported by substantial evidence.  Focusing on the failure to disclose and address the Bureau of Reclamation letter and separate court ruling, the Court of Appeal held that the question of full EIR disclosure presents “a question of law.”  The appellate court explained:

Ultimately, this case comes down to whether the discussion in the EIR regarding the project’s water supply is adequate despite the nondisclosure of information concerning uncertainties surrounding the proposed use of Holding Contract No. 7 as the project’s source of water.

From there, the appellate court reasoned that those omissions:

[R]esulted in the public and decisionmakers being deprived of a full disclosure of the uncertainties related to the project’s water supply.  The basis for this conclusion is relatively simple.  Would two objectively reasonable persons – one presented with only the water supply assessment and the other presented with both the water supply assessment and the [Bureau of Reclamation’s] letter – come to the same conclusion as to the level of uncertainty of the project’s water supply?  We conclude they would not and, thus, the water supply assessment did not provide a full disclosure of relevant information.

The case serves as a reminder that a comprehensive and detailed water supply availability analysis is critical to preparing legally defensible CEQA documents for proposed development projects.

KMTG will publish a Legal Alert with a more detailed analysis of the opinion's broad CEQA holdings.  In the meantime, a copy of the court's opinion may be found here.

For more information regarding this matter, please contact Hanspeter Walter, Andrew Tauriainen, Eric Robinson, or the KMTG attorney with whom you normally consult.

Hearing on Motion to Stay Fall X2 Injunction Set for September 16

As we recently reported, the Natural Resources Defense Council has moved to stay Judge Oliver Wanger’s August 31 order enjoining the federal government from implementing the “Fall X2” measure under the Delta smelt biological opinion.  The United States Fish and Wildlife Service subsequently filed a similar motion.  Following a brief hearing on September 9, the Court directed the plaintiffs to file an opposition to the motion no later than September 14 and scheduled a full hearing at noon on September 16.  We will report on the outcome of that hearing.

For more information regarding this matter, please contact Eric Adair, Rebecca Akroyd, Hanspeter Walter, Daniel O'Hanlon, or the KMTG attorney with whom you normally consult.

Related stories:

• Federal District Court Enjoins Water Supply Restrictions Under Delta Smelt Biological Opinion
• NRDC Seeks to Stay Injunction of Fall X2 Action Under Delta Smelt Biological Opinion

Related documents:

• Findings of Fact and Conclusions of Law re Plaintiffs' Request for Injunctive Relief Against Implementation of RPA Component 3 (Action 4)
• NRDC Motion for Stay of Fall X2 Injunction Pending Appeal
• Federal Defendants' Motion for Stay Pending Appeal of the Court's Order Enjoining Action 4
• Plaintiffs' Opposition to Defendants-Intervenors' Motion for Stay of Fall X2 Injunction Pending Appeal
• Plaintiffs' Opposition to Federal Defendants' Motion for Stay Pending Appeal of the Court's Order Enjoining Action 4

EPA Orders $20 Million Cleanup of San Gabriel Valley Superfund Site

The United States Environmental Protection Agency announced yesterday that it has ordered Northrup Grumman Systems Corporation to spend $20 million to build a groundwater cleanup system to address groundwater contamination emanating from the former Benchmark Technology facility in the City of Industry.

According to the EPA, the site is one of the largest sources of volatile organic compound groundwater contamination in the Puente Valley area of the San Gabriel Valley Superfund site.  The system to be installed will include a series of monitoring wells and a treatment plant to contain and treat groundwater contaminated by VOCs and 1,4-dioxane.  The treated water will then be discharged as surface water or injected back into the underground acquifer.

Speaking of the order, EPA Region 9 Adminstrator Jared Blumenfeld said:

Today’s order will protect the essential drinking water supplies in the San Gabriel Valley. The treatment system is designed to intercept the most highly contaminated groundwater plume and prevent it from migrating further. Once again, EPA is taking action requiring the company responsible for the pollution to pay for its cleanup in Puente Valley.

In other California-related EPA news, the EPA announced today that it has added two California sites to the National Priorities List -- the Blue Ledge Mine (abandoned mine) within the Rogue River - Siskiyou National Forest and the New Idria Mercury Mine (abandoned mercury mine) in Idria.  Two other sites have been proposed for the NPL -- Jervis B. Webb Co. (former manufacturer) and Seam Master Industries (adhesive manufacturer), both in South Gate.

For more information regarding this matter, please contact Eric Adair or the KMTG attorney with whom you normally consult.

Tehama-Colusa Canal Authority Appeals Area of Origin Decision

As we previously reported (here and here), the United States District Court for the Eastern District of California ruled in early August that water users in the Sacramento Valley have no preferential right to delivery of Central Valley Project water under California's so-called “area of origin” laws.  In a notice filed this morning, the Tehama-Colusa Canal Authority, plaintiff in Tehama-Colusa Canal Authority v. U.S. Dept. of the Interior, et al., Case No. 1:10-cv-0712 OWW DLB, appealed that ruling to the Ninth Circuit Court of Appeals.  We will continue to monitor further developments in the case and provide updates as warranted.

The underlying opinion from which the plaintiff has appealed may be found here.

If you have any questions concerning this topic, please contact Daniel J. O'Hanlon, Hanspeter Walter, or Rebecca R. Akroyd from our office, or the KMTG attorney with whom you normally consult.

Related stories:

• KMTG Legal Alert: Sacramento Valley Farmers Have No Prior Right To Central Valley Project Water Under Area Of Origin Laws
• District Court Rejects Claims to Area of Origin Priority by Tehama-Colusa Canal Authority

KMTG Legal Alert: County Not Liable For Damage From Flooding And Debris

In Gutierrez v. County of San Bernardino (--- Cal.Rptr.3d ----, Cal.App. 4 Dist., August 24, 2011), a court of appeal considered whether property owners stated a claim for inverse condemnation for damage to their properties caused by a second flood after the county installed K-rails to protect residences because a previous flow of water, sediment, and debris had caused substantial damage. The court of appeal held that the property owners did not state a claim for inverse condemnation because the county acted reasonably when it attempted to protect the private property owners from a risk created by nature and the improvement did not expose the “properties to a risk of flooding that did not otherwise exist.”

For a detailed discussion of the facts of this case, and the rationale behind the court's ruling, please see the full KMTG Legal Alert here.

A copy of the court's opinion may be found here.

If you have any questions concerning this topic, please contact Jeffrey L. Massey, William Chisum, or Hanspeter Walter from our office, or the KMTG attorney with whom you normally consult.

Related story: Appellate Court Rejects Homeowners’ Claims For Inverse Condemnation

NRDC Seeks to Stay Injunction of Fall X2 Action Under Delta Smelt Biological Opinion

On September 6, the Natural Resources Defense Council filed a notice of appeal and moved to stay Judge Oliver Wanger’s August 31 order enjoining the federal government from implementing the “Fall X2” measure under the Delta smelt biological opinion.  We previously reported on Judge Wanger’s ruling here.

In papers filed late yesterday, the NRDC appealed the injunction and separately filed a motion to stay its enforcement.  The NRDC’s motion argues that the Court’s August 31 ruling alters the status quo of its final judgment in the case.  The final judgment ruled that the biological opinion was arbitrary and capricious in several important respects and ordered the federal government to prepare a new opinion.  (The judgment has been appealed to the Ninth Circuit.)  The NRDC’s motion also challenges the Court’s findings regarding water supply impacts and argues that the injunction will imperil Delta smelt and its habitat.  The NRDC’s motion may be found here.

The NRDC also filed an application to expedite the hearing on its motion to stay the injunction.  It has requested a hearing at 1:30 p.m. on September 8.  The Court has not ruled on that application or notified the parties when a decision on that application might be rendered.  The NRDC’s application may be found here.

We will provide further updates as warranted.

If you have any questions regarding this matter, please contact Eric Adair, Rebecca Akroyd, Hanspeter Walter, Daniel O’Hanlon, or the KMTG attorney with whom you normally consult.

Related story: 

• Federal District Court Enjoins Water Supply Restrictions Under Delta Smelt Biological Opinion

Related documents: 

• Motion for Stay of Fall X2 Injunction Pending Appeal
• Application for Order Shortening Time to Hear Motion for Stay of All X2 Injunction Pending Appeal

Appellate Court Rejects Homeowners’ Claims For Inverse Condemnation

A recent decision of California's Fourth District Court of Appeal resolved claims for inverse condemnation brought against San Bernardino County by property owners whose homes were destroyed by water, dirt, and debris flowing from nearby mountains. 

The case, Michael T. Gutierrez et al. v. County of San Bernardino, addressed flooding damages caused by intense rains that occurred after a large fire had denuded the upslope area.  After the first significant rains in December 2003 caused debris to flow into the downslope neighborhood, the County placed protective “K-rails” to guide debris away from homes.  Unfortunately, in October 2004, more heavy rainfall occurred and caused more water and debris to flow downward, some of which escaped the confines of the K-rails and damaged homes.  Property owners sued, alleging the County’s installation of the K-rails was responsible for the damage.  The appellate court rejected the claims, finding that the K-rails were not a substantial cause of the damage and that the County would not be held to a strict liability standard, but one of reasonableness, which it had met.  The court found the K-rails were installed under “exigent circumstances” and that “[a]s a matter of public policy and common sense, some protective action should not be discouraged.”  The court also concluded:

Here, installing the K-rails, the County was attempting to protect private property owners from a risk created by nature.  The evidence is clear that the County’s conduct did not create a situation or risk that would not otherwise have been present had it not installed the K-rails.

Given the variable nature of California’s climate and fire cycles, such events are sure to occur again and again.  The case is a good read for agency and private lawyers alike because it addresses and distinguishes several legal standards in inverse condemnation cases, and may help shape future government and private responses to existing risks and future calamities.

A copy of the court's opinion may be found here.

If you have any questions regarding this decision, please contact Hanspeter Walter or the KMTG attorney with whom you normally consult.