The California Supreme Court held a lively oral argument session this morning (May 4, 2016), at 9:00 a.m. in its San Francisco courtroom in the case of Friends of the College of San Mateo Gardens v. San Mateo Community College District (Case No. S214061), which was live streamed for “real time” viewing on the Court’s website. This post attempts to convey a general sense of the Court’s questioning and counsel’s argument in the hour-long session; any mistakes in “translation” are mine, and I apologize for any such errors in advance. (For my prior post briefly describing the case’s facts, legal issues and significance, see “Supreme Court Set to Hear Important CEQA Subsequent Review Case,” by Arthur F. Coon, posted April 26, 2016.)

The questioning at oral argument was dominated by the newest Governor Brown appointees – Associate Justices Kruger, Cuellar and Liu – as well as Associate Justice Werdegar, the current Court’s longest-sitting jurist.

Inquiring of counsel for the petitioner College District, Sabrina Teller, Justice Kruger asked whether, in light of the presumption of finality accorded CEQA review after the time for challenge lapses, it matters how “fulsome” the initial review was, i.e., in terms of a negative declaration versus an EIR. She also inquired (consonant with the issue on which the high Court granted review) whether the College District’s counsel conceded there is a threshold “new project” test where Public Resources Code § 21166 applies and, if so, what criteria would apply to such a test. Ms. Teller responded that there was no such threshold test that could be grounded in the statute or articulated as a matter of law. In response to similar questions from the Chief Justice and others regarding the “fulsomeness” of negative declaration review, Ms. Teller emphasized that negative declarations are subjected to public review and scrutiny, are required by CEQA when an EIR is not, and are not “second class citizens.”

Justice Werdegar inquired whether, if there is “no such thing as morphing into a new project,” a lead agency is free to characterize project changes as a new project “yet a court can never do that?” In response to similar questions from Justice Cuellar about whether the Court should “jettison” Moss v. Humboldt (a case that held as a matter of law that expiration of a tentative map does not convert an identical subdivision proposal into a “new project”), Ms. Teller distinguished Moss on its facts and seemed to indicate that any “internal step” taken by an agency in deciding whether proposed changes amounted to a new project would, if challenged, be subject to deferential substantial evidence review.

Justice Liu – who appears to be enamored with the “fair argument” test, even if not intimately acquainted with its practical consequences – questioned whether Guidelines § 15162 was a “valid, gap-filling” measure, and remarked that its extension of Public Resources Code § 21166’s subsequent review standards to mitigated negative declarations seemed to authorize an “end run” or a “very big loophole” that agencies could potentially exploit.

In response to the Chief Justice’s inquiry whether any case law held that negative declarations and EIRs are “not of equal dignity,” Ms. Teller cited the Benton and Abatti opinions and reiterated that negative declarations “are not second class citizens” under CEQA. In response to Justice Cuellar’s question about whether lead agencies “could take advantage of [a deferential standard of review],” Ms. Teller argued that position impermissibly “presumes bad faith” on the part of agencies and that the reality is that “needs change, land changes hands,” etc., often requiring project changes and modifications after the original approval as a practical matter. She further emphasized that the statute’s proper focus is the “increment of change in the environment” between the already approved project and the changed project, and that if a court could decide the project is “so different” that the agency should go back to a “fair argument” standard, it would likely require the agency to do a subsequent EIR even applying the substantial evidence test to the factors of Public Resources Code § 21166 and CEQA Guidelines § 15162. However, Justice Liu noted such a test “gives agencies more leniency in decision-making.”

Susan Brandt-Hawley, arguing for the respondent Friends group, when asked by Justice Liu whether negative declarations were “second class citizens,” acknowledged that they are “certainly valid” under CEQA, and that 90% of projects may proceed under such documents, but also asserted they are “very different” from EIRs and that “the whole negative declaration process relies on the fact that there is no fair argument [of environmental impact].”

In response to Justice Cuellar’s questioning, she argued that the Lishman decision got the result right, but should have held that Public Resources Code § 21166 did not even apply to negative declarations. Much questioning ensued from the Justices as to whether this argument – which Ms. Brandt-Hawley characterized as being raised “in passing” to the Court of Appeal – had been properly raised and preserved below. Justice Kruger characterized the argument as appearing to be a “substantial shift” from the issue on which the Court had granted review to resolve a split in authority. Ms. Brandt-Hawley further asserted that Lishman was correct in positing a two-part test under § 21166 in which the “new” versus “modified” project question is the threshold inquiry. Regarding the threshold question under such a two-part test, Justice Cuellar pressed: “If you had to write the rule, what would you put in the rule?” Ms. Brandt-Hawley responded with an example she saw as fitting the facts of the instant case; i.e., where the first project is to “save or preserve an environmental asset” and then the subsequent project “destroy[s] it.”

Justices Kruger and Cuellar both questioned the “practical legal differences” between the tests being advocated, with Justice Kruger asking whether proper application of the factors of § 21166 would be sufficient to address any concerns with the adequacy of the initial document. Ms. Brandt-Hawley responded that the statute distinguishes between EIRs and negative declarations, and that there is no presumption of validity for a negative declaration when a “fair argument” is presented.

Justice Liu appeared to toy with the notion that Guidelines § 15162 could be upheld as a “valid, gap-filling measure” while invalidating tits application of the substantial evidence standard of subsequent review in cases where the initial document is a negative declaration. Ms. Brandt-Hawley insisted that Guidelines § 15162 needed to be changed to remove all references to negative declarations, and that the seminal Benton case “created the problem” because it was “incorrect and led to the improper Guidelines language.” She also attempted to cast doubt on the legal validity of the use of “addendums” to EIRs and negative declarations, arguing they were solely a “creation of the Guidelines” and did not provide for a public review process.

Justice Werdegar pressed Ms. Brandt-Hawley on how a “new project” test would be applied (as in this case) to components of a “huge” project: “How do we break it into parts?” When Ms. Brandt-Hawley responded that a new project would be found where there is a “180-degree” change as to a component – i.e., an area previously slated for preservation is to be demolished – Justice Werdegar asked: “What if [that is viewed as] a substantial revision that has new environmental impacts?” In summarizing her position, Ms. Brandt-Hawley repudiated any such “effects based” test, arguing that the “new-project” test she advocated should depend “not [on] the scope of the environmental impacts, but [on] whether [the modified proposal] was within the scope of the earlier EIR.” Stating “I don’t want to say intuitively,” she indicated that her proposed test for a modified project would be satisfied where it is “basically the same project but with a few changes.” The Chief Justice appeared skeptical and remarked: “We would need to define a new test.” In response to Justice Werdegar’s questioning, Ms. Brandt-Hawley confirmed she was, indeed, arguing that whenever a negative declaration is approved or amended – including in the subsequent review context – the “fair argument” standard of review must be applied.

In her rebuttal, Ms. Teller pointed out that even if the challenges to Guidelines § 15162 now being argued by Friends had been preserved, a “clearly unauthorized and erroneous” standard applies to such questions and had not been met. Further, in response to Ms. Brandt-Hawley’s arguments regarding CEQA’s statutory language, she pointed out that Public Resources Code § 21080.1 applies a presumption of finality and conclusiveness to an agency’s determinations on negative declarations as well as EIRs. Ms. Teller pointed out that no court has held the relevant Guidelines sections invalid and indicated there had been much reliance upon them over the years by courts and agencies.

The case is now under submission and a decision is expected to be rendered within 90 days.