On May 7, 2015, the Sixth District Court of Appeal filed a published opinion addressing numerous issues of interest under CEQA’s “fair argument” test for preparing an Environmental Impact Report (“EIR”). Keep Our Mountains Quiet v. County of Santa Clara (Candice Clark Wozniak, as Trustee, Real Party in Interest) (6th Dist. 2015) __ Cal.App.4th __, 2015 WL 2152905.

The Project, the Litigation And Key Issues

The Project at issue was a use permit issued by the County of Santa Clara (“County”) allowing Candice Clark Wozniak, a former wife of Apple co-founder Steve Wozniak and trustee of the Candice Clark Wozniak Trust (the “Trust”), to host a limited number of weddings and other events (28 per year for 100 guests) on a 14.46-acre tract of land in the Santa Cruz Mountains (the “Property”). The Property, which contains vineyards, llama/alpaca grazing lands, barns, and Ms. Wozniak’s residence, is located adjacent to an Open Space Preserve owned by the Midpeninsula Regional Open Space District (“Midpeninsula”) and otherwise surrounded by large (over two acres) heavily wooded lots containing single family residences. Following a 2 ½ year history of neighbor complaints and County enforcement activity regarding unpermitted weddings and other events using amplified sound on the Property, Wozniak applied to the County for the necessary use permit in late 2008.

After a 3-year study period, County adopted a mitigated negative declaration (“MND”) and approved the Project. Following the administrative proceedings, an unincorporated association of neighbors calling itself “Keep Our Mountains Quiet” (the “Association”) filed a petition for writ of mandate seeking to require County to prepare an EIR. The trial court granted the petition, and the Court of Appeal affirmed that decision, as well as the trial court’s order awarding the Association part of its attorneys’ fees (with no multiplier) under the “private attorney general” statute (Code Civ. Proc., § 1021.5).

Key issues addressed by the opinion include whether evidence showing a project complies with noise levels established by a local noise ordinance precludes a “fair argument” of significant noise impacts for CEQA purposes, and whether non-expert factual evidence proffered by project area residents can support a “fair argument” that significant noise and traffic safety impacts may occur. On these questions, the Court of Appeal held that (1) compliance with a noise ordinance does not foreclose a fair argument of significant noise impacts under CEQA, and (2) factual non-expert evidence can form the basis for a fair argument with respect to noise and traffic safety impacts.

Relevant Regulatory Provisions And Evidence On The Project’s Noise Impacts

The County’s noise ordinance prohibited creating noise at levels of over 70 dBA (or exceeding 50 dBA for more than 30 minutes per hour) as measured on neighboring properties between the hours of 7 a.m. and 10 p.m. in residential areas. Wozniak’s sound consultant (“Rosen”) analyzed sound generated by three 2006 events measured near the Property line in the direction of nearby homes. Rosen concluded the noise ordinance standards were not exceeded.

County’s “peer review” sound consultant (“Pack”) opined that Rosen’s chosen monitoring locations were “topographically shielded,” and that Rosen failed to consider numerous material acoustical factors. Pack was “unable to concur that the events … unequivocally do not generate any significant noise impacts.” Pack opined that live bands and DJs typically play at 85-88 dBA Leq (average) at 20 feet from the stage and speakers, and recommended additional noise analyses of mock or real events typical of a wedding, including measuring noise levels during such events at potentially affected residences, Pack conducted a mock event where a music CD was played at an average of only 82 dBA at 20 feet from the speakers, the volume having been turned down from 85 dBA for unclear reasons, but which the Court noted that some record evidence (an email from the County commenting on a draft report) suggested may have been because of Wozniak’s own direction to turn down the music during the mock event test. Pack opined the mock event music was inaudible as measured at the three monitored homes. It did not measure crowd noise, although its “raw data showed noise at the Open Space Preserve’s property line reached a maximum of 70.1 dBA during the mock event.” Pack concluded “sound levels would likely comply with the Santa Clara County and Santa Cruz County noise standards, [but] they would be noticeable at times.”

The Association’s sound consultant criticized Pack for not playing the music at the mock event at the 85 to 88 dBA Pack had “characterized as typical … in its peer review,” suggested “the mock event was unrealistically quiet,” and “opined that the County’s noise requirements for the Open Space Preserve would have been exceeded had the music been played louder, at 88 dBA.”

Project neighbors submitted comments at the planning commission hearings on the project and by declaration and letter. In reference to unpermitted 2006 events, they “described hearing “pounding music, shouted announcements, celebratory screams, hoots, cheers, and clapping,”” stated event noise was “quite audible in our closed house, with the hollers of the crowd soaring above and the throbbing bass notes reaching below any noise (such as the TV) we tried to employ to cover it[,]” and stated “lower frequencies from the amplified music, public address system and crowd penetrated the walls and windows of our home with such intensity that we could feel the resulting vibrations while sitting in our family room … or lying in bed.” The neighbors claimed the mock event was not representative, and one neighboring couple stated noise from a 2010 event – set up exactly the same way that the permit required – generated excessive noise including “pounding music and loud cheers” that led them to call the sheriff.

Midpeninsula expressed concerns about noise impacts on open space area visitors and wildlife, noting studies documented mountain lion and bobcats were present in the area and could be negatively affected by the amplified sound.

Evidence On The Project’s Traffic Impacts

Regarding potential traffic impacts, Wozniak’s traffic consultant (“Hexagon”) opined no additional eastbound left turn pocket from Summit Road to the project driveway would be needed due to the road’s low traffic volume, but Caltrans expressed concerns over potentially significant effects and requested more data and analysis. Hexagon’s supplemental report explained Summit Road carries less than 400 vehicles per day on weekends, and opined the Project would add 43 vehicles during the peak event hour (which it deemed to be 5 p.m., despite the use permit’s authorization of events between 2 p.m. and 10 p.m.) and 35 peak-hour vehicles to the Summit Road/Highway 17 interchange.

The Association’s traffic consultant (“Jeffery”) conducted a peer-review and criticized Hexagon’s failure to discuss Summit Road’s narrow, curvy conditions, the Project’s skewed driveway configuration, and limited sight distance issues at the roadway/driveway junction which raised safety concerns. Caltrans accepted Hexagon’s traffic volume figures, but expressed safety concerns based on Summit Road’s “accident history that is twice the statewide average” and how conditions could be exacerbated by the driveway and alcohol use.

Nearby residents expressed concerns about traffic impacts at the planning commission hearings and by declaration and letter, pointing out dozens of blind curves along the routes to the Property, that Summit Road had no graded or paved shoulders and is only 9 feet six inches wide at one point, and that joggers, cyclists and dog walkers frequent the road near the Property.

The Court of Appeal’s Application Of The “Fair Argument” Test

The Court of Appeal observed that CEQA provides no “ironclad definition” of what constitutes a significant effect and that “[i]f there is disagreement among expert opinion supported by facts …. the Lead Agency shall treat the effect as significant and shall prepare an EIR” (citing 14 Cal. Code Regs., § 15064(b), (g)). It reviewed and recited the applicable “fair argument” standard: “An EIR is required whenever ‘”substantial evidence in the record supports a “fair argument” significant impacts or effects may occur.’”” (Quoting City of Arcadia v. State Water Resources Control Bd. (2006) 135 Cal.App.4th 1392, 1421.) A MND is permitted only “if ‘the initial study identified potential significant effects on the environment but revisions in the project plans “would avoid or mitigate the effects to a point where clearly no significant effect on the environment would occur” and there is no substantial evidence that the project as revised may have a significant effect on the environment ….’”” (Quoting Architectural Heritage Assn. v. County of Monterey (2004) 122 Cal.App.4th 1095, 1101.)

In applying these principles, the Court stated the following key holdings and conclusions:

  • “Relevant personal observations of area residents on nontechnical subjects may qualify as substantial evidence.” (Pocket Protectors v. City of Sacramento (2004) 124 Cal.App.4th 903, 928.) “For example, an adjacent property owner may testify to traffic conditions based upon personal knowledge.” (Citizens Assn. for Sensible Development of Bishop Area v. County of Inyo (1985) 172 Cal.App.3d 151, 173.)
  • Because substantial evidence includes “reasonable assumptions predicated upon facts” (Guidelines, § 15384, [(b)]) and “reasonable inferences” … from the facts, factual testimony about existing environmental conditions can form the basis for substantial evidence.” (Citing § 15384; Banker’s Hill, Hillcrest, Park West Community Preservation Group v. City of San Diego (2006) 139 Cal.App.4th 249, 274; Taxpayers for Accountable School Bond Spending v. San Diego Unified School Dist. (2013) 215 Cal.App.4th 1013, 1054.)
  • In a footnote, the Court recognized that “testimony about current conditions is not proof of what impacts a future project may have [,]” but also noted that is not the relevant inquiry in this context under CEQA: … “[T]he question is not whether [citizen testimony] constitutes proof that [particular effects] will occur,” but whether it (or reasonable inferences from it) “constitutes substantial, credible evidence that supports a fair argument that … [the project] may have a significant impact on the environment.” (Rominger v. County of Colusa (2014) 229 Cal.App.4th 690, 721 ….) …[F]actual testimony about existing environmental conditions can form the basis for substantial evidence supporting a fair argument that significant impacts or effects may” (Emph. in orig.)
  • While “[t]he County employed the noise standards set forth in its noise ordinance and General Plan as the thresholds for significant noise exposure, deeming any increase to be insignificant so long as the absolute noise did not exceed those standards[,]” the Court found the “weight of authority” under CEQA to be contrary to this position. It held that “an EIR is required if substantial evidence supports a fair argument that the Project may have significant unmitigated noise impacts, even if other evidence shows the Project will not generate noise in excess of the County’s noise ordinance and General Plan.” (Citing numerous cases.) The Court stated that a “lead agency should consider both the increase in noise level and the absolute noise level associated with a project.”
  • Applying these principles, the Court held that in the case before it residents’ statements constituted substantial evidence supporting a fair argument in numerous areas. Statements that an actual wedding event conducted under conditions that matched the use permit’s standards produced audible noise impacts (“pounding music”) “cast doubt on whether the mock event was representative of a real wedding featuring DJ entertainment and constitutes substantial evidence supporting a fair argument …” Likewise, Pack’s opinion that live music noise “would be 10 dB louder than a DJ at neighboring residences”, “noticeable,” and would “likely” comply with noise standards, combined with the residents’ “comments as to the volume of a DJ event at their home” supported the same conclusion as to live band noise impacts. A fair argument that significant noise impacts would result from crowd noise was also made, based on the testimony of numerous residents reporting crowd noise from events Wozniak had represented were typically attended by 100 people (the use permit’s attendee limit).
  • The evidence that mountain lions and bobcats live in the Open Space Preserve and that noise may negatively affect them, combined with evidence that the mock event caused noise levels at the Property line with the Preserve to reach 70.1 dBA, supported a reasonable inference that the Project may have significant effects on biological resources. (By contrast, no substantial evidence supported a fair argument of significant noise impacts on Preserve visitors, as no trails have yet been established and no evidence showed how many permit-only visitors the Preserve actually has or how close they may get to the Property; CEQA “focus[es] on impacts to the existing environment, not hypothetical situations.”)
  • The Court likewise concluded that record evidence showing “the Project will — at times — double traffic volume on a narrow, windy, substandard road with a history of accidents” supported a fair argument that the Project may have significant traffic safety impacts by “substantially increas[ing] existing design feature -related hazards”. Hexagon’s report showed traffic volumes would more than double during hours when the Project’s guests would arrive and depart, and neighbors and the Association’s expert offered testimony that “related facts about road conditions based upon their personal knowledge.” Such facts indicated “design-feature related hazards … on Summit Road in the vicinity of the Property, including stretches … narrower than the standard 24 feet wide (and absence of centerline striping in those stretches), a lack of graded or paved shoulders, and more than 30 blind curves” as well as “one location [on the road that is] … only nine feet six inches wide.” According to the Court: “County [thus] abused its discretion in failing to require an EIR addressing the potentially significant traffic impact of the Project.”

The Court’s Attorneys’ Fees Rulings

The Court also affirmed the trial court’s award of CCP § 1021.5 attorneys’ fees – consisting of a reduced lodestar with no multiplier – as within its discretion. It rejected the Trust’s contention that the “significant benefit” and “financial burden” criteria for a fee award under the statute were not met. Regarding the former, it cited numerous cases and stated: “In the CEQA context, courts have held that actions requiring a governmental agency to analyze or reassess environmental impacts associated with a proposed project confer a significant benefit.” Whether or not the County ultimately performed any additional studies and regardless of the fact that the Project might be re-approved without modification, “[t]he significant benefit justifying an award of fees is the proper assessment of the environmental impacts associated with the Project.” (Citing River Watch v. County of San Diego Dept. of Environmental Health (2009) 175 Cal.App.4th 768, 781.)

As to the “financial burden” element, the Court held the trial court did not abuse its discretion in finding it was satisfied since any financial benefits the neighbors may have obtained from the litigation were indirect (in that changes to the Project “were by no means guaranteed”) and largely speculative in amount (“[n]o evidence was submitted attempting to quantify any potential property value reductions”). With respect to this last conclusion, the Court’s analysis was cursory and appears questionable, as it did not discuss, among other things, the impact of the burden of proof being on the fee claimant; nor did it discuss or distinguish the numerous published cases holding that plaintiffs litigating under CEQA and other statutes to halt a project to prevent its perceived adverse impact on their property values fail to meet this element, at least where they do not spend disproportionately to their individual pecuniary interest in the matter.

In rejecting the Association’s claim that “the contingency nature of the case” required a multiplier, the Court upheld the trial court’s exercise of discretion to deny a multiplier based on its reasoning that “[n]o multiplier is justified here where Petitioner’s counsel took the case only on a partial contingent basis, [Petitioner’s counsel’s billing rate] already reflects the specialized nature of CEQA litigation[,] and the full risk of contingency litigation was never present.” Per the Court of Appeal: “A trial court is not required to include a fee enhancement to the basic lodestar figure for contingent risk” and the trial judge was in the best position to make such a discretionary determination. (Citing Ketchum v. Moses (2001) 24 Cal.4th 1122, 1138; PLCM Group, Inc. v. Drexler (2000) 22 Cal.4th 1084, 1095.)

Key Takeaways

While credible and relevant qualified expert opinion, supported by fact, is sufficient to support a fair argument that a project may have a significant environmental impact, the Court of Appeal’s opinion serves as a good illustration that it isn’t always necessary. In non-technical areas, fact-based testimony and observations of existing environmental conditions by project area residents can also provide the basis for a fair argument that will compel preparation of an EIR. This can be the case, for example, in impact areas such as noise, traffic safety, aesthetics, and parking. As Bob Dylan famously sang, “You don’t need a weatherman to know which way the wind blows.”