CEQA Case Report: Understanding the Judicial Landscape for Development[i]

In an unpublished opinion issued March 26, 2018, Golden Door Properties, LLC v. Vallecitos Water District, the California Court of Appeal affirmed the trial court’s judgment sustaining the Vallecitos Water District’s (District’s) demurrer from Golden Door, LLC’s (Golden Door’s) challenge to two statutory assessments in which the District concluded there is a sufficient water supply for Newland Sierra, LLC’s (Newland’s) proposed residential development (Project) in rural unincorporated San Diego County (County). In summary, the court determined:

  • A Water Supply Assessment issued by a water district in conjunction with a project’s CEQA review process is not independently reviewable and may only be challenged as part of a final EIR.
  • Challenges to a rescinded Water Verification are moot if there is uncertainty about whether particular dispute will recur and, in any case, will not evade review.

Background for Appeal

As part of its lead agency review under CEQA, the County requested the District to prepare a Water Supply Assessment (WSA) and a Water Supply Verification (WSV) for the Project. After the District prepared these assessments as a single combined document, Golden Door filed a writ of mandate petition and complaint, requesting the superior court declare the WSV invalid because it was inconsistent with the District’s general water planning documents and contained flawed analysis. In response, the District rescinded the combined document and reissued the document solely as a WSA. Golden Door amended its complaint, asserting similar challenges against the WSA, and requested that the court address its challenges to the WSV as an exception to the mootness doctrine. The court sustained the District’s demurrer without leave to amend on grounds of lack of finality, failure to exhaust remedies, and mootness. Golden Door appealed.

Water Supply Assessment Must Be Challenged as Part of Final EIR

Golden Door argued that the WSA was inadequate and inconsistent with the District’s general water planning documents. Under CEQA, a lead agency is responsible for requesting a WSA from the applicable water supplier before approving a project. The WSA is required to evaluate whether the total water supplies during a 20-year period will meet the projected water demand for a proposed project. While the lead agency must include the WSA in the environmental impact report (EIR), the lead agency is not required to accept the WSA’s conclusions. In evaluating the WSA, the lead agency may accept or disagree with the water supplier’s analysis and make an ultimate determination whether water supplies are sufficient based on the entire record.

Here, the County, as lead agency, had the opportunity to review and disagree with the District’s findings in the WSA. Citing California Water Impact Network v. Newhall County Water Dist. (2008) 161 Cal.App.4th 1464, the court found that, because the WSA was an interlocutory and preliminary step in the EIR process, it was not currently subject to judicial review. Instead, the court held that Golden Door must wait for the County to issue its final EIR before challenging the inadequacy of the WSA.

Golden Door argued that the court should allow its challenge because the WSA constituted a de facto amendment of the applicable District-wide water management plan. However, the court found that the WSA does not create a right or entitlement to water service. Instead, the WSA is solely an informational report for use in the CEQA process, and as such, did not constitute an amendment or authorize the District to take any other action.

Golden Door also argued that the WSA was reviewable because the County did not intend to reexamine or change its findings. Golden Door relied on statements made by County representatives and the County’s draft EIR as evidence that the County would likely not change or independently evaluate the WSA. The court found that even assuming that the County did not intend to evaluate the WSA independently, the court would not preclude Golden Door from later challenging the County’s acceptance of a flawed WSA report in the final EIR. Therefore, because the County had not yet reviewed the WSA or issued a final EIR incorporating the WSA, Golden Door had not yet exhausted their remedies under CEQA and the issue was not ripe for adjudication.

Challenges to the WSV Were Moot

Golden Door argued that the court should address its challenges to the rescinded WSV as an exception to the mootness doctrine, because the dispute was highly likely to recur. Specifically, because the reissued WSA was virtually identical to the rescinded WSV, Golden Door argued that its challenges were not moot and would have to be relitigated in the future, as a WSV is required for the Project. However, the court found that because the County had the power to review and disagree with the information presented in the WSA, it was speculative that the dispute would in fact recur. Finally, because Golden Door would have the opportunity to challenge the WSA as incorporated in a final EIR and the Project could not go forward without the District issuing a challengeable WSV, the court found that the issue would not evade review. Therefore, the controversy regarding the rescinded WSV was moot.

Disposition

Accordingly, the court affirmed the trial court’s judgment. The District’s WSA was not reviewable separate from a final EIR.

  • Opinion by Acting Presiding Justice Haller, Justice Nares and Justice O’Rourke concurring.
  • Trial Court: Superior Court of San Diego County, Judge Ronald Frazier.
  • Counsel:
    • Latham & Watkins, Christopher W. Garrett, Taiga Takahashi, for Plaintiff and Appellant.
    • Law Offices of Scott & Jackson, Jeffrey G. Scott for defendant and respondent.
    • Thomas E. Montgomery, County Counsel, Claudia G. Silva, Assistant County Counsel, for real party in interest and respondent the County of San Diego.
    • Gatzke Dillon & Balance, Mark J. Dillon, Michael P. Masterson, David Hubbard for real party in interest, and respondent Newland Sierra, LLC.