BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
AB 320 (Hill)
As Amended June 14, 2011
Hearing Date: June 28, 2011
Fiscal: Yes
Urgency: No
BCP
SUBJECT
California Environmental Quality Act (CEQA): Dispute
DESCRIPTION
Existing law requires a petitioner or plaintiff to name, as a
real party in interest, any recipient of an approval that is the
subject of an action or proceeding brought pursuant to the
California Environmental Quality Act (CEQA).
This bill would, instead, require the petitioner or plaintiff to
name, as a real party in interest, the person or persons
identified in the notice of determination or notice of exemption
filed by the public agency, as specified. This bill would
require those notices to include the person, as referenced in
the definition of the project at-issue, who is undertaking the
activity that receives financial assistance from a public
agency, or receiving a lease, permit, license, certificate, or
other entitlement of use from a public agency.
BACKGROUND
Enacted in 1970, the California Environmental Quality Act
requires state and local agencies to follow a set protocol to
disclose and evaluate the significant environmental impacts of
proposed projects and adopt feasible measures to mitigate those
impacts. CEQA itself applies to "projects" undertaken or
requiring approval by state and local agencies, and, if more
than one agency is involved, CEQA requires one of the agencies
to be the "lead agency." The subsequent environmental review
process required by CEQA consists of: (1) determining if the
activity is a project; (2) determining if the project is exempt
(more)
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from CEQA; and (3) performing an initial study to identify the
environmental impacts and, depending on the findings, prepare a
Negative Declaration (no significant impacts), Mitigated
Negative Declaration (significant impacts but project is revised
to avoid or mitigate those impacts), or an Environmental Impact
Report (significant impacts).
To enforce the requirements of CEQA, a civil action may be
brought under several code sections to attack, review, set
aside, void or annul the acts or decisions of a public agency
for noncompliance with CEQA. In that action, existing law
requires the plaintiff or petitioner to name and serve, as a
real party in interest, any "recipient of an approval" that is
the subject of the action or proceeding. Failure to name
potential parties, other than the recipients of an approval, is
not ground for dismissal pursuant to the Code of Civil Procedure
section relating to necessary and indispensible parties. Since
those actions must generally be filed within 30 days after
approval of a project, failure to name a recipient of approval
that is a necessary and indispensable party within that 30 day
period may result in dismissal of the action. (See County of
Imperial v. Superior Court (2007) 152 Cal.App.4th 13, 40.)
This bill would clarify the persons who must be named as a real
party in interest in complaints for specified violations of CEQA
by removing reference to "any recipient of approval," and,
instead, require a petitioner or plaintiff to name, as a real
party in interest, any person or persons identified by the
public agency in its notice of determination, or notice of
exemption, that is filed with the Office of Planning and
Research. This bill would require those notices to list the
person or persons whose activity fell under the definition of
"project." If no notice is filed, the petitioner or plaintiff
shall name the same persons that are reflected in the agency's
record of proceedings for the project, as specified.
This bill was approved by the Senate Environmental Quality
Committee on June 20, 2011.
CHANGES TO EXISTING LAW
Existing law , the California Environmental Quality Act (CEQA),
requires a notice of determination (NOD) to be filed by a state
or local agency approving or determining to carry out a project
that is subject to CEQA, and authorizes a notice of exemption
(NOE) to be filed by a state or local agency approving or
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determining to carry out a project that is not subject to CEQA.
State agencies file the notices with the Office of Planning and
Research and local agencies file notices with the county clerk.
(Pub. Res. Code Secs. 21108, 21152).
Existing law requires a petitioner or plaintiff to name, as a
real party in interest, any recipient of an approval that is the
subject of an action or proceeding brought pursuant to certain
provisions of CEQA, and to serve the petition or complaint on
that real party in interest no later than 20 business days
following service of the petition or complaint on the public
agency. (Pub. Res. Code Sec. 21167.6.5 (a).)
Existing law provides that failure to name potential parties,
other than those real parties in interest identified above, is
not grounds for dismissal. (Pub. Res. Code Sec. 21167.6.5(d).)
Existing law defines "project" to be an activity that may cause
either a direct physical change in the environment or a
reasonably foreseeable indirect physical change in the
environment and that is any of the following: a) an activity
directly undertaken by any public agency; b) an activity
undertaken by a person that is supported by certain sources from
one or more public agencies; or c) an activity involving the
issuance to a person of a lease, permit, license, certificate,
or other entitlement for use by one or more public agencies.
(Pub. Res. Code Sec. 21065.)
This bill requires the person or persons referenced in the
definition of project, as reflected in the agency's record of
proceedings, to be identified in a NOD or NOE.
This bill requires the petitioner or plaintiff to name, as real
party in interest, the person or persons (rather than recipients
of approval) identified in its NOD or NOE or, if no notice is
filed, the person or persons referenced in the definition of
"project," as reflected in the agency's record of proceedings.
This bill clarifies that failure to name potential "persons"
(rather than "parties"), other than those real parties in
interest identified above, is not grounds for dismissal.
This bill provides that the above amendments do not apply to a
proceeding for judicial review filed pursuant to certain CEQA
requirements and pending on or before December 31, 2011, or to
an action for which a NOD or NOE was filed on or before December
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31, 2011, and the applicable law in effect on that date shall
continue to apply to that proceeding.
This bill would make other technical, clarifying changes.
COMMENT
1. Stated need for the bill
According to the author:
The main thrust of this bill is to prevent groups and
individuals from being dragged into lawsuits in which they
Ýdo not] want any part. The naming of a "recipient of
approval" does not simply mean that this party gets a letter
in the mail explaining the situation. These groups or
individuals, pursuant to Section 21167.8, are to meet, and
failure to do so may result in sanctions by the court.
These groups, such as landowners who had agreed to sell
contingent on project approval, will not in actuality need
to prepare a legal defense, as they will be dismissed, not
needing or wanting to be a party to the proceeding. This is
a pointless exercise resulting from both the 2007 case and
the inability of previous versions of this bill to get a
Governor's signature. Within this question of who should be
named is the oft-neglected question of who shouldn't be
named.
2. Real parties in interest
This bill seeks to clarify the parties that must be named in a
CEQA action as real parties in interest. Under existing law,
the petitioner or plaintiff must name, as a real party in
interest, any recipient of an approval, which the author notes
has never been defined and was the source of confusion in the
case discussed below. Failure to name a recipient that is later
found to be a necessary and indispensable party could result in
the dismissal of the action. This bill seeks to clarify the
issue by striking "recipient of an approval," and instead
require the naming of the person or persons specifically
identified by the public agency in their filed notice of
determination or exemption, as specified.
a. County of Imperial v. Superior Court
As noted above, petitioner or plaintiffs must name "any
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recipient of an approval" as a real party in interest in a
CEQA action. Existing law provides that failure to name
potential parties, other than a recipient of an approval, is
not grounds for dismissal under Section 389 of the Code of
Civil Procedure. That section, concerning necessary and
indispensable parties, requires the joinder of a person if:
(1) in his or her absence, complete relief cannot be accorded;
or (2) the person claims an interest relating to the subject
of the action and his or her absence may impair or impede his
or her ability to protect that interest, or, leave any of the
current parties subject to a substantial risk of incurring
inconsistent obligations. If the person cannot be made a
party, the court must determine whether to proceed, or,
dismiss the action without prejudice because the absent person
is "indispensable." This bill seeks to respond to the
arguable lack of clarity as to the "recipient of approval" by
providing a bright-line rule as to which persons must be named
in the CEQA complaint (which must be filed within 30 days of
specified actions by a public agency). The author further
asserts: "The ambiguity . . . lies in the fact that the real
party in interest is described as a 'recipient of approval.'
Who counts as a recipient of approval? This Ýis] the
deficiency that was exposed in the 2007 case of County of
Imperial v Superior Court . . ."
In that case, the Court of Appeal, Third Appellate District,
upheld the trial court's holding that two water districts
(Metropolitan and Coachella) were "recipients of approval" and
that the County of Imperial failed to add them as
indispensable parties within the limitations period. The
court noted that:
In comments before the Board at the time of the protest
dismissal, Metropolitan argued the Board would not be
considering approval of any action by Metropolitan or
Coachella . . . After withdrawing their protests before
the Board, Metropolitan and Coachella ceased
participating in the Board proceeding. Neither party
submitted any briefing or exhibits, nor did either party
participate in the Board's public hearing. County of
Imperial v. Superior Court (2007) 152 Cal.App.4th at
22-23.
Despite lack of participation, the court of appeal agreed with
the trial court that the two water districts were "recipients
of approval," indispensible parties, and that "Ýt]he trial
court carefully balanced the various factors and determined,
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on balance, that equity was best served by dismissing the
action for failure to name Coachella and Metropolitan." (Id.
at 14.) By removing references to "recipients of approval,"
and, instead, requiring specified persons to be named as real
parties in interest, the provisions of this bill would appear
to provide a definite list of persons who must be named as
real parties in interest under CEQA.
From a policy standpoint, it appears preferable to provide as
much certainty as possible to plaintiffs regarding who is
required to be named under CEQA. A coalition of environmental
organizations, in support, assert that:
To prevent important cases from being dismissed, CEQA
practitioners are forced to over-name and serve parties
who might or might not be considered indispensable to
ensure they have not missed anyone. In some cases,
project proponents use project managers who are
designated as the "project applicant" but are not always
the actual recipient of approval. This practice makes it
extremely difficult, even for those who participated in
the CEQA process, to know who must be included in a CEQA
lawsuit. . . . AB 320 is an extremely important and
common sense measure which will help bring clarity to the
question of which parties must be named in CEQA
litigation.
b. Persons identified by the public agency
To provide certainty as to who must be named as a real party
in interest, this bill would remove the requirement to name
"any recipient of an approval," and instead, require the
plaintiff or petitioner to name the person or persons
identified by the public agency in its filed notice, or, if no
notice is filed, the persons reflected in the agencies record
of proceedings for the project. Those notices are required to
be filed, under existing law, with the Office of Planning and
Research when a state or local agency approves or determines
to carry out a project, or, determines that the project is
exempt from CEQA. This bill would, in turn, require those
notices to identify the person, as used in the definition of
"project," that either (a) undertakes the activity that
receives financial assistance from the public agency, or (b)
receives a lease, permit, license, certificate, or other
entitlement of use from the public agency.
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Stated another way, the first determination under CEQA is
whether an activity is a project. "Project" is defined under
CEQA as meaning an activity which may cause either a direct
physical change in the environment, or a reasonably
foreseeable indirect physical change in the environment, and
which is any of the following: (1) an activity directly
undertaken by any public agency; (2) an activity undertaken by
a person which is supported, in whole or in part, through
contracts, grants, subsidies, loans, or other forms of
assistance from one or more public agencies; or (3) an
activity that involves the issuance to a person of a lease,
permit, license, certificate, or other entitlement for use by
one or more public agencies. This bill would require a public
agency to identify the person or persons, as that term is used
in the definition of project and reflected in the agency's
record of proceedings, in the filed notice of determination or
notice of exception. A plaintiff or petitioner who files an
action under CEQA would then be required to name the person or
persons identified by the public agency as a real party in
interest. As a result of those changes, this bill would
provide plaintiffs with a definite list of individuals who
must be named in the complaint. Although this would place an
additional obligation on public agencies due to the
requirement that the person be named in the filed notice (and
reflected in the proceedings), it would appear to provide a
bright-line rule as to the person that must be named in these
CEQA suits. Additionally, since the person is the individual
that caused the activity to be defined as a "project," thus
triggering CEQA, it appears appropriate to require them to be
named as a real party in interest.
The Association of California Water Agencies (ACWA), in
support, further note that "ACWA members have in recent years
been sued unnecessarily because, out of caution, the
plaintiffs cast the 'real party in interest' net too broadly
in a CEQA complaint. Being required to designate the approval
recipients early in the CEQA process would impose additional
burden on CEQA lead agencies; but we believe the benefits of
transparency and certainty for the CEQA process and possible
subsequent litigation could outweigh this burden."
3. Opposition's arguments
The American Council of Engineering Companies of California
(ACEC California), in opposition, states that they "do not
believe that AB 320 is a viable solution to the problem, if in
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fact it's even a real problem, to impose joinder and service
obligations on plaintiffs and petitioners in CEQA review
actions. We do not believe that it is fair or appropriate to
shift the burden of determining who is to be named and served in
the lawsuit from the plaintiff or petitioner to the public
agencies. . . . ÝW]e believe there is a basic unfairness in
omitting from the service provisions for CEQA review actions
some of the real parties in interest whose rights will be
affected in the section." That opposition letter, dated March
30, 2011, referred to a similar but substantively different
version of AB 320 that would have required the public agency to
actually name the recipient of their approval.
In response to the above concerns, the author asserts:
The philosophical problem is, given that the law does not
define the term 'recipient of approval,' it is not the
petitioner but the court which determines who is to be
named, and the court can only make that determination after
the naming has taken place. This rolling of the dice may
appear to induce uncertainty into the petitioner's case and
serve as barrier to the introduction of CEQA lawsuits, but
adding names to a list is no barrier at all.
This bill in no way limits a company's ability to intervene
in a case it wants to be in, though it does limit a
company's "right" . . . be dragged into a proceeding where
it would rather not.
4. No interference with pending litigation
To ensure that the changes made by AB 320 (Hill) will not impact
pending CEQA litigation, this bill would provide that the
changes regarding naming real parties in interest shall not
apply in a proceeding for judicial review that is pending on or
before December 31, 2011, or to an action or proceeding that
seeks to attack, review, void, or set aside an act or decision
of a public agency for which a notice of determination or notice
of exemption was filed on or before December 31, 2011. This
bill would further provide that for those cases, applicable law
in effect on December 31, 2011 shall continue to apply to those
proceedings.
5. Prior attempts to address this issue
Several different versions of the present proposal have been
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approved by the Legislature but subsequently vetoed. Most
recently, AB 499 (Hill, 2009) would have required the notice of
determination or exception to name the recipient of approval,
defined "recipient of approval," and clarified the dismissal
provisions. In vetoing that bill, Governor Schwarzenegger
stated:
This bill makes several changes to the California
Environmental Quality Act (CEQA) under the guise of CEQA
streamlining. Unfortunately, it appears to simply be a
back-door attempt to lessen the legal requirements for those
who seek to challenge projects under CEQA.
Current CEQA law requires the dismissal of a lawsuit if the
plaintiff fails to name a real party in interest. This bill
eliminates that dismissal and instead requires the court to
grant the petitioner additional time to find a real party in
interest and give them notice. By doing so, it gives
plaintiffs multiple bites at the apple to file CEQA
lawsuits.
The bill also requires a lead agency to list only the
project applicant in its notice. I vetoed a similar bill in
2008 due to my concerns that it placed upon the lead agency
a new liability for actions not directly related to its
review of a project. Additionally, simply listing the
project applicant omits other parties who may have legal
standing and could infringe upon their constitutional right
to due process.
A related bill by Senator Kuehl, SB 68 (2008), was vetoed by
Governor Schwarzenegger due to concerns that:
This bill would shift responsibility to lead agencies, under
the California Environmental Quality Act (CEQA), for
determining the real parties in interest in a potential
legal challenge to a CEQA decision.
Under current law, the phrase "real party in interest" in a
CEQA appeal is described as "any recipient of an approval."
This bill is meant to indirectly address this ambiguity, but
it falls short of doing so because it provides no
clarification on the meaning of the phrase and is unclear as
to how lead agencies would comply with the requirements of
this bill.
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Rather than resolving this ongoing issue, this bill places
upon the lead agency a new liability for actions not
directly related to its review of a project.
Support : Association of California Water Agencies; California
League of Conservation Voters; California State Parks
Foundation; California Native Plant Society; Clean Water Action;
Environmental Defense Fund; Natural Resources Defense Council;
Planning and Conservation League; Sierra Club California
Opposition : American Council of Engineering Companies of
California
HISTORY
Source : Author
Related Pending Legislation : None Known
Prior Legislation :
AB 499 (Hill, 2009), See Comment 5.
SB 68 (Kuehl, 2008), See Comment 5.
Prior Vote :
Senate Committee on Environmental Quality (Ayes 4, Noes 1)
Assembly Floor (Ayes 46, Noes 27)
Assembly Appropriations Committee (Ayes 12, Noes 5)
Assembly Judiciary Committee (Ayes 6, Noes 4)
Assembly Natural Resources Committee (Ayes 6, Noes 3)
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