Creed V. City of San Diego: A Case of Mistaken Identity?

Creed V. City of San Diego: A Case of Mistaken Identity?

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It is no great insight to say that the entire land use community is keenly focused on

the variety of issues concerning the analysis of greenhouse gas (GHG) emissions under the
California Environmental Quality Act (CEQA). Even the tiniest morsels of new information
are eagerly devoured. Take, for example, the recently published decision by Division One
of the Fourth District Court of Appeal in the case of CREED v. City of San Diego (Case No.
D057524, pub. order 6/10/11). Many observers are pointing to this decision as an important pro-
development victory. Maybe. Maybe not.

In the authors’ view, although much of the discussion of the CREED decision thus far has
centered on GHG emissions issues, the decision ultimately does very little to help us with GHG
emissions analysis under CEQA. Instead, the lasting impact of the CREED decision will be its
application of the “exhaustion of administrative remedies” doctrine.

To begin, we provide a brief primer on the “exhaustion of administrative remedies”
doctrine. Any petitioner who seeks to legally challenge a local agency act or decision under
CEQA (and in land use law generally) must first present their specific legal claim to that local
agency to give the agency an opportunity to address and resolve the claim prior to judicial
review; the decision-making body is entitled to respond to objections and correct errors
before the courts intervene. If an administrative appeal is available, it too must be pursued to
conclusion. This “exhaustion” requirement is fundamental and jurisdictional: if a petitioner does
not properly exhaust, the court lacks jurisdiction and therefore must dismiss the claim.

In CREED, the City Council certified an environmental impact report (EIR) in 1994 for
a 664.8-acre mixed-use development consisting of more than 4,000 dwelling units allocated
among several planning areas. In 2008, the developer applied to the City for the approval of a
portion of one of the last planning areas to be developed. Because the City already had certified
an EIR for the project, the City utilized a process under CEQA that allowed it to update the EIR
with an “Addendum” as its environmental review of the 2008 project. (Pub. Res. Code § 21166;
14 C.C.R. § 15164.)

As required by CEQA, in October 2008 the City published a notice that the Addendum
and EIR were available for public review. One month later, the Planning Commission had
a public hearing on the project and its environmental review, and recommended approval to
the City Council. In January 2009, the City Council held its public hearing. According to the
Court in its published decision, CREED submitted a “cursory letter” to the City Clerk urging the
City Council not to approve the project on various grounds, including the claim that the project
would “cause direct and indirect greenhouse-gas emissions that, when considered cumulatively,
are significant.”

The Court stated that CREED also submitted “a digital video disk (DVD) that contained
more than four thousand pages of documents and data. … It appears that the DVD contained no
table of contents, no particular organization, no summary of information, and no explanation of
how the copious materials may pertain to the proposed [] project.” CREED did not appear at the
January hearing to offer any elaboration. For unrelated reasons, the City Council continued the hearing to February.

CREED also did not appear at the continued hearing in February, but again submitted
a “cursory letter” to the City Clerk that “briefly outlined objections to the project.” The City
Council approved the addendum to the EIR and approved the project. The Court upheld the City
Council approvals and the environmental review in their entirety.

The Court rejected CREED’s GHG claims in particular because CREED had not
exhausted its administrative remedies. In applying the exhaustion doctrine, the Court not only
concluded that CREED did not properly raise its GHG claims before the City Council at its 2009
meetings, but that CREED did not properly raise its GHG claims before the City Council in 1994
(and should have) when the Council certified the original EIR (and therefore failed to exhaust
and was time-barred). It is on this latter conclusion that many CEQA practitioners have focused
their attention.

The temptation of this latter conclusion for pro-development forces is that it could be
used as a powerful litigation weapon. This part of the ruling could be used to dismiss nearly any
GHG-related claim that is brought when local agencies rely on earlier environmental documents
for later-in-time project approvals, even when that earlier environmental document was certified
as far back as 1994. The Court arguably created a massive exemption for GHG emissions from
CEQA review.

While this part of the Court’s ruling certainly is a provocative one, it was not necessary
to the Court’s holding and ultimately may be legally flawed. Yes, it is true that GHG emissions
were known to be harmful as far back as 1994, and indeed much earlier than that. However,
the possibility of studying the environmental impacts of GHG emissions from residential
development under CEQA was not at all common prior to the passage of AB 32 in 2006.
Therefore, it seems unreasonable for the Court to have required the petitioners to have raised
(and then litigated) their GHG claims in the CEQA context in 1994.

More importantly, these issues should not distract modern practitioners from seeing the
aspect of the Court’s ruling that stands on much firmer ground, and ultimately, in the authors’
view, that will have a much greater impact on CEQA jurisprudence.

As stated above, the Court’s first rationale for dismissing CREED’s GHG claims was that
CREED had not exhausted its GHG claims at the Council’s 2009 meetings. The Court so ruled
even though CREED had submitted two letters raising its GHG claims, and had “supplemented”
those letters with four thousand documents on DVD. Experienced CEQA practitioners no doubt
are familiar with such last minute “late hits” and “doc dumps” in City Council proceedings.
Many petitioners’ counsel, including the attorneys in the CREED case, frequently employ this
tactic in order to lay the ground work for a lawsuit. This can be very frustrating for project
proponents, local agency staff and elected officials, and the public when, after having undergone
months or years of public processing and review, at the last minute they are faced with the no-
win choice of either spending many more hours determining whether legitimate legal issues
exist, or risking a lawsuit on an issue they did not properly respond to (given the last minute
nature of the submission).

The CREED Court has at least raised the bar regarding the quality and clarity of message
that the exhaustion doctrine requires. According to the Court, the City could not be expected
to “pore through thousands of documents to find something that arguably supports CREED’s
belief the project should not go forward.” The Court then chastised CREED for its tactics:
“It was never contemplated that a party to an administrative hearing should … make only a
perfunctory or ‘skeleton’ showing in the hearing and thereafter obtain an unlimited trial de novo,
on expanded issues, in the reviewing court [citations omitted].”

Nor was the Court persuaded by CREED’s letters: “The letter accompanying the DVD
made only general, unelaborated objections ….” To exhaust administrative remedies, concluded
the Court, the objections “must be sufficiently specific so that the agency has the opportunity
to evaluate and respond to them [citations omitted].” If that were not the case, virtually every
project approval would be subject to litigation on new or expanded issues.”

The Court’s ruling underscores that poorly executed attempts to exhaust one’s
administrative remedies run the risk of failure. In this way, the CREED decision goes a long
way toward clarifying and reinforcing the strict requirements of the exhaustion doctrine under
CEQA. As to the broader issue of GHG emissions analysis under CEQA, the CREED decision is
not as helpful.

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