October 2018 Update
This update addresses the most significant statutory and regulatory changes since the previous update was published. It also includes discussion and analysis of relevant cases. Among the most significant developments and improvements in this book since the last update are the following:
Ethics; Rules of Professional Conduct
On May 10, 2018, the California Supreme Court issued an order approving new and amended Rules of Professional Conduct. The new rules become effective on November 1, 2018. The contents of this book have been updated to incorporate the new rules. Visit the State Bar website (http://www.calbar.ca.gov/) to see both the previous and new rules.
General and Specific Plans
Effective January 1, 2018, various statutes governing the housing element in city and county general plans, including revisions and periodic review of the housing element, were revised to add new requirements. See §§2.14, 2.16, 2.18–2.19, 2.44.
In Kennedy Comm’n v City of Huntington Beach (2017) 16 CA5th 841, the court held that charter cities are exempt from the requirement that specific plans be consistent with the city’s general plan (Govt C §65454) absent an express, unequivocal statement of intent in the city charter to adopt the consistency requirement. See §§2.55, 12.46.
In Park at Cross Creek, LLC v City of Malibu (2017) 12 CA5th 1196, the court held that a city initiative ordinance requiring a specific plan for every proposed commercial or mixed-use development over 20,000 square feet in size was not a proper exercise of its legislative and police power. See §§2.57, 4.38.
Effective January 1, 2018, as part of a major effort to spur development of affordable housing statewide, the California legislature passed several bills establishing new streamlined housing development plans, including Workforce Housing Opportunity Zones (SB 540) and Housing Sustainability Districts (AB 73). For details, see §2.59A.
Sustainability and Climate Change Regulations
By September 1, 2018, and every four years thereafter (to align with greenhouse gas (GHG) reduction target setting), the California Air Resources Board must prepare a report assessing the progress made by each metropolitan planning organization (MPO) toward meeting the regional GHG reduction targets. The report must include changes to the GHG emissions in each region, data-supported metrics for the strategies used to meet the targets, and discussion of best practices used and challenges faced by the MPOs. See Govt C §65080(b)(2)(J)(iv), discussed in §5.6.
Under amendments to Govt C §65584.05 effective January 1, 2018, each council of governments must distribute to each local government a proposed draft of the regional housing needs allocation (RHNA) at least 18 months before the scheduled revision of the RHNA. Within 60 days after receiving the draft, local governments can request a revision of their allocations. See §5.8.
After the extensive revisions made in 2017 to the statutes governing residential “accessory dwelling units” (ADUs) (primarily Govt C §65852.2), which generally made it easier for property owners to get approval for creation of ADUs, further revisions went into effect January 1, 2018. For example, the 2018 amendments clarified that an ADU may be rented separate from the primary residence, but may not be sold or conveyed separate from the primary residence. See §6.3.
Effective January 1, 2018, California’s new Housing Accountability Act provides standards for local agencies’ findings that an affordable housing development or emergency shelter is inconsistent with applicable plans or programs. See §6.16.
Also effective in 2018, the California legislature enacted several new laws to expedite the approval of affordable housing developments, notably SB 35 and SB 329. For details, see new §6.16B.
Conditional Use Permits; Conditions of Land Use Approval
In Citizens for Beach Rights v City of San Diego (2017) 17 CA5th 230, the court held that the city’s issuance of a building permit and validation of an earlier-issued site development permit for construction of a lifeguard station triggered the 90-day limitations period for challenging the site development permit. See §7.44.
In July 2017, the California Supreme Court affirmed the Fourth District Court of Appeal’s ruling that coastal blufftop homeowners’ acceptance of the benefits of a permit issued by the Coastal Commission barred them from challenging various conditions of that permit. Lynch v California Coastal Comm’n (2017) 3 C5th 470. See §§7.44, 12.57, 17.64A.
Aesthetic Regulation and Design Review
In Contest Promotions, LLC v City & County of San Francisco (9th Cir 2017) 874 F3d 597, the Ninth Circuit upheld San Francisco’s prohibition of new off-site commercial billboards, ruling it does not violate the First Amendment. See §§10.3, 12.14.
Specially Regulated Land Uses
In Real v City of Long Beach (9th Cir 2017) 852 F3d 929, the Ninth Circuit ruled that a zoning ordinance restricting the location of tattoo parlors must (1) ensure that there are sufficient locations to operate, (2) provide a clear permit process, (3) specify appropriate time limits, and (4) objectively establish standards for granting a permit. See §12.8.
In Recycle for Change v City of Oakland (9th Cir 2017) 856 F3d 666, the Ninth Circuit ruled that an ordinance regulating unattended donation collection boxes, without regard to the charitable or business purpose of the donations, is content neutral and survives intermediate scrutiny. See §12.13.
In Lafayette v City of Lafayette (2018) 20 CA5th 657, the court held that a city must submit a citizen referendum to a public vote even if the referendum could result in zoning that would be inconsistent with the city’s general plan. See §12.45.
In a case pending review before the California Supreme Court, City & County of San Francisco v Regents of Univ. of Cal. (review granted Sept. 13, 2017, S242835; superseded opinion at 11 CA5th 1107), the appellate court ruled that a charter city cannot compel a state university to collect and remit taxes from users of the university’s parking lots, on the ground that the “home rule” provision granting charter cities broad powers does not permit local regulation of state entities that are performing governmental functions. See §12.46.
In a case interpreting Govt C §53094(b), San Jose Unified Sch. Dist. v Santa Clara County Office of Educ. (2017) 7 CA5th 967, the court ruled that a county board of education lacks authority to exempt property to be used for a charter school from a city’s general plan and zoning ordinance. See §12.48.
The Ninth Circuit upheld Bus & P C §25503(f)–(h) against a First Amendment challenge in Retail Digital Network, LLC v Prieto (9th Cir 2017) 861 F3d 839, holding that alcohol manufacturers and wholesalers are prohibited from providing anything of value to retailers in exchange for advertising their alcohol products. See §12.60.
Effective June 27, 2017, the California legislature enacted the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) (Bus & P C §§26000–26231.2), which effectively repealed and replaced the former Medical Cannabis Regulation and Safety Act (MCRSA) (former Bus & P C §§19300–19360 and former Health & S C §§11362.769, 11362.777, enacted in 2015), and combined medical and recreational cannabis laws into one comprehensive piece of legislation. See §12.62.
In a case pending review before the California Supreme Court, T-Mobile W. LLC v City & County of San Francisco (review granted Dec. 21, 2016, S238001; superseded opinion at 3 CA5th 334), the appellate court ruled that a local ordinance regulating wireless equipment was not preempted by Pub Util C §§7901 and 7901.1. See §12.68.
CEQA; Environmental Review and Mitigation
The most significant recent CEQA cases include the following:
Friends of Outlet Creek v Mendocino County Air Quality Mgmt. Dist. (2017) 11 CA5th 1235, review ordered and transferred (May 24, 2017, S241669) 2017 Cal Lexis 3839 (lawsuit brought against responsible agency is limited to actions that responsible agency takes in approving project, and does not extend to actions by lead agency, or to adequacy of lead agency’s CEQA review of project); see §13.6.
POET, LLC v State Air Resources Bd. (2017) 12 CA5th 52 (activities undertaken by agency that are related to each other as “part of a single, coordinated endeavor” constitute single project); see §13.13.
Aptos Council v County of Santa Cruz (2017) 10 CA5th 266 (three zoning ordinances adopted by county did not constitute single project requiring review together under one environmental impact report because each ordinance could be implemented separately and operated independently; ordinances were not reasonably foreseeable “consequence” of one another); see §13.13.
Bridges v Mt. San Jacinto Community College Dist. (2017) 14 CA5th 104 (land acquisition agreement that conditioned opening of escrow on CEQA compliance and did not commit college district to any type of construction plan was not project under CEQA); see §13.15.
Residents Against Specific Plan 380 v County of Riverside (2017) 9 CA5th 941 (tentative approval of EIR and specific plan, subject to preparation of documents necessary for final action, did not constitute approval for CEQA purposes); see §13.15.
Protect Telegraph Hill v City & County of San Francisco (2017) 16 CA5th 261 (no unusual circumstance shown that would defeat use of categorical exemption for approval of permit for renovation of historic cottage and construction of three-unit residential building); see §13.18.
Respect Life S. San Francisco v City of S. San Francisco (2017) 15 CA5th 449 (no substantial evidence supported fair argument that clinic offering abortion services would result in significant impacts due to unusual circumstances of potential for protest demonstrations); see §13.21.
Clews Land & Livestock, LLC v City of San Diego (2017) 19 CA5th 161 (general observations without specific nexus to project, and predictions without factual foundation, do not constitute substantial evidence); see §§13.23, 13.48.
Washoe Meadows Community v Department of Parks & Recreation (2017) 17 CA5th 277 (EIR that analyzed five alternatives without identifying one as proposed project was deficient; rather than providing inconsistent descriptions of project, EIR failed to identify project at all); see §13.30.
Cleveland Nat’l Forest Found. v San Diego Ass’n of Gov’ts (2017) 3 C5th 497 (EIR for metropolitan planning agency’s Regional Transportation Plan/Sustainable Communities Strategy was not required to use consistency with 2050 GHG emissions reduction target in Executive Order S–3–05 as significance threshold); see §§13.32, 13.42, 13.47, 13.62B.
Placerville Historic Preservation League v Judicial Council (2017) 16 CA5th 187 (no evidence that relocation of courthouse would result in extreme type of economic loss necessary to cause urban decay); see §13.35.
Banning Ranch Conservancy v City of Newport Beach (2017) 2 C5th 918 (for responsible agencies to rely on EIR, that EIR must sufficiently address impacts over which responsible agencies have jurisdiction); see §§13.55, 13.58.
Federal and Regional Regulations; Clean Water Act; Hazardous Substances
In National Ass’n of Mfrs. v Department of Defense (2018) ___ US ___138 S Ct 617, the U.S. Supreme Court held that challenges to the “waters of the United States” rule must first be brought in federal district courts. See §14.5.
In Hawai’i Wildlife Fund v County of Maui (9th Cir 2018) 881 F3d 754, the Ninth Circuit held that wastewater discharges from wells into the groundwater require NPDES permits if the pollutants are “fairly traceable” from the point source to navigable waters. See §14.33.
In Catskill Mountains Chapter of Trout Unlimited, Inc. v U.S. EPA (2d Cir 2017) 846 F3d 492, the Second Circuit upheld the EPA’s water transfers rule as a “reasonable interpretation” of the Clean Water Act that was neither arbitrary nor capricious. See §14.33.
In Ecological Rights Found. v PG&E (9th Cir 2017) 874 F3d 1083, the Ninth Circuit held that when stormwater discharge permits are not issued under the Clean Water Act, the anti-duplication provision under the Resource Conservation and Recovery Act (RCRA) (42 USC §§6901–6992k) no longer applies; thus, in effect, unregulated stormwater discharges from retail or commercial facilities are subject to citizen suit under the RCRA. See §14.34.
Effective January 1, 2017, the California statute prohibiting water pollution was amended to subject water polluters to a civil penalty of not more than $10 for each gallon or pound of material discharged. However, the total amount of the civil penalty will be reduced for every gallon or pound of the illegally discharged material that is recovered and properly disposed of by the responsible party. See §14.52 and Fish & G C §5650.1(i), as amended.
In Central Coast Forest Ass’n v Fish & Game Comm’n (2017) 2 C5th 594, the supreme court held that a petition to remove a species from the endangered species list under Fish & G C §2071 on the basis of new scientific information may be used to challenge the Fish and Game Commission’s designation of any species as endangered. See §14.53.
In Otay Land Co., LLC v U.E. Limited, L.P. (2017) 15 CA5th 806, the court held that property owners who voluntarily remediated contaminated land (a prior shooting range) properly sought recovery for their response costs under the Carpenter-Presley-Tanner Hazardous Substance Account Act (HSAA) (Health & S C §§25300–25395.45). See §14.54.
In the context of statutory indemnity for government entities under HSAA, the court in Orange County Water Dist. v Sabic Innovative Plastics US, LLC (2017) 14 CA5th 343 held that a county water district can sue current and former owners for statutory indemnity under HSAA, even without proof of joint liability with the defendants, for remediation costs stemming from the contamination. See §14.54.
Effective July 1, 2017, the California legislature created the Department of Tax and Fee Administration (CDTFA) and transferred nearly all functions of the Board of Equalization to it. See Govt C §§15570.22, 15570.24. See also the CDTFA website.
Other Laws Related to Land Use Regulation
In People v Superior Court (Sahlolbei) (2017) 3 C5th 230, the California Supreme Court held that an independent contractor may also be considered a public officer or employee who would be prohibited from having a financial interest in a contract made in his or her official capacity under Govt C §1090. See §15.8.
Under a recent amendment to Govt C §65950, for a development project consisting of either (1) residential units only or (2) mixed uses in which nonresidential units comprise less than 50 percent of the total square footage, the time period within which the lead agency must approve or disapprove the project is 120 days from the date of certification of the CEQA document. Under a related amendment to Govt C §65952(b), for a responsible agency other than the California Coastal Commission, the time limit to take action on such a development project is the longer of either 90 days from the date the lead agency approves the project or 90 days from the date the responsible agency has accepted the application as complete. See §15.28.
In Attard v Board of Supervisors (2017) 14 CA5th 1066, the court ruled the property owners had no vested right to build an unlawful project. See §16.17.
The U.S. Supreme Court clarified the parcel-as-a-whole rule in its much-anticipated decision in Murr v Wisconsin (2017) ___ US ___, 137 S Ct 1933. The case concerned the takings claims of petitioners who owned two adjacent lots, but under a county zoning ordinance could build only one residence. The underlying question was how to assess the economic impact of that ordinance. In a 5–3 vote, the Court ruled that, for purposes of calculating the loss to the property owners, the two adjacent properties may be considered as a single unit because state law had merged the lots, the physical characteristics supported treatment as a unified parcel, and the parcels could not be sold or built on separately. See §§17.15, 17.24, 17.27.
In a challenge to a development restriction in an airport authority’s plan, Dryden Oaks, LLC v San Diego County Reg’l Airport Auth. (2017) 16 CA5th 383, the court held the restriction was not a final decision (for takings claim ripeness purposes) because it may be overruled by the local agencies that have ultimate zoning authority. See §17.43.
The court in Sierra Palms Homeowners Ass’n v Metro Gold Line Foothill Extension Constr. Auth. (2018) 19 CA5th 1127 ruled that, in state court takings actions, homeowners associations may have standing under CC §5980 to assert the ownership claims of their members. See §17.60.
A new section on equitable forfeiture has been added to chap 17, discussing the California Supreme Court’s decision in Lynch v California Coastal Comm’n (2017) 3 C5th 470. See §17.64A.
General and Special Taxes; Exactions
The California Air Resources Board’s adoption of a statewide cap-and trade program providing for auctions of greenhouse gas (GHG) emission allowances was upheld (as not imposing an unconstitutional tax) in California Chamber of Commerce v California Air Resources Bd. (2017) 10 CA5th 604. See §18.9.
In 1901 First St. Owner, LLC v Tustin Unified Sch. Dist. (2018) 21 CA5th 1186, the court ruled that the “assessable space” of a residential development under Govt C §65995(b)(1) includes the interior common areas of a condominium development. See §18.27.
The U.S. Supreme Court denied a certiorari petition to review the Second Appellate District’s decision in 616 Croft Ave., LLC v City of W. Hollywood (2016) 3 CA5th 621, which held that Govt C §66477 does not preclude local agencies from imposing a development impact fee based on the total number of housing units rather than the net number of units. The appellate court also held that because an in-lieu fee to subsidize low-income housing is not a special tax, the government does not bear the burden to show the reasonableness of the fee. See §§18.56, 18.67, 18.72, 18.76.
In Coyne v City & County of San Francisco (2017) 9 CA5th 1215, the court held that San Francisco’s controversial relocation fee ordinance was preempted by the Ellis Act. See §18.71.
In San Diego County Water Auth. v Metropolitan Water Dist. (2017) 12 CA5th 1124, the court held that a water authority’s attempt to foreclose a judicial challenge to its rate structure in exchange for the authority’s contribution to a member’s conservation program was an unconstitutional condition. See §18.75.
In Jacks v City of Santa Barbara (2017) 3 C5th 248, the California Supreme Court held that a franchise fee paid by a utility for use of city property and passed on to ratepayers is a tax under Proposition 218 (requiring voter approval), rather than a fee, if the amount of the charge is not reasonably related to the value of the city property used by the utility. See §18.83.
Land Use Litigation
In Citizens for Beach Rights v City of San Diego (2017) 17 CA5th 230, the court held that the city’s issuance of a building permit for construction of a lifeguard station triggered the 90-day limitations period for objectors to challenge the project on the basis that the site development permit had expired. The challenge constituted an attack on the decision within the meaning of Govt C §65009(c)(1)(E). See §21.23.
In Bridges v Mt. San Jacinto Community College Dist. (2017) 14 CA5th 104, the petitioners failed to exhaust their administrative remedies in objecting to a community college district’s purchase of real estate to build a campus project when they did not submit written objections and did not voice their concerns at the college board of trustees’ meeting when the purchase was on the agenda and public comment was allowed. See §21.28.
In another exhaustion of remedies case, Grist Creek Aggregates v Superior Court (2017) 12 CA5th 979, an air quality management district hearing board’s tie vote on the petitioners’ administrative appeal challenging the district’s approval of an application for a permit to construct a rubberized asphalt production facility constituted a decision not to revoke the permit even though the district made no factual findings. Thus, the petitioners had exhausted their administrative remedies because they could not bring any further administrative appeals. See §21.29.
In Shahbazian v City of Rancho Palos Verdes (2017) 17 CA5th 823, the court held that the landowners’ causes of action against the city, including allegations that the city had violated certain ordinances and selectively applied others in issuing a permit for a neighbor’s fence while denying the plaintiffs a permit for their deck, did not arise from protected activity. Because the owners sued the city based on underlying acts, rather than on oral statements or other expressive conduct, the court concluded that granting their anti-SLAPP motion would have a chilling effect. See §21.74.
In Town of Chester v Laroe Estates, Inc. (2017) ___ US___, 137 S Ct 1645, the U.S. Supreme Court held that when a litigant joins a lawsuit as an “intervenor of right,” the intervenor must have US Const art III standing to pursue relief different than that sought by the plaintiff. See §21.102.