CALIFORNIA FARM BUREAU FEDERATION v. CALIFORNIA WILDLIFE CONSERVATION BOARD

Filed 9/21/06

CERTIFIED FOR PARTIAL PUBLICATION^*

COPY

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(Colusa)

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APPEAL from a judgment of the Superior Court of Colusa County, John H. Tiernan, J. Affirmed.

Bill Lockyer, Attorney General, Mary Hackenbracht, Senior Assistant Attorney General, Deborah A. Wordham, Deputy Attorney General for Defendants and Appellants California Wildlife Conservation Board and Department of Fish and Game.

Gibson, Dunn & Crutcher and Alan N. Bick and Christeon J. Costanzo for Plaintiff, Intervener and Respondent California Farm Bureau Federation.

Brenda Washington Davis, John R. Weech, Ronda Azevedo Lucas for Plaintiffs, Interveners and Respondents California Farm Bureau Federation and Richard J. Mora.

Somach, Simmons & Dunn and Timothy M. Taylor, Kristen T. Castanos and Jacqueline L. McDonald and Henry E. Rodegerdts, County Counsel for Plaintiff and Respondent County of Colusa.

No appearance for Real Party in Interest Leroy V. Traynham.

This case addresses the California Wildlife Conservation Board’s (WCB) approval of a project involving the conversion of agricultural land into wildlife habitat as categorically exempt from the California Environmental Quality Act (CEQA). The California Department of Fish and Game (DFG) and the WCB appeal the grant of a peremptory writ of mandate directing them inter alia to set aside the decision finding the Traynham Ranch project (Project) to be exempt from CEQA.^[1] The DFG and WCB also appeal the award of attorney fees to the County of Colusa (County) and to petitioners California Farm Bureau Federation, Colusa County Farm Bureau (together the Farm Bureau) and intervenor Richard Mora. We shall affirm the trial court’s grant of a peremptory writ of mandate and the orders granting attorney fees.

FACTUAL AND PROCEDURAL BACKGROUND

In 2001, the DFG through the WCB (together the State Agencies) negotiated the purchase of a conservation easement on 235 acres of farmland (the property) owned by Leroy V. Traynham III (Traynham) in the County as the first acquisition/

restoration project under the North Central Valley, Conservation Reserve Enhancement Program. WCB as the lead agency approved as part of the conservation easement a site specific Waterfowl Habitat Management Plan (Management Plan) which identified measures needed to convert the property from agriculture to habitat. The project consisted of both the conservation easement and the management plan.

The property is adjacent to an existing riparian/wetland project in the Lower Colusa Trough and would expand a nearly contiguous 2,700-acre corridor of wetlands and riparian habitat along the Ridge Cut Slough that has been restored in recent years.

The property is located in the “General Agriculture” land use designation of the County’s General Plan and is zoned “Exclusive Agriculture.” The property is located within the boundaries of an agricultural preserve and is designated on the Important Farmland Series maps, pursuant to Government Code section 65570, as one or more of the following: Prime farmland, farmland of statewide significance, unique farmland, and/or farmland of local importance. The property had been part of a Williamson Act Contract with the County (Gov. Code, § 51200 et seq.) and at the time of the easement purchase by the State Agencies it was covered by a Farmland Security Zone Contract (Super Williamson Act Contract) with the County. (Gov. Code, § 51296 et seq.)^[2] Under this Super Williamson Act Contract Traynham had agreed to restrict the use of the property to production of food and fiber for commercial purposes and compatible uses. The property had been planted with row crops and rice and was planted with Sudan grass at the time of the appraisal for the easement purchase by the State Agencies.^[3]

The State Agencies provided a project description of the acquisition of the conservation easement as requiring “approximately 225 acres of leveled agricultural fields to be restored to a mixture of seasonal and semi-permanent wetlands, grasslands, and forested wetlands.” The conservation easement specifically precluded the cultivation of agricultural crops for commercial gain on the easement lands as a use inconsistent with the easement.

The conservation easement incorporated the management plan designed for the property and made part of the easement covenants. Such management plan required the “conversion” of the property from agricultural fields to wetlands. According to the management plan this would require: “1) re-constructing existing permanent levees in a meandering fashion such that all interior and exterior levees are 3 feet high and contain at least 5:1 side slopes (except where a levee borders a ditch, in which case the slope on the ditch side shall be 2:1, 2) constructing permanent interior levees (maximum 3 feet high, minimum 5:1 side slopes) to replace small rice dikes such that permanent interior levees are present at maximum intervals of every 12” of elevational drop within each field, 3) developing or improving ditches as necessary to facilitate independent flooding and drainage of wetland units, 4) installing ‘flashboard riser’ water control structures (18-24” diameter pipe, 36-48” spill width) to allow the timely flooding/drainage of wetland units and precise control of wetland water depths, 5) constructing channels or ‘swales’ (30-80 feet wide, 12-24” of excavation) that meander from the inlet to outlet structures, utilizing the resultant spoil to restore variable pond bottom topography by constructing underwater berms and hummocks, 6) developing small linear ‘loafing bars’ (20-60 feet long, 10-30 feet wide, minimum 5:1 side slopes, 0-12” above the water level) and possibly some higher mounds for duck blinds, 7) planting isolated clumps of hardstem bulrush (tules) throughout the wetland area, [and] 8) planting native willows and cottonwoods in areas that can be irrigated for the first two years.” The cost for the project, not including the cost of the conservation easement itself, was estimated at $111,140.

The project would result in approximately 145 acres of wetlands and 80 acres of uplands. Some of the wetlands would be seasonal wetlands, but at least 15 acres would be semi-permanent wetlands brood ponds, which would be flooded continuously during the spring and summer from at least March 15 through July 15.

The California Waterfowl Association (CWA) received a grant to fund the construction work. CWA submitted a work plan for the project which listed the following specific work to be done: “1) An existing 40 hp pump will be refurbished. 2) A 1500 ft pipeline will be installed to irrigate the southern upland field. 3) Levees will be refurbished or constructed and flashboard risers will be installed to control the application and management of water. 4) A catch basin will be constructed to take advantage of free water from the agricultural drainage ditch. 5) Approximately 15 acres of brood ponds will be constructed . . . . An irrigation swale will be cut from the pump, around the interior upland field and into the catch basin . . . . 6) Swales will be cut throughout the wetland units from inlet to outlet to facilitate water delivery and drainage. Excavated soil from the swales will be used to construct levees and diversify pond bottom topography. In addition to swales, ponds will be cut into the fields, varying in depth from 3 feet to 6 inches with an average of 12-18 inches in depth. 7) Tules, cottonwood trees and willow trees will be planted to restore native vegetation. 8) Small berms will be constructed in the southern upland field to facilitate irrigation. All uplands will be planted with a grass/vetch mix to establish dense nesting cover for locally nesting waterfowl, songbirds, and pheasants.”

The DFG recommended the WCB approve the project. The DFG took the position the acquisition of the conservation easement was exempt from CEQA under Class 13 of the Guidelines’ categorical exemptions for acquisitions for wildlife conservation purposes and the restoration efforts were exempt from CEQA under Class 4 of the Guidelines’ categorical exemptions for minor alterations of land to benefit fish and wildlife. The WCB approved the project on February 27, 2002, and on March 1, 2002, filed a notice of exemption asserting the project was exempt from CEQA under Class 13.

The Farm Bureau filed a petition in the trial court against the State Agencies seeking a writ of mandate and injunctive relief alleging violations of CEQA and the Williamson Act. The County, Traynham, and the CWA were named as real parties in interest. Richard Mora, an individual agricultural landowner in the County, was allowed to file a complaint in intervention similarly alleging violations of the Williamson Act and joining in the Farm Bureau’s demand for relief under CEQA.^[4] The County filed a cross-petition and cross-complaint against the State Agencies and Traynham alleging violations of the Williamson Act and failure to comply with County codes and ordinances. The trial court granted a preliminary injunction and stay against the State Agencies, Traynham, and the CWA. The trial court ordered the County’s action bifurcated and stayed pending resolution of the Farm Bureau’s petition.

After the State Agencies and Traynham amended the conservation easement to allow some commercial grazing of livestock on the property, the County dismissed its causes of action for violations of the Williamson Act, but filed a new writ petition alleging violations of CEQA by the State Agencies in approving the amendment to the easement. All parties stipulated to allow the Farm Bureau to intervene in the County’s new petition alleging CEQA violations and to consolidate the two lawsuits.

The trial court ultimately ruled the project was not exempt from CEQA and issued a peremptory writ directing the State Agencies to set aside the decision finding the project to be exempt, to refrain from any future approvals of the project unless made in compliance with CEQA, to use the condition of the property as it existed prior to the WCB’s approval of the project on February 28, 2002, as the baseline for the environmental review, and in the interim to cease all activity relating to the project. The trial court granted the motions of the Farm Bureau, Mora, and the County for attorney fees on the CEQA issue.

The remaining claims of the petition, cross-petition, and complaint in intervention were settled and dismissed. Final judgment on the consolidated matters was entered and the State Agencies have appealed.

DISCUSSION

I.

State Compliance With CEQA

A. CEQA Overview and Standards of Review

“CEQA is a comprehensive scheme designed to provide long-term protection to the environment.” (Mountain Lion Foundation v. Fish & Game Com. (1997) 16 Cal.4th 105, 112 (Mountain Lion Foundation).) It “is to be interpreted ‘to afford the fullest possible protection to the environment within the reasonable scope of the statutory language.’ [Citation.]” (Ibid.) And the Legislature has directed the Secretary of the Resource Agency to promulgate a list of classes of projects that have no significant effect on the environment. A project falling within such a categorical exemption is not subject to CEQA. (Id. at p. 124.)

To achieve this objective, the Guidelines establish a three-step process to assist a public agency in determining which document to prepare for a project subject to CEQA. (Guidelines, § 15002, subd. (k).) In the first step, the lead public agency preliminarily examines the project to determine whether the project is statutorily exempt from CEQA, falls within a Guidelines categorical exemption or if “’it can be seen with certainty’ that [the] project will not have a significant effect on the environment. [Citations.]” (Mountain Lion Foundation, supra, 16 Cal.4th at pp. 112-113.) If so, no further agency evaluation under CEQA is required. The agency may prepare a notice of exemption. (Guidelines, §§ 15002, subd. (k)(1), 15062; see Apartment Assn. of Greater Los Angeles v. City of Los Angeles (2001) 90 Cal.App.4th 1162, 1171, fn. omitted [“notice of exemption has no significance other than to trigger the running of the limitations period”]; Remy et al., Guide to the California Environmental Quality Act (10th ed. 1999) p. 86 (hereafter Remy, CEQA Guide) [agency may, but need not, file notice of exemption].) If, however, the project does not fall within an exemption and it cannot be seen with certainty that the project will not have a significant effect on the environment, the agency takes the second step and conducts an initial study to determine whether the project may have a significant effect on the environment. (Guidelines, §§ 15002, subd. (k)(2), 15063; No Oil, Inc. v. City of Los Angeles (1974) 13 Cal.3d 68, 74 (No Oil).) If the initial study shows there is no substantial evidence the project may have a significant effect on the environment or revisions to the project would avoid such an effect, the lead agency prepares a negative declaration. (§ 21080, subd. (c)(1); Guidelines, §§ 15002, subd. (k)(2), 15063, subd. (b)(2), 15070 et seq.) If the initial study shows “there is substantial evidence, in light of the whole record . . . that the project may have a significant effect on the environment,” the lead agency must take the third step and prepare an environmental impact report (EIR).^[5] (§§ 21080, subd. (d), 21100; Guidelines, §§ 15002, subd. (k)(3), 15080 et seq.; No Oil, supra, at p. 74; Salmon Protection & Watershed Network v. County of Marin (2004) 125 Cal.App.4th 1098, 1105.)

A “’[s]ignificant effect on the environment’” is statutorily defined as “a substantial, or potentially substantial, adverse change in the environment.” (§ 21068.) “’Environment’ means the physical conditions which exist within the area which will be affected by a proposed project, including land, air, water, minerals, flora, fauna, noise, objects of historic or aesthetic significance.” (§ 21060.5.) Combining these statutory definitions, a “significant effect on the environment” under CEQA is a substantial or potentially substantial adverse change in the physical conditions existing within the area affected by the project.

At issue here is the first step in the CEQA process, the determination of whether the project as defined by the DFG and WCB is subject to CEQA so that an initial study must be undertaken.

Judicial review of an agency’s compliance with CEQA where no administrative hearing at the agency level was required is governed by section 21168.5, which limits judicial inquiry to whether there was a prejudicial abuse of discretion. (§ 21168.5; No Oil, supra, 13 Cal.3d at pp. 74-75, fn. 3.)^[6] “Abuse of discretion is established if the agency has not proceeded in a manner required by law or if the determination or decision is not supported by substantial evidence.” (§ 21168.5.) We apply this same standard on appeal, reviewing the agency’s action, not the trial court’s decision. (Lighthouse Field Beach Rescue v. City of Santa Cruz (2005) 131 Cal.App.4th 1170, 1183.)

Where the specific issue is whether the lead agency correctly determined a project fell within a categorical exemption, we must first determine as a matter of law the scope of the exemption and then determine if substantial evidence supports the agency’s factual finding that the project fell within the exemption. (Fairbank v. City of Mill Valley (1999) 75 Cal.App.4th 1243, 1251 (Fairbank); see also Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165, 1192.) The lead agency has the burden to demonstrate such substantial evidence. (Magan v. County of Kings (2002) 105 Cal.App.4th 468, 475; Davidon Homes v. City of San Jose (1997) 54 Cal.App.4th 106, 114-115 (Davidon Homes).)

Once the agency meets this burden to establish the project is within a categorically exempt class, “the burden shifts to the party challenging the exemption to show that the project is not exempt because it falls within one of the exceptions listed in Guidelines section 15300.2.” (Davidon Homes, supra, 54 Cal.App.4th at p. 115.)^[7]

Where the agency fails to demonstrate the project is within a categorically exempt class, the project may nevertheless be exempt from CEQA if “’it can be seen with certainty’ that [the] project will not have a significant effect on the environment. [Citations.]” (Mountain Lion Foundation, supra, 16 Cal.4th at p. 113.) The Guidelines cover this concept in section 15061, subdivision (b)(3), called the common-sense exemption, which provides in part: “CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.” The discussion accompanying this Guideline explains: “Subsection (b)(3) provides a short way for agencies to deal with discretionary activities which could arguably be subject to the CEQA process but which common sense provides should not be subject to the Act.

This section is based on the idea that CEQA applies jurisdictionally to activities which have the potential for causing environmental effects. Where an activity has no possibility of causing a significant effect, the activity will not be subject to CEQA.” (Remy, CEQA Guide, supra, Appendix V, p. 874; Davidon Homes, supra, 54 Cal.App.4th at pp. 112-113.)

In the case of the common sense exemption, the agency has the burden to “provide the support for its decision before the burden shifts to the challenger. Imposing the burden on members of the public in the first instance to prove a possibility for substantial adverse environmental impact would frustrate CEQA’s fundamental purpose of ensuring that government officials ‘make decisions with environmental consequences in mind.’” (Davidon Homes, supra, 54 Cal.App.4th at p. 116, quoting Bozung v. Local Agency Formation Com. (1975) 13 Cal.3d 263, 283.) “[T]he agency’s exemption determination must be supported by evidence in the record demonstrating that the agency considered possible environmental impacts in reaching its decision.” (Davidon Homes, supra, at p. 117; see East Peninsula Ed. Council, Inc. v. Palos Verdes Peninsula Unified School Dist. (1989) 210 Cal.App.3d 155, 171.)

Keeping these principles in mind, we turn to the issues in this case.

B. Class 13 Categorical Exemption

“Section 21084, subdivision (a), mandates that the Guidelines include ‘a list of classes of projects which have been determined not to have a significant effect on the environment and which shall be exempt from this division.’ These categorical exemptions are found in article 19 (§ 15300 et seq.) of the Guidelines. ‘Where a project is categorically exempt, it is not subject to CEQA requirements and “may be implemented without any CEQA compliance whatsoever.”’ [Citation.]

In keeping with general principles of statutory construction, exemptions are construed narrowly and will not be unreasonably expanded beyond their terms. [Citations.] Strict construction allows CEQA to be interpreted in a manner affording the fullest possible environmental protections within the reasonable scope of statutory language. [Citations.] It also comports with the statutory directive that exemptions may be provided only for projects which have been determined not to have a significant environmental effect. [Citations.]” (County of Amador, supra, 76 Cal.App.4th at p. 966.)

In this case, the DFG took the position the acquisition of the conservation easement was exempt from CEQA under Class 13 of the Guidelines’ categorical exemptions for acquisitions for wildlife conservation purposes. (Guidelines, § 15313.) The WCB approved the project and filed a notice of exemption asserting the project was exempt from CEQA under Class 13.

At the time of the filing of the notice of exemption, section 15313 of the Guidelines provided “Class 13 consists of the acquisition of lands for fish and wildlife conservation purposes including preservation of fish and wildlife habitat, establishing ecological reserves under Fish and Game Code Section 1580, and preserving access to public lands and waters where the purpose of the acquisition is to preserve the land in its natural condition.” Section 15313 was amended in 2004 to read: “Class 13 consists of the acquisition of lands for fish and wildlife conservation purposes including (a) preservation of fish and wildlife habitat, (b) establishing ecological reserves under Fish and Game Code Section 1580, and (c) preserving access to public lands and waters where the purpose of the acquisition is to preserve the land in its natural condition.” (Changes in italics.) The Initial Statement of Reasons for Regulatory Action issued by the California Resources Agency (Resources Agency) noted the necessity for the revisions was “to avoid the misperception that the qualifying language at the end of example (c) regarding the purpose of the acquisition applies to all three examples of acquisitions for fish and wildlife conservation purposes.” The “Final Statement of Reasons” issued by the Resources Agency for the amendments to this section indicate this revision was intended to “provide structure and clarity to this section by labeling each of the three examples without changing any existing language or punctuation.”^[8]

To be continue as Part II ...

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^* Pursuant to California Rules of Court, rule 976.1, this opinion is certified for publication with the exception of part II.

^[1] CEQA is codified at Public Resources Code section 21000 et seq. All statutory references are to the Public Resources Code unless otherwise indicated. The State CEQA Guidelines are set forth in title 14, section 15000 et seq., of the California Code of Regulations. All further citations to the regulations will be referred to as the Guidelines. “[C]ourts should afford great weight to the Guidelines except when a provision is clearly unauthorized or erroneous under CEQA.” (Laurel Heights Improvement Ass’n. v. Regents of University of California (1988) 47 Cal.3d 376, 391, fn. 2.)

^[2] The California Land Conservation Act of 1965 (Gov. Code, § 51200 et seq.), also known as the Williamson Act, authorizes local governments to establish “agricultural preserves” consisting of lands devoted to agricultural and other compatible uses. (Gov. Code, § 51230; Sierra Club v. City of Hayward (1981) 28 Cal.3d 840, 850, superseded by statute as stated in Friends of East Willits Valley v. County of Mendocino (2002) 101 Cal.App.4th 191, 204.) Once a preserve is established, the local government may enter into renewable contracts with owners of included agricultural land to restrict the use of the land for at least 10 years in exchange for favorable statutory property tax assessment standards. (Gov. Code, §§ 51240, 51242, 51244.) The Act was the Legislature’s response to “the rapid and virtually irreversible loss of agricultural land to residential and other developed uses . . . and . . . the disorderly patterns of suburban development that mar the landscape, require extension of municipal services to remote residential enclaves, and interfere with agricultural activities. [Citations.]” (Sierra Club v. City of Hayward, supra, 28 Cal.3d at p. 850, fn. omitted.) The Legislature in 2000, in an effort “to expand options available to landowners for the preservation of agricultural land” and “to encourage the creation of longer term voluntary enforceable restrictions within agricultural preserves” (Gov. Code, § 51296), added statutory provisions allowing rescission of Williamson Act Contracts and simultaneous placement of the land in new farmland security zone contracts with an initial term of 20 years. (Gov. Code, § 51296 et seq.)

^[3] According to the Columbia Encyclopedia (Sixth Ed. 2001-05), Sudan grass is a type of grass sorghum used for pasture and hay.

^[4] Mora was represented by counsel for the Farm Bureau.

^[5] “The EIR has been aptly described as the ‘heart of CEQA.’ [Citations.] Its purpose is to inform the public and its responsible officials of the environmental consequences of their decisions before they are made. Thus, the EIR ‘protects not only the environment but also informed self-government.’ [Citation.]” (Citizens of Goleta Valley v. Bd. of Supervisors (1990) 52 Cal.3d 553, 564, fn. & italics omitted.)

^[6] Section 21168.5 is the CEQA standard of review for traditional mandamus actions. Section 21168 governs administrative mandamus proceedings. “The distinction between these two provisions ‘is rarely significant. In either case, the issue before the . . . court is whether the agency abused its discretion.’” (County of Amador v. El Dorado County Water Agency (1999) 76 Cal.App.4th 931, 945 (County of Amador).)

^[7] We recognize there is some uncertainty regarding the nature of the challenger’s burden of proof on the exception to the exemption, whether it is reviewed under the traditional substantial evidence standard or the “fair argument” standard. (Santa Monica Chamber of Commerce v. City of Santa Monica (2002) 101 Cal.App.4th 786, 796; Fairbank, supra, 75 Cal.App.4th at pp. 1259-1260.) We need not reach that issue in this case.

^[8] We have granted the State Agencies’ motion for judicial notice of this Final Statement of Reasons, including the summary and responses to comments received on the proposed amendments, submitted to OAL on July 27, 2004, and of all the matters judicially noticed by the trial court.