Sheppard Mullin Richter & Hampton LLP: Parties Must Exhaust Administrative Remedies Before Challenging Even A CEQA Exemption

By Jeffrey Forrest and Whitney Hodges

Tomlinson v. County of Alameda et al., S188161 (Supreme Court, June 14, 2012)

The California Supreme Court recently reinforced the CEQA requirement that a party must exhaust administrative remedies even where the public agency finds a project exempt from CEQA, if the agency (a) gave notice of the grounds for its exemption determination; and (b) held a public hearing on the project at which the public had the opportunity to object to the exemption determination, even though CEQA does not require the filing of a notice of determination for exemption determinations. This decision reversed the appellate court, and it represents a departure from the majority of prior appellate and superior court decisions on this issue.

In Tomlinson the Alameda County Board of Supervisors found that a proposed building project was categorically exempt from CEQA under CEQA Guidelines section 15332 as "infill," and approved the project. The petitioners had raised numerous objections to the proposed project at the County Board of Supervisors' hearing, but had not specifically stated that the reason the CEQA infill exemption did not apply was that the project was not located "within city limits." At issue before the Supreme Court was the CEQA provision that requires a petitioner to present "to the public agency orally or in writing by any person during the public comment period...or prior to the close of the public hearing on the project before the issuance of the notice of determination" any concerns it wishes to raise in a later court challenge. Pub. Res. Code § 21177(a) (emphasis added). This "exhaustion" doctrine requires a party to raise its concerns about a proposed project before the project is approved by a public agency so the agency has an opportunity to address the concern; any objection not so raised is barred from later being brought in a judicial challenge.

A prior appellate case, Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165 (decision here), had held that Public Resources Code 21177 applies only: "where (1) CEQA provides a public comment period, or (2) there is a public hearing before a notice of determination is issued." Azusa, 52 Cal.App.4th at 1210. CEQA exemption determinations do not require the filing of a notice of determination even if a public hearing is held. Accordingly, many lower courts have relied on Azusa to hold that the exhaustion of remedies requirement does not apply when the court challenge pertains to a lead agency's decision that a proposed project is categorically exempt from CEQA compliance even if the lead agency holds a hearing on the project. The Supreme Court determined that providing the public the opportunity to object in a public hearing was essential to whether the exhaustion requirement applies, not whether such public hearings are followed by the filing of a notice of determination. Indeed, the Supreme Court noted that the public agency in Azusa did not hold a public hearing. Thus, Tomlinson signals a significant departure in this area of the law and clarifies that, so long as the lead agency holds a public hearing prior to making the final exemption decision, project opponents must raise all CEQA-related issues to the agency before or during the public hearing or they cannot be raised later in court.

The Supreme Court remanded the Tomlinson case to the First District Court of Appeal to decide if the claims petitioners had raised were sufficient to put the County on notice that the opponents questioned the CEQA infill exemption's applicability to the project, and to address the remaining contentions that had not been resolved because of the Court of Appeal's conclusion that Section 21177's exhaustion-of-administrative remedies requirement was inapplicable.

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Copyright © 2012, Sheppard Mullin Richter & Hampton LLP 

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