California Supreme Court rules voter initiatives exempt from CEQA

August 8, 2014

By STEW JENKINS and KAREN VELIE

The California Supreme Court ruled Thursday that land use planning by voter qualified initiative is exempt from the California Environmental Quality Act (CEQA); even if a city council adopts the voter initiative to avoid holding a special election. Thursday’s ruling could impact the development of properties, such as the Dalidio Ranch, which have already received the approval of local voters.

For almost 20 years, Ernie Dalidio battled to develop his land along U.S. Highway 101 near Madonna Road in San Luis Obispo. In 2006, 65 percent of San Luis Obispo County voters approved a ballot initiative (Measure J) to allow Dalidio to incorporate business, retail, and residential without requiring annexation by the city of  San Luis Obispo on his 131-acre site.

In Thursday’s ruling that applies to counties, cities and districts in California, the Supreme Court barred Tuolumne Jobs & Small Business Alliance from suing Walmart and the city of Sonora.

In 2007, Walmart sought to expand its Sonora store to a super-center of 27,491 square feet. By the end of 2009, an Environmental Impact Report was unanimously approved by the city’s planning commission.

However, a Walmart supporter announced plans to circulate an initiative petition which would have adopted a specific plan for the construction of the super-center without the need for further processing or compliance with the California Environmental Quality Act. In Sept. 2010, the Sonora City Council considered the petition that had been signed by 20 percent of Sonora’s registered voters.

Justice Corrigan, who authored the unanimous opinion of the Court, said the “Elections Code requires” that when a voter initiative is presented with sufficient signatures to a city council it must “do one of three things: (1) adopt the initiative without alteration; (2) submit it to a special election; or (3) order an abbreviated report on the initiative.” If the city council orders the abbreviated report, “upon receipt of the report, it must then either adopt the initiative (without alteration) or hold a special election.”

According to Justice Corrigan, in Sonora, the city council did direct that a report be prepared “to examine the initiative’s consistency with previous planning commission approvals for the Wal-Mart expansion.” And at the following city council meeting, the Sonora City Council adopted the ordinance permitting the development.

Tuolumne Jobs & Small Business Alliance then sued for a writ of mandate, claiming that the city had violated CEQA “by adopting the ordinance without first completing its environmental review,” and “that the initiative … conflicted with the city’s general plan.”

The Superior Court tossed the case out of court based on a motion filed by the City of Sonora, Walmart, and the initiative’s proponent James Grinnell, holding said that the plaintiffs had no legal claim.

Tuolumne Jobs & Small Business Alliance appealed, and were apparently quite persuasive because the Third District Court of Appeal reversed the trial court, and had held that even if a land use ordinance was brought by voter initiative, the city council had no power to head off a special election by simply adopting the ordinance proposed by that initiative petition without performing a full CEQA review. This set up a conflict between Appellate Courts, since the Fourth District Court of Appeal had held in 2004 that CEQA did not apply to a voter initiative to authorize development of a private school. In that case the City Council of San Juan Capistrano had similarly adopted rather than setting it for special election.

The Supreme Court held that the “Elections Code provides the exclusive procedures for voter initiatives,” the Elections Code’s “statutory language precludes application of CEQA, application of CEQA to voter initiatives is contrary to legislative intent, and direct Adoption of a development ordinance without CEQA review does not offend public policy.”

Thursdays ruling says voters, through direct democracy initiatives, have the power to do land use planning without being constrained by the process and limitations imbedded in the CEQA even if an elected governing body like a city council chooses to avoid the cost of a special election on the initiative by adopting the land use planning ordinance proposed by the voters’ initiative petition.

Currently, Dalidio’s property is in escrow with developer Gary Grossman, who had been promoting plans to scrap the initiative in favor of a development with more residential and less retail space. If Grossman proceeds with his plan to scrap the 2006 voter approved development, further CEQA review potentially could be required. The property’s escrow is slated to close in November.

Thursday’s Supreme Court ruling could significantly affect how the developers, investors, and potential purchaser move forward on the Dalidio property.

Stew Jenkins is an attorney practicing in San Luis Obispo since 1978 providing estate planning and family law representation. Jenkins obtained preliminary injunction against the City of San Luis Obispo for the SLO Homeless Alliance in 2012, dismissal of Torres v Brennler as an SLAPP suit designed to impair press freedom in 2013, and the overturned unconstitutional California Elections Code statutes in Barta v. Debra Bowen, California Secretary of State, in 2014.