Real Estate and Construction Law Blog

On April 10, 2008, the Army Corps of Engineers ("Corps") and the Environmental Protection Agency ("EPA") issued a final rule governing mitigation requirements for unavoidable impacts to wetlands and other waters of the United States under the section 404 program of the Clean Water Act.  70 Fed. Reg. 19594. This rule is a major change to the Section 404 program.  It was published with nearly 80 pages of preamble in the Federal Register, and the rules itself is more than 30 pages.  It will take some time for the Corps staff and the regulated community to learn the new rule.  The rule is sufficiently complex that it will be many years before the effect of the changes will be fully understood.

Pacific Hills Homeowners Association v. Prun (Mar. 20, 2008, G038244) __ Cal.App.4th __

By S. Keith Garner

The California Court of Appeal for the Fourth District recently held that the five-year statute of limitations in the Code of Civil Procedure (CCP) section 336 for challenges to restrictions on the use of real property applies to a homeowners association's unrecorded rules or guidelines.  The case involved a dispute over the location and height of a fence and gate across a homeowner's driveway.  The homeowners association's CC&Rs, which were recorded, required homeowners to obtain written approval of plans for any improvements, such as fences, from the association's architectural committee before starting construction.  The association's architectural committee also adopted guidelines that imposed setback and height requirements on fences, which were not recorded.  In this case, the homeowner erected the fence and fate in November, 2000, without receiving the architectural committee's approval and in violation of the setback and height restrictions in the unrecorded guidelines.  The association immediately notified the homeowner of the violation, and, over the course of next few years, sporadically attempted to resolve the matter administratively with the homeowner.  After its requests for mediation were rebuffed, the association filed suit against the homeowner more than four years but less than five years after the installation of the gate and fence.  The homeowner argued in part that the action was barred by the four-year statute of limitations in CCP section 337.  The superior court found that the action was timely under CCP section 336(b) and issued an injunction requiring the gate and fence to be lowered or moved outside the setback.

SCOPE v. County of Los Angeles (November 26, 2007, B189116) 157 Cal. App. 4th 149

By Maria Pracher and Misti Schmidt

The California Court of Appeal for the Second District recently issued the first appellate opinion to apply the four principles delineated by the California Supreme Court in Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova, 40 Cal. 4th 412 ("Vineyard").  These principles govern whether the water services discussion in an Environmental Impact Report ("EIR") sufficiently analyzes the availability of future water supplies.  Santa Clarita Organization for Planning the Environment, et al.,  v. County of Los Angeles, 157 Cal. App. 4th 149, Civil No. B189116 at 9 (November 26, 2007) ("SCOPE").  Briefly, the Vineyard principles are:

Douda v. California Coastal Commission (February 6, 2008, B188210) ___ Cal.App.4th ___

By Aaron Foxworthy

The Second Appellate District affirmed a lower court decision that when acting as the issuing agency for a Coastal Development Permit (CDP) application, the California Coastal Commission may designate a portion of the subject property as an Environmentally Sensitive Habitat Area (ESHA) during consideration of the CDP application.  And, the Commission may then reject the CDP application based in part on potential impacts to the newly designated ESHA.  The decision is a cautionary tale for parties seeking to develop – or purchase for development – property in the Coastal Zone, that the Commission retains broad authority to designate ESHAs and restrict development.

Security National Guaranty, Inc. v. California Coastal Commission (January 25, 2008, A114647)  ___ Cal. App.4^th ___

By Bry Martin

The First Appellate District held that the California Coastal Commission does not have the authority to designate property an "environmentally sensitive habitat area" (ESHA) where a certified Local Coastal Program (LCP) is in place, and the LCP has neither designated the property as an ESHA, nor contains language anticipating later designation of the property as an ESHA through administrative action.  The decision stands to protect developers and local governments by recognizing the LCP as a bulwark against the uncertainty created by potential ESHA determinations rendered by the Coastal Commission in the appeals process.

By James G. Higgins

Prompt payment laws can pose significant risk to owners and contractors.  In S&S Cummins Corp. v. West Bay Builders, Inc. 2008 Cal. App. LEXIS 160, *, a public works general contractor was stung under Public Contract Code section 7107 for delaying retention payments to an electrical subcontractor.

Environmental Defense Project of Sierra County v. County of Sierra, et al. (January 9, 2008, C055448) __Cal. App. 4th

By Bry Martin

In a victory for public participation advocacy groups and a defeat to efforts to increase efficiency in the planning and development process, the California Court of Appeals for the Third District struck down Sierra County’s “streamlined zoning process,” which had permitted the county to provide notice of a legislative public hearing on a zoning ordinance or zoning ordinance amendment before the legislative body received a planning commission recommendation.  The court held that, under California Government Code sections 65854, 65856, 65090, and 65094, the local agency must give notice of the legislative body’s public hearing on a zoning ordinance or zoning ordinance amendment only after the planning commission has submitted its recommendation to the legislative body, and the public notice must contain the planning commission’s recommendation.

By Michael B. Wilmar and Misti M. Schmidt

With a resounding no, the California Court of Appeal for the Fifth District answered the question of whether a county can permit the use of real property that is not allowed by the zoning ordinance even if the county grants a zoning exception in a development agreement.  Such an exception is invalid where the county has not rezoned the property, amended the text of the zoning ordinance, issued a conditional use permit consistent with the ordinance, or granted a variance.

By Olivier F. Theard and Maria J. Gangemi

I. Introduction

On November 5, California filed suit for an injunction to compel EPA to rule on California's requested waiver from the Clean Air Act's prohibitions of states enforcing their own greenhouse gas emissions standards for automobiles.  Several other states have intervened, seeking to adopt California's standards as well.

Landale-Cameron Court, Inc. v. Ahonen (Oct. 10, 2007, B190309 [2^nd Dist., Div. 2]), ___ Cal. App. 4th ____; http://www.courtinfo.ca.gov/cgi-bin/opinions

By Thomas B. Snyder and Andriana Ledesma

In Landale?Cameron, the homeowner's association of a condominium complex ("HOA"), discovered various water leaks to the building and subsequently sued the builder-developers Arnold and Helen Kaufman ("Kaufman") and Petri Ahonen dba Riteway Decking and Flooring ("Riteway") for negligence and contract causes of action.  Riteway moved for summary judgment on the grounds that the complaint was barred because it was filed after the expiration of the three-year statute of limitations for actions involving injury to real property under California Code of Civil Procedure Section 338.

Lincoln Place Tenants Assoc. v. City of Los Angeles (September 19, 2007, B193235 [2^nd Dist. , Div. 7]) ___ Cal. App. 4^th ____; http://www.courtinfo.ca.gov/cgi-bin/opinions

By Alexis M. Pelosi

In this case, the Second District Court of Appeal confirmed that the Ellis Act does not preempt CEQA and that cities have a continuing obligation to comply with mitigation measures required under CEQA.

People of the State of California v. General Motors Corporation et al. (Sept. 17, 2007, C06-05755) ___Cal.App.4^th ___;

By Maria J. Gangemi

Introduction/Holding:

In a major case brought by the State of California seeking to hold automakers liable for global warming, District Judge Martin Jenkins in San Francisco granted defendants' motion to dismiss the State's nuisance causes of action under federal and state law.  The judge determined that it was a non-justiciable political question.

By Randolph C. Visser and Olivier F. Theard

Pursuant to AB 32 (the Global Warming Solutions Act) the California Air Resources Board (CARB) recently announced that it would go beyond the minimum statutory requirements and has proposed additional “early action measures” designed to help California achieve its statutory goal of reducing greenhouse gas emissions to 1990 levels by the year 2020.  If adopted, the new measures will significantly increase the current list of early action measures which were approved by CARB in June 2007.

Patel v. Liebermensch (Aug. 21, 2007, D048582 [4^th Dist, Div. 2]) __ Cal.App.4^th __; http://www.courtinfo.ca.gov/cgi-bin/opinions

By William M. Flieshhacker

In this case, the Fourth District Court of Appeal of California addressed the issue of the enforceability of an option contract that did not include essential terms regarding the time and manner of payment.  The court held that the evidence showed that the parties continued to negotiate these terms (and terms related to the amount of the deposit, the escrow period, and the payment of escrow expenses) following the tenant’s notice that he was exercising the option.  The court found that these key terms could not be added by the trial court by implication, thus rendering the option contract unenforceable.

By Robert J. Uram and Aaron Foxworthy

In Northern California River Watch v. City of Healdsburg, the Ninth Circuit held that a man-made pond that (a) contains and is largely surrounded by wetlands, (b) is separated from a traditionally navigable water only be a levee, and (c) shares a significant nexus with the adjacent navigable water can be considered a regulable water of the United States.  (Case No. 04-15442, slip op. at 9373, August 6, 2007).  The Healdsburg decision revised the court’s August 2006 opinion in the case.  (Earlier opinion at 457 F.3d 1023).

By Maria Pracher and William Fleishhacker

On August 21, 2007, the California State Legislature ended a 52?day budget stalemate, agreeing to a $145 billion spending plan.  As part of that agreement, the lawmakers passed minor amendments to the California Environmental Quality Act (“CEQA”).  The amendments require the State Office of Planning and Research to develop and prepare guidelines addressing the analysis and feasible mitigation of greenhouse gas emissions, as required by CEQA.  These guidelines must be adopted by the Resources Agency by January 1, 2010.  The amendments also provide an exemption for certain projects from CEQA lawsuits based on claims that the effects of greenhouse gas emissions were not adequately analyzed or mitigated in an Environmental Impact Report (“EIR”) or other CEQA document prepared for the project.  The projects exempted are any transportation or flood protection projects funded by the $25 billion bond measures passed by the voters in 2006.  The CEQA exemptions are temporary, expiring on January 1, 2010.

By William M. Fleishhacker

In Mani Brothers Real Estate Group v. City of Los Angeles, the Second District Court of Appeal of California addressed the issue of whether the City of Los Angeles (the “City”) and the Los Angeles Community Redevelopment Agency (the “CRA”) properly relied on a 2005 Addendum to a 1989 environmental impact report (“EIR”) in approving a modified project. In doing so, the Court specifically rejected the analysis of a 2006 case which held that the initial inquiry should focus on whether the changes amount to a “new project” requiring an EIR.  Rather, under the substantial evidence standard of review, and based on CEQA and the CEQA Guidelines, the Court held that the proper question is whether the changes result in new significant impacts compared to the original project.

U.S. v. Moses, No. 06-30379 (9^th Cir. 2007)

By Stephanie J. Helfrich

In upholding an 18-month prison sentence, plus monetary fines, under the Clean Water Act (CWA) of an eastern Idaho developer who bulldozed a creek bed, the Ninth Circuit held that a seasonally intermittent stream which ultimately empties into a river that is a water of the United States can, itself, be a water of the United States. The Court further held that deposition of materials into the intermittent stream during the 10-month dry season still constituted a discharge of fill into waters of the United States.

Muzzy Ranch Co. v. Solano County Airport Land Use Commission (2007) __ Cal. __

By Arthur J. Friedman, David P. Lanferman and Elizabeth S. Anderson

In Muzzy Ranch Co. v. Solano County Airport Land Use Commission, the California Supreme Court unanimously held that the adoption of the Travis Air Force Base Land Use Plan (the "Plan") by the Solano County Airport Land Use Commission (the "Commission") was a "project" for purposes of CEQA.  In this particular case, however, the Court affirmed the Commission's determination that the adoption of the Plan was exempt from CEQA pursuant to the "common sense" exemption since the Plan simply reiterated existing Solano County General Plan land use policies.  This decision is significant in that the Court: (1) upheld the use of the "common sense" exemption from CEQA review, even though "legitimate questions were raised" about the possible environmental impacts of the adoption of the Plan and the Commission had erred by failing to identify substantial evidence in the record in support of its invocation of the exemption; and (2) also acknowledged that CEQA may require lead agencies to consider the effects of "displaced development" resulting from restrictive land use policies where such development can be reasonably anticipated.

United States v. Atlantic Research Corporation (2007) __ U.S. ___ [http://www.supremecourtus.gov/opinions/06pdf/06-562.pdf].

By Randy Visser and Olivier Theard

In a boon to private parties who undertake to voluntarily clean-up contaminated sites, the Supreme Court in United States v. Atlantic Research Corporation established that parties who undertake clean-up efforts may bring cost recovery actions under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) against potentially responsible parties (PRPs).  Before this decision, there was a split in the circuit courts regarding whether private parties could recover costs of clean-up, or whether their exclusive remedy was a contribution action which could only be brought after they were sued by the government.  The Supreme Court, in a unanimous opinion by Justice Thomas, ruled that a private party may sue for cost recovery even if that party has not been sued or paid a judgment or settlement to the government.

LT-WR, L.L.C. v. California Coastal Commission et al, No. B187666 (Cal. Ct. App., 2d Dist. May 25, 2007)

By Jeffrey W. Forrest

The Second District Court of Appeal of California upheld a trial court decision that the California Coastal Commission (the “Commission”) exceeded its authority when the Commission denied a private landowner a permit for gates and “no trespassing” signs.  The appellate court found that the Commission’s ruling that there was a “potential” to establish prescriptive rights for public use on the property “speculative.”

Like “squatter’s rights”, prescriptive access rights are created when the public openly and repeatedly accesses private property for a sufficient period of time without the landowner’s permission.  The Commission’s denial of the permit in effect decreed the existence of such access rights and was inappropriate because the Coastal Act does not grant the Commission the authority to create prescriptive public access rights.  Only a court has the authority to adjudicate and determine whether prescriptive access rights exist.

By Robert Uram, Ella Foley-Gannon and Aaron Foxworthy

On June 5, 2007, the Army Corps of Engineers (Corps) and the U.S. Environmental Protection Agency (US EPA) published long-awaited guidance on the United States Supreme Court's decisions in Rapanos v. United States and Carabell v. United States Army Corps of Engineers.  Posted on the agencies' respective web sites, the guidance sets out their interpretation of the Rapanos and Carabell decisions, particularly their effects on the agencies' regulatory jurisdiction under Section 404 of the Clean Water Act (CWA Jurisdiction).

By Arthur J. Friedman

On May 22, 2007, the Napa County Superior Court issued its ruling in American Canyon Community United for Responsible Growth et al. v. City of American Canyon et al. (Napa County Superior Court Case No. 26-27462), approving the City’s “addendum” to the previously approved mitigated negative declaration, and thereby authorizing the partially constructed and approved Wal-Mart supercenter in American Canyon to proceed with construction and operations.  The court’s ruling is significant in part because it rejected the petitioners’ novel claim that the City was required to perform “supplemental” environmental review of the project’s potential impacts on climate change in response to the California legislature’s recent enactment of Assembly Bill 32.

Feduniak et al., v. California Coastal Commission (2007) 148 Cal. App. 4th 1346.

By Michael R. Leake

The Sixth District Court of Appeals of California overturned a trial court decision and rejected the claim of a Monterey County coastal property homeowner that the Commission should be estopped from requiring the removal of a three-hole, pitch-and-putt golf course from the property and restoration of the area to its original landscape of native dune vegetation because the Commission failed to take any action regarding the existence of the golf course in violation of restrictions placed on the property by the Commission despite the fact that the golf course was easily visible and had been there for 18 years.

National Wildlife Federation v. National Marine Fisheries Service, No. 06-35011 (9th Cir. 2007)

By Bob Uram and Keith Garner

On April 9, 2007, the Ninth Circuit held that the jeopardy analysis under the Endangered Species Act regulations must consider the effects of an action on a listed species’ chance of recovery in a Section 7 consultation.  The regulations, which were promulgated in 1986, prohibit any agency action “that reasonably would be expected, directly or indirectly, to reduce appreciably the likelihood of both the survival and recovery of a listed species in the wild.”  50 C.F.R. § 402.02.  In a challenge to a biological opinion issued for the proposed operations of the Federal Columbia River Power System dams and related facilities, the National Marine Fisheries Service had argued that the restriction bars only actions that will both reduce the likelihood of survival and recovery of the species.  Because a species may survive without recovering to the point where it is no longer imperiled, the requirement to reduce the species’ chance of both survival and recovery was effectively a survival standard.  The Ninth Circuit upheld a district court’s decision invalidating the biological opinion, noting that the agency’s interpretation “reads ‘and recovery’ entirely out of the text.” The decision also contains important guidance on the definition of discretionary federal actions and rejects the NMFS effort to view the scope of the federal action narrowly.

Shepard v. Edward Mackay Enterprises, Inc., et al., --- Cal. Rptr. 3d ---, No. C052564, 2007 WL 853456 (Cal. Ct. App. Mar. 22, 2007)

While Section 1298.7 of the California Code of Civil Procedure generally allows homebuyers to pursue defect litigation in court regardless of an agreement to arbitrate, the Third District Court of Appeal recently ruled the Federal Arbitration Act preempts California law and binds homebuyers to arbitration provisions when the transaction involves interstate commerce.  Because homes built in California today likely incorporate at least some construction materials originating outside the state and therefore implicate interstate commerce, the court's ruling may effectively preclude homebuyers from relying on this section of the Code of Civil Procedure to avoid arbitration.

Stockton East Water District, et al. v. United States (February 20, 2007)

By Philip Atkins-Pattenson and Katharine Allen

In this action against the United States, the United States Court of Federal Claims held that the Bureau of Reclamation did not breach several 1983 state water contracts with two California water districts when it withheld water from the New Melones Reservoir for fish and wildlife purposes, as required by the Central Valley Project Improvement Act.  The court further found that the reduction in allocable water did not constitute a taking because the Bureau acted in its commercial capacity when it entered into the contracts, which meant that the plaintiffs’ only remedies were contractual.

By Robert Uram and Aaron Foxworthy

In San Francisco Baykeeper v. Cargill Salt Division, the Ninth Circuit Court of Appeals provided further guidance on the limits of Clean Water Act (“CWA”) regulatory authority.  ___ F.3d ___; Case No. 05-15051, slip op. at 2666 (9th Cir., filed March 8, 2007).  Cargill argued that a non?navigable, non?wetland pond does not fall within the Environmental Protection Agency’s definition of jurisdictional water of the United States simply by virtue of its adjacency to a navigable waterway.  The Court of Appeals agreed, holding that pursuant the agency’s CWA regulations, wetlands are the only waterbodies that  fall within CWA regulatory authority based on their adjacency to navigable waters of the United States.  Since the waterbody in question was a diked pond, not a wetland, the adjacency rule did not apply.  Baykeeper argued that the pond was nevertheless subject to regulatory authority because attendant circumstances indicated it had a “significant nexus” to navigable waters.  The court rejected this argument finding no indication in previous case law that the significant nexus test is intended to apply to waterbodies other than wetlands, and that, in any event, the evidence presented by Baykeeper did not indicate that water ever flowed from the pond to adjacent navigable waters.

By Robert J. Uram and Aaron Foxworthy

District courts for the Northern District of California and the District of Connecticut recently applied the Supreme Court’s 2006 Rapanos decision to decide whether certain intermittent and ephemeral streams and adjacent wetlands were subject to Clean Water Act regulatory jurisdiction.  (Please click for further discussion of Rapanos).  In both instances, the courts found that plaintiffs had not presented sufficient evidence that the streams or wetlands in question had a significant effect on downstream navigable waters.

Kristina Dyer v. Exon Martinez et al. (February 23, 2007, G037423) __ Cal.App.4th__; http://www.courtinfo.ca.gov/opinions

By Katharine E. Allen

In this action for specific performance of a contract for the purchase of real property, the Court of Appeals found that the physical recordation of a lis pendens in the county recorder's office was insufficient to provide a prospective purchaser with constructive notice of the claim until the recorder properly indexed the lis pendens in the county real property records because a diligent title search would not reveal the existence of the claim unless it was properly indexed.

Friends Of The Sierra Railroad v. Tuolumne Park and Recreation District  (filed January 12, 2007; certified for publication February 8, 2007, F050117) __ Cal.App.4^th__

By Lori Wider

Introduction

In this case plaintiff Friends of the Sierra Railroad (Friends) challenged the approval and sale of land from Tuolumne Park and Recreation District (District) to Tuolumne Band of Me-Wuk Indians (Real Party).  The land sold contained a portion of an historic railroad right?of?way.  Friends contended that the sale constituted a “project” under CEQA, requiring prior environmental review.  The Court of Appeal held that the transfer of the land was not a “project” under CEQA under the circumstances of this case.  While some development of the property was reasonably foreseeable, review of possible impacts to the historical resource would be premature in the absence of any specific proposal for development.

Uphold Our Heritage v. Town of Woodside  (filed January 10, 2007; certified for publication February 2, 2007, A113376) __ Cal.App.4^th__

By Lori Wider

Introduction

In this case plaintiff Uphold Our Heritage (Heritage) challenged the issuance by the Town of Woodside (Town) of a permit to Steve Jobs (Jobs) to demolish a mansion on his property to enable construction of a new single family residence.  The Court of Appeal held that Town's findings of infeasibility of certain EIR project alternatives involving rehabilitation of the existing structure rather than demolition were not supported by substantial evidence in the record. While the estimated costs of restoration of the mansion were before the Town Council (Council), the record was devoid of any information regarding the likely cost of a new residence (the proposed project). Without the information necessary to compare the restoration costs against the cost of the project, there was insufficient evidence to support the findings of infeasibility of rehabilitation alternatives.

McAllister v.County of Monterey et al.  (January 31, 2007, H028813) __ Cal.App.4^th__

By Lori Wider

Introduction

This case involved a challenge by the plaintiff McAllister to approval of a coastal development permit issued to his neighbors ("Real Parties") for a single family residence on the Big Sur coast.  The primary issues addressed by the court were McAllister's arguments that (1) the County of Monterey's ("County") approval of the permit was null and void since a prior owner's violation of conditions of a previously issued development permit for the same property constituted a violation of the County Code and, therefore, divested the County of jurisdiction to approve the permit; and (2) the County violated CEQA by failing to prepare an EIR rather than a mitigated negative declaration in connection with the permit.

Concerned McCloud Citizens v. McCloud Community Services District et al.  (Filed January 2, 2007; certified for publication January 31, 2007, C050811) __ Cal.App.4^th__

By Lori Wider

Introduction and Background

The California Court of Appeal, Third Appellate District, reversed the decision of the trial court  granting a petition for writ of mandate brought to challenge approval of an agreement between the McCloud Community Facilities District ("District") and Nestle Waters North America, Inc. ("Nestle") for the sale and purchase of spring water.  The lower court determined that the District had violated CEQA by failing to conduct environmental review prior to approving the agreement.  The appellate court disagreed, finding that approval of the agreement did not trigger the requirement for environmental review prior to District approval because (a) the agreement was expressly conditioned on future CEQA compliance; and (b) it did not commit the District to a course of action or commit it to issuance of any permits or other entitlements to Nestle.

Anne Manderville et al. v. PCG&S Group, Inc. et al. (January 24, 2007, D047285) __ Cal.App.4th__; http://www.courtinfo.ca.gov/opinions/

By Katharine E. Allen

In this case, the Court of Appeals determined that exculpatory clauses contained in a purchase contract are against public policy to the extent such clauses exempt any individual from liability for his own fraud and therefore do not preclude a buyer of real property from showing that he justifiably relied on a broker’s intentional misrepresentation about the character of the property.  The court also found that any lack of due diligence by a buyer in investigating zoning and other laws restricting the use of property, even if negligent, does not preclude the buyer from establishing justifiable reliance if (a) there has been an intentional misrepresentation; and (b) the purchase contract only permits, but does not require, the buyer to undertake his or her own due diligence.

National Association of Homebuilders v. U.S. Army Corps of Engineers, 01-274 JR (D. D.C. Jan. 30, 2007)

By Robert J. Uram and Stephanie J. Helfrich

On January 30, 2007, U.S. District Judge James Robertson ruled in favor of several major trade associations when he held that a rule jointly issued by the Army Corps of Engineers and the Environmental Protection Agency defining whether “incidental fallback” that can result from activities such as ditch digging and excavation, and subjecting the activity to Section 404 jurisdiction, was invalid.  Judge Robertson held that the rule does not properly address issues raised by a 1998 D.C. Circuit Court of Appeals Decision (National Mining Association v. United States Army Corps of Engineers, 145 F.3d 1399 (D.C. Cir. 1998)) and that the rule violates the Clean Water Act.  This decision coupled with the Supreme Court’s ruling in the Carabell and Rapanos cases leaves the Section 404 program awash with uncertainty.

California Farm Bureau Federation et al. v. California State Water Resources Control Board, (January 17, 2007, C050289) __ Cal.App.4th__ http://www.courtinfo.ca.gov/opinions

By David P. Lanferman and Ella Foley-Gannon

The Court of Appeals for the Third Appellate District has declared that regulatory fee schedules adopted by the State Water Rights Control Board (“Board”) in 2003, imposing new annual fees on holders of water rights permits and licenses are unconstitutional and invalid. The decision was based largely on the court’s finding that the Board failed to demonstrate the requisite “proportionality” between the costs of the Board’s regulatory program and the fees imposed on the targeted fee payors, and addressed several important issues frequently raised in the implementation and litigation of regulatory fees.

Kemp Bros. Construction, Inc. v. Titan Electric Corp. (2007) Cal.App.4^th

By Thomas B. Snyder

In this case, Kemp was a prime contractor on two public works projects for the Los Angeles Unified School District ("LAUSD").  It subcontracted the electrical work to Titan Electric on both projects.  Partway through performance, Titan began to struggle with its payroll obligations and Kemp agreed to informally advance payments to Titan to assist in completing the work.  When problems continued, Kemp stopped the advance payments and Titan was unable to meet its payroll.  Kemp then retained another electrical subcontractor who completed the work.  Simultaneously, Kemp requested that the LAUSD approve Titan's substitution as the listed subcontractor under Public Contracts Code Section 4107, arguing that Titan was failing and refusing to perform its work and/or delaying or disrupting the progress of the work.  The LAUSD hearing officer agreed that Titan had been disrupting and delaying the work and therefore determined that Kemp had the statutory right to substitute Titan.

Black Hills Investments, Inc. v. Albertson's, Inc. - January 12, 2007

By Thomas B. Snyder

On November 22, 2004, Black Hills entered into a contract to purchase two parcels of real property in a retail shopping center.  At the time of the contract, the two parcels had not yet been created through subdivision of the property.  Black Hills deposited earnest money of $133,000 which was described as non-refundable.  The contracts contained a provision which permitted the seller, Albertson's, to terminate the contract if it failed to obtain the proper governmental approvals for creation of the two parcels.  Black Hills was given no such right.

American Canyon Community United for Responsible Growth v. City of American Canyon et al. (November 17, 2006; certified for partial publication December 18, 2006, A111278) __ Cal.App.4^th__ http://www.courtinfo.ca.gov/opinions

By Lori Wider

In this case, the Court of Appeal determined that the City of American Canyon (“City”) violated CEQA because the City’s determination that project changes would not substantially increase traffic impacts was not supported by substantial evidence and the City failed to proceed in accordance with law by refusing to consider potential extraterritorial urban decay effects of a proposed Wal-Mart supercenter.  The changes would have increased the size of the approved project by 6.5% and added 30 traffic trips.  The Court also determined that the City violated its zoning ordinance by approving the supercenter without approving a major modification application.  Only the CEQA portion of the decision is certified for publication; the last section of the decision, addressing the alleged zoning ordinance violations, is not.

City of Goleta v. Superior Court of Santa Barbara County  (December 21, 2006, S129125) __Cal.App.4th__http://www.courtinfo.ca.gov/opinions

By Maria Pracher

The California Supreme Court has held that the newly incorporated City of Goleta could disapprove a final subdivision map even though the vesting tentative subdivision map had been approved by Santa Barbara County.  Government Code section 66413.5(f), which provides for the mandatory approval of a final map by a newly incorporated city if the vesting tentative map has been approved by a county, did not apply given the facts in this case.  Additionally, the City's adoption of the County codes did not prevent it from denying the map, and nothing in the City's actions with respect to the project estopped it from denying the final map.

Calvert v. County of Yuba (December 5, 2006, C047857)__Cal.App.4^th__ http://www.courtinfo.ca.gov/opinions/

By Lori Wider

The Court of Appeal, Third Appellate District, held that a vested rights determination under the Surface Mining and Reclamation Act ("SMARA") regarding surface mining operations in the diminishing asset context is subject to the procedural due process requirements for reasonable notice and an opportunity to be heard.  The County of Yuba ("County") in this case made a determination that Western Aggregates LLC ("Western") had a vested right to mine aggregate from an area within the Yuba Goldfields.  The County had invited Western and other surface mining operators to apply for a vested rights determination following a decision by a superior court in a prior lawsuit that a zoning authorization was not an adequate substitute for a SMARA permit.  In determining that a public adjudicatory hearing, with reasonable notice and an opportunity to be heard, was required, the Court of Appeal specifically limited its holding to a vested rights claim to conduct a surface mining operation subject to the diminishing asset doctrine.  Therefore, it is not clear whether this decision has any broader application or implication beyond the facts of this case.

Wagner Farms, Inc. v. Modesto Irrigation District (Dec.6, 2006, F049966) __ Cal.App.4th __ http://www.courtinfo.ca.gov/opinions/

By Maria Pracher

In this case, the appellate court reversed an award of costs in favor of the Modesto Irrigation District (the District) granted by the trial court after the plaintiff's petition for a writ of mandate was denied.  The court found the District had failed to provide sufficient justification for the "unusually high" cost per page for preparing the record and to adequately document the time legitimately charged for assembling the record of the proceedings.

Divers’ Environmental Conservation Organization v. State Water Resources Control Board (Nov. 29, 2006, D046112) __ Cal.App.4th __ http://www.courtinfo.ca.gov/opinions

By Ella Foley-Gannon and Julie Austin

The Court of Appeals held that a permitting agency under the Clean Water Act is not required to conduct a numeric analysis of individual pollutants in industrial stormwater discharges in order to comply with federal regulations.  In addition, even if a discharge will cause the receiving body of water to violate State water quality standards, the agency is not required to impose numeric “water-quality based effluent limitations” (WQBELs) in a National Pollutant Discharge Elimination System (NPDES) permit.  Rather, to comply with the regulations, the agency may conduct more general, non-numeric tests of stormwater discharges and, if necessary, impose Best Management Practices (BMPs) on the discharger.  This decision is significant because the environmental community has recently pressured permitting agencies to impose numeric limitations on industrial discharges, which include construction discharges.  These numeric limitations, if required, would have presented a huge challenge and risk to permittees, who could violate their permits despite the fact that stormwater pollutants are highly variable and may be beyond their control.  Thus, this decision helps protect permittees by clarifying that permitting agencies are not required to use numeric limitations to regulate industrial stormwater discharges.

Wolfe v. City of Fremont (Oct. 31, 2006, A112386) __ Cal.App.4^th __ http://www.courtinfo.ca.gov/opinions/

By Julie Austin

This Court of Appeals’ decision under the Brown Act, which prohibits a majority of members of a local legislative body from reaching a “collective concurrence” outside a noticed public meeting, suggests that an improper consensus may be reached inadvertently during the course of individual conversations between members of a local legislative body.  The court found that the plaintiff alleged sufficient facts to demonstrate that an improper “collective concurrence” had occurred through a series of one-on-one conversat