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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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