G.I. Industries v. City of Thousand Oaks

Filed 10/26/22
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SIX
G.I. INDUSTRIES, 2d Civ. No. B317201
(Super. Ct. No. 56-2021-
Plaintiff and Appellant, 00554581-CU-WM-VTA)
(Ventura County)
v.
CITY OF THOUSAND OAKS et
al.,
Defendants and Respondents;
ARAKELIAN ENTERPRISES,
INC.,
Real Party in Interest and
Respondent.
The Ralph M. Brown Act (Brown Act), (Gov. Code,1 § 54950,
et seq.) requires public agencies to conduct their business in the
open with adequate notice to the public. Here, a local agency
found that a project is exempt from the California Environmental
Quality Act (CEQA) (Pub. Resources Code § 21000, et seq.).
All further references are to the Government Code unless
1
otherwise indicated.
Section 54954.2 of the Brown Act, requires this CEQA
finding of exemption to be listed on the agency’s agenda for its
public meeting. It was not. The trial court erred when it entered
judgment after sustaining demurrers without leave to amend
brought by a local agency and the real party in interest. We
reverse.
FACTS
G.I. Industries,2 doing business as Waste Management
(WM), provided solid waste management for the City of Thousand
Oaks (City).
The City was considering entering into a new exclusive
solid waste franchise agreement with Arakelian Enterprises, Inc.
doing business as Athens Services (Athens). The agreement is for
a 15-year term beginning January 1, 2022, and ending December
31, 2036.
On March 4, 2021, the City posted an agenda for a regular
meeting of the City council to be held on March 9, 2021. An item
on the agenda stated that the City would consider awarding the
franchise agreement to Athens, along with a note that the City’s
staff recommended approval. One item was not listed on the
City’s agenda, that the City would also consider whether the
agreement is exempt from CEQA. Nor did the agenda include
the City staff’s recommendation that the City find the agreement
to be categorically exempt.
On March 5, 2021, WM submitted a comment letter to the
City raising WM’s concern that the City had not considered
potentially adverse environmental impacts if the new franchise
agreement were approved.
We deny appellant’s request for judicial notice filed
2
February 16, 2022.
2
It was not until 3:30 p.m. on March 9, 2021, the day of the
City council meeting, that a supplemental item was posted giving
notice of the staff’s recommendation that the City find the
agreement to be exempt from CEQA. The posting included a
supplemental information packet with the City staff’s
recommendation for the exemptions. The staff found the
franchise award to be categorically exempt pursuant to the
CEQA Guidelines3 under the “existing facilities” and “actions by
regulatory agencies for the protection of the environment”
exemptions. (Guidelines, §§ 15301, 15308.) The staff also found
the franchise award exempt under the so-called “common-sense”
exemption. (Id., § 15061 (b)(3).)
City Council Meeting
During the council meeting representatives of Athens
stated that the vehicle and hauling yard for the project might be
located in Santa Paula, Sun Valley or “other options.” The staff
report did not consider the potential impacts of the use of the
alternative sites which also involve trucks hauling trash
throughout the City.
The City attorney stated, “There’s been a lot of questions
raised about the environmental impacts of this.” Nevertheless,
the City attorney recommended adopting the staff’s finding of
CEQA exemptions.
A council member moved to approve the Athens franchise
agreement. The mayor suggested the council member include in
the motion a finding that the project is exempt from CEQA. The
council member agreed. The City council adopted the motion as
amended to include the CEQA exemptions. The minutes of the
3All references to Guidelines are references to title 14 of
the California Code of Regulations, section 15000 et seq.
3
meeting reflect separate actions by the council in approving the
agreement and in finding it exempt from CEQA. The City then
filed a notice of exemption with the county clerk on March 15,
2021.
Cure and Correct Letter
As required by section 54960.1, subdivision (b), prior to the
commencement of litigation under the Brown Act, WM sent the
City a “cure and correct” letter. The letter stated in part:
“The City Council violated the Brown Act on March 9, 2021
by voting to adopt a Notice of Exemption (NOE) pursuant to the
California Environmental Quality Act (CEQA) (Pub. Resources
Code, § 21000 et seq.) prior to adopting the Franchise Agreement
and without adequate notice to the public as a part of the posted
agenda for the meeting.
“The Brown Act requires a posted agenda to include a
description of each item of business to be considered at a
legislative body’s meeting at least 72-hours prior to the meeting.
(Gov. Code, § 54954.2, subd. (a)(1).)”
The City did not respond to the letter within 30 days, which
is deemed a decision not to cure or correct the challenged action.
(§ 54960.1, subd. (c)(3).)
Procedure
WM petitioned the trial court for a writ of mandate
directing the City to vacate both its approval of the franchise
agreement and its finding that the project is exempt from CEQA.
Athens was joined as the real party in interest. The petition
alleged that the City violated section 54954.2 of the Brown Act by
voting to adopt the CEQA exemptions without including CEQA
exemptions as an agenda item at least 72 hours prior to the City
council meeting.
4
The City and Athens demurred to the complaint. The trial
court sustained the demurrer without leave to amend. The court
agreed with WM that the CEQA exemption is an item of business
separate from approval of the franchise agreement. The court
also concluded that because CEQA does not require a public
hearing for an exemption determination, the Brown Act does not
apply.
DISCUSSION
I.
Standard of Review
The function of a demurrer is to test whether, as a matter
of law, the facts alleged in the complaint state of a cause of action
under any legal theory. (Intengan v. BAC Home Loans Servicing
LP (2013) 214 Cal.App.4th 1047, 1052.) We assume the truth of
all facts properly pleaded, as well as facts of which the trial court
properly took judicial notice. (Ibid.) But we do not assume the
truth of contentions, deductions, or conclusions of law. (Ibid.)
Our review of the trial court’s decision is de novo.
We review the trial court’s decision to allow an amendment
to the complaint for an abuse of discretion. (Fontenot v. Wells
Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 273-274, overruled
on other grounds by Yvanova v. New Century Mortgage Corp.
(2016) 62 Cal.4th 919, 199.) Where there is no reasonable
possibility that plaintiff can cure the defect with an amendment,
sustaining a demurrer without leave to amend is not an abuse of
discretion. (Id. at p. 274.)
5
II.
Statutory Background
(a) Brown Act
The Brown Act begins with a declaration of purpose: “In
enacting this chapter, the Legislature finds and declares that the
public commissions, boards and councils and the other public
agencies in this State exist to aid in the conduct of the People’s
business. It is the intent of the law that their actions be taken
openly and that their deliberations be conducted openly.”
(§ 54950.)
To effectuate this purpose, section 54954.2, subdivision
(a)(1) provides in part: “At least 72 hours before a regular
meeting, the legislative body of the local agency, or its designee,
shall post an agenda containing a brief general description of
each item of business to be transacted or discussed at the
meeting, including items to be discussed in closed session.”
The public has the right to address the local agency.
Section 54954.3, subdivision (a) provides in part: “Every agenda
for regular meetings shall provide an opportunity for members of
the public to directly address the legislative body on any item of
interest to the public, before or during the legislative body’s
consideration of the item, that is within the subject matter
jurisdiction of the legislative body, provided that no action shall
be taken on any item not appearing on the agenda.”
Any interested person may petition the court for the
purpose of obtaining a judicial determination that an act taken in
violation of section 54954.2 is null and void. (§ 54960.1, subd.
(a).)
6
The Brown Act is supported by the California Constitution.
Article 1, section 3, subdivision (b), paragraphs (1) and (2) of the
California Constitution provide in part:
“(1) The People have the right of access to information
concerning the conduct of the People’s business, and, therefore,
the meetings of public bodies and writings of public officials and
agencies shall be open to public scrutiny.
“(2) A statute, court rule, or other authority, including
those in effect on the effective date of this subdivision, shall be
broadly construed if it furthers the People’s right of access, and
narrowly construed if it limits the right of access.”
(b) CEQA
The first step in an environmental analysis is to determine
whether an activity qualifies as a “project” within the meaning of
CEQA. Not everything a local agency does is a project subject to
CEQA. CEQA generally applies “to discretionary projects
proposed to be carried out or approved by public agencies.” (Pub.
Resources Code, § 21080, subd. (a).) That includes an activity
that is supported through public agency contracts, grants,
subsidies, loans or other forms of assistance, which activity may
cause a physical change to the environment. (Guidelines, § 15378
(a)(2).) It is undisputed that the contract at issue here qualifies
as a project within the meaning of CEQA.
If an activity is determined to be a project, the next phase
of inquiry is to determine whether the project is exempt from
CEQA. Our Legislature has created a number of statutory
exemptions (Pub. Resources Code, § 21080, subd. (b)) and has
directed the Secretary of the Natural Resources to create further
exemptions for projects that have been determined not to have a
significant impact on the environment (id., § 21084, subd. (a); see
7
Guidelines, § 15300, et seq.) Exemptions created by such
regulations are called “categorical exemptions.” (Guidelines,
§ 15354.) In addition to statutory and categorical exemptions,
there is a “common sense” exemption, “[w]here it can be seen
with certainty that there is no possibility that the activity in
question may have a significant effect on the environment.” (Id.,
§ 15061 (b)(3).)
Where a project is found to be exempt from CEQA, no
further environmental review is necessary. (Muzzy Ranch Co. v.
Solano County Airport Land Use Com. (2007) 41 Cal.4th 372,
380.) If a project is not exempt, environmental review must
proceed. (Id. at pp. 380-381.)
III.
The Brown Act Applies
The factual allegations of WM’s petition are sufficient to
state a cause of action.
By its terms the Brown Act applies to the City’s
determination that the Athen’s project is exempt from CEQA.
That determination was an item of business transacted at a
regular meeting of a local legislative body. (§ 54954.2, subd. (a).)
WM alleges it did not receive the appropriate agenda notice, and
was thus deprived of a meaningful opportunity to be heard.
In San Joaquin Raptor Rescue Center v. County of Merced
(2013) 216 Cal.App.4th 1167 (San Joaquin Raptor), the county’s
planning commission listed the approval, disapproval, or
modification of a subdivision application as an agenda item. The
agenda did not mention that the commission would be
considering the adoption of a mitigated negative declaration
(MND) under CEQA. The commission approved the subdivision
application, and, by separate motion, adopted the MND.
8
San Joaquin Raptor Rescue objected that the commission’s
agenda did not provide the required notice that an MND
determination would be made. The trial court found a violation
of the Brown Act. The Court of Appeal agreed. The Court of
Appeal stated:
“The Brown Act clearly and unambiguously states that an
agenda shall describe ‘each item of business to be transacted or
discussed’ at the meeting. (§ 54954.2, subd. (a)(1), italics added.)
Here, the Commission failed to disclose in its agenda that it
would be considering the adoption of the MND at its October 14,
2009, meeting. The adoption of the MND was plainly a distinct
item of business, and not a mere component of project approval,
since it (1) involved a separate action or determination by the
Commission and (2) concerned discrete, significant issues of
CEQA compliance and the project’s environmental impact. As an
individual item of business, it had to be expressly disclosed on the
agenda; it was not sufficient for the agenda to merely reference
the project in general. Because the commission discussed and
adopted the MND at its October 14, 2009, meeting even though
that matter was not set forth on the meeting agenda, it violated
the Brown Act.” (San Joaquin Raptor, supra, 216 Cal.App.4th at
pp. 1176-1177, fns. omitted.)
The City4 argues that its adoption of the CEQA exemption
was a component of the agenda item awarding the franchise
agreement to Athens. But San Joaquin Raptor rejected that
argument. The CEQA exemption involved a separate action or
determination by the City and concerned discrete significant
issues of CEQA compliance. Here the trial court agreed that the
4All further references to the “City,” includes Athens,
unless the content indicates otherwise.
9
CEQA exemption was a separate item of business. It follows that
the City violated the Brown Act by adopting the exemption
without having listed it as an item on its agenda for at least 72
hours.
The City attempts to distinguish San Joaquin Raptor on
the ground that it involved an MND and not a CEQA exemption.
It is true an MND involves an assessment of the environmental
impacts of a project, whereas an exemption is a determination
that CEQA does not apply. But for the purposes of the Brown
Act, it is a distinction without a difference. Members of the
public are just as entitled to have notice of and an opportunity to
participate in a local agency’s determination that a CEQA
exemption applies as they are to the agency’s determination that
an MND should be issued.
We are required by the California Constitution to broadly
construe the Brown Act to further the People’s right to access to
the conduct of the People’s business. (Cal. Const., art. 1, § 3,
subd. (b)(1)(2).) We would be remiss in that duty if we narrowly
interpreted the Brown Act to apply to a determination that an
MND is appropriate but not a determination that a project is
exempt from CEQA, both are aspects of the People’s business.
The City relies on a line of cases that hold CEQA does not
require a public hearing for a determination that a project is
exempt. (See, e.g., San Lorenzo Valley Community Advocates for
Responsible Education v. San Lorenzo Valley Unified School Dist.
(2006) 139 Cal.App.4th 1356, 1385.) The cases discuss only
CEQA. They do not discuss whether the Brown Act applies. A
case is not authority for issues it does not consider. (Contra
Costa Water Dist. v. Bar-C Properties (1992) 5 Cal.App.4th 652,
660.)
10
Moreover, the Brown Act as applied to a CEQA exemption
does not require a formal public hearing where the findings must
be supported by substantial evidence. All the Brown Act requires
is that the exemption be placed on the meeting agenda and an
opportunity for the public to comment.
The City cites no language in CEQA that precludes the
application of the Brown Act. In fact, our Supreme Court has
stated that members of the public hold a ‘“privileged position”
. . . in the CEQA process based on a belief that ‘citizens can make
important contributions to environmental protection and on
notions of democratic decision-making.”’ (Concerned Citizens of
Costa Mesa, Inc. v. 32nd Dist. Agricultural Assn. (1986) 42 Cal.3d
929, 936, quoting Selmi, The Judicial Development of the
California Environmental Quality Act (1984) 18 U.C. Davis
L.Rev. 197, 215-216) That is entirely consistent with the
application of the Brown Act to the CEQA process.
A finding that a project is exempt from CEQA is not a
minor matter. Such a finding forecloses any analysis of the
project’s environmental impact. (See Muzzy Ranch Co. v. Solano
County Airport Land Use Com., supra, 41 Cal.4th at p. 380.) A
finding of an exemption is as least as important to environmental
protection as an MND.
The City argues that applying the Brown Act to a CEQA
exemption will place an intolerable burden on local agencies. It
posits that it would require basic administrative decisions such
as the purchase of paperclips to be “agendized.”
But the section of the Brown Act on which WM relies
applies only to an item of business transacted or discussed at a
regular meeting of the legislative body of a local agency.
(§ 54954.2, subd. (a)(1).) The vast majority of the City’s day-to-
11
day business is not transacted or discussed at a regular meeting
of a legislative body. But if a local legislative body intends to vote
on or discuss a CEQA exemption at a regular meeting, it will
require minimal effort to include it as an agenda item. For a
CEQA exemption to apply, the activity must qualify as a “project”
under CEQA. Most of the City’s activities would not qualify as a
project because they have no potential environmental effect. (See
Guidelines, § 15378(a).) Our decision will not unduly burden
local public agencies.
The City argues that the City council did not vote on the
exemption at the March 9, 2021, meeting. Instead, the City
asserts its staff made the CEQA exemption determination long
prior to the meeting.
But WM’s petition alleges that approval of the CEQA
exemption was expressly made by motion and voted on at the
meeting. These are allegations of fact that we must assume are
true on demurrer. (Intengan v. BAC Home Loans Servicing LP,
supra, 214 Cal.App.4th at p. 1052.)
More importantly, the lead agency has the duty to
determine whether a project qualifies for a CEQA exemption.
(Guidelines, § 15061(a).) Here the City council, as the only
agency involved in approving the contract, is the lead agency.
The City can delegate its duty to its staff to determine whether a
CEQA exemption applies. (Guidelines, §§ 15025(a)(1), 15356.)
But the delegation only goes so far. The legislative body of the
local agency retains the inherent power to overrule its staff’s
determination. Thus, the local agency makes the ultimate
decision whether a CEQA exemption applies.
The City cannot avoid the Brown Act simply by delegating
its duty to its staff. Where a local agency at a regular meeting
12
approves a project that is subject to a staff’s determination of a
CEQA exemption, it must give notice of the CEQA exemption on
its agenda. The addition of words to the agenda indicating the
local agency is considering a project subject to staff determination
of CEQA exemption will not unduly tax a local agency’s
resources.
IV.
Cure and Correct Letter
The City contends WM’s letter was inadequate.
Section 54960.1, subdivision (b) provides in part: “Prior to
any action being commenced . . . the district attorney or
interested person shall make a demand of the legislative body to
cure and correct the action alleged to have been taken in violation
of Section . . . 54954.2 The demand shall be in writing and
clearly describe the challenged action of the legislative body and
nature of the alleged violation.”
Here WM’s letter informed the City that it violated section
54954.2 by considering the CEQA exemption without describing
the action in the agenda for at least 72-hours prior to the
meeting. The letter clearly described the challenged action of the
legislative body and the nature of the alleged violation. WM’s
petition alleges the City failed to respond in any way. Notably
the City did not ask for clarification or further details. WM’s
letter substantially complied with section 54960.1, subdivision
(b).
The City objects that WM’s letter states, “The City Council
violated the Brown Act on March 9, 2021 by voting to adopt a
Notice of Exemption (NOE) . . . prior to adopting the Franchise
Agreement and without adequate notice to the public . . . .” The
13
City points out that an NOE is filed, not adopted, and it was not
filed until March 15, 2021.
The purpose of section 54960.1, subdivision (b) is to give
the local agency notice of an alleged violation of the Brown Act so
that it can avoid litigation by curing the violation. Its purpose is
not to allow a local agency to avoid the consequences of Brown
Act violations by launching nit-picking technical attacks on the
language used in the cure and correct letter. Whether the City
council technically voted to “adopt” an NOE or when the NOE
was filed is beside the point. The point is that the City council
voted that the project is exempt, without the public notice
required by the Brown Act. WM’s cure and correct letter
adequately stated that point.
V.
Remedy
The City contends the proper remedy for a Brown Act
violation is to void the CEQA determination, not the franchise
agreement.
But our task on reviewing the sustaining of a demurrer is
to determine whether petitioner stated a cause of action that
entitles it to any remedy. (Highlanders, Inc. v. Olsan (1978) 77
Cal.App.3d 690, 697.) WM has shown that it is at least entitled
to have the CEQA exemption determination declared void. We
need not determine now whether it is entitled to any other relief.
We leave it to the trial court to fashion the appropriate remedy in
the first instance should WM prove its case.
14
DISPOSITION
The judgment is reversed. Costs are awarded to appellant.
CERTIFIED FOR PUBLICATION.
GILBERT, P. J.
We concur:
PERREN, J.*
BALTODANO, J.
*Retired Associate Justice of the Court of Appeal, Second
Appellate District, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
15
Ronda J. McKaig, Judge
Superior Court County of Ventura
______________________________
Remy Moose Manley, James G. Moose, Andrea K. Leisy,
Nathan O. George; Law Offices of Joel Franklin and Joel
Franklin for Plaintiff and Appellant.
Colantuono, Highsmith & Whatley, Holley O. Whatley,
Carmen A. Brock, for Defendants and Respondents.
Manatt, Phelps & Phillips, Benjamin G. Shatz, Viral
Mehta, Sigrid R. Waggener, Jennifer Lynch, for Real Party in
Interest and Respondent.
16