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Public agencies prevailed in 71% of CEQA cases analyzed.

By James L. Arnone, Daniel P. Brunton, Marc T. Campopiano, Shivaun A. Cooney, Benjamin J. Hanelin, John C. Heintz, Maria Pilar Hoye, Aron Potash, and Winston P. Stromberg

Latham & Watkins is pleased to present its third annual CEQA Case Report. Throughout 2019 Latham lawyers reviewed each of the 45 California Environmental Quality Act (CEQA) appellate cases, whether published or unpublished. Below is a compilation of the information distilled from that review and a discussion of the patterns that emerged from those cases. Latham has continued to monitor CEQA cases throughout 2020 and regularly posts key summaries to this blog.

The Governor has issued an Executive Order that permits commandeering of hotels and other places of temporary residence for the state’s response to COVID-19.

By Winston P. Stromberg, Lucas I. Quass and Cody M. Kermanian

As part of California’s continued response to the COVID-19 outbreak, on March 12, 2020, Governor Gavin Newsom issued Executive Order N-25-20, which, among other measures, permits the state to commandeer real property, such as hotels, for the treatment and quarantine of COVID-19 patients. Specifically, the Executive Order provides as follows:

The California Health and Human Services Agency and the Office of Emergency Services shall identify, and shall otherwise be prepared to make available — including through the execution of any necessary contracts or other agreements and, if necessary, through the exercise of the State’s power to commandeer property — hotels and other places of temporary residence, medical facilities, and other facilities that are suitable for use as places of temporary residence or medical facilities as necessary for quarantining, isolating, or treating individuals who test positive for COVID-19 or who have had a high-risk exposure and are thought to be in the incubation period.

Wildfires, ride-sharing, community choice aggregation, and more bring increased regulatory risk.

By Marc T. Campopiano, Charles C. Read, and Brian F. McCall

The California Public Utilities Commission (CPUC) has tremendous influence on public utility regulation in California and beyond. The CPUC has the biggest staff of any state utilities commission and has issued fines and penalties well in excess of US$2 billion. The CPUC has been very active with new rulemakings and proceedings that will impact utilities and a range of industries. Because of the CPUC’s outsize influence, many of these new regulatory developments may well be adopted by public utilities or public service commissions in other states. Below are summaries of five key developments at the CPUC.

The new amendments seek to clarify the division of responsibility for providing warnings among upstream entities, intermediaries, and retailers.

By: Michael G. Romey, Lucas I. Quass, and Kevin A. Homrighausen

On April 1, 2020, new amendments to the implementation regulations of California’s Safe Drinking Water and Toxic Enforcement Act of 1986 (Prop 65 Regulations) will go into effect, addressing the responsibility to provide warnings within the chain of commerce for products containing chemicals listed by the state as potentially causing cancer and/or reproductive harm. Specifically, the amendments to the Prop 65 Regulations serve to clarify when retail sellers are responsible for providing Prop 65 warnings.

In recent LCFS amendments, CARB introduced a new price cap on all LCFS credit transfers and authorized limited future credit borrowing.

By Joshua T. Bledsoe, Brian F. McCall, and Kevin A. Homrighausen

On November 21, 2019, the California Air Resources Board (CARB) passed Resolution 19-27, approving several amendments to the Low Carbon Fuel Standard (LCFS) program designed to foster stability in the LCFS market and promote access to electric vehicle (EV) transportation for disadvantaged and low-income communities in California.

Concerns of Credit Price Run-up

The LCFS is a key pillar of California’s efforts to reduce greenhouse gas (GHG) emissions in the transportation sector. As discussed in previous posts, regulated entities must either: (1) ensure that fuels supplied in California meet annual, decreasing carbon intensity (CI) targets (e.g., by blending biofuels into gasoline and diesel); or (2) procure and surrender credits to CARB. Regulated entities can buy LCFS credits in the bilateral market or in the Credit Clearance Market (CCM), a CARB-administered market intended to supply cost-controlled credits in the event of a market shortage. The rulemaking appears to reflect CARB’s acknowledgment of long-held concerns in the LCFS market that deficit generation will outstrip credit generation, and the CCM will be unable to adequately cap credit prices. The steady advance of LCFS credit prices since the summer of 2017 is well documented in CARB’s Credit Transfer Activity Reports. The most recent LCFS amendments are intended to ensure that the CCM will continue functioning in the event of a credit shortage and to safeguard against a potential LCFS credit price run-up.

A local air district is developing a rule that would require both existing and proposed warehouses to reduce trucking emissions or pay a mitigation fee.

By Joshua T. Bledsoe

The South Coast Air Quality Management District (SCAQMD or District) is developing a so-called Indirect Source Rule (ISR) that would require Southern California warehouses to reduce emissions associated with trucking activity and on-site equipment. Proposed Rule 2305, recently released by the District in discussion draft form, would establish the Warehouse Actions and Investments to Reduce Emissions (WAIRE) Program — which would apply to owners and operators of warehouses located in the South Coast Air Basin (Basin) with greater than 100,000 square feet of indoor space in a single building. If the SCAQMD’s development timeline holds, Proposed Rule 2305 will phase in on July 1, 2020.

CARB’s revised discussion draft removes a previously proposed de minimis exemption for owners of SF6 GIE.

By Aron Potash and Christopher C. Antonacci

On August 15, 2019, California Air Resources Board (CARB) staff published a revised discussion draft (Revised Draft) of potential changes to the Regulation for Reducing Sulfur Hexafluoride Emissions from Gas Insulated Switchgear (SF6 Regulation). The Revised Draft takes into account comments received from stakeholders in the past several months. Notably, it proposes several significant changes to the SF6 Regulation, including removing a previously proposed de minimis exemption to compliance with the SF6 Regulation emissions limit and revising the phase-out schedule for SF6 gas-insulated equipment (GIE). Latham & Watkins examined the previous discussion draft in this March 4, 2019, blog post.

CARB held a workshop in Sacramento the same day it released the Revised Draft, during which staff presented an overview of the changes, answered stakeholders’ questions, and solicited any questions or concerns stakeholders may have. CARB is accepting public comments on the Revised Draft through August 29, 2019.

A new webcast reveals the latest trends and approaches to CEQA compliance as the development and environmental communities react to changing law.

By Marc T. Campopiano, Christopher W. Garrett, and Jennifer K. Roy

On July 24, 2019, Latham & Watkins’ Project Siting & Approvals Practice hosted a 60-minute webcast, “Friant Ranch: Impact of California Supreme Court’s Landmark Decision on CEQA Compliance,” to zero in on the landmark decision and its ramifications. Seven months on from the Court’s decision…

2018 Year in Review: Public agencies prevailed in 65% of CEQA cases analyzed.

By James L. Arnone, Marc T. Campopiano, Christopher W. Garrett, and Lucinda Starrett

Over the course of 2018, Latham & Watkins lawyers reviewed all 57 California Environmental Quality Act (CEQA) cases, both published and unpublished, that came before California appellate courts. These cases covered a variety of CEQA documents and other topics. Below is a compilation of information from the review and a discussion of the patterns that emerged in these cases. Latham will continue to monitor CEQA cases in 2019, posting summaries to this blog.

The California Court of Appeal heard 55 CEQA cases, while the California Supreme Court heard one case: Sierra Club v. County of Fresno. This case concerned what constitutes sufficient detail in an environmental impact report (EIR) and has implications for the preparation of EIRs as well as judicial review of agency decisions certifying EIRs.

In addition to the 56 state cases, one federal CEQA case, AquAlliance v. U.S. Bureau of Reclamation, was heard by the Eastern District of California.