Opinion
C087640
12-30-2019
COUNTY OF SAN JOAQUIN et al., Plaintiffs and Appellants, v. METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA, Defendant and Respondent; RECLAMATION DISTRICT 756 et al., Real Parties in Interest and Respondents.
NOT TO BE PUBLISHED California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super. Ct. No. STK-CV-UWM-2016-0003597)
Metropolitan Water District of Southern California (Metropolitan) approved the purchase of over 20,000 acres of property, consisting of islands and tracts, in the Sacramento-San Joaquin Delta (Islands). Metropolitan filed a notice of exemption, claiming the purchase was exempt from the California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.) because CEQA applies only to projects with the potential for causing significant effects. Metropolitan also claimed exemptions from CEQA because the project consisted of the transfers of ownership of interests in land in order to preserve open space, habitat, or historical resources conditions and there was no potential for significant effects due to unusual circumstances.
Further undesignated statutory references are to the Public Resource Code.
The County of San Joaquin, County of Contra Costa, Contra Costa County Water Agency, Central Delta Water Agency, Food & Water Watch, and Planning and Conservation League (collectively Petitioners) sought a writ of mandate setting aside Metropolitan's approval of the purchase of the Islands for failure to comply with CEQA. The trial court denied the petition. Petitioners appeal from the subsequent judgment. They contend the purchase of the Islands was a "project" under CEQA, requiring an environmental impact report (EIR), and no exemption applied. They further contend the trial court erred in barring discovery or consideration of extra-record evidence.
We affirm. Metropolitan's approval of the purchase of the Islands was not the approval of a project. Metropolitan offered almost a dozen potential uses for the Islands to justify the purchase. These potential uses ranged from construction of tunnels under the delta to convey water to southern California to environmental preservation. It did not, however, commit to any particular use or uses. Because the potential uses were so varied and uncertain, preparation of an EIR at this stage would be so speculative as to be meaningless. Petitioners have not shown any prejudice resulted from the trial court's exclusion of extra-record evidence or that the discovery sought would have led to admissible evidence.
FACTUAL AND PROCEDURAL BACKGROUND
Metropolitan is a public corporation with membership of 14 southern California cities and 12 southern California water agencies. At a March 8, 2016 meeting of its Board of Directors (Board), Metropolitan approved the purchase of the Islands. Prior to this meeting there had been five public meetings of Metropolitan's Real Property and Asset Management Committee (Committee), held in September and November 2015 and January, February, and March of 2016. At each of the meetings public comment was invited and the proposed purchase was an item on the agenda. The purchase had also been on the agenda for three prior meetings of the Board.
Although discussions about the purchase price and other negotiations were held in closed session, there were public Power Point presentations and discussions about the proposed purchase, detailing the property to be purchased, its current use (mostly agricultural), and the potential benefits to Metropolitan of the purchase. The potential benefits of the purchase were identified as falling into two categories: (1) providing water supply reliability through water transfers, riparian and appropriative water rights of the Islands, flood storage and salinity outflow, emergency freshwater pathway, and assisting in the California WaterFix project that planned dual tunnels under the Delta to move water to southern California; and (2) environmental management by providing waterfowl habitat, fish food supplies, fish take reduction and turbidity management, greenhouse gas reduction, and habitat restoration and mitigation. One presenter stressed the opportunities for science and innovation through studies and working towards a sustainable delta.
In a confidential letter to the Board (partially redacted for privileged and/or work product), the Committee outlined 11 potential benefits to the purchase of the islands and tracts and indicated that most "would require additional study, environmental review, and various permits before they could be implemented." The potential benefits were (1) water transfer; (2) flood storage and salinity-outflow enhancement; (3) waterfowl habitat reserve; (4) emergency freshwater pathway and supply security enhancement; (5) carbon credit development; (6) fish food supplies enhancement; (7) turbidity management and reduction in fish take; (8) access to properties necessary for construction of the California WaterFix project; (9) access to geotechnical data and assessments for the California WaterFix project; (10) access to mitigation lands for the California WaterFix project; and (11) regulatory fine tuning.
At the March 8, 2016 meeting of the Board, Brenna Norton of petitioner Food and Water Watch, objected to spending up to $240 million to purchase the Islands. She noted that a final EIR had not yet been prepared for the WaterFix project and declared it was "outrageous" to have a closed session on the purchase of the Islands.
After Metropolitan approved the purchase, it filed a notice of exemption in San Joaquin, Contra Costa, and Solano Counties, the locations of the Islands. The notice indicated "acquisition of the property will preserve the current open space, habitat or historical resources and will allow restoration of natural conditions including plant or animal habitats." The notice claimed the project was exempt from CEQA under two CEQA Guidelines, sections 15325 and 15061(b)(3). It explained: "The project consists of the transfers of ownership of interests in land in order to preserve open space, habitat, or historical resources conditions and there is no potential for significant effects due to unusual circumstances. The project is also exempt under the general rule that CEQA applies only to projects with the potential for causing significant effects."
"The term 'CEQA Guidelines' refers to the regulations for the implementation of CEQA authorized by the Legislature (Pub. Resources Code, § 21083), codified in title 14, section 15000 et seq. of the California Code of Regulations, and 'prescribed by the Secretary of Resources to be followed by all state and local agencies in California in the implementation of [CEQA].' (CEQA Guidelines, § 15000.)" (Muzzy Ranch Co. v. Solano County Airport Land Use Com. (2007) 41 Cal.4th 372, 380, fn. 2 (Muzzy Ranch).)
Petitioners, counties, water agencies and environmental advocacy groups, petitioned the San Joaquin County Superior Court for a writ of mandate ordering Metropolitan to rescind its March 8, 2016 decision to purchase the Islands. The petition asserted that Metropolitan promoted ownership of the Islands to facilitate the tunnel construction of the California WaterFix project and that Metropolitan was required to comply with CEQA, including preparation of an EIR, before closing the purchase. It argued the purchase committed Metropolitan to a definite course of action that would result in significant physical changes and environmental impacts.
Petitioners sought a temporary restraining order and preliminary injunction to halt Metropolitan's purchase of the Islands. The trial court denied the preliminary injunction. It found the purchase was a "mere transfer of title" with no future projects either approved or defined. It found Petitioners' request was based on two levels of speculation: (1) that the WaterFix project would be approved; and (2) that Metropolitan would approve the use of the Islands to assist the WaterFix project. The court noted the myriad of potential uses for the Islands and found that Metropolitan had not committed to any specific use. When a specific use was designated, CEQA review would be required.
Petitioners appealed from this ruling. After this court vacated its stay order and denied Petitioners' petition for a writ of supersedeas, the appeal was abandoned.
Petitioners filed a motion for leave to conduct discovery. They sought leave to conduct discovery as to Metropolitan's foreseeable use of the Islands. The proposed discovery included requests for admissions, special interrogatories, and depositions of key Metropolitan staff to determine the basis for their statements in support of the benefits of the purchase of the Islands. The trial court denied the motion.
Petitioners sought a writ of mandate, prohibition, or certiorari in this court to reverse the trial court's order and allow discovery. This court denied the petition.
In connection with the hearing on the writ petition in the trial court, Petitioners requested judicial notice of three exhibits. Exhibit A was the declaration Rudy Mussi, a farmer and director of the Central Delta Water Agency. He declared that many of the parcels within the proposed purchase were below the water level and restoration of natural conditions would have significant environmental impacts. Exhibit B was the executed purchase and sale agreement for the Islands. Exhibit C was a letter from the San Diego County Water Authority, objecting to the purchase as premature because Metropolitan had not yet voted to support the WaterFix project and the purchase would entail assuming certain liabilities.
Metropolitan opposed the request for judicial notice, noting that all three exhibits postdated its approval of the purchase and arguing that they were irrelevant. Metropolitan further requested that the trial court strike all of Petitioners' arguments based on these materials.
In opposition to the writ petition, Metropolitan claimed Petitioners had failed to exhaust their administrative remedies because they had failed to raise the issue of CEQA compliance in any of the public meetings concerning the purchase of the Islands.
The trial court denied the request for judicial notice and confined its review to the administrative record. It first found Petitioners did not violate the exhaustion of administrative remedies doctrine because none of the agendas for the meetings of Metropolitan's Committee or Board gave notice to the public that Metropolitan intended to find that its authorization of the purchase was not a project under CEQA, or alternatively, was exempt from CEQA. Thus, there was no opportunity for members of the public to raise the objection.
The trial court next found the purchase was not a project under CEQA. The approval of the purchase was not connected to any development plans and nothing tied the purchase to a certain use of the Islands. Alternatively, the court found the project was exempt under CEQA Guidelines section 15061(b)(3), the "common sense" exemption, as the sale had no possibility of affecting the environment. The court denied the petition for a writ of mandate.
Petitioners appealed from the judgment.
DISCUSSION
I
Exhaustion of Administrative Remedies
Metropolitan contends the judgment must be affirmed because Petitioners failed to exhaust their administrative remedies. It argues that at no time during the various public meetings where the purchase of the Islands was on the agenda did Petitioners raise the claim of failure to comply with CEQA.
Various, but not all, real parties in interest join in Metropolitan's brief.
Petitioners respond that since the trial court found no violation of the exhaustion requirement, Metropolitan cannot raise the issue on appeal because it did not file a cross-appeal. They contend Metropolitan is seeking to overturn the judgment as to the exhaustion ruling. Petitioners are mistaken as to the need to file a cross-appeal.
"As a general rule, respondents who fail to file a cross-appeal cannot claim error in connection with the opposing party's appeal. [Citation.] A limited exception to this rule is provided by [Code of Civ. Proc.] section 906, which states in pertinent part: 'The respondent . . . may, without appealing from [the] judgment, request the reviewing court to and it may review any of the foregoing [described orders or rulings] for the purpose of determining whether or not the appellant was prejudiced by the error or errors upon which he relies for reversal or modification of the judgment from which the appeal is taken.' [Citation.] ' "The purpose of the statutory exception is to allow a respondent to assert a legal theory which may result in affirmance of the judgment." ' " (Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105, 1121.) Here, Metropolitan is asserting a legal theory (exhaustion of administrative remedies) to support affirmance of the judgment. No cross-appeal is required in that instance.
Section 21177 provides in part: "(a) An action or proceeding shall not be brought pursuant to Section 21167 unless the alleged grounds for noncompliance with this division were presented to the public agency orally or in writing by any person during the public comment period provided by this division or prior to the close of the public hearing on the project before the issuance of the notice of determination. [¶] (b) A person shall not maintain an action or proceeding unless that person objected to the approval of the project orally or in writing during the public comment period provided by this division or prior to the close of the public hearing on the project before the filing of notice of determination pursuant to Sections 21108 and 21152." "This section does not apply to any alleged grounds for noncompliance with this division for which there was no public hearing or other opportunity for members of the public to raise those objections orally or in writing prior to the approval of the project, or if the public agency failed to give the notice required by law." (Id., subd. (e).)
Metropolitan concedes there was no public hearing on the approval of the purchase of the Islands, but asserts there were eight public meetings where the purchase was on the agenda and where public comments were invited. It contends these public meetings provided ample "opportunity for members of the public to raise objections orally or in writing" and no such objections were made.
Metropolitan determined compliance with CEQA was unnecessary because either the purchase was not a project or, if it was a project, it was exempt from CEQA. As our Supreme Court has explained, "we conclude that the exhaustion-of-administrative-remedies requirement set forth in subdivision (a) of section 21177 applies to a public agency's decision that a proposed project is categorically exempt from CEQA compliance as long as the public agency gives notice of the ground for its exemption determination, and that determination is preceded by public hearings at which members of the public had the opportunity to raise any concerns or objections to the proposed project." (Tomlinson v. County of Alameda (2012) 54 Cal.4th 281, 291, italics added (Tomlinson).)
As the trial court found, none of the agendas for the public meetings discussing the purchase of the Islands gave notice of Metropolitan's determination that compliance with CEQA was not required. Metropolitan does not dispute this factual finding. The first mention of Metropolitan's position on CEQA compliance came in the Notice of Exemption, filed after approval of the purchase. Because no notice was given of the "no project" or categorical exemption determination, and therefore there was no opportunity to contest that determination, the exhaustion requirement does not apply. The trial court properly found no violation of the exhaustion requirement and proceeded to the merits. We shall do the same.
II
Standard of Review
"In reviewing an agency's compliance with CEQA in the course of its legislative or quasi-legislative actions, the courts' inquiry 'shall extend only to whether there was a prejudicial abuse of discretion.' [§ 21168.5.] Such an abuse is established 'if the agency has not proceeded in a manner required by law or if the determination or decision is not supported by substantial evidence.' " (Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007) 40 Cal.4th 412, 426, fn. omitted (Vineyard).)
"Judicial review of these two types of error differs significantly: while we determine de novo whether the agency has employed the correct procedures, 'scrupulously enforc[ing] all legislatively mandated CEQA requirements' [citation], we accord greater deference to the agency's substantive factual conclusions." (Vineyard, supra, 40 Cal.4th at p. 435.)
"An appellate court's review of the administrative record for legal error and substantial evidence in a CEQA case, as in other mandamus cases, is the same as the trial court's: the appellate court reviews the agency's action, not the trial court's decision; in that sense appellate judicial review under CEQA is de novo." (Vineyard, supra, 40 Cal.4th at p. 427.)
III
Failure to Comply with CEQA
CEQA and the CEQA Guidelines "embody California's strong public policy of protecting the environment. 'The basic purposes of CEQA are to: [¶] (1) Inform governmental decision makers and the public about the potential, significant environmental effects of proposed activities. [¶] (2) Identify ways that environmental damage can be avoided or significantly reduced. [¶] (3) Prevent significant, avoidable damage to the environment by requiring changes in projects through the use of alternatives or mitigation measures when the governmental agency finds the changes to be feasible. [¶] (4) Disclose to the public the reasons why a governmental agency approved the project in the manner the agency chose if significant environmental effects are involved.' [Citation.]" (Tomlinson, supra, 54 Cal.4th at pp. 285-286.)
CEQA and the CEQA Guidelines "establish a three-tier process to ensure that public agencies inform their decisions with environmental considerations." (Muzzy Ranch, supra, 41 Cal.4th at p. 380.) "In the first step, the public agency must determine whether the proposed development is a 'project,' that is, 'an activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment' undertaken, supported, or approved by a public agency. (§ 21065.)" (Tomlinson, supra, 54 Cal.4th at p. 286.) An activity that is not a "project," is not subject to CEQA. (Muzzy Ranch, supra, 41 Cal.4th at p. 380.)
If the proposed activity is a "project," the second step requires determining whether it is exempt under either a statutory or categorical exemption. (Tomlinson, supra, 54 Cal.4th at p. 286.) If the project is exempt, no further environmental review is required. If it is not exempt, the agency must determine whether it may have a significant effect on the environment. If not, the agency adopts a negative declaration. (Ibid.) If the project may have a significant effect on the environment, the agency proceeds to the third step which requires preparation of a full environmental impact report. (Ibid.)
Petitioners contend Metropolitan was required to proceed to the third step and prepare a full EIR because the purchase of the Islands was a project that may have a significant effect on the environment. Metropolitan counters that it could stop at the first step because the purchase was not a "project." Alternatively, it contends it needed only to go to the second step because the project was exempt either under a categorical exemption or under the common sense exemption, which applies "[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." (CEQA Guidelines, § 15061(b)(3).)
Metropolitan's filing of a notice of exemption did not preclude its argument that the purchase of the Islands is not a project. Metropolitan may argue that filing the notice of exemption was done in an abundance of caution and not required by CEQA. (See Rominger v. County of Colusa (2014) 229 Cal.App.4th 690, 700-701, disapproved on other grounds by Union of Medical Marijuana Patients, Inc. v. City of San Diego (2019) 7 Cal.5th 1171, 1194, fn. 10 (UMMP) [county could argue subdivision was not a project although county had prepared a mitigated negative declaration].)
A. First Step: Whether Activity is a Project
CEQA applies only to "discretionary projects proposed to be carried out or approved by public agencies." (§ 21080, subd. (a); see CEQA Guidelines § 15002(d).) A "project" is "an activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment" undertaken, assisted or authorized by a public agency. (§ 21065, subd. (a).) A "project" means "the whole of the action." (CEQA Guidelines, § 15378(a).)
"[A] proposed activity is a CEQA project if, by its general nature, the activity is capable of causing a direct or reasonably foreseeable indirect physical change in the environment. This determination is made without considering whether, under the specific circumstances in which the proposed activity will be carried out, these potential effects will actually occur. Consistent with this standard, a 'reasonably foreseeable' indirect physical change is one that the activity is capable, at least in theory, of causing. (Guidelines, § 15064, subd. (d)(3).) Conversely, an indirect effect is not reasonably foreseeable if there is no causal connection between the proposed activity and the suggested environmental change or if the postulated causal mechanism connecting the activity and the effect is so attenuated as to be 'speculative.' " (UMMP, supra, 7 Cal.5th at p. 1197.
"Whether an activity is a project is an issue of law that can be decided on undisputed data in the record on appeal." (Muzzy Ranch, supra, 41 Cal.4th at p. 382.)
The project is approved by an agency when the decision by a public agency "commits the agency to a definite course of action in regard to a project intended to be carried out by any person." (CEQA Guidelines, § 15352(a).) In determining if there has been project approval, we must "determine whether, as a practical matter, the agency has committed itself to the project as a whole or to any particular features, so as to effectively preclude any alternatives or mitigation measures that CEQA would otherwise require to be considered, including the alternative of not going forward with the project." (Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116, 139 (Save Tara).) In Save Tara, our Supreme Court found a development agreement conditioned on future compliance with CEQA was a project approval because the City had committed itself to a definite course of action, to develop approximately 35 housing units for low-income seniors on a specific site. (Id. at pp. 122, 142.)
1. Timing of EIR
The determination of whether there is a "project" is intertwined with that of the appropriate timing of the EIR as "the timing question may also be framed by asking whether a particular agency action is in fact a 'project' for CEQA purposes." (Save Tara, supra, 45 Cal.4th at p. 131; see also Friends of the Sierra Railroad v. Tuolumne Park & Recreation Dist. (2007) 147 Cal.App.4th 643, 657, fn. 2 (Sierra Railroad) [noting, in that case, that the issues of prematurity of CEQA review and meaning of "project" merge for all practical purposes].)
"Choosing the precise time for CEQA compliance involves a balancing of competing factors. EIRs and negative declarations should be prepared as early as feasible in the planning process to enable environmental considerations to influence project program and design and yet late enough to provide meaningful information for environmental assessment." (CEQA Guidelines, § 15004(b).)
"The timing of an environmental study can present a delicate problem." (Fullerton Joint Union High School Dist. v. State Bd. of Education (1982) 32 Cal.3d 779, 797.) " 'Thus we are pulled in two directions. Statements must be written late enough in the development process to contain meaningful information, but they must be written early enough so that whatever information is contained can practically serve as an input into the decision making process.' " (No Oil, Inc. v. City of Los Angeles (1974) 13 Cal.3d 68, 77, fn. 5, quoting Scientists' Inst. for Pub. Info., Inc. v. Atomic Energy Com'n (D.C. Cir. 1973) 481 F.2d 1079, 1094.)
" '[W]here future development is unspecified and uncertain, no purpose can be served by requiring an EIR to engage in sheer speculation as to future environmental consequences.' [Citation.] We agree that environmental resources and the public fisc may be ill served if the environmental review is too early. On the other hand, the later the environmental review process begins, the more bureaucratic and financial momentum there is behind a proposed project, thus providing a strong incentive to ignore environmental concerns that could be dealt with more easily at an early stage of the project." (Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376, 395 (Laurel Heights).)
2. Case Law on Premature EIRs
Several cases have found preparation of an EIR premature where the potential environmental impacts are speculative. In Pala Band of Mission Indians v. County of San Diego (1998) 68 Cal.App.4th 556, the county adopted a countywide integrated waste management plan that included a siting element describing and evaluating 10 proposed landfill sites that were only "tentatively reserved." A reserved area was tentative " 'until it is made consistent with the applicable city or county general plan.' " (Id. at p. 564.) In finding an EIR would be premature and its analysis speculative at that stage, the appellate court reasoned, "Because the proposed potential landfill sites identified in the siting element are only 'tentatively reserved,' there is nothing in the administrative record to establish it is reasonably foreseeable at the current planning stage that any of the sites will actually be developed." (Id. at p. 575.)
At issue in Concerned McCloud Citizens v. McCloud Community Services Dist. (2007) 147 Cal.App.4th 181 (McCloud), was an agreement for a contingent proposal for the sale and purchase of spring water. While the outline concepts of the project were set, there was no certainty or definition of the physical location or specifications; there was no identification of the springs from which water would be taken, or of the location or design of the bottling facility and collection and distribution systems, or whether a loading facility or pipelines would be necessary. (Id. at p. 197.) "At the current planning stage of this proposed project, preparation of an EIR would be premature. Any analysis of potential environmental impacts would be wholly speculative and essentially meaningless." (Ibid.)
In Sierra Railroad, supra, 147 Cal.App.4th 643, a public agency agreed to sell a historic railroad right-of-way to the Tuolumne Band of Me-Wuk Indians (Tribe). The Tribe had made known its intention to develop the property. (Id. at p. 649.) Although some development was reasonably foreseeable, the appellate court found the transfer was not a project under CEQA because there were no specific development plans. (Id. at p. 657.) "Some activities are not projects because no identifiable environmental change is reasonably foreseeable, even though it cannot be said with certainty that no significant environmental change is possible." (Id. at p. 663.) "Transferring property to an Indian tribe is not a project under the present circumstances because it is too many steps removed from any actual impact." (Id. at p. 664.)
Petitioners contend Sierra Railroad is distinguishable because it involved the public agency's sale of property to a third party, not the purchase of property. They argue the agency cannot know the development plans of the third party but can know its own development plans. The reasoning in Sierra Railroad, however, was the basis of the later decision by the Fourth District, Division 2 that an agency's purchase of property was not a project in Bridges v. Mt. San Jacinto Community College Dist. (2017) 14 Cal.App.5th 104 (Bridges). In Bridges, a community college decided to buy a plot of vacant land in Wildomar for potential future use as the site of a new campus. It entered into a purchase agreement for the land; the agreement conditioned the opening of escrow on CEQA compliance by both parties. After a bond measure for funding a campus extension was passed, appellants filed a writ petition to set aside the purchase agreement. (Id. at p. 115.) In affirming denial of the writ petition, the appellate court found the college had not committed itself to a definite use the property; no funds had been committed and there was not even a developer. (Id. at p. 122.) Nor was the purchase agreement itself a project under CEQA. Relying on Sierra Railroad, the court concluded: "Even though it is reasonably foreseeable the college may someday approve plans to build campus facilities on the Wildomar property, nothing in the purchase agreement commits the college to a definite course of development and there were no development plans in existence when it signed the agreement. As a result, the purchase agreement is not a CEQA project and its execution does not trigger the duty to prepare an EIR." (Bridges, at pp. 123-124.)
We discuss this conditional feature of the agreement in Part III D, post.
B. The Supreme Court Trio: Bozung, Muzzy Ranch, and Save Tara
Petitioners contend Metropolitan's decision to purchase the Islands was a "project approval" under CEQA. They contend this conclusion is mandated by a trio of California Supreme Court decisions. We find these cases distinguishable.
In Bozung v. Local Agency Formation Com. (1975) 13 Cal.3d 263, a local agency formation commission approved a city's annexation of the 677-acre Bell Ranch. The impetus for the annexation was the desire of the owner of the ranch to subdivide the 677 acres of agricultural land, a project that could not proceed as long as the ranch remained under county jurisdiction. (Id. at p. 281.) The city was prepared to approve its use for " 'residential, commercial and recreational' " purposes. (Ibid.) In holding that the proposed annexation constituted a project, our high court emphasized that the annexation was an essential part of a plan to develop agricultural property for urban use. "Planning was completed, preliminary conferences with city agencies had progressed 'sufficiently' and development in the near future was anticipated." (Ibid.) The annexation would "culminate in physical change to the environment." (Ibid.)
The certainty of future development as well as the type of development, present in Bozung, is absent here. No planning process has taken place and no development is expected in the near future. Metropolitan has not identified, much less specified, its intended use for the Islands.
In Muzzy Ranch, supra, 41 Cal.4th at pp. 378-379, a land use commission adopted a plan that, among other things, restricted residential development around Travis Air Force Base to existing levels permitted under the general plan and zoning regulations. Our Supreme Court concluded the adoption of the plan was a project under CEQA because banning development in one area may have the consequence of displacing development to other areas. (Id. at p. 383.) The court noted the plan spoke "in mandatory terms" and carried "significant, binding regulatory consequences for local government in Solano County." (Id. at p. 384.) It then held that because the plan "simply incorporates existing county general plan and zoning provisions concerning the maximum number of permitted dwelling units," it fell within the common sense exemption to CEQA as it was certain there was no possibility the plan might have a significant effect on the environment. (Id. at p. 389.)
In Muzzy Ranch, the potential impact on the environment of restricted residential development was displaced development. The plan was sufficiently defined that the potential environmental impact could be identified and analyzed had an EIR been required. Here, by contrast, no potential impact is identifiable because it is unknown what use Metropolitan will make of the Islands. There is no potential impact for an EIR to analyze.
In Save Tara, supra, 45 Cal.4th 116, our high court considered under what circumstances an agency's agreement allowing private development, conditioned on future CEQA compliance, constituted a project approval. That there was a project was undisputed; the project was the development of certain property into housing for low-income seniors. (Id. at p. 129, fn. 8.) The court found the city had committed to the project by its announcements that it was determined to proceed with the development, its actions in preparing to relocate current tenants, its substantial financial contribution to the project, and its willingness to bind itself to convey the property if the developer satisfied CEQA requirements. (Id. at p. 142.)
The Save Tara court recognized the there cannot be a project approval "unless the proposal before it is well enough defined 'to provide meaningful information for environmental assessment.' " (Save Tara, supra, 45 Cal.4th at p. 139.) There is no defined proposal here and Metropolitan has not committed itself to "a definite course of action." (CEQA Guidelines, § 15352(a).)
Our Supreme Court recently decided a fourth case discussing whether there was a project. In UMMP, supra, 7 Cal.5th 1171, the court found a zoning ordinance authorizing the establishment of medical marijuana dispensaries and regulating their location and operation was a project. In applying the Muzzy Ranch test, the court focused on the need for a causal connection between the proposed activity and the alleged environmental impact. (Id. at p. 1197.) The court found the necessary causal connection because the zoning ordinance was " 'an essential step' " in the establishment of new businesses capable of causing indirect physical changes in the environment. (Id. at p. 1199.)
In discussing the need for a causal connection, our high court in UMMP cited to Kaufman & Broad-South Bay, Inc. v. Morgan Hill Unified School Dist. (1992) 9 Cal.App.4th 464 at page 474, where the creation of a Mello-Roos district for the purposes of funding an anticipated future school system in an undeveloped portion of the city was not a project because "the causal link between the [formation of the district] and the alleged environmental impact (construction of new schools) is missing." The formation of the district did not create a need for new schools. (Ibid.) This case is similar; the acquisition alone of the Islands will not cause any change in the environment.
C. Analysis
Petitioners dispute Metropolitan's characterization of the activity at issue as merely a transfer of title. They argue the sole reason Metropolitan purchased the Islands was to facilitate water delivery because Metropolitan's authority to acquire property is limited. Under the enabling legislation, Metropolitan may "[a]cquire water and water rights,' "[d]evelop, store, and transport water," "[p]rovide, sell, and deliver water," "[f]ix the rates for water," and acquire "property necessary or convenient to the exercise of the powers granted by this section." (As amended by Stats. 1984, ch. 271, § 2.5, West's Ann. Wat.-Appen. (1995 ed.) ch. 2, p. 37, § 109-130.)
Further, Petitioners object that Metropolitan advanced inconsistent descriptions of the activity. In opposing the preliminary injunction, Metropolitan asserted the purchase was merely "transfers of ownership interests in land in order to preserve the status quo until a future use is approved by Metropolitan's Board." The notice of exemption describes the project as the environmentally beneficial preservation of open space, habitat, and historical resources. Petitioners contend various documents describing other potential uses of the Islands show the true purpose of the purchase of the Islands was for water delivery and the WaterFix project.
While Metropolitan may indeed intend to use the Islands to facilitate water delivery, Petitioners have not pointed to anything in the record that commits Metropolitan to that use or precludes Metropolitan from deciding not to so use the Islands and selling them. More importantly, Metropolitan's particular use of the Islands, whatever it may be, is not foreseeable, definite, or even identifiable. To justify the purchase of the Islands, Metropolitan offered at least 11 potential benefits or business justifications. These ranged from using the Islands for the WaterFix project, either for construction or for some type of environmental mitigation, such as wildlife habitat restoration, to using the Islands' water rights and using the Islands to provide flood storage and an emergency pathway for fresh water or for other environmental uses. Metropolitan did not commit to any definite course of action as to any of these potential uses; it could use the Islands to provide a reliable water source by various means or for environmental management, or a combination. It was unknown what use or potential use would apply to each island or tract.
" '[W]here future development is unspecified and uncertain, no purpose can be served by requiring an EIR to engage in sheer speculation as to future environmental consequences.' " (Laurel Heights, supra, 47 Cal.3d at p. 395.) Given the tremendous uncertainty and lack of definition of future use of the Islands, "preparation of an EIR would be premature. Any analysis of potential environmental impacts would be wholly speculative and essentially meaningless." (McCloud, supra, 147 Cal.App.4th at p. 197.)
At oral argument, Petitioners compared the acquisition here to the acquisition in UMMP at length. They argued that the enactment of the zoning ordinance at issue in UMMP, which was found to be a project for CEQA purposes, is a comparable "essential step" to the acquisition of the Islands here. (See UMMP, supra, 7 Cal.5th at p. 1199.) Although we agree with the basic observation that without acquiring the land, Metropolitan would not be permitted to control the land's use(s), UMMP differs from the instant case in significant measure.
As we have noted, in UMMP the zoning ordinance at issue authorized the establishment of dispensaries. This authorization (via the ordinance) constituted an essential step to changed land use, namely the establishment of dispensaries where none had been permitted before, with the corresponding foreseeable possibility of indirect physical changes to the environment, including the establishment of new businesses and resulting increases in traffic. (UMMP, supra, 7 Cal.5th at p. 1199.) Here, the acquisition of the Islands authorized nothing except the property's acquisition. Unlike UMMP, the acquisition did not authorize any changes to the Island's current use, as opposed to the ordinance in UMMP, which "amended the City's zoning regulations to permit the establishment of a sizable number of retail businesses of an entirely new type." (Ibid.) Further, as Metropolitan admitted several times at oral argument, any anticipated change from the current use of the Islands that rose to the level of a project would be subject to separate and new analyses and challenges under CEQA.
Although Petitioners asserted in their briefing and argued orally that they were compelled to bring their challenge at present time due to Metropolitan's filing of a notice of exemption, they at no time asserted that from this point forward they would be foreclosed from challenging any specified future project. Our holding is a narrow one: The acquisition of the Islands in and of itself was not a project. --------
Metropolitan's purchase of the Islands was not a project under CEQA. Because we find it is not a project, we need not consider Metropolitan's alternative argument that the purchase was exempt under CEQA.
D. Land Acquisition Agreements Conditioned Upon CEQA Compliance
Petitioners contend CEQA requires environmental review before a public agency acquires real property. In discussing the time for preparation of an EIR, the CEQA Guidelines state: "With public projects, at the earliest feasible time, project sponsors shall incorporate environmental considerations into project conceptualization, design, and planning. CEQA compliance should be completed prior to acquisition of a site for a public project." (CEQA Guidelines, § 15004, (b)(1), italics added.) There is a limited exception to this rule: "[A]gencies may designate a preferred site for CEQA review and may enter into land acquisition agreements when the agency has conditioned the agency's future use of the site on CEQA compliance." (Id., § 15004(b)(1)(A).) Petitioners contend Metropolitan did not attempt to utilize this exception and did not commit to CEQA compliance.
The college in Bridges relied upon this exception to excuse CEQA review of the purchase agreement for vacant land for potential future use as the site of a new campus. (Bridges, supra, 14 Cal.App.5th at p. 120.) The purchase agreement conditioned the opening of escrow on CEQA compliance, indicated the parties were not bound until the CEQA contingencies were satisfied and there was no possibility of a CEQA challenge, and required the parties to ensure the disposition of the property was in compliance with CEQA. (Id. at p. 114.) As the Save Tara court found, however, a CEQA compliance condition is not always sufficient to postpone CEQA review. "A CEQA compliance condition can be a legitimate ingredient in a preliminary public-private agreement for exploration of a proposed project, but if the agreement, viewed in light of all the surrounding circumstances, commits the public agency as a practical matter to the project, the simple insertion of a CEQA compliance condition will not save the agreement from being considered an approval requiring prior environmental review." (Save Tara, supra, 45 Cal.4th at p. 132.)
Conditioning a purchase agreement upon future CEQA compliance was appropriate in Bridges because the potential project, campus facilities on the Wildomar property, was known, but the college had not yet committed to the project. (Bridges, supra, 14 Cal.App.5th at pp. 123-124.) The exception did not apply in Save Tara because the city had committed to the project. (Save Tara, supra, 45 Cal.4th at p. 142.) Here, the situation is several steps removed from Bridges because there is no public project or even a proposed public project. As we have discussed, it is simply unknown what use, if any, Metropolitan will make of the Islands. Accordingly, the purchase of the Islands is not an "acquisition of a site for a public project." (CEQA Guidelines, § 15004, (b)(1).)
IV
Consideration of Extra-Record Evidence and Discovery
Petitioners contend the trial court erred in refusing to consider extra-record evidence by denying the motion for judicial notice of three exhibits that we have described ante; the Mussi declaration, the executed purchase and sale agreement, and a letter from the San Diego County Water Authority. Petitioners further contend the trial court erred in denying their request for discovery.
Our Supreme Court addressed the admission of extra-record evidence in a traditional mandamus proceeding challenging compliance with CEQA in Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559 (Western States). "[W]e hold that extra-record evidence is generally not admissible in traditional mandamus actions challenging quasi-legislative administrative decisions on the ground that the agency 'has not proceeded in a manner required by law' within the meaning of Public Resources Code section 21168.5. However, we will continue to allow admission of extra-record evidence in traditional mandamus actions challenging ministerial or informal administrative actions if the facts are in dispute." (Id. at p. 576.)
The parties dispute whether Metropolitan's decision to purchase the Islands was an informal decision because there was no formal hearing, or whether it was a formal decision as Metropolitan acted only after several public meetings. We need not decide the issue because even if the trial court erred in excluding the extra-record evidence, Petitioners have failed to show prejudice.
"A verdict or finding shall not be set aside, nor shall the judgment or decision based thereon be reversed, by reason of the erroneous exclusion of evidence unless the court which passes upon the effect of the error or errors is of the opinion that the error or errors complained of resulted in a miscarriage of justice . . . ." (Evid. Code, § 354.)
A "miscarriage of justice" will be declared only where the appellate court, after examining all the evidence, is of the opinion that " 'it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error.' " (Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 800.)
Petitioners, as appellants, bear the burden to show prejudice. (Christ v. Schwartz (2016) 2 Cal.App.5th 440, 455.) They rely on the trial court's comment that admitting extra-record evidence could change the result. "I am limited to the administrative record. I mean, if I went beyond the administrative record, there might perhaps be a different decision, but I'm not.· I'm sticking with the record." The court simply commented that admission of additional evidence could change the result. Speculation is insufficient to show it is "reasonably probable" Petitioners would have received a more favorable result if the extra-record evidence had been admitted.
Petitioners argue the Mussi declaration provided substantial evidence that even benign restoration activities would cause reasonably foreseeable environmental impacts, thus showing the error of Metropolitan's "no project" and exemption claims. The question at issue, however, is whether the use of the Islands was definite enough to require CEQA review, not whether a particular use would cause environmental impacts. It is undisputed that most, if not all, uses of the Islands will require CEQA review once Metropolitan commits to that use or uses.
Petitioners fail to show the discovery they sought would lead to admissible evidence. The Western States court stated: "extra-record evidence can never be admitted merely to contradict the evidence the administrative agency relied on in making a quasi-legislative decision or to raise a question regarding the wisdom of that decision." (Western States, supra, 9 Cal.4th at p. 579.) Petitioners sought discovery as to the existence of a foreseeable use of the Islands and whether Metropolitan had approved any specific use. In other words, they sought evidence to contradict the administrative record and show Metropolitan's proposed use of the Islands was foreseeable, identifiable and definite. Under Western States, such evidence was inadmissible.
The trial court did not err in denying Petitioners' request or judicial notice or their request to conduct discovery.
DISPOSITION
The judgment is affirmed. Metropolitan shall recover costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1) & (2).)
/s/_________
Duarte, J. We concur: /s/_________
Raye, P. J. /s/_________
Hull, J.