Lexology
By Miller Starr Regalia
October 14, 2024

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In a published decision filed October 7, 2024, the Third District Court of Appeal affirmed the trial court’s judgment rejecting a CEQA challenge to the revised EIR for the State Capitol renovation project based on recent legislation exempting that project from CEQA. Save Our Capitol! v. Department of General Services (Joint Committee on Rules of the California State Senate and Assembly) (2024) ___ Cal.App.5th ___. This was the Court’s third published appellate decision in the CEQA litigation over the controversial project; see my posts dated January 2 and January 23, 2023 and May 23, 2024, covering the Court’s initial two published decisions finding flaws in the project EIR, and in the trial court’s premature discharge of the remedial writ, and my post dated July 11, 2024 covering the dispositive statutory CEQA exemption enacted through SB 174.

The Court of Appeal’s Opinion

Little more need be said regarding the substantive CEQA aspects of the case, whose history is pithily summarized in this most recent opinion: the bottom line is, as stated by the Court, that “after two adverse appellate decisions, and with this third appeal pending, the Legislature decided to exempt the project from further CEQA review” by amending the State Capitol Building Annex Act of 2016 (Annex Act) through SB 174 “to provide that ‘all work performed pursuant to this [Annex Act] shall be exempt from’ CEQA’s requirements.” (Citing amended Gov. Code, § 9112(c)(1)(F), effective immediately as of July 2, 2024.) Because, pursuant to the rule in mandate actions that “a reviewing court applies the law that is current at the time of judgment in the reviewing court” (citing Make UC a Good Neighbor v. Regents of University of California (2024) 16 Cal.5th 43, 55), SB 174 “dictate[d] the result in this appeal” and the Court accordingly held that appellant “cannot prevail on its claims that DGS violated CEQA’s requirements.”

Despite this seemingly simple, and ultimately dispositive legal syllogism, however, the appellant was not ready to “go gentle into that good night.” Rather, raging against the dying of its case, appellant launched a series of (ultimately unsuccessful) arguments attempting to blunt or nullify SB 174’s project-specific exemption.

First – no doubt in an effort to preserve a “Hail, Mary” argument for CCP § 1021.5 fees as a “prevailing party” on a “catalyst” theory – appellant argued that SB 174 mooted the appeal by rendering effective relief impossible. The Court would have none of it; noting it had previously denied appellant’s motion raising the same argument, it stated that mootness occurs when events render it impossible, should the court decide the case in favor of plaintiff, to grant effective relief. (Citing Make UC a Good Neighbor, at 65.) Here, SB 174’s adoption was not such a “mooting” event because it didn’t make relief impossible were the court to decide in appellant’s favor; rather, it made clear appellant was not entitled to relief and determined it was not the prevailing party. (Ibid.)

Next, appellant leveled a constitutional attack on SB 174’s validity. This argument was based on article IV, section 28 of the California Constitution, added in 1980 by voter-approved Proposition 3, which limits the Legislature’s ability to alter certain parts of the Historic Capitol by authorizing or appropriating funds for such work through an immediately effective “urgency statute.” Specifically, the Proposition 3 constitutional limitation provides that “no bill shall take effect as an urgency statute if it authorizes or contains an appropriation for… the alteration or modification of the color, detail, design, structure or fixtures of the historically restored areas of the first, second, and third floors, and the exterior west wing of the State Capitol from that existing upon the completion of the [restorative project legally authorized as of Proposition 3’s effective date].” While SB 174 was not technically an “urgency statute,” but rather an immediately effective “trailer bill” of a type authorized by Proposition 25 only three decades after Proposition 3, the Court declined to rest its rejection of appellant’s constitutional argument on this (perhaps immaterial) linguistic distinction. Instead, it assumed for purposes of its decision that Proposition 3 covered any immediately effective statute, but found the Legislature had drafted SB 174 so as to steer clear of any constitutional defect by providing in it that appropriated funds “shall not be used to alter or modify the color, detail, design, structure or fixtures of the historically restored areas of the first, second, and third floors and the exterior of the west wing of the State Capitol unless the Legislature expressly appropriates those moneys for that purpose in accordance with subdivision (b) of Section 28 of Article IV of the California Constitution.” (Citing Gov. Code, § 14692(a)(2)(C)(vi).) Accordingly, “[b]y its express terms, Senate Bill 174 does not allow these funds to be used inconsistent with [Proposition 3’s constitutional limitation].”

The Court thus avoided the need to decide whether the Proposition 3 limits would apply to immediately effective, simple majority-vote budget trailer bills, which did not exist in 1980 (when new laws could only be made immediately effective through “urgency statutes” requiring a two-thirds supermajority for passage), and also whether Respondent DGS’s numerous other arguments for upholding SB 174 were meritorious. The Court further declined to entertain appellant’s arguments based on a “hypothetical future scenario” that DGS might violate, or the public might not be able to monitor its compliance with, SB 174.

Conclusion and Implications

This case is interesting mainly because of its players and subject matter, and the obvious specter of legislative hypocrisy pervading it. It doesn’t have any wider implications than underscoring the need for general CEQA reform, given the self-serving and project-specific exemption enacted by the Legislature here to provide itself with an escape hatch from the law’s onerous application. For the rest of the regulated community, which must comply with CEQA as written, the “takeaway” from California lawmakers here seems to be: “Do as I say, not as I do.”