In a recent decision, the Fourth Appellate District Court of Appeal ruled that the County of San Bernardino’s (“County”) placement of a transportation tax measure on the November 2004 ballot was exempt from environmental review under the California Environmental Quality Act (“CEQA”). Further, any challenge to the tax measure was barred by the petitioner, Sierra Club’s, failure to file its CEQA suit within the 35-day statute of limitations. Shepherding this case to its successful conclusion were Best Best & Krieger LLP (“BB&K”) attorneys Michelle Ouellette, Steven DeBaun, and Megan Starr. This case provides important guidance to transportation agencies and other public entities by clarifying that CEQA does not apply where one public entity acts solely at the direction of another entity.

At issue in this case is the ability of transportation agencies to fulfill their duties and obligations under the Local Transportation Authority and Improvement Act which authorizes local transportation authorities to raise local revenues for highway capital improvements and maintenance. Sierra Club’s lawsuit argued that CEQA required the San Bernardino County Board of Supervisors and the San Bernardino Associated Governments (“SANBAG”) to complete an environmental impact report before a placing an extension of Measure I, the County’s one-half cent sales tax, on the ballot. If successful, Sierra Club’s lawsuit would have required every county in the State to first conduct a CEQA review before placing any initiatives and measures on their local ballots – even if the county is required by law to place the issue on the ballot. Further, under the logic in Sierra Club’s petition, a county could be sued under CEQA for placing a local agency measure or initiative on the ballot even though the local agency had sole responsibility for the measure or initiative.

BB&K represented SANBAG’s and the County’s interests, demurring to the CEQA petition on the grounds that Sierra Club’s action was time-barred by the statute of limitations and that the County’s action in submitting the Measure I extension to the voters was a ministerial act, exempt from CEQA. The superior court overruled the demurrer, essentially holding that submitting a proposal to a vote of the people triggered CEQA review, regardless of whether the submittal was ministerial, required by law, or specifically exempt from CEQA review. The County and SANBAG appealed.

The appellate court first rejected Sierra Club’s arguments that the County’s action in placing the Measure I extension on the ballot was a discretionary action subject to CEQA. Sierra Club argued that the County’s participation as a member of SANBAG demonstrated that the County exercised discretion in shaping the Measure I extension and the transportation expenditure plan. Instead, the court agreed with BB&K’s argument that the County’s participation as a member agency of SANBAG in shaping the transportation expenditure plan and its later action in placing the Measure I extension on the ballot were entirely separate actions.

Sierra Club next argued that the County’s action in placing the Measure I extension on the ballot was a discretionary action intended to circumvent CEQA. Sierra Club relied almost exclusively on Friends of Sierra Madre v. City of Sierra Madre (2001) 25 Cal.4th 165, which held that initiative measures generated and placed on the ballot by a public agency are not exempt from CEQA. The court distinguished Sierra Madre, holding that SANBAG – an entity entirely separate from the County – generated the Measure I extension, thus the County’s placement of the Measure I extension on the ballot was not a discretionary action subject to CEQA.

The court also rejected Sierra Club’s allegations that SANBAG could merely “request,” not demand, that the County submit the Measure to the voters and determined that, when read in the context of the Legislature’s intent, the word “request” imposed a mandatory duty on the County to place transportation matters on the ballot. Thus, the court held that the County’s placement of the Measure I extension on the ballot was a ministerial act not subject to CEQA.

Although this case clarifies that a county’s placement of issues on the ballot at the direction of another public entity is exempt from CEQA, the court declined to rule on whether or not the creation of a sales tax expenditure plan was itself subject to CEQA review. The court, instead, ruled that Sierra Club’s challenges were barred by its failure to bring its CEQA action against SANBAG within the 35-day statute of limitations.

In sum, the court rejected each of Sierra Club’s arguments and held that the County’s placement of the Measure I extension on the ballot was not a discretionary action subject to CEQA and that CEQA’s strict statute of limitations barred Sierra Club’s lawsuit. Reversing the trial court’s decision, the Court of Appeal sustained the demurrer without leave to amend.