March 30, 1995

CEQA Update: CA Supreme Court Narrows Scope on Admissible CEQA Evidence

By Jack Rubens, Esq. Sheppard, Mullin, Richter & Hampton 

Ending more than 20 years of confusion among courts and practitioners, the California Supreme Court has ruled that, in a lawsuit alleging noncompliance with the California Environmental Quality Act (CEQA), courts generally may not consider evidence outside the administrative record when reviewing a quasi-legislative determination of a public agency. This decision significantly limits the ability of a party to bolster a weak administrative record or extend CEQA litigation through discovery or the submission of technical studies after the agency decision. 

In Western States Petroleum Association (WSPA) v. The Superior Court of Los Angeles, 95 Daily Journal D.A.R. 2085 (February 17, 1995), WSPA, an oil industry trade group, challenged regulations adopted by the Air Resources Board (ARB) which allow vehicles powered by "alternative" fuels to emit more air pollutants than conventional gas-powered vehicles. The ARB adopted the regulations after a lengthy administrative process, including a public hearing, in compliance with the State Administrative Procedures Act. However, the ARB apparently did not conduct any CEQA review as part of that process. 

The WSPA alleged that the regulations were based on unsound and inaccurate data, and that the ARB had adopted them without complying with CEQA. In the trial court proceedings, WSPA attempted to introduce eight documents containing expert testimony and reports which were not part of the administrative record. The trial court declined to admit the evidence. However, the Court of Appeal reversed, basing its decision on a footnote in the California Supreme Court’s landmark opinion in No Oil, Inc. v. City of Los Angeles, 13 Cal. 3d 68 (1974), and several Court of Appeal decisions.

Those earlier opinions distinguish between "quasi-judicial" (or "adjudicatory") administrative actions, in which a public agency applies existing law to particular facts (e.g., a conditional use permit, variance or subdivision map approval), and "quasi-legislative" administrative actions, which generally involve the formulation of a rule or other self-generated action by a public agency (e.g., a general plan amendment or rezoning). 

In Western States, the California Supreme Court confirmed that, in CEQA litigation, a petition for administrative mandamus under Public Resources Code Section 21168 (and therefore under Code of Civil Procedure Section 1094.5, which is incorporated into Section 21168) is appropriate when a party seeks judicial review of a quasi-judicial decision. On the other hand, a petitioner alleging noncompliance of CEQA with respect to a quasi-legislative determination must proceed with a traditional mandamus action under Public Resources Code Section 21168.5. 

It has been clearly established that, under Code of Civil Procedure Section 1094.5 (and therefore under Public Resources Code Section 21168), if a public agency conducts a public hearing which is required by law and takes evidence at that hearing, a reviewing court generally can only consider evidence in the administrative record at the time the public agency made its decision.

In contrast, a number of appellate courts have held, based on questionable analysis (or in some cases no analysis), that under Section 21168.5 a court may consider evidence not included in the administrative record. These cases have posed a thorny problem for public agencies and developers in CEQA challenges against large development projects. If any of the numerous permits and approvals typically required for such projects involved a quasi-legislative action by the agency, that opened the door for the petitioner to supplement the administrative record and strengthen an otherwise weak case. Many CEQA commentators have contended that judicial review of CEQA decisions should be limited to the administrative record as long as the public agency held a public bearing required by law prior to its decision. 

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In Western States, the California Supreme Court disapproved those cases, as well as the famous No Oil footnote, although on somewhat different grounds than recommended by the commentators. The court held that, in determining whether a public agency committed a prejudicial abuse of discretion under CEQA with respect to a quasi-legislative action, extra-record evidence is inadmissible to show that the agency reached a decision that was "not supported by substantial evidence" or that it "has not proceeded in the manner required by law." 

The court first concluded that, contrary to the analysis in earlier cases, the existence of substantial evidence is a question of law, not a question of fact, and it is well-established that extrinsic evidence is inadmissible to resolve a question of law. The court also noted that it was inappropriate for a court to review scientific data that had not been considered by the public agency, and that the judiciary lacked the expertise to do so. 

With respect to an agency's alleged failure to proceed in the manner required by law, the court noted that parties in non-CEQA lawsuits generally could not supplement the record under similar circumstances, and saw no reason why the rule should be different in CEQA actions. The court held, however, that extra-record evidence is still admissible in traditional mandamus lawsuits challenging "ministerial or informal administrative actions," because there is often little or no administrative record of such cases. 

The court's decision could result in a more restrictive standard for quasi-legislative actions than for quasi-judicial decisions. It appears that extra-record evidence will not be permitted with respect to a quasi­legislative determination even if the public agency did not hold a public hearing (as long as the action is something more than an "informal administrative action"). On the other hand, the court's standard might not permit extrinsic evidence if a public agency unlawfully determines that a discretionary quasi-legislative approval is exempt from CEQA review and does not hold a public bearing, even though the agency decision rises above the level of an "informal administrative action."

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