In August 2021, the First District Court of Appeals issued an opinion in Pacific Merchant Shipping Association v. Newsom, where the court held that Public Resources Code section 21168.6.7 does not impose on the Governor a deadline by which to certify construction of a new baseball park and mixed-use development project at the Howard Terminal site in the City of Oakland (“Project”).

Prompted by high unemployment in 2011, the Legislature enacted Assembly Bill 900 to provide streamlining benefits under the California Environmental Quality Act (“CEQA”) for specific “leadership projects” and only “for a limited period of time to put people to work as soon as possible.” AB 900 established fast-track administrative and judicial review procedures for leadership projects that met certain conditions, including the creation of high-wage, high-skilled jobs, no net additional emission of greenhouse gases (“GHG”), and the payment of certain costs by the project applicant. Under this legislation, the Governor was required to certify that a project met these statutory criteria to qualify for fast-track status. As originally enacted, AB 900 contained no deadline for the Governor’s certification of a leadership project. The statute provided a deadline for a lead agency to approve a project by June 1, 2014, and the legislation itself was set to expire on January 1, 2015, unless a later enacted statute extended or repealed that date. The statutory deadline was extended several times and in its final iteration, AB 900 required the Governor to certify a leadership project by January 1, 2020 and the lead agency to approve the project by the sunset date, January 1, 2021.

Additionally, in 2018, the Legislature passed AB 734, which is special legislation applicable solely to the Howard Terminal Project and which references the deadlines in AB 900. According to the Legislature, a special statute was necessary “because of the unique need for the development of a sports and mixed-use project in the City of Oakland in an expeditious manner.” AB 734 was codified as Public Resources Code section 21168.6.7. Under section 21168.6.7, the Project is eligible to qualify for expedited administrative and judicial review under CEQA if the Governor certifies that the Project meets an enumerated set of job-creation, environmental protection, sustainable housing, and transit and transportation infrastructure conditions. Once certified by the Governor, any court action or proceeding brought to challenge the lead agency’s adoption of the EIR or the granting of any project approvals must be resolved within 270 days to the extent feasible.

The Project was still under review in 2020, as the California Air Resources Board (“CARB”) was still evaluating whether the Project would meet its GHG reduction targets as required by AB 734. It was not until August 2020, over 16 months after real party in interest submitted its application to the Governor for certification of the Project, that CARB finally issued its determination that the Project would meet the GHG requirements.

In March 2020, Pacific Merchant Shipping Association, Harbor Trucking Association, California Trucking Association, and Schnitzer Steel Industries, Inc. (“Petitioners”) filed an action challenging the authority of Governor Newsom to certify the Project for streamlined environmental review, claiming that his authority to certify the Project expired on January 1, 2020. Soon thereafter, the Office of Planning and Research amended California Code of Regulations, title 14 (“Guidelines”) to state expressly that the timelines in the Guidelines do not apply to projects undertaken pursuant to AB 734. Petitioners filed an amended petition and complaint in May 2020, challenging the authority of OPR to “revive” the Governor’s expired certification power under Assembly Bill 734. The Governor, the City of Oakland, and real party in interest Oakland Athletics Investment Group, LLC (“Respondents”) filed motions for judgment on the pleadings, arguing that section 21168.6.7 contains no deadline for certification by the Governor. The trial court agreed with Respondents, and on February 11, 2021, the Governor certified the Project for expedited CEQA review.

Finding the plain language of the statute unclear, the court turned to the legislative history of AB 734, noting, among other things, that enforcement of a one-year certification deadline prior to the expiration of AB 900 was never mentioned and the Senate Judiciary Committee analysis suggested that the AB 900 framework, which was set to expire on January 1, 2020, “could be extended specifically for this project.” The court concluded that a fair reading of the legislative history supports Respondents’ position that the AB 900 deadlines were not meant to be imported into AB 734. The court determined that the Legislature was not concerned with existing deadlines so much as bolstering substantive environmental provisions to the proposed legislation. Noting that the Governor could not certify the project prior to CARB’s determination, the court found that Petitioners’ construction, which would doom a project solely because CARB’s step in the process would exceed the one-year deadline for certification, was “inimical to the underlying purposes of [AB] 734.”

Finally, the court found that the legislative purpose supports allowing the Project to proceed. The author of AB 734 emphasized that the special legislation was necessary because it is “critically important to the [C]ity and the entire East Bay region to retain a professional sports team.” Given these concerns, the special statute “would help provide certainty to the [C]ity and the Oakland A’s who have made a public commitment to staying in Oakland.”

Photo of Kathryn L. Oehlschlager Kathryn L. Oehlschlager

With more than a decade of experience in environmental law, Kathryn Oehlschlager has built a robust practice spanning environmental and land use compliance counselling, state and federal enforcement defense, and major litigation.

Public and private clients turn to Kathryn for advice on compliance…

With more than a decade of experience in environmental law, Kathryn Oehlschlager has built a robust practice spanning environmental and land use compliance counselling, state and federal enforcement defense, and major litigation.

Public and private clients turn to Kathryn for advice on compliance with all facets of environmental and land use law, including CEQA, NEPA, federal and state endangered species laws, contaminated site remediation, water quality and supply issues, and laws regulating solid and hazardous waste.  She routinely represents clients in all aspects of the California Environmental Quality Act (CEQA) project review process, including preparation, review, and analysis of negative declarations, draft environmental impact reports, and final environmental impact reports. (Read more…)