Public Agency Legal Updates for 2025 – Part 1
This is the first in a series of four blogs providing public agency insights for the new year. We will cover recent court decisions, legislative changes, and emerging legal trends across a variety of practice areas, including water, public agencies, air quality, environmental permitting, and municipal fees and charges. The legal landscape is constantly evolving, and staying informed is critical for individuals and businesses alike. At Baker Manock & Jensen, we are committed to keeping you updated with the latest legal developments that could impact your rights and obligations.
If you have questions about how any of these updates may impact you, please contact Shareholder Lauren D. Layne at 559-432-5400.
CEQA’s Statute of Limitations Is Triggered at Final Project Approval
Enacted in 1970, the California Environmental Quality Act (“CEQA”) requires public agencies to consider the environmental consequences of their discretionary actions. This requires the preparation of environmental documents, such as Environmental Impact Reports (“EIRs”) or Negative Declarations, depending on a project’s potential to significantly affect the environment. Generally, the project sponsor may proceed as soon as the necessary permits have been obtained. Therefore, CEQA’s effectiveness hinges on timely legal challenges when procedural or substantive violations are alleged.
Under CEQA, the statute of limitations for filing a lawsuit to challenge a project’s environmental review or approval is exceptionally short. The timeline depends on the specific circumstances. For example, 30 days from the filing of a Notice of Determination (“NOD”) by a lead agency, 35 days from the filing of a Notice of Exemption (“NOE”) for projects deemed exempt, or 180 days from the date of project approval if no notice was filed. Missing these strict deadlines can bar any legal recourse, regardless of the merits of a claim.
In Center for Biological Diversity et al. v. County of San Benito, the Court of Appeal for the Sixth Appellate District held CEQA’s 30-day statute of limitations following the issuance of a NOD begins to run at the time of final approval, as governed by the local agency’s CEQA rules. The case involves a challenge to the approval of a proposed 26-acre commercial roadside development in San Benito County, which opponents claimed violated CEQA. The Center for Biological Diversity and the Amah Mutsun Tribal Band (collectively, the “Appellants”) argued that the EIR inadequately addressed significant environmental and cultural resource impacts. After the County Planning Commission approved the project and issued a notice of determination NOD in October 2022, Appellants appealed the decision to the County Board of Supervisors (the “Board”). The Board denied the appeals in November 2022 and issued a second NOD, finalizing its approval of the project. Appellants filed lawsuits in December 2022, but the trial court dismissed their petitions as time-barred under section 21167, subdivision (c), holding that the CEQA 30-day statute of limitations began with the October NOD.
The Court of Appeal reversed, holding that the limitations period commenced with the November NOD issued after the Board’s final decision, not the earlier nonfinal NOD from the Planning Commission. The court reasoned that under CEQA and the San Benito County Code (the “Code”), project approval is not final until all administrative appeals are resolved, and only a final decision can trigger the statute of limitations. Furthermore, under the CEQA Guidelines, the finality of project approval is governed by local rules. Here, Appellants had timely appealed the approval to the Board during the 10-day period as required by the Code. The court also emphasized that CEQA provides for and requires challengers to exhaust all administrative remedies, including local agency procedures, before filing the lawsuit.
Center for Biological Diversity is not groundbreaking or surprising. Rather, the decision stands for the proposition that a NOD’s statute of limitations is tied to the final project approval as governed by local agency rules, and not a preliminary or intermediately proceeding. Also, this case reinforces the principle that CEQA’s timelines must align with the exhaustion of administrative remedies. This ensures that project challengers have a clear and fair opportunity to address their concerns within the procedural framework established by local agencies.
Assisting the Small Agricultural Truck Fleet (AB 2900)
AB 2900 directs the California Air Resources Board (“CARB”) to establish the Small Agricultural Truck Fleet Assistance Program, or use an existing program, to provide dedicated technical assistance to owner-operators or owners of small fleets to support the transition to cleaner emission-compliant trucks, giving priority for near-zero-emission or zero-emission trucks as feasible. It is intended to assist agricultural fleets to understand and comply with the overlapping state regulations regarding diesel vehicles, including the Heavy-Duty Vehicle Inspection and Maintenance Program, and the Truck and Bus Regulation.
Advanced Clear Fleets Regulation
On April 28, 2023, CARB adopted the Advance Clean Fleets Regulation (the “Regulation”). This Regulation went into effect on January 1, 2024, and broadly applies to medium- and heavy-duty on-road vehicles with a gross vehicle weight rating greater than 8,500 pounds. These types of vehicles include those owned, leased, or operated by any state or local government agency, including special districts.
Public agencies may comply with the Regulation requirements through one of two provided alternatives, referred to as “schedules.” The first is a time-based schedule (Model Year Schedule). This schedule requires half of the vehicles purchased after January 1, 2024, to be a zero-emissions vehicle (“ZEV”) and all of the vehicles purchased after January 1, 2027, to be ZEVs. Alternatively, the second option is to “permanently” comply based on a milestone-based schedule. The milestone-based schedule permits the ZEV targets to be met based on a percentage of the total fleet starting with vehicle types that are most suitable for electrification.
A district fleet is required to be electric by 2027 or 2035, based on the schedule selected. Also, the Regulation provides a limited number of fleet exemptions. Application of an exemption is fact-specific to each special district.
Under the (default) State and Local Government Fleet schedule, fleet owners must annually submit a compliance report on their California fleet as it is composed as of January 1 of the corresponding calendar year. Reporting must be completed no later than April 1 of each year until April 1, 2045. The initial report must be submitted by April 1, 2024.
Fleet owners have until January 1, 2027, to submit their initial reporting information and still establish their vehicles as part of their California fleet as of January 1, 2024. However, starting January 1, 2025, fleet owners who submit late reports will also be subject to penalties. Beginning January 1, 2025, and until January 1, 2027, failure to submit any information as specified will constitute a single, separate violation for each vehicle and each month the information is not submitted past April 1, 2024. However, no specific penalties have been published as of today’s date. CARB has the right to enter the facilities where the vehicles are located or vehicle records to verify compliance.
Loper Bright’s Impact on California Law
The U.S. Supreme Court’s 2024 decision in Loper Bright, overturning the Chevron doctrine, requires federal courts to exercise independent judgment on federal agency interpretations of ambiguous statutes rather than deferring to the agency’s reasoning. While this shift could have significant implications for federal regulatory actions, its immediate impact on California is expected to be limited.
California courts have long relied on a distinct framework for evaluating state agency interpretations of law, as established in Yamaha Corp. of America v. State Board of Equalization. Under the Yamaha framework, California courts assess two broad factors: the agency’s “comparative interpretive advantage over the courts” (i.e., Courts defer to an agency’s interpretation of its complex, technical regulations when the agency has expertise and awareness of practical implications) and those “indicating that the interpretation in question is probably correct.” (i.e. Seniority of agency official making the interpretation, consistency of interpretation, and interpretation’s timing relative to legislative enactment.) Even then, the amount of deference “turns on legally informed, commonsense assessment of [the agency’s] contextual merit.” This approach is grounded in the Skidmore doctrine, which remains unaffected by Loper Bright.
As a result, California’s system of judicial review for state agency actions remains intact and distinct from the federal framework previously governed by Chevron. Given that much of California’s environmental and water litigation takes place in state courts and California’s regulations are generally stricter than federal requirements, the ruling’s impact on state regulatory processes will likely be minimal.
Disclaimer
This Legal Update / Bulletin is for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. This update should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.
Author
