spring

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DEVELOPMENTS SPRING IN THIS EDITION:

VOLUME I, ISSUE I

GET IT ON THE CALENDAR n Upcoming MSR Events p.1 n Articles & Speaking Engagements p.1 MSR SPEAKS n Vineyard Area Citizens for Responsible Growth v. City of Rancho Cordova p.2 n Water Runs Downhill, But Who is Liable for it? p.5 n Low Impact Development in the West p.6 NEWS THAT’S FIT TO PRINT n MSR Attorneys Recognized p.8

CALENDAR

Get it on the

Upcoming Miller Starr Regalia Event(s)

n 9.26.07 - Building a New Empire: Analyzing the Successes and Challenges of the Rapid Growth of the Inland Empire Ontario Conference Center, Ontario, CA

Recent Articles & Speaking Engagements ARTICLES:

n “Low-Impact Development: A Growing Trend in Stormwater Management.” by Carolyn Nelson Rowan and Robia Chang, March 2007, Builder News Magazine

n “Thinking Globally When Acting Locally: How Will CEQA Adapt to a Changing Environment?” by Arthur Coon and Kristina Lawson, California Real Property Journal SPEAKING ENGAGEMENTS:

n 3.06.07 California Real Estate 2007

Presenters included: Edmund Regalia, Mark Cameron, Arthur Coon, Amy Matthew, Karen Turk

n 3.14.07 Legal Issues for California Professional Land Surveyors: Presented by: Ethan K. Friedman

Miller Starr Regalia ATTORNEYS RECOGNIZED!

R t! S M en Ev

Find out who on p.8

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MSR SPEAKS VINEYARD AREA CITIZENS FOR RESPONSIBLE GROWTH V. CITY OF RANCHO CORDOVA: The California Supreme Court Wades into the Murky Waters of Water Supply and Land Use Planning By Stephen Velyvis

“A nation that fails to plan intelligently for the development and protection of its precious waters will be condemned to wither because of its shortsightedness. The hard lessons of history are clear, written on the deserted sands and ruins of once proud civilizations.” These words, from then President Lyndon B. Johnson’s November 18, 1968 letter to the President of the Senate and Speaker of the House, are as relevant today as they were then. So too is the famous quote attributed to Mark Twain, “whiskey is for drinking, water is for fighting over.” As America’s population and insatiable appetite for water has grown, so too, have the number and intensity of struggles over its use. California is no stranger to the debates waged over this precious resource. In fact, evergrowing demand for finite water supplies recently prompted an ambitious entrepreneur to propose a scheme to export fresh water from the Gualala and Albion Rivers by towing giant plastic water bags down the coast from Mendocino and Sonoma Counties to San Diego. Needless to say, the availability of water remains a paramount concern today, and is often one of the most significant issues facing developers and land use planners alike. The California Supreme Court’s recent decision in Vineyard Area Citizens for Responsible Growth v. City of Rancho Cordova (“Vineyard Area Citizens”) (2007) 40 Cal.4th 412, underscores this point. In that case, the Supreme Court was asked to decide what level of uncertainty regarding the availability of water supplies can be tolerated in an environmental impact report (“EIR”) for a land use plan. Before analyzing the Court’s less than definitive answer to that question, it is important to look briefly at the history of water supply and land use planning, as well as the specific development project and identified water sources at issue in the Vineyard Area Citizens case. Water Supply Planning and CEQA While disputes over water are not new, the rise of water supply planning within the realm of environmental impact analysis under the California Environmental Quality Act (“CEQA”) is. In the past, EIR preparers rarely spent much time or effort analyzing the availability, let alone impacts, of a proposed project’s water demand. Often, agencies simply required the developer to secure a “will serve” letter from the local water supplier. Things changed dramatically in the 1990’s, however, with

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PLANNING FOR THE FUTURE WHEN IT COMES TO WATER

the passage of legislation requiring the coordination of water supply and land use planning, and even more so in 2001 Senate Bills 610 and 221. Those laws, codified in Water Code sections 10910 and 10912, and Government Code section 66473.7, respectively, require water supply assessments and verifications for large development projects to ensure water supply planning is incorporated into the environmental review process and that adequate water supplies are verified before the issuance of final subdivision maps. While such assessments may address future water supply planning in terms of plans and estimates, the verifications must certify that adequate water supplies will be available for the specific project under consideration, as well as other existing and planned future uses for a projected 20-year period. Thus, planners are required to use a sliding scale when addressing water supply planning for a particular project such that water sources are addressed with more specificity as development plans move forward from general to more specific phases. Sunrise Douglas Project In Vineyard Area Citizens, the Supreme Court reviewed the County of Sacramento’s (“County”) certification of an EIR for and approval of a very large, mixed-use development project known as Sunrise Douglas. The proposed project included a master planned community on more than 6,000 rural acres in the eastern portion of Sacramento County (in an area that has since been incorporated as the City of Rancho Cordova), which when completed would include more than 22,000 residential units, housing up to 60,000 people, along with a number of schools, parks and office and commercial uses. The overall project was proposed at a conceptual level in the Sunrise Douglas Community Plan. The first phase of the project, including detailed analysis of how the initial 2,600 acres would be developed for residential and commercial uses, was proposed in the SunRidge Specific Plan. The County prepared a single

EIR assessing the environmental impacts of all phases of the project. The EIR analyzed the potential impacts of the project’s use of two potential water sources – groundwater (from the planned North Vineyard Well Field) and surface water (from diversions of American River water) and identified several mitigation measures to address the significant adverse water supply impacts. In July 2002, the County’s Board of Supervisors passed resolutions and ordinances approving the project and certifying the final EIR. Shortly thereafter, a group of opponents filed suit seeking a writ of mandate to overturn the County’s approval of the project and certification of the EIR. The core of their claim was that the EIR failed to identify the actual source of most of the water needed to fill the project’s long-term demand and that this omission obscured the environmental impacts of the project. The Sacramento County Superior Court denied the petition for writ of mandate and the Third District Court of Appeal affirmed. The Supreme Court subsequently granted review to consider the petitioners’ appeal regarding the adequacy of the EIR’s water supply analysis (and one other issue not discussed here, concerning the need to recirculate the EIR for additional public review and comment). The Supreme Court’s Opinion Given the fact that this was the Supreme Court’s first foray into the field of water supply planning in the CEQA context, the Court began by surveying a number of previous appellate court decisions which had addressed the issue. While those cases did not address a standard of certainty for analysis of future water supply in an EIR, the Supreme Court agreed with the principles already developed by the lower appellate courts. (See Santiago County Water Dist. v. County of Orange (1981) 118 Cal. App.3d 818 [EIR may not ignore or assume a solution to the problem of supplying water to a proposed land use project]; Stanislaus Natural Heritage Project v. County of Stanislaus (1996) 48 Cal.App.4th 182 [EIR must assume all phases of a project will be built and analyze the impacts of providing water to the entire project]; Santa

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MSR SPEAKS continued from page 3 Clarita Organization for Planning the Environment v. County of Los Angeles (2003) 106 Cal.App.4th and California Oak Foundation v. City of Santa Clarita (2005) 133 Cal.App.4th 1219 [water supply must have a likelihood of proving available]; and Napa Citizens for Honest Government v. Napa County Board of Supervisors (2001) 91 Cal.App.4th 342 [where availability of anticipated future water is uncertain, EIR must discuss replacement sources and analyze environmental impacts of such contingencies]). With these principles and the sliding scale of certainty required by the water supply assessments and verifications mandated by Water Code sections 10910 and 10912 and Government Code section 66473.7 squarely in mind, the Court proceeded to assess whether the EIR adequately analyzed the project’s water supply demand and impacts. With respect to the treatment of the project’s near-term water demand, the Court found no fault with the EIR’s analysis. Rejecting the petitioners’ claims that competing uses for the well field water would foreclose the project from receiving any water from the wells, the Court concluded that despite some uncertainty, substantial evidence demonstrated a reasonable likelihood that the proposed well field water will be available to supply the project’s near-term demand. A key portion of that evidence included documents indicating that a substantial portion of the well field water would likely serve the project and that competition from already entitled projects, even if connected to the well field, would leave more than enough water for the development of the project’s initial phase. The Court’s important message here is that uncertainty in the form of competition for identified water sources does not necessarily make the supply too unlikely, as long as the EIR adequately analyzes all competing uses. The Court took issue, however, with the EIR’s long-term surface water analysis. Specifically, the Court found that the EIR failed to provide a consistent and coherent description of the project’s future water demand and supply and thus failed to provide substantial evidence showing that competing demands would not eliminate the proposed surface water supply altogether. The Court rejected arguments that the EIR’s consideration of conjunctive use – a management plan to use more surface water in wet years (allowing the groundwater resources to be recharged) and more groundwater in dry years when surface supplies are restricted – adequately addressed the inconsistencies regarding the project’s long-term water demand and supply. The Court also denounced the EIR’s attempt to defer a full analysis of the conjunctive use plan to a subsequent EIR (for related water master plan update) as improper. Finally, the Court disapproved of the EIR’s dependence on a previous environmental impact report primarily because it failed to properly incorporate the impact analysis and mitigation measures from that existing Water Forum Proposal EIR. As a result, the Court held that the EIR violated CEQA and remanded the matter to the Court of Appeal for further proceedings.

CONCLUSION Given the highly complex facts involved in the Vineyard Area Citizens matter, it is surprising that the Supreme Court chose this case to break its silence on the related issues of water supply and land use planning. Nonetheless, while the Court did not provide a clear answer to the burning question at issue - what level of uncertainty regarding the availability of water supplies can be tolerated in an EIR for a development project – it did provide useful guidance for attorneys, developers and planners alike. Specifically, the Court made clear that the ultimate question, at least at the land use planning stage, is not whether an EIR establishes a likely source of water, but whether it adequately addresses the reasonably foreseeable impacts of supplying water to the project. What is certain is that the battles and disputes over water are not going to end anytime soon, and Vineyard Area Citizens will likely not be the California Supreme Court’s only opinion in this crucial area of the law. Stephen Velyvis is a litigation associate in the firm’s Walnut Creek office and may be reached at 925.935.9400 or [email protected]

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WATER RUNS DOWNHILL, BUT WHO IS LIABLE FOR IT? By W. Scott Shepard

In general, there are three rules that govern the liability resulting from the flow of surface water over the land of adjoining property owners resulting from rain, snow or natural spring. The older “civil” law rule held that a person may not interfere with the natural flow of surface waters in such a manner as to cause an invasion of another property owner’s interest in the use and enjoyment of their property. The owner of an upper property is entitled to discharge surface water as it naturally flows onto a lower property and the lower property owner does not have the right to obstruct the flow of surface waters onto their land. (Keys v. Romely (1966) 64 Cal.2d 396, 405-407; Weaver v. Bishop (1998) 206 Cal.App.3d 1351, 1353-1354). Under the civil law rule, the upper property owner is liable for any damage caused to an adjoining property by water discharged in an unnatural manner. The civil law rule makes it each property owner’s duty to leave the natural flow of surface water undisturbed. (Archer v. City of Los Angeles (1941) 19 Cal.2d 19, 26.) The second and even older rule is called the “common” law rule, also referred to as the “common enemy” rule. It provides that each owner of property has an unqualified right to fend off surface water coming from adjoining property without being required to take into account the consequences of their acts in diverting the water onto adjacent land. It is the duty of the adjacent land owner to protect their property as best they can. (Keys v. Romely (1966) 64 Cal.2d 396, 405-406.) Because the civil law rule, which California followed for a period of time, tended to inhibit development of real property since almost any development of property would likely cause a change in the natural drainage of water across the land, California adopted a modified civil law rule known as the “rule of reasonable use” in the 1960s. The “rule of reasonable use” makes it the duty of every person owning real property to take reasonable care in the use of their property, including the drainage of surface water across or from that property, and to avoid injury to adjacent property caused by the flow of surface waters. There is a corollary duty on the adjacent property owner threatened with injury from surface waters from an uphill property to take reasonable steps to avoid or reduce any actual or potential injury. (Keys v. Romely (1966) 64 Cal.2d 396, 408-409; Burroughs v. State (1968) 260 Cal.App.2d 29, 31-34.)

“The Rule”: plain and simple The rule of reasonable use of surface waters has been summarized by case law as follows: 1. If the upper owner is reasonable and the lower owner unreasonable, the upper owner wins; 2. If the upper owner is unreasonable and the lower owner reasonable, the lower owner wins; and 3. If both the upper and lower owners are reasonable, the lower owner wins also. This provides the upper owner with a defense that it did not have before under the standard “civil law” rule: the unreasonableness of the lower owner’s conduct. However, the burden of proof on this defense is on the upper property owner. In summary, an upper owner who directs surface waters onto a lower or adjacent property is liable for damages suffered by the lower property owner regardless of whether the upper owner’s conduct was reasonable or unreasonable unless the upper owner proves the lower owner acted unreasonably. (Burroughs v. State 260 Cal.App.2d 29, 33; Ektelon v. city of San Diego (1988) 200 Cal.App.3d 804, 810.) The test is not one of negligence by either party, but the reasonableness of their conduct. It would be prejudicial error to give traditional negligence jury instructions to a jury that differ from the modified civil law rule set forth by the California Supreme Court in Keys v. Romely Cal.2d at 405-406. (Gdowski v. Louie (2000) 84 Cal.App.4th 1395, 1402-1406.) The question of who is responsible for injury to real property suffered by the lower property owner where both the upper and lower property owners acted unreasonably has not yet been answered by the California courts. However, it is likely that the upper property owner would be held responsible for damage caused by the water flowing off their property, but the lower property owner’s damages might be limited to only those that could not be avoided by reasonable mitigation conduct by the lower property owner. (See Sheffet v. County of Los Angeles (1970) 3 Cal.App.3d 720, 730.)

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MSR SPEAKS

Low Impact Development in the West: A Growing Trend in Stormwater Management by Robia S. Chang and Carolyn Nelson Rowan

Increasingly, Western communities, particularly those in urban areas, are using an approach known as “low impact development” (“LID”) to control stormwater pollution. Instead of making large investments in complex and costly engineering strategies for municipality-wide stormwater management, LID accomplishes this by various lot-level design strategies that are designed to mimic natural hydrology and processes, customized to each individual development and implemented by developers. LID addresses runoff close to the source by employing various features, including, for example, disconnecting roofs and paved areas from traditional drainage infrastructure and directing runoff to natural areas such as vegetated open spaces, which look like landscaped areas but are actually engineered systems that use plants and soil to trap and treat various contaminants. Other common LID practices include rooftop gardens, tree planter boxes, and the use of permeable pavement in low traffic areas, parking areas, and walking paths. For the most part, LID has been a voluntary approach, promoted but not required, in the Western states. Localities and developers have chosen to adopt such measures because of their benefits, not because they were mandatory. However, recent developments in California signal significant changes that may indicate an increasing trend toward mandatory LID techniques throughout the state. In California, urban stormwater is regulated through statewide permits issued by the State Water Resources Control Board (“SWRCB”), which include construction and smaller Phase II communities that operate Municipal Separate Storm Sewer Systems (“MS4s”), and regional permits issued by nine Regional Water Quality Control Boards to larger Phase I communities that operate MS4s. Both state and regional permits require Best Management Practices (“BMPs”) to prevent storm water pollution or hydromodification from harming beneficial uses of the waters. Earlier this year, the San Diego Regional Water Quality Control Board approved a stormwater runoff permit that will require the County of San Diego, the Port District, and the county’s 18 cities to increase the testing and monitoring of runoff, street sweeping, and sewer-line cleaning. Significantly, the renewal permit will also require the use of two types of LID at

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specified categories of development projects, as designated in local Standard Urban Storm Water Mitigation Plans. Both the routing of runoff from impervious to pervious areas, and the use of permeable surfaces for portions of low traffic areas, are now required LID techniques and within three years, all sites larger than one acre will be subject to the requirements. Additional provisions require the inclusion of hydromodification measures that typically involve the use of large holding basins that detain the increased stormwater runoff resulting from development projects and release the runoff to the receiving storm drain in a pattern similar to the pre-project condition. Where the county and cities previously had discretion to require LID based on applicability and feasibility, under the new permit, this determination will not be made at the sole discretion of a co-permittee; rather, the Regional Board will have discretion to provide its input. Similarly, the draft MS4 Permit issued to Ventura County by the Los Angeles Regional Board on December 27, 2006, requires that all new development and redevelopment projects integrate LID principles into project design. The permittees, including the County Watershed Protection District, the County of Ventura, and 10 cities within the county, are to develop a LID Technical Guidance Document for use by planners and developers, within 18 months of the issuance of the permit. These regional precedents likely will result in the remaining seven regional boards following suit when their MS4 permits are renewed. Already, the SWRCB has followed the approach in its renewal of the Statewide General Construction Permit, proposing significant changes from the previous permit and including new post-development hydromodification requirements that will involve the use of site design BMPs. While California appears to be leading the way by making the use of LID mandatory, many Western states have been promoting LID for some time. For example, in the state of Washington, generally recognized as having some of the nation’s most stringent stormwater management regulations, the use of LID techniques are strongly encouraged. The State Department of Ecology administers the state stormwater management program and recently, issued separate permits for the eastern and western portions of the state. In response to comments relating to LID requirements, the department recognized that there are circumstances where LID approaches, such as infiltration based strategies, may not be appropriate due to soil and site constraints. A Low Impact Technical Guidance Manual for Puget Sound targeted at engineers, planners,

developers, builders, and architects, provides LID goals and objectives and site assessment and design methods. Decisions on the use of LID techniques will be made on a site-specific basis, or may be locally mandated to meet zoning requirements. For example, in the city of Olympia, mandatory LID techniques have been adopted in a specific basin area known to contain aquatic habitat, and in Snohomish County, LID is already required for so-called Fully Contained Communities, i.e., communities located in rural areas at least one mile outside of current urban-growth areas, on at least 2,000 acres. The use of LID techniques is also encouraged, but not required, by the Oregon State Department of Environmental Quality. The Willamette Basin Total Maximum Daily Load defines the amount of a pollutant that can be present in a water body without causing water quality criteria to be exceeded. One of the strategies suggested in the September 2006 Water Quality Management Plan (“WQMP”) to attain and maintain the water quality standards is LID. To prevent pollution in urban and rural areas, the WQMP suggests environmentally sound development, including LID standards. It also suggests the use of various management strategies characteristic of LID, such as minimizing the amount of and disconnecting impervious areas and reducing the amount of new impervious surfaces associated with new development projects. Similarly, the March 2006 Tenmile Watershed Draft WQMP recommends LID as one of the Coastal Nonpoint Pollution Control Program strategies, and suggests that the “innovative” LID approaches can be used to meet a wide range of Wet Weather Flow control and community development goals while reducing the cost of stormwater treatment and management facilities construction and operation. At the local level, municipalities in the state of Nevada have been encouraging the use of LID. The Truckee Meadows Regional Stormwater Quality Management Program, which is a collaborative effort between the city of Reno, city of Sparks, and Washoe County, issued a Draft Low Impact Development Handbook, providing guidance on LID practices for new development and redevelopment. The handbook, which is supposed to be the first guidance document referenced during the development planning process, was developed to

assist planners, developers, architects, landscape professionals, city and county community development, and public works staff with the selection and design of features and practices that mimic natural hydrological functions. It suggests a variety of LID techniques, such as porous paving systems, roof rainwater collection systems, design considerations, and disconnection and reduction of impervious surfaces. LID techniques are not required in the state of Idaho, where the EPA Region 10 issues general permits for MS4s. The Idaho Department of Environmental Quality issues a guidance manual that gives possible solutions to stormwater runoff. Counties generally have policies to require the construction of retention basins for new development or redevelopment to contain runoff and in some areas, post construction stormwater runoff is allowed to drain to ditches or flood channels. The EPA recently issued renewal permits, proposing minimum components of the post-construction runoff control program, subject to the permittees’ review. The permittees are also encouraged to consider requiring or promoting other LID practices. The state has developed a catalog of BMPs, including LID, to provide technical guidance for the selection and site design of stormwater BMPs. Some Western states, such as New Mexico, have not yet made a strong (or at least statewide) push for the adoption of LID techniques, but it seems clear that the voluntary use of LID strategies has increased in the west as of late, likely because of the fact that they effectively control stormwater pollution, are affordable, and may increase property values. Given the world’s growing focus on climate change and “green” business, the emphasis on low impact development is likely to continue in the future. In leading cities such as Seattle and Portland, low impact development design techniques have been incorporated into their general plans. But while everyone may agree that communities should strive for cleaner water, the question is whether developers should bear the costs. Now that San Diego and Los Angeles have answered that question by mandating more stringent LID requirements, other Western communities may well follow. Only time will tell. Regardless of whether other Western states and communities decide to mandate the use of LID, it is particularly likely that LID techniques are here to stay and will be adopted with increasing frequency in the near future. Robia S. Chang is a land use and environmental associate with the firm’s Walnut Creek office and may be reached at 925.935.9400 or [email protected] Carolyn Nelson Rowan is a litigation associate with the firm’s Walnut Creek office and may be reached at 925.935.9400 or [email protected]

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Miller Starr Regalia Attorneys Recognized Northern California Super Lawyers 2007

Oakland Magazine’s

“East Bay’s Best Lawyers in America” (March 2007)



n Eugene H. Miller n Edmund L. Regalia n Marvin B. Starr n Richard G. Carlston n Wilson F. Wendt n Gary E. Rosenberg

Walnut Creek Office 1331 N. California Boulevard, Fifth Floor Walnut Creek, California 94596 Palo Alto Office 300 Hamilton Avenue, Third Floor Palo Alto, California 94301

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“The Top Attorneys in Northern California”

n Mark Cameron n Richard G. Carlston n Arthur Coon n James Frassetto n Karl Geier n Robin Kennedy n Amy Matthew n Daniel Miller n Eugene H. Miller n Edmund L. Regalia n (George) Bill Speir n Marvin B. Starr n Wilson F. Wendt