Courthouse Doors Open for Legal Challenges of California Power Plant Siting Approvals

The California Court of Appeal for the First Appellate District has struck down a state law that limited judicial review of California Energy Commission (CEC) thermal power plants siting approvals to the California Supreme Court. In Communities for a Better Environment et al. v. Energy Resources Conservation and Development Commission, Case No. A157299, Cal. Ct. App. Nov. 20, 2020, as modified (Nov. 23, 2020) (CBE v. CEC), the court ruled that the state law impermissibly divested superior courts and courts of appeal of original jurisdiction to review challenges to CEC approvals. Proponents of thermal power plants in California should be aware of this landmark decision, as it may lead to an influx of challenges to CEC approvals in superior courts, but may also provide leverage for applicants to counter unjustified conditions of approval sometimes imposed by CEC on new power plant projects.

Background

In California, the CEC has exclusive authority to certify the location for newly constructed and modified thermal power plants with a generating capacity of 50 megawatts or more. Section 25531 of the Warren-Alquist Act of 1974 specifies that judicial review of CEC siting approvals are reviewable solely by the California Supreme Court. That judicial forum, however, is not guaranteed because the review of each action is subject to the Supreme Court's discretion. This procedure is in stark contrast to the vast majority of local and state agency approvals, which are typically subject to nondiscretionary judicial review by superior courts, and then, if requested, by a court of appeal. Since 1974, there have been few (if any) reported cases in which the California Supreme Court conducted a substantive review of CEC's siting approvals. Because the Supreme Court rarely reviews CEC siting approvals, applicants and project opponents have shared a mutual de facto lack of access to the courts to challenge CEC decisions.

Legal Challenge

In May 2013, the plaintiffs commenced a lawsuit to facially challenge Section 25531 as unconstitutional. CBE alleged that the statute unconstitutionally restricts the powers of superior and appellate courts to hear citizen challenges to CEC approvals and the ability to review the agency's findings of fact in such challenges.

On appeal, the court weighed whether Section 25531 was unconstitutional under traditional notions of separation of powers. Specifically, Article VI, Section 10 of the California constitution states that the Supreme Court, courts of appeal and superior courts have original jurisdiction over writ of mandamus actions. Under this framework, the court asked two questions: 1) Did Section 25531 impermissibly divest superior courts and courts of appeal of their original jurisdiction over challenges to CEC siting decisions, and 2) if so, did any other provision of the California constitution allow that divestiture? Based on its review of the plain language of the California constitution and controlling case law, the court held that Section 25531 was unconstitutional, as it substantially impaired and practically defeated the constitutional powers of superior and appellate courts.

The Court's Reasoning Is Consistent with Prior Cases Invalidating Certain CEQA Litigation Streamlining Efforts

The CBE v. CEC decision reaffirms a traditional maxim of California separation of powers: The Legislature may limit judicial review of agency approvals only if authorized by the California constitution. But the court's reasoning is not new; it has been applied in other contexts. For example, in 2011, the California Legislature enacted Assembly Bill (AB) 900, which permits the governor to designate certain construction projects as "leadership projects" that are subject to specific legislative streamlining mechanisms. As enacted, AB 900 required petitioners to bring CEQA challenges directly in courts of appeal, which were given 175 days to issue a decision. In an unpublished decision from March 2013, Judge Frank Roesch of the Alameda County Superior Court invalidated these provisions of AB 900, finding that they unconstitutionally deprived superior courts and the California Supreme Court of original jurisdiction under Article VI, Section 10. (Conservation League v. State of California, Alameda Sup. Ct. Case No. RG1262904). After the court's ruling, the Legislature adopted Senate Bill 743, which replaced the direct route to courts of appeal with a general requirement that California Environmental Quality Act (CEQA) challenges of leadership projects be decided within 270 days.

Unless overturned on appeal to the California Supreme Court, the published CBE v. CEC decision could effectively preclude future attempts by the Legislature to limit superior courts' jurisdiction to hear CEQA challenges for certain projects, absent a constitutional amendment via voter initiative or legislative referral expressly authorizing lawmakers to enact CEQA litigation streamlining laws.

Implications of the Decision

Although it is reasonable to expect that this decision may lead to an influx of legal challenges to CEC siting approvals brought in superior court, the implications might be best characterized as a "double-edged sword." On one hand, CBE v. CEC will likely open the door for future challenges of CEC decisions, thereby increasing project costs and approval time frames. On the other hand, the lack of judicial scrutiny over CEC siting approvals has sometimes emboldened the CEC to impose legally suspect conditions of approvals on new projects, particularly where there is a lack of nexus between a power plant's environmental impacts and mitigation requirements, or to deny worthy projects outright. Now, project applicants have assurance that they can judicially test the legal validity of CEC permitting decisions. Thus, while the prospects of additional project litigation may be of concern to project applicants, the practical benefits that the CBE v. CEC decision may offer are not inconsiderable.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.