Parties Can Toll CEQA Statute of Limitations

Last week, in Salmon Protection and Watershed Network v. County of Marin, the California Court of Appeals found that a public agency and a party disputing the adequacy of an environmental impact report (EIR) under the California Environmental Quality Act (CEQA) can enter into a tolling agreement to toll or suspend the CEQA statute of limitations.

Petitioner SPAWN sought to challenge under CEQA the County of Marin’s general plan update on the grounds that the EIR’s cumulative impacts analysis was inadequate.  Generally, there is a short statute of limitations for challenging a public agency’s actions under CEQA.  Under California Public Resources Code section 21167, a petitioner only has 30 days from the date of the public agency’s filing of a notice of determination to challenge an EIR on the grounds that it does not comply with CEQA.  In an attempt to negotiate a pre-filing settlement, SPAWN and the County entered into a series of tolling agreements extending this 30-day limitation period.  However, when a settlement could not be reached, SPAWN brought its CEQA petition.

Subsequently, a group of property owners were granted leave to intervene to allege that SPAWN’s petition was untimely because CEQA does not permit parties to enter into tolling agreements.  In upholding the validity of the tolling agreement, the court acknowledged that there is a strong public policy favoring prompt disposition of CEQA challenges.  However, the court found that there is an equally strong public policy to encourage settlement.  Therefore, the court found that if all parties directly involved in a controversy concerning the adequacy of an EIR or compliance with CEQA agree to toll the statute of limitations, the interests of the parties and the public are promoted by permitting the tolling of the limitation period.

The court noted that for a tolling agreement to be effective in a prototypical CEQA controversy concerning the approval of a site-specific project, the project proponent must also agree to toll the statute of limitations.  However, the court rejected the property owners’ contention that they needed to agree to toll the statute of limitations.  The court found that although their properties may indirectly be affected by the update to the general plan, they were not real parties in interest in the litigation.

Had the court found that the parties could not toll the CEQA statute of limitations, this would have had a disastrous effect on public agencies.  Public agencies routinely enter into these types of tolling agreements in an effort to avoid litigation, which can be both costly and time consuming.  For this reason, the County joined with SPAWN in asserting that the tolling agreement was valid.  The League of California Cities, the California State Association of Counties, the California Building Industry Association and the Sierra Club all filed amicus briefs in favor of upholding the tolling agreement.  Likewise, had the court adopted the property owners’ contention that they also needed to agree to toll the limitations period, this would have created great uncertainty.  Parties would be placed in the unenviable position of having to obtain an agreement from potential intervenors that do not have a direct interest in the dispute.  It would be impossible to know which parties need to be signatories to the tolling agreement.  For these reasons, this blogger thinks that the court got it right.