University Responsible for Mitigating the Off-Campus Adverse Consequences of a Campus Expansion Project

In 2005, the Board of Trustees of the California State University (CSU) certified an environmental impact report (EIR) and approved a project involving new construction for the expansion of San Diego State University. The project included the construction of new buildings and an increase in student enrollment of over 10,000 full-time equivalent students. While the litigation challenging this EIR was pending, the California Supreme Court decided the case of City of Marina v. Board of Trustees of California State University (2006) 39 Cal.4th 341. As a result, the trial court issued an order setting aside the 2005 EIR and project approval. The court retained jurisdiction of the matter until it determined CSU had complied with the California Environmental Quality Act (CEQA) and the views expressed in Marina. In 2007, CSU issued a draft EIR for further public comment and, after receiving and responding to comments, CSU prepared a Final EIR.

The Final EIR identified potentially significant effects. CSU adopted findings of fact and found that the mitigation measures would reduce most of the potentially significant effects. One of the mitigation measures was for CSU to pay a "fair-share" toward off-site environmental mitigation activities. However, CSU conditioned payment of its "fair-share" on obtaining funding from the Legislature. The Final EIR further stated that if the Legislature did not provide (or delayed) funding, the mitigation of the Project's significant off-site environmental impacts would be infeasible. Nonetheless, CSU determined that the benefits of the project outweighed any unavoidable significant impacts, and approved the project.

The City of San Diego and the Redevelopment Agency of the City of San Diego (City), San Diego Association of Governments (SANDAG), and the San Diego Metropolitan Transit System (MTS) challenged CSU's certification of the Final EIR and the project approval. The trial court entered judgment for CSU finding that CSU met the requirements of the California Environmental Quality Act (CEQA) and Marina. The City, SDAG, and MTS appealed.

The court of appeal reversed the trial court, holding that CSU erred in relying on Marina to find off-site mitigation infeasible and, based on that finding, to conclude that overriding considerations justified proceeding despite the unmitigated environmental effects. The appellate court returned the case to the trial court with instructions that it order CSU to void its certification of the Final EIR, its adopted findings, and its approval of the project. The City, SDAG, and MTS appealed to the California Supreme Court.

The Supreme Court upheld the appellate court's opinion, holding that CSU improperly relied on Marina. The Marina court, addressing a different, earlier challenged EIR, concluded CSU had abused its discretion in certifying the EIR because the finding of infeasibility and statement of overriding considerations depended on incorrect legal assumptions. The most important of the incorrect assumptions was that CSU's duty to mitigate was defined by the campus' geographical boundaries. The Marina court found that CEQA requires a public agency to mitigate or avoid its projects' significant effects not just on the agency's own property but on the environment. The Marina court also stated that "a state agency's power to mitigate its project's effects through voluntary mitigation payments is ultimately subject to legislative control; if the Legislature does not appropriate the money, the power does not exist." CSU relied on this statement to justify its position that it might contribute funds for off-campus environmental mitigation only through an appropriation designated for that specific purpose. The Supreme Court disagreed.

The Supreme Court stated that CSU's interpretation of the case was strained, and reasoned that neither CEQA, Marina, nor any other case law suggests that mitigation costs for a project funded by the Legislature cannot appropriately be included in the project's budget and paid with the funds appropriated for the project. Additionally, no provision of CEQA makes the duty of a state agency to mitigate its projects' environmental effects contingent on the Legislature's grant of an earmarked appropriation. The Supreme Court noted that mitigation is the rule, and any exemptions for CSU were made explicitly. Finally, the Supreme Court reasoned that CSU's interpretation depended on a legally unsupportable distinction between environmental impacts occurring on the project site and those occurring off-site. CEQA does not draw this distinction for purposes of mitigation, and instead defines the environment the area that will be affected by a proposed project.

City of San Diego v. Board of Trustees of the California State University (2015) 61 Cal.4th 945.