Make UC a Good Neighbor v. Regents of University of Cal. - A165451 – 02/24/2023

 

Make UC a Good Neighbor v. Regents of University of California is a CEQA case filed to stop UC Berkeley from building student housing at the “People’s Park” location.  

In California, a “project” that can have a “significant” effect on the “environment” requires an “environmental impact report” under the California Environmental Quality Act (CEQA) that lists impacts and identifies way to minimize the impacts.  

 People looking to stop or delay a project can complain that the report was inadequate in some way and use courts to delay the project; a lawsuit or the prospect of a lawsuit can be used to make the project too costly to pursue, extract concessions, or just delay.

In this case, UC created an EIR in 9/2021 for building housing on People's Park and a lawsuit was filed 10/2021.  The trial court denied the petition 8/2022, but everything was put on hold for the appeal.

The petitioners asserted, among many arguments, UC needed to analyze an alternative development plan that limited student enrollment.  The court held the petitioners did not demonstrate that it was “manifestly unreasonable” to not include this alternative in the EIR because an agency does not need to consider alternatives that would change the nature of the project or go beyond the scope of the project.  Considering limits to enrollment would involve other policy considerations and tradeoffs beyond land use.

Petitioners asserted that UC needed to consider alternatives site locations to building at People’s Park.  The appellate court agreed.  UC needed to consider building on other locations or “provide a valid reason" for not doing so.

The court concluded UC's reasons for not considering alternative locations were not good enough, blaming UC for its “risky” strategy of not considering alternative sites. 

On this issue, the court demands UC to “point to evidence in the record” or complains UC “cites no evidence” on various points.  But CEQA does not require the extended explanation and does not require all reasoning and evidence be placed in the record.    The CEQA Guidelines provide that the EIR should “identify any alternatives that were considered by the lead agency but were rejected as infeasible during the scoping process and briefly explain the reasons underlying the lead agency's determination. Additional information explaining the choice of alternatives may be included in the administrative record.” (Cal. Code Regs. tit. 14 § 15126.6.)   

Further, it is the petitioners with the burden to demonstrate error.  (“Courts presume an EIR complies with this rule; it is a petitioner’s burden to demonstrate it does not”; the court must “defer” to unless the petitioner “(1) demonstrates the alternatives selected” are “manifestly unreasonable and . . . do not contribute to a reasonable range of alternatives” and “(2) identifies evidence of a potentially feasible alternative that meets most of the basic project objectives”; and the court applies the “substantial evidence standard.”)  

Strangely, the appellate court's opinion does not identify a single alternative site that the Petitioners have demonstrated was unreasonably excluded.  The Petitioner must identify a “potentially feasible alternative” that meets “most of the basic project objectives” that it was “manifestly unreasonable” to exclude. Where is this alternative?  Not clearly articulated in the opinion.

UC argued that it appropriately screened out use of alternative locations because it “could reduce the total projected number of beds within the proposed LRDP Update development program; could require UC Berkeley to identify additional housing sites that are not currently UC Berkeley properties for housing; would be constrained by site access and parcel size, as many of the eligible sites are smaller than the proposed development sites, and could therefore require multiple sites; and has the potential to introduce new historic resource impacts at many of the sites in the City Environs Properties and the Clark Kerr Campus, as both contain historic resources or are adjacent to such resources.”  Even so, “[i]n comments on the draft EIR, members of the public asked what specific sites were considered as potential alternatives for Housing Project No. 2.  The final EIR responded by identifying numerous potential housing sites that the plan also proposes for new development, redevelopment, and renovation.  Like the draft EIR, the final EIR stated that developing Housing Project No. 2 on one or more of those sites would result in fewer beds and potentially introduce new historic resource impacts.” 

UC also analyzed a “No project” alternative and rejected it.  This is functionally the same as a “different site” alternative—given that UC would be considering housing on these alternative sites under the overall plan in any case. 

If, as the court of appeal says, the “point of an EIR is to inform decisionmakers and the public about the environmental consequences of a project before approving it,” it is unreasonable to conclude that the decisionmakers and the public did not consider the  environmental consequences of the project and the concept of alternative locations.  That was clearly discussed and considered even if the UC came to different conclusion than the appellate court and the Petitioners.

The court concluded that not discussing alternative sites “failed to serve the purpose of enabling informed decision-making and public discussion.”  Do they actually believe that the decision-making and discussion was limited?  Did they review the comments and lengthy meetings on the project?  They know there were comments about building at alternative sites and that UC responded to those comments.  The comments and responses are incorporated in the EIR.

UC argued that no other site would meet the goal of revitalizing the site at issue.  The court rejected this because this reason was not in the EIR, and decided to construe the goal to apply to all of the UC sites.  Again, the court appears to put the burden on UC and not the Petitioner.  The Petitioner needed to show that the goal of revitalizing the land was not a primary goal and it was manifestly unreasonable for UC to interpret its own statement of purpose in this way.

The court of appeal also held that the EIR was insufficient because it did not consider that students have a history of noisy parties and the extra students might cause extra noise.  It reached this conclusion by asserting it was a reasonable inference that adding 1,113 students should be studied as a potential increase to noise in the neighborhood by going to parties nearby because noise from students has been a long-term problem and seemingly incapable of being mitigated.

Although less than clear, the court’s reasoning focuses on the idea that there will be noise, not from students inside the housing, but from students going to events in the neighborhood.  The project does not cause the student noise; the students in the area cause the noise. 

 It may not be pure speculation that students will party, but it is absurd to claim that the project would have any significant reduction in noise around campus.  UC Berkeley has 45,307 students.  This project involves possibly housing 2% of that population.  

And these prospective 1000 students who would live at the project, must live somewhere.  They will seek to live close to campus.  They will either live in the UC built student housing, or they will live at another property.  The students will go to parties, either from the project site, or from another residence.  There is no reasonable argument that having these students live somewhere else in the same neighborhood would result in any significant change in the environment.  Further, in the absence of the project, students will move into quieter, more residential neighborhoods; live in properties that can easily host parties; or they will travel further from their residences to events. 

The opinion describes how Berkeley took action to prevent private homes from being converted to student housing, which would host parties.  The court does not realize this undermines their conclusion.  Guess where students might live if they are not in UC build housing?  Private homes. 

The court ignores its own legal standard to place the burden on the Petitioner and to uphold reasonable decisions by the UC in evaluating the project.  The court makes a truly speculative and absurd jump from “students will party and make noise ” to “this project will increase the noise from students who party.” 

They can only do this by severing this project from the real world—a world in which students have to live in their cars while they require more irrelevant reports. 

 CEQA defines “Feasible” as “capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic, environmental, social, and technological factors.”  Ironically, CEQA and the court has made this project infeasible—the CEQA process has prevented any project from being done in a successful manner in a reasonable period of time. 

The decision confirms that no matter the supposedly deferential standards to be applied, courts have great flexibility to kill projects they disagree with by calling reasons or explanations they do not like “conclusory.”  When the court likes a project, it is the objections that are conclusory, speculative, or or insufficient. 

 

 

 

Fleming v. Oliphant Financial - A165837 - 1/31/2023

In Fleming v. Oliphant Financial, Plaintiff filed a class action against a debt collector.  The creditor sought to move the dispute to individual arbitration and avoid a class action.  The appellate court held that in order to enforce an arbitration provision in a credit card agreement, the creditor must provide evidence that the card holder actually received the agreement.  If they never signed it or received it, they could not agree to it. 

Based upon the alleged Cardmember agreement, the collector argued that the arbitrator should decide whether an agreement was reached, but until the existence of the agreement is established, there is no basis for going to an arbitrator.

 The creditor also argued that the cardholder received statements that told them to "refer to your Cardmember Agreement for additional information about the terms of your Account."  Parties are permitted to incorporate terms by reference, but the reference must be sufficiently clear and allow easy access to the terms.  But, without first establishing what the Cardmember Agreement is, this reference is unclear.

The creditor probably could not establish what happened in connection with the original application because the account was transferred so many times. 

What is the lesson?  For creditor companies: keep your records and clearly refer and incorporate terms with specific reference to where they can be found on each statement.  For everyone else: asks your representative to amend the Federal Arbitration Act to exempt form contracts that are not subject to negotiation.

Degala v. John Stewart Company - A163130 - 1/27/2023

In Degala v. John Stewart Company Plaintiff was the employee of a subcontractor at a construction site.  Three assailants made it through the fencing around the building worksite and followed Plaintiff outside of the building and attacked Plaintiff outside of the fence.  Plaintiff sued the general contractor for his injuries, saying they were negligent in not protecting the worksite from roaming criminals.

In general, employees cannot sue their employer for on-the-job injuries; their exclusive remedy is the workers compensation system.  Also, in general, an employee may not sue a company (or landowner) that hired the employer.

There is an exception where the hiring company is directly responsible for the injury and "affirmatively contributes" to the injury.  

In this case, the appellate court held hat the general contractor could be held liable because it took control over site security by maintaining fences at the job site, hiring security guards, installing a camera system, directing workers to stay inside at times, and making changes to security over time.

Basically, because the general contractor exercised control over security and could have done more to prevent the assault, the general contractor is potentially liable for Plaintiff's injuries. 

The opinion (by Hon. Marla J. Miller) was initially unpublished.  It should have remained that way.  The opinion does not distinguish key Supreme Court decisions on this issue and does not explain how the defendants affirmatively contributed to the injury.  

In Hooker v. Department of Transportation (2002) 27 Cal.4th 198, CalTrans retained control over safety conditions at a worksite, but they allowed contractors to engage in an allegedly dangerous practice:  A crane operating on an overpass blocked vehicle traffic.  So, the cane operated would retract outriggers to allow vehicles to pass.  The crane toppled when the operator forgot to re-extend the outriggers before restarting work.  CalTrans knew about the dangerous practice and could have put it to a stop.  The Court held that CalTrans was not liable because it did not "affirmatively contribute" to the practice.

The Court focused on a distinction between allowing a dangerous activity and requiring the dangerous condition.  The Court held CalTrans did not affirmatively contribute even though some of its own vehicles would use the overpass, causing the plaintiff to retract the outriggers.

The facts of Hooker are similar to Degala:  the general contractor had general control over site access safety, and could have taken additional actions to reduce the likelihood of injury, but nothing the general contractor did directly encouraged criminal conduct or prevented the subcontractor from taking additional precautions.  If anything, the facts in Degala are more favorable to the defendant.  In Hooker, CalTrans actively took advantage of the dangerous condition, in Degala, the general contractor was attempting to take reasonable steps to protect the worksite.  In neither case did the defendant affirmatively require the worker to undertake the work they were performing in a dangerous manner.

Degala does not address the recent case of Sandoval v. Qualcomm Inc. (2021) 12 Cal.5th 256.  Qualcomm hired a subcontractor to perform an inspection of an electrical system.  Qualcomm informed the subcontractor what equipment was shutdown and what parts were powered.  Plaintiff was injured from one of the live circuits.  Even though Qualcomm was in control of whether to turn off power and, in essence, required the contractor to work in the presence of dangerous live circuit, it was sufficient if Qualcomm disclosed the dangers.

The facts here are analogous in that the general contractor clearly informed the subcontractors and employees of the dangers of crime in the neighborhood and there was no evidence the general contractor hid this fact or misrepresented the extent of safety measures in place.  Just like the subcontractor in Qualcomm, Plaintiff and his employer continued to work at the jobsite with the knowledge of the dangers--dangers that the general contractor did not act to increase. 

A hirer can be liable when it directs that certain defective equipment be used by a subcontractor.  I think Plaintiff's best argument would have been that the defendants "supplied" defective "security" to the worksite, and Plaintiff was necessarily required to use defendants' security.  But from the opinion, there is no evidence this is actually the case. 

On this key factual issue, Degala misplaces the burden of production.  Once the moving parties met their initial burden, it was Plaintiff's burden to present evidence that the defendants actively prevented Plaintiff or Plaintiff's employer from taking additional security measures that would have prevented the crime.  For example, Plaintiff might be able to meet that burden by showing defendants prevented subcontractors from hiring their own security or taking other precautions.  But instead, the court reasoned that "there is no evidence that Degala or [his employer] could have made alternative site security arrangements."  Thus, the court improperly put the burden on the defendants.

Absent from the opinion  is consideration that the direct cause of the injury was third party criminal conduct. Unlike the supply of equipment or the condition of the land, third-party criminal conduct not something that the defendants have "affirmatively contributed" to unless they did something that specifically made criminal conduct more inviting.  Nothing in the facts of the decision suggest the motive of the assailants, much less that the defendants did anything to encourage crime.  It is odd that this factor was not considered in the decision.

Mchugh v. Protective Life Insurance Company - S259215 - 08/30/2021

 

In Mchugh v. Protective Life Insurance Company, the California Supreme Court construed a statute that required insurance companies to provide a grace period and certain types of notice notice before terminated a life insurance policy.  It held the statues applied to policies that were issued before the law was enacted.

As of January 1, 2013, California Insurance Code sections 10113.71 and 10113.72 provide that a life insurance policy cannot be cancelled for nonpayment until a 60-day grace period has passed and 30 days’ notice of termination has been provided. 

In Mchugh v. Protective Life Insurance Company, the insured failed to pay a life insurance premium in February 2013, the policy was terminated, and in June 2013, the insured died.  Plaintiff claimed that the defendant insurer did not properly terminate the policy because it did not comply with the required grace period and notice.  An appellate court upheld a jury verdict in favor of the insurance company on the ground that the policy at issue was issued prior to 2013 and the new statutory requirements should not be applied retroactively to policies that were issued before 2013.

The majority opinion spends considerable time asking whether the grace and notice requirements applied “retroactively” in a manner that created a presumption the Legislature did not intent to have the statute apply to policies issued before 2013.  The Court reasoned the statutes were not invoke the presumption because that the grace period and notice provisions only dictated the procedures for terminating policies going forward.  They did not impose new liabilities based upon past conduct, and the statutes did not unfairly upset the bargain of the insurance policy by requiring an insurer to provide substantially expanded coverage without giving it an opportunity to raise premiums.

The insurer argued that the grace period was an important part of the bargain, and the insurer was unable to change premiums to account for the new rules; the Court rejected this argument on the ground that the insurance industry is so heavily regulated that further regulation was a risk of doing business, and the insurer did not identify how the bargain was substantially upset by the change in cancellation procedures.

Construing the language of the statutes, the Court found arguments in favor and against applying the statutes to existing policies issued prior to 2013.  The Court then turned to legislative history that suggested the Legislature expected the statutes to apply to presently existing policies.  Weighing these considerations, the Court concluded the statutes applied to policies existing at the time of enactment.

Sandoval v. Qualcomm Inc. - S252796 - 09/09/2021

 

 In Sandoval v. Qualcomm Inc., Plaintiff Sandoval sued Defendant Qualcomm after he received severe burns during an inspection of parts of Qualcomm's electrical system.

Qualcomm had hired a subcontractor to perform the inspection.  The subcontractor had hired Plaintiff Sandoval to assist with the inspection.

Qualcomm confirmed with subcontractor employees which parts of the system were shutdown and safe to inspect; other parts were still powered and covered.  During the inspection, a subcontractor employee exposed a live circuit; Sandoval approached near the live circuit and his tape measure triggered an arc flash.

Under the Workers Compensation Act, Sandoval was entitled to payment from his direct employer for his injuries, but he is prohibited from suing his employer for damages in civil litigation (which can result in much higher payments).

Because employees claims against their employers are limited, injured employees may attempt to sue others they believe are responsible to obtain additional payments or damages.  In general, plaintiffs' counsel will sue as many potentially responsible defendants in order to increase the likelihood collecting through settlements or prevailing at trial.  Even a claim of limited merit will typically induce defendants to offer a settlement to avoid litigation expenses.

Here, Sandoval sued Qualcomm and others.  In general, everyone is responsible for injuries caused by their own negligence (i.e., failure to exercise reasonable care).  But the California Supreme Court's "Privette doctrine" holds that, in general, by hiring an independent contractor, a person "delegates to the contractor the responsibility to do the work safely" and is not responsible for injuries to the contractor's employees.  This is because the worker is already assured compensation under the Workers Compensation Act (which the hirer has indirectly paid for through the contract price) and the contractor is in the best position to ensure work is performed safely.  However, a hirer can be liable under certain conditions.

Over the last 30 years, the Supreme Court has been refining the grounds upon which a hirer can be liable to a contractor's employee.  A hirer is not liable for failing to require the contractor to take precautions, for negligently hiring an incompetent contractor, or other failings that are essentially attempts to make the hirer liable for the contractor's negligence.  A hirer may be liable if they fail to disclose concealed hazards the hirer should have known about, or where the hirer actually retains control over part of the work and affirmatively contributes to the worker's injury.  For example, by requiring the contractor to use defective equipment.

In Sandoval, Qualcomm did disclose hazards to the contractor and did not retain control over the work.

In order to be liable, Qualcomm was required to have “actually exercised” its retained control over the contracted “such that the contractor is not entirely free to do the work in the contractor’s own manner” and that it was this conduct that "affirmatively contributed" to the injury--not just failed to prevent the injury.

The strongest argument from Plaintiff Sandoval was that Qualcomm was in control of whether to turn off power and, in essence, required the contractor to work in the presence of dangerous live circuits (similar to asking a contractor to use defective equipment), but the Supreme Court found that the risks were disclosed, there was sufficient means for the contractor to safely perform the work, and the more immediate risk was created when the contractor removed a panel that exposed the live circuit.

I wonder if the result would change if the contractor had requested the hirer take some action (e.g., request that power to be turned off for safety), but the hirer refused and asked the hirer to perform the work anyway.  At some point the level of danger created by the surrounding conditions could get so high that it becomes reckless to hire a company to encounter it.