California Oil and Gas Update: In-depth look at the California BLM's fracking decision

September 16, 2014

By Scott Castro

California Oil and Gas Update:
In-depth look at the California BLM's fracking decision

Oil and gas lease sales on public lands set to resume in 2015 based upon independent fracking report

On August 28, 2014 the California State Office of the Bureau of Land Management (BLM) signaled its intent to resume oil and gas lease sales on Federal lands in the state beginning next year with its announcement of a "comprehensive strategy for the federal oil and gas program in California." This announcement was issued after an independent study commissioned by the BLM found limited environmental effects from hydraulic fracturing (i.e., "fracking") and other enhanced drilling techniques. The BLM's decision lifts a self-imposed BLM moratorium on oil and gas lease sales in California put in place on May 3, 2013, and marks another chapter in the seesaw debate in California and the nation over the use of well stimulation techniques, and raises some important considerations for the oil and gas industry in the state.

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New Law Allows Mining Operators to Remedy Compliance Issues and Retain AB 3098 List Status

April 9, 2014

by Kerry Shapiro and Garrett Colli

This article was first published in The Conveyor, a publication of the California Construction and Industrial Materials Association.

Mining companies are subject to myriad requirements under the Surface Mining and Reclamation Act (SMARA) and implementing regulations that can trip up even the most diligent of operators from time to time. When a potential violation occurs, SMARA holds that either the lead agency or the Department of Conservation (read OMR) may initiate enforcement proceedings by issuing a notice of violation (NOV). All too often, the process results in an order to comply issued against the operator, which in turn can jeopardize the operator's AB 3098 List eligibility. Removal from the AB 3098 List forecloses an operator's ability to sell materials to State and/or local agencies, often a major component of many operators' customer bases.

Enter SB 447. Under this new CalCIMA-driven legislation operators can maintain AB 3098 List eligibility while working to resolve enforcement issues required by an order to comply, and may now also negotiate the terms of, and stipulate to, such an order. These are called stipulated orders to comply.

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Clean Water Act Update: EPA and Army Corps Propose Significant Changes to the Definition of "Waters of the United States"

March 27, 2014

By Scott Castro

On March 25, 2014, the U.S. Environmental Protection Agency (EPA) and Army Corps of Engineers announced the release of their proposed rule clarifying which waters will be governed by the federal water pollution laws. The draft rule - literally years in the making following several notable U.S. Supreme Court decisions - proposes significant changes to the definition of "waters of the United States," which determines which activities are subject to federal jurisdiction under the Clean Water Act. One key element of the proposed rule would automatically subject nearly every natural and artificial stream and wetland that is adjacent to or near a traditional navigable water, interstate water, or territorial sea to federal jurisdiction.

The agencies, led by the EPA, contend that the rulemaking is needed to clarify ambiguities left in the wake of the U.S. Supreme Court's rulings in U.S. v. Riverside Bayview, Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, and Rapanos v. U.S. While clarification may be needed, the proposed rule would effectively broaden, as a matter of law, federal jurisdiction over many types of streams and wetlands that are currently subject to a case-by-case assessment. Indeed, heavy criticism has been lodged at the automatic expansion of federal jurisdiction, including the potential for jurisdiction to be asserted over water bodies where a "nexus" to navigable waterways or other traditionally regulated bodies of water no longer exists.

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Bowman v. California Coastal Commission: New California Court of Appeal Decision Holds that a Collateral Attack is no Substitute for Challenging a Condition Imposed upon the Issuance of a Quasi-Judicial Permit through a Direct Appeal

March 24, 2014

By Matthew Hinks

Sometimes in land use law, the most impactful court holdings come from the simplest of cases. That may be the situation with the new California Court of Appeal decision in Bowman v. California Coastal Commission, issued by the court on March 18, 2014.

Factual Background

Walton Emmick owned property in San Luis Obispo County. In May 2002, Emmick applied to the County for a Coastal Development Permit ("CDP") to rehabilitate an uninhabitable home on the property. Emmick died in March 2003. The County subsequently issued the CDP ("CDP-1") to Emmick's successor, SDS, subject to a condition that SDS dedicate a lateral access easement for public access along the shorefront portion of the property. SDS did not appeal the condition.

In December 2004, SDS applied to the County for a second CDP ("CDP-2") for construction of a new barn. The application included a request that the lateral access easement condition of CDP-1 be removed. The County approved CDP-2, including the removal of the coastal access condition. Environmental groups and coastal commissioners appealed the County's decision to the California Coastal Commission. After hearing, the Commission determined that the easement condition contained in CDP-1 is "permanent and binding on the landowner" and conditioned its grant of CDP-2 upon implementation of the easement condition. SDS sued.

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Property Reserve, Inc. v. Superior Court: California Property Owners Secure Victory in New Eminent Domain Opinion

March 21, 2014

By Matthew Hinks

In a victory for California property owners, the California Court of Appeal, on March 13, 2014, issued a new opinion holding that the State of California's proposed entry onto hundreds of properties in Northern California for geological and environmental testing amounted to a taking under the state constitution. The opinion of the court in Property Reserve, Inc. v. Superior Court may have a profound impact upon major public works projects throughout the state.

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SB 1270 Proposes Significant California Mining Reform

March 7, 2014

by Kerry Shapiro, Esq. and Scott Castro, Esq.

The recent submittal of significant proposed revisions to California's mining law, the Surface Mining and Reclamation Act ("SMARA"), signals potentially broad-reaching changes to the statute. On February 21, 2014, Senator Fran Pavely (D) introduced SB 1270, a bill proposing to overhaul various sections of SMARA. SB 1270 proposes fundamental changes to SMARA. Click here for a copy of SB 1270.

If these changes go through, mine owners and operators will be subject to a new regulatory system under which the State will assume a far greater and centralized role in various aspects of SMARA, including mine inspections, enforcement, and establishment of financial assurance mechanisms. The mining industry also faces the likely prospect of increased carrying costs, arising from such proposals as changes to the annual reporting fee structure (proposed at a minimum of $1,000/year on a per-acre basis, and with no maximum cap), to increased ability to appeal decisions relating to the State's "3098" list.

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Tower Lane Properties v. City of Los Angeles: JMBM Prevails in Published Court of Appeal Opinion Holding that a City's Erroneous Interpretation of an Ordinance At Odds with its Historical Practice is Entitled to No Deference

March 3, 2014

By Matthew Hinks

JMBM has prevailed in the Court of Appeal on behalf of its client in a well-publicized and hotly-contested development project in the City of Los Angeles. The court's published opinion will come as welcome relief to property owners who got caught in the bureaucratic mire when the City chose to "re-interpret" a half-a-century-year-old ordinance dealing with subdivision proposals to apply to all large hillside lots. However, the lasting impact of the decision will be what the court had to say about the deference a municipal authority is entitled to in connection with the interpretation of city ordinances and regulations.

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Appellate Court Rules in Favor of Saudi Prince in Benedict Canyon Case

March 3, 2014


Appellate Court Rules in Favor of Saudi Prince in Benedict Canyon Case
Rejects arguments that ordinance requires environmental review

In the much publicized case of a Saudi Prince seeking to build his residential estate, a unanimous three-judge panel of the Court of Appeal published a decision in which it affirmed a lower court judgment and ruled in favor of the Prince and against the City of Los Angeles, Bruce Karsh and Martha Karsh. In Tower Lane Properties v. City of Los Angeles, Bruce Karsh, Martha Karsh, the appellate court rejected the City and Karsh arguments that the residential project must first file a tentative tract map and undergo environmental and discretionary review before issuance of a building permit.

In reaching its conclusion, the court considered the plain meaning of the subject ordinance (Los Angeles Municipal Code 91.7006.8.2) as well as the City's historical interpretation and application. The court found that the prior owner of the Prince's property has been granted grading permits in 2005 and 2006, and that "...the Karshes obtained grading permits for nine projects on their large hillside property, all without undergoing any environmental review under the Ordinance." The court concluded: "Thus, out of 22 grading permits for properties having hillside grading sites larger than 60,000 square feet, only one required any type of clearance, which was obtained without undergoing any environmental review."

The court rejected the City's efforts to interpret the Ordinance in such a manner as to require the Saudi Prince to undergo environmental review, concluding: "Because the City cannot point to a consistent and long-standing interpretation, its current interpretation is entitled to no deference."

Tower Lane's land use attorney, Benjamin M. Reznik of Jeffer Mangels Butler & Mitchell LLP in Los Angeles, stated that his client, who has been the target of allegedly unfair and at times vicious attacks by local residents and the media, feels completely vindicated by the court ruling. "The City continues to single out the Saudi Prince with new requirements never before applied to other property owners all in an effort to deny him the right to a building permit. This unfair treatment has to stop," said Reznik.

Tower Lane Properties is an entity established by Saudi Prince Abdulazziz ibn Abdulazziz al Saud, who is currently the Deputy Foreign Minister of Saudi Arabia, to develop his family residence in the hills above Benedict Canyon. Next door neighbors Bruce and Martha Karsh have been leading and funding efforts to stop the Saudi Prince.

New California Court of Appeal Opinion Holds That Supreme Court's Seminal Nollan and Dolan Opinions do Not Apply Where a Permit Condition Does Not Otherwise Constitute a Taking

February 25, 2014

By Matthew Hinks

The well-known "nexus" and "rough proportionality" tests from the United States Supreme Court's opinions in Nollan v. California Coastal Commission, 483 U.S. 825 (1987) and Dolan v. City of Tigard, 512 U.S. 374 (1994) do not apply where a condition to issuance of a building permit does not otherwise constitute a taking. So says the California Court of Appeal in Powell v. County of Humboldt, a new published opinion that could potentially limit the reach of Fifth Amendment takings protections for California property owners.

Factual Background

Scott and Lynn Powell own property near the Arcata-Eureka Airport in Humboldt County. The previous owners of the property constructed a covered porch and carport without securing a building permit. In May 2008, the County gave notice to the Powells that unless they secured an "after-the-fact" permit for the porch and carport they would be subject to monetary penalties. The Powells thereafter filed a permit application, which included work to secure the porch foundation and strengthen the structures to bring them into compliance with building codes. The County informed the Powells that, pursuant to a County general plan requirement, the County would require, as a condition to issuance of the permit, that the Powells dedicate an aircraft overflight easement over their property granting the County the right to, among other things, allow flights and noise inherent thereto, and regulate the release of substances, light and electrical emissions, in the airspace over the property.

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Foothill Communities Coalition v. County of Orange: New California Court of Appeal Upholds Use of "Spot Zoning" Where a "Substantial Public Need" Exists

February 25, 2014

by Matthew Hinks

Spot zoning - the practice of singling out a parcel of property for either more or less restrictive zoning regulations - does not always constitute an impermissible abuse of discretion according to a new opinion from the California Court of Appeal in Foothill Communities Coalition v. County of Orange that could potentially alter the way spot zoning is viewed in California.

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JMBM Hotel Developers Forum: Miguel Santana advocates hotel expansion for downtown Los Angeles

November 8, 2013

At the recent Hotel Developers Forum hosted in JMBM's Los Angeles office, LA City Administrative Officer Miguel Santana emphasized the City's commitment to development, particularly of hotels in the downtown area. Santana is the chief financial advisor to the mayor, and his office has direct oversight over the city's budget, labor negotiations, and development incentives for the City.

"We're big advocates for hotel expansion in the City," he said, adding that the City of Los Angeles is willing to work with property owners in a variety of ways to create projects that balance profitability with revenue for the city.

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JMBM Recognized as a 2014 Best Law Firm in Land Use & Zoning Law

November 1, 2013

JMBM Best Law Firm 2014LOS ANGELES - Jeffer Mangels Butler & Mitchell LLP (JMBM) is pleased to announce its land use practice has been selected for inclusion in the U.S. News & World Report / Best Lawyers® list of Best Law Firms. JMBM achieved a number of First-Tier Rankings, including a Metropolitan First-Tier Ranking (Los Angeles) in the area of Land Use and Zoning Law.

"Our clients count on us to successfully guide their development projects through the maze of politics, community concerns, and the law. It's rewarding to deliver hard-won results, and a pleasure to be recognized for it," said Benjamin M. Reznik, Chair of JMBM's Government, Land Use, Environment and Energy Department. "My colleagues at JMBM and I are particularly pleased to be recognized as a Best Law Firm in this area, as it is an honor bestowed by our clients and peers."

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Last-Minute CEQA Bill Brings Significant Changes for Major Infrastructure Projects and Projects within Transit Priority Areas

September 24, 2013

By Garrett Colli

This session's California Environmental Quality Act ("CEQA") reform bill, Senate Bill 743 ("SB 743") packs a potentially large punch, but only for a narrow group of projects. SB 743 is the brainchild of Senator Darrell Steinberg (D-Sacramento), who made CEQA reform a top political priority for 2013. While Senator Steinberg's primary objective was to deliver on a promise to NBA Commissioner David Stern to streamline approval of the Sacramento Kings arena project, SB 743 also provides new rules of general applicability that significantly benefit select projects. First, with regard to projects in transit priority areas, SB 743 reduces the scope of CEQA's impact analysis and may also change the standard traffic evaluation. Second, SB 743 substantially expedites judicial review of so-called "environmental leadership development projects." Thus, while many will be disappointed that SB 743 does not completely overhaul CEQA, certain project proponents will benefit tremendously from the new rules.

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Planned Use of Eminent Domain Powers to Condemn Underwater Mortgages Faces Uncertain Constitutional Outcome

August 13, 2013

By Matthew Hinks

Amidst reports of rising home prices throughout California and fears of a new housing bubble, controversial plans floated by California cities to deal with the lingering effects of the mortgage meltdown by invoking their powers of eminent domain are gaining traction. The City of Richmond in Northern California has begun implementing the plan by sending letters to hundreds of holders of underwater mortgages -- mortgages on homes that are now worth less than the mortgage amount -- offering to purchase the loans at a discount. If the mortgage holders refuse, Richmond's mayor has indicated that the city will move to seize the loans pursuant to its eminent domain powers.

The idea came to national prominence last year when the County of San Bernardino combined with the cities of Ontario and Fontana to form a Joint Powers Authority to publicly examine proposals to assist homeowners within their jurisdictions who are underwater on their mortgages. The JPA publicly flirted with the use of eminent domain to seize underwater mortgages only to abandon the idea after opposition surfaced.

The Los Angeles Times reports that the City of El Monte is considering adopting a similar plan. Other cities across the country and throughout California, including La Puente, near El Monte, and Orange Cove and San Joaquin in Fresno County, are reportedly doing the same.

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California Supreme Court to Local Agencies: Hypothetical Future Baselines in CEQA are not per se Improper in All Cases, but likely are Improper in the Vast Majority

August 5, 2013

by Neill Brower

An August 5, 2013, the California Supreme Court provided some additional flexibility to local agencies in deciding what conditions properly constitute the "baseline" for analysis under the California Environmental Quality Act ("CEQA"). The decision, Neighbors for Smart Rail v. Exposition Metro Line Construction Authority ("Neighbors"), Case No. S202828, narrowly upholds the environmental impact report ("EIR") prepared for phase 2 of the Exposition Corridor Transit Project ("Expo Phase 2") and strikes a middle ground among previous decisions regarding the use of various future baselines. The court ruled, among other things, that although an agency may, in very limited circumstances, evaluate project impacts on the basis of conditions anticipated to exist at the time of certification of an environmental impact report ("EIR") for the project, or on a hypothetical longer-term future baseline, these cases remain the exception, rather than the rule. If using only a hypothetical future conditions and omitting existing conditions as a baseline, an agency must demonstrate that an analysis based on existing conditions "would detract from an EIR's effectiveness as an informational document" by providing an uninformative or misleading analysis. In most cases, an agency must still evaluate the impacts of a project in comparison to existing conditions, though nothing prevents additional analysis of long-term impacts, particularly in the context of a cumulative analysis or a "no project" alternatives analysis.

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