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Supreme Court Sets Aside Statement of Overriding Considerations Because CSU Made Inadequate Findings of Mitigation Infeasibility

In the legal world, the word “dictum” refers to words in a court opinion which are best considered non-binding “remarks” or “comments.”  Relying on dictum in a 2006 Supreme Court decision, the California State University Board of Trustees (the “University”) concluded that paying its fair share of offsite mitigation related to the traffic impacts of its proposed expansion of the San Diego State University campus was “infeasible.” Under CEQA, a proper finding of infeasibility would have allowed the University to adopt a Statement of Overriding Considerations and avoid the University’s fair share of offsite traffic mitigation.  The only factual basis for the University’s finding of infeasibility was that the Legislature had not earmarked specific funds to cover the University’s traffic mitigation costs and was not likely to do so.

This week, the California Supreme Court issued a decision in City of San Diego v. Board of Trustees of the California State University stating in a moment of candor that the dictum which had been relied upon by the University was “simply an overstatement.” The Court concluded that the University failed to address the availability of funding from other sources and could not support its claim that using other funds available to the University for offsite mitigation would be an illegal gift of public funds. The Court agreed with the position urged by the City of San Diego, stating that under the University’s reasoning “off-site mitigation would likely be found infeasible for many, if not all, state projects that receive non-state funding, and more such projects would proceed without mitigation pursuant to statements of overriding considerations.”  Because the Court concluded that the absence of earmarked funds did not make the University’s participation in the mitigation infeasible, the Statement of Overriding Considerations was invalid.

Although the specific holdings of this case apply to State agencies, the decision is an important reminder of the care that must be taken with any project, whether private or public, in making proper findings to support a Statement of Overriding Considerations.  To support a Statement of Overriding Considerations, CEQA requires both (i) that a finding be made that there are specific considerations which make identified mitigation measures or alternatives infeasible and (ii) that there are “overriding economic, legal, social, technological, or other benefits of the project” which outweigh the project’s significant unmitigated impacts. For the first finding, CEQA defines “feasible” to mean “capable of being accomplished in a successful manner within a reasonable period of time, taking into account economic, environmental, legal, social, and technological factors.”  Therefore, in the City of San Diego case, once the Court determined that reliance on the Legislature’s failure to earmark mitigation funds did not alone make the University’s fair share traffic mitigation obligation “infeasible,” the Statement of Overriding Considerations was doomed.