Livermore ruling helps protect projects from meritless CEQA lawsuits

The California First District Court of Appeal has upheld a trial court ruling that rejected a lawsuit challenging an affordable housing project, Save Livermore Downtown v. City of Livermore. The opinion — published after a request from the city and the League of California Cities — will allow public agencies and housing developers to better defend themselves from baseless lawsuits while building affordable housing.

The case involved a 130-unit affordable housing development in downtown Livermore. After the city approved the project, a community group called Save Livermore Downtown filed a lawsuit claiming that the city’s approval violated the California Environmental Quality Act (CEQA), as well as state planning and zoning laws. The group specifically contested the city’s determination that the project was exempt from CEQA and consistent with the city’s downtown-specific plan. 

Livermore argued that its determinations were supported by evidence and asked the court to order the plaintiffs to post a bond under Code of Civil Procedure section 529.2. This statute allows parties defending low or moderate-income housing development projects to request that the plaintiff post a bond for costs and damages that may result from a bad faith lawsuit or a lawsuit brought to delay a project. The bond must not cause undue economic hardship to the plaintiff.

The trial court ruled in favor of the city, stating that the plaintiff's CEQA arguments were “almost utterly without merit.” The court also found that the lawsuit — which was filed close to the deadline — and the plaintiff’s multiple extension requests delayed the project. The court then ordered a $500,000 bond for costs and damages incurred by the project developer by these litigation-related delays. The plaintiffs appealed the decision. 

The First District Court of Appeal expedited the case due to the city’s arguments that the delays and uncertainty had already endangered the project’s viability.

Cal Cities filed an amicus brief urging the appellate court to rule in favor of the city. The brief noted that the lawsuit’s claims, “exemplify a trend by special interest groups to weaponize CEQA lawsuits in an attempt to delay or deter housing development” and do not accomplish CEQA’s stated purposes.

The appellate court agreed that the CEQA arguments lacked merit, “so much so that the inherent weakness of these claims further supports the trial court’s finding that [petitioners] brought this action to delay the project.”

The appellate court also rejected arguments that the project was inconsistent with planning and zoning laws and that further review of environmental impacts was necessary. It upheld the trial court’s order that petitioners post a bond, noting that since the plaintiffs were represented by a prominent private law firm, they would not suffer economic hardship. 

Cities can now rely on the published opinion as precedent to urge the dismissal of meritless lawsuits brought to delay affordable housing production. The opinion also gives teeth to the Code of Civil Procedure Section 529.2’s special protections for affordable housing development.

Local officials with questions about how the ruling impacts projects in their community should consult their city attorney.