The Two Hundred lawsuit against CARB moves forward

November 13, 2018

California superior court allows The Two Hundred’s racial discrimination lawsuit to proceed.

Inside Cal/EPA
Court Accepts Most Claims In Housing Equity Suit Over ARB GHG Rules

November 01, 2018 A California superior court is accepting most of the claims in a lawsuit alleging that the state air board’s greenhouse gas regulatory “scoping plan” is racially discriminatory by increasing costs and litigation risks for new affordable housing development, according to a ruling on the board’s “demurrer” that seeks to dismiss the allegations.

However, the judge is expressing initial doubts that several key claims will prevail on their merits but is nonetheless allowing the plaintiffs to amend the allegations based on arguments made by their lawyer during an Oct. 26 hearing.For example, regarding claims that the California Air Resources Board (ARB) violated the federal Fair Housing Act (FHA) and California’s Fair Employment & Housing Act (FEHA), the court finds that these issues “are not yet ripe for adjudication, and it will sustain the demurrer to those claims for failure to state facts sufficient to constitute a cause of action,” states an Oct. 26 ruling in The Two Hundred v. ARB by Fresno County Superior Court Judge Jane Cardoza. The ruling is available on (Doc. ID: 216491)But Cardoza then says that she is allowing the plaintiff group “leave to amend” its claims related to the housing laws based on arguments by its attorney — Holland & Knight’s Jennifer Hernandez — during the Oct. 26 hearing on the demurrer that there are new facts “showing the existence of a present, existing or imminent controversy.”

Hernandez tells Inside Cal/EPA that Cardoza’s ruling is a “win for us — she’s allowing us to amend [the] complaint for three claims she had dismissed without leave to amend in her tentative [ruling], and denied all [ARB] efforts to dismiss claims that we contested. We can now start discovery and litigate on merits.”An ARB spokesman declined to comment.

The novel lawsuit charges that some of the GHG regulatory measures contained in the state’s 2017 scoping plan make housing more expensive, worsen congestion and hike fuel and electricity costs, resulting in racially disparate impacts (Inside Cal/EPA, May 25).

The Two Hundred alleges that the new GHG housing measures will “actually and predictably” have a disparate negative impact on minority communities and are discriminatory against minority communities and their members; that ARB’s policy to reduce vehicle miles traveled (VMT) will disproportionately affect minorities by increasing congestion and commute times; that a “net zero” GHG policy will make housing less affordable for minorities by increasing litigation risks; that per capita GHG targets for local climate action plans are unlawful and would cause the loss of middle- and low-income jobs that will have a disparate impact on minorities; and that ARB’s “Vibrant Communities” policies that incorporate the first three policies are also unlawful.Another key claim that Cardoza is expressing doubt about but is allowing The Two Hundred to amend is that the scoping plan violates the equal protection clauses of the California and United States constitutions. ARB argues that the plaintiffs have not adequately alleged facts showing that the board had any discriminatory intent when it adopted the scoping plan.

Cardoza states that The Two Hundred has not claimed that ARB intended to discriminate against minorities in adopting the scoping plan, but merely alleges that the plan will have the effect of making new housing less affordable and accessible to minorities.”Thus, at this time plaintiffs have failed to allege even the basic element of intent to discriminate, and as a result the court will sustain the demurrer to the fourth cause of action,” the ruling states. However, the court will “grant leave to amend, as it is possible that plaintiffs can allege that the [ARB] acted intentionally to discriminate against racial minorities when it adopted the Plan.”The judge notes that it is “rarely possible to offer direct evidence of discriminatory intent,” and that “since this case is still in its early stages, it would not be reasonable to expect plaintiffs to be able to cite to specific evidence in their complaint, whether direct or circumstantial, that the [ARB] intended to discriminate against racial minorities when it adopted the Scoping Plan.”Cardoza also expresses doubts about the merits of two other claims by the plaintiffs alleging violations of the Administrative Procedure Act (APA) when ARB adopted the scoping plan, but nonetheless is also allowing the group to amend those items.

ARB contends that The Two Hundred has not stated, and cannot state, a valid claim for APA violations because the scoping plan is not a “regulation” under the definition set forth in the APA, as it does not contain any binding rules or procedures and only sets forth optional recommendations to reduce GHG emissions, Cardoza explains.

The judge cites a recent California Supreme Court ruling that backs up ARB’s arguments, adding that “it does not appear that plaintiffs have stated any claims for violation of the APA based on the adoption of the new Scoping Plan. If the Scoping Plan is not a ‘regulation’ for purposes of the APA, then it follows that the [ARB] was not required to follow the APA’s procedures to adopt the Plan, and their alleged failure to do so does not constitute the basis for a cause of action.”

But despite that comment, Cardoza “grants leave to amend the causes of action based on plaintiffs’ counsel’s representation at the [Oct. 26] hearing that plaintiffs can allege more facts to cure the defect,” the ruling states.

Accepted Claims

Meanwhile, Cardoza is accepting several key claims in the case, including the allegation that the scoping plan violates the substantive due process clauses of the California and United States constitutions.The Two Hundred argues that the scoping plan is not “rationally related to the legitimate goal of reducing GHG emissions, and thus violates the due process clause,” and that the plan “arbitrarily discriminates against minorities by denying them affordable housing and forcing them to endure longer commutes, among other things,” the ruling says.”

Thus, plaintiffs allege that the Plan denies them their fundamental right to housing free from racially disparate impacts. The court must assume the truth of the properly pled allegations of the complaint. As a result, plaintiffs have sufficiently alleged their due process claim, and the court intends to overrule the demurrer to the third cause of action.”

Cardoza adds that while ARB argues that there is no constitutionally protected right to housing free of discrimination and thus plaintiffs have not stated a valid due process claim, “the court notes that it is well-established that there is a constitutional right to be free of discrimination based on race. . . . Here, it appears that plaintiffs are alleging that the Scoping Plan would effectively discriminate against them based on their status as racial minorities by denying them access to affordable housing, which is sufficient to support their due process claim.”

The judge is also accepting The Two Hundred’s claim that ARB’s scoping plan violated the Health & Safety Code and the California Clean Air Act.The plaintiffs allege that the plan proposes to intentionally increase congestion and that strategies in the plan to reduce VMT will actually result in more congestion by limiting construction of new roads and traffic lanes, resulting in increases of various air pollutants. This would violate ARB’s statutory duty to ensure that every reasonable action is taken to achieve attainment of state clean air standards, the plaintiffs claim.”

Thus, plaintiffs have sufficiently alleged that [ARB] has violated the Clean Air Act by adopting the Scoping Plan,” the ruling states. “The issue of whether plaintiffs’ interpretation of the Scoping Plan’s effect on emissions is true and correct cannot be resolved on demurrer, and must be determined at a later time.”Cardoza is also accepting The Two Hundred’s claim that ARB’s adoption of the scoping plan constituted an ultra vires action based on the argument that certain provisions of the plan go beyond the board’s authority.ARB contended that the ultra vires allegation should be dismissed because the scoping plan contains non-binding measures and recommendations.

However, the plaintiffs charge that the scoping plan includes requirements that are beyond ARB’s statutory authority, including the “net zero” GHG threshold, the 2050 GHG emission reduction goal, the VMT reduction requirements, and “net zero” new house building standards.”

While much of the language in the Scoping Plan appears to support the [ARB’s] interpretation that the Plan only sets forth non-binding advice and recommendations for reducing GHG emissions, there is also some language that seems to support plaintiffs’ position,” Cardoza finds.

For example, the plan states that the California Supreme Court recognized that GHG determinations in California Environmental Quality Act (CEQA) reviews should be consistent with the statewide scoping plan goals, and that CEQA documents taking a goal-consistency approach may soon need to consider a project’s effects on meeting the state’s longer term post-2020 goals, the ruling notes.”

This language seems to imply that the Plan’s goals may be more than simply recommendations, and may constitute mandatory standards,” Cardoza concludes. “Thus, the court finds that plaintiffs have adequately alleged their eleventh cause of action and therefore the court overrules the demurrer to that claim.”

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