Docket No. S258574
County of Butte v. Dept. of Water Resources
IN THE SUPREME COURT OF
CALIFORNIA
COUNTY OF BUTTE,
Plaintiff and Appellant,
v.
DEPARTMENT OF WATER RESOURCES,
Defendant and Respondent;
STATE WATER CONTRACTORS, INC., et al.,
Real Parties in Interest and Respondents.
COUNTY OF PLUMAS et al.,
Plaintiffs and Appellants,
v.
DEPARTMENT OF WATER RESOURCES,
Defendant and Respondent;
STATE WATER CONTRACTORS, INC., et al.,
Real Parties in Interest and Respondents.
S258574
Third Appellate District
C071785
Yolo County Superior Court
CVCV091258*
*
Two cases (Nos. 144282, 144283) were consolidated and
transferred from the Butte County Superior Court to the Yolo
County Superior Court (No. CVCV091258).
August 1, 2022
Justice Liu authored the opinion of the Court, in which
Justices Kruger, Groban, Jenkins, and Guerrero concurred.
Chief Justice Cantil-Sakauye filed a concurring and dissenting
opinion, in which Justice Corrigan concurred.
COUNTY OF BUTTE v. DEPARTMENT
OF WATER RESOURCES
S258574
Opinion of the Court by Liu, J.
Operation of a dam, reservoir, or hydroelectric power plant
requires a license from the Federal Energy Regulatory
Commission (FERC). (16 U.S.C. § 817(1).) For decades,
California has required public entities seeking licensing of state-
owned and state-operated hydroelectric projects to conduct
environmental review under the California Environmental
Quality Act (CEQA; Pub. Resources Code, § 21000 et seq.). In
this case, California’s Department of Water Resources (DWR or
Department) prepared an environmental impact report (EIR
under CEQA in connection with its application for renewal of its
50-year license to operate the “Oroville Facilities,” an
interrelated group of public works operated by DWR in Butte
County. Butte and Plumas Counties (the Counties) filed writ
petitions challenging the sufficiency of the EIR.
The trial court found the Department’s EIR adequate, and
the Counties appealed. The Court of Appeal did not reach the
merits of the Counties’ CEQA claims, instead finding their
actions in part preempted by the Federal Power Act (FPA; 16
U.S.C. § 791a et seq.) and otherwise premature. In 2019, we
granted the Counties’ petitions for review and transferred the
matter to the Court of Appeal with directions to reconsider its
decision in light of Friends of the Eel River v. North Coast
Railroad Authority (2017) 3 Cal.5th 677 (Eel River). On remand,
the Court of Appeal again found the Counties’ actions in part
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Opinion of the Court by Liu, J.
preempted and otherwise premature. (County of Butte v. Dept.
of Water Resources (Sept. 5, 2019) C071785, opn. ordered
nonpub. Dec. 11, 2019, S258574 (County of Butte).
The Court of Appeal held that the FPA preempts the
Counties’ challenge to the environmental sufficiency of the
settlement agreement DWR prepared as part of FERC
proceedings. We agree that the Counties’ claims are preempted
to the extent they attempt to unwind the terms of the settlement
agreement reached through a carefully established federal
process and seek to enjoin DWR from operating the Oroville
Facilities under the proposed license. As the Court of Appeal
recognized, FERC has sole jurisdiction over disputes concerning
the licensing process employed here (County of Butte, supra,
C071785; see 18 C.F.R. § 4.34(i)(6)(vii)), and the requested
injunction would be akin to the “veto power” prohibited by First
Iowa Coop. v. Federal Power Comm’n (1946) 328 U.S. 152, 164
(First Iowa).
But the Counties’ writ petitions also challenged the
sufficiency of the EIR more generally, and they have now
abandoned their requests to enjoin the operation of the Oroville
Facilities under the proposed license. In this court, the parties
have fully briefed and asked us to decide whether the FPA
preempts what remains of the Counties’ CEQA claims. On this
question, we observe that DWR relied on the EIR to analyze the
environmental impact of operating the Oroville Facilities under
the settlement agreement or an alternative proposed by FERC
staff. The EIR serves as the informational source for DWR’s
decisionmaking as to whether to request particular terms from
FERC as it contemplates the license (18 C.F.R. § 4.35(b) (2022)
or to seek reconsideration of terms once FERC issues the license
(id., § 4.200(b) (2022); 16 U.S.C. § 825l), avenues available to
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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Opinion of the Court by Liu, J.
any applicant under federal law. It also informs decisionmaking
about potential measures that may be outside of or compatible
with FERC’s jurisdiction. Nothing in the FPA suggests
Congress intended to interfere with the way the state as owner
makes these or other decisions concerning matters outside
FERC’s jurisdiction or compatible with FERC’s exclusive
licensing authority. (See Eel River, supra, 3 Cal.5th at p. 724
[CEQA not categorically preempted where the federal scheme
permits the state as owner to “make its decisions based on its
own guidelines”]; Wyeth v. Levine (2009) 555 U.S. 555, 565
[congressional intent is the “ ‘ultimate touchstone in every pre-
emption case’ ”].) Accordingly, we conclude that the Court of
Appeal erred in finding the Counties’ CEQA claims entirely
preempted.
We affirm the decision of the Court of Appeal in part,
reverse in part, and remand for further proceedings consistent
with this opinion.
I.
The license governing DWR’s operation of the Oroville
Facilities (sometimes Facilities) was issued in 1957 and was set
to expire in 2007. DWR began public preparations to apply for
renewal of the license in October 1999. DWR has yet to achieve
relicensing of the Facilities, and it currently operates the
Facilities under annual, interim licenses. (See 18 C.F.R.
§ 16.18(b)(1) (2022).
A.
At the time DWR undertook the relicensing process, FERC
regulations allowed applicants to pursue the traditional
licensing process or an alternative. DWR chose to pursue the
alternative licensing process (ALP), a voluntary procedure
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Opinion of the Court by Liu, J.
designed to achieve consensus among interested parties on the
terms of the FERC license before the licensing application is
submitted. (18 C.F.R. §§ 4.34(i), 4.34(i)(2)(iv) (2022).) The ALP
requires persons and entities with an interest in the operation
of the project to cooperate in a series of hearings, consultations,
and negotiations. (18 C.F.R. §§ 4.34(i)(3), (4) (2022).) The
objective of the process is to identify areas of concern and
disagreement among the stakeholders regarding the license
terms and to resolve those differences. (18 C.F.R.
§§ 4.34(i)(2)(ii), (iv), (v) (2022).) The ALP “[c]ombine[s] into a
single process the pre-filing consultation process [of the
traditional licensing procedure], the environmental review
process under the National Environmental Policy Act[ of 1969
(42 U.S.C. § 4321 et seq.),] and administrative processes
associated with the Clean Water Act [(33 U.S.C. § 1251 et seq.)]
and other statutes.” (18 C.F.R. § 4.34(i)(2)(i) (2022).) Ideally,
ALP participants conclude the process by entering into a
settlement agreement reflecting the terms of a proposed license.
(Id., subd. (i)(2)(v) (2022).) The settlement agreement then
becomes the centerpiece of the license application and serves as
the basis for FERC’s “orderly and expeditious review” in setting
the terms of the license. (Ibid.) Although FERC does not
surrender its regulatory authority when it allows an applicant
to pursue the ALP, the process permits the interested parties to
prepare what is effectively a first draft of the license.
FERC approved DWR’s request to use the ALP in January
2001, and the process consumed the next five years. The ALP
participants included representatives from 39 organizations —
five federal agencies, five state agencies, seven local government
entities, five Native American tribes, four local water agencies,
and 13 nongovernmental organizations. From late 2000
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Opinion of the Court by Liu, J.
through 2004, the six working groups formed to conduct the ALP
each met at least monthly, eventually logging an estimated
1,500 hours of meeting time.
During the early stages of the ALP, in September 2001,
DWR issued a document combining a CEQA notice of
preparation and a “scoping document.” The latter plays a role
under the National Environmental Policy Act (NEPA) that is
similar to a notice of preparation under CEQA. (See 40 C.F.R.
§ 1501.9 (2022) [describing role of scoping]; Cal. Code Regs.,
tit. 14 (CEQA Guidelines), § 15082 [describing the notice of
preparation and determination of scope of an EIR].) A primary
purpose of the joint document was to solicit comment on the
scope of a preliminary draft environmental assessment (PDEA
for the renewed license, a document whose preparation is
mandated by the ALP. (18 C.F.R. § 4.34(i)(4)(iii) (2022).) The
PDEA eventually prepared for the Facilities, issued in January
2005, is a 700-page analysis of the Facilities’ proposed operation
and likely environmental impact, including consideration of
alternatives to the proposed project and mitigation measures.
The PDEA’s analysis was supported by an additional 1,500
pages of appendices.
After three years of hearings and consultations, the ALP
participants began negotiating an agreement in April 2004. The
28-page settlement agreement (with 96 pages of attached
appendices), concluded in March 2006, was signed by more than
50 parties. Butte and Plumas Counties, which participated in
the ALP, were dissatisfied with the terms of the settlement and
declined to sign the agreement. One appendix to the settlement
agreement contains more than 40 pages of provisions governing
the Facilities’ operation that were intended by the parties to be
included in the new FERC license. These provisions address
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Opinion of the Court by Liu, J.
environmental protection, recreation, protection of cultural
properties, flood control, land use, and expenditures. A second
appendix added nearly 20 pages of further provisions that were
not intended for inclusion in the new license, but which, as DWR
told the trial court, DWR “nonetheless agreed to undertake to
obtain consensus.”
The settlement agreement and PDEA were submitted to
FERC as DWR’s application for a renewed license, with the first
appendix serving as DWR’s proposal for the terms of the new
license. The settlement agreement stated that “[n]othing in this
[a]greement is intended or shall be construed to be . . . a pre-
decisional determination by a Public Agency. After the Effective
Date of this Settlement Agreement but prior to the issuance of
the New Project License, each Public Agency shall participate in
the relicensing proceeding, including environmental review and
consideration of public comments, as required by applicable
law.”
The relicensing process required FERC to comply with
NEPA. Relying in part on the PDEA, FERC prepared a 500-
page draft environmental impact statement (EIS), which issued
in September 2006. As FERC explained, “In this draft [EIS], we
assess the effects associated with the operation of the project as
well as alternatives to the proposed project; make
recommendations to [FERC’s governing commission] about
whether to issue a new license; and if so, recommend terms and
conditions to become part of any license issued. . . . In addition
to the power and developmental purposes for which licenses are
issued (e.g., flood control, irrigation, and water supply), [FERC]
must give equal consideration to the purposes of energy
conservation; protection of, mitigation of damage to, and
enhancement of fish and wildlife (including related spawning
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grounds and habitat); protection of recreational opportunities;
and the preservation of other aspects of environmental quality.”
In the draft EIS, FERC analyzed the environmental impact of
three different alternatives: a “Proposed Action” that assumed
the Facilities would operate under a new license incorporating
the terms of the settlement agreement; a “No-action
Alternative” that assumed continued operation under the
existing license; and a “Staff Alternative” that assumed
operation of the Facilities under a license based on the
settlement agreement but containing modifications and
additional provisions developed by FERC staff. The draft EIS
concluded that the staff alternative was the “preferred
alternative.”
B.
The Federal Water Pollution Control Act (33 U.S.C. § 1251
et seq.), commonly known as the Clean Water Act, requires an
applicant for a federal license to operate a facility that “may
result in any discharge into the navigable waters” to obtain a
certification from a state agency that the discharge will comply
with state and federal water quality laws. (33 U.S.C.
§ 1341(a)(1).) Because there is no question that operation of the
Facilities involves discharge into California rivers, DWR was
required to obtain such a certificate from the State Water
Resources Control Board (Water Board). DWR submitted its
application for this certification in October 2005, a few months
after the submission of its relicensing application to FERC.
Although, as noted, DWR issued a CEQA notice of
preparation in 2001, it did not undertake further CEQA
procedures, including the preparation of an EIR, until several
years later, after its submission of the settlement agreement to
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FERC. In May 2007, DWR issued a draft EIR analyzing the
environmental impact of the same three alternatives considered
in FERC’s draft EIS. The EIR characterized the project under
CEQA review as implementation of the settlement agreement,
which would allow “the continued operation and maintenance of
the Oroville Facilities for electric power generation.” According
to the EIR, DWR undertook CEQA procedures because (1) the
Water Board required preparation and certification of an EIR as
part of DWR’s application for certification under the Clean
Water Act and (2) the CEQA process could inform DWR’s
decision whether to accept the license containing the terms of
either the settlement agreement or the alternative proposed by
FERC staff, both of which were analyzed in the EIR.
After receiving and responding to public comment on the
draft EIR, DWR finalized the EIR and issued a notice of
determination in July 2008. The notice contained findings that
the adoption of mitigation measures was required for approval
of the project but that the project, so mitigated, would not have
a significant effect on the environment. Consequently, “as
conditions of project approval,” DWR adopted a six-page slate of
mitigation measures “that will be implemented by DWR” and a
mitigation monitoring program to ensure that implementation.
The mitigation measures adopted by DWR addressed the
Facilities’ impacts on wildlife resources, botanical resources,
noise, air quality, public health and safety, and geology, soils,
and paleontological resources. In general terms, the mitigation
measures require DWR to operate the Facilities and to conduct
any construction activities associated with the Facilities in a
safe and environmentally sensitive manner. The first measure,
for example, requires DWR to “[m]inimize direct habitat loss or
disturbance through project design and construction timing,”
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using various specified measures. Other mitigation measures
place similar constraints on the manner in which DWR can
operate the Facilities. The mitigation monitoring program
requires DWR to assign specialists to monitor mitigation
activities, incorporate the mitigation measures into DWR’s
design and planning activities and its contracting, generate
written documents reflecting the mitigation measures and their
implementation, and certify the completion of actions taken to
implement them. The EIR designated DWR as the agency
“responsible for the implementation and management of the
[mitigation monitoring program] and for ensuring that the
procedures and measures described [in the EIR] are
implemented.”
During the CEQA review process, proceedings continued
before the Water Board, which relied on the analyses in the
Department’s EIR and FERC’s EIS to define the scope of the
project and evaluate its environmental impact. In December
2010, the Water Board certified that the project considered in
the EIR would comply with water quality requirements. The
certification contained its own conditions, many of which
overlapped with the requirements of the settlement agreement.
By operation of law, these conditions must be included as terms
of any new FERC license. (33 U.S.C. § 1341(d).
The appellate record contains no information about FERC
proceedings following DWR’s certification of the final EIR, but
the parties inform us that FERC has yet to take final action on
DWR’s application for a renewed license.
C.
In August 2008, following DWR’s certification of the EIR,
Butte County and Plumas County filed separate petitions for
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writ of mandate challenging DWR’s compliance with CEQA in
connection with the relicensing. The Plumas County lawsuit
also includes as a petitioner the Plumas County Flood Control
and Water Conservation District, a special law district that
receives water from the Facilities. We refer to the County and
the District jointly as “Plumas County.” Butte County’s claims
challenged the EIR’s analysis of the environmental impact of the
project, as well as the project definition, assessment of
alternatives, and adoption of mitigation measures with respect
to government services and socioeconomic effects, recreation,
water resources and quality, and climate change. Its petition
sought an order setting aside DWR’s certification of the EIR and
enjoining “DWR’s project,” as well as any “such further relief
that the Court deems just.” Plumas County’s petition raised
similar claims and sought similar relief, including an order
requiring the Facilities to “suspend all activity under the [EIR]
certification that could result in any change or alteration in the
physical environment” until certification of an adequate EIR
and “other equitable or legal relief that the Court considers just
and proper.”
The parties stipulated to consolidation of the two
petitions. In May 2012, the trial court issued a statement of
decision rejecting the Counties’ claims and finding the EIR
adequate, and the Counties appealed. The Court of Appeal
requested supplemental briefing to address whether the FPA
preempted the Counties’ actions. It subsequently held that the
Counties’ actions were preempted to the extent they challenged
the settlement agreement, challenges over which FERC has
exclusive jurisdiction, and premature to the extent they
challenged the Water Board’s certification, which had not issued
at the time the Counties filed their actions. We granted the
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Opinion of the Court by Liu, J.
Counties’ petitions for review and transferred the matter to the
Court of Appeal to reconsider its decision in light of Eel River,
supra, 3 Cal.5th 677. The Court of Appeal reached the same
conclusions on remand.
We granted review of this second decision to address two
issues: (1) whether the FPA preempts application of CEQA
when the state is acting on its own behalf and exercising its
discretion in pursuing relicensing of a hydroelectric dam, and (2
whether the FPA preempts challenges in state court to an EIR
prepared under CEQA to comply with section 401 (33 U.S.C.
§ 1341) of the Clean Water Act. Upon review of the appellate
record and the parties’ briefs, we conclude that the second issue
is not properly presented, and we decline to address it.
II.
We describe here the interrelated federal and state
statutory schemes at play in this case.
A.
The FPA, the original predecessor of which was enacted in
1920, was created to facilitate development of the nation’s
hydropower resources, in part by removing state-imposed
roadblocks to such development. (First Iowa, supra, 328 U.S. at
p. 174 [“Congress was concerned with overcoming the danger of
divided authority so as to bring about the needed development
of water power”].) “[The FPA] was the outgrowth of a widely
supported effort of the conservationists to secure enactment of a
complete scheme of national regulation which would promote
the comprehensive development of the water resources of the
Nation, in so far as it was within the reach of the federal power
to do so . . . .” (Id. at p. 180.
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Under the FPA, the construction and operation of a dam
or hydroelectric power plant requires a license from FERC.
(16 U.S.C. §§ 797(e) [authorizing license issuance], 817(1
[unlawful to operate a hydropower plant without a FERC
license].) Operation of a licensed facility is “conditioned upon
acceptance by the licensee of all the terms and conditions of [the
FPA] and such further conditions, if any, as [FERC] shall
prescribe,” which must be stated in the license. (16 U.S.C.
§ 799.) A FERC license must provide for, among other things,
“the adequate protection, mitigation, and enhancement of fish
and wildlife . . . , and for other beneficial public uses, including
irrigation, flood control, water supply, and recreational and
other purposes.” (16 U.S.C. § 803(a)(1); see id., § 803(j).) To
achieve this and other objectives of the FPA, FERC is granted
express authority “to require the modification of any project and
of the plans and specifications of the project works before
approval.” (16 U.S.C. § 803(a)(1).
B.
“CEQA embodies a central state policy to require state and
local governmental entities to perform their duties ‘so that
major consideration is given to preventing environmental
damage.’ [Citations.] [¶] CEQA prescribes how governmental
decisions will be made when public entities, including the state
itself, are charged with approving, funding — or themselves
undertaking — a project with significant effects on the
environment.” (Eel River, supra, 3 Cal.5th at pp. 711–712,
italics omitted.) CEQA applies to any discretionary “project,”
defined as an activity that may cause a physical change in the
environment and that is undertaken or financed by a public
agency or requires a public agency’s approval. (Pub. Resources
Code, §§ 21065, 21080; see id., § 21001.1 [projects proposed by
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Opinion of the Court by Liu, J.
public agencies are subject to the same level of review as private
projects].) If, after performing an initial study, the agency
responsible for CEQA compliance, referred to as the “lead
agency,” finds substantial evidence that a project may have a
significant environmental impact, the agency must prepare and
certify an EIR before approving or proceeding with the project.
(Union of Medical Marijuana Patients, Inc. v. City of San Diego
(2019) 7 Cal.5th 1171, 1187; Pub. Resources Code, § 21100,
subd. (a).
The EIR is often referred to as the “ ‘ “heart’ ’ ” of CEQA.
(E.g., Eel River, supra, 3 Cal.5th at p. 713.) “Its purpose is to
inform the public and its responsible officials of the
environmental consequences of their decisions before they are
made.” (Citizens of Goleta Valley v. Board of Supervisors (1990
52 Cal.3d 553, 564.) Ideally, an EIR serves “to identify the
significant effects on the environment of a project, to identify
alternatives to the project, and to indicate the manner in which
those significant effects can be mitigated or avoided.” (Pub.
Resources Code, § 21002.1, subd. (a).) The document must
include a description of the proposed project and its
environmental setting and discussions of (1) the possible
environmental effects of the project, (2) feasible measures to
mitigate any significant, adverse environmental effects of the
project, (3) the comparative environmental effects of a range of
reasonable alternatives to the proposed project, including a “no
project” alternative, (4) the cumulative impact of the project’s
various environmental effects, and (5) the economic and social
effects of the project. (CEQA Guidelines, §§ 15124, 15126,
15126.4, 15126.6, 15131.) Given the role it plays and its
required analysis, the EIR is commonly referred to as an
“informational document.” (Pub. Resources Code, § 21061;
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CEQA Guidelines, § 15121.) It serves to inform decision makers
and the general public about the nature and environmental
impact of a proposed project, feasible ways to reduce that impact
(often through the mechanism of mitigation measures), and
possible alternatives to the project. (Pub. Resources Code,
§ 21061.
Mitigation measures are modifications of the proposed
design and implementation of a project imposed by the lead
agency to reduce the project’s adverse environmental effects. If
an EIR identifies significant environmental effects, CEQA
requires the adoption of mitigation measures when “it is feasible
to do so.” (Pub. Resources Code, § 21002.1, subd. (b).) CEQA
recognizes that “economic, social, or other conditions [may]
make it infeasible to mitigate one or more significant effects on
the environment” and that in those circumstances “the project
may nonetheless be carried out or approved at the discretion of
a public agency if the project is otherwise permissible under
applicable laws and regulations.” (Pub. Resources Code,
§ 21002.1, subd. (c); see CEQA Guidelines, § 15364 [“ ‘Feasible’
means capable of being accomplished in a successful manner
within a reasonable period of time, taking into account
economic, environmental, legal, social, and technological
factors”].) To move forward with the project, the lead agency
must find that “specific overriding economic, legal, social,
technological, or other benefits of the project outweigh the
significant effects on the environment.” (Pub. Resources Code,
§ 21081, subd. (b).
When the project is publicly financed or undertaken, as
here, feasible mitigation measures must be incorporated into
the plan or project design. (CEQA Guidelines, § 15126.4,
subd. (a)(2); see also Pub. Resources Code, § 21081.6, subd. (b).
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Further, to “ensure that the mitigation measures and project
revisions identified in the EIR . . . are implemented,” the lead
agency, when approving the EIR, must also adopt “a program
for monitoring or reporting on the revisions which it has
required in the project and the measures it has imposed to
mitigate or avoid significant environmental effects.” (CEQA
Guidelines, § 15097, subd. (a); see also Pub. Resources Code,
§ 21081.6, subd. (a)(1).) In this way, CEQA’s mitigation
measures play a crucial role in reducing the environmental
impact of projects undertaken in California.
III.
“The Supremacy Clause provides that ‘the Laws of the
United States’ (as well as treaties and the Constitution itself
‘shall be the supreme Law of the Land . . . any Thing in the
Constitution or Laws of any state to the Contrary
notwithstanding.’ [U.S. Const.] Art. VI, cl. 2. Congress may
consequently pre-empt, i.e., invalidate, a state law through
federal legislation. It may do so through express language in a
statute. But even where . . . a statute does not refer expressly
to pre-emption, Congress may implicitly pre-empt a state law,
rule, or other state action.” (Oneok, Inc. v. Learjet, Inc. (2015
575 U.S. 373, 376–377 (Oneok).
There are “three different types of preemption — ‘conflict,’
‘express,’ and ‘field,’ [citation] — but all of them work in the
same way: Congress enacts a law that imposes restrictions or
confers rights on private actors; a state law confers rights or
imposes restrictions that conflict with the federal law; and
therefore the federal law takes precedence and the state law is
preempted.” (Murphy v. National Collegiate Athletic Assn.
(2018) 584 U.S. __, __ [138 S.Ct. 1461, 1480] (Murphy).
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Conflict preemption “exists where ‘compliance with both
state and federal law is impossible,’ or where ‘the state law
“stands as an obstacle to the accomplishment and execution of
the full purposes and objectives of Congress.” ’ ” (Oneok, supra,
575 U.S. at p. 377.) “[T]he threshold for establishing” such an
obstacle “is demanding: ‘It requires proof Congress had
particular purposes and objectives in mind[ and] a
demonstration that leaving state law in place would compromise
those objectives . . . .’ ” (People v. Rinehart (2016) 1 Cal.5th 652,
661; see Chamber of Commerce of the United States of America
v. Whiting (2011) 563 U.S. 582, 607 (plur. opn. of Roberts, C. J.
[a “ ‘high threshold must be met if a state law is to be pre-empted
for conflicting with the purposes of a federal Act’ ”].) “ ‘[P]re-
emption analysis is not “[a] freewheeling judicial inquiry into
whether a state statute is in tension with federal objectives” ’ ”
(Viva! Internat. Voice for Animals v. Adidas Promotional Retail
Operations, Inc. (2007) 41 Cal.4th 929, 939), but a focused
inquiry into “whether there exists an irreconcilable conflict
between the federal and state regulatory schemes” (Rice v.
Norman Williams Co. (1982) 458 U.S. 654, 659). “The existence
of a hypothetical or potential conflict is insufficient to warrant
the pre-emption of the state statute.” (Ibid.
Further, when it comes to considering preemption of state-
owned or state-operated projects, we apply a presumption that
“protects against undue federal incursions into the internal,
sovereign concerns of the states.” (Eel River, supra, 3 Cal.5th at
p. 705, citing Gregory v. Ashcroft (1991) 501 U.S. 452 and Nixon
v. Missouri Municipal League (2004) 541 U.S. 125; see also
Cipollone v. Liggett Group, Inc. (1992) 505 U.S. 504, 518.) “To
determine the reach of the federal law preempting state
regulation of a state-owned [project] we must consider a
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presumption that, in the absence of unmistakably clear
language, Congress does not intend to deprive the state of
sovereignty over its own subdivisions to the point of upsetting
the usual constitutional balance of state and federal powers.”
(Eel River, at p. 690.) And there is a “related presumption” that
“Congress does not intend to reach and preempt a state’s
proprietary arrangements in the marketplace in the absence of
evidence of such an expansive congressional intent.” (Id. at
p. 705.
A.
Respondent State Water Contractors, Inc., an association
of public water agencies, is the only party asserting that the
Counties’ claims are fully preempted. It argues that the FPA
contains the requisite “unmistakably clear” indication of
congressional intent to occupy the field and preempt the
Counties’ challenges. If the issue before us involved state
regulation of private entities, these arguments may have
prevailed. Although the FPA does not contain an express
preemption clause, the high court recognized 70 years ago in
First Iowa that “the FPA establishes a broad and paramount
federal regulatory role.” (California v. FERC (1990) 495 U.S.
490, 499.) “That broad delegation of power . . . , however, hardly
determines the extent to which Congress intended to have the
Federal Government exercise exclusive powers, or intended to
pre-empt concurrent state regulation of matters affecting
federally licensed hydroelectric projects.” (Id. at pp. 496–497.
In two decisions, First Iowa and California v. FERC, the
high court determined that state regulatory efforts that
conflicted with the exclusive federal licensing authority granted
by the FPA were preempted. First Iowa concerned the state’s
17
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Opinion of the Court by Liu, J.
attempt to require an applicant for a federal license to secure a
state permit for a privately operated project that would regulate
“the very requirements of the project that Congress has placed
in the discretion” of the federal agency. (First Iowa, supra, 328
U.S. at p. 165.) California v. FERC similarly involved
“overlapping federal and state regulation.” (California v. FERC,
supra, 495 U.S. at p. 493.) In that case, the high court rejected
an attempt by the state to mandate minimum stream flow
requirements on a private project that were higher than federal
flow requirements. Both decisions interpreted the FPA to leave
“the permit requirements at issue to the federal sphere.” (Id. at
p. 503.
First Iowa and California v. FERC could be read to apply
either conflict or field preemption. (See First Iowa, supra, 328
U.S. at pp. 167, 171, 178, 180–181; California v. FERC, supra,
495 U.S. at pp. 493, 496–497, 505, 506; cf. California Oregon
Power Co. v. Superior Court of Cal. (1955) 45 Cal.2d 858, 868
[“Implicit in [First Iowa] is the concept that the field is not
exclusively occupied for all purposes by the [FPA] or [FERC’s
predecessor]”].) As the Ninth Circuit noted in Sayles Hydro
Assn. v. Maughan (9th Cir. 1993) 985 F.2d 451 (Sayles Hydro),
“[t]he dichotomy between the two types of preemption is not so
sharp in practical terms as the legal characterization makes it
appear, so the mixed language has little significance.” (Id. at
p. 456; see Murphy, supra, 584 U.S. at p. __ [138 S.Ct. at
p. 1480] [“field preemption[,] . . . like all other forms of
preemption, . . . concerns a clash between a constitutional
exercise of Congress’s legislative power and conflicting state
law”].) Sayles Hydro ultimately applied field preemption in a
case that, similar to First Iowa and California v. FERC, involved
the licensing of a private entity.
18
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Opinion of the Court by Liu, J.
None of these cases considered whether Congress
intended to occupy the field to the extent of precluding a state
from exercising authority over its own subdivision’s license
application. Field preemption requires not only a determination
that Congress intended to occupy the field, but consideration of
what the “boundaries of the pre-empted field” are. (English v.
Gen. Electric Co. (1990) 496 U.S. 72, 82 (English).) First Iowa,
California v. FERC, and Sayles Hydro each involved state
regulation of private parties rather than the type of self-
government we discussed in Eel River, which is also at issue
here. (See Eel River, supra, 3 Cal.5th at p. 723 [“CEQA
embodies a state policy adopted by the Legislature to govern
how the state itself and the state’s own subdivisions will exercise
their responsibilities.”].) None of those cases defined the field to
include the state’s prerogative to govern the work of its own
agency in a manner that does not conflict with federal law. (See,
e.g., First Iowa, supra, 328 U.S. at p. 171 [“The [FPA] leaves to
the states their traditional jurisdiction”].
The concurring and dissenting opinion relies on the FPA’s
savings clause, 16 United States Code section 821 (commonly
referred to as section 27), in concluding that Congress intended
to occupy the field to preclude CEQA’s application here. Section
27 states: “Nothing contained in this chapter shall be construed
as affecting or intending to affect or in any way to interfere with
the laws of the respective States relating to the control,
appropriation, use, or distribution of water used in irrigation or
for municipal or other uses, or any vested right acquired
therein.” (16 U.S.C. § 821.) Notably, the statute does not say
that these matters are the only matters reserved. (See Niagara
Mohawk Power Corp. v. Hudson River-Black River Regulating
Dist. (2d Cir. 2012) 673 F.3d 84, 97 (Niagara Mohawk Power
19
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Opinion of the Court by Liu, J.
Corp.) [“just because the savings clause fails to mention certain
state-law powers does not mean that all unmentioned powers
are federally preempted”].) In Eel River, we found an explicit
and broad preemption clause insufficiently clear to overcome the
presumption that Congress did not intend to preempt a state’s
internal decisionmaking under CEQA, even if it intended to
preempt the state’s regulation of private parties in the same
context. (Eel River, supra, 3 Cal.5th at p. 723.) The language of
section 27, a savings clause, does not support a different
preemption conclusion here.
Our concurring and dissenting colleagues also rely on
judicial interpretations of section 27 in First Iowa, California v.
FERC, and Sayles Hydro. But none of these decisions is
probative of congressional intent on the issue before us, nor do
any address whether section 27 evinces an “unmistakably clear”
(Eel River, supra, 3 Cal.5th at p. 690) intent by Congress to
preempt a state’s environmental review of its own project as
opposed to its regulation of a private entity. The concurring and
dissenting opinion does not explain how any of these cases
supports defining the preempted field to include the specific
conduct at issue today. We must determine whether Congress
intended to preclude “the state [from] trying to govern itself —
to engage in ‘decision[s] of the most fundamental sort for a
sovereign entity.’ ” (Id. at p. 729; see, e.g., English, supra, 496
U.S. at p. 82; Pacific Gas & Elec. v. Energy Resources Comm’n
(1983) 461 U.S. 190, 205; Niagara Mohawk Power Corp., supra,
673 F.3d at pp. 95–96.) Reliance on these opinions in the
absence of evidence that Congress intended to reach this far is
contrary to the “strong presumption against preemption” that
applies “to the existence as well as the scope of preemption.”
(Farm Raised Salmon Cases (2008) 42 Cal.4th 1077, 1088, citing
20
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Opinion of the Court by Liu, J.
Medtronic, Inc. v. Lohr (1996) 518 U.S. 470, 485; see Eel River,
at p. 729 [“Without plainer language to that effect, we do not
believe Congress intended to displace the exercise of a state’s
ordinary power of self-governance when the state does not
propose to act in contravention of the dictates” of federal law].
The concurring and dissenting opinion contends that
Congress has accepted these interpretations of section 27 and by
so doing “has made unmistakably clear the broad preemptive
reach it intends for [the] FPA.” (Conc. & dis. opn., post, at p. 29.
But “[a]rguments based on supposed legislative acquiescence
rarely do much to persuade.” (Scher v. Burke (2017) 3 Cal.5th
136, 147; see Dyna-Med, Inc. v. Fair Employment & Housing
Com. (1987) 43 Cal.3d 1379, 1395–1396.) And they do nothing
at all when premised on acquiescence to judicial opinions that
do not concern the same subject matter. (Scher, at p. 147.) To
the extent legislative acquiescence is relevant at all, it is notable
that the concurring and dissenting opinion places no weight on
the Counties’ claim that “[f]or decades, CEQA review for such
projects has coexisted with federal regulation without FERC [or
Congress] ever suggesting that CEQA is preempted.” (See conc.
& dis. opn., post, at p. 22, fn. 8.
Neither the FPA’s legislative history nor its language
suggests that Congress intended this to be one of the “rare cases”
where it has “ ‘legislated so comprehensively’ . . . that it ‘le[aves]
no room for supplementary state legislation’ ” of the type at
issue here concerning how a state entity conducts its own
decisionmaking. (Kansas v. Garcia (2020) 589 U.S. __, __ [140
S.Ct. 791, 804]; see First Iowa, supra, 328 U.S. at p. 171 [the
FPA, when “read in the light of its long and colorful legislative
history, . . . discloses both a vigorous determination of Congress
to make progress with the development of . . . water power . . .
21
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Opinion of the Court by Liu, J.
and a determination to avoid unconstitutional invasion of the
jurisdiction of the states”].) This does not appear to be “an area
the Federal Government has reserved for itself,” which is “the
basic premise of field preemption.” (Arizona v. United States
(2012) 567 U.S. 387, 402.
As DWR states in its briefing, “[t]he fact that the [FPA]
has a significant preemptive sweep says nothing about
congressional intent to prohibit state action that is non-
regulatory.” When the state or a subdivision proposes to develop
its own property, CEQA “operates as a form of self-government
. . . . Application of CEQA to the public entity charged with
developing state property is not classic regulatory behavior,
especially when there is no encroachment on the regulatory
domain of the [federal authority] or inconsistency with [federal
law] . . . . Rather, application of CEQA in this context
constitutes self-governance on the part of a sovereign state and
at the same time on the part of an owner.” (Eel River, supra, 3
Cal.5th at p. 723.
State Water Contractors argues that the reasoning of Eel
River is inapt because the federal scheme at issue in that case
deregulated the industry while the federal legislation here
requires every dam and hydroelectric power plant to obtain a
federal license to operate and grants FERC the exclusive right
to issue such licenses. (See also conc. & dis. opn., post, at p. 26.
But our reasoning in Eel River did not hinge on the industry’s
deregulation; rather, it was based on what the federal scheme
permitted the state as owner to do as a result of that
deregulation — namely, make its own choices about its project,
guided by an EIR. (Eel River, supra, 3 Cal.5th at p. 724.) There
is “no indication in the language of the [FPA] that Congress
intended to preempt [state] self-governance” when it is carried
22
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Opinion of the Court by Liu, J.
out by means of a state law permitting challenges to a state
agency’s EIR. (Id. at p. 704; see id. at p. 730 [“The availability
of citizen enforcement mechanisms does not change our view
that CEQA operates as a system of self-governance . . . in this
case”].) Without more, we cannot conclude that “Congress . . .
intended ‘to foreclose any state [activity] in the area,’
irrespective of whether state law is consistent or inconsistent
with ‘federal standards.’ ” (Oneok, supra, 575 U.S. at p. 377,
italics omitted.
B.
At the same time, the fact that CEQA is not categorically
preempted does not mean that no CEQA applications or
remedies are preempted by the federal scheme. (Eel River,
supra, 3 Cal.5th at p. 740; id. at pp. 740–741 (conc. opn. of
Kruger, J.).) To the contrary, the Counties made clear during
oral argument that they are no longer seeking injunctive relief
that would interfere with the federal licensing process,
conceding preemption on this issue, and all parties agree that
no state court can issue a remedy that conflicts with federal law.
In this respect, the Counties now appear to acknowledge that
the Court of Appeal was correct in holding that they cannot, in
this CEQA action, challenge the terms of the settlement
agreement reached through the ALP.
We agree. The overriding purpose of the FPA is to
facilitate the development of the nation’s hydropower resources.
(First Iowa, supra, 328 U.S. at pp. 174, 180.) A primary tool in
achieving that goal was to centralize regulatory authority in the
federal government in order to remove any obstacles to such
development posed by state regulation. (Ibid.) A CEQA
challenge to the terms of a settlement agreement reached
23
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Opinion of the Court by Liu, J.
through the ALP would raise preemption concerns to the extent
the action would interfere with the federal process detailed
above or with FERC’s jurisdiction over the proceedings. (See 18
C.F.R. § 4.34(i)(6)(vii) (2022); International Paper Co. v.
Ouellette (1987) 479 U.S. 481, 494 [“A state law . . . is pre-
empted if it interferes with the methods by which the federal
statute was designed to reach [its] goal”].) A state court order
granting the injunctive relief the Counties initially sought
would stand as a direct obstacle to the accomplishment of
Congress’s objective of vesting exclusive licensing authority in
FERC. (See California v. FERC, supra, 495 U.S. at pp. 506–
507.
If that were all the Counties had requested, we would
affirm the judgment below directing the trial court to dismiss
the action in its entirety. But the Counties’ writ petitions
challenge the Department’s EIR more broadly. Beyond seeking
to enjoin DWR’s project, the Counties also requested a writ of
mandate setting aside the certification of the EIR as adequate
and whatever “further relief . . . the Court deems just.”
State Water Contractors defends the Court of Appeal’s
complete dismissal on the sole ground that all of the Counties’
CEQA claims are preempted. As discussed, the Court of Appeal
was correct to hold that the Counties’ challenge to the
environmental sufficiency of the settlement agreement was
preempted. But the Counties not only sought an injunction
against DWR’s operation of the Facilities under the terms of the
settlement agreement. They also challenged the environmental
sufficiency of the EIR itself, which they claim DWR can use in
connection with its decisionmaking about the licensing process
and the operation of the Facilities without interfering with
FERC’s authority.
24
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Opinion of the Court by Liu, J.
The EIR characterized the project under CEQA review as
implementation of the settlement agreement and analyzed the
environmental impact of the settlement agreement as well as
the FERC staff alternative. At this stage in the proceedings,
review of the Department’s EIR does not interfere with FERC’s
jurisdiction or exclusive licensing authority. Federal law
expressly allows applicants (public or private) to amend their
license application or seek reconsideration once FERC has
issued a license. (See 18 C.F.R. § 4.35(b) (2022) [application may
be amended pending review]; id., § 385.713 (2022) [authorizing
request for rehearing]; 18 C.F.R. § 4.200(b) (2022) [allowing
application to amend license after issuance]; 16 U.S.C. § 825l
[authorizing rehearing application and judicial review].) And
we are aware of no federal law — and the concurring and
dissenting opinion cites none — that limits an applicant’s ability
to analyze its options or the proposed terms of the license before
doing so. That is, DWR can undertake CEQA review, including
permitting challenges to the EIR it prepares as part of that
review, in order to assess its options going forward. Nothing
about such use of CEQA review is incompatible with federal
authority. (See Eel River, supra, 3 Cal.5th at p. 724 [where
federal law does not otherwise require, “the state as owner may
make its decisions based on its own guidelines rather than some
anarchic absence of rules of decision”].) These activities are a
far cry from the conflicting state regulations imposed on private
actors at issue in First Iowa and California v. FERC.
DWR’s decision document recognized that “[a]pproval of
the Proposed Project . . . will not lead to immediate
implementation of the [settlement agreement (SA)] articles.
DWR’s implementation of the SA actions that are within FERC’s
jurisdiction depend[s] on FERC issuing and DWR accepting a
25
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Opinion of the Court by Liu, J.
license materially consistent with the Proposed Project.” It also
noted that if the license FERC issues involves “terms and
conditions not included in the Proposed Project or FERC Staff
Alternative,” additional CEQA review will be required by DWR.
The Department’s EIR is programmatic in nature, meaning it
contemplates additional CEQA review in connection with later
activities that are part of the project. (See CEQA Guidelines,
§§ 15168, 15152.) There is no indication Congress “believe[d]
that it was inconsistent to vest [FERC] with exclusive
regulatory authority . . . while at the same time allowing”
applicants to analyze ongoing environmental considerations,
request certain terms, or seek reconsideration of the terms of
any license offered within the means federal law supplies.
(Silkwood v. Kerr-McGee Corp (1984) 464 U.S. 238, 258.
State Water Contractors takes issue with the Counties’
desire to see particular mitigation measures imposed on the
project. But any preemption concerns related to DWR’s ability
to adopt additional mitigation measures in the EIR, if
warranted, are premature. At this stage, the Counties challenge
only the sufficiency of the EIR, and they contend the EIR can
inform DWR’s decisionmaking in ways that do not conflict with
FERC’s authority. They do not ask the court to impose or
enforce any CEQA mitigation measures, much less any that are
contrary to federal authority. A CEQA challenge to the
Department’s EIR is not inherently impermissible, nor is it clear
that any mitigation measures will conflict with the terms of the
license ultimately issued by FERC. As noted, an EIR may
contain mitigation measures that fall outside of FERC’s
jurisdiction or are compatible with FERC’s exclusive licensing
authority. Meanwhile, federal law provides avenues for any
mitigation measures identified by the Department’s CEQA
26
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Opinion of the Court by Liu, J.
review that fall under FERC’s jurisdiction to be incorporated
into the eventual license if FERC so decides. If they are
incorporated, then it is no obstacle to FERC’s authority that
they originated with the state as applicant. If they are not, then
FERC has simply exercised its discretion to dictate the terms of
the license offered, preempting any particular applications or
enforcement mechanisms of CEQA that conflict with that
authority. (See Eel River, supra, 3 Cal.5th at p. 740; id. at
pp. 740–741 (conc. opn. of Kruger, J.).) In either case, CEQA can
inform the public entity’s decisionmaking without encroaching
on FERC’s ultimate licensing authority.
The concurring and dissenting opinion mistakes today’s
inquiry and our holding at several turns. We do not consider Eel
River’s rationale to be inapplicable here, nor do we understand
Eel River to have found CEQA “exempt from preemption” by the
federal statute at issue in that case. (Conc. & dis. opn., post, at
p. 24; see id. at p. 26.) In Eel River, we conducted traditional
preemption analysis to determine that the state’s use of CEQA
in particular circumstances was not preempted, while carefully
delineating the circumstances in which it was preempted.
Today’s opinion likewise does not conclude that DWR’s actions
are “not subject to” the usual analysis for field preemption and
purposes and objectives preemption. (Conc. & dis. opn., post, at
p. 33.) Instead, we find that State Water Contractors has not
carried its burden to establish field preemption here. And in
determining “ ‘whether, under the circumstances of this
particular case, [CEQA] stands as an obstacle to the
accomplishment and execution of the full purposes and
objectives of Congress’ ” (Jones v. Rath Packing Co. (1997) 430
U.S. 519, 526), we find the Counties’ claims preempted in part.
Although the concurring and dissenting opinion considers
27
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Opinion of the Court by Liu, J.
today’s ruling to go “beyond the holding of” Eel River (conc. &
dis. opn., post, at p. 33; see id. at pp. 30–31), Eel River itself
considered certain applications of CEQA preempted (Eel River,
at pp. 739–740) and took no issue with the observation that
“particular CEQA remedies might be preempted” on remand (id.
at p. 741 (conc. opn. of Kruger, J.)). We do the same here.
The concurring and dissenting opinion’s concerns about
the workability of today’s holding are misplaced. In contending
that there is or will be conflict between our decision and federal
case law, our colleagues overlook the distinction between state
regulation of private parties and the state’s self-governance at
issue here. We are not aware of any authority contrary to our
holding today. As noted, Sayles Hydro involved state regulation
of a private party, and Eel River did not involve the FPA. The
closest case that our concurring and dissenting colleagues can
find is a New York appellate court decision that applied field
preemption, based on two sentences of analysis, to an issue we
do not address here. (Conc. & dis. opn., post, at p. 22, fn. 8.
Further, the concurring and dissenting opinion says this
lawsuit has resulted in years of delay to FERC’s issuance of the
license. (Conc. & dis. opn., post, at pp. 3, fn. 1, 38.) But this
assertion is mere conjecture. No party has argued that the delay
in obtaining a license from FERC is attributable to the Counties’
litigation, and there is no evidence in the record to that effect.
There are more than a dozen relicensing applications other than
this one that were filed prior to 2010, when the section 401
certification issued in this project, that are still pending before
FERC. (See FERC, Licensing: Pending License, Relicense, and
Exemption Applications, updated 7/15/2022, available at
<https://www.ferc.gov/licensing> [as of Jul. 28, 2022]; all
Internet citations in this opinion are archived by year, docket
28
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Opinion of the Court by Liu, J.
number,
and
case
name
at
<http://www.courts.ca.gov/38324.htm>.) And a cursory
inspection of FERC’s docket reveals numerous requests for
delays in the proceedings unrelated to this litigation. Moreover,
even if the delay were attributable solely to the litigation, there
is little reason to assume any future litigation will be as
prolonged. Today’s opinion resolves the matter in dispute, and
a challenge to the environmental sufficiency of the Department’s
EIR need not delay issuance of FERC’s license in these
circumstances.
The concurring and dissenting opinion says our holding
will have little practical impact. As an initial matter, the
question of the sufficiency of the EIR or the merits of the
Counties’ claims is not before us. But even if the Counties’
lawsuit is not meritorious, that does not mean a finding of
preemption is warranted. Our colleagues repeatedly note the
fact that environmental review was conducted at earlier stages.
(Conc. & dis. opn., post, at pp. 4, 5, 34–36.) But it is incorrect to
suggest the Department’s EIR is identical to those prior
inquiries when it involves matters that were not yet before them
or are beyond their scope. An EIR can play a role in DWR’s
evaluation of matters outside of or compatible with FERC’s
jurisdiction, and the concurring and dissenting opinion does not
identify any mitigation measures DWR has adopted that conflict
with FERC’s authority. At this stage, any concerns about
conflicting mitigation measures are exaggerated or at least
premature.
In sum, we affirm the Court of Appeal’s ruling that the
Counties “cannot challenge the environmental sufficiency of the
[settlement agreement]” (County of Butte, supra, C071785) or
seek to unwind it. To do so would pose an obstacle to FERC’s
29
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Opinion of the Court by Liu, J.
congressionally granted exclusive authority on those matters.
But the same is not the case for the Counties’ challenge to the
environmental sufficiency of the EIR more generally, insofar as
a compliant EIR can still inform the state agency concerning
actions that do not encroach on FERC’s jurisdiction. Nothing
clearly precludes our courts from considering a challenge to the
sufficiency of the EIR in these circumstances and ordering, for
example, DWR to reconsider its analysis if warranted.
Accordingly, we reverse in part and remand for further
consideration of the Counties’ remaining claims, largely
unaddressed by the Court of Appeal’s decision, and for
resolution of any open questions such as whether there are
procedural or other bars to those claims.
CONCLUSION
We affirm the judgment of the Court of Appeal in part,
reverse in part, and remand for further proceedings consistent
with this opinion.
LIU, J.
We Concur:
KRUGER, J.
GROBAN, J.
JENKINS, J.
GUERRERO, J.
30
COUNTY OF BUTTE v. DEPARTMENT
OF WATER RESOURCES
S258574
Concurring and Dissenting Opinion by Cantil-Sakauye, C. J.
I agree with my colleagues that the decision of the
Department of Water Resources (DWR) to engage in review
under the California Environmental Quality Act (CEQA; Pub.
Resources Code, § 21000 et seq) is subject to the dictates of the
supremacy clause of the United States Constitution. (U.S.
Const., art. VI, cl. 2.) My disagreement concerns the scope and
consequences of that preemption.
CEQA is a powerful regulatory statute, requiring a lead
agency to adopt tailored regulations, referred to as “mitigation
measures,” designed to reduce to insignificance any potentially
significant adverse environmental effects of a project. The
majority holds that the doctrine of preemption takes effect in
this case only when these mitigation measures prove to be
inconsistent with a license granted by the Federal Energy
Regulatory Commission (FERC) or when a private action to
enforce CEQA seeks to interfere with FERC licensing
proceedings. Such limited preemption is an unavoidable
concession to the most basic doctrine of implied preemption,
which holds that “[w]here state and federal law ‘directly
conflict,’ state law must give way.” (PLIVA, Inc. v. Mensing
(2011) 564 U.S. 604, 617.) If that were all the supremacy clause
requires, I would have no quarrel with the majority’s holding
today.
1
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
The scope of preemption, however, is considerably
broader. For one, Congress can choose to occupy a regulatory
field entirely, thereby precluding all state regulation, regardless
of its content. (See Arizona v. United States (2012) 567 U.S. 387,
401 [“Where Congress occupies an entire field, . . . even
complementary state regulation is impermissible”].) Equally
applicable is “purposes and objectives” preemption, a partner of
the rule acknowledged by the majority: State legislation is
preempted not only when it directly conflicts with federal law,
but also when the state law “ ‘ “stands as an obstacle to the
accomplishment and execution of the full purposes and
objectives of Congress.” ’ ” (Oneok, Inc. v. Learjet, Inc. (2015) 575
U.S. 373, 377 (Oneok).) CEQA is preempted here under either
category.
The United States Supreme Court has consistently
interpreted the Federal Power Act (FPA; 16 U.S.C. § 791a et
seq.) to reflect Congress’s intent to occupy the field of
hydropower regulation, as the United States Court of Appeals
for the Ninth Circuit recognized nearly 30 years ago. (Sayles
Hydro Assn. v. Maughan (9th Cir. 1993) 985 F.2d 451, 454–455
(Sayles Hydro).) Through a savings clause, the FPA limits the
states to a narrow band of regulation, and no one contends that
CEQA falls within that band. Indeed, the Ninth Circuit found
CEQA preempted in connection with FPA proceedings, although
it did not identify the statute by name. (Sayles Hydro, at p. 455.
In addition, CEQA stands as a clear obstacle to the
Congressional objective of vesting exclusive control over
hydropower licensing and regulation in FERC. The key to
CEQA’s success in limiting the environmental impact of
regulated activities in California is its mitigation mandate.
A CEQA lead agency must, in approving a project, adopt both a
2
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
slate of mitigation measures, which have the effect of law, and
a mitigation monitoring program designed to ensure compliance
with those mitigation measures. That regulatory tool, however,
conflicts with the exclusive authority granted to FERC under
the FPA. The mitigation measures required by CEQA, enforced
by the equally compulsory mitigation monitoring program,
create a competing state regulatory regime that stands as a
direct obstacle to the accomplishment of the congressional
purpose and objective of vesting unchallenged regulatory
authority over hydropower in FERC.
Further, as this case glaringly demonstrates, the private
enforcement provisions of CEQA stand as an inevitable
impediment to the congressional purpose of granting to FERC
exclusive control over the hydropower licensing process. FERC’s
licensing regulations were clearly designed to render
unnecessary the application of state environmental review
statutes. Imposing such state proceedings adds nothing to the
licensing process, but it appears to have created, in this case, a
delay of 12 years (and counting).1
Because these critical features of CEQA — the mandatory
imposition of mitigation measures and the allowance for private
enforcement — stand as an obstacle to the accomplishment of
1
All of the regulatory pieces appear to have been in place
for FERC to issue a new license in 2010, but no license has
issued. The parties have not addressed the cause of the
intervening 12-year delay, but no one has suggested there is a
continuing legal barrier to license issuance. An obvious
inference is that FERC decided to let the state proceedings play
out before issuing a new license. And FERC is still waiting. The
litigation is 14 years old, and the majority’s remand will
guarantee it another year of life, at a minimum.
3
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
congressional purposes and objectives, invocation of the CEQA
statute is wholly preempted in these circumstances. On this
basis, I would affirm the judgment of the Court of Appeal
dismissing the consolidated actions brought by the County of
Butte and the County of Plumas.
I. FACTUAL AND PROCEDURAL BACKGROUND
As the majority explains, this matter comes to us in the
midst of a federal relicensing proceeding for the Oroville
Facilities (Facilities), a collection of dams and hydropower
projects operated by DWR in Butte County. (Maj. opn., ante, at
pp. 3–7.) The unfinished relicensing proceeding is, at present,
22 years old.
FERC’s alternative licensing process (ALP) is hardly
insensitive to environmental concerns. At the outset, the ALP
required DWR to prepare a preliminary draft environmental
assessment (PDEA), an analysis of the likely environmental
impact of Facilities operation. (18 C.F.R. § 4.34(i)(4)(iii) (2022).
As the majority notes, this was a 700-page document supported
by 1,500 pages of appendices. (Maj. opn., ante, at p. 5.) In its
content, the PDEA was materially indistinguishable from an
environmental impact report (EIR), whose preparation is
required by CEQA. Only after the preparation of this PDEA,
DWR and the other 50-odd participants in the ALP convened to
negotiate the terms of a proposed license for presentation to
FERC. Inasmuch as the ALP participants included a wide
variety of public agencies, managing the possible environmental
effects of Facilities operations undoubtedly played an important
role in the negotiations. In any event, no one contends that
environmental concerns were given inadequate consideration
during the ALP.
4
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
The ALP participants — with the exception of the present
two counties — managed to agree on the terms of a proposed
license, which DWR forwarded to FERC as its application for
relicensing. A FERC license must provide for, among other
things, “the adequate protection, mitigation, and enhancement
of fish and wildlife . . . , and for other beneficial public uses,
including irrigation, flood control, water supply, and
recreational and other purposes.” (16 U.S.C. § 803(a)(1); see id.,
§ 803(j).) After time for study, FERC prepared its own formal
environmental analysis, an environmental impact statement
(EIS) prepared under the authority of the federal analog to
CEQA, the National Environmental Policy Act of 1969 (NEPA;
42 U.S.C. § 4321 et seq.) Again, the informational requirements
for an EIS are not materially different from those for an EIR.2
In the EIS, FERC outlined the additional terms it proposed to
add to the license terms proposed in the settlement agreement
and evaluated the environmental impact of these additional
measures, as well as the impact of the settlement agreement’s
proposal.
At this point in the licensing process, two complete EIR
equivalents had been prepared. Yet DWR elected to prepare a
third environmental analysis under the authority of CEQA,
defining as its project the implementation of the settlement
agreement, which it viewed as equivalent to “the continued
operation and maintenance of the Oroville Facilities for electric
2
Like an EIR, an EIS “must contain, among other things, a
detailed discussion of ‘the environmental impact of the proposed
action,’ ‘adverse environmental effects which cannot be avoided,’
‘alternatives to the proposed action,’ and possible mitigation
measures.” (Protect Our Cmtys. Found. v. Lacounte (9th Cir.
2019) 939 F.3d 1029, 1035.
5
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
power generation.” Once triggered, however, CEQA required
much more than the preparation of an EIR. As part of its CEQA
compliance, DWR issued a notice of determination finding that
the adoption of mitigation measures was required for approval
of the project.3 Consequently, “as conditions of project
approval,” DWR adopted a series of mitigation measures and a
mitigation monitoring program to ensure that implementation.
The mitigation measures largely overlapped with the
environmental concerns of the settlement agreement and the
anticipated FERC license. As the majority explains, they
imposed constraints on future operation of the Facilities to
minimize the project’s environmental effects. (Maj. opn., ante,
at pp. 8–9.
Following DWR’s certification of the EIR, Butte County
and Plumas County filed petitions for a writ of mandate,
contending that DWR’s compliance with CEQA was deficient
and seeking to stay the licensing proceedings. Although no court
order halting the proceedings ever issued, the counties’ petitions
had the desired effect. All of the pieces appear to have been in
place for FERC’s issuance of a new license in 2010, but the
federal agency has, to date, taken no action on DWR’s
application.
3
The notice of determination’s reference to project
approval, of course, was approval under state law. Because
FERC has exclusive authority over Facilities’ operation, this
approval had no practical significance beyond CEQA
compliance.
6
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
II. DISCUSSION
A. Governing Law
1. Federal Power Act
The construction and operation of a dam or hydroelectric
power plant requires a license from FERC, which has broad
discretion to require changes in the project design and impose
conditions on project operation. (16 U.S.C. §§ 797(e), 799,
803(a)(1), 817(1).) This authority places the design and
operation of hydroelectric power plants and related facilities
squarely under FERC’s comprehensive regulatory control.
2. California Environmental Quality Act
“CEQA embodies a central state policy to require state and
local governmental entities to perform their duties ‘so that
major consideration is given to preventing environmental
damage.’ ” (Friends of the Eel River v. North Coast Railroad
Authority (2017) 3 Cal.5th 677, 711 (Eel River).) As discussed
more fully by the majority (maj. opn., ante, at pp. 12–15), CEQA
applies to discretionary public and private projects that may
cause a change in the physical environment. (Pub. Resources
Code, §§ 21065, 21080; see id., § 21001.1.) Projects that may
have a significant environmental impact require the
preparation of an EIR (Pub. Resources Code, § 21100, subd. (a)),
which must discuss the possible environmental effects of the
project, measures to mitigate those effects, and possible
alternatives to the project. (CEQA Guidelines, §§ 15124, 15126,
15126.4, 15126.6, 15131.)4
4
CEQA is implemented by an extensive series of
administrative regulations promulgated by the Secretary of the
7
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
An EIR provides decision makers with copious
information about the potential impact of a proposed project, but
the CEQA process is not solely informational. It also plays a
critical regulatory role, largely through the mechanism of
mitigation measures, which are conditions placed on the design
and operation of a project to reduce the project’s adverse
environmental effects. CEQA mandates their imposition, when
feasible, if significant environmental effects are identified in an
EIR. As CEQA declares in its opening provisions, “the
procedures required by this division are intended to assist public
agencies in systematically identifying both the significant
effects of proposed projects and the feasible alternatives or
feasible mitigation measures which will avoid or substantially
lessen such significant effects.” (Pub. Resources Code, § 21002,
italics added.) “Each public agency shall mitigate or avoid the
significant effects on the environment of projects that it carries
out or approves whenever it is feasible to do so.” (Id., § 21002.1,
subd. (b), italics added.) To serve this end, an EIR is required
to “identify mitigation measures for each significant
environmental effect identified in the EIR.” (CEQA Guidelines,
§ 15126.4, subd. (a)(1)(A).
Once identified in an EIR, the feasible mitigation
measures must be adopted by the lead agency as legally
enforceable features or conditions of the project. (Sierra Club v.
County of Fresno (2018) 6 Cal.5th 502, 524–525 [agencies are
Natural Resources Agency, codified at title 14, division 6,
chapter 3 of the California Code of Regulations, which I will
refer to as the “CEQA Guidelines.” Courts must “afford great
weight” to them when interpreting CEQA. (Laurel Heights
Improvement Assn. v. Regents of University of California (1988
47 Cal.3d 376, 391, fn. 2.
8
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
required “to implement all mitigation measures unless those
measures are truly infeasible”].) CEQA expressly forbids a lead
agency from approving or carrying out a project unless
“[c]hanges or alterations have been required in, or incorporated
into, the project which mitigate or avoid” any significant effects
on the environment identified in the EIR.5 (Pub. Resources
Code, § 21081, subd. (a)(1).) When the project under
consideration is a private project, the mitigation measures must
be made “fully enforceable” through “legally-binding
instruments.” (CEQA Guidelines, § 15126.4, subd. (a)(2); see
also Pub. Resources Code, § 21081.6, subd. (b).) When, as here,
the project is publicly financed or undertaken, the mitigation
measures must be incorporated into the plan or project design.
(CEQA Guidelines, § 15126.4, subd. (a)(2); see also Pub.
Resources Code, § 21081.6, subd. (b).) To ensure compliance
with the mitigation measures, CEQA also requires the adoption
and implementation of a mitigation monitoring program.
5
An exception is recognized if mitigation of the significant
environmental effects is not feasible, but a project having such
effects may only be approved if the lead agency expressly finds
that the benefits of the project outweigh its unmitigable
environmental effects. (Pub. Resources Code, § 21081, subds.
(a)(3), (b).) Although the majority appears to view this as a
significant exception to the requirement of mitigation (maj. opn.,
ante, at p. 14), the adoption of such a finding (called a “statement
of overriding considerations”) is not the preferred course.
(CEQA
Guidelines,
§ 15093,
subd.
(c).
Agencies
understandably seek to avoid the approval of projects that will
generate significant adverse environmental effects, and most
proposed mitigation measures are “capable of being
accomplished in a successful manner within a reasonable period
of time,” the standard for feasibility. (Pub. Resources Code,
§ 21061.1.
9
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
(CEQA Guidelines, § 15097, subd. (a); see also Pub. Resources
Code, § 21081.6, subd. (a)(1).
CEQA’s mitigation measures play a crucial role in
controlling and reducing the environmental impact of projects
undertaken in California. The proposed mitigation measures in
an EIR outline a series of constraints on the design and
execution of a project intended to reduce its environmental
impact. The lead agency’s adoption of these measures in
approving the project imposes these constraints on the project’s
implementation. Further, by the adoption of a mitigation
monitoring program, the lead agency ensures compliance with
this CEQA-imposed regulation.
3. Federal Preemption and the Federal Power Act
The Supreme Court has organized preemption into three
categories: Conflict, express, and field preemption. (Murphy v.
National Collegiate Athletic Assn. (2018) ___ U.S. ___, ___ [138
S.Ct. 1461, 1480] (Murphy).) Although the FPA does not
expressly preempt state law, the application of CEQA in these
circumstances triggers the two other varieties, field and conflict
preemption.
“Field preemption occurs when federal law occupies a
‘field’ of regulation ‘so comprehensively that it has left no room
for supplementary state legislation.’ ” (Murphy, supra, ___ U.S.
at p. ___, 138 S.Ct. at p. 1480.) “Where Congress occupies an
entire field . . . , even complementary state regulation is
impermissible. Field pre-emption reflects a congressional
decision to foreclose any state regulation in the area, even if it
is parallel to federal standards.” (Arizona v. United States,
supra, 567 U.S. at p. 401.
10
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
Conflict preemption is further divided into two separate
and independent doctrines. It exists (1) “where ‘compliance with
both state and federal law is impossible,’ ” or (2) “where ‘the
state law “stands as an obstacle to the accomplishment and
execution of the full purposes and objectives of Congress.” ’ ”
(Oneok, supra, 575 U.S. at p. 377.) The lower federal courts refer
to these distinct subcategories of conflict preemption as
“impossibility” and “obstacle” preemption, respectively (e.g.,
Chamber of Commerce of the United States v. Bonta (9th Cir.
2021) 13 F.4th 766, 774), but the Supreme Court has
characterized the latter as “purposes and objectives”
preemption. (Hillman v. Maretta (2013) 569 U.S. 483, 490.
I will use the language of the high court.
The FPA has long been recognized to preempt state
regulation of hydropower facilities. As the Supreme Court first
held 70 years ago in First Iowa Coop. v. Power Comm’n (1946
328 U.S. 152 (First Iowa) and subsequently reaffirmed nearly
40 year later, “the FPA establishes a broad and paramount
federal regulatory role.” (California v. FERC (1990) 495 U.S.
490, 499.) Through a savings clause, 16 United States Code
section 821 (Section 27),6 the FPA preserves some state
regulatory authority, but that authority is limited to the
determination of “ ‘proprietary rights’ ” in the use of water.
(California v. FERC, supra, 495 U.S. at p. 498; see also First
Iowa, supra, 328 U.S. at p. 176.) The high court held that state
regulation outside the scope of this preserved authority is
preempted. (First Iowa, at p. 176 [“in those fields where rights
6
Title 16 United States Code section 821 is commonly
referred to as “Section 27” due to its numbering in the original
legislation, and I observe that convention here.
11
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
are not thus ‘saved’ to the States, Congress is willing to let the
supersedure of the state laws by federal legislation take its
natural course”].) As the Ninth Circuit later characterized this
holding, “The Supreme Court has read the broadest possible
negative pregnant into this ‘savings clause.’ [Citation.] The
rights reserved to the states in [Section 27] are all the states
get.” (Sayles Hydro, supra, 985 F.2d at p. 454.
In its seminal First Iowa decision, the Supreme Court
found preempted the state’s attempt to require the proponent of
a proposed dam and power plant to obtain a state license for the
project, the terms of which would have implemented state law
governing the use of its waterways. (First Iowa, supra, 328 U.S.
at pp. 161, 166, 176–178.) As the high court noted, requiring
compliance with state law under these circumstances “would
subject to state control the very requirements of the project that
Congress has placed in the discretion of the Federal Power
Commission.” (Id. at p. 165.) The court ultimately concluded
that “[t]he detailed provisions of the [FPA] providing for the
federal plan of regulation leave no room or need for conflicting
state controls.” (Id. at p. 181.
The high court reaffirmed the FPA’s broad preemptive
effect in California v. FERC, which addressed an order issued
by our State Water Resources Control Board (Water Board
requiring the operator of a hydropower plant to maintain a
greater minimum flow rate in a stream than the minimum rate
set by FERC in the plant’s license. (California v. FERC, supra,
495 U.S. at pp. 494–496.) In addressing the preemptive effect of
the FPA, the court first rejected the Water Board’s challenge to
First Iowa’s narrow interpretation of the FPA’s savings clause,
Section 27. Although recognizing that Section 27 might
plausibly be read to reserve to the states the power to regulate
12
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
stream flow to protect wildlife (California v. FERC, at p. 497),
the court declined to revisit the earlier ruling. (Id. at p. 499.) In
holding the Water Board’s attempt to impose its own minimum
flow rate preempted, the high court reaffirmed that state law is
preempted when it either conflicts with federal law or obstructs
congressional purposes. It explained: “As Congress directed in
[the] FPA [citation], FERC set the conditions of the license,
including the minimum stream flow, after considering which
requirements would best protect wildlife and ensure that the
project would be economically feasible, and thus further power
development. [Citations.] Allowing California to impose
significantly higher minimum stream flow requirements would
disturb and conflict with the balance embodied in that
considered federal agency determination” “and would ‘constitute
a veto of the project that was approved and licensed by FERC.’ ”
(Id. at pp. 506, 507.) Because the minimum stream flow
requirement was not concerned with proprietary rights in
water, the court concluded, it was not insulated from federal
preemption. (Id. at pp. 498, 506.
B. DWR’s Use of CEQA Is Preempted by the
Doctrine of Field Preemption
As explained above, it is well settled that Section 27 of the
FPA limits state regulation in this area to proprietary rights in
water and precludes state regulation outside those confines.
(First Iowa, supra, 328 U.S. at pp. 175–176.
In Sayles Hydro, the Ninth Circuit reasonably applied
high court precedent in holding that the FPA preempts under
the doctrine of field preemption all state regulation beyond the
scope of Section 27. (Sayles Hydro, supra, 985 F.2d at p. 455;
see id. at p. 456 [“Once [California v. FERC] made it clear that
the state could control only proprietary rights to water, that
13
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
established the category as ‘occupy the field’ preemption for
everything but proprietary rights to water”].) I find no basis for
disagreeing with the Ninth Circuit’s analysis. Because DWR’s
application of CEQA purported to regulate the environmental
consequences of the Facilities, it falls far outside the regulatory
authority left to the states by Section 27 and is therefore
preempted.
In Sayles Hydro, the Water Board withheld a state
operating permit from a hydroelectric plant licensed by FERC
because the applicant eventually declined to respond to the
Water Board’s requests for “a shifting, expanding range of
reports and studies, to assure that the project satisfies the
[Water] Board’s concerns regarding recreation, aesthetics,
archaeology, sport fishing, and cultural resources.” (Sayles
Hydro, supra, 985 F.2d at p. 453.) In considering the Water
Board’s authority over the project, the Ninth Circuit concluded
that the state’s power was restricted to matters authorized by
Section 27. The court recognized that the scope of state
authority, judged solely from the language of that statute, was
“capable of different interpretations.” (Sayles Hydro, supra, 985
F.2d at p. 454.) But, the court observed, “we cannot . . . construe
this statute on a blank slate. The Supreme Court has read the
broadest possible negative pregnant into this ‘savings clause.’
[Citation.] The rights reserved to the states in this provision are
all the states get.” (Ibid.) Explaining the court’s interpretation
of the savings clause, the Ninth Circuit noted that “[i]n many
states where water is scarce, a state property law regime
enables users of streams and wells to obtain proprietary rights
in a continuing quantity of water. By perfecting state water
rights, users can enjoin other users who deprive them of their
share of the flow. [Citation.] This state property law regime in
14
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
water is what the savings clause reserves, under First Iowa.”7
(Sayles Hydro, supra, 985 F.2d at p. 455.) In contrast, the court
held, “[s]uch proprietary rights are not at issue in the case before
us. . . . Since forcing [the plaintiffs] to provide environmental
impact reports to the [Water] Board has nothing to do with
determining proprietary rights in water, federal preemption
bars the state requirements.” (Ibid.) Although Sayles Hydro did
not mention CEQA by name, its reference to “environmental
impact reports” gives the game away. (Ibid.) The court was
holding CEQA preempted in connection with the licensing of
hydropower projects.
Significantly, the Ninth Circuit addressed and rejected the
very approach to preemption adopted in the majority opinion:
“The [Water] Board urges that we read California v. FERC as
establishing federal preemption only where a state requirement
conflicts with a federal requirement, not where it supplements
a federal requirement. . . . [⁋] . . . The ratio decidendi, however,
does not take that course. Instead, California v.
FERC reaffirms First Iowa’s narrow interpretation of the
savings provision, so that the only authority states get over
federal power projects relates to allocating proprietary rights in
water. First Iowa said that the separation of authority between
state and federal governments ‘does not require two agencies to
share in the final decision of the same issue.’
[Citation.] California v. FERC reaffirms First Iowa, uses the
‘occupy the field’ characterization ‘broad and paramount federal
7
The court recognized that First Iowa’s discussion of
Section 27 could be regarded as dictum, but it held that this
contention became moot when California v. FERC reaffirmed
the ruling. (Sayles Hydro, supra, 985 F.2d at p. 455.
15
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
regulatory
role,’
[citation], and
plainly
states
that
‘constricting § 27 to encompass only laws relating to proprietary
rights’ accomplishes this ‘no sharing’ purpose. . . .” (Sayles
Hydro, supra, 985 F.2d at pp. 455–456, fn. omitted.) As the
court added: “Once the [First Iowa] Court made it clear that the
state could control only proprietary rights to water, that
established the category as ‘occupy the field’ preemption for
everything but proprietary rights to water.” (Id. at p. 456.
Sayles Hydro continued, in an observation of obvious
application here: “In the case at bar, it is clear that the federal
laws have occupied the field, preventing state regulation. This
conclusion is strengthened by the fact that most or all of the
[Water] Board’s concerns were considered by [FERC] in
granting the license, and conditions were imposed in the license
to protect these multiple values. . . . There would be no point in
Congress requiring the federal agency to consider the state
agency recommendations on environmental matters and make
its own decisions about which to accept, if the state agencies had
the power to impose the requirements themselves.” (Sayles
Hydro, supra, 985 F.2d at p. 456.
The majority argues that “First Iowa and California v.
FERC could be read to apply either conflict or field preemption.”
(Maj. opn., ante, at p. 18.) Sayles Hydro acknowledged as much
(Sayles Hydro, supra, 985 F.2d at pp. 455, 456), and the point
does not answer the Ninth Circuit’s careful analysis of the
language of those cases in finding field preemption. As Sayles
Hydro determined, the high court’s decisions lead inescapably
to the conclusion that field preemption precludes state
regulation in this area.
16
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
The majority faults Sayles Hydro for relying on a savings
clause, noting that “the statute does not say that these matters
are the only matters reserved.” (Maj. opn., ante, at p. 19.) The
Supreme Court, however, has long since resolved this issue,
holding that matters outside the savings clause are preempted,
a ruling that is binding on us regardless of the language of
Section 27. (First Iowa, supra, 328 U.S. at p. 176 [“in those fields
where rights are not thus ‘saved’ to the States, Congress is
willing to let the supersedure of the state laws by federal
legislation take its natural course”].
The majority points out that none of the cases cited, First
Iowa, California v. FERC, and Sayles Hydro, expressly declared
that field preemption applies to federally regulated public
agencies. (Maj. opn., ante, at p. 19.) The omission is
understandable because all of the cases concerned state
regulation of private parties, rather than a public agency. But
if Congress occupies a field, it does so regardless of the identity
of the party affected by the state regulation; application of the
doctrine of field preemption has never been held to depend upon
the nature of the party being regulated. Notably, the majority
cites no case holding that state regulation preempted by the
doctrine of field preemption when applied to a private party is
not similarly preempted if applied to a public agency, even when
the public agency applies that regulation to its own conduct. Eel
River comes closest, but, for the reasons discussed below, it does
not apply here.
The Ninth Circuit’s analysis and conclusions in Sayles
Hydro are sound. Under First Iowa and California v. FERC,
Congress has occupied the field of hydropower licensing and
operation outside the authority reserved to states under
Section 27. DWR’s application for relicensing did not concern
17
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
proprietary rights to water. The agency’s use of CEQA was
therefore preempted.
C. DWR’s Use of CEQA Is Also Preempted by the
Doctrine of Purposes and Objectives
Preemption
Even if Congress had not occupied the field of hydropower
regulation, the nature of CEQA and its application in these
circumstances would still require a finding of preemption
because CEQA stands as a substantial obstacle to the
accomplishment of the purposes and objectives of Congress in
enacting the FPA.
It bears repeating that CEQA is an important regulatory
statute, requiring the imposition of restrictions on the manner
in which public and private projects are designed and operated
to minimize their adverse environmental impacts. When it
undertook to comply with CEQA, DWR characterized the project
under review as implementation of the settlement agreement —
in other words, as the future operation of the Facilities under
the terms proposed in that agreement. DWR’s use of CEQA
therefore required it to adopt a series of mitigation measures,
enforceable by DWR through a mitigation monitoring program,
addressing the precise subject matter of the FERC license. The
FPA, however, vests exclusive regulatory authority over the
operation of hydropower projects like the Facilities in FERC.
DWR’s use of CEQA necessarily stands as an obstacle to the full
accomplishment of the congressional purpose and objective of
vesting exclusive regulatory authority over the operation of
hydroelectric power plants in the federal government.
In addition, DWR’s invocation of CEQA in the midst of the
ALP, a unique federal licensing process clearly designed to
18
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
duplicate and thereby supplant the need for state
environmental review, constituted a second, equally disruptive
obstacle to achieving the congressional purpose of vesting
exclusive control over hydropower licensing in FERC.
In applying the doctrine of purposes and objectives
preemption, “[w]hat is a sufficient obstacle [to the
accomplishment of Congress’s purposes and objectives] is a
matter of judgment, to be informed by examining the federal
statute as a whole and identifying its purpose and intended
effects.” (Crosby v. National Foreign Trade Council (2000) 530
U.S. 363, 373 (Crosby).) As this instruction suggests, “ ‘the
purpose of Congress is the ultimate touchstone’ ” in determining
whether state law is preempted. (Wyeth v. Levine (2009) 555
U.S. 555, 565.) Even if the federal and state laws share the same
goal, “[a] state law also is pre-empted if it interferes with the
methods by which the federal statute was designed to reach this
goal.” (International Paper Co. v. Ouellette (1987) 479 U.S. 481,
494 (Ouellette).
The obvious first step in a purposes and objectives
preemption analysis is to identify the purposes and objectives of
the federal law. (Crosby, supra, 530 U.S. at p. 373.) As the
majority acknowledges, “The overriding purpose of the FPA is to
facilitate the development of the nation’s hydropower resources.
(First Iowa, supra, 328 U.S. at pp. 174, 180.) A primary tool in
achieving that goal was to centralize regulatory authority in the
federal government in order to remove any obstacles to such
development posed by state regulation.” (Maj. opn., ante, at
p. 23.) This intent is made manifest by Section 27, which
restricts state law in this area to laws governing proprietary
rights in water. (California v. FERC, supra, 495 U.S. at p. 498;
First Iowa, at p. 176.) The Congressional objective was therefore
19
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
to promote the development of hydropower resources; an
important means it chose to accomplish that objective was to
grant FERC exclusive control over the licensing and regulation
of hydropower facilities.
DWR’s invocation of CEQA following its submission of a
license application to FERC necessarily created the risk that the
EIR would identify significant potential environmental effects
resulting from operation of the Facilities, which would, in turn,
trigger the required formulation and adoption of mitigation
measures to reduce those effects. The mitigation measures,
legally enforceable constraints governing the manner in which
a project is designed and operated, are regulations in all but
name. Because the project identified in the EIR, the operation
of the Facilities under the terms proposed in the settlement
agreement, was, as a practical matter, indistinguishable from
the subject of the FERC license, at least some, if not all, of the
mitigation measures identified in the EIR would inevitably
overlap with the authority granted FERC by the FPA. Once
adopted, such mitigation measures would impose mandatory
conditions on the operation of the Facilities that were in
addition to the license conditions ultimately imposed by FERC.
And that is what occurred. In certifying the EIR, DWR
identified significant adverse environmental effects and adopted
six pages of mitigation measures and a mitigation monitoring
program. The mitigation measures directly addressed, and
purported to constrain, the manner in which the Facilities could
operate with respect to the many factors affecting its impact on
the environment. Because these same factors are subject to
FERC’s regulatory authority, DWR’s certification of the EIR, in
effect, created an alternative set of regulations governing
operation of the Facilities and designated an agency other than
20
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
FERC to enforce these regulations. DWR’s use of CEQA in this
manner presented an obstacle to the accomplishment of the full
purposes and objectives of Congress precisely because a primary
purpose of the FPA, by vesting exclusive regulatory authority
over the operation of hydropower facilities in FERC, was to
preclude just the type of state regulation created by adoption of
the mitigation measures and their monitoring program.
The majority acknowledges that any mitigation measures
adopted by DWR that conflict with the eventual FERC license
would be preempted (maj. opn., ante, at p. 27), but that does not
solve the more fundamental problem. CEQA serves as an
obstacle to the accomplishment of congressional purposes
regardless of whether the mitigation measures adopted by DWR
are in direct conflict with the provisions of the FERC license,
including when state law interferes with the methods by which
the federal statute was designed to reach its goals. (Ouellette,
supra, 479 U.S. at p. 494.) Regardless of whether DWR’s
mitigation measures are in direct conflict with the eventual
terms of the FERC license, the adoption of the mitigation
measures and a program to enforce them created an alternative
regulatory regime governing operation of the Facilities that is
independent of the FERC license and purports to vest regulatory
authority in an agency other than FERC. These actions will
cause unnecessary confusion about the nature of the regulations
properly governing operation of the Facilities and create the
potential for future conflict over the proper roles of DWR and
FERC in regulating those operations. They are therefore
21
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
preempted as an obstacle to achieving the full Congressional
purpose.8
In addition, to meet its objectives Congress granted FERC
exclusive control not only over the terms of an eventual license
but also over the conduct of the licensing proceedings. Because
the implementation of CEQA in the midst of an ALP proceeding
is inconsistent with that process, it stands as an independent
obstacle to the accomplishment of federal purposes and
objectives. Again, that risk was realized here.
The ALP was designed not merely to focus the
participants’ attention on environmental concerns, but also to
supplant the need for independent environmental review under
state law. The ALP commences with the preparation of a PDEA,
the functional equivalent of the type of informational document
typically required by environmental review statutes such as
CEQA and NEPA. In other words, state environmental review
is already an integral part of the ALP. The inclusion of this
requirement was clearly intended to make it unnecessary for an
8
The majority contends that this analysis disregards a
decades-long history of coexistence between CEQA and
exclusive federal regulation. (Maj. opn., ante, at p. 21.) But I am
hardly the first to suggest that CEQA is preempted in this
context. Sayles Hydro so holds (Sayles Hydro, supra, 985 F.2d
at p. 455); we suggested as much in Eel River (Eel River, supra,
3 Cal.5th at p. 715); and a New York appellate court held that
application of the state’s environmental protection law was
preempted when applied to a Section 401 certification in Matter
of Eastern Niagara Project Power Alliance v. State Department
of Environmental Conservation (N.Y.App.Div. 2007) 840
N.Y.S.2d 225, 229. In light of this history, the mere fact that
CEQA’s application to a public project has not been the subject
of a published appellate opinion says nothing about the merits
of the claim.
22
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
applicant to perform its own environmental review under state
law, thereby streamlining the licensing process and avoiding
delays and regulatory conflicts found here. To further ensure
the protection of environmental values, the ALP also requires
FERC to prepare an EIS. Given the design of the ALP, the
preparation of an EIR is redundant and unnecessary to ensure
proper consideration of environmental concerns.
There is another problem (and one readily apparent from
these proceedings): CEQA’s provision for judicial review is not
contemplated by the ALP and is entirely inconsistent with an
efficient licensing process. The ALP provides for judicial review
of FERC licensing decisions, but that review occurs in the
United States Courts of Appeals after an order has been issued.
(16 U.S.C. § 825l(b).) A judicial action in state court challenging
the conduct of the licensing proceeding, as here, is wholly
outside the contemplation of the ALP. There is little doubt that
CEQA’s provision for judicial review stands as a sizable obstacle
to Congress’s objective of granting FERC exclusive control over
hydropower licensing.
The majority rightly maintains that “ ‘ “a high threshold
must be met if a state law is to be pre-empted for conflicting with
the purposes of a federal Act.” ’ ” (Maj. opn., ante, at p. 16,
quoting Chamber of Commerce of the United States of America
v. Whiting (2011) 563 U.S. 582, 607 (plur. opn. of Roberts, C. J.).
I am persuaded that the threshold is satisfied here. The
required adoption of mitigation measures and a mitigation
monitoring program unavoidably interferes with FERC’s
exercise of exclusive federal authority; the preparation of an EIR
needlessly replicates procedures already a part of the federal
licensing process; and the provision for civil enforcement of
CEQA creates a readily realized risk of interference with
23
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
FERC’s control of the licensing process. In sum, there are
compelling reasons to find CEQA preempted in its entirely, and
little reason to resist that conclusion.
D. Eel River Does Not Exempt CEQA from
Preemption in These Circumstances
As the majority concedes, the foregoing considerations
might well be conclusive in requiring field preemption of state
regulation if the applicant were a private entity. (Maj. opn.,
ante, at p. 17 [if a private party were being regulated, “these
arguments may have prevailed”]; id at p. 18 [distinguishing
Sayles Hydro as involving “the licensing of a private entity”].
But the majority consistently relies on DWR’s status as a public
entity and my decision in Eel River to justify its decision to
impose limited preemption in these circumstances. (Maj. opn.,
ante, at pp. 21–22.) Unlike the majority, however, Eel River did
not find partial preemption. Rather, as discussed below, we
found CEQA exempt from preemption by the Interstate
Commerce Commission Termination Act of 1995 (ICCTA;
49 U.S.C. § 10101 et seq.), which grants the federal government
exclusive jurisdiction over the nation’s rail transport. In
acknowledging that CEQA is preempted by the FPA, at least to
the extent it directly conflicts with the FPA, the majority
implicitly concedes that the factors exempting CEQA from
preemption in the circumstances of Eel River are not present
here.
The lead agency in Eel River, the North Coast Railroad
Authority (Railroad Authority), was created by the Legislature
to revitalize an abandoned intrastate rail line in Northern
California. (Eel River, supra, 3 Cal.5th at pp. 691–692.) Those
efforts were governed by the ICCTA, which grants exclusive
regulatory authority over railroads to the federal government.
24
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
The ancestor statute of the ICCTA was motivated by concerns
over state regulation comparable to those that brought about the
FPA (Eel River, supra, 3 Cal.5th at p. 708), but by the time of
Eel River the legislation had long since been amended to
promote deregulation. While regulation of the rail industry was
greatly diminished, exclusive federal regulatory authority was
maintained. (Eel River, at pp. 709–710.
As part of its deregulatory mission, the Surface
Transportation Board (STB), the federal agency responsible for
enforcing the ICCTA, had exempted the Railroad Authority
from the ordinary requirement to obtain a certificate of
operation, leaving the agency’s proposed activity effectively
unregulated by federal authorities. (See Eel River, supra,
3 Cal.5th at pp. 695, 709–710.) The Railroad Authority initially
followed CEQA procedures in planning for the resumption of rail
service (Eel River, at pp. 696–697), but it later reversed course,
declaring CEQA preempted by the ICCTA. (Eel River, at p. 700.
Despite the long history of federal preemption of local rail
regulation, Eel River rejected the Railroad Authority’s claim
that the ICCTA preempted the state’s application of CEQA.
We began our discussion by acknowledging that the
application of CEQA to an equivalent private project would be
preempted. (Eel River, supra, 3 Cal.5th at p. 715.) As we
observed, “Although CEQA does not on its face specifically
regulate rail transportation, its enforcement mechanisms
requiring environmental compliance as a condition of project
approval involving a private rail carrier would have the effect of
regulating rail transportation, a result inconsistent with
49 United States Code section 10501.” (Eel River, at p. 715.
But we contrasted this with a state agency’s application of
CEQA to its own rail project, which “operates as a form of self-
25
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
government” because the agency is, in effect, regulating itself.
(Eel River, at p. 723.
Importantly, our conclusion in Eel River that CEQA was
not preempted under the circumstances did not purport to
constitute a general ruling that CEQA is insulated from
preemption in connection with all federal regulation of state-
sponsored projects. The majority’s application of impossibility
preemption here is an implicit acknowledgment of this limit.
Rather, the ruling in Eel River that the Railroad Authority was
exempt from preemption rested on two circumstances unique to
the ICCTA. The first was the absence of federal regulation,
made manifest by the STB’s issuance of an exemption from the
certificate requirement. As we noted, upon issuance of such an
exemption, “the railroad owner has a protected domain that is
subject neither to federal nor to state regulation, a freedom to
plan, develop, and restore rail service on market principles . . . .”
(Eel River, supra, 3 Cal.5th at pp. 723–724.) “[W]ithin the
deregulated zone, the state as owner may make its decisions
based on its own guidelines . . . .” (Id. at p. 724.) In light of
CEQA’s role in planning for the operation of the rail line, we
held, its application was not preempted in this deregulated
context.
It cannot be seriously contended that this rationale
supports a finding of no preemption in this matter. The
regulatory circumstances here are in direct contrast to those
prevailing in Eel River. FERC has exercised its exclusive right
to regulate operation of the Facilities, and DWR has engaged in
a years-long licensing process in compliance with FERC’s
exercise of that authority. There is no “deregulated zone.”
26
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
Our second ground for declining to find CEQA preempted
in Eel River recognized CEQA’s role in intergovernmental
regulation. We noted that the application of CEQA “constitutes
the state’s governance of its own subdivision [i.e., the Railroad
Authority], a matter of self-management that the ICCTA
presumptively was not intended to entirely preempt.” (Eel
River, supra, 3 Cal.5th at pp. 725–726.) We found the language
of the ICCTA insufficiently clear to justify an interpretation that
“would infringe on state sovereignty” in the manner proposed.
(Eel River, at p. 726.
This aspect of our reasoning relied on two Supreme Court
decisions, Gregory v. Ashcroft (1991) 501 U.S. 452 (Gregory) and
Nixon v. Missouri Municipal League (2004) 541 U.S. 125
(Nixon). In Gregory, the court held that federal age
discrimination laws did not preempt a state’s constitutional
provision requiring state judges to retire at age 70. (Gregory, at
p. 464.) In explanation, the high court noted that setting judicial
qualifications “goes beyond an area traditionally regulated by
the States; it is a decision of the most fundamental sort for a
sovereign entity. . . . [⁋] Congressional interference with this
decision . . . would upset the usual constitutional balance of
federal and state powers.” (Id. at p. 460.) The court declined to
find preemption in such circumstances unless Congress had
made “ ‘its intention to do so “unmistakably clear in the
language of the statute.” ’ ” (Ibid.
Nixon addressed the preemptive effect of a federal statute
that prevented states from “prohibiting the ability of any entity
to provide” telecommunications services. (Nixon, supra, 541
U.S. at p. 128, quoting 47 U.S.C. § 253(a).) Despite the statute’s
broad language, Nixon declined to find preempted a state law
prohibiting the state’s own local governments from providing
27
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
such services. (Nixon, at p. 138.) Drawing on Gregory, the court
recognized that preempting the telecommunications ban “would
come only by interposing federal authority between a State and
its municipal subdivisions.” (Nixon, at p. 140.) Given this
circumstance, the court in Nixon “invoke[d] our working
assumption that federal legislation threatening to trench on the
States’ arrangements for conducting their own governments
should be . . . read in a way that preserves a State’s chosen
disposition of its own power, in the absence of the plain
statement Gregory requires.” (Ibid.) Finding no unmistakably
clear language in the federal statute requiring preemption in
the circumstances, Nixon declined to do so. (Id. at p. 141.
The FPA’s language, as consistently interpreted by the
Supreme Court since First Iowa, makes unmistakably clear
Congress’s intent to preempt CEQA in the present
circumstances, regardless of CEQA’s impact on inter-
governmental relations. As discussed, Section 27, the FPA’s
savings clause, defines the rights reserved to the states under
the statute. The high court has on numerous occasions
emphasized the limited nature of Section 27 and the broad reach
of the FPA. As the high court held in First Iowa, “in those fields
where rights are not thus ‘saved’ to the States, Congress is
willing to let the supersedure of the state laws by federal
legislation take its natural course.” (First Iowa, supra, 328 U.S.
at p. 176.) Section 27 contains no exception to preserve state
regulation touching inter-governmental relations.
In other words, well over a half-century ago the FPA was
construed to preempt all state laws relating to the licensing of
hydroelectric power plants, except to the extent such state
legislation governs proprietary rights in water. The limited
scope of the FPA’s savings clause was subsequently reaffirmed
28
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
in California v. FERC, which held that Section 27 “provides the
clearest indication of how Congress intended to allocate the
regulatory authority of the States and the Federal Government”
under the act. (California v. FERC, supra, 495 U.S. at p. 497.
The high court recognized that it has “endorsed and applied
First Iowa’s limited reading of [Section] 27, [citations], and has
employed the decision with approval in a range of decisions, both
addressing the FPA and in other contexts.” (California v. FERC,
at p. 499.) Further, “Congress has amended the FPA to
elaborate and reaffirm First Iowa’s understanding that the FPA
establishes a broad and paramount federal regulatory role,”
including by amending the statute to require FERC to adopt
provisions for the protection of fish and wildlife in its licenses.
(Id. at p. 499; see also id. at p. 500.
The majority notes the lack of any express language in the
FPA requiring the preemption of state regulation touching
inter-governmental relations. (Maj. opn., ante, at p. 21.) But
neither Eel River, Nixon, nor Gregory requires a literal
statement of intent to preempt self-government. Rather, these
decisions require that congressional intent to preempt the
relevant state law must be “unmistakably clear.” (Eel River,
supra, 3 Cal.5th at p. 731; see Gregory, supra, 501 U.S. at
pp. 460–461; Liberty CableVision of Puerto Rico, Inc. v.
Municipality of Caguas (1st Cir. 2005) 417 F.3d 216, 221
[finding “unmistakably clear” requirement met despite absence
of any reference to inter-governmental relations in statutory
preemption clause].) By accepting a well-settled and
consistently restrictive judicial interpretation of the savings
clause, augmented by statutory amendments accommodating
that interpretation, Congress has made unmistakably clear the
broad preemptive reach it intends for the FPA: State regulation
29
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
outside the savings clause — i.e., state law regulating matters
other than proprietary rights in water — is preempted. For the
reasons discussed above, that reach compels the conclusion that
CEQA is preempted under these circumstances, regardless of
any interference that preemption might cause to relations
between the state and its subdivisions.
The majority’s holding, if not its discussion, makes clear
that the majority does not find applicable here the second
rationale in Eel River. That rationale relied on high court
authority holding that the overriding importance of state
legislation governing intergovernmental relations makes it
immune from preemption unless Congress has unmistakably
indicated otherwise. As a consequence, any legislation subject
to this second rationale is exempt from preemption. In Gregory,
the Supreme Court held that a state’s mandatory judicial
retirement age prevailed over the contrary requirements of
federal anti-discrimination law. Nixon held the same. Although
a federal law forbade states from precluding entities from
providing telecommunications services, the Supreme Court
upheld a state statute that did just that. When the
circumstances addressed by these cases are present, preemption
simply does not operate.
In holding that CEQA is preempted in these
circumstances, the majority implicitly finds that the unusual
circumstances underlying Eel River are absent. If the FPA
indeed lacks language making unmistakably clear a
congressional intent to preempt CEQA in these circumstances,
Gregory and Nixon — and Eel River, for that matter — demand
the conclusion that preemption is absent entirely. Yet the
majority concedes that CEQA is preempted here to the extent it
directly conflicts with FERC regulation. This would appear to
30
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
be an expansion of Eel River, but the scope and application of
the exception is left unclear.
E. The Majority’s Ruling Is Unworkable and
Serves Little Practical Purpose
Preemption is ultimately an issue of law, not practicality.
But the difficulty of meshing the majority’s scheme of partial
preemption with the implementation of CEQA in these
circumstances illustrates the wisdom of precluding state
regulation when the federal government has assumed exclusive
regulatory authority.
This unworkability begins with the majority’s treatment
of CEQA’s civil enforcement mechanism. The majority permits
a CEQA compliance lawsuit to proceed, so long as it does not
seek to interfere with the FERC licensing proceedings. But, as
noted above, FERC is not bound, either by the majority’s ruling
or CEQA. Once any other necessary permits are obtained,
including a Clean Water Act certificate, FERC is free to issue a
license and move on. It need not await the resolution under
state law of issues of CEQA compliance. Yet issuance of a
license plainly moots any compliance lawsuit, practically if not
legally. If the EIR is found deficient, DWR can, perhaps, be
forced to compile a compliant EIR, but it will be for naught. The
FERC license will have issued, and any DWR dissatisfaction
with the license must be resolved in a federal lawsuit, not
through CEQA proceedings. Although DWR is presumably
permitted to impose further mitigation measures consistent
with the FERC license after its issuance, the agency would be
free to adopt such practices outside the context of CEQA in any
event. The FERC license inevitably provides no more than a
guide to project operation that must be implemented by DWR
31
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
through its administration of the facilities. CEQA adds nothing
to this process.
The practical problems with the majority’s treatment of
mitigation measures inconsistent with the FERC license are
more significant. Because, as here, CEQA compliance will
precede issuance of the FERC license, DWR will be unable to
determine at the time of their adoption whether any particular
mitigation measures will be consistent with the terms of the
FERC license. Yet the majority concedes that inconsistent
mitigation measures are preempted. Because inconsistent
mitigation measures are not self-preempting, they will remain
binding on the agency as a matter of (non-preempted) state law
unless declared preempted by an appropriate court. In the
meantime, DWR will be bound by two inconsistent regulations,
one binding under state law and one binding under federal law,
and forced to violate either one or the other.
Even assuming FERC, DWR, or a third party brings an
appropriate action to have a conflicting mitigation measure
declared preempted, the problems do not end there. Given the
majority’s holding that CEQA applies to projects covered by a
FERC licensing proceeding, those projects require lead agency
approval under CEQA. Any such approval will require, as
discussed above, a finding that the project’s adverse
environmental effects have been mitigated to insignificance, a
finding based on adoption of mitigation measures. As a
consequence, any declaration that a mitigation measure is
unenforceable necessarily invalidates the agency’s project
approval under CEQA, premised on the mitigation measure.
Operation of the project may thereby be rendered unlawful
under state law until a new CEQA proceeding results in a valid
project approval.
32
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
These conundrums highlight a fundamental problem with
the majority’s holding. CEQA was enacted to govern projects
governed by state law and requiring state regulatory approval.
CEQA was not intended or designed to operate in a manner
subordinate to a superior federal regulatory scheme. There is
no provision in CEQA for partial implementation. An agency
cannot use CEQA solely for informational purposes, without
adopting mitigation measures when required. Nor can an
agency implement CEQA without exposing its compliance to a
civil enforcement lawsuit. The practical problems cited above
are all a result of the majority’s attempt to shoehorn CEQA into
a circumstance in which its use is redundant and, under
governing federal law, preempted. There is no indication that
the Legislature intended CEQA to operate in the manner
required by the majority, or would approve of it.
The lack of a clear doctrinal basis for the majority’s version
of preemption will create further problems of its own. The
majority seems to hold that when a public agency sponsors a
project requiring federal approval, the ordinary rules of
preemption do not apply; at a minimum, the agency’s action is
not subject to field preemption and purposes and objectives
preemption. The majority justifies this partial preemption
under Eel River, but, as discussed above, because the ruling goes
well beyond the holding of that case, the boundaries,
application, and jurisprudential basis of this partial preemption
remain obscure. And there is no way to determine what other
state statutes, if any, are covered by the ruling. All of this
uncertainty will guarantee further litigation every time a public
agency invokes a state statute in the midst of a federal licensing
proceeding, adding to the cost, length and burden of such
proceedings. In addition, because there is no reason to believe
33
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
the federal courts will follow the majority in its flight — the
federal district courts in California, for example, are bound by
Sayles Hydro’s adherence to First Iowa and California v.
FERC — we can expect different results in litigation commenced
in the respective jurisdictions. As a result of the majority’s
ruling, CEQA is deemed preempted in litigation commenced in
federal court, while it is subject only to impossibility preemption
in litigation commenced in our courts.
Putting aside the unworkability of the majority’s vision of
limited CEQA preemption, the most disturbing aspect of its
ruling is the lack of any practical benefit from its bending of the
preemption rules. The implementation of CEQA here is neither
necessary, nor even important. There is no claim on any side
that environmental concerns are given short shrift in the FERC
licensing process. As noted, the ALP appears designed
specifically to render state environmental review unnecessary.
The ALP requires, at the outset of the process, the creation of a
document that is the full equivalent of an EIR. The majority
does not contend otherwise. The applicant is then required to
negotiate with all other interested parties to reach consensus on
the terms of a proposed FERC license. Given the nature of
hydropower projects and the parties interested in their
operation, environmental concerns are likely to be in the
forefront. The majority does not identify any environmental
concerns that were overlooked in the formulation of the DWR
settlement agreement. Yet FERC then performs its own
environmental analysis under NEPA, involving the preparation
of a second environmental review document, the EIS.
Environmental protection is plainly among the top priorities of
the ALP. CEQA adds nothing.
34
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
Against this background, the majority fails to articulate
any persuasive reason for preserving state environmental
review over the clear dictates of the supremacy clause. The
project considered by DWR’s EIR — the operation of the
Facilities under the settlement agreement — is virtually
identical to the project considered in FERC’s EIS. Contrary to
the majority’s claim (maj. opn., ante, at p. 29), the EIS was not
prepared at an “earlier stage[]” in the ALP. It occurred
immediately prior to DWR’s redundant preparation of the EIR.
Neither DWR nor the majority have identified a deficiency in
either NEPA or FERC’s EIS that made this duplication of effort
necessary, or even efficacious.9
DWR contends that it invoked CEQA in order to decide
whether to accept the amendments proposed by FERC to the
terms of a license proposed in the settlement agreement, and the
majority accepts the explanation. (Maj. opn., ante, at p. 2.)10
9
The majority also theorizes that “a compliant EIR can still
inform the state agency concerning actions that do not encroach
on FERC’s jurisdiction.” (Maj. opn., ante, at p. 29.) If DWR had
carefully defined the project under CEQA review in a manner
that avoided FERC jurisdiction, DWR might also have avoided
preemption. But that is demonstrably not this case. As
explained above, the project studied by DWR in its EIR was the
exact subject of FERC regulation — future operation of the
Facilities under the terms of the settlement agreement.
10
As the majority observes, “DWR relied on the EIR to
analyze the environmental impact of operating the Oroville
Facilities under the settlement agreement or an alternative
proposed by FERC staff. The EIR serves as the informational
source for DWR’s decisionmaking as to whether to request
particular terms from FERC as it contemplates the license . . .
or to seek reconsideration of terms once FERC issues the
35
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
But those new terms had already been the subject of complete
environmental review in the EIS, in addition to its full
environmental review of the settlement agreement’s proposal.
Such review is presumably the very purpose of the ALP’s
requirement of an EIS at this stage of the process — to make
unnecessary an independent state environmental review,
including review of any changes FERC might propose to the
terms of a settlement agreement. There was no need for DWR
to repeat the environmental review process to reach conclusions
about the effect and desirability of FERC’s proposal. FERC had
done the work for them. Tellingly, neither DWR nor the
majority has identified deficiencies in the EIS analysis that
were uncovered by DWR’s EIR.
DWR’s rationalization ignores the duplication of effort
represented by its pursuit of CEQA. Any information developed
by DWR to aid its decision-making had already been developed
and revealed in FERC’s EIS. The EIR added nothing to the store
of information on which DWR’s decision makers were required
to act and will add nothing to their evaluation of the FERC
proposal, should that proposal ever be communicated. The
majority’s rationale reduces to this: DWR was entitled to do the
analysis itself, even if that duplication of effort served no other
purpose. It seems a small benefit to justify upsetting the proper
application of the rules of preemption.
The impact of the majority’s ruling is magnified by the
mandatory nature of CEQA compliance. The application of
CEQA is not discretionary; when a public agency proposes to
license . . . .” (Maj. opn., ante, at p. 2.) Of course, FERC’s EIS
considered exactly the same matters, and there is no claim that
FERC’s work was inadequate.
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COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
undertake a project that might cause a physical change in the
environment, the agency must engage in CEQA procedures.
(Pub. Resources Code, §§ 21001.1, 21065, 21080.) In Eel River,
we found no preemption of CEQA in circumstances in which the
use of CEQA served an important public purpose, given the
federal government’s exemption of the state’s project from an
otherwise exclusive scheme of federal regulation. That limited
ruling was well grounded in law and public policy; CEQA was
permitted to fill the regulatory vacuum created by the
exemption. In today’s ruling, the majority appears to have
extended that ruling — granted, subject to impossibility
preemption — to every state and local public project subject to
exclusive federal regulation. Because CEQA compliance is
mandatory, public agencies subject to exclusive federal
regulation now will be required to pursue CEQA regardless of
whether, as in this case, it serves no practical or regulatory
purpose. Public agencies will be required to duplicate federal
or, as in this case, their own environmental studies, run the risk
of allowing CEQA enforcement proceedings to interfere with the
licensing proceedings, and create their own, potentially
conflicting regulatory scheme through the adoption of
mitigation measures.
The absence of any meaningful regulatory or practical
justification for DWR’s invocation of CEQA reveals the
majority’s opinion for what it is: The preservation of state
regulatory authority for its own sake. The proper role of our
court in the application of the Supreme Court’s supremacy
clause jurisprudence should be to prevent such vain assertions
of state power, not to promote and facilitate them.
37
COUNTY OF BUTTE v. DEPARTMENT OF WATER RESOURCES
Cantil-Sakauye, C. J., concurring and dissenting
III. CONCLUSION
In its haste to acquiesce to DWR’s pointless and redundant
invocation of CEQA, the majority has devised its own version of
federal preemption, relying on a vague and inappropriate
application of Eel River. The majority’s new preemption
tolerates state interference in exclusive federal authority so long
as the state’s interference does not “directly” conflict with
federal action — in other words, so long as the state does not
create a situation in which it is impossible simultaneously to
comply with state and federal mandates. This limited
preemption may seem appropriate to the majority, but it bears
no resemblance to the United States Supreme Court’s
articulation of the doctrine of preemption, which must be our
guide. In adopting its own version of preemption, the majority
tolerates DWR’s unnecessary delay of FERC’s licensing
proceedings, turns a blind eye to Congress’s invocation of field
preemption through the enactment of Section 27, and sweeps
purposes and objectives preemption under the rug. Although
I concur with the majority to the extent it finds certain aspects
of CEQA’s implementation here preempted, I decline to adopt
the majority’s version of preemption and would favor a faithful
application of the high court’s law of preemption. I would affirm
the judgment of the Court of Appeal.
CANTIL-SAKAUYE, C. J.
I Concur:
CORRIGAN, J.
38
See next page for addresses and telephone numbers for counsel who
argued in Supreme Court.
Name of Opinion County of Butte v. Department of Water Resources
Procedural Posture (see XX below
Original Appeal
Original Proceeding
Review Granted (published) XX Opn. filed 9/5/19, ordered nonpub.
12/11/19 – 3d Dist
Review Granted (unpublished)
Rehearing Granted
Opinion No. S258574
Date Filed: August 1, 2022
Court: Superior
County: Yolo
Judge: Daniel P. Maguire
Counsel:
Bruce Alpert, County Counsel; Rossmann and Moore, Antonio
Rossmann, Barton Lounsbury; Law Office of Roger B. Moore, Roger B.
Moore; Shute Mihaly & Weinberger, Ellison Folk and Edward T.
Schexnayder for Plaintiff and Appellant County of Butte.
R. Craig Settlemire, County Counsel; Law Office of Roger B. Moore,
Roger B. Moore; Law Offices of Michael B. Jackson and Michael B.
Jackson for Plaintiffs and Appellants County of Plumas and Plumas
County Flood Control and Water Conservation District.
E. Robert Wright for Sierra Club, Center for Biological Diversity,
Friends of the River, California Sportfishing Protection Alliance and
Friends of the Eel River as Amici Curiae on behalf of Plaintiffs and
Appellants.
Law Office of Adam Keats and Adam Keats for California Water
Impact Network and Aqualliance as Amici Curiae on behalf of
Plaintiffs and Appellants.
Laura E. Hirahara for California State Association of Counties as
Amicus Curiae on behalf of Plaintiffs and Appellants.
Kamala D. Harris, Xavier Becerra and Rob Bonta, Attorneys General,
Michael J. Mongan, State Solicitor General, Janill L. Richards,
Principal Deputy State Solicitor General, Robert W. Byrne, Assistant
Attorney General, Joshua Patashnik and Aimee Feinberg, Deputy
State Solicitors General, Randy L. Barrow, Tracy L. Winsor, Deborah
L. Barnes, Matthew J. Goldman, Carolyn Nelson Rowan and Linda L.
Gandara, Deputy Attorneys General, for Defendant and Respondent.
The Sohagi Law Group, Margaret M. Sohagi, Philip A. Seymour;
Duane Morris, Thomas M. Berliner, Paul J. Killion, Jolie-Anne S.
Ansley; Downey Brand and David R.E. Aladjem for Real Parties in
Interest and Respondents.
Counsel who argued in Supreme Court (not intended for
publication with opinion):
Edward T. Schexnayder
Shute Mihaly & Weinberger LLP
396 Hayes Street
San Francisco, CA 94102
(415) 552-7272
Joshua Patashnik
Deputy State Solicitor General
455 Golden Gate Avenue, Suite 11000
San Francisco, CA 94102
(415) 510-3896
Jolie-Anne S. Ansley
Duane Morris LLP
Spear Tower
One Market Street, Suite 2200
San Francisco, CA 94105-1127
(415) 957-3320
Opinion Information
| Date: | Docket Number: |
| Mon, 08/01/2022 | S258574 |
