Part three of a three-part series
As previously reported in Part 1 of this series, on June 30, 2025 Governor Gavin Newsom signed Senate Bill 131 into law (SB 131), amending the California Environmental Quality Act (CEQA) to offer streamlined environmental review for projects that narrowly miss qualifying for an exemption from CEQA. Assembly Bill 130, which accompanied SB 131, addressed important statutory and regulatory developments relating to transportation impacts analysis under CEQA and are covered in Part 2 of this series.
In this third and final update on the CEQA amendments contained in the 2025 budget trailer bills we focus on the SB 131 provisions that relate to CEQA litigation reform. These amendments are aimed at limiting challenges to CEQA-exempt projects and reducing the expense and delay associated with resolving a CEQA challenge.
As with other aspects of SB 131’s CEQA amendments, the most substantive reforms relate to projects that are exempt from CEQA review. The remaining amendments are at best a step in the right direction.
Prohibition on Serial Challenges to Exempt Projects
Prior to SB 131, a public agency’s determination that a certain activity is exempt from CEQA could not be relied upon for purposes of CEQA compliance by any other agency. This meant that every discretionary approval issued for the same project required a separate exemption determination by the relevant agencies. Each approval opened a new period for CEQA challenges. Thus, an exempt project would incur CEQA litigation risk every time a new public agency issued a permit or approval for the same project.
SB 131 amended Public Resources Code section 21080.1, subdivision (a), to state that a lead agency’s determination that an activity is exempt from CEQA shall be final and conclusive on all persons, including responsible agencies, unless timely challenged. A responsible agency is any other agency that is required to grant a discretionary approval for the project. This amendment requires a litigant to timely challenge the first CEQA exemption determination for the project or risk waiving the right to challenge the CEQA exemption determination.
As the provision does not expressly state that responsible agencies need not file a notice of exemption, public agencies may elect to continue to do so as an additional measure to try and limit exposure to future CEQA litigation.
Further Limits on the Scope of the CEQA Administrative Record
Subject to very narrow exceptions, judicial review of an agency’s CEQA determination is limited to the record of proceedings developed by the administrative agency when issuing the underling permit or approval. CEQA and the California Rules of Court define the format and content of the record of proceeding – also referred to as the “administrative record” – and the time-period within which the petitioner or the respondent public agency, as applicable, is required to prepare the administrative record.
CEQA provides that the administrative record broadly includes all written material relevant to the respondent public agency’s compliance with CEQA -- including inter-agency communications -- and courts have interpreted this provision to encompass internal email communications of the agency. The law has led to absurd results, with hundreds of thousands of email communications qualifying for inclusion in an administrative record that the respondent public agency is required to certify for accuracy and lodge with the court. The collection, review and assembly of email communications is costly, time-consuming, and in large part of limited informational value for the court or the litigants.
Recent amendments to the CEQA statute, including SB 131, have attempted to impose reasonable limits on the materials that a litigant can argue must be included in the record of proceeding. In 2023, Senate Bill 149 excluded communications that are purely of a logistical nature from the scope of the administrative record. SB 131 has now also excluded internal email communications that relate to CEQA compliance and that were not provided to the agency decision-making body or agency officers, department heads or supervisors, as defined in the bill. Given the long list of agency personnel whose email communications arguably remain “fair game” for inclusion in the administrative record, agencies looking to benefit from this provision may wish to consider developing detailed and project-specific document control mechanisms.
Legislature’s Intent That CEQA Be Used for Environmental Protection
Advocates of CEQA reform have long rallied around limiting access to the courts as a means of curbing CEQA litigation abuse. SB 131 does not limit standing for litigants and the courts have affirmed that the litigant’s motives are not dispositive of a party’s right to bring a CEQA challenge. However, SB 131 now expressly articulates the Legislature’s intent that CEQA not be used for purposes other than environmental protection. Whether this statement of the Legislature’s intent can be successfully wielded by public agencies to reign in CEQA litigation abuse remains to be seen.
