City of San Diego v. Board of Trustees of the California State University, 190 Cal. Rptr. 3d 319

Background

The CSU Board approved a master plan and certified an EIR (2007 EIR) to expand San Diego State University enrollment by ~11,385 students (approx. 10,000 FTE increase), projecting significant off-campus traffic impacts.
The Board identified fair-share mitigation measures and estimated fair-share costs, but declined to commit funds unless the Legislature made a specific earmarked appropriation, relying on dictum in City of Marina v. Board of Trustees (Marina).
Plaintiffs (City of San Diego, SANDAG, MTS) challenged certification alleging CEQA requires feasible mitigation and enforceable funding commitments; superior court initially upheld Board, Court of Appeal reversed in part and ordered vacatur of certification.
The Supreme Court granted review primarily to decide whether Marina’s dictum justified the Board’s position that CSU may fund off-site mitigation only through a specific legislative appropriation.
The Supreme Court held the Marina dictum did not support the Board’s rule; a state agency may use available discretionary powers and non‑earmarked funds (including project budgets and non-state funding) to mitigate off-site effects, and CEQA does not condition mitigation on earmarked appropriations.
Court affirmed Court of Appeal’s directive: the Board must vacate its certification and comply with CEQA, reconsidering feasible funding sources rather than treating mitigation as infeasible for lack of a legislative earmark.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Marina dictum permits CSU to treat off-site mitigation as infeasible absent a legislative earmarked appropriation	Marina was misread; CEQA requires lead agencies to seek feasible mitigation and consider available funding sources	Marina’s dictum bars voluntary mitigation payments unless Legislature appropriates funds for that purpose	Dictum in Marina does not justify that rule; Board may use other discretionary powers and funding (including non-state/project funds) to mitigate
Whether CEQA conditions a state agency’s mitigation duty on legislative earmarks	CEQA mandates mitigation when feasible and requires including mitigation costs in agency budgets	Absent earmarked funds, mitigation payments would be unlawful gifts/assessments or prohibited by legislative silence	CEQA contains no such condition; mitigation duty is not limited to on-site impacts or to funds specifically earmarked by the Legislature
Whether Board’s infeasibility finding and statement of overriding considerations were valid without funding commitment	Plaintiffs: Findings rest on erroneous legal assumption and thus are invalid	Board: It acted reasonably given budgetary limits and uncertainty of legislative action	Findings invalidated because based on erroneous legal standard; CEQA forbids relying on flawed infeasibility to justify unmitigated impacts
Whether statutes or other provisions (Ed. Code §67504, Gov. Code §13332.15, Ed. Code §66202.5) support Board’s position	Plaintiffs: Statutes do not limit CSU’s ability to use non-earmarked or non-state funds for mitigation; some provisions imply payments by campus	Board: Subsequent statutes and rules imply legislative intent that mitigation funding requires Budget Act appropriations or limit use of other funds	Court rejected Board’s statutory arguments; statutes do not codify Board’s interpretation and do not prohibit using other lawful funding sources

Key Cases Cited

City of Marina v. Board of Trustees of California State University, 39 Cal.4th 341 (Cal. 2006) (held Board abused discretion by disclaiming responsibility for off-site mitigation; contains dictum about legislative appropriations)
Laurel Heights Improvement Assn. v. Regents of University of California, 47 Cal.3d 376 (Cal. 1988) (standards for CEQA review and EIR sufficiency)
No Oil, Inc. v. City of Los Angeles, 13 Cal.3d 68 (Cal. 1974) (erroneous legal standard in CEQA context is failure to proceed as required by law)
Friends of Mammoth v. Board of Supervisors, 8 Cal.3d 247 (Cal. 1972) (CEQA to be interpreted to afford fullest possible environmental protection)
County of San Diego v. Grossmont-Cuyamaca Community College Dist., 141 Cal.App.4th 86 (Cal. Ct. App.) (EIR cannot categorically disallow use of project-appropriated funds for off-site mitigation)
Mandel v. Myers, 29 Cal.3d 531 (Cal. 1981) (separation of powers limits on courts ordering legislative appropriations)