A small well, a big CEQA decision

The California Supreme Court has long grappled with the California Environmental Quality Act.

It began in 1972, two years after Governor Ronald Reagan signed CEQA into law, when the justices rebuffed foes who sought to limit the act and resolved any doubt that it was intended as an extensive guardian of the state's natural resources by holding that it applies to private development projects, along with public works.

That foundational case, Friends of Mammoth v. Board of Supervisors, 8 Cal.3d 247 (1972), by Justice M. Stanley Mosk, expanded CEQA into a mandatory statewide process for the mitigation of environmental harm.

Mosk quoted approvingly the Legislature's intent that CEQA was designed to be a milestone in the campaign for "maintenance of a quality environment for the people of this state now and in the future."

Since then, the court has checked in often to interpret CEQA's complexities. Shortly after the Friends of Mammoth opinion, the justices ruled that CEQA applies to municipal decisions that greenlight development, further expanding the act's reach. Bozung v. Local Agency Formation Commission, 13 Cal.3d 263 (1975).

In 2007, the Supreme Court set standards for evaluating water supplies in Vineyard Area Citizens for Responsible Growth Inc. v. City of Rancho Cordova, 40 Cal.4th 412. The outcome controls the level of detail in environmental impact statements and requires full disclosure of potential impacts.

And as current CEQA reform efforts meet pushback from the act's pro-environment backers, the high court will doubtless play a large role in refereeing those disputes.

Last week, the high court again clarified and analyzed CEQA in a June 25 opinion. Environmentalists protested when an oil company sought to convert a dormant production well in the Brentwood Oil Field in eastern Contra Costa County into an injection well for wastewater produced by other wells.

Its opinion, reversing an appellate panel and calling for a more nuanced examination of the exemptions claimed by the oil company, is a case study of the intricacies of CEQA and the high court's meticulous evaluation of a potential threat to the public's access to clean drinking water.

In one sense, it was a minor case, involving only a single oil well. But the justices used the occasion both to straighten out a botched appellate ruling and to clarify how CEQA exemptions should be evaluated.

One authority, Kevin P. Bundy of Shute, Mihaly & Weinberger LLP, called the opinion "refreshing, mostly because it doesn't take sides in the policy battle over CEQA. Instead, the Supreme Court did what courts should do: interpret and apply the law consistent with its plain text and overall purpose."

The litigation began when state regulators ruled the project qualified for an exemption from CEQA, agreeing with the oil company, Reabold California LLC, that under the act's guidelines converting the well was only a minor alteration of a facility "involving negligible or no expansion of existing or former use."

Wrong, argued an environmental coalition called the Sunflower Alliance, contending that agencies must first find that there is no threat of environmental harm before identifying exemptions that might apply. Numerous freshwater wells in the area are in danger of contamination by the proposed injection of wastewater, the coalition pointed out. Sunflower Alliance v. California Department of Conservation et al., S287414 (Ca. S. Ct., op. filed June 25, 2026).

A Contra Costa County Superior Court trial judge reversed the exemption ruling and required the government to rescind its approval of the project pending a CEQA evaluation. Injecting wastewater, the judge observed, "is a significantly different use than pumping gas and oil."

But a 1st District Court of Appeal panel saw it differently. It concluded that "any expansion of the well's use is negligible because, under the facts here, the environmental risks of injecting the water are negligible." The panel credited government regulators' finding that the injected water cannot escape the aquifer and harm people, property or the environment, making the environmental risks negligible.

When the Sunflower Alliance successfully petitioned for review, the other side cited problems with CEQA to caution the high court against letting the act get in the way of its plan to dispose of oil field wastewater by injecting it in a disused well.

Lawyers for Reabold California LLC at Paul Hastings LLP described CEQA as a legal regime guilty of "elevating process over outcomes to the detriment of the public by blocking, delaying, and/or increasing the costs of the development of housing, energy and other essential infrastructure and resources which, in turn, runs down faith in government."

Reabold's arguments and support from the Western States Petroleum Association were not enough to sway the Supreme Court.

Chief Justice Patricia Guerrero wrote for five of her colleagues--with a concurrence by Justice Leondra R. Kruger--that the Court of Appeal misunderstood the process of assigning exemptions from CEQA. It sent the case back with instructions to try again, this time focusing on whether the project involves "an expansion or change in the nature or degree of a structure or facility's use," not on the alleged risks of environmental harm.

Kruger wrote to emphasize that CEQA requires not only that the environment be protected, but that its rules and processes must be transparent to the public.

Hollin N. Kretzmann, an attorney at the Center for Biological Diversity's Climate Law Institute, who filed an amicus brief backing the Sunflower Alliance, said, "The court's commonsense ruling upholds the need for careful review and community input before companies can pump toxic oilfield wastewater into aquifers. It's a win for all Californians that the court didn't allow the state or the oil industry to trample our bedrock environmental protection laws."

A veteran of the high court's CEQA decisions said the opinion and concurrence were in keeping with the court's careful attention to the act, especially when lawmakers have recently curtailed some provisions and further pushback will be on the ballot in November.

"At a time when the California Environmental Quality Act is under unprecedented challenges both in the Legislature and now at the polls, the California Supreme Court's Sunflower Alliance decision continues the Court's half-century tradition of giving a muscular interpretation to CEQA," said Richard M. Frank, a senior fellow of the California Environmental Law & Policy Center and a retired professor of environmental practice at UC Davis School of Law.

"Ever since the Supreme Court's iconic Friends of Mammoth decision in 1972, the justices have demonstrated a strong interest in CEQA,"

Frank added: "Over more than a half-century, the court has taken up and decided quite a large number of CEQA cases. And the court has generally given a broad and muscular interpretation of the statute over the years. Chief Justice Guerrero's opinion for a unanimous Court in Sunflower Alliance is very much in keeping with that long-term judicial trend."

Once the case reached the Supreme Court, Sunshine Alliance's lawyers at Aqua Terra Aeris Law Group and Brandt-Hawley Law Group got a boost as Stanford Law School's Environmental Law Clinic joined the team.

"We've been doing oil and gas cases at the clinic," said co-director Deborah A. Sivas, a law professor and environmental litigator. She added that the point is to influence state regulators at the Department of Conservation's Geologic and Energy Management Division. "We're trying to get CalGEM to take CEQA more seriously."

The high court can be an important ally, as it proved in the Sunshine Alliance case. "Generally, the Supreme Court has been faithful to the language and intent of CEQA, which is to take a serious look at any given project's impact on the environment--which, by the way, is the opposite of what's going on in the federal system."

CEQA's federal counterpart, the National Environmental Policy Act, has been hamstrung by recent executive orders limiting its regulations by the Trump administration plus adverse U.S. Supreme Court rulings.

"CEQA remains a bedrock statute that makes California projects better," Sivas said. "It's true that it can slow things down, and the streamlining by the Legislature last summer will likely give the California Supreme Court a lot more to do."