Harm to Public Interest in Informed Decisionmaking Can Tip the Scales When Courts Weigh Preliminary Injunctions

In Tulare Lake Canal Company v. Stratford Public Utility District (2023) 92 Cal.App.5th 380, the Fifth District Court of Appeal reversed and remanded a trial court order denying a preliminary injunction to halt the construction of a water pipeline through an easement granted by the Stratford Public Utilities District (SPUD) without first undergoing environmental review. The Court concluded it was a “near certainty” that SPUD had failed to comply with CEQA in granting the easement, harming the public’s interest in informed decisionmaking, and that the trial court should have taken this harm into account before denying the injunction.

In order to accommodate construction of a 12.5-mile, 48-inch water pipeline that Sandridge Partners, L.P. (Sandridge) planned to use for irrigating crops on different portions of its property (Project), SPUD gifted Sandridge a 380-foot long easement under the Tulare Lake Canal, a right-of-way owned by the petitioner, Tulare Lake Canal Company (TLCC). After Sandridge began preparing to install the pipeline through TLCC’s right-of-way, TLCC filed a petition alleging SPUD had violated CEQA by failing to conduct any environmental review before granting the easement. In a separate action not discussed further in this post, TLCC also sued Stratford for trespass.

Applying the interrelated factors test for issuing a preliminary injunction, which balances the likelihood of prevailing on the merits and the balance of harms to the parties should relief be granted, the trial court determined that, although approval of the easement was a project under CEQA and TLCC was likely to prevail on its CEQA claim, nothing in the record indicated that allowing the project to move forward would cause harm to the general public. Accordingly, the trial court denied TLCC’s motion for preliminary injunction, and TLCC timely appealed.

On appeal, Sandridge argued any CEQA violation that may have occurred was trivial and would not cause any irreparable harm. After determining SPUD was a public agency under CEQA and its approval of the easement was discretionary, the Court held SPUD’s failure to conduct any environmental review before approving the easement harmed the public’s interest in informed decisionmaking about projects with potentially significant environmental effects. Accordingly, the trial court should have taken this harm to the public’s interest into account when evaluating the relative balance of harms between parties under the interrelated factors test.

Although the Court declined to adopt a judicially-created “presumption that violation of CEQA’s information disclosure provisions causes irreparable harm” so as to automatically warrant issuance of a preliminary injunction, the Court also refused to find that noncompliance with CEQA’s information disclosure requirements must be accompanied by evidence of actual environmental harm in order for a preliminary injunction to issue. Instead, the Court took the middle ground, holding that an agency’s failure to abide by CEQA’s informational disclosure provisions is a harm to the public interest that must be considered when balancing the relative harms likely to result from a decision to grant or deny a preliminary injunction. Ultimately, the Court reversed the trial court’s order denying TLCC’s request for injunction and remanded to the trial court to reconsider application of the interrelated factors test, taking into account the public’s interest in informed decisionmaking under CEQA.

Link to Key Point Key Point

• Failure to abide by CEQA’s informational disclosure requirements is a harm to the public interest that courts must consider when evaluating the relative balance of harms from granting or denying a preliminary injunction.