CEQA Lawsuit News: Appellate Rulings, AB 130, and Union Fights

A California state employees’ union sued Governor Gavin Newsom in June 2026, arguing his return-to-office mandate required environmental review under the California Environmental Quality Act — the highest-profile entry in a year of significant CEQA lawsuit news that also includes appellate rulings on greenhouse gas offsets and tribal consultation, plus the largest statutory overhaul of CEQA since 1970.

Union Sues Over Newsom’s Return-to-Office Order

California Attorneys, Administrative Law Judges and Hearing Officers in State Employment, known as CASE, filed its petition in Alameda County Superior Court on or around June 5, 2026, under case number 26CV192463.¹ The suit targets Executive Order N-22-25, which Newsom issued on March 3, 2025, requiring state agencies to bring employees into the office at least four days per week.² Full implementation was set for July 1, 2026.

CASE argues that forcing tens of thousands of remote employees to commute four days a week is a “project” under CEQA that required an Environmental Impact Report. The union cites a California State Auditor estimate that the mandate would generate roughly 15,115 additional metric tons of carbon dioxide per month from increased commuting.³⁴ The proper environmental baseline, the union contends, is the current telework arrangement, not pre-pandemic commuting.

Before filing, CASE sent formal CEQA exhaustion letters to 96 state agencies asking them to conduct environmental review voluntarily. When those went unanswered, the union retained Richard Drury of Lozeau Drury LLP.³ As of early June 2026, the state had acknowledged the complaint but had not publicly responded to its merits.⁴

CASE is not the only union fighting the mandate, but it is the only one framing the fight as an environmental case. SEIU Local 1000 filed an unfair labor practice charge in May 2026, and the Professional Engineers in California Government previously negotiated a side letter delaying implementation until July 2026 in exchange for withdrawing labor complaints.⁵⁶ Those earlier challenges relied on labor law rather than CEQA.

Appellate Decisions Reshaping CEQA in 2025 and 2026

Cap-and-Trade Cannot Substitute for Project Mitigation

In Center for Biological Diversity v. County of Los Angeles, decided in June 2025, the Second District Court of Appeal struck down the EIR for the Centennial Specific Plan, a 12,000-acre development at Tejon Ranch with more than 19,000 residential units. The EIR claimed 96 percent of unmitigated emissions would be offset through cap-and-trade compliance. The court called that reasoning “improper and misleading” and an example of “impermissible double counting,” reasoning that the project itself is not a covered entity under the cap-and-trade program, so it cannot credit upstream energy and fuel providers’ reductions against its own emissions. The county was ordered to decertify the EIR and set aside project approvals.⁷ Future CEQA documents cannot treat other entities’ regulatory compliance as project-specific mitigation unless the reductions are genuinely additional.

Tribal Consultation Must Be Substantive

In Koi Nation of Northern California v. City of Clearlake, decided in March 2025, the First District Court of Appeal reversed the approval of a 75-room hotel and road extension. The court found Clearlake’s consultation with the tribe under Assembly Bill 52 was “perfunctory”: the city accepted information about tribal cultural resources but never analyzed it, failed to give notice before closing consultation, and declined the tribe’s requests for cultural monitors and worker training.⁸ The ruling held that AB 52 consultation must continue until the parties either agree on mitigation or reach a good-faith impasse. Construction remained stayed, and the city would have to restart consultation to proceed.⁹

Water Supply and Repeat Challenges

In January 2026, the Third District Court of Appeal upheld the EIR for the 2.4-million-square-foot Giovannioni Logistics Project in American Canyon, rejecting neighboring Vallejo’s argument that water supply risks were inadequately disclosed. The court found the project’s water entitlements under a 1996 agreement were not speculative simply because American Canyon historically purchased less than its full contractual allotment.¹⁰

Two 2026 decisions cut off repeat litigation. In Mark Baker v. Bay Area Toll Authority (June 2026), the First District ruled that a second CEQA challenge to the “Bay Lights 360” bridge illumination project was time-barred and precluded by a prior unappealed judgment.¹¹ In Bess Bair v. Caltrans (March 2026), the same court held that res judicata barred a third CEQA challenge to the Richardson Grove State Park highway improvement project after two prior unappealed final orders.¹²

AB 130 and SB 131: The 2025 Statutory Overhaul

On June 30, 2025, Newsom signed AB 130 and SB 131, budget trailer bills that represent the biggest changes to CEQA since the law’s enactment in 1970.¹³

AB 130 creates a statutory CEQA exemption for infill housing on sites up to 20 acres in urbanized areas, provided the projects meet minimum density thresholds and complete a Phase I environmental site assessment. Projects taller than 85 feet must meet prevailing wage and skilled workforce standards. AB 130 also revives and expands the Environmental Leadership Development Project program, which provides a 270-day window for CEQA litigation to be resolved, extending it to smaller infill housing developments that invest at least $15 million and dedicate 15 percent of units to low-income households.¹⁴

SB 131 covers more project types. It exempts local rezonings that implement approved housing elements, wildfire fuel-reduction projects such as prescribed burns and thinning, farmworker housing, small health clinics, child care centers, broadband deployment in local road rights-of-way, and disadvantaged-community water and sewer projects.¹³ Both bills add a “near-miss” review process: if a housing project qualifies for a CEQA exemption except for a single condition, environmental review is limited strictly to that condition, without analyzing alternatives or growth-inducing impacts.¹⁴

SB 131 also limits the CEQA administrative record by excluding most internal agency staff communications unless a supervisor or executive reviewed them. Projects involving oil and gas infrastructure or large distribution centers are carved out from that record limitation.¹⁴ The legislation establishes a statewide VMT Mitigation Bank, allowing developers to pay fees that fund transit-oriented affordable housing and infrastructure instead of project-specific vehicle miles traveled mitigation. The Governor’s Office of Land Use and Climate Innovation is not required to release implementation guidance until July 2026.¹³

Housing Litigation: Two Studies, Different Numbers

Housing is the recurring flashpoint. Two prominent studies reach very different conclusions about how much CEQA litigation blocks it.

A Holland & Knight study of lawsuits filed between 2019 and 2021 found housing consistently the top target. In 2020, CEQA suits sought to block roughly 48,000 approved housing units, which the study characterized as nearly half of the state’s total housing production that year. Just seven of the 514 lawsuits in its dataset challenged agency plans covering more than one million planned housing units. Litigation and appeals typically take four to five years to resolve, and the mere filing of a suit can freeze a project for 18 to 24 months because lenders and investors refuse to fund developments while cases are pending. The firm’s research also found that filing a CEQA lawsuit can halt construction loans for 95 percent of privately funded housing projects.¹⁵¹⁶

A 2023 Rose Foundation and Housing Workshop report challenged those numbers. That analysis found CEQA lawsuits averaged 192 per year between 2002 and 2021, with no overall increase despite population growth. Only 23.8 percent of CEQA cases filed between 2019 and 2021 challenged projects involving new housing. In 2019, housing units subject to CEQA litigation represented about 9.9 percent of total housing permits issued statewide. The report also found no evidence of any housing project being permanently scrapped as a result of CEQA litigation, arguing that suits more commonly result in project modifications.¹⁷

Unions Using CEQA as Bargaining Leverage

One controversial pattern involves labor unions filing environmental challenges and then offering to withdraw them if the developer agrees to hire union labor.

A San Francisco Chronicle report documented “East Bay Residents for Responsible Development,” an association of four building trade unions that used CEQA objections to target housing near BART stations. In one case involving a 167-unit project in San Lorenzo, the developer eventually agreed to hire some union trades after the unions challenged the project on environmental grounds, increasing total costs by an estimated 10 to 20 percent. A 222-unit project at the West Oakland BART station, unanimously approved by the Oakland Planning Commission, was delayed repeatedly after unions appealed, alleging inadequate soil contamination analysis.¹⁸

In Southern California, the Southwest Regional Council of Carpenters targeted at least 12 projects between 2017 and 2019, including three large Los Angeles developments totaling more than 1,800 units, alleging CEQA violations related to greenhouse gas emissions. Some developers have responded by filing racketeering counterclaims against project opponents.¹⁹

Neighborhood Opposition and University Housing

The Save Lafayette v. City of Lafayette saga is one of the most cited neighborhood-opposition cases. The “Terraces of Lafayette,” a 315-unit apartment project, was first proposed with an application deemed complete in 2011. After the city certified an EIR in 2013 and approved the project, Save Lafayette sued on CEQA and Housing Accountability Act grounds. The case wound through the courts for years before a unanimous Court of Appeal opinion upheld the approvals, and the California Supreme Court declined review on March 17, 2023.²⁰

The University of California system has also been a target. A 2023 appellate ruling in Make UC A Good Neighbor v. Regents of University of California initially ordered UC Berkeley to roll back undergraduate enrollment, citing “social noise” from partying students as a CEQA impact. The California Supreme Court ultimately upheld the university’s long-range development plan EIR in June 2024, rejecting the noise and alternative-location claims. A UC report found CEQA litigation had delayed seven student housing projects across the system since 2018, projects that could collectively have housed 4,100 students.²⁰

An analysis cited by Holland & Knight found that in Southern California, 78 percent of housing units challenged under CEQA were in “whiter, wealthier, and healthier areas,” and 70 percent were within half a mile of transit.²¹

1
Bloomberg Law. California Union Leans on Newsom’s Climate Record to Fight RTO
2
ACSED Online. Letter to CalHR Regarding Return-to-Office Executive Order N-22-25
3
Davis Vanguard. Lawsuit California Telework Policy
4
CBS News San Francisco. Union Files CEQA Lawsuit California In-Person Work Requirement
5
SEIU Local 1000. RTO
6
PECG. Sideletter 27
7
Alston & Bird. Land Use Matters July 2025
8
Koi Nation of Sonoma. Koi Nation Announces Landmark Legal Victory Protecting Tribal Cultural Resources
9
FindLaw. Koi Nation of Northern California v. City of Clearlake
10
CEQA Developments. Third District Affirms Judgment Upholding American Canyon’s EIR
11
CEQA Developments. Mark Baker v. Bay Area Toll Authority
12
CEQA Developments. CEQA Developments
13
Office of the Governor. Governor Newsom Signs Into Law Groundbreaking Reforms to Build More Housing Affordability
14
CEQA Developments. State Budget Bill Includes Landmark CEQA and Housing Law Changes
15
Holland & Knight. CEQA Lawsuits Remain a Roadblock to Housing
16
Holland & Knight. Getting in Its Own Way: Behind California’s CEQA Curtain
17
Rose Foundation. CEQA by the Numbers: Myths and Facts
18
San Francisco Chronicle. California Unions Environmental Law
19
Reason. How California Environmental Law Makes It Easy for Labor Unions to Shake Down Developers
20
Bay Area Council. About Time: CA Supreme Court Tosses Abusive CEQA Lawsuit, Clears Way for Lafayette Housing
21
Holland & Knight. Linking CEQA to California’s Housing Crisis