Appendix C — City of Santa Clarita, California v. Los Angeles County, California (No. 05-1462)

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

WESTERN DIVISION

ENTERED

CLERK, U.S. DISTRICT COURT

MAY 24 2004

CENTRAL DISTRICT OF CALIFORNIA

BY /s/ (initials) DEPUTY

FILED

CLERK, U.S. DISTRICT COURT

MAY 20 2004

CENTRAL DISTRICT OF CALIFORNIA

BY /s/ (initials) DEPUTY

THIS CONSTITUTES NOTICE Priority v

OF ENTRY AS REQUIRED BY Send v

FRCP, RULE 77(d). Enter v

: Closed v

JS-5/JS-6

JS-2/JS-3

Scan Only

CEMEX, INC., a Louisiana corporation

Plaintiff,

VS.

COUNTY OF LOS ANGELES and

DOES 1 through 10, inclusive

Defendant.

UNITED STATES OF AMERICA,

Plaintiff-Intervenor

CITY OF SANTA CLARITA,

Defendant-in-Intervention

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CASE NO. CV-02-747 DT (FMOx)

JUDGMENT

Judgment is hereby entered consistent with the terms of

the Consent Decree filed in this matter on May 3, 2004 and

entered on May 6, 2004.

DATED: May 20, 2004

DICKRAN TEVRIZIAN

HON. DICKRAN TEVRIZIAN

JUDGE OF THE UNITED

STATES DISTRICT COURT

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JEFFER, MANGELS BUTLER & MARMARO LLP

KERRY SHAPIRO (Bar No. 133912)

PATRICIA S. BRODY (Bar No. 70275)

SCOTT N. CASTRO (Bar No. 191499)

Two Embarcadero Center, Fifth Floor

San Francisco, California 94111-3824

Telephone: (415) 398-8080

Facsimile: (415) 398-5584

Attorneys for Plaintiff CEMEX, INC.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

WESTERN DIVISION

ENTERED

CLERK, U.S. DISTRICT COURT

MAY - 6 2004

CENTRAL DISTRICT OF CALIFORNIA

BY Js/ (initials) DEPUTY

FILED

CLERK, U.S. DISTRICT COURT

MAY - 3 2004

CENTRAL DISTRICT OF CALIFORNIA

BY DEPUTY

THIS CONSTITUTES NOTICE Priority

OF ENTRY AS REQUIRED BY Send

FRCP, RULE 77(d). Enter

Closed

JS-5/JS-6

JS-2/JS-3

Scan Only

|| Hes

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CEMEX, INC., a Louisiana corporation

Plaintiff,

VS.

COUNTY OF LOS ANGELES and

DOES 1 through 10, inclusive

Defendant.

UNITED STATES OF AMERICA,

Plaintiff-Intervenor

CASE NO. CV-02-747 DT (FMOx)

CONSENT DECREE

(PROPOSED)

Hearing Date: March 15, 2004

Time: 10:00 a.m.

Judge: Hon. Dickran Tevrizian

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

. WESTERN DIVISION

CEMEX, INC., a Louisiana corporation

Plaintiff,

VS.

COUNTY OF LOS ANGELES and

DOES 1 through 10, inclusive

Defendant.

UNITED STATES OF AMERICA,

Plaintiff-Intervenor

CASE NO. CV-0°-/47 DT (FMOx)

CONSENT DECREE

Il.

tte

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TABLE OF CONTENTS

Page

RECITALS AND BACKGROUND ............ 8

CORN PPR CSRUIND cbc a ies po en ss n> 12

Piss SER 35S as ie ee Si eS eee 12

Dy PATON fy SS cca ss cade ss oh ek eee onn 17

C. Agents for Service of Process and Notices .... 18

ID. POTN ON es 8 Sc oi gs och a Rane 20

Ei. SUCCRNRNS BE Ams so iss eS vio 22

F. Implementation of Consent Decree ......... 22

a, SED BOD ives ees ee 22

bs CCU 6 ORS eas oo a 22

3. Duration of Consent Decree .......... 29

4. > Complete Agreement 25. oe i es 29

5. Incorporation by Reference........... 30

©, NG as Sra ee a ee a 30

Fs. = NS iis Sve Sp es <5 ERE 30

Si: < Ba AON os ae es 31

ee Ear re Gre eee 32

BS ROR Sh SE Sac tk 33

11. Modifications to the Consent Decree ... 33

12. Interpretation of Consent Decree ...... 33

AS. VOR Sos seas 65 See es 34

AG, SERIO oa pw Ks RUSS CREWE A 36

AD. PRDENO PRES: 5 gs hick sy bee 36

16. Limitations as to the United States ..... 36

17. Counterparts; Facsimile ............. 36

18. Reservation of Police Power .......... 37

G. Subsequent Actions Affecting Consent Decree 37

STIPULATED FACTUAL BACKGROUND .... 38

A; - PUOOE SPVCE NOW 26 WANS ee oe 38

B. Federal Environmental Review of the Project . 40

C. County Environmental Review of the Project . 43

D. The Pleadings and the Parties Allegations .... 50

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$.. CBMBA s Alcomiont 5.68. i ess

2. United States Allegations ............

Be SOME AIOGMRIONS os 8k 855.6 6s sia as

IV. FINDINGS, CONCLUSIONS, AND

RRS EPR PARUPR EAN 5 05 hn has aoe ee es RRs

A, Wredeeal Preenmnton oo 6 si i SS

B. Adequacy Of Environmental Review ........

OC, ae FRCMI PYOGEOR 86k ik vk ws

VY. PARAMETERS OF PROJECT TO BE

APPROVED BY THE COUNTY 6.00400.

A. Federal Land Use and Environmental

EIOCMION RRR a ie a ea

B. CEQA Environmental Documentation

WU VIO sn ae ae oe aS

1. The County Will Certify the

November 2001 EIR Without Further

Public Review or Comment ..........

2. The County Will Prepare and

Adopt CEQA Findings ..............

3. The County Will Prepare and

Adopt a Statement of Overriding

CI ia re ee hs oes

C. The County Will Issue All Required

Entitlements For The County-Approved

PU ops i ces ek ieee Use eee ees

i. Surface Mming Permit ....... 266255.

2. OR FB 5 6 SES

3: PEE. Ss

WE. TRUCE RA | 6. Va oo ee wee ee ee

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Plaintiff CEMEX, Inc. (“CEMEX’), Plaintiff-in-

Intervention United States of America (“United States”), and

Defendant County of Los Angeles (“County”) have agreed to

settle the litigation CEMEX, Inc., et al. v. County of Los

Angeles, U.S.D.C. Case No. CV-02-747 DT (FMOx), in

accordance with the following terms and conditions of this

Consent Decree. Exhibits A through J shall be deemed to be

parts of this Consent Decree and are fully incorporated by

reference herein.

I. RECITALS AND BACKGROUND

On January 25, 2002, CEMEX commenced this action

alleging that the County has engaged in a course of public

action intended to obstruct, delay and frustrate implementation

of federal law, and a series of federal decisions, regarding the

mining of federal mineral resources in the County, precluding

implementation of CEMEX’s Soledad Canyon Sand and

Gravel Mining Project (“Project”), approved by the U.S.

Department of Interior, Bureau of Land Management

(“BLM”), which public action was in violation of the federal

Materials Act of 1947 (“Materials Act”), 30 U.S.C. §§ 601 et

seq. and the Federal Land Policy and Management Act, of

1976 (“FLPMA”), 43 U.S.C. §§ 1701 et seg. On September

10, 2002, the United States intervened as Plaintiff-in-

Intervention alleging that the County has blocked the BLM’s

mineral materials sales to CEMEX and interfered with BLM’s

mineral materials sales program by continually attaching land-

use restrictions and unreasonable conditions on CEMEX’s use

of the federally-owned mineral estate. The BLM further

alleges that the County’s delay aad ultimate denial of a surface

mining permit stands as an obstacle to the fulfillment of the

congressional purposes behind the Materials Act and FLPMA.

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By virtue of executing this Consent Decree, the County

is not admitting liability but has determined it is in its best

interest to resolve this litigation. Nevertheless, without

admitting liability, the Parties consent that the Court may enter

the Recitals, Findings, Conclusions, and Determinations set

forth below for purposes of this Consent Decree only and any

proceedings to enforce its provisions. This Consent Decree

resolves all claims and defenses which were or could have

been asserted in CEMEX’s complaint filed in this case

(“Complaint”), the United States’ complaint-in-intervention

filed in this case (“Complaint-in-Intervention”), and the

answers filed by the County in this case (“Answers”).

The BLM is committed to carrying out its mandates

pursuant to the Materials Act and FLPMA. Pursuant to these

statutes, and related regulations, the BLM has engaged in a

series of decisions resulting in a determination to allow the

mining of sand and gravel minerals from the federally-owned

mineral estate. As part of this process, the BLM approved

CEMEX’s Project, providing for the production of 56.1

million tons of federally-owned resources located on a 460-

acre parcel in the Soledad Canyon area of Los Angeles County

(“Project Site”), with an anticipated royalty to the United

States Government of a minimum of $28 million pursuant to

and following the issuance in 1990 of two federal mineral

material contracts (“Federal Contracts”) to CEMEX’s

predecessor-in-interest, Transit Mixed Concrete Company

(referred to hereafter as “TMC”) and following lengthy

environmental analysis and public review. True and correct

copies of the Federal Contracis are attached collectively

hereto as Exhibit A.

The BLM engaged in and completed a nearly 15-year

land-use and environmental review process for the Project.

This process included: (1) a Federal Court-approved

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settlement in 1988, in which the BLM determined to put the

Federal minera! material at the Project Site up for bid; (2) a

public bid process in which up to 100 million tons of

Federally-owned mineral material at the Project Site was

determined to be put up for sale; (3) the award of the two

Federal Contracts to TMC in 1990, providing for the mining

and production of 56.1 million tons over a period of

approximately 20 years; (4) further environmental analysis of

Plaintiff's (then, TMC’s) proposed mining Project, resulting

in publication of a Federal Final Environmental Impact

Statement (“Final EIS”) pursuant to the requirements of the

National Environmental Policy Act (“NEPA”), 42 U.S.C.

§§ 4231 et seq.; (5) the issuance of a Federal Record of

Decision (the “ROD”) on August 1, 2000, approving the

specific manner in which the proposed mining pursuant to the

Federal Contracts is to occur, with the addition of specified

mitigation measures (“Federally-Approved Project”); and (6)

the affirmation of the ROD by the U.S. Department of the

Interior, Office of Hearings and Appeals, Interior Board of

Land Appeals (“IBLA”).

The United States is committed to preserving and

supporting the implementation of the BLM’s decisions

regarding the Project, as well as its overall management of

federal lands.

The County is committed to carrying out what it asserts

are its duties as a local lead agency under both the California

Environmental Quality Act (“CEQA”), Public Resources Code

§§ 21000 et seg., and the Surface Mining and Reclamation

Act (““SMARA”), Public Resources Code §§ 2710 et seg. and

the County’s Surface Mining Permit Ordinance, L.A.C.C.

§ 22.56.1240 et seq. Federal law relating to mining, as well as

the federal decisions relating to the Project, preempt the

County from denying the Project under the Property and

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Supremacy Clauses of the United States Constitution. The

County further acknowledges that actions which unlawfully

conflict with, excessively delay, or otherwise frustrate

implementation of the Project are similarly preempted.

CEMExX< has pursued permitting and implementation of

the Project for nearly thirteen years, and has incurred

extraordinary costs during this process.

In addition to resolving all claims in CEMEX’s

Complaint filed in this case and the United States’ Complaint-

in-Intervention, the Parties enter into this Consent Decree to

provide for the expeditious implementation of the Federally-

Approved Project, including through implementation of

additional conditions as agreed to herein, and to resolve

CEMEX and the United States’ claims without resort to

continued litigation, and to avoid further costs and delay

associated with such litigation.

Through this Consent Decree, the United States is

guaranteed that federal laws and decisions relating to mining

the Project Site are given full force and effect, while CEMEX

is guaranteed that it will be able to implement the Federally-

Approved Project without delay or interference by the County.

The County, in turn, will avoid the extraordinary costs

associated with complex and protracted litigation and a

potentially adverse ruling in the underlying litigation.

Additionally, the County, through this Consent Decree, will

retain jurisdiction to complete its review and approval of the

project as detailed herein including adoption of mitigation

measures beyond those in the Federal EIS, and will also

impose a number of Project Conditions not otherwise required

under CEQA or SMARA that might otherwise be preempted

as land use conditions.

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Nothing in this Consent Decree is intended to alter the

lawful exercise by the County of its police powers as provided

by the United States and California Constitutions, nor to

abridge its general compliance with the mandates of California

law, except to the extent that County actions have or will

interfere or conflict with, or otherwise frustrate federal laws

and decisions relating to the field of federal mining projects,

and as specifically exercised in the context of the Federally-

Approved Project.

Each party represents that it is entering into this Consent

Decree in good faith and in an effort to avoid expensive and

lengthy litigation but without any admission or finding of

liability or fault as to any allegation or matter.

Il GENERAL PROVISIONS

A. Definitions

The term “AEIDEIR” means the August 2000

Additional Environmental Information to the Draft

Environmental Impact Report’, a supplemental environmental

document prepared by the County of Los Angeles pursuant to

the California Environmental Quality Act.

The term “BLM” means the United States Department

of Interior, Bureau of Land Management.

The term “Board” refers to the Board of Supervisors for

the County of Los Angeles.

The term “CEMEX” means CEMEX, Inc. as well as its

predecessors-in-interest in contract with the BLM, including

Transit Mixed Concrete Company (“TMC”), and Southdown,

Inc. (“Southdown”).

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The term “CEMEX Application shall mean the

application for a surface mining permit, first submitted by

CEMEX’s predecessor-in-interest to the County of Los

Angeles in 1991, and described as surface Mining Permit

Number 91-165(5), for the Project as defined herein.

The term “CEQA” means the California Environmental

Quality Act, California Public Resources Code §§ 21000 et

seq., and the regulations implementing that statute, located at

Title 14 of the California Code of Regulations §§ 15000 er

seq.

The term “CEQA Findings” refers to the findings and

determinations made by the County relating to the extent to

which the Project results in potential environmental impacts

and the effect of measures imposed to mitigate those impacts

as required pursuant to CEQA.

The term “Complaint” means the Complaint for

Declaratory and Injunctive Relief, Writ of Mandate, and

Damages, as amended, filed by CEMEX in this action.

The term “Complaint-in-Intervention” means the

Complaint for Declaratory and Injunctive Relief filed by the

United States of America, plaintiff-in-intervention in this

action.

The term “Consent Decree” means the recitals and

provisions set forth herein as stipulated and agreed to by the

Parties, and which becomes effective and controlling on all

Parties immediately following entry as a final judgment in this

case by the U.S. District Court, Central District of California.

The term “County” means the County of Los Angeles,

a subdivision of the State of California, and all its sitting

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Supervisors, officers, agents, employees and all other persons

associa‘ed with or affiliated with the County and acting in

their official capacity relating to such association or affiliation.

The term “County-Approved Project” means:

a. The Federally-Approved Project; and

b. The environmental mitigation measures identified

in the County’s January 2004 Proposed Mitigation

Monitoring and Reporting Plan (“January 2004

Proposed MMRP”), and

c. The Project Conditions as negotiated between the

Parties during Court-ordered mediation in this

case. Attached hereto as Exhibit H are the

Project Conditions agreed to by the Parties during

the course of the settlement negotiations. The

Project Conditions represent additional Project

requirements above and beyond the mitigation

measures for the Project included as part of the

County’s review pursuant to CEQA, and have

been agreed to by CEMEX and the United States

in an effort to avoid expenses and undue delay on

implementation of the Project.

The term “Court” means the United States District

Court, Central District of California.

The term “DPW” means the County of Los Angeles’

Department of Public Works.

The term “Effective Date” means the date this Consent

Decree is entered as a final judgment by the Court.

The term “EIR” means Environmental Impact Report, as

defined pursuant to CEQA and its implementing regulations.

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The term “EIS” means Environmental Impact Statement,

as defined pursuant to NEPA and its implementing

regulations.

The term “ESA” means the Endangered Species Act, 16

U.S.C. §§ 1531 et seq. and its implementing regulations.

The term “Federal Contracts” means the Federal

Contracts for the Sale of Units of Materials No. 20139 and

22901, issued by the BLM to Transit Mixed Concrete

Company, CEMEX’s predecessor-in-interest, in March 1990.

The term “Federally-Approved Project” means the

Project as analyzed by the BLM in the Final EIS published in

June 2000, as approved by the BLK in the August 2000

Record of Decision, and as upheld by the Interior Board of

Land Appeals on January 8, 2002;

The term “FLPMA” means the Federal Land Policy and

Management Act, 42 U.S.C. §§ 1701 et seq.

The term “IBLA” means the Interior Board of Land

Appeals, an appeals body within the Office of Hearings and

Appeais of the U.S. Department of Interior.

The term “Lawsuit” shall mean that certian action

entitled CEMEX, Inc., et al. v. County of Los Angeles, et al.,

United States District Court for the Central District of

California, Case No. CV-02-747 DT (FMOx).

The term “Materials Act’”’ means the Materials Act of

1947, 30 U.S.C. §§ 601 et seq.

_ The term “NOI” means Notice of Intent, and is an

official public notice as provided for pursuant to CEQA.

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The term “NEPA” means the National Environmental

Policy Act, 42 U.S.C. §§ 4231 et seq., and its implementing

regulations, contained at Title 40 of the Code of Federal

Regulations §§ 1500 et seq.

The term “Parties” means CEMEX, the United States,

and the County.

The term “Planning Staff’ means the Los Angeles

County Department of Regional Planning staff.

The term “Project” means the Soledad Canyon Sand and

Gravel Mining Project, located in Los Angeles County,

California, as provided by BLM Contracts for the Sale of

Units of Material Nos. CA-20139 and CA-22901, including

the mining and production of 56.1 million tons of Federally-

owned sand and gravel on approximately 460 acres.

The term “Project Findings” refers to the findings and

determinations made by the County relating to the Project’s

compliance with County regulations.

The term “Project Site” means the federally-owned

mineral estate located on a 460-acre parcel in the Soledad

Canyon area of unincorporated Los Angeles County and

which is subject to the Federal Contracts.

The term “ROD” means the BLM’s record of Decision

for the Project, issued on August 1, 2000 pursuant to NEPA.

The term “RNFSA” means the Reduced North fines

Storage Area, a section of the northern portion of the Project

Site where CEMEX had intended to place excess fine

materials that resulted as a by-product of mining activities.

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The term “RNFSA Alternative” means the Reduced

North Fines Storage Area Alternative, the Project alternative

selected by BLM as the Federally-Approved Project in the

ROD.

The term “SRHA” means the Stock-Raising Homestead

Act, 43 U.S.C. § 299.

The term “SMARA” means the Surface Mining and

Reclamation Act, California Public Resources Code §§ 1720

et seq., and its implementing regulations contained in Title 14

of the California Code of Regulations §§ 3500 et seq.

The term “SOC” means Statement of Overriding

Considerations, which identifies residual significant impacts of

a project, and benefits of project implementation, as required

pursuant to CEQA.

The term “TMC” means Transit Mixed Concrete

Company, CEMEX’s predecessor-in-interest.

B. Jurisdiction

The Court has jurisdiction over the subject matter and

over the Parties pursuant to the Declaratory Judgment Act, 28

U.S.C. §§2201 and 2202, to declare and enforce the rights and

other legal relations of Plaintiff CEMEX under Federal law,

including the Property and Supremacy Clauses of the United

States Constitution, U.S. Const. Art. TV, § 3, cl. 2 and Art.

VI, cl. 2, the Materials Act of 1947, 30 U.S.C. §§ 601 et seq.,

and regulations relating to the same, and pursuant to 42

U.S.C. § 1983 to redress the deprivation under color of

Statute, ordinance, regulations, custom or usage of rights,

privileges and immunities secured to Plaintiff CEMEX by the

Fifth and Fourteenth Amendments to the Constitution of the

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United States, as well as for money damages. Jurisdiction is

confirmed in this Court by 28 U.S.C. §§ 1331 and 1343(3),

which confer original jurisdiction on Federal District Courts in

suits to redress or prevent the deprivation of rights, privileges

and immunities as stated above. Jurisdiction in this Court is

also confirmed pursuant to 28 U.S.C. § 1345, which grants

this Court original jurisdiction of all civil actions commenced

by the United States as a plaintiff. The Court also has

jurisdiction over the subject matter on the basis of

supplemental jurisdiction pursuant to 28 U.S.C. § 1367, as

already determined by this Court. [See July 30, 2002 Order

Granting in Part and Denying in Part County of Los Angeles’

Motion to Dismiss the Second Amended Complaint for Failure

to State a Claim Upon Which Relief Can be Granted, or in the

Alternative, Motion to Abstain From the Exercise of

Jurisdiction, at 20:1 to 21:20.]

The Complaint filed herein states claims for which, if the

allegations were proved, relief could be granted. For the

purposes of this Consent Decree, the Parties waive all

objections and defenses that they may have to jurisdiction of

the Court or to venue in this District. Further, all Parties

consent to the jurisdiction of this Court and warrant not to

contest the Consent Decree. The Parties shall not challenge

the terms of this Consent Decree or this Court’s jurisdiction

to enter and enforce this Consent Decree.

C. Agents for Service of Process and Notices

All notices, requests, demands, or other communications

under this Consent Decree shall be in writing. Notice shall be

sufficiently given for all purposes as follows:

(1) When personally delivered to the recipient, notice

is effective on delivery.

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(2) When delivered by overnight delivery by Federal

Express, Airborne or United Parcel Service,

charges prepaid or charged to the sender’s

account, notice is effective on delivery, if delivery

is confirmed by the delivery service.

(3) When sent by fax to the last fax number of the

recipient known to the party giving notice, notice

is effective on receipt, provided that (a) a duplicate

copy of the notice is promptly given by first-class

or certified mail or by overnight delivery, or (b)

the receiving party delivers a written confirmation

of receipt. Any notice given by fax shall be

deemed on the next business day if it is received

after 5:00 p.m. (recipient’s time) or on a non-

business day.

(4) When sent by United States Mail, notice is

effective on receipt, after it has been deposited in

the United States mail, duly registered or certified,

with postage prepaid, and addressed a set forth

below:

To County of Los Angeles:

County Counsel, County of Los Angeles

c/o Richard D. Weiss,

Acting Assistant County Counsel

821 Kenneth Hahn Hall of Administration

500 West Temple Street

Los Angeles, CA 90012

Facsimile: (213) 617-7182

Courtesy Copy:

Fox & Sohagi

Deborah J. Fox, Esq.

ee

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10960 Wilshire Boulevard, Suite 1270

Los Angeles, CA 90024-3702

Facsimile: (310) 444-7813

To United States of America

U.S. Department of Justice

Environmental & Natural Resources Department

c/o Edward S. Geldermann, Esq.

General Litigation Section

601 D Street N.W., Room 3126

Washington, D.C. 20004

Facsimile: (202) 305-0506

Assistant United States Attorney

Vince Farhat

Room 7516, Federal Building

300 North Los Angeles St.

Los Angeles, CA 90012

(213) 894-2872

To CEMEX, Inc.

Jeffer, Mangels, Butler & Marmaro, LLP

c/o Kerry Shapiro

Two Embarcadero Center, Fifth Floor

San Francisco, CA 94111

Facsimile: (415) 398-5584

D. Parties Bound

United States: Plaintiff-in-Intervention United States

represents the interests of BLM, the U.S. Department of

Interior, and the United States of America in this action.

Under the Materials Act, the Secretary of Interior is

authorized to dispose of mineral materials on public lands of

the United States through a competitive bidding process. (30

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U.S.C. §§ 601, 602.) This authority has been delegated to

authorized agents of the BLM by the Department of the

Interior Manual. Under FLPMA, the Secretary has been

authorized to “develop, maintain, and, when appropriate,

revise land use plans which provide . . . for the use of public

lands.” 43 U.S.C. § 1712(a). “Public lands” in FLPMA is

defined to include “any interest in land owned by the United

States within the several States and administered by the

Secretary of the Interior through the Bureau of Land

Management.” 43 U.S.C. § 1712(e). The Secretary’s land-

use planning authority has been delegated to the BLM. 43

U.S.C. § 1601.0-3.

CEMEX: Plaintiff CEMEX is a Louisiana corporation

qualified to do business in the State of California. CEMEX’s

predecessors-in-interest with respect to the Project include

Southdown, Inc., dba Transit Mixed Concrete Company. The

permit and other applications for the Project at issue herein

were originally applied for by TMC, before its name changed

to CEMEX. (“TMC” and “CEMEX” are thus sometimes

used interchangeably in this Consent Decree.)

County: Defendant County of Los Angeles is a public

body, corporate and politic, and a subdivision of the State of

California. Pursuant to Section 23004 of the California

Government Code, the County is subject to this suit. Under

SMARA, the County is ordinarily responsible as “iead agency”

for review of surface mining projects, including approval of

reclamation plans and adoption of financial assurances. Under

CEQA, the County is ordinarily responsible as local “lead

agency” to analyze under State law potential environmental

effects of development projects potentially affecting the

environment that are subject to discretionary approvals,

generally including surface mining projects.

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E. Successors and Assigns

This Consent Decree and all representations, agreements

or stipulations contained herein shall constitute binding,

continuing obligations between the Parties and shall inure to

the benefit of and shall be binding upon the Parties hereto, by

and through their officials, agents, employees and successors,

and shall be binding upon their heirs, personal representatives

and permitted successors in interest.

F. Implementation of Consent Decree

1. Effective Date

This Consent Decree shall become effective immediately

upon entry by the U.S. District Court. The County shall

implement immediately all provisions of this Consent Decree,

and, as expressly stated below, no later than sixty (60) days

after the effective date of this Consent Decree, the County

shall complete all actions relating to certification and

completion of the Final EIR, adoption of Findings and the

SOC, issuance of a Surface Mining Permit, and approval of a

Reclamation Plan and Financial Assurances Cost Estimate, as

detailed herein.

2. Enforceability

A Party seeking enforcement of this Consent Decree

may file for an order to show cause why the breaching Party

should not be held in contempt and/or subject to appropriate

contempt sanctions by the Court. Any failure to timely act or

comply with the obligations set forth in this Consent Decree

which has a material adverse impact on one of the Parties shall

be deemed a material breach of this Consent Decree.

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The Court orders that this case be administratively

closed pending further order of the Court. The Court

expressly hereby retains jurisdiction over any actions relating

to the Consent Decree, its constituent parts and related actions

required pursuant thereto.

The Court further orders that if any Party reasonably

believes a Party has materially breached any of its obligations

under the Consent Decree, then pursuant to the Consent

Decree, it may file a motion in this Court seeking such a

determination. Upon making such a determination, the Court

may order whatever relief it deems appropriate, consistent

with the Consent Decree, where relevant.

In the event of a material breach which arises out of an

intentional effort by the County to materially delay, frustrate

or prevent the timely and successful implementation of the

County Approved Project, then CEMEX and the United

States may seek the additional remedy of making a Motion to

Dissolve and Set Aside the Consent Decree and seek to

reinstate the Lawsuit (“Motion to Dissolve”) and to revive the

Lawsuit as it existed as of the day prior to the execution of the

Consent Decree. In the event a Party successfully moves to

dissolve the Consent Decree, neither this Consent Decree nor

any County approvals related to this Consent Decree shall be

admissible for any purpose in the revived lawsuit. This

additional remedy is available where the County, through its

Official Policy Makers (as that term is defined herein)’, acting

' “Official Policy Makers” includes those recognized and defined

under the body of case law interpreting 42 U.S.C. § 1983 which the

Parties agree include at a minimum the County Supervisors, the County

Counsel, Department Heads, the Chief Administrative Officer, and (for

purposes of this enforcement provision) Conal McNamara, Millie Jones

and Bob Haueter for so long as they remain employed by the County.

The Parties hereby stipulate that the agreed-upon definition of the term

BEST AVAILABLE COPY

C-24

either directly or indirectly, engages in or encourages a course

of conduct intended to materially delay, frustrate or prevent

the timely and successful implementation of the County

Approved Project. The Parties specifically recognize as well

the concept of deliberate indifference and acknowledge that

this concept is also applicable in assessing the County’s

actions and whether a material breach has occurred under this

provision. Consequently, this additional remedy is also

available where the County acts with deliberate indifference

with respect to the conduct of non-Official Policy Maker

agents or employees.

It is specifically understood among the Parties that in

interpreting the preceding paragraph, intent will be determined

using an objective standard and that intent may be inferred

from conduct based on the assumption that a reasonable

person intends the natural and logical consequences of his or

her actions.

The Parties recognize that there will be a significant gap

between the time this Consent Decree was conceptualized and

the time of its implementation. Conduct occurring on and

“Official Policy Makers” and the manner in which it is interpreted and

applied herein shall not constitute an admission by any Party as to the

scope and meaning of the term “Official Policy Makers” under 42 U.S.C.

§ 1983, or any other body of law, to the extent that term may relate to

claims, assertions, or defenses in the Lawsuit or any other litigation

between the Parties. The Parties hereby recognize that as to the

individuals named any asserted acts must be within their employment

capacity while recognizing that these individuals retain certain protected

First Amendment rights which are not precluded by this Consent Decree.

The determination of whether conduct is protected by the First

Amendment, as opposed to conduct attributable to the County under this

agreement, shall be determined by a consideration of the totality of the

circumstances surrounding the conduct.

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after April 22, 2003 and before October 1, 2003, is defined as

“Retroactive Conduct.” Neither CEMEX nor the United

States shall be required to disclose Retroactive Conduct.” If

CEMEX or the United States chooses to disclose Retroactive

Conduct known to them to the County on or before October

9, 2003, then CEMEX and/or the United States may use the

Retroactive Conduct disclosure to support a Motion to

Dissolve or other motion for contempt for violation of the

Consent Decree, and the Court may consider the disclosed

Retroactive Conduct in determining the County’s actions.

Should CEMEX or the United States pursue a Motion to

Dissolve or other motion for contempt for violation of the

Consent Decree, the moving Party shall be precluded from

using any Retroactive Conduct known to it but not disclosed

to the County by October 9, 2003. Any Motion to Dissolve

or other motion for contempt for violation of the Consent

Decree seeking to use undisclosed Retroactive Conduct must

be accompanied by a declaration reciting how and when the

undisclosed Retroactive Conduct became known to CEMEX

or the United States. Undisclosed Retroactive Conduct may

be used only if such declaration (together with such other

evidence as the court may entertain or require) establishes to

the Court’s satisfaction that the undisclosed Retroactive

Conduct relied upon did not become known to CEMEX or the

United States until after October 1, 2003. Notwithstanding

the foregoing provisions of this paragraph, no Retroactive

Conduct may be used to support a Motion to Dissolve or

other motion for contempt for violation of the Consent Decree

and no Retroactive Conduct may be considered by the Court

in determining the County’s actions after expiration of 24

months following the startup of the County’s Approved

2 The option to not disclose (and forego the use of) known Retroactive

Conduct allows CEMEX and the United States to protect sources through

which knowledge of such conduct was obtained.

C-26

Project.?

Any conduct occurring after October 1, 2003 shall be

defined as “Prospective Conduct.” Prospective Conduct may

be used in connection with a Motion to Dissolve or other

motion for contempt for violation of the Consent Decree

without the need for prior disclosure by CEMEX or the

United States.

The County represents and warrants that if*will issue

instructions to its Official Policy Makers and to its non-policy

making agents and employees who are involved in any non-

incidental aspect of the implementation or administration of

the County Approved Project regarding its and their

obligations under this Consent Decree. Further, the County

specifically agrees to nclude Conal McNamara, Millie Jones,

Bob Haueter, Frank Meneses and Tom Alexander, and the

staff of each of the Board officers on this notification list. The

County agrees to republish and distribute such instructions on

an annual basis to its Official Policy Makers and to those

individuals that have a non-incidental role in the implemen-

tation of the County Approved Project during the period of

time during which this Consent Decree is in effect and being

implemented. The County represents and warrants that it will

take appropriate corrective action in the event it comes to its

attention that any of its non-policy making employees or

agents is violating the inst~::*‘ons given or otherwise acting

in a way inconsistent with the County’s obligations under this

Consent Decree. The County will take such action promptly,

so as to avoid or mitigate any materially adverse effect upon

the County Approved Project or the implementation of this

> “Startup of the County Approved Project” means when shipping off

site of materials subject toroyalty payment under the initial Bureau of

Land Management contract commences.

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Consent Decree. It is understood between the Parties that the

failure to take appropriate corrective action in response to

known violations of such instructions (or upon learning of any

action of any agent or employee inconsistent with its

obligations under this Consent Decree) will constitute

deliberate indifference on the part of the County and make

such action attributable to the County.

The County further represents and warrants that it will

take appropriate corrective action in the event it comes to its

attention that any of its Official Policy Makers are violating

the instructions given or otherwise acting in a way inconsistent

with the County’s obligations under this Consent Decree. The

taking of corrective action with respect to the actions of

Official Policy Makers will not exonerate the County from the

effects of those actions, but may be considered by Judge

Phillips or the Court in determining the scope of the penalty

on any motion to dissolve or motion for contempt violation.

The taking of corrective action with respect to the actions of

Official Policy Makers will not be evidence that such actions

are in violation of this Consent Decree.

Prior to seeking dissolution of the Consent Decree as

provided for herein, and after completion of the meet and

confer process noted below CEMEX and the United States

shall tender the matter to Retired Judge Layn R. Phillips for

the purpose of making a non-binding recommendation to the

Court as to whether or not the trigger has been satisfied to

justify this additional remedy. Judge Phillips shall

expeditiously render such a non-binding recommendation.‘

* Inthe event Judge Phillips is not available, the matter shall similarly

be tendered to retired Judge John Leo Wagner for non-binding

recommendation. In the event neither Judge Phillips nor Judge Wagner

are available, CEMEX or the United States may apply directly to the

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Although CEMEX and the United States may not move to

seek this additional remedy without first seeking a non-binding

determination from Judge Phillips, it is understood that

CEMEX and the United States may nevertheless apply to the

Court for such additional relief even in the face of an adverse

recommendation by Judge Phillips. It is further understood by

the Parties, that the Court may in its discretion grant or deny

the Motion to Dissolve or impose a sanction less severe than

dissolution of the Consent Decree.

In the event of any action, motion or proceeding among

the Parties in connection with the Consent Decree, the

prevailing Party shall be entitled to recover its reasonable

attorneys’ fees in prosecuting or defending such action,

motion or proceeding.

If either Party believes that the other Party is in violation

of this Consent Decree, said Party shall, if practicable, prior to

commencing any action to enforce this Consent Decree, first

participate in a good faith attempt to resolve said dispute, as

follows:

The complaining Party shall give written notice of the

asserted violation to the other Party. Said notice shall be in

sufficient detail to permit the respondent to evaluate the

complaint and to formulate a response. The notice shall set

forth a request for a meeting regarding the asserted

violation(s). Counsel for the Parties shall confer in a good

faith effort to cure the asserted violation, eliminate the

necessity of an enforcement action or to eliminate as many of

the disputes as possibl> It shall be the responsibility of

counsel for the complaining Party to arrange for this

conference. If all participating counsel are located within the

Court for such additional relief.

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same county of the Central District, the conference shall take

place in person at the office of the moving party’s counsel,

unless the Parties agree to meet someplace else. If all

participating counsel are not located within the same county

of the Central District, the conference may take place

telephonically. Unless relieved by written order of the Court

upon good cause shown, counsel for the opposing Party shall

confer with counsel for the moving Party within ten (10) court

days of service upon him/her of a letter requesting such

conference. The moving Party’s letter shall identify each issue

in dispute and claimed violation, shall state briefly with respect

to each such violation the moving Party’s position and specify

the terms of the resolution to be sought. Such meet and

conference process shall be in lieu of the conference of

counsel requirements set forth in the Local Rules of the

Central District of California.

If the asserted violation is not resolved to the satisfaction

of the moving party by the conclusion of the meeting of

counsel, and the moving Party does not believe that further

informal attempts by counsel will affect a satisfactory

resolution, the moving Party then may seek appropriate relief

from the Court.

3. Duration of Consent Decree

This Consent Decree shall remain in place until the

Federal Contracts between CEMEX and the United States

have expired, or are otherwise terminated by the Parties

thereto or by operation of law.

4. Complete Agreement

Except as expressly provided in Exhibit H, this Consent

Decree shall constitute the entire integrated agreement of the

C-30

Parties. There are no representations or agreements between

the Parties hereto relating to the subject matter contained

herein other than contained in this Consent Decree. This

Consent Decree (and the exhibits attached hereto and

documents incorporated herein by reference) is the complete

and final integration of all arrangements and agreements

between the Parties hereto regarding the subject matter hereof

and supersedes all prior written or oral and_ all

contemporaneous oral representations, understandings, or

agreements between the Parties regarding the subject matter

hereof. Any amendment of or supplement to this Consent

Decree must be in writing and executed by all of the Parties

hereto. This Consent Decree shall not be construed to contain

any implied covenants other than the covenant of good faith

and fair dealing.

5. Incorporation by Reference

All of the exhibits attached hereto or referenced to

herein and all documents in the nature of such exhibits, when

executed, are by this reference incorporated herein and made

a part of this Consent Decree.

6. Captions

None of the Captions of the paragraphs of this Consent

Decree shall be construed as a limitation upon the language of

such paragraphs, said captions having been inserted as a guide

and a partial index and not as a complete index of the contents

of the paragraphs.

7. Authority

Each Party hereby represents and warrants to the others

that: (1) it has the full power, right and authority to execute

C-31

this Consent Decree and hereunder, and (2) all procedures and

approvals that are necessary and required to enable it to

execute this Consent Decree and perform hereunder, and to

bind all individual or entities whom it represents, have been

followed and/or secured.

8. No Admission

The existence and execution of this Consent Decree by

CEMExX is not intended, and shall not be construed, as an

admission by CEMEX, or any of its parent corporations,

subsidiaries, or affiliates, or any of its respective officers,

directors, employees, agents shareholders, representatives or

affiliates, of any deficiency, limitation, liability, error, violation

or omission of any nature whatsoever, including without

limitation any past or current violation under CEQA,

SMARA, Los Angeles County’s Code, or any other Federal,

State or County laws or regulations.

Nothing in this Consent Decree shall be cited to as, or be

deemed, an admission by the United States that any of the

Project Conditions specified in Exhibit H, and/or any other

provision of this Consent Decree, constitute permissible

environmental regulation by the County, and do not constitute

imperinissible state and/or local land-use regulation of the

Project. Nothing in this Consent Decree shall be cited to, or

be deemed an admission by the United States that this Project

is subject to regulation under CEQA, SMARA and/or the

County’s Surface Mining Permit Ordinance, LA.M.C.

22.56.1240, and/or that the procedures required by CEQA,

SMARA, and/or the County’s Surface Mining Permit

Ordinance, constitute permissible environmental regulation of

the Project.

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By entering into this Consent Decree, the County is not

admitting any legal or equitable liability under any federal,

state, or local statute, regulation, ordinance, or the common

law, arising out of any of the occurrences alleged in the

underlying complaints.

9. Cooperation

a. Generally. The Parties hereto agree there is a duty -

of good faith and fair dealing with regard to the Consent

Decree and actions called for hereunder and agree to

cooperate in executing any other or further documents,

decisions or actions necessary to carry out the provisions of

the Consent Decree.

b. County of _Los Angeles. The County will

complete its review and approval of the Project as detailed

herein and consistent with the terms agreed to in this Consent

Decree and any additional requirements imposed by the

District Court in good faith and using due diligence, including

the following items:

° Completion and certification of a Final EIR

for the Project;

e Preparation of Findings for the Final EIR;

° Preparation of a Statement of Overriding

Considerations;

¢ Approval of a Surface Mining Pertuit;

° Approval of a Reclamation Plan;

e — Preparation of Findings for the Surface

Mining Permit; and

° Approval of Financial Assurances.

10. Release

Except as otherwise provided herein, and except as to

those obligations expressly assumed in this Consent Decree,

and further subject to the prior execution and entry of the

Consent Decree, Plaintiff and Plaintiff-in-Intervention do

hereby and forever release and discharge the County from any

and all causes of action, actions, judgments, liens, indebted-

ness, damages, losses, claims, liabilities and demands of

whatsoever kind and character in any manner whatsoever

arising from or attributable to the dispute described in the

pending Complaint and Complaint-in-Intervention.

Except as otherwise provided herein, and except as to

those obligations expressly assumed in this Consent Decree,

and further subject to the prior execution and entry of the

Consent Decree, the County does hereby and forever release

and discharge Plaintiff and Plaintiff-in-Intervention from any

and all causes of action, actions, judgments, liens, indebted-

ness, damages, losses, claims, liabilities and demands of

whatsoever kind and character in any manner whatsoever

arising from or attributable to the dispute described in the

pending Complaint and Complaint-in-Intervention.

11. Modifications to the Consent Decree

The Parties may jointly stipulate to make changes,

modifications and amendments to this Consent Decree, but

such actions shall only be effective upon review and entry by

this Court.

12. Interpretation of Consent Decree

Each of the Parties hereto has agreed to the use of the

particular language of this Consent Decree (and all attached

C-34

exhibits), and any questions of doubtful interpretation shall not

be resolved solely by any rule or interpretation providing for

interpretation against the party who causes the uncertainiy to

exist or against the draftsman.

13. Severability

If any provision of this Consent Decree is deemed or

held to be illegal, invalid or unenforceable under any present

or future laws, and the deletion of such provision would not

deny any Party the substance of the benefits intended to be

conferred or received hereunder, such provision shall be fully

severable and this Consent Decree shall be construed and

enforced as if such illegal, invalid, or unenforceable provision

had never comprised a part hereof; and the remaining

provisions hereof shall remain in full force and effect and shall

not be affected by the illegal, invalid, or unenforceable

provision or by its severance herefrom. Furthermore, in lieu

of such illegal, invalid, or unenforceable provision there shall

be added automatically as part of this Consent Decree a

provision as similar in terms to such illegal, invalid, or

unenforceable provision as may be possible to be legal, valid,

and enforceable.

In the event that any court invalidates any aspect of the

Consent Decree, then the Parties as part of their duties to

cooperate as found in Section 9 of this Consent Decree, shall

exhaust reasonable efforts to remedy any identified defect(s)

to insure that the Parties are provided the substance of the

benefits conferred under this Consent Decree. If, and only if,

the noted defects are incapable of being remedied in a way

that would allow for the successful implementation of the

County Approved Project within a reasonable time period,

after an exhaustion of the above referenced efforts, then any

Party hereto may make application to the Court entezing this

C-35

Consent Decree, to dissolve and set aside the Consent Decree

and the provisions thereof, and if the Court, upon proper

showing, grants such application, the Lawsuit shall be

reinstated and revived as of the day prior to the execution of

the Consent Decree. Prior to seeking such application, a Party

shall tender the matter to Retired Judge Layn Phillips for the

purpose of providing a non-binding recommendation to the

Court on any factual determinations including: 1) the ability to

remedy the defects; 2) the reasonable efforts of the Parties;

and/or 3)-the ability to obtain the benefit of the County-

Approved Project. Judge Phillips shall expeditiously make

such non-binding recommendation.’ Although a party may

not move to set aside the Consent Decree before first

obtaining a non-binding recommendation from Judge Phillips,

it is understood that a Party may nevertheless apply to the

Court to set aside the Consent Decree even in the face of an

adverse recommendation by Judge Phillips. The purpose of

this recommendation is to provide both the Parties and the

Court with the views of the retired judge who assisted the

Parties in reaching this Consent Decree before any Party

moves to set it aside. In making the factual determination as

to whether the benefit of the County Approved Project is

retained, the determination shall focus on whether the efforts

to correct any defects on remand have been unreasonably

delayed, or to the extent the project is approved, whether the

project has been approved in substantial conformance with the

conditions found at Exhibit H. In the event that both Retired

Judge Layn Phillips and Retired Judge John Leo Wagner are

unavailable to render a non-binding recommendation, a party

° In the event Judge Phillips is not available, the matter shall similarly

be tendered to retired Judge John Leo Wagner for non-binding

recommendation. In the event neither Judge Phillips nor Judge Wagner

are available, CEMEX or the United States may apply directly to the

Court for such additional relief.

C-36

may move to set aside the Consent Decree without first having

to seek a non-binding recommendation.

14. Waiver

Neither this Consent Decree, nor any of the terms

hereof, may be waived, discharged, modified, or amended

orally, but rather only by an instrument in writing signed oy

the Party against whom any such waiver, discharge,

modification or amendment is sought.

15. Attorneys’ Fees

Each side shall bear its own attorneys’ fees and costs in

this underlying litigation that is the subject of the Complaint

and the Complaint-in-Intervention.

16. Limitations as to the United States

Nothing in this Consent Decree shall be interpreted as,

or shall constitute, a commitment or requirement that the

United States, or any party or agency thereof, obligate or pay

funds, or take any other action in contravention of the Anti-

Deficiency Act, 31 U.S.C. § 1341, or any other applicable

appropriations law.

Nothing in this Consent Decree shall be construed to

deprive a federal official of authority to coniply with all

applicable federal statutes and regulations, or to revise, amend

or promulgate regulations.

17. Counterparts; Facsimile

This Consent Decree may be executed simultaneously or

in any number of counterparts, each of which shall be deemed

C-37

an original, but all of which together shall constitute one and

the same Consent Decree. Facsimile signatures on this

Consent Decree shall be binding as if original.

18. Reservation of Police Power

Subject to the express limitations and obligations set

forth in this Consent Decree, nothing shall prevent the County

from exercising its police power in order to protect the health,

safety and welfare of the public, and, subject to the foregoing

limitations, the County does herein reserve the right to take

any lawful enforcement action predicated on the same.

Nothing in this provision shall be corstrued as authorizing the

County to take action that is preempted by federal law.

G. Subsequent Actions Affecting Consent Decree

The Parties hereby agree to defend the provisions of this

Consent Decree and further specifically agree not to

knowingly and materially facilitate, induce or assist in the

bringing or prosecution of any administrative or judicial

challenges to the Consent Decree or the County Approved

Project, including without limitation, through actions taken to

influence the South Coast Air Quality Management District or

other agencies with regulatory authority over the County

Approved Project.

The Parties shall timely notify each other of any court or

administrative challenge to this Consent Decree, or any

challenge to the successful implementation of the County

Approved Project. In the event that any provision of this

Consent Decree is challenged in any local or state court,

removal to the federal court entering this Consent Decree shall

be sought by the Parties. The terms and obligations of this

paragraph shall be in addition to, and shall not modify, the

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obligations set forth as Condition 3 of the Project Conditions

set forth in Exhibit H, attached hereto.

il. STIPULATED FACTUAL BACKGROUND

A. Project Overview

The Project Site is a “split estate” in which the mineral

estate is owned by the United States of America, and the

surface estate is now held in private ownership, following the

Federal Government’s transferring, also known as “patenting”’,

of the surface estate into private ownership in 1934, pursuant

to the Stock-Raising Homestead Act of 1916, 43 U.S.C. §299

“SRHA”).

The Project Site is located in the Soledad Canyon area

of unincorporated Los Angeles County, approximately 30

miles from downtown Los Angeles. In 1987, the Project Site

and »djacent areas were formally designated by the State of

California, State Mining and Geology Board as a “Regionally

Significant Construction Aggregate Resource Area” pursuant

to SMARA. This designation was based upon the quality of

the mineral material, and the need for and diminishing

availability of such material in the region. State designation

seeks to protect identified important mineral resources from

permanent loss due to encroachment by urbanization.

Under the Materials Act the Secretary of the Interior is

authorized to dispose of mineral materials on public lands of

the United States through a competitive bidding process. (30

U.S.C. §§ 601, 602). This authority has been delegated to

authorized agents of the BLM. (See 43 C.F.R. Subpart 3610).

In 1989, the BLM offered for competitive sale the rights to

mine up to 100 million tons of Federally-owned sand and

gravel aggregate material on the Project Site.

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The BLM’s decision to offer the aggregate material for

sale followed a 1983 U.S. Supreme Court ruling clarifying that

gravel is a mineral reserved in the Federal “mineral estate”

under the SRHA. (Watt v. Western Nuclear, 462 U.S. 36, 103

S.Ct. 2218 (1983)). At that time, an existing mining operator,

Canyon Country Enterprises, Inc., dba Curtis Sand and Gravel

(“Curtis”), was mining the Project Site without any federal

authorizations. The United States engaged in a series of

actions against Curtis for mineral trespass and related claims,

resulting in a 1988 settlement with Curtis of the mineral

trespass claim, the terms and implementation of which were

subsequently upheld by the Ninth Circuit Court of Appeals.

The County was not involved in the prior lawsuit with Curtis.

In 1989, the BLM prepared an Environmental

Assessment pursuant to NEPA for the Notice of Sand and

Gravel Sale, analyzing the sale and removal by truck

transportation of up to 100 million tons of sand and gravel,

after specifically consulting with the County of Los Angeles

Department of Public Works (“DPW’) in the development of

the analysis. As stated in the 1989 Environmental

Assessment, the decision by the Federal Government to allow

further mining to continue at the Project Site, and thus to put

the material up for competitive bid, was based on the

following: (1) resolution in 1988 of the Curtis trespass

litigation, (2) the 1987 State designation of the mineral

resources at the Project Site; (3) the County’s identified need

for construction aggregate material; and (4) the years of prior

mining, from 1968 to 1988, consistent with the established

County zoning at the Project Site for mining.

In September 1989, the BLM determined CEMEX (then

TMC) to be the successful bidder, and in March 1990, the

BLM issued the two Federal Contracts to TMC, conferring

upon TMC the right to produce and sell approximately 56.1 |

C-40

million tons of sand and gravel.

-In 1991, following an unsuccessful District Court

challenge by Curtis, the Ninth Circuit upheld the validity of the

bid process and the award of the Federal Contract to TMC.

B. Federal Environmental Review of the Project

In May 1990, as part of the implementation of the

Federal Contracts, TMC submitted to the BLM for review a

proposed mining and reclamation plan allowing for aggregate

mining and production of ready-mixed concrete from the

Project Site. On October 16, 1995, the BLM published in the

Federal Register a Notice of Intent (“NOT”) to prepare a Draft

EIS pursuant to the provisions of NEPA, to analyze the

potential environmental impacts of the proposed action.

On January 14, 1998, following formal consultation with

the BLM pursuant to the Endangered Species Act (“ESA”),

16 U.S.C. §§ 1531 et seq., the U.S. Fish and Wildlife Service

(“Service”) released its “Biological Opinion for Transit Mixed

‘Concrete’s Application to Mine Sand and Gravel in Soledad

Canyon” (“1998 Biological Opinion’) which is incorporated

into this Consent Decree by this reference. The 1998

Biological Opinion addressed possible impacts of the Project

on the unarmored threespine stickleback fish (Gasterosteus

aculeatus williamsoni) (“UTS”), and found that the Project

was not likely to jeopardize the continued existence of the

UTS. The 1998 Biological Opinion included a statement

allowing for “incidental take” of this species.

In April 1998, CEMEX informed the County of its

position that the on-going delays by the County in the

County’s concurrent environmental review process were

delaying the BLM EIS process.

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On June 2, 2000, the BLM completed and published the

Final EIS for the Project, consisting of eight volumes and over

2,000 pages. The Final EIS, which is incorporated into this

Consent Decree by reference, incorporated changes and

additional mitigations based on public comments received on

the Draft EIS, a Supplemental Draft EIS (“SDEIS”), and

technical appendices, including a formal “conformity

determination” and accompanying analysis that the Project is

in conformity with all applicable Federal and state air quality

regulations. The Final EIS concluded that all potential

adverse impacts were mitigated to a level of less than

“significant” but for two: air quality and visual. The Final EIS

not only included written responses to written and oral public

comments on the Draft EIS and SDEIS, but also included

responses to comments on the Los Angeles County Draft EIR

for the Project, which was being prepared contemporaneously.

On August 1, 2000, the BLM published its Record of

Decision (“ROD”). A true and correct copy of the August 1,

2000 Record of Decision is attached hereto as Exhibit B. A

“record of decision” documents a Federal agency’s decision-

making process, e.g., for an “approval”, including the

considerations and factors leading up to the ultimate decision,

with respect to an application for permit or other such agency

action. The Rod approved the following components

collectively comprising the Federally-Approved Project:

° A Reduced North Fines Storage Area Alternative

("RNFSA Alternative”), allowing for extraction

and processing of 56.1 million tons of sand and

gravel by TMC over approximately 20 years, in

conformance with the Federal Contracts issued in

1990;

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° A Mining and Reclamation Plan as described in the

Final EIS, consistent with the RNFSA Alternative;

° Incorporation of the terms and conditions of the

1998 Biological Opinion for the UTS, and a

Habitat Protection Plan included in the Final EIS;

° Findings that traffic impacts were minimized,

thereby allowing delivery of said mineral material

‘ product to the market by way of truck

transportation;

° Findings that water resources were adequately

protected, thereby allowing diversion of water

from the Santa Clara River;

° Findings that the Project as approved conformed

with all applicable local, State and Federal laws,

regulations and statutes pertaining to air quality;

and

° Findings that public health and safety are

: protected, based on coordination and fact-finding

with agencies and organizations including the

South Coast Air Quality Management District, the

U.S. Environmental Protection Agency, and the

Southern California Association of Governments.

In September 2000, various Project opponents filed appeals of

the ROD with the IBLA.

In May and June of 2001, biologists hired by Project

opponents discovered arroyo toad (Bufo Californicus)

tadpoles, a Federally-listed species under the ESA, in the

Santa Clara River in a portion of the Project Site. Following

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this discovery, the BLM re-initiated consultation with the

Service pursuant to the ESA, and issued a Supplemental

Biological Assessment on August 6, 2001. Following this, the

Service issued a new Biological Opinion (“2001 Biological

Opinion”), which is incorporated herein by this reference,

finding that the Federally-Approved Project was not likely to

jeopardize the continued existence of the arroyo toad.

On January 8, 2002, following fifteen months of

extensive briefing and review, the IBLA published a decision

affirming the ROD and the BLM’s analysis of the

environmental impacts of the Federally-Approved Project

under NEPA. (Exhibit C hereto)

C. County Environmental Review of the Project

The County’s environmental review under CEQA began

in May 1991, when TMC submitted to the County an

application for a surface mining permit and approval of.a

reclamation plan, in accordance with SMARA and the

County’s surface mining permit ordinance.

In 1993, a “Screencheck” (i.e., internal or adminis-

trative) Environmental Impact Report (“EIR’’) for the Project

was prepared by TMC in accordance with CEQA and

submitted to the County Department of Regional Planning

(“Planning Staff’). The Screencheck EIR was subject to

extensive environmental review over a number of years by the

County. In response to County comments, an updated mining

and reclamation plan was submitted to the County in 1996.

Beginning in 1995, both the BLM, on at least one

occasion, and TMC, on several occasions, urged the County

to prepare a joint environmental document in compliance with

both NEPA and CEQA in order to avoid unnecessary delays

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and costs, but the County rejected this suggestion on multiple

occasions.

The County environmental review went through a long

review process beginning in 1991 and continuing through

2001. CEMEX alleges that adding to the delay was the

County’s review of the Bee Canyon mobile home project and

a site adjacent to the Project Site, which was at one time

proposed on a portion of the Project Site, and which

potentially conflicted with development of the Project,

including removal of 400,000 tons of Federally-owned mineral

from the Project Site. The Bee Canyon mobile home project

was finally taken off calendar in part due to CEMEX’s and the

BLM’s opposition.

In February 1999, a completed Draft EIR was then

circulated by the County for nine months of public review and

comment between February 1999 and November 1999, more

than seven months longer than the 45-day review period

required under CEQA.

A document entitled Additional Environmental

Information to the Draft EIR document (“AEIDEIR”) was

later prepared in August 2000, and circulated for a 60-day

public review period (until October 17, 2000), and the County

noticed a public hearing on the CEMEX appeal and County

AEIDEIR for October 24, 2000. The AEIDEIR was prepared

in order to make the Project description in the County’s EIR

consistent with the BLM’s published June 2000 Final EIS and

approved August 2000 ROD, by re-describing the proposed

Project to now consist of the previously analyzed RNFSA

Alternative, i.e., the Federally-Approved Project, which had

been recommended for approval by the County Planning Staff

back in April 1999, and thus provided only limited new

environmental analysis beyond what was presented to the

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Planning Commission or in the BLM’s Final EIS.

Eight years after CEMEX submitted its application to

the County in-1991, the hearing process before the County

formally began with the Planning Commission in April 1999.

In April 1999, County Planning Staff issued a Staff

Analysis for the Project, wherein it recommended approval of

the RNFSA Alternative, i.e. the Federally-Approved Project,

based on the Draft EIR and County Staff's conclusion that it

was the most feasible “environmentally superior alternative”

for the proposed Project. The Staff Report prepared by the

County’s professional Planning Staff recommended approval

in part based on the following: the need for additional

permitted aggregate resources in Los Angeles County; the

State of California’s designation of Soledad Canyon area

(including the Project Site) as a regionally significant mineral

resource; and the fact that the Project would provide needed

material with fewer truck miles traveled and fewer air

emissions than aggregate sources in more distant locations.

A total of over thirteen months of “formal” public

commenting under CEQA has been conducted for the Project,

which is in addition to the over eight months of “formal”

public review and comment for the various BLM EIS

documents from May 1999 to January 2000.

Following a public hearing process which spanned seven

hearing sessions over many months and allowed for public

testimony on the Project, the Planning Commission voted to

deny the surface mining permit application for the Project.

On March 13, 2000, CEMEX appealed the Planning

Commission’s action to the Los Angeles County Board of

Supervisors (“Board”).

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On October 17, 2000 the Board extended the AETDEIR

comment period for another 60 days, until December 26,

2000, and continued the hearing process for three months,

until January 23, 2001, notwithstanding the fact that no new

information was added.

In the minute order for the January 23, 2001 public

hearing session, the Board instructed the Planning Staff to

close the public hearing with respect to further environmental

comments on the CEMEX Application “as described to date,”

and to prepare a Final EIR and Statement of Overriding

Considerations (“SOC”)

However, the Board voted to continue the hearing for

another three months, until April 24, 2001, after CEMEX

expressed its willingness to meet with project opponents, the

City of Santa Clarita and community representatives, to

discuss possible Project modifications and mitigation

measures.

Between January 2001 and April 2001, CEMEX

engaged in a series of compromise negotiations with various

project opponents, City and community members. These

negotiations did not produce a settlement.

On April 24, 2001, the Board conducted the next session

of its continued hearing on the Project, at which the Board

indicated an “intent to deny” (not approve) the Project, but

directed its Planning Staff to report back to the Board at a

scheduled June 26, 2001 hearing with a detailed analysis of

various Project “mitigation measures” proposed by Project

opponents, City and community members. Pursuant to this

directive, the Planning Staff requested that CEMEX provide

detailed information on these mitigation measures.

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Prior to the scheduled June 26, 2001 public hearing, as

discussed above, biologists hired by Project opponents (the

City of Santa Clarita) located arroyo toad tadpoles on the

Project Site. Based on this discovery, CEMEX requested the

June 26 hearing to be continued for thirty days to allow the

BLM to consult with the Service under the ESA. The County

Director of Planning, however, requested a sixty day

continuance. At its June 26 public hearing, the Board

continued the hearing to August 28, 2001.

On August 7, 2001, an item was placed on the Board’s

calendar to continue the Project hearing because the federal

government had not completed its analysis of the arroyo toad.

CEMEX requested to be heard on the item. Following this

discussion, the Board determined to continue the hearing until

November 27, 2001.

On November 5, 2001, the Planning Staff issued a

Report (“November Staff Report”) analyzing the conditions

and mitigations proposed by the Project opponents, City and

community members. The Executive Summary in the

November Staff Report contained a statement from County

Counsel discussing the legal relationship between the limited

County environmental review process and the Federal

Government’s land-use decision-making process regarding

Federal resources.

On November 13, 2001, the County publicly distributed

a proposed Final EIR which included a discussion regarding

the arroyo toad and the Planning Staff considered this

se ironmental document adequate for certification under

CEQA.

During the November 27, 2001 public hearing, the

Department of Public Works, for the first time, publicly

C-48

articulated concerns relating to the traffic analysis used in the

EIR, which analysis had been under review by the County for

over three years. Based on this, the Board voted again to

continue the public hearing for the Project. A week later,

during a December 4, 2001 hearing of the Board, the Board

voted to continue the Project.

On December 20, 2001, the County sent a letter to

CEMEX informing CEMEX of various concerns the County

had regarding the traffic analysis. CEMEX and the County

exchanged several letters over the next few months relating to

the County’s traffic demands.

On January 25, 2002, CEMEX filed the Complaint in

this action.

In February 2002, the County DPW prepared a report

and “provisional” analysis seeking to apply an alternative

traffic methodology (“New DPW Methodology”) for the

Project’s traffic analysis different than the methodology

contained in the November 2001 proposed Final EIR (“ EIR

Traffic Methodology”) which previously had been considered

adequate by the County Staff including DPW. Under the New

DPW Methodology, new potential traffic impacts on Soledad

Canyon Road were identified by DPW. Also in February

2002, Planning Staff prepared a report recommending Project

denial in light of the DPW report.

On February 25, 2002, the day before the hearing on the

Project, CEMEX submitted to the Board a detailed letter

responding to the February 2002 DPW and Planning Staff

reports, and establishing the validity of the EIR Traffic

Methodology, including substantial additional documentation

to that effect.

ee ee

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On February 26, 2002, the Board conducted the last

session of its public hearing on the Project, and voted 5 to 0

to indicate its intent to deny the Project as reflected in the

February 26, 2002 minutes of the Board of Supervisors. Little

if any attention was given at the hearing to the new

information contained in CEMEX’s February 25, 2002

submittal.

As of the February 26, 2002 hearing, there were

approximately nineteen continued public hearing sessions on

the CEMEX Application before the Regional Planning

Commission and the Board of Supervisors, including at least

ten public hearing sessions with public comment and/or

testimony.

On or about March 8, 2002, the County released

Minutes of the Board’s February 26, 2002 public hearing,

describing the Board’s vote to close the public hearing and

indicate its intent to deny the applicant’s (CEMEX’s) appeal

and to deny the permit as.currently presented to the Board,

and instructing County Counsel to prepare findings for denial.

Thus, the Board twice, on April 24, 2001 and on February 26,

2002, voted its intent to deny the CEMEX Application

following the Regional Planning Commission’s vote to deny

the CEMEX Application in February 2000.

On April 18, 2002, the County Counsel released its

proposed “Findings of the Board of Supervisors and Order —

Surface Mining Permit Number 91-165(5),” consisting of

some thirty pages of findings, conclusions, and an order for

denial of the Federally-Approved Project (collectively, the

“Findings’’).

On April 23, 2002, the Board adopted the Findings and

thereafter, the Board released minutes containing the-erder

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formally denying the Project.

Following the County’s denial of the Project in April

2002, CEMEX filed a “protective” appeal with the State

Mining and Geology Board (“SMGB”), in order to ensure

exhaustion of administrative remedies, while asserting in the

appeal that the SMGB lacked jurisdiction to hear the appeal

due to preemption and other federal issues underlying

CEMEX’s challenge to the County’s denial. Over the

County’s objections, the SMGB agreed with CEMEX,

concluding that the SMGP lacked jurisdiction, and dismissed

the protective appeal. In its formal decision issued on May

22, 2002, the SMGB Chairman further concluded that “the

public record indicates delay and indecision by Los Angeles

County in its processing of this surface mining application.

The County’s conduct in this area is surprising given the

surface mining infrastructure already developed and surface

mining history of the mineral lands in question. . .”

D. The Pleadings and the Parties Allegations

1. CEMEX’s Allegations -

° CEMEX’s Complaint seeks declaratory and

injunctive relief to prevent the ongoing inter-

ference with and frustration of the implementation

of the Federally-Approved Project. Alternatively,

CEMEX’s Complaint seeks damages for violations

of CEMEX’s constitutional rights.

° CEMEX’s Complaint alleges that the County’s

continued delay, frustration, and ultimate denial of

the Federally-Approved Project are preempted by

federal law as well as federal decisions determining

whether to mine, and the nature, scope and extent

C-51

of mining of sand and gravel at the Project Site

and implementing these Federal laws and decisions

through the Federally-Approved Project.

CEMEX’s Complaint further alleges that the

County engaged in a process designed to result in

a “de facto” denial of the Federally-Approved

Project through a seemingly endless politically-

driven review process before the County, including

nearly a decade of environmental review, multiple

series of delays, changing and inconsistent

environmental review standards, excessive,

unreasonable and infeasible proposed Project

conditions, and multiple expressions of intent to

deny local approval of the Federally-Approved

Project. f

CEMEX’s Complaint alleges that on April 12,

2002, CEMEX filed its First Amended Complaint

following the Board’s February 26, 2002 vote of

intent to deny the Federally-Approved Project on

alleged procedural grounds, identifying CEMEX’s

filing of this underlying action and CEMEX’s so-

called “non-cooperation” as precluding the County

from completing the environmental review process

and thus warranting denial of the Federally-

Approved Project.

CEMEX’s Complaint alleges that on May 10,

2002, CEMEX filed its Second Amended

Complaint following the Board’s adoption of an

order to deny the Federally-Approved Project,

accompanied by findings supporting the denial that

now articulated substantive grounds for the denial

(compared to the previous alleged procedural

grounds for the vote of intent to deny).

C-52

CEMEX’s Complaint alleges that the County

improperly sought to circumvent Federal laws and

decisions and to frustrate implementation of the

Federally- Approved Project by engaging in, under

the auspices of the environmental review process,

a series of pretextual actions for the purpose of

achieving project delays. CEMEX’s Complaint

alleges that the County further utilized the

environmental review process to add an ever-

growing number of mitigation measures and

conditions to the Federally- Approved Project in an

effort to frustrate its implementation. Among

them included the imposition of new mitigation

measures and conditions that would, if applied, be

in direct conflict with the plan of mining

operations in the Federally-Approved Project.

CEMEX’s Complaint alleges that the County

repeatedly attempted to engage in inappropriate

land use decision-making for the Federally-

Approved Project, notwithstanding the preemptive

effect of federal mining laws and relevant federal

approvals, including the ROD approving

Federally-Approved Project. CEMEX’s Complaint

details how the County repeatedly subjected the

Project to analysis to consider various alternatives

to the Project that would have made imple-

mentation of the Federally-Approved Project

infeasible, including: the use of “rail-haul” (i.e.,

transportation of mined sand and gravel from the

Project Site by way of a new rail line instead of by

truck); as well as reduction in the overall quantity

of sand and gravel to be mined and produced (in

conflict with the Federal Contracts and ROD

which authorize mining and production of 56.1

C-53

million tons of production).

CEMEX’s Complaint further alleges that during a

November 2001 public hearing on the Federally-

Approved Project, the County improperly

questioned the validity of the EIR Traffic

Methodology, notwithstanding the fact that the

__ EIR Traffic Methodology at that time was known

to the County in the EIR for many years and was

one of two acceptable traffic methodologies used

in the County, and notwithstanding the fact that

the Planning Staff and DPW staff had authorized

use of the then-existing EIR Traffic Methodology

in 1997.

CEMEX’s Complaint details events at that

November 2001 public hearing and thereafter

demonstrating that further review by the County

would be futile and would result in further

frustration of the Federal approvals, including

allegations that segments of the Board appeared to

be exerting political influence over County staff to

compel re-examination of traffic impacts, even

though this issue was previously analyzed over a

period of years. CEMEX’s Complaint alleges that

this effort was made in order to try to create

further delays and as a pretext to impose onerous

and anti-competitive project conditions (e.g., rail-

haul) that could not be implemented without

conflicting with the existing Federal decisions,

notwithstanding the fact that the County’s own

attorneys publicly acknowledged that conditions

that frustrated or rendered infeasible the Federal

decisions were impermissible.

C-54

CEMEX’s Complaint alleges that the Board

ultimately denied the Federally-Approved Project

on-alleged procedural grounds relating to the last

minute change in traffic methodology, even though

the Board’s findings in support of the denial

purported to support project denial based on

substantive grounds, and even though the Board

had voted its intent to deny on February 26, 2002

based on alleged procedural deficiencies absent

discussion of the aforementioned substantive

issues. CEMEX’s Complaint alleges that the

County made these substantive findings supporting

denial even though no public hearing or other

process had been conducted to reach these

conclusions.

CEMEX’s Complaint alleges that the County’s

actions, including delay of hearings on the

Federally-Approved Project, excessive

environmental review, shifting standards of review,

and other conduct, has deprived CEMEX of due

process of law as provided by the United States

Constitution and in violation of Section 1983 of

Title 42 of the United States Code of Laws.

CEMEX’s Complaint alleges that the County and

its officers acting under color of law, have sought

to impose conditions and requirements on

CEMExX and the Federally-Approved Project, and

have subjected CEMEX through its review of the

Federally-Approved Project to a review process,

substantially different from that imposed on

similarly situated applicants, thus denying CEMEX

equal protection of law in violation of the United

States Constitution and Section 1983 of Title 42

C-55

of the United States Code of Laws.

CEMEX’s Complaint alleges that pursuant to the

requirements of CEQA, the County was required

to certify a Final EIR for the County-Approved

Project within one-year’s time from the date

CEMEX submitted a complete application.

CEMEX’s Complaint alleges that CEMEX (then,

TMC), submitted its application for a surface

mining permit and reclamation plan in May 1991,

but that the County never certified a Final EIR for

the Project, in violation of CEQA’s one-year

requirement.

CEMEX’s further alleges that principles of federal

preemption, based on federal law and the federal

decisions implementing the Federally-Approved

Project, preclude a protracted County environ-

mental review process including with regard to

certifying the Final EIR.

CEMEX’s Complaint alleges that the County’s

actions in delaying and ultimately in denying the

Federally-Approved Project, amounted to a

violation of the Takings Clause of the’ United

States Constitution by depriving CEMEX of all

economically beneficial use of its property interest

in the Federal Contracts with the United States

and the ROD, including all the conditions,

decisions and approvals relating thereto, and that

such action further violated Section 1983 of Title

42 of the United States Code of Laws.

CEMEX’s Complaint alleges that the County’s

actions in delaying and ultimately denying the

C-56 -

Federally-Approved Project amounted to inverse

condemnation in violation of the California

Constitution, Article 1, Section 9.

CEMEX’s Complaint seeks declaratory and

injunctive relief either preempting further County

review of the Federally-Approved Project, or

alternatively, judgment declaring that the County

must issue a surface mining permit and reclamation

plan, consistent with the terms and conditions in

the Federal Contracts and ROD.

CEMEX’s Complaint seeks damages for violations

of due process, equal protection and inverse

condemnation, or alternatively, under the Takings

Clause of the U.S. Consitution.

United States Allegations

Plaintiff-in-Intervention United States, on behalf of

the BLM, intervened as a plaintiff in this action to

protect its interests in the Federally-owned sand

and gravel mineral materials at the Project Site, as

well as its interests in royalty payments from

CEMEX, and its interests in the various federal

approvals for the Federally-Approved Project.

In its Complaint-in-Intervention, the United States

alleges that the County may impose only limited

environmental regulations on the Federally-

Approved Project, and that the County may not

exercise environmental authority over the

Federally-Approved Project in such a manner as to

veto the BLM Federally-Approved Project,

impose unreasonable restrictions on the Federally-

C-57

Approved Project, or indefinitely delay final

environmental review of the Federally-Approved

Project.

In its Complaint-in-Intervention, the United States

alleges that the County may not lawfully, in the

name of environmental regulation, engage in land-

use regulation of federally-owned property,

including the federal mineral estate on which the

Federally- Approved Project is located.

In its Complaint-in-Intervention, the United States

seeks to prevent the County from “further

interference” with the Federal Contiacts. The

United States alleges that by engaging in

unreasonable delay in completing its purported

environmental review of the Federally- Approved

Project, and by denying CEMEX’s application for

a surface mining permit, the County has effectively

blocked the BLM’s mineral materials sales to

CEMEX, and that the County has also interfered

with the BLM’s mineral materials sales program

by seeking to impose land-use restrictions and

other unreasonable conditions on CEMEX’ use of

the federally-owned mineral estate authorized by

the BLM.

In its Complaint-in-Intervention, the United States

alleges that the County’s delay and ultimate denial

of a surface mining permit stands as an obstacle to

the fulfillment of the congressional purposes

behind the Materials Act and FLPMA, and thus is

preempted by federal law.

C-58

In its Complaint-in-Intervention, the United States

seeks declaratory and injunctive relief preempting

the County’s denial of CEMEX’s surface mining

permit application, as well as preempting the

County’s efforts to implement State and local land

use policies on the federally-owned mineral estate.

In its Complaint-in-Intervention, the United States

seeks declaratory and injunctive relief preempting

the County’s unreasonable delay in processing

CEMEX’s surface mining permit application.

County Allegations

The county alleges that it has not unreasonably

delayed this matter, and asserts that the Federal

approval process took considerable time to

complete, and that CEMEX has acknowledged

that large mining projects may take up to ten years

to be permitted.

The County alleges that CEMEX’s proposed

mining Project was not treated differently from

similarly situated projects, that this Project to mine

56 million tons of marketable sand and gravel over

a 20 year period is larger in scale than prior

County mining projects, and that CEMEX was not

intentionally singled out for unequal treatment for

impermissible or arbitrary reasons.

The County alleges that its denial of the CEMEX

Application was based in part on Plaintiff's failure

to demonstrate that the CEMEX Application met

applicable State and County requirements, as well

as Plaintiffs failure to cooperate in the

C-59

recirculation of the EIR for the Project, as

required by CEQA. On January 25, 2002, the

applicant initiated litigation in federal court against

the County regarding its consideration of the

applicant’s surface mining permit application.

Among other things, the Plaintiff sought injunc-

tive and mandate relief to require the County to

certify the FEIR in its present form and to prevent

the County from further evaluating the environ-

mental impacts of the CEMEX Application, or

from conducting further environmental analysis

and/or, from recirculating any additional environ-

mental traffic documentation regarding the

CEMEX Application.

The County alleges that it did not seek to prohibit

all mining on the site or reclassify the site’s land

use designation. Rather, the County alleges it

sought to regulate the proposed mining use

pursuant to its police powers, as they relate to the

application of reasonable environment-' and

resource-protective measures.

The County alleges that CEMEX’s substantive

due process claim fails as a matter of law.

The County alleges that CEMEX’s procedural due

process claim is not ripe.

The County alleges that Plaintiff s causes of action

for taking and inverse condemnation are not ripe,

and that Plaintiff has no vested property interest in

obtaining a land use permit.

C-60

IV. FINDINGS, CONCLUSIONS, AND

DETERMINATIONS

The Parties hereby stipulate and determine as follows:

A. Federal Preemption

As a matter of law, federal laws and regulations, and

federal decisions, have preemptive effect over state law and

process when those processes unlawfully conflict with or

frustrate the federal decisions. See, e.g., United States v.

Shimer, 367 U.S. 374, 381 (1961); see also General Motors

v. Abrams, 897 F.2d 34 (2nd Cir. 1990); Ventura County v.

Gulf Oil Corp., 601 F.2d 1080, 1084-87 (9th Cir. 1979).

State regulatory process may also be preempted by conflict

with federal law. N.E. Hub Partners, L.P. v. CNG

Transmission Corp., 239 F.3d 333, 348 (3d Cir. 2001).

For example, a protracted state process may impose

such hardship, cost, frustration and uncertainty as to be

“sufficient to thwart the federal determination. . . .” Sayles

Hydro Associates v. Maughan, 985 F.2d 451 (9th Cir. 1993).

It is the County’s position that BLM’s mineral materials

sale to CEMEX is subject to the authority of California

Coastal Comm’n v. Granite Rock Co., 480 U.S. 572, 575,

107 S.Ct. 1419, 1422, 94 L.Ed.2d 577 (1987), and that the

County is entitled to impose reasonable environmental and

resource protective regulation on the Project pursuant to

SMARA and CEQA. The United States and CEMEX

contend that the County has no land-use authority over the

Project, and do not concede that the preemption analysis of

Granite Rock applies to BLM mineral materials sales. The

United States and CEMEX enter into this Consent Decree

without waiving the right to argue, in any subsequent litigation

° C-61

involving the Project {including this Consent Decree),

alternative theories concerning whether the state has authority

to regulate BLM’s performance of a federal function in

relation to BLM-administered lands (including federally

owned mineral escates) under the Materials Act of 1947.

It is unnecessary for the Court to decide whether the

preemption analysis of Granite Rock applies to this case,

because all Parties, agree that, at a minimum, any County

regulation of the Project that goes beyond the imposition of

reasonable environmental conditions in a timely manner

thereon is preempted by federal law under any applicable

standard. Because the Court finds that the County has

exceeded its alleged authority in this regard, the Court -

determines that the County is preempted from further

regulation of the Project except as outlined in this Consent

Decree.

Notwithstanding the preemptive effect of federal laws

and decisions on the County’s ability to frustrate the

Federally-Approved Project, in the interest of a quick

resolution of this action, CEMEX has agreed through this

Consent Decree, to the imposition of various conditions on the

Federally-Approved Project. These conditions have been

agreed to by the Parties.

On multiple occasions before 1996, the County was

invited to join with BLM to conduct a coordinated

federal-state environmental review, and the County declined

all such invitations. In this case, the County has already

conducted lengthy review of the Project pursuant to the

requirements of CEQA and SMARA that has acted as a

supplement to the environmental review of the Federally-

Approved Project already conducted and concluded by the

BLM pursuant to NEPA. There have been over thirteen

C-62

months of public review and comment on the Project, and

nineteen County public hearing sessions on the Project. The

County’s environmental review has spanned a decade,

including an EIR process that generated a 2000+ page,

eight-volume proposed Final EIR, no less than two public

circulations for comment of different iterations of the EIR,

substantial delay, and extraordinary costs for CEMEX, all in

addition to the United States’ approved Final EIS issued in

June 2000.

CEMEX and the United States assert that this review

process by the County, including the extensive public review

and numerous public hearings, already far exceeds what is

reasonable environmental regulation in the context of the

Federally-Approved Project. CEMEX and the United States

assert, and the Court agrees, that the review process

conducted by the County to date, which includes three County

government denials of CEMEX’s SMARA permit

application,° amounts to unreasonable state environmental

regulation of a federal project that is preempted by federal

law. At a minimum, all Parties, including the County,

acknowledge that further environmental review by the County,

above and beyond that already conducted, would exceed

reasonable environmental regulation and thus would be

preempted. Accordingly, the Court finds that further County

environmental process, including substitution of the EIR

Traffic Methodology with a wholly different New DPW

Methodology, and further public recirculation of the proposed

6 — The three denials occurred on the following dates: (1) in December

1999, the Regional Planning Commission voted its intent to deny the

Project, and adopted findings in support of denial in February 2000; (2)

on April 24, 2001, the Board voted its “‘intent to deny’ (not approve)”

the Project; and (3) on February 26, 2002, the Board voted its intent to

deny the Project, and adopted findings in support of denial on April 23,

2002.

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Final EIR, would “thwart the federal determination” and is

preempted. See Sayles Hydro Associates, supra, 985 F.2d

452 (9th Cir.).

Notwithstanding this finding of preemption, CEMEX

and the Untied States agree that the County may complete the

CEQA EIR process under the conditions and limitations set

forth below. The Parties acknowledge that CEQA generally

requires a lead agency to balance the economic, legal, social,

technological, or other benefits of a project against its

unavoidable environmental risks when determining v hether to

approve the project, and if such benefits outweigh the adverse

environmental effects, then adverse environmental effects may

be considered acceptable and the agency may adopt a

Statement of Overriding Considerations. (Public Resources

Code § 21081, subd. (b); California Code of Regulations, Title

14, §§ 15021, subd. (d), 15093, subd. (a)).

CEMEX and the Untied States assert that a Statement

of Overriding Considerations is only relevant where a lead

agency exercises discretionary authority to approve or deny a

proposed project. CEMEX and the United States assert that

no Statement of Overriding Considerations is required of the

County because it lacks discretion to approve or deny the

Project, and only acts in accordance with Federal-state comity

principles to impose reasonable environmental regulations,

beyond which all County regulation of the Project is

preempted by federal law.

B. Adequacy Of Environmental Review

CEQA requires that local agencies such as the County

prepare environmental documentation evaluating potential

environmental impacts of projects and identify feasible

measures to mitigate such impacts. (Public Resources Code

C-64

§§ 21002, 21100).

CEQA requires that local agencies circulate a Draft EIR

for public comment, and that the local agency prepare

responses to the comments prior to the EIR being certified as

adequate under CEQA. (Public Resources Code § 21091).

The County has prepared an EIR that identifies potential

environmental impacts of the Project, and identifies numerous

measures to mitigate potential environmental impacts. The

County has prepared a Draft EIR and has circulated the Draft

EIR for public review and comment. The County has

prepared responses to the public comments on the Draft EIR.

The County has also prepared an AEIDEIR with additional

information to supplement the Draft EIR, and has also

circulated the AEIDEIR for public review and comment. The

County has prepared responses to the public comments to the

AEIDEIR.

A local agency such as the County must complete the

EIR process within one year of the time the agency accepts

the project application as compete, subject to certain

exceptions. Cal. Pub. Res. Code § 21151.5; Sunset Drive

Corp. v. City of Redlands, 73 Cal.App. 4th 215 (1999). An

agency that has missed this deadline may be compelled to act

by writ of mandate. Sunset Drive, 73 Cal.App. 4th at 223.

This includes compelling the County to complete the EIR

process. See id., at 222. CEMEX submitted its application

for a surface mining permit to the County in 1991. As alleged

by CEMEX in its Complaint, and without conceding the

applicability of CEQA to the Federally-Approved Project,

under the Sunset Drive case, the Parties agree that the County

has exceeded the one-year limit, and is compelled to complete

the CEQA process by certifying the Final EIR absent any

further review or recirculation.

C-65

Notwithstanding that the one year time limit under

CEQA has been exceeded, the environmental review by the

County, and in particular as it relates to traffic impacts, is

adequate under CEQA. In November 2001, the Planning Staff

prepared a Staff Report recommending that the proposed Final

EIR, which was made available for public review prior to the

November 27, 2001 public hearing on the Project, was legally

adequate under, and was suitable for certification pursuant to,

the requirements of CEQA.

At the November 27, 2001 public hearing, the County

DPW testifies that the November 2001 proposed Final EIR

was inadequate due to the traffic impact analysis contained

therein. Based on this testimony, the Board continued the

hearing on the Project. As alleged in its Complaint, CEMEX

asserts that this testimony was both pretextual and politically

driven and that there were no inadequacies with the EIR

Traffic Methodology in the November 2001 proposed Final

EIR, and the proposed Final EIR was and remains legally

adequate for certification under CEQA.

Thereafter, in February 2002, DPW issued a

“provisional” traffic report using the New DPW Methodology

rather than the EIR Traffic Methodology, and based upon the

New DPW Methodology, concluded that there were

potentially significant traffic impacts from the Project not

previously identified in the November 2001 proposed Final

EIR, which would require that the proposed Final EIR be

recirculated again for additional public comment under CEQA.

On February 25, 2002, CEMEX submitted a substantial

amount of documentation establishing the validity of the EIR

Traffic Methodology. Included in the information provided by

CEMEX was documentation of the chronology of written

communications between CEMEX and DPW from October

C-66

1997 through February 1999 discussing the EIR Traffic

Methodology, dated October 30, 1997, November 13, 1997,

December 31, 1997, February 4, 1998, February 24 1998,

March 24, 1998, May 7, 1998, August 5, 1998, August 26,

1998, October 14, 1998 and February 2, 1999. CEMEX’s

February 25, 2002 letter further detailed that the EIR Traffic

Methodology in the proposed Final EIR is more reflective of

the actual “real world” conditions on the relevant roadway

(Soledad Canyon Road) than the New DPW Methodology

asserted by the County. |

The next morning on February 26, 2002, notwith-

standing this documentation submitted by CEMEX, the Board

voted its intent to deny the Federally-Approved Project in part

due to the dispute over the alleged adequacy of the EIR

Traffic Methodology. On April 23, 2002, the Board adopted

findings in support of project denial, including adoption of

numerous findings regarding the inadequacy of the EIR Traffic

Methodology.

Having had the opportunity to further review the

February 25, 2002 documentation submitted by CEMEX, the

written correspondence between DPW and CEMEX, and

other historical documentation compiled during the County’s

preparation of the administrative record in this case, as well as

the allegations and claims made by CEMEX and the United

States in this case, the County hereby reconsiders its prior

findings and determinations regarding the adequacy ofthe EIR

Traffic Methodology, and concludes that the EIR Traffic

Methodology is valid. The County further concludes that the

New DPW Methodology is also valid but that the New DPW

Methodology is more conservative than the EIR Traffic

Methodology, and is not necessary in light of the adequacy of

the EIR Traffic Methodology.

C-67

Having made such a determination, the County further

determines that the traffic analysis in the November 2001

proposed Final EIR, including the identification of mitigations

in the proposed Final EIR, are adequate, and therefore the

proposed Final EIR does not require further recirculation for

public comment under CEQA.

In light of the foregoing, and notwithstanding the

contention of CEMEX and the United States that federal

preemption limits the applicability of the State and local

environmental regulations to the Federally-Approved Project,

the County acknowledges that, based upon its environmental

review of the Federally-Approved Project, including the years

of public comment and input, as well as the preparation of the

environmental documents, findings and _ entitlements

incorporated into this Consent Decree, the environmental

impacts of the Federally-Approved Project have been

adequately analyzed pursuant to the requirements of CEQA

and local regulations.

Having reconsidered the adequacy of the EIR Traffic

Methodology and the November 2001 proposed Final EIR,

the County has further reconsidered the bases for denial of the

Federally-Approved Project and hereby rescinds (and will take

any further action required to formally accomplish this

rescission) the following County actions that followed and

flowed from the now revoked determination of inadequacy of

traffic analysis:

a. __ the February 26, 2002 vote of intent to deny the

Federally-Approved Project;

b. the April 23, 2002 findings and order supporting

Federally- Approved Project denial.

C-68

C. Public Hearing Process

CEQA does mot require hearings. See 14 C.C. R.

§ 15087, subd. (i) (no public hearing required for Draft EIR);

14.C.C.R. § 15089 (ino requirement for review of Final EIR).

The parties thus agree that the County is not required to hold

public hearings pursuant to CEQA.

The Surface Mining and Reclamation Act ("SMARA"),

only requires one public hearing: “[ever]y lead agency shall

adopt ordinances in accordance with state policy which

establish procedures for the review and approval of

reclamation plans . . . [t]he ordinances shall establish

procedures requiring at least one public hearing . . .” Pub.

Res. Code § 2774(a). The County has already had

approximately nineteen continued public hearing sessions on

the Project, both before the Regional Planning Commission,

and before the Board, including at least ten public hearing

sessions with public comment and/or testimony, giving the

County ample opportunity to hear the public’s concerns with,

comments on, and opposition/support for, the Project.

CEMExX and the United States contend that due process

principles do not require public hearings in this case because

the land use authorization for the Federally-Approved Project

has already been conferred and determined by the United

States through the BLM in the ROD approving the Project.

Moreover, to the extent due process principles arguably

require public hearings, CEMEX and the United States

contend that further state and local procedural requirements

may be foregone in the context of consent decrees where such

procedural requirements have been identified as sources of

impermissible conflict with federal law and decisions.

C-69

The Parties stipulate and the Court finds that, to the

extent that any process is due, the considerable process

already conducted before the County satisfies any such

requirements. There have already been approximately

nineteen continued public hearing sessions before the County

(over and above the hearings before the BLM) for the Project,

and for at least ten such public hearing sessions, members of

the public were able to express any concerns and provide

whatever information they wished to the County. Thus, there

has been ample opportunity for public participation under any

applicable statues.

NOW, THEREFORE, SUBJECT TO FINAL

APPROVAL OF THE COURT, THE PARTIES AGREE AS

FOLLOWS:

-_-¥. PARAMETERS OF PROJECT TO BE

APPROVED BY THE COUNTY

A. Federal Land Use and _ Environmental

Decision-Making

The BLM has engaged in a series of land use decisions

which frame the scope of the Federally-Approved Project

implementing the provisions and objectives of federal law

relating to mining and the use of the public lands, as

specifically set forth in the Materials Act and FLPMA, and in

implementing regulations. These various federal decisions, as

well as related federal decision-making (most notably by the

U.S. Fish and Wildlife Service) establish the framework for the

Project which cannot be interfered with or otherwise

frustrated by County review and requirements. In accordance

with this principle, the Parties incorporate herein by reference

the following decisions and documents issued during the

federal land use and environmental review of the Project:

C-70

« 1989 Environmental Assessment for the Notice of

Sand and Gravel Sales;

* Federal Contracts for the Sales of Units of

Materials, Contract Numbers CA-20139 and

CA-22901 (attached as Exhibit A hereto)

° 1998 Biological Opinion (incorporated herein);

° August 1, 2000 Record of Decision (also attached

as Exhibit B hereto);

° June 2000 Final EIS, and all technical documents

referenced therein (incorporated herein);

° 2001 Biological Opinion (incorporated herein);

¢ January 8, 2002 Interior Board of Land Appeals

Order Affirming ROD (attached as Exhibit C).

These documents establish the parameters of the

Federally-Approved Project, and the terms, conditions,

analyses, requirements and conclusions contained in these

documents control over any unlawfully conflicting or

inconsistent State or local provisions or requirements. In the

event that either of the aforementioned Biological Opinions

becomes the subject of a successful court challenge, and, as a

consequence, either Biological Opinion is invalidated, the

validity of this Consent Decree shall not be affected, despite

the fact that the mining activity contemplated by the

Federally-Approved Project may be suspended temporarily

pending reinitiation of consultation with the U.S. Fish and

Wildlife Service by the BLM, and the receipt of a successor

Biological Opinion.

C-71

B. CEQA Environmental Documentation and

Review

1. The County Will Certify the November

2001 EIR Without Further Public Review

or Comment |

As determined herein, the County acknowledges that the

EIR Traffic Methodology employed in the November 2001

proposed Final EIR is adequate under CEQA for analysis of

the County-Approved Project’s traffic impacts, irrespective of

whether the methodology set forth in the County’s February

2002 provisional traffic study New DPW Methodology might

also be valid, and the County expressly revokes any statements

or other representations to the contrary.

The County also agrees that the traffic mitigations in the

November 2001 proposed Final EIR are adequate under

CEQA and mitigate impacts to less than significant levels

under CEQA; and, the County expressly revokes any

statements or other representations to the contrary.

Because the Parties agree herein that the EIR Traffic

Methodology as set forth in the November 2001 proposed

Final EIR is adequate pursuant to CEQA and the County’s

own traffic guidelines, there is no “new” information relating

to the County-Approved Project that warrants further

environmental review or analysis by the County. Under

CEQA, further public notice and review for additional

comments, also known as “recirculation”, is directed where a

lead agency adds “significant new information” to an EIR.

Cal. Pub. Resources Code, § 21092.1. The Parties hereby

agree that no significant new information has been added to

the November 2001 proposed Final EIR or otherwise

identified and thus no further public review or commenting is

C-72

required. The Parties hereby further stipulate that, without

conceding the applicability of CEQA to the Project, the

County has met all hearing requirements of CEQA, as CEQA

has no public hearing requirement. See California Code of

Regulations, Title 14, §§ 15087, subd.(i) and 15089.

Additionally, the Parties further agree that even if there

were significant new information added to the November 2001

proposed Final EIR, that further environmental review and

delays would be precluded under federal preemption, as well

as under the requirements of CEQA. The Parties agree, and

the Court finds, that further public review and recirculation of

the EIR would conflict with and frustrate the implementation

of the Project, which has already been significantly delayed,

and would thus be preempted by the federal laws relating to

mining and the federal decisions in place implementing those

laws (discussed above), and the County expressly revokes any

statements to the contrary.

The Parties agree that recirculation is not substantively

required, and also, recirculation is precluded by the timing

provisions of CEQA, including Public Resources Code

§ 21151.5 and the Sunset Drive case. The County expressly

revokes any previous statement to the contrary.

Based onthe County’s express acknowledgement herein

of the adequacy of the existing EIR Traffic Methodology in

the November 2001 proposed Final EIR, the preemptive effect

of federal laws and decisions over protracted and unwarranted

County process, and CEQA’s own requirements for

certification, the Parties agree that the County will certify a

Final EIR for the County-Approved Project (defined herein),

consisting of the November 2001 proposed Final EIR,

including incorporation of the mitigation measures identified

in the January 2004 Proposed MMRP. These mitigation

C-73

measures are detailed in Exhibit D attached hereto and

incorporated into the terms of this Consent Decree. Although

not required by CEQA, additional Project Conditions

addressing traffic impacts are further detailed in Exhibit H

attached hereto and incorporated into the terms of the

Consent Decree.

The County will certify the Final EIR within sixty (60)

days of entry of this Consent Decree by the Court as a regular

agenda item during a regularly scheduled meeting of the

Board.

2. The County Will Prepare and Adopt

CEQA Findings

As part of the completion of the CEQA process, the

Parties agree that the County will complete and issue Findings,

in the form attache: hereto as Exhibit E under CEQA

(“CEQA Finding”), detailing the County’s environmental

determinations relating to the County-Approved Project.

The CEQA Findings will discuss the County’s extensive

environmental review of the Federally-Approved Project

which spanned ten years, the over thirteen months of public

review, and the approximately nineteen continued public

hearing sessions, including at least ten public hearing sessions

- With public comment and/or testimony. The CEQA Findings

will discuss how the County has complied with the

requirements of CEQA and SMARA through this process, and

how it has identified a range of reasonable environmental

conditions for the Federally-Approval Project in accordance

with the Federal approvals.

In accordance with this acknowledgment, the CEQA

Findings will detai! that the traffic methodology utilized in the

C-74

November 2001 proposed Final EIR is adequate for the

County-Approved Project. The CEQA Findings will include

a traffic discussion that would: (i) clarify that the

methodology in the November 2001 proposed Final EIR

traffic analysis is valid, irrespective of whether the metho-

dology set forth in the County’s February 2002 provisional

traffic study might also be valid, and that although the

February 2002 methodology is more conservative, it is not

necessary given the adequacy of the EIR Traffic methodology;

and (ii) the mitigations in the November 2001 proposed Final

EIR are adequate under CEQA, and further that additional

Project Conditions imposed on the Project as a compromise of

litigation through the Consent Decree process further address

Project impacts. |

The CEQA Findings will include a discussion regarding

the arroyo toad, addressing: (i) why there is no significant

impact to the arroyo toad; (ii) the additional measures

included in the Project pursuant to the 2001 Biological

Opinion; (iii) that no additional information regarding the

arroyo toad, other than what was in the November 2001 EIR

is required for the Project; and (iv) County Planning Staff's

conclusion in the November 2001 Staff Report that

recirculation of the EIR was not required based on the

discovery of arroyo toad tadpoles in the Santa Clara River in

May 2002. CEQA Findings in the form attached hereto as

Exhibit E will be adopted as a regular agenda item at the

same time the Board certifies the Final EIR.

3. The County Will Prepare and Adopt a

Statement of Overriding Considerations

The United States asserts that the federal project is not

governed by CEQA. CEMEX and the United States assert

that there is no legal requirement for the County to prepare a

C-75

Statement of Overriding Considerations (“SOC) for the

County-Approved Project because an SOC is a land use

decision-making document, and is thus not applicable where

the County exercises no land use decision-making powers.

Notwithstanding the issue of whether an SOC is required for

the County-Approved Project, in the interests of settlement,

the Parties agree that an SOC would be adopted, in the form

attached hereto as Exhibit F, consistent with principles of

federal preemption, the federal laws applicable to the Project

and BLM decisions issued pursuant to those laws, the recitals,

stipulations, findings, and determinations contained within this

Consent Decree, as well as the Court’s injunction issued

herein. Neither CEMEX nor the United States waives any

rights to assert that the SOC is gratuitous and of no legal

effect in the event of a subsequent legal challenge by a third

party.

The SOC shall detail the preemptive effect of federal law

relating to mining, including but not limited to the Materials

Act, FLPMA, and regulations implementing those statutes, as

well as the preemptive effect of the various decisions made by

the BLM relating to the sale of mineral materials at the Project

Site, as well as the various determinations relating to

CEMEX’s Project, including the ultimate decision to approve

the Federally-Approved Project in the August 2000 ROD, as

upheld in the IBLA’s January 8, 2002 decision. The SOC

would identify these federal laws and decisions as overriding

legal considerations supporting the County’s approval of the

County-Approved Project.

The SOC will discuss the series of BLM and related

federal decisions relating to mining of the Project Site as set

forth and discussed above in this Consent Decree, culminating

in the August 2000 ROD, and detail how these decisions have

a preemptive effect on the County’s ability to deny the

C-76

Federally- Approved Project.

The SOC will further discuss the series of BLM

decisions and indicate that these decisions preempt the County

from engaging in excessive delays in approving the

Federally-Approved Project, and from imposing on the

Federally-Approved Project conditions or other requirements

that would conflict with, or frustrate implementation of the

Federally-Approved Project.

The SOC will discuss the environmental analysis

conducted by the BLM pursuant to NEPA, as well as the host

of mitigation measures and other requirements imposed on the

Federally-Approved Project by the BLM to minimize

environmental impacts, and discuss how, in the context of

federal preemption, the County is limited to supplementing

these mitigation measures and requirements with reasonable

environmental conditions. The SOC in the form attached

hereto as Exhibit F will be adopted as a regular agenda item

at the same time the Board certifies the Final EIR.

C. The County Will Issue All Required

Entitlements For The County-Approved

Project

In addition to completing its environmental review of the

County-Approved Project under CEQA, the County will issue

all relevant entitlements and permits for the County-Approved

Project.

The Parties agree that there are no further public hearing

requirements relating to any of the entitlements or permits to

be approved for the County-Approved Project by the County.

SMARA only requires one public hearing. Cal. Pub.

Resources Code § 2774(a). The Parties stipulate that no

C-77

further SMARA or other entitlement hearings are required for

the County-Approved Project. The following entitlement

documents, in the forms attached hereto, will be approved for

the County-Approved Project as a regular agenda item on the

Board’s agenda within sixty (60) days of the Court’s entry of

this Consent Decree.

1. Surface Mining Permit and Project

Findings

The County will issue Findings and Order, in the form

attached hereto as Exhibit G, detailing the County’s

determinations of compliance with County requirements

relating to the County-Approved Project (“Project Findings’’),

which combined with Project Conditions, as referenced herein,

shall comprise the Surface Mining Permit for the

County-Approved Project. The County-Approved Project

shall consist of the following:

° The Federally-Approved Project as analyzed by

the BLM in the Final EIS published in June 2000,

and as approved by the BLM in the August 2000

ROD;

° The environmental mitigation measures identified

in the County’s January 2004 Proposed MMRP;

and

° The Project Conditions as negotiated between the

parties and approved by the Board on April 22,

2003. Attached hereto as Exhibit H are the

Project Conditions agreed to by the parties during

the course of the settlement negotiations. These

Project Conditions represent additional Project

requirements above and beyond the environmental

Z.

C-78

mitigation measures for the County-Approved

Project included as part of the County’s review

pursuant to CEQA, and have been agreed to by

CEMEX and the United States in an effort to

avoid expenses and undue delay on implemen-

tation of the Federally-Approved Project.

Reclamation Plan

The County will approve a Reclamation Plan for the

County-Approved Project as required by SMARA and the

County of Los Angeles Code, in the form attached hereto as

Exhibit I,’ and shall consist of the following documents

already on file with and previously reviewed by the County:

PROJECT DESCRIPTION

Revised Final Environmental Impact Report,

Volume 1 — Responses to Comments, Soledad

Canyon Sand and Gravel Mining Project,

November 2001, Selected text, pages 2-81

through 2-110;

REVEGETATION SPECIFICATIONS

Additional Environmental Information to the

Environmental Impact Report (““AEIDEIR”),

August 2000, Soledad Canyon Sand and Gravel

Mining Project, August 2000, Selected text:

pages 2-28 to 2-39;

7

The attached October 29, 2003 proposed Mining and Reclamation

Plan is prepared pursuant to both Federal and SMARA reclamation

requirements. For purposes of County compliance with SMARA, this

document is considered a “reclamation plan” only and is referred to here

and elsewhere as the proposed Reclamation Plan.

C-79

ADEM RD MAP DATING AAD REC A-

MATION PLAN

Soledad Canyon Sand and Gravel Mining Project,

June 2000, Attachment 1: Slope Stability Evalua-

tion, Hilltop Geotechnical, Inc., June 28, 1998;

MINING AND RECLAMATION PLAN

Transit Mixed Concrete Company, Soledad

Canyon Sand and Gravel Mining Project, June

1997, Selected text: pages | through 61,

Appendix G: Performance and Reclamation Bond,

Appendix H: LACO Mining and Reclamation Plan

Review Comments, and Selected Figures;

MITIGATION MONITORING AND

REPORTING PROGRAM

Revised Final Environmental Impact Report,

Soledad Canyon Sand and Gravel Mining project,

January 2004;

CONDITIONS

CEMEX Soledad Canyon Project Conditions;

SUPPORTING STUDIES FOR MITIGATED

MINING CUTS MITIGATION

Final Environmental Impact Report, Volume 6,

Technical Appendices, Appendix L, April 2001,

Slope Stability Review, Hilltop Geotechnical, Inc.,

March 23, 2001; Addendum to the Drainage

Concept, West Coast Environmental and

Engineering, March 23, 2001; and

FINAL RECLAMATION PLAN FIGURE,

EXHIBIT A

Daniel J. Pellow Consulting, October 16, 2003.

C-80

3. Financial Assurances

The County will approve financial assurances for the

County-Approved Project consistent with the. Reclamation

Plan, and the draft Financial Assurances Cost Estimate, in the

form attached hereto as Exhibit J.

Vi. INJUNCTIVE RELIEF

IN ACCORDANCE WITH THE ABOVE PROVI-

SIONS, THE FOLLOWING INJUNCTIVE RELIEF IS

HEREBY ISSUED:

The County is enjoined from taking any actions

conflicting with the provisions set forth in this Consent :

Decree, and is enjoined to comply with all provisions, terms,

requirements, and obligations set forth in this Consent Decree.

The County is further enjoined from further delaying,

frustrating or otherwise interfering with the implementation of

the Federally-Approved Project, including through delays in

approving the County-Approved Project.

The County is ordered to complete the environmental

review process pursuant to the provisions of CEQA and as

mandated in this Consent Decree, including certification of a

Final EIR for the County-Approved Project in the form of the

November 2001 proposed Final EIR, adoption of the

Mitigation Monitoring and Reporting Program, in the forms

attached hereto as Exhibits D, and issuance of CEQA

Findings and an SOC, in the forms attached hereto as

Exhibits E and F, within sixty (60) days from the date of

entry of this Consent Decree. County is enjoined from

conducting further environmental review for the

County-Approved Project prior to issuance of its approval.

C-81

The County is ordered to issue Project Findings, a

Surface Mining Permit, and Reclamation Plan in the forms

attached hereto as Exhibits G, H, and J and incorporating

the terms of Exhibit H, and Financial Assurances Cost

Estimate in the Form attached hereto as Exhibit J to

CEMEX, utilizing the process mandated by this Consent

Decree, within sixty (60) days from the date of entry of this

Consent Decree.

County is enjoined from taking any actions that interfere

with, conflict with, or otherwise frustrate or impair the terms

of this Consent Decree, and will take no action to contradict

the findings or determinations herein. The County is further

enjoined from taking any actions which seek to impair the

implementation of this Consent Decree, or that interfere with

CEMEX’s or the United States’ interests relating to the

County-Approved Project or the Project Site.

The County is enjoined from taking any actions which

affect the rights or interests of CEMEX or the United States

relating to the County-Approved Project or Project Site,

before any other body, agency or official.

THE PARTIES HEREBY CONSENT AND SEEK ENTRY

OF THIS CONSENT DECREE AS AN ORDER OF THIS

COURT

APPROVED AS TO FORM

DATED: 02-19-04

C-82

FOR PLAINTIFF

CEMEX, INC:: CEMEX, INC.

JEFFER, MANGELS,

BUTLER & MARMARO LLP

By: __/s/ Kerry Shapiro By: _/s/ Leslie A. White _

Kerry Shapiro

Attorneys for Plaintiff Its:

CEMEX, Inc., a

Louisiana corporation

DATED: FEB 03 2004

COUNTY OF LOS ANGELES

By: _/s/_ Don Knabe

Chairman, Board of

Supervisors

ATTEST:

VIOLET VARONA-LUKENS

Executive Officer/Clerk of the

Board of Supervisors

By: _/s/ Angie maS [Montes]

Deputy

APPROVED AS TO FORM

BY COUNTY COUNSEL

LLOYD W. PELLMAN

By: _/s/_ Richard D. Weiss

Deputy

APPROVED AS TQ FORM

BY FOX & SOHAGI

By: _/s/_ Deborah J. Fox 2/4/04

Deborah J. Fox

C-83

ADOPTED

BOARD OF SUPERVISORS

COUNTY OF LOS ANGELES

FEB 03 2004

/s/_ Violet Varona-Lukens

Violet Varona-Lukens

Executive Officer

I hereby certify that pursuant to

Section 25103 of the Government

Code, delivery of this document

has been made.

Violet Varona-Lukens

Executive Officer

Clerk of the Board of

Supervisors

By: _/s/ Angie maS [Montes]

Deputy

DATED: 02-11-2004

FOR UNITED STATES OF UNITED STATES OF

AMERICA AMERICA

DEPARTMENT OF JUSTICE

By:

By: _/s/ Edward S. Geldermann

Its:

IT IS SO ORDERED:

DATED: May 3, 2004

DICKRAN TEVRIZIAN

JUDGE OF THE UNITED

STATES DISTRICT COURT

C-84

(EXHIBITS A THROUGH J ARE NOT

_INCLUDED WITH THE CONSENT DECREE]

C-85

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

ENTERED

CLERK, U.S. DISTRICT COURT

MAY- 5 2004

CENTRAL DISTRICT OF CALIFORNIA

BY /s/ (initials) DEPUTY

FILED

CLERK, U.S. DISTRICT COURT

MAY - 3 2004

CENTRAL DISTRICT OF CALIFORNIA

BY DEPUTY

THIS CONSTITUTES NOTICE Priority v

OF ENTRY AS REQUIRED BY Send

FRCP, RULE 77(d). Enter

Closed

JS-5f1S-6)

JS-2/3S-

Scan Only

LTH NS

CEMEX, INC., a Louisiana Corporation,

Plaintiff,

VS.

COUNTY OF LOS ANGELES, and

DOES 1 through 10, Inclusive,

Defendants.

UNITED STATES OF AMERICA,

Plaintiff-in-Intervention.

CITY OF SANTA CLARITA,

Defendant-in-Intervention.

C-86

CASE NO. CV-02-747 DT (FMOx)

ORDER GRANTING CEMEX’S

REQUEST FOR JUDICIAL NOTICE

AND GRANTING MOTION FOR

ENTRY OF CONSENT DECREE

I. Background

A. Factual Summary

Plaintiff CEMEX, Inc. (“Plaintiff’ or “CEMEX”’) brings °

this action against the County of Los Angeles (“County’’) for

declaratory and injunctive relief, writ of mandate, and

damages related to the implementation of a federally funded

mining project located in the Soledad Canyon area of Los

Angeles County. Plaintiff asserts the following claims for

relief in its Second Amended Complaint (“SAC”): (1)

Declaratory and Injunctive Relief — Federal Preemption; (2)

Declaratory Relief — Federal Preemption; (3) Violation of

Procedural Due Process; (4) Violation of Substantive Due

Process; (5) Violation of the Equal Protection Clause; (6) Writ

of Mandate; (7) Damages — Violation of the Taking Clause;

(8) Just Compensation — Inverse Condemnation; (9) Writ of

Administrative Mandamus.

The “Stipulated Factual Background,” as contained in the

Consent Decree, is the basis of the Consent Decree and is

adopted by this Court and incorporated by reference herein as

the Factual Summary of this Case and this Order.' (See

| The Stipulated Factual Background contains the “Project Overview,”

the “Federal Environmental Review of the Project,” the “County

Environmental Review of the Project,” and the “Pleadings and the Parties

Allegations.”

C-87

Decree, p. 25-43.)

B. Procedural Summary

On January 25, 2002, Plaintiff filed a Complaint for

Declaratory and Injunctive Relieve, Writ of Mandate, and

Damages.

On January 25, 2002, Plaintiff also filed a Notice of

Related Cases re: (1) United States of America v. Canyon

County Enterprises, Inc. (dba Curtis Sand and Gravel, et al.),

Case No. CV 86-535 DT (JRx), and (2) United States of

America vy. Canyon County Enterprises, Inc., et al., Case No.

CV-97-0168 DT (ANx).

On February 25, 2002, the City filed a Motion to

Intervene.

On February 25, 2002, this Court (Snyder) filed an Order

for Ex Parte Application to Shorten Time for hearing on the

City’s Motion to Intervene, which was thereby set for March

25, 2002, at 10:00 a.m.

On March 1, 2002, the Matter was Transferred to this

Court (Tevrizian) pursuant to General Order 224 as a Related

Case.

On March 25, 2002, this Court filed an Order denying City

of Santa Clarita’s Motion to Intervene, which was thereafter

entered on March 26, 2002.

On March 28, 2002, Plaintiff filed a Notice of Entry of

Order Denying City of Santa Clarita’s Motion to Intervene.

On April 12, 2002, Plaintiff filed a First Amended

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Complaint for Declaratory and Injunctive Relief, Writ of

Mandate and Damages.

On May 10, 2002, Plaintiff filed a Request for Preparation

of Administrative Record.

On May 10, 2002, Plaintiff filed a Second Amended

Complaint for Declaratory and Injunctive Relief, Writ of

Mandate and Damages.

On May 28, 2002, the City filed a Renewed Motion to

Intervene as a Defendant under Rule 24.

On June 3, 2002, the parties filed a Joint Report re

Discovery and Other Matters pursuant to Fed.R.Civ.P. 26(f)

and Local Rule 26.

On June 17, 2002, Defendant County of Los Angeles filed

a Notice of Motion and Motion to Dismiss the Second

Amended Complaint for Failure to State a Claim Upon Which

Relief Can be Granted, or in the alternative, Motion to Abstain

from the Exercise of Jurisdiction, which this Court granted in

part and denied in part of July 29, 2002.

On July 2, 2002, County of Los Angeles filed a Notice of

CEQA Settlement Meeting pursuant to California Public

resources Code § 21167.8.

On July 8, 2002, the United States, filed an Ex Parte

Application of Edward S. Geldermann, as Attorney for the

United States, to be Relieved From Local Rule 83.2-3

Requiring Permission to Appear Pro Hac Vice, which was

denied on July 10, 2002.

On July 8, 2002, the United States filed an Ex Parte

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Application to Excuse Compliance with Local Rule 7-3 and

6-1, 7-9, and 7-10, for leave to file Motion to Intervene, and

to schedule a hearing on Motion to Intervene for July 22,

2002, which was denied without prejudice to the bringing of

a properly noticed motion on July 10, 2002.

On July 8, 2002, this Court filed an Order Denying City of

Santa Clarita’s Renewed Motion to Intervene as a Defendant

Under Rule 24, which was thereafter entered on July 10,

2002.

On August 5, 2002, the United States of America filed a

Notice of Motion and Motion to Intervene as a Plaintiff, which

was granted on September 9, 2002.

On August 5, 2002, the City of Santa Clarita filed a Notice

of Appeal from an Order denying the City’s Renewed Motion

to Intervene entered on July 10, 2002.

On August 20, 2002, the County of the Los Angeles filed

their Answer to Plaintiff's Second Amended Complaint.

On September 10, 2002, the United States of America

filed a Complaint in Intervention for Declaratory and

Injunctive Relief.

On October 9, 2002, the County of Los Angeles filed their

Answer to United States of America’s Complaint In

Intervention.

On November 18, 2002, Plaintiff, the United States, and

the County of Los Angeles filed a Joint Report Re Discovery

Plan and Other Matters pursuant to Federal Rule of Civil

Procedure 26(f) and Local Rule 26-1.

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On November 25, 2002, this Court held a Scheduling

Conference and set the following dates: Discovery Cutoff —

August 29, 2003; Summary Judgment Motions —- November

24, 2003 at 10:00 a.m. (Pretrial and Trial Settings). This ©

Court further set a hearing on proposed discovery for

December 16, 2002 at 10:00 a.m., and instructed the parties

to submit separate lists of possible candidates to preside over

mediation by December 9, 2002.

On December 3, 2002, the County of Los Angeles

submitted its three suggested judges for alternative dispute

resolution pursuant to this Court’s November 25, 2002

Scheduling Conference instructions. On the same date,

Plaintiff and the United States also submitted the names of

three suggested judges for alternative dispute resolution.

On December 11, 2002, Plaintiff filed a Report to the

Court Re Outstanding Issues Relating to Depositions and

Documents, which included Plaintiff's and the United States

of America’s Preliminary List of Proposed Witnesses for

Deposition.

On December 11, 2002, Defendant County of Los Angeles

filed a Preliminary List of Potential Deponents. On this same

date, County of Los Angeles also filed its Objection to

Plaintiffs’ Preliminary List of Eight (80) Potential Deponents.

On or about December 11, 2002, the Court selected

retired federal judge Layn Phillips to conduct alternate dispute

resolution pursuant to Local Rule 16.14 and ordered the

parties to conduct 24 hours of mediation.

On December 13, 2002, Defendant County of Los Angeles

filed a Response and Objection to Plaintiffs’ Report to Court

Re Outstanding Issues Relating to Depositions and

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Documents.

On December 16, 2002, this Court held a hearing on

proposed discovery and ordered the following: Plaintiffs 17

Depositions; Defendant — Statutory Amount of Depositions.

On January 10, 2003, Defendant County of Los Angeles

filed a Request for Enlargement of Time to File Jury Trial

Demand or, in the Alternative, Request for Relief from Failure

to File Jury Trial Demand, which this Court denied on

February 3, 2003.

On May 21, 2003, this Court set a Status Conference Re

Progress of the Case on June 16, 2003 at 10:00 a.m.

On June 16, 2003, the Status Conference was held and the

Court agreed that the EIR need not be recirculated.

On November 3, 2003, oral argument was held before the

Ninth Circuit Court of Appeals. 3

On November 24, 2003, Plaintiff filed a Notice of Entry of

Order Pursuant to the Stipulation of Parties Continuing (1)

Status Conference from November 24, 2003, to February 23,

2004 at 10:00 a.m.; (2) Discovery Cut-Off from November

28, 2003, to March 31, 2004; (3) Pre-Trial Conference from

February 23, 2004, to May 24, 2004 at 1:30 p.m.; (4)

Summary Judgment Motions from February 2, 2004, at 10:00

a.m. to April 26, 2004 at 10:00 a.m.

On November 26, 2003, City of Santa Clarita filed a

Notice of Motion and Motion for Stay of Proceedings Pending

Appeal, which was denied by this Court on January 12, 2004.

On February 11, 2004, a Stipulation and Order filed

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Continuing Status Conference until March 15, 2004.

On February 23, 2004, CEMEX filed a Motion for Entry

of Consent Decree, which is currently before this Court. On

this same date, Defendant County of Los Angeles filed a

Joinder in Motion for Entry of Consent Decree. On this same

date, Plaintiff-in-Intervenor United States also filed a Joinder

in Motion for Entry of Consent Decree.

On February 23, 2004, the County of Los Angeles lodged

Ninety-Three (93) Volumes of Administrative Record with

this Court.

On February 25, 2004, CEMEX filed a Notice to Court of

Ruling by the Ninth Circuit Regarding the Intervention of the

City of Santa Clarita as it Pertains to the Motion for Entry of

Consent Decree.

On February 26, 2004, an Order was filed granting Ex

Parte Application to Continue Hearing Date for CEMEX’s

Motion for Entry of Consent Decree and Setting Briefing

Schedule from March 15, 2004 to May 3, 2004.

On March 9, 2004, Defendant-in-Intervention City of

Santa Clarita filed an Answer to Second Amended Complaint.

On March 12, 2004, a Stipulation -was filed Continuing

Status Conference.

On March 16, 2004, this Court filed an Order Pursuant to

the Stipulation of Parties Continuing Status Conference

Hearing Date from March 15, 2004 to May 3, 2004.

On March 19, 2004, this Court received the Memorandum

Opinion issued by the Ninth Circuit Regarding the

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Intervention of the City of Santa Clarita as it Pertains to the

Motion for Entry of Consent Decree.

On April 5, 2004, Defendant-in-Intervenor City of Santa

Clarita filed a Notice of Motion and Motion for Summary

Judgment/Adjudication.

On April 5, 2004, Defendant-in-Intervenor City of Santa

Clarita filed an Opposition to Motion for Entry of Consent

Decree.

On April 6, 2004, CEMEX filed an Ex Parte Application

to Strike or, in the Alternative, Motion to Take Off Calendar

Defendant-in-Intervenor City of Santa Clarita’s Motion for

Summary Judgment. On this same date, Defendant Los

Angeles County filed a Joinder in the Ex Parte Application of

Plaintiff CEMEX for Motion to Strike or, in the Alternative,

Motion to Take Off Calendar Defendant-in-Intervenor City of

Santa Clarita’s Motion for Summary Judgement.

On April 7, 2004, Defendant United States filed a Joinder

in the Ex Parte Application of Plaintiff CEMEX for Motion to

Strike or, in the Alternative, Motion to Take Off Calendar

Defendant-in-Intervenor City of Santa Clarita’s Motion for

Summary Judgment.

On April 8, 2004, an Order was filed Granting Ex Parte

Application of Plaintiff CEMEX for Motion to Strike or, in

the Alternative, Motion to Take Off Calendar

Defendant-in-Intervenor City of Santa Clarita’s Motion for

Summary Judgment.

On April 19, 2004, CEMEX, Plaintiff-in-Intervenor United

States, and Defendant County of Los Angeles filed their

Replies in Support of Motion for Entry of Consent Decree.

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II. Discussion

A. Standards

1. Request for Judicial Notice

A court must take judicial notice if a party requests it and

supplies the court with the requisite information. Fed. R.

Evid. 201(d). “A judicially noticed fact must be one not

subject to reasonable dispute in that it is either (1) generally

known within the territorial jurisdiction of the trial court or (2)

capable of accurate and ready determination by resort to

sources whose accuracy cannot reasonably be questioned.”

Fed. R. Evid. 201(b). This Court may take judicial notice of

facts outside the pleadings without converting the motion to

one for summary judgment. See Mack v. South Bay Beer

Distributors, 798 F.2d 1279, 1282 (9th Cir. 1986)(citing

Sears, Roebuck & Co. v. Metropolitan Engravers, Ltd., 245

F.2d 67, 70 (9th Cir. 1956)).

A court may take judicial notice of “records and reports of

administrative bodies.” Mack, 798 F.2d at 1282 (citing

Interstate Natural Gas Co. v. Southern California Gas Co.,

209 F.2d 380, 385 (9th Cir. 1953)). In addition, documents

whose contents are alleged in a complaint and whose

authenticity is not in question may be considered in a motion

to dismiss. See Branch v. Turnell, 14 F.3d 449, 453-54 (9th

Cir. 1994).

This Court may take judicial notice of its own records, and

documents that are public records and capable of accurate and

ready confirmation by sources that cannot reasonably be

questioned. See MGIC Indem. Corp. v. Weisman, 803 F.2d

500, 504 (9th Cir. 1986) (courts may take judicial notice of

matters of public record outside the pleadings); United States

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v. Wilson, 631 F.2d 118, 119 (9th Cir. 1980) (courts may take

judicial notice of their own records).

2. Motion for Entry of Consent Decree

In an attempt to raise the standard for review of a consent

decree, the City of Santa Clarita (the “City”) cites to Durrett

v. Housing Authority of the City of Providence, 896 F.2d 600

(1st Cir. 1990). However, the City’s heightened standard and

interpretation of Durrett’s required factors are misplaced and

inaccurate. As a general matter, “‘a district court should enter

a proposed consent judgment if the court decides that it is fair,

reasonable and equitable and does not violate the law or public

policy.” Sierra Club, Inc. v. Electronic Controls Design, Inc.,

909 F.2d 1350, 1355 (9th Cir. 1990); see also United States

v. Oregon, 913 F.2d 576 (9th Cir. 1990), cert. denied, 501

U.S. 1250 (1991). Additionally, where a consent decree may

affect the public interest, there is a heightened responsibility

on the court to protect that interest, but “the court need not

require that the decree by ‘in the public’s best interest’ if it is

otherwise reasonable.” Id. at 581, (citing SEC v. Randolph,

736 F.2d 525, 529) (emphasis in original). Ultimately, in

approving a consent decree, the “court need only be satisfied

that the decree represents a ‘reasonable factual and legal

determination.” Jd. (citing United States v. City of Miami, 664

F.2d 435, 441 (Sth Cir. 1981) (en banc) (per curiam)).

The Supreme Court has defined consent judgments (i.e.

consent decrees as follows:

Consent decree are entered into by parties

to a case after careful negotiation has

produced agreement on their precise

terms. The parties waive their right to

litigate issues involved in the case and thus

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save themselves the time, expense, and

inevitable risk of litigation. Naturally, the

agreement reached normally embodies a

compromise; in exchange for the saving of

cost and elimination of risk, the parties

each give up something they might have

won had they proceeded with the

litigation. Thus the decree itself cannot be

said to have a purpose; rather the parties

have purposes, generally opposed to each

other, and the resultant decree embodies as

much of those opposing purposes as the

respective parties have the bargaining

power and skill to achieve.

United States v. Armour & Co., 402 U.S. 673, 681-82 (1971).

As specifically set forth in the Ninth Circuit Memorandum

Opinion in CEMEX, Inc. v. County of Los Angeles, 9th Cir.

No. 02-56364:

We note that the District Court may move

forward with a consent decree between

CEMEX and the County. See City of Los

Angeles, 288 F.3d at 405. In City of Los

Angeles, we held that “although this

appeal involves intervention decisions

made at the outset of the case, our holding

{reversing the denial of permissive

intervention and intervention of right and

remanding] does not require the district

court to turn back the clock or rescind the

consent decree.” 288 F.3d at 404-5. Asin

the City of Les Angeles, “our holding does

not require the district court to turn back

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the clock.” 288 F.3d at 404. Rather, the

City shall be allowed to intervene as of the

date of this disposition, and to be treated

as an intervenor party from that date

forward. Jd. Thus, the City shall be

entitled to be heard concerning the court’s

approval of any consent decree proposed

between the original parties, and to appeal

the approval of any such decree, but shall

not be entitled to reopen any issues already

decided in this case.

B. Analysis

Plaintiff CEMEX, Plaintiff-in-Intervenor United States of

America (“United States”), and Defendant County Los

Angeles (collectively herein referred to as the “Original

Parties”) have agreed to settle the litigation CEMEX, Inc., et.

al. v. County of Los Angeles, U.S.D.C. Case No. CV 02-747

DT (FMOx), in accordance with the terms and conditions of

a Consent Decree. By this Motion, the Parties jointly seek this

Court’s approval of their settlement and the entry of the

Consent Decree as a judgment by this Court.

The Consent Decree is the result of an intense and long

nine-month vigorously debated court supervised mediation

process before the Honorable Layn R. Phillips, retired U.S.

District Court judge. The Original Parties have settled their

disputes regarding the County’s environmental review and

permitting of CEMEX’s Soledad Canyon Sand and Gravel

Mining Project pursuant to CEQA, SMARA and the County

Surface Mining Permit Ordinance (County Code § 22.56.1240

et seq.) as reflected in the sixty-one (61) page proposed

Consent Decree. The Consent Decree also allows the United

States to complete its mineral material sale and regulatory

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approval process for the Project while accommodating local

authority by the County in a manner that does not prejudice

the federal mineral sales program, and allows CEMEX finally

to move forward with its Project. It is this Court’s duty to

independently review and scrutinize, if necessary, the terms of

the Consent Decree in making sure ample support exists in

support for the entry of said Decree.

Defendant-in-Intervention City of Santa Clarita (“City”)

recently filed an Opposition to Motion for Entry of Consent

Decree, which will also be addressed in this Order.

1. CEMEX’s Request for Judicial

Notice is Granted

CEMExX asks this Court to take judicial notice of the

following documents which are attached to the Request of

Judicial Notice in Connection with Motion for Entry of

Consent Decree, filed February 23, 2004:

Exhibit 1: January 23, 1986 Complaint for Conversion,

Trespass, Injunctive Relief and Damages

entitled United States of America v. Canyon

County Enterprises, Inc., United States

District Court, Central District of California

No. CV 86-0535 PAR (JRx);

Exhibit 2: Stipulation for Compromise Settlement and

Order Thereon in United States of America v.

Canyon County Enterprises, Inc., Central

District of California Case No. CV 86-535

PAR (JRx) filed June 23, 1988;

Exhibit 3: Notice of Motion for Partial Stay Pending

Appeal of Order Denying Vacation of

Exhibit 4:

Exhibit 5:

Exhibit 6:

Exhibit 7:

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Dismissal and Enforcement of Settlement

Agreement; Memorandum of Points and

Authorities; and Declaration of Ben W. Curtis

with exhibits dated December 27, 1989 in

United States of America v. Canyon County

Enterprises, Inc., United States District Court

for the Central District of California Case No.

CV 86-0535 DT (JRx);

A true and correct copy of the Memorandum

Opinion issued by the Ninth Circuit in United

States of America v. Canyon County

Enterprises, Inc., 9th Cir. No. 90-55302;

Amended/Agreed to Statement of

Uncontroverted Facts and Conclusions of Law

in Support of Plaintiff in Intervention and

Counterdefendant Transit Mixed Concrete

Company’s Judgment on Summary Judgment

filed November 14, 1997 in United States of

America v. Canyon County Enterprises, Inc.,

Central District of California Case No. CV

97-0168 DT (ANx);

Judgment on Summary Judgment in United

States of America v. Canyon County

Enterprises, Inc., United States District Court

for the Central District of California Case No.

CV 97-0168 DT (ANx);

Amended Order Granting in Part and Denying

in Part Motion of Plaintiff-in-Intervention

Transit Mixed Concrete for Summary

Judgment and Permanent Injunction in United

States of America v. Canyon County

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Enterprises, Inc., United States District Court

for the Central District of California Case No.

CV 97-0168 DT (ANx).

This Court hereby grants Judicial Notice of these

documents as they are capable of accurate and ready

determination by resort to sources whose accuracy cannot be

reasonably questioned, bear a direct relation to matters at

issue in the present proceedings, and have not been opposed.

3. The Parties Freely Entered Into

the Consent Decree

The City contends that one of the factors in approving a

consent decree is that the decree must be fair, adequate and

reasonable, and the parties must have validly consented to the

terms of the decree. See Durrett, 896 F.2d at 604. A consent

decree is a judgment; it contains elements of a contract and

contract principles may be applied to consent decrees. United

States v. ITT Continental Bakery, Co., 420 U.S. 223, 236-37

& n.10 (1975). With that, the City astonishingly advances an

argument that the County did not freely enter into the Consent

Decree and that it has “contract[ed] away public rights under

threat of personal embarrassment or other sanction.” (Opp.,

at 45:13-15.) However, contrary to the unsubstantiated

allegatiosn of the City, the Consent Decree did not arise as a

result of “duress” and “coercion.”

The City’s allegations fail to address the extensive and

contentious meditation process between the Original Parties

and ignores the clear record before the Court, contending that

“(following the denial” of the Federally-Approved Project on

April 23, 2002, “the County began secret negotiations with

CEMExX< and the Federal government to extricate itself from

this litigation... .” (Opp. At 12:26-27.)

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As the Parties are aware, it was during a status conference

on December 16, 2002, almost a year into the case, that the

Parties were ordered to participate in mediation before the

Honorable Layn R. Phillips, retired United States District

Court judge. This Court-mandated mediation process spanned

nine months, involving all-day sessions on February 13, 2003,

March 5, 2003, April 8, 2003, May 19, 2003, an all-weekend

session on September 6 and 7, 2003, and October 9, 2003;

numerous telephone conferences with Judge Phillips; and

countless days of direct negotiation sessions between the

Parties. (See Declaration of Layn R. Phillips, dated April 19,

2004 (“Phillips Decl.) ¥ 6; see also Declaration of Kerry

Shapiro in Support of Motion for Entry of Consent Decree,

“First Shapiro Decl.,” ¥1.)

The Consent Decree was not entered into out of duress.

Rather, the negotiations “were conducted in an adversarial,

arm’s length basis” involving “exchanges of numerous

proposals and counter-proposals among counsel[.]”’ (Phillips

Decl., { 10.) As the Court-appointed mediator said himself:

“{t}hroughout the course of the negotiations, it became clear

to me that each of the parties firmly believed that it was giving

up terms and making concessions that it otherwise felt it might

be able to obtain through litigation, in the interest of reaching

a settlement.” (Phillips Decl., 49.) The City’s arguments that

the Consent Decree is the result of “closed door, secret

negotiations” between CEMEX, the United States, and the

County and that because it was denied intervenor status, it

was “wrongfully excluded from these back-room negotiations”

is completely groundless and unsubstantiated. (Opp., at

1:9-24.) The City does not realize that all mediation sessions

are generally confidential, regardless of whether the

participating parties are public entities or not. The City

erroneously characterizes a Federal Court ordered mediation

before a highly-respected neutral moderator as “back-room

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negotiations.” Nothing could be further from the truth or

disparaging to the judicial process or damaging to alternative

dispute resolution conducted by experienced well qualified

counsel and a respected former federal judicial officer.

Furthermore, the City’s argument that “duress conditions”

in the proposed Consent Decree directed against the County

render it unfit to “police” the project mitigation measures in

violation of CEQA and NEPA is without merit. The City is

concerned with a portion of the Consent Decree establishing

that between April 2003 and October 2003, one or more

persons employed by the County engaged in some allegedly

wrongful conduct, which is defined in the Decree as

“Retroactive Conduct.” CEMEX and the Federal

Government apparently learned of this Conduct through some

undisclosed source, the confidentiality of which they seek to

protect. (Decree, p. 15, n.2.) The City contends that

although the specifics of this conduct is never detailed, it is

apparent that CEMEX and the Federal Government have

“something big on” the County and are lording it over the

County to extract concessions on the Project.

The City argues that as part of the enforceability provision

set forth in the Consent Decree and for a period of up to two

years after start-up of the Project, CEMEX or the Federal

Government may publish the Retroactive Conduct in a Motion

to Dissolve the Decree or other Motion for Contempt for

violation of the Consent Decree if they determine that the

“Official Policy Makers” (as that term is defined herein)’ of

2

“Official Policy Makers” includes those recognized and defined

under the body of case law interpreting 42 U.S.C. § 1983, which the

Parties agree include at a minimum the County Supervisors, the County

Counsel, Department Heads, the Chief Administrative Officer, and (for

purposes of this enforcement provision) Conal McNarnara, Millie Jones

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the County “directly or indirectly, engages in or encourages a

course of conduct intended to materially delay, frustrate or

prevent the timely and successful implementation of the

County Approved Project.” (Decree, 14:4-6) (hereinafter

referred to as the “Duress Provisions”). The City contends

that the County’s judgment and substantive role in its

supervisory function will be impaired and its supervision

hamstrung due to these Duress Provisions.

First, as CEMEX argues in its Reply, the City’s argument

concerning the “enforceability” provisions fails to account for

the fact that the County’s decision to enter into the Consent

Decree is not a result of the enforceability provisions included

therein, but rather as a result of the claims raised by CEMEX

and the United States relating to federal preemption and other

constitutional theories. The enforceability provisions, thus did

not “coerce” the County into settling, but rather are merely a

result of the Parties negotiations following the decision to

settle the lawsuit. The Declaration of Layn R. Phillips, the

Court-appointed mediator, lays to rest the unfounded attack

that the County only settled because CEMEX and the Federal

government had “something big on the County.” (Opp.

35:22-23.)

Moreover, the concept of “retroactive conduct” appears

to this Court to be nothing more than the creation of a time

line beyond which the Parties agree to continue forward in

good faith. The Official Policy Makers and non-Official Policy

Makers are restricted by the Consent Decree in taking only

those actions that woulld directly lead to violations of the

County’s obligations under the Consent Decree. It does not

provide an independent basis for liability outside the scope of

this case, but rather provides a mechanism to return to the

and Bob Haueter for so long as they remain employed by the County.

C-104

litigation. Thus, contrary to the City’s unsubstantiated

allegations, County officials or employees will not be

hamstrung by their inability to distinguish between actions

which “directly or indirectly, engage [] in or encourage [] a

course of conduct intended to materially delay, frustrate or

prevent the timely and successful implementation” of the

Project. (Decree, p. 14:4-6; Opp., pp. 36-37.) The Consent

Decree specifically requires that the County provide guidance,

in the form of “instructions to its Official Policy Makers and

to its non-policy making agents and employees who are

involved in any non-incidental aspect of the implementation or

administration of the [Project] regarding its and their

obligations” under the Consent Decree. (Decree, p. 16:3-6.)

Further, the County must “republish and distribute such

instructions on an annual basis to its Official Policy Makers

and to those individuals that have a non-incidental role in the

implementation of the [Project] during the period of time

during which this Consent Decree is in effect and being

implemented.” (/d., p. 16:9-13.) Through the instructions

and consultation with County Counsel, officials and staff will

be adequately guided on carrying out their discretionary

functions within the parameters of the settlement of this

litigation.

Also contrary to the City’s duress assertion is the fact that

CEMEX cannot interfere with the County’s process by

arbitrarily claiming that the County has violated its rights

under the Consent Decree. Any party claiming that the

Consent Decree has been violated must first tender the matter

to the mediator, Judge Phillips, who then must file with this

Court a non-binding recommendation whether there has been

a breach of the Consent Decree. (Decree, p. 17:6-10.) Any

party claiming a breach must also first participate in good faith

efforts to resolve the matter prior to any judicial review.

(Decree, pp. 17:22-18:24.) Thus, CEMEX will not be able to

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unilaterally charge the County with a material breach.

Ultimately, the County retains full authority to enforce all

Project conditions and environmental mitigation measures and

to take lawful action in response to any violation thereof.

4. The City’s Federal Preemption

Argument Does Not Warrant

Denial of the Consent Decree

As a matter of law, federal laws and regulations, and

federal decisions, have preemptive effect over state law and

process when those processes unlawfully conflict with or

frustrate the federal decisions. See, e.g., United States v.

Shimer, 367 U.S. 374 (1961); see also General Motors v.

Abrams, 897 F.2d 34 (2nd Cir. 1990); see also General

Motors v. Abrams, 897 F.2d 34 (2nd Cir. 1990); Ventura

County v. Gulf Oil Corp., 601 F.2d 1080, 1084-87 (9th Cir.

1979). State regulatory process may also be preempted by

conflict with federal law. N.E. Hub Partners, L.P. v. CNG

Transmission Corp., 239 F.3d 333, 348 (3d Cir. 2001). For

example, a protracted state process may impose such hardship,

cost, frustration and uncertainty as to be “sufficient to thwart

the federal determination... .” Sayles Hydro Associates v.

Maughan, 985 F.2d 451 (9th Cir. 1993).

it is the County’s position that the Bureau of Land

Management’s (“BLM”) mineral materials sale to CEMEX is

subject to the authority of California Coastal Comm'n v.

Granite Rock Co., 480 U.S. 572, 575 (1987), and that the

County is entitled to impose reasonable environmental and

resource protective regulation on the Project pursuant to

SMARA and CEQA. The United States and CEMEX

contend that the County has no land-use authority over the

Project, and do not concede that the preemption analysis of

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Granite Rock applies to BLM mineral materials sales.* The

United States and CEMEX enter into the Consent Decree

without waiving the right to argue, in any subsequent litigation

involving the Project (including the Consent Decree),

alternative theories concerning whether the state has authority

to regulate BLM’s performance of the federal function in

relation to BLM-administered lands (including federally

owned mineral estates) under the Materials Act of 1947.

a. The City’s First Argument that

this Court Does Not Have the

Authority to Enter the Proposed

Consent Decree is Misplaced

The City’s main concern is that the Consent Decree does

not allow for full CEQA compliance. Thus, perhaps in an

effort to obscure the fact that the County review process does

in fact comply with state law, the City contends that this Court

does not have the authority to approve the Proposed Consent

Decree absent an express finding that any application of

CEQA to the Project is preempted. Accordingly, the City

demands that all preemption claims be adjudicated in this

settlement process.

> The United States and CEMEX believe that there may be differences

between the statutes and regulations applicable to the hardrock mining

activities 2t issue in Granite Rock, and those governing the United

States’ proprietary mineral dispositior. regime involved here, that militate

against uncritically applying Granite Rock's analysis as the sole basis for

preemption in this case. For this reason, the parties, as part of their

negotiated settlement, did not specify Granite Rock as the controlling

legal standard, but simply agreed that the facts of this case, under any

legal standard (including Granite Rock), would satisfy a finding of

preemption at least with respect to any further regulation of the Project

by the County, except as outlined in the Consent Decree.

C-107

First, given th

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