Posts Tagged ‘Categorical Exemption’


In Protect Telegraph Hill v. City and County of San Francisco (2017) 16 Cal.App.5th 261, the First District Court of Appeal, Division Three, upheld the City and County of San Francisco’s (city) finding that a conditional use authorization for the restoration of a small cottage and construction of a three-unit condominium on Telegraph Hill was categorically exempt from CEQA, and found that the city’s conditions of approval relating to construction were not mitigation for pedestrian and traffic impacts.

The proposed project is a new three-unit condominium fronting on Telegraph Hill Boulevard, the restoration of an existing small cottage at the back of the property, and three off-street parking spaces. The city planning department determined that the renovation of the cottage was categorically exempt from CEQA under the Class 1 exemption (Guidelines, § 15301, subd. (d)), and construction of the new building was exempt under the Class 3 exemption as a residential structure totaling no more than four dwelling units (Guidelines, § 15303, subd. (b)). The planning commission approved a conditional use authorization with some conditions on construction activity. A neighborhood group appealed both decisions to the San Francisco Board of Supervisors. The board approved the exemption and the conditional use authorization, with additional conditions on the construction activity. Protect Telegraph Hill filed a petition for writ of mandate, arguing that the city’s findings relating to the exemptions and approval of the conditional use authorization were unsupported by the evidence, the city failed to consider the entire project, and unusual circumstances and the inclusion of mitigation measures made the reliance on categorical exemptions improper. The trial court denied the petition, and Protect Telegraph Hill appealed.

On appeal, the petitioner argued that granting the exemptions was unlawful because the conditions of approval imposed by the city were intended to mitigate environmental impacts from the project’s construction, indicating that the project would have significant impacts and thus could not be exempt from CEQA. The petitioner also argued that the project description was inadequate to determine whether the project was truly exempt and that the unusual circumstances exception applied.

The court concluded that while some of the conditions of approval addressed traffic and pedestrian safety, they were attached to the approval of the conditional use authorization, and not the exemptions. The exemptions were initially approved by the planning department without qualification, while the conditional use authorization was originally approved by the planning commission with certain conditions. The petitioner had to appeal both decisions separately to the Board of Supervisors, which voted separately on each decision, attaching further conditions to the conditional use authorization only. The court also found that there was no substantial evidence in the record suggesting that the project would have significant effects on traffic and pedestrian safety. The court stated that the appellant’s “expressions of concern” in the record were not substantial evidence. The court also rejected attacks on the project description, finding that the included description complied with the requirements in the San Francisco Administrative Code and there was no evidence in the record suggesting the description was deficient.

Turning to the unusual circumstances exception, the court applied the two-part test announced by the California Supreme Court in Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086. The city’s conclusion that the unusual circumstances exception was not met is reviewed for substantial evidence. But, if there are unusual circumstances, the court considers whether there is a fair argument that there is a reasonable possibility that the project will have a significant effect.

Protect Telegraph Hill argued that the location of the project on Telegraph Hill was itself an unusual circumstance. But the court found that the city’s determination that there were no unusual circumstances was supported by substantial evidence. While Telegraph Hill is described in the design element of the general plan, the project conformed to the zoning requirements for that area and was similar in proportion to the immediately adjacent buildings. The petitioner also argued that the area was heavily traveled because of its proximity to Coit Tower landmark, but the court agreed with the city that large traffic and pedestrian volumes was “more commonplace than unusual” in San Francisco.

Next, the petitioner argued that the project would impair views of the downtown skyline from the public stairway. The court rejected this argument in part by applying new Public Resources Code section 21099, subdivision (d), which applies to residential urban infill projects in transit priority areas, and requires that aesthetic impacts “shall not be considered significant impacts on the environment.” Additionally, the city considered the project’s impact on views from Coit Tower and Pioneer Park and concluded it would not have an adverse effect. The petitioner also argued that the 30% slope of the lot was an unusual circumstance. The court again agreed with the city that the slope was not unusual for San Francisco and found that the city’s engineering report provided substantial evidence supporting its decision. The petitioner also submitted an engineering report that provided conflicting evidence, but that report did not negate the substantial evidence supporting the city’s conclusion.

Lastly, the petitioner argued that the conditional use authorization finding was unsupported because of the project’s potential to obscure views of the downtown skyline from the stairway. The court held that even if there were some conflict with one policy in the general plan, the policies were not strictly construed and the project was consistent with other policies and the Urban Design Element for Telegraph Hill. Ultimately, the court found that the record supported the city’s conclusion that the project would not change the character of Telegraph Hill, and denied the petition.

In Respect Life South San Francisco v. City of South San Francisco (2017) 15 Cal.App.5th 449, the First District Court of Appeal, Division One, upheld the City of South San Francisco’s (City) finding that a conditional use permit for the conversion of an office building into a medical clinic was categorically exempt from CEQA, as well as the City’s implied finding that the unusual circumstances exception did not apply.

The challenged project proposed converting an existing office building into a medical clinic providing a range of services and operated by Planned Parenthood. The City Planning Commission approved the application after a public hearing and found that the project was categorically exempt from CEQA review. Respect Life South San Francisco (Respect Life) appealed that decision to the City Council, arguing that, because of the nature of Planned Parenthood’s services, the project might draw protests that could have environmental impacts. The City Council rejected the appeal and found that the project qualified for three categorical exemptions. Respect Life and three individuals filed a petition for writ of mandate challenging the City’s decision. The trial court denied the petition and Respect Life appealed. On appeal, Respect Life admitted that at least one of the exemptions applied, but alleged that the unusual circumstances exception applied, requiring full environmental review.

The court first rejected Planned Parenthood’s argument that Respect Life lacked standing. Planned Parenthood argued that Respect Life had failed to allege that it had a beneficial interest in the litigation, but the court found that the group’s petition included sufficient allegations to establish standing.

The court then articulated the standard of review for categorical exemptions and the unusual circumstances exception under the California Supreme Court’s recent decision in Berkeley Hillside Preservation v. City of Berkeley (2016) 60 Cal.4th 1086 (Berkeley Hillside). At the administrative level, a challenger must prove to the agency that 1) there are unusual circumstances, and 2) there is a reasonable possibility of a significant impact because of those circumstances. Upon judicial review, a court applies the deferential “substantial evidence” test to the agency’s decision regarding the first prong, and the non-deferential “fair argument” test to the agency’s decision on the second.

Here, the City denied the administrative appeal and found the project categorically exempt, but made no express finding on the unusual circumstances exception. Thus, the record did not reveal whether the City concluded that the project presented no unusual circumstances (a decision entitled to deference) or had found that, while there were unusual circumstances, there was no reasonable possibility of significant impacts due to those circumstances (a decision reviewed under the non-deferential “fair argument” test). The court determined that when an agency makes an implied finding regarding the unusual circumstances exception, the court must assume that the agency determined that there were unusual circumstances. To uphold the agency’s implied finding that the exception is inapplicable, a court must conclude that the record contains no substantial evidence supporting either 1) the existence of unusual circumstances, or 2) a fair argument that such circumstances will have a significant effect on the environment. Thus, the court applies a non-deferential test to both implied determinations.

In this instance, the court found that even assuming that the first condition had been met by Respect Life, it had not identified any substantial evidence supporting a fair argument that the protests may result in significant effects. The court stated that Respect Life contradicted itself by conceding that CEQA review does not consider the identity of the applicant or operator, but also arguing that because the proposed operator is Planned Parenthood, the project might draw protests that will create indirect environmental impacts. The court held that “the possibility of ‘foreseeable First Amendment activity’” does not establish the unusual circumstances exception, where Respect Life “simply assert[ed] that protests will lead to environmental impacts.” The court also found that comments by opponents of abortion, even those that indicated they would protest, were not substantial evidence supporting a fair argument that there is a reasonable possibility that protests will have indirect significant effects on the environment. Ultimately, Respect Life was required, but unable, to point to evidence of the alleged indirect impacts, not just evidence of the protest activity that might lead to such impacts.

In Walters v. City of Redondo Beach (2016) 1 Cal.App.5th 809, the Second District Court of Appeal determined that the City of Redondo Beach did not err in finding a combination car wash and coffee shop project categorically exempt from CEQA and that unusual circumstances exception did not apply. The site was previously a car wash, but was unused since 2001 and the original structure had been demolished, leaving a vacant lot. The city approved a conditional use permit (“CUP”) and determined that the project was exempt under CEQA Guidelines § 15303, as “new, small facilities or structures [and] installation of small new equipment and facilities in structures.”

The dispute between the parties on the exemption concerned whether a car wash fits within the category of “commercial buildings” as defined in CEQA Guidelines section 15303, subdivision (c), and whether the car wash met the size restrictions of that section. The court held that the list in 15303(c) is illustrative and the section expressly includes “similar structure[s].” The car wash qualified because it was a consumer-facing commercial business, similar to those listed in 15303(c), and it included a coffee shop which qualifies as a restaurant. On the issue of size, the court found that, because the project was going to be in an “urbanized area,” the size limit was 10,000 square feet instead of 2,500. So the project’s 4,080 square feet was well under the limit. Lastly, the court found that there was no evidence that the project would “involve the use of significant amounts of hazardous substances” and was thus exempt.

On the unusual circumstances exception issue, the court applied the two tests discussed by the California Supreme Court in Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086 (“Berkeley Hillside”). Under the first test, the court first determines whether there are unusual circumstances under the substantial evidence standard, and, if unusual circumstances are found, “whether there is a reasonable possibility of a significant effect on the environment due to unusual circumstances” under the fair argument standard. The second test requires the challenger to establish unusual circumstances by showing that the project will have a significant effect on the environment.

In applying the first test, the court found that presence of other car washes in the surrounding area, and the fact that the site had been a car wash previously, indicated that the circumstances were not unusual. The court also stated that common operational effects, like noise, traffic, and parking do not constitute unusual circumstances in and of themselves. The court concluded that the petitioners had failed to produce substantial evidence supporting unusual circumstances based on the project’s features. The court therefore never reached the second, fair argument prong of the first test.

The court applied the second test from Berkeley Hillside, and found that petitioners failed to meet their burden under that test as well. Petitioners argued that the project will have a significant effect on the environment because operating a car wash would violate the city’s noise ordinance. The court found this unpersuasive because the city had found that the project would not violate the noise ordinance and took the extra step to condition approval of the project on its meeting the noise ordinance. Petitioners also argued that the project would have a significant adverse effect on traffic because the design of the car wash would cause backups within the property. The court stated that the flow of cars within the property was not “traffic” as defined by CEQA, and there was substantial evidence supporting the city’s finding that any such backups would not affect traffic on the streets.

The court concluded that neither of the Berkeley Hillside tests had been satisfied, and therefore the petitioners had failed to show unusual circumstances. The court upheld the city’s issuance of the CUP and finding that the project was exempt from CEQA.

The court held the City of Santa Cruz failed to demonstrate with substantial evidence that amendments to its Heritage Tree Ordinance and Heritage Tree Removal Resolution fell within a categorical exemption to CEQA. (Save Our Big Trees v. City of Santa Cruz (Oct. 23, 2015) ___ Cal.App.4th ___, Case No. CV 178084.)

In 1976, the city adopted its Heritage Tree Ordinance, which established a permit process governing the preservation of heritage trees. “Heritage trees” were defined by their trunk circumference or historical value. In 1989, these protections were extended to “heritage shrubs” and “heritage tree” was redefined to include trees with horticultural significance or those that provided a valuable habitat. The term was redefined yet again to include narrower circumference trees and to include more specific definitions of historical and horticultural significance. In 1998, the City adopted the Heritage Tree Removal Resolution that outlined three circumstances under which a heritage tree or shrub could be altered or removed.

In 2013, the city council approved amendments to the Heritage Tree Ordinance and the Heritage Tree Removal Resolution. These amendments added a “purpose” section to the Ordinance and established replanting requirements for heritage tree alterations and removals. The amendments also revised the definition of heritage trees by removing references to shrubs and narrowed the manner in which a tree could acquire a heritage designation or be deemed horticulturally significant. The amendment prohibited property owners from allowing certain trees to exist in conditions that would be injurious to the trees, and also strengthened the Ordinance’s penalty provision.

The city also amended its Heritage Tree Removal Resolution by revising a provision allowing for removal of heritage trees and introducing additional circumstances under which heritage non-native invasive trees may be removed.

The city claimed the amendments were exempt from CEQA because they assured the “maintenance, restoration, enhancement, and protection” of natural resources and the environment pursuant to the categorical exemptions set forth in Guidelines sections 15307 and 15308 (class 7 and class 8). Opponents of the amendments thought it would be too easy to cut down heritage trees under the revised scheme. The City filed a notice of exemption from CEQA, and petitioners brought suit. The trial court denied the petition, ruling substantial evidence supported the city council’s exemption determination.

The Court of Appeal first looked at the meaning of the phrase “actions…to assure the maintenance, restoration, or enhancement” as used in the exemptions. The court found that the phrase embraces projects that combat environmental harm, but not those that diminish existing environmental protections. The court noted that revisions to the Heritage Tree Ordinance meant that trees could no longer be designated as heritage on a whim. As to the Heritage Tree Removal Resolution, the court observed that the amendments introduced new justifications for removing a tree (including unreasonable financial burden on a property owner, likely adverse effect on health, or invasive species), thereby relaxing removal standards.

The court rejected the city’s arguments that the amendments’ intent was not to encourage tree removal, or that in practice the amendments would not result in more heritage tree removals. The court stated that, even assuming the amended Heritage Tree Removal Resolution will not actually result in additional tree removals, that did not render it an action to assure the maintenance, restoration, or enhancement of the environment. The city also failed to show that the amendments would not increase the number of likely tree removals. The court deemed the replanting requirement, under which removed trees had to be replaced by a certain number of small trees, to be insufficient in terms of providing the same benefits to the urban environment.

The First District Court of Appeal reversed its prior holding and, under the substantial evidence standard established by the Supreme Court, upheld the City of Berkeley’s determination that exemptions applied to a single-family home project, and that no exception applied to those exemptions. The court therefore affirmed the denial of appellants’ petition. (Berkeley Hillside Preservation v. City of Berkeley (2015) ___Cal.App.4th___ , Case No. A131254.)

The case was discussed in our previous post, found here.

The decision on remand highlights the effect of the deferential substantial evidence standard. The court also importantly distinguished the Salmon Protection & Watershed Network (SPAWN) and Lotus decisions.

On remand, the Court of Appeal noted it had previously—incorrectly—held that where there is a fair argument that a proposed activity may have an effect on the environment, that in itself is an unusual circumstance triggering an exception to CEQA’s categorical exemptions. The Supreme Court held this reasoning was inconsistent with the Legislature’s purpose in creating categorical exemptions which, by definition, encompass classes of projects that are found not to have a significant effect on the environment. The Court held, however, that showing the project will have a significant effect on the environment does tend to prove that the project is unusual in some way. Thus, the court must find both substantial evidence of unusual circumstances and a fair argument that there is a reasonable probability of potentially significant effects due to those unusual circumstances.

On remand, the court noted that despite acknowledging that substantial evidence supported application of the exemptions, appellants continued to argue that the home would nevertheless be “unusual.” Appellants “fail[ed] to come to terms with the stringent standard of review that Berkeley Hillside directs us to apply” and similarly failed come to terms with evidence pointing against their contention. Where there is substantial evidence supporting an agency’s exemption determination, the court must affirm the finding even if contradictory evidence exists.

The court also found the project’s traffic control measure was not a proposed subsequent action taken to mitigate any significant effect of the project, and therefore was not a mitigation measure precluding application of the categorical exemptions. In SPAWN, the project was specifically conditioned on measures intended to mitigate impacts to threatened species habitat, which precluded application of a categorical exemption. In Lotus, the project EIR improperly compressed environmental impacts and mitigation measures into a single issue, rendering it impossible to determine whether the project would have a significant effect on the environment absent mitigation. The court here found the construction traffic management plan distinguishable. It noted that “managing traffic during the construction of a home is a common and typical concern in any urban area, and especially here given the narrow roads in the area and the volume of dirt to be removed.” Thus, the plan did not constitute mitigation that would otherwise preclude application of a categorical exemption or improperly entwine mitigation measures and project features.

Save Our Schools v. Barstow Unified School District Board of Education (Sept. 2, 2015) ___ Cal.App.4th ___, Case No. E060759.

Barstow Unified School District approved closing two of its elementary schools and transferring those students to other “receptor” schools in the District, in order to meet its financial obligations in future school years. The Board estimated the closures would save the District $600,000 annually. The District determined the closures and transfers were exempt from CEQA because they fell within the categorical exemption for “minor additions” to schools, pursuant to Public Resources Code section 21080.18 and CEQA Guidelines section 15314. The court found the District could not have properly determined an exemption applied because it did not have the necessary statistics before it when making that decision.

Under Guidelines section 15314, school closures and student transfers resulting in “minor additions to existing schools” are categorically exempt from CEQA review where the transfer of students does not increase “original student capacity” of a receptor school by (1) more than 25% or (2) ten classrooms, whichever is less. The court noted that the record did not contain figures for the “original student capacity” or total enrollment before transfers at any of the receptor schools. Thus, it was impossible to determine whether the transfers would increase that capacity beyond the levels allowed under the exemption.

At the meeting to address the proposed closures and transfers, the District board members and superintendent assumed there would be more than sufficient enrollment capacity at the receptor schools to absorb the transfers, but the board did not indicate that it would limit the number of transfers in order to keep enrollment below levels allowed by the exemption.

The court directed the District to void its determination that the closures and transfers were exempt, and reconsider the applicability of the minor additions exemption or any other exemption. Though the schools had already been closed, the court found the case was not moot, as the District (should it find the exemption did not apply) could either reopen the schools or take steps to mitigate any adverse impacts of the closures and transfers.

In an unpublished opinion, the court held that petitioner failed to satisfy the fair argument test showing that the “unusual circumstances” exception precluded application of categorical exemptions under CEQA. (Paulek v. Dept. of Fish & Game v. Ramona Duck Club (Oct. 28, 2014) Case No. D065278.)

The Wildlife Conservation Board approved the acquisition of a conservation easement over a portion of property owned by Ramona Duck Club by the Department of Fish and Game (now the Department of Fish and Wildlife). The Conservation Board determined the easement was exempt from CEQA under two categorical exemptions, one pertaining to acquisition of lands for fish and wildlife conservation purposes (Class 13, Guidelines § 15313) and another for transfers of ownership interests in land in order to preserve open space, habitat, or historical resources (Class 25, Guidelines § 15325). Petitioner conceded that both categorical exemptions applied, but that the trial court erred in finding the unusual circumstances exception to the exemptions did not apply. Petitioner also contended the conservation easement was ineligible for a categorical exemption because the Board improperly considered mitigation measures in making its exemption determination. The court disagreed.

The unusual circumstances exception applies to nullify application of a categorical exemption where 1) the project presents unusual circumstances, and 2) there is a reasonable possibility of a significant effect on the environment due to the unusual circumstances. Petitioner argued the Duck Club’s previous erection of a gate and the presence of rare and endangered plants on the conserved property were unusual circumstances creating a significant risk of adverse effects on the environment. Applying the less deferential fair argument standard, whereby the court reviews the record to determine whether it contains evidence of a fair argument that the project may have a significant effect on the environment, the court held petitioner’s cited facts did not amount to unusual circumstances.

Even assuming the circumstances qualified as unusual for a conservation easement, the court further concluded there was no showing that there was a chance of significant effects on the environment due to those circumstances. The court noted the conservation easement did not grant the Duck Club any new rights, but merely identified certain preexisting rights that would be reserved, and thus did not cause the environmental effects. The use of lead shot for non-hunting purposes would not have a significant effect on the environment caused by the easement. Use of lead shot was not permitted on the property; but even if it were, the easement reserved that right, rather than creating it. There was no causal connection between the gate and the easement, nor between the easement and endangered plants.

Petitioner failed to exhaust his administrative remedies on the mitigation issue, but the court held that even if he had exhausted, his argument would fail. To the extent the conservation easement mitigated any of the Duck Club’s impacts on the property, it did not do so because they were caused by the conservation easement, but because preservation and protection of resources was the easement’s very purpose.

 

Even though the renewal contracts have expired, and thus the case was moot, the Court of Appeal nevertheless resolved the case, finding the renewal contracts both statutorily and categorically exempt from CEQA. In North Coast Rivers Alliance v. Westlands Water District, Case No. F067383 (July 3, 2014), the Fifth District Court of Appeal upheld the Westlands Water District’s interim renewal contracts with the United States Bureau of Reclamation, which continued the existing terms for water delivery from the Central Valley Project (CVP.) The court upheld the District’s findings that the interim contracts fell under the statutory exemption for ongoing pre-CEQA projects as well as the categorical exemption for the continued operation of existing facilities.

Westlands Water District and its related distribution districts serve more than 600,000 acres of farmland in San Joaquin Valley, and have a right to receive over one million acre-feet of water per year from the CVP, due to water service contracts that have been in place with the Bureau of Reclamation since the 1960s. In 2012, the Bureau and the water districts entered into two-year contracts to renew the districts’ contractual rights to receive CVP water, during which time the Bureau was set to complete the environmental review required for 25-year renewal contracts.

The water districts found that the renewals were statutorily and categorically exempt from CEQA because they involved ongoing receipt and delivery of water on identical terms as the prior water service contracts, with no expansion of service and no new facilities, and any changes related solely to minor administrative matters.

The court first rejected the water districts’ assertion that the renewal contracts were statutorily exempt under the statutory exemption for rate-setting activities under Public Resources Code section 21080, subdivision (b)(8). The court found no evidence that the renewal contracts involved any rate-setting activity.

But the court did uphold the water districts’ conclusion that the renewal contracts were statutorily exempt as ongoing projects approved before CEQA was enacted. (See CEQA Guidelines, § 15261 subd. (a).) The court found that the original contracts and construction of facilities predated CEQA’s enactment in November of 1970. Any assignment agreements and renewals entered into after CEQA’s enactment, the court found, did not result in an expansion or material modification of the underlying activity that was initially approved; rather, the agreements merely facilitated the districts’ ability to receive a stable and adequate water supply within the scope of the original project.

The court found that the renewal projects also came within the categorical exemption for operation of existing facilities. (CEQA Guidelines, § 15301.) Categorical exemptions, unlike statutory exemptions, are subject to exceptions. While the courts of appeal disagree on whether a fair argument standard or substantial evidence standard applies to exceptions, the court here found the disagreement irrelevant because it would reach the same conclusion under either standard.

Petitioners first argued that “unusual circumstances” exception applied. The court, however, agreed with the water districts that the project did not involve unusual circumstances because it was not uncommon for utility-type public agencies to have large-scale facilities operating at a large volume and to impact the environment to some extent simply by existing and functioning as utilities. The court noted that even if the large scale of the water diversion at issue constituted unusual circumstances, as petitioners argued, petitioners would still have to establish that there was a reasonable possibility the activity will have a significant effect on the environment due to such circumstances. Using the established levels of operations as the baseline, the court concluded there was insufficient evidence that there would be a substantial adverse change from the environmental baseline, and thus the exception did not apply. The court also rejected petitioners claim that the renewal contracts fell within cumulative impacts exception to the exemption. The court stated that the present litigation was not the proper time for petitioners to raise the cumulative-impact claim because the short-term interim renewal contracts did not constitute “successive projects of the same type” and therefore did not fit within the definition of the exception.

The First District Court of Appeal ordered publication of its opinion upholding San Francisco’s determination that a city-wide utility project was exempt from CEQA under the “Class 3” categorical exemption. The case, San Francisco Beautiful v. City and County of San Francisco (April 20, 2014) ___ Cal.App. ___, was published May 30, 2014.

The challenged project was AT&T’s proposal to install 726 metal utility boxes housing telecommunications equipment on San Francisco sidewalks in order to expand its fiber-optic network. San Francisco approved the project without requiring an EIR, based on its conclusion that the project fell within the “Class 3” categorical exemption described in CEQA Guidelines section 15303. Class 3 establishes exemptions for “[1] construction and location of limited numbers of new, small facilities or structures,” and “[2] installation of small new equipment and facilities in small structures.” (CEQA Guidelines, § 15303.) Among the examples of this exemption are “[w]ater main, sewage, electrical, gas, and other utility extensions, including street improvements, of reasonable length to serve such construction.” (Guidelines, § 15303, subd. (d).)

The petitioners argued that the project was not exempt under clause 1 of the Class 3 exemption because the 726 new structures were not a “limited number,” and that it was not exempt under clause 2 because it involved the construction and location of new structures, rather than the “installation” of equipment in existing small structures. The Court of Appeal disagreed, finding that under clause 2, the terms of the exemption were not limited to the installation of equipment in existing small structures. Rather, it determined that the Class 3 exemption can apply even when new structures are installed or constructed. Based on this determination, the court held that the city’s project fit into the Class 3 exemption. Because it found the project exempt on this basis, the court found it unnecessary to address the “limited number” argument.

The petitioners also claimed that, even if the Class 3 exemption applied, the city was still required to prepare an EIR because exceptions to the exemption applied. Specifically, they argued that the project would have a significant environmental effect due to unusual circumstances and would have cumulative impacts. (See CEQA Guidelines, § 15300.2, subd. (b), (c).) Regarding the unusual circumstances exception, the court determined that the petitioners identified no unusual circumstances relating to placement of the new utility structures in an urbanized area that already housed similar structures. The court also determined that, even if there were unusual circumstances, the petitioners failed to demonstrate that the project would have a significant environmental effect.  Notably, the court rejected the petitioners’ argument that residents’ views on the project’s aesthetic effects constituted evidence of a significant impact sufficient to trigger the need for an EIR.

The court acknowledged that the appropriate standard of review for the “unusual circumstances” exception is an issue currently pending before the Supreme Court (Berkeley Hillside Preservation v. City of Berkeley (S201116, rev. granted May 23, 2012). The court was careful to explain that its decision would be the same under either standard of review (“substantial evidence” or “fair argument”) and, therefore, it was not necessary for the court to determine that issue or any other issues that are before the Supreme Court in Berkeley Hillside.

The court also rejected the applicability of the cumulative impacts exception, explaining that the city did not have to consider the cumulative impact of all similar equipment to be installed throughout the city because the CEQA Guidelines instead limit the cumulative impact exception to successive projects of the same type in the same place. For the purposes of the utility boxes, the court found the “same place” meant the individual locations where the boxes would be placed.

Lastly, the court determined that the city had not improperly relied on mitigation measures in concluding the project was categorically exempt from CEQA. Although the city was required to review the utility cabinets to evaluate their potential to impede travel, inconvenience property owners, or otherwise disturb use of the right-of-way, that review is required by a Public Works Order, which is generally applicable to excavation permits for surface-mounted facilities. According to the court, this was not considered mitigation because an agency may rely on generally applicable regulations to conclude an environmental impact will not be significant and therefore does not require mitigation.

 

Citizens for Environmental Responsibility v. State of California ex rel. 14th District Agricultural Association (Mar. 26, 2014) ___ Cal.App. ___, Case No. C070836.

On March 26, 2014, the Third District Court of Appeal affirmed the trial court’s denial of injunctive relief against a rodeo. Appellants, an environmental group concerned about possible water quality impairment due to manure runoff from the rodeo, claimed the 14th District Agricultural Association violated CEQA by approving an exemption from environmental review for a rodeo held at the Santa Cruz County Fairground in 2011. The District had found the rodeo exempt from CEQA review under the Class 23 categorical exemption for normal operations of existing facilities for public gatherings. Appellants argued that the Class 23 exemption did not apply here because (1) the rodeo project impermissibly included mitigation measures in its determination that the project was exempt, and (2) the unusual circumstances exception to the exemption applied. The Court of Appeal disagreed.

A Class 23 exemption covers “normal operations of existing facilities for public gatherings for which the facilities were designed, where there is a past history of the facility being used for the same or similar kind of purpose.” This means similar activity has been occurring for at least three years and there is a reasonable expectation that the project would not represent a change in operation of the facility. The court noted that the fairground had hosted dozens of livestock and equestrian events annually for decades. The court rejected appellants’ contention that the exemption was impermissibly premised on proposed mitigation measures. The alleged mitigation measures, which dealt with manure disposal, had been in place years before the proposed rodeo, and had been formalized in a manure management plan in 2010. Thus, the court found that the plan was not a new measure proposed for or necessitated by the rodeo project, and was instead part of the ongoing “normal operations” of the fairground.

Finding that no mitigation measure precluded application of a categorical exemption, and finding that the Class 23 categorical exemption applied to the project, the court turned to appellants’ second argument that the rodeo fit within the unusual circumstances exception to the exemption.

The court laid out a two-part test for the unusual circumstances exception: first, determine whether the project presents unusual circumstances. If there are unusual circumstances, the court then determines whether there is a reasonable possibility of a significant effect on the environment due to the unusual circumstances. In assessing whether the rodeo project presented any unusual circumstances, the court looked at whether the circumstances of the project differed from the general circumstances of projects covered under the exemption. The court found that the rodeo did not represent a change in the operation of the fairground, as the project was no different in nature and scope from previous fairground events. In addition, appellants did not provide any evidence that a “normal” fairground would operate any differently. Because the court found no unusual circumstances, it did not reach the second issue of whether there was a reasonable possibility of a significant effect on the environment due to such circumstances.

On January 3, 2014, the First District Court of Appeal ordered publication of Save the Plastic Bag Coalition v. City and County of San Francisco. We previously wrote about the case here.

The League of California Cities and the California State Association of Counties jointly submitted a request for publication. In support of this request, the groups pointed out that: no other published decision has applied the rules of preemption to single-use plastic bag bans; the opinion suggests that if environmentally beneficial components are an integral aspect of a project from its inception, they may be considered when determining that a categorical exemption from CEQA applies to the project; the opinion clarifies that local agencies can use the Class 7 and Class 8 categorical exemptions and operate in a regulatory capacity; and the opinion provides helpful guidance regarding what qualifies as substantial evidence under the fair argument standard. The court did not state which, if any, of these arguments influenced its decision to publish the opinion.

The First District Court of Appeal considered a legal challenge brought against an ordinance enacted by the Marin County Board of Supervisors in Save the Plastic Bags Coalition v. County of Marin (2013) __Cal.App.4th __ (Case No. A133868). The ordinance prohibited certain retail establishments from providing single-use plastic bags and imposed a minimum fee for the distribution of single-use paper bags. The County determined the ordinance was categorically exempt from CEQA because it was a regulatory action designed to assure the maintenance, restoration, enhancement, or protection of natural resources and the environment. Both the trial court and Court of Appeal upheld the County’s determination.

Facts and Procedural Background

The Marin County Board of Supervisors adopted the challenged ordinance in 2011. This ordinance was intended to encourage retail customers to bring reusable bags for their shopping and applied to approximately 40 retail stores within the unincorporated county selling food or perishable items. The ordinance excluded restaurants and other establishments selling prepared foods.

The ordinance was proposed by the county’s agricultural commissioner who provided analysis to the Board of Supervisors which showed that single-use plastic and paper carryout bags have adverse environmental impacts throughout the state. According to the agricultural commissioner’s analysis, a shift to reusable bags would conserve resources, reduce the amount of greenhouse gas emissions associated with the production of single-use bags, reduce waste and marine pollution, protect water resources and water quality, and enhance the quality of life for county residents, visitors, and wildlife.

Among other things, the commissioner relied on a master environmental assessment prepared by Green Cities California in which it was reported that a ban on single-use plastic bags combined with a five-cent charge for single-use paper bags in the District of Columbia had caused as many as two-thirds of consumers to shift from single-use to reusable bags. From this information, the commissioner concluded that a ban on plastic bags combined with a minimum charge on paper bags would rebut any claim that the ordinance would simply shift consumer’s habit from one environmental impact to another (single-use plastic to single-use paper). Based on this finding, the county concluded that the ordinance was categorically exempt from CEQA “by demonstrating and achieving a result that is environmentally superior: moving people to reusable bags and reducing waste from all single-use products.” The county did not identify which categorical exemption it was relying on under CEQA.

During the hearing process on the ordinance, the Plastic Bag Coalition submitted numerous objections. The Coalition primarily argued that adoption of the proposed ordinance required preparation of an EIR because alternatives (paper bags and reusable bags) are worse for the environment than plastic bags. Despite the Coalition’s objections, the County Board of Supervisors adopted the ordinance.

Plaintiff filed a petition for writ of mandate in the Marin County Superior Court. The trial court denied the petition and determined that substantial evidence supported the County’s reliance on the categorical exemptions contained in CEQA Guidelines sections 15307 and 15308. The Coalition appealed.

The Court of Appeal’s Decision

The Court of Appeal first described the standard of review applicable to its review of this case. Where an agency concludes a project is categorically exempt from CEQA, that conclusion will be upheld if supported by substantial evidence in the administrative record. Once an agency has established that the project falls within an exemption, the burden falls to the party challenging the exemption to prove that the project is not exempt because it falls within one of the exceptions listed in CEQA Guidelines, section 15300.2. The court noted that, currently, a split of authority exists on the appropriate standard of review (substantial evidence vs. “fair argument”) to apply to a question of fact regarding any exceptions that would kick a project out of exempt status. The court declined to grapple with this split, as it determined the outcome in the case before it would be the same either way.

The Court of Appeal also drew on the California Supreme Court’s decision in Save the Plastic Bag Coalition v. City of Manhattan Beach. The Court of Appeal noted that the Manhattan Beach case involved preparation of a negative declaration for a plastic bag ban ordinance rather than an exemption, but it still found the Supreme Court’s analysis instructive. In Manhattan Beach, the Supreme Court focused on the distinction between local impacts created by a proposed project and impacts that would occur outside the public agency’s geographic boundary. The Supreme Court noted that there might be circumstances when more comprehensive environmental review will be required if it can be shown that a plastic bag ban will result in a significant increase in paper bag use, but that wasn’t the case in Marin County. Marin County’s ordinance applied to roughly 40 stores, compared to over 200 stores affected by Manhattan Beach’s ordinance. The Supreme Court had noted the description of the broader impacts of increased paper bag use in Manhattan Beach to be insubstantial, and the First District Court found the impacts in Marin County to be even more trivial. Here, there were significantly fewer retailers and a fee would be charged for paper bags, thereby increasing the incentive for consumers to bring reusable bags when shopping. No such fee was required by the Manhattan Beach ordinance.

The Court of Appeal then considered the Coalition’s primary argument that the county could not rely on the categorical exemption under CEQA Guidelines sections 15307 and 15308 [Class 7 and 8] because such exemptions are available only to “regulatory agencies implementing regulations authorized by a preexisting state law or ordinance.”  As an initial matter, the Court found that, though the Coalition had not raised the claim during the administrative process, the claim was not barred by a failure to exhaust. Citing another California Supreme Court Case, Tomlinson v. County of Alameda, the court noted that exhaustion is required so long as the public agency gives notice of the grounds for its exemption determination and holds a public hearing where members of the public have the opportunity to weigh in. In this case, county counsel did not identify the basis for the claimed exemptions until a continued hearing on the project.

On the merits, the Coalition argued (without citation to authority, as noted by the court) that legislative actions, such as the enactment of an ordinance, are never exempt from CEQA under Class 7 and 8 because these exemptions apply only to regulatory agencies. But the court acknowledged that the county’s adoption of the ordinance was an exercise of regulatory power provided to it by the California Constitution. The court stated that the “ordinance constitutes a regulation enacted for the purpose of protecting natural resources and the environment.” Having found the county could properly rely on the Class 7 and Class 8 exemptions, the court concluded the Coalition failed to address the substantial evidence relied upon by the County to support its determination that the exemption applied. The Coalition therefore failed to meet its burden to demonstrate that the exemption was not supported by substantial evidence or that an exception would apply to invalidate the exemption. The Court of Appeal affirmed the trial court’s judgment upholding the County’s adoption of the ordinance banning single-use plastic bags.

On June 14, 2012, the California Supreme Court decided Tomlinson v. County of Alameda (Case No. S188161), holding that the requirement for exhaustion of administrative remedies found in Public Resources Code section 21177, subdivision (a) of the California Environmental Quality Act (CEQA) applies to an agency’s decision that a project is categorically exempt from compliance with CEQA, so long as the public agency gives notice of the grounds for its exemption determination, and that determination is preceded by a public hearing at which members of the public had the opportunity to raise objections to the project.

In its decision the Court carefully considered conflicting holdings in Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165 and Hines v. California Coastal Commission (2010) 186 Cal.App.4th 830.

Azusa held that section 21177’s exhaustion requirement does not apply to a challenge to a public agency’s decision that a project is categorically exempt from CEQA compliance, whereas Hines held to the contrary.

Procedurally, the issue is that while section 21777 requires that petitioners exhaust their administrative remedies during the public comment period or during a public hearing on the project before issuance of a notice of determination, CEQA does not provide for a public comment period prior to an agency’s determination of a categorical exemption. Further, no public hearing typically precedes the agency’s notice of determination in this situation, because a notice of determination is not generally filed for a categorical exemption.

Under Hines, an exhaustion provision does apply for categorical exemptions, where there was ample notice of a public hearing. The Court followed Hines rather than Azusa because it found that in this case, as in Hines, the agency did hold public hearings on the project which gave interested parties the opportunity to raise objections to the project before the agency’s exemption finding.

The Supreme Court did not reach the petitioners’ arguments that the public agency’s description of the requirements for the infill exemption was misleading, where the County omitted any mention of the infill exemption’s criterion requiring that the project be located “within city limits.” In Tomlinson, the County did not quote the full language in CEQA Guidelines section 15332 in any of its notices and staff reports. Instead, it substituted “in an established urban area” for the exemption’s language “within city limits” in all of its summaries of the exemption criteria in project materials. Petitioners asserted that this substitution misled and prevented them from raising the specific issue of whether the “city limits” restriction disqualified the project from using the infill exemption. The Court also did not address the argument that the petitioner’s extensive objections to the project on multiple issues at public hearings were sufficient to satisfy the exhaustion requirement.

The Court remanded the case to the Court of Appeal to determine whether the claims the petitioners raised were adequate to put the County on notice that the infill exemption did not apply, and whether the County’s omission of key criteria for a categorical exemption excuses the petitioner’s duty to exhaust on that issue.

This case continues to have important precedential value: it is still important to resolve whether an agency must provide full and accurate information in order to successfully assert the affirmative defense of failure to exhaust administrative remedies in CEQA litigation. The Tomlinson petitioners were represented by RMM partner Sabrina V. Teller.