CHIN, J. —
The California Environmental Quality Act (CEQA) (Pub. Resources Code, § 21000 et seq.)
The Court of Appeal invalidated the permit approval, relying on Guidelines section 15300.2, subdivision (c), which provides: "A categorical exemption shall not be used for an activity where there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances." In the Court of Appeal's view, that a proposed activity may have a significant effect on the environment is itself an unusual circumstance that renders the categorical exemptions inapplicable. Finding substantial evidence of a fair argument that the proposed project may have a significant environmental impact, the court held that the exemptions the City invoked do not apply, and it ordered the trial court to issue a writ of mandate directing the City to set aside the permit approvals and its finding of a categorical exemption, and to order preparation of an environmental impact report (EIR).
We granted review to consider the proper interpretation and application of Guidelines section 15300.2, subdivision (c). We reverse the Court of Appeal's decision.
Real parties in interest and respondents Mitchell Kapor and Freada Kapor-Klein (applicants) want to build a large house on their lot on Rose
Several residents of the City, including appellant Susan Nunes Fadley, filed an appeal with the city council, arguing in part that CEQA's categorical exemptions do not apply because the proposed project's "unusual size, location, nature and scope will have significant environmental impact on its surroundings." They asserted that the proposed residence would be "one of the largest houses in Berkeley, four times the average house size in its vicinity, and situated in a canyon where the existing houses are of a much smaller scale." They submitted evidence that, of Berkeley's over 17,000 single-family residences, only 17 exceed 6,000 square feet, only 10 exceed 6,400 square feet, and only one exceeds 9,000 square feet. They also asserted that the proposed residence would exceed the maximum allowable height under Berkeley's municipal code and would be inconsistent with the policies of the City's general plan, and that an EIR is appropriate to evaluate the proposed construction's potential impact on noise, air quality, historic resources, and neighborhood safety. In response, the City's director of planning
The city council received numerous letters and e-mails regarding the appeal, some in support and some in opposition. Among the appeal's supporters was Lawrence Karp, an architect and geotechnical engineer. In a letter dated April 16, 2010, Karp stated (1) he had reviewed the architectural plans and topographical survey filed with the Board, and had visited the proposed construction site; (2) "[p]ortions of the major fill for the project are shown to be placed on an existing slope inclined at about 42° (~1.1h:1v) to create a new slope more than 50° (~0.8h:1v)"; (3) "[t]hese slopes cannot be constructed by earthwork and all fill must be benched and keyed into the slope which is not shown in the sections or accounted for in the earthwork quantities. To accomplish elevations shown on the architectural plans, shoring and major retaining walls not shown will have to be constructed resulting in much larger earthwork quantities than now expected"; (4) the "massive grading" necessary would involve "extensive trucking operations"; (5) the work that would be necessary "has never before been accomplished in the greater area of the project outside of reservoirs or construction on the University of California campus and Tilden Park"; (6) the project site is "located alongside the major trace of the Hayward fault and it is mapped within a state designated earthquake-induced landslide hazard zone"; and (7) "the project as proposed is likely to have very significant environmental impacts not only during construction but in service due to the probability of seismic lurching of the oversteepened side-hill fills."
In a second letter addressing the investigation of geotechnical engineer Alan Kropp, Karp stated (1) no "fill slopes" were shown in Kropp's plan and "the recommendations for retaining walls do not include lateral earth pressures for slopes with inclinations of more than 2h:1v (~27°) or for wall heights more than 12 feet"; (2) the project's architectural plans "include cross-sections and elevations that are inconsistent with the Site Plan and limitations in" Kropp's report; (3) "all vegetation will have to be removed for grading, and retaining walls totaling 27 feet in height will be necessary to achieve grades. Vertical cuts for grading and retaining walls will total about 43 feet (17 feet for bench cutting and 26 feet for wall cutting). [¶] A drawing in the [Kropp] report depicts site drainage to be collected and discharged into an energy dissipater dug into the slope, which is inconsistent with the intended very steep fill slopes"; and (4) "the project as proposed is likely to have very significant environmental impacts not only during construction, but in service due to the probability of seismic lurching of the oversteepened side-hill fills."
In support of the permit approval, the City's director of planning and development submitted a supplemental report stating: "A geotechnical report was prepared and signed by a licensed Geotechnical Engineer and a Certified Engineering Geologist. This report concluded that the site was suitable for the proposed dwelling from a geotechnical standpoint and that no landslide risk was present at the site. Should this project proceed, the design of the dwelling will require site-specific engineering to obtain a building permit."
The city council addressed the appeal at a meeting on April 27, 2010. Karp was one of the speakers at the meeting. He began by stating his credentials, explaining that he (1) is "a geotechnical engineer specializing in foundation engineering and construction"; (2) has "an earned doctorate degree in civil engineering and other degrees from U.C. Berkeley including two masters and a post-doctoral certificate in earthquake engineering"; (3) is "fully licensed" and had "taught foundational engineering at Berkeley for 14 years and at Stanford for three"; (4) has "experience" that "includes over 50 years of design and construction in Berkeley"; and (5) "prepare[s] feasibility studies before, and engineering during, construction of unusual projects." After affirming the opinion he had earlier stated in his letters, he offered this response to the assertion that he had misread the project plans: "The recent report from [applicants] say I don't know how to read architectural drawings, but I have been a licensed architect for many years and I do know how. [¶] Their reports have not changed my opinion." After hearing from Karp, Kropp, and others, the city council adopted the Board's findings, affirmed the permit approval, and dismissed the appeal. The city planning department later filed a notice of exemption, stating that the project is categorically exempt from CEQA under Guidelines sections 15303, subdivision (a), and 15332, and that Guidelines section 15300.2 did not apply.
The Court of Appeal reversed. After noting appellants' concession, for purposes of appeal, that the project satisfies the requirements of the class 3 and class 32 exemptions, the Court of Appeal agreed with appellants that the unusual circumstances exception precludes the City from relying on those exemptions.
We then granted respondents' petition for review.
As they did in the Court of Appeal, appellants concede for purposes of this appeal that the proposed project comes within the terms of the class 3 (small
Contrary to our rules for interpreting regulations, appellants' proposed construction, which mirrors that of the Court of Appeal and which the concurring opinion would adopt, would give no meaning to the phrase "due to unusual circumstances." According to appellants, this phrase is merely "descriptive" in that "[u]nusual circumstances" are simply "self-evident underpinnings" when a project that otherwise satisfies the requirements of a categorical exemption nevertheless "has potentially significant impacts." Likewise, the concurring opinion asserts that "the phrase `unusual circumstances'... simply describes the nature of a project that, while belonging to
In addition, we agree with respondents that, under the construction of appellants and the concurring opinion, the categorical exemptions the Legislature, through the Secretary, has established would have little, if any, effect. CEQA specifies that environmental review through preparation of an EIR is required only "[i]f there is substantial evidence ... that the project may have a significant effect on the environment." (§ 21080, subd. (d).) As a corollary to this principle, CEQA also specifies that, if "[t]here is no substantial evidence, in light of the whole record before the lead agency, that the project may have a significant effect on the environment," then the proposed project is not subject to further CEQA review. (§ 21080, subd. (c)(1).) Guidelines section 15061, subdivision (b)(3), captures these principles by specifying: "Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA."
Under these provisions, where there is no substantial evidence a proposed project may have a significant environmental effect, further CEQA review is unnecessary; no categorical exemption is necessary to establish that proposition. According to appellants, under the unusual circumstances exception, the categorical exemptions are inapplicable unless an agency "check[s] its files" and finds no "evidence of potentially significant impacts." But this is precisely the inquiry an agency makes under Guidelines section 15061, subdivision (b)(3), to determine whether the proposed project is subject to CEQA review in the first instance. (Muzzy Ranch Co. v. Solano County Airport Land Use Com. (2007) 41 Cal.4th 372, 387 [60 Cal.Rptr.3d 247, 160 P.3d 116] (Muzzy Ranch) [under Guidelines, § 15061, subd. (b)(3), agency must determine whether the evidence in the administrative record shows no possibility the proposed activity may have a significant effect on the environment].) And
Appellants assert that applying a categorical exemption despite a proposed project's potential significant environmental effect would contravene CEQA statutes and the Legislature's intent in passing CEQA. They rely on three CEQA provisions: (1) section 21100, subdivision (a), which directs preparation of an EIR "on any project ... that may have a significant effect on the environment"; (2) section 21151, subdivision (a), which similarly directs preparation of an EIR "on any project ... which may have a significant effect on the environment"; and (3) section 21082.2, subdivision (d), which states that an EIR "shall" be prepared "[i]f there is substantial evidence, in light of the whole record before the lead agency, that a project may have a significant effect on the environment." This statutory authority, appellants assert, "does not allow categorical exemptions for any project that may have a significant effect on the environment." In other words, "the documented presence of a potential environmental effect ... always defeat[s] a categorical exemption." "[T]he statutory authority [the Legislature] has given to the Secretary only allows categorical exemption for projects that have no significant environmental effect, and `no statutory policy exists in favor of applying categorical exemptions where a fair argument can be made that a project will create a significant effect on the environment.'" Thus, appellants assert, requiring more than a showing that a proposed project may have a significant effect in the environment "would be inconsistent with" CEQA's statutory "mandates."
Appellants' argument ignores a basic principle of statutory interpretation: courts "do not construe statutes in isolation, but rather read every statute `with reference to the entire scheme of law of which it is part so that the whole may be harmonized and retain effectiveness.'" (People v. Pieters (1991) 52 Cal.3d 894, 899 [276 Cal.Rptr. 918, 802 P.2d 420].) Thus, we must consider the three sections appellants cite, not in isolation, but "`in the context of the statutory framework as a whole'" in order to harmonize CEQA's "`various parts.'" (Palos Verdes Faculty Assn. v. Palos Verdes 580 P.2d 1155] [construing the Ed. Code].)
The Legislature immediately responded to Mammoth by amending CEQA through urgency legislation. (See County of Inyo v. Yorty (1973) 32 Cal.App.3d 795, 803 [108 Cal.Rptr. 377].) As relevant here, it added section 21083, which generally directed the OPR, "as soon as possible," to "prepare and develop proposed guidelines for the implementation of [CEQA]," and directed the Secretary to "certify and adopt the [OPR's proposed] guidelines pursuant to" the Administrative Procedure Act. (Gov. Code, § 11340 et seq.; Stats. 1972, ch. 1154, § 1, pp. 2271, 2272-2273.) These directives exist today as subdivisions (a) and (e) of section 21083. More specifically, in several provisions, the Legislature provided for categorical exemptions to CEQA. In former section 21084, it provided: "The guidelines prepared and adopted pursuant to Section 21083 shall include a list of classes of projects which have been determined not to have a significant effect on the environment and which shall be exempt from the provisions of [CEQA]. In adopting the guidelines, the Secretary ... shall make a finding that the list or classification of projects referred to in this section do not have a significant effect on the environment." (Former § 21084, as added by Stats. 1972, ch. 1154, § 1,
Collectively, these provisions indicate that the Legislature intended to establish by statute "classes of projects" that "have been determined not to have a significant effect on the environment," to require the OPR and the Secretary to apply their expertise and identify those "classes" by "mak[ing] a finding" that the projects they comprise "do not have a significant effect on the environment," and to "exempt" from CEQA proposed projects within the classes the OPR and the Secretary have identified. (§ 21084, subd. (a).) This conclusion comports with the impetus for the Legislature's enactment of these provisions: our decision in Mammoth, which (1) observed that CEQA's applicability turns on "questions of degree," (2) stated that "the majority" of private projects "may be approved exactly as before" CEQA's enactment because they "are minor in scope ... and hence, in the absence of unusual circumstances, have little or no effect on the public environment," and (3) called for "[f]urther legislative or administrative guidance" on these issues. (Mammoth, supra, 8 Cal.3d at pp. 271-272.) To address these considerations, the Legislature, through the Guidelines, intended to enumerate classes of projects that are exempt from CEQA because, notwithstanding their potential effect on the environment, they already "have been determined not to have a significant effect on the environment." (§ 21084, subd. (a).) The Guidelines implement this intent, by setting forth the "classes of projects" that the
By contrast, as earlier explained, appellants' construction of the unusual circumstances exception would render useless and unnecessary the statutes the Legislature passed to identify and make exempt classes of projects that have no significant environmental effect. Try as they might, appellants can identify no purpose or effect of the categorical exemption statutes if, as they assert, a showing of a fair argument of a potential environmental effect precludes application of all categorical exemptions. Construing the unusual circumstances exception to apply anytime there is a reasonable possibility of a significant environmental effect would, therefore, contravene our duty to adopt a construction that gives effect to all parts of the statutory and regulatory framework, rather than one that renders part of the framework "wholly useless and unnecessary." (French Bank Case (1879) 53 Cal. 495, 530.)
The concurring opinion's attempt to succeed where appellants have failed — i.e., to show that the categorical exemptions still have some "value" under their construction (conc. opn., post, at p. 1128) — is also unpersuasive. The concurring opinion first asserts that proposed projects enjoy "a considerable procedural advantage" when an agency finds that they fall within the terms of an exempt category. (Ibid.) As to such projects, the concurring opinion notes, an agency need not follow any particular procedure, include any written determination, undertake an initial study, or adopt a negative declaration. (Id. at p. 1128.) However, the same is true of proposed projects that fall within the terms of Guidelines section 15061, subdivision (b)(3), i.e., projects that are "not subject to CEQA" because "it can be seen with certainty that there is no possibility that [they] may have a significant effect on the environment ...." (See Muzzy Ranch, supra, 41 Cal.4th at p. 380 [initial study not required where Guidelines, § 15061, subd. (b)(3) applies].) As already explained, the concurring opinion's interpretation renders the categorical exemptions duplicative of this guideline, and the concurring opinion does not persuasively demonstrate otherwise. Thus, its discussion of these so-called procedural advantages fails to show that, under its interpretation, the categorical exemptions have independent value.
The concurring opinion also notes that, when an agency finds that a project meets the terms of a categorical exemption, it "impliedly finds that it has no significant environmental effect," and "the burden shifts to" project opponents
However, even if a proposed project faces no opposition, an agency invoking a categorical exemption may not simply ignore the unusual circumstances exception; it must "consider the issue of significant effects ... in determining whether the project is exempt from CEQA where there is some information or evidence in the record that the project might have a significant environmental effect." (Association for Protection etc. Values v. City of Ukiah (1991) 2 Cal.App.4th 720, 732 [3 Cal.Rptr.2d 488] (Ukiah).) This follows from Guidelines section 15061, subdivisions (a) and (b)(2), which, respectively, (1) direct a lead agency to determine whether a proposed project is "exempt from CEQA," and (2) specify that a project is exempt if a categorical exemption applies "and the application of that categorical exemption is not barred by one of the exceptions set forth in Section 15300.2." Thus, an agency may not apply a categorical exemption without considering evidence in its files of potentially significant effects, regardless of whether that evidence comes from its own investigation, the proponent's submissions, a project opponent, or some other source. Moreover, under the concurring opinion's interpretation, if those files contain "substantial evidence" of a mere "fair argument" that the project will have significant environmental effects, the agency may not apply a categorical exemption. (Conc. opn., post, at p. 1129.) Thus, under the concurring opinion's interpretation of the unusual circumstances exception, the "considerable procedural advantage" the concurring opinion posits is largely illusory. (Id. at p. 1127.)
Also illusory is the "second advantage" that, in the view of the concurring opinion, gives some value to categorical exemptions under its interpretation: the "comparative arguments" available to project proponents when an opponent invokes the unusual circumstances exception. (Conc. opn., post, at p. 1129.) According to the concurring opinion, proponents may "argue," if "supported by evidence," that (1) the project's effects are "typical" of those generated by projects in the exempt category, "such that few or no projects in the category would be exempt if the effects were deemed significant," and (2) "the project's dimensions or features are not unusual compared to typical projects in the exempt category, thereby suggesting that the project is similar to those that the Secretary has determined not to have a significant environmental effect." (Id. at pp. 1129.) However, under the fair argument test the concurring opinion would apply here, "an agency is merely supposed to look to see if the record shows substantial evidence of a fair argument that there may be a significant effect. [Citations.] In other words, the agency is not to weigh the evidence to come to its own conclusion about whether there will be a significant effect. It is merely supposed to inquire, as a matter of law,
Moreover, contrary to the assertion of the concurring opinion, even were the categorical exemptions to retain some limited value under its construction, there would still be "reason[s]" (conc. opn., post, at p. 1130) to reject that construction. First, as earlier explained (ante, at p. 1097), because that construction would transform the phrase "due to unusual circumstances" into meaningless surplusage, it is one we "should avoid." (Metcalf v. County of San Joaquin (2008) 42 Cal.4th 1121, 1135 [72 Cal.Rptr.3d 382, 176 P.3d 654].) Second, nothing suggests that either the Legislature or the Secretary intended the categorical exemptions to have such minuscule value. Had that been their intent, surely they would have expressed it in a more clear, concise, direct, and obvious way.
As to projects that meet the requirements of a categorical exemption, a party challenging the exemption has the burden of producing evidence supporting an exception. (Davidon Homes v. City of San Jose (1997) 54 Cal.App.4th 106,
This reading of the guideline is not inconsistent with the phrase "reasonable possibility that the activity will have a significant effect on the environment." (Guidelines, § 15300.2, subd. (c).) A party invoking the exception may establish an unusual circumstance without evidence of an environmental effect, by showing that the project has some feature that distinguishes it from others in the exempt class, such as its size or location. In such a case, to render the exception applicable, the party need only show a reasonable possibility of a significant effect due to that unusual circumstance. Alternatively, under our reading of the guideline, a party may establish an unusual circumstance with evidence that the project will have a significant environmental effect. That evidence, if convincing, necessarily also establishes "a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances." (Guidelines, § 15300.2, subd. (c).)
As this discussion demonstrates, our approach is consistent with the concurring opinion's statement of its central proposition: "When it is shown "that a project otherwise covered by a categorical exemption will have a significant environmental effect, it necessarily follows that the project presents unusual circumstances." (Conc. opn., post, at p. 1123, italics added.) However, for reasons already set forth, we part company with the concurring opinion when it moves from this central proposition to the conclusion that a reviewing court must find the exception applicable, and overturn an agency's application of an exemption, if there is "substantial evidence" of "a fair argument that the project will have significant environmental effects." (Ibid.) The Secretary, in complying with the Legislature's command to determine the "classes of projects" that "do not have a significant effect on the environment" (§ 21084, subd. (a)), necessarily resolved any number of "fair arguments" as to the possible environmental effects of projects in those classes.
Appellants assert that Wildlife Alive v. Chickering (1976) 18 Cal.3d 190 [132 Cal.Rptr. 377, 553 P.2d 537] (Chickering) precludes us from construing the unusual circumstances exception to require a showing of something more than a potentially significant environmental effect. There, we held in relevant part that the setting of hunting and fishing seasons by the Fish and Game Commission (Commission) was not exempt from CEQA under Guidelines former section 15107. (Chickering, supra, at p. 205.) That former guideline established a categorical exemption for "`actions taken by regulatory agencies... to assure the maintenance, restoration, or enhancement of a natural resource where the regulatory process involves procedures for protection of the environment'" (id. at p. 204), and it described as an example "`the wildlife preservation activities of the State Department of Fish and Game.'" (Id. at p. 205.) We gave two reasons for finding this exemption inapplicable on its terms. First, the Commission "is not" the Department of Fish and Game. (Ibid.) Second, and "[m]ore significantly," several of the statutes that granted powers and duties to the Department of Fish and Game "contemplate projects specifically designed for the preservation of wildlife." (Ibid.) These are the "departmental functions" to which the former guideline referred in mentioning "[t]he `wildlife preservation activities of the State Department of Fish and Game.'" (Ibid.) "The [Commission's] fixing of hunting seasons, while doubtless having an indirect beneficial effect on the continuing survival of certain species, cannot fairly or readily be characterized as a preservation activity in a strict sense." (Ibid.)
After concluding in Chickering that the Commission's activity did not fall within the language of the former guideline, we discussed why it would have been problematic to "expand[]" that "language to imply" an exemption for that activity. (Chickering, supra, 18 Cal.3d at p. 206.) Doing so, we stated, would contravene the "principle" that "... CEQA must be interpreted so as to afford the `fullest possible protection' to the environment." (Ibid.) Moreover, we explained in a passage appellants quote, "if" we "expand[ed]" (id. at p. 206) the former guideline's language "to cover the commission's hunting program, it is doubtful that such a categorical exemption [would be] authorized under the statute.... [N]o regulation is valid if its issuance exceeds the scope of the enabling statute. [Citations.] The secretary is empowered to exempt only those activities which do not have a significant effect on the environment. (Pub. Resources Code, § 21084.) It follows that where there is any reasonable possibility that a project or activity may have a significant effect on the environment, an exemption would be improper," and "the setting
For several reasons, appellants' reliance on Chickering is unavailing. First, Chickering predated the Secretary's adoption of the unusual circumstances exception and, thus, addressed neither the meaning nor the validity of that exception. Second, as here relevant, the only issue in Chickering was whether the Commission's activity fell within the scope of Guidelines former section 151071. After concluding it did not, we added the discussion appellants cite, which, to buttress our conclusion, explored the validity of a hypothetical exemption that would include the Commission's activity. (Chickering, supra, 18 Cal.3d at pp. 205-206.) Third, because that added discussion was tangential to the issue before us and unnecessary to resolve the case, it was, understandably, summary. For example, it did not consider the broader statutory framework, the evolution of the CEQA statutes, or the implications of its statement for the effectiveness of various other CEQA statutes. Finally, in 1993, after we decided Chickering, the Legislature enacted section 21083.1, which directs courts "not [to] interpret [the CEQA statutes] or the state guidelines adopted pursuant to Section 21083 in a manner which imposes procedural or substantive requirements beyond those explicitly stated in [CEQA] or in the state guidelines." (§ 21083.1, italics added.) According to the legislative history, the purpose of this statute was to "limit judicial expansion of CEQA requirements" and to "`reduce the uncertainty and litigation risks facing local governments and project applicants by providing a "safe harbor" to local entities and developers who comply with the explicit requirements of the law.'" (Assem. Com. on Natural Resources, Analysis of Sen. Bill No. 722 (1993-1994 Reg. Sess.) for hearing on July 12, 1993, p. 2.) Given appellants' concession for purposes of appeal that the proposed project here falls within two of the categorical exemptions, under Guidelines section 15300.2, subdivision (c), environmental review is necessary only if "there is a reasonable possibility [the project] will have a significant effect on the environment due to unusual circumstances." Given that the listing of a class of projects as exempt constitutes the Secretary's finding, pursuant to the Legislature's command, that the typical effects of projects within that class are not significant within the meaning of CEQA, interpreting the unusual circumstances exception to require environmental review absent unusual circumstances would violate the Legislature's express directive in section 21083.1 "not [to] interpret" the CEQA statutes and the Guidelines "in a manner which imposes procedural or substantive requirements beyond those" the statutes and the Guidelines "explicitly state[]."
Appellants also substantially rely on this court's decision in Mountain Lion Foundation v. Fish and Game Com. (1997) 16 Cal.4th 105 [65 Cal.Rptr.2d 580, 939 P.2d 1280] (Mountain Lion). There, the majority held in relevant part that the same categorical exemption previously at issue in Chickering — which had been renumbered as Guidelines section 15307 — did not apply to the Commission's decision to remove the Mojave ground squirrel from the threatened species list. (Mountain Lion, supra, at pp. 124-127.) As noted earlier, that guideline establishes an exemption for "actions taken by regulatory agencies as authorized by state law or local ordinance to assure the maintenance, restoration, or enhancement of a natural resource where the regulatory process involves procedures for protection of the environment." (Guidelines, § 15307.) The majority found that "a delisting action cannot be fairly included within this class ..." because it "removes rather than secures [the] protections" that an endangered or threatened species enjoys under the California Endangered Species Act (Fish & G. Code, § 2050 et seq.). (Mountain Lion, supra, at p. 125.) Moreover, the majority added, in light of other guidelines, a delisting could not come within a categorical exemption. "[A] categorical exemption represents a determination by the Secretary that a particular project does not have a significant effect on the environment. (§ 21084.)" (Mountain Lion, supra, at p. 124.) "It follows," the majority stated in the passage on which appellants rely, "that an activity that may have a significant effect on the environment cannot be categorically exempt." (Ibid.) Under Guidelines section 15065, subdivision (a), an agency "must find" that a proposed project may have that effect if it has "`the potential to ... reduce the ... number or restrict the range of an endangered, rare or threatened species.'" (Mountain Lion, supra, at p. 124.) Because a delisting, by "withdraw[ing] existing levels of protection," "creates at least the potential for population reduction or habitat restriction," this guideline "obligate[s]"
For reasons similar to those earlier discussed in connection with Chickering, supra, 18 Cal.3d 190, appellants' reliance on Mountain Lion is unavailing. Like Chickering, Mountain Lion addressed neither the meaning nor the validity of the unusual circumstances exception. Also like Chickering, as here relevant, Mountain Lion presented only the issue of whether the Commission's activity fell within the express terms of a categorical exemption. Because the court found it did not, the hypothetical discussion of whether the Secretary could have established a categorical exemption was tangential, unnecessary, and summary. In any event, properly understood, the discussion in Mountain Lion stands only for the proposition that the Secretary, having established in one guideline that a delisting may have a significant effect on the environment, may not in another guideline "make a finding" that delistings, as a class, "do not have a significant effect on the environment" and are therefore exempt from CEQA. (§ 21084, subd. (a).) It does not, as appellants assert, establish that where the Secretary, exercising statutorily delegated authority, has found that projects of a certain kind "do not have a significant effect on the environment" and are exempt from CEQA, a proposed project that falls within that class and does not involve any unusual circumstances is, nonetheless, subject to environmental review if an argument can be made that it may have a significant effect on the environment. That question simply was not before us in Mountain Lion, supra, 16 Cal.4th 105.
Several CEQA statutes expressly address judicial review of agency action. Section 21168 provides the standard of review for decisions "made as a result of a proceeding in which by law a hearing is required to be given, evidence is required to be taken and discretion in the determination of facts is vested in a public agency." Section 21168.5 provides the standard of review in all other actions "to attack, review, set aside, void or annul a determination, finding, or decision of a public agency on the grounds of noncompliance with [CEQA]." Because nothing required the City to hold an evidentiary hearing in this case, the latter section governs. Under it, a court's inquiry is "whether there was a prejudicial abuse of discretion. Abuse of discretion is established if the agency has not proceeded in a manner required by law or if the determination or decision is not supported by substantial evidence." (Ibid.) Thus, reversal of
The parties disagree about how these standards apply to an agency's determination that the unusual circumstances exception is inapplicable. Respondents, invoking the traditional substantial evidence standard, argue that a reviewing court must uphold such a determination if substantial evidence supports it, even if substantial evidence in the record also shows that a contrary conclusion would be equally, or even more, reasonable. Appellants, on the other hand, contend that, even if substantial evidence supports the agency's determination, a reviewing court must overturn the determination if there is a fair argument based on substantial evidence that the proposed project may have a significant effect on the environment due to unusual circumstances. A fair argument exists, appellants assert, "if any facts, fact-based assumptions, or expert opinion in the administrative record support... arguments that [the] exception may apply, regardless of contrary evidence."
The fair argument approach derives from our application of section 21168.5 in No Oil, Inc. v. City of Los Angeles (1974) 13 Cal.3d 68 [118 Cal.Rptr. 34, 529 P.2d 66] (No Oil). There, we reviewed the City of Los Angeles's application of section 21151, which requires preparation of an EIR for a nonexempt project that "may have a significant effect on the environment." (Id., subd. (a).) Although the proposed project in No Oil did not qualify for an exemption under the CEQA statutes or the Guidelines, Los Angeles had found, after conducting an initial threshold environmental study, that no EIR was necessary because the project would not have [a] significant effect on the environment. We reversed, concluding that the finding constituted a prejudicial abuse of discretion under section 21168.5 because, in making it, Los Angeles had failed to proceed as required by law in two ways: (1) it had not made its determination in writing; and (2) it had used the wrong standard to determine whether the proposed project might have a significant effect on the environment. Regarding the latter, we construed section 21151 to require
The Natural Resources Agency has since expressly incorporated No Oil's fair argument approach into the Guidelines. Guidelines section 15064, subdivision (f)(1), now states: "If the lead agency determines there is substantial evidence in the record that the project may have a significant effect on the environment, the lead agency shall prepare an EIR (Friends of B Street v. City of Hayward (1980) 106 Cal.App.3d 988 [165 Cal.Rptr. 514]). Said another way, if a lead agency is presented with a fair argument that a project may have a significant effect on the environment, the lead agency shall prepare an EIR even though it may also be presented with other substantial evidence that the project will not have a significant effect (No Oil, Inc. v. City of Los Angeles (1974) 13 Cal.3d 68 [118 Cal.Rptr. 34, 529 P.2d 66])."
The fair argument standard Guidelines section 15064, subdivision (f)(1), sets forth applies by its terms to determinations of a lead agency, not of a court. Under sections 21168 and 21168.5, judicial review of agency decisions
There have been several attempts to extend the fair argument standard to CEQA determinations other than the one at issue in No Oil, supra, 13 Cal.3d 68, i.e., whether to prepare an EIR for a nonexempt project. We considered, and rejected, one such attempt in Laurel Heights II, which involved an agency's decision not to recirculate an EIR for public comment. Section 21092.1 requires recirculation if "significant new information is added to" an EIR after initial circulation and before certification. In Laurel Heights II, a neighborhood improvement association argued that in determining whether recirculation is required, "the `fair argument' test used to review the decision... to prepare a negative declaration" in lieu of an EIR should apply. (Laurel Heights II, supra, 6 Cal.4th at p. 1134.) We disagreed, explaining: "[S]ection 21151 commands that an EIR must be prepared whenever a project `may have a significant effect on the environment.' (Italics added.) In No Oil ..., we interpreted section 21151 to require preparation of an EIR whenever it can be fairly argued on the basis of substantial evidence that the project may have significant environmental impact. [Citation.] Our decision, however, expressly acknowledged that judicial review of agency decisions under CEQA is governed by sections 21168 (administrative mandamus) and 21168.5 (traditional mandamus) and, of course, did not purport to alter the standard of review set forth in those statutes. Rather, the `fair argument' test was derived from an interpretation of the language of, and policies underlying, section 21151 itself. For this reason, the `fair argument' test has been applied only to the decision whether to prepare an original EIR or a negative
Several courts, however, have extended the fair argument approach to aspects of the determination whether the unusual circumstances exception applies. (Voices for Rural Living v. El Dorado Irrigation Dist. (2012) 209 Cal.App.4th 1096, 1108 [147 Cal.Rptr.3d 480] (Voices); Wollmer v. City of Berkeley (2011) 193 Cal.App.4th 1329, 1350 [122 Cal.Rptr.3d 781]; Banker's Hill, supra, 139 Cal.App.4th at pp. 261-267; Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165, 1206 [61 Cal.Rptr.2d 447]; Dunn-Edwards Corp. v. Bay Area Air Quality Management Dist. (1992) 9 Cal.App.4th 644, 654-656 [11 Cal.Rptr.2d 850].) Other courts have noted judicial disagreement as to whether the fair argument standard applies in this context, but have declined to decide the issue, finding that the standard's application would not have affected the result. (Save the Plastic Bag Coalition v. City and County of San Francisco (2013) 222 Cal.App.4th 863, 879 [166 Cal.Rptr.3d 253]; Hines v. California Coastal Commission (2010) 186 Cal.App.4th 830, 855 [112 Cal.Rptr.3d 354]; San Lorenzo Valley Community Advocates for Responsible Education v. San Lorenzo Valley Unified School Dist. (2006) 139 Cal.App.4th 1356, 1390 [44 Cal.Rptr.3d 128]; Santa Monica Chamber of Commerce v. City of Santa Monica (2002) 101 Cal.App.4th 786, 796 [124 Cal.Rptr.2d 731] (Santa Monica); Fairbank v. City of Mill Valley (1999) 75 Cal.App.4th 1243, 1259-1260 [89 Cal.Rptr.2d 233]; Ukiah, supra, 2 Cal.App.4th at pp. 728-729, fn. 7.) The principal supporting authority these courts cite for the fair argument standard's inapplicability is Centinela Hospital Assn. v. City of Inglewood (1990) 225 Cal.App.3d 1586 [275 Cal.Rptr. 901]. There, in rejecting the claim that the unusual circumstances exception applied, the court reasoned: "When appellant argues that the facility is located `at an extremely sensitive location in terms of public usage and traffic,' and it `will create a health and safety hazard, which in turn, will place increased demands on public services such as police and fire protection,' appellant is asking us to adopt an improper standard of review and independently reweigh the evidence. We conclude that substantial evidence supports the express findings of the [City of Inglewood Planning] Commission and city council as to traffic and public health and safety issues and
Whether a particular project presents circumstances that are unusual for projects in an exempt class is an essentially factual inquiry, "`founded "on the application of the fact-finding tribunal's experience with the mainsprings of human conduct."'" (People v. Louis (1986) 42 Cal.3d 969, 987 [232 Cal.Rptr. 110, 728 P.2d 180].) Accordingly, as to this question, the agency serves as "the finder of fact" (Save Our Peninsula Committee v. Monterey County Bd. of Supervisors (2001) 87 Cal.App.4th 99, 117 [104 Cal.Rptr.2d 326]), and a reviewing court should apply the traditional substantial evidence standard that section 21168.5 incorporates. (Save Our Peninsula Committee, at p. 117.) Under that relatively deferential standard of review, the reviewing court's "`role'" in considering the evidence differs from the agency's. (Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 576 [38 Cal.Rptr.2d 139, 888 P.2d 1268].) "`Agencies must weigh the evidence and determine "which way the scales tip," while courts conducting [traditional] substantial evidence ... review generally do not.'" (Ibid.) Instead, reviewing courts, after resolving all evidentiary conflicts in the agency's favor and indulging in all legitimate and reasonable inferences to uphold the agency's finding, must affirm that finding if there is any substantial evidence, contradicted or uncontradicted, to support it. (Id. at p. 571; see Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376, 393 [253 Cal.Rptr. 426, 764 P.2d 278] (Laurel Heights I) [reviewing court's "task is not to weigh conflicting evidence and determine who has the better argument" or whether "an opposite conclusion would have been equally or more reasonable"].)
This bifurcated approach to the questions of unusual circumstances and potentially significant effects comports with our construction of the unusual circumstances exception to require findings of both unusual circumstances and a potentially significant effect. It would be inappropriate for an agency to apply the fair argument standard to determine whether unusual circumstances exist. That standard is intended to guide the determination of whether a project has a potentially significant effect, not whether it presents unusual circumstances. While evidence of a significant effect may be offered to prove unusual circumstances, circumstances do not become unusual merely because a fair argument can be made that they might have a significant effect. Evidence that a project may have a significant effect is not alone enough to remove it from a class consisting of similar projects that the Secretary has found "do not have a significant effect on the environment." (§ 21084, subd. (a), italics added; cf. Laurel Heights II, supra, 6 Cal.4th at p. 1134; No Oil, supra, 13 Cal.3d at p. 83, fn. 16.) Therefore, an agency must weigh the evidence of environmental effects along with all the other evidence relevant to the unusual circumstances determination, and make a finding of fact. Judicial review of such determinations is limited to ascertaining whether they are "supported by substantial evidence." (§ 21168.5.)
We reject respondents' assertion that applying two different standards to the unusual circumstances exception is "fundamentally inconsistent with the legal framework for categorical exemptions" and would, by making the process "too complicated and cumbersome," "defeat the Legislature's intent in having categorical exemptions." As explained above, requiring an agency to apply the fair argument standard to determine whether unusual circumstances give rise to "a reasonable possibility that the activity will have a significant effect on the environment" (Guidelines, § 15300.2, subd. (c)) is fully consistent with CEQA's framework and the Legislature's intent to provide categorical exemptions. Nor, for a reviewing court, is there anything particularly "complicated" or "cumbersome" about applying section 21168.5's substantial evidence prong to unusual circumstance determinations, and its "proceeded in a manner required by law" prong to determinations as to potentially significant effects. Courts are well versed in bringing a variety of considerations to bear in making such determinations.
Contrary to respondents' assertion, applying the fair argument standard to aspects of the unusual circumstances exception does not conflict with our decision in Muzzy Ranch, supra, 41 Cal.4th 372. The premise of respondents' argument is that, in Muzzy Ranch, we applied the traditional substantial evidence test in reviewing an agency's determination under Guidelines section 15061, subdivision (b)(3), that a proposed project was not subject to CEQA. However, in Muzzy Ranch, we had no occasion to identify the standard of review we applied. Moreover, as appellants explain, the language of Guidelines section 15061, subdivision (b)(3), is considerably different from the language of the unusual circumstances exception; the former applies "[w]here it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment" (Guidelines, § 15061, subd. (b)(3)), whereas the latter applies "where there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances" (Guidelines, § 15300.2, subd. (c)). Thus, even under respondents' reading of Muzzy Ranch, applying the fair argument standard in the context of the unusual circumstances exception creates no conflict with that decision.
In reviewing the City's determination that the unusual circumstances exception does not apply, the trial court identified and made "two separate determinations": (1) whether "there is a reasonable possibility that the activity will have a significant effect on the environment"; and (2) "whether such reasonable possibility of a significant effect is due to unusual circumstances associated with the project." It answered the first question in the affirmative, explaining in part that, "[d]espite Respondents' criticisms of [Karp's] report and [his] methodology, and even when discounting the clearly erroneous and misleading portions, Dr. Karp's opinion" regarding the "`probability of seismic lurching of oversteepened side-hill fills'" "provides substantial evidence of a fair argument of a significant environmental effect consequent to the Project." However, the court also found that the proposed project did not present "unusual circumstances," explaining: "Though the Project involves a large house, built in the hills on a steep slope, there is nothing so out of the ordinary about such a project that it would take it out of the exemption. Moreover, there is no evidence to support a finding that any of the circumstances surrounding the Project make it `unusual.' ... [T]hough it is a large
In reversing the judgment, the Court of Appeal agreed with the trial court "that Karp's letters ... amounted to substantial evidence of a fair argument that the proposed construction would result in significant environmental impacts." But it disagreed that the unusual circumstances exception applies only if the proposed project's potentially significant environmental effects are due to unusual circumstances. In the Court of Appeal's view, "the fact" that the proposed project "may" have a significant effect on the environment "is itself an unusual circumstance" that "preclude[s]" the City from applying a categorical exemption. The Court of Appeal went on to note that it may nevertheless "be helpful" to determine "whether unusual circumstances exist" apart from the project's potentially significant environmental effect. Considering this question de novo, it found that, with respect to the class 3 small structure exemption, the proposed project's size constitutes such a circumstance. In reaching this result, it reasoned that "whether a circumstance is unusual `is judged relative to the typical circumstances related to an otherwise typically exempt project,' as opposed to the typical circumstances in one particular neighborhood." As to the class 32 in-fill development exemption, the court offered no additional analysis.
It is apparent that neither the trial court nor the Court of Appeal applied principles like those we have set out above. Remand for application of the standards we announce today is therefore both appropriate and necessary.
Respondents separately attack the conclusion of both the trial court and the Court of Appeal that Karp's submissions constitute substantial evidence of a fair argument that the proposed project may have a significant environmental effect. As earlier noted, Karp opined that the proposed project "is likely to have very significant environmental impacts ... due to the probability of seismic lurching of the oversteepened side-hill fills." Respondents contend that Karp's opinion does not constitute substantial evidence of a fair argument because it is based on a misreading of the plans the City approved. In their view, the evidence in the record, including the submissions of Kropp and Toby, conclusively establishes that "the project approved by the City does not involve `side-hill fill'" and that Karp was mistaken in reading the plans otherwise. Because of Karp's erroneous belief there would be side-hill fill, his opinion, respondents assert, "is not substantial evidence." A finding of potential environmental impacts, respondents argue, must be based on the proposed project as actually approved, and may not be based on unapproved activities that opponents assert will be necessary because the project as approved cannot be built. If the proposed project "cannot be built as approved" and applicants want to build a different project, then "they must return to the City for approval of a different project and the City could issue a stop-work notice to prevent unauthorized construction."
We decline to extend Laurel Heights I to situations where project opponents claim, not that the proposed project will lead to additional future development, but that the proposed project cannot be carried out as approved and will require additional work that may or will have a significant environmental effect. The latter situation, unlike the former, presents little risk of either bureaucratic and financial impediments to proper environmental review or piecemeal review of a project with the potential for significant cumulative effects. As respondents argue, if a proposed project cannot be built as approved, then the project's proponents will have to seek approval of any additional activities and, at that time, will have to address the potential environmental effects of those additional activities. As respondents also argue, if a project opponent's opinion that unapproved activities may have a significant environmental effect constitutes fair argument, then it is doubtful that any project could survive challenge. Accordingly, Karp's opinion is insufficient as a matter of law insofar as it is based on the potential effect of unapproved activities Karp believes will be necessary because the project cannot be built as approved.
This conclusion has implications for respondents' claim that, because Karp misread the proposed project's plans, his opinion is legally insufficient. As part of the permit application, applicants submitted a set of architectural plans for the project. In opining that the proposed project would result in "oversteepened side-hill fills" with potentially significant environmental effects — including "seismic lurching" — Karp relied largely, if not entirely, on a page of those plans entitled "TRANSVERSE SECTION LOOKING EAST." In April 2010, during the appeal to the city council, Karp stated that this page "indicates [that] fills [will be] placed directly on very steep existing slopes,"
Finally, because reversal and remand is appropriate for reasons explained above, we need not resolve respondents' claim that the remedy the Court of Appeal chose upon finding the proposed project not to be exempt under class 3 or class 32 — ordering preparation of an EIR — was improper. However, it is appropriate to discuss that issue because the question of remedy could arise again on remand.
The Court of Appeal's judgment is reversed and the matter is remanded for further proceedings consistent with this opinion.
Cantil-Sakauye, C. J., Corrigan, J., Baxter, J.,
LIU, J., Concurring.
I agree with today's opinion that "a finding of environmental impacts must be based on the proposed project as actually approved and may not be based on unapproved activities that opponents assert will be necessary because the project, as approved, cannot be built." (Maj. opn., ante, at p. 1119.) This rule will not lead to evasion of the environmental review requirements of the California Environmental Quality Act (CEQA; Pub. Resources Code, § 21000 et seq.) because presumably a developer's failure to build the project as approved will be remedied by the local agency that approved the project. Where opponents of a project make a credible argument that it cannot be built as approved, a trial court may exercise its discretion to retain continuing jurisdiction after rendering a judgment in order to ensure CEQA compliance. (See 2 Witkin, Cal. Procedure (5th ed. 2008) Jurisdiction, § 420, pp. 1070-1071; City of Pasadena v. City of Alhambra (1949) 33 Cal.2d 908, 936 [207 P.2d 17] [court reserves
I do not agree, however, with the court's reading of section 15300.2, subdivision (c) of the CEQA guidelines (Cal. Code Regs., tit. 14, § 15000 et seq. (Guidelines)) or with the court's novel and unnecessarily complicated approach to the standard of review. Section 15300.2, subdivision (c) (hereafter section 15300.2(c)) provides that a categorical exemption from CEQA review shall not apply when "there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances." The court says this language establishes two distinct requirements for section 15300.2(c)'s applicability: (1) there must be a reasonable possibility the project will have significant environmental effects and (2) those effects must be due to unusual circumstances. But, as explained below, a project falling within a categorical exemption is, by definition, a project belonging to a class of projects that does not have significant environmental effects. (See Pub. Resources Code, § 21084, subd. (a).) When there is a reasonable possibility that a project otherwise covered by a categorical exemption will have a significant environmental effect, it necessarily follows that the project presents unusual circumstances. In other words, the reasonable possibility of a significant environmental effect means that some circumstance of the project is not usual in comparison to the typical project in the exempt category. Instead of comprising a distinct requirement, the phrase "unusual circumstances" in section 15300.2(c) simply describes the nature of a project that, while belonging to a class of projects that typically have no significant environmental effects, nonetheless may have such effects. The sole question for courts reviewing agency determinations under section 15300.2(c) is whether substantial evidence supports a fair argument that the project will have significant environmental effects.
It is unfortunate that today's opinion, instead of simplifying the law in accordance with the CEQA statute and guidelines, adds further complexity to an area that many courts, practitioners, and citizens already find difficult to navigate. Nevertheless, I expect that after today's decision, as before, courts reviewing agency determinations under section 15300.2(c) will be guided by that guideline's basic purpose, which echoes the statutory mandate: to ensure that projects with a reasonable possibility of significant environmental effects are not exempted from CEQA review.
The main purpose of environmental review under CEQA is to "identify the significant effects on the environment of a project" and to identify project alternatives and feasible mitigation measures. (Pub. Resources Code, § 21002.1, subd. (a); all statutory references are to this code unless otherwise indicated.) Consistent with that purpose, the Legislature created categorical exemptions and directed the Secretary of the Natural Resources Agency (the Secretary) to list classes of projects exempt from CEQA review. Section 21084, subdivision (a) (hereafter section 21084(a)) provides: "The guidelines prepared and adopted pursuant to Section 21083 shall include a list of classes of projects that have been determined not to have a significant effect on the environment and that shall be exempt from this division. In adopting the guidelines, the Secretary of the Natural Resources Agency shall make a finding that the listed classes of projects referred to in this section do not have a significant effect on the environment." (Italics added.) Thus, section 21084(a) instructs the Secretary to exempt from CEQA review only classes of projects that do not have a significant effect on the environment.
The exempt classes of projects listed by the Secretary stand in contrast to statutory exemptions created by the Legislature. The latter include certain kinds of affordable housing (§ 21159.23), certain high priority transit projects (§ 21155.1), and the construction of certain prisons (§§ 21080.01, 21080.02). The statutory exemptions are not based on any determination that the exempt projects will not have significant environmental effects. Instead, they are based on the Legislature's determination that each of the exemptions "promote[s] an interest important enough to justify forgoing the benefits of environmental review." (Napa Valley Wine Train, Inc. v. Public Utilities Com. (1990) 50 Cal.3d 370, 382 [267 Cal.Rptr. 569, 787 P.2d 976].) The categorical exemptions authorized by section 21084(a) are fundamentally different. They are not based on a judgment that certain categories of projects should be exempt despite their potential effect on the environment. They are based on a wholesale judgment that projects within the exempt category will not have significant environmental effects.
The fact that a categorical exemption reflects a wholesale judgment about a class of projects, and not an individual judgment about a particular project, gives rise to the interpretive question before us. A class of projects "determined not to have a significant effect on the environment" (§ 21084(a)) — for example, a single-family residence — may turn out to be overinclusive insofar as it includes some projects that fit the category but nevertheless may have significant environmental effects. How are such outliers to be treated under the CEQA scheme?
In Wildlife Alive v. Chickering (1976) 18 Cal.3d 190, 205-206 [132 Cal.Rptr. 377, 553 P.2d 537] (Chickering), we said that "no regulation is valid if its issuance exceeds the scope of the enabling statute. [Citations.] The [S]ecretary is empowered to exempt only those activities which do not have a significant effect on the environment. (Pub. Resources Code, § 21084.) It follows that where there is any reasonable possibility that a project or activity may have a significant effect on the environment, an exemption would be improper." Section 15300.2(c), promulgated shortly after Chickering, was an attempt to codify Chickering and its understanding of section 21084(a). A portion of section 15300.2's rulemaking file reproduced by appellants confirms this regulatory intent, and respondents do not suggest otherwise. (See 1 Kostka & Zischke, Practice Under the Cal. Environmental Quality Act (Cont.Ed.Bar2d ed. 2008) § 5.72, p. 5-62 (rev. 3/14) (1 Kostka & Zischke) [§ 15300.2(c) "adopted to codify the court's ruling" in Chickering that the Secretary "may exempt only activities that do not have a significant effect on the environment"]; Communities for a Better Environment v. California Resources Agency (2002) 103 Cal.App.4th 98, 129 [126 Cal.Rptr.2d 441] (Communities for a Better Environment) [§ 15300.2(c) exception to categorical exemptions was "based on the Chickering decision"].)
Section 15300.2(c) reads in full: "Significant Effect. A categorical exemption shall not be used for an activity where there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances." This language is one of six provisions under the heading "Exceptions" in section 15300.2 of the Guidelines. Like section 15300.2(c), each of the other five provisions makes the categorical exemptions authorized by section 21084(a) inapplicable to projects that, while belonging to an exempt class, have certain characteristics that raise environmental concerns. (See §§ 15300.2, subd. (a) [exception for "a project ... ordinarily insignificant in its impact on the environment [that] may in a particularly sensitive environment be significant"], 15300.2, subd. (b) [exception for "successive projects of the same type in the same place" whose "cumulative impact ... over time is significant"], 15300.2, subd. (d) [exception for "a project which may result in damage to scenic resources ... within ... a state scenic highway"], 15300.2, subd. (e) [exception for a project located on a hazardous waste site], 15300.2, subd. (f) [exception for a project that may adversely affect a historical resource].)
In construing section 15300.2(c), it is worth noting that the title of the provision is "Significant Effect." Hence I shall refer to section 15300.2(c) as the "significant effect exception." In calling section 15300.2(c) the "unusual circumstances exception," today's opinion ignores the title and places primary emphasis on a term that the provision itself does not emphasize.
As the court acknowledges, the term "unusual circumstances" first appeared in the context of CEQA review in Friends of Mammoth v. Board of Supervisors (1972) 8 Cal.3d 247, 272 [104 Cal.Rptr. 761, 502 P.2d 1049] (Friends of Mammoth), and this usage is key to understanding section 15300.2(c). In Friends of Mammoth, we said that "common sense tells us that the majority of private projects for which a government permit or similar entitlement is necessary are minor in scope — e.g., relating only to the construction, improvement, or operation of an individual dwelling or small business — and hence, in the absence of unusual circumstances, have little or no effect on the public environment. Such projects, accordingly, may be approved exactly as before the enactment of the [CEQA]." (8 Cal.3d at p. 272, italics added.) We did not suggest that a finding of "unusual circumstances" was a prerequisite to CEQA review. Rather, we used that phrase in the course of acknowledging that private projects generally do not have significant effects on the environment, and so when they do, such effects will be due to unusual circumstances. Reading "unusual circumstances" in this straightforward manner squares section 15300.2(c) with both Friends of Mammoth and Chickering.
This understanding of "unusual circumstances" is restated in Communities for a Better Environment, supra, 103 Cal.App.4th 98, a case concerning the in-fill development exemption under section 15332 of the Guidelines. In explaining that environmental effects not mentioned in section 15332, such as aesthetics or health and safety impacts, must be considered in determining the exemption's applicability, the court said: "These other environmental effects... would constitute `unusual circumstances' under this exception for a
In sum, when there is a reasonable possibility of a significant environmental effect from a project belonging to a class that generally does not have such effects, the project necessarily presents "unusual circumstances," and section 15300.2(c) applies.
Today's opinion objects that this reading of section 15300.2(c) would result in categorically exempt projects being treated the same as nonexempt projects, thereby undermining the purpose of categorical exemptions. "Try as they might," the court says, "appellants can identify no purpose or effect of the categorical exemption statutes if, as they assert, a showing of ... potential environmental effect precludes application of all categorical exemptions." (Maj. opn., ante, at p. 1102.) "[T]o establish the unusual circumstances exception, it is not enough for a challenger merely to provide substantial evidence that the project may have a significant effect on the environment, because that is the inquiry CEQA requires absent an exemption. (§ 21151.) Such a showing is inadequate to overcome the Secretary's determination that the typical effects of a project within an exempt class are not significant for CEQA purposes." (Id. at pp. 1105.) The court is thus led to conclude that the term "due to unusual circumstances" sets forth a requirement separate and distinct from "a reasonable possibility [of] significant effect[s]" in section 15300.2(c). In turn, the court devises a novel "bifurcated" standard of review that evaluates whether there is a reasonable possibility of a significant environmental effect under the fair argument standard, while evaluating whether significant effects are due to unusual circumstances under a deferential substantial evidence standard. (Maj. opn., ante, at pp. 1114-1116.) This approach, the court suggests, is necessary in order to treat categorically exempt projects differently from nonexempt projects and thereby realize the purpose of categorical exemptions.
But the major premise of the court's reasoning is faulty, for there are two reasons why it is not true that categorical exemptions would have no value if we interpret section 15300.2(c) to apply whenever there is a reasonable possibility of significant environmental effects.
By contrast, an agency finding that a project falls into an exempt category need not follow any particular procedure nor include any written determination, and the agency need not undertake an initial study or adopt a negative declaration. (See 1 Kostka & Zischke, supra, § 5.114, pp. 5-100 to 5-101 (rev. 3/14).) When an agency finds that a project is subject to a categorical exemption, it impliedly finds that it has no significant environmental effect, and the burden shifts to the challengers of the proposed project to produce evidence that the project will have a significant effect. (Id. at § 5.71, pp. 5-61 to 5-62 (rev. 3/14), and cases cited therein.) Once an agency finds a project categorically exempt, it is the project opponent's burden to produce evidence that the significant effect exception applies.
This procedural advantage should not be underestimated. In many cases, categorical exemptions are not litigated, and the applicability of the exemption is evident. In the mine-run of cases, the efficiency gains of sparing the agency the task of conducting an initial study and issuing a negative declaration provide a strong policy justification for categorical exemptions. Moreover, as is generally true of burden allocations in the law, in cases where an exemption's applicability presents a close issue, requiring the challenger to show the reasonable possibility of a significant effect, instead of requiring the agency to show no such effects, can be determinative.
The court says this procedural advantage is "largely illusory" because "an agency may not apply a categorical exemption without considering evidence in its files of potentially significant effects, regardless of whether that evidence comes from its own investigation, the proponent's submissions, a project opponent, or some other source." (Maj. opn., ante, at p. 1103.) But an agency's obligation to consider evidence in its files of potentially significant effects can hardly be equated with an agency's obligation, in the case of a nonexempt project, to undertake an initial study of the project's environmental effects, to solicit and consider public comments on the study, and to issue
Moreover, an agency finding that a project falls into an exempt category confers a second advantage. As the court observes, the Secretary had to interpret the meaning of "significant effects" in order to identify classes of projects with no significant effects pursuant to section 21084(a). The Secretary's designation of an exempt category reflects a judgment that projects in the category typically do not have significant environmental effects, and this judgment is entitled to considerable weight. When an opponent seeks to subject such a project to CEQA review, the proponent can make two comparative arguments (assuming they are supported by evidence) that are unavailable in the case of a nonexempt project. First, the proponent can argue that the project's effects are typical of the effects generated by projects in the exempt category, such that few or no projects in the category would be exempt if the effects were deemed significant. Second, the proponent can argue that the project's dimensions or features are not unusual compared to typical projects in the exempt category, thereby suggesting that the project is similar to those that the Secretary has determined not to have a significant environmental effect. The availability of these arguments shows that the phrase "`due to unusual circumstances'" is not "meaningless surplusage." (Maj. opn., ante, at p. 1104.) Such arguments make it more likely that a project belonging to an exempt category will be able to bypass the environmental review that would otherwise be required in the absence of any categorical exemption. (See, e.g., San Francisco Beautiful v. City and County of San Francisco (2014) 226 Cal.App.4th 1012, 1025 [172 Cal.Rptr.3d 134] (San Francisco Beautiful); Fairbank v. City of Mill Valley (1999) 75 Cal.App.4th 1243, 1260 [89 Cal.Rptr.2d 233] (Fairbank); Association for Protection etc. Values v. City of Ukiah (1991) 2 Cal.App.4th 720, 736 [3 Cal.Rptr.2d 488] (Ukiah).
The court says this advantage is also "illusory" because "evidence a project proponent offers to show that the project will only have typical effects, dimensions, and features is irrelevant if a project opponent can make a mere fair argument that those effects, dimensions, or features are not typical, or that the project will have a significant environmental effect." (Maj. opn., ante, at p. 1104.) But evidence of typicality is surely relevant to whether a project opponent can make a fair argument of atypical features or significant effects. This is confirmed by the cases just cited (San Francisco Beautiful, Fairbank, and Ukiah), each of which relies on such comparative arguments in finding no substantial evidence of a fair argument of significant effects. The
Today's opinion also contends that my reading of section 15300.2(c) puts a project proponent who claims a categorical exemption in the same position as the proponent of a nonexempt project who claims the commonsense exemption in Guidelines section 15061, subdivision (b)(3). (Maj. opn., ante, at p. 1102.) But the commonsense exemption is available only when the agency, based on the record evidence, meets its burden of demonstrating "with certainty that there is no possibility that the activity in question may have a significant effect on the environment." (Guidelines, § 15061, subd. (b)(3), italics added; see Muzzy Ranch Co. v. Solano County Airport Land Use Com. (2007) 41 Cal.4th 372, 386-387 [60 Cal.Rptr.3d 247, 160 P.3d 116].) This exacting requirement exceeds an agency's obligation, before applying a categorical exemption, to consider the evidence in its files and preliminarily rule out a reasonable possibility of significant effects. Indeed, if an agency could apply the commonsense exemption to a project not covered by a categorical exemption simply by making a preliminary determination based on evidence in its files that there is no reasonable possibility of significant effects, then the commonsense exemption would swallow the general rule that an agency must conduct an initial study to determine whether a project not covered by a categorical exemption will have significant effects. (See Guidelines, § 15063, subd. (a).)
An agency may find that a project falls within a categorical exemption without first making an express or definitive finding that no section 15300.2 exception applies; the burden is on the party challenging the categorical exemption to show that an exception applies. (Committee to Save the Hollywoodland Specific Plan v. City of Los Angeles (2008) 161 Cal.App.4th 1168, 1186-1187 [74 Cal.Rptr.3d 665].) In addition, project proponents seeking to invoke a categorical exemption may employ comparative arguments that are not available to project proponents seeking to invoke the commonsense exemption. Thus, the availability of the commonsense exemption for projects meeting its narrow standard of "certainty" does not negate the advantages that a categorical exemption confers.
The court is thus mistaken that the categorical exemption statutes have "no purpose or effect ... if ... a showing of ... potential environmental effect precludes application of all categorical exemptions." (Maj. opn., ante, at p. 1102.) Without this erroneous premise, there is no reason to construe "due to unusual circumstances" as an independent requirement in section 15300.2(c) or to adopt a separate standard of review for the determination of "unusual circumstances." As explained above, this approach is at odds with
Today's decision ventures a panoply of reasons why Chickering should not be read to mean what it says, including the opaque contention that Chickering's interpretation of section 21084(a) somehow violates "the Legislature's express directive in section 21083.1 `not [to] interpret' the CEQA statutes and the Guidelines `in a manner which imposes procedural or substantive requirements beyond those' the statutes and the Guidelines `explicitly state[].'" (Maj. opn., ante, at p. 1107.) But the court's reluctance to follow Chickering is ultimately based not on the language or legislative history of section 21084(a), but on the premise that reading section 21084(a) and section 15300.2(c) in harmony with Chickering would deprive categorical exemptions of any purpose or effect. Because this premise is flawed, so is the court's haphazard effort to minimize Chickering's simple and sensible reading of section 21084(a).
It is true that over the years, the Courts of Appeal have divided on whether "unusual circumstances" and "significant effect[s]" are distinct requirements in section 15300.2(c). However, when one examines the reasoning of the many cases applying section 15300.2(c), it is clear that "unusual circumstances" and "significant effects" have invariably traveled together. In the nearly four decades since section 15300.2(c) was adopted, no published case has ever found or even hinted that a project that belongs to an exempt category yet has a reasonable possibility of significant environmental effects may nonetheless evade CEQA review on the ground that the effects are not due to unusual circumstances. The only court on record to have reached such a conclusion is the trial court in this case. But, as today's opinion suggests, that conclusion is unlikely to stand. The absence of case law finding a reasonable possibility of significant effects but no unusual circumstances further confirms that section 15300.2(c) boils down to one inquiry, not two.
Among cases that have focused on "unusual circumstances," it is evident that courts have treated unusual circumstances as a proxy for significant effects. In Wollmer v. City of Berkeley (2011) 193 Cal.App.4th 1329, 1350-1352 [122 Cal.Rptr.3d 781], for example, the court titled one part of its opinion "No Unusual Circumstances Preventing Categorical Exemption" and then proceeded to find no substantial evidence of potential significant environmental effects. In Voices for Rural Living v. El Dorado Irrigation Dist. (2012) 209 Cal.App.4th 1096, 1108-1113 [147 Cal.Rptr.3d 480], the court concluded that a casino requiring a high volume of water usage was an unusual circumstance for a project within the "`small facilities'" exemption, and it then proceeded to find that such high volume water usage presented the potential for significant environmental risks. Other courts have employed similar reasoning. (See Bloom v. McGurk (1994) 26 Cal.App.4th 1307, 1315-1316 [31 Cal.Rptr.2d 914] ["existing facilities" exemption applied to medical waste facility, and there were no "`unusual circumstances'" because the facility was located in an area zoned for heavy industry and not adjacent
As for the proper standard of review, many courts have held that the fair argument test applies. (Maj. opn., ante, at pp. 1113-1114 [citing cases].) One older case has disagreed, holding that section 15300.2(c) does not apply if there is substantial evidence supporting the agency's conclusion that the project will not generate significant effects. (Centinela, supra, 225 Cal.App.3d at p. 1601.) As today's opinion notes, "[o]ther courts have noted judicial disagreement as to whether the fair argument standard applies in this context, but have declined to decide the issue, finding that the standard's application would not have affected the result." (Maj. opn., ante, at p. 1113, citing Save the Plastic Bag Coalition v. City and County of San Francisco (2013) 222 Cal.App.4th 863, 879 [166 Cal.Rptr.3d 253]; Hines v. California Coastal Com. (2010) 186 Cal.App.4th 830, 855 [112 Cal.Rptr.3d 354]; San Lorenzo, supra, 139 Cal.App.4th at p. 1390; Santa Monica, supra, 101 Cal.App.4th at p. 796; Fairbank, supra, 75 Cal.App.4th at pp. 1259-1260; Ukiah, supra, 2 Cal.App.4th at p. 728, fn. 7.) In each of these cases, the court found no substantial evidence supporting a fair argument that the project would have significant environmental effects.
Thus, courts have overwhelmingly used the fair argument standard in reviewing the applicability of the significant effect exception either because they believed it was the appropriate standard or because they assumed it was. For more than two decades, courts have not felt the need to resolve the question of the proper standard because the fair argument standard has proven adequate to the task of ferreting out bogus CEQA challenges that would subject categorically exempt projects to unnecessary environmental review. The ultimate touchstone of all of these courts' inquiries has been whether there is a reasonable possibility that the project would have significant environmental effects.
Today's opinion observes that "evidence that the project will have a significant effect does tend to prove that some circumstance of the project is unusual." (Maj. opn., ante, at pp. 1103-1105.) This observation, though understating the real relationship between "significant effect[s]" and "unusual circumstances," authorizes courts applying section 15300.2(c) to continue reasoning the way they have been doing for years — i.e., focusing their inquiry on whether there is a reasonable possibility that the project will have significant environmental effects. Indeed, before a project has been subject to
Although I join the court in reversing and remanding for further proceedings, I would hold that the Court of Appeal did not err in its reading of section 15300.2(c).
Werdegar, J., concurred.
