Posts Tagged ‘Unusual Circumstances Exception’

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 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.

The California Supreme Court reversed the First District Court of Appeal’s decision that the “unusual circumstances” exception in CEQA Guidelines section 15300.2, subdivision (c), precluded the City of Berkeley’s finding that a single-family residence qualified for a categorical exemption. That section provides that 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.” The Supreme Court established a two-part test for determining whether the “unusual circumstances” exception applies. Berkeley Hillside Preservation, et al. v. City of Berkeley, et al. (March 2, 2015) __ Cal.4th __, Case No. S201116.

Homeowners in the Berkeley hills applied to demolish their house, and to construct a new, two–floor, 6,478 square-foot house with an attached 3,394 square-foot ten-car garage on a steep lot in a heavily wooded area. The City concluded the proposed project fell within the Class 3 (new construction of small structures) and Class 32 (infill) categorical exemptions. Project opponents hired an engineer who submitted letters stating the grading required would result in unstable conditions and could cause landslides during an earthquake. The homeowners’ engineer submitted a report stating the opponents’ engineer had misread the plans. The City eventually approved the proposed project, relying on the categorical exemptions.

The Court of Appeal concluded that the “unusual circumstances” exception under CEQA Guidelines section 15300.2, subdivision (c), applied. According to the court, if there is a fair argument the project may result a significant impact, then by definition the circumstances are “unusual.” Finding substantial evidence of a fair argument that the proposed residential project may have a significant environmental effect, the court held the proposed project was not categorically exempt. The Court of Appeal ordered the trial court to issue a writ of mandate directing the City to set aside the project approval and its finding of a categorical exemption, and to order preparation of a full EIR. Thereafter, Respondents filed a petition for review in the Supreme Court, which the Court granted on May 23, 2012.

The Supreme Court reversed the Court of Appeal. In the majority opinion, authored by Justice Chin, the Court laid out a two-part test for determining whether the unusual circumstances exception applies. Under the first part of the test, the lead agency must determine whether there are “unusual circumstances,” which the court reviews under the “substantial evidence” standard of review.

Under the second part of the test, if the lead agency determines in the first instance that unusual circumstances exist, the lead agency then considers whether there is a fair argument that the proposed activity may have a significant environmental effect.

In coming to its decision, the Court relied, in part, on the rules governing statutory interpretation requiring that every phrase in a statute (and regulation) be given meaning. The Court turned to the plain text of section 15300.2, subdivision (c), and concluded that the phrase “due to unusual circumstances” has meaning and cannot be read out of the regulation. Thus, the Court of Appeal incorrectly held that a proposed project may have a significant effect on the environment is itself an unusual circumstance rendering the categorical exemption inapplicable.

Justice Liu authored the concurring opinion in which Justice Werdegar joined. The concurring opinion agreed with the Court’s reversal and remand of the appellate court’s decision. Parting ways with the majority, however, Justice Liu disagreed with the Court’s reading of CEQA Guidelines section 15300.2, subdivision (c). The concurring opinion advocated for a one-part test, observing that “‘unusual circumstances’ and ‘significant effects’ have invariably traveled together.” According to the concurring opinion, the phrase “unusual circumstances” in section 15300.2, subdivision (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.” Justice Liu thus concluded that the standard of review is limited to whether substantial evidence supports a fair argument that the project will have significant environmental effects.

The majority acknowledged that evidence that the project will have a significant effect does tend to prove that some circumstance of the project is unusual. The majority also explained that in considering the first part of the test, the lead agency has “discretion to consider conditions in the vicinity of the proposed project.” The Court stated that the appellate court had erred in determining that the unusual circumstances inquiry excludes consideration of typical circumstances in a particular neighborhood. Beyond that, though, the Court provided little guidance on the legal test for what constitutes “unusual circumstances.”

The Court also addressed the proper remedy on remand. Relying on Public Resources Code section 21168.9, the Court stated that on remand the Court of Appeal could order preparation of an EIR only if it found that neither of the categorical exemptions applied and if the City lacked discretion to apply another exemption or to issue a negative declaration.


Note: The opinion was modified on May 27, 2015. These changes do not affect the result of the case.