Does CEQA Provide For Classes of Exempt Projects? Parties File Opening Merits Brief in Supreme Court in Berkeley Hillside Preservation

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[author: Arthur F. Coon]

Following up on previous posts (see February and May archives), the City of Berkeley Respondents and the Kapors (Real Parties in Interest) filed their joint 80-page opening brief on the merits on July 27 in Berkeley Hillside Preservation, et al. v. City of Berkeley, et al., California Supreme Court, Case No. S201116. The case will decide whether the Court of Appeal erred in overturning the City’s approval of the Kapors’ two-story, 6,478 square foot single family residence, and 3,394 square foot garage, on a 29,714 square foot parcel zoned Single Family Residential District–Hillside Overlay.

The Supreme Court granted review after the Court of Appeal, reversing the trial court’s judgment, held the City could not rely on the CEQA Guidelines’ categorical exemptions for “New Construction” (14 Cal. Code Regs. §15303(a)) and “In-Fill Development” (§ 15332) in approving the single family residence as exempt from further CEQA review. The Court of Appeal applied the “fair argument” test to review of the exemption determination, holding that the “unusual circumstances” exception to all of CEQA’s categorical exemptions applies whenever there is substantial evidence that the proposed activity may have a significant environmental effect. It attributed no independent significance to the language of Guidelines Section 15300.2(c) requiring that the potential effect be “due to unusual circumstances” for the exception to apply, and collapsed the two-step inquiry other courts had followed by reasoning “the fact that proposed activity may have an effect on the environment is itself an unusual circumstance” removing the activity from the otherwise-exempt class.

The City’s and Kapors’ opening brief makes a number of compelling arguments why the First District got it wrong on this important CEQA issue, including:

  • CEQA Guidelines’ categorical exemptions are regulations duly adopted and authorized by Public Resources Code § 21084’s Legislative mandate that the Resources Agency designate classes of projects determined not to have a significant effect on the environment. (See Pub. Resources Code, § 21086; 14Cal. Code Regs. § 15300.3.)
  • The “unusual circumstances” exception, which applies to all 33 categorically exempt classes, has roots in the Supreme Court’s seminal CEQA decision, Friends of Mammoth v. Bd. of Supervisors (1972) 8 Cal.3d 247, 272, where the Court not only held private projects approved by public agencies were subject to CEQA, but also stated: “[C]ommon 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 [C]EQA.” (Emph. added.)
  • The Legislative directive to the Resources Agency to identify and determine classes of projects that do not have a significant environmental effect and are exempt from CEQA was part of comprehensive CEQA amendments made in direct response to the Friends of Mammoth decision, and which “made plain that the purpose of CEQA is to protect the environment, in a way that would not cause needless time and expense.” (Opening Brief, p. 2.)
  • “[T]he Legislature intended the [ ] [Resources Agency’s promulgated] exemptions to be bright-line, categorical rules that would streamline review of routine and minor projects that occur throughout the State.” (Id. at p. 4.)
  • “The Legislature did not direct or intend that agencies and courts would revisit the question of whether activities falling within the exempted classes of projects will have a “significant effect on the environment[ ]” [unless] … the physical impacts of the project are [both] atypical of the exempt category and … potentially significant.” (Ibid., emph. in orig.)
  • The Court of Appeal’s holding “would eviscerate the very concept of categorical exemptions” because it would render meaningless both the Legislature’s authorization to the Resources Agency to identify, and the Agency’s regulatory determination of, classes of exempt projects. (Id. at pp. 4-5.)
  • The “substantial evidence” standard of review that applies to a lead agency’s determination that a project is categorically exempt should also apply to its determination whether the “unusual circumstances” (or any other) exception applies: “It is fundamentally inconsistent with the legal framework for categorical exemptions to apply the substantial evidence standard to the exemption determination, and then turn around and review the same facts under the fair argument standard when deciding if the exception applies. Applying these two different standards is inconsistent with and undermines the Legislature’s directive that there be classes of exempt projects. [¶] Making the process for applying a categorical exemption too complicated and cumbersome would defeat the Legislature’s intent in having categorical exemptions in the first place.” (Id. at pp. 53-54.)
  • The Court of Appeal further erred in finding the size of the home constituted “unusual circumstances,” since the Kapors’ single-family home project was fully consistent with the City’s local zoning and General Plan development standards, there is no square-foot limitation contained in the categorical exemption for single-family residences or multi-family residences (14 Cal. Code Regs.; § 15303(a), (b)), and substantial record evidence also supported all City’s findings that the “In-Fill” exemption (§ 15322) applied; accordingly, substantial evidence supported City’s determination that the project was not atypical of projects within these exempt classes, and therefore the “unusual circumstances” exception did not apply.

While it is impossible to do an 80-page brief justice with some bullet points, it will suffice for present purposes to say that the opening brief does an excellent job of framing an issue that is fundamental to the intended operation of CEQA: Does CEQA meaningfully recognize classes of exempt projects as designated by binding regulations of the Resources Agency, or are projects falling within such classes just as vulnerable to an “expert” opinion “fair argument” challenge as any other project? Following briefing, which should be completed within a few months (Appellants’ counsel has filed a request for extension of time to file their answer brief until October 10), and oral argument, the Supreme Court will have to answer that question.

Questions? Please contact Arthur F. Coon of Miller Starr Regalia. Miller Starr Regalia has had a well-established reputation as a leading real estate law firm for over forty-five years. For nearly all that time, the firm also has written Miller & Starr, California Real Estate 3d, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. The firm has expertise in all real property matters, including full-service litigation and dispute resolution services, transactions, acquisitions, dispositions, leasing, construction, management, title insurance, environmental law, and redevelopment and land use. For more information, visit www.msrlegal.com.