In Parker Shattuck Neighbors, et al. v. Berkeley City Council, et. al. (First Appellate District, December 30, 2013) (“Shattuck Neighbors”), the court upheld the City of Berkeley’s approval of a mitigated negative declaration (“MND”) for a residential infill project. The court found no Environmental Impact Report (“EIR”) was necessary because the expert opinion upon which Petitioners relied—which suggested preparing a vapor-intrusion study to study human health risks from soil contamination—did not constitute substantial evidence supporting a fair argument that there may be a significant effect on the environment.

In Parker Shattuck, CityCentric Investments sought approval for three mixed use buildings on properties previously used as a car dealership, service garage, and service station. Several environmental site assessments identified potential soil contamination at the site, and soil remediation was performed. Subsequently, the City approved the project and certified the MND, concluding that mitigation would reduce any potential impact associated with remaining soil contamination to a less than significant level by ensuring there would be no significant hazard to the public or environment during any necessary remediation of the site or construction of the project. The trial court denied Petitioner’s challenge to that approval, and Petitioner appealed.

On appeal, the court agreed that disturbance of contaminated soil may be a physical change in the environment pursuant to CEQA. (Slip. Opin. at 10.) The Court disagreed, however, that existence of contaminated soil at a project site, without accompanying disturbance, was in and of itself a significant impact requiring CEQA review and mitigation. (Id. at 12.)

More importantly, the court found that the expert opinion upon which Petitioners relied failed to constitute substantial evidence supporting a fair argument that disturbance of contaminated soil may have a significant effect on the environmental necessitating an EIR. The expert report suggested that the level of volatile organic carbon (“VOC”) vapors and hydrocarbons present on site warranted preparation of a vapor-intrusion study and investigation, but the court held that,

“a suggestion to investigate further is not evidence, much less substantial evidence, of an adverse impact." (Slip Opin. at 18.)

Further, the VOC levels present at the site did not exceed Regional Board levels for nonpotable water, and Petitioner’s expert presented no opinion as to why those levels might pose health risks to construction workers.

Although the Court ultimately found such a finding to be unnecessary, it also noted that, “it is far from clear that adverse effects confined only to the people who build or reside in a project can ever suffice to render significant the effects of a physical change. In general, CEQA does not regulate environmental changes that do not affect the public at large. . .” (Slip Opin. at 13.)

For agencies and developers contemplating urban infill and brownfield projects, the Parker Shattuck decision is worth noting for at least two reasons. First, it holds that the existence of contamination is not itself a significant environmental impact, and that to constitute substantial evidence of health risk, evidence must demonstrate a connection between the risk and health impacts. Second, dicta raises questions whether impacts to a small group of people related to the project—in this case, construction workers and potential residents—can ever be a cognizable impact under CEQA.