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On February 18, 2015, the Fourth District Court of Appeal rejected numerous California Environmental Quality Act (CEQA) challenges to the City of San Diego’s (City) coastal and site development permits authorizing already-completed emergency storm drain work and a site revegetation plan.  (CREED-21 v. City of San Diego (2015) 234 Cal. App. 4th 488.)  The Court of Appeal’s decision supporting use of a post-emergency project environmental baseline follows logically from the general rule that the proper CEQA baseline is the existing physical conditions on the ground when environmental review begins.

Background

In 2007 and 2008, City consultants prepared engineering and biological reports for a storm drain project.  Prior to commencing work, the storm drain failed.  In order to proceed with the project, the City issued an emergency exemption under CEQA based on the imminent threat to public safety associated with potential soil erosion.  The City issued an emergency permit for the project that included a condition requiring the City’s engineering department to subsequently apply for a regular permit.  In 2010, the emergency storm drain work was completed.

City engineering then filed for a regular coastal and site development permit, which included a revegetation plan for the site.  The City determined that the current project included the emergency repair work that had already been completed plus a revegetation plan, and that the only physical change at issue with the regular permit was implementation of the revegetation plan.  The City determined that the revegetation plan would not result in a significant impact on the environment, and would therefore be exempt from CEQA under both the “common sense” exemption (CEQA Guidelines, § 15061(b)(3)), and categorical exemptions for repair and replacement of existing structures (CEQA Guidelines, §§ 15301, 15302).  Plaintiff, CREED-21, challenged the City’s CEQA determinations, and prevailed at the trial court level.  The City appealed the trial court decision.

Environmental Baseline

The Court of Appeal agreed with the City on its selection of the post-2010 environmental baseline.  The plaintiff argued that the 2010 emergency exemption was for “temporary” work, and that CEQA required the City, at the time of issuance of the regular permit, to conduct CEQA review to determine whether the already completed project would have a significant effect on the environment.  First, the Court noted that work conducted under the emergency exemption was “temporary” according to the City’s municipal code rather than CEQA.  Further, the Court found that CEQA does not contain any requirement for environmental review of emergency projects, and any work completed under an emergency exemption is outside of CEQA’s requirements and no subsequent review is required.  In terms of the baseline, the Court held that the 2010 storm drain work changed the physical environment for purposes of CEQA, and any future site work would need to be judged against this environment without consideration of the 2010 work or the environment that existed prior to the work.  Thus, the City properly determined that only the revegetation work needed to be evaluated.

Regular Permit CEQA Exemptions

For the regular permit, the City relied on the “common sense” exemption set forth in CEQA Guidelines section 15061(b)(3) to reach the conclusion that the revegetation plan was exempt from CEQA.  Section 15061(b)(3) provides that an exemption 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 ….”  Only a substantial, or potentially substantial adverse change in any of the physical conditions constitutes a significant effect on the environment.  (CEQA Guidelines, § 15382, emphasis added.)  The Court of Appeal found that reports from City consultants and the City’s environmental planner provided substantial evidence that the revegetation plan would improve conditions at the site by installing native plants in an environment that consisted mostly of bare dirt and nonnative vegetation.  The Court found that because the revegetation plan would indisputably improve site conditions, there was substantial evidence in the record that there would not be a significant effect on the environment.  Plaintiff, CREED-21, did not present any evidence to the contrary.  Based on the City’s evidence, the Court concluded that the City’s use of the common sense exemption was appropriate.

Unusual Circumstances Exception to Categorical Exemption

Notwithstanding the fact that the Court of Appeal relied solely on the City’s use of the common sense exemption to uphold the City’s exemption determination, the Court addressed the issue of whether the plaintiff had met its burden in arguing that the “unusual circumstances” exception defeated the City’s use of categorical exemptions.  CEQA Guidelines section 15300.2(c) 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 Court of Appeal, having decided the case before the California Supreme Court’s March 2, 2015 decision in Berkeley Hillside Preservation v. City of Berkeley (2015 Cal. LEXIS 1213), acknowledged that it is unclear whether the “fair argument” (less deferential to agency) or “substantial evidence” (more deferential to agency) standard applies in reviewing whether an exception applies to a categorical exemption.  In CREED-21, the Court of Appeal held that, regardless of the standard that applies, the plaintiff did not meet its burden because it did not present any evidence showing that the revegetation plan for the site was unusual compared to other typically exempt revegetation plans, and that the plan would have a significant effect on the environment because of those unusual circumstances.

The outcome in this case would likely have been the same if decided post-Berkeley Hillside.  InBerkeley Hillside, the California Supreme Court adopted a two-part test for review of whether the unusual circumstances exception applies to use of a categorical exemption.  Relevant here is the first part of the test, which provides that an agency’s determination regarding the existence of “unusual circumstances” will be upheld by a court if there is substantial evidence in the record supporting such a determination, regardless of whether the evidence is contradicted or uncontradicted.  In CREED-21, the Court of Appeal did not directly address whether there was substantial evidence indicating unusual circumstances did not exist.  Yet, it seems likely that the City could have pointed to some evidence supporting a conclusion that they did not exist.  Thus, in CREED-21, the “unusual circumstances” exception issue would likely have been decided the same way post-Berkeley Hillside.

Conclusion

The Court’s decision clarifies that where an emergency project has changed the physical condition of the landscape, the post-emergency project environmental condition is the proper baseline for subsequent CEQA analyses at the site, despite the “emergency” nature of the original project.

For further information please contact Aaron Ferguson at aferguson@somachlaw.com.

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