Tag: project definition

First District Court of Appeal Holds That “Demolition By Neglect” Does Not Constitute a Project Under CEQA

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The First District Court of Appeal held that a failure to act to preserve an historic property is not a
“project” under CEQA. (The Lake Norconian Club Foundation v. Department of Corrections and Rehabilitation (2019) 39 Cal.App.5th 1044.)

The Lake Norconian Club opened in 1929 as a “luxury resort catering to Hollywood stars and sports celebrities.” Since then, the building has operated as a military hospital, a drug rehabilitation facility, and administrative offices. The building, which sits adjacent to a state prison, has been vacant since 2002.

In 2012, the Legislature enacted SB 1022, which required the Department of Corrections and Rehabilitation to close the adjacent prison. The Department published a draft EIR for the closure of the prison, which included analysis of potential impacts on the former hotel as a result of the closure. The EIR concluded there was no funding for repair or rehabilitation of the building, and continued deterioration was expected. The Legislature subsequently rescinded closure of the prison. The Department certified a final EIR in 2013, which concluded that although the prison would not be closed, the Department would not be able to repair or maintain the former hotel.

The Lake Norconian Club Foundation filed a petition for writ of mandate in November 2014, alleging the Department abused its discretion by failing to act to protect the hotel. The Foundation alleged that the “department’s de facto issuance of ongoing demolition permits is a precommitment to a CEQA project that cannot lawfully be considered for approval or implementation without first preparing and certifying an EIR to consider impacts and alternatives.”

The trial court concluded that the Department’s failure to seek or allocate funding to preserve the hotel was a project within the meaning of CEQA, but rejected the Foundation’s assertion that the failure to engage in routine maintenance or mere inaction was a project. Regardless, the trial court held that the petition was untimely because the statute of limitations began to run when the Department certified the EIR for the closure of the prison complex in 2013.

The Court of Appeal upheld the trial court’s denial of the petition, but on different grounds. The court concluded that an agency’s failure to act is not itself an activity subject to CEQA, even if there are potential environmental consequences of the inaction. The continuing failure to make repairs, the court said, is not an activity under CEQA. The court noted several difficulties with determining when the statute of limitations would begin to run on an agency’s inaction. The court relied on similar circumstances arising in NEPA case law and explained that federal courts have repeatedly rejected similar arguments.

Finally, the court explained that it need not decide whether the analysis would be different where there is a mandatory duty on the part of the agency to act, because here, the Department had no such mandatory duty. For sure, the court said, absent a statutory duty, the Department’s failure to act cannot be deemed a project or challenged for noncompliance with CEQA.

California Supreme Court Holds Adoption of Zoning Ordinance for Medical Marijuana Dispensaries is a “Project” Subject to CEQA

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On August 19, 2019, the California Supreme Court issued its decision in Union of Medical Marijuana Patients, Inc. v. City of San Diego (2019) 7 Cal.5th 1171, in which the Court unanimously held that the City of San Diego’s adoption of a zoning ordinance for medical marijuana dispensaries is a “project” subject to CEQA. Although the Court agreed with the Fourth District Court of Appeal and the city in rejecting the petitioner’s argument that the adoption of a zoning ordinance is always a project, as a matter of law, under Public Resources Code section 21080, the Court reasoned that the adoption of the ordinance at issue was nonetheless the type of activity which, by its general nature, “is capable of causing a direct or reasonably foreseeable indirect physical change in the environment.” As such, the Court held, it is a “project” subject to CEQA.

Background

In 2014, the city adopted a zoning ordinance authorizing the establishment of medical marijuana dispensaries in the city and imposing various restrictions on their location and operation. The ordinance specified zones where dispensaries are permitted, included a cap on the number of dispensaries in any one district, restricted their proximity to sensitive uses, and imposed basic conditions on lighting, security, and hours of operation. At the time the ordinance was proposed, the city determined that the adoption of the ordinance did not constitute a “project” for purposes of CEQA. The city, therefore, did not conduct any environmental review prior to adopting the ordinance.

Following the city’s adoption of the ordinance, petitioner filed a petition for writ of mandate challenging the city’s decision not to conduct CEQA review. In the trial court, petitioner argued that the adoption of the ordinance should have been found to be a project under Public Resources Code section 21065, which defines a “project” as any activity undertaken or funded by, or requiring the approval of, a public agency that “may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.” According to the petitioner, the ordinance had the potential, among other effects, to cause increased vehicle traffic across the city, increase user cultivation, and concentrate dispensary development-related impacts in certain areas. The trial court rejected petitioner’s arguments and upheld the city’s decision, finding the petitioner’s claims were unsupported by evidence in the record.

On appeal, petitioner reiterated its argument regarding the potential to cause physical changes in the environment, and further argued that the adoption of the zoning ordinance was a project as a matter of law under Public Resources Code section 21080. Section 21080 states that CEQA “shall apply to discretionary projects proposed to be carried out or approved by public agencies, including, but not limited to, the enactment and amendment of zoning ordinances …” Pointing to this language, petitioner argued that the enactment of a zoning ordinance is automatically a project under CEQA, regardless of the potential for environmental change. Petitioner’s argument was based in part on the Third District’s decision in Rominger v. County of Colusa (2014) 229 Cal.App.4th 690, where the court held that the county’s approval of a tentative map—another activity expressly listed in section 21080—was a project as a matter of law.

Notwithstanding Rominger, the Fourth District Court of Appeal rejected both of petitioner’s arguments, holding that the enactment of a zoning ordinance is subject to the same “project” test as any other activity under Public Resources Code section 21065. Further, the court found no error in the city’s conclusion that the zoning ordinance was not a project because it lacked the potential to cause a physical change in the environment. According to the Fourth District, the potential environmental effects raised by the petitioner were unsupported by the record and too speculative to establish a potential to physically change the environment.

The Supreme Court’s Review

Seeking to resolve the split between the Fourth District’s decision and Rominger, the Supreme Court granted review to address two issues: (1) whether, under Public Resources Code section 21080, a public agency’s enactment of a zoning ordinance is always project under CEQA, as a matter of law; and (2) whether the enactment of the city’s zoning ordinance was a “project” under section 21065.

The Court began its analysis by placing the dispute into context. As the Court explained, CEQA proceeds by way of a three-step process or “decision tree.” First, the lead agency must determine whether the proposed activity is a “project” subject to CEQA at all. Second, assuming CEQA applies, the agency must determine whether the project qualifies for one or more of the many CEQA exemptions. Third, assuming no exemptions apply, the agency must undertake environmental review, namely, preparation of an initial study and a negative declaration, mitigated negative declaration, or an environmental impact report. At issue here was the very first step of the process—the city’s determination that the adoption of the zoning ordinance was not a “project” subject to CEQA at all.

Turning to the first issue, the Court agreed with the Fourth District that Public Resources Code section 21080 does not dictate the result as a matter of law. Engaging in a statutory interpretation analysis, the Court reasoned that while section 21080 is ambiguous when read in isolation, the Legislature’s use of the statutorily defined term “project” in that section must be read to incorporate the definition of “project” in section 21065. Accordingly, the language in PRC section 21080 that CEQA “shall apply to discretionary projects” must be read to provide that CEQA applies to activities that are both (1) discretionary; and (2) meet the definition of a “project” in section 20165. According to the Court, the specific activities listed in section 21080 are merely generic examples of the type of activities approved or carried out by public agencies to which CEQA could apply, however, the mere listing of an activity in that section does not supplant the potential “physical change” analysis required under section 21065.

The Court found further support for its reading of section 21080 in the definition of the term “project” in CEQA Guidelines section 15378, which makes clear the enactment of a zoning ordinance is merely an example of an activity undertaken by public agencies; policy considerations against subjecting activities to CEQA where there is no potential to effect the environment; and the legislative history of section 21065 revealing the Legislature’s intent to narrow CEQA’s application to activities posing a possibility of an environmental effect.

The Court also refuted the notion that its reading of the statute renders section 21080 mere surplusage, noting that the significance of section 21080 is that it states, in the affirmative, the additional requirement that projects must be “discretionary” for CEQA to apply.

After concluding that the adoption of a zoning ordinance is not a project as a matter of law, the Court turned to whether the adoption of the dispensary ordinance in this case was nonetheless a project subject to CEQA under Public Resources Code section 21065. The Court disagreed with the appellate court and answered the question in the affirmative.

As the Court explained, the governing decision for the “project” inquiry is Muzzy Ranch Co. v. Solano County Airport Land Use Commission (2007) 41 Cal.4th 372. In that case, the Court observed, “Whether an activity constitutes a project subject to CEQA is a categorical question respecting whether the activity is of a general kind with which CEQA is concerned, without regard to whether the activity will actually have environmental impact.” In other words, an agency’s task in determining whether a proposed activity is a project is to determine if, by its general nature, the activity is capable of a causing physical change in the environment, without regard to whether actual effects will occur under the circumstances.

Applying Muzzy Ranch, the Court held that the city erred in determining that the adoption of the zoning ordinance was not a project subject to CEQA. The Court noted that the ordinance would permit the establishment of a sizable number of new businesses, which could foreseeably result in new construction. Furthermore, the ordinance could cause changes in vehicle traffic patterns as a result of customers, employees, and suppliers. Finally, the Court explained, the necessary casual connection between the ordinance and these effects was satisfied because the adoption of the ordinance was “an essential step culminating in action . . . which may affect the environment.” For these reasons, the Court held, the adoption of the zoning ordinance was a “project” subject to CEQA.

Collin McCarthy