San Francisco Beautiful v. City & County of San Francisco (1st. Dist., Div. 4, 5/30/2014)

The First District Court of Appeal held that AT&T’s proposed installation of new utility cabinets in the City of San Francisco fell within CEQA’s Class 3 categorical exemption for the “installation of small new equipment and facilities in small structures.”  The court rejected the applicability of any exceptions to the exemption and affirmed the trial court’s denial of the petition.  The court acknowledged the split of authority regarding the applicable standard of proof and standard of review but stated it would reach the same result under either standard.

In 2010, AT&T applied for a categorical exemption for a revised project designed to construct 726 new utility cabinets on public sidewalks throughout the City.  The San Francisco Planning Department determined the project was categorically exempt from environmental review under the Class 3 exemptions for (1) construction and location of limited numbers of new, small facilities or structures and (2) installation of small new equipment and facilities in small structures.  (§15303, CEQA Guidelines.)  Petitioners argued that the project did not meet these requirements because the new structures were not limited in number and did not involve installation of equipment in existing small structures.

In finding the Class 3 exemption applicable to the project, the Court of Appeal rejected petitioners’ argument that the exemption did not apply because the project involved the construction of new structures. The court found the “common-sense” interpretation of the exemption included the “installation” of utility cabinets.  Because the project qualified for the exemption under clause (2), the court noted that it “need not consider whether 726 utility cabinets, dispersed throughout the City’s 122 million square feet of sidewalks, qualify as a ‘limited number[ ]’ of small structures for purposes of clause [1] of the Class 3 exemption.”

The court acknowledged the split of authority regarding the standard of proof and the standard of review applicable to an agency’s determination of whether any exception to the categorical exemption applied. The court noted, however, whether it reviewed the record for evidence to support a “fair argument” of a significant environmental impact or for substantial evidence to support the City’s determination, it would reach the same result.  The court found the petitioners had not identified any unusual circumstances or any possibility of a significant effect associated with the project.  Statements from the public about the unsightly nature of the utility boxes and the possibility that they would attract graffiti, public urination, and garbage did not constitute evidence that the project would have a significant aesthetic impact in the urban environment that already contains numerous structures on the sidewalks.  The court also found that petitioners had failed to identify any evidence to support a finding that the boxes would result in significant cumulative impacts in their individual locations.

The court acknowledged the general principle that mitigation measures typically may not support a categorical exemption.   The court determined, however, that the individual permit review by the City’s Department of Public Works pursuant to the requirements of the Public Works Code and a Department of Public Works Order did not constitute a mitigation measure.  Instead, the court observed that this review is generally applicable to all permits for such facilities and noted that an “agency may rely on generally applicable regulations to conclude an environmental impact will not be significant and therefore not require mitigation.”  Additionally, the court found AT&T’s agreement to provide a certain public outreach and other benefits did not constitute mitigation for significant environmental effects.

The court’s decision provides common sense guidance on the analysis of Class 3 categorical exemptions.