In its recent decision in Hilltop Group Inc. v. County of San Diego, California’s Fourth District Court of Appeal issued a number of holdings that resulted in a strong ruling in support of streamlined environmental review for projects that are consistent with and within the scope of a program environmental impact report (EIR) for a general plan. The Court clarified that CEQA Guidelines section 15183 (“Section 15183”) does not permit additional environmental review for such projects except as necessary to determine whether a project will have significant effects that are peculiar to the project or the site that were not analyzed in the prior EIR and cannot be substantially mitigated by uniformly applied development policies or standards. The Court went on to hold that public controversy and lay testimony about “peculiar” impacts that might arise from a project do not constitute substantial evidence sufficient to require further environmental review under Section 15183. Perhaps the most important lesson of Hilltop Group Inc. is that decisionmakers cannot err on the side of requiring environmental review simply because a project is controversial, particularly when streamlining is in play. If substantial evidence demonstrates a project’s environmental effects were studied in the prior general plan EIR or can be addressed through uniform policies and procedures, the California Environmental Quality Act (“CEQA”) does not permit the lead agency to require an EIR, mitigated negative declaration or other additional environmental review.

Background and Procedural History

Hilltop Group submitted applications to develop a recycling facility that would process and recycle trees, logs, wood, construction debris, asphalt, and other inert material from construction projects in the unincorporated County of San Diego. The proposed use was consistent with the applicable General Plan land use designation of “High Impact Industrial” and zoning designation of “General Impact Industrial” which permitted recycling facilities such as the proposed project. The environmental impacts of development in accordance with these land use designations were evaluated in a certified programmatic EIR (“PEIR”) when the General Plan was last updated. Not surprisingly, the project was opposed by many, including nearby homeowners associations and the neighboring City of Escondido.

Due to the public controversy, the County initially advised Hilltop Group that an EIR was required for the project. Hilltop Group submitted a draft EIR and more than a dozen technical reports to the County in support of the project, but subsequently asked the County to drop the requirement for an EIR and instead find the project exempt from CEQA under Section 15183.[1] Finding that the project’s environmental impact were fully analyzed in the PEIR for the County’s General Plan, which analyzed the environmental impacts of building out pursuant to the General Plan, County staff agreed that the technical studies provided by Hilltop Group showed that the project would not have environmental effects beyond those studied in the PEIR and that exemption under Section 15183 was appropriate.

Thus, the County prepared a checklist pursuant to Section 15183 finding the Project qualified for an exemption from additional environmental review because: (1) the project was consistent with the zoning designated within the general planl; (2) there were no project-specific effects peculiar to the project or its site which the PEIR failed to analyze as significant effects; (3) there were no potentially significant offsite and/or cumulative impacts which the PEIR failed to evaluate; (4) there was not substantial new information that the project would result in more severe environmental impacts that those anticipated by the PEIR; and (5) the project would undertake feasible mitigation measures specified in the PEIR.

The County Zoning Administrator conducted a public hearing for the project, received a staff report supporting the CEQA exemption, heard public testimony from a number of public opponents, and then approved the Section 15183 exemption recommendation. That decision was appealed to the Planning Commission, which also upheld the application of the CEQA exemption after a contentious public hearing. The Planning Commission’s decision was further appealed to the Board of Supervisors (“Board”), which granted the appeals to deny utilization of the Section 15183 exemption and, in so doing, rejected its own staff’s recommendation. Instead, the Board found the project would result in project-specific peculiar impacts on air quality, traffic, noise and greenhouse gas emissions that were not analyzed as significant impacts under the PEIR. The Board of Supervisors directed the preparation of a project specific EIR.

Prior to the hearing, the Board received more than 150 e-comments and heard verbal commentary from 24 members of the public, mostly all opposing the project. In addition to this commentary, the Board also considered the Section 15183 consistency evaluation, technical studies supplied by Hilltop Group supporting the project’s eligibility for an exemption under Section 15183 and detailed responses from County staff and the applicant rebutting the appellants’ claims for additional environmental review.

Rather than concede and proceed with the EIR it had previously prepared, Hilltop Group sued the County asking the court to: (1) set aside the Board’s decision granting the administrative appeals and requiring the preparation of an EIR; and (2) direct the Board to affirm the Zoning Administrator’s decision approving the Section 15183 exemption.

The trial court ruled in favor of the County, concluding that there was a fair argument that the project may have “significant non-mitigable effects on the environment which are peculiar to the subject project, were not addressed as significant in the prior environmental impact report, and for which new information shows will be more significant than described in the prior environmental impact report.” Hilltop Group appealed and ultimately prevailed.

Court of Appeal Ruling

The Court of Appeal first addressed the applicable standard of review for Section 15183 exemptions, ruling that the substantial evidence standard of review – and not the fair argument standard – applies to the determination as to whether a project is eligible for exemption from further CEQA review under Section 15183. Interestingly, the County argued that the standard of review was dependent upon the action being taken by the lead agency. Under the County’s argument, the fair argument standard of review applies to the review of an agency’s determination to deny a project’s exemption under Section 15183, and the substantial evidence standard of review should apply to review of an agency’s decision to approve an exemption. The Court saw no reason to apply a different standard of review depending on whether the County approved or rejected the Section 15183 exemption and held that the substantial evidence standard of review applies in both circumstances. As the substantial evidence standard of review is deferential to the agency decision, the Court went on to state that it must “resolve all conflicts in the evidence in support of the Board of Supervisors’ action and indulge all reasonable inference in favor of their findings.” 

Remarkably, even with the favorable substantial evidence standard of review, the Court ruled against the County finding that its decision was supported by speculative and/or uninformed lay testimony rather than actual evidence. Recognizing that one of the essential purposes of PEIRs is to streamline environmental review of projects within the scope of a prior environmental document, the Court stated that an exemption under Section 15183 must be given unless a project will have significant environmental effects (i) that are peculiar to the project or the project site, (ii) were not analyzed as significant effects in a prior EIR on the zoning action, general plan or community plan with which the project is consistent, (iii) are potentially significant offsite impacts and cumulative impacts which were not discussed in the prior EIR, or (iv) are previously identified significant effects, which as a result of substantial new information which was not known at the time the PEIR was certified, are determined to have a more severe adverse impact that discussed in the prior environmental analysis.

In addition, the Court ruled that pursuant to Section 15183(f), additional environmental review can only be required for peculiar impacts that will not be substantially mitigated by the application of uniformly applied development policies or standards. The County argued that the project would have “project-specific peculiar” impacts that were not analyzed as significant impacts in the PEIR with respect to air quality, traffic, noise and greenhouse gas emissions and therefore was not eligible for the CEQA exemption at all. The Court disagreed and framed the issue as an evaluation of the extent to which the CEQA exemption could be relied upon for peculiar impacts that were not analyzed in the PEIR and would not be substantially mitigated by the application of uniformly applied development policies or standards. The Court went on to hold that the County did not identify substantial evidence showing that the project would have such “peculiar” impacts requiring further environmental review. Instead, the County relied on general comments and lay opinions from project opponents about the significant impacts the community might experience with respect to aesthetics, air quality, traffic, noise and greenhouse gas emissions. The Court found these speculative concerns uncompelling in the face of the evidence-based analysis contained in the County’s Section 15183 consistency evaluation and supporting technical studies, including evidence such as visual simulations to demonstrate the project would not have significant impacts on aesthetics and noise analyses demonstrating the project would operate in compliance with the County’s noise ordinance. In the end, the Court found there was insufficient evidence to support the Board’s findings that the project would result in peculiar environmental impacts that would not be mitigated by previously adopted uniform policies and procedures in the areas of aesthetics, noise, traffic, air quality and GHG emissions.

Implications

Hilltop Group Inc. v. County of San Diego should serve as a reminder that the CEQA exemption available under Section 15183 is a powerful tool for projects that are consistent with an applicable general plan, community plan or zoning ordinance for which an EIR was previously certified. A checklist and supporting technical reports can be used to evaluate whether the proposed project is consistent with and within the scope of the prior EIR. Implementation of mitigation measures from the prior EIR and subsequently adopted uniformly applied development policies and procedures that can substantially mitigate any peculiar project-specific impacts may avoid or significantly limit the need for further environmental review completely. Hilltop Group also clarifies that a lead agency cannot reject a CEQA exemption under Section 15183 simply because a project generates significant public controversy and attracts droves of opponents to vocalize their NIMBY-based concerns. Additional CEQA review can only be required if substantial evidence demonstrates the project is not eligible for exemption. Once a policy decision has been made on what land uses are allowed and where in a legislative document (such as a general plan), those questions should not be reopened in the context of an environmental review. This case can provide useful “cover” to decisionmakers looking to explain why an agency is required to approve projects that may be unpopular with constituents.

FOOTNOTES

[1] CEQA Guidelines section 15183(a) provides that additional environmental review cannot be required for projects “consistent with the development density established by existing zoning, community plan or general plan policies for which an EIR was certified . . . except as might be necessary to examine whether there are project-specific significant effects which are peculiar to the project or its site.”