In a published decision last month, the Fourth District Court of Appeal of California helped clarify the scope and application of a statutory exemption from the California Environmental Quality Act (“CEQA”) for certain projects that are consistent with a zoning or community plan.  The decision was in Hilltop Group, Inc. v. County of San Diego (Case No. D081124) (“Hilltop Group”). 

Hilltop Group concerned a proposed facility in an industrial zone to recycle construction, demolition, and inert debris.  The facility, known as the North County Environmental Resources Project (“NCER Project”), would be located on a parcel of land that was part of the County of San Diego’s (“County”) General Plan Update (“Update”) in 2011.  The County Board of Supervisors (“Board”) certified a program environmental impact report (“PEIR”) for the Update.  Because the NCER Project was on land that was part of the Update, it triggered the possibility that it was exempt under Public Resources Code section 21083.3 (“Section 21083.3”) and CEQA Guidelines section 15183 (“Section 15183”). 

Section 21083.3 provides, in relevant part, that “[i]f a development project is consistent with the general plan of a local agency and an environmental impact report was certified with respect to that general plan,” CEQA review of that project “shall be limited to effects on the environment which are peculiar to the parcel or to the project and which were not addressed as significant effects in the prior environmental impact report, or which substantial new information shows will be more significant than described in the prior environmental impact report.”  (Cal. Pub. Res. Code, § 21083.3(b).)

Section 15183 provides, in relevant part, that “[i]n approving a project meeting the requirements of this section, a public agency shall limit its examination of environmental effects to those which the agency determines, in an initial study or other analysis: (1) Are peculiar to the project or the parcel on which the project would be located, (2) 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, (3) Are potentially significant off-site impacts and cumulative impacts which were not discussed in the prior EIR prepared for the general plan, community plan or zoning action, or (4) Are previously identified significant effects which, as a result of substantial new information which was not known at the time the EIR was certified, are determined to have a more severe adverse impact than discussed in the prior EIR.” (CEQA Guidelines , § 15183(b).) 

County staff reviewed the NCER Project for an exemption under Section 15183.  They found that the project qualified for the exemption because, among other reasons, it was consistent with the zoning designations under the Update and there were no project-specific effects peculiar to the project or its site which the PEIR failed to analyze as significant effects.”  (Hilltop Group at p. 9.)  The County staff recommended that the County Zoning Administrator approve the CEQA exemption for the project, which the administrator did.   

That decision was appealed to the County Planning Commission, which upheld the Zoning Administrator’s decision.  Another set of appeals followed, but this time the Board reversed the exemption determination, finding that the NCER Project would result in project-specific peculiar impacts in the areas of air quality, traffic, noise, and greenhouse gas emissions, which, according to the Board, were not analyzed as significant in the PEIR. (Id. at p. 16.)  The Board concluded that “[i]n short, additional analysis is required to study the peculiar impact of the project which were not analyzed in the General Plan EIR for this specific site with its unique features, location, and surrounding uses.”  (p. 16.)  The Board granted the appeals and remanded the project back to the Zoning Administrator with the direction to order preparation of an EIR.  (Id.) 

Rather than following that course of action, the project applicant, Hilltop Group, filed a petition for writ of mandate in San Diego County Superior Court requesting that the court set aside the Board’s decision and direct the Board to affirm the Section 15183 exemption for the project.  The court denied the petition because it concluded there was a fair argument that the NCER Project may have “significant non-mitigatable 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.”  (p. 16.) 

The Court of Appeal reversed the trial court, holding that the NCER Project was exempt from further CEQA review under Section 15183.  In reaching its decision, the court provided useful guidance on three issues for Section 15183 cases: (1) what standard of review applies; (2) whether a project’s significant effects is enough to kick it out of the exemption; and (3) how to interpret the term “peculiar.” 

Standard of Review

The court rejected the County’s argument that the fair argument standard of review applied, relying on Gentry v. City of Murrieta (1995) 36 Cal.App.4th 1359. There, the court “suggested” in a footnote that the fair argument standard might apply where a statutory exemption depends on whether the project will have a significant effect on the environment, as is the case under Section 21083.3  But the Hilltop Group court declined the appellant’s invitation to follow dicta, and cited one case for the proposition that “footnote dicta” is the “lowest form of dicta.”  (pp. 26-27, citing and quoting County Line Holdings, LLC v. McClanahan (2018) 22 Cal.App.5th 1067, 1074.) 

Instead, the court held that “the substantial evidence standard governs our review of a CEQA exemption, including that of Guidelines section 15183.”  (Hilltop Groupat p. 21.)  “In determining whether an agency’s findings concerning a statutory exemption from CEQA may be upheld, we review the administrative record to see that substantial evidence supports each element of the exemption.”  (p. 21, citing and quoting Concerned Dublin Citizens v. City of Dublin (2013) 214 Cal.App.4th 1301, 1311.)  Relying on Lucas v. City of Pomona (2023) 92 Cal.App.5th 508, 538, which also concerned the Section 15138 exemption, the court found that the substantial evidence standard “is the proper standard where … an agency determines that a project consistent with a prior program EIR presents no significant, unstudied adverse effect.”  (p. 22, citing and quoting Lucas, 92 Cal.App.5th at p. 538.)  And, like the Lucas court, the Hilltop Group court emphasized that “substantial evidence standard requires us to resolve all conflicts in the evidence in support of the Board of Supervisors action and indulge all reasonable inferences in favor of their findings.” (Id.)  It’s worth noting that this presumption, under Lucas and Hilltop Group, applies to the lead agency whether it determined the Section 15183 exemption applied or rejected its application. 

Interpretation of Section 15183

The County argued that because, in their view, the project would have significant environmental effects peculiar to the project, it did not qualify for the Section 15183 exemption.  The court rejected the County’s argument, explaining that the peculiar effects of a project are not disqualifying factors under Section 15183, but rather issues that are within the scope of the streamlined environmental review contemplated by that section. 

It further found that under Section 15183, streamlining is mandatory. “[B]ecause the NCER Project is consistent with the [Update] for which the PEIR was certified, we conclude the streamlined process in Guidelines section 15183 is applicable to the project.”  (p. 27.) The express terms of Guidelines section 15183, subdivision (d), state that the regulation’s streamlined review is applicable to the NCER Project because it is consistent with the [Update]. Rather, the issue before this court is the extent to which the process is streamlined and what further review is required based on substantial evidence of the project’s peculiar environmental impacts.”  (pp. 27-28 [emphasis in original].)

As such, Section 15183 “limits environmental review for qualifying projects to those effects that are peculiar and project-specific, or not addressed as significant in the prior environmental impact report, but does not state that such effects render the streamlined process wholly inapplicable.”  (p. 27.)

This means that if a project is consistent with a general plan or community plan for which a program environmental impact report has been prepared, the Section 15183 exemption applies, and the only question is which factors of the streamlined environmental review process under that section should be applied to the project. 

Peculiar

The County argued that the NCER Project required further environmental review because there was sufficient evidence that it may have significant environmental impacts peculiar to it.  The court rejected this argument, explaining that just because a project may have environmental effects that were not previously studied under a program environmental impact report, that, by itself, does not trigger further environmental review under Section 15183. Rather, the question is whether existing standards and policies will substantially mitigate such effects.  If so, such effects are not “peculiar” for purposes of Section 15183.   

An environmental effect “shall not be considered peculiar to the project or parcel … if uniformly applied development policies or standards have been previously adopted by the city or county with a finding that the development policies or standards will substantially mitigate that environmental effect applied to future projects, unless substantial new information shows that the policies or standards will not substantially mitigate the environmental effect.”  (p. 32, citing and quoting CEQA Guidelines, § 15183(f).)  “Thus, contrary to the County’s assertions, the issue is not simply whether sufficient evidence in the record supports a finding that the NCER Project may have significant environmental impacts.  Rather, the issue is whether substantial evidence in the record supports the Board of Supervisors’ findings that there are project-specific impacts that will not be substantially mitigated by previously adopted and uniformly applied policies and procedures.”  (pp. 32-33.)

Applying these standards, the court rejected the County’s arguments that the NCER Project would have peculiar impacts on aesthetics, noise, traffic, or air quality and GHG emissions. 

Conclusion

Section 15183 provides a valuable tool to lead agencies and developers for streamlining environmental review of proposed projects that fall under a program environmental impact report.  Hilltop Group provides clarity on the exemption’s application and the discretion that lead agencies have in applying it.  It also provides a refreshing win for lead agencies and developers who have seen CEQA litigation delay or stop many projects that are exempt from CEQA.