May 31, 2012

Cal Supremes take up important CEQA case

By Damien M. Schiff Senior Attorney

Last week, the California Supreme Court granted review in Berkeley Hillside Preservation v. City of Berkeley.  The case concerns the scope of the single-family residence “categorical exemption” under the California Environmental Quality Act (CEQA).  Pursuant to CEQA, an environmental impact report must be prepared for every discretionary governmental “project” (including permits) where it is reasonably foreseeable that the project will have a significant impact on the physical environment.  Such reports are often very large, tedious, and expensive to produce.  Consequently, CEQA regulations provide for the exemption of certain classes of activities that, generally speaking, would not have a significant impact on the environment, such as the construction of a single-family residence.

In Berkeley Hillside Preservation, a local no-growth group objected to the city’s permitting of a single-family residence of over 6,000 square feet with a garage of over 3,000 square feet.  The city concluded that CEQA’s categorical exemption for single-family residences applied to the project.  But the plaintiff group argued that the “unusual circumstances” exception to all categorical exemptions applied.  Under that exception, a project otherwise within a categorical exemption is still subject to CEQA if “there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances.”  The plaintiff contended that, given the house’s size in comparison to all other homes in the city (not just in the immediate neighborhood), the project would have a significant impact on the environment, thus triggering the requirement to produce an environmental impact report.

The trial court ruled in the city’s favor, reasoning that, regardless of whether the project would have a significant impact on the environment, it was still exempt from CEQA because any significant impact would not be attributable to any “unusual circumstances.”  (The trial court presumably here relied on the fact that the home was similar in size to others in the vicinity).  The court of appeal reversed, but its decision is not a model of clarity.  It appears that the court was disinclined to accept the proposition that a categorical exemption can remove a project from thorough environmental review, notwithstanding its significant environmental impacts, simply because those impacts are not attributable to unusual circumstances.  Accordingly, the court of appeal ruled that once a project has been determined to have a significant impact on the environment, no categorical exemption may be applied, regardless of the relationship between the significant impacts and any unusual circumstances.

Nevertheless, the court, later on in its opinion, seemed to backtrack from that position, explaining that the housing project’s significant impacts were due to the home’s unusual size (again, unusual for the entire city, not just the immediate neighborhood), and therefore was not subject to a categorical exemption.

It’s difficult to guess precisely why the Supreme Court accepted review.  I suspect, however, that the Court’s decision may have been influenced by the fact that the court of appeal’s opinion, arguably eviscerating the single-family home exemption, threatened to raise significantly the cost of home construction, an odious result given the state’s languorous economic condition.

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