$201116 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA --_____ SUPREME COURT BERKELEY HILLSIDE PRESERVATION,ET AL. F L E D Petitioners and Appellants, JUL 27 2012 Vv. Frank A. McGuire Clerk CITY OF BERKELEY, ET AL. Respondents. Deputy MITCHELL D. KAPOR AND FREADA KAPOR-KLEIN Respondents and RealParties in Interest. Aftera Published Decision by The Court of Appeal First Appellate District, Division Four Civil Case No. A131254 After an Appeal From The Superior Court of Alameda County Case No. RG10517314 Honorable FRANK ROESCH RESPONDENTS AND REAL PARTIESIN INTEREST’S OPENING BRIEF ON THE MERITS MEYERS, NAVE, RIBACK, SILVER & Zach Cowan,City Attorney (SBN: 96372) WILSON Laura McKinney, Deputy City Attorney Amrit 8. Kulkarni (SBN: 202786) (SBN:176082) Julia L. Bond (SBN: 166587) 2180 Milvia Street, Fourth Floor 555 12th Street, Suite 1500 Berkeley, CA 94704 Oakland, California 94607 Telephone: (510) 981-6998 Telephone: (510) 808-2000 Facsimile: (510) 981-6960 Facsimile: (510) 444-1108 Attorneys for Respondents and Real Parties Attorneys for Respondents City of in Interest Mitchell Kapor and Freada Berkeley and City Council of the City of Kapor-Klein Berkeley S201116 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA BERKELEY HILLSIDE PRESERVATION,ET AL. Petitioners and Appellants, Vv. CITY OF BERKELEY,ET AL. Respondents. MITCHELL D. KAPOR AND FREADA KAPOR-KLEIN Respondents and Real Parties in Interest. After a Published Decision by The Court of Appeal First Appellate District, Division Four Civil Case No, A131254 After an Appeal From The Superior Court ofAlameda County Case No. RG10517314 Honorable FRANK ROESCH RESPONDENTS AND REAL PARTIESIN INTEREST’S OPENING BRIEF ON THE MERITS MEYERS, NAVE, RIBACK, SILVER & Zach Cowan, City Attorney (SBN: 96372) WILSON Laura McKinney, Deputy City Attorney Amrit S. Kulkarni (SBN: 202786) (SBN:176082) Julia L. Bond (SBN: 166587) 2180 Milvia Street, Fourth Floor 555 12th Street, Suite 1500 Berkeley, CA 94704 Oakland, California 94607 Telephone: (510) 981-6998 Telephone: (510) 808-2000 Facsimile: (510) 981-6960 Facsimile: (510) 444-1108 Attorneys for Respondents and Real Parties Attorneys for RespondentsCity of in Interest Mitchell Kapor and Freada Berkeley and City Council ofthe City of Kapor-Klein Berkeley TABLE OF CONTENTS Page ISSUES PRESENTED........ccssssssssssssesssssscsssssersesesscsesssasassseacsssssaeseceseseneee. l INTRODUCTIONou.ceecscsesesssssesssesesssscsvsssssasssaearsasasasssissvssessaseesapeveveseesecs 2 SUMMARY OF ARGUMENT......cccsscsssssssssscsssssessesseacscsessearssessssseccessreevenes3 FACTUAL AND PROCEDURAL BACKGROUND uoeccccsccccsssseccceseceeseeees 8 STANDARD OF REVIEW ......c.cceesaisschnasbonseceseevaeeseesteseesvsecssnruen 12 ARGUMENT.csscsccssssssssssssvsssssicnsseseesaseeesnae stesstsnseesesiestnstuesssentene 13 I THE APPELLATE COURT ERRED BY APPLYING THE “UNUSUAL CIRCUMSTANCES” EXCEPTION WITHOUT REQUIRING A SHOWINGOF SIGNIFICANT IMPACTS DUE TO UNUSUAL CIRCUMSTANCES....ccecccesececees 13 A, CEQA’s Purposes and Structure ....c.c.ccescccssessscsesssssesecseeeees 13 - B. Overview of Categorical Exemptions........cosssssssnsseceseeeesaeeee 15 l. Legislative Direction for Categorical EX€MPTiONS..0... sc ceesesessesecseessssscseseessscessssstsesecsssesecans 15 2. History of Categorical Exemptions.0.....c.ccccccsesecssesees 16 3. Process for Categorical Exemptions........c.cccsssessesees 17 C, The Long-Standing Judicial Construction of Guidelines § 15300.2 Requires a Separate Showing of “Unusual Circumstances”.......cccccccsccsssessesecessecssestsssscscecesseees 18 D. Under Yamaha Prong One,the “Unusual Circumstances” Requirementin Guidelines § 15300.2 Is Within the Scope of Authority Conferred by the Legislature in Section 21084 wcsscccsssescsssescsessesececececes21 I, The “Unusual Circumstances” Requirementin Guidelines § 15300.2 Is Consistent with the Plain Meaning of § 21084...ccccccesessseecssescscsees22 I. H. The “Unusual Circumstances” Requirementin Guidelines § 15300.2 Is Consistent with the Legislative History of § 21084oceeeesessesseseeees27 The Legislature’s Subsequent Amendmentof§ 21084 Confirmsthat the “Unusual Circumstances” Requirement Is Consistent with the Legislative Intent in § 21084oeeceseeeeee32 Nothing in this Court’s Decision in Wildlife Alive or Any Other Authority Supports the Court of Appeal’s OPINION oo. eeeeeeseeseecesecsecsserssesesesssseeseeeatssessesssssssecateaserees 33 1. The Court of Appeal’s Reliance on Wildlife Alive Is Misplaced.......csscccsssssessesssssscecssscsscssessesseseens 33 2. No Other Authority Supports the Court of Appeal’s Opinion .......cccssscsecsscsssssesesesssseecscsersevaeens 37 3. Appellants’ Authorities Do Not Support the Court of Appeal’s Opinion .......... ce eceeessesseccesseeeceeees 39 Under Yamaha Prong Two, the “Unusual Circumstances” Requirement in Guidelines § 15300.2 Is Reasonably Necessary to Effectuate the Purpose of Section 21084icesscecsssessssessesscseeseessecsesesscssssessvseseceeees4] The “Unusual Circumstances” Requirementin Guidelines § 15300.2 Is Consistent with CEQA’s Structure for EXemptions.........cccsccssesessesseesssesscssesessesevarerees43 The “Unusual Circumstances” Requirementin Guidelines § 15300.2 Is Consistent with Public Policy.........46 THE PROPER STANDARD OF REVIEW APPLICABLE TO THE UNUSUAL CIRCUMSTANCESEXCEPTIONIS THE SUBSTANTIAL EVIDENCE STANDARD...eceeeeeeeesAg A. Overview of Standards of Review........cccccscsssssescecceeserseres48 B. The Long-Standing Split in Court of Appeal Decisions on the Applicable Standard of Review for the Unusual Circumstances EXCeption.......cccscsscssesecscsessesssscssecssescrseseees 50 -ii- Il. C. The Standard of Review Should Be the Substantial Evidence Standard ............cccccccccccscsssscscccceececsessesecscasseeeeeenenees 51 l. The Substantial Evidence StandardIs Consistent with the Concept of and Purpose for Categorical Exemptions.........ccccccscssccessssescsecsseceesees 51 2. The Substantial Evidence Standard Is Consistent with this Court’s Treatmentof the Common-Sense Exemption ........cccscesecseesessessesssseeees 55 UNDER THE CORRECT INTERPRETATION OF ~ GUIDELINES§ 15300.2, THE COURT SHOULD UPHOLD THE CITY’S DETERMINATION THAT THE PROJECTIS CATEGORICALLY EXEMPT FROM CEQA......ccccccsccsssecsersseeees 57 A. It Is Undisputed that Substantial Evidence Supportsthe _ City’s Determination that the Categorical Exemptions Apply to the Project... ecssssssssesssessecsssseessssecssssscsscesasenees 57 B. The Appellate Court Erred in Finding that Appellants Met Their Burden of Showing Unusual Circumstances........ 57 1. The Proposed Home Is Not Unusual Compared to Typical New Construction Projects Under Guidelines § 15303 oo... cccsssessscssecsssssecsssaderseessseters 58 2. The Court of Appeal Erred in Ignoring the City’s Legislatively-Adopted Development Standards Regarding the Allowable Size of a Homeon this Property ......cccccsssscsscsssessesssssesssssseseees 59 3. The Proposed Home Is Not Unusual Compared to Typical In-Fill Projects Under Guidelines § T5332 vscessscssscsssscssecsseceseseeeeesecsessessecsesseesserscescsesacaseas 62 C. The Appellate Court Erred in Finding a Reasonable Possibility of a Significant Environmental Impact Resulting From Unusual Circumstances ........00.cccseeeeseseeees64 1. There Is No Substantial Evidence Raising a Fair ArgumentofAny Significant. Geotechnical TMPaCts ..... cc cecceeesecesecsseseessesscseeessessssssssesesccnecsceetseecs65 -iii- 2. The City’s Determination Regarding the Scope of the Proposed Project Per the Approved Plans is Not Subject to Expert Dispute oo...eeeseeteees67 3. CEQA’s Requirement to Prepare an EIR Cannot Be Triggered by Alleged Impacts of Project Elements Which Are Neither Proposed Nor APPTOVedd ......ceecceeseeeseeeceseetseteneeseeseeseseeeeeeseesaseaeeseaees 70 4, Even Assuming a Reasonable Possibility of Significant Geotechnical Impacts, Appellants Failed to Show that Such Impacts Were Dueto Unusual Circumstances 0.0... .eceseecceeseceeeseeeeesessneeenees 74 5. The Court of Appeal Erred By Holding that the Unusual Circumstances Exception Was Triggered By Allegations of an Impact of the - Environment on the Project ........:ccccccssssssecsseessseseetes74 IV. THE COURT OF APPEAL ERRED IN ORDERING THE CITY TO PREPARE AN EIRwo... cecseseeseeeserseseseesneeseesaeeanens77 CONCLUSIONQeiccccscessssstecsscnsesseseseseessesseseecsscesnssneesaeaseasesecensenseneeas 80 WORD CERTIFICATION ou...cc eeceseeeseeseeeceaeeaeesetseeeeseeesecarsereseesaseeneesees 81 -ivV- TABLE OF AUTHORITIES Page(s) CASES Associationfor Protection ofEnvironmental Values in Ukiah v. City of Ukiah (1991) 2 Cal.App.4th 720.0... cccescscsssecsecsscssceesesseeceseseas 20, 45, 51, 59 Apartment Assn. ofGreater Los Angelesv. City ofLos Angeles (2001) 90 Cal.App.4th 1162.0... cccsccccscsssscsssesssscscesesessssesesesssseacsessess 17 Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165... cccccsescsssssscssssssccssssscesssvecersssstscsees passim Baird v. Court ofAppeal (1995) 32 Cal.App.4th 1464.0...sesteneenees seve eesecseseesereaeeneteaeaeeseeaeas 75 Ballona Wetlands Land Trust v. City ofLos Angeles (2011) 201 Cal.App.4th 455 occcccccscscscsssssssessscssscssssesesessecscavsvecersaeess 76 Banker's Hill, Hillcrest, Park West Community Preservation Group v. City ofSan Diego (2006) 139 Cal.App.4th 249occcscccscsssssescscsessesssceessersssssescsesees passim Bello v. ABA Energy (2004) 121 Cal.App.4th 301... ccecssssescsssscssscscessscseeceesssssscersseescsnes69 Benton v. Board ofSupervisors (1991) 226 Cal.App.3d 1467 ..ccccccccssscsssessescssscssscssesestsesceceeecsescescavees 52 Bowmanv. City ofPetaluma (1986) 185 CalApp.3d 1065 oo... ccecsescescsssscsccscssecescsrssssercarsesecatseenees 52 Bozung v. Local Agency Formation Com. (1975) 13 Cal.3d 263 oe ccccscsceesesssserscssscsscssssssescessacseacercasacsesaens 35, 45 Briggs v. Eden Councilfor Hope & Opportunity (1999) 19 Cal.4th 1106...sccsssssssscsescsesscscscscssssssssreeseecssstatscsteeeavens23 California Farm Bureau Federation v. California Wildlife Conservation Board (2006) 143 Cal.App.4th 173 occccssseessesssscscccssssesssssnssesceserseecass 44, 46 California Native Plant Society v. County ofEl Dorado (2009) 170 Cal-App.4th 1026.0...ceeescecccsecsseeeseseeeeeaeseeeseeeeeeeaeeaneenseas66 California Unionsfor Reliable Energy v. Mojave Desert Air Quality Memt. District (2009) 178 Cal.App.4th 1225oiececsssessessessesscssseesesserssstcsesaeeateas79 Citizensfor Responsible Development in West Hollywoodv. City of West Hollywood (1995) 39 Cal.App.4th 490... ceccseeseeeeccsseecaseaeesseceeesessseeseaeeeeseeseas 71 Citizens ofGoleta Valley v. Board ofSupervisors (1990) 52 Cal.3d 553oeeecesseesecsscceseesaceceeeeteesesaeesaeeenseseneeeas 14, 49 City ofBerkeley v. Cukierman (1993) 14 CalApp.4th 1331] ooescsesstecerecssctsstsesseesecsterseeesseseesenees40 City ofLong Beach v. Los Angeles Unified Sch. Dist. (2009) 176 Cal.App.4th 889iececsessssecesecsessesseseseesecctesseseeseeeearees 76 City ofMarina v. Board of Trustees ofCalifornia State University (2006) 39 Cal4th 341oceenecseceneceeessecseecesersrsseeseneeatescssesesneseeeeeees79 City of Walnut Creek v. County ofContra Costa (1980) 101 Cal-App.3d 1012, L021.eeeeccsesseesseeeceeeeeereeeteeeeees68 Clover Valley Foundation v. City ofRocklin (2011) 197 Cal.App.4th 200oeeecsecsseessresseeseeesseeeceatsasearees 25, 26 Coalition ofConcerned Communities, Inc. v. City ofLos Angeles (2004) 34 Cal4th 733 ooesscssecsscessessstsnsessectserscesseseaeeeteserseasesrseness22 Committee to Save Hollywoodland Specific Plan v. City ofLos Angeles (2008) 161 Cal.App.4th 1168oocsceeeseteccneersnsesseeeestseseeseeesaees 51 Communitiesfor a Better Environment v. California Resources Agency (2002) 103 CalApp.4th 98ooceeccescsteeeserecetetsseeestesesstessresenes passim Davidon Homes vy. City ofSan Jose (1997) 54 CalApp.4th 106.0... ccscecseseeeseesseceeeesseseeeeeeetseeneeaees 46, 55 DeVita v. County ofNapa (1995) 9 Cal 4th 763oecceseescessccesseersseseccsneeeesecssaeeeseeeseesneseuessaeeeees60 -Vi- Dyer v. Superior Court (1997) 56 Cal.App.4th 61 cceccssssscscsssscsssssssssessssssesessssstsssssssssssecersvenssse40 Eureka Citizensfor Responsible Governmentv. City ofEureka (2007) 147 Cal.App.4th 357 occ csscssssscsssssssscsssessesscsessesssscsssseseseeeesaees26 Fairbank v. City ofMill Valley (1999) 75 Cal.App.4th 1243 occ cceccssscsscsesscssesserscsssrsssseessseees passim Federation ofHillside & Canyon Associations v. City ofLos Angeles (2000) 83 Cal.App.4th 1252... ccccccscsssscsssessesssecsessesscscessscssssssecesereates 79 Friends of “B” Street v. City ofHayward (1980) 106 CalApp.3d 988oececcsssssssessereesssesesscescsssssseassessees 49, 51 Friends ofLagoon Valley v. City of Vacaville (2007) 154 Cal.App.4th 807cc cscescssssesesssecsssssssscsscsssscssssstscscsesaeercaees 60 Friends ofMammoth v. Board ofSupervisors (1972) 8 Cal.3d 247 oo cecescssessccscssessesscssssscsessssscsesesscestessesecsseaees passim Gentry v. City ofMurrieta (1995) 36 Cal.App.4th 1359... ccseccsccscscsesecsescsscsesscssvsesvssssestecees 49, 78 Harrott v. County ofKings (2001) 25 Cal. 4th 1138... essessesssecsseesessseessessessssssessecsnseseerecneneenen68 Highland Ranch v. Agricultural Labor Relations Bd. (1981) 29 Cal.3d 848 oosecssssssssssssssesssssececsescsesusscsssssscssecesssvseeneesees68 Hines v. California Coastal Commission, (2010) 186 CalApp.4th 830.0... ccccccsssesesesecsssescsscessscssscsseaens 50, 51, 59 Horn v. Swoap (1974) 41 Cal.App.3d 375 ..cccccssssssssessssescsecssecssssessssssessssscserevsseesaeeares 32 Hughes v. Pair (2009) 46 Cal.4th 1035... cccsccsssscsscsesesesssecsssessscsssscssssescssscesessaceaeevaes 31 Inre H.E. (2008) 169 Cal.App.4th 710... ccccccccccescscsecsesssesscsscsecsssassessrssseneserseees23 Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376 oo. eecesccsscsseseccscsessssssscsssstessessesssssess 12, 19, 48, 49 -Vii- Laurel Heights Improvement Assn. v. Regents of University of California (1993) 6 Cal.4th L112.eeceeeesreeserenesetneeenens saseneeseeneeenees 12, 48, 52 Leonoffv. Monterey County Bd. ofSupervisors (1990) 222 Cal.App.3d 1337 oi ceeesssssscsesseesscetseeesseseesesssssssesesseesseeees 73 Lincoln Place Tenants Assn. v. City ofLos Angeles (2007) 155 Cal.App.4th 425 oiccscecsesseesessssessssssssecssesseseceseeeeeeets79 Lucas Valley Homeowners Assn. v. County ofMarin (1991) 233 Cal.App.3d 130... eeecssscccsscsssessssessssesseseseeessescssessssscnsseees71 Mountain Lion Foundation v. Fish and Game Commission (1997) 16 Cal.4th 105 vcecccccsssesssescesseesssssecsssesesesscsesceessereaees 39, 40 Muzzy Ranch Co. v. Solano County Airport Land Use Com. (2007) 41 Cal.4th 372.0. esesccetecscsseecteesessesssensesseaees 14, 15, 43, 55, 56 Myers v. Board ofSupervisors . (1976) 58 Cal.App.3d 413.eeseceeseseesentesecnessssseseenessssessseseneesseee43 No Oil, Inc. v. City ofLos Angeles (1974) 13 Cal.3d 68 oo. eccceccsseecsetsesessssssssssssessenesw+ 25, 43, 44, 49, 51 North Gualala Water Company v, State Water Resources Control Board (2006) 139 Cal.App.4th 1577 vcccccsscssssseccsccssesecessesvencessecssaeesesessseeseeen 70 People v. Banks (1993) 6 Cal.4th 926 oo... cesesssssecsscssscevssesscccnssscsssesssecsseesessrsesssarersntes40 Pistoresi v. City ofMadera (1982) 138 Cal.App.3d 284oeceetesetscesssesctecsebecesssesssessstessesaesrens44 Pocket Protectors v. City OfSacramento (2004) 124 Cal.App.4th 903 ooeeecsseeeerstsceecseesetestessesseesesesseesesseees66 Protect the Historic Amador Waterways v. Amador Water Agency (2004) 116 CalApp.4th 1099oicccescscseesssseesesssssssseeessscsessesseseeees79 Reno v. Baird (1998) 18 Cal.4th 640.0... ccccecsecssssssscssssseccesseccssesseesesestaseeeeesetrenees 68 San Bernardino Valley Audubon Soc’y v. Metro. Water Dist. (2001) 89 CalApp.4th 1097iesccesesesesessssssseeesesssssccsesesseessessesees79 -Viii- San Lorenzo Valley Community Advocatesfor Responsible Education v. San Lorenzo Valley Unified School Dist. (2006) 139 CalApp.4th 1356.0...iececccsesteseeeceeeseteeees 14, 50, 76, 77 Santa Monica Chamber ofCommerce vy. City ofSanta Monica (2002) 101 Cal.App.4th 786.0... eeccsccstecsecsscssstsssessessesees 18, 20, 51, 66 Save Our Peninsula Committee v. Monterey County Bd. of Supervisors (2001) 87 CalApp.4th 99ooiccecscseseestesnseseseeseesserserssstersessarseesaes69 Save the Plastic Bag Coalition v. City ofManhattan Beach (2011) 52 Cal.4th 155iccesessstessessseseeeesssseeseessessesseseneees 15, 42, 54 Schellinger Bros. v. City ofSebastopol (2009) 179 CalApp.4th 1245.eesescscsssectesseresssesesseestsssesseseessseees 79 South Orange County Wastewater Authority v. City ofDana Point (2011) 196 Cal-App.4th 1604oieeccsecsecssensecseesteestessesreeses 75, 76 Stone v. Board ofSupervisors (1988) 205 Cal.App.3d 927oeesscecssesssrccecsssseetenecsseaeecsseaseanens 69, 70 Tomlinson v. County ofAlameda (2012) 54 Cal.4th 281oeecceesseeteesneestecseessesesecteesenecsesseesens 14, 15 Tuolumne County Citizensfor Responsible Growth, Inc. v. City of Sonora (2007) 155 Cal.App.4th 1214 ..cccccccccssscssssssecssssssesecsssssessessnessecssseeesesen79 Valley Advocates v. City ofFresno (2008) 160 Cal.App.4th 1039oeeesceeereseeseeseessecsssetsesseessessaeens 53 Vineyard Area Citizensfor Responsible Growth y, City ofRancho Cordova (2007) 40 Cal.4th 412.eeccseesssseeeessecsteeecssecseecssssssetsesseeenes 12, 48 Western States Petroleum Assn. v. Superior Court (1995) 9 Cal4th 559oocesesseessseteeecneesessecsrecnerstssesaesesesseenes 49, 79 Whitcomb Hotel, Inc. v. Cal. Emp. Com. (1944) 24 Cal.2d 753 oo iceescccscecesseteceesecssessecesssseseeestsesssesseeeaeas 12, 34, 69 Wildlife Alive v. Chickering (1976) 18 Cal.3d 190.ecsccccsssccssstsecsseeeecssessrsecessesesssseeesssesenes passim -ix- Wollmerv. City ofBerkeley (2011) 193 Cal.App.4th 1329.0esesceeseeecenseecsetesneeeseeeeeeasenes passim Yamaha Corp. ofAmerica v. State Bd. ofEqualization (1998) 19 Cal.4th Loeeccscssssessrscssseesseeeseessseseeesessecsssasenssesssess passim STATUTES California Code of Regulations Title 14 Section 15006 0... eessssssscssssssccssecsssesseesssceessesssecsseseseesesscssseseesseesseeeesens 14 Section 15061(a)......cccesccccscssseecsseecetsessecsseecssesseecsseesscseesessseasessseeesseees 17 Section 15061(D) ..... ce cessccsssesstceesseessscersessseessesenseesseecssseeesstssatessatesseaees 17 Section 15061 (D)(3).... cc ccecsssccccssecessecseesseesseesseseeesesssnesessesseseseneae 43, 56 Section 15064(a)......ccecesscccsssesscsesseecsssessscssssesseseseeessesessseseseesseeceseessaeees 25 Section 15064(D)oc.ecsccsesssereestscsseeceressssessreseresessesesensesereseecesseesseees 25 Section 15107 oo... ccecscssscscessscsvscsssssesessesscesseceeasscscesecssestectseeeeas 34, 35 Section 15300 wo... .csscscsceccessessscesssesessessecesscessssessecseeeeeeseeseeseaterssssesseees 16 Sections 15300-15333 ........cscesssscesesessesseeessscesssessessessseseecetessterssnsesarecs47 Section 15300.2 ocsccssecssesceccssessscssesseecssessscsscseeseeeseeesseseeeeaeeees passim Section 15300.2(a) occ ccscccsccsececssecssessecseeeseeeseeeseeueecesecseessesseeessueesseseneess 53 Section 15300.2(b) ......csesssessssscesccssecsssccesecsssssereceestseeseeeceeeesessesseress 53 Section 15300.2(C)...ccecccsccssrceessecssessrscsssesssesseessseesssereseseseeeeesss passim Section 15300.2(f) occeccccssssssccescecsrecsssesseccssevsseeessessesseseesesereeesseesessees 53 Section 153003... cessccssccscsssccssesssesssseseeseeessessssseecessssaeseseseeceseeessesseseas 16 Section 15301 oeeesscsseccsseeesssecessecssesssseseesessseseeesessseeseeeeeesseeseeessesenses47 Sections 15301-15333... ccceessssessscssecsssecescssscssseecsstecessesetesessessusssesees 16 Section 15302(a).....ccsscccscccssesssecesssesssccseceseeseaeeeaseceseesesseeessesessessssensssees47 Section 15303 oo... ceescsccssseessesssseesseessseeesscseseeesseesesecssevecseeeennsess 47, 58, 59 Section 15303(a).......ccsessseceeesSuneesceecsceceesceeueussseusessesceseuseecesesseess 9, 57, 58 Section 15303(b) oo... csssscesssssssssessecesseessecsescesseeenecesseeesssssensecsssseseseanscs 58 Section 15303(C)......cscssscccsssesssccssseessccessceseeceseeseeesseesessesessesssscesseessesees 58 Section 15311 oecscscessecsecsseccesecssssssssssssseeseeseeseeecesecaescseseeseseeessseeseas47 Section 15314iccscscsssccsssesssscecsescessesseeessesssesenseesstsessesessresssscesseesaeess47 Section 15323 viccscccsccsteccesessscecsseecsscseesseecsseseseeevsessesseeesseeeeesesseresesens48 SeCtiOn 15327 oe ceesscsscsssccsscssccssessscessesseeseesseeseesseecssesssecessesestseesteeseas48 Section 15332... ecccscsscetccseeccssensseeesscssscesseceeeseeeseteessesaeeeseees passim Section 15332(a).....ccccsssssccssseccccesseesessecesseeesssscsseeeeesssesecsesseeeseeceesuseesues63 Section 15378(a)(3) ...ccccescccscsssseesecseseeseeceseeseecsseseeseecsesesessessescesssesuses 70 Section 15378(C).....ccscsccsssccsseecessseeseccerscsseeessssssecsesasesseeeseseessevsessevsscanss 70 SeCtiON 15382 oo... ceecsccssscccseeesssnecseessesesecessseesseesaaeesseeecesaseetecsseeesssensees 75 Section 15384(a)......ccscccssscessscessseessecesscessecesssevsresseeessasesseseseescsavesuneseeeas66 Government Code Sections 11340-11528... ceccccsscccssseesseceessesseesessessseecssesessnecesseeeseaeeens 15 Section 11342.2 vccccccccccsssscccssssecesssssscssssnsessecssssteccessesecsseseeessnsenseesenes 12 Section 11346.4 wu... sssssscccecsssssccceccecsneceeccanesseccssesseesesessnsaeeseesbensesanens 16 Section 11346.5 vcccccsccscscccssscscssssssscscssssssesssvessssssssssssssessesssscssessssersee LO Section 11346.8 vcccccccessscccsseeccesssssesssessceeccessersesscaeeeesaeesecsseaseesees 16 Section 11374........vevssssaceasssescussscsenseuseussusesuseusessscsscsesssasausssassesssesasseseses 12 Section 65000 ........ccccsessssccssssscesssesesesssesessseeseseececstseesscsesesestseeeesseaseesens60 SeOction 65850(a)......ccccccccccsssccssseccsecssssesseeeeeestaeeseeeseneeeeteesereessnaneseeaaeees60 Section O5850(C).......ccessscccsssscsssccsseecsesessseeceecsaeecssnseeatecseseesessesesnteeseneees60 Public Resources Code Section 21000. .......cccessssssccessssccsssesceecssscseseeessneeececsssecesesteesssseeessssserecesses 1 Section 21003 ........escescsesssceccesesssececcecesssssensesneeseeesesaaueeeeeessnesesereseeeses 14 Section 21065 ........cecessssccessecssscceseecscssesseceeesesseecesteessageeesntecsnes 14, 27, 28 Section 21065(C)..... cee ceesccsscecsneceseesnceceaseaneeeesseessaeesseeseasetesseeeseeseseeeserees70 Section 21068 .......cccecccccccssscessssssssssvssesceveeeeceuseseesesceeseseesaceeeuaess 15, 25, 75 Section 21080 cc. cccssssssssccccseesssseccesccsseeeeceeeceecevesseseeeeeeessssetnesesene 23,31 Section 21080(C)........cecssscssssccssrecsseeccssscesnseeeeesteeeesrerseeuessseeessseesnes 22, 23 Section 21080(C)(1) nc. eccecccesssceccsnrececestseeerseseteeeeeseaeeeeseuaesesseeeseseeneseees23 Section 21 080d)... ccc cecsscccsssnrecsseeceessceceseesesneeeeceteeeeeeseeeesnaeeersees 22, 23 Section 21080(e)(1) oo... cescccserccsssececccsssecceecescssceeessaeeeecssnesessaeeseeseaneeess65 Section 21080(€)(2).......cceeccsssssccssseccecsnsecesceessseececeeneescssatecesseeeeeseeseeesss66 Section 21082.2(C)........ccccescccsssssccesnccecssceeeccecsseeseesieesesssensceseeeeeeseneeeees66 Section 21082.2(d) ...cecssscccsccccsnsessececcssessseeceeceseeecesssssneeessssecseesesseeesenses23 Section 21083(a)......ccccccssscccsessscecsseceecesseceeecessnsesecesseesseesanecesneecesessasesees 15 Section 21083(D) oc.ceeeeceeeeeeeseesseeeeeeeteeeaeeeeeecceesesetsceceaecesesceeenaeenaeeeues 25 Section 21083(€)......ccccesssscesseccsseettecesetssseneesseccaueesseescsesetessenes 15, 16, 24 Section 2108301... ccsccssteccsssscessneccecssseeeeecesssnseeecseeeesessseeessueeeseenaneeess 14 Section 21084oeeesesceeseeseesensessssceeeessaeeseseneessessessareeaeeeseaeeras passim Section 21084(a)....... cc eesssecsseccssnesssteceeseeessnnsessaeeceeeeeeeeeseseeeereesse passim Section 21084(b) oo... ccccccesssccssseessescessecenseneeceseeeessseseceeceeseesseeesees 32, 33 Section 21086 .......ccescssssssescsssssecesnceeccesseseeccecsseeesesseeeseesateres seeseneceeseaes 16 Section 21086(a).........ccccssccssseccesscsssscecesesencnescessasesseesesuesesnseeseeseeenecseaes 16 Section 21092.1 occeccessccsseccsssccssecessssesseeeeessseecsesesesseeeessesseeeeseseesesees 52 Section 21100(a).......cccccsccsssccsssecsneccessecseseeeeseseeeessscssseeseescseneeseaes 15, 23 Section 2115S] ccccesscsssseccccccsscesecsssueeeeesccsssseeususssenseeegsessees 15, 51, 53 Section 211518)... ccccssccssscesssccsseeeesseceesessecsseeeseesseesssseesseeees 15, 23, 52 Section 21168 .......cccccccssssccecccssssescecccesssssecenncaseecesnsesnseeeseesanseteseeersees48 Section 21168.5 voce cccccccsssssccecesssssssseeseverecceessseausecseeecseeecesseaaeeeeseseees48 Section 21168.9 ....cccccccsccssssccssscesseecessecsesseseeesssseesecesesessenseenseecsseesenes 78 Section 21168.9(C)........cccsccccssccsssscesseceessesesssssecesacecessceeesescesseseeesenees 7,78 -X]- OTHER AUTHORITIES 1 Kostka and Zischke, Practice Under the California Environmental Quality Act (Cont.Ed.Bar March 2012) Section 1.22 .....ccccsccsscscccssesssccccsscsssnseecsssesescssescessssssneeescessceseseesstseeseseeeees28 Section 5.127 .....cccccescsccsscssssscsscccsstscessssuecssssssesecnsessceseesecevsesveeseess 50, 53 Section 5.129 oo... ccccsscscssessssccsscecessscscscssscescscsseeveeseeseneeeeeesetesessneeseess 55, 56 X10]0)6 a eteaeeseeseateasseesssaees 36 SeCtiON 5.72 .....cccecsesssssccsvesscccecescessessceucesesesecssscseesevsenaeeeneeecceeseransseseeeeanes21 -Xli- ISSUES PRESENTED 1. For a project that is categorically exempt from review under the California Environmental Quality Act (“CEQA”),! does the unusual circumstances exception to the exemption in CEQA Guidelines section . 15300.2(c)* require both a finding that there is a reasonable possibility of a significant environmental effect and a findingthat the potentially significant effect is due to “unusual circumstances’? 2. Whatis the appropriate standard of review for whether the unusual circumstances exception to a categorical exemption applies? 3. When determining whether the unusual circumstances exception applies, must a public agency consider alleged effects of activities that are not included in the project as proposed and approved? 4. In determining whether there are unusual circumstances relating to a project, may a court consider the particular neighborhood in whichit is proposed to be located or should it be judgedrelative to a “typical exempt project” statewide? 5. Doesevidence of a potential adverse impactofthe existing environmenton the project constitute evidence of potentially significant “environmental impacts” that require review under CEQA? 6. After setting aside an agency’s finding that a project is categorically exempt from CEQA, maya court order the agency to prepare ' All references to “CEQA”are to Public Resources Code § 21000 ef seq. Unless otherwise indicated, all further statutory references are to the Public Resources Code. ? All references to “CEQA Guidelines”or “Guidelines” are to California Code of RegulationsTitle 14. an EIRinstead of ordering the agencyto exerciseits discretion to determine how to comply with CEQAin light of the court’s opinion? INTRODUCTION Forty years ago, this Court issued its landmark decision in Friends of Mammoth v. Board ofSupervisors (1972) 8 Cal.3d 247, holding that CEQA applies to private projects being approved by a public agency. In that case, the Court established that the foremostprinciple in interpreting CEQAis that “the Legislature intended [CEQA]to beinterpreted in such a manneras to afford the fullest possible protection to the environment within the reasonable scope ofthe statutory language.” (/d. at 259.) In that same case, however, this Court also stated that: [C]ommonsensetells us that the majority of private projects for which a governmentpermitor similar entitlementis necessary are minorin scope-- e.g., relating only to the construction, improvement, or operation of an individual dwelling or small business -- and hence, in the absence of unusual circumstances, havelittle or no effect on the public environment. Such projects, accordingly, may be approved exactly as before the enactment of the [CJEQA. (dd.at 272, emphasis added.) Three monthslater, and in direct response to this Court’s decision, the Legislature adopted a comprehensive amendment to CEQA. That amendment madeplain that the purpose of CEQAisto protect the environment, in a way that wouldnot cause needless time and expense. That amendmentincluded a directive to the Resources Agencyto identify and determine classes of projects that do not have a significant effect on the environmentand are exempt from CEQA. Overthe years, the Resources Agency adopted 33 so-called “categorical exemptions” from CEQA. Activities so exempted include an addition to schools of upto ten classrooms, construction of four new commercialbuildings of up to 10,000 square feet in urban areas, construction of single-family houses and accessory structures such as pools, garages, and fences. The Resources Agencyalso adopted several exceptions to the exemptions. Atissue in this case is the “unusual circumstances” exception, which mirrors this Court’s language in Friends ofMammoth and provides that a categorical exemption shall not be used for a project where there is a reasonable possibility that the activity will have a significant effect on the environment“due to unusual circumstances.” (Guidelines § 15300.2(c).) In this case, the City of Berkeley (“City”) approved an application by Mitchell Kapor and Freada Kapor-Klein (the “Kapors”) to build a single-family home. The City found the project exempt from CEQA under the categorical exemptions for construction of small structures and urban in-fill projects. In so finding, the City rejected the project opponents’ opinion that significant construction fill would be required to construct the project because it was notproposed by the Kapors and,therefore, not approved by the City. Thetrial court upheld the City’s decision, holding that evidence of a potentially significant impact wasinsufficient to preclude use of a categorical exemption unless the alleged impact was due to “unusual circumstances”. The Appellate Court reversed, finding that evidence of a potentially significant impactis itse/fan unusual circumstance whichprecludesreliance on a categorical exemption. | SUMMARY OF ARGUMENT Thefirst issue raised by this case is whether use of a categorical exemption is precluded wheneverthe possibility of significant impacts is demonstrated, regardless of whether those impactsare related to circumstances which are “unusual”for the exempted category. Until this case, all courts addressing this issue have conducted the two-part inquiry employed bythe trial court based upon the plain language of the unusual circumstances exception. These cases all have interpreted the exception as requiring both a finding that there is a reasonable possibility of a significant environmental effect and a finding that the alleged effect is due to unusual circumstances with regard to the exempt category of projects. The Court of Appeal’s Opinion,that allegations of any significant impacts are per se unusual circumstancesthat preclude application of a categorical exemption and obviate the need for the second finding, contradicts this long line of established precedent. The Court of Appeal’s holdingis also flatly inconsistent with CEQA,the Legislature’s intent and the purposes of CEQA. In response to this Court’s decision in Friends ofMammoth, the Legislature directed the Resources Agencyto identify and determine classes of projects that do not have a significant effect on the environmentand are exempt from CEQA. In doing so, the Legislature intended these exemptionsto be bright-line, categorical rules that would streamline review of routine and minorprojects that occur throughoutthe State. The Legislature did not direct or intend that agencies and courts wouldrevisit the question of whetheractivities falling within the exempted classes of projects will have a “significant effect on the environment.” The Resources Agency hasalready answered that questionin the negative by promulgating the categorical exemptions. Rather, the unusual circumstances exception is designed to provide for further review of projects when the physical impacts of the project are atypical of the exempt category and are potentially significant. This exceptionis clearly authorized and consistent with the Legislature’s directive andintent. The Court of Appeal’s new rule violates the Legislature’s directive because it would eviscerate the very concept of categorical exemptions. If “unusual circumstances”is read out of the exception, as the Court of Appeal has done, then the Legislature’s authorization would look like this: Identify a class of projects that do not have a significant effect on the environment and are exempt from CEQA,except where an individual project within that class has a significant effect on the environmentandis not exempt from CEQA. The inquiry would be circular and meaningless. Thus, the Legislature’s entire premise for categorical exemptions would be gutted if the Court of Appeal’s reasoning is adopted. The second issue raised by this case is the appropriate standard of review for the unusual circumstances exception. The Court of Appealheld that the “fair argument” standard applies, holding that the exceptionis applicable wheneverthere is any credible evidence of a reasonable possibility of a significant effect, regardless of contrary evidence that no significant effect would occur. There is a long-standing split in authority on this issue, with some courts applying the fair argument standard, and others applying the more deferential substantial evidence standard, under which an agency mayrely on evidence showingthat there would be no significant impact. The substantial evidence standard should apply to a determination by the public agency that the exception does not apply. It is well established that the substantial evidence standard applies to an agency’s determination that a project is categorically exemptin the first instance. It is fundamentally inconsistent then to apply the non-deferential fair argument standard to the secondary question ofwhether that exemption determination should be negated because ofalleged potential for significant effects, regardless of contrary evidencethat no significant impact would occur. Moreover, applying these two standardsto oneproject leads to unduly complicated and time-consuming proceedings for what are supposed to be minor androutine projects under CEQA. Ifthe process for applying categorical exemptionsis too cumbersome and uncertain, the Legislature’s purpose in creating categorical exemptions is undermined. The third issue for the Court’s review is whether an agency,in deciding whether an EIR should be prepared for a project, must consider evidence thata potentially significant impact might result from an aspect of a projectthat is alleged, but is neither proposed nor approved. This holding by the Court of Appealis clearly erroneous and contrary to existing law. Not surprisingly, CEQA clearly provides that the projectthatis reviewed under CEQAisthe activity approved by the public agency, not a project variant conjured up by opponents. Here, by contrast, the Appellate Court held that opinion evidence of potentially significant seismic impacts of allegedly required “side-hill fill” - which wasnotincludedin either the proposed or approved Project plans ~ required the City to prepare an EIR. This holding wouldallow opponents to defeat categorical exemptions simply by asserting their own misconception of a project and asserting that the misconception, rather than the actual project, may result in significant impacts. This cannot bethe rule under CEQA. Fourth, the Court of Appeal purportedto find “unusual circumstances”in this case, but erred in its application of the exception. The Court of Appealheld that, as a matter of law,the size of the proposed homein this case was unusual. This holding is not only wrong,it is meaningless. Underthe exception, the relevant inquiry is whetherthe project differs from the typically exempt project underthe categorical exemption. The “new construction” exemption doesnotspecify a size restriction for single family homes, although it does so for other types of development. Indeed, size in the abstract is meaningless. The same size house on a tiny lot clearly presents a different situation than the samesize house on a large lot. Thus, public agencies rely ontheir legislatively adopted zoning and developmentstandardsto determineif a particular homeis unusual, and courts should defer to this determination ifit is supported by substantial evidence. Allowing courts to declare whatis “unusual” by wayofjudicialfiat allows courts to improperly second-guess legislatively-adopted zoning requirements that are within the purview of local agencies. It also meansthat public agencies applying the exception have no guidanceor certainty as to what is “unusual”. Moreover, the Court of Appeal failed to even analyze whether the Project was unusual comparedto the typical project underthe in-fill categorical exemption. Under that exemption, size is not a factor. Indeed, the same Court of Appeal recently held that a 5-story building with 98 residential units, 7,700 square feet of commercial space, and 114 parking spaces fell within the in-fill categorical exemption and that there was nothing about that project that differed from the typically-exemptin-fill project. Clearly, then, the size of one single-family home does not present anything unusual comparedto the typically-exempt in-fill project. Fifth, the Court of Appeal erred, in applying the unusual circumstances exception, in relying upon evidencethat is legally incapable of showing potentially significant CEQA impacts. Specifically, the geotechnical comments of Appellants’ expert showed, at most, the potential for an adverse impact ofthe existing environment on the Project. Under CEQA,such impacts of the environmenton a projectare not potentially significant “environmental impacts”that require review under CEQA. Therefore, Appellants’ evidence is incapable - as a matter of law - of raising even a “reasonable possibility” that the Project would have a | “significant effect on the environment due to unusual circumstances”. Finally, even if the Court were to uphold the decision, the Court of Appeal improperly ordered the trial court to issue a writ of mandate that directs the City to exercise its direction in a certain way, i.e., by preparation of an EIR. This order violates CEQA,andspecifically, section 21168.9(c), which providesthat “[njothing in this section authorizes a court to direct any public agency to exerciseits discretion in any particular way.” A proper writ would require the City to set asideits finding ofa categorical exemption, and comply with CEQA,but allow the City to exerciseits discretion in the first instance as to how to comply with CEQAin response to the court’s order. In summary, by imposing the unusual circumstances exception even wherealleged impacts are not tied to unusual circumstances; wherethose impacts are unrelated to the Project as proposed and approved; and where evidence showsthose impacts would not occur, the Court of Appeal’s Opinion would decimate agencies’ use of categorical exemptions as intended by the Legislature. This Court should upholdtheclear Legislative directive andintentin authorizing categorical exemptionsfor single-family homes, desperately needed urbanin-fill projects, and the many other minor projects which the Resources Agency has already determined should not require further CEQA review. This Court should also clarify the standards applicable to the exception, so that CEQA functions smoothly and the process is not so cumbersomeasto defeat the purposeofcategorical exemptions. Finally, Respondents request that the Court reverse the Court of Appeal decision, and uphold the trial court determination denying the petition for writ of mandate. FACTUAL AND PROCEDURAL BACKGROUND The Project in this case is a permit to demolish existing structures and construct a two-story, 6,478 square foot, single-family home, with a 3,394 square foot garage, on a 29,714 square foot parcel at 2707 Rose Street in Berkeley’s Single Family Residential District - Hillside Overlay (the “Project”).> (1 AR 3.)* The proposed homecovers 16 percent of the property, leaving 84 percent in open space. (1 AR 127.) On January 28, 2010, the Zoning Adjustment Board (“ZAB”) held a public hearing and approvedthe Project. (1 AR 3, 144-146; 2 AR 516.) The City found that the Project was categorically exempt under Guidelines sections 15303(a) (“New Construction”) and 15332 (“In-Fill Development Projects”). (1 AR 5, 30, 34, 40.) The City also found that the Project did nottrigger any of the exceptions to the exemptions in Guidelines section 15300.2, and that the Project was exempt from further review under CEQA. (1 AR 5, 34, 40.) Appellants appealed the ZAB decision to the City ‘Council. (1 AR 3, 193-206.) On April 27, 2010, the City Council affirmed the ZAB’s decision and dismissed the appeal. (1 AR 3.) Appellants filed this action in May 2010. (Appellants? Appendix (“AA”):1.) The Superior Court, the Honorable Frank Roeschpresiding, held a hearing on the merits on December 2, 2010, and, in a detailed, 19- page decision, denied the Petition on December 30, 2010. (AA:140-159.) Thetrial court held that there was substantial evidence of a fair argument that the Project would cause significant environmental impacts. However, the trial court held that the Project did not trigger the significant effects exception in Guidelines section 15300.2(c), because the possible significant impacts were not due to “unusual circumstances”. > Appellants opposed the demolition ofthe existing structures, arguing that they were historical resources. The Court of Appeal denied Appellants’ petition for writ of supersedeas, and the Kapors demolished the existing structures. Thus, the only remaining issues relate to the construction of the proposed single-family home. ‘ Cites to “AR” are to the Administrative Record. The Court of Appeal issued its decision, certified for publication, on February 15, 2012. The Court of Appeal disagreed with thetrial court’s use of the two-step inquiry and held: | Wherethere is substantial evidence that proposed activity may havean effect on the environment, an agencyis precluded from applying a categorical exemption. (Wildlife Alive, supra, 18 Cal.3d at pp. 205-206.) Thetrial court concludedthat therelevant exception did not apply becauseit found no “unusual circumstances” present; however, the fact that proposed activity may have an effect on the environment is itselfan unusual circumstance, because such action would not fall “within a class ofactivities that does not normally threaten the environment,” and thus should be subject to further environmental review. ([Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165], at p. 1206.) (Opinion, 13, italics by court.) In support of this conclusion, the Court of Appeal cited to this Court’s decision in Wildlife Alive v. Chickering (1976) 18 Cal.3d 190 (“Wildlife Alive”). (Opinion, 11.) The Court of Appeal acknowledgedthat courts have interpreted the unusual circumstances exception as requiring two separate inquiries, the first being whether the Project presents unusual circumstances. (Opinion, 12.) The Court of Appeal also acknowledged that the trial court’s approach was consistent with the two-step approach applied in those cases. (/d. at 13.) However, the Court of Appealtried to distinguish those cases and arguethat they “did not actually employ such a two-step procedure” butinstead “streamlined” [their] approach by ‘proceeding directly to the question of whether, applying the fair argument standard, there is a reasonable possibility of a significant effect on the environment due to any .... purported unusual circumstances.’” (/bid, citation omitted.) The Court of Appeal further acknowledged “thatit may be helpful to. analyze the applicability of the unusual circumstances exceptionas part of a -10- two-step inquiry ...” (/d. at 15.) However, the Court of Appeal concluded,“onceit is determined that a proposed activity may have a significant effect on the environment, a reviewing agencyis precluded from applying a categorical exemptionto the activity.” (/bid.) The Court of Appeal held that the fair argument standard applied to the agency’s determination under Guidelines section 15300.2(c). (Opinion, 16.) The Court of Appeal then purported to apply the two-step inquiry to the facts of this case, holding that the proposed single-family residence was unusual based onits size. (Opinion, 17.) In making this determination, the Court of Appeal held that whether a circumstanceis unusualis judged relative to the typically exempt project, as opposedto the typical circumstancesin a particular neighborhood. (/d. at 17-18.) Finally, the Court of Appeal found that there was substantial evidence of a fair argumentthat the Project would result in significant geotechnical impacts to constructionfill for the Project. (Opinion, 18.) However, the Court of Appeal did not determine that any significant environmental effects would result from the “unusual circumstance”ofthe Project’s size. Rather, the Court accepted the opponents’ assertion that the Project would require construction fill that was not proposed by the applicant and was, therefore, not permitted as part of the Project approved by the City. (/bid.) It was the alleged potentially significant impacts of “seismic lurching”to this supposedly required construction fill which the Court found to require preparation of an EIR. (/bid.) Respondents sought a rehearing in the Court of Appeal, which was denied. The Opinion was modified (without any change in judgment) on March 7, 2012. This Court granted the City’s and the Kapors’ timely petition for review. -11- STANDARD OF REVIEW The fundamental question presented by the Court of Appeal’s Opinion is whether the “unusual circumstances” requirement in Guidelines section 15300.2(c) is consistent with the statutory languagein section 21084(a). Accordingly, the Court is reviewing the legality of a regulation adopted pursuant to a delegation of legislative power. (Yamaha Corp. of America v. State Bd. ofEqualization (1998) 19 Cal.4th 1, 11.) This Court “has not decided the issue of whether the Guidelines are regulatory mandatesor only aids in interpreting CEQA.” (Laurel Heights Improvement Assn. v. Regents of University ofCalifornia (1988) 47 Cal.3d 376, 391, fn. 2 [“Laurel Heights P’].) However, this Court has held that, “[a]t a minimum,. . . courts should afford great weight to the Guidelines except when a provisionis clearly unauthorized or erroneous under CEQA.” (bid; See also Laurel Heights Improvement Assn. v. Regents of University ofCalifornia (1993) 6 Cal.4th 1112, 1123, fn. 4 [“Zaurel Heights IT’|; Vineyard Area Citizensfor Responsible Growth v. City of Rancho Cordova (2007) 40 Cal.4th 412, 428, fn. 5.) In any event, the Guidelines on categorical exemptions, of course, can only be “regulatory mandates”-the Legislature effectively so provided. “[N]o regulation is valid if its issuance exceeds the scope of the enabling statute.” (Wildlife Alive, supra, 18 Cal.3d at 205, citing former Gov. Code § 11374 and Whitcomb Hotel, Inc. v. Cal. Emp. Com. (1944) 24 Cal.2d 753, 757.) Government Code section 11342.2 (former Government Code § 11374) provides: Wheneverby the express or implied terms of any statute a state agency has authority to adopt regulations to implement, interpret, make specific or otherwise carry out the provisions of the statute, no regulation adoptedis valid or effective unless consistent and not in conflict with the statute and reasonably necessary to effectuate the purpose ofthe statute. -12- Underthefirst prong of this standard, courts independently review the administrative regulation to determineifit is within the scope of the authority conferred by the statute. (Yamaha, supra, 19 Cal.4th at 11 and fn. 4; Communitiesfor a Better Environmentv. California Resources Agency (“CBE”) (2002) 103 Cal.App.4th 98, 108-109.) “By contrast, the second prongofthis standard, reasonable. necessity, generally does implicate the agency’s expertise; thereforeit receives a much more deferential standard of review. The question is whether the agency’s action wasarbitrary, capricious, or without reasonable or rational basis.” (CBE, supra, 103 Cal.App.4th at 109, citing Yamaha, - supra, 19 Cal.4th at 11.) The standard of review for application of the unusual circumstances exception to the Project in this case is one ofthe issues to be decided by this Court. It is discussed in detail below. ARGUMENT I. THE APPELLATE COURT ERRED BY APPLYING THE “UNUSUAL CIRCUMSTANCES” EXCEPTION WITHOUT REQUIRING A SHOWINGOF SIGNIFICANT IMPACTS DUE TO UNUSUAL CIRCUMSTANCES A. CEQA’s Purposes and Structure The purposes of CEQAare well established, and were recently reiterated by this Court: The California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) (CEQA)andthe regulations implementing it (Cal. Code Regs., tit. 14, § 15000 et seq.) embody California’s strong public policy of protecting the environment. “The basic purposes of CEQAareto: [4] (1) Inform governmental decision makers and the public about the potential, significant environmental effects of proposed activities. [{] (2) Identify ways that environmental damage can be avoidedor significantly reduced. [4] (3) Prevent significant, avoidable damage to the environment by requiring changesin projects throughthe useofalternatives or mitigation measures when the governmental agencyfinds -13- the changesto be feasible. [{] (4) Disclose to the public the reasons why a governmental agency approved the project in the mannerthe agency choseif significant environmental effects are involved.” (Cal. Code Regs., tit. 14, $ 15002.) (Tomlinson v. County ofAlameda (2012) 54 Cal.4th 281, 285-286.). In addition, the Legislature, Resources Agency and the courts have all explained that CEQA should be implemented in a mannerthat reduces delay and paperwork. (§ 21003; Guidelines § 15006; Citizens ofGoleta Valley v. Board ofSupervisors (1990) 52 Cal.3d 553, 567.) The Legislature has directed that courts, in interpreting CEQA,shall not interpret CEQA or the Guidelines “in a manner which imposes procedural or substantive requirements beyond those explicitly stated in [CEQA]or the [G]uidelines.” (§ 21083.1) This Court has also cautioned that “rules regulating the protection of the environment must not be subverted into an instrument for the oppression and delay of social, economic, or recreational development and advancement.” (Goleta, supra, 52 Cal.3d at 576.) As also recently explained by this Court, to achieve these goals, CEQAand the implementing regulations provide for a three-step process: In the first step, the public agency must determine whether the proposed developmentis a “project,”that is, “an activity which may causeeither a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment” undertaken, supported, or approved by a public agency. (§ 2/065.) The secondstep of the processis required if the proposed activity is a “project.” The public agency must then decide whetherit is exempt from compliance with CEQA under either a statutory exemption (¢§ 2/080) or a categorical exemption set forth in the regulations ($ 2/084, subd. (a); Cal. Code Regs., tit..14, § 15300). A categorically exempt project is not subject to CEQA,and no further environmental review is required. (Muzzy Ranch Co. v. Solano County Airport Land Use Com. (2007) 41 Cal.4th 372, 380 [60 Cal. Rptr. 3d 247, 160 P.3d 116]; San Lorenzo Valley Community Advocatesfor Responsible Education v. San Lorenzo Valley -14- Unified School Dist. (2006) 139 Cal.App.4th 1356, 1373 [44 Cal. Rptr. 3d 128].) If the project is not exempt, the agency must determine whetherthe project may havea significant effect on-the environment.If the agency decides the project will not have such an effect, it must “adopt a negative declaration to that effect.” ($ 2/080, subd. (c); see Cal. Code Regs., tit. 14, $15070; Muzzy Ranch Co. v. Solano County Airport Land Use Com., supra, at pp. 380-381.) Otherwise, the agency must proceedto the third step, which entails preparation of an environmental impact report before approvalofthe project. ($$ 2/100, subd. (a), 21151, subd. (a).) (Tomlinson, supra, 54 Cal.4th at 286.) By its terms, then, CEQA only requires an EIR for a project “which may havea significant effect on the environment.” (§ 21151; Friends of Mammoth, supra, 8 Cal.3d at 271.) Thus, “a public agency pursuing or approving a project need not prepare an EIR unless the project mayresult in a ‘significant effect on the environment’ ($$ 2/100, subd. (a), 21151, subd. (a)), defined as a ‘substantial, or potentially substantial, adverse change in the environment’($ 2/068).” (Save the Plastic Bag Coalitionv. City ofManhattan Beach (2011) 52 Cal.4th 155, 171.) This case deals with the secondstep in this three-step process-a determination that a project is categorically exempt from CEQAand not subject to an exception to the categorical exemption. B. Overview of Categorical Exemptions 1. Legislative Direction for Categorical Exemptions The Legislature directed the Office of Planning and Research to prepare and develop guidelines for the implementation of CEQA by public agencies, and transmit them immediately to the Secretary of the Resources Agency. (§ 21083(a), (e).) The Legislature directed the Secretary of the Resources Agencyto certify and adopt the Guidelines pursuant to the California Administrative Procedures Act (“APA”), Government Code -15- sections 11340-11528. (§ 21083(e).) The Legislature further directed that the Resources Agency must adopt the Guidelines in compliance with Government Code sections 11346.4, 11346.5, and 11346.8, which provide notice and hearing requirements for the adoption of regulations. (§ 21083(e).) Aspart of the Guidelines, the Legislature specifically directed the Resources Agency to designate categorical exemptions fron CEQA. (§ 21084(a).) The Legislature also set up a process for public agencies to request that the Resources Agency add ordelete classes of projects to and from the list designated pursuantto section 21084. (§ 21086; Guidelines § 15300.3.) Any such request must be supported by information supporting the public agency’s position that the class of projects does, or does not, have a significant impact on the environment. (§ 21086(a).) 2. History of Categorical Exemptions In responseto the legislative mandate in section 21084, the Resources Agency has adopted 33 categorical exemptions. (Guidelines §§ 15301-15333.) In doing so, the Secretary of the Resources Agency expressly “found that [these] classes of projects listed in this article do not have a significant effect on the environment, and they are declared to be categorically exempt from the requirementfor the preparation of environmental documents.” (Guidelines § 15300.) The Resources Agency also adopted six exceptionsto the categorical exemptions. (Guidelines § 15300.2.) The unusual circumstances exception at issue in this case provides: A categorical exemption shall not be used for an activity wherethere is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances. (Guidelines § 15300.2(c).) Following notice and a public hearing, the Resources Agency adopted the unusual circumstances exception in 1980. (Appellants’ -16- Request for Judicial Notice filed in Court of Appeal, Exh. 3, pp. 8-11; Exh. 4, pp. 12-21.) The Resources Agency’s 1982 “Statement of Reasons”for amendments to the Guidelines provides that the “exemptionsareall necessary for avoiding the time and expense of going through the CEQA process where it can be determined in advancethat a class of projects will not have a significant effect on the environment.” (/d. at Exh. 7, p. 32.) 3. Process for Categorical Exemptions Asset forth above, public agencies employa three-step process to implement CEQA,andthe secondstep ofthat process is to review for exemptions. Once an agency has determinedthat an activity is a project subject to CEQA,it then determines whetherthe project is exempt from CEQA. (Guidelines § 15061(a).) A project is exempt from CEQAif: (1) The project is exemptbystatute (see, e.g., Article 18, commencing with Section 15260). (2) The project is exempt pursuant to a categorical exemption (see Article 19, commencing with Section 15300) and the application of that categorical exemption is not barred by one of the exceptionsset forth in Section 15300.2. (3) The activity is covered by the general rule that CEQA applies only to projects, which havethe potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may havea significanteffect on the environment, the activity is not subject to CEQA. (Guidelines § 15061(b).) In judicial review of an agency’s determination that a project is categorically exempt from CEQA,“the substantial evidence test governs [the court’s] review ofthe city’s factual determination that a project falls within a categorical exemption.” (Fairbank v. City ofMill Valley (1999) 75 Cal.App.4th 1243, 1251. See also Apartment Assn. ofGreater Los Angeles v. City ofLos Angeles (2001) 90 Cal.App.4th 1162, 1173, 1175.) Once an agency determinesthat a project is categorically exempt, the burden then -17- shifts to the challenging party to produce evidence showingthat one ofthe exceptions applies to take the project out of the exempt category. (Santa Monica Chamber ofCommercev. City ofSanta Monica (2002) 101 Cal.App.4th 786, 796.) C. The Long-Standing Judicial Construction ofGuidelines § 15300.2 Requires a Separate Showingof “Unusual Circumstances” Thereis a long line of established Court of Appeal cases holding that whether or not “unusual circumstances”are present is a separate inquiry underthe exception in Guidelines § 15300.2. Again, that exception provides that a categorical exemption shall not be used “wherethere is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances.” In Banker’s Hill, Hillcrest, Park West Community Preservation Group v. City ofSan Diego (2006) 139 Cal.App.4th 249, 278, the court explained that: The application of Guidelines section 15300.2(c) involves two distinct inquiries. First, we inquire whether the Project presents unusual circumstances. Second, we inquire whether there is a reasonable possibility of a significant effect on the environment due to the unusual circumstances. (Italics original, underlining added.) The unusual circumstancestest set forth in the Guidelinesis satisfied “where the circumstances of particular project (i) differ from the general circumstancesofthe projects covered by a particular categorical exemption, and (ii) those circumstances create an environmentalrisk that does not exist for the general class of exempt projects.” (/bid, emphasis added; see also Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165, 1207; Wollmer v. City ofBerkeley (2011) 193 Cal.App.4th 1329, 1350; Santa Monica, supra, 101 Cal.App.4th at 800 -18- {“[a] negative answerto either question means the exception does not apply.” (emphasis added)]. The court in Banker’s Hill acknowledged the direction by this Court that “courts should afford great weight to the Guidelines,” noting that this exception requires not only that environmentalrisks be present, but that those risks be the result of unusual circumstancesnot generally at issue with most projects within the scope of the exemption. (Banker’s Hill, supra, 139 Cal.App.4th at 254, fn. 2, citing Laurel Heights I, supra 47 Cal.3d at 391, fn. 2.) The court in Fairbank, supra, 75 Cal.App.4"at 1260-1261, held that _ “in the absence of any evidence of unusual circumstances nullifying the grant of categorical exemption, there can be no basis for a claim of exception under Guidelines section 15300.2(c).” The court explained that without the two separate inquires, no project that satisfies the criteria under the categorical exemption could ever be found to be exempt. (/d. at 1260.) In that case, the court held that a 5,855 square foot retail/office building was exempt under the then-categorical exemption for new construction of small commercial structures in urbanized areas. The court rejected an “unusual circumstances” argument based on claimsof inadequate parking facilities and increasedtraffic flows as follows: The shortcoming in Fairbank’s argumentis that she has made no showing whatsoever of any “unusual circumstances” surroundingthe construction of this small commercial structure givingrise to any risk of “significant” effects upon the environment. (Guidelines, 15300.2(c).) While the addition of any small building to a fully developed downtown commercial areais likely to cause minor adverse changes in the amountand flow oftraffic and in parking patterns in the area, such effects cannot be deemed “significant” without a showingof some feature of the project that distinguishesit from any other small, run-of-the-mill commercial building or use. Otherwise, no project that satisfies the criteria set forth in Guidelines section 15303(c) could ever be found to be -19- exempt. There is nothing about the proposed 5,855-square- foot retail/office building that sets it apart from any other small commercialstructure to be built in an urbanized area, without the use of hazardous substances and without any showing of environmentalsensitivity. (Id. at 1260, emphasis added.) Thus, the court acknowledged that there could be adverse changesto parking andtraffic from the project, but rejected the claimed exception because no unusual circumstances were shown. | In Santa Monica, supra, 101 Cal.App.4th at 801-803, the court held that there were no unusual circumstances within the meaning ofthe exception where the project created a large parking district requiring residential parking permits. Rather, the court held that there were only the “normal and common considerations”that any city might face when operating its public parking facilities and deciding best how toallocate its limited parkingfacilities. (/bid.) Similarly, in Associationfor Protection ofEnvironmental Values in City of Ukiah (1991) 2 Cal.App.4th 720, 734 (“Ukiah”), the court held that concerns aboutheight, view obstruction, privacy and water runoff were normal and commonconsiderations in construction of a single-family hillside residence; therefore, these concerns did not amount to “unusual circumstances”. In Azusa, supra, 52 Cal.App.4™ at 1198, the court foundthat, as a matter of law, the board’s findings established not just a reasonable possibility that the project would havea significant adverse effect, but that the project was causing a significant adverse effect. (/bid.) The court then expressly recognized “the second requirement” of the exception, and went on to find that the threat to the environmentin that case “[wa]s due to numerous circumstancesthat are unusual in comparison with existing facilities in general.” (/d. at 1206-1209.) -20- Most recently, in Wollmer, supra, 193 Cal.App.4th 1329, 1350, the court rejected the petitioner’s claim that the location ofthe project at two major thoroughfares and petitioner’s view ofthe city’s traffic modeling qualified as substantial evidence of an unusual circumstance within the meaning of Guidelines section 15300.2(c). Ud. at 1350-1352.) In reaching this conclusion, the court compared the circumstancesofthe project with the general class of exemptprojects. Specifically, the exemption in that case wasfor “In-Fill Development Projects” under Guidelines section 15332, which required that the project be substantially surrounded by urban uses and adequately served by public services. The court stated that locating an in-fill project at the intersection of two majorcity streets is “well within the range of characteristics one would expect for class 32 projects and precisely what the law encourages.” (/d. at 1351.) Accordingly, the court held, the location was not an “unusual circumstance”that did not generally exist for other in-fill projects. (/bid.) Thus, there is a long line of established Court of Appeal decisions holding that “unusual circumstances” is a necessary separate inquiry under the exception in Guidelines section 15300.2(c). The leading CEQA practice guide sets forth the same rule. (1 Kostka and Zischke, Practice Under the California Environmental Quality Act (Cont.Ed.Bar March 2012) § 5.72, p. 248 [application of Guidelines § 15300.2(c) “involves two distinct inquiries,” with the first being “whether the project presents unusual circumstances.”].) D. Under Yamaha Prong One,the “Unusual Circumstances” Requirementin Guidelines § 15300.2 Is Within the Scope of Authority Conferred by the Legislature in Section 21084 The fundamental question presented by the Court of Appeal’s Opinion is whether “unusual circumstances”as a required separate inquiry is consistent with the statutory language in section 21084(a). Or, as stated -21- in the words of the Court of Appeal, does the statutory languagein section 21084(a) meanthat “onceit is determined that a proposed activity may have a significant effect on the environment, a reviewing agency is precluded from applying a categorical exemption to the activity”? (Opinion, 15.) This Court reviews the Guideline to determine whetherit is within the scope of the authority conferred by the statute. (Yamaha, supra, 19 Cal.4th at 11 and fn.4.) 1. The “Unusual Circumstances” Requirement in Guidelines § 15300.2 Is Consistent with the Plain Meaningof § 21084 The court’s first task in interpreting a statute is to “examine the statutory language, giving it a plain and commonsense meaning.” (Coalition ofConcerned Communities, Inc. v. City ofLos Angeles (2004) 34 Cal.4th 733, 737.) “Ifthe languageis clear, courts must generally follow its plain meaning,unlessa literal interpretation would result in absurdconsequencesthe Legislature did not intend.” (/bid.) If the plain meaningofthe statute is unclear or ambiguous,“courts may consider other aids, such asthe statute’s purpose, legislative history, and public policy.” ([bid.) Section 21084(a) provides: The guidelines prepared and adopted pursuant to Section 21083 shall include a list of classes of projects that have been determined notto have a significant effect on the environment and that shall be exemptfrom this division. In adopting the guidelines, the Secretary of the Natural Resources Agency shall makea finding that the listed classes of projects referred to in this section do not have a significant effect on the environment. It is clear from the plain meaning ofthis section that the Legislature is not directing each public agency reviewing a project to determineif that individual project may havea significant effect on the environment. Indeed, the Legislature imposesthat requirementdirectly in section 21080, -22- subsections (c) and (d), where it requires public agencies to determine whether projects “not otherwise exemptfrom this division” (§ 21080(c)) may have a significant effect on the environment. (Seealso §§ 21100(a); 21151(a); 21082.2(d) [all requiring agencies to prepare an EIR for projects that may havea significant effect on the environment].) Under section - 21080,if there is no substantial evidence that the project “may have a significant effect on the environment”then the Legislature directs that the public agency shall adopt a negative declaration. (§ 21080(c)(1).) On the other hand,if there is substantial evidence that the project “may have a significant effect on the environment” then the Legislature directs the public agency to prepare an EIR. (§ 21080(d).) Accordingly, reading section 21084(a) to mean that the only inquiry for application of a categorical exemption is whether the project “may have a significant effect on the environment” would render it meaningless. Such an interpretation would render section 21084(a) simply duplicative of the Legislature’s directive in sections 21080(c) and (d), 21100(a), 21151(a), and 21082.2(d). This violates the well-established rule of statutory construction that “every part of a statute serves a purpose andthat nothing is superfluous.” (Un re H.E. (2008) 169 Cal.App.4th 710, 721, citation omitted.) Another well-established rule of statutory construction is that “[w]here different words or phrases are used in the same connection in different parts of a statute, it is presumed the Legislature intended a different meaning.” (Briggs v. Eden Councilfor Hope & Opportunity (1999) 19 Cal.4th 1106, 1117.) Here, it is clear from the language in section 21084(a) that the Legislature meant much morethan directing each public agency to determine if every project “may have a significant effect on the environment”. Rather, the statutory language clearly directs the Resources Agencyto identify a class of projects and determine, through a -23- specific finding, that these classes of projects do not havea significant effect on the environment. Asset forth above, the Legislature established a process for the Resources Agency to accomplish this, including compliance with the procedures in the APA andnotice and hearing requirements. (§ 21083(e).) Thus, the plain meaning ofthe statute is that the Legislature delegated to the Resources Agency the authority to identify and find that classes of projects do not have a significant effect on the environment and are therefore exempt from CEQA. In doing so, the Legislature did not authorize every public agencyin the State to second-guess the Resource Agency’s determination on a case- by-case basis, by asking if each otherwise exempt project may have a significant effect on the environment. That assessment has already been madeby the Resources Agency... For the 33 classes of projects identified by the Resources Agency, the Agency has determinedthat those classes of projects do not havea significant effect on the environment. Thus, in reviewing a project for a categorical exemption, the inquiry for the public agency and the reviewing court is no longer whether the project may have a significant effect on the environment. Rather, the only remaining inquiries are whetherthe project at issue falls within the scope of a categorical exemption,and, if so, whether under Guidelines section 15300.2, one of the exceptions to the categorical exemptions applies. For the unusual circumstances exception, that inquiry is whether there is something unusual or different about that project that takes it outside ofits class of typically exemptprojects. Indeed, without the requirement of a two-step inquiry, it could be argued that the unusual circumstances exceptionitself violates the plain meaning of section 21084, because it requires review ofindividual projects for more than whetherthey fall within the exempt class. Underthe plain language in section 21084, once the Resources Agency makesits finding -24- that a class of projects does not have a significant effect on the environment, the only inquiry left for the public agency is whether the project fits within the class. Since the Legislature did not contemplate any exception or individual review ofprojects to second-guess the Resources Agency’s decision,it is only the inclusion of the language “due to unusual circumstances”that renders the exception consistent with the statutory language. This interpretation is supported by the “critical role” that determining whether a project may havea significant effect plays in the CEQAprocess. (Guidelines § 15064(a).) Whether a project may have a significant effect is the threshold jurisdictional question as to whether CEQAappliesin the first instance. (No Oil, Inc. v. City ofLos Angeles (1974) 13 Cal.3d 68, 76.) However, “significant”is “not a term of precision but encompassesa range of meaning.” (/bid.) The Legislature has defined “significant effect on the environment”as “a substantial, or potentially substantial, adverse change in the environment” (§ 21068), and directs that the Guidelines shall specifically include criteria for public agencies to follow in determining whether or not a proposed project may havea significant effect on the environment (§ 21083(b)). The Guidelines conclude that “[a]n ironclad definition of significant effect is not always possible because the significance of an activity may vary with the setting.” (Guidelines § 15064(b).) Thus, the determination of whethera project may have a significant effect on the environment “calls for careful judgment on the part of the public agency involved, based to the extent possible on scientific and factual data.” (/bid.) Accordingly, the lead agency hasthe discretion to determine whetherto classify an impact as significant, depending on the nature of the area affected. (/bid; Clover Valley Foundation v. City ofRocklin (2011) 197 Cal.App.4th 200, 243.) “In exercising its discretion, a lead agency must necessarily makea policy -25-. decision in distinguishing between substantial and insubstantial adverse environmental impacts based, in part, on the setting.” (bid, citation omitted. See also Eureka Citizens for Responsible Governmentv. City of Eureka (2007) 147 Cal.App.4th 357, 375-376.) Here, pursuant to the Legislature’s directive, the Resources Agency determined that the physical changesto the environment typically associated with developing the classes of projects listed in the categorical exemptions do not constitute a significant effect on the environment. The Legislature clearly intendedthis to be a uniform determination that applies state-wide. Necessarily, then, the focus of the unusual circumstances exception is whetherthere is something unusual or different about the circumstances associated with the project that would take it outside of the normal physical changes associated with the typically exemptproject. That is why case after case has employed the two-part test and held that the exception only applies “where the circumstances of a particular project (i) differfrom the general circumstances ofthe projects covered by a particular categorical exemption,and(ii) those circumstancescreate an environmentalrisk that does not existfor the general class ofexempt projects.” (Azusa, supra, 52 Cal.App.4th at 1207, emphasis added.) Thus, the Court ofAppeal’s holding violates section 21084(a) becauseit reinstates the initial inquiry of whether a project “may have a significant effect on the environment”that the Legislature specifically delegated to the Resources Agency. By requiring the public agency to repeat this analysis for individual projects, and then allowing courts to judicially review this question, the Court of Appeal renders null and void the Legislature’s language in section 21084(a). The Court of Appeal’s Opinion places every project at the third step of the three-step process described above, by going directly to the inquiry of whether each project “may have a significant effect on the environment.” -26- The Opinion nullifies the Resources Agency’s determination that 33 classes - of projects do not have a significant effect on the environment and, by doing so, contravenesthe plain meaning of section 21084(a). The “unusual circumstances” requirement in Guidelines section 15300.2(c) is clearly within the scope of the authority conferred by the Legislature in section 21084. 2. The “Unusual Circumstances” Requirementin Guidelines § 15300.2 Is Consistent with the Legislative History of § 21084 Theplain meaning of section 21084(a)is clear, and therefore thereis no need for the Court to resort to legislative history to construe the statute. If the Court were to do so, however, thelegislative history unmistakably demonstrates that the “unusual circumstances” requirement in Guidelines section 15300.2(c) is consistent with section 21084(a). Notably, the Legislature’s directive to the Resources Agency to adopt categorical exemptions waspart ofthe legislatively-crafted compromise in response to this Court’s decision in Friends ofMammoth,supra, 8 Cal.3d 247. Moreover, it was this Court, in the Friends ofMammoth decision,that first used the “unusual circumstances” language that is at issue in this case, and the Legislature adopted the statute with clear knowledgeofthis language. Following its adoption in 1970, CEQA was initially understood to apply only to public projects actually carried out by a public agency. In Friends ofMammoth, supra, 8 Cal.3d at 259, this Court held that CEQA also applied to private projects for whicha permit or other entitlement is approved by a public agency. In responseto this decision, the Legislature enacted section 21065 to codify the decision and define “project” to include private activities that require an approvalby a public agency. -27- This Court’s decision in Friends ofMammoth caused confusion for public agencies and the construction industry. Asset forth in a leading CEQApractice guide: In responseto reports that previously approved projects were being stoppedin progress, the legislature crafted a . compromise within three months that wasthefirst significant amendmentofthe statute. In tandem with enacting Pub Res C § 21065 to confirm the holding in Friends ofMammoth,the legislature enacted short statutes of limitation on CEQA- based challenges to project approvals and a 120-day moratorium on the application ofCEQA to private projects. (1 Kostka and Zischke, supra, § 1.22, p. 20.) The legislative history of the statute confirmsthis history.” The Legislature added section 21084(a) to CEQA in Assembly Bill 889 (“AB 889”) in 1972. (RJN, Exh. A, Legislative History Report and Analysis,p. 1.) AB 889 wasfirst introduced in March 1972. (RJN, Exh. A.1.) This Court decided the Friends ofMammoth decision midway through the legislative consideration ofAB 889, on September 21, 1972. (RJN, Exh. A, Legislative History Report and Analysis, p. 2.) According to the legislative history, “[a]s a result and because there are no standards for [EIRs] for private projects, a great deal of confusion has arisen as to what projects can or cannot be authorized and built without an [EIR].” (RJN, Exh. A.5, p. 4 [“Comments”section of analysis prepared for Senate Committee on Governmental Organization]. See also Exh. A.5, p. SP-40 [claiming that as a result of the Friends ofMammoth decision, ° The City and Kaporshaveprovided this Court with the legislative history of section 21084, subdivision (a), prepared by Legislative Intent Services. (See City’s and Kapors’ Motion Requesting Judicial Notice [“RJN”], filed concurrently herewith, Exhibit A.) -28- “[mJany construction projects already under way have been stopped, new projects are frozen,[it] is creating unemployment, chaosin local government, and unfair hardship within the construction, banking and savings and loan industry”].) The legislative history also describes the two divergent groups of commentators that developed in response to the decision, with one group supporting it and the other predicting “massive statewide economic disruptions within weeks.” (RJN, Exh. A.5, p. SP-47-SP-51.) According to the history, “the Mammoth question has becomea questionofthe larger future of the Environmental Quality Act and the Legislature’s total regard for environmental planning as a prerequisite to public andprivate developmentactions.” (Jd. at SP-50.) On November13, 1972, AB 889 wassubstantially rewritten with the Friends ofMammoth decision in mind. (Jbid; Exh. A.1, November13, 1972 version ofAB 889.) The analysis prepared for the Senate Committee on Governmental Organization provides that “[a]mendments dated on November 13, 1972 are intended by the author to clarify the questions whichhavearisen asa result of the Supreme Court’s decision.” (RJN, Exh. A.5, p. 4.) This history is relevant here, because the Legislature’s directive to the Resources Agencyto designate categorical exemptions waspart of the amendments on November13, 1972to clarify the statute in response to the Friends ofMammoth decision. (RJN,Exh. A, Legislative History Report and Analysis, p. 3; Exh. A.le.). Significantly, it was this Court that first used the “unusual circumstances” languagethatis at issue in this case. Specifically, this Court stated that: [C]ommonsensetells us that the majority of private projects for which a government permit or similar entitlementis -29- necessary are minorin scope-- e.g., relating only to the construction, improvement, or operation of an individual dwelling or small business -- and hence, in the absence of unusual circumstances, havelittle or no effect on the public environment. Such projects, accordingly, may be approved exactly as before the enactment of the [C]JEQA. (8 Cal.3d at 272, emphasis added.) The Legislature then added the language of section 21084 as part of the amendments on November 13, 1972 to clarify the statute in response to the Friends ofMammoth decision. (RJN, Exh. A, Legislative History Report and Analysis, p. 3; Exh. 1.) The proposed language was amended once, and then enacted into law. (RJN, Exh. A, Legislative History Report _ and Analysis, p. 3-4; Exh. A.1.) The Senate Committee analysis ofAB 889 providedthat section 21084: Requires the above guidelines to includea list, to be determined by the Secretary of the Resources Agency,of categorical “classes” of projects to be exempted which the Secretary determines do not have a significant effect on the environmenteither cumulatively or individually and with provisions for adding or deleting from such list the same as may be requested by public agencies. (RJN, Exh. A.5,p. 2.) The history further showsthat the Sierra Club opposed the new languagein section 21084, asserting that the “legislature should makethe ultimate decision as to which classes of projects, if any, should be exempted from the provisions of the Act.” (RJN, Exh. A.6, document SP- 21; Legislative History Report and Analysis, p. 4.) On the other hand, the League of California Cities objected that there “should be greater flexibility for local governmentto adopt categorical exemptions consistent with the guidelines but necessary to meet local circumstances.” (RJN, Exh. A.10,p. A-66.) The League further argued that “cities and counties should be given express authority to make such categorical exemptions”and that the Supreme Court in Friends ofMammoth “makesit clear that such a list of -30- exemptions may be adopted.” (/bid.) The Legislature did not follow either suggested approach, but instead directed the Resources Agency to designate the classes of projects that would be exempt from CEQA. Whenstatutory language includes words or termsthat courts have previously construed, the presumption is that the Legislature intended the statute to have the same meaning given by the courts. (Hughes v. Pair (2009) 46 Cal.4th 1035, 1046.) Here,it is clear that the Legislature amended the statute and added section 21084 with clear knowledge and in direct response to this Court’s decision in Friends ofMammoth. Accordingly, as the Friends ofMammoth decision identified the role of categorical exemptions from CEQA “in the absence of unusual circumstances,”it can be presumed that the Legislature intended that classes of minor projects be exempt from CEQA,in the absence of unusual circumstances. Finally, it is significant that section 21084 waspart of a compromise adopted by the Legislature, to codify the Friends ofMammoth holding, while at the same time imposing measuressuchasshort statute of limitations to alleviate concerns regarding CEQA unduly interfering with economic developmentin the State. Identifying “classes” of projects that are exempt waspart of that compromise. If the Legislature simply wanted to confirm the general rule that only projects that may have a significant effect on the environmentare subject to CEQA,it accomplished that in section 21080. However, the Legislature wantedto establish uniform classes of projects throughoutthe State that could easily be identified as being exempt from CEQA. The obvious purposeof this wasto allow minorprojects to proceed without undue delay and expense suchas those specifically called out in the Friends of Mammoth decision including “construction . . . of an individual dwelling”. (8 Cal.3d at 272.) Allowing an exception to these exempt classes only -31- whenthere is something unusual about the individual project is consistent with this intent. Thus, the legislative history of section 21084(a) supports the conclusion that the “unusual circumstances” requirement in Guidelines section 15300.2(c) is consistent with the plain meaning andintent of section 21084(a), and is within the scope of the authority conferred by that statute. 3. The Legislature’s Subsequent Amendmentof § 21084 Confirms that the “Unusual Circumstances” RequirementIs Consistent with the Legislative Intent in § 21084 A well-established rule of statutory constructionis thatif, in amendinga statute, the Legislature makes no substantial modification of a preexisting and long-standing administrative practice or regulation, there is a strong indication that the administrative practice or regulation was consistent with the Legislature’s intent. (Horn v. Swoap (1974) 41 Cal.App.3d 375, 382.) Here, the Legislature amended section 21084 in 2011, to make minor modifications to subsection (a) and add the following new subsection (b): A project’s greenhouse gas emissions shall not, in and of themselves, be deemed to cause an exemption adopted pursuantto subdivision (a) to be inapplicable if the project complies with all applicable regulations or requirements adopted to implementstatewide, regional, or local plans consistent with Section 15183.5 of Title 14 of the California Code of Regulations. (RJN, Exh. B.1.) There is no question that the “unusual circumstances” language in Guidelines section 15300.2(c) was preexisting and longstanding, as was the long line of cases holding that “unusual circumstances” was a separate requirement under the exception. In amending section 21084,the Legislature made no attempt to change the “unusual circumstances” -32- requirement. Thelegislative history demonstrates that the Legislature was well aware ofthe existing law that “CEQA includes variousstatutory exemptions, as well as categorical exemptions in the CEQA guidelines.” (RJN, Exh. B.3, p. LIS-3.) Moreover, the nature of the amendmentin subsection (b) wasto prohibit a project’s greenhouse gas emissions from being used as an exception to a categorical exemption. Thus, the Legislature clearly knew of the exceptions in the Guidelines. This legislative amendmentis a strong indication that the “unusual circumstances” requirement in Guidelines section 15300.2(c) was consistent with the Legislature’s intent. E. Nothingin this Court’s Decision in Wildlife Alive or Any Other Authority Supports the Court of Appeal’s Opinion 1. The Court of Appeal’s Reliance on Wildlife Alive Is Misplaced The Court of Appeal reachedits result based on this Court’s statement in Wildlife Alive, supra, 18 Cal.3d at 205-206 that: “The Secretary [of the California Resources Agency] is empowered to exempt only those activities which do not havea significant effect on the environment. [Citation.] It follows that where there is any reasonable possibility that a project or activity may havea significant effect on the environment, an exemption would be improper.” (Opinion, 11, italics added by Court of Appeal.) The Court of Appeal here relied on this statementto eliminate the use of categorical exemptions for a project wheneverthere is any credible evidence of a potentially significant impact, regardless ofwhether the impact is due to “unusual circumstances”. However, prior courts have declined to read this Court’s statement in Wildlife Alive so broadly. In CBE, supra, 103 Cal.App.4th at 127, the court stated that “{t]his admonition from [Wildlife Alive] cannot be read so broadly as to defeat the very idea underlying CEQAsection 21084 of -33- classes or categories of projects that do not have significant environmentaleffect.” (Italics original.) The Court of Appeal’s reliance on Wildlife Alive, supra, 18 Cal.3d 190, is misplaced. This Court decided Wildlife Alive in 1976, four years after it decided Friends ofMammoth and the Legislature adopted section 21084. The Court in Wildlife Alive was addressingthe first question analyzed in applying a categorical exemption-whetherthe project at issue | fell within the scope of a categorical exemption. The Court was not addressing the unusual circumstances languageit previously set forth in its Friends ofMammoth decision. In Wildlife Alive, the issue was whetherthe setting of hunting and fishing seasons by a commission of the Department of Fish and Game was categorically exempt from CEQA under then-Guideline section 15107, which exempted actions taken by regulatory agencies to assure the maintenance,restoration, or enhancementofa natural resource where the regulatory process involved proceduresfor protection of the environment. (Ud. at 204-205.) Thus, the question was whether the project at issue fit within the scope of the exemption. The Court first observed that this categorical exemption applied to wildlife preservation activities of the State Department of Fish & Game, and that the fixing of hunting seasons by a commission could not fairly be characterized as within the scope of the exemptionin the first instance. (/d. at 205.) The Court wenton tostate that, even if the exemption was intended to cover the commission’s hunting program,“it is doubtful that such a categorical exemption is authorized underthe statute.” (/bid.) The Court explained: Wehaveheld that no regulation is valid if its issuance exceeds the scope of the enabling statute. (See Gov. Code, $ 11374; Whitcomb Hotel, Inc. v. Cal. Emp. Com. (1944) 24 Cal.2d 753, 757 [151 P.2d 133, 155 A.L.R. 405].) The -34- secretary is empowered to exemptonly those activities which do not have a significant effect on the environment. ( Pub. Resources Code, § 21084.) It follows that where there is any reasonable possibility that a project or activity may have a significant effect on the environment, an exemption would be improper. (/d. at 205-206.) Thus, the issue before the Court was not whether a given project was properly exempt under formersection 15107, but the scope ofthat exemption, and its discussion related to the authority of the Secretary to adopt categorical exemptions in the first instance. This is made clear by the Court’s conclusionthat: [W]e have consistently held that CEQA must be interpreted so asto afford the “fullest possible protection” to the environment. ( Bozung v. Local Agency Formation Com., supra, 13 Cal.3d 263, 274; Friends ofMammoth v. Board of Supervisors, supra, 8 Cal.3d 247, 259.) We will not abandon that principle by unreasonably expandingstatutory and regulatory language to imply an exemption for the commission whenit enacts hunting regulations. We cannot concludethat the Legislature so intended. (/d. at 206.) Clearly, the Resources Agency’s authority to identify classes of projects that are exempt from CEQAislimited by section 21084 to classes of projects that do not have a significant effect on the environment. If the Resources Agency adopts a categorical exemption for a class of projects that has the potential for significant environmentaleffects, that adoption would exceed the Agency’s statutory authority. For example,if the Agency found that permits approving construction ofall large shopping malls or football stadiums were categorically exempt from CEQA, such a finding would exceed the Agency’s statutory authority. Such a determination could be challengedin court and set aside. It follows then, that the scope of the exemptions must be construed in light of the statutory authority and the principle of interpretation that CEQAaffords the fullest protection to the environment within the statutory -35- language. This rule of law wasestablished by this Court in Wildlife Alive, and is frequently applied by courts in determining whethercertain types of activities fall within a particular categorical exemption. (See Azusa, supra, 52 Cal.App.4th at 1192-1193 [applying these principles in deciding whetherlandfill was existing “facility” within scope of categorical exemption].) Indeed, because many categorical exemptions only include a general description of the category or activity covered by the exemption, agencies and courts frequently have to determine whethersimilar activities also fall within the exemption. (See 1 Kostka and Zischke, supra, § 5.3, p. 195.) However, onceit is determined that a project properly falls within the scope of a categorical exemption, as wasthe case here,different considerations apply to the exception. The purposeofcategorical exemptionsis to provide a bright-line rule so that routine and minor projects that do not typically have a significant effect on the environment do not have to go through the time and expense of environmental analysis. That purpose is completely undermined if every routine and minorproject that falls within the scope of an exemption cannot rely on the exemption, but instead must go through the analysis of whetherit may have a significant effect on the environmentin the first instance andis therefore subject to CEQA. In the wordsofthis Court in Friends ofMammoth, “common sense tells us that the majority of private projects for which a government permit or similar entitlement is necessary are minor in scope... and hence, the absence of unusual circumstances, havelittle or no effect on the public environment.” (8 Cal.3d at 272, emphasis added.) In using this Court’s phrase “unusual circumstances”, the Resources Agencycrafted an exception where circumstances that are unusual with respect to exempt categories would present the reasonable possibility of a significant effect. -36- Notonly is this language entirely consistent with section 21084, any other rule would “defeat the very idea underlying CEQAsection 21084 ofclasses or categories of projects that do not have a significant environmental effect.” (CBE, supra, 103 Cal.App.4th at 127, italics original.) | Thus, this Court’s decision in Wildlife Alive does not support reading “unusual circumstances”out of the Guideline. 2. No Other Authority Supports the Court of Appeal’s Opinion The Court of Appeal also misconstrued the CBE case (Opinion, 14- 15), which involved a challenge to certain revisions to the Guidelines, including section 15332 which created a categorical exemption for urban in-fill projects. In order to fall within this exemption, the agency has to determine that approval of the project would notresult in any significant effects relating to traffic, noise, air quality, or water quality. The petitioner argued that by listing these types of impacts, the exemption “necessarily foreclose[d] the consideration of other effects such as aesthetics, cultural resources, water supply, and health and safety.” (103 Cal.App.4th at 129.) _ The court responded: | That is not correct. An important exception to categorical exemptions[is the exception in Guidelines section 15300.2, subdivision (c)]. These other environmental effects that CBE mentions would constitute “unusual circumstances” under this exception for a project that otherwise meets the Guidelines section 15332 criteria. This is because a project that does meet the comprehensive environmentally protective criteria of section 15332 normally would not have other significant environmental effects; if there was a reasonable possibility that the project would have such effects, those - effects would be “unusual circumstances” covered by the section 15300.2, subdivision (c) exception. In this way, these other effects would fall within the concept of unusual circumstancesset forth in Azusa: “unusual circumstances of a particular project (i) differ from the general circumstances of the projects covered by a particular categorical exemption, -37- and(ii) those circumstances create an environmentalrisk that does not exist for the general class of exempt projects.” (/bid, emphasis added.) Thus, the CBE court did not hold that “unusual circumstances” in section 15300.2 means nothing different than “significant effects”. Rather, as the complete discussionillustrates, the court was responding to a contention by the petitioner that certain types of environmental impacts would escape review underthe terms of the categorical exemption in section 15332. The court’s discussion, viewed in its entire context, providesthat “those effects” not typical of the category, and the reasonable possibility that those atypical effects would be significant, could be reviewed under the unusual circumstances exception. Moreover, the CBE court expressedits agreement with the definition of “unusual circumstances”set forth in Azusa and the host ofother cases applying the two-pronged inquiry under Guidelines section 15300.2(c). Thus, the Court ofAppeal was simply wrong in claiming that CBE changed the law set forth in a long line of established cases applying the unusual circumstances exception. Contrary to the Court of Appeal’s assertion, the Opinionis also directly inconsistent with Banker ’s Hill, supra 139 Cal.App.4th at 278. In that case, the court upheld a determination that a 14-story residential | building project was categorically exempt and that the unusual circumstances exception did not apply. The court in Banker's Hill expressly adopted the two-step inquiry that was determined unnecessary by the Court of Appeal. (/bid.) The Court ofAppeal claimsthat the court in Banker’s Hill streamlined its approach by proceeding directly to the question of whether there was a reasonable possibility of a significant effect on the environment. (Opinion, 13.) However, the court in Banker’s Hill did not -38- hold that it was unnecessary to determine whetherallegedly significant impacts were due to “unusual circumstances” under the exception. Rather, it found that there was no substantial evidence of a reasonable possibility of a significant effect “due to any of those purported unusual circumstances” identified by the project opponents. (Banker’s Hill, supra 139 Cal.App.4th at 278.) Thus, the court employed the two-step inquiry required by the Guidelinesto find allegedly significant impacts were due to “unusual circumstances”. (/d. at 279, fn. 26.) 3. Appellants’ Authorities Do Not Support the Court of Appeal’s Opinion Appellants’ additional arguments in support of reading “unusual circumstances”out of the Guideline are also wrong. Appellants cite to this Court’s decision in Mountain Lion | Foundation v. Fish and Game Commission (1997) 16 Cal.4th 105, and specifically the statement in that case that a “categorical exemption represents a determination by [an agency] that.a particular project does not have a significant effect on the environment. (§ 21084.) It follows that an activity that may have a significant effect on the environment cannot be categorically exempt.” (d. at 124.) However,as in Wildlife Alive, the issue in that case was whetherthe project at issue fell within the scope of a categorical exemption, not whether the unusual circumstances exception applied. The projectin that case wasa decision by the Fish & Game Commission to removethe Mojave ground squirrel from the threatened specieslist. The Court rejected the argumentthat there was an implied exemption from CEQAforthis delisting action, and further held that the delisting action could notbe fairly included within a class of projects determined by the Resources Agencyto be exempt. (/d. at 124-125.) Consistent with Wildlife Alive, the Court held -39- that “[e]xemption categories are not to be expanded beyond the reasonable scope oftheir statutory language.” (/d. at 125.) Thus, the issue in that case was the scope of the categorical exemptionitself, and whetherthe project fit within that exemption. The case does not address the situation where a project fits within the scope of the categorical exemption andthe issue is whether the exception applies. “[L]anguage contained in a judicial opinion is to be understoodin light of the facts and issue then before the court, and an opinion is not authority for a proposition not therein considered.” (Dyer v. Superior Court (1997) 56 Cal.App.4th 61, 66, citing People v. Banks (1993) 6 Cal.4th 926, 945.) Appellants also requested judicial notice in the Court of Appeal of the legislative history materials for Guidelines section 15300.2(c). Appellants argue that the title of the exception is somehow relevant because it is titled “Significant Effect” rather than “Unusual Circumstances.” Not so. “[T]he law is clear that the title of legislation may not be used to control or enlarge the positive provisions of the statute.” (City ofBerkeley v. Cukierman (1993) 14 Cal.App.4th 1331, 1340.) Appellants also cite to the “Note” following the Guideline, which states: | Authority cited: Section 21083, Public Resources Code; Reference: Sections 21084 and 21085, Public Resources Code; Wildlife Alive v. Chickering, 18 Cal.3d 190. (Appellants’ RJN in Court of Appeal, p. 11.) However, Appellants ignore the larger statutory schemeandhistory of the exemptions discussed above, including this Court’s express use of the “unusual circumstances” language in Friends ofMammoth. Moreover, the Wildlife Alive decision is simply cited as a reference, and does not deal directly with the “unusual circumstances” requirement. -40- Appellants also claimed that no case has upheld a categorical exemption where evidence has been presented ofa potentially significant environmental effect. However, up until this case,all of the cases applying the unusual circumstances exception applied the two-prong inquiry discussed above, and many did not need to go beyondthefirst prong,i.e., that the petitioners failed to show unusual circumstances. If the Court of Appeal here had correctly applied the law, the court would not have needed to go beyond this step either. Moreover,as discussed below,there was no credible evidence of a potentially significant environmental effect presented in this case in any event. F. Under Yamaha Prong Two, the “Unusual Circumstances” Requirement in Guidelines § 15300.2 Is Reasonably Necessary to Effectuate the Purpose of Section 21084 Underthe second prong ofthe standard for review of administrative regulations, the “unusual circumstances” requirementis reasonably necessary to effectuate the purpose of section 21084. (Yamaha, supra, 19 Cal.4th at 11.) Indeed, it is essential to effectuate section 21084. The Court reviewsthis question under a deferential arbitrary or capricious standard. (/bid.) For the reasonsset forth above, the “unusual circumstances” language easily meets this deferential standard. Asdiscussed above, the Legislature clearly directed that the Resources Agency determine that classes of projects did not have a significant effect on the environment and were exempt from CEQA. Nothing in the statutory language indicated that the Legislature intended that there be exceptionsto this rule for individual projects within those classes that may havea significant effect on the environment. Moreover, the Resources Agency had the benefit of this Court’s decision in Friends of Mammoth, where the Court stated the commonsenseprinciple that certain classes of projects are minorin scope (i.e., “construction ... of an -4]- individual dwelling”) and “in the absence of unusual circumstances”, have little or no effect on the environment. (8 Cal.3d at 272.) Thus, it was reasonably necessary to effectuate the purpose of section 21084 to craft an exceptionthat would not simply re-weigh the determination of the Resources Agency, but, rather, would ask whether there was anything unusualor different about the project that would result in a significant effect on the environment. The apparent purposeofthe “unusual circumstances” requirement was to “enable agencies to determine whichspecific activities--within a class of activities that does not normally threaten the environment--should be given further environmental evaluation and hence excepted from the exemption.” (Azusa, supra, 52 Cal.App.4th at 1206.) This requirementis also consistent with the purpose ofCEQA in general. This Court has consistently stated that the “foremost principle”in interpreting CEQAis that “the Legislature intended [CEQA] to be interpreted in such a mannerasto afford the fullest possible protection to the environment within the reasonable scope of the statutory language.” (Friends ofMammoth, supra, 8 Cal.3d at 259; CBE, supra, 103 Cal.App.4th at 110.) However, it was in that same decision that this Court affirmed the commonsenseprinciple that certain classes of projects are minorin scope and “in the absence of unusual circumstances”, havelittle or no effect on the environment. (8 Cal.3d at 272.) This Court also recently held that “[c]ommonsense in the CEQA domainis not restricted to the [commonsense exemption]. It is an important consideration at all levels of CEQAreview.” (Save the Plastic Bag Coalition, supra, 52 Cal.4th at 175.) Here, it is consistent with the purpose of CEQA for the Resources Agency to makea determination that classes of minor projects do not have a significant effect on the environmentand are therefore exempt from CEQA,andto only allow an exception to this where there is something -42- unusual ordifferent about the project at issue from the remainderofthe class. Moreover, commonsense dictates that categorical exemptions for minorprojects should beeasily distinguished from non-exempt projects. For these reasons, the Resources Agency’s careful construction of the exception in Guidelines section 15300.2(c) is not arbitrary or capricious, and should be upheld. G. The “Unusual Circumstances” Requirement in Guidelines § 15300.2 Is Consistent with CEQA’s Structure for Exemptions The separate “unusual circumstances” requirement is further supported by the structure of CEQA with respect to the “common-sense” exemption. The “commonsense” exemption applies “[w]hereit can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment” (CEQA Guidelines, § 15061, subd. (b)(3)).” (Muzzy Ranch, supra, 41 Cal.4th at 380.) The purposeofthe commonsense exemptionis “[t]o guard against the possibility that some obviously exempttype ofproject, which wasnotlisted in compiling the categorical exemptions, might be required needlessly to comply with the requirements of CEQA.” (Myers v. Board ofSupervisors (1976) 58 Cal.App.3d 413, 425.) The basis for the exemptionis that, by its terms, CEQAonly appliesto projects that havethe potential for having a significant effect on the environment. (No Oil, supra, 13 Cal.3dat 76.) The problem with the Opinion hereis that it collapses the legal framework for analyzing categorical exemptions and the exceptions into a one-question inquiry that is duplicative of the framework for analyzing the “common sense” exemption. The result is that the Opinion does away with categorical exemptions altogether and replaces them with the “common sense” exemption. -43- In applying the unusual circumstancesexception, according to the Court of Appeal, the only meaningful question is whetherthereis substantial evidence that the proposed activity may havea significant effect on the environment. If that is the case, then an agency is precluded from applying a categorical exemption, regardless of whetherit falls within a class of projects determined by the Resources Agency to not have a significant effect on the environment. However,this interpretation of the unusual circumstances exception by the Court of Appeal is almost identical to the language of the commonsense exemption: In the language of the Guidelines’ commonsense exemption: “Whereit can be seen with certainty that there is no possibility that the activity in question may havea significant effect on the environment, the activity is not subject to CEQA.” (Guidelines, § 1506/, subd. (b)(3), italics added; see No Oil, supra, 13 Cal.3d at p. 74 [discretionary activity having no possibility of causing significant effect not subject to CEQA].) If, however, there is a reasonablepossibility that a proposed project will have a significant effect upon the environment, then the lead agency must conductaninitial study. (Wildlife Alive v. Chickering (1976) 18 Cal.3d 190, 206 [132 Cal. Rptr. 377, 553 P.2d 537]; Pistoresi v. City of Madera (1982) 138 Cal. App. 3d 284, 285 [188 Cal. Rptr. 136].) (California Farm Bureau Federation v. California Wildlife Conservation Board(2006) 143 Cal.App.4th 173, 194.) Indeed, the cases citing the common sense exemption rely on the same statement in Wildlife Alive that the Court of Appeal did here in construing the unusual circumstances exception (Opinion, 11). (See California Farm Bureau Federation, supra, 143 Cal.App.4th at 194.) Thus, the Court of Appeal has effectively equated the test for categorical exemptions with the test for the commonsense exception under CEQA. This improperly eviscerates the Resources Agency’s determination of classes of projects that are categorically exempt. By removing the -44. inquiry into whetheralleged impacts are due to “unusual circumstances”, the Court has made the “significant effects” inquiry the only relevant question andit is effectively the same question that is asked under the commonsense exemption. However, the categorical exemptions haveto mean something different than the common sense exemption. Asexplained in multiple cases, there is a fundamental difference between the two exemptions: A categorical exemptionis based on a finding by the Resources Agencythat a class or category of projects does not have a significant effect on the environment. ( Pub. Resources Code, § 21083, 21084; Guidelines, § 15354.) Thus an agency’s finding that a particular proposed project comes within one of the exemptclasses necessarily includes an implied finding that the project has no significant effect on the environment. (Ukiah, supra, 2 Cal. App. 4th at p. 732.) In [categorical exemption cases], the agency first conducted an environmental review andbased its determination that the project was categorically exempt on evidence in the record.It is appropriate under such circumstances for the burden to shift to a challenger seeking to establish one of the exceptions to produce substantial evidence to support “a reasonable possibility” that the project will have a significant effect on the environment. (Guidelines, § 75300.2, subd. (c).) In the case of the common sense exemption, however, the agency’s exemption determination is not supported by an implied finding by the Resources Agency that the project will not have a significant environmental impact. Without the benefit of such an implied finding, the agency mustitself provide the support for its decision before the burdenshifts to the challenger. Imposing the burden on membersofthe public in the first instance to prove a possibility for substantial adverse environmental impact would frustrate CEQA’s fundamental purpose of ensuring that governmentofficials “make decisions with environmental consequences in mind.” (Bozung v. Local Agency Formation Com. (1975) 13 Cal. 3d 263, 283 [118 Cal.Rptr. 249, 529 P.2d 1017].) -45- (Davidon Homes v. City ofSan Jose (1997) 54 Cal.App.4th 106, 115-116. See also California Farm Bureau Federation, supra, 143 Cal.App.4th at 184-186.) Thus, the Court of Appeal’s decision ignores the Resources Agency’s implied finding that the project will not have a significant environmental impact. H. The “Unusual Circumstances” Requirement in Guidelines § 15300.2 Is Consistent with Public Policy Finally, it cannot be overlookedthat the real-world implications of the Court of Appeal’s decision are far-reaching and significant. Under the decision, no single-family house would be found categorically exemptif opponents produced anycredible evidence to support a hypothesis under which impacts typical of such projects could be construed potentially significant, even if the lead agency had evidence which showedthat would not be the case. Under the Opinion, such evidence,by itself, would be enough to require an EIR for a single-family home. CEQAclearly was not intended to be applied in this manner. Indeed, the danger of this happeningis represented by this case. In the trial court, Appellants argued that any one of the followingopinions would be enough alleged “evidence”to trigger the exception and require an EIRfor this single-family home: Resident Dawn Hawkfoundthe project to be a breathtaking and radical departure from the style of the neighborhood. Berkeley resident Elaine Chan is of the opinionthatthis large, office-like structure will change the character of the neighborhoodin a negative way. Rose Street resident Rick Carr explained that a project ofthis size with the proposed amountof parking willin fact invite commercial level use in terms oftraffic, not consistent with the current zoning. (AA 54-55, 58.) -46- Thus, Appellants’ own argumentsin the trial court demonstrate why the effect of the Court of Appeal’s interpretation of the exception is so far- reaching. Under Appellants’ view and the Opinion, any one of the above statements would be enoughalleged “evidence”to defeat the use of a categorical exemption for a single-family home, regardless of whetherit was a completely typical home with no unusual circumstances associated with its development, and regardlessofthe fact that these statements do not even constitute substantial evidence. Moreover,the implications of the Opinion go far beyond single- family homes. The unusual circumstances exception applies to all 33 classes of categorically exempt projects in CEQA Guidelines §§ 15300- 15333. Accordingly, when faced with any alleged “reasonable possibility” of a significant impact-even an impacttypical of an exempt class of projects-an agency wouldhaveto prepare EIRs for the following classes of projects: e Operation, repair, maintenance, or minoralteration of existing structures or facilities. (Guidelines § 15301.) e Replacementor reconstruction of existing schools and hospitals to provide earthquakeresistant structures which do not increase - capacity by more than 50 percent. (Guidelines § 15302(a).) e Accessory structures including garages, carports, patios, swimming pools and fences. (Guidelines § 15303.) ¢ Construction or placement oflifeguard towers, mobile food units, portable restrooms in publicly owned parks, stadiumsor other facilities designed for public use. (Guidelines § 15311.) ¢ Minor additions to schools within existing grounds where they do not increase student capacity by more than 25% orten classrooms. (Guidelines § 15314.) e Normaloperations offacilities such as racetracks, stadiums, convention centers, auditoriums, amphitheaters, planetariums, -47- swimming pools and amusementparks, for public gatherings. (Guidelines § 15323.) e Leasing of newly constructed or previously unoccupied privately ownedfacility by a state or local agency which doesnotresult in a traffic increase of greater than 10% of front access road capacity. (Guidelines § 15327.) The Court of Appeal’s decision allows the unusual circumstances exception to swallow all the categorical exemptions. The Legislature clearly did not intend such a result. This is particularly truein light of the Legislature’s 2011 amendments to CEQA discussed above, which were to address harm caused by the severe economicrecession in the State. Il. THE PROPER STANDARD OF REVIEW APPLICABLE TO THE UNUSUAL CIRCUMSTANCES EXCEPTIONIS THE SUBSTANTIAL EVIDENCE STANDARD A. Overview of Standards of Review CEQAsets forth the standard of review for reviewing an agency’s decision. (§§ 21168; 21168.5.) This Court has held that the standard of review is essentially the same whetherthe action is one oftraditional mandamus governedby section 21168.5 or one of administrative mandamus governed by section 21168. (Laurel Heights I, supra, 47 Cal.3d at p. 392, fn. 5; Laurel Heights II, supra, 6 Cal.4th at 1133 fn. 17.) Under either statute, the questions are whether the agency has not proceededin a mannerrequired by law orifthe decision is not supported by substantial evidence. (Vineyard, supra, 40 Cal.4th at 426.) Underthe substantial evidencetest, “the reviewing court may notset aside an agency’s approval of an EIR on the groundthat an opposite conclusion would have been equally or more reasonable, for, on factual questions, our task is not to weigh conflicting evidence and determine who has the better argument.” (/d. at 435, citation omitted.) The court does not review the correctness of an agency’s ultimate environmental conclusions, -48- but only whetherits findings and decisions are supported by substantial evidencein the record. (Citizensfor Goleta Valley, supra, 52 Cal.3d at 564; Laurel Heights I, supra, 47 Cal.3d at 392.) This substantial evidencetest is the sameas applied by an appellate court in reviewingthe factual findings of a lowertribunal. (Western States Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 571.) All conflicts in the evidence mustbe resolved in favor of the agency’s decision. (Ibid.) The reviewing court does not reweigh the evidence considered by the agency, andall reasonable doubts must be resolved in favorofthe agency’s decision. (Laurel Heights I, supra, 47 Cal.3d at 393, 407-408.) Underthe substantial evidence prong, courts have applied the “fair argument” standard to the question of whetherto prepare an EIRin thefirst instance. (No Oil, Inc., supra, 13 Cal.3d at 75, 82; Friends of “B”Streetv. City ofHayward (1980) 106 Cal.App.3d 988, 1002.) One ofthe bases for this rule is that there is a strong presumption in CEQAin favorofrequiring preparation of an EIRin thefirst instance. Underthe fair argumenttest, if substantial evidence supports a “fair argument”that a project may havea significant effect on the environment, the public agency must prepare an EIR evenifthere is also other substantial evidence showingthat the project will not have a significant effect. (No Oil, Inc., supra, 13 Cal.3d at 75.) The fair argument standard applies both to the public agency’s decision whether to prepare an EIR or a negative declaration, and to judicial review of an agency’s decision to adopt a negative declaration. (Gentry v. City ofMurrieta (1995) 36 Cal.App.4th 1359, 1399.) -49- B. The Long-Standing Split in Court of Appeal Decisions on the Applicable Standard of Review for the Unusual Circumstances Exception The Court of Appeal applied the fair argument standard to the question of whetherthere is a reasonable possibility that the activity will have a significant effect on the environment under the unusual circumstances exception. (Opinion, 16.) However, there is a long-standing split in authority over the correct standard of review for this inquiry. As recently as 2010, one Court of Appeal acknowledgedthat: There is a split of authority on the appropriate standard of judicial review of a question of fact when the issue is whether a project that would otherwise be found categorically exempt is subject to one of three general exceptions (significant impacts due to unusual circumstances, significant cumulative impacts, and impacts on a uniquely sensitive environment) to the categorical exemptions set forth in Regulation section 15300.2, subdivisions (a) through (c). (1 Kostka and Zischke, supra, § 5.127, p. 297; San Lorenzo Valley CARE, supra, 139 Cal.App.4th at p. 1390, 44 Cal.Rptr.3d 128; Fairbank v. City ofMill Valley (1999) 75 Cal.App.4th 1243, 1259, 89 Cal.Rptr.2d 233.) “Some courts have relied on cases involving review of a negative declaration, holding that a finding of categorical exemption cannot be sustained if there is a ‘fair argument’ based on substantial evidence that the project will have significant environmental impacts, even where the agencyis presented with substantial evidence to the contrary. [Citation.] Other courts apply an ordinary substantial evidencetest ..., deferring to the express or implied findings ofthe local agency that has found a categorical exemption applicable. [Citation.]” (Fairbankv. City ofMill Valley, at pp. 1259-1260, 89 Cal.Rptr.2d 233; accord, San Lorenzo Valley CARE,at p. 1390, 44 Cal.Rptr.3d 128; see 1 Kostka and Zischke, § 5.127, pp. 297-299.) (Hines v. Coastal Commission (2010) 186 Cal.App.4th 830, 855-856.) This Judicial split is acknowledged in CEQApractice guides. (See 1 Kostka and Zischke, supra, § 5.127, pp. 298-301.) -50- Manyofthese courts have not resolved this dispute because the petitioner failed to meet the burden of proving the exception applied even under the moreliberal “fair argument” standard of review. (Hines, supra, 186 Cal.App.4th at 856; Fairbank, supra, 75 Cal.App.4th at 1260; Santa Monica, supra, 101 Cal.App.4th at 796-797; see also Ukiah, supra, 2 Cal.App.4th at 728, fn. 7 [court applied fair argument standard because the parties agreed upon that standard, but observedthat “the traditional substantial evidence standard of review may be more appropriate.”’]; Committee to Save Hollywoodland Specific Plan v. City ofLos Angeles (2008) 161 Cal.App.4th 1168, 1187 [court recognizedsplit in authority and found evidence that exception applied wassufficient undereither | standard].) C. The Standard of Review Should Be the Substantial Evidence Standard For the reasons set forth below, this Court should hold that the proper standard of review for the unusual circumstances exception is the substantial evidence standard, not the fair argument standard. 1. The Substantial Evidence Standard Is Consistent with the Concept of and Purpose for Categorical Exemptions Asthis Court has explained, the fair argument test was derived from the statutory language in section 21151 and,for that reason, should only be applied to the decision whether to prepare an original EIR or a negative declaration: [S]Jection 21151 commandsthat an EIR must be prepared whenevera project “may havea significant effect on the environment.”(Italics added.) In No Oil, Inc. v. City ofLos Angeles, supra, 13 Cal.3d atpages 68, 75, 83-85, we interpreted section 21/51 to require preparation of an EIR wheneverit can be fairly argued on the basis of substantial evidence that the project may have significant environmental impact. (See also Friends of “B” Street v. City ofHayward (1980) 106 Cal.App.3d 988, 1002 [165 Cal.Rptr. 514] -51- [applying “fair argument” test to affirm judgmentinvalidating decision not to prepare an EIR].) Our decision, however, expressly acknowledged thatjudicial review of agency decisions under CEQAis governed by sections 21168 (administrative mandamus) and 2/ 168.5 (traditional mandamus) and, of course, did not purport to alter the standard of review set forth in those statutes. Rather, the “fair argument”test was derived from aninterpretation of the languageof, and policies underlying, section 21151 itself. Forthis reason, the “fair argument”test has been applied only to the decision whetherto prepare an original EIR or a negative declaration. (E.g., Benton v. Board ofSupervisors (1991) 226 Cal.App.3d 1467, 1481-1483 [277 Cal.Rptr. 481] [rejecting use of test to review decision of whether second negative declaration proper for modified project]; Bowman v. City ofPetaluma (1986) 185 Cal.App.3d 1065, 1071-1072 [230 Cal.Rptr. 413] [rejecting use of test to review decision under section 21166].) (Laurel Heights IT, supra, 6 Cal.4th at 1134-1135 [holding that substantial evidence standard, not fair argument, applied to agency’s decision not to recirculate EIR under section 21092.1].) Pursuantto this Court’s reasoning, the “fair argument”test should be limited to the decision of whether to prepare an EIRin thefirst instance. In applying the fair argumenttest to the unusual circumstances exception, the court in Banker’s Hill, supra, 139 Cal.App.4th at 548-549, reasoned that the focus in section 21151(a) on whethera project “may have a significant effect on the environment” wassimilar to the language in Guidelines section 15300.2(c) of whether there is a “reasonable possibility that the activity will have a significant effect on the environment.” However,there is a significant difference between the decision to prepare an EIRin the first instance and the application of an exception to a categorical exemption-the Legislature directed the Resources Agency to designate classes of projects that did not have a significant effect on the environment and are exempt from CEQA. -52- Thus, an activity that falls within a categorically exempt class is in a substantially different position that an activity that has had no prior CEQA review or similar determination. Accordingly, it makes sense for courts to apply the more deferential standard of review to the exception. Moreover, the court in Banker’s Hill left out the phrase “due to unusual circumstances”from its analysis. The question posed by Guidelines section 15300.2(c) is whether there is a “reasonablepossibility that the activity will have a significant effect on the environment due to unusual circumstances.” (Emphasis added.) This is clearlya different inquiry than that posed by section 21151, i.e., whether a project “may have a significant effect on the environment.” In addition,it is well established that courts review an agency’s determination that a project is categorically exempt from CEQA underthe substantial evidence standard.° (Fairbank, supra, 75 Cal.App.4th at 1251.) It is fundamentally inconsistent with the legal framework for categorical exemptionsto apply the substantial evidence standard to the exemption determination, and then turn around and review the samefacts under the fair argument standard when decidingifthe exception applies. Applying ° Courts havealso applied the substantial evidence standard to another exception in Guidelines section 15300.2; specifically, the historical resources exception in subsection (f). (See Valley Advocates v. City of Fresno (2008) 160 Cal.App.4th 1039, 1071-1074.) Thus,there is an inconsistency in the standards of review being applied to the exceptionsto the categorical exemptions. Moreover, there is also confusion over what standard of review applies to the exceptions in Guidelines section 15300.2(a) and (b) for significant cumulative impacts and impacts on a uniquely sensitive environment. (See 1 Kostka & Zischke, supra, section 5.127, p. 298.) Thus, the Court’s decision in this case will likely inform the standard of review for these other exceptions. -53- these two different standards is inconsistent with and undermines the Legislature’s directive that there be classes of exemptprojects. Making the process for applying a categorical exemption too complicated and cumbersome would defeat the Legislature’s intent in having categorical exemptionsin the first place. The complexity, and, indeed, almost absurdity, of applying two different standards to the same project, is demonstrated by the Banker’s Hill case. In that case, the court reviewed the city’s determination that the urban in-fill categorical exemption applied under the substantial evidence standard. One of the determinations under review was the city’s determination that the project would notresult in any significant effects relating to traffic. (139 Cal.App.4th at 273.) The court first found that there was substantial evidence in the record supporting the city’s determination. (/d. at 274-276.) The court then “consciously appl[ied] a different standard,” i.e., the fair argument standard, to the exact same question under the unusual circumstances exception, that is, whether the project would result in any significant effects relating to traffic. Ud. at 280- 281.) At this point, any benefit the project may have gainedfrom falling within categorical exemption is lost by the complexity of the process to makethat determination. Again, the standard is applied both by the public agency in determining whether the exemption applies, and by courts in reviewing that determination. “Commonsense... . is an important consideration at all levels of CEQA review.” (Save the Plastic Bag Coalition, supra, 52 Cal.4th at 175.) The Court should employ that commonsense here. CEQA complianceis resource-intensive, and public agencies todayare facing tight budgets and limited resources. Application of the substantial evidence standard to the exception would ensure that CEQAfunctions smoothly and does not becomeso burdensomeinits 54. application as to unduly hinder developmentofthousands of minor and routine projects. 2. The Substantial Evidence Standard Is Consistent with this Court’s Treatment of the Common-Sense Exemption There is another reason the Court should apply the substantial evidence standard to the exception. The application of the fair argument test to the significant effects exception would create conflict with this Court’s ruling on the standard of review for the commonsense exemption (Muzzy Ranch, supra, 41 Cal.4th at 386-387), raising even more uncertainty during the administrative process. In Muzzy Ranch, this Court held that whethera particular activity qualifies for the commonsense exception “presents an issue offact, and[]the agency invoking the exemption has the burden of demonstrating it applies.” (Muzzy Ranch, supra, 41 Cal.4th 372, 386.) This Court expounded: An agency’s duty to provide such factual support “is all the more important where the record shows,asit does here, that opponents of the project have raised arguments regarding possible significant environmental impacts.” . . . “[T]he agency’s exemption determination must [rely on] evidencein the record demonstrating that the agency considered possible environmental impacts in reaching its decision.” (id. at 386-387, citing Davidon Homesv. City ofSan Jose, supra, 54 Cal.App.4th at p. 117. See also | Kostka and Zischke, supra, § 5.129, pp. 302.1 [Under Muzzy Ranch, substantial evidence standard applies to review agency’s application of commonsense exemption].)’ ” In their Answerto the Petition for Review, Appellants arguedthat this Court modified its decision in Muzzy Ranch “following a request by the undersigned counsel and other non-parties regarding its references to the substantial evidence standard inapplicable to categorical exemptions.” -55- The Court should apply a consistent standard to both situations. Otherwise, the Court of Appeal’s interpretation of the unusual _ circumstances exception, combined with its application of the fair argument standard, creates an inconsistency for agencies and applicants applying exemptions. For example, in this case, because the Court ofAppeal found substantial evidenceofa fair argument of potentially significant geotechnical impacts, the City was precluded from finding the Project to be categorically exempt. However, because there wasalso substantial evidence in the record supporting a determination that there was no possibility that the Project would havea significant effect, the City could also have found the Project exempt under the commonsense exemption in Guidelines section 15061(b)(3). Under this Court’s decision in Muzzy Ranch, such a determination by the City would be upheld under the substantial evidence standard. Thus, the Court of Appeal’s decision not only collapses the categorical exemptions and exception determinationsinto one inquiry that is essentially identical to that for the commonsense exemption,it did so in a way that would result in different outcomes under the samesetoffacts. Assuch,it is inconsistent with this Court’s decision in Muzzy Ranch and wrong as a matter of law. It would also create significant confusion and uncertainty for project applicants and public agencies trying to navigate the legal framework for categorical exemptions for what are supposedto be (Answer, p. 11.) Appellants appear to suggest that this Court backed away from the substantial evidence standard in Muzzy Ranch. However, although there is some uncertainty following Muzzy Ranch,that decision has been interpreted as applying the substantial evidence standardofreview to the commonsense exemption. (1 Kostka and Zischke, supra, § 5.129, pp. 302.1.) -56- minor, exemptprojects under CEQA. Theresult will be expensive and . unnecessary environmental review documents and processes for routine, minor developmentactivities, all without furthering the Legislature’s intent in enacting CEQA. I. UNDER THE CORRECT INTERPRETATION OF GUIDELINES§ 15300.2, THE COURT SHOULD UPHOLD THE CITY’S DETERMINATION THAT THE PROJECTIS CATEGORICALLY EXEMPT FROM CEQA A. It Is Undisputed that Substantial Evidence Supports the City’s Determination that the Categorical Exemptions Apply to the Project Thereis no dispute in this case that the Project falls within two categorical exemptions. The City determined that the Project was categorically exempt from CEQA pursuant to Guidelines Sections 15303(a) (“New Construction”) and 15332 (“In-Fill Development Projects”). There is substantial evidence in the record supporting the City’s determination that the Project is categorically exempt from CEQA pursuantto both these exemptions. Specifically, the staff reports and staff testimony in the record constitute substantial evidence supporting the City’s determination on these points. (1 AR 30-39, 147-152; 2 AR 463-468.) As discussed above, the Court reviews the City’s determination that the project is categorically exempt from CEQA underthe substantial evidence standard. (Fairbank, supra, 75 Cal.App.4th at 1251.) Appellants concede thatthereis substantial evidence in the record supporting the City’s findings that the Project fits within these categorical exemptions. The burden then shifts to Appellants to show that an exception to the categorical exemption applies. B. The Appellate Court Erred in Finding that Appellants Met Their Burden of Showing Unusual Circumstances Appellants did not meet their burden ofdemonstrating that unusual circumstances exist in this case, and the Appellate Court erred in finding -57- unusual circumstances. Even though the Court ofAppeal concluded that a finding of unusual circumstances was unnecessary, it then purported to find unusual circumstances present based solely on the size of the proposed home. (Opinion, 17-18.) This conclusion is wrong. To meettheir burden under the exception, Appellants must show that the circumstancesof the Project (i) differ from the general circumstances of the projects covered by Guidelines sections 15303(a) for New Construction and 15332 for In-Fill DevelopmentProjects, and (ii) those circumstances create an environmentalrisk that does not exist for the general class of these exempt projects. (Wollmer, supra, 193 Cal.App.4th at 1350.) Accordingly, in assessing the exception, it is necessary to understand what the classes of projects are that are covered by the exemptionsrelied upon by the City. 1. The Proposed HomeIs Not Unusual Compared to Typical New Construction Projects Under Guidelines § 15303 Appellants argued and the Appellate Court found that the Kapors’ homeis “unusual” because of the size of the home. However,the issue is whether the circumstancesof the Project differs from that of the typical project under the class of exempt projects. The categorical exemption in Guidelines section 15303(a) applies to construction and location of new, small facilities or structures, including one single-family residence. This categorical exemption also applies, in urbanizedareas, to up to three single-family residences and apartments, duplexes, and similar structures for not more than six dwelling units on any one legal parcel. (Guidelines § 15303(a) and (b).) The exemption also applies to, in urbanized areas, up to four commercial buildings, not exceeding 10,000 square feet in floor area. (Guidelines § 15303(c).) -58- Here, the proposed homeis well within the range of characteristics for the class of exempt projects under this exemption. The exemptiononits face applies to one single-family residence, and, indeed, up to three single- family residences in urbanized areas like Berkeley. Thus, one single-family residenceis the least intensive structure encompassed in the exemption. Notably, there is no square foot limitation on single family residences or multi-family residences. (/d. at (a), (b).) Thus, the proposed homeis well within the range of characteristics for the class of exempt projects under this exemption. (See Ukiah, supra, 2 Cal.App.4th 720 [construction of single-family residence within Guidelines § 15303 exemption; unusual circumstances exception did not apply because height, privacy andsoils issues were “normal and common considerations”in the construction of a single-family residence]; Hines v. California Coastal Commission, supra, 186 Cal.App.4th 830 [upholding application of § 15303 exemption to single-family residence].) 2. The Court of Appeal Erred in Ignoring the City’s Legislatively-Adopted Development Standards Regarding the Allowable Size of a Homeon this Property The Court of Appeal erred in concluding “as a matter of law”that the homeis “unusual” because the circumstancesofthe homediffer from the circumstances of an “otherwise typically exempt single-family residence” becauseofits size. (Opinion, 17-18.) The fundamental problem with the Court’s decisionis that it replaced the City’s determination that the size of the home was normalandtypical under its development standards with its own arbitrary opinion that the home was “‘too big”. The Court of Appeal’s focus on size in the abstract is meaningless. Whetherthe size of a homeis “unusual” depends on the circumstances of the proposal. Obviously, a house on a small lot that needs a variance from - local zoning presents different issues than the same-size house on a large -59. lot that complies with local zoning. A local agency’s zoning and General Plan standards define what is an appropriate size of development for each property. A general plan is the “constitution for future developmentlocated at the top of the hierarchy oflocal government law regulating land use.” (DeVita v. County ofNapa (1995) 9 Cal.4th 763, 773, citation omitted.) The State Planning and Zoning Law, Government Codesection 65000 et seq. authorizes the legislative body of cities to adopt zoning ordinancesthat regulate the use of buildings, structures. and lands as between various purposes;the location, height, bulk, numberofstories, and size of buildings and structures; and the size and use of lots. (Govt. Code § 65850(a), (c).) A governing body’s conclusionthat a particular project is consistent with its general plan and zoning “carries a strong presumptionofregularity that can be overcomeonly by a showingofabuseofdiscretion.” (Friends of LagoonValley v. City of Vacaville (2007) 154 Cal.App.4th 807, 816-817, citation omitted.) Moreover,“[rJeview is highly deferential to the local agency, recognizing that the body which adopted the general plan policies in its legislative capacity has unique competenceto interpret those policies whenapplying them in its adjudicatory capacity.” (/bid, citation omitted.) Here,the size of the Kapors’ proposed new homeis not unusualfor the area or exceptional for the property underthe City’s regulations. (1 AR 127.) Notably, the home will cover only 16 percentofthe property, leaving 84 percentofthe property in open space. (1 AR 127.) The City’s Code allows 40 percent lot coverage, and thus would actually allow a much larger structure for a lot ofthis size, or even several structures. (1 AR 127.) City staff provided evidencein the hearings on the Project that, regarding size, and usingfloorarea to lot area (FAR) as a guide, 16 parcels within 300 feet of the Project site are developed with a FAR that exceeds the Project. (2 AR 468.) -60- Moreover, even if size in the abstract was relevant, the evidence demonstrates that the size of the single-family homeis consistent with other homesin the area. The proposed single-family dwelling would be approximately 6,478 square feet on two floors plus an open-air lowerlevel, with a 3,394 square foot, 10 car garage beneath the main floorlevel ofthe house. (1 AR 36.) There are more than 20 housesin the neighborhood, five of them immediately surroundingthe property, that range in size from 4,000 to 6,000 square feet. (4 AR 1041.) During Project review, City staff also showedthat 68 single-family dwellings in the City have more than 6,000 square feet of floor area and, of these, nine are larger than 9,000 square feet, and five are larger than 10,000 square feet.2 (1 AR 157.) Moreover, the Kapors got the idea for the 10-car garage from the immediate neighbors, who have8 off-street parking spaces at their house. (1 AR 84, 126.) Based on these undisputed facts, City staff concluded that the “proposed dwelling is by no meansthe largest in the City nor amongthe most intensely developed parcels citywide or within 300-feet of the proposed dwelling.” (1 AR 157.) Thus,the evidence in the record abundantly supports the conclusion that there is nothing unusual about the circumstances surroundingthis Project that differs from other single-family homesunderthe City’s regulations. The Court of Appeal essentially imposed an arbitrary square-foot limitation on whatis a typical or atypical house. There must be some ® The Court of Appeal questioned the City’s evidence ofother similar sized homesin the City, because the City used the word “dwelling”in its brief instead of “single-family dwellings.” (Opinion, 17.) The record ts clear that the City was referring to single-family dwellings. (1 AR 157.) -61- consideration of what is typical for the particular environment in which the homeis to be located, such as the size and location of the property. Under the Court of Appeal’s ruling, any housein the State approaching 10,000 square feet (including the garage) would automatically be “unusual”for purposes of the exception. However, pursuant to the State Planning and Zoning Law,the local agency’s developmentstandards already regulate whatis typical and normalsize for developmentinits jurisdiction. Here, the City already set development standards determining whatis normal and typical for single-family homes in Berkeley. Becausethe Kapors’ proposed home meetsall of those standards, it cannot be considered unusual. The Court of Appeal’s decision fails to give deference to the City’s finding that the proposed home complies with the local general plan and zoning requirements, and is therefore not unusual. This improperly supplants the deferential abuse of discretion standard with the court’s independent judgment. Not only is this contrary to the authorities cited above,it sets a dangerous precedent. If courts could simply rule by judicial fiat that a particular project is unusual, without reference to what is normal and typical under the agency’s development standards, then agencies will have no guidanceor certainty in applying the unusual circumstances ~ exception. A project that is normal and typicalin all respects underthe agency’s development standards runs therisk of a court arbitrarily deciding that some aspectof it makesit “unusual”. Indeed, that is exactly what happenedhere. 3. The Proposed HomeIs Not Unusual Comparedto Typical In-Fill Projects Under Guidelines § 15332 Asdiscussed above, the City concluded that the Project was categorically exempt under two separate exemptions. The Court of Appeal only conductedits analysis as an exception to the New Construction exemption. It failed to even look at whether the exception took the Project -62- out of the In-fill exemption. A project only needsto fall within one categorical exemption to be exempt from CEQA. Thus, Appellants must also showthat the circumstancesofthe Project differ from the general circumstancesofthe projects covered by the In-Fill exemption. The categorical exemption in Guidelines section 15332 applies to projects characterized as in-fill development meeting the following conditions: (a) The project is consistent with the applicable general plan designation andall applicable general plan policies as well as with applicable zoning designation and regulations. (b) The proposed developmentoccurs within city limits on a project site of no more than five acres substantially surrounded by urbanuses. (c) The project site has no value as habitat for endangered, rare or threatened species. (d) Approval of the project would not result in any significant effects relating to traffic, noise, air quality, or water quality. (e) The site can be adequately served byall required utilities and public services. Appellants concede there is substantial evidence in the record supporting the City’s findingson all of these points. Notably, the In-Fill exemption does not addressthe size of the - building falling within the exemption. It does provide that the project be consistent with the applicable general plan and zoning designations. (Guidelines § 15332(a).) Here, the Kapors’ home conformsto all of the applicable development standards and designations. (1 AR 6.) In setting these standards, the City has defined whatis typical for a single-family homein Berkeley’s urban environment. Since the Kapors’ proposed home meets these standards, it is difficult to see how its size could giverise to any unusual circumstances. -63- Moreover, cases applying the In-fill exemption have held that the size of a project is not an unusual circumstance taking a project out of the In-fill exemption. Indeed, this same Court of Appeal recently held that a 5- story building with 98 residential units, 7,700 square feet of commercial space and 114 parking spacesfell within the In-fill categorical exemption, and that there was nothing aboutthat project that differed from the typically-exemptIn-fill project. (Wollmer, supra, 193 Cal.App.4th 1329, 1351.) Similarly, in Banker’s Hill, supra, 139 Cal.App.4th 249, the court upheld application of this exemption to a 14-unit, 14-story high-rise condominium project, with underground parking. It further found that there was no reasonable possibility of a significant effect on the environment due to any unusual circumstances surrounding the project. (/d. at 278.) Clearly, then, the size of one single-family home does not present anything unusual comparedto the typically-exempt In-fill project. Moreover, the size of the Project does not create an environmentalrisk that does not exist for the general class of In-fill projects. Accordingly, there are no “unusual circumstances” based on the size of the home. C. The Appellate Court Erred in Finding a Reasonable Possibility of a Significant Environmental Impact Resulting From Unusual Circumstances The Court of Appeal also erred in finding a reasonable possibility of a significant impact resulting from the allegedly unusual circumstance of the size of the home. Thesole basis of the Court’s decision wasalleged geotechnical impacts. The Opinion foundthatletters submitted by Appellants’ expert Lawrence Karp “amounted to substantial evidence of a fair argumentthat the proposed construction would result in significant environmental impacts.” (Opinion, 18.) As the Court of Appeal noted, Mr. Karp asserted that the Project would not be constructed as proposed and approvedby the -64- City, but would instead require additional construction activities, including the placementof “side-hill fills.” (Opinion, 4-5.) Mr. Karp further opined that the allegedly required side-hill fills would be subject to “seismic lurching” impacts. Mr. Karp’s opinion was contradicted by the applicant’s geotechnical engineer, Mr. Kropp. (Opinion, 5.) However, Mr. Kropp did not differ with Mr. Karp as to whetherthe “side-hill fill” would be subject to this “seismic lurching”-there is no “disagreement among experts” on this issue. Rather, he explained that Mr. Karp had misread the project plans, and thatin fact, no “side-hillfill” was proposed. As a consequence, none would be constructed, so there would be nothing to “seismically lurch”. Thus, because the Project did not call for side-hill fill, none of the concerns raised by Mr. Karp applied to the Project proposed for approval. ([bid.) The seismic impactsto the allegedly required side-hill fills were the only potentially significant impacts which the Appellate Court identified as triggering the unusual circumstances exception. (Opinion, 18.) | If the Court applies the substantial evidence standard, it should uphold the City’s determination becausethere is substantial evidence in the record supporting the City’s conclusion that the Project would not have any geotechnical impacts. Even if the Court applies the fair argumenttest, however, it should uphold the City’s determination because Appellants did not meet their burden of presenting substantial evidence of a fair argument that the Project may havesignificant geotechnical effects on the environment. Moreover, the Court of Appeal madeseveral incorrect holdings as a matter of law onthis issue. 1. There Is No Substantial Evidence Raising a Fair Argument of Any Significant Geotechnical Impacts In the CEQA context, substantial evidenceis “fact, a reasonable assumption predicated upon fact, or expert opinion supported byfact.” (§ -65- 21080(e)(1), emphasis added; 21082.2(c).) Substantial evidence does not include “argument, speculation, unsubstantiated opinion or narrative, [or] evidencethat is clearly inaccurate or erroneous...” (§ 21080(e)(2); 21082.2(c).) “Mere argument, speculation, and unsubstantiated opinion, even expert opinion,is not substantial evidence for a fair argument.” (Pocket Protectors v. City OfSacramento (2004) 124 Cal.App.4th 903, 928-929. See also § 21082.2(c); Guidelines § 15384(a); Santa Monica, supra, 101 Cal.App.4th at 797; California Native Plant Society v. County of El Dorado (2009) 170 Cal.App.4th 1026, 1059.) In this case, Appellants provided the City with an opinion by an expert regarding alleged geological impacts of the Project resulting from allegedly massive excavation and topographical changesto the property. Specifically, Lawrence Karp submitted an opinion that the Project would havea significant environmental impact becauseoffill, landslide, truck traffic and slope issues. (2 AR 448, 449.) However, Mr. Karp’s entire opinion was based on the premise that the Project would not be built as proposed, but, rather, would require additional construction activities, including the placementof “‘side-hill fills.” (Zbid.) | In response, the applicant submitted two expert opinionsstating that the project could be constructed as proposed andthat the massive excavation feared by Mr. Karp may have been a result of his misreading of the plans. (4 AR 961, 963-966, 1064-1067.) There is.a detailed summary of the evidence in the record explaining how, contrary to Mr. Karp’s contention, the Project would not require “side-hill fills”: Contrary to Mr. Karp’s Opinion, there will be no “Side Hill” Fill What Mr. Karp calls a large, side-hill fill is in fact “the current ground surface where the east wing of the new building will be located.” (Kropp letter, April 21, 2010, [4 AR 1061]) There is “no evidence ...in the plans” of what -66- Karp calls “fills are placed directly on very steep existing slopes”. (Letter Jim Toby, [4 AR 1065]) An accurate reading [of] the submitted plans showsthat the “the only fill placed by the downhill portion of the homewill be backfill for backyard retaining walls***The current groundsurface, along with the vegetation, will be maintained on the downhill portion of the lot.” [4 AR 1061] Most of Mr. Karp’s letter relates to unsubstantiated concerns related to the non-existent fact of ‘a large side-hill fill’: e Removal of vegetation on the lower slopes, e Massive grading on a steep slope, including deep keyways and benchesinto thehill, e Construction of a new,very steep fill slope,’ e Extensive trucking to stockpile excavated materials to re-use in the fill slope, e Future seismic lurching on the steep side-hill fill. “TSince] there will be no steep, side-hill fill constructed, none of these assumptions, concernsor‘facts’ relied on for those opinions apply to the proposed project.” [4 AR 1061-1062] (4 AR 934-935, emphasis original, citing 4 AR 1061-1062, 1064-1067. See also 2 AR 537-538.) Thus the fundamental question posed by Appellants’ geotechnical argumentis: does the project approved by the City involve “side-hill fill’? 2. The City’s Determination Regarding the Scope of the Proposed Project Per the Approved Plans is Not Subject to Expert Dispute The fundamental purposeof the land use permit processis to enable a public agency to determine what may and what maynotbe built, and how. It follows that the City is entitled to determineforitself the scope of a project that it approves. In this case, the application proposed and the City -67- approved’a project that it determined would involve excavation of approximately 1,500 cubic yardsofsoil, of which approximately 800 cubic yards would beretained onsite, on a slope of approximately 50%. (1 AR 34, 63.) The geotechnical impactofthat proposalis potentially subject to dispute among experts. What is not subject to dispute is the proposalitself. Appellants argue that a purported disagreement amongexperts as to the geotechnicaleffects of the project constitutes substantial evidence supporting a fair argumentthat the project has the potential for a significant adverse impact on the environment. But they ignore the fact that the project as approved will, by all accounts, not have the impacts they allege. To the contrary, the impacts their expert foresees could result only from a differently designed project. But that differently designed project is not whatthe City approved. WhenAppellants argued to the City Council that staff did “not mention the impact of the massive excavation and topographical changes to the property”, City planning staff stated unequivocally that“[t]his appeal pointis factually incorrect” andreiterated that as approved, the excavation would involve approximately 1500 cubic yards, of which approximately 800 cubic yards would beretained onsite. (1 AR 149.) In reviewing a City’s interpretation of its own laws, contemporaneousconstruction given a statute by the officials charged with administering and followingit, including their construction of the authority vested in them byit, is entitled to great weight.!° Onereason forthis rule is 9 Representations in the application defined the proposal before the City and becameconditions ofproject approval. (1 AR 8.) 9 Harrottv. County ofKings (2001) 25 Cal. 4th 1138, 1154-55; Reno v. Baird (1998) 18 Cal.4th 640, 660; Highland Ranch v. Agricultural Labor -68- that agencies will often have “a comparative interpretive advantage over the courts.” (Yamaha, supra, 19 Cal.4th at 12, quoting Cal. Law Revision Com., Tent. Recommendation, Judicial Review of Agency Action (Aug. 1995) p. 11 (Tentative Recommendation).) In considering the deference to be accorded an agencyinterpretation, courts are “morelikely to defer to an agency’s interpretation of its own regulation thanto its interpretation of a statute, since the agencyis likely to be intimately familiar with regulations it authored andsensitive to the practical implications of one interpretation over another.” (/bid.) Courts will also consider “indications of careful consideration by senior agencyofficials.” (Ud. at 13.) The samerule applies to agencies’ interpretations of their own permits, and for the same reasons. “Deference is particularly appropriate where,as here, the agencyis interpreting its own language, drafted to suit a particular circumstance, rather than language drafted by the legislature.” (Bello v. ABA Energy (2004) 121 Cal.App.4th 301, 318 [county interpretation of its own encroachment permit entitled to deference].) For example, in Stone v. Board ofSupervisors (1988) 205 Cal.App.3d 927, the Tuolumne County Board of Supervisors considered whether a mining company was in compliance with a use permit condition that required it to have a $25 million liability insurance policy. The company had only a $12.5 million policy, plus a $3 million pollution liability policy, and had agreed to fund an environmental monitor to prevent pollution. Despite the contrary opinion of county counsel, the Board Relations Bd. (1981) 29 Cal.3d 848, 859; Whitcomb Hotel, Inc., supra, 24 Cal.2d 753, 756-757; Save Our Peninsula Committee v. Monterey County Bd. ofSupervisors (2001) 87 Cal.App.4th 99, 142; City of Walnut Creekv. County ofContra Costa (1980) 101 Cal.App.3d 1012, 1021. -69- determined that the company was in compliance. In doingso,it relied on the facts that: (1) an environmental monitor could substitute for insurance coverage by preventing pollution from occurring; (2) the parties werelikely aware whenthe permit originally issued that environmental liability would probably be excluded from any insurancepolicy; (3) the cost of the additional $12.5 million in coverage was very high; and (4) $12.5 million in coverage was generally regarded as adequate in the industry. (/d. at 933- 937.) The court upheld this decision, using a “reasonableness”standard of review, under whichthe plaintiff had the burden of proving the nonexistence of the facts on which the decision was based. (/d. at 933- 934.) | Similarly, in North Gualala Water Company v. State Water Resources Control Board (2006) 139 Cal.App.4th 1577, the court gave “considerable deference” and “great weight” to the Board’s interpretation of the term “bypass” in a permit condition, noting that the condition was “awkwardly worded”and could no longerbeinterpretedliterally due to changed circumstances. (/d. at 1607 & 1581, fn. 3.) So, to answer the question posed by Appellants’ geotechnical argument, no, the project approved by the City does not involve “side-hill fill”. 3. CEQA’s Requirement to Prepare an EIR Cannot Be Triggered by Alleged Impacts of Project Elements Which Are Neither Proposed Nor Approved Under CEQA,a “project” refers “to the activity which is being approved...” (Guidelines § 15378(c).) A “project” means the whole of an action and, in this case, is “[a]n activity involving the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies.” (Guidelines § 15378(a)(3); § 21065(c).) -70- Courts have held that evidence ofpotentially significant impacts which doesnotrelate to the project proposed or approvedis not capable of . supporting a “fair argument” that an EIR must be prepared. In Lucas Valley Homeowners Assn. v. County ofMarin (1991) 233 Cal.App.3d 130, the court upheld the county’s approval of a negative declaration and conditional use permit to convert a single-family homeinto a synagogue. The court rejected claims by project opponents that the synagogue would be larger than what was approved,holding that such claims “ignored the reality of the permit as approved and accepted.” (/d. at 162.) The court held that “the focus mustbe onthe use, as approved, andnot the feared or anticipated abuse.” (/d. at 164; see also Citizensfor Responsible Development in West Hollywoodv. City of West Hollywood(1995) 39 Cal.App.4th 490, 501 [evidence ofhistorical significance of two buildings not included in the proposed project to demolish and restore structures was not substantial evidence to support a fair argumentofa potentially significant impact].) The Court of Appeal departed from this established precedent. The Opinion foundthat letters submitted by Lawrence Karp “amounted to substantial evidence of a fair argument that the proposed construction wouldresult in significant environmental impacts.” (Opinion, 18.) The Opinion held that where there is a disagreement among experts over the significance of an effect of the project, the agencyis to treat the effect as significant. (Opinion, 19.) This glossed over the threshold question noted above of whetherthe effect in question wasactually an effect of the project or was in contrast the effect of a consultant’s mistaken reading ofthe plans. In fact, there was no disagreementoverthe significance of an effect ofthe projector the proposed construction of the project: Mr. Karp neversaid that the project as described by the application and as approved-i.e., without the “side-hill fill’--would havea significant impact on the -7|- environment. Rather, his letters were limited to presenting his misconception as to whatthe project wasin the first instance. Underthe Appellate Court’s holding, agencies must accept as conclusive evidence from project opponents purporting to show that the project will not be constructed in the manner proposed for approval, but rather will be constructed in a mannercontrary to their entitlements andthat raises the specter of potentially significant impacts. Accordingto the Opinion, evidencethatis not related to any element ofthe Project as proposed and approved,but rather to elements which Project opponents “fear or anticipate” may occur, maytrigger the requirement to prepare an EIR. | Here, the Project does not include a “side-hill fill.” The Kapors may only construct the Project as shown on the plans approved by the City. The City approved the Project by adopting Resolution No. 64,860-N.S. (1 AR 3-29.) Resolution No. 64,860-N.S. affirmatively adopted the project plans attached as Exhibit B to the Resolution and madeconstruction in compliance with those plans a condition of approval. (1 AR 3.) The approved Project plans attached as Exhibit B to the Resolution do not include the “side-hill fill” that Mr. Karp opined waspart of the project. Rather, the approved project plans contained in Exhibit B to Resolution No. 64,860-N.S. contain the only approved grading plan for the Project. (1 AR 13-29.) Andthat approved grading plan only allows 1500 cubic yards of cut and 800 cubic yardsoffill. (1 AR 28.) The approved gradingplanis the only approved documentthat allows cut andfill for the Project. As stated above, Condition Number 5 of the approved Use Permit provides that all approved plans and representations submitted by the applicant are deemed conditions of approval of the Use Permit. (1 AR 8.) It is neither Appellants’ nor a court’s role to decide whether or not the approval should be different than what is specified on the approved -72- plans. The purpose of CEQAis to review the environmental impacts ofthe project, which is defined as the activity that is approved by the public agency. If the Opinion is allowed to stand, no project subjectto the fair argument standard could everwithstand judicial review. Such a result would imposesignificant delay and expense on what wasintended to be exempt projects andis, thus, in contravention of CEQA. Here, Appellants’ expert asserted that the “project grading ... will ... be much more extensive than represented to the City.” (Emphasis added) (2 AR 532.) Thus, he acknowledged that the City-approved plans did not represent the “extensive grading” he feared would actually occur. As aresult, Appellants’ expert admits that the “extensive grading” could only actually take place pursuant to a modifiedpermit (which would be subject to further review under CEQA). Consequently, there is absolutely no disagreement among experts regarding what the plans depict, whatthe City authorized and, thus, the impacts of the Project. Rather, Appellants’ expert only offered testimony regarding what he feared might happen in contravention of the City’s approval. This cannot, and does not, form the basis of a significant environmental impact under CEQA. As a result, the evidence submitted by Appellants is not substantial evidence becauseit is not based on facts, is clearly erroneous, and is misleading. Even an expert cannot manufacture a significant impact by ignoring the reality of the project.'' “Unsubstantiated opinions, concerns, and suspicions about a project, though sincere and deeply felt, do not rise to the level of substantial evidence.” (Leonoffv. Monterey County Bd. of. '' The fact that a Ph.D. in mathematics maytestify that 2+2=5 is not substantial evidence for that proposition. -73- Supervisors (1990) 222 Cal.App.3d 1337, 1352 [erroneousinformationthat is.corrected by other evidence in record may be disregarded].) 4, Even Assuming a Reasonable Possibility of Significant Geotechnical Impacts, Appellants Failed to Show that Such Impacts Were Due to Unusual Circumstances Another problem with the Court of Appeal’s decisionis that, under the unusual circumstances exception,it is not enough for Appellants to show a reasonable possibility of a significant impact. Rather, Appellants must show that such an impactis “due to unusual circumstances.” (Guidelines § 15300.2.) No such showing was madein this case, and the Court of Appeal failed to addressthis issue. The only purportedly unusual circumstance here wasthe size of the proposed home. However,there is no evidencethat the alleged geotechnical impacts discussed aboveare dueto the size of the homein a waythat differs from the typical new construction or in-fill project. Accordingly, the Court of Appeal decision is wrong on this ground as well. 5. The Court of Appeal Erred By Holding that the Unusual Circumstances Exception Was Triggered By Allegations of an Impact of the Environment on the Project The Court of Appeal further erred whenit held that the geotechnical comments of Mr. Karp required the City to apply the unusual circumstances exception. The Court held that Mr. Karp’s assertion that “seismic lurching of oversteepenedside-hill fills” would occur was substantial evidence upon whichit could be fairly argued that the Project “may have[a] significant environmental impact,” and that therefore categorical exemptions were inapplicable. (Opinion, 18.) This conclusion is wrong, as a matter of law. Any “seismic lurching” that might conceivablyoccur would be an effect of Berkeley’s existing earthquake-prone environmenton an alleged “side-hill fill” element of the Project. Case law makesclear that CEQA -74- does not require agenciesto analyzethe significance of impacts of the existing environment on a proposedproject, and furthermoreestablishes that evidence of such impacts is not capable ofraising even a “reasonable possibility” that the Project would have a “significant effect on the environment”that requires application of the unusual circumstances exception. Under CEQA,a “significant effect on the environment”is a substantial, or potentially substantial, adverse change in the environment. (§ 21068.) Under the Guidelines, this means “an adverse change in any of the physical conditions within the area affected by the project including land,air, water, minerals, flora, fauna, ambient noise, and objects of historic or aesthetic significance.” (Guidelines § 15382.) Numerouscases have made clear, however, that potentially adverse effects ofthe existing environment on a project cannotconstitute significant environmental effects that require CEQA review. In Bairdv. Court ofAppeal (1995) 32 Cal.App.4th 1464, 1468, the court held that evidence of existing soil contamination,at the site of proposed construction of a drug and alcoholtreatmentfacility, could not support a fair argument of a potentially significant environmental impact. The court held that such evidence at mostindicated that preexisting site conditions might have an adverse effect on the proposedfacility. (Ibid.) Such effects, the court held, are “beyond the scope of CEQA,since “[t]he purpose of CEQAis to protect the environment from proposedprojects, not to protect proposed projects from the environment.” (/bid.) A similar result was reached in South Orange County Wastewater Authority v. City ofDana Point (2011) 196 Cal.App.4th 1604 (“SOCWA”), In that case, the court held that evidence that a proposedresidential development would experience odor impacts from a nearby sewage treatment plant was incapable of supporting a fair argumentofa potentially -75- significant environmental impact. “SOCWA’s objection,” the court wrote, “essentially turns CEQA upside down. Instead of using the act to defend the existing environment from adverse changes caused by a proposed project, SOCWAwantsto use the act to defend the proposed project... from a purportedly adverse existing environment... .” (Ud. at 1615.) And most recently, in Ballona Wetlands, the court held that CEQA did not require an EIR for construction of a mixed-use developmentto evaluate potential impacts of coastal inundation on the project site due to global warming. (Ballona Wetlands Land Trust v. City ofLos Angeles (2011) 201 Cal.App.4th 455, 473-474,citing SOCWA and City ofLong Beach v. Los Angeles Unified Sch. Dist. (2009) 176 Cal.App.4th 889, 905 [EIR was not required to examine purported impacts of emissions from nearby freeway on staff and students of proposed school].) These cases makeclear that evidence suggesting that existing environmental hazards may adversely affect a project is legally incapable of supporting a fair argumentofa potentially significant environmental impact of that project. | Consistent with these cases, at least one court has specifically held that allegations of the effect of existing seismic risks on a proposed project are not relevant when considering whether the unusual circumstances exception applies. That case concerned a challenge to an agency’s determination that two school closures were exempt from CEQA. (San Lorenzo Community Advocatesfor Responsible Education v. San Lorenzo Valley Unified Sch. Dist. (2006) 139 Cal.App.4th 1356, 1389-1390.) Amongthe grounds for challenge wasa claim that the agency should have found the unusual circumstances exception applied, since the closures would transfer students to another school that wasalleged to be in a high seismic-risk zone. (/d. at 1389-1393.) The court held that, since the seismic risks already existed, evidence that the project would expose -76- students to that risk was not evidence of an “environmental impact” capable of serving as the basis for the unusual circumstances exception. (/d. at 1392.) Therefore, the evidence upon which the Court of Appealin this case relied to hold that there was a reasonable possibility that the Project may result in a significant impact, and therefore that a categorical exemption could not be used, is inadequate for that purpose as a matter of law. The Court noted that Mr. Karp opined that the Project could not be constructed as proposed and approvedbythe City, but would instead require additional construction activities, including the placementof“side-hill fills.”. (Opinion, 4-5, 18.) Mr. Karp further opined that the alleged side-hill fills would be subject to “seismic lurching” dueto the location of the Project site “alongside the majortrace of the Hayward Fault.” (/d.at 4.) Mr. Karp’s evidence, therefore, supported at most an argument that the allegedly required “side-hill fill” componentofthe Project would be adversely affected by seismic events due to an existing fault line. The record contains no evidencethat alleged “seismic lurching” would cause damage to the environmentother than to the imagined “side-hill fill” elementofthe Project itself. This is exactly the sort of evidence of a potential adverse effect ofthe environment on the Project that courts have uniformly held to be legally incapable of establishing a potentially significant environmental impact that requires analysis under CEQA. Accordingly, the Appellate Court erred, as a matter of law,in finding that the unusual circumstances exception applied. IV. THE COURT OF APPEAL ERRED IN ORDERING THE CITY TO PREPAREAN EIR Finally, the Court of Appeal erred in ordering the City to prepare an EIRafter setting aside the City’s categorical exemption determination, rather than allowing the City to exercise its discretion as to whether -.77- alternative procedures under CEQA would be more appropriate. (Opinion, 20.) CEQA affirmatively prohibits a court from directing an agency to exerciseits discretion in any particular way. Section 21168.9, subdivision (c), provides in relevant part: “Nothing in this section authorizes a court to direct any public agencyto exerciseits discretion in any particular way.” This provision affords lead agencies a substantial amountofdiscretion throughout the multi-step CEQA process to determine whatlevel of environmental review is appropriate. Here, because the City initially found the Project to be exempt, it did not have occasion to consider what type of environmental document would be appropriate, such as another exemption, a mitigated negative declaration, or EIR. As a consequence, the appropriate remedy should have been to remandthe matter to the City to exerciseits discretion to determine what CEQAreview is appropriate. The Court ofAppeal’s commandthat the City prepare an EIR deprived the City of its discretion and violated the plain languageofsection 21168.9. | The court’s orderalso runs afoul of an unbrokenline of authority holding that where there is more than one way for an agency to comply with CEQApursuantto a court’s decision finding non-compliance, then the appropriate remedyis an ordersetting aside the agency’s decision and remanding the matter to the agency for further consideration. In Gentry v. City ofMurrieta, supra, 36 Cal.App.4th at 1424, for example, the court vacated a city’s negative declaration, but held that: Nothing in this opinion should be taken to meanthat the City must prepare an EIR for the Project. When the City takes up the matter again, it may consider: whether ... an SEIR is required; whether the Project is partially exempt under section 21083.3; whetherto use tiering; and whetherto propose a new mitigated negative declaration. -78- Other cases recognize that CEQAfirmly prohibits courts from ordering an agency to exercise its discretion in any particular way when an agencyretains the discretion to choose amongalternatives tosatisfy its obligations under CEQA. (See City ofMarina v. Board ofTrustees of California State University (2006) 39 Cal.4th 341, 369 [reversing a writ that infringed on the agency’s discretion]; California Unionsfor Reliable Energy v. Mojave Desert Air Quality Mgmt. District (2009) 178 Cal.App.4th 1225, 1248 [ruling setting aside finding of categorical exemption did not preclude agency from finding another exemption applied]; Tuolumne County Citizensfor Responsible Growth, Inc. v. City of Sonora (2007) 155 Cal.App.4th 1214, 1232 [disposition “should not be construed to require City to exercise its lawful discretion [under CEQA] in a particular way.”]; Federation ofHillside & Canyon Associations v. City ofLos Angeles (2000) 83 Cal.App.4th 1252, 1266 [courts cannotdirect agency to exercise its discretion in particular way]; San Bernardino Valley Audubon Soc’y v. Metro. Water Dist. (2001) 89 Cal.App.4th 1097, 1103 [same]; Lincoln Place Tenants Assn. v. City ofLos Angeles (2007) 155 Cal.App.4th 425, 453 [same]; Protect the Historic Amador Waterways v. Amador Water Agency (2004) 116 Cal.App.4th 1099, 1112 [same].) Therationale for this rule protecting an agency’s discretion under these circumstancesis a function of the constitutional separation ofpowers. (See Western States Petroleum Association, supra, 9 Cal.4th at 572.) These principles explain why the “corrective power” of the courts under CEQAis “distinctly limited - and essentially negative.” (Schellinger Bros. v. City of Sebastopol (2009) 179 Cal.App.4th 1245, 1266.) CEQAthus recognizes that “a public agency may be directed to comply with CEQA,or to exercise its discretion on a particular subject, but a court will not orderthat discretion to be exercised in a particular fashion, or to producea particular result.” (bid, citation omitted.) -79- Forall of these reasons, this Court should vacate the Court of Appeal’s ruling on remedies. CONCLUSION The City and the Kapors respectfully request that the Court reverse the Court of Appeal judgment. DATED:July “7, 2012 MEYERS,NAVE, RIBACK, SILVER & WILSON By: Locaameae al Amrit S, Kulkarni Attorneys for Réspondents and Real Parties in Interest Mitchell Kaporand Freada Kapor-Klein DATED:July 28, 2012 ZACH COWAN,City Attorney >LauraMicKinney Attorneys for Respondents City of Berkeley and City Council of the City of Berkeley 1936820.1 -80- WORD CERTIFICATION I herebycertify that, as counted by my MS Word word-processing system,this brief contains 23,385 words exclusive of the tables, signature block, the quotation of issues pursuant to California Rules of Court, Rule 8.520(b)(2) andthis certification. Executed this /7 day of July, 2012 at Oakland, California. LdES Amrit S. Kufkacai2--S -81- PRACTICE OEE SED California Environmental Quality Act SECOND EDITION 1 Authors StephenL. Kostka Michael H. Zischke __ CEB Attorney Editor Ann H.Davis March 2012 Update Authors Stephen L. Kostka Michael H. Zischke CEB Attorney Editor Ann H. Davis S:. eee os} fp SMa CONTINUING EDUCATION OF THE BAR = CALIFORNIA Oakland, California Forupdate information call 1-800-232-3444 Website: ceb.com RE-33784 §1:22 Practice Under the California Environmental Quality Act * 20 of Mammoth v Board of Supervisors, supra, was probably even more important than the result in the case. The court held:(8 C3d at 259) that the Legislature intended [CEQA] to be interpreted in such manner as to afford thefullest possible protection to the environment within the reasonable scope of the ‘statutory language. Citing precedents interpreting the’ National Environmental ‘Policy Act of 1969 (NEPA) (42 USC §§4321-4370h), the court carved out’ an active role for the courts '‘in enforcing CEQA.’ 8 C3d at 261. §122 Legislative, Response to Friends of . MammothDecision - “When Friends.ofMammothv Boardof Supervisors (1972) 8.3d 247, 104.CR;761,, was decided in September 1972, ,agencies and the construction industry .were confused because they, had. formerly assumed that CEQA did not; apply to. private projects. In response to reports that previously approved projects were being stopped in progress, the legislature crafted a compromise within three months that was the first .significant-amendment-of-the,-statute. In tandem with enacting Pub ‘Res C §21065to confirm the holding. in Friends of Mammoth, the iegislature enactedshort statutes. oflimitation on CEQA-based challenges to project approvals anda 120--daymoratori- um on the:application‘of CEQA to private,Projects. “See! Comment, rie EnvironmentalQuality Act,3 Ecology’ LQ349" (1973). La e123 3 Judicial. Interpretation FollowingFriends,of _ Mammoth,Decision, ant "Followingtthe approachin Friends.ofMammothviBoard ofSuper- visors. (1972) 8 ,C3d, 247, 104 CR: 761, later.,California. Supreme Court:.cases defined fundamental. principles. governing the-CEQA process. In No. Qil, Inc. v. City of Los. Angeles. (1974) 13,.€3d,:68, 85, 118 CR-34,.the supreme court. stated that an EIRshould be prepared whenever.an agency action “arguably” might have a.signifi- cant. adverse environmental impact. The court.generally. rejected agency attempts to characterize governmentactions as “nonprojects” outside CEQA’s reach. See, ¢.g., Fullerton Joint Union High. Sch. 3/12 195 '* Is the. Project Exempt? : §5.3 to as categorical exemptions (14 -Cal Code Regs §§15061(b)(2), 15354). The categorical exemptions are found in the CEQA Guide- lines. (14 Cal Code Regs §§15300-15329). See §85.68-5.109. Finally, even. if a.project:does not fit within a statutory or a categorical exemption,itcan be exemptfrom CEQA underthe gener-al pule that “CEQAapplies only. to projects which have the potential for causinga Significant effect on the environment.” 14 Cal. Code Regs. §15061(b)(3). ‘This rule -is known as. the “common sense” ex- emption, and was. adopted as patt., of. the Guidelines to avoid the possibility,that projectsthat obviouslyshould be exemptmight need- lessly. be.required. to,comply with .CEQA’s review requirements. - Accritical differencebetweenstatutory and categorical exemptions isthat, nlikestatutoryexemptions, categorical exemptions are sub- Jject-19.exceptions that defeat, the,use of, theexemption. Great Oaks WaterCo.,v.SantaClaraValleyWaterDist. (2009) 170. CA4th 956, 966 n8,.88.CR3d 506; Communities for a Better Env'tv California Resources Agency (2002) 103 CA4th 98, 128, 126 CR2d 441, Thus, Statutory.exemptionsareabsolute; the exemption appliesifthe project fits within,its terms.In contrast, whenconsidering useofa categoricalexemption;:ia lead agency..considers ‘both whether the activity, fits within the,termsof the exemption and whether one of the exceptions mightapply.to-defeatuse ofthe exemption. On exceptions. tothe ‘Categorical, exemptions,see ,§§5.70-5.71... Gy eR maeat eke, ;* Anotherdifferencebetween statutory and categorical exemptions reflects the,nature of, categorical, exemptions as “classes of projects” (or categories ofprojects) that the Secretary of the Natural Resources ‘Agency has’ fouriddonot have’ a’significaittefféct.’Many‘categorical exemptions ifi¢lude a géhetal description’ of the ‘category ‘or‘activity that’ is excluded: Unilike” statutory’éxémptions, “however, many of the categorical exemptions set forth examples of ‘the types of‘activi- ties covered by the exemption. Theseexamplesare typically listed as nonexclusive, and; basedoii that chatacterization,itis appropriate for lead:agencies to; apply.the exemptionto activitiesthat are similar ‘to: thelisted: examples. California Farm Bureau Fed’nv California Wildlife: Consery. Bd. (2006) 143.CA4th 173, 189, 49 CR3d.169 (rejecting. use: of exemption. because sthe activity was. not similar to-the listed: examples); Centinela Hosp. Ass’n v City of Inglewood (1990)225 CA3d‘1586,1600, 275:CR901 (upholdinguseof exemp- tion’ because the activity was similarto the listed examples). 3/12 cme §5.72 Practice Under the California Environmental Quality Act * 248 (1976) 18 C3d 190, 204, 132 CR 377. The Wildlife court. held that, because the Secretary of the Natural Resources Agency may exempt only. activities that do nothavea significant effect on the environment (Pub Res C §21084), a reasonable possibility that an activity. will have a-significant effect on the environment precludes.a categorical _ exemption. See also. International Longshoremen’s. &,. Warehouse- men’s Union, Local. 35 v-Board. of Supervisors (1981) 116 CA3d 265, 275, 171 CR 875; Dehne v County of Santa, Clara (1981) 115. CA3d 827, 842, 171: CR. 753. As.the :court. explained in Azusa Land Reclamation Co. v-Main.San Gabriel:Basin Watermaster(1997) 52,CA4th 1165, 61 CR2d 447, this exceptionapparently was adopted to, allow,agencies to .determine: which:-specific. activities; ..within: a class. of activities that,.do not: normally threaten the; ,environment, should be excluded from ‘the exemption, -andgiven:furtherenviron- mental, evaluation. The,unusual-circumstances¢xception applieswhen the:circumstances of a:project differ from the circumstances‘ofipro- jects-covered by a particular categorical exemption, and:those’circum- stances‘create an. environmental risk : that ‘is inconsistent: withthe exemption; Seealso Fairbank.v. City. of Mill Valley(1999) 75.CA4th 1243, 1260,.89 CR2d 233 (exception can:.betriggered by. showing that, some.. feature of. project: distinguishes‘it from:* ordinary. use, of categorically exempt -project).- _ Under..14. Cal. Code;Regs §15300.2(c),. an.-_ activity, that would otherwise be subject to a categorical exemption is excluded:‘from the exemption if: “there isa.reasonable.possibility, that theactivity wil. have..a significant.effect. on;-the, environment, due.to; unusual circumstances:”,(Emphasis added.) See; City,of;Pasadena.y,State (1993). 14 CAdth 810,.824,.17.CR2d, 766;;-Application.of.this:itest involves:two distinct inquiries: (1) whethertheproject: presents;aun- usual, circumstances, and: (2):whether thereis a, reasonable;ipossibility circumstances.“Banker's Hill,“Hillcrest, “Park W. ‘Community.Pres- ervation Group v City of San Diego (2006) 139 CA4th 249, 261, 42 CR3d 537. See also Turlock Irrig. Dist. v Zanker (2006). 140 CA4th 1047, 1066, 45 CR3d)467.5“Asnegativeanswer to ‘either question meanstheexception ,does not apply.” Santa Monica,Cham- ber of Commerce v. City of Santa ‘Monica (2002) 1101.CA4th 786, 800, 124.-CR2d 731, For example, in WollmervCity.of.Berkeley (2011) 193 CA4th 1329, 1351, 122 CR3d° 781, thé‘court Tejected claims that the location of an infill project at a‘crowded intersection 3/12 §5.127 Practice Under the California Environmental! Quality Act * 298 asa matter of law, the project was “similar to” the nonexclusive examples listed in the CEQA Guidelines. Centinela Hosp.. Ass’n v City of Inglewood (1990) 225. CA3d 1586, 1600, 275 CR 901; see also California Farm Bureau Fed’nv California Wildlife Conserv. Bd. (2006): 143) :CA4th 173,189, 49 CR3d 169 (rejecting use of an exemption because. the activity was.not “similar in kind” to the listed examples). In: contrast; in :a ‘decision «reflecting the fact that the. project: would have major,. significant:.environmental impacts, Azusa Land Reclamation Co: v-Main San Gabriel Basin Watermaster (1997) 52 CA4th 1165,61.CR2d:447, the court:rejected a-categorical exemption: determination, : interpreting narrowly the terms: used in the exemption: on } which the agency relied. ne ~The ‘same test applies toa decision: that, a project doesnotfall within, one of the ‘exemption: categories. The agency’s. decision -will be upheld if it issupported: by. substantial ‘evidence in: the record. Meridian Ocean Sys. v State Lands Comm’n,+0)2222 CA3d'153, 169,.271. CR 445.. etl eye hhort E. StandardofReview for’“Exceptions oS , toCategoricalExemptions’a + ed os CORP EPEDS op bios : §5.127. 1. Significant Effects,Exceptionaand. OtherGeneralExceptions. ....- 0. Tt is unclear what‘standard ‘applies to‘fudicial séview of questions of fact when itis a8serted: that’ an ‘activity that would‘otherwise be categorically ‘exempt is subject to’ one’‘of: the'‘three general“excep- tions -to the categotical: exeniptions. ‘These ‘three generalexceptions (significant impacts due’to’ unusual ‘circumstances; significant cumu- lative impacts, and: impacts'‘on:a’ uniquely ‘sensitive environment) are'set forth in 14 Cal Code: Regs'§15300.2(a)-(c). See’§§5:71-5.74. One view’ is that the‘standard substantial evidence’tedt ‘does‘not apply ‘and that any substantial evidence ‘in’ the record that significant impacts might result triggers‘thesignificant effectsexception: to the categorical exemptionseven though’there is: ‘substantial evidence to the contrary. This ‘is the samestandardtised' to 'teview adoption ofa. negativedeclarationin a case alleging that the project may have significant effects on theenvironment: See §6.37: - In Dunn-Edwards Corp. v Bay Area Air Quality Mgmt. Dist. (1992) 9. CA4th 644, 11 CR2d 850; the court ‘found. that possible adverse impacts precluded a categorical exemption and recited the 3/12 299 © Is the Project Exempt? §5.127 “fair argument” test that applies to negative declarations: An EIR must be prepared whenever it can be fairly argued on the basis of substantial evidence that the project may have significant. environ- mental impacts, even though. the agency is presented with substantial evidence to the. contrary...On the. fair argument test, see §6.37. The court in Associationfor. Protection ofEnvt’l. Values. v City of Ukiah (1991) 2 CA4th‘720, 3:CR2d; 488,also relied on negative-declaration cases in upholding theagency’s decision to find a project exempt only after. reviewing therecord to-determine whether any. substantial evidence supporteda fair. argument that oneof: the:“exceptions to the categorical exemptions: applied. “In:Azusa Land Reclamation; Co: v MainSan Gabriel Basin.Water- master. (1997): 52 CA4th:1165,.61-CR2d-447,, the, court applied the fair argument test to a determination that,the. exceptionin 14 Cal. Code ;Regs. §15300.2(c). precludes.an. exemption.df. there ;is a “reasonable, possibility”.the project will result:in’a significant effect on the environmentdue to:unusual:circumstances. The court,reasoned that | because; the, ‘significant,-effects exception is. triggered-by the possibility of. a,Significant.effect, the,exception should apply when thereis:substantial evidence in the, recordshowing that a.significant effect might: occur, The:court;in Banker’s Hill, Hillcrest,;Park W. Community; Preservation. Group,v. Gity: ofSan: Diego. (2006). 139 CAA4th249; 261,.42.CR3d-537,.cameto. the same.,conclusion based on the exception’s use of the term “reasonable possibility””..as well as the policy: that,only,activitiesthat.do. not, have. a.significant. effect on,,,the; envizonment,.can.:be-,declared ,.categorically,exempt from CEQA. 1139. .CA4th: at_266. With..respect to. the..question. whether an.‘impact.would, result, from, an. “unusual: circumstance,” however, the: court noted that, the agency’s. factual. determinations. regarding theTelevant,circumstances wouldbe reviewed under the, substantial evidence, test;, while. the determination-whether.those. circumstances are. unusual, would normally,involve a.question of law. 139 CA4th at,,262.n11..Seealso.Wollmer, v City.ofBerkeley (2011) 193 CA4th 1329, 122/CR3d781,(citingBankers Hilland applying fair argument Standard,butfinding noevidence.to, support claimedfair argument); City ofPasadenavState(1993) 14 CA4th810, 17 CR2d 766 (finding that.exception didnot apply. but apparently, assuming that substantial evidenceof significant impacts: would be: sufficient to trigger the exception,precluding an,exemption). . The. alternative view is that the questions of fact relating to the 3/12 §5.127 Practice Under the California Environmental Quality Act * 300 application of the significant effects exception must be«reviewed underthe traditional substantial evidence test: For example, the court in Dehne v County of Santa Clara (1981) 115.CA3d 827, 171 CR 753,held that a reviewing courtis limited tothe’ substantial evidence test and may not independently weigh*the evidence: to’‘idetermine whether a significant impact: on the environment might’ résult from a project subject to’ a categorical exemption. InCentinela’ Hosp. Ass’nv City of Inglewood (1990) 225°CA3d 1586, 1601, 275-CR 901,the court affirmed an exemption, holding that: substantial evi- dence supportedthe city’s implieddetermination‘that‘the proposed facility would not cause any significant environmental’ effects and rejecting: the arguments about conflicting: evidence as-a requestthat the court “adopt an improper ‘standard! oftreview and’ independently réweigh’the’evidence:” poh Be Taaching a In Association: for ‘Protection’ofErivt'l Values v City’of‘Ukiah (1991)'2.CA4th 720, 728 n7; 3CR2d 488,‘the: court’ noted: that a‘“teasonable case” may be‘made‘thatthe “fair argument” tést ‘iis not appropriatefor a decision’ that’a project! is categorically”exeiiipt and‘that‘the traditional’ substantial evidence ‘test°applies. Similarly, in Fairbank 'v' City of: Mill: Valley’ (1999)15”CA4th'1243; 1259, 89 CR2d 233; the court récognized'the: split’‘ih authoritybut found it unnécessary* to decide which standard°ofsreview* ‘applied:-becatse there’ iad:been no’‘showing:of unusualcircumstances triggering ‘the exception.* ety x a Hoott fe aap 2 ocoeary afb as * [threeother decisions,the’ courts”recophized'‘the’ splitinatithority, but: fourid-it unnécessary to decidéwhich’ standard’ applied because there‘was‘no’ substantial évidence! in‘the’ recordthat would support the clditned“excéption‘to the exemption, ‘so thie:challenge”failéd'under either standard! Seé Hines v'California Coastal Comm’n'(2010) 186 CA4th830,856, 112°CR3d 354(citing‘this’ book)’ (noevidence in ‘técord-that project ‘wouldhave’a significant imipact dué’ to’whusual circumstances or that significant cumulative ‘ithipacts' would’ occur); San: Lorenzo Valley Community’ Advocates for:‘Responsible«‘Educ. v San ‘Lorenzo’ Valley Unified Sch?Dist:'(2006)139‘CA4th 1356, 1375; 44: CR3d 128; Santa ‘Monica’‘Chamber of’ Comiierce'v'City of‘Santa ‘Monica (2002) 101° CA4th '786, 796, 124°CR20°731. ‘See also Apartment Ass’n of Greater Los Angeles v‘City ofLos’Angeles (2001) 90CA4th 1162, 1175, 109 CR2d 504° (vague: and unsubstan- tiated expert opinion and public’ controversy are not sufficient’ ‘to trigger application of an exception). By Contrast, in another case, 3/12 301 * Is the Project Exempt? . §5.128 - the court. recognized the split in authority and foundthat the evidence was sufficient to support the claimthat an exemption. was barred by the exception for significant impactsdue to.unusual circumstances. Committee to Save the Hollywoodland Specific Plan v.City of Los Angeles (2008). 161. CA4th 1168, 1187, 74.CR3d.665..., PRACTICE TIPS» As a practical matter, thé ‘Courts“tendto”defer ‘to an agency’s determination’ that “an ‘action’ is “categorically exempt. If there is support for the agency’sdecision inthe “record andif there is no substantial evidence ofasignificant impact, a reviewing court will ordinarily uphold ' it’’Given’ the stringent standard of review’for ‘negatis declar ations’ ‘(see ~ §6.37), an agency should ordinarily find a‘project‘to be exempt from CEQA, ‘rather ‘than “adopta negative|‘declaration S when “thereis a’ choi¢e ‘between ‘the twoCourses “6f “action dnd’ there is no evidenceshowing:a reasonable possibility’that'‘significant ~~ impacts willoccur, aan Also, given, the. uncertainty. regardingthe, standard.‘oftreview cethat tis. applied to claimed exceptions,to the;categorical-exemp: evidence to support a,‘claim that,.an. exception applies. Af there is no evidence supporting such a claim, or-if the,,proffered evidence is’ not:,substantial.- evidence, then, the: agency, should be.-able to determine. that. the, exception does-,not .apply,..and such a determination’ should: withstand.legal. challenge., % ~ Practitioners should’ note ‘that thost Of the “case ‘law’‘discussing the’ standard of review for the 1three general exceptions:“has arisen under the ‘significant effects’ exce :ption.. The ‘Court in Association for Protection of Envt’l Values v Cityof Ukiah (1991) ; CA4th |720, 3 CR2d 488, however, considered all three’ general ‘exceptions, and the court in Santa Monica’ Chamber of ‘Commerce |v ‘City:‘ofSanta Monica (2002) ‘101 CA4th 786, 796, 124° CR2d°731, ‘considéred both’the cumulative iivipact and’‘significant effects‘exceptions.‘Thus, it appears that the uncertainty regardingthe’‘applicable staridard’ of review extends toJudicialreview,of allthree,of the|ge erar l exceptions. §5.128 2. spetiticExceptions AS noted in §5.70,' there até specific exceptions ‘to categorical exemptions that apply to projects that may damage scenic resources 3/12 302.1 * Is the Project Exempt? §5.129 ‘determined to be historic), the case law suggests that, until there are more definitive rulings on the standard of review, agencies should simply evaluate whether there is any evidence submitted to support: the claimed exception. If there is no evidence supporting such a claim, or if the proffered evidence is not substantial evidence, then the agency should be able to determine that the exception does not apply, and such a determination should withstand legal challenge. §5.129 F. Standard of Review for Common Sense Exemption An agency’s determination that the common sense exemption ap- plies presents an issue of fact, and the agency invoking the exemption has the burden of demonstrating that it applies. Muzzy Ranch Co. v Solano County Airport Land Use Comm’n (2007) 41 C4th 372, 386, 60 CR3d 247. Under the terms of the exemption, however, the evidence must support an agency determination that “it can be seen with certainty that there is no possibility that the activity in questions may have a significant effect on the environment.” 14 Cal Code Regs §15061(b)(3). In Muzzy Ranch, the California Supreme Court arguably created some uncertainty regarding the standard of review that is applied to an agency’s use of the commonsense exemption. The court clearly departed from prior case law that had held that even a mere argument could defeat the use of the exemption (see §5.111), and the court plainly stated that whether an activity qualifies for the exemption presents “an issue of fact.” 41 C4th at 386. The court also upheld the exemption in that case based on “the record before us.” Although such statements normally suggest that a court is applying the substan- tial evidence standard, the court did not explicitly refer to that stan- dard. In the authors’ view, the statements in the Muzzy Ranch deci- sion implicitly indicate that the court was applying the substantial evidence standard, and those statements are not consistent with other standards of review. Thus, in the authors’ view, the substantial evi- dence standard applies to review of an agency’s application of the common sense exemption, but the showing that must be made, and supported by such substantial evidence, is a stringent one-i.e., that it is certain that there is “no possibility that the activity ... may have a significant effect on the environment.” 3/12 PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF ALAMEDA Atthe time of service, I was over 18 years of age and not a party to this action. I am employed in the County ofAlameda,State of California. Mybusinessaddressis 555 12th Street, Suite 1500, Oakland, CA 94607. On July Yo, 2012, I served true copies of the following document(s) described as OPENING BRIEF ON THE MERITS OF RESPONDENTS AND REAL PARTIESIN INTERESTonthe interested parties in this action as follows: Susan Brandt-Hawley Esq. Alameda County Superior Court Brandt-Hawley Law Group 1225 Fallon Street 13760 Amold Drive Oakland, CA 94612 Glen Ellen, CA 95442 Court of Appeal First District Court of Appeal 350 McAllister Street San Francisco, CA 94102 BY MAIL: I enclosed the documentin a sealed envelope or package addressed to the person and courts at the addresseslisted above and placed the envelope for collection and mailing, following our ordinary business practices. I am readily familiar with Meyers, Nave, Riback, Silver & Wilson’s practice for collecting and processing correspondence for mailing. On the same daythat the correspondenceis placed for collection and mailing, it is deposited with the United States Postal Service, in a sealed envelope with postage fully prepaid. I declare under penalty of perjury under the laws ofthe State of California that the foregoing is true and correct. Executed on July 4°, 2012, at Oakland, California. | Sit Carak 2 Erika Casady 1933249.1
