While the Project May Change, the Standard of Review Should Remain the Same

• Publication year: 2015
• Author: by Linda C. Klein

While the Project may Change, the Standard of Review should Remain the Same

by Linda C. Klein¹

INTRODUCTION

The California Environmental Quality Act (CEQA) encourages agencies to "tier" environmental analysis when possible, which means to rely on previously prepared environmental documents when those documents studied a project that is the same as or encompasses the subsequently proposed project. This approach is logical. If the agency has already considered the environmental impacts of its decision, there is no need for the agency to repeat the same studies. Repeating studies of environmental impacts that have already been adequately reviewed serves no purpose and wastes valuable resources. CEQA's purpose is not to generate paper, but rather to compel government to make decisions with environmental consequences in mind.²

But what if the subsequent project is not the same as the original project? The agency must carefully determine whether the existing environmental review fully covered that subsequent project. The agency's decision not to prepare a new environmental impact report (EIR) because the existing environmental review covers the potential impacts of the subsequent project is, of course, subject to legal challenge. This article explores the standard of review that applies when such challenges occur.

Through a series of cases, the California Court of Appeal has confirmed that an agency's determination that a later project is "within the scope" of a project already considered in a programmatic EIR is reviewed under the traditional, deferential substantial evidence standard. Now the California Supreme Court is poised to decide whether the same standard of review applies to an agency's decision that a changed project is within the scope of a project previously considered in a mitigated negative declaration (MND).³ For the reasons discussed in this article, the same standard should apply.

A SHORT REVIEW OF CEQA'S STANDARDS OF REVIEW AND WHEN THEY APPLY

When a local agency considers the environmental effects of a proposed project in the first instance, the agency undertakes a three-step inquiry.⁴ First, the agency determines whether the project is exempt from CEQA.⁵ "If the agency finds the project is exempt from CEQA under any of the stated exemptions, no further environmental review is necessary."⁶ Second, if the project is not exempt and the agency determines the project will not have a significant effect on the environment, either as designed or with mitigation, it can prepare a negative declaration⁷ or MND.⁸ Third, if the agency determines the project "may have a significant effect on the environment," the agency must prepare and certify an EIR.⁹

Courts apply one of two standards when considering whether an agency properly determined a project's potential environmental impacts have been adequately analyzed, and if found significant, mitigated to less than significant: the "fair argument" standard and the "substantial evidence" standard. If the agency determined an EIR was not required and approved the project based on a negative declaration or MND, that decision is reviewed under the fair argument standard.¹⁰ The fair argument standard "is derived from [Public Resources Code] section 21151," which "mandates preparation of an EIR in the first instance 'whenever it can be fairly argued on the basis of substantial evidence that the project may have significant environmental impact.'"¹¹ Under this standard, if there is substantial evidence of a significant impact, "contrary evidence is not adequate to support a decision to dispense with an EIR."¹² For example, under the fair argument standard, "if there is a disagreement among experts over the significance of an effect, the agency is to treat the effect as significant and prepare an EIR."¹³ This standard reflects CEQA's "low threshold requirement for initial preparation of an EIR and reflects a preference for resolving doubts in favor of environmental review when the question is whether any such review is warranted."¹⁴

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"The test is markedly different, however, if a project is evaluated after an initial environmental review has occurred."¹⁵ Once review has occurred, courts review a challenge to an agency's decision not to prepare additional environmental review under the deferential substantial evidence standard.¹⁶ Under this standard, an agency's decision is upheld as long as it is supported by substantial evidence, even if other substantial evidence in the record contradicts the agency's conclusion.¹⁷ This standard reflects Public Resources Code section 21166, which prohibits agencies from requiring a subsequent or supplemental EIR unless there would be new, significant environmental impacts.¹⁸ Under Public Resources Code section 21166, once an EIR has been prepared for a project, no additional EIR is required unless one of the following occurs: "(a) substantial changes are proposed in the project which will require major revisions of the environmental impact report"; "(b) substantial changes occur with respect to the circumstances under which the project is being undertaken which will require major revisions in the environmental impact report"; or "(c) new information, which was not known and could not have been known at the time the environmental impact report was certified as complete, becomes available."¹⁹ Public Resources Code section 21166 indicates an intent "to restrict the powers of agencies 'by prohibiting them from requiring a subsequent or supplemental environmental impact report' unless the stated conditions are met."²⁰

The standard of review applied to agency decisions regarding tiered environmental review involves both the fair argument and substantial evidence standards. The tiering provisions in Public Resources Code section 21094 apply when a later project appears related to a program, plan, policy, or ordinance for which an EIR has already been prepared.²¹ Under those circumstances, an agency first must determine whether the events listed in Public Resources Code section 21166 have occurred.²² That decision, if challenged, is reviewed under the substantial evidence standard.²³ If an event listed in section 21166 has occurred, then under section 21094(a) the agency must prepare additional environmental review for environmental impacts that would not be mitigated or avoided as a result of the prior EIR or were not examined at a sufficient level of detail in the prior EIR to enable the agency to devise a way to avoid those environmental impacts.²⁴ The lead agency determines whether the later project "may cause significant effects on the environment that were not examined in the prior [EIR]" by completing an initial study. The similarities between the "may cause significant effects" language in Public Resources Code section 21094(c) and the "may have a significant effect" language in Public Resources Code section 21151 have led courts to conclude that an agency's decision not to prepare a tiered EIR when Public Resources Code section 21094(a) applies (i.e., the later project may have significant impacts not considered in the previously prepared EIR) is reviewed under the fair argument standard.²⁵

SAME OR DIFFERENT? A SIMPLE QUESTION WITH A COMPLICATED ANSWER

When an agency receives an application seemingly related to a project for which it previously conducted environmental review, it must decide whether the later project requires additional environmental review because it has new or more significant impacts than already disclosed.²⁶This is the "within the scope" inquiry that arises when an agency reviews a later project after a programmatic EIR has been prepared²⁷ or when an agency is determining whether to prepare an addendum to existing environmental review rather than new review.²⁸ In each case, the determination turns on whether the events listed in CEQA Guidelines section 15162, which clarifies Public Resources Code section 21166, have occurred.²⁹

The answer to the "within the scope" question is significant, particularly if the agency decides not to prepare an EIR for the later "project," because different standards of review apply depending on the answer if the decision is challenged. As discussed in more detail below, if the agency correctly concludes the later project is within the scope of a project that already has undergone environmental review, then the decision not to prepare additional environmental review will be reviewed for substantial evidence. But if the agency is mistaken, then, because no prior environmental review has been prepared, the fair argument standard would apply. And when an agency decides to proceed without further environmental review, the agency's determination of the relationship between the two projects is often contested.

The above issue has arisen where the initial project was a plan or program, reviewed in a programmatic EIR, and the later project is found to be part of the plan or program.³⁰ But the cases most associated with this issue, Save Our Neighborhood v. Lishman³¹ and Mani Brothers Real Estate Group v. City of Los Angeles ("Mani Brothers"),³² arose when the project applicant made changes to a project that had undergone project-level environmental review and the lead agencies choose to prepare addenda. These cases are important because they highlight the controversy over how a court should review an agency's determination that a later project is the same as or within the scope of an earlier project.

Save Our Neighborhood held that the "threshold question [of] whether we are dealing with a change to a particular project or a new project altogether"³³ "is a question of law for the court."³⁴ Reviewing a question of law involves "a certain degree of independent review of the record, rather than the typical substantial evidence standard which usually results in great deference being given to the factual determinations of an agency."³⁵ A court exercises a similar degree of independent review under...