In Union of Medical Marijuana Patients, Inc. v. City of San Diego (2019) Cal. LEXIS 6005, the California Supreme Court tackled the illusive question of when is a discretionary action which does not qualify for exemption, “not a project”. Like many other CEQA judicial decisions, the answer does not involve a bright line test.

The decision originated with the City of San Diego amending its zoning code. The effect of this action was to permit cannabis enterprises as a use within a number of zoning districts in the City. The ordinance also had the effect of capping the number of facilities. As part of the code amendment, the City concluded that the action was not a “project” for CEQA purposes, and accordingly did not prepare any formal CEQA documentation. Petitioner Union of Medical Marijuana Patients, Inc., challenged the ordinance on CEQA grounds. The trial court denied relief and at the court of appeal, Petitioner argued that Public Resources Code § 21080 provided as a matter of law that a zoning ordinance was a project. The court of appeal rejected that argument, reaching a contrary conclusion to a similar holding in Rominger v. County of Colusa (2014) 229 Cal.App.4th 690.  The Supreme Court granted review to resolve the conflicting appellate decisions.

The Supreme Court first addressed the potential conflict between Public Resources code §§ 21065 and 21080. The Court ultimately concluded that zoning ordinances were not “projects” per se, notwithstanding the suggestion in § 21080 to the contrary.

The Supreme Court then addressed whether the City reached the correct conclusion when concluding that the ordinance was not a project. On this issue, the Supreme Court reversed. 

The decision draws heavily from the Muzzy Ranch decision involving the airport land use commission’s adoption of a policy precluding additional rezoning with the effect of increasing residential density in areas subject to high levels of overflight noise. Muzzy Ranch Co. v. Solano County Airport Land Use Commission (2007) 41 Cal.4th 372. The commission relied on the “common sense” exemption and did not conduct CEQA review. A property owner challenged the decision, arguing the potential for displaced development to occur elsewhere. In Muzzy Ranch, the Supreme Court concluded that the Commission had incorrectly concluded that the policy adoption was not a project. Nevertheless, the Court concluded that the Commission’s action was otherwise correct on the basis that any displaced development would be consistent with existing general plans and zoning and therefore exempt under Public Resources Code § 21083 and Guidelines § 15183.

The obligation of the lead agency in applying the commonsense exemption is to consider “the potential environmental effects of undertaking the type of activity proposed, ‘without regard to whether the activity will actually have environmental impact,’… a project is a CEQA project if, by its general nature, is capable of causing a direct or reasonably foreseeable indirect physical change in the environment.” Union of Medical Marijuana Patients, citing Muzzy Ranch, supra 41 Cal.4th at p.382. With respect to indirect effects, the lead agency should evaluate two scenarios. An indirect effect is not reasonably foreseeable if “there is no casual connection between the proposed activity and the suggested environmental change or if the postulated causal mechanism connecting the activity and the effect is so attenuated as to be ‘speculative.’” Union of Medical Marijuana Patients citing City of Livermore v. Local Agency Formation Com. (1986) 184 Cal.App.3d 531, 541-543. The Court then cited to examples: adoption of LAFCo policies permitting development outside of cities was a project (Id.) whereas the formation of a Mello-Roos district for the purposes of new school facilities was not a project as the causal connection was missing (Kaufman & Broad-South Bay, Inc. v. Morgan Hill Unified School District (1992) 9 Cal.App.4th 464). 

The Court also noted that the required inquiry was somewhat theoretical, as factual records are rarely developed in circumstances involving the application of commonsense exemptions. Applying the aforementioned criteria, the Court concluded the City’s ordinance had the potential for new uses to established. This in turn created the potential for changed traffic patterns, a reasonably foreseeably indirect impact. Reinforcing the theoretical nature of the inquiry, the court added “the likely actual impact of an activity is not at issue in determining its status as a project.”

When relying upon the commonsense exemption, lead agencies will need to engage in a more abstract evaluation of direct and indirect impacts.    

William Abbott is a shareholder at Abbott & Kindermann, Inc.  For questions relating to this article or any other California land use, real estate, environmental and/or planning issues contact Abbott & Kindermann, Inc. at (916) 456-9595.

The information presented in this article should not be construed to be formal legal advice by Abbott & Kindermann, Inc., or the formation of a lawyer/client relationship. Because of the changing nature of this area of the law and the importance of individual facts, readers are encouraged to seek independent counsel for advice regarding their individual legal issues.