Union of Med. Marijuana Patients, Inc. v. City of San Diego

CEQA's applicability : When a public agency is asked to grant regulatory approval of a private activity or proposes to fund or undertake an activity on its own, the agency must first decide whether the proposed activity is subject to CEQA. (Guidelines, § 15060, subd. (c).) In practice, this requires the agency to conduct a preliminary review to determine whether the proposed activity constitutes a "project" for purposes of CEQA. ( Tuolumne Jobs , supra , 59 Cal.4th at p. 1037, 175 Cal.Rptr.3d 601 , 330 P.3d 912 ; see § 21065 ; Guidelines, § 15378, subd. (a) [both defining "project"].) If the proposed activity is found not to be a

3. The Court of Appeal's decision

At issue before the Court of Appeal was the first tier in the CEQA process, the determination by a putative lead agency whether a proposed activity constitutes a project. In particular, the court was asked to decide whether a public agency's amendment of a zoning ordinance constitutes a project as a matter of law.

As suggested ante , two separate provisions of the Public Resources Code are potentially relevant to this question. "Project"

Having held that the Ordinance was not a project unless it had the potential to cause a direct or reasonably foreseeable indirect physical change in the environment, as required by section 21065, the Court of Appeal proceeded to consider UMMP's argument that the City erred in concluding that the Ordinance did not have that potential. ( Marijuana Patients , supra , 4 Cal.App.5th at p. 119, 208 Cal.Rptr.3d 507 .) UMMP effectively conceded that the Ordinance did

UMMP has not suggested any reason why the ordinary presumption requiring a defined term to carry that meaning should not apply in these circumstances, and we aware of none. As noted, the definition in section 21065 is legislatively mandated to apply to section 21080, as well as to the remainder of CEQA. (§ 21060.) Nothing in section 21080 suggests that the Legislature intended to exempt the listed activities from satisfying the requirements for a project. On the contrary, its use of the defined term "project," rather than a generic term such as "activity," suggests that the Legislature intended to incorporate the defined concept. Finally, using the defined meaning does not result in an absurdity or otherwise impair the enforcement of CEQA. It simply confirms that the public agency activities listed in section 21080 must satisfy the same requirement applicable to

In approving the TALUP, the commission initially adopted a resolution finding that the approval was not a project under

Our understanding of Muzzy Ranch is therefore somewhat different from Rominger 's understanding, which UMMP urges here. UMMP argues that Muzzy Ranch 's reference to "a categorical question respecting whether the activity is of a general kind with which CEQA is concerned" ( Muzzy Ranch , supra , 41 Cal.4th at p. 381, 60 Cal.Rptr.3d 247 , 160 P.3d 116 ) makes it unnecessary to consider the substance of a proposed activity. Instead, UMMP argues, it is sufficient to know the nature of the agency action involved - for example, approval of a zoning amendment or of a permit for private land development. On the contrary, as our discussion demonstrates, Muzzy Ranch clearly requires a public agency to consider the substance of a proposed activity in determining its status as a project. What need not be considered is the activity's actual impact in the specific circumstances presented. As Muzzy Ranch noted, the analysis is conducted "without regard to whether the activity will actually have environmental impact." ( Ibid ., italics added.) Similarly irrelevant is the specific type of governmental action required, so long as the proposed

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he judgment of the Court of Appeal is reversed. That court is directed to vacate the order of the superior court denying a writ of mandate and to remand the case to the trial court for further proceedings consistent with this opinion.

We Concur:

CHIN, J.

CORRIGAN, J.

LIU, J.

CUÉLLAR, J.

KRUGER, J.

GROBAN, J.

Our overriding purpose in construing a provision of CEQA, as with any statute, is "to adopt the construction that best gives effect to the Legislature's intended purpose." ( California Building Industry Assn. v. Bay Area Air Quality Management Dist. (2015) 62 Cal.4th 369 , 381, 196 Cal.Rptr.3d 94 , 362 P.3d 792 ( Building Industry ).) In determining that intended purpose, we follow "[s]ettled principles." (

Environmental review : Environmental review is required under CEQA only if a public agency concludes that a proposed activity is a project and does not qualify for an exemption. In that case, the agency must first undertake an initial study to determine whether the project "may have a significant effect on the environment." (Guidelines, § 15063, subd. (a); Friends of the College of San Mateo Gardens v. San Mateo County Community College Dist. (2016) 1 Cal.5th 937 , 945, 207 Cal.Rptr.3d 314 , 378 P.3d 687 ( San Mateo Gardens ).) If the initial study finds no substantial evidence that the project may have a significant environmental effect, the lead agency must prepare a negative declaration, and environmental review ends. (§ 21080, subd. (c)(1); San Mateo Gardens , at p. 945, 207 Cal.Rptr.3d 314 , 378 P.3d 687 .) If the initial study identifies potentially significant environmental effects but (1) those effects can be fully mitigated by changes in the project and (2) the project applicant agrees to

When interpreting the provisions of CEQA, however, we do not consider them in isolation, but in the context of the entire statute. (

Policy considerations favor this interpretation as well. Finding a proposed activity subject to CEQA can lead to additional costs, in time and money, for both a public agency and a private applicant. ( Sky Ranch Pilots , supra , 47 Cal.4th 902 , 909, 102 Cal.Rptr.3d 894 , 220 P.3d 905 .) As section 21065 recognizes, there is no reason to impose those costs by subjecting a proposed activity to CEQA if the activity does not have the potential to affect the environment. Declaring all of the activities listed in section 21080 to be a project would necessarily subject them to these incremental costs without regard to their potential for causing an environmental impact.

The legislative history of sections 21065 and 21080 also supports our conclusion. As

It might be objected that this interpretation of section 21080, subdivision (a), strips the provision of its legal significance, rendering it surplusage (e.g., Berkeley Hillside , supra , 60 Cal.4th 1086 , 1097, 184 Cal.Rptr.3d 643 , 343 P.3d 834 [we should avoid "interpretations that render any language surplusage"] ), but that argument misunderstands the significance of section 21080 within CEQA. Section 21080, subdivision (a) establishes that CEQA applies to

As noted above, we began our discussion of the TALUP's status as a project by observing, "Whether an activity constitutes a project subject to CEQA is a categorical question respecting whether the activity is of a general kind with which CEQA is concerned, without regard to whether the activity

Only as so understood is the nature of the project decision consistent with the scope of appellate review. As noted, we evaluate that decision as a question of law, rather than fact, to be decided on "undisputed data in the record on appeal." ( Muzzy Ranch , supra , 41 Cal.4th at p. 382, 60 Cal.Rptr.3d 247 , 160 P.3d 116 ; see

Although UMMP raised these potential effects in the Court of Appeal, as well as other, less plausible effects, it framed them in the context of the specific circumstances it claimed to prevail in the City, hypothesizing various City-specific reasons why the Ordinance might indirectly produce physical changes. The Court of Appeal understandably rejected these specific impacts as speculative, given the absence of any evidence to support their occurrence. For the reasons discussed above, however, both UMMP's framing of the arguments in this manner and the court's rejection of them put the cart

Finally, the City argues, in passing, that environmental review would be more appropriate at the time each dispensary applies for a conditional use permit, which is required by the Ordinance for operation of a dispensary. We withhold comment on the significance of this argument for tiers two and three of the CEQA decision tree, but we note that the requirement of individual use permits does not prevent the Ordinance from being considered a project if section 21065 is otherwise satisfied. As we observed in Fullerton , supra , 32 Cal.3d at page 795, 187 Cal.Rptr. 398 , 654 P.2d 168 , a local agency "cannot argue" that approval of a regulation is not a project "merely because further decisions must be made" before the activities directly causing environmental change will occur. The City argues that too little is known about the environmental impact of the Ordinance to permit effective environmental review at this stage, but that argument conflates the various tiers of CEQA review. ( Muzzy Ranch , supra , 41 Cal.4th at p. 383, 60 Cal.Rptr.3d 247 , 160 P.3d 116 ["That further governmental decisions need to be made before a land use measure's actual environmental impacts can be determined with precision does not necessarily prevent the measure from qualifying as a project"].) At this initial tier in the CEQA process, the potential of the Ordinance to cause an environmental change requires the City to treat it as a project and proceed to the next steps of the CEQA analysis.

It ultimately might prove true that, in the context of the City, the actual environmental effects of the Ordinance will be minimal. It is possible, as the

1. Statutory interpretation

Statutory interpretation is "an issue of law, which we review de novo."

The Court of Appeal rejected the contrary conclusion of Rominger , supra , 229 Cal.App.4th 690 , 177 Cal.Rptr.3d 677 , because that court's "analysis ignores the definition of a project as set forth in CEQA and the CEQA Guidelines." ( Marijuana Patients , supra , 4 Cal.App.5th at p. 118, 208 Cal.Rptr.3d 507 .) Rominger , in holding that a county's approval of a tentative subdivision map constituted a project as a matter of law under section 21080, did not base its ruling on an analysis of the respective texts of sections 21065 and 21080. Rather, it looked to our observation in Muzzy Ranch , supra , 41 Cal.4th 372 , 60 Cal.Rptr.3d 247 , 160 P.3d 116 , that "[w]hether an activity constitutes a project subject to CEQA is a categorical question respecting whether the activity is of a general kind with which CEQA is concerned, without regard to whether the activity will actually have environmental impact." ( Id . at p. 381, 60 Cal.Rptr.3d 247 , 160 P.3d 116 .) Taking this principle as its

Because the plain language of section 21080 is unambiguous when evaluated in context, it is unnecessary for us to consider

Because we conclude that section 21080 does not declare every zoning amendment to be a CEQA project as a matter of law, we must, like the Court of Appeal, review the City's conclusion that the Ordinance did not qualify as a project under section 21065. On this issue, we part ways with the Court of Appeal.

The governing decision is Muzzy Ranch , supra , 41 Cal.4th 372 , 60 Cal.Rptr.3d 247 , 160 P.3d 116 . The lead agency in Muzzy Ranch was a Solano County commission (commission) established to regulate land uses associated with county airports. ( Id. at p. 378, 60 Cal.Rptr.3d 247 , 160 P.3d 116 .) The activity of concern was the commission's adoption of the Travis Air Force Base land use compatibility plan (TALUP), which set out model land use policies for portions of the county neighboring the military air base. The policies were designed " 'to ensure that future land uses in the surrounding area will be compatible with the realistically foreseeable, ultimate potential aircraft activity at the base.' " ( Ibid . ) The Muzzy Ranch plaintiff was particularly concerned with the TALUP's model policy for a 600-square-mile area exposed to low altitude overflights by aircraft using the base. The policy, which did not apply to developed areas within existing city limits, "purport[ed] to restrict residential development within [areas subject to overflights] to levels currently permitted under existing general plans and zoning regulations. Specifically, the TALUP state[d] that '[n]o amendment of a general plan land use policy or land use map designation and no change of zoning shall be permitted if such amendment or change would allow more

On this issue, the plaintiff contended that the TALUP's limitation of development in the relevant area to existing approved levels could cause intensified development in other parts of the county, a phenomenon referred to as "displaced development." ( Muzzy Ranch , supra , 41 Cal.4th at p. 382, 60 Cal.Rptr.3d 247 , 160 P.3d 116 .) The commission responded that such effects were "inherently too speculative to be considered a reasonably foreseeable effect of an airport land use compatibility plan." ( Ibid . ) We began our analysis by recognizing that "no California locality is immune from the legal and practical necessity to expand housing due to increasing population pressures." ( Id . at p. 383, 60 Cal.Rptr.3d 247 , 160 P.3d 116 .) Given this expectation of growth, we reasoned that a local agency "may reasonably anticipate that its placing a ban on development in one area of a jurisdiction may have the consequence, notwithstanding existing zoning or land use planning, of displacing development to other areas of the jurisdiction." ( Ibid . ) On that reasoning alone, we held that the TALUP's approval might cause a reasonably foreseeable indirect physical change in the environment and therefore constituted a project. ( Ibid . )

Our analysis of the commission's notice of exemption was quite different. In finding the TALUP exempt from environmental review, the commission relied on the "commonsense" exemption of the Guidelines, which applies "[w]here it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment." (Guidelines, § 15061, subd. (b)(3).) In contrast to the decision under section 21065, which we treated as an issue of law, Muzzy Ranch held that the TALUP's eligibility for the commonsense exemption "presents an issue of fact, and ... the agency invoking the exemption has the burden of demonstrating it applies." ( Muzzy Ranch , supra , 41 Cal.4th at p. 386, 60 Cal.Rptr.3d 247 , 160 P.3d 116 .) Applying this standard of review, we held that the commission correctly found that the commonsense exemption applied, notwithstanding our conclusion that the TALUP's possible environmental impact was sufficient to require its treatment as a project. As we reasoned, "When approving a project that is consistent with a community plan, general plan,

Under Muzzy Ranch , a local agency's task in determining whether a proposed activity is a project 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." ( Muzzy Ranch , supra , 41 Cal.4th at p. 381, 60 Cal.Rptr.3d 247 , 160 P.3d 116 .) Applying this test, our discussion of the TALUP's status as a project was brief and straightforward. We made no reference to any evidence in the record bearing on the actual impact of the TALUP on development in Solano County. Instead, the decision restricted itself to an examination of the potential effects that could reasonably be anticipated from adopting a land use policy of the type contained in the TALUP. Reasoning that population growth and resulting development can be anticipated in California counties, and that a policy capping development in one area might be expected to divert this growth to other areas of a county, we found the TALUP to be the sort of activity that could result in a physical change in the environment. ( Id . at p. 383, 60 Cal.Rptr.3d 247 , 160 P.3d 116 .)

To encapsulate the Muzzy Ranch test, a proposed activity is a CEQA project if, by its general nature, the activity is capable of causing a direct or reasonably foreseeable indirect physical change in the environment. This determination is made without considering whether, under the specific circumstances in which the proposed activity will be carried out, these potential effects will actually occur. Consistent with this standard, a "reasonably foreseeable" indirect physical change is one that the activity is capable, at least in theory, of causing. (Guidelines, § 15064, subd. (d)(3).) Conversely, an indirect effect is not reasonably foreseeable if there is no causal 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." ( Ibid .; e.g., City of Livermore v. Local Agency Formation Com. (1986) 184 Cal.App.3d 531 , 541-543, 230 Cal.Rptr. 867 [amendment of local agency formation commission guidelines to permit urban development outside cities constitutes a project]; Kaufman & Broad-South Bay, Inc. v. Morgan Hill Unified School Dist. (1992) 9 Cal.App.4th 464 , 474, 11 Cal.Rptr.2d 792 [creation of a Mello-Roos district for the purposes of funding an anticipated future school system in an undeveloped portion of the city not a project because "the causal link between the [formation of the district] and the alleged environmental impact (construction of new schools) is missing"].)

The somewhat abstract nature of the project decision is appropriate to its preliminary role in CEQA's three-tiered decision tree. Determination of