Hilltop Group, Inc., et al. v. County of San Diego et al.
(Case No. D081124) (2024 WL 653387)

In a significant ruling, Division One of the State of California’s Court of Appeal, Fourth Appellate District, addressed a dispute between Hilltop Group, Inc. (Hilltop) and the County of San Diego (County) concerning the environmental review process for a construction and demolition debris recycling facility. The case centers on the California Environmental Quality Act (CEQA) and its application to a project consistent with a general plan that has already undergone programmatic environmental review. Our firm, with David Hubbard as lead counsel, represented Hilltop in the administrative and judicial proceedings summarized below, which culminated in a favorable decision for Hilltop.

Factual Background

In 2011, the County adopted its General Plan Update (GPU), which designated the subject property for industrial use; the environmental impacts of the GPU were evaluated in a certified program environmental impact report (PEIR) prepared pursuant to CEQA. The PEIR conducted a programmatic review of the GPU’s environmental effects, noting that detailed analyses for specific projects would follow to determine further CEQA review requirements. The PEIR also found that some impacts, such as those associated with aesthetics, air quality, noise, and traffic, would remain significant and unavoidable.

The firm’s client, Hilltop, proposed the establishment of a recycling facility (project) on the subject property, aiming to support recycling efforts in line with the County’s environmental sustainability goals. Following its consideration of detailed technical analyses, County staff ultimately determined the project was exempt from further CEQA review, based upon application of Public Resources Code section 21083.3 and its companion regulation, State CEQA Guidelines section 15183, which exempt projects consistent with a general plan for which an EIR has been certified. However, following public opposition, the County Board of Supervisors concluded that a full environmental impact report (EIR) was necessary due to potential significant environmental impacts that allegedly were not fully analyzed in the GPU PEIR. The County Board cited specific concerns about air quality, noise, traffic, and greenhouse gas emissions.

Legal Framework

The Court’s analysis began with an overview of CEQA’s purpose—to evaluate and mitigate the environmental effects of projects before they are undertaken—and the specific exemption at issue. Under Guidelines section 15183, projects consistent with the development density established by existing zoning, community plan, or general plan policies for which an EIR has been certified can be exempt from further environmental review. This exemption aims to streamline the approval process for projects aligning with previously analyzed and adopted plans.

The Court also discussed the standard of judicial review within the context of CEQA in relation to the use of statutory exemptions for projects. It rejected the County’s position that  the “fair argument” standard applied, and instead held that the “substantial evidence” standard applies when reviewing agency decisions regarding statutory exemptions, such as the one provided by section 15183.

Court’s Analysis

The Court first evaluated whether the project was consistent with the County’s GPU, particularly its goals for recycling and waste management. The Court noted the importance of the project’s alignment with GPU policies to qualify for the CEQA exemption. Because the project was consistent with the GPU for which the PEIR was certified, the streamlined process in section 15183 was applicable to the project.

The Court then observed that the language of section 15183 limits environmental review for qualifying projects to those effects that are peculiar and project specific, or not addressed as significant in the prior environmental impact report. The Court held that limiting environmental review to effects not previously examined as significant in the PEIR is essential to avoiding redundancy and streamlining the review process for projects within the scope of a PEIR.

As to whether the project posed new significant environmental impacts beyond those analyzed in the GPU PEIR, the Court scrutinized the County’s rationale for determining that additional impacts—such as increased traffic, noise, and potential harm to local ecosystems—warranted a full EIR. The Court reviewed the applicability of section 15183, focusing on environmental impacts that are peculiar to the project and defined peculiar impacts as those unique to the project or characteristic of only the project.

The Court highlighted that if uniformly applied development policies or standards had been previously adopted with a finding that they would substantially mitigate environmental effects, then an impact should not be considered peculiar to the project unless new substantial information indicates otherwise. Specifically, subdivision (f) of State CEQA Guidelines section 15183 states impacts of future projects, which can be substantially mitigated by policies or standards that have been previously adopted and are uniformly applied, should not be considered “peculiar.” Therefore, the Court focused on whether there was substantial evidence supporting the County’s findings that there are specific impacts from the project that would not be significantly mitigated by these existing policies and procedures. This implies a nuanced approach to assessing exemptions, where the project’s unique impacts are considered in light of the mitigating effect of pre-existing regulatory measures.

Central to the Court’s decision was whether the County Board’s rejection of the staff recommendation was based on substantial evidence of potential significant environmental impacts not previously considered. The Court emphasized the legal standard for overturning agency decisions under CEQA, which requires a showing that the agency’s findings were not supported by substantial evidence. The Court evaluated whether there was substantial evidence supporting the County Board’s findings of peculiar impacts in areas such as aesthetics, noise, traffic, greenhouse gas emissions, and air quality and concluded that the record did not support findings of peculiar impacts that would not be substantially mitigated by previously adopted and uniformly applied policies and standards.

Conclusion

The Court ultimately ruled in favor of the firm’s client, Hilltop, concluding State CEQA Guidelines section 15183 was applicable to the project because it was consistent with the GPU for which a PEIR was certified. The Court held that the County’s decision to require a full EIR was not supported by substantial evidence. This decision underscores the significance of the substantial evidence standard in CEQA litigation and reaffirms the role of general plan consistency in determining the need for further environmental review.

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