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California Supreme Court Provides Guidance on the “Unusual Circumstances Exception” From Applying a Categorical Exemption under CEQA

March 4, 2015
On Monday, March 2, the California Supreme Court issued its opinion in Berkeley Hillside Preservation v. City of Berkeley, clarifying and providing guidance to cities on the use of categorical exemptions for projects under the California Environmental Quality Act (CEQA).
 
 
The city of Berkeley, in approving a permit application to build a large single-family house, relied on two categorical exemptions from CEQA review for the project (Class 3 for constructing small structures including a single-family residence, and Class 32 for an “in-fill development” project). The Court of Appeal held the exemptions did not apply, invalidated the permit approval and ordered preparation of an environmental impact report, based on CEQA Guidelines section 15300.2(c) that states: “A categorical exemption shall not be used for an activity where there is a reasonable possibility that the activity will have a significant effect on the environment due to unusual circumstances.” (Italics added.)
 
The Supreme Court reversed and remanded the case in a majority opinion. The decision confirms that cities should apply a two-part test for determining whether the “unusual circumstances exception” under section 15300.2(c) precludes a city from relying on a categorical exemption(s) for a project. First, the city must determine whether there are any “unusual circumstances” present (subject to the deferential “substantial evidence” standard of review). If not, then the city may rely on a categorical exemption(s) and can look to the local conditions in evaluating unusual circumstances. However, if there are any unusual circumstances, the agency must then determine whether there is “a reasonable possibility” that the unusual circumstance will produce “a significant effect on the environment” (subject to the less deferential “fair argument” standard of review). If not, then the city may rely on the categorical exemption(s) for the project.
 
The California Supreme Court has accepted ten cases covering a broad range of issues under CEQA in the past few years. The League has filed or will file amicus (“friend of the court”) briefs or letters on behalf of California cities in eight of those cases. The Berkeley Hillside ruling is the second decision to emerge from the court from the ten cases, providing much-anticipated clarity for cities on when a categorical exemption from CEQA review may apply to a project.
 
The League congratulates the city of Berkeley on the ruling and also thanks Amanda J. Monchamp and Melanie Sengupta, with the law firm of Holland & Knight for preparing the League’s amicus brief filed in the case.


 
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