Numerous California communities regulate broad economic development objectives through general plan goals and policies intended to encourage and support small businesses or to ensure the compatibility of new commercial development with the community or neighborhood. Such objectives are susceptible to a range of reasonable interpretations that are difficult to successfully challenge. On July 13, 2016, the Court of Appeal for the Fourth Appellate District partially published Joshua Tree Downtown Business Alliance v. County of San Bernardino, __ Cal.App.4th __ (2016) (Case No. E062479), a case that illustrates the key legal principles—including the correct standard of review—that can make such challenges a little like tilting at windmills. The case also addresses several CEQA issues (including whether the County adequately considered whether project had the potential to cause urban decay and whether an EIR was required because there was substantial evidence to support a fair argument that the project could cause urban decay) my partner Art Coon will write about on his CEQA Developments blog.

The case arose out of the County’s approval of a conditional use permit for a 9,100 square foot Dollar General store with associated improvements. A coalition of residents and business owners concerned about the nature and future of downtown Joshua Tree—the gateway to Joshua Tree National Park—alleged that the project was inconsistent with several general plan goals and policies. The trial court rejected the group’s argument that the project’s inconsistencies constitute significant impacts under CEQA and, as such, that it should be reviewed under the “fair argument” standard rather than the usual “substantial evidence” standard that applies to claims that a project is inconsistent with the general plan.

The opponents alleged, for example, that the project is inconsistent with policies that “encourage and support small independent businesses” and that “support commercial development that is of a size and scale that . . . is compatible with surrounding development” because the project would compete with and may harm established local businesses. The opponents also argued that the project is inconsistent with policies intended to “discourage regional commercial facilities within Joshua Tree” and to “avoid ‘big box’ commercial developments that are out of character with the rural desert community” because, at 9,100 square feet, the project would be roughly twice the size of the next largest business in Joshua Tree.

The court of appeal first rejected the opponent’s reliance on the fair argument standard to bootstrap their general plan inconsistency claim into a determination that the County erred by adopting a negative declaration rather than an EIR. The court determined that the goals and policies the opponents relied on were not adopted to mitigate environmental impacts but rather are economic development goals adopted to preserve the small-town, rural atmosphere that residents of Joshua Tree prefer. The court thus concluded that any inconsistency between the project and these aspects of the general plan does not implicate CEQA.

The court recited various fundamental provisions of the substantial evidence standard of review applicable to general plan consistency challenges:

  • A governing body’s conclusion that a particular project is consistent with the relevant general plan carries a strong presumption of regularity that can be overcome only by a showing of abuse of discretion. An abuse of discretion is established only if the governing body has not proceeded in a manner required by law, its decision is not supported by findings, or the findings are not supported by substantial evidence.
  • A court may neither substitute its view for that of the governing body, nor reweigh conflicting evidence presented to that body.
  • This review is highly deferential to the local agency, recognizing that the body that adopted the general plan policies in its legislative capacity has unique competence to interpret those policies when applying them in its adjudicatory capacity.
  • Because policies in a general plan reflect a range of competing interests, the governmental agency must be allowed to weigh and balance the plan’s policies when applying them, and it has broad discretion to construe its policies in light of the plan’s purposes.
  • A reviewing court’s role is simply to decide whether the local officials considered the applicable policies and the extent to which the proposed project conforms with those policies.
  • It is important to keep in mind the deferential nature of a court’s review. It is not for the court to substitute its judgment for that of a local agency in making a determination of consistency; rather, the agency’s determination comes to the court with a strong presumption of regularity.
  • Once a general plan is in place, it is the province of elected agency officials to examine the specifics of a proposed project to determine whether it would be in harmony with the policies stated in the plan.
  • It is, emphatically, not the role of the courts to micromanage these development decisions. Thus, as long as the local agency reasonably could have made a determination of consistency, its decision must be upheld, regardless of whether the court would have made that determination in the first instance.
  • A local agency’s findings that the project is consistent with its general plan can be reversed only if it is based on evidence from which no reasonable person could have reached the same conclusion. Thus, the party challenging a local agency’s determination of general plan consistency has the burden to show why, based on all of the evidence in the record, the determination was unreasonable.

Given these important general principles, the court readily rejected the challenge to the County’s general plan consistency determination. Among other things, there was insufficient evidence to show that the project would put local competitors out of business, and the mere fact the project may compete with existing local businesses does not make it inconsistent with the general plan. While the general plan has a policy of encouraging and supporting small independent businesses, it does not require the rejection of all businesses that are not both small and independent. The court held that “ ‘Encourage’ and ‘support’ are precisely the sort of amorphous policy terms that give a local agency some discretion.” The court also held that in determining consistency with the general plan, the County has the discretion to look at the relative size of the building, rather than its absolute square footage.

Joshua Tree Downtown Business Alliance is but the latest in a long line of cases that demonstrate the substantial discretion cities and counties have to interpret their general plans, particularly when dealing with policies that are qualitative or, in the words of the court of appeal, “amorphous.” Project opponents challenging an agency’s general plan consistency determination face an uphill battle meeting their burden of showing why, based on all the evidence in the record, the determination was unreasonable.