Like the fable of the blind men and the elephant, CEQA’s prohibition on “piecemealing” of environmental review is animated by a basic recognition that the “whole” of an action under review is greater than its individual parts viewed separately. (The same important insight also underlies CEQA’s requirement to analyze a project’s cumulative impacts.) But CEQA’s expansive and rather amorphous definition of what constitutes a “project” ensures that its piecemealing rule shares another similarity with the famous fable: what conduct constitutes improper piecemealing often appears to be in the “eye of the beholder” and individual perceptions can differ greatly based on more-or-less subjective factors. Appellate courts have long wrestled with application of the relevant legal principles, which essentially attempt to prohibit a lead agency’s “chopping up” of a project into smaller components so that it can turn a “blind eye” to reasonably foreseeable environmental impacts of the “whole” action.
On March 30, 2017, the Sixth District Court of Appeal issued a published opinion that rejected piecemealing and other CEQA challenges raised by the plaintiff/appellant group Aptos Council to several zoning ordinance amendments separately adopted and reviewed for CEQA purposes by the County of Santa Cruz; the enactments addressed discrete topics, but were all initiated by County as part of its general “regulatory reform” effort to “modernize, clarify, streamline and/or provide [clear] standards” for its land use regulations. Aptos Council v. County of Santa Cruz (2017) ____ Cal.App.5th ____.
While appellant perceived a coordinated and inadequately analyzed project to increase development in ways that would adversely impact the small unincorporated town of Aptos, the Court of Appeal held that County’s Code modernization process did not constitute a single project improperly “piecemealed” under CEQA, and that County’s challenged CEQA review was adequate.
County’s Ordinances Amending Its Zoning Code
The three ordinances at issue amended the Planning and Zoning Regulations title of County’s Code. The first (Ordinance No. 5181, the “Minor Exceptions Ordinance”) was adopted in 2014 and extended the geographic area in which variances characterized as “minor exceptions” to zoning site standards could be administratively approved without a public hearing. An earlier County ordinance (No. 5087) adopted with a negative declaration had provided certain numerically delimited minor exceptions to height, setback, small lot FAR, and total allowable lot coverage standards could be approved for properties within the urban services line and certain mapped areas; Ordinance No. 5181 extended the process of administratively approving such “minor exceptions” to the entire County, and allowed a 25 percent increase in lot coverage for parcels less than 6,000 square feet. County adopted an addendum to the negative declaration for its earlier ordinance finding the amendments would not have significant environmental impacts.
The second ordinance at issue (No. 5171, the “Hotel Ordinance”), also adopted in 2014 (with a negative declaration), dealt with visitor accommodations in the County’s commercial districts. It removed a previous density restriction requiring 1,100 square feet of developable area per habitable hotel room; presumed any room over 400 square feet was two or more rooms; removed an existing 3-story limit (while leaving in place the standard 35-foot height limit); and reduced parking requirements from 1.1 to one space per unit.
The third ordinance (No. 5172, the “Sign Ordinance”), also adopted in 2014 (pursuant to several categorical exemptions from CEQA), allowed administrative approval of certain sign exceptions with a public notice, while providing for a public hearing before the zoning administrator for exceptions exceeding certain limits; previously, any application for signs exceeding County’s regulations required a variance and public hearing.
The trial court entered judgment denying appellant’s petition for writ of mandate challenging County’s approvals. While appellant argued the Sign Ordinance was not CEQA-exempt, that the Hotel Ordinance negative declaration failed to consider the impact of future developments under it, and that County had improperly piecemealed its review of the various ordinances’ impacts, the trial court disagreed. It ruled County’s “regulatory reform efforts” did not constitute a single project under CEQA, that no substantial record evidence supported a fair argument that the Hotel Ordinance could have reasonably foreseeable environmental impacts, and that the Sign Ordinance was CEQA-exempt. Aptos Council appealed.
The Court of Appeal’s Decision
Standard of Review
In affirming, the Court of Appeal noted several relevant principles guided its review. A CEQA “project” is “an activity which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment” and refers to “the whole of an action[.]” (Quoting Banning Ranch Conservancy v. City of Newport Beach (2012) 211 Cal.App.4th 1209, 1220.) “[E]nvironmental analysis ‘should be prepared as early as feasible in the planning process to enable environmental considerations to influence project program and design and yet late enough to provide meaningful information for environmental assessment.’” (Quoting Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376, 395.) Further, “CEQA forbids ‘piecemeal’ review of the significant environmental impacts of a project” (quoting Berkeley Keep Jets Over The Bay Com. v. Board of Port Comr’s. (2001) 91 Cal.App.4th 1344, 1358), and “[t]his standard is consistent with the principle that ‘environmental considerations do not become submerged by chopping a large project up into many little ones – each with a minimal impact on the environment – which cumulatively may have disastrous consequences.’” (Quoting Laurel Heights, 47 Cal.3d at 396.)
The anti-piecemealing rule provides that “an EIR must include an analysis of the environmental effects of future expansion or other action if: (1) it is a reasonably foreseeable consequence of the initial project; and (2) the future expansion or action will be significant in that it will likely change the scope or nature of the initial project or its environmental effects. Absent these two circumstances, the future expansion need not be considered in the EIR for the proposed project.” (Ibid.)
Per the Court of Appeal: “Whether the challenged ordinances constitute a single project under CEQA and whether the County improperly engaged in piecemeal environmental review are questions of law that we review independently.” (Citing Banning Ranch, 211 Cal.App.4th at 1224.)
The County’s Actions Did Not Constitute A Single Project
The CEQA Review Of Which Was Piecemealed
Appellant’s argument that County’s various ordinance enactments were but a single CEQA project relied on CEQA Guidelines sections defining a “project” as the “whole of an action” and including “enactment and amendment of zoning ordinances” (§ 15378(a)), and requiring a “single program EIR” for “a series of actions that can be characterized as one large project and are related either: (1) Geographically, (2) As logical parts in the chain of contemplated actions, (3) In connection with issuance of rules, regulations, plans, or other general criteria to govern the conduct of a continuing program, or (4) As individual activities carried out under the same authorizing statutory or regulatory authority and having generally similar environmental effects which can be mitigated in similar ways.” (§§ 15165, 15168(a).) While appellant argued County’s Code reform efforts met the last three definitions, the Court of Appeal disagreed, and did “not … find the County’s actions in this particular instance – engaging in reform of the zoning code – is a single project under CEQA[.]
The Court noted that “there may be improper piecemealing when the purpose of the reviewed project is to be the first step toward future development” (quoting Banning Ranch, 211 Cal.App.4th at 1223), and cited as an example the Laurel Heights case. There, UCSF relocated its pharmacy school to a portion of a Laurel Heights neighborhood building, acknowledged the university would ultimately occupy the entire building when the remaining space became available, estimated how many faculty, staff and students would populate the fully occupied building, yet failed to discuss in its EIR the additional environmental impacts from such full occupancy. This was “improperly piecemealed environmental review, because it was ‘indisputable that the future expansion and general type of future use [was] reasonably foreseeable.’” (Quoting Laurel Heights, 47 Cal.3d at 396.)
The Court further observed “improper piecemealing [may occur] when the reviewed project legally compels or practically presumes completion of another action.” (Quoting Banning Ranch, 211 Cal.App.4th at 1223, and citing as example Tuolumne County Citizens for Responsible Growth, Inc. v. City of Sonora (2007) 155 Cal.App.4th 1214, 1226 [where court held city improperly piecemealed review of building of shopping center and widening of street, because street widening was condition precedent to shopping center development].) By contrast, no piecemealing occurs when “projects have different proponents, serve different purposes, or can be implemented independently.” (Quoting Banning Ranch, at 1223.)
Distinguishing cases cited by appellant and finding the situation analogous to that in Banning Ranch (which found no piecemealing where adjacent private development and city park projects served different purposes, the park would go forward without the development, and it “was a stretch” to call the development a “consequence” of the park project), the Court of Appeal found Santa Cruz County’s actions did not satisfy both Laurel Heights criteria. While approval of various zoning regulations could conceivably impact the scope or nature of others, and regulatory reforms were reasonably foreseeable in a general sense, the future actions that appellant wanted analyzed under CEQA were not a “reasonably foreseeable consequence” of the project. Rather, while they had the same proponent, “the regulatory reforms [at issue] operate independently of each other and can be implemented separately[,] “ i.e., “they serve different purposes.”
Distinguishing the facts of Tuolumne County and a number of other decisions relied on by appellant, the Court stated:
The “objective” of moderning the County Code is vague. It is not the type of tangible “objective” that has been found to be the basis of a CEQA project. Modernizing and updating the County Code is not, like the objective contemplated in Tuolumne County, analogous to the development of a home improvement center and realignment of a road. All of the cases cited by [appellant] deal with the environmental review and approval of specific development projects. None of them involve the adoption of various unrelated reforms in the context of updating or modernizing regulations.
Noting that while early review is preferred, “premature environmental analysis may be meaningless and financially wasteful” (citing Laurel Heights, 47 Cal.3d at 396), the Court observed that because County’s Code modernization efforts are not “fixed” or “set in stone” requiring “a single environmental review this early in the process would … be meaningless.” Moreover, while CEQA’s requirement to analyze a project’s cumulative impacts – i.e., those of the project together with past, current and probable future projects – in determining whether to prepare an EIR would be relevant to addressing appellant’s concerns, the County’s failure to address such impacts in its reviews here was “readily explained”: “At the time the ordinances were considered, other regulatory reforms that may have cumulative impacts had not yet come to fruition. When future reforms are considered for environmental review, the cumulative effects of all related reforms, as articulated in the CEQA Guidelines, will be examined.”
County’s CEQA Review Of The Hotel Ordinance Was Sufficient
Appellant waived and abandoned its challenges to the Minor Exceptions Ordinance negative declaration and the Sign Ordinance categorical exemptions by failing to raise them in its opening brief on appeal, and the Court thus declined to address the trial court’s findings upholding those County actions. It addressed and upheld the adequacy of the County’s initial study and negative declaration for the Hotel Ordinance, distinguishing numerous cases cited by appellant as concerning the different issue “whether there was substantial evidence of a fair argument that a proposed project may have a significant environmental effect.”
Here, the Court found the relevant “initial inquiry” to be “whether the negative declaration and corresponding initial study should have taken into account the impacts of future development” that might occur under the Hotel Ordinance. However, appellant’s cases were relevant as establishing the principles that a lead agency is not excused from evaluating a project’s growth-inducing effects “simply because it is unclear what future developments may take place” and that it must analyze impacts of the “most probable development patterns.” (Citing City of Antioch v. City Council (1986) 137 Cal.App.3d 1325, 1337.)
However, the cases’ key limiting principles affecting these rules are that only “reasonably foreseeable indirect physical [environmental] changes … caused by the project” need be considered (Guidelines, § 15064(d)), and that “[a] change which is speculative or unlikely to occur is not reasonably foreseeable.” (§ 15064(d)(3).) The Court thus framed the issue as “whether increased hotel developments, such as hotels proposed at higher densities than before, are a reasonably foreseeable consequence of the ordinance.” Despite County’s “stated reasons for pursuing the ordinance – [i.e.,] to facilitate growth” – the Court nonetheless found “the potential for future developments to be too speculative to be reasonably foreseeable.” While various of County’s statements in the record “indicate a hope that hotel developments will occur as a result of the ordinances” nothing in the record demonstrated this was “reasonably foreseeable, rather than an ‘optimistic gleam in [the County’s] eye.’” (Citing Topanga Beach Renters Assn. v. Department of General Services (1976) 58 Cal.App.3d 188, 196.)
The County’s negative declaration considered potential impacts of future hotel development, but concluded they were “speculative until it was known whether any developments would be proposed any, if [so] …, what type of hotels would be built” and there would be no significant impact “because any future developments would be subject to further environmental review under CEQA.” The County did not reach these conclusions without investigation, but contacted “owners of the two most prominent vacant lots” on which hotels could be built and “[they] expressed no foreseeable [sale or development] plan[s]”; further, it tallied the existing parcels on which hotel development could occur, determining which were vacant and developed, and found that 20 of the 34 were already developed with such uses, while noting “the [new] ordinance did not permit the development of hotels in any areas where hotels could not have been developed before.” In essence, there were “no probable future development patterns” for County to analyze “because it is unclear whether the ordinance will in fact induce future development, including development of higher density hotels.” Following its adequate initial investigation, the County thus properly found the potential impact was simply too speculative for meaningful evaluation. This “conclusion that denser hotel developments are speculative [was not based] or [County’s] own failure to compile evidence.” And appellant’s speculation in this regard “failed to satisfy its burden to show there is a fair argument that significant environmental effects may result from the ordinance” as “such speculation cannot amount to substantial evidence” and “[p]ointing to a lack of evidence in the record does not by itself constitute substantial evidence of a significant environmental impact” or invalidate a negative declaration.
This case provides a thorough and helpful analysis of the facts and holdings of numerous piecemealing cases. Causation, independent utility, and reasonable foreseeability of future actions remain significant limiting factors in analyzing a piecemealing claim under CEQA, and – as illustrated by this case – actions united only by a vague general objective without concrete and clearly defined content are less likely to be ruled a single “project” or “program” subject to early programmatic CEQA review as such. Nor is a negative declaration inadequate for failing to engage in speculative analysis of impacts that are not reasonably foreseeable where the lead agency has undertaken a reasonable investigation of relevant facts and not simply tried to hide behind its own failure to investigate and gather relevant data.