In an opinion filed November 29, and belatedly ordered published on December 22, 2016, the First District Court of Appeal affirmed the trial court’s denial of a writ petition challenging on CEQA grounds the San Francisco Municipal Transportation Agency’s (Muni) approval of a light rail construction contract. The Committee For Re-evaluation of the T-Line Loop, et al v. San Francisco Municipal Transportation Agency, et al (Mitchell Engineering, Real Party in Interest) (1st Dist., Div. 2, 2016) __ Cal.App.5th __, 2016 WL ___________. The contract was to install the final 900 feet of light rail line needed to complete a partially constructed “Loop” around a City block in the Dogpatch neighborhood, so that trains on the T-Third light rail line will be able to turn around and lay over to meet service needs for special events and peak travel periods. In approving the contract, Muni relied on the 1998 EIS/EIR (FEIR) certified for the two-phase Third Street Light Rail Project to connect southeastern San Francisco by light rail to the rest of the City; it also relied on SF Planning Department statements in 2012 and 2014 that the FEIR analyzed the Loop and that no further CEQA analysis was needed because there had been no substantial changes in the project or the area.

In rejecting plaintiffs’ arguments that the fair argument standard of review under Public Resources Code § 21151 should apply, the Court of Appeal held that substantial evidence supported both the City’s determination to proceed under CEQA’s subsequent review rules (i.e., Public Resources Code, § 21166) and its determination that no further EIR or other CEQA document for the Loop was required. Those interested in the factual and procedural background and history of the light rail project (including the Loop) are encouraged to read the Court of Appeal’s full opinion here. Key CEQA takeaways from the opinion include:

  • “[O]nce an EIR has been prepared for a project, CEQA prohibits the agency from requiring further EIR’s “unless one or more of the following events occurs: [¶] (a) substantial changes are proposed in the project which will require major revisions of the environmental impact report. [¶] (b) substantial changes occur with respect to the circumstances under which the project is being undertaken which will require major revisions in the environmental impact report. [¶] (c) new information, which was not known and could not have been known at the time the environmental impact report was certified as complete, becomes available.” (§ 21166.)”
  • “In reviewing an agency’s decision not to prepare an EIR in the first instance under section 21151, we “must set aside the decision if the administrative record contains substantial evidence that a proposed project might have a significant environmental impact ….” [citation] An agency’s decision not to prepare an EIR in the first instance is upheld “only where there is no credible evidence to the contrary.” [citation]”
  • By contrast to the “fair argument” test recited above, under the “more deferential test [applied] to an agency’s decision not to prepare a further EIR under section 21166 … [that] decision … is upheld if it is supported by substantial evidence in the agency’s record. [Citations]” Further, “[a] party challenging an agency’s decision under section 21166 has the burden to demonstrate that the agency’s decision is not supported by substantial evidence” and “[t]he court defers to the agency as finder of fact, and indulges all reasonable inferences from the evidence that support the agency’s findings, and resolves conflicts in the evidence in favor of the agency’s decision.” (Citations omitted.)
  • Recent Supreme Court precedent has clarified “that the substantial evidence standard of review applies” to the “agency’s determination whether section 21151 (review in the first instance) or 21166 (subsequent review) applies to a particular project.” (Citing Friends of the College of San Mateo Gardens v. San Mateo Community College Dist. (2016) 1 Cal.5th 937, 953.) The decision to proceed under CEQA’s “subsequent review” provisions necessarily depends on an implicit or explicit determination “that the original [CEQA] document retains some informational value,” and this “predominantly factual question” is one “for the agency to answer in the first instance, drawing on its particular expertise.” (Citations omitted.) The Supreme Court has emphasized that in conducting deferential substantial evidence review of such determinations a court’s role “is not to weigh conflicting evidence and determine who has the better argument” and accordingly that “occasions when a court finds no substantial evidence to support an agency’s decision to proceed under CEQA’s subsequent review provisions will be rare, and rightly so; ‘a court should tread with extraordinary care’ before reversing an agency’s determination, whether implicit or explicit, that its initial environmental document retains some relevance to the decision-making process.’” (Citations omitted.)
  • Reviewing the administrative record in light of these relevant legal principles, the Court of Appeal “conclude[d] that substantial evidence supports the determination that the Loop project described in the September 2014 resolution [to approve the contract] was analyzed as part of the [light rail project’s] Initial Operating Segment as described in the [1998] FEIR, and also supports the determination, implicit in the City’s decision to proceed under section 21166, that the FEIR retains informational value with respect to the Loop.” This conclusion was based on the Court’s review of “the language of the FEIR and the 2014 resolution” as well as “[s]ubstantial evidence external to the FEIR [that] also indicates that the Loop is part of the Initial Operating Segment and not part of the Central Subway or an independent project.” Such “external evidence showed that “a significant portion of the Loop … was installed in 2003, during the period of construction for the Initial Operating Segment, which began operation in 2007.”
  • The Court further rejected plaintiffs’ argument that the FEIR’s discussion of the Loop as part of the project’s Initial Operating Segment was not “a detailed, CEQA-compliant analysis of the Loop.” Per the Court: “This argument amounts to an untimely challenge [to] the FEIR, which was certified in 1998. Under [Public Resources Code] section 21167.2, an EIR is conclusively presumed valid unless a lawsuit has been timely brought to contest its validity …. “This presumption acts to preclude reopening of the CEQA process even if the initial EIR is discovered to have been fundamentally inaccurate and misleading in the description of a significant effect or the severity of its consequences. After certification, the interests of finality are favored over the policy of encouraging public comment.”” (Citing Laurel Heights Improvement Assn. v. Regents of University of California (1993) 6 Cal.4th 1112, 1130.)
  • In rejecting plaintiffs’ arguments that the “fair argument” standard should be applied to City’s determination that completing the Loop required no subsequent CEQA review, the Court observed that they misplaced reliance on inapposite quotations from cases dealing with Public Resources Code sections other than section 21166. This case did not involve a determination regarding whether to prepare an initial EIR governed by section 21151 or a tiered EIR following a program or plan EIR governed by section 21094(a). Per the Court: “The FEIR is not a program or plan EIR with respect to the Initial Operating Segment or the Loop: it is a project-level EIR that evaluated impacts and alternatives. A project-level EIR is prepared for a particular project, and examines site-specific considerations in detail, including planning, construction and operation [citations], which is exactly what the FEIR examined for the Initial Operating Segment, including the Loop.”
  • Plaintiffs/Appellants failed to fairly summarize the record evidence supporting the City’s decision and thus failed to carry their burden in making a substantial evidence challenge. Per the Court: “The 2012 and 2014 statements from the Planning Department that the Loop had been analyzed in the FEIR and that no further CEQA analysis was needed, and the memoranda from Muni to which those statements respond constitute substantial evidence that there were no substantial changes proposed to the Loop project that was analyzed in the FEIR and no substantial changes in the area that would require major revisions to the FEIR or the preparation of further environmental impact reports.” (Citations and fn. omitted.) While “[t]he memoranda describe[d] the changes in the area of the Loop since the FEIR was certified, including the completion of two housing developments and a proposal to construct an arena for the Golden State Warriors nearby[,]” “[t]he FEIR assumed extensive new residential and commercial developments in the area and analyzed the impacts of constructing and operating light rail in residential areas, including the area of the Loop.” (The 2013 Environmental Assessment (EA) for the Federal Transit Administration’s NEPA analysis resulting in a Finding of No Significant Impact (FONSI) provided further evidentiary support for City’s decision not to prepare a subsequent EIR.)
  • The Court also rejected plaintiffs’ novel argument that the decision to defer construction of the Loop portion of the Initial Operating Segment past 2003 (when spur tracks on 18th and 19th streets were built) was a “substantial change” in the project. Per the Court: “[T]he Committee does not cite any authority holding that mere delay in completing construction constitutes a substantial change in a project under section 21166.” The CEQA cases cited by plaintiffs “involved not only delays in construction, but also major changes to project design.” (Citing and thus distinguishing Ventura Foothill Neighbors v. County of Ventura (2014) 232 Cal.App.4th 429, 431-432; Concerned Citizens of Costa Mesa v. 32nd Dist. Agricultural Assn. (1986) 42 Cal.3d 929, 934-935.)
  • In holding plaintiffs’ “changed circumstances” argument fell short, the Court observed that “changes in neighborhood do not constitute a change in circumstances that requires a new EIR under section 21166, unless the changes require “major revisions” to an existing EIR. [citations] Here, however, the FEIR anticipated an increase residential use and other development and analyzed the impacts of constructing and operating light rail in residential areas, including the area of the Loop. Among other things, the FEIR addressed the environmental effects of which the Committee complains: noise and vibration, dust, air quality, parking and roadway capacity. [¶] Similarly, new information does not require a new EIR unless it shows effects that were not addressed in the previous EIR or effects that would be “substantially more severe” than those addressed, or shows that the agency refuses to adopt certain new or feasible mitigation measures or alternatives. [citation] The Committee makes no such showing.”
  • Finally, the Court rejected plaintiffs’ argument that Muni failed to follow allegedly “required procedures” by relying on “an unsupported staff conclusion” and failing to make “public, evidence-based, analysis and determination[s].” Among other reasons for rejecting this unsupported argument, the Court held: “These are not procedural flaws, because CEQA does not set forth any particular procedure to support an agency’s decision that a new EIR is not required. CEQA does not require an initial study or public hearing in these circumstances.”

The First District’s belatedly published opinion represents the first California appellate decision to apply the new rules set forth in the Supreme Court’s Friends of the College of San Mateo Gardens decision for reviewing an agency’s decision to proceed under CEQA’s subsequent review rules. It underscores that an EIR has no arbitrary “expiration date,” and that mere (even if substantial) delay in building out a CEQA-reviewed and approved project will not in and of itself require a new EIR. It also shows that a project EIR that accurately describes a long-term project, and anticipates and accounts for future changed circumstances and cumulative development, will not only “retain informational value” so as to justify the lead agency proceeding under CEQA’s subsequent review rules (rather than “reinventing the wheel” by treating a project modification or implementation actions as a wholly “new project”), but may well obviate the need for any subsequent CEQA document even for actions occurring decades “down the line.”