Cities charged with preparing EIRs for proposed projects often look to their general plans and other adopted policies to set thresholds of significance for assessing environmental impacts. A lead agency’s discretion to select a particular significance threshold has long been afforded deference under CEQA’s “substantial evidence” standard of review. Potential impacts assessed under a general plan-based significance threshold have similarly enjoyed deferential review under the substantial evidence standard. However, in East Sacramento Partnerships for a Livable City v. City of Sacramento (2016) 5 Cal.App.5th 281, as modified on denial of rehearing, the Third Appellate District appears to have relied on the less deferential “fair argument” standard in holding that compliance with a general plan policy does not conclusively establish there is no significant environmental impact. In so holding, the court found that the City of Sacramento (“the City”) failed to adequately address the traffic impacts related to a development project.
Following publication of the East Sacramento decision, requests for depublication were filed with the California Supreme Court. Although the Supreme Court denied those requests, the weight of appellate authority still strongly favors application of the substantial evidence standard of review in this context. For this reason, the East Sacramento description of the governing legal standards is an outlier of little precedential value to the extent it is cited for the proposition that fair argument review may be applied to an EIR.
The underlying project involved a 328-unit residential development (“Project”) on an approximately 49-acre infill site located in the City of Sacramento. The City certified an EIR which found that all project-specific and cumulative impacts could be mitigated to a less than significant level. A neighborhood group, East Sacramento Partnership for a Livable City (“ESPLC”), filed a petition for writ of mandate challenging the development and alleging a number of CEQA violations. The trial court denied the petition in its entirety. On appeal, ESPLC raised five alleged CEQA violations, of which the Court of Appeal found merit in only one: that the City’s use of a general plan policy as a threshold of significance resulted in an inadequate analysis of the Project’s traffic impacts.
The general plan policy at issue—Mobility Element Policy M 1.2.2—allows for flexible Level of Service (“LOS”) standards depending on geographic area. It allows LOS F conditions (i.e., congested, “stop and go” traffic) in the “core area” during peak hours, but generally requires that LOS E (roadway at traffic capacity) be maintained in multi-modal districts and LOS D (roadway approaching capacity) be maintained in all other areas. Using this policy as a significance threshold, the EIR found no significant traffic impacts in the core area, even though several intersections in that area would operate at LOS F (under cumulative plus project conditions), and similar changes to LOS conditions outside the downtown-midtown area were deemed to be significant impacts that required mitigation.
The Third District found fault in the City’s reliance on this significance threshold and held the EIR’s traffic impacts analysis to be deficient on that basis. Specifically, the court held that compliance with a general plan policy does not, by itself, “insulate a project from the EIR requirement, where it may be fairly argued that the project will generate significant environmental effects.” In reaching this conclusion, the Third District’s analysis muddled the distinction between the ‘substantial evidence’ and ‘fair argument’ standards of review.
In the opinion, the court initially set forth the proper standard of review in the EIR context: whether the lead agency’s decision is supported by substantial evidence, with reasonable doubts resolved in favor of the agency. But the court then reviewed the City’s significance threshold for the traffic impact analysis under a line of appellate decisions that apply the “fair argument” standard to a lead agency’s initial determination regarding whether to prepare an EIR. Namely, under the fair argument standard, a project requires preparation of an EIR, rather than a mitigated negative declaration, whenever it can be fairly argued on the basis of substantial evidence that the project may have significant environmental impacts. However, a long line of CEQA cases articulates that the fair argument standard does not apply after the lead agency has elected to prepare an EIR.
Here, the Third District may actually have applied the substantial evidence standard of review, or determined that the standard of review did not make a difference to the result. Regardless, the opinion as drafted, even after the court modified it upon denial of rehearing, is difficult to parse and ultimately blurs the distinction between substantial evidence review and fair argument review, which is otherwise very clear in the corpus of CEQA case law.