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In Respect Life S. San Francisco v. City of South San Francisco, 2017 Cal. App. LEXIS 801, the First Appellate District held that the City of South San Francisco’s approval of a conditional-use permit allowing an office building to be converted to a medical clinic did not violate requirements imposed by the California Environmental Quality Act (CEQA). The City determined that the project fell within several categorical exemptions to CEQA, and thus, the permit did not require further CEQA review.

The case arose after the owner of an office building in downtown South San Francisco applied for a conditional-use permit to allow the building to be used as a medical clinic for a new tenant, Planned Parenthood. The physical changes to conversion of the building for use as a medical clinic were minor, and the City’s Planning Commission approved the permit after holding a public hearing.

Petitioner Respect Life South San Francisco (Respect Life) disagreed with the Planning Commission’s determination that the project fell into categorical exemptions and appealed to the City Council. Specifically, Respect Life alleged that the City ignored the “inherently noxious and controversial nature” of Planned Parenthood’s services which would cause protests leading to “environmental impacts… including traffic, parking, [and] public health and safety concerns,” thus necessitating an Environmental Impact Report (EIR) under CEQA.

The City Council affirmed the Planning Commission’s determination that the permit was exempt from CEQA under three categorical exemptions applying to (1) the operation of existing facilities (CEQA Guidelines section 15301); (2) the conversion of small structures (CEQA Guidelines section 15303); and (3) the development of urban in-fill projects (CEQA Guidelines section 15332). Thereafter, Respect Life filed a petition for a writ of mandate. The trial court upheld the City’s finding that the Project was exempt from CEQA and denied the petition. Respect Life subsequently appealed to the First District.

On appeal, Respect Life acknowledged that the project fell within at least one of CEQA’s categorical exemptions, but contended a full environmental review was still necessary due to the unusual-circumstances exception to those categorical exemptions. The “unusual-circumstances exception” provides that “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 the unusual circumstances.”

The Court of Appeal first noted the different standards of review: first the party seeking to establish the unusual-circumstances exception must show “that the project has some feature that distinguishes it from others in the exempt class, such as its size or location,” and second, that there is “a reasonable possibility of a significant effect [on the environment] due to that unusual circumstance.” (Berkeley Hillside Preservation v. City of Berkeley (2015) 60 Cal.4th 1086.) The Court elaborated that a deferential standard applies in reviewing the first element, and a non-deferential standard applies in reviewing the second.

Because the City Council did not directly address whether the Project would result in any unusual-circumstances, the Court concluded that to affirm such an implied municipal determination, the court must assume that the entity found the project involved unusual circumstances, but then consider whether a fair argument exists that the project will have significant effect on the environment. The Court then held that Respect Life failed to identify substantial evidence of any potentially significant environmental impact.

In reaching this holding, the Court explained that a “significant effect on the environment means a substantial or potentially substantial, adverse change in the environment.” (§ 21068.) The Court was unpersuaded by Respect Life’s argument that “the notoriety of [Planned Parenthood] and its activities,” would cause significant environmental impacts such as sidewalk obstruction, public safety concerns, parking congestion, business disruption and increases in noise levels. They found that there was no substantial evidence presented to support a fair argument that there was a reasonable possibility that these impacts will have a significant environmental impact, and conversely found evidence in the record showing the opposite. As a result, the Court of Appeal upheld the trial court’s decision denying Respect Life’s petition.

Key Point:

While the City ultimately prevailed in this litigation, the decision serves as an important reminder regarding the value of a lead agency making express findings addressing the exceptions to the categorical exemptions.  If the City had expressly concluded that the Project did not involve any unusual circumstances, then the Court could have upheld the City’s determination based on the much more deferential “substantial evidence” standard of review and not been required to consider whether a “fair argument” of a potentially significant environmental impact existed.