Hilltop Group, Inc. v. County of San Diego (Feb. 16, 2024) 99 Cal.App.5th 890

Hilltop Group proposed to build and operate a construction waste recycling center on industrially zoned land. The County of San Diego initially required preparation of a draft EIR for the project, then, upon the submittal of additional studies of aesthetics, noise, air quality and GHG emissions, and traffic, County of San Diego staff concluded that the project could be considered under the limited exemption provided by Public Resources Code Section 21083.3 (State CEQA Guidelines Section 15183). That section limits environmental analysis to impacts peculiar to the project that have not been mitigated by regulatory requirements when that project is consistent with the general plan and zoning for which a prior EIR had been certified. The County of San Diego relied on the Program EIR for its general plan update (and applicable mitigation measures) as the basis for the exemption.

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Neighbors appealed the use of the Section 21083.3 exemption to the Board of Supervisors, who instead ordered preparation of an EIR after hearing extensive testimony from project opponents. County of San Diego staff had comprehensively documented its decision to use the exemption; however, the County Board’s findings approving the appeal were generally conclusory.

The Court of Appeal held in favor of Hilltop Group, concluding that the County Board’s decision to require an EIR in place of the Section 21083.3 exemption (based on general findings) was not supported by substantial evidence. This case offers several lessons. This exemption can be applied to individual projects such as the proposed recycling center (previous cases on this subject had been on rezonings). The question before the agency is not whether the project may have impacts, but whether there are new impacts peculiar to the project that are not mitigated by either the mitigation measures of the original EIR or the local regulatory program. The agency’s determination that a project is exempt under Section 21083.3 is subject to the substantial evidence standard, not the fair argument test. Public controversy, absent expert testimony or other substantial evidence, is not sufficient to trigger the need to prepare an EIR. Furthermore, an agency cannot rely on lay testimony regarding potential impacts when substantial evidence for less-than-significant impacts exists in the form of expert studies; the lay testimony is not substantial evidence of impacts. The plaintiff was not required to wait until the agency had made a decision on its project to challenge the CEQA process.

Here is the Court’s final conclusion:

In summary, we conclude Guidelines section 15183 is applicable to the NCER Project because it is consistent with the GPU for which a program EIR was certified. The Board of Supervisors did not proceed in a manner required by law when they denied the exemption and failed to limit further environmental review to those effects enumerated in Guidelines section 15183, subdivision (b)(1) through (4). The Board of Supervisors’ findings of peculiar environmental effects—effects that will not be mitigated by previously adopted uniform policies and procedures—in the areas of aesthetics, noise, traffic, air quality, and GHG emissions, is not supported by substantial evidence in the record. Accordingly, we conclude the Board of Supervisors’ decision denying the CEQA exemption and requiring the preparation of an EIR constituted a prejudicial abuse of discretion.

We also find no merit to the County’s argument that Hilltop Group cannot demonstrate prejudice because the NCER Project application was not denied, but merely subjected to further environmental review. The County cites to no authority that would support such an interpretation of the term “prejudice,” and under their interpretation Hilltop Group could be subject to an indefinite review process without judicial recourse so long as the project application is not formally denied. For the purposes of CEQA compliance, a “prejudicial” abuse of discretion “is established if the agency has not proceeded in a manner required by law or if the determination or decision is not supported by substantial evidence.” (§21168.5.) Such a prejudicial abuse of discretion has been demonstrated here.