In Friends of the College of San Mateo Gardens v. San Mateo County Community College District (Supreme Court No. S214061, filed Sept. 19, 2016), the California Supreme Court resolved the vexing question of whether a change to a project that previously has been studied under CEQA constitutes a new project necessitating a new environmental review, or a modification that can be evaluated under CEQA’s subsequent review provisions allowing reliance on earlier CEQA documents.

The Court held the question turns on whether the prior document retains relevance – meaning at least some of the environmental impacts of the modified project were considered in the original document.  If so, the agency then determines whether the project changes will require major revisions to the original CEQA document due to new, previously unconsidered significant environmental effects.  

The case before the Court involved a master plan approved by a community college district.  The plan contemplated nearly $1 billion in new construction and building renovations at the district’s three campuses.  At the College of San Mateo, the district planned to demolish certain buildings and renovate others.  The district approved the plan after adopting a mitigated negative declaration, finding that implementation of the plan would have no significant unmitigated effects.

Five years later, the district decided to demolish one building complex that it previously had planned to renovate and to renovate some buildings that it previously had planned to demolish.  The district prepared an addendum to the prior mitigated negative declaration to document its analysis showing the project changes did not necessitate a subsequent CEQA document.  Under CEQA, an agency may prepare an addendum to a prior EIR or negative declaration when some modifications to the prior document are needed, but none of the conditions described in CEQA Guidelines section 15162 calling for preparation of a subsequent EIR or negative declaration have occurred.

The plaintiff challenged the district’s approvals and claimed the changes to the master plan amounted to a new project, requiring a new round of CEQA compliance commencing with a new initial study and precluding the district from relying on its earlier mitigated negative declaration.  Both the trial court and the court of appeal agreed, finding the newly proposed building demolition was a new project.

In overruling the lower courts, the California Supreme Court explained:  “When an agency proposes changes to a previously approved project, CEQA does not authorize courts to invalidate the agency’s action based solely on their own abstract evaluation of whether the agency’s proposal is a new project, rather than a modified version of an old one.”  To the contrary, the agency’s environmental review obligations “depend on the effect of the proposed changes on the decisionmaking process, rather than on any abstract characterization of the project as ‘new’ or ‘old.’”

The Court’s decision resolves a disagreement among the appellate courts that had been brewing for years.  In 2006, the Third District Court of Appeal invalidated an agency’s approval of a modification to a project that previously had been approved based on a negative declaration.  Save Our Neighborhood v. Lishman, 140 Cal. App. 4th 1288 (2006).  The original project and the revised project involved a similar mix of uses, but there were some significant differences in the proposed plans and the project proponent had changed.  The court found the key issue, to be decided as a question of law, was whether the proposal constituted a new project, and it rejected the agency’s decision to treat the proposal as a project modification. 

By contrast, in 2007, the Second District Court of Appeal upheld an agency’s decision to rely on a prior EIR for revisions to a project that included reductions in some components, elimination of other components and an overall increase in the project size.  Mani Brothers Real Estate Group v. City of Los Angeles, 153 Cal. App. 4th 1385 (2007).  The Mani Brothers court distinguished Lishman since that case involved a negative declaration but also reasoned that Lishman’s “new project” test inappropriately bypassed CEQA regulations and “undermined the deference due to the agency.”

The Supreme Court sided with Mani Brothers.  It found a decision to proceed under CEQA’s subsequent review provisions must necessarily rest on a determination—whether implicit or explicit—that the original environmental document retains some informational value.  That question does not turn on whether the project is new or old in the abstract, or on the identity of the project proponent or on other matters unrelated to environmental consequences.  If the original document retains some informational value despite the proposed changes, the agency proceeds to determine whether a subsequent or supplemental environmental document is required.  The Court made it clear that the determination whether the original document retains relevance is a factual question for the agency to decide. 

The plaintiff also offered an alternative theory that CEQA’s subsequent review provisions do not apply to a project originally approved based on a negative declaration, rather than a full EIR, because negative declarations are not mentioned in the CEQA statute.  The Court rejected that argument, finding that the Resources Agency’s decision to add negative declarations to the subsequent review provisions in CEQA Guidelines section 15162 did not conflict with the statute and reasonably filled a gap in the law.  The Court reasoned that both negative declarations and EIRs are entitled to a presumption of finality once they are adopted. 

However, the Court stated that “CEQA Guidelines section 15162 requires an agency to prepare an EIR whenever there is substantial evidence that the changes to a project for which a negative declaration was previously approved might have a significant environmental impact not previously considered in connection with the project as originally approved, and the courts must enforce that standard.”  The Court cited Friends of “B” Street v. City of Hayward, 106 Cal. App. 3d 988 (1980), which held that an EIR must be prepared when it can be “fairly argued” that a project might have a significant environmental effect. 

The Court did not rule on some important merits issues that the lower courts did not decide, including whether an EIR was required for the modified project under the CEQA’s subsequent review provisions.  That issue will be decided on remand.

The Court’s decision unequivocally disposes of the artificial distinction between a new project and a modified project—and in doing so announces a clear standard for applying CEQA’s subsequent review provisions based on whether the underlying CEQA document provides information about the impacts of the modified project.  

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