A county may not rely on mitigation measures to determine that a project is categorically exempt from the California Environmental Quality Act (CEQA), the First District Court of Appeal has ruled.

“If a project may have a significant effect on the environment, CEQA review must occur and only then are mitigation measures relevant,” the court ruled. “Mitigation measures may support a negative declaration but not a categorical exemption.”

The decision appears to mean that Marin County will have to prepare at least a negative declaration for the project in question - the construction of one house in a riparian area.

In June 2002, property owner Joshua Hedlund submitted an application for design review of a proposed 3,646-square-foot house on a 7.2-acre lot along San Geronimo Creek. The creek supports a large run of coho salmon, as well as smaller populations of steelhead trout and chinook salmon. The county's Community Development Agency concluded that the project was categorically exempt from CEQA and approved the house subject to conditions intended to protect the riparian habitat.

The Salmon Protection and Watershed Network (SPAWN) and the Tomales Bay Association appealed to the Planning Commission, which approved the project with additional mitigation measures. The opponents further appealed to the Board of Supervisors, which upheld the Planning Commission.

At roughly the same time the Hedlund application was moving through the administrative process, the county adopted a zoning ordinance that requires discretionary review of construction near streams that have salmon or steelhead populations. In adopting the ordinance, the Board of Supervisors found that discretionary review was necessary to protect the threatened fish species from development on 160 creekside parcels, including Hedlund's.

In May 2003, the opponents filed a lawsuit that argued the project was subject to environmental review. Marin County Superior Court Judge Lynn Duryee ruled that the county had “erred procedurally and substantively” in finding the project categorically exempt, a decision that forced Hedlund to halt construction. The county then backed out of the case, but Hedlund appealed to the First District, where a unanimous three-judge panel upheld the lower court.

Single-family homes are categorically exempt from CEQA. However, CEQA Guidelines § 15300, subdivisions (a) through (c) list exceptions: when a project may impact an environmental resource of “critical concern,” when the cumulative impact is significant, or when there is a reasonable possibility the project will have an impact because of unusual circumstances. Project opponents argued that all three exceptions applied. The possibility the project would impact a resource of critical concern was enough for the court.

“The county itself conceded in the lower court that the project is within an area of 'critical concern' of its own designation,” Justice Patricia Sepulveda wrote for the court. “The relevant issue is thus reduced to whether the project 'may impact' on that environmental resource of critical concern.”

Hedlund argued, as the county did at the lower court, that the mitigation measures eliminated any impacts, thus making the project eligible for categorical exemption. But the court said no.

“The determination of whether a project may impact a designated environmental resource must be made without reference or reliance upon any proposed mitigation measures,” Sepulveda wrote. “Reliance upon mitigation measures (whether included in the application or later adopted) involves an evaluative process of assessing those mitigation measures and weighing them against potential environmental impacts, and that process must be conducted under established CEQA standards and procedures for EIRs or negative declarations.”

Hedlund's attorney, Anne E. Mudge, said the case was decided partly on the definition of “mitigation measures.” What the court called “mitigation measures,” she called “project features” that were intended to ensure the project would not have a significant impact.

The court relied heavily on Azusa Land Reclamation Co. v. Main San Gabriel Basin Watermaster, 52 Cal.App.4th, 1165 (see CP&DR Legal Digest, March 1997), in which the court ruled that reopening an old garbage dump was not categorically exempt.

“As the Azusa court observed,” Sepulveda wrote, “there are sound reasons for precluding reliance upon mitigation measures at the preliminary stage of determining eligibility for a categorical exemption. Regulatory guidelines … 'contain elaborate standards - as well as significant procedural requirements - for determining whether proposed mitigation will adequately protect the environment and hence make an EIR unnecessary; in sharp contrast, the guidelines governing preliminary review do not contain any requirements that expressly deal with the evaluation of mitigation measures.' An agency should not be permitted to evade standards governing the preparation of a mitigated negative declaration 'by evaluating proposed mitigation measures in connection with the significant effect exception to a categorical exemption.'”

Although it did not participate at the First District, the county has asked the state Supreme Court to review the case because of concerns about the future use of categorical exemptions. The property owner is not part of that appeal.

“I think it's not the death knell for categorical exemptions,” Mudge said of the decision. “This was a project with a difficult administrative record on a stream that is sensitive.”

The Case:
Salmon Protection and Watershed Network v. County of Marin, No. A105592, 05 C.D.O.S. 521, 2005 DJDAR 677. Filed December 16, 2004. Modified and ordered published January 18, 2005.
The Lawyers:
For SPAWN: Michael Graf, (510) 525-7222.
For the property owner: Anne E. Mudge, Stoel Rives, (415) 617-8900.