Pacific Research Institute

A Primer on The California Environmental Quality Act (CEQA)

The California Environmental Quality Act (CEQA) is among the most significant environmental laws on the books in the United States. Its best attribute is that it included for the first time explicit consideration of the environment in the planning process. But CEQA, in addition to being unreasonably costly in practice, may not actually protect the environment very well. The process of CEQA has come to dominate the substance of CEQA, and hence too many environmental reviews result in 1000-plus page reports whose primary purpose is to avoid litigation rather than to aid agency decision-makers in their deliberations.

A Primer on The California Environmental
Quality Act (CEQA)


Introduction: How to Read This Briefing

The California Environmental Quality Act (CEQA) is among the most significant environmental laws on the books in the United States. Its best attribute is that it included for the first time explicit consideration of the environment in the planning process. But CEQA, in addition to being unreasonably costly in practice, may not actually protect the environment very well. The process of CEQA has come to dominate the substance of CEQA, and hence too many environmental reviews result in 1000-plus page reports whose primary purpose is to avoid litigation rather than to aid agency decision-makers in their deliberations.

There is no way to estimate the full cost of CEQA to the California economy, because it is a regulatory mechanism whose action is diffused throughout the economy and, therefore, hidden within the prices of final goods and paid for by consumers. There is no line item in any official government budget or price tag.

But the economic cost of CEQA is a secondary issue compared to its legal principles and operation. The operation of CEQA often turns on vague and subjective standards, such as "significant effect," "substantial evidence," and "cumulative effect." Hence, the litigation ensuing because of these undefined standards has resulted in turning CEQA into "judge-made law." The courts routinely exercise substantive review of the evidence promulgated in the administrative proceedings under CEQA. In other words, environmental policy under CEQA has been driven by the judiciary instead of the legislative or administrative process, which should be regarded as a highly problematic phenomenon in American constitutional government.

This four-part briefing, written by Pacific Research Institute summer fellow Robert O'Reilly, tells the story of CEQA's origins in 1970 and subsequent development in the California courts and legislature. It summarizes the main points of recently enacted reforms, and suggests possible reforms from other states that should be considered.

The first section is designed to acquaint readers with the ins-and-outs of how CEQA unfolded in the courts. The second section outlines problems outstanding with CEQA as a result of these court cases and legislative modifications. The third section reviews recent CEQA reform, and the fourth section reviews promising reform ideas from other states.

--Steven Hayward
Senior Policy Fellow


Section I: The History and Development of CEQA
Summary of Act Passed in 1970

On January 1, 1970, President Richard Nixon signed into law the National Environmental Policy Act.1 This act established environmental policies and procedures so that every Federal agency would evaluate environmental concerns in their decision-making process. For legislative proposals and major federal actions, federal agencies must prepare environmental impact statements, which examine and discuss the environmental consequences of a project.2

Nine months after NEPA was signed into law, and four months after the first Earth Day, the California Legislature passed the California Environmental Quality Act.3 The Act was not considered controversial, in part because few people had any idea of the sweeping character it would take on a scant two years later. The act was introduced by the Assembly Select Committee on Environmental Quality, a temporary committee formed by the chairmen of the various committees having oversight over environmental affairs. The group met several times and made many recommendations from 1969 to 1973.

The general policy of CEQA, laid out in Sections 21000 and 21001 of the California Public Resources Code, constitutes a broad endorsement of the primacy of the environment over all other values. CEQA was also intended to provide both the government and the public with information on how projects were to affect the environment. The legislative intent notes that "Every citizen has a responsibility to contribute to the preservation and enhancement of the environment."4 "It is the intent of the Legislature that all agencies of the state government which regulate activities of private individuals, corporations, and public agencies which are found to affect the quality of the environment, shall regulate such activities so that major consideration is given to preventing environmental damage."5 The act adds: "[I]t is the policy of the state to:... (b) Take all action necessary to provide the people of this state with clear air and water, enjoyment of aesthetic, natural, scenic, and historic environmental qualities, and freedom from excessive noise." It goes on to say that "the long-term protection of the environment shall be the guiding criterion in public decisions."6

It should be noted that these broad policy statements of legislative intent usually have little significance. No legislator would ever argue that everyone shouldn't have clean air and water, but if that means California must spend billions of dollars to remove the last particle of ozone from the air, many legislators might have other ideas on where that money could be better spent. But an explicit tradeoff of this kind is seldom if ever confronted in the legislative process. The procedural aspects of the original bill seem quite tame in comparison to the legislative intent. CEQA in 1970 stated that state and local agencies "shall include in any report on any project they propose to carry out which could have a significant effect on the environment of the state, a detailed statement [i.e. an environmental impact report]."7

This report is to include: "(a) The environmental impact of the proposed action. (b) Any adverse environmental effects which cannot be avoided if the proposal is implemented. (c) Mitigation measures proposed to minimize the impact. (d) Alternatives to the proposed action. (e) The relationship between local short-term uses of man's environment and the maintenance and enhancement of long-term productivity. (f) Any irreversible environmental changes which would be involved in the proposed action should it be implemented."8

CEQA then charges the Office of Planning and Research (OPR), in conjunction with appropriate state, regional, and local agencies, with the task of developing guidelines for implementing the environmental impact reports.9

The agency which is preparing the EIR must also consult with and gather comments from any other governmental agency related to the project, which must then be included in the regular project report used for budgetary purposes. This information will also be made available to the Legislature and the general public.10

It should be noted that the original act was quite brief: it takes only three pages in the Statutes of California. Also, it doesn't define any terms, including "project," "environment," and "significant effect"; and it makes no mention of "negative declaration" or "initial study," despite their prominence in the Act as it stands today.

From this review, it is easy to see why the act, when first passed, faced little opposition. It was taken directly from NEPA; it created no new agencies or organizations; it seemed to affect only what documents should be included in a government budgetary report; and it seemed that it would make a nod to the environmentalists without upsetting the structure and operations of government, or the commerce that various government agencies regulate.

Judicial and Legislative Development of CEQA

When CEQA went into effect on November 23, 1970, nothing changed. Agencies subject to CEQA waited for the CEQA guidelines which were to be developed by the Governor's Office of Planning and Research (OPR). The role of courts in reviewing CEQA was uncertain, and the act left several critical terms undefined, most importantly, "project" and "significant effect."

Because of the small size and budget of the Office of Planning and Research, the Governor's Office decided to delegate the formulation of CEQA guidelines to the Office of Secretary for Resources, Norman B. Livermore, Jr., which only has "general supervision" over the various Resource Agencies, and some important agencies subject to CEQA were outside of the Resources Agency." Resistance to CEQA from single-purpose agencies and bureaucrats who saw CEQA as an intrusion made developing the guidelines difficult. The draft guidelines distributed by Livermore's office in June of 1971 read the statute narrowly, and covered only State activities. The Attorney General responded with a petition for the guidelines to adhere to the letter and spirit of the Act, and to read the statute broadly, establishing, "the statutory purpose of making environmental values the primary ones to be protected."12 Because of the resistance within the government, and divided opinions on the meaning of CEQA among legislators, bureaucrats, environmentalists, developers, and the media, official guidelines were never issued by Secretary Livermore's office.13

The first court ruling involving CEQA came as a result of a case filed by the Environmental Defense Fund charging that the Coastside County Water District (in San Mateo County) failed to prepare an EIR before proceeding with a project to increase its water supply,l4 This case set several expansive precedents that have since become the foundation for all CEQA litigation. At issue is whether a court could issue an injunction based on a claim that an agency failed to follow the procedures set forth in CEQA; and whether it was a judicial function to consider the adequacy of an environmental impact report.

An injunction was ordered against the water supply project because no EIR had been prepared.15 Eight days later, the district filed an EIR prepared by their contractors. The judge then dissolved the preliminary injunction, stating: "It is not the function of this court to consider the adequacy or thoroughness of this report in these proceedings."16

The EDF appealed, claiming the court had the responsibility to pass on the acceptability of an EIR. The court of appeals, noting that there was no direct precedent on CEQA, found sufficient guidance in the legislative intent, which it deemed "justifies, if indeed it does not demand, that the operative parts of the act be construed liberally."17 The court also cited the need for judges to protect natural resources, as they are the "final vindicators" of rights to environmental protection. Additionally, the court held that the guidelines and decisions regarding the National Environmental Policy Act could be persuasive in interpreting CEQA.

The court then reviewed the EIR submitted in this case and found, that it did not adequately discuss the possibility that more water connections will lead to more development; it did not address the problem of sea water intrusion on the ground water basin; it did not address the effect it would have on the agriculture in the area; and it did not include criticism from experts, concerned organizations (such as EDF), and the general public. The court then issued an injunction, to be dissolved when an EIR adequately addressing these issues was prepared.

In this case, most of the major themes of CEQA litigation can be found. The litigation was driven by environmental and local activist groups. The court took an interventionist position, instead of deferring to agencies as is normal in administrative proceedings. The court was willing to delve into the actual EIR, and to engage in the scientific fact-finding about which courts are usually reticent. And the court introduced public participation into the CEQA process, something which was not in the original CEQA statute.

The Friends of Mammoth Case

The next major judicial construction of CEQA, Friends of Mammoth v. Board of Supervisors, came in September, 1972.18 International Recreation, a real estate developing company, filed an application for a conditional use permit with the Mono County Planning Commission. They intended to build six buildings of six to eight stories containing condominiums, restaurants, and specialty shops at Mammoth Lakes in Mono County. The Commission approved the permit. After exhausting administrative remedies to oppose the development project, the Friends of Mammoth, an unincorporated association of property owners at Mammoth Lakes, filed a petition for judicial relief which was eventually taken up by the Supreme Court of California.

Because no state agency is involved, and Mono County does not have a conservation element of its general plan, the controlling language of CEQA is Section 21151:

All other local government agencies shall make an environmental impact report on any project they intend to carry out which may have a significant effect on the environment and shall submit it to the appropriate local planning agency as part of the report required by Section 65402 of the Government Code.

Hence, the central question is whether the issuing of a permit constitutes a "project" which a government agency carries out.19 In other words, the Friends of Mammoth case turns on whether CEQA applies to both public and private projects, or just public ones.

The term "project" is not explicitly defined in CEQA, and the Court, noting this fact asserts, "that absent a single meaning of the statute apparent on its face, we are required to give it an interpretation based upon the legislative intent with which it was passed."20 In dissent, Justice Sullivan argued that a single meaning is apparent, but the Court chose to disregard it. Instead the Court turned to the legislative intent sections of CEQA.21 The Court relied most heavily upon Section 21000, subdivision (g), which states:

It is the intent of the Legislature that all agencies of the state government which regulate activities of private individuals, corporations and public agencies which are found to affect the major consideration is given to preventing environmental damage.22

The Court then examined NEPA for guidance. Within the Council for Environmental Quality's interim guidelines for implementing NEPA, circulated four months prior to the passage of CEQA, "projects" are a subset of "actions," and it is under this subset that leases and permits are included.23 On the basis of this analysis, and the legislative intent the Court held that the term "project" was intended to include permits issued to private companies, and that environmental impact reports would have to be prepared if the project applying for the permit were to have a significant effect on the environment.

Both the broad policy statements in the legislative intent and the interim NEPA guidelines led the Court to conclude that the Legislature intended the act to be construed so as to give the environment the fullest protection possible. This analysis became known as the "Mammoth interpretative principle," and has caused many judges to take an activist role in applying CEQA.

Justice Sullivan's dissent is worth noting, largely because he makes the case that the act was what it appeared to be: sweeping policy statements with a small procedural change. He also argued that the Court's statutory construction was inappropriate because there was a single, apparent meaning on the face of the statute. If CEQA had been explicitly meant to regulate private activities, it would not have passed with so little controversy.24

The days after the Friends of Mammoth decision were filled with dire predictions about California's economy, and media hysteria about the cessation of all construction work in the state. Observers speculated that an impact report would have to be prepared before getting a driver's license. The principle concern of developers, however was that banks would withhold financing for construction projects fearing non-compliance with the statute. Though some banks required developers to sign liability disclaimers, and some agencies stopped issuing permits pending clarification of the decision, persuasive evidence exists that the immediate impact of the Mammoth case was negligible.25

After the Court announced its ruling in the Mammoth case, the Governor requested that the Attorney General (who always held the position that CEQA applied to private projects) asked the Court to modify its decision." The Attorney General requested that the decision not apply retroactively and that it not take effect until 61 days after the adjournment of the Legislature.27

The Court denied a rehearing on the merits of the case November 6, 1972, the day before the election. Justice Stanley Mosk, however, did modify his position on the scope of his decision. He commented that most private projects requiring a permit were small, and wouldn't invoke CEQA, because they "have little or no effect on the public environment."28 Citing this rationale, Justice Mosk did not grant either of the Attorney General's requests.

The Legislature Responds to Mammoth

In response to the public outcry concerning the confusion and controversy over the Mammoth decision, the Legislature moved quickly to enact AB 889, a bill introduced by John Knox, who chaired the Assembly Select Committee on Environmental Quality.29 This bill was designed to resolve many of the ambiguities of CEQA; unfortunately, it further complicated the meaning and interpretation of CEQA. The amendment added Chapter 2.5, "Definitions," which codified the Mammoth ruling, and Chapter 2.6, which, among other things, defined "significant effect" as a) the potential to degrade the quality of the environment b) the possible effects of a project are cumulatively considerable, or c) causing substantial adverse effects on humans beings, either directly or indirectly.30 It also required local governments which had conservation plans to follow the EIR procedure (previously, the governments only had to make a finding that a project was "in accord" with their conservation plan).31 AB 889 also added Chapter 5, "Submission of Information":

Whenever any person applies to any public agency for a lease, permit, license, certificate, or other entitlement for use, the public agency may require that person to submit data and information which may be necessary to enable the public agency to determine whether the proposed project may have a significant effect on the environment or to prepare an environmental impact report.32

This passage represents a profound change in the nature of CEQA. Agencies could now require permit-seekers to furnish extensive, and potentially exhaustive, information in regards to their projects. Government officials could do this without regard to the cost incurred, the delay caused, or its necessity.33

Chapter 6, "Limitations," was also added by AB S89.34 In addition to clarifying procedural questions involving permits from multiple agencies, the Chapter also delineated the scope of judicial review. The courts could review for either failure to proceed in a manner required by law, or for making a determination or decision not supported by substantial evidence. Section 21168 specifies "the court shall not exercise its independent judgment on the evidence but shall only determine whether the act or decision is supported by substantial evidence in light of the whole record."35

This amendment is an important step between the 1970 statute and what we have today. The amendment codifies that CEQA not only applies to private projects, but lets agencies shift the burden of preparing EIRs to the private developers; it codifies the use of the courts to challenge agency decisions, albeit on limited grounds; and it gives "significant effect"--the primary threshold determinant--a sweeping definition, thereby giving agencies maximum latitude in deciding what consequences should be investigated.36

No Oil and "Significant Effect"

Of course, the CEQA controversy did not go away. Guidelines were released by the Secretary of Resources in February of 1973, and local governments and state agencies began the arduous task of implementing the directives of CEQA into their administrative processes. It wasn't long after the Mammoth case that the Supreme Court of California again construed CEQA. In No Oil Inc. v. City of Los Angeles,37 the Supreme Court reviewed the decision of the Los Angeles City Council that a project involving exploratory drilling would not require an EIR. The council held to the position that an EIR was not required because the project would not have a significant effect on the environment. The court applied the principle from the Mammoth case that CEQA was to be interpreted so as to offer the fullest environmental protection possible, and ruled that an EIR is required "whenever the action arguably will have an adverse environmental impact."38 Noting that the council did not follow the law properly in deciding whether or not an EIR was required, the Supreme Court then stated that it believed that if the council had followed the law, it would have decided that an EIR was necessary, and thus ordered one.39

The No Oil case put a subtle gloss on the 1972 amendments. Prior to the decision, the law was generally thought to mean that as long as there was substantial evidence in the record to support an agency's decision, the decision itself was not subject to judicial review. Moreover, if the court decided that there wasn't substantial evidence, the decision would be remanded for reconsideration. In No Oil, the court turned that around so that if there was substantial evidence that showed that a project arguably may have a significant effect on the environment, then an EIR would be required. In other words, if an environmental group can make a fair argument about the possibility of significant environmental effects, the agency will have to order an EIR, or else face further delays while a court reviews all of their materials.

Further Judicial Construction of CEQA

Another 1974 case, this time in the appellate court established the rule that EIRs would be voided if agencies failed to respond to comments made by the public. People v. County of Kern viewed public participation as a means for insuring "the integrity of the process."40 Russian Hill Improvement Association v. Board of Permit Appeals held that CEQA required the EIR to be released prior to an agency decision so that comments could influence the decision-making process.41

CEQA also further complicated land use decision-making by broadening the scope of actions coming under the purview of CEQA. Bozung v. Local Agency Formation Commission42 involved the annexation of county land under the Knox-Nisbet Act. A technical reading of CEQA would indicate that it was a project, but because no land use would change, it would have no effect on the environment. The Supreme Court, however, held that because the approval would contribute to cummulative physical changes to the environment the annexation met the test of a "significant effect" on the environment. Hence, the Court ruled that an EIR was required.

The benign intent of members of the judiciary and the legislature was that early use of the CEQA process would enable mitigating changes to be made with minimal delay and cost. Unfortunately, the Court went too far and required EIRs to be prepared on the basis of speculation of development patterns far in advance of the actual construction. In a case similar to Bozung, however, a court of appeals reached the conclusion that no EIR was needed. Simi Valley Recreation Park District v. Local Agency Formation Commission43 involved a detachment of park land, but because the only change was political, not physical, it did not meet the significant effect test. Thus, the court held that CEQA did not apply.

San Francisco Ecology Center v. City & County of San Francisco concerned the adequacy of an EIR prepared for the approval of expansion at San Francisco International Airport.44 The court of appeals, in ruling the EIR acceptable, applied standards used in NEPA cases, especially the "rule of reason," which means if the information is sufficient to allow a reasonable choice between alternatives, there is no need for it to be perfect or exhaustive. The San Francisco Ecology Center court also addressed the substantive component of CEQA. Agency decision-makers were required by CEQA to weigh a project's benefits against its environmental risks, and to give the environment a higher priority than economic benefits.

Meanwhile, the Supreme Court limited the extent of the exemptions which were added in 1972 In Wildlife Alive v. Chickering,45 the court held that the Fish and Game Commission had to prepare an EIR before setting the hunting dates for black bear. The Court again relied upon the "Mammoth interpretative principle," and commented that because the Fish and Game Commission was not specifically exempted from CEQA, it should, therefore, be subject to CEQA. The court rejected the arguments that the Fish and Game Commission was exempted by the Secretary of Natural Resources, or that its own reviewing procedures were the functional equivalent of an EIR.46

Legislative "Reform" of CEQA

The greatly increased scope of the term "project" brought with it increased paperwork, on the part of bureaucrats and developers alike, and much dissatisfaction with the extremes to which CEQA had been taken. This dissatisfaction prompted several proposals for CEQA reform during the 1975-76 legislative term. Again, the final amendment that passed constituted a compromise between environmentalists and developers. The amendment made the provisions regarding court review even more explicit: in any addition for judicial review of an agency's decision, "the court shall not exercise its independent judgment on the evidence but shall only determine whether the act or decision is supported by substantial evidence in light of the whole record."47 Another important change in CEQA was Section 13:

A public agency may charge and collect a reasonable fee from any person proposing a project subject to the provisions of this division in order to recover the estimated costs incurred by the public agency in preparing a negative declaration or an environmental impact report for such project.

This, combined with the fact that agencies may require applicants to provide information, means that government agencies no longer have to be responsible for the costs they incur. Instead, they can bill the developer, and the developer can pass these increases on to the public. Because the costs are indirect, the public never realizes how much they are actually paying because of CEQA.48

This amendment also made CEQA's substantive requirements explicit. Public agencies were not to approve projects if there were feasible alternatives or mitigation measures which would substantially lessen the significant environmental effects of the project. Part of this change required agencies to make a finding prior to approval (thus providing another source of litigation). The finding must be that 1) changes in the project mitigate or avoid the significant effects; 2) another agency has jurisdiction over the changes; or 3) social or economic considerations make changes infeasible.

The amendment also required that agencies make a formal finding if, among other things, the effects of a project are "cumulatively considerable."49 This requirement again expanded the scope of the EIR, and required developers to make predictions about what would probably happen as a result of their projects, and other likely projects.

With this amendment in 1976, CEQA had taken on its modern form. The Supreme Court rarely addressed CEQA again as a principle issue, and lower courts have been given the task of settling the minor disputes that arise. A few court decisions and legislative amendments are worth review. It should be noted that many legislative amendments to CEQA are proposed every year, but since 1976, meaningful reform of CEQA did not occur until 1993. Most amendments passed have been to exempt certain projects or agencies from CEQA provisions, based on the argument that the costs involved in the EIR process would render the project infeasible.

There are several areas of litigation worthy of review. The theme which runs through all of them is that CEQA relies on subjective standards, and the perceived importance of judicial protection of the environment encourages activism on the bench. Areas of dispute include judicial review of agency decisions, the proper threshold for significant effect, the substantive requirements of CEQA (especially regarding mitigation measures), the standard in EIRs for addressing cumulative effects, the standard in EIRs for addressing alternatives, and the issue of premature CEQA analysis.


Section II: Outstanding Issues of CEQA
1. Judicial Review of CEQA

The nature and extent of judicial review of agency decisions, as first established in No Oil, continued to be litigated. Pacific Water Conditioning Association v. City Council held that if there was substantial evidence, in light of the whole record, to support an agencies decision, then there was no abuse of discretion." The crux of this decision was that the determination of a significant effect was a matter of fact, not of law. Therefore, the court could only review whether the agency took the proper steps to reach its conclusion, not the conclusion itself. This appears to be the reasoning implemented in the 1972 amendment, but unfortunately, this interpretation did not withstand further judicial modification.

Friends of "B" Street v. City of Hayward, coming three years after Pacific Water Conditioning, returned to the "fair argument" reasoning of No Oil. This decision, along with No Oil, set the controlling precedent, although in several cases courts have come down on both sides of the issue, applying both substantive and procedural criteria in their rulings.51

In 1983, the legislature acted to clarify judicial review. Assembly Bill 1462 established that unless an initial study shows that there is no substantial evidence that a project will have a significant effect on the environment, a complete EIR will have to be done.52 However, the court of appeal in Sundstrom v. County of Mendecino,53 read the significance determination in light of No Oil and established a lower standard for determining if a "fair argument" exists, holding that courts could make a substantive review of the evidence about significant environmental impact in initial studies, and determine that a full EIR should be conducted."

This means, in effect, that whenever the government issues a permit, or approves a decision, it must prepare an EIR if there is any substantial evidence of an environmental threat. The agency cannot evaluate the evidence, or look at its credibility, until an EIR has been done. Hence, more expansive EIRs are required, as Professor Selmi states:

By treating the issue as a legal one, the courts imply that public agency decisions in this area should be closely examined, perhaps because agencies are subject to political pressure to avoid the full EIR process. This scrutiny is, of course, a marked departure from the usual judicial deference to the actions of agencies.55

Unfortunately, neither the courts nor the legislature bear the costs of the litigation that arises from this expanded application of CEQA. At the same time that legislators complain that CEQA is causing massive delays in development projects, they pass laws which have the effect of causing agencies to be more hesitant about making decisions, lest they face litigation and judicial review.

2. Substantial Requirements of CEQA

The substantive requirements of CEQA, as amended in 1976, were also the subject of litigation. In Laurel Hills Homeowners Association v. City Council, a housing project originally proposed with 126 units was approved at 95 units, despite the finding that 63 units would be an environmentally superior alternative. The plaintiff argued that CEQA required that the agency adopt the 63 unit alternative because it did not find it "infeasible."56

The court of appeals ruled that CEQA did not require that an agency choose the environmentally superior project. Instead, the court made the argument that once a project's significant effects were eliminated or mitigated to "an acceptable level," the agency has discretion to approve the project. The procedural language of CEQA would seem to indicate that this is the correct ruling, but the case has been made that CEQA's intent was to make the environment a priority in decision-making, and that this case did not apply the Mammoth interpretative principle that the statute should be read so as to provide the "fullest protection possible" to the environment.57

The substantive aspect of CEQA received little attention from environmental litigators. Environmentalists and "not-in-my-back-yard" (NIMBY) activists largely sought zero development, and thus focused on procedural objections and delays. The opportunity for wise, measured growth was neglected in the furor of contentious litigation.58 A subsequent challenge on CEQA's substantive requirements did come several years later, when the Sierra Club brought suit against a developer, arguing that a project might threaten the California Tiger Salamander, a species considered neither endangered nor threatened by the federal or state governments. In Sierra Club v. Gilroy City Council,59 the court of appeal held that an agency has the duty to mitigate all environmental effects to an insignificant level, or else cite what overriding considerations cause the project to be acceptable.60

3. Cumulative Effects

The definition of significant effect, as amended in 1972, includes when the possible effects of a project are cumulatively considerable. This has caused some controversy in the courts, largely because the standard is vague and subjective, and, moreover, entails the kind of speculation which defies scientific measurement. In Whitman v. Board of Supervisors,61 a court of appeals ruled that the EIR was unacceptable. The EIR devoted only one paragraph to the cumulative effects of the project an exploratory oil well, and was "devoid of any reasoned analysis" of what the effects of the project may be.62

A challenge to the cumulative effect section of an EIR was again raised in San Franciscans for Reasonable Growth v. City and County of San Francisco.63 The court of appeals found the EIR to be inadequate because the city approved the project based on one estimate of the cumulative impact, despite having knowledge of another, much larger estimate involving related projects. These cases do show that courts became more and more willing to substitute their judgment for that of the agency. It should be noted, however, that the cumulative effect analysis did not generate more litigation because many courts are reluctant to pursue scientific challenges.

4. Alternative Projects

As noted above, Laurel Hills Homeowners Association v. City Council involved the alternative analysis required in an EIR.65 In that case, there was no dispute over which alternatives should be analyzed, only over the merits of the alternatives. However, litigation frequently has challenged the selection of alternatives included an EIR.65 In Iinyo County v. City of Los Angeles, an EIR was found not to comply with CEQA because it included only one project alternative, extracting ground water at a rate of 51 cubic feet per second instead of the proposed 130 cubic feet per second." Because the EIR didn't discuss reasonable alternatives to the water extraction plan, or the "no project" option, the EIR was deemed insufficient by the court. Similar cases involved disputes over the sites to be analyzed. In Citizens of Goleta Valley v. Board of Supervisors, the Supreme Court addressed the issue of sufficiency in an EIR as it pertains to alternative site analysis.67 Hyatt, the hotel chain, was interested in developing Haskell's Beach into a resort hotel. After nearly ten years of permit-seeking and environmental analysis, a citizens' group challenged the Final EIR on the grounds that it did not analyze inland sites. The Final EIR, however, did analyze several possible on-site alternatives, as well as other coastal options. The Court ruled that the EIR was sufficient, largely because the project would be infeasible if located inland. In adopting the "feasible" standard, the Court limits the scope of the project EIR to what can be done by the individual developer, not what is best for the region. The decision appropriately notes that decisions about where region-wide development should occur, without regard to feasibility of projects by specific builders, should be made at the general plan level.

5. Premature CEQA Evaluation

One of the most intractable disputes over CEQA is at what stage environmental review should take place. As noted above in Bozazg, the court found that an annexation required an EIR, because a change in the environment could occur afterwards, though no concrete plans were established. Despite the Simi Valley ruling, which would seem to moderate this holding, the courts of appeals have continued to apply, and even broaden, the holding of Bozang McQueen v. Board of Directors68 involving the purchase of land from the federal government by a local agency. Included in the purchase were transformers containing a toxic material, but the federal government would maintain responsibility for the removal of these transformers. The court's holding was that the acquisition might eventually cause a change in the environment, and thus, pursuant to Bozang, required an EIR. This decision was clearly the result of the court being unhappy with the state of the property, and not a concern for any change in the environment. The case is an excellent example of wasteful practices inherent in the CEQA process. As a result of McQueen, the land was not acquired, the federal government had no incentive to clean it up, and the money spent on litigation had no beneficial effect on the actual physical environment. Despite 20 years of modifications, expansions, and reform of CEQA, few are satisfied that the law works well. Granted, some of the problems involve redundancy in the permit process,69 but CEQA still carries much of the blame for serving as the vehicle allowing anti-growth activists to abuse the system in such a way that the goal of rational, informed decision-making is often lost.


There are real problems in CEQA today. CEQA's best attribute is that developers actually account for the environment in their plans and mitigate many environmental effects. Unfortunately, many participants in CEQA don't believe the act works well. According to a survey by the Association of Bay Area Governments (ABAG), over half of their respondents (all people active in the CEQA process) believe that legal defensibility, rather than disclosure of environmental information, is the primary concern of those preparing EIRs.70 But the survey found that less than 1% of all project applications were involved in litigation. Clearly, the fear of litigation has much more effect on the CEQA process than actual litigation. Unfortunately, this causes EIRs to be technical to a fault, and of little use to agency decisionmakers who don't have the scientific background necessary to make use of such a document. One such document, an EIR for a landfill in Ventura County, ran 1475 pages and cost $1.2 million, a hefty sum considering the low cost of building the landfill itself.71 Agency officials are not known for their studious ways, and it is unlikely, even inconceivable, that many will rely on a 1475 page scientific report to make their decision.

Another problem with CEQA is that almost every standard involved is subjective. The "significant effect" standard, the "substantial evidence" standard, "cumulative effect" and even the decision to approve a project despite environmental damage are subjective. This has allowed the courts to take a leading role in determining what CEQA means. If objective standards were determined by the legislature, the role of courts would be greatly reduced; developers and agency decision-makers would no longer have to fear litigation if their project complied with the objective standards, and consistency from agency to agency within the government would be achieved.

CEQA also faces a conceptual problem, one that has been inadequately addressed since the Act was passed. CEQA focuses on site-specific environmental concerns. Largely neglected within the procedural framework are concerns of the entire community or region. For example, when a housing development must mitigate its number of units from 150 to 90, the net effect is to contribute to urban sprawl, because it means that 60 residents will have to find housing elsewhere. These types of concerns, however, should not be the responsibility of the developer. They should be addressed by the local, regional and state governments, preferably before a project is proposed. However, even when they are, these projects are not exempt from CEQA and possible environmental challenges. One way to allow more sensible planning is to determine baseline environmental effects, and to mitigate only those above the baseline. For example, a 150-unit development would only have to mitigate effects which were abnormal for such a development. This would mean recognizing that reducing unavoidable environmental effects in one location will only shift them elsewhere in the area.

CEQA reform has been a problem from its inception. Every change to CEQA is costly to agencies and developers as they have to adapt to the new guidelines. Recently legislation passed which required the CEQA guidelines to be updated every two years. Certainly this sentiment is worthwhile; the guidelines should be kept current, and information can be promulgated through this manner. In fact, the state implementing guidelines have not been updated since 1986. However, the benefits of keeping CEQA unchanged is that those affected by it would be able to comply with it once, and then maintain the same procedure.

There has also been reform legislation proposed and passed which does not aim to cure problems, but only to treat its symptoms. For example, many CEQA observers and participants recognize that EIRs are unfocused, and cover too many issues to be of use to agency decision-makers. Because of this, lawmakers have sponsored legislation to encourage the use of tiered or focused EIRs. Unfortunately, this reform addresses only the symptoms, not the substance of the problem. Without complementary reforms in the nature of judicial review, permit streamlining, and threshold questions of "significant effect," agencies would remain exposed to challenges of abuse of discretion if they used focused EIRs.


Section III: Recent Legislation

In 1993, the California State Legislature, responding in part to the prolonged economic slump the state has experienced, passed the first significant CEQA reforms in many years. These bills are excellent examples of the problems CEQA reform faces. The most difficult aspect of CEQA reform is determining how to simplify it without rendering it ineffectual.

The most comprehensive proposal was AB 1888 (sponsored by Assemblyman Byron Sher), which allows developers to submit a Master Environmental Impact Report (MEIR), that will shield the related subsequent projects (later phases of a development, for example) from further environmental review.72 The bill also exempts from CEQA review housing and commercial projects that conform to local plans, and establishes a public assistance and information program to facilitate resolution of complaints in the CEQA process.73 This bill, which calls itself the California Environmental Quality Reform Act of 1993, is designed chiefly to grant relief to certain kinds of large-scale developments, such as multi-phased, master-plan communities, and seems to promise little change in the CEQA process itself. Instead of proceeding with environmental review at each stage of a development's progress, the bill shifts the majority of the analysis to the front end of the developing plan. The real tradeoff is that in exchange for being able to proceed with a project once approved without (much) further review, the developer faces increased review in the initial phases. If a developer is absolutely certain about what the final outcome of the project will be, this should be beneficial. But if changes must be made to the project, either due to investors' desires or governmental concerns (other than CEQA), the environmental review cost could increase. A companion bill, SB 919 (sponsored by Senator Ralph Dills), did attempt some substantive reform of judicial review of the CEQA process, by narrowing the grounds of the "fair argument" standard. The relevant portion of the bill reads: "Argument, speculation, unsubstantiated opinion or narrative, evidence which is clearly inaccurate or erroneous, or evidence of social or economic impacts which do not contribute to, or are not caused by, physical impacts on the environment, is not substantial evidence. Substantial evidence shall include facts, reasonable assumptions predicated upon facts, and expert opinion supported by facts." The bill also attempts to lessen CEQA's substantive requirements, so that agencies could approve projects if they find that specific benefits outweigh adverse environmental impacts.

Missing from these reforms, however, is any meaningful simplification of the CEQA process itself, which would reduce the number of 1000-plus page EIRs that are wasteful and have little relation to actual environmental protection in many cases.


Section IV: Ideas from Other States

There are several states which have enacted "Little NEPA's" similar to CEQA, and most of them work better than, or at least aren't as vilified as, CEQA." The examples of other states should prove to be a fertile ground for examining how CEQA can be reformed.75 We examine several issues below.

1. Washington State

Like CEQA, Washington's State Environmental Policy Act (SEPA) was enacted shortly after NEPA.76 SEPA, however, took a markedly different approach to environmental protection than CEQA. Rather than rely on procedural protections, such as public and agency comments on EIRs and judicial review, SEPA charges agencies with the task of mitigating environmental effects. SEPA applies, like NEPA, only to legislation and major actions having a significant effect. However, unlike NEPA, it does apply to private projects which require a permit or entitlement. The Act also follows NEPA by requiring impact reports only in cases where the effect on the environment is more concrete than speculative. Though it is clear that the scope of SEPA is considerably narrower than CEQA, there are still grounds for third party litigation and judicial review.77 Washington addresses this through expansive substantive requirements in SEPA.

The substantive requirements give agencies more discretionary power. In California, as noted above, the substantive requirements of CEQA are not the focus of attention over CEQA, and many agencies and environmentalists are ignorant that CEQA has these requirements. Washington, however, gives its agencies broad latitude to deny projects should they not address environmental concerns. The leading case, Polygon Corporation v. City of Seattle, involved the denial of a building permit because of aesthetic concerns.78 Polygon argued that SEPA was purely procedural, but the court held that SEPA's policy requires that agencies review all proposals affecting the environment. The threshold for judicial review of agency decisions (which in this system tend to be denials which are then challenged by the permit seekers), is very high, and unless a clear error by the agency is established, the judiciary will bow to the agency's decision. Instead of concerning itself with a strict procedure, SEPA focuses on the actual agency decision. The chief merit of this approach is that EIRs can be aimed at helping decision-makers, without an overriding concern about legal defensibility.

2. New York

New York's State Environmental Quality Review Act (SEQRA) came into effect in 1978. As does CEQA and SEPA, SEQRA applies to public and private projects, but its definition of projects is akin to CEQA in that it applies to all projects undertaken or approved by an agency. However, SEQRA's implementing guidelines categorize projects objectively, and then exempt many entirely. There are several classes of projects: Type I projects are those which are preemptively regarded as having an impact on the environment; Type II projects, which won't have an impact on the environment; unlisted projects, which are borderline cases (but still there are objective standards to guide agency decision-makers); and exempted and excluded projects. Type II, exempt and excluded projects are not required to comply with SEQRA. Type I projects include:

  1. the adoption of a municipality's land use plan, the adoption by any agency of a comprehensive resource management plan or the initial adoption of a municipality's comprehensive zoning regulations;
  2. the adoption of changes in the allowable uses within any zoning district, affecting 25 acres or more;
  3. the granting of a zoning change, at the request of an applicant, for an action that meets or exceeds one or more of the thresholds given elsewhere in this list;
  4. the acquisition, sale, lease, annexation or other transfer of 100 or more contiguous acres of land by a State or local agency;
  5. construction of new residential units which meet or exceed the following thresholds;

    (i) 10 units in municipalities which have not adopted zoning or subdivision regulations;

    (ii) 50 units not to be connected (at commencement of habitation) to existing community or public water and sewerage systems including sewerage treatment works;

    (iii) in a city, town or village having a population of less than 150,000: 250 units to be connected (at the commencement of habitation) to existing community or public water and sewerage systems including sewerage treatment works;

    (iv) in a city, town or village having a population of greater than 150,000 but less than 1,000,000: 1000 units to be connected (at the commencement of habitation) to existing community or public water and sewerage systems including sewerage treatment works;

    (v) in a city, town or village having a population of greater than 1,000,000: 2,500 units to be connected (at the commencement of habitation) to existing community or public water and sewerage systems including sewerage treatment works;

  6. activities, other than the construction of residential facilities, which meet or exceed any of the following thresholds; or the expansion of existing no-residential facilities by more than 50% of any of the following thresholds:

    (i) a project or action which involves the physical alteration of 10 acres;

    (ii) a project or action which would use ground or surface water in excess of 2,000,000 gallons per day;

    (iii) parking for 1,000 vehicles;

    (iv) in a city, town or village having a population of 150,000 persons or less: a facility with more than 100,000 square feet of gross floor area;

    (v) in a city, town or village having a population of more than 150,000 persons: a facility with more than 240,000 square feet of gross floor area;

  7. any structure exceeding 100 feet above original ground level in a locality without any zoning regulation pertaining to height;
  8. any non-agricultural use occurring wholly or partially within an agricultural district (certified pursuant to Agriculture and Markets law, article 25, section 303 and 304) which exceeds 25 percent of any threshold established by this section;
  9. any Unlisted action (unless the action is designed for the preservation of the facility or site) occurring wholly or partially within, or substantially contiguous to, any historic building, structure, facility, site or district or prehistoric site that is listed on the National Register of Historic Places, or that has been proposed by the New York State Board on Historic Preservation for a recommendation to the state Historic Preservation Officer for nomination for inclusion in said National Register, or that is listed on the State Register of Historic Places (The National Register of Historic Places is established by 36 Code of Federal Regulations (C.F.R) Parts 60 and 63, 1986 (see section 617.19 of this Part).);
  10. any Unlisted action which exceeds 25 percent of any threshold in this section, occurring wholly or partially within or substantially contiguous to any publicly owned or operated parkland, recreation area or designated open space, including any site on the Register of National Natural Landmarks pursuant to 36 C.F.R. Part 62, 1986 (see section 617.19 of this Part);
  11. any Unlisted action which exceeds a Type I threshold established by an involved agency pursuant to section 617.4 of this Part; or
  12. any Unlisted action which takes place wholly or partially within or substantially contiguous to any critical environmental area designated by a local or state agency pursuant to section 617.4(h) of this Part.79

After determining whether the SEQRA process does apply, it must make an initial review of the possible environmental effects, using a Preliminary Environmental Assessment form, If this indicates that the project or action may have a significant effect on the environment (according to the specific definitions included within SEQRA and its guidelines), an environmental impact statement must be prepared.

The objective guidelines for SEQRA make the act far more narrow than CEQA, but there is still controversy over the proper judicial review of agency decisions. The primary question was whether or not SEQRA made substantive requirements on agencies, and if so, should the courts defer to the agencies or instead substitute its judgment for the courts.80 These questions are similar to ones addressed in No Oil, Inc. and are still a subject of jurisprudential controversy in New York courts as well as in California.

These two possible environmental review strategies are important largely because they more closely adhere to the older understanding of administrative responsibility within a scheme of the separation of powers within constitutional government. To give an administrative agency discretionary powers carries with it the presumption that the agency will make decisions wisely, and that the accountability for their administration lies within their branch of government. By giving administrators either objective standards, or protection from judicial review, these states are allowing the agencies to see themselves as the final authority in these matters, and thus, act as stewards. The remedy form improper policy or administration should be with the electorate, except for clear and carefully spelled out exceptions. The reward to society in that the process is less cumbersome than allowing the judiciary to make the tough decisions the legislature has passed on, or usurping the rightful duties of the executive branch of government.

What Would Successful CEQA Reform Entail?

The most important element to be fixed in CEQA is the degree of uncertainty in the process. This expresses itself in subjective standards, Additional problems are agency abuse of the CEQA process (especially at the local level), and a procedural emphasis, neglecting any discussion of a substantive improvement of the environment.

From this analysis, it becomes apparent the traits successful CEQA reform will have are 1) less governmental apparatus, since the size of government in and of itself is a major problem with CEQA; 2) fewer procedures replacing current ineffective ones; and 3) an emphasis on the practical and feasible, while removing the current focus on highly speculative predictions about what might happen to the environment. Several proposals fitting this model are:

  • Exempting smaller projects, as done in Washington and New York, so that our environmental review resources can be spent on projects which have the greatest probability of harming the environment, while preventing slow-growth supporters from abusing CEQA as a tactic to delay and frustrate development, especially by small businesses.
  • Establishing objective standards in every phase of CEQA, and then letting the courts use a clear error standard, thus giving agencies more discretion and incentive to work on the public's behalf, and limiting the additional expense and time delay in CEQA litigation, except in extreme cases.81
  • The establishment of baseline levels of environmental impact for specific types of developments, particularly residential development, and then requiring that environmental effects must be mitigated down to the baseline, thus giving developers a definite objective in planning their development, while also reducing uncertainty before the CEQA process begins.

True reform of CEQA should free up government resources to tackle environmental concerns, and private investment to spur the economy. As the emphasis of CEQA turns from being an adversarial, procedural act to a cooperative, substantive one, it can be hoped that the nature of regulation itself will change from frustrating free enterprise to facilitating it.

--By Robert O'Reilly*


Policy Issue: environment


*Robert O'Reilly was a summer research fellow for the Pacific Research Institute in 1993. He is presently studying law at the University of Wisconsin.

  1. 42 U.S.C. Section 4332 (1988)
  2. Since being implemented, the United States Supreme Court has generally viewed the statute as procedural rather than substantive. In Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., [435 U.S. 519 (1978)], the Supreme Court de-emphasized the policy statements within NEPA, and instead argued that NEPA placed no substantive burden on federal agencies to do more than follow the specified procedures. NEPA's policy statements can be found at Section 4332, subdivision 1 of NEPA, and the procedural requirements at subdivision 2. Note that this decision came down several years after Friends of Mammoth v. Planning Board, which was decided in 1972. Presumably, if this case had preceded Friends of Mammoth v. Board of Supervisors, 8 Cal.3d.247 (1972), the policy statements within Friends of Mammoth would have been de-emphasized, and CEQA might not have the expansive character it does today.
  3. Enacted as Chapter 1433, Stat. of Cal., Reg. Sess. 1970.
  4. Public Resource Code Section 21000, subd. (e) (1986).
  5. Public Resource Code Section 21000, subd. (g) (1986).
  6. Public Resource Code Section 21001, subd. (d) (1986).
  7. Public Resource Code Sections 21100 and 21151 (1986).
  8. Public Resource Section 21100 (1986). Note that these requirements are parallel to section 102(2)(c) of NEPA. In NEPA, the report is referred to as an environmental impact statement, and is abbreviated EIS. Other than that, there is little difference between the two.
  9. Public Resource Code Section 21103 (1986).
  10. Public Resource Code Sections 21104 and 21105 (1986). Similar requirements are placed on local agencies in Sections 21150 and 21151.
  11. Thaddeus C. Trzyna and Arthur W. Jokela, The California Environmental Quality Act: An Innovation in State and Local Decisionmaking (Claremont, CA: Center for California Public Affairs, 1974), p. 19. Hereinafter cited as Trzyna. See also Robert Andrews, Jr., "After Mammoth: Friends of Mammoth and the Amended California Environmental Quality Act." 3 Ecology Law Quarterly 353 (1973).
  12. Attorney General of the State of California, Petition, "In re Proposed Guidelines for the Preparation and Evaluation of Environmental Impact Statements under the California Environmental Quality Act of 1970," September 3, 1971, quoted in Trzyna, p. 20.
  13. For a full discussion of the period between the passage of CEQA and the Friends of Mammoth case, see Trzyna, p.17-24.
  14. Environmental Defense Fund, Inc. v. Coastside County Water District, 27 Cal.App.3d 695 (1972). This is the first case heard by a court of appeal that doesn't involve whether or not an agency is exempt from CEQA or if CEQA applies retroactively; the first case heard by the Supreme Court of California involving CEQA is Friends of Mammoth v. Board of Supervisors, discussed below. Note that this case was decided just a few weeks before Friends of Mammoth.
  15. Implementing guidelines had not been issued, so many agencies and contractors ignored the act, given that they were unsure of how to comply with it. In fact, no guidelines were presented until after the Act was amended in 1972.
  16. Quoted in Environmental Defense Fund, Inc. v. Coastside County Water District, 27 Cal.App.3d at 698.
  17. 27 Cal.App.3d at 704.
  18. 8 Cal.3d. 247 (1972).
  19. 8 Cal.3d at 256.
  20. 8 Cal.3d at 256 (quoting Benor v. Board of Medical Examiners 8 Cal.App.3d 542 (1970), at 546-547).
  21. Public Resources Code Sections 21000 and 21001.
  22. Emphasis added by Mosk, J., 8 Cal.3d at 256.
  23. 8 Cal.3d at 262, citing 35 Fed.Reg. 7390, 7391. The Council on Environmental Quality was formed by NEPA in the Executive Branch, and was charged with developing guidelines in the same way the Office of Planning and Research was in CEQA.
  24. It is likely, however, that some form of CEQA would have eventually been passed, and given that the Friends of Mammoth decision was codified within two months of the ruling, it may even have passed if it explicitly regulated private activities.
  25. Trzyna and Jokela review the period immediately following the September 21, 1972 Mammoth decision extensively. It should also be noted since the implementing guidelines were not available, agencies did not modify their practices, and CEQA still had little effect.
  26. Trzyna, p. 31.
  27. An election was to be held six weeks after the Mammoth decision was announced.
  28. 8 Cal.3d at 272. In the first version of the Mammoth case, Justice Mosk stated " . . . [T]he term [significant effect] must be interpreted broadly to include other activities which have any nontrivial effect on the environment." In the modified opinion, Justice Mosk "substitutes the simple statement that the courts will not countenance abuse of the 'significant effect standard to excuse the making of impact reports . . . ." See Kevin Kane, "From Friends of Mammoth to No Oil, Inc.: When Does a Private Construction Project in California Require An Environmental Impact Report?", Los Angeles Bar Journal, October 1976 at 144-145.
  29. Enacted as Chapter 1154, Stat. of Cal., Reg. Sess. 1972.
  30. Chapter 1154 Cal.Stat. Section 1 (1972).
  31. This is an excellent example of how CEQA requires redundant information to be prepared and analyzed. The idea behind this change was to have consistent procedures from county to county, and make sure that all environmental impacts are considered. But its true effect was to increase paperwork, and to shift the burden of environmental analysis from the planning committee to the public. Proposals to restore this idea, now called the Master EIR plan, have recently been released. See CEQA Reform below.
  32. Chapter 1154, Section 15, Stat. of Cal., Reg. Sess. 1972, Public Resource Code Section 21160 (1986).
  33. Note that the agency may require information regardless of the significance or the nature of the impact. There is no threshold for the agency to cross before being able to require the information, and there is no limit to what extent the agency can require the applicant to provide information.
  34. Chapter 1154, Section 16, Stat. of Cal., Reg. Sess. 1972. Public Resource Code Section 21165 et seq. (1986).
  35. Chapter 1154, Section 16, Stat. of Cal., Reg. Sess. 1972. Public Resource Code Section 21168 (1986).
  36. It should be noted that the final version of AB 889 was passed on the final day of the Session, and constituted a compromise between environmentalists and builders and developers. In exchange for codifying Mammoth, and extending many provisions of the act, developers received a 120-day moratorium on CEQA applying to private projects, a grandfather clause, and categorical exemptions, to be formulated by the Resources Agency and to include "ministerial actions," permits which a local or state agency had to approve without exercising any discretionary judgment in the matter. Trzyna, p. 31.
  37. 13 Cal.3d. 68 (1974)
  38. This phrase was taken from Students Challenging Regulatory Agency Procedures v. United States, 346 F.supp. 189, 201 (D.D.C. 1972)(emphasis in original). This case involved a similar situation, but concerned NEPA, not CEQA.
  39. 13 Cal.3d at 88.
  40. 39 Cal.App.3d 830 (1974), at 841.
  41. 44 Cal.App.3d 158 (1974).
  42. 13 Cal.3d 263 (1975).
  43. 51 Cal.App.3d 648 (1975).
  44. 48 Cal.3d 584.
  45. 18 Cal.3d. 190 (1976).
  46. The functional equivalent test comes from NEPA litigation, but the court decided that the 1972 amendments had exempted everything that the legislature had wanted to exempt, and so the functional equivalent test didn't apply.
  47. Chapter 1312, Section 19, subd. 1., Stat. of Cal., Reg. Sess. 1976.
  48. In fact, because developers plan using the principle of rate of return on investment (ROI), the consumers actually pay the costs of CEQA plus a percentage of the amount which the developers expect to receive on their investment. For example, if an EIR costs $500,000, and the developer expects to earn 15% off his investment, he will mark up his project by $575,000 ($500,000 + 15% of 500,000).
  49. Chapter 1312, Section 10, Stat. of Cal., Reg. Sess. 1976. Public Resources Code Section 21083 (1986).
  50. 73 Cal.App.3d. 546 (1977). This was a rejection of the No Oil reasoning which stated that if a fair argument could made that a project might significantly affect the environment, then an EIR was required. See above.
  51. Two notable cases are Newberry Springs Water Association v. County of San Bernadino, 150 Cal.App.3d. 740 (1984), and Brentwood Association for No Drilling v. City of Los Angeles, 134 Cal.App.3d. 491 (1982). In Brentwood, the court applied the Mammoth interpretative principle and thus used the No Oil, Inc. standard to decide against the City of Los Angeles. In Newberry, the same court which handed down Pacific Water Conditioning, in a convoluted decision, seemed to create a hybrid between the two approaches. Its approach was to conclude that the county had substantial evidence to support the decision that there wasn't sufficient evidence to support a fair argument. Semantics aside, it is obvious from this decision that the standard in Friends of "B" Street has been adopted by the lower courts.
  52. Chapter 771, Stat. of Cal., Reg. Sess. 1983.
  53. 202 Cal.App.3d 296 (1988). This is the law as it stands today.
  54. The case also resolved a minor issue of the importance of a public controversy in deciding whether or not an EIR was necessary. The court, stating that the burden of environmental review was placed on the government and not the public, held that a public controversy would only be significant if the case involved a marginally significant effect. The court's emphasis was on the analysis of scientific evidence.
  55. Daniel Selmi, "Judicial Development of CEQA" 18 U.C. Davis Law Review 197 (1984), 227. Professor Selmi filed an amicus brief in Friends of "B" Street arguing for broad judicial review.
  56. 83 Cal.App.3d 515 (1978).
  57. For critical analysis of the Laurel Hills case, see Daniel Selmi, supra at note 45, page 263.
  58. For example, this happened when the California State University selected Taylor Ranch in Ventura County as possible campus site. Because of procedural attacks on the proposal from the community, state officials eventually selected another site. Now the Taylor Community feels that a university would be preferable to the alternative of residential housing development. Sean Stuart Varner, "CEQA After Two Decades: Revenant Problems and Ideas for Necessary Reform" 19 Pepperdine Law Review 1447 (1992), at 1484-1485.
  59. 222 Cal.App.3d 30 (1990).
  60. In this particular case, the court found that there was substantial evidence that supported the conclusion that the California Tiger Salamander would not be endangered by the project. Moreover, the court held that the developer did not have to perform an analysis on the entire species of the California Tiger Salamander to determine if the species would still be viable post-development.
  61. 88 Cal.App.3d 397 (1979).
  62. 88 Cal.App.3d at 411. The court's ruling was subsequently added to the CEQA Guidelines.
  63. 151 Cal.App.3d 61 (1984).
  64. 83 Cal.App.3d 515 (1978).
  65. The alternative of "no project" must be evaluated in every EIR. Foundation for San Francisco's Architectural Heritage v. City and County of San Francisco, 106 Cal.App.3d 893 (1980).
  66. 71 Cal.App.3d 185, motion denied 78 Cal.App.3d 82 (1977).
  67. 52 Cal.3d 553 (1990).
  68. 249 Cal. Rptr. 439 (1988).
  69. According to the Economist, July 17-23, 1993, page 24, a company must receive permission from eight different agencies in order to plant a tree in Los Angeles, and to chop it down and make furniture requires 47 more permits.
  70. Western City, Vol. 67, No. 8 (August 1991), p. 15.
  71. Kenneth R. Weiss, "Reports Have an Impact on Environment," Los Angeles Times, September 15, 1991 at B1.
  72. It is worth noting that Sher's amendment uses the term Master EIR differently than everyone else. He refers to a Master EIR of a specific development, which is usually concluded in phases. Others, such as the Governor's Strategic Growth Management Council, use MEIR to refer to environmental review at the local government level, and as long as a project conforms with the MEIR, it doesn't need to comply with CEQA.
  73. The program, to be located within OPR, would assist both permit-seekers and planning officials, and would also create and maintain a database to assist in the preparation of environmental reports.
  74. States with "Little NEPA's" include Connecticut, Hawaii, Indiana, Maryland, Massachusetts, Minnesota, Montana, New York, North Carolina, South Dakota, Virginia, Washington, and Wisconsin. See Mandelker, "NEPA Law and Litigation" (1984) (cited in "The California Environmental Quality Act (CEQA) After Two Decades: Relevant Problems and Ideas for Necessary Reform," Sean Stuart Varner, 19 Pepperdine Law Review 1447 (1992)).
  75. See Varner, supra note 22. As he notes at note 314, existing environmental policies in other states are too numerous and complex to be discussed within the context of an essay or singular report. However, OPR or Cal/EPA should be able to study other states' experiences with environmental review.
  76. Washington Rev. Code Ann. Section 43.21C.900 (West 1983).
  77. In Norway Hill Preservation and Protection Association v. King County Council, 552 P.2d 674 (Washington 1976), the Washington Supreme Court held that because environmental review could be circumvented by setting the threshold for review too high, a judicial check is necessary.
  78. 578 P.2d 1309 (Washington 1978).
  79. Section 617.12(b) of SEQRA, adapted from Sean Stuart Varner, supra.
  80. The leading case is H.O.M.E.S. v. New York State Urban Development Corporation, 418 N.Y.S.2d 827 (N.Y.App.Div. 1979).
  81. The Legislature should take the lead in establishing these objective procedural standards. Delegation to agencies in the past has yielded great delays and more litigation.