Title: Berkeley Hillside Preservation v. City of Berkeley
Citation: N/A
Docket Number: S201116
State: California
Issuer: California Supreme Court
Date: March 2, 2015

Filed 3/2/15 
 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
BERKELEY HILLSIDE 
) 
PRESERVATION et al. 
) 
 
 
) 
 
Plaintiffs and Appellants, 
) 
 
 
) 
S201116 
 
v. 
) 
 
 
) 
Ct.App. 1/4 A131254 
CITY OF BERKELEY et al., 
) 
 
) 
Alameda County 
 
Defendants and Respondents; ) 
Super. Ct. No. RG10517314 
 
 
) 
DONN LOGAN et al., 
) 
 
 
) 
 
Real Parties in Interest and 
) 
 
 
Respondents.  
) 
 
 
 
____________________________________) 
 
The California Environmental Quality Act (CEQA) (Pub. Resources Code, 
§ 21000 et seq.)1 establishes a comprehensive scheme to provide long-term 
protection to the environment.  It prescribes review procedures a public agency 
must follow before approving or carrying out certain projects.  For policy reasons, 
the Legislature has expressly exempted several categories of projects from review 
under CEQA.  (See § 21080, subd. (b)(1) – (15).)  By statute, the Legislature has 
also directed the Secretary of the Natural Resources Agency (Secretary) to 
establish ―a list of classes of projects that have been determined not to have a 
significant effect on the environment and that shall be exempt from‖ CEQA.  
                                                          
 
1  
All further unlabeled statutory references are to the Public Resources Code. 
 
2 
(§ 21084, subd. (a).)  ―In response to that mandate,‖ the Secretary ―has found‖ that 
certain ―classes of projects . . . do not have a significant effect on the 
environment‖ and, in administrative regulations known as guidelines, has listed 
those classes and ―declared [them] to be categorically exempt from the 
requirement for the preparation of environmental documents.‖  (Cal. Code Regs., 
tit. 14, § 15300; see id., § 15000 et seq., Guidelines for Implementation of CEQA 
(Guidelines).)  Respondent City of Berkeley (City), in approving a permit 
application to build a 6,478-square-foot house with an attached 3,394-square-foot 
10-car garage, relied on two of the class exemptions the Secretary has established 
pursuant to the Legislature‘s mandate:  (1) ―Class 3,‖ which comprises the 
construction of ―new, small facilities or structures,‖ including ―[o]ne single-family 
residence, or a second dwelling unit in a residential zone‖ (Guidelines, § 15303); 
and (2) ―Class 32,‖ which comprises ―in-fill development‖ projects, i.e., projects 
that ―occur[] within city limits on a project site of no more than five acres 
substantially surrounded by urban uses‖ and that meet other specified conditions 
(Guidelines, § 15332).   
The Court of Appeal invalidated the permit approval, relying on Guidelines 
section 15300.2, subdivision (c), which provides:  ―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 unusual circumstances.‖  
In the Court of Appeal‘s view, that a proposed activity may have a significant 
effect on the environment is itself an unusual circumstance that renders the 
categorical exemptions inapplicable.  Finding substantial evidence of a fair 
argument that the proposed project may have a significant environmental impact, 
the court held that the exemptions the City invoked do not apply, and it ordered 
the trial court to issue a writ of mandate directing the City to set aside the permit 
 
3 
approvals and its finding of a categorical exemption, and to order preparation of an 
environmental impact report (EIR). 
We granted review to consider the proper interpretation and application of 
Guidelines section 15300.2, subdivision (c).  We reverse the Court of Appeal‘s 
decision. 
I. FACTUAL BACKGROUND 
 
Real parties in interest and respondents Mitchell Kapor and Freada Kapor-
Klein (applicants) want to build a large house on their lot on Rose Street in 
Berkeley.  The lot is on a steep slope (approximately 50 percent grade) in a 
heavily wooded area.  In May 2009, their architect applied to the City for a use 
permit to demolish the existing house on the lot and to build a 6,478-square-foot 
house with an attached 3,394-square-foot 10-car garage.  The residence would be 
built on two floors, would include an open-air lower level, and would cover about 
16 percent of the lot. 
 
In January 2010, the City‘s zoning adjustments board (Board), after holding 
a public hearing and receiving comments about the project, approved the use 
permit.  It found the project exempt from CEQA review under Guidelines 
sections 15303, subdivision (a), and 15332.  The former, which the Secretary has 
designated Class 3, includes ―construction and location of limited numbers of new, 
small facilities or structures,‖ including ―[o]ne single-family residence, or a 
second dwelling unit in a residential zone,‖ and ―up to three single-family 
residences‖ ―[i]n urbanized areas.‖  (Guidelines, § 15303, subd. (a).)  The latter, 
which the Secretary has designated Class 32, applies to a project ―characterized as 
in-fill development‖ meeting the following conditions:  (1) it ―is consistent with 
the applicable general plan designation and all applicable general plan policies as 
well as with applicable zoning designation and regulations‖; (2) it ―occurs within 
city limits on a project site of no more than five acres substantially surrounded by 
urban uses‖; (3) its ―site has no value[] as habitat for endangered, rare or 
 
4 
threatened species‖ and ―can be adequately served by all required utilities and 
public services‖; and (4) its approval ―would not result in any significant effects 
relating to traffic, noise, air quality, or water quality.‖  (Guidelines, § 15332.)  The 
Board also found that Guidelines section 15300.2, subdivision (c), does not 
preclude use of these categorical exemptions because the project as proposed and 
approved will not have any significant effects on the environment due to unusual 
circumstances.   
 
Several residents of the City, including appellant Susan Nunes Fadley, filed 
an appeal with the city council, arguing in part that CEQA‘s categorical 
exemptions do not apply because the proposed project‘s ―unusual size, location, 
nature and scope will have significant environmental impact on its surroundings.‖   
They asserted that the proposed residence would be ―one of the largest houses in 
Berkeley, four times the average house size in its vicinity, and situated in a canyon 
where the existing houses are of a much smaller scale.‖  They submitted evidence 
that, of Berkeley‘s over 17,000 single-family residences, only 17 exceed 6,000 
square feet, only 10 exceed 6,400 square feet, and only one exceeds 9,000 square 
feet.  They also asserted that the proposed residence would exceed the maximum 
allowable height under Berkeley‘s municipal code and would be inconsistent with 
the policies of the City‘s general plan, and that an EIR is appropriate to evaluate 
the proposed construction‘s potential impact on noise, air quality, historic 
resources, and neighborhood safety.  In response, the City‘s director of planning 
and development stated that 16 residences within 300 feet of the project have a 
greater floor-area-to-lot-area ratio and that 68 Berkeley ―dwellings‖ exceed 6,000 
square feet, nine exceed 9,000 square feet, and five exceed 10,000 square feet. 
 
The city council received numerous letters and e-mails regarding the 
appeal, some in support and some in opposition.  Among the appeal‘s supporters 
was Lawrence Karp, an architect and geotechnical engineer.  In a letter dated 
April 16, 2010, Karp stated:  (1) he had reviewed the architectural plans and 
topographical survey filed with the Board, and had visited the proposed 
 
5 
construction site; (2) ―[p]ortions of the major fill for the project are shown to be 
placed on an existing slope inclined at about 42º (~1.1h:1v) to create a new slope 
more than 50º (~0.8h:1v)‖; (3) ―[t]hese slopes cannot be constructed by earthwork 
and all fill must be benched and keyed into the slope which is not shown in the 
sections or accounted for in the earthwork quantities.  To accomplish elevations 
shown on the architectural plans, shoring and major retaining walls not shown will 
have to be constructed resulting in much larger earthwork quantities than now 
expected‖; (4) the ―massive grading‖ necessary would involve ―extensive trucking 
operations‖; (5) the work that would be necessary ―has never before been 
accomplished in the greater area of the project outside of reservoirs or construction 
on the University of California campus and Tilden Park‖; (6) the project site is 
―located alongside the major trace of the Hayward fault and it is mapped within a 
state designated earthquake-induced landslide hazard zone‖; and (7) ―the project 
as proposed is likely to have very significant environmental impacts not only 
during construction but in service due to the probability of seismic lurching of the 
oversteepened side-hill fills.‖   
 
In a second letter addressing the investigation of geotechnical engineer 
Alan Kropp, Karp stated:  (1) no ―fill slopes‖ were shown in Kropp‘s plan and 
―the recommendations for retaining walls do not include lateral earth pressures for 
slopes with inclinations of more than 2h:1v (~27º) or for wall heights more than 
12 feet‖; (2) the project‘s architectural plans ―include cross-sections and elevations 
that are inconsistent with the Site Plan and limitations in‖ Kropp‘s report; (3) ―all 
vegetation will have to be removed for grading, and retaining walls totaling 27 feet 
in height will be necessary to achieve grades.  Vertical cuts for grading and 
retaining walls will total about 43 feet (17 feet for bench cutting and 26 feet for 
wall cutting).  [¶] A drawing in the [Kropp] report depicts site drainage to be 
collected and discharged into an energy dissipater dug into the slope, which is 
inconsistent with the intended very steep fill slopes‖; and (4) ―the project as 
proposed is likely to have very significant environmental impacts not only during 
 
6 
construction, but in service due to the probability of seismic lurching of the 
oversteepened side-hill fills.‖  
 
In response, Kropp stated that the project site is in an area where an 
investigation is required to evaluate the potential for landslides, and that he had 
conducted the necessary investigation and found there is, in fact, no landslide 
hazard.  Kropp also stated that, in raising concerns about ―side-hill fill,‖ Karp had 
―misread[]‖ the project plans.  According to Kropp, ―the only fill placed by the 
downhill portion of the home will be backfill for backyard retaining walls and 
there will be no side-hill fill placed for the project.  The current ground surface, 
along with the vegetation, will be maintained on the downhill portion of the lot.‖  
Because there will not, as Karp claimed, be any ―steep, side-hill fill constructed,‖ 
Karp‘s concerns do not apply to the proposed construction.  A civil engineer, Jim 
Toby, also submitted a letter stating that he saw ―no evidence‖ in the project plans 
that fill will be placed ― ‗directly on steep slopes‘ ‖ and that Karp‘s contrary 
assertion is based on a ―misreading‖ of the plans.    
 
In support of the permit approval, the City‘s director of planning and 
development submitted a supplemental report stating:  ―A geotechnical report was 
prepared and signed by a licensed Geotechnical Engineer and a Certified 
Engineering Geologist.  This report concluded that the site was suitable for the 
proposed dwelling from a geotechnical standpoint and that no landslide risk was 
present at the site.  Should this project proceed, the design of the dwelling will 
require site-specific engineering to obtain a building permit.‖  
 
The city council addressed the appeal at a meeting on April 27, 2010.  Karp 
was one of the speakers at the meeting.  He began by stating his credentials, 
explaining that he (1) is ―a geotechnical engineer specializing in foundation 
engineering and construction‖; (2) has ―an earned doctorate degree in civil 
engineering and other degrees from U.C. Berkeley including two masters and a 
post-doctoral certificate in earthquake engineering‖; (3) is ―fully licensed‖ and had 
―taught foundational engineering at Berkeley for 14 years and at Stanford for 
 
7 
three‖; (4) has ―experience‖ that ―includes over 50 years of design and 
construction in Berkeley‖; and (5) ―prepare[s] feasibility studies before, and 
engineering during, construction of unusual projects.‖  After affirming the opinion 
he had earlier stated in his letters, he offered this response to the assertion that he 
had misread the project plans:  ―The recent report from [applicants] say I don‘t 
know how to read architectural drawings, but I have been a licensed architect for 
many years and I do know how.  [¶]  Their reports have not changed my opinion.‖  
After hearing from Karp, Kropp, and others, the city council adopted the Board‘s 
findings, affirmed the permit approval, and dismissed the appeal.  The city 
planning department later filed a notice of exemption, stating that the project is 
categorically exempt from CEQA under Guidelines sections 15303, subdivision 
(a), and 15332, and that Guidelines section 15300.2 did not apply. 
 
Fadley then filed a petition for writ of mandate in the trial court, joined by 
appellant Berkeley Hillside Preservation, which is a self-described unincorporated 
association of ―City residents and concerned citizens who enjoy and appreciate the 
Berkeley hills and their environs and desire to protect the City‘s historic, cultural, 
architectural, and natural resources.‖  Following a hearing, the trial court denied 
the petition.  It first concluded that the administrative record contains substantial 
evidence to support the City‘s application of the Class 32 in-fill and Class 3 small 
structures categorical exemptions.  It next found that Guidelines section 15300.2, 
subdivision (c), did not preclude application of these categorical exemptions 
because, notwithstanding evidence of potentially significant environmental effects, 
the proposed project does not present any unusual circumstances.   
 
The Court of Appeal reversed.  After noting appellants‘ concession, for 
purposes of appeal, that the project satisfies the requirements of the Class 3 and 
Class 32 exemptions, the Court of Appeal agreed with appellants that the unusual 
circumstances exception precludes the City from relying on those exemptions.2  In 
                                                          
 
2  
The concurring opinion prefers to call section 15300.2, subdivision (c), ―the 
significant effect exception,‖ based on its title.  (Conc. opn. of Liu, J., post, at p. 
 
8 
the court‘s view, ―the fact that proposed activity may have an effect on the 
environment is itself an unusual circumstance‖ that triggers the exception, 
―because such action would not fall ‗within a class of activities that does not 
normally threaten the environment,‘ and thus should be subject to further 
environmental review.‖  The court next reasoned that the standard of judicial 
review for an agency‘s determination that the exception does not apply is whether 
the record contains evidence of a fair argument of a significant effect on the 
environment, not whether substantial evidence supports the agency‘s 
determination.  Finally, finding substantial evidence of a fair argument that the 
proposed project may have a significant environmental impact, the court held that 
the unusual circumstances exception renders the categorical exemptions 
inapplicable.  It ordered the trial court ―to issue a writ of mandate directing the 
City to set aside the approval of use permits and its finding of a categorical 
exemption, and to order the preparation of an EIR.‖ 
 
We then granted respondents‘ petition for review.  
II.  DISCUSSION 
As they did in the Court of Appeal, appellants concede for purposes of this 
appeal that the proposed project comes within the terms of the Class 3 (small 
structures) and Class 32 (in-fill development) exemptions under the Guidelines.  
What they do not concede is that the City may rely on those exemptions.  In their 
view, as the Court of Appeal held, the unusual circumstances exception precludes 
such reliance.  Respondents, in challenging the Court of Appeal‘s decision, raise 
                                                                                                                                                                             
6.)  Our use of the term ―unusual circumstances exception‖ is consistent with the 
Court of Appeal‘s decision in this case and the vast majority of published case 
law.  Of course, a provision‘s title ―is never allowed to enlarge or control the 
language in the body of the [provision].‖  (Hagar v. Sup. of Yolo Co. (1874) 47 
Cal. 222, 232; see DaFonte v. Up-Right, Inc. (1992) 2 Cal.4th 593, 602 [―Title or 
chapter headings are unofficial and do not alter the explicit scope, meaning, or 
intent of a statute.‖].)  
 
9 
two primary arguments:  (1) a proposed project‘s potential significant effect on the 
environment is not, as the Court of Appeal held, itself an unusual circumstance 
that triggers the exception, and an unusual circumstance apart from the project‘s 
potential environmental effect is a prerequisite to the exception‘s application; and 
(2) in reviewing the City‘s conclusion that the exception is inapplicable, the Court 
of Appeal should have determined whether there was substantial evidence in the 
record to support that conclusion, not whether the record contains evidence of a 
fair argument of a significant effect on the environment.  To these arguments, we 
now turn. 
A.  A Potentially Significant Environmental Effect Is Not Alone 
Sufficient to Trigger the Unusual Circumstances Exception. 
Generally, the rules that govern interpretation of statutes also govern 
interpretation of administrative regulations.  (Guzman v. County of Monterey 
(2009) 46 Cal.4th 887, 898; Cal. Drive-in Restaurant Assn. v. Clark (1943) 22 
Cal.2d 287, 292.)  Thus, we begin here with the language of the unusual 
circumstances exception, giving effect to its usual meaning and avoiding 
interpretations that render any language surplusage.  (Brewer v. Patel (1993) 20 
Cal.App.4th 1017, 1021.)  As noted earlier, Guidelines section 15300.2, 
subdivision (c), provides:  ―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 unusual circumstances.‖  The plain 
language of this provision supports the view that, for the exception to apply, it is 
not alone enough that there is a reasonable possibility the project will have a 
significant environmental effect; instead, in the words of the Guideline, there must 
be ―a reasonable possibility that the activity will have a significant effect on the 
environment due to unusual circumstances.‖  (Guidelines, § 15300.2, subd. (c), 
italics added.)   
 
10 
Contrary to our rules for interpreting regulations, appellants‘ proposed 
construction, which mirrors that of the Court of Appeal and which the concurring 
opinion would adopt, would give no meaning to the phrase ―due to unusual 
circumstances.‖  According to appellants, this phrase is merely ―descriptive‖ in 
that ―[u]nusual circumstances‖ are simply ―self-evident underpinnings‖ when a 
project that otherwise satisfies the requirements of a categorical exemption 
nevertheless ―has potentially significant impacts.‖  Likewise, the concurring 
opinion asserts that ―the phrase ‗unusual circumstances‘ . . . simply describes the 
nature of a project that, while belonging to a class of projects that typically have 
no significant environmental effects, nonetheless will have such effects.‖  (Conc. 
opn, post, at p. 2.)  In other words, in the view of appellants and the concurring 
opinion, the phrase ―due to unusual circumstances‖ adds nothing to the meaning of 
the regulation, and the exception applies if there is a fair argument that a project 
―may‖ (according to appellants) or ―will‖ (according to the concurring opinion 
(ibid.)) have a significant environmental effect.  However, had that been the 
Secretary‘s intent, the phrase ―due to unusual circumstances‖ would, no doubt, 
have been omitted from the regulation; rather than confuse the issue with 
meaningless language, the regulation would clearly and simply provide that the 
exception applies ―if there is a reasonable possibility that the activity will have a 
significant effect on the environment.‖  Reading the phrase ―due to unusual 
circumstances‖ out of the regulation, as appellants and the concurring opinion 
propose, would be contrary to the principle of construction that directs us ―to 
accord meaning to every word and phrase in a regulation.‖  (Price v. Starbucks 
Corp. (2011) 192 Cal.App.4th 1136, 1145.)     
In addition, we agree with respondents that, under the construction of 
appellants and the concurring opinion, the categorical exemptions the Legislature, 
through the Secretary, has established would have little, if any, effect.  CEQA 
 
11 
specifies that environmental review through preparation of an EIR is required only 
―[i]f there is substantial evidence . . . that the project may have a significant effect 
on the environment.‖  (§ 21080, subd. (d).)  As a corollary to this principle, CEQA 
also specifies that, if ―[t]here is no substantial evidence, in light of the whole 
record before the lead agency, that the project may have a significant effect on the 
environment,‖ then the proposed project is not subject to further CEQA review.  
(§ 21080, subd. (c)(1).)  Guidelines section 15061, subdivision (b)(3), captures 
these principles by specifying:  ―Where it can be seen with certainty that there is 
no possibility that the activity in question may have a significant effect on the 
environment, the activity is not subject to CEQA.‖   
Under these provisions, where there is no substantial evidence a proposed 
project may have a significant environmental effect, further CEQA review is 
unnecessary; no categorical exemption is necessary to establish that proposition.  
According to appellants, under the unusual circumstances exception, the 
categorical exemptions are inapplicable unless an agency ―check[s] its files‖ and 
finds no ―evidence of potentially significant impacts.‖  But this is precisely the 
inquiry an agency makes under Guidelines section 15061, subdivision (b)(3), to 
determine whether the proposed project is subject to CEQA review in the first 
instance.  (Muzzy Ranch Co. v. Solano County Airport Land Use Com. (2007) 41 
Cal.4th 372, 387 (Muzzy Ranch) [under Guidelines, § 15061, subd. (b)(3), agency 
must determine whether the evidence in the administrative record shows no 
possibility the proposed activity may have a significant effect on the 
environment].)  And appellants‘ test for determining whether the unusual 
circumstances exception applies —whether there is a ―reasonable possibility‖ the 
proposed project ―will have a significant effect on the environment‖ (Guidelines, § 
15300.2, subd. (c)) — is precisely the test used to determine whether Guidelines 
section 15061, subdivision (b)(3), applies.  (California Farm Bureau Federation v. 
 
12 
California Wildlife Conservation Bd. (2006) 143 Cal.App.4th 173, 194 
[Guidelines, § 15061, subd. (b)(3), inapplicable if ―there is a reasonable possibility 
that a proposed project will have a significant effect upon the environment‖].)  
Thus, under appellants‘ view, the categorical exemptions would serve no purpose; 
they would apply only when the proposed project is, by statute and Guidelines 
section 15061, subdivision (b)(3), already outside of CEQA review.   
Appellants assert that applying a categorical exemption despite a proposed 
project‘s potential significant environmental effect would contravene CEQA 
statutes and the Legislature‘s intent in passing CEQA.  They rely on three CEQA 
provisions:  (1) section 21100, subdivision (a), which directs preparation of an EIR 
―on any project . . . that may have a significant effect on the environment‖; (2) 
section 21151, which similarly directs preparation of an EIR ―on any project . . . 
which may have a significant effect on the environment‖; and (3) section 21082.2, 
subdivision (d), which states that an EIR ―shall‖ be prepared ―[i]f there is 
substantial evidence, in light of the whole record before the lead agency, that a 
project may have a significant effect on the environment.‖  This statutory 
authority, appellants assert, ―does not allow categorical exemptions for any project 
that may have a significant effect on the environment.‖  In other words, ―the 
documented presence of a potential environmental effect . . . always defeat[s] a 
categorical exemption.‖  ―[T]he statutory authority [the Legislature] has given to 
the Secretary only allows categorical exemption for projects that have no 
significant environmental effect, and ‗no statutory policy exists in favor of 
applying categorical exemptions where a fair argument can be made that a project 
will create a significant effect on the environment.‘ ‖  Thus, appellants assert, 
requiring more than a showing that a proposed project may have a significant 
effect in the environment ―would be inconsistent with‖ CEQA‘s statutory 
―mandates.‖  
 
13 
Appellants‘ argument ignores a basic principle of statutory interpretation:  
courts ―do not construe statutes in isolation, but rather read every statute ‗with 
reference to the entire scheme of law of which it is part so that the whole may be 
harmonized and retain effectiveness.‘ ‖  (People v. Pieters (1991) 52 Cal.3d 894, 
899.)  Thus, we must consider the three sections appellants cite, not in isolation, 
but ― ‗in the context of the statutory framework as a whole‘ ‖ in order to 
harmonize CEQA‘s ― ‗various parts.‘ ‖  (Palos Verdes Faculty Assn. v. Palos 
Verdes Peninsula Unified Sch. Dist. (1978) 21 Cal.3d 650, 659 [construing the Ed. 
Code].)   
Here, several CEQA provisions, as well as their evolution, are relevant to 
the issue.  When the Legislature enacted CEQA in 1970, it directed the Governor‘s 
Office of Planning and Research (OPR), ―in conjunction with appropriate state, 
regional, and local agencies,‖ to ―coordinate the development of objectives, 
criteria, and procedures to assure the orderly preparation and evaluation of‖ EIRs.  
(Former § 21103, added by Stats. 1970, ch. 1433, § 1, pp. 2780, 2782.)  Two years 
later, in Friends of Mammoth v. Board of Supervisors (1972) 8 Cal.3d 247, 259 
(Mammoth), we held that CEQA applies, not just to public projects, but also to 
private activities requiring a government permit or similar entitlement.  Before 
Mammoth, it had been ―generally believed‖ that CEQA ―appl[ied] only to projects 
undertaken or funded by public agencies.‖  (Friends of Lake Arrowhead v. Board 
of Supervisors (1974) 38 Cal.App.3d 497, 513.)  Cognizant of our decision‘s 
potential ramifications, after recognizing that ―the reach of the statutory phrase, 
‗significant effect on the environment,‘ is not immediately clear,‖ we noted:  ―To 
some extent this is inevitable in a statute which deals, as the [CEQA] must, with 
questions of degree.  Further legislative or administrative guidance may be 
forthcoming on this point among others.‖  (Mammoth, supra, at p. 271, italics 
added.)  We then added:  ―[C]ommon sense tells us that the majority of private 
 
14 
projects for which a government permit or similar entitlement is necessary are 
minor in scope — e.g., relating only to the construction, improvement, or 
operation of an individual dwelling or small business — and hence, in the absence 
of unusual circumstances, have little or no effect on the public environment.  Such 
projects, accordingly, may be approved exactly as before the enactment of the 
[CEQA].‖  (Id. at p. 272.)  
The Legislature immediately responded to Mammoth by amending CEQA 
through urgency legislation.  (See County of Inyo v. Yorty (1973) 32 Cal.App.3d 
795, 803.)  As relevant here, it added section 21083, which generally directed the 
OPR, ―as soon as possible,‖ to ―prepare and develop proposed guidelines for the 
implementation of [CEQA],‖ and directed the Secretary to ―certify and adopt the 
[OPR‘s proposed] guidelines pursuant to‖ the Administrative Procedure Act.  
(Stats. 1972, ch. 1154, § 1, pp. 2271, 2272-2273.)  These directives exist today as 
subdivisions (a) and (e) of section 21083.  More specifically, in several provisions, 
the Legislature provided for categorical exemptions to CEQA.  In section 21084, it 
provided:  ―The guidelines prepared and adopted pursuant to Section 21083 shall 
include a list of classes of projects which have been determined not to have a 
significant effect on the environment and which shall be exempt from the 
provisions of [CEQA].  In adopting the guidelines, the Secretary . . . shall make a 
finding that the list or classification of projects referred to in this section do not 
have a significant effect on the environment.‖  (§  21084, as added by Stats. 1972, 
ch. 1154, § 1, pp. 2271, 2273.)  This provision remains substantively the same 
today.  In former section 21085, the Legislature provided that ―[a]ll classes of 
projects designated pursuant to Section 21084 . . . shall be exempt from the 
provisions of [CEQA].‖  (Stats. 1972, ch. 1154, § 1, pp. 2271, 2273.)  The 
substance of this section appears today in section 21080, subdivision (b)(9), which 
provides that CEQA ―does not apply‖ to ―[a]ll classes of projects designated 
 
15 
pursuant to Section 21084.‖  Finally, the Legislature enacted section 21086 to 
establish a mechanism for challenging the Secretary‘s categorical exemptions.  
(Stats. 1972, ch. 1154, § 1, pp.  2271, 2273-2274.)  Subdivision (a) of that section 
provides:  ―A public agency may, at any time, request the addition or deletion of a 
class of projects, to the list designated pursuant to Section 21084.  That request 
shall be made in writing to the [OPR] and shall include information supporting the 
public agency‘s position that the class of projects does, or does not, have a 
significant effect on the environment.‖  Subdivision (b) of section 21086 requires 
the OPR to ―review each request‖ and ―submit‖ a recommendation to the 
Secretary, and authorizes the Secretary, ―[f]ollowing the receipt of [the OPR‘s] 
recommendation,‖ to ―add or delete the class of projects to the list of classes of 
projects designated pursuant to Section 21084 that are exempt from the 
requirements of [CEQA].‖  Subdivision (c) of section 21086 then provides:  ―The 
addition or deletion of a class of projects, as provided in this section, to the list 
specified in Section 21084 shall constitute an amendment to the guidelines 
adopted pursuant to Section 21083 and shall be adopted in the manner prescribed 
in Sections 21083 and 21084.‖ 
Collectively, these provisions indicate that the Legislature intended to 
establish by statute ―classes of projects‖ that ―have been determined not to have a 
significant effect on the environment,‖ to require the OPR and the Secretary to 
apply their expertise and identify those ―classes‖ by ―mak[ing] a finding‖ that the 
projects they comprise ―do not have a significant effect on the environment,‖ and 
to ―exempt‖ from CEQA proposed projects within the classes the OPR and the 
Secretary have identified.  (§ 21084, subd. (a).)  This conclusion comports with 
the impetus for the Legislature‘s enactment of these provisions:  our decision in 
Mammoth, which (1) observed that CEQA‘s applicability turns on ―questions of 
degree,‖ (2) stated that ―the majority‖ of private projects ―may be approved 
 
16 
exactly as before‖ CEQA‘s enactment because they ―are minor in scope . . . and 
hence, in the absence of unusual circumstances, have little or no effect on the 
public environment,‖ and (3) called for ―[f]urther legislative or administrative 
guidance‖ on these issues.  (Mammoth, supra, 8 Cal.3d at pp. 271-272.)  To 
address these considerations, the Legislature, through the Guidelines, intended to 
enumerate classes of projects that are exempt from CEQA because, 
notwithstanding their potential effect on the environment, they already ―have been 
determined not to have a significant effect on the environment.‖  (§ 21084.)  The 
Guidelines implement this intent, by setting forth the ―classes of projects‖ that the 
Secretary, acting ―[i]n response to [the Legislature‘s] mandate,‖ ―has found . . . do 
not have a significant effect on the environment.‖  (Guidelines, § 15300.)  Thus, 
construing the unusual circumstances exception as requiring more than a showing 
of a fair argument that the proposed activity may have a significant environmental 
effect is fully consistent with the Legislature‘s intent. 
By contrast, as earlier explained, appellants‘ construction of the unusual 
circumstances exception would render useless and unnecessary the statutes the 
Legislature passed to identify and make exempt classes of projects that have no 
significant environmental effect.  Try as they might, appellants can identify no 
purpose or effect of the categorical exemption statutes if, as they assert, a showing 
of a fair argument of a potential environmental effect precludes application of all 
categorical exemptions.  Construing the unusual circumstances exception to apply 
any time there is a reasonable possibility of a significant environmental effect 
would, therefore, contravene our duty to adopt a construction that gives effect to 
all parts of the statutory and regulatory framework, rather than one that renders 
part of the framework ―wholly useless and unnecessary.‖  (French Bank Case 
(1879) 53 Cal. 495, 530.) 
 
17 
The concurring opinion‘s attempt to succeed where appellants have 
failed — i.e., to show that the categorical exemptions still have some ―value‖ 
under their construction (conc. opn, post, at p. 9) — is also unpersuasive.  The 
concurring opinion first asserts that proposed projects enjoy ―a considerable 
procedural advantage‖ when an agency finds that they fall within the terms of an 
exempt category.  (Conc. opn., post, at p. 10.)  As to such projects, the concurring 
opinion notes, an agency need not follow any particular procedure, include any 
written determination, undertake an initial study, or adopt a negative declaration.  
(Ibid.)  However, the same is true of proposed projects that fall within the terms of 
Guidelines section 15061, subdivision (b)(3), i.e., projects that are ―not subject to 
CEQA‖ because ―it can be seen with certainty that there is no possibility that 
[they] may have a significant effect on the environment.‖  (See Muzzy Ranch, 
supra, 41 Cal.4th at p. 380 [initial study not required where Guidelines, § 15061, 
subd. (b)(3) applies].)  As already explained, the concurring opinion‘s 
interpretation renders the categorical exemptions duplicative of this guideline, and 
the concurring opinion does not persuasively demonstrate otherwise.  Thus, its 
discussion of these so-called procedural advantages fails to show that, under its 
interpretation, the categorical exemptions have independent value.  
The concurring opinion also notes that, when an agency finds that a project 
meets the terms of a categorical exemption, it ―impliedly finds that it has no 
significant impact,‖ and ―the burden shifts to‖ project opponents ―to produce 
evidence‖ that the unusual circumstances exception applies.  (Conc. opn, post, at 
pp. 9-10.)  This is significant, the concurring opinion maintains, because ―[i]n 
many cases, categorical exemptions are not litigated, and the applicability of the 
exemption is evident.‖  (Id. at p. 10.)  
However, even if a proposed project faces no opposition, an agency 
invoking a categorical exemption may not simply ignore the unusual 
 
18 
circumstances exception; it must ―consider the issue of significant effects . . . in 
determining whether the project is exempt from CEQA where there is some 
information or evidence in the record that the project might have a significant 
environmental effect.‖  (Association for Protection etc. Values v. City of Ukiah 
(1991) 2 Cal.App.4th 720, 732 (Ukiah).)  This follows from Guidelines section 
15061, subdivisions (a) and (b)(2), which, respectively, (1) direct a lead agency to 
determine whether a proposed project is ―exempt from CEQA,‖ and (2) specify 
that a project is exempt if a categorical exemption applies ―and the application of 
that categorical exemption is not barred by one of the exceptions set forth in 
Section 15300.2.‖  Thus, an agency may not apply a categorical exemption 
without considering evidence in its files of potentially significant effects, 
regardless of whether that evidence comes from its own investigation, the 
proponent‘s submissions, a project opponent, or some other source.  Moreover, 
under the concurring opinion‘s interpretation, if those files contain ―substantial 
evidence‖ of a mere ―fair argument‖ that the project will have significant 
environmental effects, the agency may not apply a categorical exemption.  (Conc. 
opn, post, at p. 14.)  Thus, under the concurring opinion‘s interpretation of the 
unusual circumstances exception, the ―considerable procedural advantage‖ the 
concurring opinion posits is largely illusory.  (Id. at p. 10.) 
Also illusory is the ―second advantage‖ that, in the view of the concurring 
opinion, gives some value to categorical exemptions under its interpretation:  the 
―comparative arguments‖ available to project proponents when an opponent 
invokes the unusual circumstances exception.  (Conc. opn, post, at p. 11.)  
According to the concurring opinion, proponents may ―argue,‖ if ―supported by 
evidence,‖ that (1) the project‘s effects are ―typical‖ of those generated by projects 
in the exempt category, ―such that few or no projects in the category would be 
exempt if the effects were deemed significant,‖ and (2) ―the project‘s dimensions 
 
19 
or features are not unusual compared to typical projects in the exempt category, 
thereby suggesting that the project is similar to those that the Secretary has 
determined not to have a significant environmental effect.‖  (Id. at pp. 11-12.)  
However, under the fair argument test the concurring opinion would apply here, 
―an agency is merely supposed to look to see if the record shows substantial 
evidence of a fair argument that there may be a significant effect.  [Citations.]  In 
other words, the agency is not to weigh the evidence to come to its own conclusion 
about whether there will be a significant effect.  It is merely supposed to inquire, 
as a matter of law, whether the record reveals a fair argument. . . . ‗ ―[I]t does not 
resolve conflicts in the evidence but determines only whether substantial evidence 
exists in the record to support the prescribed fair argument.‖ ‘ [Citation.] ‖  
(Banker’s Hill, Hillcrest, Park West Community Preservation Group v. City of San 
Diego (2006) 139 Cal.App.4th 249, 263 (Banker’s Hill); see Guidelines, § 15064, 
subd. (f)(1) [a lead agency ―presented with a fair argument that a project may have 
a significant effect on the environment . . . shall prepare an EIR even though it 
may also be presented with other substantial evidence that the project will not 
have a significant effect‖].)  Thus, under the concurring opinion‘s interpretation, 
evidence a project proponent offers to show that the project will only have typical 
effects, dimensions, and features is irrelevant if a project opponent can make a 
mere fair argument that those effects, dimensions, or features are not typical, or 
that the project will have a significant environmental effect.  For these reasons, the 
concurring opinion fails to demonstrate that the categorical exemptions would 
retain any significant ―value‖ under its interpretation.  (Conc. opn, post, at p. 9.)  
Moreover, contrary to the assertion of the concurring opinion, even were 
the categorical exemptions to retain some limited value under its construction, 
there would still be ―reason[s]‖ (conc. opn, post, at p. 14) to reject that 
construction.  First, as earlier explained (ante, p. 10), because that construction 
 
20 
would transform the phrase ―due to unusual circumstances‖ into meaningless 
surplusage, it is one we ―should avoid.‖  (Metcalf v. County of San Joaquin (2008) 
42 Cal.4th 1121, 1135.)  Second, nothing suggests that either the Legislature or the 
Secretary intended the categorical exemptions to have such minuscule value.  Had 
that been their intent, surely they would have expressed it in a more clear, concise, 
direct, and obvious way. 
Accordingly, the Court of Appeal erred by holding that a potentially 
significant environmental effect itself constitutes an unusual circumstance.  In 
listing a class of projects as exempt, the Secretary has determined that the 
environmental changes typically associated with projects in that class are not 
significant effects within the meaning of CEQA, even though an argument might 
be made that they are potentially significant.  The plain language of Guidelines 
section 15300.2, subdivision (c), requires that a potentially significant effect must 
be ―due to unusual circumstances‖ for the exception to apply.  The requirement of 
unusual circumstances recognizes and gives effect to the Secretary‘s general 
finding that projects in the exempt class typically do not have significant impacts. 
As to projects that meet the requirements of a categorical exemption, a 
party challenging the exemption has the burden of producing evidence supporting 
an exception.  (Davidon Homes v. City of San Jose (1997) 54 Cal.App.4th 106, 
115; see 1 Kostka & Zischke, Practice under the Cal. Environmental Quality Act 
(2d ed. 2008) § 5.71 (citing cases).)  As explained above, to establish the unusual 
circumstances exception, it is not enough for a challenger merely to provide 
substantial evidence that the project may have a significant effect on the 
environment, because that is the inquiry CEQA requires absent an exemption.  
(§ 21151.)  Such a showing is inadequate to overcome the Secretary‘s 
determination that the typical effects of a project within an exempt class are not 
significant for CEQA purposes.  On the other hand, evidence that the project will 
 
21 
have a significant effect does tend to prove that some circumstance of the project 
is unusual.  An agency presented with such evidence must determine, based on the 
entire record before it — including contrary evidence regarding significant 
environmental effects — whether there is an unusual circumstance that justifies 
removing the project from the exempt class. 
This reading of the guideline is not inconsistent with the phrase ―reasonable 
possibility that the activity will have a significant effect on the environment.‖  
(Guidelines, § 15300.2, subd. (c).)  A party invoking the exception may establish 
an unusual circumstance without evidence of an environmental effect, by showing 
that the project has some feature that distinguishes it from others in the exempt 
class, such as its size or location.  In such a case, to render the exception 
applicable, the party need only show a reasonable possibility of a significant effect 
due to that unusual circumstance.  Alternatively, under our reading of the 
guideline, a party may establish an unusual circumstance with evidence that the 
project will have a significant environmental effect.  That evidence, if convincing, 
necessarily also establishes ―a reasonable possibility that the activity will have a 
significant effect on the environment due to unusual circumstances.‖  (Guidelines, 
§ 15300.2, subd. (c).) 
As this discussion demonstrates, our approach is consistent with the 
concurring opinion‘s statement of its central proposition:  ―When it is shown that a 
project otherwise covered by a categorical exemption will have a significant 
environmental effect, it necessarily follows that the project presents unusual 
circumstances.‖  (Conc. opn, post, at p. 2, italics added.)  However, for reasons 
already set forth, we part company with the concurring opinion when it moves 
from this central proposition to the conclusion that a reviewing court must find the 
exception applicable, and overturn an agency‘s application of an exemption, if 
there is ―substantial evidence‖ of ―a fair argument that the project will have 
 
22 
significant environmental effects.‖  (Ibid.)  The Secretary, in complying with the 
Legislature‘s command to determine the ―classes of projects‖ that ―do not have a 
significant effect on the environment‖ (§ 21084, subd. (a)), necessarily resolved 
any number of ―fair arguments‖ as to the possible environmental effects of 
projects in those classes.  Allowing project opponents to negate those 
determinations based on nothing more than ―a fair argument that the project will 
have significant environmental effects‖ (conc. opn., post, at p. 12) would be 
fundamentally inconsistent with the Legislature‘s intent in establishing the 
categorical exemptions. 
Appellants assert that Wildlife Alive v. Chickering (1976) 18 Cal.3d 190 
(Chickering) precludes us from construing the unusual circumstances exception to 
require a showing of something more than a potentially significant environmental 
effect.  There, we held in relevant part that the setting of hunting and fishing 
seasons by the Fish and Game Commission (Commission) was not exempt from 
CEQA under Guidelines former section 15107.  (Chickering, supra, at p. 205.)  
That former guideline established a categorical exemption for ― ‗actions taken by 
regulatory agencies . . . to assure the maintenance, restoration, or enhancement of 
a natural resource where the regulatory process involves procedures for protection 
of the environment‘ ‖ (id. at p. 204), and it described as an example ― ‗the wildlife 
preservation activities of the State Department of Fish and Game.‘ ‖  (Id. at p. 
205.)  We gave two reasons for finding this exemption inapplicable on its terms.  
First, the Commission ―is not‖ the Department of Fish and Game.  (Ibid.)  Second, 
and ―[m]ore significantly,‖ several of the statutes that granted powers and duties to 
the Department of Fish and Game ―contemplate projects specifically designed for 
the preservation of wildlife.‖  (Ibid.)  These are the ―departmental functions‖ to 
which the former guideline referred in mentioning ―[t]he ‗wildlife preservation 
activities of the State Department of Fish and Game.‘ ‖  (Ibid.)  ―The 
 
23 
[Commission‘s] fixing of hunting seasons, while doubtless having an indirect 
beneficial effect on the continuing survival of certain species, cannot fairly or 
readily be characterized as a preservation activity in a strict sense.‖  (Ibid.) 
After concluding in Chickering that the Commission‘s activity did not fall 
within the language of the former guideline, we discussed why it would have been 
problematic to ―expand[]‖ that ―language to imply‖ an exemption for that activity.  
(Chickering, supra, 18 Cal.3d at p. 206.)  Doing so, we stated, would contravene 
the ―principle‖ that ―CEQA must be interpreted so as to afford the ‗fullest possible 
protection‘ to the environment.‖  (Ibid.)  Moreover, we explained in a passage 
appellants quote, ―if‖ we ―expand[ed]‖ (id. at p. 206) the former guideline‘s 
language ―to cover the commission‘s hunting program, it is doubtful that such a 
categorical exemption [would be] authorized under the statute. . . . [N]o regulation 
is valid if its issuance exceeds the scope of the enabling statute.  [Citations.]  The 
secretary is empowered to exempt only those activities which do not have a 
significant effect on the environment.  (Pub. Resources Code, § 21084.)  It follows 
that where there is any reasonable possibility that a project or activity may have a 
significant effect on the environment, an exemption would be improper,‖ and ―the 
setting of hunting and fishing seasons has the potential for a significant 
environmental impact . . . .‖  (Id. at pp. 205-206.)     
For several reasons, appellants‘ reliance on Chickering is unavailing.  First, 
Chickering predated the Secretary‘s adoption of the unusual circumstances 
exception and, thus, addressed neither the meaning nor the validity of that 
exception.  Second, as here relevant, the only issue in Chickering was whether the 
Commission‘s activity fell within the scope of Guidelines former section 15107l.  
After concluding it did not, we added the discussion appellants cite, which, to 
buttress our conclusion, explored the validity of a hypothetical exemption that 
would include the Commission‘s activity.  (Chickering, supra, 18 Cal.3d at pp. 
 
24 
205-206.)  Third, because that added discussion was tangential to the issue before 
us and unnecessary to resolve the case, it was, understandably, summary.  For 
example, it did not consider the broader statutory framework, the evolution of the 
CEQA statutes, or the implications of its statement for the effectiveness of various 
other CEQA statutes.  Finally, in 1993, after we decided Chickering, the 
Legislature enacted section 21083.1, which directs courts ―not [to] interpret [the 
CEQA statutes] or the state guidelines adopted pursuant to Section 21083 in a 
manner which imposes procedural or substantive requirements beyond those 
explicitly stated in [CEQA] or in the state guidelines.‖  (§ 21083.1, italics added.)  
According to the legislative history, the purpose of this statute was to ―limit 
judicial expansion of CEQA requirements‖ and to ― ‗reduce the uncertainty and 
litigation risks facing local governments and project applicants by providing a 
―safe harbor‖ to local entities and developers who comply with the explicit 
requirements of the law.‘ ‖  (Assem. Com. on Natural Resources, Analysis of Sen. 
Bill No. 722 (1993-1994 Reg. Sess.) for hearing on July 12, 1993, p. 2.)  Given 
appellants‘ concession for purposes of appeal that the proposed project here falls 
within two of the categorical exemptions, under Guidelines section 15300.2, 
subdivision (c), environmental review is necessary only if ―there is a reasonable 
possibility [the project] will have a significant effect on the environment due to 
unusual circumstances.‖  Given that the listing of a class of projects as exempt 
constitutes the Secretary‘s finding, pursuant to the Legislature‘s command, that the 
typical effects of projects within that class are not significant within the meaning 
of CEQA, interpreting the unusual circumstances exception to require 
environmental review absent unusual circumstances would violate the 
Legislature‘s express directive in section 21083.1 ―not [to] interpret‖ the CEQA 
statutes and the Guidelines ―in a manner which imposes procedural or substantive 
requirements beyond those‖ the statutes and the Guidelines ―explicitly state[].‖   
 
25 
As we have explained, ―in the . . . years since CEQA was enacted the 
Legislature has, for reasons of policy, expressly exempted several categories of 
projects from environmental review.  (See § 21080, subd. (b)(1)-[(15)].)  This 
court does not sit in review of the Legislature‘s wisdom in balancing these policies 
against the goal of environmental protection because, no matter how important its 
original purpose, CEQA remains a legislative act, subject to legislative limitation 
and legislative amendment.‖  (Napa Valley Wine Train, Inc. v. Public Utilities 
Com. (1990) 50 Cal.3d 370, 376.)  Consistent with section 21083.1‘s directive, we 
have held that ―rules regulating the protection of the environment must not be 
subverted into an instrument for the oppression and delay of social, economic, or 
recreational development and advancement.‖  (Citizens of Goleta Valley v. Board 
of Supervisors (1990) 52 Cal.3d 553, 576.)  Adopting appellants‘ interpretation 
would do precisely that, by requiring environmental review of projects that one 
could argue may have a significant environmental effect, but that the OPR and the 
Secretary, exercising the authority the Legislature has by statute delegated to them 
and required them to exercise, have already determined do not, in fact, ―have a 
significant effect on the environment.‖  (§ 21084, subd. (a).) 
Appellants also substantially rely on this court‘s decision in Mountain Lion 
Foundation v. Fish and Game Commission (1997) 16 Cal.4th 105 (Mountain 
Lion).  There, the majority held in relevant part that the same categorical 
exemption previously at issue in Wildlife Alive — which had been renumbered as 
Guidelines section 15307 — did not apply to the Commission‘s decision to 
remove the Mojave ground squirrel from the threatened species list.  (Mountain 
Lion, supra, at pp. 124-127.)  As noted earlier, that guideline establishes an 
exemption for ―actions taken by regulatory agencies as authorized by state law or 
local ordinance to assure the maintenance, restoration, or enhancement of a natural 
resource where the regulatory process involves procedures for protection of the 
 
26 
environment.‖  (Guidelines, § 15307.)  The majority found that ―a delisting action 
cannot be fairly included within this class‖ because it ―removes rather than secures 
[the] protections‖ that an endangered or threatened species enjoys under the 
California Endangered Species Act.  (Mountain Lion, supra, at p. 125.)  Moreover, 
the majority added, in light of other Guidelines, a delisting could not come within 
a categorical exemption.  ―[A] categorical exemption represents a determination 
by the Secretary that a particular project does not have a significant effect on the 
environment.  (§ 21084.)‖  (Mountain Lion, supra, at 124.)  ―It follows,‖ the 
majority stated in the passage on which appellants rely, ―that an activity that may 
have a significant effect on the environment cannot be categorically exempt.‖  
(Ibid.)  Under Guidelines section 15065, subdivision (a), an agency ―must find‖ 
that a proposed project may have that effect if it has ― ‗the potential to . . . reduce 
the . . . number or restrict the range of an endangered, rare or threatened species.‘ ‖  
(Mountain Lion, supra, at p. 124.)  Because a delisting, by ―withdraw[ing] existing 
levels of protection,‖ ―creates at least the potential for population reduction or 
habitat restriction,‖ this guideline ―obligate[s]‖ the Commission ―to find a 
delisting may have a significant environmental effect.  Such a finding precludes 
invocation of a categorical exemption.‖  (Ibid.) 
For reasons similar to those earlier discussed in connection with 
Chickering, supra, 18 Cal.3d 190, appellants‘ reliance on Mountain Lion is 
unavailing.  Like Chickering, Mountain Lion addressed neither the meaning nor 
the validity of the unusual circumstances exception.  Also like Chickering, as here 
relevant, Mountain Lion presented only the issue of whether the Commission‘s 
activity fell within the express terms of a categorical exemption.  Because the 
court found it did not, the hypothetical discussion of whether the Secretary could 
have established a categorical exemption was tangential, unnecessary, and 
summary.  In any event, properly understood, the discussion in Mountain Lion 
 
27 
stands only for the proposition that the Secretary, having established in one 
guideline that a delisting may have a significant effect on the environment, may 
not in another guideline ―make a finding‖ that delistings, as a class, ―do not have a 
significant effect on the environment‖ and are therefore exempt from CEQA.  
(§ 21084.)  It does not, as appellants assert, establish that where the Secretary, 
exercising statutorily delegated authority, has found that projects of a certain kind 
―do not have a significant effect on the environment‖ and are exempt from CEQA, 
a proposed project that falls within that class and does not involve any unusual 
circumstances is, nonetheless, subject to environmental review if an argument can 
be made that it may have a significant effect on the environment.  That question 
simply was not before us in Mountain Lion, supra, 16 Cal.4th 105.3   
B. Standards of Review. 
Several CEQA statutes expressly address judicial review of agency action.  
Section 21168 provides the standard of review for decisions ―made as a result of a 
proceeding in which by law a hearing is required to be given, evidence is required 
to be taken and discretion in the determination of facts is vested in a public 
agency.‖  Section 21168.5 provides the standard of review in all other actions ―to 
attack, review, set aside, void or annul a determination, finding, or decision of a 
public agency on the grounds of noncompliance with [CEQA].‖  Because nothing 
required the City to hold an evidentiary hearing in this case, the latter section 
governs.  Under it, a court‘s inquiry is ―whether there was a prejudicial abuse of 
discretion.  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 
                                                          
 
3 
Consistent with the preceding analysis, we disapprove Communities for a 
Better Environment v. California Resources Agency (2002) 103 Cal.App.4th 98, 
129, insofar as it suggests that a proposed project‘s potential environmental effects 
alone render the unusual circumstances exception applicable. 
 
28 
substantial evidence.‖  (Ibid.)  Thus, reversal of the City‘s action here is 
appropriate only if (a) the City, in finding the proposed project categorically 
exempt, did not proceed in the manner required by law, or (b) substantial evidence 
fails to support that finding.4 
The parties disagree about how these standards apply to an agency‘s 
determination that the unusual circumstances exception is inapplicable.  
Respondents, invoking the traditional substantial evidence standard, argue that a 
reviewing court must uphold such a determination if substantial evidence supports 
it, even if substantial evidence in the record also shows that a contrary conclusion 
would be equally, or even more, reasonable.  Appellants, on the other hand, 
contend that, even if substantial evidence supports the agency‘s determination, a 
reviewing court must overturn the determination if there is a fair argument based 
on substantial evidence that the proposed project may have a significant effect on 
the environment due to unusual circumstances.  A fair argument exists, appellants 
assert, ―if any facts, fact-based assumptions, or expert opinion in the 
administrative record support . . . arguments that [the] exception may apply, 
regardless of contrary evidence.‖  
The fair argument approach derives from our application of section 21168.5 
in No Oil, Inc. v. City of Los Angeles (1974) 13 Cal.3d 68 (No Oil).  There, we 
                                                          
 
4  
We have previously observed that ―the standard of review is essentially the 
same‖ under sections 21168 and 21168.5.  (Laurel Heights Improvement Assn. v. 
Regents of University of California (1993) 6 Cal.4th 1112, 1133, fn. 17 (Laurel 
Heights II).)  Section 21168 requires review ―in accordance with the provisions of 
Section 1094.5 of the Code of Civil Procedure,‖ and declares that ―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 the light of the 
whole record.‖  Code of Civil Procedure section 1094.5, subdivision (b), provides, 
similarly to section 21168.5, that ―[a]buse of discretion is established if the 
respondent has not proceeded in the manner required by law, the order or decision 
is not supported by the findings, or the findings are not supported by the 
evidence.‖ 
 
29 
reviewed the City of Los Angeles‘s application of section 21151, which requires 
preparation of an EIR for a nonexempt project that ―may have a significant effect 
on the environment.‖  Although the proposed project in No Oil did not qualify for 
an exemption under the CEQA statutes or the Guidelines, Los Angeles had found, 
after conducting an initial threshold environmental study, that no EIR was 
necessary because the project would not have a significant effect on the 
environment.  We reversed, concluding that the finding constituted a prejudicial 
abuse of discretion under section 21168.5 because, in making it, Los Angeles had 
failed to proceed as required by law in two ways:  (1) it had not made its 
determination in writing; and (2) it had used the wrong standard to determine 
whether the proposed project might have a significant effect on the environment.  
Regarding the latter, we construed section 21151 to require preparation of an EIR 
for a nonexempt project ―whenever it can be fairly argued on the basis of 
substantial evidence that the project may have a significant environmental 
impact.‖  (No Oil, supra, at p. 75.)  At the trial court‘s direction, Los Angeles had 
applied ―a far more restrictive test that limited use of an EIR to projects which 
may have an ‗important‘ or ‗momentous‘ effect of semi-permanent duration.‖  
(Ibid.)  In reaching our conclusion, we cited the following factors:  (1) ―the 
preparation of an EIR is the key to environmental protection under CEQA‖ (ibid.); 
(2) the statute speaks, not of projects that will have a significant effect on the 
environment, but of projects that ―may‖ have such effect (id. at p. 83, fn. 16); (3) 
the Legislature intended that CEQA be interpreted to afford the fullest protection 
to the environment within the reasonable scope of the statutory language, but the 
test Los Angeles had applied afforded the least possible protection within the 
statutory language (id. at p. 85); and (4) by ―bar[ring] preparation of an EIR‖ in 
―close and doubtful cases,‖ the test Los Angeles applied would ―defeat the 
Legislature‘s objective of ensuring that environmental protection serve as the 
 
30 
guiding criterion in agency decisions‖ (id. at p. 84).  Because we concluded that 
Los Angeles had failed to proceed as required by law, in part by applying the 
wrong standard, we expressly declined to decide whether its decision was 
―supported by substantial evidence.‖  (Id. at p. 75.)   
The Natural Resources Agency has since expressly incorporated No Oil‘s 
fair argument approach into the Guidelines.  Guidelines section 15064, subdivision 
(f)(1), now states:  ―If the lead agency determines there is substantial evidence in 
the record that the project may have a significant effect on the environment, the 
lead agency shall prepare an EIR (Friends of B Street v. City of Hayward (1980) 
106 Cal. App. 3d 988).  Said another way, if a lead agency is presented with a fair 
argument that a project may have a significant effect on the environment, the lead 
agency shall prepare an EIR even though it may also be presented with other 
substantial evidence that the project will not have a significant effect (No Oil, Inc. 
v. City of Los Angeles (1974) 13 Cal. 3d 68).‖5  If, however, an agency‘s ―initial 
study‖ for a nonexempt project ―shows that there is no substantial evidence that 
the project may have a significant effect‖ on the environment, the agency 
―prepares a negative declaration‖ (Guidelines, § 15002, subd. (k)(2)) describing 
―the reasons‖ why no EIR is required (§ 21064).    
The fair argument standard Guidelines section 15064, subdivision (f)(1), 
sets forth applies by its terms to determinations of a lead agency, not of a court.  
Under sections 21168 and 21168.5, judicial review of agency decisions is for 
abuse of discretion.  (Laurel Heights II, supra, 6 Cal.4th at p. 1135.)  The scope of 
review of an agency‘s application of the fair argument standard is described in 
Friends of “B” Street v. City of Hayward (1980) 106 Cal.App.3d 988, 1002 
                                                          
 
5  
This guideline first appeared in 1983 as Guidelines section 15064, 
subdivision (g)(1).  (See Guidelines, §  15064, Register 83, No. 29 (July 16, 1983) 
p. 308.) 
 
31 
(Friends of “B” Street), a decision that section 15064, subdivision (f)(1), cites.  
Friends of “B” Street explained that a reviewing court may not uphold an 
agency‘s decision ―merely because substantial evidence was presented that the 
project would not have [a significant environmental] impact.  The [reviewing] 
court‘s function is to determine whether substantial evidence support[s] the 
agency‘s conclusion as to whether the prescribed ‗fair argument‘ could be made.  
If there [is] substantial evidence that the proposed project might have a significant 
environmental impact, evidence to the contrary is not sufficient to support a 
decision to dispense with preparation of an EIR and adopt a negative declaration, 
because it [can] be ‗fairly argued‘ that the project might have a significant 
environmental impact.  Stated another way, if the [reviewing] court perceives 
substantial evidence that the project might have such an impact, but the agency 
failed to secure preparation of the required EIR, the agency‘s action is to be set 
aside because the agency abused its discretion by failing to proceed ‗in a manner 
required by law.‘ ‖  (Friends of “B” Street, supra, at p. 1002.) 
There have been several attempts to extend the fair argument standard to 
CEQA determinations other than the one at issue in No Oil, supra, 13 Cal.3d 68, 
i.e., whether to prepare an EIR for a nonexempt project.  We considered, and 
rejected, one such attempt in Laurel Heights II, which involved an agency‘s 
decision not to recirculate an EIR for public comment.  Section 21092.1 requires 
recirculation if ―significant new information is added to‖ an EIR after initial 
circulation and before certification.  In Laurel Heights II, a neighborhood 
improvement association argued that in determining whether recirculation is 
required, ―the ‗fair argument‘ test used to review the decision . . . to prepare a 
negative declaration‖ in lieu of an EIR should apply.  (Laurel Heights II, supra, 6 
Cal.4th at p. 1134.)  We disagreed, explaining:  ―[S]ection 21151 commands that 
an EIR must be prepared whenever a project ‗may have a significant effect on the 
 
32 
environment.‘  (Italics added.)  In No Oil . . . , we interpreted section 21151 to 
require preparation of an EIR whenever it can be fairly argued on the basis of 
substantial evidence that the project may have significant environmental impact.  
[Citation.]  Our decision, however, expressly acknowledged that judicial review of 
agency decisions under CEQA is governed by sections 21168 (administrative 
mandamus) and 21168.5 (traditional mandamus) and, of course, did not purport to 
alter the standard of review set forth in those statutes.  Rather, the ‗fair argument‘ 
test was derived from an interpretation of the language of, and policies underlying, 
section 21151 itself.  For this reason, the ‗fair argument‘ test has been applied only 
to the decision whether to prepare an original EIR or a negative declaration.  
[Citations.]  The Association has advanced no persuasive authority or reasons for 
taking this test out of the context of the statutory language of section 21151 and 
applying it to an agency‘s decision under section 21092.1.  [¶]  We conclude that 
the substantial evidence standard set forth in section 21168.5 governs the 
[agency‘s] decision not to recirculate the EIR in this case.‖  (Id. at pp. 1134-1135, 
fns. omitted.) 
Several courts, however, have extended the fair argument approach to 
aspects of the determination whether the unusual circumstances exception applies.  
(Voices for Rural Living v. El Dorado Irr. Dist. (2012) 209 Cal.App.4th 1096, 
1108 (Voices); Wollmer v. City of Berkeley (2011) 193 Cal.App.4th 1329, 1350; 
Banker’s Hill, supra, 139 Cal.App.4th at pp. 261-267; Azusa Land Reclamation 
Co. v. Main San Gabriel Basin Watermaster (1997) 52 Cal.App.4th 1165, 1206; 
Dunn-Edwards Corp. v. Bay Area Air Quality Management Dist. (1992) 9 
Cal.App.4th 644, 654-656.)  Other courts have noted judicial disagreement as to 
whether the fair argument standard applies in this context, but have declined to 
decide the issue, finding that the standard‘s application would not have affected 
the result.  (Save the Plastic Bag Coalition v. City and County of San Francisco 
 
33 
(2013) 222 Cal.App.4th 863, 879; Hines v. California Coastal Commission (2010) 
186 Cal.App.4th 830, 855; San Lorenzo Valley Community Advocates for 
Responsible Educ. v. San Lorenzo Valley Unified School Dist. (2006) 139 
Cal.App.4th 1356, 1390; Santa Monica Chamber of Commerce v. City of Santa 
Monica (2002) 101 Cal.App.4th 786, 796 (Santa Monica); Fairbank v. City of Mill 
Valley (1999) 75 Cal.App.4th 1243, 1259-1260; Ukiah, supra, 2 Cal.App.4th at p. 
728, fn. 7.)  The principal supporting authority these courts cite for the fair 
argument standard‘s inapplicability is Centinela Hospital Assn. v. City of 
Inglewood (1990) 225 Cal.App.3d 1586.  There, in rejecting the claim that the 
unusual circumstances exception applied, the court reasoned:  ―When appellant 
argues that the facility is located ‗at an extremely sensitive location in terms of 
public usage and traffic,‘ and it ‗will create a health and safety hazard, which in 
turn, will place increased demands on public services such as police and fire 
protection,‘ appellant is asking us to adopt an improper standard of review and 
independently reweigh the evidence.  We conclude that substantial evidence 
supports the express findings of the [City of Inglewood Planning] Commission 
and city council as to traffic and public health and safety issues and substantial 
evidence supports the implied finding in the notice of exemption that the facility  
would not cause any significant environmental effects.‖6  (Centinela, at p. 1601.) 
We conclude that both prongs of section 21168.5‘s abuse of discretion 
standard apply on review of an agency‘s decision with respect to the unusual 
circumstances exception.  The determination as to whether there are ―unusual 
circumstances‖ (Guidelines, § 15300.2, subd. (c)) is reviewed under section 
21168.5‘s substantial evidence prong.  However, an agency‘s finding as to 
                                                          
 
6  
The courts noting judicial disagreement regarding the applicable standard 
also cite Dehne v. County of Santa Clara (1981) 115 Cal.App.3d 827, but that 
decision does not mention or discuss the unusual circumstances exception. 
 
34 
whether unusual circumstances give rise to ―a reasonable possibility that the 
activity will have a significant effect on the environment‖ (Guidelines, § 15300.2, 
subd. (c)) is reviewed to determine whether the agency, in applying the fair 
argument standard, ―proceeded in [the] manner required by law.‖  (§ 21168.5;  
Friends of “B” Street, supra, 106 Cal.App.3d at p. 1002.) 
Whether a particular project presents circumstances that are unusual for 
projects in an exempt class is an essentially factual inquiry,  ― ‗founded ―on the 
application of the fact-finding tribunal‘s experience with the mainsprings of 
human conduct.‖ ‘ ‖  (People v. Louis (1986) 42 Cal.3d 969, 987.)  Accordingly, 
as to this question, the agency serves as ―the finder of fact‖ (Save Our Peninsula 
Committee v. Monterey County Board of Supervisors (2001) 87 Cal.App.4th 99, 
117), and a reviewing court should apply the traditional substantial evidence 
standard that section 21168.5 incorporates.  (Save Our Peninsula Committee, at p. 
117.)  Under that relatively deferential standard of review, the reviewing court‘s 
― ‗role‘ ‖ in considering the evidence differs from the agency‘s.   (Western States 
Petroleum Assn. v. Superior Court (1995) 9 Cal.4th 559, 576.)  ― ‗Agencies must 
weigh the evidence and determine ―which way the scales tip,‖ while courts 
conducting [traditional] substantial evidence . . . review generally do not.‘ ‖  
(Ibid.)  Instead, reviewing courts, after resolving all evidentiary conflicts in the 
agency‘s favor and indulging in all legitimate and reasonable inferences to uphold 
the agency‘s finding, must affirm that finding if there is any substantial evidence, 
contradicted or uncontradicted, to support it.  (Id. at p. 571; see Laurel Heights 
Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376, 
393 `(Laurel Heights I ) [reviewing court‘s ―task is not to weigh conflicting 
evidence and determine who has the better argument‖ or whether ―an opposite 
conclusion would have been equally or more reasonable‖].) 
 
35 
As to the whether there is ―a reasonable possibility‖ that an unusual 
circumstance will produce ―a significant effect on the environment‖ (Guidelines, 
§ 15300.2, subd. (c)), a different approach is appropriate, both by the agency 
making the determination and by reviewing courts.  As we explained in Laurel 
Heights II, supra, 6 Cal.4th at pages 1134-1135, the fair argument standard ―was 
derived from an interpretation of the language of, and policies underlying,‖ the 
statute at issue in No Oil — section 21151 — which ―commands that an EIR must 
be prepared whenever a project ‗may have a significant effect on the 
environment.‘ ‖  (Italics omitted.)  As the Court of Appeal observed in Banker’s 
Hill, supra, 139 Cal.App.4th at page 264, there are ―close textual similarities‖ 
between this statutory language and the language of Guidelines section 15300.2, 
subdivision (c), which precludes application of categorical exemptions ―where 
there is a reasonable possibility that the activity will have a significant effect on 
the environment due to unusual circumstances.‖  (Italics added.)  Notably, we 
observed in No Oil that ―the word ‗may‘ connotes a ‗reasonable possibility . . . .‘ ‖  
(No Oil, supra, 13 Cal.3d at p. 83, fn. 16.)  Accordingly, when there are ―unusual 
circumstances,‖ it is appropriate for agencies to apply the fair argument standard 
in determining whether  ―there is a reasonable possibility of a significant effect on 
the environment due to unusual circumstances.‖  (Guidelines, § 15300.2, subd. 
(c).)  As to this question, the reviewing court‘s function ―is to determine whether 
substantial evidence support[s] the agency‘s conclusion as to whether the 
prescribed ‗fair argument‘ could be made.‖  (Friends of “B” Street, supra, 106 
Cal.App.3d at p. 1002.) 
This bifurcated approach to the questions of unusual circumstances and 
potentially significant effects comports with our construction of the unusual 
circumstances exception to require findings of both unusual circumstances and a 
potentially significant effect.  It would be inappropriate for an agency to apply the 
 
36 
fair argument standard to determine whether unusual circumstances exist.  That 
standard is intended to guide the determination of whether a project has a 
potentially significant effect, not whether it presents unusual circumstances.  
While evidence of a significant effect may be offered to prove unusual 
circumstances, circumstances do not become unusual merely because a fair 
argument can be made that they might have a significant effect.  Evidence that a 
project may have a significant effect is not alone enough to remove it from a class 
consisting of similar projects that the Secretary has found ―do not have a 
significant effect on the environment.‖  (§ 21084, subd. (a), italics added;  cf. 
Laurel Heights II, supra, 6 Cal.4th at p. 1134; No Oil, supra, 13 Cal.3d at p. 83, 
fn. 16 .)  Therefore, an agency must weigh the evidence of environmental effects 
along with all the other evidence relevant to the unusual circumstances 
determination, and make a finding of fact.  Judicial review of such determinations 
is limited to ascertaining whether they are ―supported by substantial evidence.‖  
(§ 21168.5.) 
On the other hand, when unusual circumstances are established, the 
Secretary‘s findings as to the typical environmental effects of projects in an 
exempt category no longer control.  Because there has been no prior review of the 
effects of unusual circumstances, the policy considerations we discussed in No Oil 
apply.  An agency must evaluate potential environmental effects under the fair 
argument standard, and judicial review is limited to determining whether the 
agency applied the standard ―in [the] manner required by law.‖  (§ 21168.5.) 
We reject respondents‘ assertion that applying two different standards to 
the unusual circumstances exception is ―fundamentally inconsistent with the legal 
framework for categorical exemptions‖ and would, by making the process ―too 
complicated and cumbersome,‖ ―defeat the Legislature‘s intent in having 
categorical exemptions.‖  As explained above, requiring an agency to apply the 
 
37 
fair argument standard to determine whether unusual circumstances give rise to ―a 
reasonable possibility that the activity will have a significant effect on the 
environment‖ (Guidelines, § 15300.2, subd. (c)) is fully consistent with CEQA‘s 
framework and the Legislature‘s intent to provide categorical exemptions.  Nor, 
for a reviewing court, is there anything particularly ―complicated‖ or 
―cumbersome‖ about applying section 21168.5‘s substantial evidence prong to 
unusual circumstance determinations, and its ―proceeded in a manner required by 
law‖ prong to determinations as to potentially significant effects.  Courts are well 
versed in bringing a variety of considerations to bear in making such 
determinations.   
Contrary to respondents‘ assertion, applying the fair argument standard to 
aspects of the unusual circumstances exception does not conflict with our decision 
in Muzzy Ranch, supra, 41 Cal.4th 372.  The premise of respondents‘ argument is 
that, in Muzzy Ranch, we applied the traditional substantial evidence test in 
reviewing an agency‘s determination under Guidelines section 15061, subdivision 
(b)(3), that a proposed project was not subject to CEQA.  However, in Muzzy 
Ranch, we had no occasion to identify the standard of review we applied.  
Moreover, as appellants explain, the language of Guidelines section 15061, 
subdivision (b)(3), is considerably different from the language of the unusual 
circumstances exception; the former applies ―[w]here it can be seen with certainty 
that there is no possibility that the activity in question may have a significant 
effect on the environment‖ (Guidelines, § 15061, subd. (b)(3)), whereas the latter 
applies ―where there is a reasonable possibility that the activity will have a 
significant effect on the environment due to unusual circumstances‖ (Guidelines, § 
15300.2, subd. (c)).  Thus, even under respondents‘ reading of Muzzy Ranch, 
applying the fair argument standard in the context of the unusual circumstances 
exception creates no conflict with that decision. 
 
38 
Finally, and again contrary to respondents‘ assertion, our approach is fully 
consistent with — and is, indeed, affirmatively supported by — the decision in 
Valley Advocates v. City of Fresno (2008) 160 Cal.App.4th 1039.  At issue there 
were the following CEQA provisions:  (1) section 21084.1, which provides that 
―[a] project that may cause a substantial adverse change in the significance of an 
historical resource is a project that may have a significant effect on the 
environment‖; (2) section 21084, subdivision (e), which provides that ―[a] project 
that may cause a substantial adverse change in the significance of a historical 
resource, as specified in Section 21084.1, shall not be exempted from [CEQA] 
pursuant to subdivision (a)‖; and (3) Guidelines section 15300.2, subdivision (f), 
which provides that ―[a] categorical exemption shall not be used for a project 
which may cause a substantial adverse change in the significance of a historical 
resource.‖  The court held that, in applying these provisions, ―the fair argument 
standard does not govern‖ an agency‘s determination of whether a building 
qualifies as a ―historical resource.‖  (Valley Advocates, supra, at p. 1072.)  
However, the court continued, ―once the resource has been determined to be an 
historical resource, then the fair argument standard applies to the question whether 
the proposed project ‗may cause a substantial adverse change in the significance of 
an historical resource‘ [citation] and thereby have a significant effect on the 
environment.‖  (Ibid.)  This discussion supports the conclusion that, if ―unusual 
circumstances‖ are established, an agency should apply the fair argument standard 
in determining whether there is ―a reasonable possibility‖ that those circumstances 
will produce ―a significant effect‖ within the meaning of CEQA.  (Guidelines, § 
15300.2, subd. (c).) 
C.  Lower Court Rulings. 
In reviewing the City‘s determination that the unusual circumstances 
exception does not apply, the trial court identified and made ―two separate 
 
39 
determinations‖:  (1) whether ―there is a reasonable possibility that the activity 
will have a significant effect on the environment‖; and (2) ―whether such 
reasonable possibility of a significant effect is due to unusual circumstances 
associated with the project.‖  It answered the first question in the affirmative, 
explaining in part that, ―[d]espite Respondents‘ criticisms of [Karp‘s] report and 
[his] methodology, and even when discounting the clearly erroneous and 
misleading portions, Dr. Karp‘s opinion‖ regarding the ― ‗probability of seismic 
lurching of oversteepened side-hill fills‘ ‖ ―provides substantial evidence of a fair 
argument of a significant environmental effect consequent to the Project.‖  
However, the court also found that the proposed project did not present ―unusual 
circumstances,‖ explaining:  ―Though the Project involves a large house, built in 
the hills on a steep slope, there is nothing so out of the ordinary about such a 
project that it would take it out of the exemption.  Moreover, there is no evidence 
to support a finding that any of the circumstances surrounding the Project make it 
‗unusual.‘ . . . [T]hough it is a large house proposed to be built on a large and steep 
hillside lot with grading and retaining walls, the Project is not so unusual for a 
single family residence, particularly in this vicinity, as to constitute the type of 
unusual circumstances required to support application of this exception.‖    
In reversing the judgment, the Court of Appeal agreed with the trial court 
―that Karp‘s letters . . . amounted to substantial evidence of a fair argument that 
the proposed construction would result in significant environmental impacts.‖  But 
it disagreed that the unusual circumstances exception applies only if the proposed 
project‘s potentially significant environmental effects are due to unusual 
circumstances.  In the Court of Appeal‘s view, ―the fact‖ that the proposed project 
―may‖ have a significant effect on the environment ―is itself an unusual 
circumstance‖ that ―preclude[s]‖ the City from applying a categorical exemption.   
The Court of Appeal went on to note that it may nevertheless ―be helpful‖ to 
 
40 
determine ―whether unusual circumstances exist‖ apart from the project‘s 
potentially significant environmental effect.  Considering this question de novo, it 
found that, with respect to the Class 3 small structure exemption, the proposed 
project‘s size constitutes such a circumstance.  In reaching this result, it reasoned 
that ―whether a circumstance is unusual ‗is judged relative to the typical 
circumstances related to an otherwise typically exempt project,‘ as opposed to the 
typical circumstances in one particular neighborhood.‖  As to the Class 32 in-fill 
development exemption, the court offered no additional analysis. 
It is apparent that neither the trial court nor the Court of Appeal applied 
principles like those we have set out above.  Remand for application of the 
standards we announce today is therefore both appropriate and necessary.7 
The Court of Appeal erred in another respect by indicating, as noted above, 
that the unusual circumstances inquiry excludes consideration of ―the typical 
circumstances in one particular neighborhood.‖  In a number of decisions, our 
appellate courts have looked to conditions in the immediate vicinity of a proposed 
project to determine whether the unusual circumstances exception applied.  
(Bloom v. McGurk (1994) 26 Cal.App.4th 1307, 1315-1316; City of Pasadena v. 
State of California (1993) 14 Cal.App.4th 810, 826-827; Ukiah, supra, 2 
Cal.App.4th at p. 736.)  Indeed, in the only decision the Court of Appeal cited for 
its contrary view — Santa Monica, supra, 101 Cal.App.4th 786 — the court 
                                                          
 
7  
In reversing based on potential geotechnical effects, the Court of Appeal 
did not address other potential effects appellants allege, including aesthetic and 
view impacts, inconsistencies with land use plans and policies the City has 
adopted for environmental protection, construction-related traffic impacts, and 
permanent traffic impacts related to contemplated fundraising activities at the 
house.  Nor did the Court of Appeal address appellants‘ argument that the City‘s 
adoption of a traffic management plan is a mitigation measure that precludes a 
finding that the proposed project is categorically exempt.  Rather than address 
these issues here in the first instance, we leave their consideration to the Court of 
Appeal on remand.     
 
41 
quoted Ukiah on this point and declared it to be ―instructive.‖  (Santa Monica, at 
p. 802.)  Insofar as these decisions indicate that local conditions are relevant, we 
agree.  In determining whether the environmental effects of a proposed project are 
unusual or typical, local agencies have discretion to consider conditions in the 
vicinity of the proposed project. 
Respondents separately attack the conclusion of both the trial court and the 
Court of Appeal that Karp‘s submissions constitute substantial evidence of a fair 
argument that the proposed project may have a significant environmental effect.  
As earlier noted, Karp opined that the proposed project ―is likely to have very 
significant environmental impacts . . . due to the probability of seismic lurching of 
the oversteepened side-hill fills.‖  Respondents contend that Karp‘s opinion does 
not constitute substantial evidence of a fair argument because it is based on a 
misreading of the plans the City approved.  In their view, the evidence in the 
record, including the submissions of Kropp and Toby, conclusively establishes 
that ―the project approved by the City does not involve ‗side-hill fill‘ ‖ and that 
Karp was mistaken in reading the plans otherwise.  Because of Karp‘s erroneous 
belief there would be side-hill fill, his opinion, respondents assert, ―is not 
substantial evidence.‖  A finding of potential environmental impacts, respondents 
argue, must be based on the proposed project as actually approved, and may not be 
based on unapproved activities that opponents assert will be necessary because the 
project as approved cannot be built.  If the proposed project ―cannot be built as 
approved‖ and applicants want to build a different project, then ―they must return 
to the City for approval of a different project and the City could issue a stop-work 
notice to prevent unauthorized construction.‖  
We agree with respondents that a finding of environmental impacts must be 
based on the proposed project as actually approved and may not be based on 
unapproved activities that opponents assert will be necessary because the project, 
 
42 
as approved, cannot be built.  In Laurel Heights I, supra, 47 Cal.3d at page 395, 
we considered whether there are circumstances under which an EIR must address 
―future action related to‖ a proposed project.  There, the University of California, 
San Francisco (UCSF), had certified an EIR for moving its school of pharmacy to 
100,000 square feet of a 354,000-square-foot building it had purchased.  (Id. at p. 
393.)  Although UCSF admitted it intended to use the remainder of the building 
when existing tenants left, the EIR it prepared did not consider the potential 
environmental effect of that intended future use.  (Id. at pp. 393, 397.)  To justify 
this omission, UCSF argued that it had ―not formally decided precisely how [it 
would] use the remainder of the building.‖  (Id. at p. 396.)  In rejecting this 
argument, we first held that an EIR for a proposed project must consider the 
potential environmental effects of future expansion if expansion (1) ―is a 
reasonably foreseeable consequence of the initial project‖ and (2) ―will be 
significant in that it will likely change the scope or nature of the initial project or 
its environmental effects.‖  (Ibid.)  This standard, we reasoned, properly balances 
the following considerations:  (1) delayed review may produce ―bureaucratic and 
financial momentum‖ that ―provid[es] a strong incentive to ignore environmental 
concerns that could be dealt with more easily at an early stage of the project‖ (id. 
at p. 395); (2) ― ‗environmental considerations do not become submerged by 
chopping a large project into many little ones — each with a minimal potential 
impact on the environment — which cumulatively may have disastrous 
consequences‘ [citation]‖; and (3) ―premature environmental analysis may be 
meaningless and financially wasteful‖ (id. at p. 396).  We then concluded that 
UCSF‘s EIR had to address the potential effects of future use because there was 
―telling evidence‖ UCSF had, by the time it prepared the EIR, ―either made 
decisions or formulated reasonably definite proposals as to future uses of the 
building.‖  (Id. at p. 397.)  We clarified, however, that an EIR need not discuss 
 
43 
―specific future action that is merely contemplated or a gleam in a planner‘s eye.‖  
(Id. at p. 398.)   
We decline to extend Laurel Heights I to situations where project 
opponents claim, not that the proposed project will lead to additional future 
development, but that the proposed project cannot be carried out as approved and 
will require additional work that may or will have a significant environmental 
effect.  The latter situation, unlike the former, presents little risk of either 
bureaucratic and financial impediments to proper environmental review or 
piecemeal review of a project with the potential for significant cumulative effects.  
As respondents argue, if a proposed project cannot be built as approved, then the 
project‘s proponents will have to seek approval of any additional activities and, at 
that time, will have to address the potential environmental effects of those 
additional activities.  As respondents also argue, if a project opponent‘s opinion 
that unapproved activities may have a significant environmental effect constitutes 
fair argument, then it is doubtful that any project could survive challenge.  
Accordingly, Karp‘s opinion is insufficient as a matter of law insofar as it is based 
on the potential effect of unapproved activities Karp believes will be necessary 
because the project cannot be built as approved.   
This conclusion has implications for respondents‘ claim that, because Karp 
misread the proposed project‘s plans, his opinion is legally insufficient.  As part of 
the permit application, applicants submitted a set of architectural plans for the 
project.  In opining that the proposed project would result in ―oversteepened side-
hill fills‖ with potentially significant environmental effects — including ―seismic 
lurching‖ — Karp relied largely, if not entirely, on a page of those plans entitled 
―TRANSVERSE SECTION LOOKING EAST.‖  In April 2010, during the appeal 
to the city council, Karp stated that this page ―indicates [that] fills [will be] placed 
directly on very steep existing slopes,‖ ―creat[ing] a new slope more than 50º.‖  
 
44 
However, the plans the Board had already approved three months earlier (along 
with the use permit) did not include this page.  Nor, as appellants concede, do the 
project plans the city council ultimately approved include this page.8  Insofar as 
Karp thus based his opinion regarding the project‘s potential effects on side-hill 
fill that has not been approved, his opinion is legally insufficient.9  On remand, the 
Court of Appeal should apply these principles to Karp‘s opinion should it reach 
that point in its analysis.10 
Finally, because reversal and remand is appropriate for reasons explained 
above, we need not resolve respondents‘ claim that the remedy the Court of 
Appeal chose upon finding the proposed project not to be exempt under Class 3 or 
Class 32 — ordering preparation of an EIR — was improper.  However, it is 
appropriate to discuss that issue because the question of remedy could arise again 
on remand.   
Section 21168.9 specifically addresses the available remedies for CEQA 
violations.  As here relevant, subdivision (a) provides that, upon finding that a 
                                                          
 
8  
In its resolution affirming the Board‘s decision, the city council stated:  
―[T]he Council hereby adopts . . . the project plans on Exhibit B.‖  The page on 
which Karp relied does not appear in that exhibit.  
9  
Based on other expert evidence before the city council — the letters from 
Kropp and Toby — respondents also assert that Karp misread the omitted page, 
and that what he identified on that page as side-hill fill is actually nothing more 
than the lot‘s current ground surface.  In light of our conclusion, we need not 
address this argument. 
10  
Respondents also argue that the ―the probability of seismic lurching‖ Karp 
identified is an effect, not of the project, but of Berkeley‘s ―existing earthquake-
prone environment,‖ and that application of the unusual circumstances exception 
may not be based on evidence of the existing environment‘s impact on a proposed 
project.  In California Building Industry Assn. v. Bay Area Air Quality 
Management Dist. (review granted Nov. 26, 2013, S213478), we granted review to 
decide whether CEQA requires an analysis of how existing environmental 
conditions will impact future residents or users of a proposed project.  Given this 
fact, and the other errors that require reversal and remand, we do not address this 
claim. 
 
45 
public agency‘s decision violates CEQA, a court should enter an order that 
includes (1) a mandate that the decision be voided in whole or in part, and/or (2) a 
mandate that the agency ―take specific action as may be necessary to bring 
the . . . decision into compliance with‖ CEQA.  (§ 21168.9, subd. (a)(1), (3).)  
Subdivision (b) states that any such order ―shall be made by the issuance of a 
peremptory writ of mandate specifying what action by the public agency is 
necessary to comply with [CEQA].‖  (§ 21168.9, subd. (b), italics added.)  
Consistent with these provisions, we have ordered preparation of an EIR upon 
finding that a public agency had improperly issued a negative declaration for a 
proposed project (Communities for a Better Environment v. South Coast Air 
Quality Management Dist. (2010) 48 Cal.4th 310, 320), and upon finding that a 
certified EIR was inadequate (Laurel Heights I, supra, 47 Cal.3d at p. 388). 
However, as respondents note, subdivision (c) of section 21168.9 provides 
in part that ―[n]othing in this section authorizes a court to direct any public agency 
to exercise its discretion in any particular way.‖  In Voices, supra, 209 
Cal.App.4th at page 1113, the Court of Appeal held that, upon finding that an 
agency erred in applying a categorical exemption, the trial court had ―exceeded its 
authority‖ in ordering the agency to prepare an EIR.  ―How an agency complies 
with CEQA,‖ the Court of Appeal reasoned, ―is a matter first left to the agency‘s 
discretion.  Having determined the project was not exempt from CEQA, the court 
should have ordered [the agency] to proceed with further CEQA compliance, 
which in this case would have been the preparation of an initial study and a 
determination of whether further environmental review would require an EIR or a 
mitigated negative declaration.‖  (Ibid.)  Consistent with these authorities, if, on 
remand, the Court of Appeal determines that neither of the categorical exemptions 
discussed above applies, then it may order preparation of an EIR only if, under the 
 
46 
circumstances, the City would lack discretion to apply another exemption or to 
issue a negative declaration, mitigated or otherwise.  
III.  DISPOSITION 
The Court of Appeal‘s judgment is reversed and the matter is remanded for 
further proceedings consistent with this opinion. 
 
 
 
 
 
 
 
CHIN, J. 
WE CONCUR: 
 
CANTIL-SAKAUYE, C. J. 
CORRIGAN, J. 
BAXTER, J.* 
BOREN, J.** 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
_____________________________ 
* 
Retired Associate Justice of the Supreme Court, assigned by the Chief 
Justice pursuant to article VI, section 6 of the California Constitution. 
 
** 
Administrative Presiding Justice of the Court of Appeal, Second Appellate 
District, Division Two, assigned by the Chief Justice pursuant to article VI, 
section 6 of the California Constitution.
 
1 
 
 
 
 
 
 
 
 
 
CONCURRING OPINION BY LIU, J. 
 
 
I agree with today‘s opinion that ―a finding of environmental impacts must 
be based on the proposed project as actually approved and may not be based on 
unapproved activities that opponents assert will be necessary because the project, 
as approved, cannot be built.‖  (Maj. opn., ante, at p. 42.)  This rule will not lead 
to evasion of the environmental review requirements of the California 
Environmental Quality Act (CEQA) because presumably a developer‘s failure to 
build the project as approved will be remedied by the local agency that approved 
the project.  Where opponents of a project make a credible argument that it cannot 
be built as approved, a trial court may exercise its discretion to retain continuing 
jurisdiction after rendering a judgment in order to ensure CEQA compliance.  (See 
2 Witkin, Cal. Procedure, Jurisdiction, § 420, pp. 1070–1071; City of Pasadena v. 
City of Alhambra (1949) 33 Cal.2d 908, 936 [court reserves jurisdiction to modify 
water rights judgment ― ‗in the event material change be found or any such 
abandonment or forfeiture be established‘ ‖].)  In this case, because the trial court 
and Court of Appeal did not limit environmental review to projects actually 
approved, I agree that reversal and remand are warranted.  (Maj. opn., ante, at 
pp. 41–44.) 
I do not agree, however, with the court‘s reading of section 15300.2, 
subdivision (c) of the CEQA guidelines (Cal. Code Regs., tit. 14, § 15000 et seq. 
 
2 
(Guidelines)) or with the court‘s novel and unnecessarily complicated approach to 
the standard of review.  Section 15300.2, subdivision (c) (hereafter 
section 15300.2(c)) provides that a categorical exemption from CEQA review 
shall not apply when ―there is a reasonable possibility that the activity will have a 
significant effect on the environment due to unusual circumstances.‖  The court 
says this language establishes two distinct requirements for section 15300.2(c)‘s 
applicability:  (1) there must be a reasonable possibility the project will have 
significant environmental effects and (2) those effects must be due to unusual 
circumstances.  But, as explained below, a project falling within a categorical 
exemption is, by definition, a project belonging to a class of projects that does not 
have significant environmental effects.  (See Pub. Resources Code, § 21084, 
subd. (a).)  When there is a reasonable possibility that a project otherwise covered 
by a categorical exemption will have a significant environmental effect, it 
necessarily follows that the project presents unusual circumstances.  In other 
words, the reasonable possibility of a significant environmental effect means that 
some circumstance of the project is not usual in comparison to the typical project 
in the exempt category.  Instead of comprising a distinct requirement, the phrase 
―unusual circumstances‖ in section 15300.2(c) simply describes the nature of a 
project that, while belonging to a class of projects that typically have no 
significant environmental effects, nonetheless may have such effects.  The sole 
question for courts reviewing agency determinations under section 15300.2(c) is 
whether substantial evidence supports a fair argument that the project will have 
significant environmental effects. 
It is unfortunate that today‘s opinion, instead of simplifying the law in 
accordance with the CEQA statute and guidelines, adds further complexity to an 
area that many courts, practitioners, and citizens already find difficult to navigate.  
Nevertheless, I expect that after today‘s decision, as before, courts reviewing 
 
3 
agency determinations under section 15300.2(c) will be guided by that guideline‘s 
basic purpose, which echoes the statutory mandate:  to ensure that projects with a 
reasonable possibility of significant environmental effects are not exempted from 
CEQA review. 
I. 
The main purpose of environmental review under CEQA is to ―identify the 
significant effects on the environment of a project‖ and to identify project 
alternatives and feasible mitigation measures.  (Pub. Resources Code, § 21002.1, 
subd. (a); all statutory references are to this code unless otherwise indicated.)  
Consistent with that purpose, the Legislature created categorical exemptions and 
directed the Secretary of the Natural Resources Agency (the Secretary) to list 
classes of projects exempt from CEQA review.  Section 21084, subdivision (a) 
(hereafter section 21084(a)) provides:  ―The guidelines prepared and adopted 
pursuant to Section 21083 shall include a list of classes of projects that have been 
determined not to have a significant effect on the environment and that shall be 
exempt from this division.  In adopting the guidelines, the Secretary of the Natural 
Resources Agency shall make a finding that the listed classes of projects referred 
to in this section do not have a significant effect on the environment.‖  (Italics 
added.)  Thus, section 21084(a) instructs the Secretary to exempt from CEQA 
review only classes of projects that do not have a significant effect on the 
environment. 
The exempt classes of projects listed by the Secretary stand in contrast to 
statutory exemptions created by the Legislature.  The latter include certain kinds 
of affordable housing (§ 21159.23), certain high priority transit projects 
(§ 21155.1), and the construction of certain prisons (§§ 21080.01, 21080.02).  The 
statutory exemptions are not based on any determination that the exempt projects 
will not have significant environmental effects.  Instead, they are based on the 
 
4 
Legislature‘s determination that each of the exemptions ―promote[s] an interest 
important enough to justify forgoing the benefits of environmental review.‖  
(Napa Valley Wine Train, Inc. v. Public Utilities Com. (1990) 50 Cal.3d 370, 382.)  
The categorical exemptions authorized by section 21084(a) are fundamentally 
different.  They are not based on a judgment that certain categories of projects 
should be exempt despite their potential effect on the environment.  They are 
based on a wholesale judgment that projects within the exempt category will not 
have significant environmental effects. 
The fact that a categorical exemption reflects a wholesale judgment about a 
class of projects, and not an individual judgment about a particular project, gives 
rise to the interpretive question before us.  A class of projects ―determined not to 
have a significant effect on the environment‖ (§ 21084(a)) — for example, a 
single-family residence — may turn out to be overinclusive insofar as it includes 
some projects that fit the category but nevertheless may have significant 
environmental effects.  How are such outliers to be treated under the CEQA 
scheme? 
One approach would be to say that section 21084(a) permits such 
overinclusion because most projects in an exempt class will not have significant 
environmental effects and the efficiency gains of exempting the entire class 
outweigh the value of requiring CEQA review of the few projects in the class that 
may have significant effects.  But neither the court nor any party has advanced this 
theory, and for good reason. 
In Wildlife Alive v. Chickering (1976) 18 Cal.3d 190, 205–206 
(Chickering), we said that ―no regulation is valid if its issuance exceeds the scope 
of the enabling statute.  [Citations.]  The [S]ecretary is empowered to exempt only 
those activities which do not have a significant effect on the environment.  (Pub. 
Resources Code, § 21084.)  It follows that where there is any reasonable 
 
5 
possibility that a project or activity may have a significant effect on the 
environment, an exemption would be improper.‖  Section 15300.2(c), promulgated 
shortly after Chickering, was an attempt to codify Chickering and its 
understanding of section 21084(a).  A portion of section 15300.2‘s rulemaking file 
reproduced by appellants confirms this regulatory intent, and respondents do not 
suggest otherwise.  (See 1 Kostka & Zischke, Practice Under the California 
Environmental Quality Act (2d ed. 2008) § 5.72, p. 5-62 (1 Kostka & Zischke) 
[§ 15300.2(c) ―adopted to codify the court‘s ruling‖ in Chickering that the 
Secretary ―may exempt only activities that do not have a significant effect on the 
environment‖]; Communities for a Better Environment v. California Resources 
Agency (2002) 103 Cal.App.4th 98, 129 (Communities for a Better Environment) 
[§ 15300.2(c) exception to categorical exemptions was ―based on the Chickering 
decision‖].) 
Section 15300.2(c) reads in full:  ―Significant Effect.  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 unusual 
circumstances.‖  This language is one of six provisions under the heading 
―Exceptions‖ in section 15300.2 of the CEQA guidelines.  Like section 
15300.2(c), each of the other five provisions makes the categorical exemptions 
authorized by section 21084(a) inapplicable to projects that, while belonging to an 
exempt class, have certain characteristics that raise environmental concerns.  (See 
§§ 15300.2, subd. (a) [exception for ―a project . . . ordinarily insignificant in its 
impact on the environment [that] may in a particularly sensitive environment be 
significant‖], 15300.2, subd. (b) [exception for ―successive projects of the same 
type in the same place‖ whose ―cumulative impact . . . over time is significant‖], 
15300.2, subd. (d) [exception for ―a project which may result in damage to scenic 
resources . . . within . . . a state scenic highway‖], 15300.2, subd. (e) [exception for 
 
6 
a project located on a hazardous waste site], 15300.2, subd. (f) [exception for a 
project that may adversely affect a historical resource].) 
This regulatory structure — categorical exemptions, with various 
exceptions to the exemptions — confirms that ―a categorical exemption authorized 
by CEQA section 21084 is an exemption from CEQA for a class of projects that 
the Resources Agency determines will generally not have a significant effect on 
the environment.‖  (Communities for a Better Environment, supra, 103 
Cal.App.4th at p. 127; see Azusa Land Reclamation Co. v. Main San Gabriel 
Basin Watermaster (1997) 52 Cal.App.4th 1165, 1206 (Azusa) [a categorical 
exemption identifies ―a class of activities that does not normally threaten the 
environment‖ (italics added)].)  The CEQA guidelines anticipate the 
overinclusivity of categorical exemptions and address the problem by establishing 
a list of exceptions. 
In construing section 15300.2(c), it is worth noting that the title of the 
provision is ―Significant Effect.‖  Hence I shall refer to section 15300.2(c) as the 
―significant effect exception.‖  In calling section 15300.2(c) the ―unusual 
circumstances exception,‖ today‘s opinion ignores the title and places primary 
emphasis on a term that the provision itself does not emphasize. 
As the court acknowledges, the term ―unusual circumstances‖ first 
appeared in the context of CEQA review in Friends of Mammoth v. Board of 
Supervisors (1972) 8 Cal.3d 247 (Friends of Mammoth), and this usage is key to 
understanding section 15300.2(c).  In Friends of Mammoth, we said that ―common 
sense tells us that the majority of private projects for which a government permit 
or similar entitlement is necessary are minor in scope — e.g., relating only to the 
construction, improvement, or operation of an individual dwelling or small 
business — and hence, in the absence of unusual circumstances, have little or no 
effect on the public environment.  Such projects, accordingly, may be approved 
 
7 
exactly as before the enactment of the [CEQA].‖  (Id. at p. 272, italics added.)  We 
did not suggest that a finding of ―unusual circumstances‖ was a prerequisite to 
CEQA review.  Rather, we used that phrase in the course of acknowledging that 
private projects generally do not have significant effects on the environment, and 
so when they do, such effects will be due to unusual circumstances.  Reading 
―unusual circumstances‖ in this straightforward manner squares section 
15300.2(c) with both Friends of Mammoth and Chickering. 
This understanding of ―unusual circumstances‖ is restated in Communities 
for a Better Environment, supra, 103 Cal.App.4th 98, a case concerning the in-fill 
development exemption under section 15332 of the CEQA guidelines.  In 
explaining that environmental effects not mentioned in section 15332, such as 
aesthetics or health and safety impacts, must be considered in determining the 
exemption‘s applicability, the court said:  ―These other environmental effects . . . 
would constitute ‗unusual circumstances‘ under this exception for a project that 
otherwise meets the Guidelines section 15332 criteria.  This is because a project 
that does meet the comprehensive environmentally protective criteria of section 
15332 normally would not have other significant environmental effects; if there 
was a reasonable possibility that the project would have such effects, those effects 
would be ‗unusual circumstances‘ covered by the section 15300.2, subdivision (c) 
exception.‖  (Communities for a Better Environment, at p. 129.) 
In sum, when there is a reasonable possibility of a significant 
environmental effect from a project belonging to a class that generally does not 
have such effects, the project necessarily presents ―unusual circumstances,‖ and 
section 15300.2(c) applies. 
 
8 
II. 
Today‘s opinion objects that this reading of section 15300.2(c) would result 
in categorically exempt projects being treated the same as nonexempt projects, 
thereby undermining the purpose of categorical exemptions.  ―Try as they might,‖ 
the court says, ―appellants can identify no purpose or effect of the categorical 
exemption statutes if, as they assert, a showing of potential environmental effect 
precludes application of all categorical exemptions.‖  (Maj. opn., ante, at p. 16.)  
―[T]o establish the unusual circumstances exception, it is not enough for a 
challenger merely to provide substantial evidence that the project may have a 
significant effect on the environment, because that is the inquiry CEQA requires 
absent an exemption.  (§ 21151.)  Such a showing is inadequate to overcome the 
Secretary‘s determination that the typical effects of a project within an exempt 
class are not significant for CEQA purposes.‖  (Id. at pp. 20–21.)  The court is thus 
led to conclude that the term ―due to unusual circumstances‖ sets forth a 
requirement separate and distinct from ―a reasonable possibility of significant 
effects‖ in section 15300.2(c).  In turn, the court devises a novel ―bifurcated‖ 
standard of review that evaluates whether there is a reasonable possibility of a 
significant environmental effect under the fair argument standard, while evaluating 
whether significant effects are due to unusual circumstances under a deferential 
substantial evidence standard.  (Maj. opn., ante, at pp. 34–37.)  This approach, the 
court suggests, is necessary in order to treat categorically exempt projects 
differently from nonexempt projects and thereby realize the purpose of categorical 
exemptions. 
But the major premise of the court‘s reasoning is faulty, for there are two 
reasons why it is not true that categorical exemptions would have no value if we 
interpret section 15300.2(c) to apply whenever there is a reasonable possibility of 
significant environmental effects. 
 
9 
First, when an agency has determined that a project falls within an exempt 
category, the project enjoys a considerable procedural advantage.  For any project 
not covered by a categorical or other exemption, the reviewing agency has the 
burden of conducting an initial study into whether the project will have significant 
environmental effects.  (See Guidelines, § 15063, subd. (a).)  The project may 
proceed without further environmental review only if the agency issues a negative 
declaration identifying the project‘s environmental effects and explaining why 
they are not significant.  (See id., § 15063, subd. (b)(2); 1 Kostka & Zischke, 
supra, § 6.2, pp. 6-6 to 6-7.)  Notice and public review and comment are required 
of a negative declaration, and an agency must consider comments and potentially 
modify its conclusions in response to those comments.  (See 1 Kostka & Zischke, 
supra, §§ 7.10, pp. 7-9 to 7-10; 7.19, pp. 7-16 to 7-17.) 
By contrast, an agency finding that a project falls into an exempt category 
need not follow any particular procedure nor include any written determination, 
and the agency need not undertake an initial study or adopt a negative declaration.  
(See 1 Kostka & Zischke, supra, § 5.114, pp. 5-100 to 5-101.)  When an agency 
finds that a project is subject to a categorical exemption, it impliedly finds that it 
has no significant environmental effect, and the burden shifts to the challengers of 
the proposed project to produce evidence that the project will have a significant 
effect.  (Id. at § 5.71, pp. 5-61 to 5-62 and cases cited therein.)  Once an agency 
finds a project categorically exempt, it is the project opponent‘s burden to produce 
evidence that the significant effect exception applies. 
This procedural advantage should not be underestimated.  In many cases, 
categorical exemptions are not litigated, and the applicability of the exemption is 
evident.  In the mine run of cases, the efficiency gains of sparing the agency the 
task of conducting an initial study and issuing a negative declaration provide a 
strong policy justification for categorical exemptions.  Moreover, as is generally 
 
10 
true of burden allocations in the law, in cases where an exemption‘s applicability 
presents a close issue, requiring the challenger to show the reasonable possibility 
of a significant effect, instead of requiring the agency to show no such effects, can 
be determinative. 
The court says this procedural advantage is ―largely illusory‖ because ―an 
agency may not apply a categorical exemption without considering evidence in its 
files of potentially significant effects, regardless of whether that evidence comes 
from its own investigation, the proponent‘s submissions, a project opponent, or 
some other source.‖  (Maj. opn., ante, at p. 18.)  But an agency‘s obligation to 
consider evidence in its files of potentially significant effects can hardly be 
equated with an agency‘s obligation, in the case of a nonexempt project, to 
undertake an initial study of the project‘s environmental effects, to solicit and 
consider public comments on the study, and to issue a negative declaration 
explaining why potential environmental impacts would not be significant.  The 
procedural burdens falling on agencies when they review nonexempt projects are 
considerably greater than when they review categorically exempt projects.  The 
court‘s suggestion to the contrary will certainly come as news to the agencies that 
undertake these different review procedures. 
Moreover, an agency finding that a project falls into an exempt category 
confers a second advantage.  As the court observes, the Secretary had to interpret 
the meaning of ―significant effects‖ in order to identify classes of projects with no 
significant effects pursuant to section 21084(a).  The Secretary‘s designation of an 
exempt category reflects a judgment that projects in the category typically do not 
have significant environmental effects, and this judgment is entitled to 
considerable weight.  When an opponent seeks to subject such a project to CEQA 
review, the proponent can make two comparative arguments (assuming they are 
supported by evidence) that are unavailable in the case of a nonexempt project.  
 
11 
First, the proponent can argue that the project‘s effects are typical of the effects 
generated by projects in the exempt category, such that few or no projects in the 
category would be exempt if the effects were deemed significant.  Second, the 
proponent can argue that the project‘s dimensions or features are not unusual 
compared to typical projects in the exempt category, thereby suggesting that the 
project is similar to those that the Secretary has determined not to have a 
significant environmental effect.  The availability of these arguments shows that 
the phrase ―due to unusual circumstances‖ is not ―meaningless surplusage.‖  (Maj. 
opn., ante, at p. 20.)  Such arguments make it more likely that a project belonging 
to an exempt category will be able to bypass the environmental review that would 
otherwise be required in the absence of any categorical exemption.  (See, e.g., San 
Francisco Beautiful v. City and County of San Francisco (2014) 226 Cal.App.4th 
1012, 1025 (San Francisco Beautiful); Fairbank v. City of Mill Valley (1999) 75 
Cal.App.4th 1243, 1260 (Fairbank); Association for Protection of Environmental 
Values in Ukiah v. City of Ukiah (1991) 2 Cal.App.4th 720, 736 (Ukiah). 
The court says this advantage is also ―illusory‖ because ―evidence a project 
proponent offers to show that the project will only have typical effects, 
dimensions, and features is irrelevant if a project opponent can make a mere fair 
argument that those effects, dimensions, or features are not typical, or that the 
project will have a significant environmental effect.‖  (Maj. opn., ante, at p. 19.)  
But evidence of typicality is surely relevant to whether a project opponent can 
make a fair argument of atypical features or significant effects.  This is confirmed 
by the cases just cited (San Francisco Beautiful, Fairbank, and Ukiah), each of 
which relies on such comparative arguments in finding no substantial evidence of 
a fair argument of significant effects.  The court nowhere suggests these cases 
erred in their reasoning or results.  The fact that comparative arguments may not 
 
12 
always defeat a fair argument of significant effects does not negate their value in 
the cases where they do. 
Today‘s opinion also contends that my reading of section 15300.2(c) puts a 
project proponent who claims a categorical exemption in the same position as the 
proponent of a nonexempt project who claims the common sense exemption in 
Guidelines section 15061, subdivision (b)(3).  (Maj. opn., ante, at p. 17.)  But the 
common sense exemption is available only when the agency, based on the record 
evidence, meets its burden of demonstrating ―with certainty that there is no 
possibility that the activity in question may have a significant effect on the 
environment.‖  (Guidelines, § 15061, subd. (b)(3), italics added; see Muzzy Ranch 
Co. v. Solano County Airport Land Use Com. (2007) 41 Cal.4th 372, 386–387.)  
This exacting requirement exceeds an agency‘s obligation, before applying a 
categorical exemption, to consider the evidence in its files and preliminarily rule 
out a reasonable possibility of significant effects.  Indeed, if an agency could 
apply the common sense exemption to a project not covered by a categorical 
exemption simply by making a preliminary determination based on evidence in its 
files that there is no reasonable possibility of significant effects, then the common 
sense exemption would swallow the general rule that an agency must conduct an 
initial study to determine whether a project not covered by a categorical exemption 
will have significant effects.  (See Guidelines, § 15063, subd. (a).) 
An agency may find that a project falls within a categorical exemption 
without first making an express or definitive finding that no section 15300.2 
exception applies; the burden is on the party challenging the categorical exemption 
to show that an exception applies.  (Committee to Save Hollywoodland Specific 
Plan v. City of Los Angeles (2008) 161 Cal.App.4th 1168, 1186–1187.)  In 
addition, project proponents seeking to invoke a categorical exemption may 
employ comparative arguments that are not available to project proponents 
 
13 
seeking to invoke the common sense exemption.  Thus, the availability of the 
common sense exemption for projects meeting its narrow standard of ―certainty‖ 
does not negate the advantages that a categorical exemption confers. 
The court is thus mistaken that the categorical exemption statutes have ―no 
purpose or effect . . . if . . . a showing of potential environmental effect precludes 
application of all categorical exemptions.‖  (Maj. opn., ante, at p. 16.)  Without 
this erroneous premise, there is no reason to construe ―due to unusual 
circumstances‖ as an independent requirement in section 15300.2(c) or to adopt a 
separate standard of review for the determination of ―unusual circumstances.‖  As 
explained above, this approach is at odds with section 15300.2(c)‘s origins in 
Chickering and Friends of Mammoth.  Section 15300.2(c) affirms the principle 
that ―where there is any reasonable possibility that a project or activity may have a 
significant effect on the environment, an exemption would be improper.‖  
(Chickering, supra, 18 Cal.3d at p. 206.)  And just as a project belonging to an 
exempt class will have no significant effects ―in the absence of unusual 
circumstances‖ (Friends of Mammoth, supra, 8 Cal.3d at p. 272), a project that 
may have significant effects, despite belonging to an exempt class, is necessarily a 
project that presents unusual circumstances.  The only question for a court 
reviewing an agency‘s section 15300.2(c) determination is whether substantial 
evidence supports a fair argument that the project will have significant 
environmental effects.  (See Friends of “B” Street v. City of Hayward (1980) 106 
Cal.App.3d 988, 1002.)  It need not be more complicated than that. 
Today‘s decision ventures a panoply of reasons why Chickering should not be 
read to mean what it says, including the opaque contention that Chickering‘s 
interpretation of section 21084(a) somehow violates ―the Legislature‘s express 
directive in section 21083.1 ‗not [to] interpret‘ the CEQA statutes and the Guidelines 
‗in a manner which imposes procedural or substantive requirements beyond those‘ the 
 
14 
statutes and the Guidelines ‗explicitly state[].‘ ‖  (Maj. opn., ante, at p. 24.)  But the 
court‘s reluctance to follow Chickering is ultimately based not on the language or 
legislative history of section 21084(a), but on the premise that reading section 
21084(a) and section 15300.2(c) in harmony with Chickering would deprive 
categorical exemptions of any purpose or effect.  Because this premise is flawed, so is 
the court‘s haphazard effort to minimize Chickering‘s simple and sensible reading of 
section 21084(a). 
III. 
It is true that over the years, the Courts of Appeal have divided on whether 
―unusual circumstances‖ and ―significant effects‖ are distinct requirements in 
section 15300.2(c).  However, when one examines the reasoning of the many 
cases applying section 15300.2(c), it is clear that ―unusual circumstances‖ and 
―significant effects‖ have invariably traveled together.  In the nearly four decades 
since section 15300.2(c) was adopted, no published case has ever found or even 
hinted that a project that belongs to an exempt category yet has a reasonable 
possibility of significant environmental effects may nonetheless evade CEQA 
review on the ground that the effects are not due to unusual circumstances.  The 
only court on record to have reached such a conclusion is the trial court in this 
case.  But, as today‘s opinion suggests, that conclusion is unlikely to stand.  The 
absence of case law finding a reasonable possibility of significant effects but no 
unusual circumstances further confirms that section 15300.2(c) boils down to one 
inquiry, not two. 
Indeed, most courts applying section 15300.2(c) have focused directly on 
whether there is a reasonable possibility that the project will have significant 
environmental effects.  (See, e.g., North Coast Rivers Alliance v. Westlands Water 
Dist. (2014) 227 Cal.App.4th 832, 871–874 [finding no evidence of possible 
 
15 
significant environmental effects while assuming without deciding that there were 
―unusual circumstances‖]; Banker’s Hill, Hillcrest, Park West Community 
Preservation Group v. City of San Diego (2006) 139 Cal.App.4th 249, 278–281 
[rejecting application of the exception on the ground that there were no significant 
environmental effects]; San Lorenzo Valley Community Advocates for Responsible 
Education v. San Lorenzo Valley Unified School Dist. (2006) 139 Cal.App.4th 
1356, 1392–1394 (San Lorenzo) [no substantial evidence of significant 
environmental effects]; Santa Monica Chamber of Commerce v. City of Santa 
Monica (2002) 101 Cal.App.4th 786, 800–801 (Santa Monica) [only effects of 
adopting a new preferred parking zone were socioeconomic, not environmental, 
and therefore not cognizable under CEQA]; Apartment Assn. of Greater Los 
Angeles v. City of Los Angeles (2001) 90 Cal.App.4th 1162, 1175–1176 
[insufficient evidence of significant effects]; City of Pasadena v. State of 
California (1993) 14 Cal.App.4th 810, 827–834 [rejecting various arguments that 
a parole office located in downtown Pasadena would have significant 
environmental effects]; Centinela Hospital Assn. v. City of Inglewood (1990) 225 
Cal.App.3d 1586, 1601 (Centinela) [substantial evidence supported finding of no 
significant environmental effect]; McQueen v. Board of Directors (1988) 202 
Cal.App.3d 1136, 1149 [known existence of hazardous materials on the property 
threatening the environment brings the project within the exception].) 
Among cases that have focused on ―unusual circumstances,‖ it is evident 
that courts have treated unusual circumstances as a proxy for significant effects.  
In Wollmer v. City of Berkeley (2011) 193 Cal.App.4th 1329, 1350–1352, for 
example, the court titled one part of its opinion ―No Unusual Circumstances 
Preventing Categorical Exemption‖ and then proceeded to find no substantial 
evidence of potential significant environmental effects.  In Voices for Rural Living 
v. El Dorado Irrigation Dist. (2012) 209 Cal.App.4th 1096, 1108–1113, the court 
 
16 
concluded that a casino requiring a high volume of water usage was an unusual 
circumstance for a project within the ―small facilities‖ exemption, and it then 
proceeded to find that such high-volume water usage presented the potential for 
significant environmental risks.  Other courts have employed similar reasoning.  
(See Bloom v. McGurk (1994) 26 Cal.App.4th 1307, 1315–1316 [―existing 
facilities‖ exemption applied to medical waste facility, and there were no ―unusual 
circumstances‖ because the facility was located in an area zoned for heavy 
industry and not adjacent to a residential area that might be adversely affected by 
such a facility]; Azusa, supra, 52 Cal.App.4th at p. 1207 [finding landfill 
―unusual‖ because it overlay a major drinking water aquifer and presented a 
substantial risk of pollution].)  Again, it appears that no court, other than the trial 
court here, has ever found a reasonable possibility of significant effects while also 
finding that the effects were not due to unusual circumstances. 
As for the proper standard of review, many courts have held that the fair 
argument test applies.  (Maj. opn., ante, at pp. 32–33 [citing cases].)  One older 
case has disagreed, holding that section 15300.2(c) does not apply if there is 
substantial evidence supporting the agency‘s conclusion that the project will not 
generate significant effects.  (Centinela, supra, 225 Cal.App.3d at p. 1601.)  As 
today‘s opinion notes, ―[o]ther courts have noted judicial disagreement as to 
whether the fair argument standard applies in this context, but have declined to 
decide the issue, finding that the standard‘s application would not have affected 
the result.‖  (Maj. opn., ante, at p. 33, citing Save the Plastic Bag Coalition v. City 
and County of San Francisco (2013) 222 Cal.App.4th 863, 879; Hines v. 
California Coastal Commission (2010) 186 Cal.App.4th 830, 855; San Lorenzo, 
supra, 139 Cal.App.4th at p. 1390; Santa Monica, supra, 101 Cal.App.4th at 
p. 796; Fairbank, supra, 75 Cal.App.4th at pp. 1259–1260; Ukiah, supra, 2 
Cal.App.4th at p. 728, fn. 7.)  In each of these cases, the court found no substantial 
 
17 
evidence supporting a fair argument that the project would have significant 
environmental effects. 
Thus, courts have overwhelmingly used the fair argument standard in 
reviewing the applicability of the significant effect exception either because they 
believed it was the appropriate standard or because they assumed it was.  For more 
than two decades, courts have not felt the need to resolve the question of the 
proper standard because the fair argument standard has proven adequate to the task 
of ferreting out bogus CEQA challenges that would subject categorically exempt 
projects to unnecessary environmental review.  The ultimate touchstone of all of 
these courts‘ inquiries has been whether there is a reasonable possibility that the 
project would have significant environmental effects. 
Today‘s opinion observes that ―evidence that the project will have a 
significant effect does tend to prove that some circumstance of the project is 
unusual.‖  (Maj. opn., ante, at p. 21.)  This observation, though understating the 
real relationship between ―significant effects‖ and ―unusual circumstances,‖ 
authorizes courts applying section 15300.2(c) to continue reasoning the way they 
have been doing for years — i.e., focusing their inquiry on whether there is a 
reasonable possibility that the project will have significant environmental effects.  
Indeed, before a project has been subject to environmental review, the only thing 
that courts are generally positioned to assess with confidence is whether there is a 
reasonable possibility of significant environmental effects.  (See No Oil, Inc. v. 
City of Los Angeles (1974) 13 Cal.3d 68, 84–85.)  Even under the cumbersome 
rules set forth today, it is hard to imagine that any court, upon finding a reasonable 
possibility of significant effects under the fair argument standard, will ever be 
compelled to find no unusual circumstances and thereby uphold the applicability 
of a categorical exemption.  Rather, courts may continue to affirm in practice what 
we have stated as a simple principle:  ―where there is any reasonable 
 
18 
possibility that a project or activity may have a significant effect on the 
environment, an exemption would be improper.‖  (Chickering, supra, 18 Cal.3d at 
p. 206.) 
Although I join the court in reversing and remanding for further 
proceedings, I would hold that the Court of Appeal did not err in its reading of 
section 15300.2(c). 
 
 
 
 
 
 
LIU, J. 
 
 
I CONCUR: 
 
WERDEGAR, J. 
 
 
1 
 
See last page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion Berkeley Hillside Preservation v. City of Berkeley 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 203 Cal.App.4th 656 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S201116 
Date Filed: March 2, 2015 
__________________________________________________________________________________ 
 
Court: Superior 
County: Alameda 
Judge: Frank Roesch 
 
__________________________________________________________________________________ 
 
Counsel: 
 
Brandt-Hawley Law Group and Susan Brandt-Hawley for Plaintiffs and Appellants. 
 
Michael W. Graf for Center for Biological Diversity and High Sierra Rural Alliance as Amici Curiae on 
behalf of Plaintiffs and Appellants. 
 
Chatten-Brown & Carstens, Jan Chatten-Brown, Douglas P. Carstens; Law Offices of Michael W. Stamp, 
Michael W. Stamp and Molly Erickson for Planning and Conservation League, Endangered Habitats 
League, Inc., California Preservation Foundation, Save Our Heritage Organisation, Save Our Carmel River 
and The Open Monterey Project as Amici Curiae on behalf of Plaintiffs and Appellants. 
 
Veneruso & Moncharsh and Leila H. Moncharsh for Berkley Architectural Heritage Association as Amicus 
Curiae on behalf of Plaintiffs and Appellants. 
 
Zach Cowan, City Attorney, and Laura McKinney, Deputy City Attorney, for Defendants and Respondents. 
 
Perkins Coie, Stephen L. Kostka and Barbara J. Schussman for Building Industry Association of the Bay 
Area as Amicus Curiae on behalf of Defendants and Respondents. 
 
Downey Brand, Christian L. Marsh, Andrea P. Clark and Graham St. Michel for Association of California 
Water Agencies as Amicus Curiae on behalf of Defendants and Respondents. 
 
Meyers, Nave, Riback, Silver & Wilson, Amrit S. Kulkarni and Julia L. Bond for Real Parties in Interest 
and Respondents. 
 
Cox, Castle & Nicholson, Michael H. Zischke and Andrew B. Sabey for California Building Industry 
Association, California Business Properties Association and Building Industry Legal Defense Foundation 
as Amici Curiae on behalf of Defendants and Respondents and Real Parties in Interest and Respondents. 
 
 
 
 
 
2 
 
 
 
 
Page 2 – S20116 – counsel continued 
 
Counsel: 
 
Lozano Smith, Harold M. Freiman, Kelly M. Rem; Charles F, Robinson and Kelly L. Drumm for 
California School Boards Association‘s Education Legal Alliance, The Regents of the University of 
California and The Board of Trustee of the California State University as Amici Curiae on behalf of 
Defendants and Respondents and Real Parties in Interest and Respondents. 
 
M. Reed Hopper for Pacific Legal Foundation as Amicus Curiae on behalf of Defendants and Respondents 
and Real Parties in Interest and Respondents. 
 
Holland & Knight, Amanda Monchamp and Melanie Sengupta for League for California Cities and 
California State Association of Counties as Amici Curiae on behalf of Defendants and Respondents and 
Real Parties in Interest and Respondents. 
 
Kamala D. Harris, Attorney General, Sally Magnani, Assistant Attorney General, Janill Richards and 
Catherine M. Wieman, Deputy Attorneys General, as Amici Curiae. 
 
 
3 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
Susan Brandt-Hawley 
Brandt-Hawley Law Group 
P.O. Box 1659 
Glen Ellen, CA  95442 
(707) 938-3900 
 
Amrit S. Kulkarni 
Meyers, Nave, Riback, Silver & Wilson 
555 12th Street, Suite 1500 
Oakland, CA  94607 
(510) 808-2000