Court Opinion

ID: 4426667
Source: CourtListenerOpinion
Date Created: 2019-08-19 17:02:44.952139+00
Date Added: 2024-06-11T14:46:28.734219
License: Public Domain

IN THE SUPREME COURT OF
               CALIFORNIA

   UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
               Plaintiff and Appellant,
                           v.
               CITY OF SAN DIEGO,
             Defendant and Respondent;
        CALIFORNIA COASTAL COMMISSION,
                Real Party in Interest.

                           S238563

           Fourth Appellate District, Division One
                         D068185

              San Diego County Superior Court
               37-2014-00013481-CU-TT-CTL

                       August 19, 2019

Chief Justice Cantil-Sakauye authored the opinion of the
Court, in which Justices Chin, Corrigan, Liu, Cuéllar, Kruger
and Groban concurred.
    UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
               v. CITY OF SAN DIEGO
                            S238563

         Opinion of the Court by Cantil-Sakauye, C. J.

      The California Environmental Quality Act, Public
Resources Code sections 21000 et seq. (CEQA), applies to
“projects,” a term defined by statute. In general, a project is an
activity that (1) is undertaken or funded by, or subject to the
approval of a public agency and (2) may cause “either a direct
physical change in the environment, or a reasonably
foreseeable indirect physical change in the environment.”
(Pub. Res. Code, § 21065.)1 Although section 21065 supplies
the definition of a project, another provision of CEQA, section
21080, subdivision (a), can be interpreted to declare specified
public agency activities, including the amendment of a zoning
ordinance, to be a project as a matter of law, without regard to
their potential for causing a physical change in the
environment. In this matter, we must decide whether to adopt
this interpretation of section 21080, which would prevail over
section 21065 with respect to the specific public agency
activities listed in section 21080.
     In 2014, the City of San Diego (City) adopted an
ordinance authorizing the establishment of medical marijuana

1
      Unless indicated otherwise, all further           statutory
references are to the Public Resources Code.

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         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

dispensaries and regulating their location and operation. The
central provisions of this ordinance amended various City
zoning regulations to specify where the newly established
dispensaries may be located. Because the City found that
adoption of the ordinance did not constitute a project for
purposes of CEQA, it did not conduct any environmental
review. Petitioner Union of Medical Marijuana Patients
(UMMP) challenged the City’s failure to conduct CEQA review
in a petition for writ of mandate, which was denied by the trial
court.
      On appeal, UMMP argued (1) the amendment of a zoning
ordinance, one of the public agency activities listed in section
21080, is conclusively declared a project by that statute and
(2) the City’s ordinance, in any event, satisfied the definition of
a project under section 21065. The former argument was
premised in part on Rominger v. County of Colusa (2014)
229 Cal. App. 4th 690 (Rominger), which relied on section 21080
in concluding that a county’s approval of a tentative
subdivision map, another activity listed in section 21080, was a
project as a matter of law. Here, the Court of Appeal disagreed
with Rominger, concluding that the amendment of a zoning
ordinance is subject to the same statutory test as public agency
activities not listed in section 21080. The court proceeded to
find no error in the City’s conclusion that the ordinance was
not a project because it did not have the potential to cause a
physical change in the environment. We granted review to
resolve the conflict between the two Courts of Appeal regarding
the interpretation of section 21080.
     We agree with the Court of Appeal below that section
21080 does not override the definition of project found in

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        UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                   v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

section 21065. Accordingly, the various activities listed in
section 21080 must satisfy the requirements of section 21065
before they are found to be a project for purposes of CEQA. On
the other hand, we conclude that the Court of Appeal
misapplied the test for determining whether a proposed
activity has the potential to cause environmental change under
section 21065, which was established in Muzzy Ranch Co. v.
Solano County Airport Land Use Commission (2007) 41 Cal. 4th
372 (Muzzy Ranch), and erred in affirming the City’s finding
that adoption of the ordinance did not constitute a project. For
that reason, we reverse and remand for further proceedings.
        I. FACTUAL AND PROCEDURAL BACKGROUND
     A. The City’s Medical Marijuana Ordinance
      Health and Safety Code section 11362.83, a provision of
the Medical Marijuana Program (Health & Saf. Code,
§ 11362.7 et seq.), recognizes the authority of local
governments to adopt ordinances regulating the “location,
operation, or establishment of a medicinal cannabis
cooperative or collective.” (Health & Saf. Code, § 11362.83,
subd. (a); see Kirby v. County of Fresno (2015) 242 Cal. App. 4th
940, 956.) In 2014, the City enacted such a regulation, San
Diego Ordinance No. O-20356 (Ordinance). The Ordinance
amended a variety of City Municipal Code sections to authorize
the establishment, and regulate the siting and operation of,
“medical marijuana consumer cooperatives” (dispensaries),
which were defined as “a facility where marijuana is
transferred to qualified patients or primary caregivers in
accordance with the Compassionate Use Act of 1996 and the
Medical Marijuana Program Act.” (Ord., § 1.)

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         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

      The primary provisions of the Ordinance amended
several of the City’s zoning regulations to cap the number of
dispensaries and specify where in the City they could be
located. Dispensaries were added to the list of permitted uses
in two of the City’s six categories of commercial zones and two
of the four categories of industrial zones (Ord., §§ 6, 7, 13, 15),
and they were expressly excluded from open space,
agricultural, and residential zones.          (Id., §§ 3, 4, 5.)
Dispensaries were also added to the list of permitted uses in
certain planned districts of the City. (Id., §§ 10, 11, 13.) The
Ordinance placed an upper limit of four dispensaries in any
single city council district and required a dispensary to be
located more than 1,000 feet from certain sensitive uses, such
as parks and schools, and more than 100 feet from a
residential zone. (Id., § 8.) Regardless of location, the
Ordinance required the grant of a conditional use permit for a
dispensary’s operation. (Id., §§ 2, 6, 7, 8.)
      In addition to defining the location of dispensaries, the
Ordinance imposed basic conditions on their operation, such as
prohibiting the provision of medical consultation services,
requiring particular lighting and security, defining permissible
signage, and limiting hours of operation. (Ord., § 8.)
      Because the City contains nine city council districts, the
Ordinance’s limit of four dispensaries per district permitted, in
theory, the establishment of 36 dispensaries.          A study
commissioned by the City, however, found that the other
restrictions placed on the location of dispensaries by the
Ordinance, such as the limitation to particular zoning districts
and the minimum distance from sensitive uses, precluded the
establishment of a dispensary entirely in one city council

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         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

district and limited two other districts to three dispensaries
each. This left a practical maximum of 30 dispensaries. City
planning staff concluded that the actual number of
dispensaries to be created “is very likely to be significantly
less,” since “factors such as available units for rent, rental
rates, overall demand for dispensaries, and proximity of
potential sites to target markets would rule out some sites.”
      Because the City found CEQA inapplicable to the
Ordinance’s enactment, it conducted no environmental review
prior to its adoption.          The City’s finding explained its
reasoning: “The . . . Ordinance is not subject to [CEQA] . . . , in
that it is not a Project . . . . Adoption of the ordinance does not
have the potential for resulting in either a direct physical
change in the environment, or reasonably for[e]seeable indirect
physical change in the environment. Future projects subject to
the ordinance will require a discretionary permit and CEQA
review, and will be analyzed at the appropriate time in
accordance with CEQA.”
      B. This Litigation
      According to its President, UMMP is “a civil rights
organization that is devoted to defending and asserting the
rights of medical cannabis patients as well as promoting safe
access to medical marijuana.”        Prior to adoption of the
Ordinance, UMMP submitted two letters to the City Council
objecting to the failure to conduct environmental review under
CEQA. The letters argued that the Ordinance should have
been found to be a project for purposes of CEQA because it had
the potential to cause either a direct physical change in the
environment or a reasonably foreseeable indirect physical
change. (§ 21065.) According to UMMP, adoption of the

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        UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                   v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

Ordinance could affect the environment because (1) restrictions
on the siting of dispensaries would require “thousands of
patients to drive across the City” to obtain medical marijuana;
(2) the City might prosecute and close existing, unpermitted
marijuana dispensaries, causing medical marijuana users to
engage in the “inherently agricultural practice” of growing
their own marijuana; and (3) “the unique development impacts
associated with [dispensaries] [would be] shifted to certain
areas of the City and intensified due to the limit on the total
number of [dispensaries].”
      After the City disregarded UMMP’s arguments and
adopted the Ordinance without further environmental review,
UMMP filed a petition for writ of mandate challenging the
adoption of the Ordinance under CEQA. The trial court, in an
extensive written minute order, rejected UMMP’s claims of the
Ordinance’s potential for causing environmental change,
concluding there was insufficient evidence in the record to
support those claims.
      On appeal, UMMP repeated its argument that the
Ordinance should have been considered a project as a result of
its potential for physical change in the environment, but it
raised the additional argument that the Ordinance should be
deemed a project as a matter of law under section 21080, which
states that CEQA “shall apply to discretionary projects
proposed to be carried out or approved by public agencies,
including, but not limited to, the enactment and amendment of
zoning ordinances . . . .” (§ 21080, subd. (a).) In effect, UMMP
argued, section 21080 classifies every zoning amendment as a
project under CEQA, regardless of its potential for effecting
environmental change. In a published opinion that will be

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         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

discussed in more detail post, the Court of Appeal rejected both
arguments. (Union of Medical Marijuana Patients, Inc. v. City
of San Diego (2016) 4 Cal.App.5th 103, 116, 119-124
(Marijuana Patients).)      In doing so, the court expressly
disagreed    with    the     holding  of    Rominger,     supra,
229 Cal. App. 4th 690, that section 21080 declares the specified
public agency activities to be CEQA projects as a matter of law.
(Rominger, at pp. 702-703; Marijuana Patients, at p. 118.)
                         II. DISCUSSION
     A. Governing Law
         1. Statutory interpretation
     Statutory interpretation is “an issue of law, which we
review de novo.” (United Riggers & Erectors, Inc. v. Coast Iron
& Steel Co. (2018) 4 Cal.5th 1082, 1089.)
       Our overriding purpose in construing a provision of
CEQA, as with any statute, is “to adopt the construction that
best gives effect to the Legislature’s intended purpose.”
(California Building Industry Assn. v. Bay Area Air Quality
Management Dist. (2015) 62 Cal. 4th 369, 381 (Building
Industry).) In determining that intended purpose, we follow
“[s]ettled principles.” (Elk Hills Power, LLC v. Board of
Equalization (2013) 57 Cal. 4th 593, 609 (Elk Hills).) “We
consider first the words of a statute, as the most reliable
indicator of legislative intent.” (Tuolumne Jobs & Small
Business Alliance v. Superior Court (2014) 59 Cal. 4th 1029,
1037 (Tuolumne Jobs).) In doing so, we give the words “their
usual and ordinary meaning,” viewed in the context of the
statute as a whole. (Pineda v. Williams-Sonoma Stores, Inc.
(2011) 51 Cal. 4th 524, 529.) As part of this process, “ ‘ “[every]

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         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

statute should be construed with reference to the whole system
of law of which it is a part so that all may be harmonized and
have effect.” ’ ” (Elk Hills, at p. 610.)
      When the language of a statute is ambiguous — that is,
when the words of the statute are susceptible to more than one
reasonable meaning, given their usual and ordinary meaning
and considered in the context of the statute as a whole — we
consult other indicia of the Legislature’s intent, including such
extrinsic aids as legislative history and public policy. (Ceja v.
Rudolph & Sletten, Inc. (2013) 56 Cal. 4th 1113, 1119; Elk
Hills, supra, 57 Cal.4th at pp. 609-610.) If there is no
ambiguity, “ ‘ “ ‘we presume the Legislature meant what it said
and the plain meaning of the statute governs.’ ” ’ ” (Ceja, at
p. 1119.)
      In construing provisions of CEQA, two unique
considerations apply. First, CEQA is implemented by an
extensive series of administrative regulations promulgated by
the Secretary of the Natural Resources Agency, ordinarily
referred to as the “CEQA Guidelines.”2 (Guidelines, § 15000.)
Through long practice, we “afford great weight to the
Guidelines except when a provision is clearly unauthorized or
erroneous under CEQA.” (Laurel Heights Improvement Assn.
v. Regents of University of California (1988) 47 Cal. 3d 376, 391,
fn. 2; see Building Industry, supra, 62 Cal.4th at p. 381.)
Second, from CEQA’s inception we have held that “the

2
      We will cite and refer to CEQA’s implementing
regulations, codified at title 14, division 6, chapter 3 of the
California Code of Regulations, as the “Guidelines.”

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        UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                   v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

Legislature intended . . . [C]EQA to be interpreted in such
manner as to afford the fullest possible protection to the
environment within the reasonable scope of the statutory
language.” (Friends of Mammoth v. Board of Supervisors
(1972) 8 Cal. 3d 247, 259; see Building Industry, at p. 381.)
         2. CEQA generally
       “CEQA was enacted to advance four related purposes: to
(1) inform the government and public about a proposed
activity’s potential environmental impacts; (2) identify ways to
reduce, or avoid, environmental damage; (3) prevent
environmental damage by requiring project changes via
alternatives or mitigation measures when feasible; and
(4) disclose to the public the rationale for governmental
approval of a project that may significantly impact the
environment.” (Building Industry, supra, 62 Cal.4th at p. 382.)
“CEQA embodies a central state policy to require state and
local governmental entities to perform their duties ‘so that
major consideration is given to preventing environmental
damage.’ [Citations.] [¶] CEQA prescribes how governmental
decisions will be made when public entities, including the state
itself, are charged with approving, funding — or themselves
undertaking — a project with significant effects on the
environment.” (Friends of the Eel River v. North Coast
Railroad Authority (2017) 3 Cal.5th 677, 711-712, italics
omitted (Eel River).)
      “CEQA review is undertaken by a lead agency, defined as
‘the public agency which has the principal responsibility
for carrying out or approving a project which may have a
significant effect upon the environment.’ ” (Eel River, supra,
3 Cal.5th at p. 712, quoting § 21067, italics omitted.)

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         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

A putative lead agency’s implementation of CEQA proceeds by
way of a multistep decision tree, which has been characterized
as having three tiers. (Muzzy Ranch, supra, 41 Cal.4th at
p. 380.)   First, the agency must determine whether the
proposed activity is subject to CEQA at all. Second, assuming
CEQA is found to apply, the agency must decide whether the
activity qualifies for one of the many exemptions that excuse
otherwise covered activities from CEQA’s environmental
review. Finally, assuming no applicable exemption, the agency
must undertake environmental review of the activity, the third
tier.3 (Muzzy Ranch, at pp. 380-381.) We examine the three-
tier process in more detail below.
      CEQA’s applicability: When a public agency is asked to
grant regulatory approval of a private activity or proposes to
fund or undertake an activity on its own, the agency must first
decide whether the proposed activity is subject to CEQA.
(Guidelines, § 15060, subd. (c).) In practice, this requires the
agency to conduct a preliminary review to determine whether
the proposed activity constitutes a “project” for purposes of
CEQA. (Tuolumne Jobs, supra, 59 Cal.4th at p. 1037; see
§ 21065; Guidelines, § 15378, subd. (a) [both defining

3
      In a very early CEQA case, No Oil, Inc. v. City of Los
Angeles (1974) 13 Cal. 3d 68, we described the three tiers
differently, disregarding the project step and dividing the third
tier into two parts, the preparation of an initial study and, if
required, an environmental impact report (EIR). (Id. at p. 74.)
Because the initial study and EIR are both aspects of
environmental review, we find the Muzzy Ranch
characterization more helpful in understanding CEQA’s
procedures.

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         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

“project”].) If the proposed activity is found not to be a project,
the agency may proceed without further regard to CEQA.4
(Muzzy Ranch, supra, 41 Cal.4th at p. 380; Guidelines,
§ 15060, subd. (c)(3) [if a proposed activity does not qualify as a
project, it “is not subject to CEQA”].)
      Exemption from environmental review: If the lead agency
concludes it is faced with a project, it must then decide
“whether the project is exempt from the CEQA review process
under either a statutory exemption [citation] or a categorical
exemption set forth in the CEQA Guidelines.” (Building
Industry, supra, 62 Cal.4th at p. 382.)         The statutory
exemptions, created by the Legislature, are found in section
21080, subdivision (b). Among the most important exemptions
is the first, for “[m]inisterial” projects, which are defined
generally as projects whose approval does not require an
agency to exercise discretion.       (§ 21080, subd. (b)(1);
Guidelines, § 15369; see Sierra Club v. County of Sonoma
(2017) 11 Cal.App.5th 11, 19-20 (Sierra Club).) The categorical
exemptions, found in Guidelines sections 15300 through 15333,
were promulgated by the Secretary for Natural Resources in
response to the Legislature’s directive to develop “a list of

4
      Courts have often labeled the project decision
“jurisdictional” because it determines whether CEQA applies
at all. (Muzzy Ranch, supra, 41 Cal.4th at p. 380; Davidon
Homes v. City of San Jose (1997) 54 Cal. App. 4th 106, 112.)
The term is inapposite because an agency’s jurisdiction over a
proposed activity does not depend upon the application of
CEQA. Nonetheless, its use conveys the preliminary nature of
the project determination.

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         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

classes of projects which have been determined not to have a
significant effect on the environment.” (§ 21084, subd. (a);
Guidelines, § 15354; see generally, Berkeley Hillside
Preservation v. City of Berkeley (2015) 60 Cal. 4th 1086, 1100-
1101 (Berkeley Hillside).) If the lead agency concludes a
project is exempt from review, it must issue a notice of
exemption citing the evidence on which it relied in reaching
that conclusion. (Muzzy Ranch, supra, 41 Cal.4th at pp. 380,
386-387.) The agency may thereafter proceed without further
consideration of CEQA.
      Environmental review: Environmental review is required
under CEQA only if a public agency concludes that a proposed
activity is a project and does not qualify for an exemption. In
that case, the agency must first undertake an initial study to
determine whether the project “may have a significant effect on
the environment.” (Guidelines, § 15063, subd. (a); Friends of
the College of San Mateo Gardens v. San Mateo County
Community College Dist. (2016) 1 Cal.5th 937, 945 (San Mateo
Gardens).) If the initial study finds no substantial evidence
that the project may have a significant environmental effect,
the lead agency must prepare a negative declaration, and
environmental review ends. (§ 21080, subd. (c)(1); San Mateo
Gardens, at p. 945.) If the initial study identifies potentially
significant environmental effects but (1) those effects can be
fully mitigated by changes in the project and (2) the project
applicant agrees to incorporate those changes, the agency must
prepare a mitigated negative declaration. This too ends CEQA
review. (§ 21080, subd. (c)(2); San Mateo Gardens, at p. 945.)
Finally, if the initial study finds substantial evidence that the
project may have a significant environmental impact and a

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        UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                   v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

mitigated negative declaration is inappropriate, the lead
agency must prepare and certify an environmental impact
report before approving or proceeding with the project.
(§ 21080, subd. (d); Building Industry, supra, 62 Cal.4th at
p. 382.)
         3. The Court of Appeal’s decision
      At issue before the Court of Appeal was the first tier in
the CEQA process, the determination by a putative lead
agency whether a proposed activity constitutes a project. In
particular, the court was asked to decide whether a public
agency’s amendment of a zoning ordinance constitutes a
project as a matter of law.
      As suggested ante, two separate provisions of the Public
Resources Code are potentially relevant to this question.
“Project” is defined in section 21065 as an activity
(1) undertaken or funded by or requiring the approval of a
public agency that (2) “may cause either a direct physical
change in the environment, or a reasonably foreseeable
indirect physical change in the environment.”5 (See Sunset

5
      The full text of section 21065 follows:
      “ ‘Project’ means an activity which may cause either a
direct physical change in the environment, or a reasonably
foreseeable indirect physical change in the environment, and
which is any of the following:
      “(a) An activity directly undertaken by any public agency.
      “(b) An activity undertaken by a person which is
supported, in whole or in part, through contracts, grants,
subsidies, loans, or other forms of assistance from one or more
public agencies.

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         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

Sky Ranch Pilots Assn. v. County of Sacramento (2009)
47 Cal. 4th 902, 907 (Sky Ranch Pilots).) The controversy
arises because a related statute, section 21080, can be
interpreted to override section 21065 with respect to the
classification of zoning ordinance amendments and certain
other public agency activities: “Except as otherwise provided
in this division, this division shall apply to discretionary
projects proposed to be carried out or approved by public
agencies, including, but not limited to, the enactment and
amendment of zoning ordinances, the issuance of zoning
variances, the issuance of conditional use permits, and the
approval of tentative subdivision maps unless the project is
exempt from this division.” (§ 21080, subd. (a), italics added.)
As UMMP argued, this language can be read to classify the
various listed agency activities as “discretionary projects” in
every case, regardless of their potential for bringing about a
physical change in the environment.
       The Court of Appeal rejected UMMP’s argument that
“any enactment of a zoning ordinance by a public agency
necessarily constitutes a project.” (Marijuana Patients, supra,
4 Cal.App.5th at p. 114.) The court began its analysis by
concluding that section 21080’s listing of various local agency
activities is ambiguous. As the court viewed it, the Legislature
could have intended either “that the examples given . . . are
illustrations of activities that are ‘discretionary projects

      “(c) An activity that involves the issuance to a person of a
lease, permit, license, certificate, or other entitlement for use
by one or more public agencies.”

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         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
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              Opinion of the Court by Cantil-Sakauye, C. J.

proposed to be carried out or approved by public agencies,’ or
. . . are illustrations of activities ‘proposed to be carried out or
approved by public agencies,’ but that not all such activities
will qualify as ‘discretionary projects.’ ” (Marijuana Patients,
at p. 115.) The court rejected the first reading on the basis of
section 21065. It noted that section 21065 defines a project as
having two characteristics, the potential to cause a physical
change in the environment and the involvement of a public
agency. To harmonize the “more specific provision” of section
21065 with the “more general provision” of section 21080, the
court held that the “most reasonable interpretation” of section
21080, subdivision (a), is that the various listed public agency
activities are examples of “ ‘[a]n activity directly undertaken by
any public agency’ as set forth in section 21065, but that the
enactment or amendment of a zoning ordinance will not
constitute a CEQA project unless it also meets the second
requirement in section 21065, namely that it ‘may cause either
a direct physical change in the environment, or a reasonably
foreseeable indirect physical change in the environment.’ ”
(Marijuana Patients, at p. 116.)
      The court found support for its interpretation in
Guidelines section 15378.       (Marijuana Patients, supra,
4 Cal.App.5th at p. 116.) As noted above, the Guidelines are
“afford[ed] great weight” in interpreting CEQA. (Building
Industry, supra, 62 Cal.4th at p. 381.) In defining “project,”
Guidelines section 15378, subdivision (a)(1) partially melds
sections 21065 and 21080: “ ‘Project’ means the whole of an
action, which has a potential for resulting in either a direct
physical change in the environment, or a reasonably
foreseeable indirect physical change in the environment, and

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         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

that is any of the following: [¶] (1) An activity directly
undertaken by any public agency including but not limited to
public works construction and related activities[,] clearing or
grading of land, improvements to existing public structures,
enactment and amendment of zoning ordinances, and the
adoption and amendment of local General Plans or elements
thereof . . . .”6 Although Guidelines section 15378 includes an
express reference to the enactment or amendment of a zoning
ordinance, it classifies those activities merely as examples of
“activit[ies] directly undertaken by any public agency.”
(Id., subd. (a)(1).) The requirement that an activity have the
potential to cause a change in the environment is classified by

6
      The complete text of Guidelines section 15378,
subdivision (a), is as follows:
      “ ‘Project’ means the whole of an action, which has a
potential for resulting in either a direct physical change in the
environment, or a reasonably foreseeable indirect physical
change in the environment, and that is any of the following:
      “(1) An activity directly undertaken by any public agency
including but not limited to public works construction and
related activities[,] clearing or grading of land, improvements
to existing public structures, enactment and amendment of
zoning ordinances, and the adoption and amendment of local
General Plans or elements thereof pursuant to Government
Code Sections 65100-65700.
      “(2) An activity undertaken by a person which is
supported in whole or in part through public agency contracts,
grants, subsidies, loans, or other forms of assistance from one
or more public agencies.
      “(3) An activity involving the issuance to a person of a
lease, permit, license, certificate, or other entitlement for use
by one or more public agencies.”

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             Opinion of the Court by Cantil-Sakauye, C. J.

Guidelines section 15378 as an independent element of
“project,” applicable whether or not the activity is listed in
section 21080. “Thus,” the Court of Appeal concluded, “under
the CEQA Guidelines, the enactment and amendment of a
zoning ordinance is a project only if that action also creates ‘a
potential for resulting in either a direct physical change in the
environment, or a reasonably foreseeable indirect physical
change in the environment.’ ” (Marijuana Patients, supra, at
p. 116.)
      The Court of Appeal rejected the contrary conclusion of
Rominger, supra, 229 Cal. App. 4th 690, because that court’s
“analysis ignores the definition of a project as set forth in
CEQA and the CEQA Guidelines.” (Marijuana Patients, supra,
4 Cal.App.5th at p. 118.) Rominger, in holding that a county’s
approval of a tentative subdivision map constituted a project as
a matter of law under section 21080, did not base its ruling on
an analysis of the respective texts of sections 21065 and 21080.
Rather, it looked to our observation in Muzzy Ranch, supra, 41
Cal. 4th 372, that “[w]hether an activity constitutes a project
subject to CEQA is a categorical question respecting whether
the activity is of a general kind with which CEQA is concerned,
without regard to whether the activity will actually have
environmental impact.” (Id. at p. 381.) Taking this principle
as its guide, Rominger concluded that “the Legislature has
determined [in section 21080, subdivision (a)] that certain
activities, including the approval of tentative subdivision
maps, always have at least the potential to cause a direct
physical change or a reasonably foreseeable indirect physical
change in the environment.” (Rominger, at p. 702.) In
reaching this conclusion, Rominger did not, as Marijuana

                                  17
        UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                   v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

Patients rightly noted, take into account the language of
section 21065 or otherwise attempt to reconcile the two
statutes.
       Having held that the Ordinance was not a project unless
it had the potential to cause a direct or reasonably foreseeable
indirect physical change in the environment, as required by
section 21065, the Court of Appeal proceeded to consider
UMMP’s argument that the City erred in concluding that the
Ordinance did not have that potential. (Marijuana Patients,
supra, 4 Cal.App.5th at p. 119.) UMMP effectively conceded
that the Ordinance did not have the potential to cause a direct
physical change (Marijuana Patients, at p. 113), but it
contended, as noted above, that the Ordinance had the
potential to cause various indirect effects, namely, increased
traffic from patients driving to the new dispensaries, increased
self-cultivation of marijuana, and changed patterns of urban
development within the City. (Marijuana Patients, at p. 120.)
After evaluating each of the claimed indirect effects
individually, the court concluded that all were too speculative
or lacking in evidentiary support in the administrative record
to permit a finding that they were reasonably foreseeable, as
required by section 21065. (Marijuana Patients, at pp. 120-
124.) Finding no error in the City’s determination that CEQA
was inapplicable, the Court of Appeal affirmed the trial court’s
denial of a writ of mandate. (Marijuana Patients, at p. 124.)

                                  18
         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

     B. Whether Section 21080 Conclusively Declares
        the Amendment of a Zoning Ordinance To Be a
        CEQA “Project”
     We agree with the Court of Appeal that section 21080
does not dictate the result here as a matter of law, and we
agree for essentially the reasons cited by that court.7
      As the Court of Appeal concluded, section 21080’s
statement that CEQA applies to “discretionary projects
proposed to be carried out or approved by public agencies,”
followed by its listing of the amendment of a zoning ordinance
as an example, is ambiguous, at least when considered in
isolation. It is unclear from the text of section 21080 whether
the amendment of a zoning ordinance, as well as the other
listed activities, are examples of “discretionary projects” to

7
       The City urges us to dismiss this appeal as moot on the
basis of Business and Professions Code section 26055,
subdivision (h), enacted after we granted review (Stats. 2017,
ch. 27, § 41), which exempts from CEQA a public agency’s
enactment of any regulation that requires discretionary review
of licenses to engage in “commercial cannabis activity.” The
City does not argue that subdivision (h) applies retroactively to
exempt the Ordinance from CEQA, and we offer no opinion on
that issue. Instead, the City contends that UMMP can no
longer be granted effective relief because the City could re-
enact the Ordinance without environmental review. (See In re
David B. (2017) 12 Cal.App.5th 633, 644 [a matter becomes
moot if effective relief can no longer be granted].) We reject the
argument because the trial court can still grant some of the
relief requested by UMMP by vacating the City’s approval of
the Ordinance, if such relief is appropriate. (See Save Tara v.
City of West Hollywood (2008) 45 Cal. 4th 116, 127 [matter not
moot because petitioner “can still be awarded the relief it
seeks, an order that [the] [c]ity set aside its approvals”].)

                                  19
         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

which CEQA does apply, or whether they are examples of
discretionary activities “proposed to be carried out or approved
by public agencies” to which CEQA might apply.
      When interpreting the provisions of CEQA, however, we
do not consider them in isolation, but in the context of the
entire statute. (Tuolumne Jobs, supra, 59 Cal. 4th 1029, 1037.)
Within CEQA, “project” is not merely a word; it is a defined
term. “ ‘If the Legislature has provided an express definition of
a term, that definition ordinarily is binding on the courts.’ ”
(State ex rel. Dept. of California Highway Patrol v. Superior
Court (2015) 60 Cal. 4th 1002, 1011.) As a corollary of this
principle, “[t]erms defined by the statute in which they are
found will be presumed to have been used in the sense of the
definition.” (Faulder v. Mendocino County Bd. of Supervisors
(2006) 144 Cal. App. 4th 1362, 1371.) In the case of CEQA, this
judicial presumption is legislatively mandated. Section 21060
expressly states that CEQA’s definitions “govern the
construction of this division.”
      Applying this principle of interpretation, we must
assume that in using the defined term “project” in section
21080, the Legislature intended it to bear the definition
assigned in section 21065. Accordingly, the first portion of
section 21080, subdivision (a) — “Except as otherwise provided
in this division, this division shall apply to discretionary
projects proposed to be carried out or approved by public
agencies” — must be understood to mean that CEQA applies to
activities proposed to be carried out or approved by a public
agency that both (1) are discretionary and (2) satisfy the
requirements for a project under section 21065. Although all of
the exemplary activities listed in section 21080 necessarily

                                  20
         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

satisfy section 21065’s requirement of public agency
involvement, there is no reason to conclude that they
invariably satisfy its requirement of the potential to cause a
physical change in the environment. For that reason, we must
interpret the listing of public agency activities in section
21080, subdivision (a), merely to offer generic examples of the
type of “discretionary [activities] proposed to be carried out or
approved by public agencies” to which CEQA could apply.
CEQA does apply only to activities that qualify as projects —
in other words, to specific examples of the listed activities that
have the potential to cause, directly or indirectly, a physical
change in the environment.
      UMMP has not suggested any reason why the ordinary
presumption requiring a defined term to carry that meaning
should not apply in these circumstances, and we aware of none.
As noted, the definition in section 21065 is legislatively
mandated to apply to section 21080, as well as to the
remainder of CEQA. (§ 21060.) Nothing in section 21080
suggests that the Legislature intended to exempt the listed
activities from satisfying the requirements for a project. On
the contrary, its use of the defined term “project,” rather than a
generic term such as “activity,” suggests that the Legislature
intended to incorporate the defined concept. Finally, using the
defined meaning does not result in an absurdity or otherwise
impair the enforcement of CEQA. It simply confirms that the
public agency activities listed in section 21080 must satisfy the
same requirement applicable to nonlisted activities before they
are subject to CEQA, the requirement of potential for physical
change in the environment. (See § 21065.)

                                  21
         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

      Because the plain language of section 21080 is
unambiguous when evaluated in context, it is unnecessary for
us to consider other indicia of meaning. Yet it is worth noting
that other available indicia support our interpretation. First
and most important, as the Court of Appeal recognized, our
interpretation is consistent with that of the Secretary for
Natural Resources in the Guidelines, to which we must “afford
great weight.” (Building Industry, supra, 62 Cal.4th at p. 381.)
In defining “project,” the Guidelines impose the requirement of
a potential for causing a physical change in the environment
on all public agency activities. (Guidelines, § 15378, subd. (a).)
Although Guidelines section 15378 mentions enactment and
amendment of a zoning ordinance, activities also mentioned in
section 21080, it cites those activities merely as examples of
activities “directly undertaken by any public agency” (§ 15378,
subd. (a)(1)), a usage equivalent to our understanding of the
significance of the list of activities in section 21080. Guidelines
section 15378 does not suggest that the enactment or
amendment of a zoning ordinance constitutes a project without
regard to its potential for causing environmental change.
      Policy considerations favor this interpretation as well.
Finding a proposed activity subject to CEQA can lead to
additional costs, in time and money, for both a public agency
and a private applicant. (Sky Ranch Pilots, supra, 47 Cal. 4th
902, 909.) As section 21065 recognizes, there is no reason to
impose those costs by subjecting a proposed activity to CEQA if
the activity does not have the potential to affect the
environment. Declaring all of the activities listed in section
21080 to be a project would necessarily subject them to these

                                  22
         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

incremental costs without regard to their potential for causing
an environmental impact.
      The legislative history of sections 21065 and 21080 also
supports our conclusion. As originally enacted, section 21065
defined “project” merely as an activity undertaken, financed or
subject to approval by a government agency, using the text
now contained in subdivisions (a) through (c) of the statute.
(Stats. 1972, ch. 1154, § 1, pp. 2271-2272.) The statute did not
contain the further requirement that a proposed activity have
the potential to cause environmental change. At that time,
section 21080, subdivision (a) was materially identical to its
present text. (Stats. 1972, ch. 1154, § 1, p. 2272.) Accordingly,
the local government activities listed in section 21080
necessarily constituted examples of “projects,” since all land
use regulations and approvals constituted projects under the
version of section 21065 in effect at the time.8 In 1994, section
21065 was amended to its present form, limiting “projects” to
governmental activities that posed the possibility of an
environmental effect. (Stats. 1994, ch. 1230, § 4, p. 7682.) The
purpose of the amendment was to “prohibit CEQA from being
used to delay or kill [activities] that have no direct or indirect
effect on the environment” by narrowing the definition of
project. (Assem. Natural Resources Com., Republican Analysis
of Sen. Bill No. 749 (1993-1994 Reg. Sess.) Aug. 22, 1994, p. 1.)

8
     The significance of the list in section 21080 was
presumably to classify the activities as “discretionary” projects,
which made them ineligible for the ministerial exemption
under section 21080, subdivision (b).

                                  23
         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

To continue to treat all of the activities listed in section 21080
as “projects” following this amendment of section 21065,
regardless of their potential for producing an environmental
change, would entirely defeat the narrowing purpose of the
amendment, at least as far as the listed activities are
concerned.
      The Rominger court, in holding that section 21080
declared all tentative subdivision map approvals to be projects,
explained its reasoning in part by noting, “Presumably no one
goes to the trouble of subdividing property just for the sake of
the process; the goal of subdividing property is to make that
property more useable. And with the potential for greater or
different use comes the potential for environmental impacts
from that use.” (Rominger, supra, 229 Cal.App.4th at p. 702.)
Even assuming this to be true with respect to tentative
subdivision maps, the rationale supports Rominger’s statutory
interpretation only if the same logic also holds for the other
public agency activities listed in section 21080. It does not. As
amici curiae League of California Cities and California State
Association of Counties point out, many types of local
government regulations are labeled “zoning ordinances,”
covering a wide range of regulatory subjects. Whether the
enactment or amendment of a regulation denominated a
“zoning ordinance” carries the potential for environmental
change depends entirely on the nature of the particular
regulation.    A potential environmental effect cannot be
presumed solely from the label applied to it. The same point
applies with equal force to the two other activities listed in
section 21080, zoning variances and conditional use permits.
Neither can reliably be presumed to have the potential to

                                  24
         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

create environmental change. To subject such activities to
CEQA as a matter of course serves no obvious public policy
purpose.
      It might be objected that this interpretation of section
21080, subdivision (a), strips the provision of its legal
significance, rendering it surplusage (e.g., Berkeley Hillside,
supra, 60 Cal. 4th 1086, 1097 [we should avoid “interpretations
that render any language surplusage”]), but that argument
misunderstands the significance of section 21080 within
CEQA. Section 21080, subdivision (a) establishes that CEQA
applies to activities proposed to be carried out or approved by a
public agency that are (1) discretionary and (2) satisfy the
requirements for a project. This limitation to activities
requiring the exercise of agency discretion is not otherwise
reflected in CEQA, at least as stated in the affirmative. The
only other statutory reference occurs by negative inference
from the exemption for ministerial activities, which are defined
as activities not requiring an agency’s exercise of discretion.
(Sierra Club, supra, 11 Cal.App.5th at pp. 19-20.) Not by
coincidence, this exemption is contained in subdivision (b)(1) of
section 21080, the subdivision immediately following the
statute’s reference to “discretionary projects.”9 Because it
establishes the requirement of discretionary agency action,
section 21080, subdivision (a) retains a legal significance

9
      As originally enacted, section 21080 consisted of the
present text of subdivision (a) and a single exemption, the
ministerial exemption, which was codified as subdivision (b).
(Stats. 1972, ch. 1154, § 1, p. 2272.)

                                  25
         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

independent of its purported classification of the agency
activities it specifies.
      UMMP relies on Rominger, supra, 229 Cal. App. 4th 690,
in arguing that our decision in Muzzy Ranch, supra, 41 Cal. 4th
372, dictates the conclusion that section 21080 declares the
listed public agency activities to be a project as a matter of law.
Again, we do not agree. Muzzy Ranch did not address, or even
purport to consider, the question before us. Because the
activity of concern in Muzzy Ranch was a local agency’s
approval of a land use compatibility plan (Muzzy Ranch, at
p. 378), an activity not mentioned in section 21080, we had no
reason to construe that statute, and the decision mentions
section 21080 only once, in a general discussion of statutory
exemptions. (Muzzy Ranch, at p. 380.) Muzzy Ranch is in no
way binding in the present circumstances.10
      We recognize that the Muzzy Ranch observation cited by
Rominger, “[w]hether an activity constitutes a project subject
to CEQA is a categorical question respecting whether the
activity is of a general kind with which CEQA is concerned,”
may be interpreted to suggest that certain types of activities
can be considered projects as a matter of law. (Muzzy Ranch,
supra, 41 Cal.4th at p. 381, italics added.) Yet the decision
does not so state. Other than its particular choice of phrase,

10
      For reasons stated in the text, we disapprove Rominger v.
County of Colusa, supra, 229 Cal. App. 4th 690, to the extent it
holds that the various public agency activities listed in section
21080, subdivision (a), are conclusively declared to be CEQA
projects.

                                  26
        UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                   v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

there is no indication in Muzzy Ranch that the description of
the project decision as a “categorical question” was intended to
imply that entire categories of local governmental activities
may be deemed projects, without consideration of their
individual substance. Instead, as discussed further below, that
characterization was intended to convey the relatively abstract
and preliminary nature of the project decision.
     C. Whether the Ordinance Is the Sort of Activity
        That May Cause a Direct or Indirect Physical
        Change in the Environment
      Because we conclude that section 21080 does not declare
every zoning amendment to be a CEQA project as a matter of
law, we must, like the Court of Appeal, review the City’s
conclusion that the Ordinance did not qualify as a project
under section 21065. On this issue, we part ways with the
Court of Appeal.
       The governing decision is Muzzy Ranch, supra,
41 Cal. 4th 372. The lead agency in Muzzy Ranch was a Solano
County commission (commission) established to regulate land
uses associated with county airports. (Id. at p. 378.) The
activity of concern was the commission’s adoption of the Travis
Air Force Base land use compatibility plan (TALUP), which set
out model land use policies for portions of the county
neighboring the military air base. The policies were designed
“ ‘to ensure that future land uses in the surrounding area will
be compatible with the realistically foreseeable, ultimate
potential aircraft activity at the base.’ ” (Ibid.) The Muzzy
Ranch plaintiff was particularly concerned with the TALUP’s
model policy for a 600-square-mile area exposed to low altitude
overflights by aircraft using the base. The policy, which did

                                  27
        UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                   v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

not apply to developed areas within existing city limits,
“purport[ed] to restrict residential development within [areas
subject to overflights] to levels currently permitted under
existing general plans and zoning regulations. Specifically, the
TALUP state[d] that ‘[n]o amendment of a general plan land
use policy or land use map designation and no change of zoning
shall be permitted if such amendment or change would allow
more dwelling units in the affected area than are allowed
under current zoning.’ ” (Muzzy Ranch, at p. 379.)
      In approving the TALUP, the commission initially
adopted a resolution finding that the approval was not a
project under CEQA because the TALUP would not cause a
direct or reasonably foreseeable indirect physical change in the
environment. (Muzzy Ranch, supra, 41 Cal.4th at p. 378.)
Five days later, the commission also adopted a CEQA notice of
exemption, finding that the TALUP’s adoption “created ‘[n]o
possibility of significant effect on the environment.’ ” (Id. at
p. 379.)    Muzzy Ranch reviewed both the commission’s
conclusion that TALUP’s approval was not a project and its
finding that, if a project, the approval was exempt from
environmental review.
      As noted above, we began our discussion of the TALUP’s
status as a project by observing, “Whether an activity
constitutes a project subject to CEQA is a categorical question
respecting whether the activity is of a general kind with which
CEQA is concerned, without regard to whether the activity will
actually have environmental impact.” (Muzzy Ranch, supra,
41 Cal.4th at p. 381.) Because there was no question the
commission’s approval satisfied section 21065’s requirement of
public agency involvement, we addressed only “whether the

                                  28
        UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                   v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

Commission’s adoption of the TALUP is the sort of activity
that may cause a direct physical change or a reasonably
foreseeable indirect physical change in the environment.”
(Muzzy Ranch, at p. 382.)
      On this issue, the plaintiff contended that the TALUP’s
limitation of development in the relevant area to existing
approved levels could cause intensified development in other
parts of the county, a phenomenon referred to as “displaced
development.” (Muzzy Ranch, supra, 41 Cal.4th at p. 382.)
The commission responded that such effects were “inherently
too speculative to be considered a reasonably foreseeable effect
of an airport land use compatibility plan.” (Ibid.) We began
our analysis by recognizing that “no California locality is
immune from the legal and practical necessity to expand
housing due to increasing population pressures.” (Id. at
p. 383.) Given this expectation of growth, we reasoned that a
local agency “may reasonably anticipate that its placing a ban
on development in one area of a jurisdiction may have the
consequence, notwithstanding existing zoning or land use
planning, of displacing development to other areas of the
jurisdiction.” (Ibid.) On that reasoning alone, we held that the
TALUP’s approval might cause a reasonably foreseeable
indirect physical change in the environment and therefore
constituted a project. (Ibid.)
      Our analysis of the commission’s notice of exemption was
quite different.      In finding the TALUP exempt from
environmental review, the commission relied on the
“commonsense” exemption of the Guidelines, which applies
“[w]here it can be seen with certainty that there is no
possibility that the activity in question may have a significant

                                  29
        UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                   v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

effect on the environment.” (Guidelines, § 15061, subd. (b)(3).)
In contrast to the decision under section 21065, which we
treated as an issue of law, Muzzy Ranch held that the TALUP’s
eligibility for the commonsense exemption “presents an issue of
fact, and . . . the agency invoking the exemption has the
burden of demonstrating it applies.” (Muzzy Ranch, supra,
41 Cal.4th at p. 386.) Applying this standard of review, we
held that the commission correctly found that the
commonsense exemption applied, notwithstanding our
conclusion that the TALUP’s possible environmental impact
was sufficient to require its treatment as a project. As we
reasoned, “When approving a project that is consistent with a
community plan, general plan, or zoning ordinance for which
an environmental impact report already has been certified, a
public agency need examine only those environmental effects
that are peculiar to the project and were not analyzed or were
insufficiently analyzed in the prior environmental impact
report.” (Id. at pp. 388-389.) In restricting growth in areas of
the county affected by overflights, the TALUP merely
incorporated limits already imposed by existing general plan
and zoning provisions. (Id. at p. 389.) As a result, “any
potential displacement the TALUP might otherwise have
effected already has been caused by the existing land use
policies and zoning regulations to which the TALUP is keyed.”
(Ibid.)
       Under Muzzy Ranch, a local agency’s task in
determining whether a proposed activity is a project is to
consider the potential environmental effects of undertaking the
type of activity proposed, “without regard to whether the
activity will actually have environmental impact.” (Muzzy

                                  30
         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

Ranch, supra, 41 Cal.4th at p. 381.) Applying this test, our
discussion of the TALUP’s status as a project was brief and
straightforward. We made no reference to any evidence in the
record bearing on the actual impact of the TALUP on
development in Solano County. Instead, the decision restricted
itself to an examination of the potential effects that could
reasonably be anticipated from adopting a land use policy of
the type contained in the TALUP. Reasoning that population
growth and resulting development can be anticipated in
California counties, and that a policy capping development in
one area might be expected to divert this growth to other areas
of a county, we found the TALUP to be the sort of activity that
could result in a physical change in the environment. (Id. at
p. 383.)
      To encapsulate the Muzzy Ranch test, a proposed activity
is a CEQA project if, by its general nature, the activity is
capable of causing a direct or reasonably foreseeable indirect
physical change in the environment. This determination is
made without considering whether, under the specific
circumstances in which the proposed activity will be carried
out, these potential effects will actually occur. Consistent with
this standard, a “reasonably foreseeable” indirect physical
change is one that the activity is capable, at least in theory, of
causing. (Guidelines, § 15064, subd. (d)(3).) Conversely, an
indirect effect is not reasonably foreseeable if there is no causal
connection between the proposed activity and the suggested
environmental change or if the postulated causal mechanism
connecting the activity and the effect is so attenuated as to be
“speculative.” (Ibid.; e.g., City of Livermore v. Local Agency
Formation Com. (1986) 184 Cal. App. 3d 531, 541-543

                                  31
         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

[amendment of local agency formation commission guidelines
to permit urban development outside cities constitutes a
project]; Kaufman & Broad-South Bay, Inc. v. Morgan Hill
Unified School Dist. (1992) 9 Cal. App. 4th 464, 474 [creation of
a Mello-Roos district for the purposes of funding an anticipated
future school system in an undeveloped portion of the city not a
project because “the causal link between the [formation of the
district] and the alleged environmental impact (construction of
new schools) is missing”].)
       The somewhat abstract nature of the project decision is
appropriate to its preliminary role in CEQA’s three-tiered
decision tree. Determination of an activity’s status as a project
occurs at the inception of agency action, presumably before any
formal inquiry has been made into the actual environmental
impact of the activity. The question posed at that point in the
CEQA analysis is not whether the activity will affect the
environment, or what those effects might be, but whether the
activity’s potential for causing environmental change is
sufficient to justify the further inquiry into its actual effects
that will follow from the application of CEQA. If the proposed
activity is the sort that is capable of causing direct or
reasonably foreseeable indirect effects on the environment,
some type of environmental review is justified, and the activity
must be deemed a project. CEQA analysis is then undertaken
to evaluate the likelihood and nature of the project’s
environmental impacts, in order to determine the extent of
environmental review required.
      Only as so understood is the nature of the project
decision consistent with the scope of appellate review. As
noted, we evaluate that decision as a question of law, rather

                                  32
         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

than fact, to be decided on “undisputed data in the record on
appeal.” (Muzzy Ranch, supra, 41 Cal.4th at p. 382; see San
Mateo Gardens, supra, 1 Cal.5th at p. 952 [whether an activity
constitutes a project under CEQA is “a predominantly legal
question”].) Given the often disputed nature of the real-world
environmental impacts of a typical project and the discretion
invested in an agency to make related factual findings, the
environmental effects of a proposed activity can be reviewed as
a matter of law only if the analysis is restricted to the effects
that the activity is capable of causing, rather than those it
actually will cause if implemented.
      Our understanding of Muzzy Ranch is therefore
somewhat different from Rominger’s understanding, which
UMMP urges here. UMMP argues that Muzzy Ranch’s
reference to “a categorical question respecting whether the
activity is of a general kind with which CEQA is concerned”
(Muzzy Ranch, supra, 41 Cal.4th at p. 381) makes it
unnecessary to consider the substance of a proposed activity.
Instead, UMMP argues, it is sufficient to know the nature of
the agency action involved — for example, approval of a zoning
amendment or of a permit for private land development. On
the contrary, as our discussion demonstrates, Muzzy Ranch
clearly requires a public agency to consider the substance of a
proposed activity in determining its status as a project. What
need not be considered is the activity’s actual impact in the
specific circumstances presented. As Muzzy Ranch noted, the
analysis is conducted “without regard to whether the activity
will actually have environmental impact.”         (Ibid., italics
added.)      Similarly irrelevant is the specific type of
governmental action required, so long as the proposed activity

                                  33
         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

satisfies one of the criteria for governmental involvement
established in section 21065, subdivisions (a) through (c).11
      Applying the foregoing test, we conclude the City erred in
determining that the adoption of the Ordinance was not a
project.    Prior to the Ordinance, no medical marijuana
dispensaries were legally permitted to operate in the City. The
Ordinance therefore amended the City’s zoning regulations to
permit the establishment of a sizable number of retail
businesses of an entirely new type. Although inconsistency
with prior permissible land uses is not necessary for an activity
to constitute a project (see Muzzy Ranch, supra, 41 Cal.4th at
p. 388), establishment of these new businesses is capable of
causing indirect physical changes in the environment. At a
minimum, such a policy change could foreseeably result in new
retail construction to accommodate the businesses.             In
addition, as UMMP suggests, the establishment of new stores
could cause a citywide change in patterns of vehicle traffic
from the businesses’ customers, employees, and suppliers. The
necessary causal connection between the Ordinance and these
effects is present because adoption of the Ordinance was “an
essential step culminating in action [the establishment of new

11
      The characterization of the project decision in Muzzy
Ranch as a “categorical question” derives from the description
of the relevant question as whether “the activity is of a general
kind with which CEQA is concerned.” (Muzzy Ranch, supra,
41 Cal.4th at p. 381, italics added.) Given the demonstrated
potential for confusion in using the term, however, we now
refrain from characterizing the project decision as a
“categorical question.” This will also avoid any confusion with
“categorical exemptions,” an unrelated concept.

                                  34
         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

businesses] which may affect the environment.” (Fullerton
Joint Union High School Dist. v. State Board of Education
(1982) 32 Cal. 3d 779, 797 (Fullerton).) The theoretical effects
mentioned above are sufficiently plausible to raise the
possibility that the Ordinance “may cause . . . a reasonably
foreseeable indirect physical change in the environment”
(§ 21065), warranting its consideration as a project.
      Although UMMP raised these potential effects in the
Court of Appeal, as well as other, less plausible effects, it
framed them in the context of the specific circumstances it
claimed to prevail in the City, hypothesizing various City-
specific reasons why the Ordinance might indirectly produce
physical changes.       The Court of Appeal understandably
rejected these specific impacts as speculative, given the
absence of any evidence to support their occurrence. For the
reasons discussed above, however, both UMMP’s framing of
the arguments in this manner and the court’s rejection of them
put the cart before the horse. The likely actual impact of an
activity is not at issue in determining its status as a project.12

12
      The Court of Appeal misunderstood its task in reviewing
the City’s decision. Although the court noted Muzzy Ranch’s
characterization of the project decision as requiring a
“categorical approach,” it ultimately described the required
analysis in a very different way. Quoting Wal-Mart Stores, Inc.
v. City of Turlock (2006) 138 Cal. App. 4th 273, 290-291, the
court held, “ ‘The correct analysis of the relevant physical
change in the environment involves a comparison of (1) the
physical conditions that existed at the time the Ordinance was
proposed or approved with (2) forecasts of reasonably
foreseeable future conditions that may occur as a result of the
adoption of the Ordinance.’ ” (Marijuana Patients, supra,

                                  35
         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

Further, at this stage of the CEQA process virtually any
postulated indirect environmental effect will be “speculative”
in a legal sense — that is, unsupported by evidence in the
record (e.g., People v. Murtishaw (2011) 51 Cal. 4th 574, 591
[“defendant’s claim . . . is entirely speculative, for he points to
nothing in the record that supports his claim”]) — because
little or no factual record will have been developed. A lack of
support in the record, however, does not prevent an agency
from considering a possible environmental effect at this initial
stage of CEQA analysis. Instead, such an effect may be
rejected as speculative only if, as noted above, the postulated
causal mechanism underlying its occurrence is tenuous.
      Finally, the City argues, in passing, that environmental
review would be more appropriate at the time each dispensary
applies for a conditional use permit, which is required by the
Ordinance for operation of a dispensary.          We withhold
comment on the significance of this argument for tiers two and
three of the CEQA decision tree, but we note that the
requirement of individual use permits does not prevent the
Ordinance from being considered a project if section 21065 is
otherwise satisfied. As we observed in Fullerton, supra,

4 Cal.App.5th 103, 120.) The test quoted from Wal-Mart,
however, was not intended to govern the project decision but
instead concerned the application of Guidelines section 15183,
which permits “a streamlined environmental review for
qualifying projects that are consistent with a general plan for
which an EIR was certified.” (Wal-Mart, supra, at p. 286; see
id. at pp. 286-288.) The project decision never arose in Wal-
Mart because the court assumed that the activity under
consideration was a project. (Id. at p. 286.)

                                  36
         UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                    v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

32 Cal.3d at page 795, a local agency “cannot argue” that
approval of a regulation is not a project “merely because
further decisions must be made” before the activities directly
causing environmental change will occur. The City argues that
too little is known about the environmental impact of the
Ordinance to permit effective environmental review at this
stage, but that argument conflates the various tiers of CEQA
review. (Muzzy Ranch, supra, 41 Cal.4th at p. 383 [“That
further governmental decisions need to be made before a land
use measure’s actual environmental impacts can be
determined with precision does not necessarily prevent the
measure from qualifying as a project”].) At this initial tier in
the CEQA process, the potential of the Ordinance to cause an
environmental change requires the City to treat it as a project
and proceed to the next steps of the CEQA analysis.
      It ultimately might prove true that, in the context of the
City, the actual environmental effects of the Ordinance will be
minimal. It is possible, as the Court of Appeal assumed, that
the City’s commercial vacancy rate is sufficient to provide
retail space for the new businesses without the need for
expansion. (Marijuana Patients, supra, 4 Cal.App.5th at
p. 123 [dispensaries “could simply cho[o]se to locate in
available commercial space in an existing building”].) It is also
possible, as UMMP suggests, that a significant number of
unlicensed businesses selling medical marijuana already exist
in the City and that the newly licensed businesses will simply
displace them. Rather than causing increased traffic and other
activity, the net effect of this substitution might be little or no
additional environmental burden on the City. All of these
factors can be explored in the second and, if warranted, third

                                  37
        UNION OF MEDICAL MARIJUANA PATIENTS, INC.,
                   v. CITY OF SAN DIEGO
             Opinion of the Court by Cantil-Sakauye, C. J.

tiers of the CEQA process. As to those tiers, we are in no
position to offer, and do not express, an opinion on the
applicability of the various exemptions or, alternatively, the
appropriate level of environmental review.
                        III. DISPOSITION
      The judgment of the Court of Appeal is reversed. That
court is directed to vacate the order of the superior court
denying a writ of mandate and to remand the case to the trial
court for further proceedings consistent with this opinion.

                                       CANTIL-SAKAUYE, C. J.

We Concur:
CHIN, J.
CORRIGAN, J.
LIU, J.
CUÉLLAR, J.
KRUGER, J.
GROBAN, J.

                                  38
See next page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion Union of Medical Marijuana Patients, Inc. v. City of San Diego
__________________________________________________________________________________

Unpublished Opinion
Original Appeal
Original Proceeding
Review Granted XXX 4 Cal.App.5th 103
Rehearing Granted

__________________________________________________________________________________

Opinion No. S238563
Date Filed: August 19, 2019
__________________________________________________________________________________

Court: Superior
County: San Diego
Judge: Joel R. Wohlfeil

__________________________________________________________________________________

Counsel:

Channel Law Group, Jamie T. Hall and Julian Killen Quattlebaum for Plaintiff and Appellant.

Jan I. Goldsmith and Mara W. Elliott, City Attorneys, George F. Schaefer, Assistant City Attorney, Glenn
T. Spitzer and M. Travis Phelps, Deputy City Attorneys, for Defendant and Respondent.

Best Best & Krieger, Michelle Ouellette, Charity Schiller and Sarah E. Owsowitz for League of California
Cities and California State Association of Counties as Amici Curiae on behalf of Defendant and
Respondent.

No appearance for Real Party in Interest.
Counsel who argued in Supreme Court (not intended for publication with opinion):

Jamie T. Hall
Channel Law Group
8383 Wilshire Boulevard, Suite 750
Beverly Hills, CA 90211
(310) 982-1760

Julian K. Quattlebaum
Channel Law Group
8383 Wilshire Boulevard, Suite 750
Beverly Hills, CA 90211
(310) 982-1760

M. Travis Phelps
Deputy City Attorney
Office of the City Attorney
1200 Third Avenue, Suite 1100
San Diego, CA 92101-4100
(619) 533-5800