Union of Medical Marijuana Patients, Inc. v. City of San Diego (2019) 7 Cal. 5th 1171
In 2014, the City of San Diego adopted an ordinance amending its zoning code to allow for medical marijuana dispensaries. The ordinance capped the number of dispensaries allowed in each city council district, placed restrictions on where the dispensaries could be located, and required conditional use permits for all dispensaries. The City found that adopting the ordinance was not a project, and therefore, was not subject to CEQA. The findings stated that the ordinance did not have the potential to cause environmental impacts, and noted that future dispensaries would require a discretionary permit and environmental review.
The Union of Medical Marijuana Patients (UMMP) filed a petition, arguing the ordinance should have been considered a project subject to environmental review. The trial court disagreed and denied the petition. On appeal, UMMP reiterated their argument and asserted that section 21080 requires zoning amendments be considered projects under CEQA as a matter of law. The appellate court disagreed, holding that the statute did not require such a finding; and rejected the argument that the City should have found the ordinance to be a project. Thereafter, the California Supreme Court accepted the case for review.
The Court first addressed the question of whether an agency amendment of a zoning ordinance constitutes a project as a matter of law. The Court reiterated the significance of California Public Resources Code section 21065, which defines a ‘project’ under CEQA. Under section 21065, an activity is a project if it “may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment” and is subject to agency control in some way (e.g., undertaken by the agency itself, funded by the agency, or subject to licensing or permitting by the agency).
UUMP relied on section 21080’s definition of statutory exemptions from CEQA, which states, “[e]xcept as otherwise provided, [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 … unless the project is exempt from this division.” UMMP argued that section 21080’s statutory reference to zoning amendments means that such ordinances, as a matter of law, are projects under CEQA. This argument was supported by Rominger v. County of Colusa (2014) 229 Cal.App.4th 690, a case concerning the approval of a tentative subdivision map (which is also listed in section 21080).
The Supreme Court disagreed and disapproved the ruling in Rominger, holding that section 21080 did not classify all zoning code amendments as projects. Rather, the Court evaluated the plain language of 21080 and 21065 and concluded that, when read together, the language unambiguously allows for zoning amendments that do not meet the definition of a ‘project’ to be deemed ‘not a project’. These zoning code amendments would fall outside of CEQA’s obligations. The Court supported this conclusion by noting the needless costs involved in subjecting an ordinance which did not have the potential to impact the environment to additional environmental review.
In other words, the language of 21080, which lists various types of approvals, does not create a list of projects mandating CEQA review. Rather, 21080 must be read together with 21065 and the listed activities in 21080 must have the potential to result in a direct or indirect physical change in the environment, as described in 21065.
The Court addressed whether the City had properly concluded the zoning ordinance was not a project. The Court’s analysis largely centered on Muzzy Ranch Co. v. Solano County Airport Land Use Com. (2007) 41 Cal.4th 372. Muzzy Ranch involved two issues: whether approval of a transportation and land use plan was a project, and if so, whether the project was exempt under the commonsense exemption. The commonsense exemption states that a project is exempt, “[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.” (CEQA Guidelines, §15061(b)(3).) Despite similar language between the commonsense exemption and section 21065’s definition of a ‘project’, the Court in Muzzy Ranch held that the approval was a project, yet was exempt from CEQA under the commonsense exemption.
Here, the Court underscored its decision in Muzzy, finding that the initial determination of whether an action constitutes a project is a legal inquiry to determine if the “activity’s potential for causing environmental change is sufficient to justify the further inquiry into its actual effects”. The Court concluded that the somewhat “abstract” nature of defining ‘project’ was appropriate to the “preliminary role” in “CEQA’s three-tiered decision tree”. The Court concluded that prior to the ordinance, dispensaries were not allowed, but illegal businesses did operate within the City. New retail and closure of prior illegal dispensaries creating different patterns of traffic are sufficiently plausible impacts to find the ordinance may result in a “reasonably foreseeable indirect physical change in the environment.” But whether the ordinance will result in “actual” impacts on the environment is a determination best left to later tiers in the CEQA decision tree.
While the Court acknowledged certain impacts alleged by UMMP could turn out to be minimal or nonexistent, it held that both the City and Court of Appeal improperly attempted an evaluation of the actual impacts. The Court held that there were potential impacts of the ordinance, such as construction related to new dispensaries and changes in traffic patterns. On that basis, the Court found that the ordinance was a project.