Rejection of the New Project Test in Friends of the College of San Mateo Gardens v. College of San Mateo: More Consistency for Project Developers
On September 19, 2016, in a unanimous decision affecting project developers concerned about extensive and wasteful subsequent CEQA review, the California Supreme Court in Friends of the College of San Mateo Gardens v. College of San Mateo rejected the arbitrary “new project test” and confirmed that California courts would continue to give deference to the guidance of lead agencies and would apply the “substantial evidence” test to determine whether an agency’s proposal constitutes a new project or a modified project.
This decision is likely to have a significant impact on the level of scrutiny that modified projects receive from California courts – project developers can be assured of a process more consistent with the determination of the lead agency.
The New Project Test
The “new project test” conceived by the Third District court in Save Our Neighborhood v. Lishman was, to some extent, an attempt to hijack the normal process for supplemental CEQA review.
Under CEQA, post-approval changes to a project require either minor supplemental review or a completely new, initial CEQA review process, based on the lead agency’s determination as to whether the changed project represents a mere modification or an entirely new project. If the agency’s supplemental environmental review of a project is challenged, California courts give deference to the lead agency and evaluated such review for substantial evidence in support of the agency’s decisions.
The Lishman new project test represented a significant shift in the decision-making capacity of courts with regard to CEQA supplemental review. Under the new project test paradigm, lead agencies were required to conduct a threshold inquiry as to whether a project was entirely new or a mere modification of the existing project, and courts were required to review this question as a matter of law de novo without giving deference to the determination of the lead agency.
One of many concerns voiced by the Supreme Court in College of San Mateo was that the new project test laid out no standards for courts to apply in conducting their de novo judicial review of a project’s new or modified nature. According to the Court, application of the new project test would have necessarily led to arbitrary review.
Implications of the Substantial Evidence Standard
In College of San Mateo, the Supreme Court re-confirmed application of the substantial evidence standard, with some modification.
At the outset, the lead agency must determine whether the initial environmental review document has retained “informational value” such that it does not require substantial revision – in other words, if no new and significant environmental impacts are expected as a consequence of a project’s changes.
The court must conduct judicial review of the decision of the lead agency in accordance with the substantial evidence standard. If the court finds that substantial evidence exists to support the agency’s decision, then the court will then evaluate whether the lead agency’s decision not to pursue supplemental environmental review is supported by substantial evidence.
The California Supreme Court’s rejection of the new project test and re-confirmation of the substantial evidence standard ensures a basic level of consistency for project approvals moving forward. Courts must give deference to the determination of the lead agency regarding subsequent or supplemental environmental review, and may challenge such determination only if substantial evidence does not support it – a scenario that the Court found to be unlikely.
In the wake of this decision, post-approval CEQA challenges are much less likely to stall a project. Judicial review of a lead agency’s supplemental environmental review determination may only undermine the decision of the lead agency if there is no substantial evidence to support it. As the lack of substantial evidence will be a rare circumstance, post-approval challenges will simply lack the teeth to threaten a project.
To speak with an experienced California CEQA attorney, please contact Bick Law LLP today.