Over a quarter century of CEQA litigation over the validity of an agreement between the Department of Water Resources and State Water Project contractors finally came to an end with the court of appeal’s decision in Central Delta Water Agency v. Department of Water Resources, 69 Cal. App. 5th 170 (2021), and the California Supreme Court’s denial of a petition for review of that decision.

In 1994, the Department of Water Resources entered into an agreement with State Water Project contractors called the “Monterey Agreement” in an effort to settle disputes over water allocations under long-term water supply contracts. Broadly, the Monterey Agreement modified formulas incorporated in the contracts for allocating water among SWP contractors, changed certain operations of SWP facilities and provided for the transfer of 20,000 acres of farmland for development of a water bank in Kern County.

Opponents challenged the legal adequacy of the program EIR on the Agreement. The court of appeal in Planning & Conservation League v. Department of Water Resources, 83 Cal.App.4th 892 (2000), found that the EIR violated CEQA because it had been prepared by two DWR contractors rather than DWR as lead agency, and continuation of a former contract provision relating to reduction in contractor entitlements in the event of a permanent water shortage should have been evaluated as a “no project” alternative. The court ordered DWR to prepare a new EIR but did not order that the Monterey Agreement, the contract amendments, or the land transfer be set aside, leaving it to the trial court to decide what further relief should be ordered. The case returned to the trial court, and after protracted negotiations, the parties entered into a settlement agreement which identified necessary contents of the EIR, allowed the SWP to continue operating as it had since the Monterey Agreement was adopted, and left the land transfer for the water bank in place.  The terms of the settlement were incorporated in the trial court’s writ of mandate.

In response to the writ of mandate, DWR continued ongoing operations under the Monterey Agreement while it prepared a new EIR. The new EIR was certified in 2010 and was quickly followed by three new lawsuits challenging its adequacy. Ultimately, the trial court upheld the new EIR, except for its assessment of the impacts of Kern Water Bank operations.  It ordered that the EIR be revised to reevaluate the water bank’s impacts on groundwater and water quality but allowed the Kern Water Bank to continue its ongoing operations in the meantime. Following certification of the revised EIR, yet another lawsuit was filed, but the trial court found the revised EIR was legally adequate and fully complied with court’s order. The court of appeal consolidated the appeals in the cases challenging the second and third EIRs.

Central Delta Water Agency, an appellant in the challenge to the second EIR, claimed that because that EIR treated continuation of SWP operations under the Monterey Agreement as the proposed project, the second EIR was an improper retrospective assessment of an ongoing project’s environmental impacts.  The court disagreed, concluding the approach taken was consistent with the writ of mandate, which allowed the project to continue while the new EIR was prepared.  The court also rejected an argument that the EIR should have included a “no project” alternative which would retain a prior contract provision that allowed DWR to refuse to deliver surplus water to contractors as necessary to avoid dependence on deliveries of surplus water.  The court found that the EIR had done enough by analyzing four no project alternatives, including two that addressed this prior contract provision, and also separately analyzed its practical effect.

In the case challenging the third EIR, appellant Center for Food Safety claimed, among other things, that the EIR failed to adequately address the water bank’s contribution to an increase in the planting of permanent crops that would result from improved water supply reliability.  The court disagreed, holding that the revised EIR’s finding that the water bank’s operations were not a primary cause of crop conversion it its service area was supported by substantial evidence, as was the EIR’s analysis of the impact of crop conversion on regional and statewide water supplies.  The court also rejected an argument that the trial court erred by issuing a limited remedy which allowed the water bank to continue operating while DWR revised the EIR.  Noting the trial court’s finding that invalidating the project approvals “would throw the entire SWP into complete disarray, smack in the middle of one of the most severe droughts on record,” the court of appeal concluded the trial court had not abused its discretion under the remedial provisions of CEQA, by allowing project operations to continue while the EIR was being revised.

The Monterey Agreement saga was finally concluded on January 5, 2022, when the California Supreme Court denied petitions seeking review of the court of appeal’s decision.

A trial court could not order a remedy that required preparation of an environmental impact report limited to the potentially significant impacts that led to invalidation of the project’s negative declaration — once the trial court found substantial evidence supported a fair argument that the project may have one significant environmental impact, it had no option but to require preparation of a “full EIR.” Farmland Protection Alliance v. County of Yolo, 71 Cal. App. 5th 300 (2021).

Yolo County had adopted a mitigated negative declaration for a use permit to construct and operate a bed and breakfast, commercial event facility and supporting on-site crop production.  The mitigated negative declaration acknowledged potentially significant impacts to agricultural resources and wildlife species and included measures to mitigate those impacts.

The trial court found substantial evidence supported a fair argument that the project may have a significant effect on three wildlife species despite the county’s adopted mitigation measures.  The trial court ordered the county to remedy this deficiency by preparing an EIR that would address the project’s impacts on the three relevant species.

The court of appeal characterized the question before it as whether an agency can comply with CEQA by preparing a negative declaration for some of a project’s impacts, and an EIR to address other impacts found to be potentially significant.  The court found no basis for allowing an agency to comply with CEQA by preparing a negative declaration to analyze some of the project’s impacts and an EIR to analyze others. CEQA requires that an EIR be prepared if any aspect of the project may have a significant effect on the environment. Thus, the court concluded that once a negative declaration is invalidated, the agency must prepare what it referred to as a “full EIR” for the proposed project—not an EIR confined to discrete impacts that would result from the project.


Courts may deny permissive intervention if there are already multiple parties in the case and the intervenor’s interests will be adequately represented by other parties. South Coast Air Quality Management District v. City of Los Angeles, No. B310783 (2d Dist., Nov. 4, 2021).

The South Coast Air Quality Management District filed a petition for a writ of mandate against four city entities and four shipping companies for failure to implement mitigation measures prescribed in a 2008 environmental impact report for operations at the Port of Los Angeles. The California Attorney General, California Air Resources Board, and a local union filed motions to intervene in the action. The trial court denied the union’s motion for permissive intervention, but granted limited mandatory intervention to CARB and allowed the Attorney General to intervene based on its statutory right.

Trial courts have discretion to permit nonparties to intervene in a lawsuit if the following four factors are met: (1) the nonparty followed proper procedures; (2) the nonparty has a direct and immediate interest in the action; (3) intervention will not enlarge the issues; and (4) the reasons for intervention outweigh any opposition by the existing parties.

The court of appeal agreed with the trial court’s decision to deny permissive intervention to the union because of the large number of parties involved in the case and the fact that the Air District’s interest in litigating the case without the union outweighed the union’s reasons for intervening. The union argued that it had a direct and immediate interest in avoiding the loss of union jobs that could result from rescission of the relevant permits and approvals. However, the court reasoned that other parties, such as the city, had a strong interest in defending the approval of the project and the continued operation of the terminal. There was no claim that the city or other parties might seek to carve out union jobs as unimportant while fighting to maintain operations at the terminal. It was therefore reasonable for the trial court to conclude that union participation would be largely cumulative and would unduly complicate the case.

The court noted that a union declaration underscored the risk of undue complexity by citing the 3,000+ union jobs that depended on operations at the Terminal and the 80,000 indirect jobs in the Los Angeles region related to terminal operations. The trial court “reasonably could conclude that permitting Union intervention in the lawsuit would spur representatives of the other tens of thousands of jobs connected to the Terminal to enter the fray . . . and [the] result would be unmanageable.”

The State Water Resources Control Board’s registrations of small water diversions are ministerial projects and hence exempt from CEQA. As such, allegedly erroneous registrations cannot be challenged under CEQA. Mission Peak Conservancy v. State Water Resources Control Board, No. A162564, 2021 WL 5917917 (1st Dist., Dec. 15, 2021).

The Water Rights Permitting Reform Act of 1988 created a streamlined process for a person to acquire a right to divert a small amount of water from a stream into a storage facility for domestic or certain other uses. To obtain this right, a person must register the use with the State Water Board, pay a fee, and put the water to reasonable and beneficial use. The registration form requires the person’s contact information; details about the proposed water use, diversion, and storage; a certification that the person has provided the information to the California Department of Fish and Wildlife (CDFW) and will comply with any conditions imposed by CDFW; and a copy of any such conditions. The registration is deemed completed, and the person obtains the right to appropriate water, when the State Water Board receives a substantially compliant registration form and the fee. The State Water Board has designated this registration process to be exempt from CEQA as a ministerial decision.

In this case, the petitioners challenged the State Water Board’s acceptance of a registration form that allegedly contained false information. The petitioners claimed that the State Water Board violated CEQA by accepting the registration without conducting environmental review. The trial court and the court of appeal agreed with the State Water Board that the registration process is ministerial and exempt from CEQA.

CEQA applies to public agencies’ discretionary projects, whereas ministerial projects are exempt from CEQA. A discretionary project requires an agency to exercise judgment or deliberation in deciding whether to approve an activity. In contrast, ministerial projects involve little or no personal judgment by the public official as to the wisdom or manner of carrying out a project. An agency’s action is discretionary if the law governing its decision to approve a project gives it authority to require changes that would lessen the project’s environmental effects; if not, the project is ministerial.

The court of appeal held that the registration process was ministerial because the State Water Board lacked authority to impose conditions on an individual registration to reduce its environmental effects. The court explained that the State Water Board’s role in reviewing a registration form for compliance essentially amounts to applying a checklist of fixed criteria.

The court rejected the petitioners’ argument that the registration process was discretionary because CDFW had authority to impose conditions to ameliorate the environmental impacts of water diversions. The court noted that the State Water Board must accept any conditions imposed by CDFW and has no authority to modify or shape those conditions. The court explained that the discretionary authority of one agency (CDFW) could not be imputed to a different agency (the State Water Board).

The court also rejected the petitioners’ argument that the State Water Board had discretion to deny the registration based on the alleged false information on the registration form. The court explained that the test was not whether an agency has discretion “in a colloquial sense” to deny a project, but whether the agency has legal authority to impose environmentally beneficial changes as conditions on the project. Here, the State Water Board had no such authority.

The petitioners also argued that the State Water Board’s acceptance of the registration violated CEQA because it did not meet the program requirements. The court disagreed. The court explained that the petitioners essentially claimed that the State Water Board made an erroneous ministerial decision by misapplying fixed criteria to the facts and by making factual determinations that were not supported by substantial evidence. But, the court held, that argument could not be a basis for a CEQA claim because “CEQA does not regulate ministerial decisions—full stop.”

In the first reported interpretation of a 2012 amendment to CEQA’s statute of limitations provisions, the First District Court of Appeal addressed “whether an action against a lead agency must be dismissed–despite being filed within the limitations period–because of a failure to [timely name and serve] necessary third parties.”  Save Berkeley’s Neighborhoods v. The Regents of the University of California (Collegiate Housing Foundation, American Campus Communities, et al.), 70 Cal.App.5th 705 (2021). Acknowledging that the Legislature sought to “provid[e] a bright-line rule as to which persons must be named [and served] in the CEQA complaint,” the Court nonetheless decided that Code of Civil Procedure Section 289(b)’s equitable test for determining indispensability still applies to determine whether an incurable failure to timely name and serve real parties requires dismissal of the entire action.

The Regents of the University of California filed a notice of determination on May 17, 2019, regarding certification of a Supplemental Environmental Impact Report analyzing an academic building, campus housing and parking project approved by the Regents for the Berkeley campus.  The NOD identified American Campus Communities and the Collegiate Housing Foundation as the parties undertaking the project.  Save Berkeley’s Neighborhoods’ June 13, 2019 petition for a writ of mandate failed to name either ACC or CHF.  A first amended petition filed on September 18, 2019, added ACC and CHF as real parties in interest, and a “first amendment to the first amended petition” subsequently sought to add various ACC entities as real parties.

ACC and CHF argued that the incurable failure to timely name and serve persons identified on a NOD as undertaking a project requires dismissal.  The First District rejected this argument, relying on legislative history to resolve textual ambiguities in Section 21167.6.5 and preserve the applicability of an equitable indispensable party analysis in CEQA actions.

Prior to 2012, Public Resources Code Section 21167.6.5(a) required that “any recipient of an approval” be named and served in CEQA actions as real parties in interest.  However, then-applicable PRC Section 21108(a) did not require state agencies to identify the “recipient of an approval” on NODs.  Courts enforced Section 21167.6.5(a) by 1) identifying the “approval” subject to challenge and the “recipients” thereof, and then 2) applying Code of Civil Procedure Section 389(b)’s equitable balancing test to determine whether unnamed approval recipients were indispensable such that an incurable failure to name them requires dismissal of the entire action.

Assembly Bill 320 (2012) amended Section 21108(a) to require state agencies to identify on notices of determination those undertaking a project supported by “contracts, grants, subsidies, loans, or other forms of assistance from one or more public agencies” or “that involves the issuance to a person of a lease, permit, license, certificate, or other entitlement for use by one or more public agencies.”  Public Res. Code § 21065(b) and (c).  AB 320 also amended Section 21167.6.5(a) “to replace the phrase ‘any recipient of an approval’” with ‘the person or persons identified by the public agency in its notice filed pursuant to” Section 21065(b) or (c).

The Court of Appeal held that amended Section 21167.6.5(a) does not require dismissal for failure to timely name and serve as real parties those identified on a NOD as undertaking a project.  It ruled that the use of “shall” in 21167.6.5(a) (“The petitioner or plaintiff shall name, as a real party in interest …”) “only requires that parties ‘shall’ file and serve the real parties in interest within a limitations period … Failure to do so excludes real parties in interest from the action.  The statutory language does not expressly condition a petitioner’s ability to bring suit upon the inclusion of the real parties in interest.”

Having found AB 320’s amendments left Section 21167.6.5(a) “silent as to the impact on a party’s failure to name and serve the real parties in interest,” the Court of Appeal concluded that the Legislature sought only to eliminate uncertainty arising from parties and courts “independently assess[ing] which entities qualified” as “recipients” of an “approval”–notoriously complex inquiries often involving “numerous sub-inquiries.”  The Legislature, however, did not address the courts’ use of CCP Section 389(b)’s equitable balance test to determine indispensability.  Reviewing the legislative history, the court noted that the Senate deleted a provision in the Assembly version of the bill that allowed a CEQA legal action to be “dismissed for failure to serve the recipients of the lead agency’s approval with the petition or complaint.”  The opinion also referenced the Legislature’s expressed intent to “prevent the dismissal of important and meritorious CEQA cases,” observing that “[t]he approach advocated by appellants would increase dismissal of CEQA cases.”

The City of San Diego’s approval of underground utility lines was incomplete because its Climate Action Plan checklist improperly allowed certain non-occupancy projects to avoid greenhouse gas emission (GHG) consistency analysis. To take advantage of streamlined GHG review, CEQA requires lead agencies analyze each project’s consistency with the Climate Action Plan, regardless of occupancy. McCann v. City of San Diego, 70 Cal. App. 5th 51 (2021).

Each year, the San Diego City Council approves plans to underground approximately 15 miles of utility lines. The selected areas are divided into groups based on city blocks, and then submitted for environmental review and project approval. In 2019, the City approved two undergrounding projects—one that the City found exempt under CEQA (“Exempt Project”) and another that the City approved subject to a mitigated negative declaration with monitoring for tribal resources during construction (“MND Project”).  San Diego property owner Margaret McCann challenged both approvals arguing the environmental review was inadequate under CEQA.

First, with respect to the Exempt Project, the court held McCann’s CEQA claims were barred because she failed to exhaust administrative remedies. The San Diego Municipal Code provides that a party wishing to challenge an “environmental determination,” which includes a project exemption, must file an appeal within 10 business days.  McCann conceded that no appeal was filed, and the court therefore concluded her challenge to the project exemption was barred.

Second, with respect to the MND Project, the court ruled that the City did not improperly segment the undergrounding projects and that the project description and consideration of aesthetic impacts were proper. However, the City’s GHG determination was not supported by substantial evidence. CEQA requires lead agencies to analyze the amount of GHGs a project will emit. To ease the burden of calculating individualized emissions for every project, a lead agency may adopt a Climate Action Plan which, if detailed and adequately supported, may be used to evaluate a specific project’s contribution to cumulative GHGs. A finding of consistency with the Climate Action Plan provides sufficient evidence for an agency to conclude the project has no significant GHG impact under CEQA.

Here, the City of San Diego’s overarching process—making a Climate Action Plan consistency determination to fulfill its obligation to evaluate GHG impacts under CEQA—was acceptable. However, the City erred by relying on an inadequate checklist to determine that the undergrounding project would have no significant GHG impact. The City’s checklist expressly stated that the Climate Action Plan consistency evaluation did not apply to certain projects, including those that did not require a certificate of occupancy, like the infrastructure project at issue, but the court found no rational basis for this exemption. The Climate Action Plan itself contemplated the GHG impact of many non-occupancy structures and these projects could have significant GHG impacts, too. Therefore, to avail itself of the streamlined GHG review a Climate Action Plan provides, the City was required to make a consistency determination for each project, whether within the scope of the checklist as written or not.

Without this required consistency analysis, the City’s determination that undergrounding would have no significant impact on GHGs was not supported by substantial evidence and the City abused its discretion in approving the mitigated negative declaration.


A Court of Appeal held that the state’s density bonus law (Gov’t Code § 65915) does not require applicants to submit financial information to support requests for incentives or waivers and preempted a city ordinance that required such financial documentation to show that a project would not be “economically feasible” without the requested incentives. Schreiber v. City of Los Angeles, 69 Cal. App. 5th 549 (2021).

The Los Angeles City Planning Commission approved a mixed-used development that qualified for increased building density under the density bonus law due to its inclusion of low-income housing. The Commission also granted the developers various incentives and waivers under the city ordinance implementing the state density bonus law. The ordinance required the applicant to submit a pro forma or other financial documentation to show that the requested incentives would make the project “economically feasible,” but the Commission granted the incentives without this documentation. Appellants filed a petition for writ of mandamus, challenging the Commission’s approval of the project. The trial court denied the petition.

On appeal, the key issue was the appellants’ contention that the state density bonus law required applicants to submit certain financial information to support a request for incentives and waivers. The court concluded that it did not.

The court explained that the density bonus law does not require applicants to establish that the grant of incentives or waivers would result in cost savings. Instead, the burden of proof is on the city, not the applicants, to overcome the presumption that incentives or waivers will result in cost reductions. The city was required to grant the incentive or waiver unless it made a specific written finding that the incentive or waiver would (a) not result in in identifiable and actual cost savings, (b) have a specific adverse impact upon public health or safety, or (c) be contrary to state or federal law.

While a city or county may require that an applicant provide “reasonable documentation” regarding cost reductions, it may not require information demonstrating that an incentive is necessary to make a project “economically feasible.” Thus, to the extent that the city ordinance required financial documentation from the applicant to show that a project is “economically feasible,” it conflicted with the density bonus law and was preempted.

The court rejected a claim that the city violated CEQA Guidelines section 15088.5(g) by failing to summarize each of the revisions to a draft EIR made by a revised and recirculated draft EIR. Save Civita Because Sudberry Won’t v. City of San Diego, 2021 WL 5937417 (No. D077591, 4th Dist. 1st Div., December. 16, 2021).

The original draft EIR was prepared as a program EIR that addressed a proposed amendment to the circulation element of a community plan to add a road connection.  The draft EIR was limited to the plan amendment and did not evaluate the impacts that would result from constructing the road.  In response to critical public comments, the city elected to replace the draft program EIR with a revised draft EIR that provided a project-level analysis of the impacts of construction and operation of the road.

CEQA Guidelines section 15088.5(g) requires that when a lead agency revises a draft EIR and recirculates the revised draft for review and comment, the revised draft EIR must “summarize the revisions made to the previously circulated draft EIR.”  The court found the summary in the revised draft EIR sufficient under this standard. The revised draft EIR made it clear that while the first draft EIR had evaluated the community plan amendment at a program level, the revised draft EIR was a project-level EIR which entirely replaced the prior EIR.  The court rejected the argument that the revised draft EIR should have specifically described each change made to the prior draft EIR.  The city argued that the prior draft EIR had been revised so extensively that a summary of each of the changes made to it would not provide useful information.  According to the court, it was sufficient that the revised EIR explained that it entirely replaced the prior EIR, made clear the overall nature of the changes, and gave notice that the final EIR would respond to comments on the revised draft EIR, but not to comments on the prior draft EIR it replaced.

A project challenger failed to exhaust administrative remedies because an email exchange and dinner meeting with city officials expressing general concerns about a recent permit approval did not satisfy the burden to “petition” a city official in order to appeal. Muskan Food & Fuel, Inc. v. City of Fresno, 69 Cal. App. 5th 372 (2021).

In 2017, the City of Fresno approved a conditional use permit for development of a shopping center, including a grocery mart, across the street from a gas station and convenience store owned by plaintiff, Muskan Food & Fuel. Concerned about the approval, due to oversaturation of off-sale alcohol licenses in the area and perceived misapplication of an exception to conditional use permit requirements, the president of Muskan Food & Fuel sought to appeal.

Under the Fresno Municipal Code, planning commission decisions may be appealed to the city council by either a councilmember or the mayor, “either on their own initiative or upon receiving a petition from any person.” Muskan Food & Fuel argued they properly petitioned city officials on two occasions. First, the president of Muskan Food & Fuel emailed the president of the Fresno Chapter of the American Petroleum and Convenience Store Association (APCA) expressing concerns about over-saturation of alcohol licenses in the project area. The APCA president forwarded this email to the mayor. Second, principals of Muskan Food & Fuel participated in an informal dinner with city councilmembers to discuss the planning commission’s decision.

Because the Fresno Municipal Code does not define “petition,” or otherwise clarify how a petition must be made, the court held a petition may be oral, written, or a combination of the two. However, regardless of the mode, it must be clear that the challenger is petitioning as part of the formal appeal process and not simply expressing general concerns. Here, Muskan Food & Fuel’s efforts fell short. The email was a general request for the mayor to investigate an issue (oversaturation of alcohol licenses), not a petition to appeal.  Despite Muskan Food & Fuel’s intentions, nothing in the original email or the response from the mayor could be objectively viewed as a petition. The dinner with city councilmembers also did not satisfy the petition requirement. Although discussion at dinner included the planning commission’s recent decision, the court could not find this impliedly included a petition or request for appeal because there was no substantial evidence to support such a finding.

Therefore, there was no proper petition and Muskan Food & Fuel failed to exhaust administrative remedies. Allowing general statements of concern to fulfill the “petition” requirement would “encourage end-runs, undermine judicial efficiency, and undermine the city council’s autonomy as the elected body with the ultimate authority over land use decisions.”

In Protect Tustin Ranch v. City of Tustin, 70 Cal. App. 5th 951 (2021), the court of appeal upheld a city’s reliance on the infill development categorical exemption under CEQA for a new gas station in an existing shopping center in a commercial area.

The petitioner, Protect Tustin Ranch, challenged the City of Tustin’s approval of a conditional use permit for a new Costco gas station in an existing shopping center. The shopping center contained a Costco warehouse, a tire center, a fast-food restaurant, and other retail businesses. The shopping center was located along a major commercial thoroughfare and was surrounded by commercial and residential uses. The project would involve demolishing the tire store and building a 16-pump gas station and 56 new parking spaces.

The City determined that the project qualified for the Class 32 categorical exemption for infill development (CEQA Guidelines section 15332). The infill exemption applies to projects that meet the following criteria: (1) the project is consistent with the general plan and zoning, (2) the project site is within city limits and no more than 5 acres substantially surrounded by urban uses, (3) the project site has no value as habitat for protected species, (4) the project would not have significant effects relating to traffic, noise, air quality, or water quality, and (5) the project site can be served adequately by all required utilities and public services.

The petitioner argued that the project site was more than 5 acres and, therefore, the second condition for the infill exemption was not met. The petitioner also argued that the infill exemption could not be used because there was a reasonable probability that the project would have a significant environmental effect due to unusual circumstances.

Standards of Review. The substantial evidence standard of review applied to the City’s finding that the criteria for the infill exemption were met. Because the petitioner did not argue that the project would have a significant environmental effect, the court reviewed its claim of unusual circumstances under the two-part test set forth in Berkeley Hillside Preservation v. City of Berkeley, 60 Cal. 4th 1086 (2015): First, whether substantial evidence supported the city’s finding that the project did not have a feature that distinguished it from others in the exempt class; second, whether there was a fair argument of a reasonable possibility that the project would have a significant environmental impact due to that unusual circumstance.

Project Size. Although the total size of the shopping center was approximately 12 acres, only 2.38 acres of the shopping center site would be altered by the project. The court held that substantial evidence supported the City’s conclusion that the size of the project site was less than 5 acres.

Unusual Circumstances. The petitioner claimed that three unusual circumstances were present: (1) part of the project site was formerly a tire center where tires were installed and automotive fluids were changed, (2) the gas station would be unusually large, and (3) the project would use retractable bollards and additional employees to direct traffic during peak times. The petitioner did not explain, however, why these features distinguished the gas station from other projects that would qualify for the infill exemption. The court held that substantial evidence supported the City’s finding that the project was not unusual in relation to other projects that qualified for the infill exemption: The size of the project was not remarkably different from other Costco gas stations in California; the project was consistent with the applicable general plan, specific plan, zoning, and development and design standards; and the project would be consistent with the characteristics of the surrounding setting, as it was located in an existing shopping center, adjacent to an auto center, and along a major commercial thoroughfare.

Because there was not an adequate showing of an unusual circumstance, the court did not reach the second part of the inquiry (i.e., whether there was a fair argument of a reasonable possibility of a significant environmental impact). Even so, the court held that there was no evidence in the record to support the petitioner’s assertion that the project site was contaminated due to its prior use as a tire center.