In December 2018, the California Court of Appeal for the Third District issued its decision in Georgetown Preservation Society v. County of El Dorado. The court dealt with whether the El Dorado County Review Board (Board) properly adopted a Mitigated Negative Declaration under the California Environmental Quality Act (CEQA) based on the Board’s application of its Design Review Guidelines in connection with a developer’s request to erect a chain discount store on three vacant main street lots in a hamlet’s historic center. This case deals with the application of the fair argument standard in connection with CEQA. [Georgetown Preservation Society v. County of El Dorado, et al., ___Cal.App.5th___, Case No. C084872 (3rd Dist. Dec. 17, 2018).]

Factual and Procedural Background

This case arose out of a developer’s attempt to erect a Dollar General® chain discount store on three vacant Main Street lots in Georgetown. Georgetown is an unincorporated Gold Rush-era hamlet in rural El Dorado County (including the county board of supervisors: County) and is also a state Historical Landmark and not far from where the California Gold Rush began. The project is proposed to be located on a 1.2-acre lot, consisting of three parcels to be merged in a commercial zone on Main Street. The project area is surrounded by a museum, a historic stamp mill, a park, a post office, a local library, some commercial property, the American River Inn bed and breakfast, and a historic residence.

In response to the proposed project, local residents, acting through the Georgetown Preservation Society (Society), objected to the project claiming it would impair the look of Georgetown. The residents lodged many criticisms in many forms, including petitions signed by residents and letters arguing that the project did not fit into Georgetown functionally or visually. Some of the letters in the record were from local residents who are architects, professional engineers, city planners, and a landscape architect and restoration ecologist.

The County approved the project because the County found the project design, architectural treatments, and associated improvements substantially conform to the El Dorado County Historic Design Guide and would not substantially detract from Georgetown’s historic commercial district. The Society appealed this finding to the board of supervisors (Board). The Board denied the Society’s appeal, which the County then followed by filing its notice of determination, referencing a Mitigated Negative Declaration.

Following the County’s Mitigated Negative Declaration, the Society promptly filed the instant petition for writ of mandate, alleging several CEQA violations (some of which were abandoned) including that the County had not adequately reviewed traffic issues and aesthetics. In a second claim the Society alleged violation of planning and zoning laws, including that the project was inconsistent with parts of the County’s General Plan.

Following moving and opposing papers and oral arguments, the trial court issued a ruling finding that the public comments submitted to the County provided substantial evidence to support a fair argument that the project may have significant aesthetic impacts, thus requiring an EIR. The trial court also found the County had made no credibility determinations regarding the public comments and therefore those comments could not be categorically disregarded. The County appealed the trial court’s findings.

The Court of Appeal’s Decision

At the heart of this case is the issue of aesthetics and the requirements of CEQA related thereto and if lay commentary on nontechnical matters can satisfy the fair argument test which would trigger the need for an Environmental Impact Report (EIR).

Initially the Court of Appeal set out a few of the general rules governing CEQA, its requirements regarding EIRs and when a Negative Declaration and a Mitigated Negative Declaration may be appropriate. Specifically, the court found that a Mitigated Negative Declaration may be appropriate:

• . . .when the initial study has identified potentially significant effects on the environment, but (1) revisions in the project plans … would avoid the effects or Mitigated the effects to a point where clearly no significant effect on the environment would occur, and(2) there is no substantial evidence in light of the whole record before the public agency that the project, as revised, may have a significant effect on the environment. (Cal. Code Regs., tit. 14, § 15369.5, italics added.)

Substantial Evidence and the Fair Argument Standard

Furthermore, the court pointed out that for CEQA purposes “substantial evidence”:

• . . .means enough relevant information and reasonable inferences from this information that a fair argument can be madeto support a conclusion, even though other conclusions might also be reached. Whether a fair argument can be made that the project may have a significant effect on the environment is to be determined by examining the whole record before the lead agency. Argument, speculation, unsubstantiated opinion or narrative, evidence which is clearly erroneous or inaccurate, or evidence of social or economic impacts which do not contribute to or are not caused by physical impacts on the environment does not constitute substantial evidence. (Cal. Code Regs., tit. 14, § 15384(a), italics added; see also § 21082.2.)

Historic Design Review and Public Controversy

The court then turned to analyze the effects of the County’s historic design review and whether it was sufficient to arrive at the County’s Mitigated Negative Declaration and determination that it is not required to prepare an initial EIR in connection with the project. The court noted that a leading treatise explained:

• . . .a strong presumption in favor of requiring preparation of an EIR is built into CEQA. This presumption is reflected in what is known as the ‘fair argument’ standard, under which an agency must prepare an EIR whenever substantial evidence in the record supports a fair argument that a project may have a significant effect on the environment. (1 Kostka & Zischke, Practice Under Cal. Environmental Quality Act (Cont.Ed.Bar 2d ed. 2018) Initial Study, § 6.3.)

Included in the court’s discussion of the fair argument standard is the issue of whether a project can be insulated from CEQA review and preparation of an EIR if a fair argument is presented that a project may have a significant impact on the environment as well as the nature of the comments (in this case from residents of Georgetown) giving rise to the fair argument and if such comments can be contradicted by expert opinions thereby eliminating the need for an EIR.

The court pointed out that the mere existence of a public controversy does not satisfy the fair argument standard. (See, Cal. Code Regs., tit. 14, § 21082.2, subd. (b); Bowman v. City of Petaluma,185 Cal.App.3d 1065 (1986), 1080-1081, 230 Cal.Rptr. 413.). The court did find (and concur with the trial court) that the fair argument standard was met in this case and that, since many commentators objected to the size and over-all appearance of the proposed building, it cannot seriously be disputed that this body of opinion meets the low threshold needed to trigger an EIR. In support of this, the court pointed out that many cases, some involving aesthetics, have found lay commentary on nontechnical matters to be admissible and probative, such that they can satisfy the fair argument test. (See, e.g., Taxpayers for Accountable School Bond Spending v. San Diego Unified School Dist., 215 Cal.App.4th 1013, (2013), 1053-1054, 156 Cal.Rptr.3d 449).

Specifically, the court stated that:

•. . .in this case, a large number of interested people believe this project would have a significant and negative effect on aesthetics. They have commented that the project is too big and too boxy or monolithic to blend in, such that its presence will damage the look and feel of the historic center of Georgetown. That is enough to trigger an EIR. (2018 WL 6600087, p. 9).

Lay Opinion

Lastly, despite the County’s argument that it “reasonably found that lay opinions of even longtime residents did not amount to substantial evidence where those lay opinions lacked a factual basis, ignored the project’s substantial compliance with the County’s Historic Design Guide, and were contradicted by undisputed experts in historic architecture and the County’s reasonable finding of General Plan consistency” the court pointed out that the trial court noted the County never made any such findings “reasonably” or otherwise and the evidentiary record does not contain that the County made any such findings. The court even went on to point out that, even if it considered that the County did make such findings that the public opinions lacked credibility and foundation, the court would find the County abused its discretion. The court pointed out that:

• . . .many of the commentators were local residents and therefore capable of giving a lay opinion on the nontechnical aesthetic issues of size and general appearance [which is in controversy for whether or not an EIR was triggered].

Conclusion and Implications

The Court of Appeal ultimately concluded that “[it] ha[s] not considered evidence of general societal conditions or economic consequences or individualized impacts. [But], the evidence clearly shows that the low-threshold fair argument test has been met. Despite the subjective nature of aesthetic concerns, it is clear that the project mayhave a significant adverse environmental impact. Whether it likely willor will nothave such an impact is a question that an EIR is designed to answer.” The court’s opinion is available online at: https://scholar.google.com/scholar_case?case=9058333253001468456&q=Georgetown+Preservation+Society+v.+County+of+El+Dorado&hl=en&as_sdt=2006&as_vis=1

(Alexis B. Sinclair, Matthew Henderson)