Jane W. Greenfield, Greenfield, Glasrud, Fisher & Skinner
and James T. Skinner, Jr., for Plaintiffs and Appellants.
George Deukmejian, Attorney General, Robert H. Connett and E.
Clement Shute, Jr., Assistant Attorneys General, Alexander T.
Henson and Daniel P. Selmi, Deputy Attorneys General, as Amici
Curiae on behalf of Plaintiffs and Appellants.
John W. Scanlon, City Attorney, Myron A. Johnson, Assistant City
Attorney, and Thomas R. Curry, Deputy City Attorney, Berliner,
Cohen & Biagini and Jeffrey P. Widman for Defendants and Appellants.
Adrian Kuyper, County Counsel (Orange), and John R. Griset, Deputy
County Counsel, as Amici Curiae on behalf of Defendants and Appellants.
Friends of 'B' Street, an unincorporated citizens' group (Friends),
sought a writ of mandamus and an injunction to compel the City
of Hayward to (1) prepare an environmental impact report pursuant
to the California Environmental Quality Act (CEQA) (Pub. Resources
Code, § 21000 et seq.) before proceeding with a proposed
street improvement project (the 'B' Street Project); (2) refrain
from proceeding with the project until the general plan of the
city met the requirements of the state Planning and Zoning Law
(specifically Gov. Code, §§ 65302, 65855 and 65860);
and (3) refrain from proceeding with the project on the grounds
of an alleged violation of Government Code sections 3600-3760.
The mandamus cause of action was tried first and submitted on
documentary evidence. The court rendered judgment granting the
writ on the ground that it was an abuse of discretion for the
city council to adopt a 'negative declaration' certifying that
the project would not have a significant environmental effect,
since there was substantial evidence to the contrary. On the second
cause of action the court rendered judgment for the city on the
ground that injunctive relief was not an available remedy. The
court rejected the Friends' request for attorney fees, stating
that 'the Court lacks power to make such an award.' The court
dismissed the third cause of action without prejudice.
The Friends appealed from the judgment insofar as it denied them
attorney fees and denied the injunctive relief sought in the second
cause of action. The city cross-appealed from the judgment insofar
as it determined that it was improper for the city to adopt a
'negative declaration' with respect to the proposed project. This
court affirmed the judgment in a published opinion filed November
17, 1977. The California Supreme Court granted a hearing and retransferred
the cause to this court on September 20, 1979, for reconsideration
in light of Woodland Hills Residents Assn., Inc. v. City Council
(1979) 23 Cal.3d 917 [154 Cal.Rptr. 503, 593 P.2d 200], Northington
v. Davis (1979) 23 Cal.3d 955 [154 Cal.Rptr. 524, 593 P.2d 221],
Save El Toro Assn. v. Days (1977) 74 Cal.App.3d 64, 70-74 [141
Cal.Rptr. 282], and Woodland Hills Residents Assn., Inc. v. City
Council (1975) 44 Cal.App.3d 825, 838 [118 Cal.Rptr. 856].
The private attorney general theory, as codified in Code of Civil
Procedure section 1021.5, [FN1] authorizes an award of
attorney fees in the present case if (1) the Friends' action 'has
resulted in the enforcement of an important right affecting the
public interest,' (2) 'a significant benefit, whether pecuniary
or nonpecuniary, has been conferred on the general public or a
large class of persons,' and (3) 'the necessity and financial
burden of private enforcement are such as to make the award appropriate....'
(Code Civ. Proc., § 1021.5; Woodland Hills Residents Assn.,
Inc. v. City Council, supra., 23 Cal.3d 917, 934-935 [Woodland
Hills II].) Although section 1021.5 had not yet become effective
at the time the trial court denied the Friends' request for attorney
fees, it applies to this proceeding because the ruling was pending
on appeal at the time the legislative enactment became effective.
(Woodland Hills II, supra., 23 Cal.3d at pp. 928-932.)
FN1 Code of Civil Procedure section 1021.5: 'Upon motion,
a court may award attorney's fees to a successful party against
one or more opposing parties in any action which has resulted
in the enforcement of an important right affecting the public
interest if: (a) a significant benefit, whether pecuniary or nonpecuniary,
has been conferred on the general public or a large class of persons,
(b) the necessity and financial burden of private enforcement
are such as to make the award appropriate, and (c) such fees should
not in the interest of justice be paid out of the recovery, if
any. With respect to actions involving public entities, this section
applies to allowances against, but not in favor of, public entities,
and no claim shall be required to be filed therefor.'
The city contends that no important right was vindicated by the
Friends' action in the present case, which resulted in the trial
court's proscription against further action on the 'B' Street
Project until an environmental impact report (EIR) was prepared,
because the failure to have an EIR prepared was merely a 'procedural
error' and was not of statewide importance or effect. The trial
court, however, correctly determined that the Friends' suit 'effectuated
the strong State policy expressed in the California Environmental
Quality Act of 1970' and had the result of enforcing important
environmental laws. '[T]he Legislature in CEQA has enacted a logical
and carefully devised program of wide application and broad public
purpose. In many respects the EIR is the heart of CEQA. The report...may
be viewed as an environmental 'alarm bell' whose purpose it is
to alert the public and its responsible officials to environmental
changes before they have reached ecological points of no return.'
( County of Inyo v. Yorty (1973) 32 Cal.App.3d 795, 810 [108 Cal.Rptr.
377].) An important statutory policy was effectuated in the present
case, and the private attorney general theory (as codified in
Code Civ. Proc., § 1021.5) may encompass effectuation of
statutory as well as constitutional rights. ( Woodland Hills II,
supra., 23 Cal.3d at p. 935.)
The trial court's findings predated the enactment of section 1021.5,
but they are so unambiguous and so close in language to the statutory
requirement of 'enforcement of an important right affecting the
public interest' that remand for a further finding on this point
is unnecessary. (Cf. Woodland Hills II, supra., 23 Cal.3d at p.
938 [remand necessary because trial court did not undertake the
necessary inquiry].) The court withheld an award of attorney fees
only because it concluded that it lacked the authority to make
such an award.
The trial court concluded that as a result of the Friends' suit,
'there has been a conferral of substantial benefits upon a large
class of a pecuniary and/or nonpecuniary nature.' This finding
is dispositive as to the second statutory requirement, that 'a
significant benefit, whether pecuniary or nonpecuniary, has been
conferred on the general public or a large class of persons....'
(Code Civ. Proc., § 1021.5.)
The trial court did not, however, render a determination on the
third statutory requirement, that 'the necessity and financial
burden of private enforcement are such as to make the award appropriate.'
The court determined that the Friends had 'successfully carried
the difficult and heavy burdens of enforcing important environmental
laws,' but did not determine to what extent, if any, this burden
justified an attorney fee award. An award of attorney fees pursuant
to section 1021.5 requires a determination by the trial court,
upon remand of the cause, as to whether the necessity and financial
burden of private enforcement placed a burden on the Friends disproportionate
to their individual interests in the matter and made an attorney
fee award appropriate. ( Woodland Hills II, supra., 23 Cal.3d
at pp. 941-942.)
Independent of the private attorney general theory, the Friends
are entitled to an attorney fee award under the substantial benefit
rule, a nonstatutory equitable basis for attorney fee awards.
(See Woodland Hills II, supra., 23 Cal.3d at pp. 942-943.) This
rule 'permits the award of fees when the litigant, proceeding
in a representative capacity, obtains a decision resulting in
the conferral of a 'substantial benefit' of a pecuniary or nonpecuniary
nature. In such circumstances the court, in the exercise of its
equitable discretion, thereupon may decree that under dictates
of justice those receiving the benefit should contribute to the
costs of its production.' ( Serrano v. Priest (1977) 20 Cal.3d
25, 38 [141 Cal.Rptr. 315, 569 P.2d 1303].) Unlike the private
attorney general theory, which is intended to promote the vindication
of important rights affecting the public interest, the substantial
benefit rule is intended to prevent unjust enrichment. ( Woodland
Hills II, supra., 23 Cal.3d at pp. 943-945.)
An award of fees under the substantial benefit rule does not require
substantial benefit to the defendant, but permits the award where
it will operate to spread costs proportionately among the benefited
members of an ascertainable class, e.g., where the defendant represents
or acts on behalf of the benefited class. ( Id., at pp. 943-944;
see also Serrano v. Priest, supra., 20 Cal.3d at p. 40, fn. 10.)
'So long as the costs bear a reasonable relation to the benefits,
the 'involuntary client' who retains a substantial gain from the
litigation will generally have no just cause to complain.' ( Woodland
Hills II, supra., 23 Cal.3d at p. 945; italics added.)
The court in Woodland Hills II stated that, while the substantial
benefit rule has its clearest application where litigation results
in the conferral of a substantial benefit of a pecuniary nature,
'there have been instances in which litigation has produced nonpecuniary
benefits of such a concrete and clearly substantial value that
equitable considerations have suggested the injustice in permitting
others to obtain such benefits without contributing to their cost.'
(Woodland Hills II, supra., 23 Cal.3d at pp. 945-946.) The stare
decisis result of litigation, however, is not alone sufficient
to justify an attorney fee award under the rule. (Id.., at pp.
946-947.) Nor was an award justified in Woodland Hills II on the
basis that the litigation resulted in the effectuation of the
statutory policy requiring approved subdivision maps to be consistent
with a general plan. '[T]he private attorney general doctrine
rather than the substantial benefit theory is the appropriate
basis for evaluating attorney fee requests arising from the effectuation
of such statutory policies.' ( Id., at p. 947.) This is because
the unjust enrichment justification for the substantial benefit
rule is ill suited for application to benefits 'less tangible
and more ephemeral in nature.' ( Id., at p. 945.)
By contrast, in Northington v. Davis, supra., 23 Cal.3d 955, 961-962,
the court held that the trial court there could consider the propriety
of an attorney fee award under the substantial benefit rule because
the litigation, which resulted in the enjoining of construction
of a helicopter landing strip by the City of Los Angeles without
the required approval of the State Department of Transportation,
prevented the illegal expenditure of $9,600 of public funds. The
only results of the litigation in Woodland Hills II were prevention
of private expenditure on a proposed subdivision that might be
inconsistent with a comprehensive general plan and effectuation
of the statutory policy in favor of consistency, while the result
in Northington was to prevent the illegal expenditure of public
funds. The trial court in Northington could thus have determined
that the litigation bestowed a substantial benefit upon the people
of Los Angeles sufficient to justify at least a partial attorney
fee award, although that benefit could not justify the $11,000
attorney fee award granted by the court. ( Id., at p. 962.)
The Friends' litigation did not merely result in the preparation
of an EIR, but also prevented the illegal expenditure of public
funds on the 'B' Street Project (i.e., expenditure without preparation
of the required EIR). The trial court commanded the city to take
no further action on development and construction of the 'B' Street
Project until an EIR had been prepared. That work on the project
might resume after the statutory requirements were satisfied was
apparently not a bar to an award of attorney fees under the substantial
benefit rule in Northington and does not prevent the award under
that theory here. The illegal expenditure of public funds was
prevented in both cases. The Northington decision thus authorizes
an award of attorney fees under the substantial benefit rule,
but only to the extent that the fees bear a reasonable relation
to the benefits of the litigation.
The city made no attempt to show that the results of the Friends'
lawsuit could have been obtained by available means other than
litigation. (See Save El Toro Assn. v. Days (1979) 98 Cal.App.3d
544, 555 [159 Cal.Rptr. 577].) The trial court correctly determined
that because of the Friends' suit, 'there has been a conferral
of substantial benefits upon a large class of a pecuniary and/or
nonpecuniary nature.' The court may thus award attorney fees to
the Friends pursuant to the substantial benefit rule, in an amount
reasonably related to the benefits conferred by the litigation.
Because the 'benefits conferred' within the context of the substantial
benefit rule might not justify an award of a fee fully commensurate
with the time spent by the attorney, the court may find it necessary
to determine whether the Friends are also entitled to an award
of attorney fees pursuant to Code of Civil Procedure section 1021.5,
on the basis of significant benefit through the enforcement of
an important right affecting the public interest.
The Friends challenge the trial court's determination that injunctive
relief was not an available remedy on their second cause of action,
in which they sought cessation of the 'B' Street Project on the
grounds that (1) it was inconsistent with the city's general plan,
and (2) the general plan did not contain a noise element as required
by Government Code section 65302, subdivision (g).
Government Code section 65300 requires a city to adopt a comprehensive,
long-term general plan for the use and physical development of
land within the city. The general plan is to serve 'as a pattern
and guide for the orderly physical growth and development and
the preservation and conservation of open space land of the county
or city and as a basis for the efficient expenditure of [the city's
or county's] funds relating to the subjects of the general plan....'
(See Gov. Code, § 65400.) The general plan 'is, in short,
a constitution for all further development within the city.' (
O'Loane v. O'Rourke (1965) 231 Cal.App.2d 774, 782 [42 Cal.Rptr.
283]; 58 Ops.Cal.Atty.Gen. 21 (1975); see also City of Santa Ana
v. City of Garden Grove (1979) 100 Cal.App.3d 521, 532 [160 Cal.Rptr.
The plan 'shall consist of a statement of development policies
and shall include a diagram or diagrams and text setting forth
objectives, principles, standards, and plan proposals.' (Gov.
Code, § 65302.) It must include elements for land use, circulation,
housing, conservation, open space, seismic safety, noise, scenic
highways, and safety. The requirements of section 65302 are applicable
to charter cities, such as the City of Hayward. (Gov. Code, §
65302.) [FN2] The Friends argued at trial that the 'B'
Street Project was not consistent with the general plan's circulation
element and strip development provisions, and that the plan lacked
a noise element entirely.
FN2 See also Government Code section 65700, providing that
the provisions of chapter 3 of the State Planning and Zoning Law
'shall not apply to a charter city, except to the extent that
the same may be adopted by charter or ordinance of the city; except
that charter cities shall adopt general plans in any case, and
such plans shall be adopted by resolution of the legislative body
of the city, or the planning commission if the charter so provides,
and such plans shall contain the mandatory elements required by
Article 5 (commencing with Section 65300) of Chapter 3....'
City approval of a proposed subdivision, construction of public
improvements, and private sale of subdivided lots may be enjoined
for lack of consistency of the subdivision map with the general
plan. ( Save El Toro Assn. v. Days, supra., 74 Cal.App.3d 64,
70-74; Woodland Hills Residents Assn., Inc. v. City Council, supra.,
44 Cal.App.3d 825, 838 [Woodland Hills I].) Such consistency is
expressly required by Government Code section 66473.5 (former
Bus. & Prof. Code, § 11526). The Friends correctly argue
that a city's public works projects, as well as private development
as set forth in Woodland Hills I and Save El Toro Assn., must
be consistent with its general plan.
Government Code section 65302 requires charter as well as general
law cities to adopt a general plan containing specified mandatory
elements. In setting forth these requirements the Legislature
must have intended that the city would comply with whatever general
plan elements it had adopted. (See O'Loane v. O'Rourke, supra.,
231 Cal.App.2d at pp. 782-783.) This conclusion is supported by
the Legislature's own declaration of state policy and legislative
intent that 'decisions involving the future growth of the state,
most of which are made and will continue to be made at the local
level, should be guided by an effective planning process, including
the local general plan....' (Gov. Code, § 65030.1.) [FN3]
The Legislature did not limit this policy to decisions regarding
proposed private developments; it encompasses all decisions involving
the future growth of the state, which necessarily includes decisions
by a city to proceed with public works projects. All such decisions
are to be guided by an effective planning process that includes
the local general plan.
FN3 Government Code section 65030.1, enacted in 1976, was
derived from similar statutory provisions enacted in 1970 (former
Gov. Code, § 65030, added by Stats. 1970, ch. 1534, §
2, p. 3096).
The City of Hayward was required to adopt all mandatory elements
specified in Government Code section 65302, including a noise
element, and was required to conform its proposed public works
projects to its general plan. The implied statutory requirement
of consistency has no less effect than the express statutory subdivision
map consistency requirement invoked in Save El Toro Assn. and
Woodland Hills I.
That Government Code section 65302 does not provide for injunctive
relief where a proposed public works project is not consistent
with a general plan does not deprive the trial court of authority
to employ this remedy. Where a right is created by statute without
any prescribed remedy, it may be enforced by any appropriate remedy,
legal or equitable. (Palo Alto- Menlo Park Yellow Cab Co. v. Santa
Clara County Transit Dist. (1976) 65 Cal.App.3d 121, 131 [135
Cal.Rptr. 192]; accord, Paxton v. Paxton (1907) 150 Cal. 667,
670 [89 P. 1083]; see also Southern Cal. Acoustics Co. v. C. V.
Holder, Inc. (1969) 71 Cal.2d 719, 727 [79 Cal.Rptr. 319, 456
P.2d 975].) Thus, for example, in Environmental Defense Fund,
Inc. v. Coastside County Water Dist. (1972) 27 Cal.App.3d 695,
704-705 [104 Cal.Rptr. 197], the court concluded that where trial
courts determine an EIR to be insufficient as an informative document,
'the courts properly may use their ancient and purposeful instrument
of injunction to deal with a need for effective equitable action
in a new but universally recognized situation....' Similarly,
the decision in Save El Toro Assn. authorized the enjoining of
a public works project on the basis of its relationship to a proposed
private subdivision that was inconsistent with the local general
plan, although no statute authorized injunctive relief. (74 Cal.App.3d
at pp. 70-74.) The Friends may thus obtain injunctive relief on
the basis of inconsistency of the proposed 'B' Street Project
with the city's general plan.
The trial court also may grant injunctive relief for want of a
noise element in the city's general plan, with which the 'B' Street
Project is to be consistent. Government Code section 65302 prescribes
no remedy for failure of a general plan to contain a mandatory
element; therefore, any appropriate legal or equitable remedy
may be employed. The Friends, however, could bring a direct action
to compel the city to adopt the mandated noise element. (See 58
Ops.Cal.Atty.Gen. 21, 27 (1975).) Whether the injunctive relief
sought is the appropriate remedy to be employed here, in light
of the availability of relief by alternative means, is to be determined
by the trial court, within the exercise of its sound discretion.
The city, as cross-appellant, challenges the trial court's determination
that the city council abused its discretion in dispensing with
an EIR on the basis of a negative declaration. CEQA requires all
local agencies to prepare an EIR on any project 'which may have
a significant effect on the environment.' (Pub. Resources Code,
§ 21151; Shawn v. Golden Gate Bridge etc. Dist. (1976) 60
Cal.App.3d 699, 701 [131 Cal.Rptr. 867].) The act provides a three-tiered
structure to guide agencies: If a proposed project falls within
a category exempt from the requirements of CEQA by administrative
regulation, or if it is certain that the project will not have
a significant effect upon the environment, no further agency evaluation
is required. ( No Oil, Inc. v. City of Los Angeles (1974) 13 Cal.3d
68, 74 [118 Cal.Rptr. 34, 529 P.2d 66]; Shawn v. Golden Gate Bridge
etc. Dist., supra., 60 Cal.App.3d 699, 703; see COAC, Inc. v.
Kennedy Engineers (1977) 67 Cal.App.3d 916, 921 [136 Cal.Rptr.
890].) If there is a possibility that the project may have a significant
environmental effect, the agency must conduct an initial threshold
study. (Cal. Admin. Code, tit. 14, § 15080.) If the initial
study reveals that the project will not have such effect, the
lead agency may complete a negative declaration briefly describing
the reasons supporting this determination. [FN4] ( People
v. County of Kern (1976) 62 Cal.App.3d 761, 777-778 [133 Cal.Rptr.
389]; Shawn v. Golden Gate Bridge etc. Dist., supra., 60 Cal.App.3d
699, 703; see Pub. Resources Code, § 21064; Cal. Admin. Code,
tit. 14, §§ 15033, 15035, 15083 However, if the project
may have a significant effect on the environment, an EIR must
be prepared. ( No Oil, Inc. v. City of Los Angeles, supra., 13
Cal.3d 68, 74; COAC, Inc. v. Kennedy Engineers, supra., 67 Cal.App.3d
916, 921; see Pub. Resources Code, § 21151; Cal. Admin. Code,
tit. 14, §§ 15080, 15084
FN4 Section 15083, subdivision (c) of the state EIR guidelines
provides as follows: '(c) Contents. A Negative Declaration shall
include: (1) A brief description of the project; including a commonly
used name for the project if any; (2) The location of the project
and the name of the project proponent; (3) A finding that the
project will not have a significant effect on the environment;
(4) An attached copy of the Initial Study documenting reasons
to support the finding. (5) Mitigation measures, if any, included
in the project to avoid potentially significant effects.' (Cal.
Admin. Code, tit. 14, § 15083, subd. (c); see People v. County
of Kern (1976) 62 Cal.App.3d 761, 778 at fn. 5 [133 Cal.Rptr.
State EIR regulation defines 'significant effect' as 'a substantial,
or potentially substantial, adverse change in any of the physical
conditions within the area affected by the activity including
land, air, water, minerals, flora, fauna, ambient noise, and objects
of historical or aesthetic significance.' (Cal. Admin. Code, tit.
14, § 15040.) 'There may be a difference of opinion on whether
a particular effect should be considered adverse or beneficial,
but where there is, or anticipated to be, a substantial body of
opinion that considers or will consider the effect to be adverse,
the lead agency should prepare an EIR to explore the environmental
effects involved.' (Cal. Admin. Code, tit. 14, § 15081.)
In specified instances proposed projects must be found to have
a significant effect on the environment. (Cal. Admin. Code, tit.
14, § 15082.)
The Supreme Court declared in No Oil, Inc. v. City of Los Angeles,
supra., that, 'since the preparation of an EIR is the key to environmental
protection under CEQA, accomplishment of the high objectives of
that act requires the preparation of an EIR whenever it can be
fairly argued on the basis of substantial evidence that the project
may have significant environmental impact.' (13 Cal.3d at p. 75;
see also Cal. Admin. Code, tit. 14, § 15084, subd. (b) ['An
EIR should be prepared whenever it can be fairly argued on the
basis of substantial evidence that the project may have a significant
effect on the environment.'].) The court also stated that 'the
existence of serious public controversy concerning the environmental
effect of a project in itself indicates that preparation of an
EIR is desirable.' (13 Cal.3d at pp. 85-86.)
The trial court in the present case determined that the city council
abused its discretion when it adopted a negative declaration,
because it was presented with '[s]ubstantial evidence that the
project might have a significant effect environmentally.' The
city contends that the court should have confined its review to
a determination whether the decision to adopt a negative declaration
was supported by substantial evidence, and that the decision should
have been upheld because regardless of any evidence that the project
might have a significant environmental effect there was substantial
evidence to the contrary.
The city relies upon Pacific Water Conditioning Assn., Inc. v.
City Council (1977) 73 Cal.App.3d 546, 558 [140 Cal.Rptr. 812],
in which the trial court had found substantial evidence to support
a determination that a proposed ordinance would have no significant
environmental effect. The appellant asserted that there was substantial
evidence to the contrary and contended that the city was required
to prepare an EIR whenever it perceived some substantial evidence
that a project may have a significant environmental effect. The
court stated that the appellant was 'correct that that is the
standard to be observed by the agency in making its determination.
[Citations.] But that is not the applicable standard for judicial
review. The test to be applied by a reviewing court is whether
there is any substantial evidence in light of the entire record
to support the decision of the agency.' (Id.; accord, Shawn v.
Golden Gate Bridge etc. Dist., supra., 60 Cal.App.3d 699, 704;
Snyder v. City of South Pasadena (1975) 53 Cal.App.3d 1051, 1060
[126 Cal.Rptr. 320]; Running Fence Corp. v. Superior Court (1975)
51 Cal.App.3d 400, 423 [124 Cal.Rptr. 339]; Plan for Arcadia,
Inc. v. City Council of Arcadia (1974) 42 Cal.App.3d 712, 725
[117 Cal.Rptr. 96]; Hixon v. County of Los Angeles (1974) 38 Cal.App.3d
370, 379- 382 [113 Cal.Rptr. 433]; see Pub. Resources Code, §
Pacific Water Conditioning states the correct standard of judicial
review. But if a local agency is required to secure preparation
of an EIR 'whenever it can be fairly argued on the basis of substantial
evidence that the project may have significant environmental impact'
( No Oil, Inc. v. City of Los Angeles, supra., 13 Cal.3d at p.
75; italics added), then an agency's adoption of a negative declaration
is not to be upheld merely because substantial evidence was presented
that the project would not have such impact. The trial court's
function is to determine whether substantial evidence supported
the agency's conclusion as to whether the prescribed 'fair argument'
could be made. If there was substantial evidence that the proposed
project might have a significant environmental impact, evidence
to the contrary is not sufficient to support a decision to dispense
with preparation of an EIR and adopt a negative declaration, because
it could be 'fairly argued' that the project might have a significant
environmental impact. Stated another way, if the trial court perceives
substantial evidence that the project might have such an impact,
but the agency failed to secure preparation of the required EIR,
the agency's action is to be set aside because the agency abused
its discretion by failing to proceed 'in a manner required by
law.' (Pub. Resources Code, § 21168.5.)
Pacific Water Conditioning did not properly apply this standard
of judicial review. It was not enough for the court to determine
that the agency was presented with substantial evidence that the
proposed ordinance would not have a significant environmental
impact. The court should have assessed the evidence to the contrary
to determine whether it could be fairly argued that the ordinance
might have such impact. Only in this manner can a reviewing court
determine whether an agency's decision to authorize a negative
declaration was supported by substantial evidence in light of
the whole record.
One court properly refused to conclude that the adoption of a
negative declaration is an abuse of discretion whenever any controversy
as to possible environmental impact is presented: 'We reject the
inference that the existence of factual controversy, uncertainty,
conflicting assertions, argument, or public controversy can of
themselves nullify the adoption of a negative declaration and
require the preparation of an EIR when there is no substantial
evidence in the record that the project as designed and approved
will fall within the requirements of [CEQA ].' ( Running Fence
Corp. v. Superior Court, supra., 51 Cal.App.3d 400, 424.) The
standard to be employed by the agency is not whether any argument
can be made that a project might have a significant environmental
impact, but rather whether such an argument can fairly be made.
(See No Oil, Inc. v. City of Los Angeles, supra., 13 Cal.3d at
pp. 85-86 ['the existence of serious public controversy...indicates
that preparation of an EIR is desirable' (italics added)].) If,
as stated in Running Fence, there is no substantial evidence that
a project will fall within the requirements of CEQA, an argument
that a project might have such impact cannot fairly be made.
In the present case the adoption of a negative declaration was
an abuse of discretion. The city's initial study revealed that
the short term effects of the 'B' Street Project include increased
dust and auto exhaust, disruption of business during the construction
of the project, and increased bank erosion and possible loss of
wildlife habitat along San Lorenzo Creek during construction of
a bridge. Among the long term effects of the project are increased
traffic, increased noise, paving and removal of grass and garden
areas, the removal of vegetation, landscaping, shrubs and hedgerows,
the removal of 153 mature trees (some more than 80 years old)
which presently line the street, and the elimination of on-street
parking on 'B' Street and Center Street, aggravating present parking
problems that already exist in the area. Two neighborhood stores
would be removed, and 12 families would be displaced due to the
removal of residential structures. The project would result in
the loss of the residential community characteristic of the area,
and a decrease in residential property values. The residential
desirability of adjacent properties would be adversely affected
by the increased noise and exposure to traffic, reduced setbacks
of the structures from the street, and the loss of on-street parking.
The conversion of single-family dwellings to commercial or multi-family
use would be accelerated. The project would also result in a decreased
visual or aesthetic quality of the area due to the removal of
the trees, grass and garden areas, and the decrease in the setback
of the structures from the street. This evidence indicated that
a finding of significant environmental effect was mandatory. (Cal.
Admin. Code, tit. 14, § 15082.) The trial court correctly
determined that there was substantial evidence that the 'B' Street
Project might have a significant environmental effect.
The judgment is reversed insofar as it denies the Friends' request
for attorney fees and denies injunctive relief on the second cause
of action, and is affirmed in all other respects. The cause is
remanded for proceedings consistent with this opinion. The Friends
shall recover their costs on the appeal and on the cross-appeal.
Rattigan, Acting P. J., and Poch'e J., concurred.