Union of Med. Marijuana Patients, Inc. v. City of San Diego

• Decision Date: 19 August 2019
• Docket Number: S238563
• Citation: 7 Cal.5th 1171,250 Cal.Rptr.3d 818,446 P.3d 317
• Court: California Supreme Court
• Parties: UNION OF MEDICAL MARIJUANA PATIENTS, INC., Plaintiff and Appellant, v. CITY OF SAN DIEGO, Defendant and Respondent; California Coastal Commission, Real Party in Interest.

7 Cal.5th 1171

446 P.3d 317

250 Cal.Rptr.3d 818

UNION OF MEDICAL MARIJUANA PATIENTS, INC., Plaintiff and Appellant,

v.CITY OF SAN DIEGO, Defendant and Respondent;

California Coastal Commission, Real Party in Interest.

S238563

Supreme Court of California.

August 19, 2019

Channel Law Group, Jamie T. Hall and Julian Killen Quattlebaum, Beverly Hills, for Plaintiff and Appellant.

Jan I. Goldsmith and Mara W. Elliott, City Attorneys, George F. Schaefer, Assistant City Attorney, Glenn T. Spitzer and M. Travis Phelps, Deputy City Attorneys, for Defendant and Respondent.

Best Best & Krieger, Michelle Ouellette, Charity Schiller, Riverside, and Sarah E. Owsowitz, Walnut Creek, for League of California Cities and California State Association of Counties as Amici Curiae on behalf of Defendant and Respondent.

No appearance for Real Party in Interest.

Opinion of the Court by Cantil-Sakauye, C. J.

The California Environmental Quality Act, Public Resources Code sections 21000 et seq. (CEQA), applies to "projects," a term defined by statute. In general, a project is an activity that (1) is undertaken or funded by, or subject to the approval of a public agency and (2) may cause "either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment." ( Pub. Res. Code, § 21065.)¹ Although section 21065 supplies the definition of a project, another provision of CEQA, section 21080, subdivision (a), can be interpreted to declare specified public agency activities, including the amendment of a zoning ordinance, to be a project as a matter of law, without regard to their potential for causing a physical change in the environment. In this matter, we must decide whether to adopt this interpretation of section 21080, which would prevail over section 21065 with respect to the specific public agency activities listed in section 21080.

In 2014, the City of San Diego (City) adopted an ordinance authorizing the establishment of medical marijuana dispensaries and regulating their location and operation. The central provisions of this ordinance amended various City zoning regulations to specify where the newly established dispensaries may be located. Because the City found that adoption of the ordinance did not constitute a project for purposes of CEQA, it did not conduct any environmental review. Petitioner Union of Medical Marijuana Patients (UMMP) challenged the City’s failure to conduct CEQA review in a petition for writ of mandate, which was denied by the trial court.

On appeal, UMMP argued (1) the amendment of a zoning ordinance, one of the public agency activities listed in section 21080, is conclusively declared a project by that statute and (2) the City’s ordinance, in any event, satisfied the definition of a project under section 21065. The former argument was premised in part on Rominger v. County of Colusa (2014) 229 Cal.App.4th 690, 177 Cal.Rptr.3d 677 ( Rominger ), which relied on section 21080 in concluding that a county’s approval of a tentative subdivision map, another activity listed in section 21080, was a project as a matter of law. Here, the Court of Appeal disagreed with Rominger , concluding that the amendment of a zoning ordinance is subject to the same statutory test as public agency activities not listed in section 21080. The court proceeded to find no error in the City’s conclusion that the ordinance was not a project because it did not have the potential to cause a physical change in the environment. We granted review to resolve the conflict between the two Courts of Appeal regarding the interpretation of section 21080.

We agree with the Court of Appeal below that section 21080 does not override the definition of project found in section 21065. Accordingly, the various activities listed in section 21080 must satisfy the requirements of section 21065 before they are found to be a project for purposes of CEQA. On the other hand, we conclude that the Court of Appeal misapplied the test for determining whether a proposed activity has the potential to cause environmental change under section 21065, which was established in Muzzy Ranch Co. v. Solano County Airport Land Use Commission (2007) 41 Cal.4th 372, 60 Cal.Rptr.3d 247, 160 P.3d 116 ( Muzzy Ranch ), and erred in affirming the City’s finding that adoption of the ordinance did not constitute a project. For that reason, we reverse and remand for further proceedings.

I. FACTUAL AND PROCEDURAL BACKGROUND

A. The City’s Medical Marijuana Ordinance

Health and Safety Code section 11362.83, a provision of the Medical Marijuana Program ( Health & Saf. Code, § 11362.7 et seq. ), recognizes the authority of local governments to adopt ordinances regulating the "location, operation, or establishment of a medicinal cannabis cooperative or collective." ( Health & Saf. Code, § 11362.83, subd. (a) ; see Kirby v. County of Fresno (2015) 242 Cal.App.4th 940, 956, 195 Cal.Rptr.3d 815.) In 2014, the City enacted such a regulation, San Diego Ordinance No. O-20356 (Ordinance). The Ordinance amended a variety of City Municipal Code sections to authorize the establishment, and regulate the siting and operation of, "medical marijuana consumer cooperatives" (dispensaries), which were defined as "a facility where marijuana is transferred to qualified patients or primary caregivers in accordance with the Compassionate Use Act of 1996 and the Medical Marijuana Program Act." (Ord., § 1.)

The primary provisions of the Ordinance amended several of the City’s zoning regulations to cap the number of dispensaries and specify where in the City they could be located. Dispensaries were added to the list of permitted uses in two of the City’s six categories of commercial zones and two of the four categories of industrial zones (Ord., §§ 6, 7, 13, 15), and they were expressly excluded from open space, agricultural, and residential zones. (Id ., §§ 3, 4, 5.) Dispensaries were also added to the list of permitted uses in certain planned districts of the City. (Id ., §§ 10, 11, 13.) The Ordinance placed an upper limit of four dispensaries in any single city council district and required a dispensary to be located more than 1,000 feet from certain sensitive uses, such as parks and schools, and more than 100 feet from a residential zone. (Id ., § 8.) Regardless of location, the Ordinance required the grant of a conditional use permit for a dispensary’s operation. (Id ., §§ 2, 6, 7, 8.)

In addition to defining the location of dispensaries, the Ordinance imposed basic conditions on their operation, such as prohibiting the provision of medical consultation services, requiring particular lighting and security, defining permissible signage, and limiting hours of operation. (Ord., § 8.)

Because the City contains nine city council districts, the Ordinance’s limit of four dispensaries per district permitted, in theory, the establishment of 36 dispensaries. A study commissioned by the City, however, found that the other restrictions placed on the location of dispensaries by the Ordinance, such as the limitation to particular zoning districts and the minimum distance from sensitive uses, precluded the establishment of a dispensary entirely in one city council district and limited two other districts to three dispensaries each. This left a practical maximum of 30 dispensaries. City planning staff concluded that the actual number of dispensaries to be created "is very likely to be significantly less," since "factors such as available units for rent, rental rates, overall demand for dispensaries, and proximity of potential sites to target markets would rule out some sites."

Because the City found CEQA inapplicable to the Ordinance’s enactment, it conducted no environmental review prior to its adoption. The City’s finding explained its reasoning: "The ... Ordinance is not subject to [CEQA] ..., in that it is not a Project .... Adoption of the ordinance does not have the potential for resulting in either a direct physical change in the environment, or reasonably for[e]seeable indirect physical change in the environment. Future projects subject to the ordinance will require a discretionary permit and CEQA review, and will be analyzed at the appropriate time in accordance with CEQA."

B. This Litigation

According to its President, UMMP is "a civil rights organization that is devoted to defending and asserting the rights of medical cannabis patients as well as promoting safe access to medical marijuana." Prior to adoption of the Ordinance, UMMP submitted two letters to the City Council objecting to the failure to conduct environmental review under CEQA. The letters argued that the Ordinance should have been found to be a project for purposes of CEQA because it had the potential to cause either a direct physical change in the environment or a reasonably foreseeable indirect physical change. ( § 21065.) According to UMMP, adoption of the Ordinance could affect the environment because (1) restrictions on the siting of dispensaries would require "thousands of patients to drive across the City" to obtain medical marijuana; (2) the City might prosecute and close existing, unpermitted marijuana dispensaries, causing medical marijuana users to engage in the "inherently agricultural practice" of growing their own marijuana; and (3) "the unique development impacts associated with [dispensaries] [would be] shifted to certain areas of the City and intensified due to the limit on the total number of [dispensaries]."

After the City disregarded UMMP’s arguments and adopted the Ordinance without further environmental review, UMMP filed a petition for writ of mandate challenging the adoption of the Ordinance under CEQA. The trial court, in an extensive written minute order, rejected UMMP’s claims of the Ordinance’s potential for causing environmental change, concluding there was insufficient evidence in the record to support those claims.

On appeal, UMMP repeated its argument that the Ordinance should have...