Opinion clarifies when projects involving the construction of hundreds of new small utility structures may be exempt from environmental review

The California Court of Appeal upheld San Francisco’s determination that the installation of more than 700 metal utility boxes throughout San Francisco was exempt from the California Environmental Quality Act (CEQA). Although the opinion issued last week in San Francisco Beautiful v. City of San Francisco is currently unpublished, it is significant because it explains when projects involving the installation of small structures may be exempt from environmental review. If published, this opinion may be particularly helpful to public agencies defending their approvals of similar projects. Any interested party may request the publication of this opinion by sending a letter of request to the First District Court of Appeal by May 20.

San Francisco Beautiful involved a proposal by a telecommunications company to install 726 metal utility boxes housing telecommunications equipment on San Francisco sidewalks to expand a fiber-optic network. The City and County of San Francisco approved the project and determined that it was exempt from CEQA review under a Class 3 exemption, which applies to: 1) “construction and location of limited numbers of new, small facilities or structures,” and 2) “installation of small new equipment and facilities in small structures.”

After their lawsuit was rejected by the trial court, two interest group plaintiffs appealed. On appeal, the interest groups argued that the project was not exempt because the 726 new structures were not a “limited number,” and because it involved the construction of new structures, rather than the “installation” of equipment in existing small structures.

The Court of Appeal found that the terms of the exemption were not limited to the installation of equipment in existing small structures. The court reasoned that, if such a limitation had been intended, it could easily have been specified. Because it found the project exempt on this basis, the court found it unnecessary to address the “limited number” argument.

The interest groups also claimed that, even if the Class 3 exemption applied, the City was still required to prepare an environmental impact report because the project would have a significant environmental effect due to unusual circumstances and cumulative impacts. However, the court found that the interest groups identified no unusual circumstances relating to placement of the new utility structures in an urbanized area that already has tens of thousands of such structures. The court also rejected the applicability of the cumulative impacts exception to categorical exemptions, explaining that the City did not have to consider the cumulative impact of all similar equipment to be installed throughout the City because CEQA guidelines instead limits the cumulative impact exception to successive projects of the same type in the same place. For the purposes of the utility boxes, the court found the “same place” meant the individual locations where the boxes would be placed.