Friday, June 26, 2026
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California Supreme Court:
CEQA Exemption Applies if Expansion to Use Is ‘Negligible’ Regardless of Environmental Risk
Opinion Says Court of Appeal Erred in Interpreting Regulation to Incorporate Ecological Impact of Proposal Into Question of Whether Plan Significantly Expands How Existing Facility Operates
By a MetNews Staff Writer
A proposed modification to an existing facility qualifies for an exemption to the statutory scheme requiring an administrative evaluation of a project’s environmental impacts if the proposal involves “negligible or no expansion” to the use of the property, regardless of any ecological effects caused by the changes, the California Supreme Court held yesterday.
At issue is the so-called “class 1” categorical exemption to the California Environmental Quality Act (“CEQA”), found in regulatory guidelines promulgated by the secretary of California’s Natural Resources Agency (“CNRA”), which carves out from administrative review “minor alteration[s] of existing…facilities…involving negligible or no expansion of existing or former use.”
Chief Justice Patricia Guerrero authored yesterday’s opinion, joined in by Justices Carol Corrigan, Goodwin H. Liu, Joshua P. Groban, Kelli Evans, and Justice Victoria M. Chavez of this district’s Div. Two, sitting by assignment. Guerrero wrote:
“We hold that the phrase ‘negligible or no expansion of existing or former use’ in CEQA’s class 1 exemption pertains to an expansion or change in the nature or degree of a structure or facility’s use, not the risk of environmental harm caused by such an expansion or change in use.”
The question arose after Reabold California LLC filed an application with the California Department of Conservation’s Geologic and Energy Management Division (“CalGEM”) in 2020, seeking to convert a dormant oil and gas well in Contra Costa County into a water injection pump that would send wastewater byproduct created by the extraction of fossil fuels elsewhere on the facility back into an underground aquifer.
Exemption Decision
After concerns about protecting nearby drinking water sources were assuaged, CalGEM determined that the project was exempt under the “class 1” exception. An environmental advocacy group, Sunflower Alliance, responded by filing a petition for a writ of mandate challenging the determination.
On March 2, 2023, Conta Costa Superior Court Judge Edward Weil granted the petition and entered judgment in favor of Sunflower, finding that water injection is a “significantly different use” from extracting oil.
Div. Five of the First District Court of Appeal reversed the judgment in 2024, concluding that the analysis should focus “on the consequences of a change in use” as “[n]o purpose is served by myopically focusing on whether a use is new, thereby excluding from the exemption many projects that would cause no environmental harm—precisely the type of borderline projects for which categorical exemptions are useful.”
In yesterday’s opinion, Guerrero declared:
“Because the Court of Appeal relied on an incorrect understanding of the class 1 exemption in determining whether substantial evidence supported CalGEM’s determination that the proposed well conversion was exempt, we reverse the judgment and remand this matter…for further proceedings consistent with our opinion.”
Justice Leondra Kruger wrote separately to “acknowledge… the dilemma the Court of Appeal” faced in interpreting “negligible,” saying that the term “demands some frame of reference” but agreeing with the majority that it erred in defining the word entirely by reference to whether the expansion “poses a more-than-negligible risk of environmental harm.”
No Dispute
Looking to “the plain text of the class 1 exemption,” Guerrero said:
“Here, neither party disputes that the phrase ‘negligible or no expansion’ in the class 1 exemption modifies the phrase ‘existing or former use.’…However, the parties have different interpretations of its import.”
Noting that Sunflower asserted that the exemption should only apply where a negligible increase in the degree of an existing use is proposed and Reabold promoted the Court of Appeal’s interpretation, the chief justice pointed out that “CNRA and CalGEM…, appearing here as amici curiae,” argued that projects that involve negligible “expansions” of use qualify while more significant ones do not.
Saying that “the agencies’ interpretation of the class 1 exemption is closest to the mark,” the jurist opined:
“Even putting aside any deference that may be owed to CNRA as the agency empowered to promulgate the Guidelines, the agencies’ interpretation is the most consistent with the class 1 exemption’s plain text and CEQA’s overall statutory and regulatory scheme.”
She continued:
“Expansions are commonly understood to include changes or additions. This interpretation is further supported by the examples of covered projects included in the class 1 exemption itself, several of which appear to involve a change in the use of an existing structure or facility…. These examples seem to contemplate a change, not just in degree, but in the nature of the use, including additional uses. We must interpret the word ‘expansion’ in this context.”
No Mention
Adding that the “exemption does not mention the risk of environmental harm at all, and we must not read into the regulation words it does not contain,” she pointed out that the carve-out reflects an agency determination that the environmental impact typically associated with such “negligent” expansions is not significant enough to warrant CEQA procedures.
Noting that incorporating the environmental impact analysis into the exemption would require that “the lead agency…analyze environmental effects prematurely—without the full benefit of public participation and other procedural safeguards that a comprehensive environmental review normally entails,” she commented:
“The court’s role is not to second-guess the Legislature’s wisdom in directing the Secretary to adopt categorical exemptions or the Secretary’s expertise in identifying categories of projects that are unlikely to have significant environmental effects.”
In her concurring opinion, Kruger wrote:
“The majority today holds that the words ‘negligible or no expansion of existing or former use’ mean ‘negligible or no expansion of existing or former use.’ I agree, of course. Who wouldn’t?
However, she said:
“Ultimately, to determine whether the expansion at issue here is ‘negligible,’ the primary task for the Court of Appeal on remand will be to measure the expansion—i.e., converting a long-dormant oil extraction well into a well dedicated to daily injecting some 12,600 gallons of treated wastewater into an underground aquifer—not only by referring to CEQA’s ultimate purpose of protecting the environment, but also by giving careful consideration to the manner in which CEQA demands that environmental concerns be aired and assessed.”
The case is Sunflower Alliance v. Department of Conservation, 2026 S.O.S. 1818.
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