Thursday, April 19, 2012

Court Upholds Use of Future CEQA Baseline, Contravening Sunnyvale and Madera

On April 17, 2012, the Court of Appeal for the Second Appellate District upheld the use of a 2030 baseline for an Environmental Impact Report’s (EIR) traffic and air quality analysis in Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (April 17, 2012, B232655) __ Cal.App.4th __ (“Neighbors for Smart Rail”).  In so doing, the court expressly declined to follow two 2011 appellate court cases holding that CEQA requires a proposed project to be evaluated against a baseline of existing environmental conditions.

CEQA requires that an EIR, “include a description of the physical environmental conditions in the vicinity of the project, as they exist at the time the notice of preparation is published, or if no notice of preparation is published, at the time environmental analysis is commenced . . .”  (CEQA Guidelines, § 15125, subd. (a).)  “Normally” this setting “constitute[s] the baseline physical conditions by which a lead agency determines whether an impact is significant.”  (Id.)  A number of cases have held that “the impacts of a proposed project are ordinarily to be compared to the actual environmental conditions existing at the time of CEQA analysis, rather than to allowable conditions defined by a plan or regulatory framework.”  (Communities for a Better Environment v. South Coast Air Quality Management Dist. (2010) 48 Cal.4th 310, 320-321 (“CBE”).)

In Neighbors for Smart Rail, supra, the Exposition Metro Line Construction Authority proposed to build the second phase of a high capacity, high frequency transit service.  The agency based the traffic and air quality impacts analysis on a 2030 baseline, finding, “the existing physical environmental conditions (current population and traffic levels) do not provide a reasonable baseline for the purpose of determining whether traffic and air quality impacts of the Project are significant.”  (Opinion, p. 13.)  The agency explained it was “necessary to evaluate future projected traffic and air quality conditions with and without the project ‘so that the public and the decision makers may understand the future impacts on traffic and air quality of approving and not approving the project.’” (Opinion, p. 14.)

The court upheld the use of the future baseline, finding the decision to do so was supported by substantial evidence. The court reasoned:
“As a major transportation infrastructure project that will not even begin to operate until 2015 at the earliest, its impact on presently existing traffic and air quality conditions will yield no practical information to decision makers or the public. . . An analysis of the project’s impacts on anachronistic 2009 traffic and air quality conditions would rest on the false hypothesis that everything will be the same 20 years later.”
(Opinion, p. 15.)

The court related its decision to prior cases’ discussion of baseline. The Neighbors for Smart Rail court explained that its decision was consistent with CBE’s rejection of the use of a hypothetical baseline.  CBE involved the expansion of a petroleum refinery.  The refinery had four boilers which never operated at the same time, yet the environmental analysis used permitted operations – all four boilers operating at the same time – as the baseline.  The CBE court stated, “By comparing the proposed project to what could happen, rather than to what was actually happening, the District set the baseline not according to, ‘established levels of a particular use’  but by ‘merely hypothetical conditions allowable’ under the permits.”  (CBE, supra, 48 Cal.4th at p. 322.)  This approach provided “an illusory basis for a finding of no significant adverse effect.”  (Ibid.)  Neighbors for Smart Rail distinguishes the illusory baseline at issue in CBE from the 2030 baseline used for the Metro Line, explaining, that while assuming four boilers running at once is an illusory baseline because it never had or would occur, “[a] decision to measure environmental effects of a long-term project by looking at those effects in the long term is neither hypothetical nor illusory. It is a realistic and rational decision.”  (Opinion, p. 16.)

The court went on to distinguish and disapprove of Sunnyvale West Neighborhood Association v. City of Sunnyvale City Council (2010) 190 Cal.App.4th 1351 (“Sunnyvale”) and Madera Oversight Coalition, Inc. v. County of Madera (2011) 199 Cal.App.4th 48 (“Madera”) which relied on CBE to hold the use of future baselines inadequate.  Sunnyvale held that CEQA ”requires the impact of any proposed project to be evaluated against a baseline of existing environmental conditions, which is the only way to identify the environmental effects.”  Madera relied on Sunnyvale stating that an EIR must “reflect existing physical conditions” and “lead agencies do not have the discretion to adopt a baseline that uses” future conditions. (Madera, supra, 199 Cal.App.4th 48 89-90.)  The Neighbors for Smart Rail court found this interpretation unsupported and inconsistent with the regulatory text and with CEQA’s objective to provide informed decisionmaking. “Nothing in the use of a baseline of future projected conditions, not ‘hypothetical allowable’ conditions, has been shown to be inconsistent with the provisions of CEQA or its purpose.”  (Opinion, p. 19.) 

Neighbors for Smart Rail provides the most practical solution to the question of what baseline to use, giving lead agencies discretion to determine – based on the particulars of each project – what baseline would best provide informed decisionmaking as to potential environmental effects. Given the different interpretations espoused by the Second, Fifth, and Sixth District Court of Appeals, the issue is prime for review by the California Supreme Court. 

For more information regarding this matter, please contact Leslie Z. Walker or Hanspeter Walter or the KMTG attorney with whom you normally consult.

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