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.

Fish & Wildlife Service Finds Bay-Delta Longfin Smelt Warrant Protection Under The Endangered Species Act

The U.S. Fish and Wildlife Service (Service) recently announced a 12-month finding on a petition to list the San Francisco Bay-Delta population of longfin smelt as endangered or threatened under the Endangered Species Act (ESA), finding that the Delta population of longfin smelt warranted ESA protection. The Service’s April 2, 2012, Federal Register notice of its 12-month finding is available here.

The Bay-Delta longfin smelt is a small fish, averaging approximately four inches in length, which is found in the San Francisco Bay-Delta, including Suisun Marsh and San Pablo Bay. The population of Bay-Delta longfin smelt has declined significantly in recent years. The Service’s 12-month finding identified a variety of threats to the Bay-Delta longfin smelt population, including habitat modification and the introduction of non-native species.

The Service found that listing of the Bay-Delta longfin smelt under the ESA is warranted but listing is currently precluded by higher priority actions. The Service added the Bay-Delta longfin smelt to its candidate species list, under which its status will be reviewed annually. Candidate species do not receive protection under the ESA, so the 12-month finding will not impose any new requirements or restrictions to protect the longfin smelt. However, the longfin smelt species is listed as a threatened species under the California Endangered Species Act, and is thus protected under state law. The Service stated that is will develop a proposed rule to list the the Bay-Delta longfin smelt under the ESA as its priorites allow. Any future proposal to add longfin smelt to the federal list of threatened or endangered species would be subject to public review and comment.

For more information regarding this matter, please contact Elizabeth Leeper or the KMTG attorney with whom you normally consult.


Related Stories:

Congressional ESA Oversight Hearing Materials Available Online
Congressional Committee Will Hold Oversight Hearing On Endangered Species Act Litigation

California Department of Water Resources Increases State Water Project Allocation to 60 Percent

The California Department of Water Resources (DWR) announced today that it was increasing its State Water Project allocation to 60 percent.  In a notice to State Water Project (SWP) contractors, DWR stated that in approving the allocation increase, it considered "existing storage in SWP conservation reservoirs, SWP operational constraints such as the conditions of the recent Biological Opinions for Delta smelt and salmonids and the longfin smelt incidental take permit, and 2012 contractor demands."

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

Related stories:
DWR Reduces 2012 Allocation to 50%; Reclamation Announces Initial 2012 Allocation of 30%
Department of Water Resources Announces 60% Initial Allocation for 2012

Bureau of Reclamation Announces Updated CVP Water Allocations

Today, the Bureau of Reclamation (Reclamation) provided a Central Valley Project (CVP) water supply allocation update of 100 percent to North-of-Delta agricultural water service contractors and 40 percent to South-of-Delta agricultural water service contractors.  Both amounts reflect an increase from the initial allocation of 30 percent for agricultural contractors North- and South-of-Delta.  Municipal and Industrial water service contractors remain projected to receive 75 percent of their historic use.

In addition, the allocations for Sacramento River Settlement Contractors and San Joaquin River Exchange and Settlement Contractors have increased to 100 percent from the initial allocation of 75 percent.  The wildlife refuges allocation has also increased to 100 percent.

Reclamation's press release announcing the increased allocation may be found here.

For more information regarding this matter, please contact Rebecca R. Akroyd or the KMTG attorney with whom you normally consult.

Related stories:
DWR Reduces 2012 Allocation to 50%; Reclamation Announces Initial 2012 Allocation of 30%
Department of Water Resources Announces 60% Initial Allocation for 2012

Petition Filed to List Gray Wolf under California Endangered Species Act

On March 12, 2012, the California Fish and Game Commission received a petition to list the gray wolf as endangered under the California Endangered Species Act. A copy of the petition may be found here. The petition, filed by the Center for Biological Diversity, Big Wildlife, the Environmental Protection Information Center, and the Klamath Siskiyou Wildlands Center, states:

The gray wolf is not currently listed as an endangered or threatened species under the California Endangered Species Act. The gray wolf is also absent from the California list of game animals. (See CA §250–479). As a result, the gray wolf does not fall under any regulatory scheme within the state, despite being a species that is native to California. Given the possibility that gray wolves are already naturally dispersing to California and have a high potential to do so in the near future, the California Department of Fish & Game must address this anomaly by listing the gray wolf as an endangered species and develop a management scheme for the protection of the gray wolf. Such an action would be consistent with the approach taken by the States of Oregon and Washington, both of which listed the gray wolf at a time when no individuals were presently located within their respective State boundaries.

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

Property Owners Entitled to Judicial Review of EPA Compliance Orders

Last week, in a closely-watched Clean Water Act case, the United States Supreme Court unanimously upheld the rights of property owners to obtain judicial review of a compliance order issued by the Environmental Protection Agency (EPA). The Court's opinion may be found here.

The decision arises out of an order issued by the EPA under Section 309 of the Clean Water Act. The order declared that property owned by Mike and Chantell Sackett of Priest Lake, Idaho, contained wetlands adjacent to Priest Lake. The order found that the Sacketts violated the Clean Water Act by discharging fill material into wetlands, a violation of Sections 301 and 502(12) of the Act, and directed the Sacketts to restore their property as directed by the EPA and to allow EPA access to the property and documentation regarding the site. Failure to comply with the order exposed the Sacketts to civil penalties of up to $75,000 per day for as long as the violation continues.

The issue resolved by the Court involves the Sacketts' efforts to obtain judicial review of the compliance order. After the EPA denied their request for a hearing, the Sacketts sued in federal district court in Idaho, which dismissed their complaint for lack of subject matter justice. That dismissal was subsequently upheld by the Ninth Circuit Court of Appeals, which held that the Clean Water Act precludes pre-enforcement judicial review of administrative compliance orders, and that such preclusion does not violate due process. The Ninth Circuit's opinion may be found here. Absent judicial review, the Sacketts were faced with the prospect of complying with an order at a cost greater than the value of their property. Alternatively, they could ignore the order and risk a civil action by the EPA, with civil penalties that grew with each passing day of alleged violation.

In reversing the Ninth Circuit, the Court held that EPA's compliance order satisfied the requirements for final agency action for which there is no adequate remedy, other than review under the Administrative Procedure Act, and that nothing in the Clean Water Act precluded judicial review. Concluding the opinion of the Court, Justice Scalia explained:

The APA’s presumption of judicial review is a repudiation of the principle that efficiency of regulation conquers all. And there is no reason to think that the Clean Water Act was uniquely designed to enable the strong-arming of regulated parties into “voluntary compliance” without the opportunity for judicial review—even judicial review of the question whether the regulated party is within the EPA’s jurisdiction.

But perhaps the most interesting commentary in the decision is found in Justice Alito's concurring opinion, where he commented:

The reach of the Clean Water Act is notoriously unclear. Any piece of land that is wet at least part of the year is in danger of being classified by EPA employees as wetlands covered by the Act, and according to the Federal Government, if property owners begin to construct a home on a lot that the agency thinks possesses the requisite wetness, the property owners are at the agency’s mercy. The EPA may issue a compliance order demanding that the owners cease construction, engage in expensive remedial measures, and abandon any use of the property. If the owners do not do the EPA’s bidding, they may be fined up to $75,000 per day ($37,500 for violating the Act and another $37,500 for violating the compliance order). And if the owners want their day in court to show that their lot does not include covered wetlands, well, as a practical matter, that is just too bad. Until the EPA sues them, they are blocked from access to the courts, and the EPA may wait as long as it wants before deciding to sue. By that time, the potential fines may easily have reached the millions. In a nation that values due process, not to mention private property, such treatment is unthinkable.

The practical effect of the Court's ruling is that the Sacketts, and others who may find themselves in the "unthinkable" predicament described by Justice Alito, will have their day in court. They will certainly be permitted to challenge EPA's claim of regulatory authority over their property. It is less clear whether, at the pre-enforcement stage, they will also be able to challenge the terms and conditions of the compliance order, as Justice Ginsburg explains in her concurring opinion.

For more information regarding this matter, please contact Eric Adair or the KMTG attorney with whom you normally consult.

State Senate Committee Holds Informational Hearing On Delta Plan and Bay-Delta Conservation Plan

The State Senate’s Committee on Natural Resources and Water held an informational hearing regarding the Delta Plan and Bay-Delta Conservation Plan on March 13, 2012. A video of the hearing, along with related written materials, is available here.

The Delta Plan is a mandate of SBX7-1 of California's landmark 2009 water legislation, which requires that the Delta Stewardship Council develop, adopt and carry out a comprehensive long-term management plan for the Delta. The Delta Plan must include measures that promote: (1) viable populations of aquatic and terrestrial species; (2) functional corridors for migratory species; (3) diverse habitats; (4) reduced threats; (5) more reliable water supplies; (6) improved water quality; and (7) the economic vitality of the State. It must also include recommendations promoting statewide water conservation, options for new and improved infrastructure relating to water conveyance in the Delta, and in-Delta disaster and risk reduction considerations. The most recent version of the Delta Plan is the Fifth Staff Draft, which is available here. The Sixth Staff Draft of the Delta Plan is scheduled to be released in mid to late April. The draft Environmental Impact Report for the Delta Plan is available here.

The Bay-Delta Conservation Plan is a conservation plan for the Sacramento-San Joaquin River Delta, and is being developed pursuant to the federal Endangered Species Act and California Natural Communities Conservation Planning Act. The BDCP is intended to help meet California’s co-equal goals for Delta management: water supply reliability and ecosystem restoration.  The public draft BDCP will include a set of actions to redesign and re-operate state and federal water projects in the Delta; restore native fish, wildlife, and plant habitat; and address other ecological stressors in the Delta such as invasive plant species, barriers to fish migration, and predation of native fish. As a conservation plan, the BDCP is subject to environmental review under the California Environmental Quality Act and National Environmental Policy Act. A preliminary draft of the Bay-Delta Conservation Plan, including those portions recently released on February 29, 2012, is available here. A preliminary draft of the Environmental Impact Report/Environmental Impact Statement for the BDCP, including those portions recently released on February 29, 2012, is available here.

For more information regarding this matter, please contact Elizabeth Leeper or the KMTG attorney with whom you normally consult.