California Supreme Court Weighs in on the CEQA Projected Baseline Issue

On August 5, 2013, the California Supreme Court issued its decision in Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (S202828), which attempted to answer once and for all whether a lead agency can rely on a projected baseline under the California Environmental Quality Act (CEQA).

The Supreme Court explained that environmental review normally analyzes a project's impacts on existing conditions, but in limited circumstances, a lead agency could deviate from that norm if the agency can show that the existing conditions analysis would be "misleading or without informational value to EIR users."

The opinion stressed that a lead agency only has to justify its decision to substitute a future conditions analysis for an existing conditions analysis. No justification is needed for an EIR that examines both existing and future conditions. Since nothing in CEQA precludes an agency from including multiple baselines in an EIR's primary analysis of a project's significant adverse impacts, the Supreme Court opinion essentially espoused the "more is better" rule for baseline analysis.

Peculiarities Of The Opinion

The Supreme Court disagreed with the trial court and the Second District Court of Appeal – both of which upheld the use of a future baseline for the proposed Los Angeles light rail project – but nevertheless affirmed the denial of the petition for writ of mandate because the Court determined that the projected baseline error was not prejudicial. [Read more about the 2012 Court of Appeal ruling here.]

A concurring and dissenting opinion signed by three justices agreed with the ultimate decision to affirm the Court of Appeal, but contended that the majority failed to comply with CEQA's requirement that the courts defer to a lead agency's discretion and introduced a new layer of uncertainty into the baseline process that would invite additional litigation and project delays. A separate concurring and dissenting opinion agreed with the majority's analysis, but argued the baseline error was prejudicial.

Can A Lead Agency Skip The Existing Conditions Analysis And Only Consider A Projected Baseline?

The Supreme Court reviewed a challenge to the second phase of a light rail line that would connect downtown Los Angeles with Santa Monica. Petitioner argued that the lead agency, Exposition Metro Line Construction Authority (Expo Authority), relied on an improper baseline to assess the project's traffic and air quality impacts.

Earlier Case Law

In its analysis, the Court discussed its earlier opinion in Communities for a Better Environment v. South Coast Air Quality Management Dist. (2010) 48 Cal.4th 310, 325, 328, which required the use of a "realistic baseline" to give "the public and decision makers the most accurate picture practically possible of a project's likely impacts."

The Supreme Court also considered three prior appellate decisions that addressed the baseline question – Sunnyvale West Neighborhood Assn. v. City of Sunnyvale City Council (2010) 190 Cal.App.4th 1351, Madera Oversight Coalition, Inc. v. County of Madera (2011) 1991 Cal.App.4th 48, and Pfeiffer v. City of Sunnyvale City Council (2011) 200 Cal.App.4th 1552.

Breaking these down individually, the Court explained that the Sunnyvale Court of Appeal determined that "the use of a single future conditions baseline was per se a violation of CEQA; it was not a discretionary choice that could be justified by substantial evidence." But, the Sunnyvale court did find that a lead agency could include an existing conditions analysis and a projected future conditions analysis if both would be "helpful to an intelligent understanding of the project's environmental impacts." The appellate court in Madera simply adopted the Sunnyvale rule that agencies "do not have the discretion to adopt a baseline that uses conditions predicted to occur on a date subsequent to the certification of the EIR." In contrast, the Court of Appeal in Pfeiffer distinguished Sunnyvale because in Pfeiffer, the traffic analysis was "not limited to projected traffic conditions in the year 2020, but also included existing conditions and the traffic growth anticipated from approved but not yet constructed developments."

A Projected Baseline Must Be Justified By A Lead Agency

Reiterating that the fundamental goal of an EIR is "to inform decision makers and the public of any significant adverse effects," the Court determined that "[p]rojected future conditions may be used as the sole baseline for impacts analysis if their use in place of measured existing conditions – a departure from the norm stated in [CEQA] Guidelines section 15125(a) – is justified by unusual aspects of the project or the surrounding conditions." A lead agency can solely rely on a "future conditions" analysis if the existing conditions analysis "would detract from an EIR's effectiveness as an informational document, either because the analysis based on existing conditions would be uninformative or because it would be misleading to decision makers and the public." The Supreme Court therefore disapproved Sunnyvale and Madera to the extent that they held that an agency could never rely solely on a projected baseline analysis.

As part of its analysis, the Supreme Court recognized the counterintuitive fact that although most projects do not exist and are not operational when an EIR is prepared, nevertheless, the analysis generally assumes that the project does exist and is fully operational for purposes of CEQA analysis.

Further, the Court also recognized that in some "appropriate" circumstances, a lead agency may "adjust its existing conditions baseline to account for a major change in environmental conditions that it expected to occur before project implementation." Whether that adjustment is appropriate will depend on whether the EIR serves its purposes as an informational document, i.e., whether the lead agency can show that the existing conditions analysis would be "uninformative or misleading to decision makers and the public."

As noted above, the Supreme Court explained that "nothing in CEQA precludes an agency . . . from considering both types of baseline – existing and future conditions – in its primary analysis of the project's significant adverse effects," but if an agency "chooses to evaluate only the impacts on future conditions, foregoing the existing conditions analysis called for under the CEQA Guidelines," the agency needs to justify that choice.

The Expo Authority Did Not Justify Its Projected Baseline, But There Was No Prejudice

Based on the facts presented, the Supreme Court rejected the Expo Authority's explanation for a 2030 baseline for traffic and air quality impacts because of a lack of substantial evidence in the record. The Court held that "[b]y focusing solely on the project's operational impacts in the distant future, the EIR neglects to inform the public and decision makers explicitly of any operational impacts that could occur in the project's first 15 years of operation."

However, the Supreme Court determined that the exclusive use of a future traffic condition baseline had no prejudicial effect because the EIR included an "extensive" and "detailed" traffic congestion analysis. And, because the project's air quality impact would be beneficial throughout its operation, the Court held that the use of a future air quality condition baseline had no prejudicial effect either.

Did The EIR Include Adequate Mitigation Measures?

The Supreme Court granted the petition for review on a second, but less hot-button issue, that nonetheless deserves mention here.

Petitioner also argued on appeal that the Expo Authority included inadequate mitigation for spillover parking that may result at transit stations without parking facilities. The EIR proposed, and the Expo Authority adopted, a series of measures that required the monitoring of on-street parking in areas where effects are anticipated before and for six months after the transit line opens. If a parking shortage occurs, the Los Angeles County Metropolitan Transportation Authority (MTA) would help the responsible local jurisdiction establish a permit parking program and MTA would pay for signage and administrative costs. Where a parking permit program is not appropriate, the MTA would work with the local jurisdiction on another option, including time-restricted, metered, or shared parking.

Although the EIR determined that any adverse spillover parking effects would be less than significant, the Expo Authority made findings – supported by substantial evidence – that binding mitigation measures had been "required in, or incorporated into" the project and that "[t]hose changes or alterations are within the responsibility and jurisdiction of another public agency and have been, or can and should be, adopted by that other agency."

The Supreme Court explained that the MTA was required to monitor parking, pay for a residential permit parking program where spillover parking resulted in a parking shortage, and assist in developing other measures if a parking permit program would not work in a particular area. Therefore, the Court rejected Petitioner's speculative claim that a municipality might not agree to a parking program, because as noted in the opinion – MTA would pay for the parking program and the program would benefit the municipality's own residents.