Second Appellate District Approves Use of Projected Future Baseline to Measure Environmental Impacts in L.A. Light Rail Case

On Tuesday, the Second District Court of Appeal issued its decision in Neighbors for Smart Rail v. Exposition Metro Line Construction Authority, ruling that a lead agency’s use of projected future conditions to measure the environmental impacts that a long-term infrastructure project will have on traffic and air quality did not violate the California Environmental Quality Act  (CEQA).  The court’s decision places it in fundamental disagreement with the rulings of the Sixth District and Fifth District Court of Appeals, which have each held that lead agencies are required by CEQA to evaluate project impacts against actual existing environmental conditions, and that agencies do not have the discretion to solely assess project impacts against future conditions expected to exist at the time a project will come into operation.  Although the decision is positive news for the many public agencies that historically engaged in this type of impact analysis to assess traffic and air quality impacts for long-term projects, the defensibility of CEQA documents that solely rely on projected future baselines will remain uncertain until the California Supreme Court takes the issue up for review.

Neighbors for Smart Rail involved the approval of the second phase of a light rail project designed to connect West Los Angeles to an existing regional rail network.  In approving the second phase, the Exposition Metro Line Construction Authority (Authority) relied on an Environmental Impact Report (EIR) that evaluated the significance of most environmental impacts against existing conditions; however, in regards to the significance of the project’s traffic and air quality impacts, the Authority elected to use a 20-year planning horizon, and consider conditions with and without the project in the year 2030.  Project opponents challenged the Authority’s use of a projected future baseline under CEQA, relying in part, on recent appellate court decisions that require environmental impacts to be evaluated against present conditions irrespective of the nature of a project.  The lower court denied opponents’ petition to set aside the Authority’s approval, finding the Authority had complied with CEQA.  Opponents filed an appeal with the Second District Court of Appeal, which upheld the trial court’s ruling.

In upholding the trial court’s ruling, the court engaged in a practical review of the nature of the light rail project and the purpose of CEQA.  The court noted that“[a]s a major transportation infrastructure project that will not even begin to operate until 2015 at the earliest, [the project’s] impact on presently existing traffic and air quality conditions [would] yield no practical information to decision-makers or the public.”  Rather, utilization of a present-day baseline “would only enable decision-makers and the public to consider the impact of the rail line if it were here today.”  Given that the objective of CEQA is to provide information that is relevant and permits informed decision-making, the Court agreed with the Authority and amici curiae public agencies that, “when supported by substantial evidence, use of projected conditions may be an appropriate way to measure the environmental impacts that a project will have on traffic, air quality, and greenhouse gas emissions.”  The court noted that in reviewing the agency’s use of a projected baseline, what is important to the court is “the reliability of the projections and the inevitability of the changes on which those projections are based.”

The court’s analysis included a blunt rejection of the reasoning of the Sixth District Court of Appeal in Sunnyvale West Neighborhood Assn. v. City of Sunnyvale City Council, 190 Cal.App.4th 1351 (2010), wherein the Sixth District held that the impact of any proposed project must be evaluated against a baseline of conditions in existence no later than the date of project approval.  Noting that none of CEQA’s statutory provisions nor the CEQA Guidelines mandated such a singular approach, the court stated: “Sunnyvale cites no authority for its own conclusion that use of a baseline of current conditions ‘is the only way’ to identify impacts ‘specific to the project alone’ and we find that conclusion is erroneous when applied to traffic and air quality impacts of a long-term infrastructure project, the very purpose of which is to improve traffic and air quality conditions over time.”  The court likewise dismissed the Fifth District’s decision in Madera Oversight Coalition, Inc. v. County of Madera, 199 Cal.App.4th 48 (2011), noting that the Fifth District had followed Sunnyvale without adding anything to the Sixth District’s analysis, with which the court was in fundamental disagreement.

Acknowledging that it was bound by California Supreme Court precedent, the court stated that, contrary to the assertion of project opponents, the Supreme Court’s decision in Communities for a Better Environment v. South Coast Air Quality Management Dist., 48 Cal.4th 310 (2010), was not dispositive of the present case.  Communities for a Better Environment rejected the use of “hypothetical allowable conditions” when those conditions were “not a realistic description of the existing conditions” without the project; however the court noted that in the present case what was at issue was the use of projected future conditions not “hypothetical allowable” conditions.  In the court’s opinion, “[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.”

The court’s analysis also included construction of the CEQA Guidelines.  The court concluded that these regulations expressly reserve an agency’s discretion to select a baseline by identifying present conditions as the baseline “normally” used.  The court explained that “[t]o state the norm is to recognize the possibility of departure from the norm.”

While the analysis of the Second District will likely be welcome news to many public agencies, the defensibility of CEQA documents that primarily rely on projected future baselines will remain uncertain absent a controlling decision from the California Supreme Court.  Public agencies preparing environmental documents for long-term transportation projects may benefit from a consultation with counsel before electing to exclusively rely on projected future baselines to assess a project’s traffic or air quality impacts.

The case is Neighbors for Smart Rail v. Exposition Metro Line Construction Authority et al., (Case No. B232655), in the Second Appellate District Court of Appeals.