Air Quality Thresholds of Significance Not a “Project” Under CEQA

A local air quality management district proposed new thresholds of significance for air pollutants to meet tighter state and federal air quality standards and to clarify analysis of air pollutant impacts under the California Environmental Quality Act (“CEQA”).  A construction industry trade group challenged the thresholds in court, arguing that the thresholds themselves were a “project” subject to CEQA review.  The trial court agreed.  The court of appeal reversed the trial court decision, finding the thresholds were not a “project” because the CEQA regulations already provided for public review of the thresholds.  Additionally, the thresholds would not have a reasonably foreseeable impact on the environment.  (California Building Industry Association v. Bay Area Air Quality Management District (--- Cal.Rptr.3d ----, Cal.App. 1 Dist., August 13, 2013).

Facts

Under CEQA, public agencies are encouraged to create “thresholds of significance” used to measure whether projects are likely to have a significant impact on the environment.  In 2009, the Bay Area Air Quality Management District (“District”) proposed new thresholds of significance (“thresholds”) for limiting air pollutants to help meet tighter state and federal air quality standards.  The California Building Industry Association (“CBIA”), a trade group representing members of building trades and professions, commented on the proposed thresholds stating they would hinder development of urban infill projects and push development to suburban areas, with a net effect of increasing rather than reducing air pollution.  After, the District adopted the new thresholds, CBIA petitioned for writ of mandate to reverse adoption of the thresholds.  The trial court granted the petition, finding that the District’s promulgation of the thresholds was a project that was subject to CEQA review, which the District did not perform.

Decision

The First District Court of Appeal reversed the trial court decision, finding that the District’s promulgation of the thresholds was not a project requiring CEQA review.  The court noted that under CEQA, a “project” includes activities “which may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change” and that in some cases the adoption of a public agency rule or regulation may be a CEQA project.  However, the appellate court concluded that the District’s new thresholds were not a project subject to CEQA review.  The court observed that the District promulgated the thresholds under section 15064.7 of the CEQA Guidelines.  Section 15064.7 encourages public agencies to develop thresholds of significance to aid in determining the significance of environmental effects of projects.  The section requires that thresholds of significance be “formally adopted through a public review process and supported by substantial evidence.”  The court noted that section 15064.7 does not require additional CEQA review, such as an EIR, because such review would be repetitive of the public review process and the substantial evidence standard already required during development of thresholds.  The District had performed a thorough public review process, conducting over a year of hearings and workshops and examining staff reports, scientific studies, public comments, and other materials totaling over 7,000 pages.  The court held that to require an EIR on top of the public review process “would result in a duplication of effort, at taxpayer expense and to little if any purpose.”

Additionally, the appellate court rejected CBIA’s argument that the thresholds were a “project” under CEQA because they would cause a physical change in the environment by pushing housing development to suburban and rural areas.  The court found that the environmental effect alleged by CBIA was speculative and not reasonably foreseeable.  The court stated that a long chain of events would have to occur in order for development to be pushed to the suburbs, and while “such a scenario is possible, it is too attenuated” to require CEQA review.  Moreover, no commenters presented any evidence to show such an outcome would occur.

The court disagreed with CBIA’s contention that the case Muzzy Ranch Co. v. Solano County Airport Land Use Com. (2007) 41 Cal.4th 372 supported a conclusion that the thresholds were a CEQA project.  In Muzzy Ranch, a land use commission restricted residential development near an air force base, an action that the court ruled was a project under CEQA because it pushed housing development to other areas.  The appellate court concluded that in Muzzy Ranch, it was foreseeable that the action would displace residential development, because the action specifically limited housing developments.  In contrast, the District’s thresholds did not limit housing density and the likelihood of “displaced development was speculative at best.”

The appellate court also distinguished the case California Unions for Reliable Energy v. Mojave Desert Air Quality Management Dist. (2009) 178 Cal.App.4th 1225.  In Mojave Desert, a local air district enacted a rule allowing stationary pollution sources to offset particulate emissions by paving dirt roads.  However, in Mojave Desert, the local air district acknowledged that the rule was a CEQA project.  Furthermore, the rule had a direct effect on the environment by allowing more particulate matter to be emitted both by allowing for offsets and by creating more paved roads.  In contrast, the District’s thresholds would not “authorize the same sort of specific and immediate change.”

CBIA also argued that the thresholds’ significance levels for toxic air contaminants (“TAC”) and particulate matter (“PM”) caused by a new pollutant source and for new receptors violated CEQA because the analysis required would consider the effect of existing pollution on the project rather than the effect of the project on the environment, citing Baird v. County of Contra Costa (1995) 32 Cal.App.4th 1464; City of Long Beach v. Los Angeles Unified School Dist. (2009) 176 Cal.App.4th 889; South Orange County Wastewater Authority v. City of Dana Point (2011) 196 Cal.App.4th 1604; and Ballona Wetlands Land Trust v. City of Los Angeles (2011) 201 Cal.App.4th 455.  The court pointed out that Public Resources Code section 21083 “defines a ‘significant effect on the environment’ to include situations in which the environmental effects of a project will cause substantial adverse effects on human beings either directly or indirectly.  A new project located in an area that will expose its occupants to preexisting dangerous pollutants can be said to have substantial adverse effect on human beings.”

However, the appellate court found that the present factual scenario did not require it to decide if the Baird line of cases were correct in holding that CEQA does not require an analysis of the existing environment on the project.  At the same time, the court signaled that it might be willing to consider the correctness of the Baird line of cases at a later time and under different circumstances:  “The continuing vitality of Baird et al. is better reserved for a case in which the receptor thresholds have actually been applied to a project.”

Finally, the court rebuffed CBIA’s argument that the thresholds for cumulative and single source emissions of TACs were not supported by substantial evidence.  The court stated that CBIA had the burden of establishing that no substantial evidence supported the thresholds, but that CBIA failed to carry that burden.  Instead, the record contained evidentiary support for the thresholds in the form of agency reports, public hearing explanations, and supporting EPA guidance.