In a victory for public agencies, the California Supreme Court today issued its much-anticipated ruling in Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (August 5, 2013). The Court held that, in limited circumstances and where supported by substantial evidence, future conditions may be used as the sole baseline for conducting an environmental impacts analysis under the California Environmental Quality Act (CEQA). At issue in this case is the second phase of the construction of a light-rail line connecting downtown Los Angeles with Santa Monica.

While this decision grants lead agencies the flexibility to evaluate a project using a baseline other than existing conditions as the sole measure of a project’s impacts, it also identifies a strict standard to apply before such a determination is made. Specifically, the Court found that there must be substantial evidence in the record reflecting unusual aspects of the project or surrounding conditions in order to justify the decision to omit an existing conditions analysis. A lead agency cannot rely solely on the fact that a future conditions analysis would be informative; it must also show that an analysis based on existing conditions would detract from an environmental impact report’s (EIR) effectiveness, either because it would be uninformative or misleading. Even with these caveats, this decision is a victory for public agencies in that it expressly overturns the 2010 decision in Sunnyvale West Neighborhood Association v. City of Sunnyvale City Council to the extent that decision differs from the Supreme Court’s ruling today. In Sunnyvale, the court held that omitting an existing conditions baseline was, under all circumstances, a violation of CEQA.

In applying this newly articulated test to the Expo Line EIR, the state Supreme Court found that nothing in the record supported the Expo Authority’s choice to exclude an existing conditions baseline. However, a plurality of the Court found that this error was not prejudicial, as nothing in the EIR’s analysis using a 2030 baseline demonstrated that the same analysis performed against an existing conditions baseline would produce substantially different information. The Court ruled that the Expo Line’s EIR and project approvals should not be set aside and affirmed the judgment of the Court of Appeal.

The Expo Line Final EIR was certified by the Expo Authority in 2010. Throughout the litigation, the plaintiff argued that the EIR should have determined project impacts using baseline conditions that existed in 2009 when the EIR was circulated, not in 2030 when the project was anticipated to be fully operational. The trial court and the Court of Appeal found for the Expo Authority.