On August 5, 2013, the California Supreme Court issued a split decision in Neighbors for Smart Rail v. Exposition Metro Line Construction Authority, et al. The court held that a lead agency may choose to avoid using an existing conditions baseline only where (1) the departure is justified by “unusual aspects of the project or surrounding conditions”; and (2) where “an analysis based on existing conditions would be uninformative or because it would be misleading to decision makers and the public.” Neighbors for Smart Rail, at pg. 11 (lead opinion of Werdergar, J.). Thus, an agency may use a future conditions baseline for analyzing a project’s impacts in lieu of the conditions existing at the time a CEQA analysis is prepared, but only if it makes the specific determinations above and supports them with substantial evidence in the record.
In Neighbors for Smart Rail, project opponents challenged the EIR for Phase 2 of the Expo Line light rail project that would connect Culver City and Santa Monica, alleging the EIR improperly used projected future conditions in 2030 as a baseline for analyzing traffic and air quality impacts. The California Court of Appeal for the Second District held that a public agency’s use of a projected future baseline as the only baseline for evaluating a project’s environmental impacts was permissible, if the agency’s predictions regarding such future conditions were supported by substantial evidence. In so holding, the Second District rejected the recent holdings in the Fifth and Sixth Districts in Madera Oversight Coalition, Inc. v. County of Madera, 199 Cal.App.4th 48, 90 (2011) and Sunnyvale West Neighborhood Assn. v. City of Sunnyvale City Council, 190 Cal.App.4th 1351, 1382-1383 (2010) to the extent they precluded a lead agency’s discretion to employ a baseline that used only projected future conditions.
The California Supreme Court affirmed the Second District, in part, adopting a standard less restrictive than Sunnyvale and Madera but more restrictive than the appellate decision.
The question posed to the court was whether the baseline used may consist solely of projected future conditions, even at a date in the distant future, or whether the EIR must include an analysis of the project’s significant impacts on conditions existing at the time the environmental analysis is performed. A majority of the Supreme Court’s justices (Werdegar, Kennard, Corrigan, and Liu) held that “while an agency preparing an EIR has discretion to omit an analysis of the project’s significant impacts on existing environmental conditions and substitute a baseline consisting of environmental conditions projected to exist in the future, the agency must justify its decision by showing an existing conditions analysis would be misleading or without informational value.” Neighbors for Smart Rail, at pg. 19.
This decision disapproved the Court of Appeals’ holdings in Sunnyvale and Madera insofar as they held that an agency may never employ a projected future conditions as the sole baseline for assessing a project’s impacts. However, the court did not disapprove Sunnyvale and Madera to the extent they declared that the CEQA Guidelines clearly establish that an existing conditions baseline is what is normally required for an EIR’s environmental impact analysis. See id. at pgs. 2, 5.
The court explained that the key is the “EIR’s role as an informative document,” in that “[t]o the extent a departure from the “norm” of an existing conditions baseline (Guidelines, § 15125(a)) promotes public participation and more informed decision making by providing a more accurate picture of a proposed project’s likely impacts, CEQA permits the departure.” Id. at pgs. 13-14. Further, based on the EIR’s purpose as an informative document, the court reasoned that it could “find nothing precluding an agency from employing, under appropriate factual circumstances, a baseline of conditions expected to obtain at the time the proposed project would go into operation.” Id. at pg. 13.
The court confirmed that the required justification (unusual circumstances and an existing baseline that is misleading or uninformative) is needed only where an “agency substitutes a future conditions analysis for one based on existing conditions, omitting the latter, and not to an agency’s decision to examine project impacts on both existing and future conditions. Id. at pg. 14 (emphasis in the original). The court further explained that “nothing in CEQA law precludes an agency, as well, from considering both types of baseline—existing and future conditions—in its primary analysis of the project’s significant adverse effects.” Neighbors for Smart Rail, at pg. 15.
Accordingly, if an agency decides to use a projected future conditions baseline in a CEQA analysis, the agency cannot just state that such an analysis would be more informative than evaluating impacts against existing conditions. Rather, a lead agency may choose to avoid using an existing conditions baseline only where, based on substantial evidence in the record, (1) the departure is justified by “unusual aspects of the project or surrounding conditions”; and (2) where “an analysis based on existing conditions would be uninformative or because it would be misleading to decision makers and the public.” Id. at pg. 11.
Decision: The Lead Agency Abused Its Discretion, But It Was Not Prejudicial
Applying its newly articulated standard, the court determined the Expo Authority’s use of a projected 2030 baseline did not meet that standard. The court held that the Expo Authority’s assertion that existing conditions did not provide a reasonable baseline was not supported by substantial evidence, and “without such evidence the Expo Authority cannot justify its decision to completely omit an analysis of the project’s impacts on existing traffic congestion and air quality.” Id. at pg. 24.
However, a plurality of the court’s justices also found the Expo Authority’s error to have no prejudicial effect. As such, the court did not require revisions to the EIR. The court found that the EIR’s extensive traffic and air quality impact analyses (using only a 2030 baseline) were sufficient, and did not preclude informed decision-making and informed public participation.
The court was clear to limit the holding to the specific circumstances of this case, and explained “[t]o comply fully with CEQA’s informational mandate, the Expo Authority should have analyzed the project’s effects on existing traffic congestion and air quality conditions. Under the specific circumstances of this case, however, its failure to do so did not deprive agency decision makers or the public of substantial information relevant to approving the project, and is therefore not a ground for setting that decision aside.” Id. at pg. 30.