California Court of Appeal Finds EIR’s Air Quality Analysis Deficient

by Latham & Watkins LLP
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CEQA Case Report: Understanding the Judicial Landscape for Development[1]

In a partially published opinion[2] issued January 12, 2018, City of Long Beach v. City of Los Angeles, the California Court of Appeal affirmed in part and reversed in part the trial court’s judgment requiring the City of Los Angeles (Los Angeles) to set aside certifications of the environmental impact report (EIR) for a project whereby BNSF Railway Company (BNSF) would construct a 153-acre near-dock railyard four miles from the Ports of Long Beach and Los Angeles (Project).  In summary, the court determined:

  • An EIR’s analysis of air quality impacts is incomplete where it fails to provide information sufficient for the public and decision makers to understand how air quality will change with reference to time.
  • The Attorney General is exempt from CEQA’s issue exhaustion requirement.
  • A project description does not need to analyze the project’s environmental impacts.

Petitioner City of Long Beach (Petitioner) filed a petition for writ of mandate seeking to invalidate the City of Los Angeles’s (Los Angeles) EIR for the Project.  On appeal, Los Angeles challenged the trial court’s conclusions that: 1) the EIR was deficient because its project description and analysis of indirect impacts failed to discuss reasonably foreseeable indirect impacts from freeing capacity at the existing railyard near the Project site, the Hobart railyard; 2) the EIR’s analysis of noise, traffic, air quality, and greenhouse gas emissions was inadequate; and 3) the Attorney General, who intervened in the petition, was not precluded from asserting objections to the EIR that were not raised in the administrative proceedings.  The court agreed with Los Angeles that the project description, analysis of indirect impacts, and analysis of noise, traffic, and greenhouse gas emissions were adequate, but affirmed the trial court’s decision with respect to the inadequacy of the EIR’s air quality analysis and the Attorney General’s exemption from issue exhaustion rules. 

Background for Appeal

  • On February 22, 2013, the Los Angeles Harbor Department issued the final EIR, which concluded that he Project would have significant unavoidable impacts on, among other things, air quality, noise, greenhouse gas emissions, and traffic. On March 7, 2013, the Los Angeles Board of Harbor Commissioners certified the EIR, adopted a statement of overriding considerations, and approved the Project.  Following an appeal, the Los Angeles City Council affirmed the certification and approval on May 8, 2013.  In June 2013, seven petitions were filed challenging the certification and approval.  In May 2014, the Attorney General intervened in the action on behalf of Petitioner.  The trial court ruled in favor of Petitioner and Los Angeles appealed.

Attorney General Exempt from Exhaustion Requirement

As an initial matter, Los Angeles argued the trial court lacked jurisdiction to consider certain objections to the sufficiency of the EIR asserted by the Attorney General because his objections were not made by any party in the administrative proceedings.  The Court of Appeal determined that Government Code section 21177(d)’s plain language excused the Attorney General from the issue exhaustion requirement, concluding there was no ambiguity in the statutory language based on the legislative history.

Project Description Does Not Require Analysis of Impacts

Los Angeles argued that the trial court’s holding that the project description was deficient – because it failed to include a discussion of the reasonably foreseeable indirect impacts at Hobart railyard – was based on a misunderstanding of what must be included in a project description.  Los Angeles argued that a project description does not need to include an analysis of a project’s impacts but merely describes the project.  The Court of Appeal agreed with Los Angeles, and held that the project description accurately described the pertinent features of construction and operation of the proposed railyard.  Additionally, the court found nothing misleading or inaccurate about the project description.  Therefore, the Court of Appeal held that the EIR’s project description was not deficient because it accurately described the Project’s pertinent features.

EIR Analysis of Indirect Impacts Adequate

The trial court concluded that the EIR’s analysis of indirect impacts was deficient because it omitted any discussion of reasonably foreseeable impacts that will be caused by freeing capacity at Hobart railyard.  The trial court stated that by constructing the Project, BNSF will double the railyard’s capacity, and the EIR failed to analyze how BNSF will utilize Hobart railyard once that capacity was created.  However, the Court of Appeal disagreed, stating that the EIR’s responses to comments addressed potential indirect impacts at Hobart railyard, and the record reflected that there was no unmet demand for rail service at Hobart railyard that would give rise to additional traffic when intermodal traffic is diverted to the new railyard.  In addition, there were multiple analyses in the record showing that existing railyards were not operating at their maximum capacity, and any additional freed-up capacity would not give rise to indirect environmental impacts.

The Court of Appeal stated that this conclusion was supported by two reasons:  (1) the EIR stated that a facility’s capacity does not create growth in demand; and (2) substantial evidence supports the finding that BNSF has capacity at Hobart railyard to meet all projected growth until at least 2035.  Thus, there was a sufficient evidentiary basis for Los Angeles’ conclusion that a predicted amount of economic growth will occur with or without the Project, and any such growth is not an indirect impact that the EIR was required to study.  Therefore, the Court of Appeal concluded that there was substantial evidence in the record supporting Los Angeles’s conclusion regarding the Project’s potential indirect impacts, and the EIR was not required to study indirect impacts resulting from economic growth.

EIR Analysis of Noise, Traffic, and Greenhouse Gas Emissions Adequate

Regarding noise, the trial court concluded that the EIR failed to analyze under impact NOI-6 whether single-event noise would exceed maximum noise levels allowed under the City of Long Beach noise ordinance.  However, the Court of Appeal agreed with Los Angeles that impact NOI-6 was intended to evaluate only increases in ambient noise levels, not single-event noise.

Regarding traffic, the trial court concluded that the EIR failed to analyze traffic on San Gabriel Avenue and consider how the influx of trucks will impact residents.  The Court of Appeal held that the EIR reasonably concluded that trucks and residents would not often share the road because San Gabriel Avenue serves only a small residential area.

With respect to greenhouse gas emissions, the trial court concluded that the discussion of impacts was inadequate because it did not inform the public or decision makers the reasons why the Project is consistent with state and local plans and policies.  The Court of Appeal disagreed, finding that a comparison of the Project’s expected emissions to a hypothetical business-as-usual scenario was an appropriate tool for evaluating efficiency and conservation efforts, and may be used to make the Project consistent with Assembly Bill 32’s statewide goal of a 29 percent reduction from business as usual.  The EIR properly used such a comparison tool and supported its conclusion with substantial evidence, sufficiently separating its quantitative analysis from its qualitative analysis to inform the reader that the emissions will exceed baseline levels but the Project was nonetheless consistent with state and local plans.

Therefore, the Court of Appeal determined that there was no inadequacy in the EIR’s analysis of noise, traffic, or greenhouse gas emissions.

EIR Analysis of Air Quality Analysis Inadequate

Los Angeles argued that the EIR’s analysis of air quality was adequate because the composite emissions scenario methodology used was a “common industry-accepted protocol” that is supported by substantial evidence.  Los Angeles argued it was not misleading and did not result in the omission of any necessary information from the EIR.  The Court of Appeal agreed with Los Angeles that the methodology was not misleading but held, with the trial court, that the analysis of air pollution concentration impacts was incomplete.

The Court of Appeal concluded that the EIR failed to provide sufficient detail to enable participants to meaningfully understand and consider the issues raised by the Project.  The Court of Appeal agreed with the trial court that crucial information was omitted from the EIR, because the EIR did not disclose or estimate how frequently and for what length of time the level of particulate air pollution in the area surrounding the Project will exceed the standard of significance.  Los Angeles’s reliance on cases approving “worst case scenario” analyses was misplaced because a neighbor could not predict how bad air quality would be, if the railyard is constructed, at any point or for how long in the future.  Thus, the EIR failed to set forth sufficient information to foster public participation and reasoned decision making.

With respect to the cumulative air quality impacts analysis, the trial court determined that the analysis relied on deficient screening methodology and failed to discuss how a potential cumulative expansion project will affect pollutant concentrations.  Los Angeles argued that CEQA does not require the quantification of air quality impacts of the potential cumulative expansion project because quantification would be impractical and unreasonable.  The Court of Appeal recognized that while quantification would be time consuming, the fact that CEQA does not require quantified analyses does not mean all meaningful information on a subject can be omitted from an EIR’s cumulative impacts analysis.  Thus, the EIR should have made a “good faith and reasonable disclosure” of the cumulative impacts prior to approval.

Therefore, the Court of Appeal determined that the EIR was inadequate for failure to include sufficient information to allow the public to adequately comment and analyze the Project’s potential air impacts.

Disposition

Accordingly, the Court of Appeal affirmed in part and reversed in part the trial court’s judgment and required Los Angeles to set aside certification of the EIR and approvals and to suspend Project activities until Los Angeles complies with CEQA.

[1] California court decisions on California Environmental Quality Act (CEQA) related cases can impact business not only in California, but more broadly in other US jurisdictions (e.g. under the US National Environmental Policy Act (NEPA), though statutory provisions may differ). Latham’s case summary series provides a comprehensive archive of both published and unpublished cases, in order to track judicial interpretations of CEQA and new legal developments.

[2] This portions of the opinion discussed herein are certified for publication with the exception of the discussion of traffic and noise analyses.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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