California Supreme Court Clarifies Standard of Review for EIRs and Requirements for Air Quality Impact Analyses

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

In a published opinion issued December 24, 2018, Sierra Club v. County of Fresno, Case No. S219783, the California Supreme Court determined that an environmental impact report (EIR) prepared and certified by Fresno County (County) for a development project failed to include certain information and analysis required by CEQA. The California Supreme Court held that the EIR did not adequately discuss potential health consequences that could be caused by a significant increase in pollutants resulting from the development project. In summary, the California Supreme Court determined:

  • A discussion of potential environmental impacts in an EIR must include sufficient detail to enable those who did not participate in its preparation to understand and to meaningfully consider the issues raised by the proposed project.
  • The issue of whether a discussion in an EIR is sufficient is a mixed question of law and fact subject to de novo review, though underlying factual determinations in an EIR are subject to a more deferential standard.
  • An EIR must either make a reasonable effort to correlate a project’s significant air quality impacts to potential health consequences, or explain why providing such an analysis is not feasible.
  • A lead agency does not impermissibly defer mitigation if it leaves open the possibility of employing better mitigation efforts consistent with improvements in technology.
  • A lead agency may adopt mitigation measures that do not reduce a project’s significant and unavoidable impacts to a less-than-significant level, so long as the agency can demonstrate in good faith that the mitigation measures will be at least partially effective in mitigating impacts.

Background for Appeal

In 2011, the County approved a proposed master-planned community project consisting of residential, commercial, and open space, as well as a specific plan and community plan update (collectively, the Project). Specifically, the Project contemplates the construction of more than 2,500 residential units, 250,000 square feet of commercial space on 482 acres, and 460 acres of open space. Construction would occur in five phases over 10 years. As part of the Project approval, the County certified the EIR and adopted a Mitigation Monitoring Program, which noted that the County would enforce compliance with mitigation measures through subsequent conditions of approval for future discretionary actions.

Several organizations (collectively, Petitioners) challenged the County’s approval of the Project and certification of the EIR, alleging that the EIR was deficient because: the EIR failed to include an analysis connecting the Project’s emission of air pollutants to the Project’s potential impact on human health; the mitigation measures for the Project’s long-term air quality impacts were vague, unenforceable, and lacked specific performance criteria; and the EIR failed to support its statement that the air quality mitigation measures would substantially reduce air quality impacts. The trial court denied the petition for writ of mandamus, and Petitioners appealed. The Court of Appeal reversed the trial court’s denial of the petition, agreeing with Petitioners’ contentions.

In Reviewing the Sufficiency of an EIR’s Discussion of Potential Impacts, Courts Must Be Satisfied That the EIR Provides Sufficient Detail to Allow for Meaningful Public Participation

The California Supreme Court first analyzed the proper standard of review that courts must apply when adjudicating a challenge to the adequacy of an EIR’s discussion of adverse environmental impacts and mitigation measures. The Court determined that an EIR must include sufficient detail “to enable those who did not participate in its preparation to understand and to consider meaningfully the issues raised by the proposed project.”

To reach its decision, the Court began with the general standard of review in a CEQA case: abuse of discretion. A lead agency may abuse its discretion by failing to follow the procedures required by CEQA or by reaching factual conclusions unsupported by substantial evidence. The Court recognized that judicial review of these types of errors differs; the question of whether an agency followed proper CEQA procedures is subject to de novo review, while courts give great deference to an agency’s factual determinations under the substantial evidence standard.

The Court clarified, however, that judicial review of claims concerning the adequacy of an EIR’s discussion of environmental impacts does not neatly fit within the “procedural/factual paradigm.” Put differently, the question of whether an EIR sufficiently describes an environmental impact is distinct from the question of whether the agency’s significance determinations are supported by substantial evidence. The Court explicitly provided that the issue of whether a description of an environmental impact is insufficient because it lacks analysis is not a substantial evidence question.

As such, the Court reasoned that a reviewing court’s inquiry into the sufficiency of the EIR’s discussion should be whether the EIR includes sufficient detail to further CEQA’s goal of facilitating informed agency decision-making and public participation. The Court held as the sufficiency of a discussion in an EIR is a mixed question of law and fact, a reviewing court should generally complete such an inquiry applying de novo review, meaning the court would not give deference to the agency’s determination. However, the Court also provided that underlying factual determinations in an EIR, such as an agency’s decisions on which methodologies to use in analyzing an environmental effect, should be subject to a “more deferential standard.”

The EIR Failed to Connect Significant Project Emissions to Potential Human Health Impacts

After establishing the applicable standard of review, the Court then moved to the issue of whether the EIR properly analyzed the impact of the Project’s significant emissions of air pollutants on human health. The EIR analyzed the Project’s potential impact on air quality, which estimated the Project’s annual emissions of criteria air pollutants and described the generalized health effects from exposure to those pollutants. The EIR concluded that the Project would have a significant and unavoidable adverse effect on air quality. However, the Court held that the EIR did not adequately correlate the Project’s significant air quality emissions to potential public health consequences.

For instance, the Court stated that while the EIR included a general discussion of the health effects of the air pollutants emitted by the Project, the EIR did not indicate the concentrations at which the pollutants would trigger the symptoms discussed. The EIR also did not adequately translate the bare numbers of the estimated emissions into adverse health impacts that would be caused by the Project.

The Court discussed amici curiae briefs, including briefs from expert air quality agencies, the South Coast Air Quality Management District and San Joaquin Valley Air Pollution Control District, that argued the current science does not allow a close correlation between criteria pollutant emissions from a single development project and health impacts given the state of environmental modeling. The Court acknowledged “[t]he parties may be correct” but expressed no view on the subject except to note that scientific certainty is not the standard. The Court concluded, however, that information in amici curiae briefs could not cure the lack of data or analysis in the administrative record. The Court explained that if it is infeasible to connect a project’s significant air quality emissions with potential human health impacts, the EIR “must adequately explain what the agency does know and why, given existing scientific constraints, it cannot translate potential health impacts further.”

The EIR’s Statement That Mitigation Would Substantially Reduce Air Effects Was Unsupported

Next, the Court reviewed whether the EIR’s discussion of the proposed mitigation measures accurately reflected the measures’ impact on reducing the identified adverse effects of the Project. The EIR stated summarily that “[i]mplementation of the following mitigation measures will substantially reduce air quality impacts related to human activity within the entire Project area but not to a level that is less than significant.” The Court concluded that this statement was unsupported because the EIR provided no further explanation or factual support for that proposition. The EIR’s conclusion that the mitigation measures would have a “substantial” impact on the Project’s air quality effects must be supported by sufficient facts and analysis.

The County Did Not Improperly Defer Mitigation

The Court then addressed whether the EIR had impermissibly deferred selection of mitigation measures by including a clause that allowed the County to substitute different mitigation measures in the future. Generally, an EIR cannot defer the formulation of mitigation measures until after project approval. However, here, the Court held that the EIR’s substitution clause did not impermissibly defer selection of mitigation measures. The Court reasoned that the substitution clause should be encouraged because it allows for additional and better mitigation measures when they become available, thereby furthering CEQA’s goal of environmental protection. Thus, the County may retain the discretion to modify or substitute the adopted mitigation with equally or more effective measures in the future, so long as the changes do not increase the Project’s significant impacts. As such, the substitution clause was not an impermissible deferral of mitigation.

It should be noted that on January 3, 2019, the California Natural Resources Agency carried out a number of changes to the state guidelines for implementing CEQA, including changes related to deferred mitigation. The changes to the guidelines on deferred mitigation clarify that identification of mitigation measures may never be deferred, except under certain circumstances. Deferral may be appropriate as part of a future regulatory process if compliance is mandatory and substantial evidence confirms that the regulatory process would achieve the requisite performance standards. The new guidelines further provide that specific details of a mitigation plan may be deferred if fully formulating the mitigation plan at the time of project approval is impractical or infeasible, subject to certain conditions. Finally, the guidelines provide that deferral may also be appropriate if another regulatory agency is required to issue a permit for the project and that agency is expected to impose mitigation requirements independent of the CEQA process.

The EIR Properly Included Mitigation Measures to Reduce Significant Environmental Impacts, Even if the Measures Will Not Render the Impacts Insignificant

The Court next analyzed whether the County had violated CEQA by including mitigation measures in the EIR that would reduce the impacts of the Project, but would not reduce those impacts below the level of significance. A lead agency must adopt all feasible mitigation measures to reduce potential impacts to a level below the threshold of significance. However, the Court explained that an EIR can also include mitigation measures that only partially reduce significant impacts without violating CEQA. The Court recognized that, in enacting CEQA, the California legislature did not seek to prevent all development. Instead, CEQA allows a project to proceed even if there are significant environmental effects that cannot be fully mitigated. If, as in this case, a project still has significant environmental effects after all feasible mitigation measures have been implemented, the project may nonetheless be approved if the agency finds that the unmitigated effects are outweighed by the project’s benefits. As such, the Court ruled that the EIR properly included mitigation measures that partially reduce potential environmental impacts, even if the measures will not reduce the impacts to below the level of significance.

The Mitigation Measures Were Enforceable

Finally, the Court addressed Petitioners’ argument that certain mitigation measures in the EIR were unenforceable. The mitigation measures included equipping HVAC units at individual projects with catalyst systems and planting shade trees. Petitioners argued that these measures were unenforceable because the selection methodology for the catalyst systems was vague and because the measures did not specify the persons responsible for selecting which trees to plant. The Court disagreed, holding that the mitigation measures were sufficiently enforceable. The EIR’s methodology for determining whether an HVAC catalyst system was economically feasible was not vague because the mitigation measure specified the cost at which a catalyst system was feasible and identified the brand of catalyst system to be used. Further, the measure for selecting shade trees was not vague because it made clear that the individuals or entities submitting plans to the County would select the trees. In addition, the Court stated that it was clear that the County would be enforcing the mitigation measures during the approval process for future development within the Project’s planned community.

Disposition

Accordingly, the Supreme Court affirmed in part and reversed in part the Court of Appeal’s judgment. The Court determined that the EIR’s analysis of air quality impacts from the Project violated CEQA by failing to adequately connect the Project’s anticipated emissions of air pollutants to their likely effects on human health. However, the Court found that the remainder of the EIR’s discussion of air quality impacts and mitigation measures satisfied CEQA’s requirements.

  • Opinion by Justice Chin, with Chief Justice Cantil-Sakauye, Justice Corrigan, Justice Liu, Justice Cuéllar, Justice Kruger, and Justice Robie concurring.
  • Trial Court: Superior Court of Fresno County, Case No. 11CECG00726, 11CECG00706, 11CECG00709, Judge Rosendo Peña, Jr.

[i] 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. Unpublished or “non-citable” opinions are opinions that are not certified for publication in Official Reports and generally may not be cited or relied on by other courts or parties in any filing with California courts in other court proceedings. (see California Rules of Court, rule 8.1115).

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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