On August 5, the California Supreme Court issued an important new California Environmental Quality Act (CEQA) decision in Neighbors for Smart Rail v. Exposition Metro Line Construction Authority, et al. (Neighbors). In Neighbors, the Supreme Court established that, under limited circumstances, a lead agency can compare a project’s potential environmental impact against a baseline consisting of projected physical environmental conditions at some future point.
Over the past three years, conflicting opinions by different districts of the Courts of Appeal created uncertainty over whether such an approach was permissible under CEQA. Overturning (in part) two of those decisions, the Supreme Court held that under CEQA a public agency has discretion to study a project’s environmental impacts compared to future conditions instead of to physical conditions that exist when the analysis is prepared — even if the future conditions analyzed are many years away. However, the Court severely constrained that discretion, holding that an agency may only avoid using the existing conditions as a baseline where (1) that is justified by “unusual aspects of the project or surrounding conditions” and (2) “an analysis based on existing conditions would be uninformative or because it would be misleading to decision makers and the public.” Absent an agency supporting these specific determinations with substantial evidence in the record, analyzing a project’s impacts against existing conditions at the time a CEQA analysis is prepared remains the “norm” in California.
In Neighbors, project opponents challenged the EIR for Phase 2 of the Expo Line light rail project, alleging that the EIR improperly used projected future conditions in 2030 as a baseline for analyzing traffic, air quality and greenhouse gas impacts. Applying the newly established test to the facts of the case, the Supreme Court found no substantial evidence supporting Metro’s implicit decision that an existing conditions analysis would have been misleading or without informational value.
However, and somewhat surprisingly, a plurality of the justices also found that the agency’s error was not prejudicial because the EIR’s extensive traffic and air quality impact analyses (using the year 2030 baseline) did not preclude informed decisionmaking and informed public participation. Therefore, the Court did not require corrections to the EIR and did not require this major transportation project, already under construction, to be stopped. Justice Baxter, joined by Chief Justice Cantil-Sakauye and Justice Chin, filed a partial concurrence and dissent, in significant part, on the grounds that substantial evidence in the record supported Metro’s use of the 2030 baseline.
As a result of the Court’s vague standard, it is expected that most lead agencies and project applicants will opt to reduce the risk of litigation by preparing an existing conditions assessment for all projects. If so, it may be that in overturning Sunnyvale and Madera the Supreme Court nonetheless codified the heart of those holdings in practice.
To read more about this important new CEQA decision, please click here.
If you would like additional information on this topic, please feel free to contact Jim Arnone at 213.891.8204, DJ Moore at 213.891.7758, Winston Stromberg at 213.891.8983 or Michele Leonelli at 213.891.8903.
 Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (August 5, 2013, S202828) __ Cal.4th __ (Neighbors) (lead opn. of Werdergar, J.).
 Sunnyvale West Neighborhood Association v. City of Sunnyvale City Council (2010) 190 Cal.App.4th 1351; Madera Oversight Coalition, Inc. v. County of Madera (2011) 199 Cal.App.4th 48; Pfeiffer v. City of Sunnyvale City Council (2011) 200 Cal.App.4th 1552; Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (2012), formerly published at 204 Cal.App.4th 1480 .