In a 2-1 published opinion filed November 24, 2014, the Fourth District Court of Appeal, Division 1, affirmed and modified the trial court’s judgment granting writ petitions by plaintiff groups challenging the EIR for the San Diego Association of Governments’ (SANDAG) 2050 Regional Transportation Plan/Sustainable Communities Strategy (2050 RTP/SCS). Cleveland National Forest Foundation, et al. v. San Diego Association of Governments, et al. (2014) ___ Cal.App.4th ___, 2014 WL 6614394.  SANDAG’s RTP was the first of its kind approved under SB 375, and it sought to better align transportation, land use, and housing so as to achieve regional GHG emissions reductions targets set by the California Air Resources Board (CARB).  SANDAG’s assigned targets are to reduce per capita CO2 emissions 7% below 2005 levels by 2020, and 13% below 2005 levels by 2035.

The majority opinion, written by Presiding Justice McConnell, found the EIR’s primary flaw to be a lack of analysis of the RTP’s inconsistency with what it held to be “state climate policy” expressed in a 2005 Executive Order issued by then-Governor Schwarzenegger.  The Order called for reduction of GHG emissions to 2000 levels by 2010, to 1990 levels by 2020, and to 80% below 1990 levels by 2050.  SANDAG’s EIR only analyzed the RTP’s impacts against GHG emissions reduction targets for years 2020 and 2035 – the only actual numeric targets set for SANDAG’s region by CARB, which has not yet set 2050 targets.

The primary disagreement between the majority opinion and the dissent authored by Justice Benke pivoted on the legal effect and status of the Executive Order, and, more specifically, whether it established a “threshold of significance” against which SANDAG’s EIR was required to analyze the RTP’s GHG impacts under Guidelines § 15064.4(b).  While the majority held “the Legislature, through AB 32 [the Global Warming Solutions Act of 2006], effectively endorsed the [2005] Executive Order and its overarching goal of ongoing [GHG] emissions reductions as state climate policy[,]” the dissent would have held the 2005 Order “does not unilaterally qualify as a threshold of significance[,]” “was at its inception merely a broad policy statement of [statewide] goals issued by the Governor[,]” and “does not have an identifiable foundation in the constitutional power of the Governor or in statutory law.”  The dissent criticized the majority’s failure “to expressly declare its position on whether the Executive Order is a threshold of significance as that term is employed in CEQA analysis.”  The dissent stated that if it had done so, the majority would have to confront the “reality” that the “Order simply does not meet the requirements necessary to have attained [the] status [of a threshold of significance]” and that if the “Order is not a threshold of significance, then [the majority] must also acknowledge that SANDAG is quite correct that it was not required to employ it as a CEQA measuring stick in assessing compliance.”

While purporting to apply the “substantial evidence” standard of review to the “predominately [sic] factual” issue whether the EIR’s GHG “analysis reflects a reasonable, good faith effort to disclose and evaluate the [RTP’s] [GHG] emissions impacts[,]” the majority’s review was anything but deferential.  Based on its premises that “[t]he Executive Order underpins all of the state’s current efforts to reduce [GHG] emissions” and that its “overarching goal of ongoing emissions reductions” was “validated and ratified” by AB 32, the majority held “SANDAG’s decision to omit an analysis of the transportation plan’s consistency with the Executive Order did not reflect a reasonable, good faith effort at full disclosure and is not supported by substantial evidence because SANDAG’s decision ignored the Executive Order’s role in shaping state climate policy.”  It held this “failure to analyze the [RTP’s] consistency with state climate policy” and to “adequately inform the public and decision makers [that] the [RTP] is inconsistent with state climate policy, … deterred the decision makers from devising and considering changes to favorably alter the trajectory of the [RTP’s] post-2020 [GHG] emissions.”  According to the majority:  “By disregarding the executive Order’s overarching goal of ongoing emissions reductions, the EIR’s analysis of the transportation plan’s [GHG] emissions makes it falsely appear as if the [RTP] is furthering state climate policy when, in fact, the trajectory of the transportation plan’s post-2020 emissions directly contravenes it. …  Such an omission is particularly troubling where, as here, the project under review involves long-term, planned expenditures of billions of taxpayer dollars.  No one can reasonably suggest it would be prudent to go forward with planned expenditures of this magnitude before the public and decision makers have been provided with all reasonably available information bearing on the project’s impacts to the health, safety, and welfare of the region’s inhabitants.  We, therefore, conclude SANDAG prejudicially abused its discretion by omitting from the EIR an analysis of the transportation plan’s consistency with the state climate policy, reflected in the Executive Order, of continued greenhouse gas reductions.”

In line with this foundational holding, the majority went on to hold that SANDAG’s RTP EIR further violated CEQA by failing to analyze a reasonable range of alternatives to the project; failing to adequately analyze, correlate health effects to, and mitigate air quality impacts; and understating the plan’s impacts on agricultural lands by utilizing studies and methodologies with significant “known data gaps.”  It also found plaintiffs failed to exhaust administrative remedies on two minor issues.

As indicated above, the dissent saw the issues quite differently, and would have upheld the EIR’s analysis as adequate and supported by substantial evidence.  Justice Benke accused the majority of effectively improperly “applying an independent standard of review” and stated that the majority contravened controlling case law by “elevat[ing] the Executive Order to the status of a threshold of significances without ever having to expressly declare they are doing so,” calling this action “judicial fiat, pure and simple.”  According to the dissent, the Legislature did not endorse all aspects of the Executive Order as state policy; rather, “although the Legislature has exercised its own independent prerogative by tasking CARB with adopting required GHG reduction targets for 2020 and 2035, it has not done so for 2050 [and is] … currently considering a comprehensive and complex plan for 2050 that tasks the CARB to establish regional targets.  It is possible the Legislature may alter the Executive Order’s 2050 goals or reject them altogether.  Using the majority’s own logic, the Legislature has not ratified the executive Order’s qualitative or quantitative goals for 2050.”

The dissent pointed out that the nature of the additional CEQA “consistency analysis” being required by the majority was unclear, since it would appear to require SANDAG – a regionalagency – to derive from the Executive Order’s statement of statewide goals a regional GHG emissions target reflecting its “fair share” of GHG emissions reductions.  Moreover, it would require SANDAG to undertake this “complex and science-based process” despite lack of authority or expertise to deal with GHG emissions from industry sectors outside its planning discretion (e.g., heavy industry), and at a time when CARB – the state agency expressly tasked by the Legislature with setting such regional targets for MPOs – has not yet acted to do so for year 2050.

As stated by the dissent:  “I fear the majority’s demand that SANDAG ‘do more’ now based on mere policy goals and/or theoretical targets, and without providing any guidance as to what more should be done, will in effect require SANDAG to set unilaterally 2050 regional GHG reduction targets in order to try to satisfy, somehow, the majority’s ‘consistency analysis.’  In doing so, it may take action that ultimately conflicts with requirements set by CARB.”  The dissent also accused the majority of doing “profound harm” to CEQA with its unwarranted and impermissibly expansive construction of Guidelines § 15064.4:  “This insinuation [by the majority] of judicial power into the environmental planning process and usurping of legislative prerogative is breathtaking.  Now we, the courts, without institutional planning expertise or knowledge, get to tell a lead agency what it must use as a threshold of significance ….  It does not take much energy to foresee the permutations possible as each MPO [in the state] receives judicial instruction [from six different appellate district courts of appeal].  Chaos in environmental planning comes to mind.”

Having recently granted review in a case involving issues of the proper CEQA baseline setting and assessment methodology to be applied to GHG emissions from the Newhall Ranch project’s approvals (see Supreme Court’s CEQA Docket Expands With Grant of Review in Newell Ranch Case,” by Arthur F. Coon, posted 7/10/14), the California Supreme Court has shown an interest in clarifying this area of CEQA – among many others.  The Cleveland National Forest Foundation decision presents issues in the same vein – i.e., the lead agency’s discretion to adopt thresholds of significance, the proper methodology and “baseline” for GHG analysis generally, and the interplay between CEQA and SB 375-mandated RTPs – which are of statewide significance from both a legal and practical perspective.  Accordingly, and particularly in light of the many compelling points made by Justice Benke’s powerful dissent, this CEQA case should be considered a strong candidate for yet another grant of review by the high court.