On April 17, 2012, the Court of Appeal for the Second Appellate District issued its opinion in Neighbors for Smart Rail v. Exposition Metro Line Construction Authority holding that in certain circumstances – projected future conditions may serve as a proper baseline for California Environmental Act (CEQA) review. This ruling upholds the EIR for a light rail project in Los Angeles and rejects the controversial holdings of Sunnyvale West Neighborhood Assn. v. City of Sunnyvale City Council (2010) 190 Cal.App.4th 1351, 1383 (Sunnyvale) and Madera Oversight Coalition, Inc. v. County of Madera (2011) 199 Cal.App.4th 48, 90 (Madera) issued by the Court of Appeal for the Sixth and Fifth Appellate Districts, respectively. Consequently, a split of authority now exists between Appellate Districts.

Are "Projected Future Conditions" A Valid Baseline For Environmental Review?

Petitioner challenged the EIR for the second phase of a light rail line along the Exposition Corridor connecting downtown Los Angeles with Santa Monica. Petitioner alleged, among other things, that the approving agency, the Expo Authority, violated CEQA by using hypothetical future conditions in the year 2030 as the baseline to analyze impacts on traffic, air quality and greenhouse gas emissions (GHG). Petitioner claimed that the EIR should have used existing 2009 conditions, as required by Sunnyvale and Madera. The trial court denied the petition for writ of mandate, and Petitioner appealed.

The EIR relied on existing conditions for most environmental impacts, but the Expo Authority elected to use a future baseline condition for traffic, air quality and GHG emissions because the "existing physical environmental conditions (current population and traffic levels) do not provide a reasonable baseline for the purpose of determining whether traffic and air quality impacts of the Project are significant."

As a result, the "no-build" alternative included existing transit services and improvements already programmed and funded for construction by 2030 and evaluated projected future traffic and air quality conditions with and without the project. As explained in the EIR, "it is reasonable to assume that the population in the project area and the region will continue to increase over the life of the project. The projected population increases will, in turn, result in increased traffic congestion and increased air emissions from mobile sources in the project area and in the region."

The Court Parts Company With Sunnyvale and Madera

Relying on the Supreme Court decision in Communities for a Better Environment v. South Coast Air Quality Management Dist. (2010) 48 Cal.4th 310 (CBE), the Neighbors for Smart Rail court determined that "in a proper case, and when supported by substantial evidence, use of projected conditions may be an appropriate way to measure the environmental impacts that a project will have on traffic, air quality and greenhouse gas emissions. As a major transportation infrastructure project that will not even begin to operate until 2015 at the earliest, its impact on presently existing 2009 traffic and air quality conditions will yield no practical information to decision makers or the public." (Emphasis in original.)

Therefore, the court "reject[ed] the notion that CEQA forbids, as a matter of law, use of projected conditions as a baseline. Nothing in the statute, the CEQA Guidelines, or CBE requires that conclusion. To the extent Sunnyvale and Madera purport to eliminate a lead agency's discretion to adopt a baseline that uses projected future conditions under any circumstances, we disagree with those cases." The court emphasized that an agency must consider the "reliability of the projections, and the inevitability of the changes on which those projections are based. The objective is to provide information that is relevant and permits informed decisionmaking."

"Hypothetical" v. "Inevitable" Projected Conditions

In summary, the court held that "there is a 'profound difference' between projected conditions supported by substantial evidence and the 'hypothetical' or 'illusory' conditions" discussed in CBE, Sunnyvale and Madera. "Population growth, with its concomitant effects on traffic and air quality, is not hypothetical in Los Angeles County, it is inevitable. Neither CBE nor CEQA forbids the use of a future baseline, and an agency's use of discretion in selecting a baseline is expressly reserved in the CEQA Guidelines by the use of the word 'normally.'"

The decision may have limited effect since the facts of the case – a large infrastructure project years away from completion – are unique. Nevertheless, the Neighbors for Smart Rail decision is welcome news to the League of California Cities, the California State Association of Counties and numerous transportation authorities, which submitted briefs in support of the Expo Authority. Yet, the ruling creates a split of authority between Appellate Districts unless and until the Supreme Court steps in to address the issue. As a result, project applicants and public agencies should carefully consider the appropriate baseline for environmental review in light of the ongoing uncertainty.  

Read the full Neighbors for Smart Rail decision.