Supreme Court Sets Standards for Using Future Environmental Baselines in Environmental Impact Reports

On August 5, the California Supreme Court issued a long-awaited decision on the rules governing a local agency’s selection of the baseline it will use as the foundation for evaluating project impacts in an environmental impact prepared pursuant to the California Environmental Quality Act (CEQA). In Neighbors for Smart Rail v. Exposition Metro Line Construction Authority, the court evaluated an EIR for a mass transit rail line extension. The rail authority used a future baseline in the EIR to evaluate the environmental impacts of the extended line, based on a determination that the rail line would not be fully functional until the year 2030. It reasoned that measuring the potential impacts of the project against a future baseline offered a more realistic analysis than trying to measure future impacts against the existing physical conditions at the time the EIR was prepared. The Court’s decision is something of a mixed bag for project proponents and public agencies, allowing the use of future baselines, but requiring additional justification when an EIR bases its impact analysis entirely on a future conditions baseline. The decision, including dissenting and concurring opinions, includes the following holdings:

First, the Court affirmed the standards that apply when an EIR uses both an existing conditions baseline and a future baseline to evaluate environmental impacts. In that situation, the standards set by the Court in the Court’s 2010 Communities for a Better Environment v. South Coast Air Quality Management District decision apply. The agency has discretion to determine the proper baseline, and that decision is reviewed by a court only to determine whether it is supported by substantial evidence.

Second, the Court developed a new rule that applies when a lead agency chooses to use only a future baseline to evaluate impacts, as occurred in this case. While the lead agency has discretion to use only a future baseline, the lead agency must support that decision by making a factual determination that use of an existing conditions baseline would be misleading or provide no informational value to EIR users. A court would uphold this factual determination if it is supported by substantial evidence.

Three of the seven justices filed a dissenting opinion asserting that no further justification was required for the use of a future conditions baseline, so the new rule for future baselines was adopted by a 4-3 majority of the court. The same 4-3 majority found that the rail authority in this case had not provided a sufficient justification for the future baseline, but three of those justices found that the EIR defect was not prejudicial because the environmental impact conclusions would have remained the same even if a proper baseline determination had been made. With three justices finding that the EIR was adequate, and three finding that the inadequacy in the baseline analysis was not prejudicial, the EIR was upheld.

The Court also unanimously upheld the EIR mitigation measures for spillover parking impacts against a claim that they were not sufficiently enforceable. The EIR acknowledged that spillover parking impacts could occur as transit patrons seek to park in nearby neighborhoods with limited parking. The mitigation measures required the rail authority to monitor spillover parking. If it finds a parking shortage, then the rail agency is to assist local jurisdictions in establishing permit parking programs, with the rail authority paying the signage and administrative costs. The Court rejected a challenge that these measures were not sufficiently enforceable because they depend on the cooperation of other agencies, noting that CEQA allows a lead agency to make a finding that other agencies “can and should” implement the measures recommended in an EIR. The court held that rail agency findings were supported by substantial evidence, and the speculation that other agencies might not cooperate in implementing such permit programs was not sufficient to show any CEQA error.

While a majority of the Court upheld the rail authority’s use of a future baseline in this case, in so doing, it has established a new standard that is likely to be challenging for agencies to meet. It will be left to future cases to develop a body of law that may assist agencies and project applicants in determining whether they can justify using only a future baseline to analyze a project’s impacts.

Mike Zischke, Andrew Sabey, and Rachel Jones represented the League of California Cities and the California State Association of Counties in filing a friend of the court brief in this case.