In Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (2012) 205 Cal.App.4th 552 (Smart Rail), the Second Appellate District upheld the lead agency’s determination that a future 2030 baseline was proper for determining the significance of traffic and air quality impacts caused by a proposed light rail project in Los Angeles. In doing so, the Second Appellate District squarely disagreed with the Sixth Appellate District’s decision in Sunnyvale West Neighborhood Assn. v. City of Sunnyvale City Council (2010) 190 Cal.App.4th 1351 (Sunnyvale) and the Fifth Appellate District’s decision in Madera Oversight Coalition, Inc. v. County of Madera (2011) 199 Cal.App.4th 48 (Madera), both of which held that projected future conditions provide an improper baseline for determining traffic impacts. This clear split of authority on an issue with important implications set the stage for Supreme Court intervention. (See our blog entry (Smart Rail) entitled “Court Disagrees with Sunnyvale and Madera Decisions and Holds that use of Projected Future Conditions as a Baseline for Analyzing Environmental Impacts is Proper where Supported by Substantial Evidence.”)

The Supreme Court granted review of Smart Rail on August 8, 2012. The hearing was held on May 7, 2013. At the hearing, John Bowman from Elkins, Kalt, Weintraub, Rueben, and Gartside represented the Petitioner, Neighbors for Smart Rail, and Rob Thornton from Nossaman represented the Respondent, Exposition Metro Line Construction Authority.

The case turns on whether lead agencies have the discretion to use an environmental baseline (a description of the existing conditions against which a project’s potential impacts are compared) that incorporates assumptions about future conditions. Under the California Environmental Quality Act (CEQA), the baseline “normally” consists of a description of the existing conditions at the time a Notice of Preparation (NOP) of an Environmental Impact Report (EIR) is posted. (CEQA Guidelines Section 15125, subd. (a).) The use of the word “normally” in the Guidelines implies that agencies have some discretion to deviate from the norm and use an alternative baseline. In Smart Rail the EIR used an existing conditions baseline for short term impacts caused by construction activities, but the agency then elected to utilize a 2030 baseline to analyze the project’s operational impacts.

At the hearing, Petitioner relied on Sunnyvale and Communities for a Better Environment v. South Coast Air Quality Management Dist. (2010) 48 Cal.4th 310 (CBE) to argue that the word “normally” in CEQA Guidelines Section 15125 only gives agencies the discretion to select a baseline that describes the environmental conditions that exist between the posting of the NOP and the date of project approval. Justice Kennard questioned whether Sunnyvale ignored the discretion that should be allowed under the word “normally.” Petitioners struggled to provide a narrow definition of “normally” but nonetheless argued that in the context of an EIR the word “normally” should be limited to a description of conditions as they exist prior to project approval. Petitioners also argued that, even if a future baseline was permissible, the record in this case did not include substantial evidence to support the agency’s use of a 2030 baseline because the project will be operational in 2015. Several justices seemed to agree with the Petitioners on that point.

The Respondents argued that agencies should be allowed to select a future baseline when doing so furthers informed decision-making. Respondents conceded the EIR did not compare operational impacts to existing conditions and that the project would be operation in 2015. Respondents defended the use of the 2030 baseline by arguing traffic and air quality conditions are anticipated to be worse in 2030 than in 2015, so the 2030 baseline resulted in a more conservative and more informative analysis of the project’s impacts. Several justices took issue with Respondent’s position, but Justice Lui in particular challenged the agency’s logic. Justice Lui questioned why agencies should have the discretion to select a future baseline when the public might be more concerned about short term impacts. Justice Lui stated that there was no question that the 2030 analysis was valuable information, but the agency should also disclose the project’s short-term operational impacts.

Respondent argued that an existing conditions analysis served no informational purposes whatsoever and that experts from all major transportation agencies agreed that the 2030 baseline for operational impacts was the proper approach. Justice Baxter responded approvingly to this argument and quipped that the preparation of EIRs has become nearly as big of an undertaking as the underlying projects, implying that the agency had done enough in this case.

In the end, Chief Justice Cantil-Sakauye along with Justices Kennard, Werdegar, and Lui, seemed very concerned about the EIR’s failure to analyze operational impacts that might occur between 2015 and 2030. Justices Corrigan and Ming did not comment during the hearing.

The Court will issue a written opinion within 90 days of oral argument.