Practical Recommendations for Implementing California Supreme Court's Latest CEQA Decision

HIGHLIGHTS:

• The California Supreme Court recently held that the California Environmental Quality Act (CEQA) generally does not require analysis or mitigation of the impact of existing environmental conditions on a project.
• However, the decision creates a new legal ambiguity by concluding that the environment's impacts on a project may need to be included in CEQA if a project may "exacerbate" an existing environmental condition.
• The cost of completing what is currently the standard suite of CEQA topics will be unchanged, but lead agencies and project proponents have an important new litigation defense for challenges involving the environment's impact on a project.

In California Building Industry Association (CBIA) v. Bay Area Air Quality Management District (BAAQMD), the California Supreme Court held that the California Environmental Quality Act (CEQA) generally does not require analysis or mitigation of the impact of existing environmental conditions on a project, including a project's future users or residents.¹

The decision, announced on Dec. 17, 2015, creates a new legal ambiguity, however, by concluding that the environment's impacts on a project may need to be included in CEQA if a project may "exacerbate" an existing environmental condition.² The decision also does not comprehensively address all categories of the environment's impact on a project, including those that have long been included in CEQA documents based on other appellate court decisions, and those set forth in Appendix G of the state CEQA Guidelines (Guidelines).³

The recent Supreme Court decision is a great example of why California Gov. Jerry Brown describes CEQA as a "blob" that grows and is distorted in unpredictable patterns by decades of judicial decisions. Both sides of this lawsuit proclaimed victory: CBIA claimed that the Court's decision means CEQA cannot be applied to require evaluation of the environment's impact on a project absent a specific statutory mandate, while BAAQMD's advocates asserted that the Court had actually expanded CEQA by requiring a new analysis of how a project could "exacerbate" – in any manner, whether "significant" for CEQA purposes or not – an existing environmental condition, in which case CEQA continues to apply to the environment's impact on a project.

OPR's Response Unclear

The state's Office of Planning and Research (OPR) is obligated to periodically update the CEQA Guidelines to conform to new legislation and judicial opinions. OPR has previously declined to make changes to the Guidelines that conform to the many CEQA appellate cases that have previously reached the same legal conclusion as the Supreme Court, including Baird v. County of Contra Costa (1995) 32 Cal.App.4th 1464, 1468 (pre-existing soil contamination on project site not within scope of CEQA); City of Long Beach v. Los Angeles Unified School Dist. (2009) 176 Cal.App.4th 889, 905 (impacts of current air quality conditions on project users not within scope of CEQA); South Orange County Wastewater Authority v. City of Dana Point (2011) 196 Cal.App.4th 1604, 1614 (pre-existing odors from nearby sewer plant not within scope of CEQA); and Ballona Wetlands Land Trust v. City of Los Angeles (2011) 201 Cal.App.4th 455, 473 (potential sea level rise impacts on project site not within scope of CEQA). In 2012, Holland & Knight published a practical guide for complying with this line of cases (see Holland & Knight's alert, "Recommendations for Complying with Ballona Wetlands' Definitive Rejection of ‘Converse-CEQA' Analysis," May 30, 2012).

Given OPR's past track record on this issue, it is unclear when or whether the office will make conforming changes to the Guidelines. Legislative proposals to expand CEQA and reverse the Supreme Court's holding are also planned for the 2016 session, as was the case after Ballona was issued in 2011.⁴

Recommended Approach for CEQA Documents

As a practical matter, absent a prompt amendment to the Guidelines, we are not recommending any changes in the scope of CEQA documents prepared or expected to be in the preparation and approval process in the next two years. Instead, we are recommending that CEQA documents should generally follow the approach of describing: (a) the Supreme Court's decision in the CBIA v. BAAQMD case; (b) the fact that the lead agency also has authority other than CEQA to require measures to protect public health and safety; (c) the fact that other laws and regulations enforced by other agencies also protect public health and safety, as well as the environment; (d) the conclusion that notwithstanding the CBIA decision, the CEQA document includes for informational purposes an evaluation of the environment's impacts on the project consistent with the current version of Appendix G, including mitigation recommendations to reduce or avoid these impacts where feasible; and (e) confirmation that the CEQA document assesses both the existing setting and the project's impacts, and thus addresses the extent to which a project could "exacerbate" an existing environmental condition that is otherwise excluded by the CBIA decision.

The details of precisely which, if any, of the environment's impacts on a project fall outside the scope of the CBIA v. BAAQMD decision, and the issue of whether the Court created an entirely new "exacerbation" standard in CEQA, can then be debated among the lawyers and judges involved in resolving any lawsuits filed against a project. By including the recommended text described above, the lead agency (and for private projects, the project applicant) will have erred on the side of disclosure and completeness, the public disclosure purpose of CEQA will have been served, and any subsequent appellate court decisions can inform what Gov. Brown has quipped is a law that has become "almost medieval in its scholasticism."

The Bottom Line

The cost of completing what is currently the standard suite of CEQA topics will be unchanged, but lead agencies and project proponents have an important new litigation defense for challenges involving the environment's impact on a project.

Notes

¹ ___ P.3d ____, Case No. S213478, 196 Cal.Rptr.3d 94, slip op. at 1.

² Id.

³ The Guidelines effectively serve as the statewide CEQA regulations, and as the court noted in its opinion, the Guidelines "affect how agencies comply with CEQA," "are central to the statutory scheme," and are afforded "great weight" by courts. Id., slip op. at 7, 12.

⁴ These legislative proposals to respond to Ballona Wetlands were put on hold after the Court of Appeal reached its decision in CBIA in 2013.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.