EIR’s Traffic Analysis Violated CEQA Because It Used Hypothetical Baseline of Future Conditions Rather than Existing Conditions

The Sixth District Court of Appeal in Sunnyvale West Neighborhood Association v. City of Sunnyvale City Council (2010) 190 Cal.App.4th 1351 held that the City of Sunnyvale violated CEQA because its EIR for a proposed roadway improvement project failed to analyze the project’s impacts against existing, present day conditions. Instead, the EIR used as its baseline for analyzing project impacts projected traffic conditions in the year 2020, the year the project is expected to go on line. According to the court of appeal, the failure to analyze the project’s impacts against existing conditions constituted a failure to proceed in a manner required by law. Although CEQA states that the existing setting at the time the Notice of Preparation is published “normally” is the baseline for assessing project impacts (CEQA Guidelines, § 15125, subd. (a)), where conditions are expected to change during environmental review, project effects might reasonably be compared to predicted conditions at the date of project approval. But the court drew the line there. “We do not construe the word ‘normally’ … to mean that a lead agency has carte blanche to select conditions on some future, post-approval date as the ‘baseline’ so long as it acts reasonably as shown by substantial evidence.” The Court noted that “The Supreme Court never sanctioned the use of predicted conditions on a date subsequent to EIR certification or project approval as a ‘baseline’ for assessing a project’s environmental consequence.” The Court of Appeal, therefore, found that doing so was a failure to proceed in the manner required by law.

Background. In 2007, the City of Sunnyvale certified an EIR for a large roadway improvement project. The EIR used projected traffic conditions in the year 2020 as its baseline to evaluate the project’s traffic impacts, because that was the year the project was anticipated to be available for use. The EIR did not evaluate traffic impacts against existing conditions, although several of the thresholds of significance identified in the EIR asked whether the project would result in substantial changes to the “existing” environment. Following the city council’s approval of the project, petitioners filed a petition for writ of mandate, alleging in relevant part that the EIR was legally deficient because it used a 2020 baseline for assessing the project’s impacts. The superior court agreed and granted the petition. The city appealed.

The Holding. The court reviewed CEQA’s mandates regarding an EIR’s baseline analysis. As the court explained, under CEQA Guidelines section 15125, “[a]n EIR must include a description of the physical environmental conditions in the vicinity of the projects, as they exist at the time the notice of preparation is published, or if no notice of preparation is published, at the time environmental analysis is commenced, both from a local and regional perspective. This environmental setting will normally constitute the baseline physical conditions by which a lead agency determines whether an impact is significant.’” Further, CEQA Guidelines section 15126.2 provides that “[a]n EIR shall identify and focus on the significant environmental effects of the proposed project. In assessing the impact of a proposed project on the environment, the lead agency should normally limit its examination to changes in the existing physical conditions in the affected area as they exist at the time the notice of preparation is published, or if no notice of preparation is published, at the time environmental analysis is commenced.’”

As explained by the court, case law makes clear an EIR must focus on impacts to the existing environment, “not hypothetical situations.” “It is only against this baseline that any significant environmental effects can be determined. For instance, in Communities for a Better Environment v. South Coast Air Quality Management District (2010) 48 Cal.4th 310, the Supreme Court held an air district abused its discretion in evaluating a refinery project by using a baseline of the maximum operating capacity of the equipment under existing permits, rather than actual operational emissions. “By comparing the proposed project to what could happen, rather than to what was actually happening, the District set the baseline not according to ‘established levels of a particular use,’ but by ‘merely hypothetical conditions allowable’ under the permits.” In that case, the Supreme Court acknowledged that some flexibility existed for the determination of baseline conditions. For example, where environmental conditions are anticipated to change quickly during the period of environmental review for reasons other than the proposed project, it may be reasonable to compare predicted conditions at the expected date of approval, rather than to conditions at the time analysis has begun. Despite the acknowledgement of this limited flexibility, however, according to the court of appeal, the Supreme Court never sanctioned the use of predicted conditions on a date subsequent to EIR certification or project approval for use as the baseline. Further, none of the cases cited by the city authorized use of a baseline beyond the date of project approval.

The court rejected arguments that the methodology used here was warranted because industry practice and regional transportation guidelines called for use of a future baseline when assessing traffic impacts of a traffic project that would be built in the future. According to the court, use of a future baseline cannot be upheld because such an approach “contravenes CEQA regardless whether the agency’s choice of methodology for projecting those future conditions is supported by substantial evidence.” Although a comparison of future conditions with and without the project may be useful in assessing a project’s impacts, this does not alleviate the requirement to include in an EIR a comparison of the existing environment with and without the project. The failure to comply with this requirement constitutes a failure to proceed in a manner required by law.

The court of appeal adopted a strict interpretation of CEQA under which the failure to analyze a project against existing environmental conditions constitutes a failure to proceed by law, regardless of whether or not there is any reason to believe the project will be operational in the near future. The court, however, acknowledged that a comparison of future conditions with and without the project could provide valuable information, particularly for projects, such as the roadway project at issue in the case, which may not be constructed and operated until well into the future. Under the court’s holding, EIRs for such projects must include a comparison of existing conditions with and without the project and, it would seem, should also include a comparison of future conditions with and without the project. One important question not addressed by the court is whether the lead agency should base its mitigation measures on impacts under the existing conditions scenario or the future conditions scenario.