California Supreme Court Rejects CEQA Guideline Requiring Analysis of the Existing Environment’s Impacts on a Proposed Project

A unanimous California Supreme Court has held that the California Environmental Quality Act (CEQA) generally does not require an analysis of how existing environmental conditions will impact a project’s future users or residents. The Court invalidated a CEQA Guideline requiring evaluation of environmental conditions existing on a proposed project site, finding that the CEQA statute authorizes analysis of a proposed project’s impacts on the existing environment but, absent statutory exceptions, does not require analysis of the existing environment’s impact on the proposed project. California Building Industry Association v. Bay Area Air Quality Management District, N. S213478 (December 17, 2015).

The case arose following the Bay Area Air Quality Management District’s (BAAQMD’s) adoption of guidelines for CEQA analysis in the Bay Area, including a requirement that agencies evaluate potential exceedance of “significance thresholds” posed by existing toxic air contaminants, greenhouse gases and fine particulates at and around the proposed project site, and the potential air quality impacts for residents and other users of new developments. The California Building Industry Association (CBIA) and others had objected to the guideline, expressing concern that requiring consideration of the impacts of existing air pollutants on future project users or residents would jeopardize or significantly delay approval of urban infill projects.

BAAQMD rejected these concerns and adopted the new guidelines. CBIA responded by filing suit contending, among other arguments, that CEQA does not require analysis of the impacts that existing environmental conditions will have on a new project’s occupants. The Alameda County Superior Court found in favor of CBIA, but the Court of Appeal reversed.

The Supreme Court granted review on a single question:  “Under what circumstances, if any, does CEQA require an analysis of how existing conditions will impact future residents or users (receptors) of a proposed project?”  To answer this question, the Court reviewed the statutory purpose of CEQA as informing the government and the public about potential environmental impacts posed by a proposed activity, evaluating such impacts and measures to reduce or avoid environmental damage, and disclosing the rationale for approval of projects that may pose significant impacts. However, the Court found the statute “does not contain language directing agencies to analyze the environment’s effects on a project.”   

Relying on the language of the statute, the high Court found that provisions in CEQA Guidelines Section 15126.2(a) (that mirrored the contested BAAQMD guideline) mandating an evaluation of impacts on future residents or users of existing environmental conditions is an impermissible expansion of CEQA. The Court observed:

Despite the statute’s evident concern with protecting the environment and human health, its relevant provisions are best read to focus almost entirely on how projects affect the environment. *   *   *  Consider the alternative:  Stretching the definition so it encompasses the analysis of how environmental conditions could affect a project’s future residents – the kind of analysis that the Guidelines purport to require – would require us to define “environmental effects of a project” in a manner that all but elides the word “environmental.”  That approach, in turn, would allow the phrase to encompass nearly any effect a project has on a resident or user. Given the sometimes costly nature of the analysis required under CEQA when an EIR is required, such an expansion would tend to complicate a variety of residential, commercial and other projects beyond what a fair reading of the statute would support.

Accordingly, the Court invalidated portions of Guidelines Section 15126.2(a) that require an agency to consider the effects of existing environmental conditions on a project’s future users or residents. The Court noted that the CEQA statute expressly mandates analysis of the impacts posed by existing conditions on some types of projects, including projects near airports, schools in proximity to hazardous sites and freeways, and housing projects subject to wildfires, seismic, landslide and flood hazards, but held those limited statutory requirements are an exception to the general rule. The Court also held that CEQA will still require analysis of whether a project would exacerbate existing environmental conditions, such as analysis of impacts posed by a project that could cause the release of existing hazardous materials into the environment.

The Supreme Court’s decision will assist lead agencies, landowners and developers in fulfilling the objectives of CEQA without unwarranted expansion of review and unreasonable restrictions on urban development and other projects. The decision will in no way impair protection of human health, species and the environment, which will remain adequately addressed under CEQA, as well as other state and federal statutes.