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Court of Appeal Holds That Lead Agencies Cannot Use Predicted Future Conditions As Baseline in Environmental Impact Reports

January 25, 2011

by Adam D. Link

In a ruling that will force substantial changes in how many lead agencies approach their California Environmental Quality Act (CEQA) analysis of traffic impacts, a California appellate court has ruled that traffic impact analyses may not measure impacts against predicted future traffic conditions.  Instead, impacts must be measured against the baseline defined by CEQA’s implementing regulations, which for traffic purposes normally will constitute the conditions existing at the time the agency commences its preparation of an environmental impact report (EIR).  

Faced with the challenge of understanding traffic impacts that will not be fully realized until a project is completed, which in many cases can be a decade or more, lead agencies and traffic engineers often measure proposed projects’ traffic impacts against predicted future conditions expected to occur when the project is built out.  The Sixth District Court of Appeal last month rejected this approach and invalidated an EIR certified by the City of Sunnyvale that set the baseline conditions for a road improvement project far beyond the project approval date.  (Sunnyvale West Neighborhood Assn. v. City of Sunnyvale City Council (2010) 190 Cal.App.4th 1351 (Sunnyvale).)  The court ruled that while lead agencies are given some flexibility in calculating the “existing conditions” to serve as an EIR baseline, this flexibility does not extend to predicted conditions more than a decade after preparation of the EIR.  This decision clarifies an area of CEQA that was left open by recent court decisions, and describes the parameters in which lead agencies must operate when setting baseline conditions in an EIR.


CEQA generally requires preparation and certification of an EIR for any proposed project that may have a significant effect on the environment.  The CEQA Guidelines (14 Cal. Code Regs. §§ 15000 et seq.) require the lead agency to establish an accurate baseline of environmental conditions in an EIR to properly gauge the impacts of the proposed project.  Specifically, the Guidelines direct:

[A]n EIR must include a description of the physical environmental conditions in the vicinity of the project, as they exist at the time the notice of preparation is published, or if no notice of preparation is published, at the time the environmental analysis is commenced, from both 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.  (CEQA Guidelines, § 15125(a), emphasis added.)

The project approved by the Sunnyvale City Council, the Mary Avenue Extension (MAE) project, was a proposed roadway extension designed to alleviate traffic congestion in the adjacent area.  The project EIR used as its baseline for measuring traffic impacts year 2020 traffic conditions, under the rationale that the 2020 conditions represented an estimate of when the MAE project would actually be open to traffic given various funding and design considerations.  In the City Council’s opinion, the 2020 conditions also best described the reasonably foreseeable consequences of the project and followed the Santa Clara Valley Transportation Authority (SCVTA) Guidelines for transportation impact analyses.  Because noise and emission impacts of the proposed traffic project are based on the conditions surrounding vehicle travel, the use of 2020 conditions impacted the baseline analyses in these areas as well.  


Opening the Door for Flexibility in Establishing a Baseline

While the plain language of the CEQA Guidelines directs that the baseline in an EIR should identify existing conditions at the time environmental analysis is commenced, some prior case law could be viewed as supporting the City Council’s position to employ a different baseline.  For example, in Fairview Neighbors v. County of Ventura (1999) 70 Cal.App.4th 238 (Fairview Neighbors), a County Board of Supervisors approved an expansion of an existing mining operation, a decision which was then challenged on the basis that the traffic impacts analyzed under the EIR were arbitrary, speculative, and did not analyze the actual existing traffic.  The court in Fairview Neighbors found that because traffic fluctuates considerably based on a number of factors, and the project was an ongoing operation that might have been approved under a supplemental EIR or related categorical exemption, the EIR appropriately assumed the “existing” traffic impact level to be the traffic generated when the mine operates at full capacity.  (Fairview Neighbors, 70 Cal.App.4th at pp. 242-243.)  Similarly in Save Our Peninsula Committee v. Monterey County Board of Supervisors (2001) 87 Cal.App.4th 99 (Save Our Peninsula), the court in dicta provided a hypothetical describing that “ ... where the issue involves an impact on traffic levels, the EIR might necessarily take into account the normal increase in traffic over time.  Since the environmental review process can take a number of years, traffic levels at the time the project is approved may be a more accurate representation of the existing baseline against which to measure the impact of the project.”  (Save Our Peninsula, 87 Cal.App.4th at pp. 125-126.)

More recently, the California Supreme Court’s decision in Communities for a Better Environment v. South Coast Air Quality Management District (2010) 48 Cal.4th 310 (Communities for a Better Environment), may have impliedly opened the door to wider claims of flexibility in adopting a baseline.  Quoting Save Our Peninsula, the Supreme Court stated that:

[T]he date for establishing baseline cannot be a rigid one.  Environmental conditions may vary from year to year and in some cases it is necessary to consider conditions over a range of time periods ....  Where environmental conditions are expected to change quickly during the period of environmental review ... project effects might reasonably be compared to predicted conditions at the expected date of approval, rather than to conditions at the time analysis is begun ....  (Communities for a Better Environment, 48 Cal.4th at p. 328.)  

The Supreme Court went on to state:

 Neither CEQA nor the CEQA Guidelines mandates a uniform, inflexible rule for determination of the existing conditions baseline.  Rather, an agency enjoys the discretion to decide, in the first instance, exactly how the existing physical conditions without the project can most realistically be measured, subject to review, as with all CEQA factual determinations, for support by substantial evidence.  (Ibid.)  

These cases could be construed to allow approval of an EIR employing a baseline of future estimated conditions if the approving agency had substantial evidence that such a baseline would more accurately reflect project impacts.

The Use of a Post Project Approval Baseline Was an Abuse of Discretion

Focusing on the plain language of the Guidelines, the Sixth Circuit rejected such arguments.  In upholding the superior court’s decision invalidating the EIR, the Sixth District distinguished the above referenced cases.  Examining Fairview Neighbors, the court found that the project at issue in that case was characterized as merely a modification of a previously analyzed project.  In contrast, the MAE project was a new project that had not been previously analyzed under CEQA, and hence was not entitled to the same level of flexibility or leeway to deviate from what would normally be considered existing conditions.  In distinguishing Save Our Peninsula and the more recent Communities for a Better Environment, the court examined the holdings contained therein and determined that while the Supreme Court endorsed the use of a baseline consisting of the reasonably foreseeable conditions on the expected date of project approval under limited circumstances, it did not sanction the use of predicted conditions on a date subsequent to EIR certification or project approval as the baseline for assessing a project’s environmental consequences.  In fact, the Sixth District found no decision upholding the use of a future baseline beyond the date of project approval, and chose not to extend the rationale behind the limited flexibility outlined in Communities for a Better Environment to such circumstances.  The MAE project at issue in this case was approved in 2008, yet the baseline conditions in the EIR were set more than a decade after project approval, in 2020, when the City estimated that the project would actually be completed.  Approval of an EIR containing such an improperly calculated baseline was an abuse of discretion by the City Council.

Substantial Evidence Does Not Support the Deviation from Existing Conditions

The court then looked to whether, even if it had been appropriate to use the 2020 conditions as a baseline in the EIR, there was substantial evidence supporting the decision to deviate from what would normally be required, and found none.  The court found that the anticipated project completion date of 2020 was nothing more than a “guesstimate” based on testimony and the application of the SCVTA Guidelines to CEQA, a purpose for which they were not intended.  As such, this did not constitute substantial evidence that supported deviation from the Guidelines’ definition of the environmental baseline.  The court noted that the fact that it may be industry practice in the traffic engineering context to evaluate transportation improvement projects based on future scenarios does not alter the CEQA mandate that existing conditions normally serve as the baseline for analysis.


Finally, the court looked to whether the failure to proceed in a manner required by law resulted in prejudice.  The court found that the merits of the project and each alternative in the EIR could not be accurately compared if the significant effects, as measured against a proper baseline, were not fully ascertained and disclosed.  The court held that even if the use of future, post-approval estimates was reasonable and supported by substantial evidence, it does not give the lead agency the authority to use those conditions as a baseline in the EIR.  Compliance with an accurate baseline is necessary even if the results would have been no different.  The court made clear that even if a complete analysis of the project’s traffic and related impacts in the existing environment would have produced no findings of different or greater significance than the City Council found, the actions of the City Council would have been invalidated for failure to proceed in a manner required by law.  In sum, because the baseline was inaccurately portrayed in the EIR, the decision makers and the public lacked complete information and could not grasp the true impacts of the project, resulting in the requisite prejudice.

The Use of Flexible Baselines is Not Completely Prohibited

Although the court did restrict the ability of lead agencies to set a CEQA baseline beyond the project approval date, it nonetheless provided several examples of ways in which the lead agency has some discretion in setting the baseline.  For example, if evidence demonstrates that traffic congestion has temporarily decreased such that the “existing” conditions are inconsistent with the usual historical conditions (or near future anticipated conditions), then the lead agency has the flexibility to use traffic modeling or other appropriate methodologies to determine the “generally existing conditions.”  In addition, if there is data to support the assertion that traffic levels are expected to increase significantly during the environmental review process, the projected traffic levels at the expected date of project approval may still serve as the appropriate baseline.  In no circumstances, however, may environmental impacts be evaluated only against a baseline consisting of predicted conditions that may exist after project approval.

Conclusions and Implications

Sunnyvale invalidates a common practice among lead agencies in evaluating traffic impacts for projects with long build-out periods.  The case squarely holds that an EIR may not measure project impacts against future conditions beyond the date of project approval.  To the extent that the Supreme Court’s decision in Communities for a Better Environment left the door open for an argument that lead agencies could do so, this decision appears to foreclose that possibility.  For projects with a long build-out period, where the future baseline may be substantially different than that at the time the project is approved, it may be helpful in understanding a project’s impacts for an EIR to also evaluate and disclose the effect of the project against the predicted future conditions.  Nothing in Sunnyvale prohibits an EIR from including such supplemental analysis.  However, if an agency elects to provide such supplemental analysis, it should be careful that the EIR makes clear that impact determinations, findings and adopted mitigation measures are based on an analysis of project effects that is measured against current conditions.  The project approval date appears to be the latest date to which baseline conditions can be set, and even then, the decision to set a baseline at this date rather than at the publication of the notice of preparation or commencement of the environmental analysis constitutes a deviation from the “norm” and requires a showing of substantial evidence to support such a decision.

For further information on Sunnyvale West Neighborhood Assn. v. City of Sunnyvale City Council (2010) 190 Cal.App.4th 1351, please contact Adam D. Link at alink@somachlaw.com.

Somach Simmons & Dunn provides the information in its Environmental Law & Policy Alerts and on its website for informational purposes only.  This general information is not a substitute for legal advice, and users should consult with legal counsel for specific advice.  In addition, using this information or sending electronic mail to Somach Simmons & Dunn or its attorneys does not create an attorney-client relationship with Somach Simmons & Dunn.
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