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CA Supreme Court Issues Major Ruling on “CEQA-In-Reverse”

A significant outstanding issue under the California Environmental Quality Act (CEQA) is whether the analysis of the impact of existing environmental conditions on a proposed project is required. Since the central purpose of CEQA is to analyze a project’s adverse impact on the environment, this issue has been called “CEQA-In-Reverse”. In California Building Industry Association v. Bay Area Quality Management District, the California Supreme Court answered this question. The Court ruled that CEQA generally does not require the analysis and mitigation of the impact of existing environmental conditions on a project’s future users or residents, except in limited circumstances. This court decision will have broad implications on environmental analysis in CEQA documents.

The Court ruling turned in part on the interpretation of Public Resources Code section 21083. Section 21083(c) generally states that “a project may have a ‘significant effect on the environment'” if “[t]he environmental effects of a project will cause substantial adverse effects on human beings, either directly or indirectly.” The Court rejected the argument that the statutory language was broad enough to require the analysis of how existing environmental conditions in the vicinity of a proposed project might adversely impact future residents or users, such as by causing adverse health and safety impacts. The Court opined that the statutory language of “environmental effects” does not encompass these considerations. Given the plain language of section 21083 in conjunction with other relevant CEQA provisions, the Court found the term “environmental effects” means the impacts on a project’s users or residents arising from the project’s effects on the environment, not the environment’s effects on a project.

The Court also addressed the validity of CEQA Guidelines section 15126.2(a), promulgated pursuant to section 21083, which directs agencies to consider significant environmental effects a proposed project might cause “by bringing development and people into the area affected.” The Court found most, but not all, of this Guideline consistent with section 21083. Section 15126.2(a) is valid to the extent that it requires an agency to evaluate whether a proposed project may exacerbate existing environmental hazards. The Court reconciled sections 21083 and 15126.2(a) by stating that both sections contemplate analyzing existing conditions impacted directly by a proposed project. The Court noted that the statutory language emphasizes how the analysis of a project’s potential to exacerbate existing conditions is not an exception to, but a direct consequence of, CEQA’s core requirement that an agency evaluate a project’s impact on the environment.

However, the Court invalidated a portion of section 15126.2(a) that states: “[A]n EIR on a subdivision astride an active fault line should identify as a significant effect the seismic hazard to future occupants of the subdivision. The subdivision would have the effect of attracting people to the location and exposing them to the hazards found there.” By striking this example from the section, the Court made it clear that CEQA does not require lead agencies to analyze potential impacts from existing hazards on a proposed project where the proposed project would not exacerbate the existing hazard.

The Court also ruled that a “CEQA-In-Reverse” analysis is required by certain specific provisions of CEQA. An evaluation of the effects of existing hazards on future users of a proposed project is required under CEQA when the proposed project: is located adjacent to an airport (§ 21096); involves the purchase of a school site or the construction of a new elementary or secondary school (§ 21151.8); or involves certain types of housing development projects (§§ 21159.21, subds. (f), (h); 21159.22, subds. (a), (b)(3); 21159.23, subd. (a)(2)(A); 21159.24, subds. (a)(1), (3); 21155.1, subds. (a)(4), (6)).

For CEQA practitioners, the implication of this Decision is that CEQA requires an analysis of the existing environment on a project when (1) the proposed project exacerbates impacts from existing environmental hazards; or (2) specifically required by statutory language. If a project exacerbates existing environmental hazards, then CEQA requires the analysis and mitigation of those impacts on a project’s future users or residents. The Decision does not create a black and white rule on whether CEQA requires the analysis of the impact on a project from sea level rise and flooding due to climate change or toxic air contaminants from adjacent roadways. Instead, the resolution will turn on the factual determination of whether the proposed project would exacerbate these existing environmental conditions.