The Supreme Court issued its opinion in California Building Industry Association v. Bay Area Air Quality Management District (2015) __Cal.4th__ (Case No. S213478). In one of the most closely-watched CEQA cases of the year, the Court addressed whether CEQA requires analysis of the existing environment’s impact on the residents and users of a proposed project.

The case involved a challenge to BAAQMD’s adoption of new CEQA thresholds of significance for air pollutants, including Toxic Air Contaminant (TAC) “receptor thresholds” ­– thresholds for “new receptors” consisting of residents and workers who will be brought to the area as a result of a proposed project – and thresholds for GHGs and PM2.5. The thresholds were published in the District’s 2010 CEQA Air Quality Guidelines. CBIA challenged the adoption of the thresholds on various CEQA grounds. Relevant here, CBIA claimed the receptor thresholds were invalid because CEQA does not require analysis of the impacts that existing hazardous conditions will have on a new project’s occupants.

The Court of Appeal narrowly determined that the receptor thresholds have valid applications irrespective of whether CEQA requires an analysis of how existing environmental conditions impact a project‘s future residents or users, and therefore were “not invalid on their face.”

The Supreme Court granted review, but limited the scope of review to the following issue: Under what circumstances, if any, does CEQA require an analysis of how existing environmental conditions will impact future residents or users (receptors) of a proposed project?

In answering this question, the Court held that “agencies subject to CEQA generally are not required to analyze the impact of existing environmental conditions on a project‘s future users or residents. But when a proposed project risks exacerbating those environmental hazards or conditions that already exist, an agency must analyze the potential impact of such hazards on future residents or users. In those specific instances, it is the project’s impact on the environment ­– and not the environment’s impact on the project – that compels an evaluation of how future residents or users could be affected by exacerbated conditions.”

Based on its holding, the Court found CEQA Guidelines section 15126.2, subdivision (a), valid only in part. The Court noted that CEQA Guidelines section 15126.2, subdivision (a), indicates that CEQA generally requires an evaluation of environmental conditions and hazards existing on a proposed project site if such conditions and hazards may cause substantial adverse impacts to future residents or users of the project. Finding that CEQA calls upon an agency to evaluate existing conditions in order to assess whether a project could exacerbate hazards that are already present, the Court held that most of subdivision (a) is valid. The Court, however, found that the following two sentences were clearly erroneous and unauthorized by CEQA: “[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.” The Court therefore, invalidated these two sentences of the Guidelines.

After marching through relevant CEQA sections, the CEQA Guidelines, and case law, the Court concluded that its holding was consistent with the language and purposes of CEQA. The Court also concluded that its decision was not inconsistent with Court of Appeals cases on this issue, including Baird and Ballona Wetlands, among others.

The issue of whether CEQA requires analysis of the environment on a project is sometimes referred to as “CEQA-in-reverse.” The Supreme Court took issue with that characterization, finding it “misleading and inapt.” The Court explained that “[b]ecause CEQA does sometimes require analysis of the effect of existing conditions on a project‘s future residents or users, such analysis is not the reverse of what CEQA mandates.”

The Supreme Court remanded the case to the Court of Appeal for reconsideration in light of the Court’s holding.