California Court Complicates Environmental Baseline Determinations, Lawson Rock & Oil v. State Air Resources Board

Identifying the appropriate “baseline” from which to evaluate the environmental impacts of a transportation project is fraught with complexity. Courts find NEPA violations when an agency miscalculates the "no build" baseline or when the baseline assumes the existence of a proposed project. See, e.g., Friends of Yosemite Valley v. Kempthorne, 520 F.3d 1024, 1037-38 (9th Cir. 2008); N.C. Alliance for Transp. Reform, Inc. v. United States DOT, 151 F. Supp. 2d 661, 690 (M.D.N.C. 2001); Sierra Club, Illinois Chapter v. United States Department of Transportation, 962 F. Supp. 1037 (N.D. Ill. 1997). Courts have also invalidated a no build baseline where the future land use baseline is inconsistent with the land uses projected in the metropolitan transportation plan. Openlands, Midewin Heritage Ass’n. v. U.S. Dep’t of Transportation, 124 F. Supp. 3d 796 (N.D. Ill. 2015).

In John R. Lawson Rock & Oil, Inc. v. State Air Resources Board, Case No. F074003, 2018 WL 636063 (Jan. 31, 2018) (“Lawson Rock & Oil”), the California Court of Appeal adds additional complexity to the law governing the environmental baseline. The court upheld the use of an air quality baseline that excluded certain emission reductions from trucks and buses required (but not yet achieved) by an air quality regulation. Although decided under state law, the court’s reasoning has potential implications for cases that arise under the National Environmental Policy Act (“NEPA”).

Many transportation projects raise complex baseline issues similar to the issues in Lawson Rock & Oil. For example, transportation agencies commonly assume future, but not yet built, land uses (and resulting traffic and air quality impacts) in the No Action Alternative baseline against which each of the action alternatives is judged. The federal circuits are split on the showing required to support the use of a No Action Alternative baseline that assumes the impacts of future land uses in the area of a proposed transportation project. (Compare Laguna Greenbelt v. U.S. Dep't of Transp. (9th Cir. 1994) 42 F.3d 517, 525 with North Carolina Wildlife Federation v. North Carolina Department of Transportation, 677 F.3d at 605.)

NEPA and its California state law parallel (the California Environmental Quality Act) require the lead agency to evaluate the potential impacts of an agency action against a No Action or No Project “baseline” Alternative. (Friends of Yosemite Valley v. Kempthorne, 520 F.3d at 1037-1038.) With certain exceptions, California law requires agencies to evaluate a project’s environmental impacts against a baseline of conditions in existence at the time of the project approval. (Neighbors for Smart Rail v. Exposition Metro Line Construction Authority (2013) 57 Cal.4th 439, 447-457.) The California decisions leave unclear to what extent the environmental baseline should include changes to conditions required by existing regulations where the changes are not achieved as of the date of project approval.

In Lawson Rock & Oil, the plaintiffs challenged a state regulation that proposed to delay the implementation of an existing air quality regulation designed to reduce emissions from trucks and buses. The air quality baseline adopted by the agency excluded future emission reductions required for many small truck and bus fleet operators from the baseline. Although these reductions are required by existing law, the agency reasoned that because they have not yet been achieved, the agency was not required to account for those potential, future reductions in its baseline for air quality. The effect of the agency-adopted baseline was that it reduced the air quality impacts of the agency proposal to delay regulatory requirements. Plaintiffs argued that the baseline adopted by the State Air Resources Board created a “fictional universe” in which the excluded emission reduction regulations did not exist, and then improperly measured the policy delay impacts against this fictional universe.

The court concluded that the State Air Resources Board had the discretion to select a baseline “that measured the current environment without further reducing figures based on regulations that should have taken effect during the course of the analysis.” The court relied on an earlier California Supreme Court decision holding that an air quality management agency violated the California Environmental Quality Act by selecting a baseline that assumed the maximum permitted operation of the refinery boilers even though the refinery had never operated the boilers to the maximum level authorized in the air quality permit. The court specifically noted that, “[b]y adopting as a baseline the current environmental conditions, the Board did take into account the applicable laws and regulations as they had affected the environment to that point in time.” In concluding that the State Air Resources Board appropriately used its discretion to select a proper baseline that excluded the regulations that only had speculative, future effects on emissions, the court pointed out that the laws and regulations requiring reductions were not retroactively excluded from the baseline analysis.