“CEQA-in-Reverse” Case Headed for the California Supreme Court

“CEQA-in-Reverse” –

Real estate developers, public agencies and private businesses involved in land development or redevelopment may soon have to contend with a new far-reaching interpretation of the California Environmental Quality Act (CEQA).

It is widely known among those involved in real estate development that CEQA requires a public agency to prepare an Environmental Impact Report (EIR) for any project “that may have a significant impact on the environment.” (California Public Resources Code Sections 21080, 21082.2, 21100, 21151.). CEQA, however, does not expressly provide that an EIR is required where it is claimed that the existing environment may have a significant impact on a proposed project.

The California Supreme Court is poised to decide in California Building Industry Association v. Bay Area Air Quality Management District (Supreme Court No. S213478 – review granted Nov. 26, 2013) whether this “reverse” EIR requirement is mandated by CEQA. Should the Supreme Court do so, this would have tremendous implications for real estate development projects of all kinds, and especially urban infill and development projects near transportation corridors.

Originally published in the Orange County Business Journal – May 12-18, 2014.

Please see full article below for more information.

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already determined that CEQA does not require an EIR to be prepared based upon the
impact the environment may have on a proposed project.
For example, the Fourth District Court of Appeal (which hears appeals from Orange
County trial courts) rejected a claim similar to that made by the BAAQMD in the CBIA case
in the case of South Orange County Wastewater Authority v. City of Dana Point, 196 Cal.
App. 4th 1604 (2011). In that case, the South Orange County Wastewater Authority
(SOCWA) challenged the approval of a residential development zoning change by the City
of Dana Point based on the argument that an EIR (and not just a Mitigated Negative
Declaration) was required to assess the impact that odors and noise from the SOCWAʼs
sewage treatment plant might have on future residents. The Fourth District rejected the
“CEQA-in-Reverse” argument made by the SOCWA, stating:
“SOCWAʼs objection to the adoption of the MND for the rezoning essentially turns
CEQA upside down. Instead of using the act to defend the existing environment from
adverse changes caused by a proposed project, SOCWA wants to use the act to
defend the proposed project (the future residences) from a purportedly adverse
existing environment (smells from the sewage treatment plant)…. The Legislature did
not enact CEQA to protect people from the environment. Other statutes, ordinances,
and regulations fulfill that function…”
The First District did not expressly disapprove of the SOCWA decision (and three other
cases that previously held that CEQA did not apply to impacts of the environment on a
project, including Baird v. County of Contra Costa, 32 Cal. App. 4th 1464 (1995)). Instead,
the First District noted only that “[t]he continuing validity of Baird et al is better reserved for
a case in which the receptor thresholds have actually been applied to a project.”
Future Implications for Orange County Urban Infill/Transportation Projects
As noted above, proposed infill redevelopment and transportation projects to be sited in
Orange County are subject to the jurisdiction of the South Coast Air Quality Management
District, including the requirements contained in the SCAQMDʼs CEQA Air Quality
Handbook. The SCAQMD, like the BAAQMD, also has adopted thresholds of significance.
Notably, the District filed an amicus curiae (“friend of the court”) brief in support of the
BAAQMD in the CBIA case and, in so doing, alerted businesses and public agencies in
Orange County that the SCAQMD, like the BAAMQD, can be expected to encourage public
agencies to assess any potential harm of the environment on future projects (the “CEQA-in
Reverse” concept), should the California Supreme Court permit it and other agencies the
latitude to do so. By way of example, the District asserted in its amicus brief:
“As the home to approximately half of Californiaʼs population and an extensive
network of freeways, railyards and port activity, the residents of the South Coast Air
Basin are experiencing significant harm from exposure to toxic air contaminants.
These impacts fall disproportionately on low-income and minority populations. As a
result, the evaluation and mitigation of toxic air contaminants is a serious priority for
the SCAQMD. This brief will aim to assist the Court by highlighting the health
impacts of exposure to toxic air pollution and its environmental justice implications,
and by demonstrating that such an analysis is consistent with the policies underlying
CEQA. This brief will also aim to explain the benefits of evaluating the potential for
harm under CEQA as opposed to relying on other regulatory frameworks.”
The CBIA case has been fully briefed and oral argument is anticipated to take place this
Rick McNeil
Rick McNeil is a partner in the firmʼs commercial litigation
practice group. He has over 25 years of experience representing
businesses in the defense, aerospace, chemical, energy, waste
disposal, manufacturing, food processing, printing, dry cleaning,
real estate development and other industries against
environmental claims. Reach McNeil at 714.427.7517 or
Jon Frank
Jon Frank is a partner in the firmʼs real estate practice group.
His practice is concentrated in general real estate, including
purchase, sale and development transactions involving income
producing property, hotels and resorts, retail, residential, vacant
land, solar, alternative energy and other uses; commercial
leasing; Mexico real estate law; and zoning and land use. Reach
Frank at 714.427.7022 or
Connie Bak
Connie Bak is an associate in the firmʼs real estate group. Her
practice focuses on all aspects of real estate development
including resort, hotel, retail, and office development and
disposition; office/retail leasing; zoning and land use; partnerships
and joint ventures; real estate financing; and construction. Reach
Bak at 213.929.2625 or cbak@swlaw.com.
REAL ESTATE LAW Advertising Supplement MAY 12, 2014

c When siting a new receptor, a Lead Agency shall examine


“CEQA-in-Reverse” Case Headed for the California Supreme Court
by Rick McNeil, Jon Frank, Partners, and Connie Bak, Associate, Snell & Wilmer

REAL ESTATE LAW Advertising Supplement MAY 12, 2014

c When siting a new receptor, a Lead Agency shall examine


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