[Petition for review granted by the Supreme Court.  The court limited review to the following issue: Under what circumstances, if any, does the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) require an analysis of how existing environmental conditions will impact future residents or users (receptors) of a proposed project? ]

In California Building Industry Association v. Bay Area Air Quality Management District (CBIA) (Case No. A135335 (Cal. Ct. App. 1st, August 13, 2013)), the First District Court of Appeal overturned the trial court and held that the thresholds of significance adopted by the Bay Area Air Quality Management District (BAAQMD) were not subject to CEQA review for two reasons. First, “the CEQA Guidelines establish the required procedure for enacting generally applicable thresholds of significance such as those at issue in this case, and a prior CEQA review of the thresholds is not a part of this procedure.” CBIA, at pg. 11. Second, “the environmental change posited by CBIA as the basis for requiring CEQA review is speculative and not reasonably foreseeable,” thus adopting the thresholds is not considered a “project” pursuant to CEQA. Id.


The California Building Industry Association (BIA) filed a lawsuit against BAAQMD alleging that BAAQMD had violated CEQA by not reviewing the environmental impact of the thresholds of significance for air quality and GHG emissions (Thresholds) before adopting them. The trial court agreed, finding that adopting the Thresholds was a “project” under CEQA requiring review, and ordering the Thresholds be set aside. The trial court also directed BAAQMD to take no further action to promulgate the standards until CEQA review was completed. BAAQMD appealed the decision and updated the BAAQMD CEQA Guidelines to eliminate the Thresholds per the direction of the trial court.


In regard to the first point, the appellate court cited CEQA Guidelines Section 15064.7(b), which lays out the process by which thresholds of significance should be adopted. The appellate court reasoned that the section does not explicitly call for CEQA review and that such a process would duplicate the public review process and substantial evidence standard set out under Section 15064.7(b). As stated by the appellate court, “[t]he District drafted proposed revised thresholds of significance in 2009, utilizing the scientific and administrative expertise of its staff,” and it “conducted public hearings, outreach, and workshops for more than a year. The administrative record, which contains staff reports, scientific reports and protocols, analyses of the effect the proposed thresholds would have on various projects, letters from interested parties, responses by the District, transcripts of hearings, and records from various workshops, is in excess of 7000 pages.” CBIA, at pgs. 12-13. The appellate court further noted that BIA and other groups with similar concerns about the proposed Thresholds and their effects participated in that process and the comments were taken into consideration before the Thresholds were adopted. Accordingly, the appellate court reasoned that requiring BAAQMD to also conduct a CEQA analysis “would result in a duplication of effort, at taxpayer expense and to little if any purpose.” Id. at pg. 13.

Second, pursuant to CEQA Guidelines Section 15378(a), a project is defined as “an activity directly undertaken by any public agency” that “may cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. While the appellate court acknowledged that the BIA’s prediction of indirect physical change in the environment due to the BAAQMD’s adoption of the Thresholds “is possible,” it found them to be “too attenuated and speculative to be reasonably foreseeable.” Id. at pg. 16 (emphasis in original). Because the physical effect on the environment was too speculative, the court concluded that adopting the Thresholds could not be considered a “project” as defined by CEQA.

Surprisingly, although the trial court had not addressed BIA’s substantive challenges to the Thresholds themselves, the appellate court addressed these arguments as well. The appellate court found that BIA’s arguments did not justify overturning the BAAQMD’s adoption of the Thresholds. BIA argued that the Thresholds themselves were not based on substantial evidence and violated CEQA because the Thresholds improperly required an analysis of the impact of the existing environment on a project, rather than the impact of the project on the existing environment. BIA further argued that this type of analysis is improper under CEQA and not in accordance with other case law on the issue. The BAAQMD, on the other hand, argued that there were scenarios in which the Thresholds could be used to properly assess whether and in what amount a project would add pollution to the environment and the appellate court agreed. It concluded that the Thresholds were not facially invalid and that the BIA had failed to carry its burden of proving that there was no substantial evidence in the record to support the adoption of the Thresholds.

It is worth noting that the decision did not discuss the issue of whether, in relation to a specific project, such thresholds should be applied if they would only address the impacts of the environment on the project and not whether and in what amount a project would impact the environment. For example, the court did not decide if a project is required to utilize a threshold that requires analysis of the impact of existing toxic air emissions on a project (i.e., on future residents of the project) and not to what extent the project itself impacts the environment.

While the BIA was challenging the Thresholds partly due to a concern that they would deter infill development and promote sprawl, this decision has some pro-development implications. For example, jurisdictions promoting infill development may adopt redefined traffic thresholds of significance for certain intersections and/or road segments of the jurisdiction where infill is desirable. Pursuant to this case, the adoption of such thresholds could be accomplished by complying with CEQA Guidelines Section 15064.7(b) and would not require a mitigated negative declaration or environmental impact report.