California Supreme Court Upholds CALFED Environmental Impact Report

June 2008

On June 5, 2008, the California Supreme Court upheld the CALFED program’s Programmatic Environmental Impact Statement/Report, which a Court of Appeal had struck down as inadequate under the California Environmental Quality Act. In re Bay-Delta Programmatic Environmental Impact Report Coordinated Proceedings, ___ Cal.4th ____ (Cal. June 5, 2008). The Court’s ruling upheld CALFED’s omission from its environmental analysis an alternative requiring a reduction in exports from the Bay-Delta and its use of a programmatic “first tier” environmental analysis document to analyze water supply issues at a general level.

Background
The CALFED program was formed in 1994 by 18 state and federal agencies to address problems in the Sacramento-San Joaquin Delta related to declining wildlife habitat, an increasing risk of failure of Delta levees, and degradation of water supplies from the Delta. CALFED’s goal was to design and implement a long-term plan to both restore the ecological health of the Delta and to improve management of Bay-Delta water for the many beneficial uses that depend on it. As a first step to implementing this long-term strategy, in July 2000 CALFED released a final Programmatic Environmental Impact Statement/Environmental Impact Report (“PEIS/R”) prepared pursuant to the National Environmental Policy Act and the California Environmental Quality Act (“CEQA”).

The stated goals of the CALFED Program as described in the PEIS/R were “to develop a long-term comprehensive plan that will restore ecological health” to the Bay-Delta to “improve water management for beneficial uses of the Bay-Delta system.” Consistent with its programmatic nature, the PEIS/R described the CALFED program “a general description of a range of actions that will be further refined, considered and analyzed for site-specific environmental impacts as part of second- and third-tier environmental documents prior to making a decision to carry out those later actions.” Slip. Op. at 9.

The PEIS/R was challenged on CEQA and NEPA grounds in three different legal actions, which were coordinated in 2001 in Sacramento County under the title Bay-Delta Programmatic EIR cases, Judicial Council Coordinated Proceeding No. 4152. In April 2003 the trial court ruled on the CEQA claims, concluding that the PEIS/R wholly satisfied the requirements of CEQA.

In 2005, the Third District Court of Appeal held, in a 200+ page opinion, that the PEIS/R was deficient under CEQA for the following reasons: (1) it failed to discuss an alternative to the CALFED program that would require a reduction in water exports from the Bay-Delta; (2) it did not adequately discuss the environmental impacts of diverting water from various potential sources; and (3) it failed to include certain information regarding the Environmental Water Account.

The Supreme Court Decision
The Supreme Court disagreed with the Court of Appeal on all three of its bases for invalidating the PEIS/R. First, on the reduced exports alternative, the Court held that CALFED’s reasons for eliminating a reduced exports alternative from analysis under the PEIS/R were supported by substantial evidence and consistent with CEQA. In an early phase of the program, CALFED had studied the feasibility of reducing exports of Bay-Delta water by means of a “demand reduction approach” and submitted this alternative along with nine others for public comment. Opposition to this strategy by the public and CALFED agencies led CALFED staff to conclude that demand reduction techniques would in fact exacerbate conflicts rather than alleviate them. According to the Court the PEIS/R adequately explained why the alternative was not studied further – actions such as increasing emphasis on water use efficiency and eliminating actions that would improve export water supplies and the adequacy of Bay-Delta water to meet Delta outflow needs “would not achieve the primary objective for water supply reliability.” Slip. Op. at 21. In other words, reducing or capping exports may achieve water quality objectives but would prevent CALFED from achieving its water supply reliability objectives.

Under the Court’s analysis, while an EIR should not exclude an alternative from detailed consideration merely because it would “impede to some degree the attainment of project objectives,” an EIR need not study an alternative that is either infeasible or that the lead agency has determined cannot achieve the project’s underlying fundamental purpose. CALFED’s determination that a reduced export alternative was not feasible because it would compromise the water supply objective and not achieve the basic underlying goal of reducing conflicts, and its decision to not carry forward the reduced export alternative into the final PEIS/R, was therefore a proper exercise of its discretion under CEQA.

The Court of Appeal had also concluded that the PEIS/R should have included a reduced export alternative because such an alternative would be “environmentally superior” in terms of ecosystem restoration in the Delta, one of the objectives of the program. The Supreme Court rejected this line of reasoning because it fails to distinguish between preexisting environmental problems in the Delta and adverse environmental effects of the CALFED program itself. The Court of Appeal erred in its determination that the reduced export alternative should have been included because it more effectively addresses preexisting environmental problems, because preexisting environmental problems are part of baseline conditions and are not program-generated environmental impacts.

Second, the Court of Appeal erred in holding that the PEIS/R lacked sufficient detail about the sources of water that would be used to implement CALFED and the environmental impacts of supplying water from each source. Listing only the potential sources of water and deferring ultimate source determinations for later, in the opinion of the Court of Appeal, violated the basic informational purpose of and environmental document under CEQA.

The Supreme Court concluded that as a “first-tier” program EIR, the CALFED PEIS/R was not required to identify particular sources of water for "second-tier" projects; the PEIS/R only needed to analyze generally the effects of obtaining water from potential sources, and the PEIS/R satisfied this requirement. The Court referenced its recent opinion in Vineyard Area Citizens for Responsible Growth, Inc v. City of Rancho Cordova (2007) 40 Cal. 4th 412 in explaining that a different amount of detail is required for different stages in the tiering process and in upholding the use of tiering to defer analysis of environmental impacts to later phases. The Court generally endorsed CALFED’s use of a programmatic “first tier” PEIS/R and the sufficiency of its discussion of sources of water, which included identification of potential sources and an evaluation “in general terms” of the potential environmental effects of supplying water from those potential sources.

Finally, the Supreme Court rejected the Court of Appeal’s holding that the PEIS/R did not provide adequate detail about the Environmental Water Account (EWA) project. The EWA is a “second-tier” project under which acquisitions, banking, transfers and borrowing of water by state and federal agencies would provide increased water for fish without reducing deliveries to water users, effectively balancing the competing demands of fisheries with the need to improve water supply reliability. The Court of Appeal held that specific information about the EWA, including specific sources for the EWA’s initial assets, should have been included in the PEIS/R and was improperly deferred for later environmental review.

Again the Supreme Court upheld the level of detail in the PEIS/R as consistent with CEQA’s tiering principles, under which a lead agency can focus a first-tier environmental analysis on a general plan or program and leave project-level details to subsequent analyses of specific projects.

The Supreme Court’s holding has important implications for both water management in the Delta and CEQA. The upholding of CALFED’s decision to leave out the alternative of reduced water exports from the Delta gives the current Bay Delta Conservation Plan flexibility in its consideration of such an alternative and validates CALFED’s approach, from a CEQA perspective, of aiming to both restore ecological health and improve water management in the Delta. The Court’s approval of CALFED’s programmatic “tiered” CEQA analysis provides important guidance on the tiering of environmental analysis documents under CEQA.

In re Bay-Delta Programmatic Environmental Impact Report Coordinated Proceedings Supreme Court Decision.