As part of developing solutions to global warming, the California Legislature adopted the California Global Warming Solutions Act of 2006 (the Act;
ARB's task of creating the LCFS regulations was complex and presented many questions of science, economics and law. ARB's proposed regulations were required to meet substantive requirements of the Act, procedural requirements for rulemaking in California's Administrative Procedure Act (APA; Gov. Code, § 11340 et seq.), and substantive and procedural requirements in the California Environmental Quality Act (CEQA; Pub. Resources Code, § 21000 et seq.). Furthermore, the Act required the LCFS regulations, as well as other greenhouse gas measures, to be in place by January 1, 2010. In sum, ARB was given a difficult task and the pressure of a statutory deadline.
ARB's efforts to complete the LCFS regulations on time satisfied a vast majority of the applicable legal requirements, but ran afoul of several procedural requirements imposed by CEQA and the APA. While these procedural violations are not trivial, they do not require us to automatically discard the existing LCFS regulations and order ARB to restart the complex rulemaking process anew. The statutes in question allow courts to tailor the remedy to the circumstances of each case and, therefore, we may consider the public interests affected by setting aside the LCFS regulations. Those public interests include adverse environmental impacts and, in particular, whether suspending the LCFS regulations would result in more environmental harm than allowing them to remain in effect pending the completion of ARB's corrective action. Because of the potential adverse environmental impacts, as well as other disruptions, we will allow the LCFS regulations to remain operative while ARB complies with the procedural requirements it failed to satisfy. In other words, we will avoid the irony of violations of an environmental protection statute being used to set aside a regulation that restricts the release of pollutants into the environment.
POET, LLC, and James M. Lyons (plaintiffs) have challenged the LCFS regulations on the grounds that ARB violated the APA and CEQA during the adoption process. Plaintiffs contend ARB violated the APA by excluding from the rulemaking file made available to the public certain e-mails from consultants. The e-mails concerned the computer model ARB used to calculate the indirect carbon emissions attributable to ethanol due to land use changes caused by the increased demand for the crops used to produce ethanol. Assigning ethanol a higher carbon content based on indirect land use change is controversial because many uncertainties affect the estimates for the land use changes and the carbon emissions resulting from those changes. Also, ethanol is the only biofuel given an increased carbon rating based on land use changes.
Plaintiffs also contend ARB violated CEQA by (1) giving its "approval" to the regulations before the environmental review was complete, (2) splitting the authority to approve or disapprove the regulations from the responsibility of completing the environmental review, and (3) impermissibly deferring the analysis and formulation of mitigation measures for potential increases in the emission of nitrogen oxide (NOx) resulting from the increased use of biodiesel.
We conclude that plaintiffs' APA claim has merit because the e-mails contain "other factual information" that was "submitted to" ARB and thus are required to be included in ARB's rulemaking file.
Analyzing the CEQA challenges under the independent standard of review, we conclude that ARB prematurely approved the LCFS regulations at its public hearing on April 23, 2009, well before it completed its environmental review. The CEQA guidelines mandate that approval of the LCFS regulations follow completion of the environmental review.
To remedy these CEQA and APA violations, we direct the trial court to issue a writ of mandate directing ARB to set aside its approval of the subject LCFS regulations while allowing the regulations to remain in effect pending ARB's taking action to comply with the statutes.
We therefore reverse the judgment.
In 2006, the Legislature passed Assembly Bill No. 32 (2005-2006 Reg. Sess.) (Assembly Bill 32), which became the California Global Warming Solutions Act of 2006. Assembly Bill 32 is codified at Health and Safety Code sections 38500 through 38599 and requires California's statewide greenhouse gas emissions to be lowered to 1990 levels by 2020.
Assembly Bill 32 designated ARB as the state agency charged with monitoring and regulating the sources of emissions of greenhouse gases. (Health & Saf. Code, § 38510.) Assembly Bill 32 directed ARB to take certain action, such as preparing a "scoping plan" to achieve maximum technologically feasible and cost-effective reduction in global warming, adopting measures that could be implemented quickly (i.e., "discrete early action"), and formulating other measures that would require more time to study and implement. Assembly Bill 32 also imposed timelines for these actions.
The requirements of Assembly Bill 32 relevant to this appeal concern (1) the scoping plan for reducing greenhouse gases and (2) discrete early action. The scoping plan, which addresses many measures besides the LCFS regulations, includes an overview of standards for lowering the carbon content of transportation fuel. Assembly Bill 32 required ARB to prepare and approve the scoping plan by January 1, 2009. (Health & Saf. Code, § 38561,
The "discrete early action" provisions of Assembly Bill 32 are relevant because the regulations implementing standards for lowering the carbon content of fuel were early action measures. Assembly Bill 32 directed ARB, by June 30, 2007, to publish a list of the greenhouse gas emission reduction measures that would qualify as "discrete early action." (Health & Saf. Code, § 38560.5, subd. (a).) Regulations implementing the discrete early actions were to be adopted by January 1, 2010. (Health & Saf. Code, § 38560.5, subd. (b).) This is the deadline ARB attempted to meet in promulgating the regulations governing the carbon content of transportation fuels.
In January 2007, Governor Schwarzenegger issued Executive Order No. S-01-07 (Jan. 18, 2007), which (1) set a statewide goal of reducing the carbon intensity of California's transportation fuels by at least 10 percent by 2020, (2) called for the establishment of an LCFS for transportation fuels, and (3) directed the ARB to determine if an LCFS could be adopted as a discrete early action measure pursuant to Assembly Bill 32.
In September 2007, ARB included an LCFS in its list of nine potential discrete early actions. The list also included measures on the electrification of ships while they were in port, improved landfill methane gas capture, a tire inflation program, and the reduction of PFC's in semiconductor manufacturing.
The scoping plan, eventually adopted in December 2008, included an LCFS that identified transportation as the largest single source of greenhouse gas emissions in California and stated that greenhouse gas emissions could be reduced by improving vehicle efficiency, lowering vehicle miles traveled and reducing the carbon intensity
In August 2007, ARB began consulting with the public about an LCFS. In 2008 and early 2009, ARB staff conducted 16 public workshops on proposed LCFS throughout California and participated in numerous meetings with various stakeholders. ARB refers to these meetings, workshops and matters as informal rulemaking activity.
ARB staff used the information gathered during its workshops with the public, as well as its own scientific and technical analysis (which included the use of consultants), in preparing a formal proposal for the LCFS regulations. The proposed regulations were part of the "Staff Report: Initial Statement of Reasons" (ISOR) published on March 5, 2009.
The proposed LCFS regulations aimed to achieve a reduction in greenhouse gas emission by establishing performance standards, expressed as carbon intensity values, that fuel producers and importers were required to meet each year beginning in 2011.
For example, for 2011 the standard proposed for gasoline and its replacements was set at 95.61 grams of carbon dioxide equivalent per megajoule or gCO2E/MJ.
The other standard for transportation fuels applies to diesel fuel and its replacements. The benchmark for diesel fuel was established using low sulfur
To determine whether or not a regulated party would meet the yearly standard, the proposed LCFS assigned carbon intensity values for various types of fuels and required the regulated party to calculate the average carbon intensity of all the fuel it provided for that year. The proposed LCFS regulations did not prohibit or require the use of any particular type of fuel. Instead, regulated parties were given the freedom to determine the mix of fuels they would use to meet that the annual standard. When a regulated party came in below the annual standard, credits would be generated and could be sold to other regulated parties or carried over to subsequent years.
The carbon intensity values assigned to particular fuel life cycles were important to the producers of that fuel, as well as the regulated parties in California, because those values created an incentive or disincentive to use that fuel. For instance, when an alternative fuel has a lower carbon intensity value than the gasoline or diesel benchmark, producers and importers have an incentive to use that alternate fuel as a substitute for the higher carbon intensity fuels they sold in the past. Therefore, the assigned carbon intensity values would ultimately affect the demand and price of that alternative fuel. Controversies arose regarding the carbon intensity values assigned as producers of the various types of fuel vied for favorable terms for their product.
The carbon intensity value assigned to the various fuels was determined using a life cycle analysis. This analysis estimates the aggregate quantity of greenhouse gas emissions from all steps in a fuel's life cycle, including the direct effects of producing and using the fuel, and the indirect effects that may result from the increased production of that fuel. A fuel's life cycle can be divided chronologically into two stages: (1) all the steps leading up to the delivery of the finished fuel or blendstock into a vehicle's fuel tank and (2) the combustion of the fuel in the vehicle. When the fuel is derived from crops, the steps occurring before combustion include (1) farming practices, such as seedbed preparation and fertilizer and pesticide use; (2) harvesting the crop; (3) collecting and transporting the crop to a fuel processing plant; (4) the fuel production process, which involves variables such as the type of fuel used, the energy efficiency of the production technology, and the coproducts generated; and (5) the transportation and distribution of the fuel to its end users. Crop yield is another variable that affects the carbon intensity values assigned to a biofuel produced from that crop.
Because the steps before combustion are not the same for each specific kind of fuel, the proposed LCFS regulations identified different fuel pathways for estimating the carbon intensity value assigned to that fuel. A fuel pathway consists of all the steps in producing, transporting and using that fuel. One example of different fuel pathways involves ethanol produced in the Midwest using corn and a dry milling process, as compared to a wet milling process. Each milling process produces a distiller's grain coproduct. When a plant using the dry milling process dries its distiller's grain coproduct, it uses more energy and, thus, the ethanol produced in such a plant is assigned a higher carbon intensity value than ethanol produced in a plant that sells its coproduct as wet distiller's grain. Ultimately, the LCFS regulations included 35 different pathways for corn ethanol and six different pathways for sugarcane ethanol.
ARB staff calculated carbon intensity values assigned to a fuel's direct emissions using the greenhouse gases, regulated emissions, and energy use in transportation model, modified for use in California (CA-GREET). The CA-GREET model is, in essence, a very large spreadsheet that performs accounting for greenhouse gas emissions in the calculation of the life cycle emissions associated with a fuel.
In addition to the direct emissions associated with producing, transporting and using fuels, the life cycle analysis considers the indirect effect on greenhouse gases that are caused by a particular fuel. ARB staff identified land use changes resulting from increased use of some crop-based biofuels as a significant source of additional greenhouse gas emissions. Assessing land use changes is based on the idea that a large increase in biofuel demand in the United States will cause land to be converted to farming both in the United States and in countries that trade agricultural products with the United States.
ARB staff chose the global trade analysis project (GTAP) model for assessing the land use change impacts of increased biofuel production levels.
The analyses ARB conducted using the GTAP model resulted in estimates of the carbon intensity component that should be added to ethanol to account for land use changes. Based on these analyses, ARB's staff proposed that 30 gCO2E/MJ be added to the carbon intensity value assigned to each of the 11 different pathways identified for the production of ethanol from corn. These additional 30 units are noteworthy because, before they were added, all 11 pathways had a total carbon intensity value below the 2020 standard set for gasoline and its substitutes. After the addition for the indirect effect of land use change, only two of the pathways had a carbon intensity value below the 2020 standard. Furthermore, the total carbon intensity value of five of the pathways was raised above the 2011 standard of 95.61 gCO2E/MJ. As a result, ethanol from these five pathways would hinder, rather than help, a regulated party comply with the standards set for 2011 and thereafter. The ISOR also proposed to set 46 gCO2E/MJ as the carbon intensity related to land use changes associated with ethanol produced from Brazilian sugarcane.
ARB's March 5, 2009, publication of the ISOR started a 45-day public comment period. Along with the ISOR, ARB made available the technical appendices and approximately 10,000 pages of reference materials.
During the comment period, ARB received written comments from stakeholders and other interested parties consisting of nearly 2,100 pages. In addition, written comments presented to ARB during the April 23, 2009, hearing total 290 pages.
One of the controversial positions taken in the ISOR concerned whether the substitution of biodiesel for petroleum-based diesel would increase emissions of NOx. In the ISOR, ARB's staff assumed that there would be no
ARB received a number of comments challenging the assumption that biodiesel use would not increase NOx emissions. In response to these comments, ARB reiterated its position that it would "ensure that biodiesel fuel use does not increase NOx emissions significantly by promulgating a new motor vehicle fuel specification for biodiesel."
Additional information regarding biodiesel and the controversy regarding NOx emissions is set forth in part IV.A., post.
After the close of the comment period, ARB held a public hearing on April 23, 2009. At the close of the hearing, the "Board"
After the hearing, ARB issued a press release stating: "Today, the Air Resources Board adopted a regulation that will implement Governor Schwarzenegger's Low Carbon Fuel Standard calling for the reduction of greenhouse gas emissions from California's transportation fuels by ten percent by 2020." (Underscoring omitted.)
Resolution 09-31, establishing the LCFS and adopted for approval on April 23, 2009, included a finding that indirect land use change had been appropriately included in the analysis of the life cycle of some crop-based biofuels
The Board's actions on April 23, 2009, are important for purposes of this appeal because those actions are the basis for plaintiffs' argument that ARB prematurely approved the LCFS regulations before completing its environmental review and thereby violated CEQA.
As directed by Resolution 09-31, the Executive Officer incorporated the modifications approved by the Board at the April 23, 2009, hearing, along with appropriate conforming modifications, and made the modifications available for a supplemental comment period of 15 days. The notice of the public availability of the modified text and additional documents was issued on July 20, 2009, and August 19, 2009, was set as the deadline for public comment.
Further modifications to the LCFS regulations were made available to the public in a second 15-day notice dated September 23, 2009.
On November 25, 2009, the Executive Officer issued Executive Order No. R-09-014, which adopted the LCFS regulations except for (1) a severability provision that had been inadvertently omitted and (2) provisions regarding the carbon intensity values for biodiesel converted from Midwest soybeans and renewable diesel converted from Midwest soybeans. On the same date, ARB issued a notice of decision and response to significant environmental issues, stating that the executive order had adopted the LCFS regulations and comments raising significant environmental issues had been responded to in an attached final statement of reasons (FSOR).
The LCFS regulations adopted by Executive Order No. R-09-014 were the subject of a notice of approval of regulatory action issued by the Office of
On March 4, 2010, the Executive Officer issued Executive Order No. R-10-003, which adopted amendments to provisions of the LCFS regulations regarding the matters not included in the initial regulations. ARB also filed a notice of decision with the Natural Resources Agency of California regarding the action taken by Executive Order No. R-10-003.
On April 15, 2010, the Office of Administrative Law issued a notice of approval of regulatory action approving the amendments to the LCFS regulations concerning the carbon intensity values for biodiesel and renewable diesel fuel made from Midwest soybeans and the severability clause. The notice stated that the regulatory action became effective on April 15, 2010. The LCFS regulations are set forth in sections 95480 through 95490 of title 17 of the California Code of Regulations.
Plaintiffs POET, LLC (POET), and James M. Lyons initiated this litigation on December 23, 2009, by filing a petition for writ of mandate and complaint for declaratory and injunctive relief.
POET produces corn ethanol. In an April 2009 comment letter, POET asserted it was "currently the largest producer of ethanol in the world" and had started its ethanol business in the 1980's in Minnesota. POET currently operates plants across the Midwest from Ohio to South Dakota. POET alleged its ethanol is used in California and the implementation of the LCFS regulations would cause it injury.
James M. Lyons is a California resident who commented on the LCFS regulation, opposed its approval and alleged he would be injured by its
On January 22, 2010, plaintiffs filed a first amended petition and complaint, which is the operative pleading in this case. The pleading named as defendants (1) ARB, (2) James N. Goldstene in his official capacity as the Executive Officer of ARB, (3) Lori Andreoni, in her official capacity as a manager of ARB, and (4) Ellen Peter, in her official capacity as chief counsel of ARB (collectively, defendants). Plaintiffs alleged 25 causes of action for violations of CEQA, the APA and the Health and Safety Code.
Attached to the first amended petition and complaint were many documents that plaintiffs obtained from ARB in response to an August 2009 request for records pursuant to the California Public Records Act, Government Code section 6250 et seq.
As to CEQA compliance, the first cause of action alleged CEQA required the decision maker to respond to comments in writing before approving a regulation change. The first cause of action also alleged how ARB's delegation to the Executive Officer, staff members and consultants of the responsibility for considering, reviewing and preparing responses to the comments on environmental effects, violated CEQA. Thus, the first cause of action challenges both the timing of ARB's approval of the LCFS regulations and the delegation of authority to the Executive Officer.
Plaintiffs' fifth cause of action alleged ARB violated CEQA by (1) failing to mitigate or consider mitigation for increases in NOx emissions caused by the use of biodiesel and (2) impermissibly adjourning for further study any effort to address the potential increase in NOx emissions.
In May 2011, ARB filed its brief on the merits and a motion to strike (1) documents attached to the declaration filed in support of plaintiffs' opening brief and (2) documents attached to plaintiffs' pleading. ARB characterized the documents as extra-record evidence and irrelevant.
Following a hearing on the merits of the writ petition and the motion to strike, the trial court filed a statement of decision and ruling on motion to strike on November 2, 2011. The court granted ARB's motion to strike plaintiffs' extra-record evidence, denied plaintiffs' petition for a writ of mandamus, and filed a judgment in favor of ARB.
Because ARB acted under a certified regulatory program, no EIR was prepared and circulated in this case. Consequently, we will provide a brief overview of certified regulatory programs and the rules of law that apply to (1) agency action under such a program and (2) judicial review of that action for CEQA compliance.
Where a public agency has taken quasi-legislative action, such as ARB's approval and adoption of the LCFS regulations, judicial review of that action for compliance with CEQA "shall extend only to whether there was a prejudicial abuse of discretion." (§ 21168.5; see Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007) 40 Cal.4th 412, 426 [53 Cal.Rptr.3d 821, 150 P.3d 709] (Vineyard Area) [review for abuse of discretion].) Such an abuse "is established if the agency has not proceeded in a manner required by law or if the determination or decision is not supported by substantial evidence." (§ 21168.5.) This statutory language has been interpreted as classifying abuses of discretion into two types of agency error — namely, legal error (the failure to proceed in the manner required by
Each type of error is subject to a different standard of judicial review. (Madera Oversight Coalition, Inc. v. County of Madera (2011) 199 Cal.App.4th 48, 101 [131 Cal.Rptr.3d 626] [in CEQA matter, appropriate standard of review depends on whether a legal or factual question is being reviewed].)
As to legal error, courts conduct an independent review to determine whether the public agency proceeded in the manner required by law. (Vineyard Area, supra, 40 Cal.4th at p. 426.) Alternatively, when reviewing an agency's factual determinations for error, courts apply the substantial evidence standard. (Ibid.) As a result of the two standards, "a reviewing court must adjust its scrutiny to the nature of the alleged defect, depending on whether the claim is predominantly one of improper procedure or a dispute over the facts." (Id. at p. 435.)
In accordance with this principle, we will scrutinize each of plaintiffs' CEQA claims to determine whether the alleged defect is predominantly one of improper procedure or a disagreement with the agency's factual findings.
The cornerstone of ARB's analysis of the CEQA claims is its certified regulatory program. In ARB's view, the fact it acted under a certified regulatory program plays a key role in determining the applicable standards of judicial review.
With respect to legal error — that is, whether it "has not proceeded in a manner required by law" (§ 21168.5) — ARB contends: "The procedures by which ARB is to be judged are those set forth in its certified regulatory program. (See Pub. Resource Code, § 21080.5(c); Sierra Club v. State Bd. of Forestry (1994) 7 Cal.4th 1215, 1236 [32 Cal.Rptr.2d 19, 876 P.2d 505].)"
This contention is an incomplete statement of the procedures that ARB must follow to satisfy CEQA. A certified regulatory program is exempt from the procedures regarding the preparation of a negative declaration or EIR, but the "certified program remains subject to other provisions in CEQA such as the policy of avoiding significant adverse effects on the environment where feasible." (Guidelines, § 15250.) Thus, ARB's approach to legal error is unduly narrow because it ignores the procedures in the "other provisions in CEQA" (ibid.) applicable to the action taken by ARB under its certified regulatory program.
To complete the description of ARB's approach to judicial review, we note that ARB also contends that (1) the documents prepared under a certified regulatory program are to be judged under the deferential substantial evidence standard, (2) ARB's substantive determinations are entitled to deference, and (3) this deference extends to its interpretation of statutes and regulations.
Our inquiry into the standards of judicial review that apply to the CEQA claims presented in this appeal begins with the following basic question: Are the standards of judicial review applicable to agency action taken under a certified regulatory program determined by the same analysis used in other CEQA contexts, such as those involving the preparation of an EIR? We conclude the same analysis is used to determine the appropriate standard of judicial review. (See 2 Kostka & Zischke, supra, § 21.1, p. 1084 (rev. 3/13) [standard of review is the same when challenged action was taken under a certified regulatory program].)
Our conclusion is based on the wording of section 21168.5, which refers to "any action or proceeding" challenging an agency decision on the grounds of noncompliance with CEQA. Plaintiffs' lawsuit clearly qualifies as an "action or proceeding." The statute's use of the word "any" is not qualified and, thus, provides no basis for concluding section 21168.5 does not apply to plaintiffs' CEQA claims. (See Estate of Lucas (1943) 23 Cal.2d 454, 465 [144 P.2d 340] [statutory reference to "`any claim'" and "`any suit'" construed broadly].) Furthermore, neither section 21168.5 nor any other provision in CEQA expressly excludes decisions made under a certified regulatory program from the standards of judicial review contained in section 21168.5.
Therefore, under the abuse of discretion standard set forth in section 21168.5, we will independently review claims of legal error and apply the substantial evidence standard to claims that ARB committed factual error. Our choice between independent and substantial evidence review is guided by
Our "scrutiny [of] the nature of the alleged defect" (Vineyard Area, supra, 40 Cal.4th at p. 435) in plaintiffs' first CEQA claim begins with an examination of the parties' contentions and the requirements of CEQA that plaintiffs allege were violated.
Plaintiffs contend that ARB violated CEQA by approving the LCFS regulations before it completed the environmental review process required by CEQA. Plaintiffs reference the definition of "approval" in Guidelines section 15352 and contend that ARB's "approval" of the LCFS regulations occurred on April 23, 2009, when the Board passed Resolution 09-31.
In response, ARB contends that plaintiffs' argument "rests on a false premise: that ARB completed its rulemaking process at its Board meeting on April 23, 2009." ARB asserts that Resolution 09-31 was merely the initial approval and that the final LCFS regulations were not adopted until November 25, 2009, and March 4, 2010, as reflected in Executive Order No. R-09-014 and Executive Order No. R-10-003, respectively. These executive orders were issued after the Executive Officer completed ARB's environmental review process by issuing written responses to public comments. In ARB's view, it fully complied with its certified regulatory program and CEQA because it completed the environmental review before the LCFS regulations became final.
Plaintiffs argue that ARB's position contains legal error because ARB has treated "approval" as occurring when "ARB completed its rulemaking process" or "when the LCFS regulations became final ...." Plaintiffs suggest this legal error occurred because ARB ignored the definition of "approval" contained in Guidelines section 15352 as well as Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116 [84 Cal.Rptr.3d 614, 194 P.3d 344] (Save Tara), a Supreme Court case that discussed the application of this definition of "approval."
The Legislature's declaration of the policy underlying CEQA is contained in section 21002, which provides: "The Legislature finds and declares that it is the policy of the state that public agencies should not approve projects as proposed if there are feasible alternatives or feasible mitigation measures available which would substantially lessen the significant environmental effects of such projects, and that the procedures required by this division are intended to assist public agencies in systematically identifying both the significant effects of proposed projects and the feasible alternatives or feasible mitigation measures which will avoid or substantially lessen such significant effects." (Italics added.)
The first three purposes are best served when the environmental review document, such as an EIR or its equivalent, "provide[s] decision makers with information they can use in deciding whether to approve a proposed project, not [informs] them of the environmental effects of projects that they have already approved." (Laurel Heights Improvement Assn. v. Regents of University of California (1988) 47 Cal.3d 376, 394 [253 Cal.Rptr. 426, 764 P.2d 278].) When an environmental review occurs after approval of the project, it is likely to become nothing more than a post hoc rationalization to support action already taken. (Ibid.) In short, the policy declaration in section 21002 implies that an evaluation of environmental issues, such as feasible alternatives and mitigation measures, should occur before an agency approves a project.
CEQA does not explicitly address the timing of project "approval" when the environmental review is contained in documents generated under a certified regulatory program. The Guidelines, however, do address this question. Specifically, Guidelines section 15004, subdivision (a) states: "Before granting any approval of a project subject to CEQA, every lead agency or responsible agency shall consider a final EIR or negative declaration or another document authorized by these guidelines to be used in the place of an EIR or negative declaration. See the definition of `approval' in Section 15352." (Italics added.)
In closing our overview of the timing requirement, we will consider an argument that might be implied from (1) ARB's position that the Guidelines are not directly applicable to its environmental review documents and (2) ARB's failure to mention or even cite Guidelines section 15004. ARB might be of the view that the timing requirement in subdivision (a) of Guidelines section 15004 does not apply to its action in promulgating the LCFS regulations.
The parties disagree over when ARB is deemed to have approved the LCFS regulations. Our analysis of this issue begins with the definition of the word "approval."
The word "approval" and variants such as "approve" appear in both CEQA and the Guidelines, but CEQA itself does not define these terms. Guidelines section 15352, subdivision (a) however, define "approval" as follows: "`Approval' means the decision by a public agency which commits the agency to a definite course of action in regard to a project intended to be carried out by any person. The exact date of approval of any project is a matter determined by each public agency according to its rules, regulations, and ordinances. Legislative action in regard to a project often constitutes approval."
ARB's appellate brief lacks any mention of Guidelines section 15352 or the case law applying its definition of "approval." At oral argument, counsel for ARB argued that the second sentence of the definition of "approval" regarding the "exact date of approval" supports the conclusion that the LCFS regulations were not approved for purposes of CEQA until the Executive Officer took final action. We reject this argument. First, ARB has not adopted a rule or regulation that identifies the exact date when approval occurs for purposes of CEQA. Second, the ARB regulation that states the decision maker shall approve a written response to each significant environmental issue raised "[p]rior to taking final action on any proposal" does not, in our view, establish that "approval" for purposes of CEQA occurs when the decision maker takes "final action." (Cal. Code Regs., tit. 17, § 60007, subd. (a).)
Thus, we conclude that the definition of approval contained in Guidelines section 15352 applies even though ARB acted under a certified regulatory program. As a result, we must determine when ARB made the decision that committed it to a definite course of action in regard to the LCFS regulations.
Whether we conduct an independent review or apply the substantial evidence standard depends on "the nature of the alleged [CEQA] defect." (Vineyard Area, supra, 40 Cal.4th at p. 435.) We must determine "whether the claim is predominantly one of improper procedure or a dispute over the facts." (Ibid.)
The California Supreme Court's position on the standard of review applicable to the question of the timing of project approval relative to the environmental review is set forth in Save Tara, supra, 45 Cal.4th 116. Save Tara involved a city's agreement to sell land and allow private development of that land so long as the developers complied with CEQA. The Supreme Court considered whether entry into that agreement constituted "approval" of the project and, thus, was required to be preceded by the preparation of an EIR. (Save Tara, supra, at p. 121.) The court concluded that "the City of West Hollywood's conditional agreement to sell land for private development, coupled with financial support, public statements, and other actions by its officials committing the city to the development, was, for CEQA purposes, an approval of the project ...." (Id. at pp. 121-122.) As to the standard of review, the court determined "that postponement of an EIR until after the project approval constitutes procedural error that is independently reviewable ...." (Id. at p. 131, fn. 10.)
The Supreme Court's decision in Save Tara, supra, 45 Cal.4th 116 is the leading case regarding the application of the definition of "approval" contained in Guidelines section 15352. (See City of Santee v. County of San Diego (2010) 186 Cal.App.4th 55, 61 [111 Cal.Rptr.3d 47] [Save Tara provides "significant and controlling elaboration" of the definitions of "approval" and "project."].) The legal question we must decide is whether the general principles set forth in Save Tara regarding the application of the definition of "approval" should be extended to the instant case. We conclude they should.
There are two main differences between the situation presented in Save Tara and the facts of the instant case. First, Save Tara involved a project that would be completed by private parties. Here, the project is being carried out by ARB, a public agency. Second, the environmental review document prepared for the project in Save Tara was an EIR. Here, there is no EIR because the implementation of the LCFS regulations is being accomplished under a certified state regulatory program. We conclude that the general principles regarding "approval" set forth in Save Tara should be extended to projects undertaken by public agencies under certified regulatory programs. Our conclusion is based on the text of the regulatory definition and the fundamental policies underlying CEQA.
Furthermore, nothing in the definition of "approval" suggests that it is limited to situations involving EIR's or otherwise does not extend to projects subject to environmental review under a certified regulatory program. Other provisions in the Guidelines indicate the definition of approval does not change when a certified regulatory program is involved. Specifically, Guidelines section 15004, subdivision (a) includes a cross-reference to Guidelines section 15352 and the definition of "approval" and sets forth the principle that documents prepared in place of an EIR (such as those prepared under a certified regulatory program) shall be considered before granting any approval to the project.
The intended function of the environmental review documents prepared under a certified regulatory program in lieu of an EIR is the same as that served by an EIR. (See Guidelines, § 15002, subd. (a) [basic purposes of CEQA].) Regulatory programs are certified when they involve "the same consideration of environmental issues as is provided by use of EIRs and negative declarations." (Guidelines, § 15002, subd. (l).)
To inform and guide decision makers, these documents must be considered before approval of the project. (See Laurel Heights Improvement Assn. v. Regents of University of California, supra, 47 Cal.3d at p. 394 [when environmental review occurs after approval of the project, it is likely to become nothing more than a post hoc rationalization to support action already taken].) The "same consideration of environmental issues" (Guidelines, § 15002, subd. (l)) would not occur under a certified regulatory program if the environmental review documents were not completed until after the project was approved.
In summary, nothing in the text of CEQA, the Guidelines or the underlying purposes of CEQA leads us to conclude that different timing considerations should be applied to environmental review conducted under a certified regulatory program. Regardless of context, it is a matter of common sense that decisionmaking is aided when information is received prior to the decision, not after it is made. Thus, we will apply the general principles set forth in Save Tara regarding the application of the definition of "approval" to the facts of this case.
The next legal question we address concerns the conditions set forth in Resolution 09-31, adopted on April 23, 2009, and how those conditions affect when the approval occurred.
In Save Tara, supra, 45 Cal.4th 116, the city council approved an agreement to sell land to private developers that included a predevelopment loan to the developers of nearly half a million dollars. (Id. at p. 124.) The agreement required the satisfaction of certain conditions, including that the developers take the actions necessary to comply with CEQA. (Save Tara, supra, at
Our application of the foregoing principle to the present case will involve an examination of the terms of the resolution passed by the Board as well as the surrounding circumstances to determine whether the ARB, as a practical matter, committed itself to the LCFS regulations, or any particular feature of those regulations, at the April 23, 2009, public hearing, so as to effectively "preclude any alternatives or mitigation ... including the alternative of not going forward with the project...." (Save Tara, supra, 45 Cal.4th at p. 139.)
Plaintiffs' position that the ARB approved the LCFS regulations on April 23, 2009, is based on (1) the wording of documents created by ARB and (2) the practical effect of the provisions in Resolution 09-31.
Plaintiffs cite documents created by ARB that state the LCFS regulations were either "approved" or "approved for adoption" at the April 23, 2009, public hearing. Plaintiffs argue that these statements amount to an admission that, for purposes of CEQA, the Board gave its "approval" to the LCFS regulations at the April 2009 hearing.
As to the practical effect of the resolutions passed by the Board at the April 23, 2009, hearing, plaintiffs' argument is based on the wording of those resolutions and the way they were implemented. Plaintiffs contend that, before the environmental review was completed, the resolutions effectively foreclosed the consideration of alternatives and mitigation, "including the alternative of not going forward with the project" (Save Tara, supra, 45 Cal.4th at p. 139).
Plaintiffs have cited a number of documents prepared by ARB, including (1) the notice of the Board's public hearing on April 23, 2009, (2) Board
The notice of public hearing regarding the LCFS regulations stated that ARB "will conduct a public hearing at the time and place noted below to consider adoption of a regulation to implement the Low Carbon Fuel Standard (LCFS)." (Italics added.)
At the end of the public hearing on April 23, 2009, the Board passed Resolution 09-31, which included the following provisions:
"NOW, THEREFORE, BE IT RESOLVED that the Board hereby approves for adoption new sections [of the LCFS regulations] as set forth in Attachment A hereto, with the modifications described in Attachment B hereto.
"BE IT FURTHER RESOLVED that the Board directs the Executive Officer: (1) to incorporate into the approved regulations and incorporated document the modifications described in Attachment B hereto and such other conforming modifications as may be appropriate; (2) to make the modified regulations (with the modifications clearly identified) and any additional documents or information available for public comment for a period of at least 30 days; (3) to consider any comments on the modifications received during the supplemental comment period; and then (4) either to adopt the regulations as made available with any appropriate additional nonsubstantial modifications, to make additional modifications available for public comment for an additional period of at least 15 days, or to present the regulations to the Board for further consideration if he determines that this is warranted." (Italics added.)
After the hearing, the ARB issued a press release stating: "Today, the Air Resources Board adopted a regulation that will implement Governor Schwarzenegger's Low Carbon Fuel Standard calling for the reduction of greenhouse gas emissions from California's transportation fuels by ten percent by 2020." (Underscoring omitted.)
The November 25, 2009, notice of decision related to the LCFS regulations and issued by the ARB included the following two lines:
The notice of decision also stated that "[c]omments raising significant environmental issues have been responded to in the Final Statement of Reasons (Attached)."
A subsequent notice of decision filed with the Natural Resources Agency of California on March 4, 2010, relating to modifications to the LCFS regulations included the following lines:
Each of the notices of decision states that the LCFS regulations were approved by Resolution 09-31, which the Board passed on April 23, 2009.
Plaintiffs also refer to an update regarding the LCFS regulations that ARB released in October 2009, which stated: "On April 23, 2009, the California Air Resources Board (ARB/Board) approved the Low Carbon Fuel Standard (LCFS) for transportation fuels used in California." (Italics added.) The update also stated: "The Board-approved revisions to the regulation are undergoing public review and as such are subject to change." (Italics added.)
We conclude that these documents show the LCFS regulations had significant bureaucratic momentum after they were approved for adoption by the Board on April 23, 2009. ARB's press release stated that the Board "adopted a regulation that will implement Governor Schwarzenegger's Low Carbon Fuel Standard...." The phrase "adopted a regulation" describes what happened in the past and the phrase "will implement Governor Schwarzenegger's Low Carbon Fuel Standard" (italics added) describes ARB's view of what will happen in the future. This unqualified public statement about the future "increased the political stakes" (Save Tara, supra, 45 Cal.4th at p. 135) and left little doubt that ARB was committed to implementing the LCFS regulations as a result of the action taken by the Board on April 23, 2009.
Next, we examine the terms of the resolutions passed by the Board on April 23, 2009, "to determine whether, as a practical matter, the agency has committed itself to the project as a whole or to any particular features, so as to effectively preclude any alternatives or mitigation measures ...." (Save Tara, supra, 45 Cal.4th at p. 139.)
Plaintiffs argue that the terms of Resolution 09-31 committed ARB to particular features of the LCFS regulations because, among other things, the
Plaintiffs' argument accurately characterizes the authority of the Executive Officer. In Resolution 09-31, the Board required the Executive Officer "either [(a)] to adopt the regulations as made available with any appropriate additional nonsubstantial modifications, [(b)] to make additional modifications available for public comment for an additional period of at least 15 days, or [(c)] to present the regulations to the Board for further consideration if he determines that this is warranted." Under this grant of authority, the Executive Officer could not scrap the LCFS regulations and begin anew based on information learned during his environmental review. The most he could do was decline to adopt the regulations and refer them back to the Board, an option that was not practical in view of the January 1, 2010, deadline set for discrete early action regulations by Health and Safety Code section 38560.5, subdivision (b).
The Board also gave the Executive Officer the authority to "add new or customized fuel pathways and carbon intensity values to the Carbon Intensity Lookup Table in section 95486, [and] revise any existing fuel pathway or carbon intensity value (except values based on land use or other indirect effects that are specified in the Carbon Intensity Lookup Table in section 95486 as adopted in this rulemaking) ...." (Italics added.) Plaintiffs argue the stated exception prohibited the Executive Officer from modifying the 30 gCO2E/MJ added to the carbon intensity value of ethanol produced from corn to account for indirect effects from land use changes and, thus, demonstrates that the Board was committed to particular features of the LCFS regulation as approved at the April 23, 2009, public hearing. We agree. The Board's resolution effectively precluded the Executive Officer from adopting alternatives to the carbon intensity values based on land use or other indirect effects.
Based on the foregoing and the absence of any analysis of Guidelines section 15352 and Save Tara in the appellate briefing submitted on behalf of ARB, we conclude that ARB committed itself to a definite course of action regarding the LCFS regulations when it passed Resolution 09-31 and issued the related press release on April 23, 2009. Therefore, we conclude April 23, 2009, is the date of ARB's "approval" of the LCFS regulations for purposes of Guidelines section 15352 and CEQA.
Consequently, ARB's assertion that the "final LCFS regulation as modified was not adopted until November 25, 2009, in Executive Order R-09-014, and March 4, 2010, in Executive Order R-10-003" might be a proper use of the word "final." But, the concept of finality has little impact on the relevant legal question concerning when "approval" occurred. (See Guidelines, § 15352.)
The fact that the environmental review under ARB's certified regulatory program had not been completed by April 23, 2009, is not disputed by ARB. The incompleteness is illustrated by, among other things, the following sentence in the resolutions passed by the Board on April 23, 2009: "The Executive Officer is the decision maker for the purposes of title 17, California Code of Regulations, section 60007 and responding to environmental issues raised on the proposed regulation, and by approving this Resolution 09-31, the Board is not prejudging any of the responses that will be made by the Executive Officer to these environmental issues ...." This resolution plainly indicates that part of the environmental review under the certified regulatory program (i.e., response to comments) would occur after April 23, 2009.
Based on the fact that the environmental review was not finished when ARB "approved" the project on April 23, 2009, it follows that ARB violated CEQA's requirement that project approval must occur after the public agency has considered the environmental review documentation prepared to satisfy CEQA. (See Guidelines, § 15004, subd. (a) [agency shall consider environmental review document before granting any approval].)
Plaintiffs' second CEQA claim concerns who approved the project and whether the required environmental review was done by someone who could act as a decision maker.
Plaintiffs view CEQA as requiring the decision maker who approves the project to be the person or entity that has completed the environmental review process. Plaintiffs assert that ARB violated this procedural rule of law because the Board approved the LCFS regulations while the responsibility of completing the environmental review process was delegated to the Executive Officer. To support their view of the law, plaintiffs argue that CEQA's prohibition against improperly delegating authority is based on the rationale that an environmental review document "cannot serve its informational function unless it is reviewed and considered by the governmental body which takes action having an effect upon the environment." (Kleist v. City of Glendale (1976) 56 Cal.App.3d 770, 779 [128 Cal.Rptr. 781].)
ARB counters plaintiffs' position by contending it properly conducted the environmental review and properly delegated responsibility to the Executive Officer to finalize the LCFS regulations and respond to significant environmental issues. ARB supports this contention by asserting (1) the "decision-maker" in ARB rulemakings encompasses both the Board and the Executive Officer, (2) the Health and Safety Code explicitly authorizes ARB's hybrid decisionmaking structure, (3) the regulatory history of ARB's certified regulatory program confirms the Executive Officer is properly considered a "decision maker" for ARB rulemaking, and (4) ARB's CEQA findings and delegation to the Executive Officer in Resolution 09-31 are consistent with CEQA and the Health and Safety Code.
ARB's arguments regarding improper delegation of authority, like its arguments regarding premature approval of the project, are based on its position that the critical point in the rulemaking process is the adoption of the final regulation. For example, ARB argues that the Executive Officer was the final "decision maker" and "properly executed each of his delegated responsibilities in analyzing and approving the responses to comments raising significant environmental issues, and properly adopted the final regulation." ARB also asserts: "Viewed in the correct light, it is simply inaccurate to argue that ARB took final action on the proposed regulation prior to
Plaintiffs' arguments regarding the improper delegation of authority reference (1) the principles regarding the delegation of authority in Guidelines section 15025, (2) the definition of "decision-making body" contained in Guidelines section 15356, and (3) case law that discusses the delegation of authority.
Conversely, subdivision (b) of Guidelines 15025 states that "[t]he decisionmaking body of a public agency shall not delegate the following functions: [¶] (1) Reviewing and considering a final EIR or approving a negative declaration prior to approving a project. [¶] (2) The making of findings required by Sections 15091 and 15093." (Italics added.) Although this subdivision does not refer to documents that may be used in place of an EIR, plaintiffs contend that the prohibition against delegation also applies to documents that are the functional equivalent of an EIR and, therefore, applies in this case.
In Sundstrom v. County of Mendocino (1988) 202 Cal.App.3d 296 [248 Cal.Rptr. 352] (Sundstrom), an owner of property located near a proposed private sewage treatment plant filed a petition for a writ of mandate that challenged the county board of supervisor's issuance of a use permit for the construction of the plant. The use permit included a condition that required the applicant to submit a hydrological study, which would be subject to review and approval by the county planning commission. (Id. at p. 306.) The use permit also required that any mitigation measures recommended by the hydrological study be incorporated into the project's plans. (Ibid.)
The neighboring landowner in Sundstrom asserted various procedural and substantive violations of CEQA tainted the county's adoption of a negative declaration for the project. (Sundstrom, supra, 202 Cal.App.3d at p. 304.) The trial court denied the property owner's petition. (Id. at p. 301.) The appellate court reversed and directed the trial court to issue the requested writ of mandate. (Id. at p. 314.) Among other things, the appellate court concluded that the conditions contained in the use permit "improperly delegate[d] the County's legal responsibility to assess environmental impact by directing the applicant himself to conduct the hydrological studies subject to the approval of the planning commission staff." (Id. at p. 307.) The county's board of supervisors could not delegate its responsibility to assess the project's environmental impacts to the staff of the planning commission. (Ibid.)
Plaintiffs also cited El Morro Community Assn. v. California Dept. of Parks & Recreation (2004) 122 Cal.App.4th 1341 [19 Cal.Rptr.3d 445] as an example where the action necessary for CEQA compliance was taken by a proper decision maker. In that case, California's Department of Parks and Recreation (Department) proposed a project that involved the conversion of a mobilehome park to a public campground and other facilities. (El Morro, supra, at p. 1346.) A homeowners group asserted that the Department had failed to proceed in the manner required by law because the EIR was not
Based on the foregoing cases and Guidelines sections 15025 and 15356, plaintiffs assert that the Executive Officer should not have been given the responsibility to finalize the environmental assessment because he did not have the authority to approve or disapprove the project — he was not the decision maker.
Earlier, we concluded that the Board gave its "approval" to the LCFS regulations before the Executive Officer completed the environmental review of the project and, as a result, violated CEQA. Our conclusion that the Board "approved" the project on April 23, 2009, necessarily requires us to reject ARB's position that the Executive Officer properly adopted the final regulation. The Executive Officer's adoption of the final regulation was improper because it violated the timing requirement of CEQA that "approval" occur after consideration of the environmental review documents. This flaw in the timing of the project's approval has tainted the procedures used by ARB and prevents us from analyzing, in isolation, the claim that the Executive Officer was not a proper decision maker.
The application of the concept of "approval" and our earlier conclusion that the "approval" came at an improper time leads us to the further conclusion that the Executive Officer, in the circumstances presented, cannot qualify as the "[d]ecision-making body" under the definition contained in Guidelines section 15356.
Under the facts of this case, it is clear that ARB violated a fundamental policy of CEQA when it gave the responsibility for completing the environmental review process to the Executive Officer because he did not have the authority to approve or disapprove the project. In particular, the Executive Officer had no authority to alter the way the Board resolved the controversy regarding the carbon intensity values added to certain fuel pathways to account for indirect effects caused by land use changes.
Plaintiffs' third CEQA claim asserts that ARB impermissibly deferred its analysis and mitigation of potential increases in NOx emissions resulting from the increased use of biodiesel fuel that will be caused by the LCFS regulations.
One of ARB's methods for reducing the carbon content of transportation fuels used in California is to promote the use of biodiesel, either as a substitute for, or blended with, petroleum-based diesel fuel. In 2008, approximately 4.2 billion gallons of diesel fuel were consumed in California, while
Biodiesel and renewable diesel were among the fuels and conversion technologies discussed in the ISOR as being currently available for commercial use.
The process for making biodiesel uses a catalyst and alcohol to convert oils and fats into biodiesel.
The ISOR includes a chapter that addresses the environmental benefits and impacts associated with the LCFS regulation. The section on air quality impacts discusses motor vehicle emissions and includes three paragraphs about biodiesel and renewable diesel.
More details about the emission from vehicles using biodiesel and renewable diesel are set forth in appendix F7 of the ISOR, which is titled "Motor Vehicle Emissions — Biodiesel vs. Diesel." Appendix F7 states that under the
The statements in the ISOR about additional rulemaking to establish specifications for biodiesel were confirmed in Resolution 09-31, which directed the Executive Officer to work with various stakeholders "to complete the ongoing multimedia evaluation for biodiesel and renewable diesel; and propose, as appropriate, motor-vehicle fuel specifications for biodiesel and renewable diesel by December 2009."
Despite the unresolved issue regarding NOx emissions from biodiesel, the proposed LCFS regulations included two pathways for biodiesel in the carbon intensity lookup table for diesel and fuels that substitute for diesel. The pathways addressed two methods of converting used cooking oil to biodiesel.
In addition, the FSOR released in December 2009 stated that it was ARB's "intent that, by the end of the rulemaking, Table 7 in section 95486(b) will include specified carbon intensity values and supporting documentation for two additional fuel pathways" — namely, biodiesel converted from Midwest soybeans and renewable diesel converted from Midwest soybeans. The two additional pathways were to be discussed in a separate FSOR.
The FSOR also included a response to a comment that challenged ARB's assumption that increased biodiesel usage would not increase NOx emissions. That response provided in full:
"We acknowledge the reviewer's comment that NOx is generally higher with biodiesel and biodiesel blends than diesel. Also, the NOx difference typically increases as the blend level increases, with pure biodiesel (B100) generally having highest NOx difference. Although NOx is caused by thermal formation, a number of studies show that fuel specifications can affect NOx emissions. The reviewer notes that fuel specifications alone cannot make
"Other potential strategies may include blending biodiesel feedstocks with other low NOx feedstocks, such as renewable diesel or gas-to-liquids diesel substitutes, to counteract the NOx increase due to biodiesel. The preliminary results from ARB's ongoing biodiesel emissions study suggest that NOx emissions may be mitigated for biodiesel blends (up to B20) that are made from soy, which is a feedstock that has been shown to be on the high end for NOx emissions."
The FSOR also included a comment from the American Trucking Association stating it was uncertain how ARB would ensure that that biodiesel use did not increase NOx emission and expressing the concern that fuel additives to reduce such emissions might increase fuel costs and adversely impact engine durability or the long term efficacy of emission control equipment. ARB responded that it would "ensure that biodiesel fuel use does not increase NOx emissions significantly by promulgating a new motor vehicle fuel specification for biodiesel," the adoption of which was "now tentatively scheduled for 2010."
This schedule, like the December 2009 date set in Resolution 09-31, was not achieved. The final report generated by ARB's biodiesel emissions study was not issued until October 2011. The report noted that a number of factors affected NOx emissions, such as the feedstock used to produce the biodiesel, percentage of biodiesel in the fuel blend, engine type, and engine operating conditions including load. The report stated that "further research is needed to understand the impacts biodiesel would have in California with widespread use."
As of June 2013, it does not appear that ARB has adopted any regulations containing fuel specifications for biodiesel.
There is not a single, all-encompassing statement of the judge-made exception to the general rule prohibiting the deferral of the formulation of mitigation measures. Although the parties have agreed that such an exception exists, they have not described that exception in the same language. Consequently, we will review the way the exception has been expressed in various cases.
Under this statement of the exception, it appears that the formulation of mitigation measures is properly deferred when three elements are satisfied. First, practical considerations prevented the formulation of mitigations measures at the usual time in the planning process. Second, the agency committed itself to formulating the mitigation measures in the future. Third, the agency adopted specific performance criteria that the mitigation measures were required to satisfy.
In Endangered Habitats League, Inc. v. County of Orange (2005) 131 Cal.App.4th 777 [32 Cal.Rptr.3d 177] (Endangered Habitats), the Fourth Appellate District addressed the deferred formulation of mitigation measures using the following language: "`Deferral of the specifics of mitigation is permissible where the local entity commits itself to mitigation and lists the alternatives to be considered, analyzed and possibly incorporated in the mitigation plan. [Citation.] On the other hand, an agency goes too far when it simply requires a project applicant to obtain a ... report and then comply with any recommendations that may be made in the report. [Citation.]' [Citation.] If mitigation is feasible but impractical at the time of a general plan or zoning amendment, it is sufficient to articulate specific performance criteria and make further approvals contingent on finding a way to meet them. [Citation.]" (Endangered Habitats, supra, 131 Cal.App.4th at p. 793.)
In California Native Plant Society v. City of Rancho Cordova (2009) 172 Cal.App.4th 603 [91 Cal.Rptr.3d 571] (CNPS), the Third Appellate District's discussion of the case law concerning the deferred formulation of mitigation measures included the following statement: "... SOCA stands for the proposition that when a public agency has evaluated the potentially significant impacts of a project and has indentified measures that will mitigate those impacts, the agency does not have to commit to any particular mitigation measure in the EIR, as long as it commits to mitigating the significant impacts of the project. Moreover, under SOCA, the details of exactly how mitigation will be achieved under the identified measures can be deferred pending completion of a future study." (Id. at p. 621.)
Later, in less expansive language, the court set forth the principle that "[i]f the agency has identified one or more mitigation measures and has committed to mitigating the impact those measures address, then the principles forbidding deferral of mitigation are not implicated." (CNPS, supra, 172 Cal.App.4th at p. 623, italics added.) We note that these quotes from CNPS do not mention specific performance criteria like the earlier quoted language from SOCA and Endangered Habitats.
In Communities for a Better Environment v. City of Richmond (2010) 184 Cal.App.4th 70 [108 Cal.Rptr.3d 478] (CBE), the First Appellate District set forth another description of the exception permitting deferral. After discussing SOCA and CNPS, the court stated that those cases "permitted the lead agency to defer the formulation of specific mitigation measures after the lead agency (1) undertook a complete analysis of the significance of the environmental impact, (2) proposed potential mitigation measures early in the planning process, and (3) articulated specific performance criteria that would ensure that adequate mitigation measures were eventually implemented." (CBE, supra, at p. 95.)
ARB's version of the exception is based primarily on the following quote: "`Deferral of the specifics of mitigation is permissible where the local entity commits itself to mitigation and lists the alternatives to be considered, analyzed and possibly incorporated in the mitigation plan.' ... [Citation.]" (Endangered Habitats, supra, 131 Cal.App.4th at p. 793; see CNPS, supra, 172 Cal.App.4th at p. 621.)
ARB's version of the exception does not reference "specific performance criteria" or the future action being "contingent" upon the satisfaction of such criteria. (See SOCA, supra, 229 Cal.App.3d at p. 1029; 1 Kostka & Zischke, supra, § 14.12, pp. 698-699 (rev. 3/13) [deferral may be particularly appropriate when performance criteria are identified and further approvals are made contingent on finding a way to meet those criteria].)
Because of ARB's view of the law, it has not explicitly addressed the issue whether it committed to specific performance criteria when it deferred formulating mitigation measures for the potential increase in NOx emissions from biodiesel. Nonetheless, the ISOR addressed NOx emissions from biodiesel by stating that ARB's staff would conduct an extensive testing program for biodiesel and "will follow that effort with a rulemaking to establish specifications to ensure there is no increase in NOx." Thus, we will consider whether the statement that ARB's future rules will "establish specifications to ensure there is no increase in NOx" has articulated specific performance criteria as required by SOCA and subsequent cases, such as this court's decision in Gray. We conclude that "no increase in NOx" is not a specific performance criterion.
In CBE, supra, 184 Cal.App.4th 70, another case involving greenhouse gas emissions, Chevron proposed to replace and upgrade certain manufacturing facilities at its oil refinery in Richmond. The city council approved the necessary permits and certified the EIR. (Id. at p. 75.) Late in the environmental review process — that is, in an addendum circulated four months after issuance of the final EIR — the city belatedly found that the project's greenhouse gas emissions would be a significant impact. (Id. at pp. 90-91.) The amended EIR addressed this impact by putting forth "some proposed mitigation measures to ensure that the Project's operation `shall result in no net increase in GHG emissions over the Proposed Project baseline.'" (Id. at p. 91.) The amended EIR plan gave Chevron one year to submit to the city, for approval by the city council, "`a plan for achieving complete reduction of GHG emissions up to the maximum estimated ... Project GHG emissions increase over the baseline (898,000 metric tons per year...).'" (Ibid.) The First Appellate District concluded the mitigation plan for greenhouse gases violated CEQA because the city "delayed making a significance finding until late in the CEQA process, divulged little or no information about how it quantified the Project's greenhouse gas emissions, offered no assurance that the plan for how the Project's greenhouse gas emissions would be mitigated to a net-zero standard was both feasible and efficacious, and created no objective criteria for measuring success." (CBE, supra, at p. 95, italics added;
We conclude that ARB's statement that its future rulemaking will "establish specifications to ensure there is no increase in NOx" suffers from the same defect as the net-zero standard for greenhouse gas emissions adopted in CBE — it established no objective performance criteria for measuring whether the stated goal will be achieved. As a result, we and members of the public have not been informed how ARB will determine that the requirements it adopts in a fuel specifications regulation will ensure that use of the biodiesel does not increase NOx emissions. To illustrate this point, it is unclear what tests will be performed and what measurements will be taken to determine that biodiesel use is not increasing NOx emissions.
In summary, ARB's statement that its rulemaking would "ensure that there is no increase in NOx" is similar to the "generalized goal of no net increase in greenhouse gas emissions" that was deemed deficient in CBE, supra, 184 Cal.App.4th at page 93. Thus, ARB violated CEQA by improperly deferring the formulation of mitigation measures for the increase in NOx emissions that might result from the increase use of biodiesel fuel caused by the LCFS regulations.
Here, ARB has gone forward with the project's activity — that is, ARB has implemented the LCFS regulations — without putting in place any mitigation measures for the potential increase in NOx emissions resulting from the use of biodiesel. This absence of mitigation measures for project activity constitutes a violation of CEQA. Only the formulation of mitigation measures may be deferred, mitigation itself cannot be deferred past the start of the project activity that causes the adverse environmental impact.
On remand, ARB may not simply assume that the LCFS regulations will not have a significant adverse impact on the environment. ARB must make a finding of fact, supported by substantial evidence, on the question whether the project will have a significant adverse effect on the environment as a result of the potential increase in NOx emissions.
If ARB finds that the LCFS regulations will adversely impact the environment by increasing NOx emissions, then ARB must adopt mitigation measures that minimize the adverse impact. (See § 21080.5, subd. (d)(3)(A).)
Alternatively, if ARB finds that the LCFS regulations will not adversely impact the environment by increasing NOx emissions, then no mitigation measures are required by CEQA. We recognize that the parties disagree on how the potential adverse impacts of NOx emissions should be analyzed, but are not able resolve those disagreements because they involve questions of fact that must be addressed in the first instance by ARB. For example, we cannot define the appropriate geographical area or areas for analyzing the NOx emissions. Also, we cannot determine whether the NOx emissions analysis should be done from the perspective that analyzes the project as a whole, each substitute fuel separate, or some other basis.
Generally, the GTAP model is used to estimate the impacts resulting from changes in policy. Here, the GTAP model was adapted to estimate the land use changes likely to result from the proposed LCFS regulations and to estimate how those changes would impact greenhouse gas emissions. Ultimately, ARB relied on the model's estimates of indirect land use effects to add 30 gCO2E/MJ to the carbon intensity value of ethanol produced from corn. The application of the GTAP model and the calculation of indirect impacts from land use changes is a controversial subject.
The four e-mails are relevant to the interests of POET and other ethanol producers because they relate to the carbon intensity value assigned to
The basic criticisms of increasing ethanol's carbon intensity value based on land use changes are that (1) other fuels are not required to account for their indirect greenhouse gas impacts, which gives those other fuels an inappropriate advantage over ethanol, and (2) the indirect effects are too difficult to quantify at the present because of incomplete data and assumptions made in modeling the effects.
The other side of the argument asserts that, although uncertainty exists, a start must be made somewhere. For example, a comment letter dated April 21, 2009, from the "Union of Concerned Scientists" took the position that the LCFS regulations should use carbon intensity values that include indirect emissions from land use changes. That letter asserted: "There are uncertainties inherent in estimating the magnitude of indirect land use emissions from biofuels, but assigning a value of zero is clearly not supported by the science. The data on land use change indicate that the emissions related to biofuels are significant and can be quite large. Grappling with the technical uncertainty and developing a regulation based on the best available science is preferable to ignoring a major source of emissions. Over time, greater accuracy and detail in a more refined analysis can be reflected in future LCFS rulemakings."
The e-mails from Hertel and Plevin tie into these arguments because they address topics such as databases, assumptions used and results produced by the GTAP model.
Plaintiffs contend that ARB violated the rulemaking procedures of the APA specifying the contents of the rulemaking file by omitting the consultant e-mails from that file, thereby thwarting the public's right to information. Plaintiffs further contend that ARB's decision to keep these documents confidential until after the regulation was finalized constitutes a substantial failure to comply with the APA and, thus, justifies invalidating the regulation. ARB disagrees with these contentions
We hold that ARB violated its disclosure obligations under the rulemaking procedures of the APA. Our holding is based on the following conclusions:
(1) The statutory interpretation of the APA advocated by ARB in this litigation is entitled to no deference from the courts.
(2) The interpretation of the provisions of the APA presents this court with a question of law subject to independent review.
(3) The e-mails contain "other factual information" and were "submitted to the agency" as those terms are used in section 11347.3, subdivision (b)(6). Therefore, ARB violated the statute by omitting the e-mails from the rulemaking file.
As for the appropriate remedy, we conclude that, even if the omissions constitute "a substantial failure to comply with" the APA as that phrase is used in subdivision (a) of section 11350, the circumstances of this case do not favor invalidating the LCFS regulation. Instead, pursuant to our equitable authority, we will direct ARB to include the e-mails in the rulemaking file, which will allow the public to comment on the e-mails prior to ARB's reconsideration of the LCFS regulations.
Pursuant to those procedural requirements, agencies must, among other things, (1) give the public notice of the proposed regulatory action; (2) issue a
One purpose of the APA's formal rulemaking procedures is to give those persons and entities affected by a regulation a voice in its creation. (Tidewater, supra, 14 Cal.4th at p. 568.) The benefits of public participation in the regulatory process include (1) the agency being informed by interested parties about possible unintended consequences of a proposed regulation and (2) directing the attention of agency policymakers to the public they serve, thus providing some protection against bureaucratic tyranny. (Id. at p. 569.) Another purpose of the APA's procedural requirements is to create an administrative record assuring effective judicial review. (Voss v. Superior Court (1996) 46 Cal.App.4th 900, 908 [54 Cal.Rptr.2d 225].)
Compliance with the rulemaking procedures set forth in chapter 3.5 of the APA is significant because the "regulation ... may be declared to be invalid for a substantial failure to comply with [chapter 3.5]...." (§ 11350, subd. (a).)
Section 11350, subdivision (d)(3) establishes that the four e-mails were relevant, admissible evidence for purposes of proving plaintiffs' claim that ARB violated the APA's provisions governing the contents of the rulemaking
"(6) All data and other factual information, any studies or reports, and written comments submitted to the agency in connection with the adoption... of the regulation.
"(7) All data and other factual information, technical, theoretical, and empirical studies or reports ... on which the agency is relying in the adoption ... of a regulation.... [¶] ... [¶]
"(11) Any other information, statement, report, or data that the agency is required by law to consider or prepare in connection with the adoption ... of a regulation." (§ 11347.3, subd. (b).)
Under these provisions, the rulemaking file must include certain materials that were (1) submitted to the agency, (2) relied upon by the agency, or (3) required by law to be considered by the agency.
Before deciding the proper interpretation of the mandatory provisions of section 11347.3, subdivision (b) and how to apply that interpretation to the facts of this case, we must resolve a threshold dispute regarding the appropriate standard of review.
Plaintiffs contend that a procedural error, such as the failure to proceed in the manner required by the APA, is subject to independent review by this court.
In addition, ARB argues that a regulation certified by the Office of Administrative Law is subject to a rebuttable presumption that the regulation was "duly adopted" and in compliance with all the requirements of chapter 3.5 of the APA. (§ 11343.6, subd. (a); see id., subd. (c).) Thus, in ARB's view, plaintiffs must overcome the deference given to interpretations of the agency and the Office of Administrative Law, as well as the presumption of compliance.
We conclude ARB's interpretation of the statutory provisions concerning the rulemaking file is not entitled to deference because (1) ARB's interpretation was not set forth in a formal regulation; (2) ARB is subject to the statute in question, not charged with its administration (Morris v. Williams (1967) 67 Cal.2d 733, 748 [63 Cal.Rptr. 689, 433 P.2d 697]); (3) ARB has no expertise or technical knowledge that gives it special insight into the meaning of the APA's provisions that specify the mandatory contents of a rulemaking file (see California Society of Anesthesiologists v. Brown (2012) 204 Cal.App.4th 390, 405 [138 Cal.Rptr.3d 745]; Church v. Jamison (2006) 143 Cal.App.4th 1568, 1579 [50 Cal.Rptr.3d 166]); (4) the interpretation advanced by ARB in this litigation was not explicitly adopted or approved by the agency's senior officials, such as the Board or the Executive Officer (see Allende v. Department of California Highway Patrol (2011) 201 Cal.App.4th 1006, 1018 [134 Cal.Rptr.3d 27] [agency decision carefully considered by senior agency officials is entitled to greater weight]; Yamaha, supra, 19 Cal.4th at p. 12 [interpretation contained in an advice letter prepared by a single staff member receives less deference]); and (5) the record contains no evidence indicating that the interpretation advanced by counsel in this litigation has a long-standing history at ARB or any other agency (State of California ex rel. Nee v. Unumprovident Corp. (2006) 140 Cal.App.4th 442, 451 [44 Cal.Rptr.3d 491] [where agency has neither a formal regulation nor a long-standing interpretation of a statute, "courts may simply disregard the opinion offered by the agency"]).
In addition to the foregoing factors, if California courts deferred to each public agency's interpretation of the APA's provisions governing the contents of the rulemaking file, several different interpretations could result and the public disclosure provided to California's citizens would vary from agency to agency. To avoid this lack of uniformity, the judiciary should make the ultimate decision regarding the meaning and effect of section 11347.3 without deference to the position adopted by the agency.
Therefore, we conclude that the independent standard of appellate review applies to the interpretation of subdivision (b) of section 11347.3. This statutory interpretation poses a question of law. (See PM & R Associates v. Workers' Comp. Appeals Bd. (2000) 80 Cal.App.4th 357, 364 [94 Cal.Rptr.2d 887] [construction of a statute is a pure question of law subject to independent review on appeal].) Because there is no dispute regarding the contents of
Our independent determination of the meaning of section 11347.3, subdivision (b) is guided by the following general principles of statutory construction.
Alternatively, when the statutory language is ambiguous, courts must select the construction that comports most closely with the apparent intent of the Legislature, with a view to promoting rather than defeating the general purpose of the statute. (Grayson Services, Inc. v. Wells Fargo Bank, supra, 199 Cal.App.4th at p. 570.) The interpretation of ambiguous wording is guided by the fundamental principle that courts construe those words in the context and with reference to the entire scheme of law of which they are a part. (State Farm Mutual Automobile Ins. Co. v. Garamendi (2004) 32 Cal.4th 1029, 1043 [12 Cal.Rptr.3d 343, 88 P.3d 71]; see Schatz v. Allen Matkins Leck Gamble & Mallory LLP (2009) 45 Cal.4th 557, 569 [87 Cal.Rptr.3d 700, 198 P.3d 1109] [every statute should be construed with reference to the whole system of law of which it is a part].) Courts resolving statutory ambiguity also may be aided by the ostensible objects to be achieved by the legislation, the evils to be remedied, the legislative history, and public policy. (Honchariw v. County of Stanislaus (2011) 200 Cal.App.4th 1066, 1073 [132 Cal.Rptr.3d 574].) When a court interprets an ambiguous statute, it is not authorized to rewrite the statute. It must simply declare what is, in terms or in substance, contained in the statute. (Code Civ. Proc., § 1858.) Court do not have the authority "to insert what has been omitted, or to omit what has been inserted" by the Legislature. (Ibid.)
Therefore, when a court is confronted with resolving a statutory ambiguity related to the public's access to information, the California Constitution requires the court to construe the ambiguity to promote the disclosure of information to the public.
Plaintiffs contend that the four e-mails should have been included in the rulemaking file because, among other things, they contain "data and other factual information" that was "submitted to the agency in connection with the adoption ... of the regulation." (§ 11347.3, subd. (b)(6).)
ARB argues that (1) plaintiffs are raising this interpretation and application of the statute for the first time on appeal and (2) the e-mails contain opinions, not facts or data. In addition, ARB argues that the statutory phrase "submitted to the agency" limits the scope of section 11347.3, subdivision (b)(6) to items that come from external sources. Under this interpretation, items from ARB consultants would not be covered because the consultants are ARB agents and, thus, any item they present would be properly regarded as an internal item, not an item submitted to ARB from an outside source.
In the instant case, the application of the provisions of section 11347.3, subdivision (b)(6) to the four e-mails presents questions of law because the facts are not in dispute. The contents of the e-mails appear on the face of the documents and the circumstances of their delivery to ARB, such as the time and the source, are not disputed. Furthermore, because of the public interest involved in the proper interpretation and application of the disclosure provisions of the APA, we will exercise our discretion and determine the legal issue whether the e-mails contain "other factual information" and thus should have been included in the rulemaking file pursuant to section 11347.3, subdivision (b)(6).
Section 11347.3, subdivision (b)(6) requires the rulemaking file to include "[a]ll data and other factual information, any studies or reports, and written comments submitted to the agency in connection with the adoption ... of the regulation."
The dispute regarding the meaning and application of subdivision (b)(6) of section 11347.3 concerns the phrases "other factual information" and "submitted to the agency." We will begin with the broader question, which involves the phrase "submitted to the agency" and whether materials sent to the agency by its hired consultants fall within the scope of that phrase.
Pursuant to the constitutional directive for public access and the disclosure of information, we interpret section 11347.3, subdivision (b)(6) to mean that e-mails from consultants to ARB were "submitted to the agency."
Next, we consider the meaning of the word "information" in the phrase "other factual information." (§ 11347.3, subd. (b)(6).) Webster's Third New International Dictionary defines "information" as "something received or obtained through informing: as a : knowledge communicated by others or obtained from investigation, study, or instruction b : knowledge of a particular event or situation : INTELLIGENCE, NEWS, ADVICES ... c : facts or figures ready for communication or use as distinguished from those incorporated in a formally organized branch of knowledge : DATA...." (Webster's 3d New Internat. Dict. (1993) p. 1160, col. 3, boldface omitted.) The noun "advice," which appears in the definition of "information," is defined to include a "recommendation regarding a decision or course of conduct : COUNSEL...." (Id. at p. 32, col. 1.)
Here, ARB has argued that the e-mails contain only the opinions of the consultants and, therefore, do not constitute "factual information." We disagree on both points and conclude that (1) the e-mails contain nonopinion information and (2) the fact that an expert holds a particular opinion is factual information that the public has an interest in knowing.
To illustrate, Plevin's March 17, 2009, e-mail to ARB discusses the "Woods Hole" emission factors, their use in the GTAP model, and the
In addition, Plevin's e-mail states that "these assumptions are not very solid," which is a reference to the "Woods Hole" data set used by ARB staff. This statement is a narrative of Plevin's opinion. From the perspective of the public, the fact that Plevin, an expert retained by ARB, held such an opinion is factual information.
Similarly, the three e-mails from Hertel contain "factual information" for purposes of section 11347.3, subdivision (b)(6).
Hertel's April 9, 2009, e-mail regarding "LCFS Board Presentation" attached a PowerPoint document relating to the GTAP model and its use in policy analysis. Hertel's third numbered point in the e-mail states: "I wish that ARB would make use of the confidence intervals that we have produced. Instead the final estimate is a rather arbitrary average across a set of model runs. This is much less defensible."
Hertel's assertions that ARB's "final estimate is a rather arbitrary average across a set of model runs" qualifies as "factual information" because it presents knowledge about a particular event — namely, how the estimate was created. (See Webster's 3d New Internat. Dict., supra, at p. 1160, col. 3 [definition of "information" includes "knowledge of a particular event or situation"].)
In addition, Hertel's April 16, 2009, e-mail discusses results for global land conversion generated by running his model assuming unchanging yields worldwide. Hertel asserted: "Previous scrutiny has brought down the yield response to higher prices as well (i.e. more recent studies of U.S. corn show a declining yield response)." Immediately following, Hertel cautioned: "But we know very little about yield response in the rest of the world." These statements provide the reader with knowledge about the operation of the
Hertel's November 16, 2008, e-mail was sent to ARB after he read a "Renewable Fuels Association report." Hertel stated that the report indicated that meeting the corn ethanol mandate would require only a few million hectares, which was "pretty much the same figure as we estimate, given that they are starting in 2007!" Hertel also stated: "Our analysis predicts very similar impacts on global land use — but shows that the emissions impacts are enough to rule out corn ethanol as a GHG reducing fuel." These statements provide the reader with knowledge about the operation of the GTAP model and the conclusions reached by an outside entity. Thus, they contain "factual information" for purposes of section 11347.3, subdivision (b)(6).
In summary, we conclude that the four e-mails contain factual information that was submitted to ARB. Accordingly, the omission of the e-mails from the rulemaking file was a violation of the APA. (§ 11347.3, subd. (b).)
Because the two issues are independent of one another, nothing in this opinion's interpretation of the APA should be read as vitiating or otherwise limiting the deliberative process privilege as it might be applied to materials delivered to public agencies by outside consultants or experts. Whether that privilege applies is determined on a case-by-case basis and the party claiming the privilege has the burden of presenting evidence to support the existence of the privilege. (See Citizens for Open Government v. City of Lodi (2012) 205 Cal.App.4th 296, 307 [140 Cal.Rptr.3d 459] [city failed to carry its burden of demonstrating the e-mails from consultants were protected by deliberative process privilege].)
Here, counsel for ARB stated during oral argument that ARB was not asserting that the four e-mails should have been excluded from the rulemaking file on the basis that the deliberative process privilege applied to them.
The court in Pulaski addressed the meaning of the APA's "substantial failure to comply" language by quoting the following text from earlier cases: "`"`Substantial compliance, as the phrase is used in the decisions, means actual compliance in respect to the substance essential to every reasonable objective of the statute.' ... Where there is compliance as to all matters of substance technical deviations are not to be given the stature of noncompliance.... Substance prevails over form."'" (Pulaski, supra, 75 Cal.App.4th at p. 1328.)
For purposes of this appeal, we will assume, without deciding, that the omission of each of the four e-mails adversely affected public participation and constituted a "substantial failure to comply with" the rulemaking procedures. Based on this assumption, we will proceed to the appropriate remedy for the violations of the APA.
The use of "may" in this statutory provision has been interpreted to mean that courts have the discretion to declare the regulation invalid, but are not required to do so. (California Assn. of Medical Products Suppliers v. Maxwell-Jolly (2011) 199 Cal.App.4th 286, 306 [131 Cal.Rptr.3d 692].)
As discussed below, we believe the public interest is not served by invalidating (i.e., suspending the operation of) the LCFS regulations. Instead, the purpose underlying the public disclosure of the contents in the rulemaking file can be accomplished on remand by requiring ARB to include the four e-mails in the rulemaking file and allowing the public to comment on those e-mails during the reapproval process that will be mandated to correct the CEQA violations.
First, the court's order "shall include only those mandates which are necessary to achieve compliance with [CEQA] and only those specific project activities in noncompliance with [CEQA]." (§ 21168.9, subd. (b).)
Second, "the order shall be limited to that portion of a determination, finding, or decision or the specific project activity or activities found to be in noncompliance only if a court" makes certain findings. (§ 21168.9, subd. (b).) Severance and a limited order are appropriate when the "court finds that (1) the portion or specific project activity or activities are severable, (2) severance will not prejudice complete and full compliance with [CEQA], and (3) the court has not found the remainder of the project to be in noncompliance with [CEQA]." (§ 21168.9, subd. (b).)
Third, a court is not authorized "to direct any public agency to exercise its discretion in any particular way." (§ 21168.9, subd. (c).)
The foregoing limitations on the court's authority must not be interpreted to create implied limitations. The legislative intent on this point is stated clearly: "Except as expressly provided in this section, nothing in this section is intended to limit the equitable powers of the court." (§ 21168.9, subd. (c).)
Our analysis of which "mandates" listed in subdivision (a) of section 21168.9 should be included in the writ issued to ARB begins with the basic proposition that the purpose of the "mandates" is to achieve compliance with CEQA. This remedial purpose is evident in the text of subdivision (b) of section 21168.9, which states that the order granting relief "shall include only those mandates which are necessary to achieve compliance with [CEQA]...." (§ 21168.9, subd. (b).)
Second, ARB improperly split the decisionmaking authority to approve the project from the responsibility for completing the environmental review. For instance, the Executive Officer completed the environmental review by responding to the public comments directed at the carbon intensity values attributed to land use changes even though the Board previously determined those values.
Third, ARB deferred the formulation of mitigation measures for NOx emissions from biodiesel without committing to specific performance criteria for judging the efficacy of the future mitigation measures.
Subdivision (a)(1) of section 21168.9 authorizes this court to "mandate that the ... decision be voided by the public agency, in whole or in part." Pursuant to this authority, we shall mandate that the decision to defer the formulation of mitigation measures be voided by ARB. Voiding this decision means that ARB must replace the defective decision with a new decision that complies with CEQA. The action ARB should take before making that new decision is addressed in parts VI.B.5. and VI.B.6. below.
Here, the "in whole or in part" language in the statute presents the question whether the project approval could be voided in part. It does not appear, however, that ARB's decision to approve the project can be separated into a
Save Tara, supra, 45 Cal.4th 116 is similar to the present case because it also involved a premature project approval. In Save Tara, the Supreme Court decided that the approval should be voided. In selecting this judicial remedy, the Supreme Court used mandatory language, stating it agreed "with the Court of Appeal that City must be ordered to `declare void its approval of the May and August 2004 Agreements' and to reconsider those decisions in light of a legally adequate EIR for the project. (See § 21168.9, subd. (a)(1).)" (Save Tara, supra, 45 Cal.4th at p. 143.) The Supreme Court again used mandatory language when it framed its instructions for remand: "This matter must therefore be returned to the superior court for that court (1) to order City to set aside its prior approval of the project...." (Ibid., italics added.)
Whether voiding a defective project approval is mandatory or a matter of discretion is a question we need not decide because our choice of remedy is the same. Regardless of which rule of law applies, we conclude that the circumstances of this case justify an order directing ARB to set aside its approval of the LCFS regulations. Voiding the defective approval clears the way for ARB to implement an approval that complies with CEQA.
The next question presented is whether voiding the defective approval automatically suspends the operation of the LCFS regulations. We conclude it does not.
Therefore, we conclude that the LCFS regulations should remain in operation so long as ARB is diligent in taking the action necessary bring its approval of the project into compliance with CEQA. This exercise of our discretionary authority, while unusual, does not contravene principles established in other published cases.
County Sanitation Dist. No. 2 v. County of Kern (2005) 127 Cal.App.4th 1544 [27 Cal.Rptr.3d 28] (County Sanitation) is similar to the present case in that it concerned an ordinance adopted in violation of CEQA. The ordinance was designed to reduce the environmental impact resulting from the application of sewage sludge to agricultural land by requiring the sewage sludge be treated to heightened standards before its application to land. Thus, the ordinance is comparable to the LCFS regulations in that both were designed to regulate activity that could harm the environment. The CEQA violation in County Sanitation was more fundamental because it involved a failure to prepare the requisite environmental review document — an EIR.
In County Sanitation, like this case, we requested supplemental briefing regarding how to apply section 21168.9 and the directions to be given the superior court on remand. (County Sanitation, supra, 127 Cal.App.4th at p. 1604.) In that case, we asked the parties "whether the heightened treatment standard should be voided or allowed to remain in effect pending the completion of an EIR." (Ibid.) The parties responded by agreeing that the ordinance should remain in effect. (Id. at pp. 1604-1605.) Thus, the analysis we adopted in County Sanitation is limited to situations where the parties agree to preserving the status quo, which is not the situation presented by the instant case.
Besides County Sanitation, there do not appear to be many published California cases in which the appellate court allowed a regulation, rule, ordinance, general order or other type of written requirement governing third party action to remain operative pending the public agency's taking action necessary to achieve CEQA compliance.
In contrast, the California Supreme Court has set aside ordinances because of CEQA violations. (E.g., Friends of Sierra Madre v. City of Sierra Madre
These cases, two of which were decided before the 1993 amendments to section 21168.9 became effective, do not compel the conclusion that regulations, rules or ordinances adopted in violation of CEQA must be set aside pending CEQA compliance. Furthermore, even if the cases are regarded as creating a preference for a CEQA remedy that invalidates the regulations, rules and ordinances pending CEQA compliance, we conclude the circumstances of this case justify departing from that preference. Those circumstances include the probable impacts on the environment of allowing the written standards to remain in effect compared to the impact of setting the written standards aside.
Subdivision (a)(3) of section 21168.9 authorizes this court to "mandate that the public agency take specific action as may be necessary to bring the determination, finding, or decision into compliance with [CEQA]." One commentator has interpreted this language and the provisions of subdivision (b) of section 21168.9 as requiring courts to "rule on all alleged deficiencies so that the agency will know exactly what steps are necessary to bring its action into compliance with CEQA." (See 2 Kostka & Zischke, supra, § 23.125, p. 1271 (rev. 3/13); see § 21005, subd. (c).)
To bring the approval of the LCFS regulations (or a modified version of those regulations) into compliance with CEQA, the "approval" decision must be made by a decision maker with the responsibility for completing environmental review after that decision maker has completed the environmental review. Consequently, the Board first must identify a decision maker and make sure that the decision maker has full authority to (1) complete the required environmental review and (2) approve or disapprove the project. It appears the two most likely decision makers in this case are the Board and the Executive Officer. If the Board designates the Executive Officer as the decision maker, it must (1) give the Executive Officer full authority to approve or disapprove every aspect of the regulations and (2) direct him or her to exercise that authority only after completing the environmental review.
One of the specific problems created by ARB's 2009 approach to the approval of the LCFS regulations was that the transfer of authority to the Executive Officer effectively precluded the Executive Officer from analyzing and revising the carbon intensity values assigned to ethanol to account for indirect effects caused by land use changes. As a result, when the Executive Officer responded to comments regarding the carbon intensity values attributed to land use changes, the Executive Officer was simply providing a post hoc rationalization for a decision about carbon intensity values already made by the Board. (See Laurel Heights Improvement Assn. v. Regents of University of California, supra, 47 Cal.3d at p. 394.)
The carbon intensity values attributed to land use changes by the Board also are related to the consultant e-mails omitted from the rulemaking file in violation of the APA. Those e-mails concerned the operation of the GTAP model — the model used to calculate land use changes and the indirect carbon emissions attributable to biofuels to account for those land use changes. The exclusion of those e-mails from the rulemaking file precluded the written comments submitted before the April 23, 2009, public hearing from using information in the e-mails in formulating challenges to the use of the GTAP model and the carbon intensity values attributed to land use changes.
With regard to ARB's errors in addressing the emissions of NOx resulting from the use of biodiesel, compliance with CEQA might be achieved by different routes. (See part VI.B.5, ante.)
This court will not set forth specific requirements for the timing of the reproposal of the LCFS regulations because ARB should be allowed the option of coordinating the reconsideration and potential reapproval with any other actions that it might take regarding the regulations. Consequently, we will direct ARB to file an initial return reporting to the superior court the steps and schedule it proposes to take to comply with the writ of mandate. (See 2 Kostka & Zischke, supra, § 23.125A, p. 1273 (rev. 3/13) ["initial return describing the action [the agency] will take to comply" is usual practice].) The use of the initial return might allow some objections to be resolved before ARB proceeds with its corrective action.
The judgment is reversed and the matter remanded for further proceedings. The superior court is directed (1) to vacate its decision denying the petition for writ of mandate and granting the Air Resources Board's motion to strike and (2) to enter a new order that (a) denies the motion to strike and (b) grants the petition for writ of mandate.
The superior court shall issue a peremptory writ of mandate that compels the Air Resources Board to take the following action:
(1) Set aside its approval of the LCFS regulations, including Board Resolution 09-31, dated April 23, 2009; Executive Order No. R-09-014, dated November 25, 2009; Executive Order No. R-10-003, dated March 4, 2013; and ARB's decision to defer the formulation of mitigation measures relating to NOx emission from biodiesel.
(3) Address whether the project will have a significant adverse effect on the environment as a result of increased NOx emissions, make findings (supported by substantial evidence) regarding the potential adverse environmental effect of increased NOx emissions, and adopt mitigation measures in the event the environmental effects are found to be significant.
(4) Allow public comments for a period of at least 45 days on all issues related to the approval of the proposed LCFS regulations (which shall include, without limitation, issues concerning (a) the carbon intensity values attributed to land use changes, (b) the application of the GTAP model, and (c) any new material in any supplemental staff report prepared in connection with the proposed LCFS regulations) and respond to those comments before approving the proposed LCFS regulations.
(5) Include the four e-mails in question in its rulemaking file.
(6) Preserve the status quo by continuing to adhere to the LCFS regulations standards in effect for 2013 until the corrective action is completed. Notwithstanding the directive herein that ARB set aside its prior approvals of the LCFS regulations and related resolutions and orders, the LCFS regulations shall remain in operation and shall be enforceable unless its operation is suspended as provided below.
The superior court shall retain jurisdiction over the proceedings by way of a return to the writ. The superior court shall require ARB to file an initial return no later than 30 days after issuance of the writ. The initial return shall explain what action ARB will take to satisfy the writ's requirements; this explanation shall include a schedule and shall identify who will act as the decision maker. Within 15 days of the filing of the initial return, plaintiffs may file a response, which shall include plaintiffs' objections to matter addressed in the initial return. If plaintiffs file a response, ARB's reply shall be due no later than 15 days after the response.
As to the filing of the final return and the corrective action taken pursuant to this writ, the superior court shall require ARB to proceed in good faith without delay. In the event ARB fails to proceed in good faith with diligence, the superior court immediately shall vacate the portion of the writ that
Costs on appeal are awarded to plaintiffs.
Wiseman, Acting P. J., and Kane, J., concurred.
"Choosing the precise time for CEQA compliance involves a balancing of competing factors. EIRs and negative declarations should be prepared as early as feasible in the planning process to enable environmental considerations to influence project program and design and yet late enough to provide meaningful information for environmental assessment. [¶] ... [¶]
"(2) To implement the above principles, public agencies shall not undertake actions concerning the proposed public project that would have a significant adverse effect or limit the choice of alternatives or mitigation measures, before completion of CEQA compliance. For example, agencies shall not: [¶] ... [¶]
"(B) Otherwise take any action which gives impetus to a planned or foreseeable project in a manner that forecloses alternatives or mitigation measures that would ordinarily be part of CEQA review of that public project."
"(a) If a court finds, as a result of a trial, hearing, or remand from an appellate court, that any determination, finding, or decision of a public agency has been made without compliance with [CEQA], the court shall enter an order that includes one or more of the following:
"(1) A mandate that the determination, finding, or decision be voided by the public agency, in whole or in part.
"(2) If the court finds that a specific project activity or activities will prejudice the consideration or implementation of particular mitigation measures or alternatives to the project, a mandate that the public agency and any real parties in interest suspend any or all specific project activity or activities, pursuant to the determination, finding, or decision, that could result in an adverse change or alteration to the physical environment, until the public agency has taken any actions that may be necessary to bring the determination, finding, or decision into compliance with this division.
"(3) A mandate that the public agency take specific action as may be necessary to bring the determination, finding, or decision into compliance with this division."
