Duraflame, Inc. v. Bay Area Air Quality Management Dist.

Full title: DURAFLAME, INC., Plaintiff and Appellant, v. BAY AREA AIR QUALITY…

Court: California Court of Appeals, First District, Fifth Division

Date published: Sep 30, 2010

No. A128062 (Cal. Ct. App. Sep. 30, 2010)

Opinion

DURAFLAME, INC., Plaintiff and Appellant, v. BAY AREA AIR QUALITY MANAGEMENT DISTRICT, Defendant and Respondent. A128062 California Court of Appeal, First District, Fifth Division September 30, 2010

NOT TO BE PUBLISHED

Contra Costa County Super. Ct. No. N09-0102

NEEDHAM, J.

Respondent Bay Area Air Quality Management District (the District) adopted a regulation designed to limit particulate air pollution caused by the burning of wood and solid fuel products. Appellant Duraflame, Inc. (Duraflame) filed a petition for writ of mandate to invalidate the regulation to the extent it restricts the use of manufactured fireplace logs on certain winter days and requires manufactured logs in the Bay Area to carry a label advising consumers of the restriction. The superior court denied the writ, concluding the District had properly exercised its rulemaking authority in passing the challenged provisions. We affirm.

I. Background

The District is a local agency charged with limiting nonvehicular air pollution in the San Francisco Bay Area. It is authorized to adopt and enforce rules and regulations regarding the emission of pollutants, and to ensure that state and federal ambient air quality standards are met. (Health & Saf. Code, §§ 39002, 40000, 40001, subd. (a).)¹

1 Further references are to the Health and Safety Code unless otherwise indicated

The federal government has established air quality standards for particulate matter that is less than 2.5 microns in diameter (PM_2.5). (42 U.S.C. § 7407.) Particulate pollution is a serious health concern and can cause or aggravate conditions such as asthma, nose and throat irritations, bronchitis and lung damage. As of 2008, the Bay Area had exceeded the national standard for PM_2.5 for an average of 17 days each winter. Approximately 33 percent of the total wintertime PM_2.5 is caused by solid-fuel burning. On July 9, 2008, in an effort to ensure compliance with federal PM_2.5 standards, the District adopted Regulation 6, Particulate Matter and Visible Emissions, Rule 3: Wood-burning Devices (the Rule).

The Rule contains a number of provisions designed to reduce emissions caused by solid-fuel burning. Among other things, it sets standards for the sale and installation of wood-burning devices and the types of wood-burning devices that may be installed in new building construction; it prohibits the burning of certain types of materials such as plastics and garbage; it restricts moisture content of firewood offered for sale; and it requires that the opacity of visible emissions from wood-burning devices be no greater than 20 percent.

Two additional provisions of the Rule are relevant to this case. First, Section 301 provides for a “Mandatory Solid-fuel Burning Curtailment” on days specified by the District during the months of November through February, and on which “no person shall operate (combust wood or solid-fuel products in) any wood burning device” (the curtailment requirement).² The “curtailment period” is defined by Section 203 of the Rule as “[a]ny period so declared to the public by the [Air Pollution Control Officer] when a negative impact upon public health is anticipated, resulting from PM_2.5 levels forecast to exceed 35 micrograms/[square meter].” The second provision of the Rule at issue in this appeal is Section 404.1, which requires that any person offering solid fuel or wood for sale must attach a label to the package notifying consumers: “Use of this and other solid fuels may be restricted at times by law. Please check [Toll-Free Number] or [Web Address] before burning” (the labeling requirement).

2 This aspect of the Rule does not apply to persons who live in areas where gas or electric service is unavailable, or whose only source of heat for residential space is a wood burning device.

Manufactured fireplace logs are “solid fuel” as defined by Section 214 of the Rule. Duraflame, a nationwide producer of such logs, participated in the rulemaking proceedings by the District that led to the adoption of the Rule. During those proceedings, it consistently objected to the labeling requirement as unduly burdensome and costly. It also urged the Board to implement measures encouraging the use of manufactured logs as a cleaner burning fuel than firewood on days that did not fall within the curtailment period; i.e., on days when no restriction was placed on the use of wood burning devices.

After the Rule was adopted, Duraflame filed a petition for writ of mandate asking the court to declare unenforceable the labeling and curtailment requirements. (Code Civ. Proc., §§ 1084-1085.) The trial court denied the petition. Duraflame appeals, arguing that (1) the administrative record does not establish the necessity of the labeling requirement, which is, in any event, arbitrary and unconstitutional; and (2) the administrative record does not support the curtailment requirement.

II. Discussion

A. Standard of Review

The adoption of the Rule was a quasi-legislative action addressing a subject within the District’s area of expertise, and as such is entitled to a “strong presumption of validity.” (Western States Petroleum Assn. v. State Dept. of Health Services (2002) 99 Cal.App.4th 999, 1007; see also California Building Industry Assn. v. San Joaquin Valley Air Pollution Control Dist. (2009) 178 Cal.App.4th 120, 129 (California Building Industry Assn).) Our review is “ ‘limited to determining whether the decision of the agency was arbitrary, capricious, entirely lacking in evidentiary support, or unlawfully or procedurally unfair.’ ” (California Building Industry Assn,, at p. 129; Western States Petroleum Assn. v. South Coast Air Quality Management Dist. (2006) 136 Cal.App.4th 1012, 1018 (Western States Petroleum).)

“Courts exercise such limited review [of quasi-legislative actions] out of deference to the separation of powers between the Legislature and the judiciary, to the legislative delegation of administrative authority to the agency, and to the presumed expertise of the agency within its scope of authority.” (California Building Industry Assn., supra, 178 Cal.App.4th at p. 129.) Particular deference is given when the agency has applied technical expertise to solve a complex problem; in such cases, “courts will permit agencies to work out their problems with as little judicial interference as possible.” (Ibid,) A court must accept the agency’s factual conclusions on a quasi-legislative matter unless, on the evidence before the agency, “a reasonable person could not have reached the same conclusion.” (Corona-Norco Unified School Dist. v. City of Corona (1993) 17 Cal.App.4th 985, 992.)

Duraflame argues that the relevant inquiry is whether the District’s factual findings were supported by substantial evidence-evidence that is “reasonable, credible and of solid value” (Plastic Pipe & Fittings Assn. v. California Building Standards Com. (2004) 124 Cal.App.4th 1390, 1407) and which “a reasonable mind might accept as adequate support for a conclusion” (Taylor Bus Service, Inc. v. San Diego Bd. of Education (1987) 195 Cal.App.3d 1331, 1340). This is the same standard used to review factual findings under the “arbitrary and capricious” standard applicable when a quasi-legislative act is reviewed by ordinary mandamus; accordingly, the question for us is the same under either formulation: were the District’s findings reasonable based on the evidence in the record? (California Native Plant Society v. City of Rancho Cordova (2009) 172 Cal.App.4th 603, 637.)

B. The Labeling Requirement

Section 40727 provides in relevant part, “Before adopting... a rule or regulation, the district board shall make findings of necessity, authority, clarity, consistency, nonduplication, and reference, as defined in this section, based upon information developed pursuant to Section 40727.2 [requiring a written analysis by the district], information in the rulemaking record maintained pursuant to Section 40728 [requiring maintenance of file containing data and other information regarding the regulation], and relevant information presented at the hearing.” Section 40727, subdivision (b)(1) defines “necessity” to mean “that a need exists for the regulation... as demonstrated by the record of the rulemaking authority.” Duraflame argues that the labeling requirement is invalid as to manufactured logs because there is no showing in the record that it is necessary within the meaning of the statute. We disagree.

Duraflame interprets the “necessity” provision of section 40727 to mean that in this case, the District could only impose the labeling requirement if it was necessary to achieve the ultimate goal targeted by the Rule-the reduction of PM_2.5 emissions to comply with federal standards. Duraflame argues that the labeling requirement is unenforceable because there was no evidence before the District to suggest it was essential to reducing emissions. The District responds that the finding of “necessity” required by section 40727 is satisfied when the record establishes that a need exists for the rule or regulation as a whole, and that it is not required to show a need for each individual provision of the Rule.

Even if we adopt Duraflame’s more stringent interpretation of section 40727, the District did not act arbitrarily or capriciously in determining that “a need exists” for the labeling requirement. The Rule is designed to reduce PM_2.5 emissions through, among other things, a mandatory curtailment period during which solid fuel would not be burned. It is logical to infer that this goal would be promoted by a label advising consumers of the curtailment periods and the methods of ascertaining when those periods are in effect. (See In re Michael D. (2002) 100 Cal.App.4th 115, 126 [substantial evidence includes circumstantial evidence and the reasonable inferences flowing therefrom].) As a District representative explained during the public hearing on the Rule, “Seventy–three percent of the emission reductions associated with this proposed regulation are associated with the Mandatory Curtailment Provision, and without the public’s cooperation to not burn on the Spare the Air Tonight, we will not achieve the necessary emission reductions to attain healthy air.”

Duraflame complains that the District relied on “intuition” rather than evidence in determining that a labeling requirement would promote the goal of the curtailment requirement, namely, to have fewer consumers burning solid fuel on days falling within a curtailment period. Duraflame notes that during the hearing before the trial court on its writ petition, counsel for the District cited no specific evidence of necessity, but stated that it was “intuitively apparent” the label would make consumers aware of the curtailment period. It also asserts that at the hearing on the Rule, a District representative relied on “conclusory” statements by its staff, such as, “The District believes the labeling requirement is critical, ” and “[W]e think that it’s very reasonable to require a label on these products.” (Italics added.)

We do not construe any of these remarks as an admission by the District that there was no evidentiary basis for the labeling requirement. Taken in context, they simply make the point that while the ultimate impact of the labeling requirement was not absolutely certain, it was reasonable for the District to conclude that labeling would promote compliance with the Rule. We agree with the District that given the “forward-looking nature” of the labeling requirement, evidence of how it would actually function was necessarily based on opinion rather than historical fact. But this does not detract from the sufficiency of that evidence and the inferences to be reasonably drawn. “An agency may also rely upon the opinion of its staff in reaching decisions, and the opinion of staff has been recognized as constituting substantial evidence.” (Browning-Ferris Industries v. City Council (1986) 181 Cal.App.3d 852, 866.) Here, the District staff had particular expertise with the efficacy of labeling requirements, because similar requirements had been imposed on other products, most notably aerosol spray paint cans. We defer to the District’s judgment on this subject. (California Building Industry Assn., supra, 178 Cal.App.4th at p. 129.)

Duraflame notes that the record did not affirmatively establish that other methods of reaching the public-the District’s website, news bulletins, e-mail lists, and the like-were insufficient to promote awareness of the Rule. This does not render the labeling requirement invalid. While the District apparently contemplates using those other methods as well, it could reasonably conclude that an effective way of getting the word out to the consumers of solid fuel was to put a label on the very product that was being targeted.

Duraflame also argues that the District’s decision to impose the labeling requirement was somehow lacking in transparency, citing Association of Irritated Residents v. San Joaquin Valley Unified Air Pollution Control Dist. (2008) 168 Cal.App.4th 535 (Irritated Residents). We do not agree. In Irritated Residents, the court invalidated a regulation concerning emissions from agricultural sources because there had been no assessment of its impact on public health, as required by statute. (Id, at pp. 540, 542-549.) The decision notes that the lack of a health assessment deprived the public of information that was necessary for it to “persuade and monitor government through the democratic process.” (Id, at p. 548.) The labeling requirement in this case was based on the commonsense determination that information about a product and its permissible use may be conveyed to consumers by means of a label attached to that product. The reason for the Rule was not hidden from the public in any way. Duraflame’s real complaint seems to be that the District did not provide a more thorough analysis of the likely efficacy of the labeling requirement as compared to other methods of informing the public. But it cites no authority suggesting that labeling must be the only method or even the best method of promoting the purpose of the Rule.

Taking a different approach, Duraflame argues that the labeling requirement is unconstitutional because it arbitrarily requires the producers of manufactured logs to undergo the expense of separately labeling products sold in the Bay Area when there has been no showing the labeling requirement will actually limit PM_2.5 emissions. “In matters not involving First Amendment rights, the test of the validity of an exercise of the police power is its reasonableness in relation to the objective of the legislation.” (Tip Top Foods, Inc. v. Lyng (1972) 28 Cal.App.3d 533, 541.) As we have already discussed, it was reasonable for the District to conclude that information about the curtailment periods would be conveyed to consumers via labels affixed to the solid fuel affected by those curtailment periods. Moreover, the District carefully considered the economic impact of the labeling requirement upon Duraflame. A socioeconomic impact analysis prepared by District staff concluded that the costs of the Rule to fire log producers would be approximately $3.5 million per year, which could be passed along to consumers at a cost of about five cents per log.

Finally, Duraflame argues that the labeling requirement is unconstitutional because the company might be penalized for an inadvertent violation in the event that some distributor of Duraflame logs outside the Bay Area sells unlabeled logs to Bay Area retailers. It suggests the Rule is unconstitutionally vague because it is unclear whether it covers the sale of unlabeled inventory that was sent to distributors before the effective date of the rule. As the District has made no attempt to enforce the rule in such situations, these concerns are purely speculative and are not ripe for review. (See PG&E Corp. v. Public Utilities Com. (2004) 118 Cal.App.4th 1174, 1216-1219.)

C. The Curtailment Requirement

Duraflame also challenges the Rule’s extension of the mandatory curtailment period to the burning of manufactured fireplace logs. It claims the District improperly equated manufactured logs with firewood, even though the administrative record contains no evidence that manufactured logs contribute to PM_2.5 emissions. This issue is not properly before us because Duraflame failed to exhaust its administrative remedies in the rulemaking proceedings before the District.

Stakeholders such as Duraflame must object to an agency’s action during the administrative process to preserve their claims for review by the courts. (Evans v. City of San Jose (2005) 128 Cal.App.4th 1123, 1138.) Such objections need not be made with the same degree of specificity as is required during a lawsuit, but they must be sufficient to allow the agency to respond. (Ibid,)

During the administrative proceedings in this case, Duraflame was critical of certain aspects of the curtailment requirement. It argued for the use of the Air Quality Index as a trigger for curtailment periods rather than the measure used under the proposed Rule; it suggested that mandatory curtailment be triggered at one level and voluntary curtailment at another; and it urged the District to promote manufactured logs over firewood during the proposed voluntary curtailment periods. But it did not suggest that manufactured logs played no part in the PM_2.5 emissions that the Rule was designed to ameliorate. Were it in fact the case that manufactured logs played no role in PM_2.5 emissions that were targeted by the rule, it is inconceivable that Duraflame would have failed to present evidence to that effect. It would not be fair to fault the District for failing to be more explicit on this basic point, which seems to have been conceded by all concerned.

Duraflame also complains there was no evidence that it was necessary to curtail the use of manufactured logs to satisfy the purpose of the Rule. Noting that the purpose of the Rule is to limit PM_2.5 emissions, not to eliminate them, Duraflame suggests the curtailment period could not be extended to manufactured logs without a showing that the federal standards could not be met by curtailing the burning of firewood alone. We disagree.

At the hearing itself, a Duraflame representative stated that the company supported curtailment on days when the air quality was poor, but suggested that on non-curtailment days, the burning of manufactured logs should be encouraged as a cleaner alternative (emitting 60 to 80 percent less particulate than firewood). While this representative did not state that the 60 to 80 percent number applied to PM_2.5 emissions, such a statement can be readily inferred from the fact that the Rule specifically dealt with PM_2.5 emissions. Thus, Duraflame essentially admitted at the hearing that its logs emit between 20 to 40 percent of the amount of particulate matter that firewood emits. Because the record supports a finding that manufactured logs emit PM_2.5 emissions, it was not arbitrary and capricious to preclude the burning of those logs during mandatory curtailment periods. (California Building Industry Assn,, supra, 178 Cal.App.4th at p. 129.)

Duraflame suggests the District admitted that it did not have sufficient information to include manufactured logs within the curtailment requirement. We are not persuaded. Duraflame notes that during the public hearing on the Rule, a District representative stated that it “would prefer to gather additional information about Bay Area consumers’ actual use of these products to determine whether there are real emission reductions from the use of manufactured logs....” These and similar remarks were made while explaining why the District was not prepared to follow Duraflame’s recommendation that it actively promote the use of manufactured logs over firewood during non-curtailment periods. The comments do not prove the District lacked sufficient information that manufactured logs cause emissions; to the contrary, they reflect uncertainty as to whether the use of such logs would provide a net benefit in controlling emissions, as Duraflame claimed. Similarly, the District’s decision to modify the labeling requirement to delete language stating that fireplace logs could be harmful to public health (a change that inured to Duraflame’s benefit) does not translate into a finding that fireplace logs do not emit PM_2.5.

III. Disposition

The judgment (order denying petition for writ of mandate) is affirmed. Costs on appeal are awarded to respondent.

We concur. JONES, P. J. BRUINIERS, J.