American Coatings Association, Inc. v. South Coast Air Quality District
California Supreme Court, No. S177823
June 25, 2012
A manufacturers’ association sued the South Coast Air Quality Management District over rules enacted to reduce air pollution from non-vehicular sources. The District was created in 1976 by statute to address critical air pollution problems as part of the state implementation of the federal Clean Air Act. The statute allows the District to issue variances to avoid arbitrary or unreasonable taking of property or the practical closing and elimination of a lawful business.
At the core of the complaint, the association argued the District lacked authority to impose rules under its 2002 amendments to Rule 1113 that limit certain pollution-causing paints and coatings and essentially require a technology that does not yet exist. The focus was on “architectural coatings” which include paint, varnish, stains, etc., applied in the field where pollution control measures cannot be used. The volatile organic compounds (VOC) from such sources were more than twice as great as all such emissions from refineries, aerospace, printing, and furniture manufacturing combined, and were equal to the VOCs of 1.7 million cars per day. VOCs were a substantial cause of ozone pollution, and the District’s basin was in “extreme” nonattainment of compliance with federal laws in such regard and was the worst in the nation. Rule 1113 dealt with such VOCs.
The District enacted regulations in 1999, which were amended in 2002, with a compliance date of 2006. The District contended the relevant statute defined “best available retrofit technology” (BARCT) by reference to “achievable” emissions reductions, and thus allowed the District to enact “technology-forcing” standards that it anticipated could be achieved by the compliance date. While the Court of Appeal disagreed, the Supreme Court agreed. The Court determined the definition of BARCT, found at Health & Safety Code section 40406, did not limit the District to what has already been achieved. Also, the Legislature only granted the retrofit standards to severely polluted districts. The Court concluded BARCT is a “technology-forcing standard designed to compel the development of new technologies to meet public health goals,” while allowing for practical economic considerations. In so doing, it reversed the Court of Appeal on that point.
The Supreme Court noted the District was exercising quasi-legislative power granted to it by the Legislature. Thus, the scope of review is narrow. The Court found the record supported there were current and reasonably foreseeable technology to comply, and thus the rule was not arbitrary or capricious or lacking in evidentiary support.
Finally, the Supreme Court also sided with the District (and Court of Appeal) that the paint and coating categories subject to the new rules were reasonably drawn and did not have to show current technology available in each category for every paint or coating application.
Prepared by John Reaves