ELR Citation: ELR 20447
No(s). 63339 (Cal. Ct. App. Mar 10, 1982)

The court affirms the trial court ruling overturning state ambient air quality standards for sulfate and sulfur dioxide because the procedures used in adopting the standards were unfair and the state Air Resources Board was arbitrary and capricious in refusing to consider the cost of attaining the standards. The court first rules that the board conducted the rulemaking process improperly. The board, though exercising quasi-legislative powers, is subject to both the specific procedural directives of the state Administrative Procedure Act (APA) and the implied requirements that it act within the scope of its delegated authority, employ equitable procedures, and act reasonably. Neither the APA nor California precedent bars the court from imposing procedural requirements beyond those specifically prescribed by statute. And while there is a genuine question as to whether the board followed the minimum statutory procedures, even if it did, the process was arbitrary and unfair in that interested parties lacked adequate opportunity to comment on the data and reports on which the board based its standards.

The court also rules that the board was arbitrary and capricious in failing to consider the cost of compliance with the proposed standards. The court rules that a commonsense interpretation of the statute directing the board to consider the economic effects of pollution requires the board to consider not only the costs pollution imposes, but also the costs of compliance. In the absence of definitive legislative history, the court finds that several aspects of the statutory program support this conclusion. The statute authorizes the board to adopt different standards for different air basins, yet the only variation between such regions would be the cost of compliance. Other sections of the Health and Safety Code indicate that the legislature intended the board to consider economic impacts. Moreover, the legislature would not have entursted the standard-setting process to a board unless it intended the use of a balancing process for decisionmaking. Finally, as the board itself emphasized, setting air quality standards puts the board on the frontiers of science, making consideration of the economic effects of regulation even more rational.

Next, the court rules that the board acted arbitrarily and capriciously in failing to explain why it did not adopt the recommendations of the Health Department, upon which it was required by statute to base the standards. Finally, the court conducts an independent review of the record and finds that the trial court correctly ruled that the board failed to use proper procedures and did not act reasonably in promulgating the air quality standards.

Counsel for Plaintiffs
Philip K. Verleger, Jack D. Fudge, Michael L. Hickok
McCutchen, Black, Verleger & Shea
600 Wilshire Blvd., Los Angeles CA 90017
(213) 624-2400

Counsel for Defendants
R.H. Connett, Ass't Attorney General; Joel S. Moskowitz, Deputy Attorney General
Department of Justice, 555 Capitol Mall, Suite 350, Sacramento CA 95814
(916) 445-9555

Counsel for Amicus Curiae
Ronald A. Zumbrun, General Counsel; John H. Findley, Anthony T. Caso
Pacific Legal Foundation, 455 Capitol Mall, Sacramento CA 95814
(916) 444-0154

Joined by Roth and Beach, JJ.