PAINTCARE et al., Plaintiffs and Appellants, v. CAROLL MORTENSEN, as Director, etc., et al., Defendants and Respondents.
No. B251351
Second Dist., Div. Seven
Feb. 3, 2015.
1292
Greenberg Traurig, Gene Livingston, Monica J. Baumann and Scott D. Bertzyk for Plaintiffs and Appellants.
Kamala D. Harris, Attorney General, Robert W. Byrne, Assistant Attorney General, Gary E. Tavetian and Daniel M. Lucas, Deputy Attorneys General, for Defendants and Respondents.
OPINION
FEUER, J.*—
INTRODUCTION
PaintCare and American Coatings Association appeal from a judgment denying their petition for a writ of mandate, entered in favor of California‘s Department of Resources Recycling and Recovery and its director, Caroll Mortensen (collectively CalRecycle). By their petition, PaintCare and American Coatings Association sought to invalidate regulations adopted by CalRecycle to implement and enforce the architectural paint recovery program (Program) (
As we discuss below, CalRecycle had authority to adopt the regulations. Further, the regulations do not go beyond the Program because they do not
FACTUAL AND PROCEDURAL BACKGROUND
A. The Waste Management Act
In 1989, the Legislature enacted the California Integrated Waste Management Act of 1989 (Waste Management Act;
The Waste Management Act established the Integrated Waste Management Board, now CalRecycle,2 to implement the act. (
B. The Architectural Paint Recovery Program
In 2010, the Legislature passed Assembly Bill No. 1343 (2009-2010 Reg. Sess.) (Assembly Bill 1343), which created the Program (
Manufacturers of architectural paints sold in California must prepare and implement “paint stewardship plan[s]” (Plans), individually or through a stewardship organization,4 designed to “implement a recovery program to reduce the generation of postconsumer architectural paint, promote the reuse of postconsumer architectural paint, and manage the end-of-life of postconsumer architectural paint, in an environmentally sound fashion, including collection, transportation, processing, and disposal.” (
The Plans must also demonstrate sufficient funding for the stewardship program described in the Plans through a fee charged to consumers for each container of architectural paint sold in California. (
The Program prohibits manufacturers from selling paint in California unless they comply with the requirements of the Program. (
The Program requires CalRecycle to post on its Web site the names of manufacturers that have submitted compliant annual reports. (
C. The Regulations Adopted by CalRecycle
In early 2011, CalRecycle began the process of drafting regulations to implement the Program. Over a period of more than 13 months, CalRecycle drafted proposed regulations, received public comments, and held hearings on the proposed regulations. On May 14, 2012, CalRecycle adopted regulations, specifically sections 18950 through 18958, “to clarify existing statute [(the Program)] and establish administrative procedures to efficiently and effectively implement [CalRecycle‘s] responsibilities under the law and to provide a uniform competitive business environment to all architectural paint manufacturers pursuant to
1. Paint Stewardship Plans
The regulations specify what the Plans must contain. (
The Plans also must provide “a description of education and outreach efforts to consumers, contractors, and retailers to promote source reduction
2. Annual Reports
The regulations also specify what information the annual reports must contain. (
3. Civil Penalties
The regulations specify the civil penalties that may be imposed for failure to comply with the Program or the regulations. (
4. Recordkeeping Requirements and Fees
The regulations contain recordkeeping requirements for manufacturers, stewardship organizations and retailers subject to the Program. (
D. The Mandate Proceedings
American Coatings Association is a voluntary, nonprofit trade association of paint and coatings manufacturers, and it is the sole owner of PaintCare, a nonprofit paint stewardship organization (collectively, PaintCare). PaintCare filed this action on October 30, 2012, seeking a writ of mandate vacating the regulations and ordering CalRecycle to cease implementing and enforcing the regulations. PaintCare claimed that the regulations were invalid because CalRecycle lacked authority to adopt them; they were inconsistent with and exceeded the scope of the Program; and they were not “reasonably necessary” to effectuate the purpose of the Program.
The trial court denied the petition. After setting forth the standard of review and governing law, the trial court analyzed PaintCare‘s claims. It noted that CalRecycle had the “authority to promulgate regulations which enable it to ascertain whether manufacturers are following the Program.” Further, it held that this “gap-filling authority is dispositive of all the issues in this case” and that the regulations were “necessary to ‘fill up the details’ of the statutory scheme.” The court agreed with CalRecycle that ” ‘[t]o hold . . . that administrative regulations are valid only when a statutory provision directly calls for regulation would be to eliminate any role for agency discretion and is contrary to law. ’ ”
DISCUSSION
A. Standard of Review
Where, as here, a party challenges a regulation under
As our Supreme Court held in Western States, ” ‘Because agencies granted such substantive rulemaking power are truly “making law,” their quasi-legislative rules have the dignity of statutes. When a court assesses the validity of such rules, the scope of its review is narrow. If satisfied that the rule in question lay within the lawmaking authority delegated by the Legislature, and that it is reasonably necessary to implement the purpose of the statute, judicial review is at an end.’ ” (Western States, supra, 57 Cal.4th at p. 415, quoting Yamaha, supra, 19 Cal.4th at pp. 10-11.)
CalRecycle urges us to adopt a “deferential standard” to determine “whether the agency reasonably interpreted the legislative mandate,” citing Yamaha, supra, 19 Cal.4th at pages 10-11 and Credit Ins. Gen. Agents Assn. v. Payne (1976) 16 Cal.3d 651, 657 [128 Cal.Rptr. 881, 547 P.2d 993]. In Yamaha, the Supreme Court considered the standard to apply in reviewing an agency‘s interpretation of the tax consequences of transactions under the Revenue and Taxation Code, finding that the weight the agency‘s interpretation should be given is “situational,” depending on a number of factors, including the technical expertise and knowledge of the agency. (Yamaha, supra, at p. 12.) However, the question of an agency‘s interpretation of a statute is different from the issue here of whether regulations fall within the scope of the agency‘s authority, for which the Supreme Court in Yamaha found the court does not defer to the agency‘s view.6 (Yamaha, at pp. 10–11.)
In Payne, also relied upon by CalRecycle, the Supreme Court applied a deferential standard of review where the question was whether the challenged regulations were ” ‘necessary’ ” to carry out the statutory provisions relating to credit insurance. (Credit Ins. Gen. Agents Assn. v. Payne, supra, 16 Cal.3d at p. 657.) This question of necessity is the second prong of the analysis under
B. CalRecycle‘s Regulations Are a Valid Exercise of Its Rulemaking Authority Under the Program
PaintCare argues both that CalRecycle did not have the authority to adopt regulations implementing the Program and, further, that even if it did have authority to adopt regulations, the regulations at issue here improperly enlarged the scope of the Program by imposing additional requirements on manufacturers not found in the statute. We address these arguments in turn.
1. The Legislature Delegated to CalRecycle Authority to Adopt Regulations to Implement the Program
An administrative agency “has only as much rulemaking power as is invested in it by statute.” (Carmel Valley Fire Protection Dist. v. State of California (2001) 25 Cal.4th 287, 299 [105 Cal.Rptr.2d 636, 20 P.3d 533]; see Association for Retarded Citizens v. Department of Developmental Services (1985) 38 Cal.3d 384, 391 [211 Cal.Rptr. 758, 696 P.2d 150].)
a. The plain language of Public Resources Code section 40502, subdivision (a) , supports a finding that CalRecycle has authority to adopt regulations.
In determining whether the Legislature has authorized CalRecycle to exercise its rulemaking power to implement the Program, “we first ’ “scrutinize the actual words of the statute, giving them a plain and commonsense meaning.” ’ [Citation.]” (Gomez v. Superior Court (2012) 54 Cal.4th 293, 300 [142 Cal.Rptr.3d 808, 278 P.3d 1168]; accord, People v. McGraw-Hill Companies, Inc. (2014) 228 Cal.App.4th 1382, 1388 [176 Cal.Rptr.3d 496].) Where the court interprets different portions of a statute, the court considers the sections ” ‘in the context of the entire statute and the statutory scheme of which it is a part.’ ” (McGraw-Hill Companies, Inc., supra, at pp. 1388-1389 [interpreting two subdivisions of anti-SLAPP statute in light of overall statutory scheme], quoting Curle v. Superior Court (2001) 24 Cal.4th 1057, 1063 [103 Cal.Rptr.2d 751, 16 P.3d 166]; CB Richard Ellis, Inc. v. Terra Nostra Consultants (2014) 230 Cal.App.4th 405, 414 [178 Cal.Rptr.3d 640] [interpreting statute setting timeframe for dissolution of limited liability company in light of purpose of entire statutory scheme to prevent unjust enrichment of members of limited liability companies at expense of creditors].)
The Waste Management Act added division 30 to the Public Resources Code. (Stats. 1989, ch. 1095, § 22, p. 3812;
A plain reading of
Our reading of the Waste Management Act is consistent with
b. CalRecycle has authority to “fill up the details” of the Program through adoption of regulations.
The lack of specific language in the Program itself authorizing CalRecycle to adopt regulations does not negate the authority set forth in
In Ford Dealers Assn., our Supreme Court considered a challenge to five regulations adopted by the Department of Motor Vehicles (DMV) to implement Vehicle Code section 11713, subdivision (a), barring the dissemination of false or misleading statements to the public. The court held that the regulations were a valid exercise of the DMV‘s regulatory authority under section 1651 of the Vehicle Code. (Ford Dealers Assn. v. Department of Motor Vehicles, supra, 32 Cal.3d at p. 354.) Vehicle Code section 1651, which is similar to
The court held that under Vehicle Code section 1651, the DMV was authorized to ” ‘fill up the details’ ” of the Occupational Licensing and Business Regulations statute, barring a specific class of misleading statements, including prohibiting certain dealer added charges on sales and requiring disclosure of a vehicle‘s prior history as a rental vehicle. (Ford Dealers Assn. v. Department of Motor Vehicles, supra, 32 Cal.3d at pp. 362-365.)
c. The Legislature‘s grant of rulemaking authority for other programs in the Waste Management Act does not mean the Legislature intended not to grant CalRecycle rulemaking authority as to the Program.
PaintCare argues that to find that CalRecycle had “gap-filling authority” as to the Program on the basis of
PaintCare cites examples of the Legislature‘s express grant of regulation-making authority in the Waste Management Act,9 including Public Resources Code sections 42297, subdivision (a) [CalRecycle “may adopt such regulations as it determines are necessary” to implement the chapter on plastic bags], 42475, subdivision (b) [CalRecycle “may adopt regulations” to implement the Electronic Waste Recycling Act of 2003 (
PaintCare contrasts these programs with those in the Waste Management Act in which the Legislature did not specify that CalRecycle had the authority to adopt implementing regulations, including the Rechargeable Battery Recycling Act of 2006 (
The flaw in this argument is that the same rule of construction equally supports the opposite conclusion—if the Legislature intended only to allow agency rulemaking as to specified programs within the Waste Management Act, this would render
2. The Regulations’ Requirements for Plans Do Not Enlarge or Impair the Scope of the Program
PaintCare contends that CalRecycle‘s regulations enlarge the scope of the Program by setting requirements for manufacturers to follow that go beyond what the Program requires. Specifically, PaintCare argues that the regulations improperly set requirements for how they are to reduce the generation of postconsumer paint, promote its reuse, and properly prepare for its end-of-life management. However, a careful review of the regulations reveals that manufacturers are still free to decide how they intend to comply with the Program‘s requirements; the regulations require that manufacturers disclose in their Plans what they are going to do to achieve these objectives.
We next turn to each of the challenged provisions contained in
a. The regulatory provisions for setting goals for Plans are consistent with Public Resources Code section 48703, subdivision (d) .
PaintCare points to
PaintCare argues that by requiring the Plans to include a baseline from which the goals will be measured and dictating how to calculate the baseline, CalRecycle is imposing specific program goals on the manufacturer. To the contrary, nowhere do the regulations require manufacturers to set a specific goal, for example, a defined percentage increase in collection of leftover postconsumer paint. Under the Program, manufacturers can set their own goals for reducing postconsumer paint, but the Program does not specify how manufacturers are to measure goals for inclusion in their Plans. CalRecycle has “filled up the details” by clarifying that the manufacturer should calculate a baseline of the current status of household hazardous waste management at the time the Plan is submitted, then set a goal based on a change in this baseline level. (
PaintCare also contends that the requirement that Plans describe the methodology used for estimating the amount of leftover paint improperly expands the scope of the Program, which is silent as to the choice of methodology.12 As with the requirement that Plans include a baseline to measure goals, the regulations do not require manufacturers to use a particular methodology, but instead allow them to choose the methodology that will best enable them to measure their goals. This too is within CalRecycle‘s authority to “fill up the details.”
PaintCare next argues that the Program allows a manufacturer to raise or lower its goals every year based on data collected for the annual report (
Requiring manufacturers in their Plans to set goals to reduce generation, promote reuse, and provide for management of postconsumer paint, and to describe how they will achieve these goals, is consistent with the purpose of the Program “to require paint manufacturers to develop and implement a program to collect, transport, and process postconsumer paint to reduce the costs and environmental impacts of the disposal of postconsumer paint in this state.” (
b. The regulatory provisions governing collection of postconsumer paint are consistent with Public Resources Code sections 48702, subdivision (a) , and 48703, subdivision (d) .
While the Program does not contain specific requirements for paint collection systems, the Program does require that each manufacturer prepare and implement a Plan “to develop and implement a recovery program to reduce the generation of postconsumer architectural paint, promote the reuse of postconsumer architectural paint, and manage the end-of-life of postconsumer architectural paint, in an environmentally sound fashion, including the collection, transportation, processing, and disposal.” (
Thus, the Program envisions that each Plan will address the “collection, transportation, processing, and disposal” of postconsumer paint and that the manufacturer will develop and implement a “recovery program” to meet the goals of reduction and reuse of postconsumer paint. CalRecycle has “filled up the details” to clarify the criteria for evaluation of manufacturer Plans.
For example, the regulations require that the Plans disclose the destination for reuse, recycling and/or disposal for paints. (
ii. Requirements to make disclosures “by type” of paint fall within the Program‘s scope.
PaintCare contends that the regulations impermissibly require them to describe collection methods used for architectural paint “by type” (
PaintCare points out that in enacting the Program, the Legislature found both latex and oil-based architectural paints to be hazardous (Stats. 2010, ch. 420, § 1). PaintCare also cites to Health and Safety Code sections 25217
By these provisions, the Legislature has explicitly recognized that there are different requirements for recycling and disposal of different types of paint. Accordingly, tailoring collection plans and disposal destinations to the types of paint to be collected is consistent with the Program‘s goal to achieve reductions in postconsumer paint. In addition, as argued by CalRecycle, information on collection of paints by type is necessary for the calculation of costs of collection and reuse or recycling of the paints, which costs are to be assessed on individual cans of paint. (
iii. Requirements that Plans disclose “best management practices” to be used at collection sites and “any training” to be provided fall within the Program‘s scope.
For the same reasons we discussed above, CalRecycle properly “filled up the details” as to best management practices to be used and “any training” the manufacturer will provide to ensure proper collection and management of postconsumer paint. Nothing in these provisions mandates that a particular best management practice be implemented or that a specific type of training be provided, but rather, that the manufacturer decide these issues, and disclose them in the Plans. (
iv. Requirements that Plans disclose how consumers can recycle and manage unwanted paint, including listing available statewide collection sites, fall within the Program‘s scope.
3. The Regulations’ Requirements for Annual Reports Do Not Enlarge or Impair the Scope of the Program
The Program requires CalRecycle to review manufacturers’ annual reports and to “adopt a finding of compliance or noncompliance with this chapter.” (
a. The regulatory provisions for annual reports contained in California Code of Regulations, title 14, section 18954, subdivision (a)(3) and (4) , are consistent with Public Resources Code section 48705, subdivision (a) .
PaintCare contends that
For the same reasons we concluded that CalRecycle had authority to adopt
b. The regulatory provisions for reporting Program costs in annual reports contained in California Code of Regulations, title 14, section 18954, subdivision (a)(5) , are consistent with Public Resources Code section 48705, subdivision (a) .
PaintCare contends that
PaintCare challenges the requirement in CalRecycle‘s regulations that annual reports break down costs to include “(C) Capital costs[,] [¶] (D) Cost($)/capita[,] [¶] (E) Cost ($)/gallon collected[,] [¶] (F) Education/Outreach (% of total program cost)[, and] [¶] (G) End-of-life materials management (% of total program cost, with line items for reuse, transportation, recycling, fuel incineration, and proper disposal).” (
Given the Program‘s requirement that the annual report disclose the total cost of a manufacturer‘s recovery program, evaluate how the funding mechanism operated, and provide the results of an independent financial audit, the regulations provide guidance to manufacturers as to what information needs to be provided to accomplish the requirements of
California Code of Regulations, title 14, section 18954, subdivision (a)(6) , are consistent with Public Resources Code section 48705, subdivision (a) .
PaintCare raises the same claim of overreaching with respect to
PaintCare argues that the regulation goes beyond the scope of the Program by requiring that manufacturers provide educational materials to retailers and contractors (in addition to consumers), and incorporate methods for determining the materials’ effectiveness into their programs in order to obtain approval of their annual reports. Again, PaintCare is blurring the lines between reporting obligations and mandates. Nothing in
4. The Regulations’ Criteria for Imposition of Civil Penalties Do Not Enlarge or Impair the Scope of the Program
PaintCare contends that CalRecycle exceeded its authority by adopting these regulations, which impose penalties for actions that do not violate the Program. Specifically, PaintCare argues that the Legislature intended that the principal enforcement mechanism to ensure compliance with the Program be the mandate in
This argument ignores
PaintCare argues that the regulations impermissibly would penalize a manufacturer for not submitting a Plan or annual report even if it no longer sells paint in California. But the regulations limit enforcement under the penalty provisions to manufacturers selling paint in California. (See
CONCLUSION
The regulations CalRecycle adopted to implement the Program are within the rulemaking authority the Legislature delegated to CalRecycle and do not enlarge or impair the scope of the Program.
DISPOSITION
The judgment is affirmed. CalRecycle is to recover its costs on appeal.
Perluss, P. J., and Zelon, J., concurred.
Appellants’ petition for review by the Supreme Court was denied May 13, 2015, S225105.