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VERIFIED PETITION FOR WRIT OF MANDATE AND
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
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SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF FRESNO
AMERICAN CHEMISTRY COUNCIL AND GENERAL COATINGS MANUFACTURING CORP.,
Petitioners and Plaintiffs, v.
CALIFORNIA DEPARTMENT OF TOXIC SUBSTANCES CONTROL, MEREDITH WILLIAMS, in her official capacity as Acting Director of the Department of Toxic Substances Control and Deputy Director of the Safer Products and Workplaces Program; BRUCE LABELLE, Ph.D., Chief of the Environmental Chemistry Laboratory, GAVIN NEWSOM, in his official capacity as Governor of the State of California; and XAVIER BECERRA, in his official capacity as Attorney General of the State of California,
Respondents and Defendants.
Case No.
VERIFIED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF (California Code of Civil Procedure §§ 1060 and 1085)
(Filed concurrently with Memorandum of Points and Authorities; Declaration of Eric Montie; Declaration of Lee Salamone; Request for Judicial Notice)
Complaint Filed: August 9, 2019
Sean A. Commons (SBN 217603) SIDLEY AUSTIN LLP 555 West Fifth Street Los Angeles, CA 90013 Tel: 213-896-6010 Fax: 213-896-6600 Email: [email protected] Paul J. Zidlicky (pro hac vice pending) Joseph T. Zaleski (SBN 318745) SIDLEY AUSTIN LLP 1501 K Street, NW Washington, DC 20005 Tel: 202-736-8000 Fax: 202-736-8711 E-mail: [email protected] E-mail: [email protected] Attorneys for Petitioner/Plaintiff American Chemistry Council Edward S. Orchon (SBN 67039) P.O. Box 2743 Winnetka, CA 91396 Tel: (747) 224-1010 E-mail: [email protected] Attorney for Petitioner/Plaintiff General Coatings Manufacturing Corp.
2 VERIFIED PETITION FOR WRIT OF MANDATE AND
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
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Comes now Petitioners/Plaintiffs, the American Chemistry Council (“ACC”) and General
Coatings Manufacturing Corp. (“General Coatings”), by and through their attorneys, and state as
follows:
INTRODUCTION AND SUMMARY
1. This lawsuit is brought by ACC on behalf of its members and General Coatings to
challenge the legality of the decision of the California Department of Toxic Substances Control
(“DTSC” or “the Department”) to list Spray polyurethane foam (“SPF”) systems containing
unreacted methylene diphenyl diisocyanates (“MDI”) (collectively, “SPF Systems”) as a Priority
Product under the Department’s Safer Consumer Products Regulations, Cal. Code Regs., tit. 22, §
69501 et seq.
2. On February 25, 2019, DTSC denied ACC’s appeal to the Director challenging
DTSC’s decision to list SPF Systems. That determination was final agency action and is not
subject to further administrative review.
3. ACC and General Coatings seek (1) a writ of mandate requiring DTSC to delist SPF
Systems as a Priority Product; (2) a declaration that DTSC violated the California Administrative
Procedure Act and an order enjoining DTSC from continuing to exceed its statutory and
regulatory authority in listing SPF Systems as a Priority Product; (3) a declaration that DTSC
violated the California Environmental Quality Act (“CEQA”) and order enjoining the listing SPF
Systems as a Priority Product; and (4) any other and further relief as the court deems just and
proper.
THE PARTIES
Petitioners/Plaintiffs
4. Petitioner/Plaintiff ACC is one of America’s oldest trade associations, representing a
diverse set of nearly 170 companies in the $526 billion business of U.S. chemistry, which creates
the building blocks for 96 percent of all manufactured goods. See generally Decl. of Lee
Salamone in Support of Petition for Writ of Mandate ¶¶ 3-8 (Aug. 9, 2019) (Attached hereto).
ACC’s members include the leading companies of all sizes, engaged in every aspect of the
business of chemistry, including chemical manufacturing, transportation and distribution, storage
3 VERIFIED PETITION FOR WRIT OF MANDATE AND
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
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and disposal, sales and marketing, consulting, use, logistics, and equipment manufacturing.
5. ACC brings this suit on behalf of its members. One or more of ACC’s members
possesses standing to sue it its own right because the listing of SPF as a Priority Product affects
ACC and its members manufacturing SPF Systems in and for sale in California. The listing of
SPF as a Priority Product subjects ACC’s members to additional regulatory burdens. ACC
members that manufacturer SPF Systems in or for use in California are harmed by DTSC’s listing
of SPF because they are required to complete a detailed and comprehensive Alternatives Analysis
whereby each individual company (or another entity such as a trade association authorized to act
on its behalf) analyzes whether potential alternatives exist. These regulated parties are subject to
additional harm in the form of a range of regulatory responses ordered by DTSC, including label
changes, restriction or potential prohibition on use of MDI in SPF Systems, or mandatory funding
of challenge grants to develop alternatives to SPF Systems. These regulatory responses, in turn,
would harm consumers who benefit from the unique, energy saving attributes that SPF Systems
provide when used as insulation and roofing for homes and buildings across California.
6. ACC participated on behalf of its members in the notice-and-comment period during
development of DTSC’s Safer Consumer Products regulations and also DTSC’s proposed listing
of SPF Systems as a Priority Product. ACC has also initiated an informal dispute resolution and
an appeal to the DTSC Director, as provided in the Safer Consumer Products regulations, in
response to the Department’s decision to list SPF Systems as a Priority Product.
7. Petitioner/Plaintiff General Coatings is a Fresno, California-based company that
produces SPF Systems for industrial, commercial, and residential use in numerous sectors in the
state of California, including roofing, wall insulation, cold storage, tanks, oil and gas, and military.
See generally Decl. of Eric Monte in Support of Petition for Writ of Mandate ¶¶ 3-9 (Aug. 8,
2019) (Attached hereto).
8. General Coatings participated in the regulatory process by filing comments with
DTSC. DTSC’s listing of SPF Systems as a Priority Product imposes burdens on General
Coatings and causes it harm.
4 VERIFIED PETITION FOR WRIT OF MANDATE AND
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
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Respondents/Defendants
9. Respondent/Defendant DTSC is an agency of the state government and has
promulgated the regulation listing SPF Systems as a Priority Product under the Department’s own
Safer Consumer Products Regulations.
10. Respondent/Defendant MEREDITH WILLIAMS is Acting Director of DTSC and
responsible for overseeing implementation of the Department’s Safer Consumer Products
Regulations. Ms. Williams is named in her official capacity only.
11. Respondent/Defendant DR. BRUCE LABELLE is Chief of the Environmental
Chemistry Laboratory, which supports DTSC and the California Environmental Protection
Agency in implementing the Department’s Safer Consumer Products regulations. Dr. Labelle was
also specifically designated by Acting Director Williams to consider and render a final decision on
ACC’s appeal to the Director. Dr. LaBelle is named in his official capacity only.
12. Respondent/Defendant GAVIN NEWSOM is the Governor of the State of
California. Mr. Newsom is named in his official capacity only.
13. Respondent/Defendant XAVIER BECERRA is Attorney General of the State of
California. Mr. Becerra is named in his official capacity only.
JURISDICTION AND VENUE
14. ACC brings this action as a petition for a writ of mandate pursuant to article VI,
section 10 of the California Constitution and section 1085 of the California Code of Civil
Procedure, and as a complaint for declaratory and injunctive relief under section 1060 of the
California Code of Civil Procedure.
15. ACC has no other plain, speedy, and adequate remedy in the ordinary course of law,
meets the requirements for a beneficially interested petitioner, and seeks to correct DTSC’s abuse
of discretion and failure to perform duties. This action is based upon an actual controversy
relating to the legal rights and duties of the respective parties.
16. ACC has exhausted all available administrative remedies by initiating an informal
dispute resolution with the Department and raising an appeal to the Director of DTSC, as provided
in California Code of Regulations § 69507 et seq.
5 VERIFIED PETITION FOR WRIT OF MANDATE AND
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
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17. ACC has complied with Code of Civil Procedure § 388 by serving a copy of this
petition on the Attorney General, who is also a Respondent/Defendant in this action.
18. Venue is proper in this Court pursuant to sections 393(b) and 401 of the Code of
Civil Procedure.
GENERAL ALLEGATIONS
“Green Chemistry” Law and the Safer Consumer Product Regulations
19. The California Legislature passed a “Green Chemistry” law under the state Health
and Safety Code in 2008. (Stats. 2008, ch. 560, § 1, codified at Health & Saf. Code, § 25251 et
seq. The Green Chemistry statute authorized the California Environmental Protection Agency’s
Department of Toxic Substances Control (“DTSC” or “the Department”) to adopt regulations
establishing a process for identifying and prioritizing chemicals of concern in consumer products
and then evaluating these chemicals of concern through an alternatives analysis process.
20. Pursuant to the Green Chemistry law, DTSC promulgated a set of “Safer Consumer
Product” regulations that became effective in 2013. (Cal. Code Regs., tit. 22, § 69501 et seq.
(“Safer Consumer Product Regulations” or “SCP Regulations”). The SCP Regulations establish
the process for identifying candidate chemicals, listing chemicals as priority products, requiring
industry to conduct alternatives analyses for those identified priority products, and the process of
raising administrative challenges to the Department’s listing decisions.
Description of Spray Polyurethane Foam Systems Containing Unreacted Methylene Diphenyl Diisocyanates
21. SPF is an umbrella term for different categories of products prized for providing
exceptional thermal insulation under a wide range of temperatures, effective air-impermeable
sealants, durable roofing, and rigid structural enhancement. SPF Systems include high-pressure
and low-pressure two-component systems. High-pressure and low-pressure SPF Systems have
distinct physical properties, different exposure profiles, and separate uses. Further, there are
numerous distinct products within both the high-pressure and low-pressure categories of SPF
Systems.
6 VERIFIED PETITION FOR WRIT OF MANDATE AND
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
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DTSC’s Decision to List SPF Systems as a Priority Product
22. In March 2017, DTSC proposed to list SPF Systems as a “Priority Product” under
the SCP Regulations (RJN Ex. 6.) The Department’s proposal did not distinguish between the
various, materially distinct types of SPF Systems, encompassing distinct physical properties and
different exposure potentials, in its proposed listing. In June 2017, ACC and General Coatings
submitted comments as part of the regulatory notice-and-comment period opposing the listing of
SPF Systems as a Priority Product (RJN Exs. 9 and 10.) ACC’s comments explained that the
Department failed to distinguish between materially distinct products, did not follow its regulatory
procedure for listing a Priority Product, failed to satisfy the procedural requirements of the
California Administrative Procedure Act, and improperly determined that its listing decision was
exempt from the environmental review requirements of CEQA.
23. In May 2018, DTSC issued its Final Statement of Reasons and a variety of technical
documents in support of its decision to list SPF Systems as a Priority Product. DTSC’s listing of
SPF Systems triggers a variety of mandatory actions by manufacturers of SPF Systems in
California, including submission of a Priority Product Notification to the Department and
preparation and submission of an Alternatives Analysis (RJN Ex. 11.)
24. In response to DTSC’s decision to list SPF Systems as a Priority Product, ACC
initiated an informal administrative dispute resolution process with the Department, as provided in
the SCP Regulations, in May 2018 (RJN Ex. 14.) (See Cal. Code Regs., tit. 22, § 69507.1.) ACC
explained that DTSC’s listing of SPF Systems as a Priority Product was unlawful because SPF
Systems do not meet the criteria for inclusion as a Priority Product and should not have been
deemed exempt from CEQA.
25. ACC proposed that DTSC and ACC explore an enforceable consent agreement
(“ECA”) that could produce an example Alternatives Analysis as one possible outcome.
26. In December 2018, DTSC rejected ACC’s request that the Department withdraw its
proposal to list SPF Systems as a Priority Product as well as ACC’s request that the Department
consider entering into an ECA with SPF Systems manufacturers (RJN Exs. 16a and 16b).
7 VERIFIED PETITION FOR WRIT OF MANDATE AND
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
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27. ACC timely initiated a formal appeal to the DTSC Director, as provided in the SCP
Regulations (RJN Ex. 17). (See Cal. Code Regs., tit. 22, § 69507.2.) ACC explained that (i) the
listing of SPF Systems is contrary to the DTSC regulations and unsupported by the record, (ii) DTSC
has authority to adopt an enforceable consent agreement in lieu of the Priority Product listing, (iii)
DTSC had failed to comply with procedural obligations, and (iv) that the Department improperly
concluded that its listing decision was exempt from CEQA.
28. On February 25, 2019, DTSC denied ACC’s Appeal to the Director. (RJN Ex. 18.)
29. ACC has exhausted all administrative remedies provided for in the SCP Regulations
to challenge the Department’s decision to list SPF Systems as a Priority Product.
FIRST CAUSE OF ACTION
Writ of Mandate – Code of Civil Procedure § 1085
(Violation of Statutory and Regulatory Authority)
30. ACC re-alleges and incorporates by reference all of the prior paragraphs set forth
above.
31. Respondents/Defendants have only the authority conferred on them by the Green
Chemistry statute. Respondents/Defendants exceeded their statutory and regulatory authority by
listing SPF systems as a Priority Product. Respondents/Defendants have adopted a definition of
SPF Systems that impermissibly includes different products, used for different purposes, under
materially distinct circumstances and with materially distinct exposure profiles, including those
designed for use by professional installers that fall outside the commonsense definition of
“consumer products.”
32. Further, the Green Chemistry law required DTSC to “establish an identification and
prioritization process that includes . . . [t]he potential for exposure to the chemical in a consumer
product.” (Health & Saf. Code, § 25252, subd. (a)(2).) The SCP Regulations, which implement
the Green Chemistry law, require that before a Candidate Chemical is listed as a Priority Product
it meet two criteria: (1) “[t]here must be a potential public and/or aquatic, avian, or terrestrial
animal or plant organism exposure to the Candidate Chemical(s) in the product,” and (2) “[t]here
must be the potential for one or more exposures to contribute to or cause significant or widespread
8 VERIFIED PETITION FOR WRIT OF MANDATE AND
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
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adverse impacts.” (Cal. Code Regs., tit. 22, § 69503.2, subds. (a)(1), (2).)
33. Respondents/Defendants listed SPF Systems as a Priority Product even though SPF
Systems satisfy neither criteria. First, DTSC has failed to define a minimum threshold for
“exposure.” Under DTSC’s approach, nearly every product sold in California containing a
Candidate Chemical could have the potential for public and/or aquatic, avian, or terrestrial animal
or plant organism exposure to a chemical in a chemical-product combination. The failure to
identify an exposure threshold expands the Department’s authority to identify Priority Products
beyond the limits imposed by the California legislature and by the Department’s own SCP
Regulations. Second, the data identified by DTSC do not satisfy the adverse impact requirement
under the SCP Regulations because they do not demonstrate a “potential for . . . significant or
widespread adverse impacts.”
34. SPF Systems also cannot be listed a Priority Product because they are already
regulated by existing federal and state law. (See 22 Cal. Code Regs., tit. 22, § 69503.2, subd.
(b)(2).) Exposure to MDI is regulated by federal Occupational Safety and Health Administration
and Cal/OSHA, which have set quantitative MDI exposure limits and also require employers to
adopt engineering and administrative controls ensuring proper workplace ventilation, worker
training programs, and personal protective equipment requirements for applicators. Listing of SPF
Systems would not meaningfully enhance the protection of public health or the environment.
Listing of SPF Systems is contrary to the limitations included in the SCP Regulations.
SECOND CAUSE OF ACTION
Declaratory Relief – Code of Civil Procedure § 1060
Government Code § 11350
(Violation of California Administrative Procedure Act)
35. ACC re-alleges and incorporates by reference all of the prior paragraphs.
36. DTSC has failed to conduct an adequate analysis of alternative regulatory pathways
to listing SPF Systems, as required by the California Administrative Procedure Act. DTSC’s
alternatives analysis did not properly address the potential for an enforceable consent agreement
with SPF Systems manufacturers.
9 VERIFIED PETITION FOR WRIT OF MANDATE AND
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
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THIRD CAUSE OF ACTION
Declaratory Relief – Code of Civil Procedure § 1060
Government Code § 11350
(Violation of California Administrative Procedure Act)
37. ACC re-alleges and incorporates by reference all of the prior paragraphs.
38. Respondents/Defendants violated the California Administrative Procedure Act by
failing to provide a full, final cost estimate for listing SPF systems as a Priority Product. DTSC’s
economic analysis of the proposed listing presents mismatched costs and benefits because the
Department has omitted certain, material costs to industry.
FOURTH CAUSE OF ACTION
Writ of Mandate – Code of Civil Procedure § 1085
Public Resources Code § 21168.5
(Violation of CEQA)
39. ACC re-alleges and incorporates by reference all of the prior paragraphs.
40. DTSC has abused its discretion by concluding that the decision to list SPF Systems
as a Priority Product is exempt from the environmental review requirements of CEQA, in
violation of Public Resources Code § 21168.5. This decision improperly bifurcated consideration
of the listing decision from the impacts of any regulatory action undertaken in response to the
Alternatives Analysis process and also impermissibly relied on the premise that the listing
decision was intended to provide environmental benefits to reach the CEQA exemption
determination.
RELIEF REQUESTED
WHEREFORE, Petitioners/Plaintiffs respectfully pray for relief as follows:
1. Issue a writ of mandate directing Respondents/Defendants to remove SPF Systems as
a listed Priority Product and prohibiting the listing of SPF Systems as a Priority Product under the
Green Chemistry Statute and SCP Regulations;
2. Issue a declaratory judgment that Defendants/Respondents have violated the
California Administrative Procedure Act by failing to conduct an adequate economic analysis and
10 VERIFIED PETITION FOR WRIT OF MANDATE AND
COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF
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enjoining the listing of SPF Systems as a Priority Product;
3. Issue a declaratory judgment that Defendants/Respondents have violated the
California Administrative Procedure Act by failing to conduct an adequate analysis of alternatives,
including the viability of enforceable consent agreement, and enjoining the listing of SPF Systems
as a Priority Product;
4. Issue a declaratory judgment that Defendants/Respondents have violated CEQA and
enjoining the listing of SPF Systems as a Priority Product; and
5. For such other and further relief as the court deems just and proper. Dated August 9, 2019 SIDLEY AUSTIN LLP By: /s/ Sean A. Commons Sean A. Commons
Paul J. Zidlicky Joseph T. Zaleski
Attorneys for Petitioners and Plaintiffs American Chemistry Council
By: /s/ Edward S. Orchon Edward S. Orchon Attorney for Petitioners and Plaintiffs
General Coatings Manufacturing Corp.
1 VERIFICATION FOR AMERICAN CHEMISTRY COUNCIL
2 I, Lee Salamone, declare as follows:
3 I am Senior Director of the Center for the Polyurethanes Industry, which is a self-funded
4 group of the American Chemistry Council ("ACC"), Petitioner/Plaintiff in this action. I have read
5 the foregoing VERIFIED PETITION FOR WRIT OF MANDATE AND COMPLAINT FOR
6 DECLARATORY RELIEF and know its contents. The same is true of my knowledge, except as
7 to those matters which are therein stated on information and belief, and as to those matters I believe
8 it to be true.
9 I declare under penalty of perjury under the laws of the State of California that the foregoing
10 is true and correct.
11 Executed this 9th day of August, 2019, in Washington, District of Columbia.
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Lee Salamone Senior Director
VERIFICATIO FOR AMERICAN CHEMISTRY COUNCIL
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VERIFICATION FOR GENERAL COATINGS MANUFACTURING CORP.
I, Ashish Dhuldhoya, declare as follows:
I am the President of General Coatings Manufacturing Corp. ("General Coatings"),
Petitioner/Plaintiff in this action. I have read the foregoing VERIFIED PETITION FOR WRIT
OF MANDATE AND COMPLAINT FOR DECLARATORY RELIEF and know its contents.
The same is true of my knowledge, except as to those matters which are therein stated on
information and belief, and as to those matters I believe it to be true.
I declare under penalty of perjury under the laws of the State of California that the foregoing
is true and correct.
Executed this 9th day of August, 2019, at Fresno, California.
Ashish Dhuldhoya
12 VERIFICATION FOR GENERAL COATINGS CORPORATION