The opinion of the court was delivered by: Lawrence J. O'Neill United States District Judge
ORDER RE MOTION TO DISMISS (DOC. 17); CROSS MOTION FOR SUMMARY JUDGMENT (DOC. 23); AND STAYING CASE.
This case arises under the citizen suit provision of the Clean Air Act ("CAA"), 42 U.S.C. § 7604(a). Plaintiffs, a coalition of environmental and labor interests, allege that Defendant VWR International, LLC, ("VWR"), a laboratory supply distributor, violated San Joaquin Valley Air Pollution Control District ("District") Rule 9510, implemented and approved as part of California's State Implementation Plan ("SIP") under the CAA, by failing to apply for an Indirect Source Review ("ISR") permit prior to obtaining approval to open and/or operate a trucking distribution facility in Visalia, California. Before the Court for decision is Defendant's motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(1) and 12(b)(6), Doc. 17, and Plaintiffs' cross motion for partial summary adjudication, Doc. 23.
Defendant filed its motion to dismiss on November 11, 2012, setting the motion for hearing on December 10, 2012. Doc. 17. The parties then stipulated to move the hearing date to December 20, 2012. Doc. 22. Plaintiffs filed an opposition to the motion, along with a cross-motion for partial summary adjudication on the issue of liability under the CAA, a statement of undisputed facts, and a request for judicial notice. Doc. 23. Defendant filed an opposition to the motion for partial summary adjudication as well as a response to the statement of undisputed fact. Doc. 31. Upon preliminary review of the parties' filings, the hearing was vacated to permit time for the Court to review thoroughly the voluminous materials. Doc. 30. Having reviewed those filings, the Court requested a supplemental joint status report on a parallel state court action. Doc. 36. The joint status report was submitted January 30, 2012. In light of the entire record, the Court is now prepared to rule on the motion to dismiss and cross motion for partial summary adjudication. The Court does not believe oral argument is necessary to aid resolution of this request, and hereby rules on the papers pursuant to Local Rule 230(g).
VWR is a global laboratory supply and distribution company that supplies a wide range of laboratory supplies and chemicals to pharmaceutical companies, biotech companies, and other industrial, education, and governmental facilities throughout California. Compl., Doc. 1, at ¶ 35. On or around September 2010, VWR submitted an application to the City of Visalia, seeking permission to construct a new distribution and shipping facility (the "Project") at 8711 W. Riggin Avenue, in the City of Visalia, California, which lies within the San Joaquin Valley Air Basin. Id. at ¶¶ 33-34, 45. On September 22, 2010, the City of Visalia Site Plan Review Committee ("SPRC") reviewed the project, directed VWR to make approximately 50 modifications to the Project, and instructed VWR to return for further review once the changes had been made. Id. at ¶ 45. Among other things, the Committee warned VWR:
If your project requires discretionary action . Please note that the project is subject to SJVAPCD Rule 9510. The applicant is encouraged to do early indirect source modeling consultation with the Air District.
On October 14, 2010, VWR submitted a letter to the City Engineer proposing to construct 126 parking spots for the Project, requesting relief from the City's requirement of 1 parking space per 1,000 square feet, which would have required 500 parking spaces. Id. at ¶ 46. On that same date, VWR resubmitted revised Project plans to the City. Id. On November 16, 2010, the City approved the VWR Project. Id. at ¶ 49. On December 10, 2010, the Visalia City Council voted to give VWR up to $1.5 million to pay for major street improvements necessary for the Project. Id. at ¶ 50. At no point during this process did VWR apply to the Air District for an ISR permit. Id. at ¶ 52. Project construction began in January 2011. Id. at ¶ 53. VWR commenced operations in September 2012. Id. at ¶ 55.
Prior to initiating construction, VWR received a written determination from the City that no discretionary approval would be required for the Project. Request for Judicial Notice ("RJN"), Doc. 17-2, at Ex. A.*fn1 VWR also received a written determination from the District that because the City determined no discretionary approval was required, Rule 9510 would not apply to the Project. RJN, Ex.
B.Clean Air Act & State Implementation Plans.
In California, air quality is regulated under the federal Clean Air Act ("CAA"), 42 U.S.C. §§ 7401, et seq., and the California Clean Air Act ("CCAA"), Cal. Health & Safety Code, §§ 39000, et seq. Under the CAA, regulatory authority is bifurcated between the federal Environmental Protection Agency ("EPA") and states. EPA identifies pollutants to regulate and establishes national ambient air quality standards ("NAAQS"). EPA sets NAAQS for "criteria" pollutants, including coarse particulate matter ("PM 10"), fine particulate matter ("PM2.5"), ozone, carbon monoxide, nitrogen dioxide, sulfur dioxide, and lead, and designates regions as in "attainment" or "nonattainment" of the standards. 42
U.S.C. §§ 7407, 7409. In areas designated as nonattainment for a pollutant, states are empowered to develop and submit for EPA approval state implementation plans ("SIPs") to provide attainment, maintenance and enforcement of NAAQS within the state. SIPs must include rules and measures to demonstrate that NAAQS will be attained by dates set in the CAA. See 42 U.S.C. §§ 7409, 7410(a). EPA reviews and approves SIPs, and after its approval, a SIP is enforceable by EPA and the state.
The CAA authorizes, but does not require, states to regulate indirect sources of emissions and to include indirect source review programs in their attainment plans. § 7410(a)(5)(A)(ii). Section 7410(a)(5)(C) defines "indirect source" as "a facility, building, structure, installation, real property, road, or highway which attracts, or may attract, mobile sources of pollution." An "indirect source review program" is "the facility-by-facility review of indirect sources of air pollution, including such measures as are necessary to assure, or assist in assuring, that a new or modified indirect source will not attract mobile sources of air pollution" that would contribute to exceeding, or prevent maintenance of, NAAQS. § 7410(a)(5)(D). "Direct emissions sources or facilities at, within, or associated with, any indirect source shall not be deemed indirect sources for the purpose" of an indirect source review program. § 7410(a)(5)(C).
In California, regulatory authority under the CCAA is bifurcated between the California Air Resources Board ("CARB") and 35 local air districts, including the District. See Cal. Health & Safety Code, § 39002. The CCAA authorizes CARB to set state ambient air quality standards and tailpipe emissions standard for vehicles. Id. Local air districts have "primary responsibility" to control other sources, including stationary sources (factories and oil refineries) and mobile sources through indirect and areawide source programs and transportation control measures. See Cal. Health & Safety Code, §§ 39002, 40716, 40717. The CCAA directs local air districts to consider the "full spectrum of emissions sources" to develop attainment plans and to "focus particular attention on reducing emissions from transportation and areawide emission sources." Cal. Health & Safety Code, §§ 40910.
District Rule 9510 "is designed to achieve reductions in air pollution attributable to development projects." Nat'l Ass'n of Home Builders v. San Joaquin Valley Unified Air Pollution Control Dist., 2008 WL 4330449, *4 (E.D. Cal. Sept. 19, 2008) aff'd, 627 F.3d 730 (9th Cir. 2010). The Rule applies "to any applicant that seeks to gain a final discretionary approval" for certain large development projects, including any project that will include industrial space in excess of 100,000 square feet. Rule 9510 § 2.1.
When Rule 9510 was adopted, the San Joaquin Valley was classified as nonattainment under federal and state standards for PM10, PM2.5 and ozone. PM10 and PM2.5 can be directly-emitted geologic material, including entrained road and other dust. PM10 and PM2.5 can [also] be formed when precursor emissions, such as oxides of Nitrogen ("NOx") and volatile organic compounds ("VOCs") are emitted as a gas and form PM10 and PM2.5 through chemical processes. [N]ew residential and commercial development indirectly causes air pollution by attracting mobile sources and contributing increased energy use.  Rule 9510 targets indirect sources of air pollution.... [by] set[ting] target reductions for emissions associated with construction ("construction emissions") and future operation of development projects ("operational emissions"). For construction, Rule 9510's target is to reduce PM10 emissions by 45 percent and NOx by 20 percent as compared to emissions generated using "average" construction equipment in California. For future operation, Rule 9510's target is to incorporate mitigation measures into project design to reduce emissions that would be otherwise indirectly caused by the project (e.g., increased traffic) over a 10-year period. The PM 10 target is to reduce unmitigated operational emissions by 50 percent. The NOx target is to reduce emissions by 33.3 percent.
[U]nder Rule 9510, a computer model is used to calculate emissions attributable to "construction" and "operational" phases of a development project, and the project developer is responsible to mitigate a portion of those emissions. The District notes that under Rule 9510, mitigation may be achieved: (1) "on-site" by incorporating design features and other pollution mitigation measures into the project; (2) "off-site" by paying a mitigation fee which the District uses to "buy" requisite amount of emissions reductions through its emissions reduction incentive program ("ERIP"); or (3) by a combination of "on-site" and "off-site" measures.
D.Plaintiffs' State Lawsuit.
On December 28, 2010, the Teamsters Joint Council 7 and one of its members, Kevin Long, both Plaintiffs in this action, filed a complaint and petition for a writ of mandamus against the City, the District, and VWR, alleging, among other things, that VWR and the Air District were in violation of Rule 9510. RJN, Ex. C.
Plaintiffs filed a first amended petition ("FAP") on February 1, 2011, adding the Coalition for Clean Air, the Center for Environmental Health, and the Association of Irritated Residents as plaintiffs, each of which is also a Plaintiff in this action. RJN, Ex. D. The FAP named as defendants the City of Visalia, along with its City Council and Site Plan Review Committee; Chris Young, the Community Development Director; and the District; as well as VWR and an affiliated company, Midstate Hayes 184 Distribution Center, LLC ("Midstate Hayes"), as real parties in interest. Id. The FAP alleged:
(1) all defendants violated the California Environmental Quality Act ("CEQA") by classifying approval of the Project as a ministerial act exempt from CEQA;
(2) all defendants failed to comply with provisions of the Visalia Municipal Code requiring a planned development permit for any development in the Planned Heavy Industrial Zone;
(3) real parties in interest VWR and Midstate Hayes violated Rule 9510 by failing to apply for an ISR permit, and the District violated the Rule by refusing to enforce the permit requirement;
4) VWR and Midstate Hayes' violation of Rule 9510 constituted unfair business practice under California Business and Professions Code § 17200;
(5) VWR's related violation of California's Hazardous Materials Response Plans and Inventory Act also constituted an unfair business practice under § 17200;
(6) the City of Visalia defendants were illegally expending funds to support the Project;
(7) the District violated CEQA by failing to conduct any review of the Project under that statute; and
(8) VWR and Midstate Hayes would create a public and private nuisance.
VWR filed a demurrer to the FAP in February 2011, arguing:
(a) the CEQA claims are time barred;
(b) there is no private right action permitting challenges under either the Visalia Municipal Code or Rule 9510 and petitioners lacked the beneficial interest necessary to prosecute a mandamus action;
(c) the unfair business practices allegations fail because they do not allege an actual economic injury that is concrete and specific and seek inappropriate judicial intervention into the permit process administered by local agencies, requiring judicial abstention; (d) the illegal expenditure of funds claim fails because petitioners allege the expenditure was a discretionary act and because the expenditure was expressly authorized by the Visalia Municipal Code;
(e) the nuisance claim is barred as a matter of law because defendants' commercial enterprise operates in a manner consistent with zoning restrictions and there is no allegation that they employed unnecessary and injurious methods of operation.
While the demurrer was still pending, the petitioners dismissed the fourth and fifth (§ 17200) claims, as well as the seventh (one of the CEQA claims) and eighth (nuisance) claims. Petitioners also entered into a stipulated judgment with the District that fully resolved their claim against the District for enforcement of Rule 9510. RJN, Ex. M. Under the terms of that agreement, the District denied liability, but consented to the entry of a judgment providing:
If the Court finds that any governmental entity was or is required to issue a discretionary approval with respect to the VWR Project, then the Air District shall require VWR to comply with  Rule 9510 prior to the commencement of construction of the VWR Project, or within ten (10) days of the date of the ruling of the Court, whichever date is later.
Id. at 3. The Stipulated Judgment further provided that:
Except for the obligations under this Stipulated Judgment, Petitioners, on behalf of themselves and in the public interest, hereby release and discharge the Air District from any and all claims asserted, or that could have been asserted, arising out of the facts alleged in the operative Petition and Complaint in this action.
Id. at 4. The Superior Court for the County of Tulare retained jurisdiction to enforce the terms of the stipulated judgment. Id.
The Tulare County Superior Court sustained the demur to the first cause of action, concluding that the CEQA cause of action was time-barred. RJN, Ex. F, at p. 3 of 5. It also sustained the demurrer to the second and third causes of action, concluding that a California Code of Civil Procedure § 1085 cause of action for a writ of mandate could not be maintained because petitioners had not established the existence of any right or duty that compelled the governmental defendants to act in a certain manner, nor had they demonstrated § 1085 could be used to compel a private party (namely, VWR) to obtain a permit from a governmental agency. Id. at p. 4-5 of 5. Finally, the demurrer was sustained as to the sixth cause of action under California Code of Civil Procedure § 526a for unlawful expenditure, because the challenged funding decision was discretionary in nature. Id. at p. 5 of 5.
Petitioners appealed the ruling. RJN, Ex. G. On September 14, 201, the California Court of Appeal for the Fifth Appellate District reversed the judgment, finding: (1) that a notice of exemption filed before the final approval of the proposed project was invalid and therefore did not trigger CEQA's 35-day statute of limitations; and that (2) leave to amend was warranted as to the illegal expenditure of government funds claim. Plaintiff's Request for Judicial Notice in Support of Request for Preliminary Injunction ("PIRJN"), Ex A at 2-3.*fn2 The California Court of Appeal (in the only part of the decision NOT certified for publication) also reversed in part the trial court's conclusion regarding standing to pursue a writ of mandate. The Court of Appeal agreed with the trial court that plaintiffs could not seek a writ of mandate to compel VWR to obtain a permit, because mandamus may only be used to compel official acts of government agencies. Id. at 28. The Court of Appeals turned next to plaintiffs' argument that a writ of mandamus should issue against the City because the City violated its municipal code by failing to issue a planned development permit and findings for the VWR project. Id. at 29. The Appellate Court concluded that "the decision to issue a planned development permit [is] discretionary, not ministerial" so any decision not to issue such a permit and/or related findings was not subject to mandamus. Id. However, the Court of Appeals acknowledged that the "second cause of action mentions another duty that might be subject to enforcement by writ of mandate." Id. at 30. Specifically, plaintiffs alleged "[n]o building permits may be issued until after a planned development permit is obtained." Id. This allegation was based upon Visalia Municipal Code ("VMC") § 17.28.070, which provides in part:
Once the applicant receives a planned development permit, building permits may be issued. No permits may be issued for the erection or enlargement of building or structures and no persons shall perform any development or construction of work on the site except within full compliance of this section.
This amounted to a "ministerial duty" to refrain from issuing building permits without a planned development permit, thereby satisfying the ministerial duty element of ...