CERTIFIED FOR PARTIAL PUBLICATION[*]
APPEAL from a judgment of the Superior Court of Fresno County. No. 09CECG04659 Jeffrey Y. Hamilton, Jr., Judge.
Wanger Jones Helsley, Timothy Jones, John P. Kinsey, and Daren A. Stemwedel for Plaintiffs and Appellants.
Kamala D. Harris, Attorney General, Kathleen A. Kenealy, Senior Assistant Attorney General, Robert W. Bryne, Gavin G. McCabe, Supervising Deputy Attorneys General, Mark W. Poole, David A. Zonana, and M. Elaine Meckenstock, Deputy Attorneys General, for Defendants and Respondents.
Kahn, Soares, & Conway, Louis A. Brown, and Joshua J. Bettencourt for National Biodiesel Board and California Biodiesel Alliance as Amici Curiae on behalf of Defendants and Respondents.
Shute, Mihaly & Weinberger, Matthew D. Zinn; Timothy J. O’Connor; and Matthew Vespa for American Lung Association in California, Coalition for Clean Air, Conservation Law Foundation, Environmental Defense Fund, and Sierra Club Environmental Law Program as Amici Curiae on behalf of Defendants and Respondents.
J. Nathan Jensen for Clean Energy as Amicus Curiae on behalf of Defendants and Respondents.
Judi K. Mosley for Pacific Gas and Electric Company as Amicus Curiae on behalf of Defendants and Respondents.
As part of developing solutions to global warming, the California Legislature adopted the California Global Warming Solutions Act of 2006 (the Act) and established the first comprehensive greenhouse gas regulatory program in the United States. The California Air Resources Board (ARB) is the state agency charged with regulating the sources of emissions of greenhouse gases that cause global warming. The goal of the Act is to reduce greenhouse gas emissions to 1990 levels by 2020, by regulation to establish a statewide cap on greenhouse gas emissions beginning in 2012. California’s single largest source of greenhouse gas emissions, which include carbon dioxide and other carbon compounds, is the fuel used for transportation. To reduce the emissions from transportation, ARB adopted a number of regulations, including the Low Carbon Fuel Standards (LCFS) regulations that require the reduction of the carbon content of transportation fuels sold, supplied or offered for sale in California.
ARB’s task of creating the LCFS regulations was complex and presented many questions of science, economics and law. ARB’s proposed regulations were required to meet substantive requirements of the Act, procedural requirements for rulemaking in California’s Administrative Procedures Act (APA), and substantive and procedural requirements in the California Environmental Quality Act (CEQA). Furthermore, the Act required the LCFS regulations, as well as other greenhouse gas measures, to be in place by January 1, 2010. In sum, ARB was given a difficult task and the pressure of a statutory deadline.
ARB’s efforts to complete the LCFS regulations on time satisfied a vast majority of the applicable legal requirements, but ran afoul of several procedural requirements imposed by CEQA and the APA. While these procedural violations are not trivial, they do not require us to automatically discard the existing LCFS regulations and order ARB to restart the complex rulemaking process anew. The statutes in question allow courts to tailor the remedy to the circumstances of each case and, therefore, we may consider the public interests affected by setting aside the LCFS regulations. Those public interests include adverse environmental impacts and, in particular, whether suspending the LCFS regulations would result in more environmental harm than allowing them to remain in effect pending the completion of ARB’s corrective action. Because of the potential adverse environmental impacts, as well as other disruptions, we will allow the LCFS regulations to remain operative while ARB complies with the procedural requirements it failed to satisfy. In other words, we will avoid the irony of violations of an environmental protection statute being used to set aside a regulation that restricts the release of pollutants into the environment.
Summary of Legal Issues and Our Conclusions
POET, LLC and James M. Lyons (plaintiffs) have challenged the LCFS regulations on the grounds that ARB violated the APA and CEQA during the adoption process. Plaintiffs contend ARB violated the APA by excluding from the rulemaking file made available to the public certain emails from consultants. The emails concerned the computer model ARB used to calculate the indirect carbon emissions attributable to ethanol due to land use changes caused by the increased demand for the crops used to produce ethanol. Assigning ethanol a higher carbon content based on indirect land use change is controversial because many uncertainties affect the estimates for the land use changes and the carbon emissions resulting from those changes. Also, ethanol is the only biofuel given an increased carbon rating based on land use changes.
Plaintiffs also contend ARB violated CEQA by (1) giving its “approval” to the regulations before the environmental review was complete, (2) splitting the authority to approve or disapprove the regulations from the responsibility of completing the environmental review, and (3) impermissibly deferring the analysis and formulation of mitigation measures for potential increases in the emission of nitrogen oxide (NOx) resulting from the increased use of biodiesel.
We conclude that plaintiffs’ APA claim has merit because the emails contain “other factual information” that was “submitted to” ARB and thus are required to be included in ARB’s rulemaking file.
Analyzing the CEQA challenges under the independent standard of review, we conclude that ARB prematurely approved the LCFS regulations at its public hearing on April 23, 2009, well before it completed its environmental review. CEQA Guidelines mandate that approval of the LCFS regulations follow completion of the environmental review. We also conclude ARB violated CEQA by splitting the authority between ARB and its Executive Officer (Executive Officer) to approve the project from the responsibility for completing the environmental review. Finally, we conclude that ARB violated CEQA by deferring the formulation of mitigation measures for NOx emissions from biodiesel without committing to specific performance criteria for judging the efficacy of the future mitigation measures. As a result of this failure, ARB failed to qualify for the exception to the general rule prohibiting the deferral of the formulation of mitigation measures.
To remedy these CEQA and APA violations, we direct the trial court to issue a writ of mandate directing ARB to set aside its approval of the subject LCFS regulations while allowing the regulations to remain in effect pending ARB’s taking action to comply with the statutes.
We therefore reverse the judgment.
In 2006, the Legislature passed Assembly Bill No. 32 (AB 32), which became the Global Warming Solutions Act of 2006. AB 32 is codified at Health and Safety Code sections 38500 through 38599 and requires California’s statewide greenhouse gas emissions to be lowered to 1990 levels by 2020. (Health & Saf. Code, § 38550.)
AB 32 designated ARB as the state agency charged with monitoring and regulating the sources of emissions of greenhouse gases. (Health & Saf. Code, § 38510.) AB 32 directed ARB to take certain action, such as preparing a “scoping plan” to achieve maximum technologically feasible and cost-effective reduction in global warming, adopting measures that could be implemented quickly (i.e., “discrete early action”), and formulating other measures that would require more time to study and implement. AB 32 also imposed timelines for these actions.
The requirements of AB 32 relevant to this appeal concern (1) the scoping plan for reducing greenhouse gases and (2) discrete early action. The scoping plan, which addresses many measures besides the LCFS regulations, includes an overview of standards for lowering the carbon content of transportation fuel. AB 32 required ARB to prepare and approve the scoping plan by January 1, 2009. (Health & Saf. Code, § 38561, subd. (a).) The scoping plan was required to “identify and make recommendations on direct emission reduction measures, alternative compliance mechanisms, market-based compliance mechanisms, and potential monetary and nonmonetary incentives for sources and categories of sources that the [ARB] finds are necessary or desirable to facilitate the achievement of the maximum feasible and cost-effective reductions of greenhouse gas emissions by 2020.” (Health & Saf. Code, § 38561, subd. (b).)
The “discrete early action” provisions of AB 32 are relevant because the regulations implementing standards for lowering the carbon content of fuel were early action measures. AB 32 directed ARB, by June 30, 2007, to publish a list of the greenhouse gas emission reduction measures that would qualify as “discrete early action.” (Health & Saf. Code, § 38560.5, subd. (a).) Regulations implementing the discrete early actions were to be adopted by January 1, 2010. (Health & Saf. Code, § 38560.5, subd. (b).) This is the deadline ARB attempted to meet in promulgating the regulations governing the carbon content of transportation fuels.
Low Carbon Fuel Standard (LCFS)
In January 2007, Governor Schwarzenegger issued Executive Order S-01-07, which (1) set a statewide goal of reducing the carbon intensity of California’s transportation fuels by at least 10 percent by 2020, (2) called for the establishment of a LCFS for transportation fuels, and (3) directed the ARB to determine if a LCFS could be adopted as a discrete early action measure pursuant to AB 32.
In September 2007, ARB included a LCFS in its list of nine potential discrete early actions. The list also included measures on the electrification of ships while they were in port, improved landfill methane gas capture, a tire inflation program, and the reduction of PFC’s in semiconductor manufacturing.
The scoping plan, eventually adopted in December 2008, included a LCFS that identified transportation as the largest single source of greenhouse gas emissions in California and stated that greenhouse gas emissions could be reduced by improving vehicle efficiency, lowering vehicle miles traveled and reducing the carbon intensity of transportation fuels consumed in California. The scoping plan also stated that the LCFS adopted would provide flexibility to fuel providers in how they meet the requirements and would examine the impacts of the full fuel cycle of transportation fuels. ARB expected the LCFS to transform the state’s energy portfolio and move California towards less dependence upon one source of fuel for transportation.
In August 2007, ARB began consulting with the public about a LCFS. In 2008 and early 2009, ARB staff conducted 16 public workshops on proposed LCFS throughout California and participated in numerous meetings with various stakeholders. ARB refers to these meetings, workshops and matters as informal rulemaking activity.
ARB staff used the information gathered during its workshops with the public, as well as its own scientific and technical analysis (which included the use of consultants), in preparing a formal proposal for the LCFS regulations. The proposed regulations were part of the “Staff Report: Initial Statement of Reasons” published on March 5, 2009 (ISOR).
Carbon Content Standards—Carbon Intensity Values
The proposed LCFS regulations aimed to achieve a reduction in greenhouse gas emission by establishing performance standards, expressed as carbon intensity values, that fuel producers and importers were required to meet each year beginning in 2011.
For example, for 2011 the standard proposed for gasoline and its replacements was set at 95.61 grams of carbon dioxide equivalent per megajoule or gCO2E/MJ. Each year the standard was reduced and, by 2020, reached 86.27 gCO2E/MJ. The baseline carbon content used in developing the yearly standard for gasoline was derived from reformulated gasoline mixed with corn-derived ethanol.
The other standard for transportation fuels applies to diesel fuel and its replacements. The benchmark for diesel fuel was established using low sulfur diesel fuel. For 2011, the carbon intensity value for diesel fuel and its substitutes was set at 94.47 gCO2E/MJ. By 2020, the standard was reduced to 85.24 gCO2E/MJ.
To determine whether or not a regulated party would meet the yearly standard, the proposed LCFS assigned carbon intensity values for various types of fuels and required the regulated party to calculate the average carbon intensity of all the fuel it provided for that year. The proposed LCFS regulations did not prohibit or require the use of any particular type of fuel. Instead, regulated parties were given the freedom to determine the mix of fuels they would use to meet that the annual standard. When a regulated party came in below the annual standard, credits would be generated and could be sold to other regulated parties or carried over to subsequent years.
The carbon intensity values assigned to particular fuel lifecycles were important to the producers of that fuel, as well as the regulated parties in California, because those values created an incentive or disincentive to use that fuel. For instance, when an alternative fuel has a lower carbon intensity value than the gasoline or diesel benchmark, producers and importers have an incentive to use that alternate fuel as a substitute for the higher carbon intensity fuels they sold in the past. Therefore, the assigned carbon intensity values would ultimately affect the demand and price of that alternative fuel. Controversies arose regarding the carbon intensity values assigned as producers of the various types of fuel vied for favorable terms for their product.
The carbon intensity value assigned to the various fuels was determined using a lifecycle analysis. This analysis estimates the aggregate quantity of greenhouse gas emissions from all steps in a fuel’s lifecycle, including the direct effects of producing and using the fuel, and the indirect effects that may result from the increased production of that fuel. A fuel’s lifecycle can be divided chronologically into two stages: (1) all the steps leading up to the delivery of the finished fuel or blendstock into a vehicle’s fuel tank and (2) the combustion of the fuel in the vehicle. When the fuel is derived from crops, the steps occurring before combustion include: (1) farming practices, such as seedbed preparation and fertilizer and pesticide use; (2) harvesting the crop; (3) collecting and transporting the crop to a fuel processing plant; (4) the fuel production process, which involves variables such as the type of fuel used; the energy efficiency of the production technology, and the co-products generated; and (5) the transportation and distribution of the fuel to its end users. Crop yield is another variable that affects the carbon intensity values assigned to a biofuel produced from that crop.
Because the steps before combustion are not the same for each specific kind of fuel, the proposed LCFS regulations identified different fuel pathways for estimating the carbon intensity value assigned to that fuel. A fuel pathway consists of all the steps in producing, transporting and using that fuel. One example of different fuel pathways involves ethanol produced in the Midwest using corn and a dry milling process, as compared to a wet milling process. Each milling process produces a distiller’s grain co-product. When a plant using the dry milling process dries its distiller’s grain co-product, it uses more energy and, thus, the ethanol produced in such a plant is assigned a higher carbon intensity value than ethanol produced in a plant that sells its co-product as wet distiller’s grain. Ultimately, the LCFS regulations included 35 different pathways for corn ethanol and six different pathways for sugarcane ethanol.
ARB staff calculated carbon intensity values assigned to a fuel’s direct emissions using the Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation model, modified for use in California (CA-GREET). The CA-GREET model is, in essence, a very large spreadsheet that performs accounting for greenhouse gas emissions in the calculation of the lifecycle emissions associated with a fuel.
Land Use Changes
In addition to the direct emissions associated with producing, transporting and using fuels, the lifecycle analysis considers the indirect effect on greenhouse gases that are caused by a particular fuel. ARB staff identified land use changes resulting from increased use of some crop-based biofuels as a significant source of additional greenhouse gas emissions. Assessing land use changes is based on the idea that a large increase in biofuel demand in the United States will cause land to be converted to farming both in the United States and in countries that trade agricultural products with the United States. Emissions from land use changes were the only indirect effects included for consideration in the proposed LCFS regulations.
ARB staff chose the Global Trade Analysis Project (GTAP) model for assessing the land use change impacts of increased biofuel production levels. ARB’s staff’s use of the GTAP model was a cooperative effort with researchers from the University of California at Berkeley and Purdue University. The GTAP model was used to estimate the amounts and types of land across the globe that would be converted to agricultural production.
The analyses ARB conducted using the GTAP model resulted in estimates of the carbon intensity component that should be added to ethanol to account for land use changes. Based on these analyses, ARB’s staff proposed that 30 gCO2E/MJ be added to the carbon intensity value assigned to each of the 11 different pathways identified for the production of ethanol from corn. These additional 30 units are noteworthy because, before they were added, all 11 pathways had a total carbon intensity value below the 2020 standard set for gasoline and its substitutes. After the addition for the indirect effect of land use change, only two of the pathways had a carbon intensity value below the 2020 standard. Furthermore, the total carbon intensity value of five of the pathways was raised above the 2011 standard of 95.61 gCO2E/MJ. As a result, ethanol from these five pathways would hinder, rather than help, a regulated party comply with the standards set for 2011 and thereafter. The ISOR also proposed to set 46 gCO2E/MJ as the carbon intensity related to land use changes associated with ethanol produced from Brazilian sugarcane.
45-Day Public Comment Period
ARB’s March 5, 2009, publication of the ISOR started a 45-day public comment period. Along with the ISOR, ARB made available the technical appendices and approximately 10, 000 pages of reference materials.
During the comment period, ARB received written comments from stakeholders and other interested parties consisting of nearly 2, 100 pages. In addition, written comments presented to ARB during the April 23, 2009, hearing total 290 pages.
Comments Regarding Emissions from Biodiesel
One of the controversial positions taken in the ISOR concerned whether the substitution of biodiesel for petroleum-based diesel would increase emissions of NOx. In the ISOR, ARB’s staff assumed that there would be no increase in the NOx emissions based on the position that, after conducting a test program for biodiesel, ARB would institute regulations setting fuel specifications for biodiesel that would ensure NOx emissions did not increase.
ARB received a number of comments challenging the assumption that biodiesel use would not increase NOx emissions. In response to these comments, ARB reiterated its position that it would “ensure that biodiesel fuel use does not increase NOx emissions significantly by promulgating a new motor vehicle fuel specification for biodiesel.”
Additional information regarding biodiesel and the controversy regarding NOx emissions is set forth in part IV.A, post.
After the close of the comment period, ARB held a public hearing on April 23, 2009. At the close of the hearing, the Board passed resolution number 09-31 (Resolution 09-31) in which the Board approved for adoption the proposed LCFS regulations with certain modifications and designated the Executive Officer of ARB as the decisionmaker for purposes of responding to environmental issues and making further nonsubstantive modifications. More details regarding the contents of Resolution 09-31 and the Executive Officer’s role are set forth in part II.D.2, post.
After the hearing, ARB issued a press release stating: “Today, the Air Resources Board adopted a regulation that will implement Governor Schwarzenegger’s Low Carbon Fuel Standard calling for the reduction of greenhouse gas emissions from California’s transportation fuels by ten percent by 2020.” (Underlining omitted.)
Resolution 09-31, establishing the LCFS and adopted for approval on April 23, 2009, included a finding that indirect land use change had been appropriately included in the analysis of the lifecycle of some crop-based biofuels and that excluding the effects of land use change would delay the development of truly low-carbon fuels and jeopardize the achievement of the 2020 goal of a 10 percent reduction in carbon intensity. Resolution 09-31 also approved the Carbon Intensity Lookup Table in section 95486 of title 17 of the California Code of Regulations and gave the Executive Officer the authority to revise the fuel pathways and carbon intensity values set forth in that table, except for the carbon intensity values based on land use changes. Therefore, the 30 and 46 gCO2E/MJ assigned to ethanol from corn and sugarcane, respectively, to account for carbon emissions from land use changes was established by the Board at the April 23, 2009, public hearing and could not have been changed by the Executive Officer.
The Board’s actions on April 23, 2009, are important for purposes of this appeal because those actions are the basis for plaintiffs’ argument that ARB prematurely approved the LCFS regulations before completing its environmental review and thereby violated CEQA.
Executive Officer’s Actions
As directed by Resolution 09-31, the Executive Officer incorporated the modifications approved by the Board at the April 23, 2009, hearing, along with appropriate conforming modifications, and made the modifications available for a supplemental comment period of 15 days. The notice of the public availability of the modified text and additional documents was issued on July 20, 2009, and August 19, 2009, was set as the deadline for public comment.
Further modifications to the LCFS regulations were made available to the public in a second 15-day notice dated September 23, 2009.
Executive Order R-09-014
On November 25, 2009, the Executive Officer issued Executive Order R-09-014, which adopted the LCFS regulations except for (1) a severability provision that had been inadvertently omitted and (2) provisions regarding the carbon intensity values for biodiesel converted from Midwest soybeans and renewable diesel converted from Midwest soybeans. On the same date, ARB issued a notice of decision and response to significant environmental issues, stating that the executive order had adopted the LCFS regulations and comments raising significant environmental issues had been responded to in an attached Final Statement of Reasons (FSOR).
The LCFS regulations adopted by Executive Order R-09-014 were the subject of a notice of approval of regulatory action issued by the Office of Administrative Law on January 12, 2010. The notice stated that the regulatory action became effective on January 12, 2010, which was only 11 days after the statutory deadline for regulations implementing discrete early action.
Executive Order R-10-003
On March 4, 2010, the Executive Officer issued Executive Order R-10-003, which adopted amendments to provisions of the LCFS regulations regarding the matters not included in the initial regulations. ARB also filed a notice of decision with the Resources Agency of California regarding the action taken by Executive Order R-10-003.
On April 15, 2010, the Office of Administrative Law issued a notice of approval of regulatory action approving the amendments to the LCFS regulations concerning the carbon intensity values for biodiesel and renewable diesel fuel made from Midwest soybeans and the severability clause. The notice stated that the regulatory action became effective on April 15, 2010. The LCFS regulations are set forth in sections 95480 through 95490 of title 17 of the California Code of Regulations.
Plaintiffs POET, LLC (POET) and James M. Lyons initiated this litigation on December 23, 2009, by filing a petition for writ of mandate and complaint for declaratory and injunctive relief.
POET produces corn ethanol. In an April 2009 comment letter, POET asserted it was “currently the largest producer of ethanol in the world” and had started its ethanol business in the 1980’s in Minnesota. POET currently operates plants across the Midwest from Ohio to South Dakota. POET alleged its ethanol is used in California and the implementation of the LCFS regulations would cause it injury.
James M. Lyons is a California resident who commented on the LCFS regulation, opposed its approval and alleged he would be injured by its implementation without full compliance with CEQA. Lyons is a partner in Sierra Research, which has an office in Sacramento, California. His April 22, 2009, comment letter addressed emission effects of new vehicle purchases involving ultra-low emission vehicles and partial zero emission vehicles.
On January 22, 2010, plaintiffs filed a first amended petition and complaint, which is the operative pleading in this case. The pleading named as defendants (1) ARB, (2) James N. Goldstene in his official capacity as the Executive Officer of ARB, (3) Lori Andreoni, in her official capacity as a Manager of ARB, and (4) Ellen Peter, in her official capacity as Chief Counsel of ARB (collectively, defendants). Plaintiffs alleged 25 causes of action for violations of CEQA, the APA and the Health and Safety Code.
Attached to the first amended petition and complaint were many documents that plaintiffs obtained from ARB in response to an August 2009 request for records pursuant to the California Public Records Act, Government Code section 6250 et seq. The attached documents included numerous emails from consultants hired by ARB to assist it in developing the LCFS regulation, including four emails that plaintiffs claim should have been disclosed to the public during the rulemaking process before the hearing on April 23, 2009. Plaintiffs’ second and fifteenth causes of action alleged that ARB’s exclusion of those emails from the public file documenting its rulemaking activity violated ARB’s own regulations and section 11347.3 of the APA.
As to CEQA compliance, the first cause of action alleged CEQA required the decision maker to respond to comments in writing before approving a regulation change. The first cause of action also alleged how ARB’s delegation to the Executive Officer, staff members and consultants of the responsibility for considering, reviewing and preparing responses to the comments on environmental effects, violated CEQA. Thus, the first cause of action challenges both the timing of ARB’s approval of the LCFS regulations and the delegation of authority to the Executive Officer.
Plaintiffs’ fifth cause of action alleged ARB violated CEQA by (1) failing to mitigate or consider mitigation for increases in NOx emissions caused by the use of biodiesel and (2) impermissibly adjourning for further study any effort to address the potential increase in NOx emissions.
In March 2011, plaintiffs filed their opening brief on the merits in the trial court, along with a declaration that included as attachments a number of emails plaintiffs obtained from ARB pursuant to their Public Records Act request.
In May 2011, ARB filed its brief on the merits and a motion to strike (1) documents attached to the declaration filed in support of plaintiffs’ opening brief and (2) documents attached to plaintiffs’ pleading. ARB characterized the documents as extra-record evidence and irrelevant.
Following a hearing on the merits of the writ petition and the motion to strike, the trial court filed a statement of decision and ruling on motion to strike on November 2, 2011. The court granted ARB’s motion to strike plaintiffs’ extra-record evidence, denied plaintiffs’ petition for a writ of mandamus, and filed a judgment in favor of ARB.
I. CEQA AND CERTIFIED REGULATORY PROGRAMS 
ARB promulgated the LCFS regulations under a regulatory program certified by the Secretary of Resources as meeting the requirements of section 21080.5. (Guidelines, § 15251, subd. (d) [ARB included in list of certified regulatory programs].) When a regulatory program of a state agency requires the preparation of a plan or other written documentation containing the environmental information specified by CEQA section 21080.5 and has been certified, the state agency may rely on that plan or other documentation in lieu of an EIR. (CEQA, § 21080.5, subds. (a) & (d)(3).) The rationale for this rule is to avoid the redundancy that would result if environmental issues were addressed in both program-related documents and an EIR. (San Mateo County Coastal Landowners’ Assn. v. County of San Mateo (1995) 38 Cal.App.4th 523, 551-552.) Stated from a slightly different perspective, regulatory programs are certified when they involve “the same consideration of environmental issues as is provided by use of EIRs and negative declarations.” (Guidelines, § 15002, subd. (l).)
Because ARB acted under a certified regulatory program, no EIR was prepared and circulated in this case. Consequently, we will provide a brief overview of certified regulatory programs and the rules of law that apply to (1) agency action under such a program and (2) judicial review of that action for CEQA compliance.
A. Overview of Certified Regulatory Programs
When a regulatory program of a state agency has been certified, action taken under the program “is exempt from Chapter 3 (commencing with Section 21100), Chapter 4 (commencing with Section 21150), and Section 21167, except as provided” in the statutory provisions governing master EIR’s. (§ 21080.5, subd. (c).) The practical effect of this exemption is that a state agency acting under a certified regulatory program need not comply with the requirements for preparing initial studies, negative declarations or EIR’s. (Guidelines, § 15250; 2 Kostka & Zischke, Practice Under the Cal. Environmental Quality Act (Cont.Ed.Bar 2d ed. 2013) § 21.2, p. 1084 (2 Kostka & Zischke).) The agency’s actions, however, remain subject to other provisions of CEQA. (Guidelines, § 15250.)
ARB’s regulatory program is contained in sections 60005, 60006 and 60007 of title 17 of the California Code of Regulations. These provisions require the preparation of a staff report at least 45 days before the public hearing on a proposed regulation, which report is required to be available for public review and comment. (Cal. Code Regs., tit. 17, § 60005, subd. (a).) It is ARB’s policy “to prepare staff reports in a manner consistent with the environmental protection purposes of [ARB’s] regulatory program and with the goals and policies of [CEQA].” (Cal. Code Regs., tit. 17, § 60005, subd. (b).) The provisions of the regulatory program also address environmental alternatives and responses to comments to the environmental assessment. (Cal. Code Regs., tit. 17, §§ 60006, 60007.)
B. Judicial Review
1. General Principles Regarding Abuse of Discretion
Where a public agency has taken quasi-legislative action, such as ARB’s approval and adoption of the LCFS regulations, judicial review of that action for compliance with CEQA “shall extend only to whether there was a prejudicial abuse of discretion.” (§ 21168.5; see Vineyard Area Citizens for Responsible Growth, Inc. v. City of Rancho Cordova (2007) 40 Cal.4th 412, 426 [review for abuse of discretion] (Vineyard Area).) Such an abuse “is established if the agency has not proceeded in a manner required by law or if the determination or decision is not supported by substantial evidence.” (§ 21168.5.) This statutory language has been interpreted as classifying abuses of discretion into two types of agency error—namely, legal error (the failure to proceed in the manner required by law) and factual error (making findings that are not supported by substantial evidence). (Vineyard Area, supra, at p. 426.)
Each type of error is subject to a different standard of judicial review. (Madera Oversight Coalition, Inc. v. County of Madera (2011) 199 Cal.App.4th 48, 101 [in CEQA matter, appropriate standard of review depends on whether a legal or factual question is being reviewed].)
As to legal error, courts conduct an independent review to determine whether the public agency proceeded in the manner required by law. (Vineyard Area, supra, 40 Cal.4th at p. 426.) Alternatively, when reviewing an agency’s factual determinations for error, courts apply the substantial evidence standard. (Ibid.) As a result of the two standards, “a reviewing court must adjust its scrutiny to the nature of the alleged defect, depending on whether the claim is predominantly one of improper procedure or a dispute over the facts.” (Id. at p. 435.)
In accordance with this principle, we will scrutinize each of plaintiffs’ CEQA claims to determine whether the alleged defect is predominantly one of improper procedure or a disagreement with the agency’s factual findings.
2. ARB’s Approach to Judicial Review and Applicable Law
The cornerstone of ARB’s analysis of the CEQA claims is its certified regulatory program. In ARB’s view, the fact it acted under a certified regulatory program plays a key role in determining the applicable standards of judicial review.
With respect to legal error—that is, whether it “has not proceeded in a manner required by law” (§ 21168.5)—ARB contends: “The procedures by which ARB is to be judged are those set forth in its certified regulatory program. (See Pub. Resource Code, § 21080.5(c); Sierra Club v. State Bd. of Forestry (1994) 7 Cal.4th 1215, 1236.)”
This contention is an incomplete statement of the procedures that ARB must follow to satisfy CEQA. A certified regulatory program is exempt from the procedures regarding the preparation of a negative declaration or EIR, but the “certified program remains subject to other provisions in CEQA such as the policy of avoiding significant adverse effects on the environment where feasible.” (Guidelines, § 15250.) Thus, ARB’s approach to legal error is unduly narrow because it ignores the procedures in the “other provisions in CEQA” (ibid.) applicable to the action taken by ARB under its certified regulatory program.
Another aspect of the analysis of legal error that is important in this appeal concerns the Guidelines and their role in determining whether ARB failed to proceed in a manner required by law. ARB’s respondent’s brief contends that “in analyzing compliance with a certified regulatory program, the CEQA Guidelines do not directly apply to the environmental documentation. [Citation.]” This contention appears to be the basis for ARB’s failure to cite any Guideline concerning the “other provisions in CEQA” (Guidelines, § 15250) that are applicable to certified regulatory programs. For example, ARB did not cite Guidelines section 15352, which defines the “approval” of a CEQA project or the Guidelines that address the timing of that approval.
To complete the description of ARB’s approach to judicial review, we note that ARB also contends that (1) the documents prepared under a certified regulatory program are to be judged under the deferential substantial evidence standard, (2) ARB’s substantive determinations are entitled to deference, and (3) this deference extends to its interpretation of statutes and regulations.
3. Our Approach to Judicial Review
Our inquiry into the standards of judicial review that apply to the CEQA claims presented in this appeal begins with the following basic question: Are the standards of judicial review applicable to agency action taken under a certified regulatory program determined by the same analysis used in other CEQA contexts, such as those involving the preparation of an EIR? We conclude the same analysis is used to determine the appropriate standard of judicial review. (See 2 Kostka & Zischke, supra, § 21.1, p. 1084 [standard of review is the same when challenged action was taken under a certified regulatory program].)
Our conclusion is based on the wording of section 21168.5, which refers to “any action or proceeding” challenging an agency decision on the grounds of noncompliance with CEQA. Plaintiffs’ lawsuit clearly qualifies as an “action or proceeding.” The statute’s use of the word “any” is not qualified and, thus, provides no basis for concluding section 21168.5 does not apply to plaintiffs’ CEQA claims. (See Estate of Lucas (1943) 23 Cal.2d 454, 465 [statutory reference to “‘any claim”” and “‘any suit”” construed broadly].) Furthermore, neither section 21168.5 nor any other provision in CEQA expressly excludes decisions made under a certified regulatory program from the standards of judicial review contained in section 21168.5.
Therefore, under the abuse of discretion standard set forth in section 21168.5, we will independently review claims of legal error and apply the substantial evidence standard to claims that ARB committed factual error. Our choice between independent and substantial evidence review is guided by the California Supreme Court’s statement that “a reviewing court must adjust its scrutiny to the nature of the alleged defect, depending on whether the claim is predominantly one of improper procedure or a dispute over the facts.” (Vineyard Area, supra, 40 Cal.4th at p. 435.) Thus, when plaintiffs’ CEQA claim is predominantly one of procedure, we will conduct an independent review. When plaintiffs’ CEQA claim disputes the factual findings made by ARB, we will review the record to determine whether the challenged finding is supported by substantial evidence.
II. PROJECT APPROVAL AND TIMING OF PREPARATION OF CEQA DOCUMENTATION
Our “scrutiny [of] the nature of the alleged defect” (Vineyard Area, supra, 40 Cal.4th at p. 435) in plaintiffs’ first CEQA claim begins with an examination of the parties’ contentions and the requirements of CEQA that plaintiffs allege were violated.
A. Contentions of the Parties
Plaintiffs contend that ARB violated CEQA by approving the LCFS regulations before it completed the environmental review process required by CEQA. Plaintiffs reference the definition of “approval” in Guidelines section 15352 and contend that ARB’s “approval” of the LCFS regulations occurred on April 23, 2009, when the Board passed Resolution 09-31.
In response, ARB contends that plaintiffs’ argument “rests on a false premise: that ARB completed its rulemaking process at its Board meeting on April 23, 2009.” ARB asserts that Resolution 09-31 was merely the initial approval and that the final LCFS regulations were not adopted until November 25, 2009, and March 4, 2010, as reflected in Executive Order R-09-014 and Executive Order R-10-003, respectively. These executive orders were issued after the Executive Officer completed ARB’s environmental review process by issuing written responses to public comments. In ARB’s view, it fully complied with its certified regulatory program and CEQA because it completed the environmental review before the LCFS regulations became final.
Plaintiffs argue that ARB’s position contains legal error because ARB has treated “approval” as occurring when “ARB completed its rulemaking process” or “when the LCFS regulations became final.…” Plaintiffs suggest this legal error occurred because ARB ignored the definition of “approval” contained in Guidelines section 15352 as well as Save Tara v. City of West Hollywood (2008) 45 Cal.4th 116 (Save Tara), a Supreme Court case that discussed the application of this definition of “approval.”
The parties’ contentions can be read as presuming that CEQA requires agencies acting under a certified regulatory program to complete their environmental review before approving their project. Rather than simply joining this presumption, we will set forth the basis for the principle that environmental review must be completed before project approval and discuss how “approval” is defined for purposes of this requirement.
B. Statutory and Regulatory Provisions
1. Timing of Environmental Review and Project Approval
A certified regulatory program remains subject to the provisions of CEQA outside the scope of the exemption provided by subdivision (c) of section 21080.5. (2 Kostka & Zischke, supra, § 21.11, p. 1093; Guidelines, § 15250.) Thus, certified regulatory programs are subject to CEQA’s broad policy goals and substantive standards. (City of Arcadia v. State Water Resources Control Bd. (2006) 135 Cal.App.4th 1392, 1422; 2 Kostka & Zischke, supra, § 21.11, p. 1093.) Those policies and standards include those set forth in the Legislature’s declaration of its intent and its declaration of policy. (§§ 21000, 21002; 2 Kostka & Zischke, supra, § 21.11, p. 1094.)
The Legislature’s declaration of the policy underlying CEQA is contained in section 21002, which provides:
“The Legislature finds and declares that it is the policy of the state that public agencies should not approve projects as proposed if there are feasible alternatives or feasible mitigation measures available which would substantially lessen the significant environmental effects of such projects, and that the procedures required by this division are intended to assist public agencies in systematically identifying both the significant effects of proposed projects and the feasible alternatives or feasible mitigation measures which will avoid or substantially lessen such significant effects.” (Italics added.)
This declaration of policy is supplemented by the Guidelines, which identify the basic purposes of CEQA: “(1) Inform governmental decision makers and the public about the potential, significant environmental effects of proposed activities. [¶] (2) Identify ways that environmental damage can be avoided or significantly reduced. [¶] (3) Prevent significant, avoidable damage to the environment by requiring changes in projects through the use of alternatives or mitigation measures when the governmental agency finds the changes to be feasible. [¶] (4) Disclose to the public the reasons why a governmental agency approved the project in the manner the agency chose if significant environmental effects are involved.” (Guidelines, § 15002, subd. (a).)
The first three purposes are best served when the environmental review document, such as an EIR or its equivalent, “provide[s] decision makers with information they can use in deciding whether to approve a proposed project, not [informs] them of the environmental effects of projects that they have already approved.” (Laurel Heights Improvement Assn. v. Regents of University of California (1998) 47 Cal.3d 376, 394.) When an environmental review occurs after approval of the project, it is likely to become nothing more than a post hoc rationalization to support action already taken. (Ibid.) In short, the policy declaration in section 21002 implies that an evaluation of environmental issues, such as feasible alternatives and mitigations measures, should occur before an agency approves a project.
This implication is borne out by CEQA’s explicit requirements for EIRs. Section 21061 addresses the timing of environmental review as it relates to the approval of a project for which an EIR was prepared. It provides that an EIR “is an informational document which, when its preparation is required by [CEQA], shall be considered by every public agency prior to its approval or disapproval of a project.” (§ 21061, italics added.)
CEQA does not explicitly address the timing of project “approval” when the environmental review is contained in documents generated under a certified regulatory program. The Guidelines, however, do address this question. Specifically, Guidelines section 15004, subdivision (a) states: “Before granting any approval of a project subject to CEQA, every lead agency or responsible agency shall consider a final EIR or negative declaration or another document authorized by these guidelines to be used in the place of an EIR or negative declaration. See the definition of ‘approval’ in Section 15352.” (Italics added.)
We conclude that the phrase “another document authorized by these guidelines to be used in place of an EIR” (Guidelines, § 15004, subd. (a)) includes “a plan or other written documentation containing environmental information” referred to in section 21080.5 and prepared under a certified regulatory program. Such a plan or document “may be submitted in lieu of [an EIR].” (§ 21080.5, subd. (a); see Guidelines, § 15252 [document of certified regulatory program used as substitute for EIR].) Therefore, we conclude that the timing requirement set forth in Guidelines section 15004, subdivision (a) applies to the environmental review documents prepared by ARB in this case—that is, the staff reports and written responses to comments that ARB used in lieu of an EIR. (See Cal. Code Regs., tit. 17, §§ 60005, subd. (a) & 60007.)
Guidelines section 15004, subdivision (b) addresses the requirement that the CEQA documents be considered before project approval by setting forth the general principle that “[c]hoosing the precise time for CEQA compliance involves the balancing of competing factors.” The next sentence explains this balancing process by stating that “EIRs and negative declarations should be prepared as early as feasible in the planning process to enable environmental considerations to influence project program and design and yet late enough to provide meaningful information for environmental assessment.” (Guidelines, § 15004, subd. (b).)
The requirement that the CEQA document be considered before project approval is reflected in the corollary that “public agencies shall not undertake actions concerning the proposed public project that would have a significant adverse effect or limit the choice of alternatives or mitigation measures, before completion of CEQA compliance.” (Guidelines, § 15004, subd. (b)(2), italics added.) To illustrate this point, the Guidelines state that a public agency shall not “take any action which gives impetus to a planned or foreseeable project in a manner that forecloses alternatives or mitigation measures that would ordinarily be part of CEQA review of that public project.” (Guidelines, § 15004, subd. (b)(2)(B).)
In closing our overview of the timing requirement, we will consider an argument that might be implied from (1) ARB’s position that the Guidelines are not directly applicable to its environmental review documents and (2) ARB’s failure to mention or even cite Guidelines section 15004. ARB might be of the view that the timing requirement in subdivision (a) of Guidelines section 15004 does not apply to its action in promulgating the LCFS regulations.
We reject this position. Instead, we conclude that certified regulatory programs, while exempt from certain requirements of CEQA, are not exempt from the timing requirement in Guidelines section 15004. Our conclusion is based on the language used in subdivision (a) of Guidelines section 15004, which extends beyond EIRs and includes other documents authorized for use in place of EIRs. In addition, the timing requirement is derived from the Legislature’s policy declaration in section 21002,  a provision of CEQA that applies to certified regulatory programs. The policy of environmental review of feasible alternatives and mitigation measures makes practical sense only if that review occurs before an agency approves a ...