# Am. Chemistry Council v. Dept. of Toxic Substances Control

> California Court of Appeal · December 12, 2022

URL: https://www.frixlaw.com/law-library/cases/9324618

## Case

- **Court:** California Court of Appeal
- **Decided:** December 12, 2022
- **Precedential status:** Published
- **Opinion:** Opinion
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

Filed 11/18/22; Certified for Publication 12/12/22 (order attached)

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIFTH APPELLATE DISTRICT

AMERICAN CHEMISTRY COUNCIL et al.,
F082604
Plaintiffs and Appellants,
(Super. Ct. No. 19CECG02938)
v.

DEPARTMENT OF TOXIC SUBSTANCES OPINION
CONTROL et al.,

Defendants and Appellants.

APPEAL from a judgment of the Superior Court of Fresno County. Ana I.
de Alba, Judge.
Sidley Austin, Sean A. Commons, Paul J. Zidlicky and Joseph T. Zaleski for
Plaintiff and Appellant American Chemistry Council.
Atkinson, Andelson, Loya, Ruud & Romo, Brian M. Wheeler and Andrew M.
Aller for Plaintiff and Appellant General Coatings Manufacturing Corp.
Rob Bonta, Attorney General, Edward H. Ochoa, Assistant Attorney General,
Sarah E. Morrison, Catherine M. Wieman and Lani M. Maher, Deputy Attorneys
General, for Defendants and Appellants.
-ooOoo-
This case involves an appeal and cross-appeal following the trial court’s
determination that the Department of Toxic Substances Control (the Department) acted
within its authority and properly complied with the California Administrative Procedure
Act (APA; Gov. Code, § 11340 et seq.) but violated the California Environmental Quality
Act (CEQA; Pub. Resources Code, § 21000 et seq.) when it enacted a regulation listing
spray polyurethane foam systems containing unreacted methylene diphenyl diisocyanates
(spray foam systems) as a priority product under California’s “Green Chemistry” law
(Health & Saf. Code, §§ 25251–25257.2) (the listing regulation). 1 Appellants in this
case, American Chemistry Council (ACC) and General Coatings Manufacturing Corp.
(General Coatings), challenge the Department’s actions on two grounds. First, that
listing spray foam systems as a priority product was in excess of the Department’s
authority under the Green Chemistry law and its enacting regulations, the Safer
Consumer Products regulations. Second, that the Department violated the APA in
multiple ways when enacting the listing regulation. The Department raises a separate
issue in its cross-appeal that challenges the trial court’s determination that it violated
CEQA. The Department argues the trial court’s ruling was incorrect, but also that the
claim should have been deemed untimely under CEQA’s statute of limitations. For the
reasons set forth below, we affirm the trial court’s determination that the Department
acted within its authority and within the requirements of the APA when it enacted the
listing regulation. We then reverse the trial court’s finding of a CEQA violation on the
ground that the claim was untimely under the statute of limitations.
OVERVIEW OF THE GREEN CHEMISTRY LAW AND THE SAFER
COMSUMER PRODUCTS REGULATIONS
Given the importance of the Green Chemistry law and the Safer Consumer
Products regulations to both the overall understanding of the factual record and many of

1 Named as a defendant with the Department is its Director, Meredith Williams.

2.
the core issues in this case, we begin by summarizing both the law and the regulatory
structure.
Overview of the Green Chemistry Law
In 2008, article 14, the Green Chemistry law, was added to chapter 6.5 of
division 20 of the Health and Safety Code, the chapter on Hazardous Waste Control.
(See Health & Saf. Code, §§ 25251–25257.2, added by Stats. 2008, ch. 560, § 1.)
Although amended throughout the years, the statutory scheme itself remains relatively
sparse. It consists of definitions, two statutes providing guidance for and authorizing
additional regulations, an evaluation process for generating those regulations, the
establishment of a green ribbon science panel and toxic information clearinghouse,
protections for trade secrets disclosed in connection with the statutory scheme’s goals,
boundaries on the authority granted to regulate hazardous waste, and a later-added set of
statutory guidelines for a healthy nail salon recognition program.
Relevant to the issues in this appeal, the statutes contain one definition related to
the core functions of the law. In this definition, “consumer product” is defined to mean
“a product or part of the product that is used, bought, or leased for use by a person for
any purposes.” (Health & Saf. Code, § 25251, subd. (e).) The definition then excludes
any “dangerous drug or dangerous device” under section 4022 of the Business and
Professions Code, “[d]ental restorative materials” under section 1648.20, subdivision (b)
of the same code, any “device” as defined in section 4023 of the same code, any “food”
as defined in section 109935, subdivision (a) of the Health and Safety Code, the
packaging associated with several of these products, and any “pesticide” as defined under
a certain federal law. (Health & Saf. Code, § 25251, subd. (e)(1)–(6).)
As noted, the statutory scheme includes two core authorizations for further
regulatory actions. The first requires the Department to adopt regulations “to establish a
process to identify and prioritize those chemicals or chemical ingredients in consumer
products that may be considered as being a chemical of concern.” (Health & Saf. Code,

3.
§ 25252, subd. (a).) These regulations must “establish an identification and prioritization
process that includes, but is not limited to,” three considerations: (1) the “volume of the
chemical in commerce in this state”; (2) the “potential for exposure to the chemical in a
consumer product”; and (3) the “[p]otential effects on sensitive subpopulations, including
infants and children.” (Health & Saf. Code, § 25252, subd. (a)(1)–(3).) In developing
the regulations, the Department must also “develop criteria by which chemicals and their
alternatives may be evaluated,” including “traits, characteristics, and endpoints” as
included in the clearinghouse aspects of the statutory scheme. (Health & Saf. Code,
§ 25252, subd. (b)(1).)
The second authorization for regulatory action requires the Department to adopt
regulations “that establish a process for evaluating chemicals of concern in consumer
products, and their potential alternatives, to determine how best to limit exposure or to
reduce the level of hazard posed by a chemical of concern.” (Health & Saf. Code,
§ 25253, subd. (a)(1).) As part of these regulations, the Department must “establish a
process that includes an evaluation of the availability of potential alternatives and
potential hazards posed by those alternatives, as well as an evaluation of critical exposure
pathways” and include life cycle assessment tools that consider at least 13 identified
factors such as product function or performance, public health impacts, and economic
impacts. (Health & Saf. Code, § 25253, subd. (a)(2).) Finally, the regulations developed
in this area must “specify the range of regulatory responses that the [D]epartment may
take following the completion of the alternatives analysis,” including “[n]ot requiring any
action,” “[i]mposing requirements to provide additional information needed to assess”
chemicals of concern and their alternatives, imposing labeling requirements or
restrictions on use, “[p]rohibiting the use of the chemical of concern in the consumer
product,” and requiring funding for “green chemistry challenge grants where no feasible
safer alternative exists,” among others. (Health & Saf. Code, § 25253, subd. (b).)

4.
To the extent the statutory scheme contains any indication of the overall goals of
the new regulatory scheme, those are contained in the statute defining the role of the
green ribbon science panel. There, the panel is authorized to advise on “matters in
support of the goals of this article,” which are described as “significantly reducing
adverse health and environmental impacts of chemicals used in commerce, as well as the
overall costs of those impacts to the state’s society, by encouraging the redesign of
consumer products, manufacturing processes, and approaches.” (Health & Saf. Code,
§ 25255, subd. (a).)
Finally, the statutory scheme includes limitations on the newly granted authority
by noting the statutes may not limit any other agency’s “existing authority over
hazardous materials” and that the statutes do “not authorize the [D]epartment to
supersede the regulatory authority of any other department.” (Health & Saf. Code,
§ 25257.1, subds. (a), (b).) Further, the statute prevents duplicating or adopting
conflicting regulations “for product categories already regulated or subject to pending
regulation consistent with the purposes of this article.” (Health & Saf. Code, § 25257.1,
subd. (c).)
Overview of the Safer Consumer Products Regulations
The regulations ultimately adopted to implement the Green Chemistry law are
called the Safer Consumer Products regulations. (See Cal. Code Regs., tit. 22, § 69501 et
seq.) 2 The regulations state they specify the “process for identifying and prioritizing
Priority Products and their Chemicals of Concern, and identifying and analyzing
alternatives to determine how best to eliminate or reduce potential exposures to, or the
level of potential adverse impacts posed by, the Chemical(s) of Concern in Priority
Products.” (Tit. 22, § 69501, subd. (a).)

2 Further references to title 22 are to title 22 of the California Code of Regulations.

5.
At a general level, and as applicable to this case, the regulations set forth a four-
step process for identifying and regulating priority products and their chemicals of
concern. 3 These steps are: (1) to identify candidate chemicals (see tit. 22, §§ 69502–
69502.3); (2) to identify and prioritize products containing candidate chemicals (see
tit. 22, §§ 69503–69503.7); (3) to have responsible parties submit alternatives analysis
reports for priority products (see tit. 22, §§ 69505.1–69505.9); and (4) to utilize those
reports to identify and implement regulatory responses for priority products (see tit. 22,
§§ 69506–69506.10). Although this case focuses primarily on issues relating to the
second step, we provide a fuller summary of the regulations for context.
Identifying Candidate Chemicals
Candidate chemicals are those chemicals that are considered to be “a candidate for
designation as a Chemical of Concern” under the regulatory scheme. (Tit. 22, § 69501.1,
subd. (a)(19).) The list of these chemicals is derived either through reference to lists
created by other identified national and international bodies or through an independent
evaluation by the Department that considers enumerated adverse impacts, particularly on
sensitive subpopulations, and both potential and actual exposure to the chemical in
question. (See tit. 22, § 69502.2.)
As used throughout the regulations, “adverse impacts” are defined as “adverse
public health impacts and/or adverse environmental impacts.” (Tit. 22, § 69501.1,
subd. (a)(5).) Each of these two subcategories of adverse impacts are regulatorily defined
to include additional subcategories, which themselves may include other definitions. For
example, adverse environmental impacts include five enumerated impacts, including
adverse air quality impacts. (Tit. 22, § 69501.1, subd. (a)(4)(A).) “Adverse air quality
impacts” are defined to mean “indoor or outdoor air emissions of any of the air

3 Both the terms “priority product” and “chemical of concern” are defined by the
regulations. (See tit. 22, § 69501.1, subd. (a)(21), (53).) These definitions, and others relevant
to the court’s analysis, will be noted or discussed as necessary when they arise.

6.
contaminants listed below that have the potential to result in adverse public health,
ecological, soil quality, or water quality impacts.” (Tit. 22, § 69501.1, subd. (a)(2).) The
regulations then list seven categories of air contaminates, which reference other internal
and external regulations and include additional identifications of eight greenhouse gases.
(Tit. 22, § 69501.1, subd. (a)(2)(A)–(G).)
“Adverse public health impacts” are defined to mean “any of the toxicological
effects on public health specified in article 2 or article 3 of chapter 54, or exceedance of
an enforceable California or federal regulatory standard relating to the protection of
public health,” and public health “includes occupational health.” (Tit. 22, § 69501.1,
subd. (a)(6).) Articles 2 and 3 of chapter 54 refer to the regulations defining hazard traits
considered under the related statutory authority creating a toxic information
clearinghouse. These traits include such things as a chemical’s carcinogenicity,
developmental and reproductive toxicity, and dermatoxicity. (See tit. 22, § 69401 et seq.)
Identifying Priority Products
Once the list of candidate chemicals has been created, the regulations require the
Department to “identify and prioritize products containing Candidate Chemicals.”
(Tit. 22, § 69503.) Such products include any “products that contain one or more
Candidate Chemicals and that are placed into the stream of commerce in California.”
(Tit. 22, § 69503.1.) Those products of highest concern are deemed priority products and
the list of such products is required to be established and updated through rulemaking
under the APA. (Tit. 22, §§ 69503.2, 69503.5, subd. (a).)
The process for prioritizing products and creating the priority products list is set
out within the regulations and guided by two “Key Prioritization Principles”: (1) there
“must be potential public and/or aquatic, avian, or terrestrial animal or plant organism
exposure to the Candidate Chemical(s) in the product”; and (2) there “must be the
potential for one or more exposures to contribute to or cause significant or widespread
adverse impacts.” (Tit. 22, § 69503.2, subd. (a).)

7.
The regulations explain that whether a product is determined to be a high priority
turns on “an evaluation of the product-chemical combination to determine its associated
potential adverse impacts, potential exposures, and potential adverse waste and end-of-
life effects” using factors for which “information is reasonably available.” (Tit. 22,
§ 69503.2, subd. (b).) The types of adverse impacts and exposures considered are
separately listed in title 22, section 69503.3. For adverse impacts, seven factors are
enumerated, such as the chemical’s hazard traits, aggregate effects, cumulative effects
with other chemicals, physicochemical properties, environmental fate, and potential to
degrade, along with the populations which may be impacted by the chemical. (Tit. 22,
§ 69503.3, subd. (a)(1)(A)–(G).) For exposures, four factors are enumerated, with some
having additional subparts. These are: (1) the product’s market presence, as identified
through sales by volume and number of units, as well as intended product use and
targeted customers; (2) the occurrence or potential occurrence of exposure to the
chemical in the product; (3) the household and workplace presence of the product; and
(4) potential exposures to the chemical in the product’s life cycle, including among other
factors the “[f]requency, extent, level, and duration of potential exposure for each use
scenario and end-of-life scenario.” (Tit. 22, § 69503.3, subd. (b).)
In addition to these factors, the regulations consider “the scope of other California
State and federal laws … under which the product or the Candidate Chemical(s) in the
product is/are regulated and the extent to which these other regulatory requirements
address, and provide adequate protections with respect to the same potential adverse
impacts and potential exposure pathways, and adverse waste and end-of-life effects, that
are under consideration as a basis for the product-chemical combination being listed as a
Priority Product.” (Tit. 22, § 69503.2, subd. (b)(2).) Where a product is already
regulated “with respect to the same potential adverse impacts and potential exposure
pathways …, the Department may list such a product-chemical combination as a Priority
Product only if it determines that the listing would meaningfully enhance protection of

8.
public health and/or the environment with respect to the potential adverse impacts,
exposure pathways, and/or adverse waste and end-of-life effects that are the basis for the
listing.” (Ibid.) Finally, in its discretion, the regulations permit the Department to
consider “whether there is a readily available safer alternative that is functionally
acceptable, technically feasible, and economically feasible.” (Tit. 22, § 69503.2,
subd. (b)(3).)
Based on this analysis, a priority products list is created. For each proposed
priority product, the Department must provide a “description of the product-chemical
combination that is sufficient for a responsible entity to determine whether one or more
of its products is a Priority Product” and identify the “Candidate Chemical(s) that is/are
the basis for the product being listed as a Priority Product,” along with their hazard traits
and environmental or toxicological endpoints. (Tit. 22, § 69503.5, subd. (b)(1)(A),
(2)(A).) In addition, the Department must provide the “due date for submission of the
[p]reliminary [alternatives analysis r]eport” required by the regulations. (Tit. 22,
§ 69503.5, subd. (b)(3)(A).)
Requiring Alternatives Analysis Reports
Once a product-chemical combination is added to the priority products list, a
series of regulatory requirements are imposed on responsible entity parties, with a
“responsible entity” being defined as a manufacturer, importer, assembler, or retailer of
the priority product. (Tit. 22, § 69501.1, subd. (a)(60).) The ultimate obligation is the
submission of an alternatives analysis report for the priority product. (Tit. 22, § 69505.1,
subd. (b).) However, the submission of this report may not be required if the
manufacturer takes one of two types of action.
First, the manufacturer may remove the chemical of concern from the stream of
commerce. This can be done by providing one of three notices in a manner that complies
with the regulations. These options are a “Chemical Removal Intent,” a “Product
Removal Intent,” or a “Product-Chemical Replacement Intent” notice. (Tit. 22,

9.
§ 69505.2, subd. (a)(1)(A).) Notably, if only a removal notice is provided, and a
subsequent confirmation notice is not timely submitted, a preliminary alternatives
analysis report, or similar report, must still be submitted. (Tit. 22, § 69505.2,
subd. (a)(1)(B).)
Second, if the Department has decided to identify an alternatives analysis
threshold, a manufacturer may submit an alternatives analysis threshold notification
certifying its product does not exceed the alternatives analysis threshold set by the
Department. (Tit. 22, § 69505.3, subd. (a)(1)–(4).) An “alternatives analysis threshold”
is a discretionarily set “concentration for any Chemical of Concern that is an intentionally
added ingredient” to a priority product. (Tit. 22, § 69503.5, subd. (c).) The threshold is
defined as either the “Practical Quantitation Limit for a Chemical of Concern that is
present in a Priority Product solely as a contaminant” or the “applicable concentration, if
any, specified by the Department.” (Tit. 22, § 69501.1, subd. (a)(12).) The “practical
quantitation limit” for a chemical is itself defined as “the lowest concentration of a
chemical that can be reliably measured within specified limits of precision and accuracy
using routine laboratory operating procedures.” (Tit. 22, § 69501.1, subd. (a)(52).)
If neither of these conditions are met, a two-stage alternatives analysis report is
required under the regulations. (See tit. 22, § 69505.4, subd. (a).) In the first stage, the
responsible entity must (1) identify the product requirements and functions of the
chemicals of concern, (2) identify alternatives, (3) identify factors relevant for a
comparison of those alternatives, (4) provide an initial evaluation and screening of
alternative replacement chemicals, (5) consider any additional pertinent information
relevant to the goals of the alternatives analysis, and (6) submit a preliminary alternatives
analysis report. (Tit. 22, § 69505.5, subds. (a)–(f).) Each of these individual steps are
governed by regulations setting forth the manner and extent to which each must be
conducted. (See ibid.) However, if in the process of conducting the first five steps a
responsible entity “determines a functionally acceptable and technically feasible

10.
alternative is not available,” they may, in compliance with additional regulatory
requirements, submit “an [a]bridged [alternatives analysis r]eport in lieu of the
[p]reliminary and [f]inal [alternatives analysis r]eports.” (See tit. 22, § 69505.4,
subd. (b).)
An abridged alternatives analysis report, if acceptable, allows the responsible
entity to complete the first five steps preceding the completion of a preliminary
alternatives analysis report and the first step leading to a final alternatives analysis report
in one initial report. (Tit. 22, § 69505.4, subd. (b)(1)–(2).) Recognizing that additional
regulatory action will be taken, the responsible entity must also include “an
implementation plan” for “proposed regulatory responses” (tit. 22, §§ 69505.4,
subd. (b)(4)) including, at a minimum, providing information to consumers (tit. 22,
69506.3) and either initiating “a research and development project” or funding “a
challenge grant” that seeks to speed the implementation or use of a safer alternative to the
Priority Project in one of four enumerated ways (tit. 22, § 69506.8).
Where an abridged alternatives analysis report is not proper, and once a
preliminary alternatives analysis report is approved by the Department, a second, five-
step stage is required for analyzing any alternative chemicals still under consideration.
(Tit. 22, § 69505.6.) In this stage, the responsible entity must again (1) identify factors
relevant for comparing alternatives, (2) compare the priority product and alternatives,
(3) consider any other pertinent information, (4) “select the alternative(s) that will replace
the Priority Product, unless the decision is to retain the existing Priority Product,” and
(5) submit a final alternatives analysis report to the Department for approval. (Tit. 22,
§ 69505.6, subds. (a)–(e).) The content of both the preliminary and final alternatives
analysis reports are subject to extensive additional regulations regarding the required
scope and content of those reports. (Tit. 22, § 69505.7.)

11.
Implementing Regulatory Responses
Ultimately, the process moves toward implementation of a regulatory response
regarding the priority product. Under the regulations, the Department “shall identify and
require implementation of one or more regulatory responses for Priority Products and/or
selected alternative products when the Department determines such regulatory responses
are necessary to protect public health and/or the environment.” (Tit. 22, § 69506,
subd. (a).) The Department is instructed to “give preference to regulatory responses
providing the greatest level of inherent protection,” meaning, “avoidance or reduction of
adverse impacts … that is achieved through the redesign of a product or process, rather
than through administrative or engineering controls designed to limit exposure to, or the
release of, a Chemical of Concern or replacement Candidate Chemical in a product.”
(Tit. 22, § 69506, subd. (b).)
The regulations provide for several potential responses including providing
information to consumers, imposing use restrictions on products, prohibiting sales,
engineering safety measures or imposing administrative controls on accessing products,
defining end-of-life management requirements, and requiring further research on
potential alternatives. (Tit. 22, §§ 69506.3–69506.8.) Exemptions are permitted to the
regulations, but only where the response conflicts with or duplicates other regulatory
programs. (Tit. 22, § 69506.9, subd. (b)(6).)
Resolving Disputes
Throughout the regulatory process, the Department provides opportunities for
affected responsible entities to dispute decisions made by the Department. (Tit. 22,
§ 69507.) Subject to some irrelevant exceptions, the regulations first require use of an
informal dispute resolution procedure that must be started within 30 days of the decision
subject to dispute and is expected to be resolved within 30 days of initiating the dispute.
(Tit. 22, § 69507.1.) If informal dispute resolution fails, an affected responsible entity
may then file an appeal to the director of the Department (the director). (Tit. 22,

12.
§ 69507.2.) This appeal must be filed within 30 days of the resolution of the informal
dispute procedure and should be resolved within 60 days of the appeal being filed.
(Tit. 22, § 69507.2, subds. (b)–(c).)
FACTUAL AND PROCEDURAL BACKGROUND
As mentioned, this case revolves around the regulatory decision to list spray foam
systems as a priority product. Spray foam systems were initially identified as a potential
priority product in March 2014. As part of the process for finalizing spray foam systems
as a priority product under the regulations, the Department drafted multiple documents
over several years detailing findings relevant to the listing regulation. These documents
are contained in the administrative record and provided support for the initial statement
of reasons and final statement of reasons released by the Department as part of the
standard regulatory process. With respect to issues discussed below, these documents
include a 2017 “Summary of Technical Information and Scientific Conclusions for
Designating Spray Polyurethane Foam Systems with Unreacted Methylene Diphenyl
Diisocyanates as a Priority Product” (Technical Summary), a 2018 “Economic and Fiscal
Impact Statement” (Economic Assessment), and a 2018 “California Environmental
Quality Act Notice of Exemption” (Exemption Notice). We begin by summarizing these
three documents.
The Technical Summary
The Department’s Technical Summary was drafted “to present the scientific
information the Department … relied on to identify and prioritize spray polyurethane
foam … systems containing unreacted methylene diphenyl diisocyanates (MDI) for
listing as a Priority Product.” With relevant citations to scientific references, the first part
of the Technical Summary, titled Executive Summary, explains that isocyanates are
chemicals known to “elicit an immune response known as respiratory sensitization”
which “can lead to an elicitation of asthma in subsequent exposures to isocyanates, even
when exposures are very low.” “[I]t is generally accepted that isocyanates, including

13.
MDI, are asthmagens … and are associated with work-related asthma.” In data from
1993 through 2008, the California Work-Related Asthma Prevention Program “recorded
47 cases of work-related asthma associated with isocyanate exposure, with eight cases
specifically attributed to MDI exposure.”
Inhalation of MDI “during and soon after application” of spray foam systems is
identified as a “particular concern” based in part on the fact that “MDI-induced fatalities
have been documented for workers using spray polyurethane paints … and resins
containing MDI.” Exposure “may occur with use of either high- or low-pressure [spray
foam] systems, including home use kits.” While certain workers have been found to have
exposures that exceed the threshold limit values set by the American Conference of
Governmental Industrial Hygienists and/or the permissible exposure limits of the
California Division of Occupational Safety and Health Administration, studies “also
suggest[] that exposure to very low concentrations of MDI can trigger adverse reactions
in previously sensitized individuals.” Although engineering controls, such as personal
protective equipment (PPE), can be effective in reducing exposure, several factors make
PPE use unreliable to the point that estimates suggest “only about 64 [percent] of
construction workers wear proper PPE on a regular basis”
With respect to what are known as high-pressure spray foam systems, “industry
recommended engineering and administrative controls and use of PPE reduces the
likelihood of exposure, but cannot eliminate worker exposure to MDI during spraying.”
Aerosolized exposure “in the workers’ breathing zone” exists throughout “the entire work
shift,” and additional exposure may occur “through accidental spills or leaks, cleaning
and maintenance of the equipment … [or f]ailure to use …, improper use of, imperfect fit
or malfunction of PPE.”
Other types of systems, known as low-pressure systems, are “used by insulation
contracting businesses, including those with employees … and sole proprietors, and by
individual consumers” and are “exempt from federal … and [state] requirements.” There

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is “[l]imited data” suggesting that such systems generate “less airborne MDI” but, “in
several studies, measurable MDI was detected around applicators’ breathing zones during
application.” Use of such systems is particularly concerning “because [users] are
unlikely to use engineering controls and PPE or industry recommended administrative
controls.”
Based on these findings, the Executive Summary explains that applying spray
foam “through high- and low-pressure systems, including home use [spray foam] kits, has
the potential to cause significant or widespread adverse impacts to human health”
including “not only workers of highly specialized commercial operations” but also “any
applicator who is either improperly protected or unprotected against MDI exposures such
as sole proprietors and individual consumers in California.”
Following this part, the Technical Summary contains six more parts supporting the
Executive Summary’s statements. The first four parts define the nature of the identified
priority product and chemicals of concern, including those chemicals’ hazard traits and
environmental impacts. The other two parts discuss the exposure potential to humans and
impacts on sensitive populations.
Although the document discusses both high- and low-pressure spray foam
systems, it explains that products of both types share a common feature in the fact that
they utilize two separate containers, one holding pure MDI and the other holding
materials to combine with the MDI, and mix the contents of those containers together in
order to spray out a foam. Although identified generally as MDI, the chemicals of
concern are “isocyanates that are referred to as 4,4’-MDI or pure MDI …, generic MDI,
and technical grade MDI, all of which contain 4,4’-MDI.” MDI is listed, classified, or
identified by multiple national and international agencies that track potentially harmful
chemicals.
MDI is “a respiratory sensitizer and generally considered as an asthmagen …
associated with work-related asthma .… Once sensitized, re-exposure to even low

15.
concentrations of MDI … may trigger severe asthma attacks in some people.” The
Technical Summary reviews several studies relating to isocyanates generally, and MDI
specifically, focusing on allergic sensitization and respiratory toxicity issues in humans
and animals supporting this conclusion. The Technical Summary then discusses how
MDI may exist in the environment, including its susceptibility to discharge in the air,
water, and soil. In the discussion of air discharge, the Technical Summary notes that
“airborne concentrations of MDI are expected to be negligible” once the spray foam has
cured but that the product “can undergo thermal degradation and release toxic chemicals”
even after that point.
With respect to the exposure potential to MDI in spray foam systems, the
Technical Summary first summarizes the market presence of the proposed priority
product, noting that the total market exceeds a billion dollars and is expanding, that there
are at least 38 California contractors listed as members of the Spray Polyurethane Foam
Alliance, that the estimated market in California is between $55 and $60 million, and that
use of spray foam systems in California is increasing based on energy conservation
incentives to the point that in one county, all newly constructed homes are being
insulated entirely with spray foam systems.
The Technical Summary then discusses various exposure routes to MDI, including
inhalation when a product is sprayed. In such circumstances, even “when MDI
concentrations were maintained below [regulated limits], studies suggest[] that
applicators should still use PPE to protect themselves from potentially harmful
exposures.” Reviewing monitoring studies, the Technical Summary explains there have
“not been many monitoring studies conducted to measure airborne concentrations of MDI
during” spray foam applications, although it reviews some known studies. Based on this,
the Technical Summary focuses on known fatalities and occupational asthma data related
to isocyanate exposure in other fields.

16.
When it comes to non-occupational exposure points, the Technical Summary notes
that “over 50 [spray foam] products containing MDI” are “readily available to
consumers” and that 7.7 percent of the U.S. population suffer from asthma. However, the
Technical Summary concedes there is limited data on non-occupational exposure. The
report concludes that although there is little data, there is no dispute that isocyanates “are
sensitizers and potent asthmagens” and “no evidence that exposure to MDI at non-
occupational settings [is] safe and do[es] not cause asthma.”
The Technical Summary next reviews sensitive subpopulations. The “population
subgroups of greatest concern” are identified as “commercial operators using high-
and/or low-pressure [spray foam] systems employing only lower tiers of protection,
unprotected workers in any commercial businesses, sole proprietors, and individual
consumers who purchase [spray foam] systems for various do-it-yourself projects.” The
summary notes that workers “may be susceptible to both acute and chronic exposure,”
that isocyanates are “recognized as a cause of occupational asthma,” that training for
some workers exists but there is little evidence that “applicators who are exempt from
state and federal worker protection standards” receive that training, that regardless of
training accidental spills, leaks, and cleaning, along with poor or no use of PPE may still
result in exposure, that the general public may purchase products without any safety
information or proper PPE, and that no current monitoring program exists for protecting
workers from exposure to isocyanates. Any exposure was of particular concern because
sensitized employees can “not reverse or cure the allergic sensitization that has already
occurred.”
Based on all these findings, the Technical Summary “conclude[s] that workers,
consumers, and bystanders could be exposed to MDI during the use of either high-
pressure or low-pressure [spray foam] systems that contain MDI” and that these
“exposures have the potential to contribute to or cause significant or widespread adverse
impacts on the health of a considerable number of people in the State of California.”

17.
The Economic Assessment
As part of the APA requirements for the proposed regulation listing spray foam
systems as a priority product, the Department created the Economic Assessment
discussing the economic impacts of the proposed listing. Focusing on the requirement
that spray foam system manufacturers would be required to submit reports following the
listing, the Economic Assessment states there are “17 [spray foam] systems
manufacturers located throughout the U.S. that could be impacted” by the regulation,
with individual estimated costs of between $62,800 and $182,800 and total costs between
$1,067,600 and $3,107,600.
The Department concluded, in part through surveys with the known
manufacturers, that spray foam systems are “likely the first product that will result in
manufacturers conducting [a]bridged [alternatives analysis]” reports. In its own research,
the Department concluded such reports would cost between $48,000 and $78,000 to
complete, but ultimately accepted industry estimates of $50,000 to $150,000. Notably,
industry estimates for a full alternatives analysis report are between $120,000 and
$250,000. The remaining cost estimates came from additional paperwork required by the
regulations and Department review time.
The Department also looked at potential benefits and costs of the proposed
regulation. For benefits, the Department noted that the primary goal of its regulatory
process is “to protect public health” by evaluating ways to make spray foam systems
safer for consumers and workers. The Department stated this goal could cause
manufacturers to realize “financial benefits from increased product sales, reduced
employee health and safety costs, and reduced workers’ compensation claims.”
Employers, workers, and consumers could also benefit from “reduced medical costs,
lower incidence of debilitation chronic conditions, and less need for [PPE] or specialized
safety training.”

18.
The Department also felt that the expected use of abridged alternatives analysis
reports would further benefit manufactures because “it allows the continued sale and use
of the Priority Product on the condition” that manufacturers provide proper data, fund
research projects, and take steps to protect consumers. The Department could not,
however, fully identify potential benefits because the requirement that manufacturers
identify proposed regulatory responses meant it could not “predetermine the actions that
[spray foam] manufacturers would need to take, either individually or collectively, to
improve consumer product information and advance green chemistry or green
engineering principles.”
With respect to costs, in addition to the actual figures calculated, the Department
looked at the number and types of businesses affected, the number of businesses created
or eliminated, and the number of jobs created or eliminated. The Department concluded
the listing regulation would affect only the 17 known manufacturers of spray foam
systems, two of which are known to be small businesses, and all of which are “likely to
submit an [a]bridged [alternatives analysis r]eport.”
The Department concluded listing spray foam systems as a priority product “is
unlikely to result in the elimination or creation of [spray foam] systems manufacturing
businesses.” Given the usefulness of and demand for the product, the Department did
“not anticipate that manufacturers will remove or replace unreacted MDI nor will they
remove their [spray foam] products from the California marketplace.” Further, because
the Department’s survey indicates there are “currently no known functionally equivalent
or technically feasible alternatives to the use of unreacted MDI,” the Department
concluded businesses “could be created to assist manufacturers in meeting regulatory
obligations by providing consulting services, as well as chemical and material science
research and development support” while the manufacturers proceed through their
regulatory obligations. Additional similar benefits to product safety specialists,

19.
workplace trainers, and chemical researchers are also noted given the requirements
imposed when an abridged alternatives analysis is undertaken.
With respect to jobs, the Department concluded the proposed regulatory
requirements are “not likely to result in the creation or elimination of jobs in California,”
given that manufacturers are mostly out of state. However, “statewide job expansion
could occur in areas related to business consulting, product research and design,
manufacturing and sales of PPE, product marketing, consumer education, worker safety
training, and professional certification programs.”
The Economic Assessment also looks at the need for regulation and alternatives to
the listing decision. On the need for regulation, the document states there are “no
equivalent federal regulations that require product manufacturers to determine if the
chemical in the product is necessary and if there is a safer alternative” and that
California’s “worker protection standards do not apply to consumers or sole proprietors.”
Accordingly, the “proposed regulation is an important supplement to current state and
federal worker safety standards and the ongoing federal efforts to protect California
workers by preventing worker and consumer injuries.”
With respect to alternatives, the Economic Assessment considers three potential
alternatives. The first two alternatives would increase the scope of the priority product
by also including products “containing toluene diisocyanate” or “one-component pre-
mixed cans” of spray foams containing MDI. These were rejected because the “TDI-
containing coatings are a separate product that serves a different function” and pre-mixed
spray foams do not have much unreacted MDI and exposures are not well characterized
and assumed to be low. The third alternative allowed spray foam systems “manufacturers
to take voluntary actions to minimize potential worker and consumer exposures to
unredacted MDI.” The Department rejected this option “because it does not advance the
goals of the … regulations in general and of this proposed regulation in specific.” The
Department stated, “voluntary initiatives are not enforceable” and explained, “there

20.
would be no assurance that the [spray foam] industry would vigorously pursue safer
alternatives to the use of unreacted MDI in [spray foam] products” and that the
Department “needs to be able to take effective actions to ensure that workplaces are safe
and that all [spray foam] applicators, including sole proprietors and consumers, have
access to health and safety information.” When discussing costs of this alternative, the
Department noted it “did not quantify costs or benefits associated with [the third
alternative] due to a lack of authority to implement this alternative.”
The Exemption Notice
In an apparent effort to comply with its CEQA obligations, the Department issued
the Exemption Notice with respect to its decision to list spray foam systems as a priority
product. Summarizing the regulatory structure of the Green Chemistry law, the
Department noted that after a priority product is identified, “a responsible entity may
choose to remove the [chemical of concern] from the Priority Product; stop selling or
distributing the Priority Product in California; or perform an Alternatives Analysis.” The
Department also explained that if the alternatives analysis route is chosen, the
Department “may impose regulatory responses that are designed to prevent or
significantly reduce the potential for adverse impacts to public health and the
environment.”
Looking at its decision to list spray foam systems as a priority product, the
Department concluded the listing was exempt from CEQA because the “project will not
result in a change in any of the physical conditions within the area affected by the
project.” Therefore, the Department found “with certainty that there is not a possibility
that the activities in question will result in a significant environmental effect.”
The Administrative Challenge, Lawsuit, and Present Appeal
After public hearings and consideration of the documents above, the Department
eventually elected to add spray foam systems as a priority product. In March 2018, the

21.
Department submitted the final regulatory package for the listing regulation to the Office
of Administrative Law. The listing was approved on April 26, 2018.
On May 30, 2018, ACC submitted an informal dispute resolution request to have
the Department withdraw its listing of spray foam systems as a priority product. This
request was denied on December 3, 2018. ACC then filed an appeal to the director,
which was denied on February 25, 2019.
On August 9, 2019, appellants filed a petition for writ of mandate and complaint
for declaratory and injunctive relief. An amended petition and complaint was filed on
January 31, 2020, which became the basis for the underlying action. The amended
petition and complaint contains one cause of action alleging a violation of statutory and
regulatory authority, two causes of action under the APA, and one under CEQA.
Ultimately, the trial court rejected the excess of authority and APA claims, but found a
violation of CEQA. The present appeal and cross-appeal followed.
DISCUSSION

In the context of the appeal and cross-appeal filed in this matter, we are asked to
consider three distinct types of challenges to the Department listing spray foam systems
as a priority product: (1) whether the Department’s listing determination exceeded its
legal authority; (2) whether the Department failed to satisfy the requirements of the APA;
and (3) whether the Department failed to comply with CEQA. The first two challenges
were rejected by the trial court and are appealed by appellants. The third was accepted
by the trial court and is appealed by the Department. Each challenge contains several
related subarguments. We consider these three primary challenges in the order presented
in the briefing.
The Department Did Not Exceed Its Authority
Appellants first contend the Department’s decision to list spray foam systems as a
priority product is unlawful and should be set aside. Appellants raise multiple bases for
this contention. First, appellants argue that the decision to list spray foam systems as a

22.
priority product exceeded the Department’s authority because the Department failed to
identify any threshold level of exposure to the underlying chemical of concern. Next,
appellants argue the Department exceeded its authority through its definition of spray
foam systems, claiming the definition improperly groups multiple distinct products
together, covers nonconsumer products, and includes products subject to existing
regulations.
The Department responds by asserting it was not obligated to establish an
exposure threshold under the law and that it did not act arbitrarily or capriciously when
determining spray foam systems qualify as a priority product. The Department further
disputes that it could not list high- and low-pressure spray foam systems together, that it
could not deem such systems consumer products, and that any existing regulations
prevented its priority product determination.
Standard of Review
When evaluating the validity of a regulation, there are two questions that can drive
the court’s analysis. The first asks “whether the regulation is ‘ “consistent and not in
conflict with” ’ the provision that authorizes it,” and the second “whether the regulation
is reasonably necessary to effectuate the purpose of the authorizing law.” (In re Gadlin
(2020) 10 Cal.5th 915, 926.) Particularly when the regulation constitutes a quasi-
legislative rule, derived from lawmaking authority delegated to the agency, the scope of
our review is narrow. (Western States Petroleum Assn. v. Board of Equalization (2013)
57 Cal.4th 401, 415 (Western States).) “When a regulation is challenged on the ground
that it is not ‘reasonably necessary to effectuate the purpose of the statute,’ our inquiry is
confined to whether the rule is arbitrary, capricious, or without rational basis [citation]
and whether substantial evidence supports the agency’s determination that the rule is
reasonably necessary [citation].” (Ibid.) “[W]hen an implementing regulation is
challenged on the ground that it is ‘in conflict with the statute’ [citation] or does not ‘lay
within the lawmaking authority delegated by the Legislature’ [citation], the issue of

23.
statutory construction is a question of law on which a court exercises independent
judgment.” (Ibid.)
“We presume the validity of a regulation promulgated by a state agency.
[Citation.] The burden lies with the party challenging the regulation to show its
invalidity.” (In re Gadlin, supra, 10 Cal.5th at p. 926.) “ ‘ “Our function is to inquire
into the legality of the regulations, not their wisdom.” ’ ” (Ibid.) “ ‘ “Administrative
regulations that alter or amend the statute or enlarge or impair its scope are void and
courts not only may, but it is their obligation to[,] strike down such regulations.” ’ ”
(Ibid.)
The Department Is Not Obligated To Set Threshold Exposure Levels
Relying on the language of Health and Safety Code section 25252,
subdivision (a)(2) and title 22, section 69503.2, subdivision (a)(1) and (2), appellants
allege that the Department lacked authority to list spray foam systems as a priority
product without expressly considering “any threshold level of what constitutes an
exposure” to the underlying chemical of concern. According to appellants, one cannot
demonstrate a “ ‘potential public … exposure’ ” or a “ ‘potential for one or more
exposure to contribute to or cause significant widespread adverse impacts’ ” without first
determining what level of exposure causes harm. Appellants argue that failing to identify
this figure and using it when determining the potential risks expands the Department’s
authority beyond that authorized by the Green Chemistry law. Appellants further
contend no evidence in the record shows that the exposure of workers or individual
citizens using spray foam systems exceeds any level necessary to support a claim of
potential public exposure or a potential for significant widespread adverse impacts,
particularly when multiple settings for exposures are considered.
Appellants’ argument is not persuasive. As noted above, Health and Safety Code
section 25252, subdivision (a) authorizes regulations “to establish a process to identify
and prioritize those chemicals or chemical ingredients in consumer products that may be

24.
considered as being a chemical of concern.” The three identified statutory factors to
consider in this process are: (1) the “volume of the chemical in commerce in this state”;
(2) the “potential for exposure to the chemical in a consumer product”; and (3) the
“[p]otential effects on sensitive subpopulations, including infants and children.” (Health
& Saf. Code, § 25252, subd. (a)(1)–(3).) From a plain language reading, then, the notion
that a potential for exposure or a potential effect requires a set exposure level is
unsustainable. While such a notion could be forcibly shoehorned into the concept of a
potential for exposure, the same notion would be meaningless when identifying potential
effects on sensitive subpopulations. (See Hassan v. Mercy American River Hospital
(2003) 31 Cal.4th 709, 715–716 [“The words of the statute should be given their ordinary
and usual meaning and should be construed in their statutory context. [Citations.] These
canons generally preclude judicial construction that renders part of the statute
‘meaningless or inoperative.’ [Citation.] In addition, words should be given the same
meaning throughout a code unless the Legislature has indicated otherwise.”]; Knapp v.
Ginsberg (2021) 67 Cal.App.5th 504, 533 [“ ‘We must construe identical words in
different parts of the same act or in different statutes relating to the same subject matter
as having the same meaning.’ ”].) Rather, the statutory use of “potential” makes sense
only if it relates to the possibility of something happening, regardless of the extent.
The regulatory structure adopted for prioritizing products utilizes the term
“potential” in the same manner as the statute. Paralleling the statutory language, the two
“Key Prioritization Principles” set out in the regulations look at whether there is a
“potential public … exposure to the Candidate Chemical(s) in the product” and whether
there is the “potential for one or more exposures to contribute to or cause significant or
widespread adverse impacts.” (Tit. 22, § 69503.2, subd. (a)(1)–(2).) In other regulations,
such as those focusing on identifying exposures, the regulations again track the general
statutory guidance and utilize the term potential in ways that most naturally reads as
relating to a possibility. For example, when considering the “occurrence, or potential

25.
occurrence, of exposures to” chemicals as an exposure factor. (Tit. 22, § 69503.3,
subd. (b)(2).) This is further confirmed by the fact the regulations consider the
“[f]requency, extent, level, and duration of potential exposure” for each use of the
product as a separate factor. (Tit. 22, § 69503.3, subd. (b)(4)(F).) The language used
separates the notion of extent or level of exposure from the possibility of potential
exposure directly.
Upon review of the statutes and regulations, we see nothing in their language or
structure that requires the Department “to identify any threshold level of what constitutes
an exposure” in order to prioritize a product. Contrary to appellants’ argument, this does
not render the notion of “exposure” meaningless. As noted, the overall process is one of
prioritization. Thus, minimal exposure levels or low possibilities for actual exposure in
use are always relevant when comparing one product to another. But neither factor is
necessary in order to determine a product qualifies for priority status under the multitude
of factors considered.
Notably, appellants do not argue an abuse of discretion or excess of authority in
ranking spray foam systems above some known chemical/product combination because
the failure to consider a threshold exposure level made an objective difference in the
prioritization process. Instead, appellants contend that without a set threshold for
exposure level, the Department could not prioritize products at all. The multitude of
factors considered by the Department, both based on the statute and implementing
regulations, and the specific language used in both, demonstrates no such threshold
exposure level is necessary for prioritization.
Further, even if some threshold exposure requirement was necessary, the record
contains evidence supporting a conclusion that even miniscule exposure to MDI could
cause meaningful harm to previously sensitized individuals. Although we agree with
appellants that the record does not definitively show a substantial number of known
injuries related to MDI exposure through the use of spray foam systems, we do not agree

26.
this demonstrates the Department’s regulation was not reasonably necessary or otherwise
flawed. Rather, as reflected above, the record is filled with evidence demonstrating the
harmfulness of exposure to MDI. This evidence includes studies showing exposure
causes severe asthma and the potential for death, the fact that MDI exposure may occur
through multiple known routes attributed to use of spray foam systems, and the fact that
even minimal exposure can be severely detrimental to sensitized populations. As the
purpose of the statutory scheme is to identify chemicals contained in consumer products
based in part on a potential for exposure and potential effects on sensitive subpopulations,
this is substantial evidence showing the Department’s determination MDI exposure
through spray foam systems could be prioritized had a rational basis and was neither
arbitrary nor capricious. (Western States, supra, 57 Cal.4th at p. 415 [“[w]hen a
regulation is challenged on the ground that it is not ‘reasonably necessary to effectuate
the purpose of the statute,’ our inquiry is confined to whether the rule is arbitrary,
capricious, or without rational basis [citation] and whether substantial evidence supports
the agency’s determination that the rule is reasonably necessary”].)
The Department Did Not Improperly Define Spray Foam Systems
Appellants also argue the Department exceeded its authority in defining spray
foam systems by (1) combining together distinct product categories of products,
(2) failing to capture only “consumer products” in the definition of a spray foam system,
and (3) including products already subject to regulation within the same definition.
Concerning the claim the Department improperly combined together distinct
product categories when defining spray foam systems, appellants compare and contrast
high-pressure and low-pressure spray foam systems, highlighting the fact that the
Department was aware of these differences, before arguing that combining the two
systems within one definition resulted in the Department expanding “the scope of its
regulatory authority by ignoring critical differences in the products’ potential exposure

27.
and widespread and significant adverse impacts.” 4 Appellants’ arguments, however, fail
to identify any statutory or legal basis for limiting the Department’s authority to a single
uniform product category. Rather, as noted above, the statutory scheme reads as much
more focused upon the underlying chemicals of concern as opposed to the products in
which they are contained. Upon review of the statutory language, we find nothing that
would limit the Department’s authority to include more than one product category within
its prioritization process for a chemical of concern. Indeed, when the Department does
impose regulations upon a chemical of concern, Health and Safety Code section 25257.1,
subdivision (c) expressly states that the Department “shall not duplicate or adopt
conflicting regulations for product categories already regulated … consistent with the
purposes of this article.” (Italics added.) This strongly supports the notion that the
Department’s statutory authority permits it to include multiple product categories within
a single prioritization action if they share a chemical of concern.
The regulatory structure does not contradict this conclusion. The regulations focus
on product-chemical combinations. To be prioritized, the regulations require a potential
public exposure and the potential for one or more exposures to contribute to or cause
significant or widespread adverse impacts. (Tit. 22, § 69503.2, subd. (a).) While many
regulations focus on impacts and exposures in a product’s life cycle, no regulation or
definition prevents multiple product categories from being grouped into a single product
definition. Even the regulatory definition for a priority product seeks only to define a

4 Appellants focus on whether the Department exceeded its authority by combining two
different product types into one definition. Appellants do not raise any issues concerning
whether the Department could prioritize products instead of chemicals under the statutory
authorization for further regulations. (See Health & Saf. Code, §§ 25252, subd. (a)(1)
[authorizing regulations “to establish a process to identify and prioritize those chemicals or
chemical ingredients in consumer products that may be considered as being a chemical of
concern” including factors such as “the volume of the chemical” in the state], 25253, subd. (a)(1)
[authorizing regulations “that establish a process for evaluating chemicals of concern in
consumer products”].) Our opinion here takes no position on that potential argument.

28.
product-chemical combination specific enough “for a responsible entity to determine
whether one or more of its products” meets the definition. (Tit. 22, § 69503.5,
subd. (b)(1)(A), italics added.) Likewise, if the product-chemical combination is a
component used within multiple products, the Department is required to identify those
products if known. (Tit. 22, § 69503.5, subd. (b)(1)(B).) Nothing in the regulatory
scheme would prevent the Department from broadly defining a product-chemical
combination provided it then prioritized that combination based on the known facts for
products contained within that definition according to the regulatory factors.
Upon review, then, the court finds the Department did not exceed its statutory or
regulatory authority when it defined spray foam systems to include both high-pressure
and low-pressure systems. The underlying chemical of concern is the same in both
systems, and the systems share at least one similarity in that the definition requires the
combination of two canisters of products, one containing the chemical of concern.
Further, as noted above, the record contains at least some evidence regarding exposure
for both systems and indicates that even minimal exposure can be problematic for
previously sensitized groups. The Department thus had a properly developed definition
and adequate evidence to engage in its prioritization process for the definition chosen.
Appellants next contend the definition of spray foam systems is improper because
it includes products that are not “consumer products” as required by the statutory and
regulatory scheme. More specifically, appellants point out that high-pressure foam
systems are used exclusively by professional workers in commercial settings who are
specifically trained in their use. Appellants’ position, however, runs contrary to one of
the few statutory definitions provided by the Legislature. The statutory definition of
consumer product covers “a product or part of the product that is used, brought, or leased
for use by a person for any purposes” and specifically excludes at least one product that
would be used by professionals and not consumers in the colloquial sense, dental
restorative materials. (Health & Saf. Code, § 25251, subd. (e).) A plain reading of the

29.
definition shows the Department did not exceed its authority in selecting a definition that
included high-pressure spray foam systems. Regardless of their use in commercial
settings, such products are used by persons for a purpose and, unlike dental restorative
materials, are not excluded from the definition of consumer products selected by the
Legislature. Moreover, the Legislature’s specific choice of broad language and the lack
of any conflict between the definition and the regulatory scheme enacted differentiates
this case from those cited by appellants, such as Styrene Information & Research Center
v. Office of Environmental Health Hazard Assessment (2012) 210 Cal.App.4th 1082,
1096–1098, where a literal reading of the statute would be inconsistent with voter intent,
and Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, 757, where the contested products
could not be used in a manner that fit within the construct of the overall statutory scheme.
There is nothing in the statutory definition, statutory scheme, or regulatory scheme that
would warrant deviating from the literal language utilized by the Legislature.
Appellants’ third argument is that the Department exceeded its authority by
adopting a definition that included products already regulated by existing workplace
regulations. Again, the focus is upon high-pressure spray foam systems, which are
already regulated by the federal government’s Occupational Safety and Health
Administration and California’s parallel agency. Here, appellants claim that the
Department’s justification for listing spray foam systems as a priority product, thus
triggering regulatory response requirements, is insufficient and therefore the listing
exceeds the Department’s authority as defined by title 22, sections 69501,
subdivision (b)(3)(A) and 69503.2, subdivision (b)(2).
Title 22, section 69501, subdivision (b)(3)(A)(1)–(2) states the overall regulations
do not apply to already regulated consumer products provided those existing regulations
“[a]ddress the same potential adverse impacts, [and] potential exposure pathways … that
could otherwise be the basis for the product being listed as a Priority Product” and
“[p]rovide a level of public health and environmental protection that is equivalent to or

30.
greater than the protection that would potentially be provided if the product were listed as
a Priority Product.” Title 22, section 69503.2, subdivision (b)(2) requires the Department
to consider other regulations in existence to determine “the extent to which these other
regulatory requirements address, and provide adequate protections with respect to the
same potential adverse impacts and potential exposure pathways … that are under
consideration as a basis for the product-chemical combination being listed as a Priority
Product.” We review an agency’s action in this context to “ ‘determine whether the
agency’s action was arbitrary, capricious, or without evidentiary support, and/or whether
it failed to conform to the law.’ ” (California Assn. of Medical Products Suppliers v.
Maxwell-Jolly (2011) 199 Cal.App.4th 286, 302–303 (Maxwell-Jolly).)
The record shows the Department recognized the existence of workplace
regulations relating to MDI exposure. For example, it explained that both federal and
state authorities had “established Permissible Exposure Limits for MDI that employers
must observe,” which were “typically achieved through training and the use of PPE.”
However, the Department determined these regulatory efforts were “the least desirable
because the original hazard … is still present in the workplace” and did “not apply to
consumers or sole proprietors.” The Department stated its listing of spray foam systems
would work as “an important supplement” to the current standards, which it had
concluded were not equivalent to the regulatory scheme enacted through the Green
Chemistry law. Further, in response to a comment about duplicating existing laws, the
Department stated it “disagrees that current laws applicable to [spray foam systems]
provide adequate protection,” and pointing to its discussion of “Exposure and PPE,”
stated, “Eliminating the chemical hazard entirely, or substituting a less hazardous
chemical, is the most effective means of minimizing potential occupational chemical
exposures.”
As appellants point out, preexisting regulations set exposure limits for MDI at
ranges around and including 20 parts per billion. Yet, in its technical discussions, the

31.
Department pointed to evidence that sensitive subpopulations can be harmed by very low
exposures, including those below the various exposure limits set by state and federal
regulations. Further, the Department noted that exposures are not limited to inhalation
protected by current regulations, but includes dermal routes, particularly in previously
sensitized populations. This evidence supports the Department’s conclusion that current
regulations fail to provide adequate protection for individuals exposed to MDI. Even if
we assume existing regulations perfectly prevent workplace injuries due to overexposure
through inhalation, a point also contested by the evidence cited by the Department, the
regulations are not designed to protect against known exposure risks to sensitive
subpopulations or exposures through dermal contacts. The difference in exposure
pathways, known risks, and existing protection shows the Department’s position does not
render title 22, “section 69501[, subdivision ](b)(3)(A) meaningless surplusage,” as
argued by appellants. Rather, these differences highlight the Department’s determination
that the chemical of concern in this case is not adequately regulated to cover the known
exposure pathways and risks it presents in the community. Listing spray foam systems as
a priority product, then, does not run afoul of the regulations prohibiting the Department
from superseding existing regulatory authority because the existing regulations do not
provide an equivalent protection to public health. 5
The Department Satisfied the APA
Appellants raise three arguments why the Department’s efforts to comply with the
APA were inadequate. With respect to the requirement that the Department conduct an
economic analysis, appellants argue the Department engaged in a mismatched analysis

5 We take no position, however, on whether future regulatory action taken against spray
foam systems subject to current workplace regulations as contemplated by Health and Safety
Code section 25253, subdivision (b) would be valid under Health and Safety Code
section 25257.1, subdivision (c)’s restriction on adopting conflicting regulations for product
categories already regulated should they result in additional burdens on the use of such products
in workplace settings.

32.
when considering the costs and benefits of the proposed regulation. With respect to the
requirement that the Department conduct an alternatives analysis to the regulatory listing,
appellants argue both that the Department failed to identify and fully assess reasonable
alternatives and that the Department misunderstood its authority to impose an enforceable
consent agreement.
Standard of Review and Applicable Law
“[T]he APA establishes basic minimal procedural requirements for rulemaking in
California. [Citation.] ‘Pursuant to those procedural requirements, agencies must,
among other things, (1) give the public notice of the proposed regulatory action; (2) issue
a complete text of the proposed regulation with a statement of reasons for it; (3) give
interested parties an opportunity to comment on the proposed regulation; (4) respond in
writing to public comments; and (5) maintain a file as the record for the rulemaking
proceeding.’ ” (John R. Lawson Rock & Oil, Inc. v. State Air Resources Bd. (2018)
20 Cal.App.5th 77, 111.)
With respect to the obligation to provide a statement of reasons for the regulation,
an agency is required to conduct both an economic impact assessment and a reasonable
alternatives analysis. The economic impact assessment must be submitted with the initial
statement of reasons as part of the required notice of proposed action. (Gov. Code,
§ 11346.2, subd. (b).) The reasonable alternatives analysis must be submitted with the
final statement of reasons. (Gov. Code, § 11346.9, subd. (a)(4).)
Looking first at the economic impact assessment, a “state agency proposing to
adopt, amend, or repeal any administrative regulation shall assess the potential for
adverse economic impact on California business enterprises and individuals, avoiding the
imposition of unnecessary or unreasonable regulations or reporting, recordkeeping, or
compliance requirements.” (Gov. Code, § 11346.3, subd. (a).) In addition, for
regulations such as the one contested here, the agency must assess “whether and to what
extent [the regulation] will affect the following”: (1) “[t]he creation or elimination of

33.
jobs within the state”; (2) “[t]he creation of new businesses or the elimination of existing
businesses within the state”; (3) “[t]he expansion of businesses currently doing business
within the state”; and (4) “[t]he benefits of the regulation to the health and welfare of
California residents, worker safety, and the state’s environment.” (Gov. Code, § 11346.3,
subd. (b)(1)(A)–(D).) The analysis is “intended to provide agencies and the public with
tools to determine whether the regulatory proposal is an efficient and effective means of
implementing the policy decisions enacted in statute or by other provisions of law in the
least burdensome manner.” (Gov. Code, § 11346.3, subd. (e).)
The economic impact assessment can essentially result in one of two findings—
the action may have a significant impact, or the action will not have a significant impact.
If the agency “makes an initial determination that the action may have a significant,
statewide adverse economic impact directly affecting business,” it must include
information regarding the types of businesses affected, a description of compliance
requirements resulting from the action, and a statement seeking submission of
alternatives “in the notice of proposed action.” (Gov. Code, § 11346.5, subd. (a)(7).) If
the agency “makes an initial determination that the action will not have a significant,
statewide adverse economic impact directly affecting business, including the ability of
California businesses to compete with businesses in other states, it shall make a
declaration to that effect in the notice of proposed action. In making this declaration, the
agency shall provide in the record facts, evidence, documents, testimony, or other
evidence upon which the agency relies to support its initial determination.” (Gov. Code,
§ 11346.5, subd. (a)(8).) Regardless of which finding is made, the statute requires a
“description of all cost impacts, known to the agency at the time the notice of proposed
action is submitted to the office, that a representative private person or business would
necessarily incur in reasonable compliance with the proposed action.” (Gov. Code,
§ 11346.5, subd. (a)(9).) Notably, though, these requirements “shall not be construed in
any manner that results in the invalidation of a regulation because of the alleged

34.
inadequacy of the notice content or the summary or cost estimates, or the alleged
inadequacy or inaccuracy of the housing cost estimates, if there has been substantial
compliance with those requirements.” (Gov. Code, § 11346.5, subd. (c).)
The Legislature has explained that the economic impact assessment is not meant to
“impose additional criteria on agencies, above that which exists in current law, in
assessing adverse economic impact on California business enterprises, but only to assure
that the assessment is made early in the process.” (Maxwell-Jolly, supra,
199 Cal.App.4th at p. 307.) “The qualifying adjective ‘initial’ indicates the agency’s
determination need not be conclusive, and the qualifying adjective ‘significant’ indicates
that the agency need not assess or declare all adverse economic impact[s] anticipated.”
(Ibid.) Notably, “a regulation is not necessarily invalid, even if it has a significant
adverse economic impact on business” as “regulations may have negative economic
impacts if necessary or reasonable under the circumstances.” (Id. at p. 306.)
Turning to the reasonable alternatives analysis, after all relevant periods of public
comment, the agency seeking to create a new regulation must submit a final statement of
reasons that includes the reasonable alternatives analysis contested in this case. The
agency must submit a “determination with supporting information that no alternative
considered by the agency would be more effective in carrying out the purpose for which
the regulation is proposed, would be as effective and less burdensome to affected private
persons than the adopted regulation, or would be more cost effective to affected private
persons and equally effective in implementing the statutory policy or other provision of
law.” (Gov. Code, § 11346.9, subd. (a)(4).) Relatedly, the agency must submit an
“explanation setting forth the reasons for rejecting any proposed alternatives that would
lessen the adverse economic impact on small businesses.” (Gov. Code, § 11346.9,
subd. (a)(5).)
A regulation may be overturned based on a failure to properly complete either of
these requirements. However, the bases for overturning a regulation are limited. Under

35.
the statutory scheme, a “regulation or order of repeal may be declared to be invalid for a
substantial failure to comply” with the APA. (Gov. Code, § 11350, subd. (a); see
Maxwell-Jolly, supra, 199 Cal.App.4th at p. 303 [“The regulation ‘may’ be declared to be
invalid by a court because of a ‘ “substantial failure” to comply with’ the APA.”].) “In
addition to any other ground that may exist, a regulation or order of repeal may be
declared invalid if either” the agency’s determination that a regulation is reasonably
necessary to support the purpose of a statute “is not supported by substantial evidence” or
the “agency declaration pursuant to paragraph (8) of subdivision (a) of [Government
Code s]ection 11346.5 is in conflict with substantial evidence in the record.” (Gov.
Code, § 11350, subd. (b)(1)–(2); see Maxwell-Jolly, at p. 304 [summarizing same].)
The language referencing a substantial failure to comply is understood as requiring
“substantial compliance” with the substance essential to the reasonable objectives of the
statutory scheme. (See Maxwell-Jolly, supra, 199 Cal.App.4th at p. 307.) “ ‘ “ ‘Where
there is compliance as to all matters of substance[,] technical deviations are not to be
given the stature of noncompliance.… Substance prevails over form.’ ” ’ ” (Ibid.; see
Sims v. Department of Corrections & Rehabilitation (2013) 216 Cal.App.4th 1059, 1073
[“noncompliance is insubstantial, or ‘harmless,’ only where it does not compromise any
‘reasonable objective’ of the APA”].)
“ ‘ “Substantial evidence” is evidence of ponderable legal significance, evidence
that is reasonable, credible and of solid value. [Citation.] “Substantial evidence … is not
synonymous with ‘any’ evidence.” Instead it is “ ‘ “substantial” proof of the essentials
which the law requires’ ” [Citations.] The focus is on the quality, rather than the
quantity, of the evidence.’ ” (Maxwell-Jolly, supra, 199 Cal.App.4th at p. 308.)
Appellants’ APA arguments were raised under two claims brought for declaratory
relief under Code of Civil Procedure section 1060 and Government Code section 11350.
The standards for resolving the validity of regulations subject to the APA, however, are
regularly considered under the principles applicable to a writ of mandate. (See Maxwell-

36.
Jolly, supra, 199 Cal.App.4th at pp. 302–303 [“a trial court’s role generally is to
‘determine whether the agency’s action was arbitrary, capricious, or without evidentiary
support, and/or whether it failed to conform to the law’ ”]; Western States, supra,
57 Cal.4th at p. 429 [adopting Maxwell-Jolly’s analysis after summary judgment granted
on regulatory validity].) Under this framework, this court “ ‘ “ ‘may make its own
determination when the case involves resolution of questions of law where the facts are
undisputed’ ” ’ ” and utilizes the same standard as the trial court when reviewing for
substantial evidence. (Maxwell-Jolly, at p. 303.) The trial court cited to these same
standards in its order but did not indicate whether it was treating the claim as one for
summary judgment on a declaratory relief claim or resolution of the same issues through
writ of mandate. Regardless, neither party in this case disputes the standard of review on
these issues nor raises procedural issues with the trial court’s order, and both argue in the
context of the Maxwell-Jolly analysis. We, too, apply that standard.
The Economic Impact Assessment Was Adequate
Appellants argue that the Department’s economic impact assessment was
inadequate because of a mismatch between the identified benefits of the listing decision
and the identified costs of that same decision. More specifically, appellants claim that the
Department identified benefits from the listing decision that would only arise after
additional regulatory actions were taken—such as expanded business interests arising
from researching alternative chemical options and future health benefits from reducing
future exposures—while failing to account for any costs arising in the same timeframe—
such as research, development, and consulting fees and allegedly increased consumer
costs from reduced heating efficiency. This mismatch allegedly resulted in an incomplete
costs analysis and an economic determination that conflicts with substantial evidence in
the record.
The Department contests this argument in four ways. First, the Department
generally asserts that its analysis complied in all respects with the APA’s requirements,

37.
particularly focusing on the fact the regulatory action analyzed was that of listing foam
spray systems as priority products. Second, the Department notes that even if it did note
some irrelevant costs, the APA only requires it to consider significant known impacts,
which the Department claims it did. Third, the Department states that while its analysis
was complete and correct in terms of the factors it considered, it was unable to and
therefore did not quantify the contested benefits, meaning any alleged imbalance did not
occur. Fourth, the Department notes that its finding that there may be a significant
financial impact means both that its analysis is not subject to the same statutory and legal
scrutiny argued by appellants and that its conclusion was properly supported by the
record.
We note at the outset that this court’s review of a finding regarding the potential
for a significant economic impact asks whether the Department made “an initial showing
that there was some factual basis for [its] decision” that substantially complied with the
statutory scheme and is supported by substantial evidence in the record. (Western States,
supra, 57 Cal.4th at p. 429.)
Under this standard, even if we assume the Department utilized an unbalanced
comparison of costs and benefits, appellants’ argument that the Department’s
determination warrants invalidating the regulation listing spray foam systems as a priority
product still fails. This is so because the Department’s process substantially complied
with the requirements of the APA and because appellants’ arguments for error fail to
show how the alleged error would impact the Department’s finding.
As noted above, the APA requires the Department to engage in a multi-step
process to determine whether the proposed regulation may or will not have a significant
economic impact. As part of this process, the Department is tasked with making an
initial determination, releasing that determination publicly for comment, and then
updating the initial determination to reflect either changes based on or rejections of the
comments received. (Western States, supra, 57 Cal.4th at pp. 425–426.) The initial

38.
determination need not be conclusive or all encompassing. But it must be more than
mere speculative belief and must include a description of all cost impacts to a
representative person or business that are known at the time and would be necessarily
incurred. (Id. at pp. 427–428.)
Here, the Department followed this procedure. It gathered information on
expected costs through surveys and other fact gathering and publicly disclosed its
determination that the proposed regulation may have a significant economic impact in the
form of costs associated with the regulatory response deemed most likely to occur based
on the surveys. In response, the Department received public feedback, including from
appellants, that suggested it had not properly considered all of the future costs associated
with the regulatory decision. The Department responded to those comments, asserting
that it had only included costs associated with the immediate regulatory response
expected, based on industry feedback.
As to procedure and statutory expectations, the process used by the Department in
this case substantially complied with the requirements of the APA. In determining there
may be a significant economic impact from the regulation proposed, the Department was
required to describe, among other factors, any “compliance requirements” resulting from
the action and “all cost impacts, known to the agency at the time the notice of proposed
action is submitted to the office, that a representative private person or business would
necessarily incur in reasonable compliance with the proposed action.” (Gov. Code,
§ 11346.5, subd. (a)(7)(B), (9).) These figures assist with the future determination
whether any reasonable alternative exists to the proposed regulation. The Department
was able to quantify the expected costs associated with the expected response under the
regulation and was able to, and did, provide substantial evidence regarding the basis for
these determinations. As such, parties reviewing the record would understand the
perceived costs and have sufficient guidance to suggest potential alternatives if such

39.
alternatives existed. We conclude, in the context of a finding there may be a substantial
economic impact, that the Department’s actions substantially complied with the APA.
Appellants relatedly argue, under the premise the Department failed to consider all
relevant costs, that the Department utilized a mismatched economic impact assessment
through consideration of long-term benefits of the underlying law but only immediate
costs. Even assuming the Department had an obligation to consider costs associated with
potential future regulatory responses, as argued by appellants, the failure to do so in this
particular case would not demonstrate a failure to substantially comply with the
requirements of the APA or a lack of substantial evidence supporting the Department’s
determination. 6
As noted, the purpose of the APA is to provide an early indication of the costs and
effects of a proposed regulation in order to determine whether the proposal will adversely
affect business and thus to provide an opportunity to properly consider less economically
impactful but equally effective alternatives. As the Department’s finding that there may
be a significant economic impact from the regulation was supported by substantial
evidence, appellants’ argument that additional evidence of increased costs must be
considered before the regulation can be upheld is misplaced. The purpose of the statute
was met the moment substantial evidence supported the Department’s determination that
there may be a significant impact. Unlike cases where the Department contends no
impact will occur, the actions required to satisfy the APA do not meaningfully change
once the evidence reaches a critical mass and triggers the conclusion there may be a
significant financial impact. Rather, at that point, the focus turns to the alternatives
available and whether there is a reasoned basis to reject any reasonable alternatives

6 As best as this court can discern, the statutory underpinning of appellants’ argument is
the requirement the Department consider all cost impacts to a representative person or business
that are known at the time and would be necessarily incurred. It is not evident, however, how
costs associated with one of multiple potential future regulatory actions could be known at the
time and necessarily incurred.

40.
identified. Appellants’ claim there was no substantial compliance with the APA because
the Department did not identify enough of a substantial economic impact thus fails. We
therefore turn to whether the alternatives analysis conducted by the Department was
proper given the supportable finding there may be a significant economic impact from the
decision to list spray foam systems as a priority product.
The Reasonable Alternatives Analysis Was Adequate
With respect to the alternatives analysis conducted by the Department, appellants
argue the Department “failed properly and fully to consider an [enforceable consent
agreement] as an adequate alternative to the listing decision.” Appellants contend the
Department failed to consider the alternative of a consent agreement or permit public
comment on the idea because it incorrectly determined it lacked the authority to enter into
such an agreement as an alternative to the listing decision. The Department responds
with the position that it acted appropriately because it determined the proposed
alternative was not reasonable, therefore relieving the Department from considering it
under the statutory scheme, and further that it lacked authority to impose a consent
agreement in lieu of a regulatory listing
Government Code section 11346.2, subdivision (a)(4)(A) requires a “description
of reasonable alternatives to the regulation and the agency’s reasons for rejecting those
alternatives” as part of the initial statement of reasons. The argument raised by
appellants in this case, however, focuses on whether the Department satisfied
section 11346.9, which does not specifically mention “reasonable alternatives.” Despite
this lack of symmetry in language, both parties’ arguments proceed on the assumption
that alternatives must be reasonable to be considered. Accordingly, we accept the
premise that only reasonable alternatives must be considered for the purposes of the
issues raised.
Accepting this premise, we agree with the Department’s argument that an
enforceable consent decree is not a reasonable alternative and find that its rejection of

41.
that option is supported by substantial evidence. Under Government Code
section 11346.2, subdivision (b)(4)(A), “[r]easonable alternatives … include, but are not
limited to, alternatives that are proposed as less burdensome and equally effective in
achieving the purposes of the regulation in a manner that ensures full compliance with the
authorizing statute or other law being implemented or made specific by the proposed
regulation.” In this case, the Department rejected the idea of utilizing voluntary industry
programs in place of listing spray foam systems as a priority product both prior to and
throughout the regulatory proceedings.
The Department’s reasoning remains consistent throughout and is reflected in the
administrative record. As early as 2015, in response to pre-listing options raised by
appellants through ACC, the Department explained it did not believe voluntary programs,
including attempts at enforceable agreements, are appropriate alternatives to identifying a
product as a priority product. The Department explained the strategies covered by the
proposed agreements were already at least partially available nationally, would not ensure
equal coverage of all potential manufacturers, and might not be enforceable under the
law. Particularly with respect to coverage, the Department noted the proposed
framework creates problems for the Department and “also leaves product manufacturers
who have signed onto the alternative process proposed here at a disadvantage to those
who have not signed on.” In contrast, regulatory coverage would ensure “any new
product manufacturer would still be a responsible entity and would need to comply with
the regulatory requirements” to sell products in California.
In 2017 ACC comments, appellants noted that the Department “described three
possible alternatives to the current proposal, including the industry’s proposed alternative
to the regulation” but argued they disagreed with the Department’s conclusion that
voluntary programs would not achieve the purpose of the Green Chemistry law. In its
final statement of reasons, the Department again rejected the industry’s proposal of
voluntary action, explaining “it does not advance the goals of the [Safer Consumer

42.
Product] regulations in general and of this proposed regulation in specific: to drive
[spray foam] systems manufacturers to find safer alternatives to MDI in [spray foam
systems] while avoiding regrettable substitutions. Additionally, voluntary initiatives are
not enforceable.”
The Department’s concerns track the language of the underlying statutory scheme
and the practical realities of the regulatory system in place. Health and Safety Code
section 25252 requires that the Department “identify and prioritize those chemicals or
chemical ingredients in consumer products that may be considered as being a chemical of
concern” (Health & Saf. Code, § 25252, subd. (a)) and “develop criteria by which
chemicals and their alternatives may be evaluated” (Health & Saf. Code, § 25252,
subd. (b)(1)). Similarly, Health and Safety Code section 25253 requires that the
Department “establish a process for evaluating chemicals of concern in consumer
products, and their potential alternatives, to determine how best to limit exposure or to
reduce the level of hazard posed by a chemical of concern” (Health & Saf. Code,
§ 25253, subd. (a)(1)) and “establish a process that includes an evaluation of the
availability of potential alternatives” (Health & Saf. Code, § 25253, subd. (a)(2)). Only
once this review is complete does the Department determine what regulatory responses
are required, if any. (Health & Saf. Code, § 25253, subd. (b).) As discussed more fully
above, the regulatory structure adopted identifies chemicals with known toxicities and
then seeks to identify a limited number of high priority products utilizing one or more of
those chemicals so that the state may leverage manufacturers of those products when
conducting alternatives analyses and deciding on appropriate regulatory actions.
Accordingly, in light of the requirements of the authorizing statutes and regulatory
scheme in place, the suggestion that enforceable consent agreements be used in place of
listing spray foam systems as a priority product was not a reasonable alternative. Failing
to list spray foam systems as a priority product would result in the Department not
conducting the alternatives analysis for the underlying chemicals required under the

43.
statutes, undermine the prioritization process for chemicals utilized in consumer products
required by the statutes, and curtail the Department’s ability to impose any appropriate
regulatory responses under the regulatory scheme adopted to implement the relevant
statutes. Further, only those that enter into agreements could be governed by their terms,
leaving new market entrants and holdouts to different standards than signatories. In this
way, the Department’s identified concerns show the use of enforceable consent
agreements would not be equally effective in achieving the purpose of the statute and
would not fully comply with the authorizing statutes. The record evidence shows the
Department reviewed the proposed alternative and determined it was not reasonable. We
agree with this conclusion. As an unreasonable alternative, the proposal did not trigger
any statutory obligation under the APA to have the Department identify and discuss
enforceable consent agreements as a reasonable alternative to the listing decision. 7
Appellants’ CEQA Claim Is Untimely
As noted at the outset, this case consists of a cross-appeal filed by the Department
over appellants’ CEQA claim. The Department argues both that this claim was time-
barred and that the trial court erred in concluding the Department violated CEQA when it
determined that its priority product listing determination was exempt from CEQA.
Ultimately, we agree with the Department that appellants failed to timely file their CEQA
claim. As such, we do not reach whether appellants’ claim of a CEQA violation was
correct.

7 Having reached this determination, the court need not reach whether the Department
correctly considered whether it has authority to enter into such agreements in the first place. The
court notes, however, that the allegedly authorizing statute, Health and Safety Code
section 25180, subdivision (d), refers to “enforcing” laws contained within the relevant chapter
and specifically points to examples such as imposing penalties, referring violations for
prosecution, settling cases, and adopting enforcement policies. The court does not readily see
how identifying priority products under the current regulations falls within the Department’s
enforcement authority and, thus, how the Department could enter into an enforceable agreement
with manufacturers in lieu of the listing decision.

44.
Additional Relevant Facts
As noted in the court’s initial factual recitation, the Department drafted and
published the Exemption Notice from CEQA when reaching its decision to list spray
foam systems as a priority product. 8 At the outset of the regulatory process, the
Department explained in its initial notice of proposed regulatory action that it had
“determined that this rulemaking project is exempt under CEQA (Pub[.] Resources
Code[, §] 21000[] et seq.). This rulemaking meets the General Rule Exemption available
under Section 15061[, subdivision] (b)(3) of Title 14 of the California Code of
Regulations. A draft Notice of Exemption [] is available for review with this rulemaking
file and will be filed with the State Clearinghouse when the regulations are adopted.”
The Department then received public comments alleging it was not properly complying
with CEQA as part of its overall regulatory process. The Department made no changes to
its CEQA position based on the comments and ultimately rejected them when issuing its
final statement of reasons in February 2018.
Shortly thereafter, the Department sent its proposed regulatory package to the
Office of Administrative Law. On April 26, 2018, the Office of Administrative Law
endorsed, approved, and filed the regulatory package. And on May 1, 2018, the
Department issued an alert stating that spray foam systems would be listed as a priority
product effective July 1, 2018.
On May 30, 2018, ACC started the informal appeal process designated in title 22,
section 69507.1. ACC proceeded through the full regulatory dispute resolution process
until their concerns were finally rejected on February 25, 2019. Appellants then filed a
petition for writ of mandate on August 9, 2019.

8 Although the Exemption Notice was drafted and published, there is no dispute that it was
not forwarded to the Office of Planning and Research or any other government agency relevant
to the CEQA analysis. As such, the publication did not potentially trigger a shorter statute of
limitations than the 180-day period discussed below.

45.
The Department filed a demurrer. In its filing, the Department argued that
appellants’ CEQA claim was time-barred because it had not been filed within 180 days of
the Office of Administrative Law’s endorsement, approval, and filing of the regulatory
package. Relevant to a dispute raised in this appeal, the Department also sought to
dismiss all claims raised by General Coatings, including by implication the CEQA claim,
on the ground there was no proof that General Coatings exhausted its administrative
remedies. The trial court overruled the demurrer with respect to the timeliness claim,
finding the Department’s decision was not final until completion of the regulatory
appeals and therefore that the statute of limitations did not begin to run until that time.
The court sustained the demurrer with respect to General Coatings, however, concluding
there was no evidence it had exhausted its administrative remedies. The court’s analysis
relied on a conclusion that completing the Safer Consumer Products regulations’ dispute
resolution procedures was required before filing suit. The Department again raised the
issue of timeliness as a part of its briefing in opposition to the writ of mandate. In that
position, the Department argued the trial court had incorrectly concluded the Green
Chemistry law’s regulatory proceedings applied to CEQA issues. The trial court again
rejected the timeliness argument, reiterating its finding that the statute of limitations had
been tolled before noting that the issue had previously been resolved and refusing to
reconsider that ruling.
Standard of Review and Applicable Law
In circumstances similar to this case, where the relevant agency has determined its
project is exempt from CEQA, a party has 180 days from the approval of the project to
file suit if the public has not been given the required notice that the project is exempt
from CEQA. (See Pub. Resources Code, § 21167, subd. (d) [“If the notice has not been
filed, the action or proceeding shall be commenced within 180 days from the date of the
public agency’s decision to carry out or approve the project.”].) Although the language
of the relevant statute can be confusing, both the CEQA Guidelines and the case law

46.
consistently interpret it to set a 180-day statute of limitations regardless of the basis for
the exemption finding. (See CEQA Guidelines, § 15112, subd. (c)(5)(A) [“The statute of
limitations periods under CEQA are as follows: [¶] … [¶] (5) Where; none of the other
statute of limitations periods in this section apply, 180 days after … [¶] (A) The public
agency’s decision to carry out or approve the project.”]; City of Chula Vista v. County of
San Diego (1994) 23 Cal.App.4th 1713, 1719–1720 [“If an agency determines a project is
categorically exempt from the environmental review requirements of CEQA and
proceeds to approve the project, any party objecting that such determination was
improper must file an action within 35 days after a valid [notice of exemption] has been
filed by the agency. If none was filed or the [notice of exemption] is defective in some
material manner, the filing period for actions is limited to 180 days after the project is
approved.”]; Save Lafayette Trees v. East Bay Regional Park Dist. (2021) 66 Cal.App.5th
21, 40 [“Our Supreme Court has held that when an agency approves a project without
filing either a notice of determination [] as to whether a project will have a significant
environment impact or a[ notice of exemption] as to whether a project is statutorily
exempt from CEQA, [Pub. Resources Code, §] 21167 nonetheless ‘permits a legal
challenge to be brought up to 180 days after the agency’s decision or commencement of
the project,’ which ‘is deemed constructive notice for potential CEQA claims.’ ”].)
Where the underlying facts are not disputed, we review a finding regarding the
applicability of CEQA’s statute of limitations de novo. (Cumming v. City of San
Bernardino Redevelopment Agency (2002) 101 Cal.App.4th 1229, 1232–1233.)
Appellants’ CEQA Claim Was Not Timely
Neither party in this case contests that a 180-day statute of limitations applies.
Rather, the core dispute is when that period began to run. Underlying that determination
is a dispute over whether the Safer Consumer Products’ regulatory structure for
administrative appeals covers CEQA issues.

47.
The general principle that one must exhaust administrative remedies is applicable
in CEQA cases. Indeed, CEQA itself has a core exhaustion requirement which precludes
actions unless one has raised the CEQA issue during a required public comment period.
(Pub. Resources Code, § 21177, subd. (a) [“An action or proceeding shall not be brought
pursuant to [Pub. Resources Code, §] 21167 unless the alleged grounds for
noncompliance with this division were presented to the public agency orally or in writing
by any person during the public comment period provided by this division or before the
close of the public hearing on the project before the issuance of the notice of
determination.”]; see Tomlinson v. County of Alameda (2012) 54 Cal.4th 281, 291 [“the
exhaustion-of-administrative-remedies requirement set forth in subdivision (a) of [Pub.
Resources Code §] 21177 applies to a public agency’s decision that a proposed project is
categorically exempt from CEQA compliance as long as the public agency gives notice
of the ground for its exemption determination, and that determination is preceded by
public hearings at which members of the public had the opportunity to raise any concerns
or objections to the proposed project”].) CEQA does not, however, require an
administrative appeal as part of its administrative exhaustion requirements. (McCann v.
City of San Diego (2021) 70 Cal.App.5th 51, 76 [Pub. Resources Code, “[§] 21177
addresses the exhaustion of administrative remedies in CEQA cases, but it does not
prescribe a specific appeal process following a determination a project is exempt from
CEQA”].) Rather, several “cases recognize that when an agency elects to adopt an
administrative appeal process, the common law rule requiring the exhaustion of
administrative remedies applies to CEQA litigation and the scope of the remedy is
‘determined by the procedures applicable to the public agency in question.’ ” (McCann,
at p. 77.)
In these cases, however, the administrative procedures adopted specifically
include review of CEQA determinations. (See Tahoe Vista Concerned Citizens v. County
of Placer (2000) 81 Cal.App.4th 577, 582, 592 [exhaustion requirement not met where

48.
the appellant failed to check box for raising CEQA dispute in administrative appeal];
California Clean Energy Committee v. City of San Jose (2013) 220 Cal.App.4th 1325,
1345 [administrative appeal process specifically references environmental impact report];
but see San Bernardino Valley Audubon Society, Inc. v. County of San Bernardino (1984)
155 Cal.App.3d 738, 747–748 [questioning whether right to appeal “land use decision”
would cover CEQA requirement before rejecting lack of exhaustion argument on
different grounds].) Moreover, even where an appeal was possible but not taken,
exhaustion was excused where the final decisionmaker was informed of the dispute and
held public hearings on issues raised. (See California Clean Energy Committee, at
pp. 1347–1348 [administrative exhaustion satisfied despite lack of appeal from initial
decision where final decisionmaking body presented arguments, held public hearings, and
directly responded to issues when adopting environmental impact report].) In context,
then, the case law shows full exhaustion of an agency’s administrative appeals process is
only required in a CEQA case when the agency has crafted administrative proceedings
that include CEQA issues within their scope. If no such decision has been made,
CEQA’s core exhaustion requirements control and there is no obligation to
administratively appeal an adverse determination. For this reason, the deadline for filing
a CEQA action in this case turns on whether the administrative remedies covered by the
Green Chemistry law regulations include review of CEQA issues or whether the standard
CEQA exhaustion requirements are all that are needed to exhaust administrative
remedies.
Turning to the administrative dispute resolution process for the Safer Consumer
Products regulations, this court sees no indication that CEQA issues are included within
its provisions. The overall process is set out at title 22, sections 69507 through 69507.6.
From the outset its scope is limited. The initial applicability statement limits the process
to only resolving disputes by responsible entities over decisions made by the Department
under the Safer Consumer Products regulations. (Tit. 22, § 69507, subd. (a) [“[t]his

49.
article applies to any responsible entity that wishes to dispute a decision made by the
Department under this chapter that applies to the responsible entity”].) The statement on
exhaustion limits itself to “resolving disputes arising under this chapter,” and the
statement of scope further limits the range of issues by excluding from review decisions
“made by the Department under article 2, 4, or 9” of chapter 55. 9 (Tit. 22, § 69507,
subds. (b), (c).) Even the automatic stay is limited; not to any regulatory process but
rather to requirements “imposed by the Department under this chapter on a responsible
entity, and any posting concerning the requirement on the Failure to Comply List.”
(Tit. 22, § 69507, subd. (d).)
The informal dispute resolution process and appeal to the director include similar
limitations on the scope of the dispute resolution process. An informal dispute resolution
request is limited to “a dispute regarding a decision made by the Department under the
provisions of this chapter other than article 6” of chapter 55, while the appeal to the
director is limited to issues raised in the informal process and requires “reasons why the
decision does not comply with this chapter or is otherwise unreasonable.” (Tit. 22,
§§ 69507.1, subd. (a), 69507.2, subd. (a).) The resolution of the appeal to the director
additionally notes that if relief is denied, the director must specify “the date by which the
responsible entity must comply with the requirements of this chapter that were in
dispute.” (Tit. 22, § 69507.2, subd. (c)(2).) The remaining aspects of the dispute
resolution process create a separate and unique process for “disputes regarding a decision
made by the Department under article 6” of chapter 55, which covers final regulatory
responses. (Tit. 22, § 69507.3; see tit. 22, § 69506.)
Taken together, the court finds no basis to conclude that the regulations are
intended to or do include provisions for resolving disputes arising under CEQA. Rather,

9 These articles cover the process for identifying candidate chemicals, the petition process
for identification and prioritization of chemicals and products, and trade secret protections. (See
tit. 22, §§ 69502, 69504, 69509.)

50.
the regulations provide a dispute resolution process for only a limited set of issues that
can arise under the broader regulatory scheme, specifically those issues that are most
likely to directly impact responsible entities. Broader issues within the regulatory
scheme, such as generating the list of chemicals necessary to identify product/chemical
combinations or seeking trade secret protections, are separated and subjected to different
procedures. Indeed, with trade secret decisions, the regulations authorize quick judicial
review.
This structure supports the Department’s assertion that CEQA issues are not
subject to the regulatory dispute process. CEQA is a separate statutory scheme that
contains its own process for exhausting administrative remedies. The dispute resolution
process in the Safer Consumer Products regulations readily limit themselves to only a
subset of potential issues that can arise under the various chapters included therein. It
would be incongruent with that structure to conclude, as argued by appellants, that the
phrase “a decision made by the Department under this chapter” covers ancillary issues
arising under separate statutory schemes merely because they are potentially triggered by
a decision under the Safer Consumer Products regulations. Accordingly, we reject
appellants’ claim that they were obligated to exhaust their administrative remedies under
the Safer Consumer Products regulations in order to file their CEQA claim.
This determination does not resolve the statute of limitations dispute, however, as
there still remains a question as to when the statute begins to run. Although not required
to exhaust their administrative remedies under the Safer Consumer Products regulations,
appellants note that they did raise issues under that process and that the regulations do not
allow for final agency decision until that process is complete. (See tit. 22, §§ 69507.1,
subd. (a) [“[i]f a request for informal dispute resolution is not received within thirty
(30) days of the notice …, the Department’s decision is final”], 69507.2, subd. (d) [“A
decision issued under [§ 69507.2, subd.] (c) is the Department’s final decision and is not
subject to additional administrative dispute resolution.”].) Appellants thus contend the

51.
statute of limitations did not begin to run until their regulatory appeal was complete. We
do not agree.
“ ‘The limitations period starts running on the date the project is approved by the
public agency and is not retriggered on each subsequent date that the public agency takes
some action toward implementing the project.’ ” (Citizens for a Green San Mateo v. San
Mateo County Community College Dist. (2014) 226 Cal.App.4th 1572, 1594.) Under the
CEQA Guidelines, “approval” “means the decision by a public agency which commits
the agency to a definite course of action in regard to a project intended to be carried out
by any person. The exact date of approval of any project is a matter determined by each
public agency according to its rules, regulations, and ordinances. Legislative action in
regard to a project often constitutes approval.” (Cal. Code Regs., tit. 14, § 15352,
subd. (a).) “ ‘Generally speaking, an agency acts to approve a proposed course of action
when it makes its earliest firm commitment to it, not when the final or last discretionary
approval is made.’ [Citation.] Approvals under CEQA, therefore, are not dependent on
‘final’ action by the lead agency, but by conduct detrimental to further fair environmental
analysis.” (John R. Lawson Rock & Oil, Inc. v. State Air Resources Bd., supra,
20 Cal.App.5th at p. 99.)
In this case, the Department contends the project was approved no later than the
point at which the regulatory packet was approved and filed by the Office of
Administrative Law. While we do not agree that event marks the approval of the project,
we do agree that the date could be no point later. By the time the Office of
Administrative Law approved and filed the regulatory packet, the Department had
publicly indicated its intent to list spray foam systems as a priority product, taken and
responded to comments from the public on that decision, indicated that it believed the
project was exempt from CEQA requirements, and released its final statement of reasons
for the action. At that point, the Department had clearly made a firm commitment to its
planned listing. Indeed, having claimed to have reviewed the project for CEQA issues

52.
and found it exempt, then finalized the determination despite comments raising CEQA
objections, there is no doubt that the Department had reached the point where its conduct
was detrimental to further fair environmental analysis. At that point, the project had been
thoroughly vetted and approved. The statute of limitations to raise a CEQA claim thus
began to run no later than the point the Office of Administrative Law approved and filed
the regulatory packet. As this date was April 26, 2018, and the CEQA claim was not
filed until August 9, 2019, the claim was untimely under CEQA’s 180-day statute of
limitations.
Finally, we reject appellants’ argument that the Department has changed its
position from trial and should therefore be precluded from arguing the CEQA claim was
untimely. The court has reviewed the Department’s filings before the trial court and
notes that the Department has consistently argued appellants’ CEQA claim should be
time-barred because it was not filed within 180 days of when the regulatory packet was
approved and filed by the Office of Administrative Law. The trial court ultimately found
that the CEQA claim was timely based on its belief that the Safer Consumer Products
regulations applied to CEQA claims. However, this position does not appear to be tied to
a position taken by the Department, but rather to appellants’ direct argument in
opposition that “before [appellants] could challenge [the Department]’s determination
that the listing of [spray foam s]ystems is exempt from CEQA, they first were obligated
to exhaust administrative remedies before [the Department].” Indeed, the Department
specifically argued that “on its face, the [Safer Consumer Product] Regulations’
exhaustion requirement, which applies only to ‘a decision made by [the Department]
under this chapter’ does not apply to [appellant]s’ CEQA claim.” Given this argument
history, we find no basis to preclude the Department’s argument based on a change in
position.

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DISPOSITION
The judgment is affirmed with respect to the first, second, and third causes of
action seeking relief based on allegations the Department exceeded its authority through
the listing determination and allegations the Department violated the APA. The
judgment is reversed with respect to the fourth cause of action, under CEQA, and
remanded with instructions that the trial court dismiss the claim as untimely.
Costs are awarded to the Department.

HILL, P. J.
WE CONCUR:

DETJEN, J.

PEÑA, J.

54.
Filed 12/12/22

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT

AMERICAN CHEMISTRY COUNCIL et al.,

Plaintiffs and Appellants, F082604

v. (Fresno Super. Ct. No. 19CECG02938)

DEPARTMENT OF TOXIC SUBSTANCES
CONTROL et al., ORDER GRANTING REQUEST
FOR PUBLICATION
Defendants and Appellants.

As the nonpublished opinion filed on November 18, 2022, in the above-entitled
matter hereby meets the standards for publication specified in the California Rules of
Court, rule 8.1105(c), it is ordered that the opinion be certified for publication in the
Official Reports.

HILL, P. J.
WE CONCUR:

DETJEN, J.

PEÑA, J.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9324618. Public record. Not legal advice.