Auto industry sues Vermont to block a regulation curbing greenhouse gas emissions from new motor vehicles; court rejects industry’s arguments that the regulation is preempted by federal law and that it interferes with U.S. foreign policy
Status: Appeal by auto industry pending in the Second Circuit Court of Appeals. (Nos. 07-4342,-4360); effect of EPA’s December 2007 denial of California waiver request on this litigation is unclear
Discussion & Analysis: The Clean Air Act (CAA) establishes uniform national standards for controlling emissions from new motor vehicles. However, Section 209(b) of the Act grants to California the authority to set its own, more protective emissions standards, which other states may choose to follow. To exercise this option, California must obtain a waiver from EPA (see below for an update on the status of California’s waiver request). In 2004, California completed work on a regulation addressing greenhouse gas emissions from new motor vehicles, calling for a thirty percent reduction in greenhouse gases from new cars and light trucks by the year 2016. In 2005, Vermont adopted the California standards (thirteen other states have since done the same). In December 2005, California formally asked EPA to issue the waiver required under the CAA.
The automotive industry launched legal challenges to these proposed greenhouse gas regulations in three states: Vermont, California, and Rhode Island. The core constitutional arguments made by industry in each case are the same: (1) that the state regulations are preempted by federal laws (specifically, the CAA, unless EPA were to grant a waiver; and the Energy Policy and Conservation Act (EPCA)); and (2) that the regulations interfere with U.S. foreign policy. The Vermont court was the first to render judgment.
In a rigorous, 240-page opinion, following a 16-day bench trial, the district judge ruled in favor of Vermont and, in so doing, squarely rejected industry’s constitutional arguments. The court first determined that preemption doctrine—a claim that state law is superseded by conflicting federal law—does not apply at all in this case. Rather, the question is how the CAA must be interpreted in light of EPCA, the federal statute that provides for establishment of minimum corporate average fuel economy (“CAFE”) standards by the National Highway Traffic Safety Administration. The court found that a properly-issued California emissions standard under the CAA simply becomes another “government standard” to be taken into account under the requirements of EPCA. In other words, these two federal statutes can appropriately be read in tandem to give effect to Congress’s intent under each.
The court went on to explain that even if the preemption doctrine were applicable, EPCA does not preempt state greenhouse gas regulations adopted under the CAA’s California waiver scheme. First, there is no “express preemption,” as the language of EPCA’s preemption provision is intended to preempt fuel economy standards, not greenhouse gas emission standards. Second, there is no “field preemption,” which would require evidence that Congress intended regulation of automotive greenhouse gas emissions to remain solely the province of the federal government; after all, the CAA invites state involvement under the California waiver scheme. Third, on the issue involving “the bulk of the evidence at trial,” the court declined to find “conflict preemption”—that is, that the effects of Vermont’s regulation thwart the ability of the federal government to set fuel economy standards under EPCA. (The question of preemption under the CAA is much more straightforward: if EPA were eventually to grant California’s pending request for a waiver, the California regulation, along with any identical regulations in Vermont and other states, would not preempted; but if EPA were to deny the waiver request—as ultimately happened—all of these regulations would be expressly preempted by the CAA.)
Next, the court rejected the claim of foreign policy preemption, the argument that Vermont’s regulation intrudes on U.S. foreign policy or conflicts with an express foreign policy. To the contrary, the court cited multiple recent statements made by the federal government in international fora that actually applaud the contribution of non-federal efforts to combat greenhouse gas emissions in the United States—specifically referencing state efforts under the CAA California waiver scheme.
Green Mountain Chrysler is important for its discussion of the Supreme Court’s recent decision in Massachusetts v. Environmental Protection Agency. As a consequence of that Court’s determination that EPA may regulate greenhouse gases under the CAA, some commentators argued that courts are increasingly likely to find that state efforts to combat global warming are preempted. But Green Mountain Chrysler rejects this notion, at least in the context of emissions regulations adopted through the CAA’s California waiver scheme. Additionally, on the persistent question of whether state efforts to regulate domestic greenhouse gas emissions intrude on federal primacy in the foreign policy sphere, the Vermont court referenced with approval the Supreme Court’s observation in Massachusetts that the President’s broad authority over foreign policy does not extend to a refusal to execute domestic laws.
Status of California’s Waiver Request: On December 19, 2007, EPA announced its decision denying California’s waiver request; EPA’s written decision document was issued on February 29, 2008. California filed a petition for review in the Ninth Circuit Court of Appeals challenging the denial. Fifteen additional states have joined California in this suit. A coalition of environmental organizations filed a parallel suit in the Ninth Circuit. In the absence of a waiver from EPA, California’s regulations are expressly preempted by the Clean Air Act, and neither California nor any other state may implement them.
Status of California’s Waiver Request: In December 2007, EPA announced its decision denying California’s waiver request. In response, California filed a petition for review in the Ninth Circuit Court of Appeals challenging the denial. Fifteen additional states have joined California in this suit. A coalition of environmental organizations filed a parallel suit in the Ninth Circuit. In the absence of this waiver, California’s regulations are expressly preempted by the Clean Air Act, and neither California nor any other state may implement them.
Key Opinion: Green Mountain Chrysler Plymouth Dodge Jeep v. Crombie, F.Supp.2d 295 (D. Vt. 2007).
See Also: Central Valley Chrysler-Jeep, Inc. v. Goldstene, 529 F. Supp. 2d 1151 (E.D. Cal. 2007) (ruling, as did the Vermont court, that California’s proposed regulations are preempted neither by EPCA nor by the federal government’s foreign policy prerogatives) and __ F. Supp. 2d __, 2008 WL 2600786 (E.D. Cal. June 24, 2008) (rejecting new industry argument on preemptive effect of CAA); and Lincoln Dodge, Inc. v. Sullivan, 1:06-cv-00070-T-LDA (filed Feb. 13, 2006) (similar case by auto industry challenging Rhode Island emissions regulation).
Clean Air Act waiver-related litigation: California v. Environmental Protection Agency, No. 08-70001 (9th Cir. filed Jan. 2, 2008) (suit by California challenging EPA denial of waiver request); and No. 08-70030 (9th Cir. filed Jan. 02, 2008) (parallel suit by environmental organizations). See also California v. Environmental Protection Agency, No. 1: 07-cv-02024-RCL (D.D.C. filed Nov. 5, 2007) and No. 07-1457 (D.C. Cir. filed Nov. 8, 2007) (pre-decision litigation by California charging EPA with unreasonable delay in deciding California’s waiver request).
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