United States: California And Other States File Lawsuit Challenging Federal Regulations That Preempt State Automobile Emissions Standards

Last Updated: November 5 2019
Article by Thomas M. Donnelly and Nicholas M. Faas

On September 20, 2019, California, joined by 21 states, the District of Columbia, the people of Michigan, and the cities of New York and Los Angeles ("Plaintiffs"), filed a complaint for declaratory and injunctive relief from the National Highway Traffic Safety Administration ("NHTSA") and Environmental Protection Agency's ("EPA") final action entitled the "One National Program Rule" ("Rule"). California v. Chao, No. 1:19-cv-02826 (D.D.C.). According to NHTSA and EPA, "[t]his action makes clear that federal law preempts state and local tailpipe greenhouse gas (GHG) emissions standards as well as zero emission vehicle (ZEV) mandates." Plaintiffs' suit comes only one day after the Rule was signed. The lawsuit raises several issues, including whether NHTSA has authority to preempt state vehicle emissions standards, whether GHG and ZEV standards are sufficiently correlated with fuel economy, whether NHTSA violated agency rulemaking procedures before implementing the Rule, and how the Rule will impact California's and other states' ability to comply with clean air laws.

NHTSA and EPA assert that the federal Energy Policy and Conservation Act of 1975 ("EPCA") gives the United States Department of Transportation the right to set national fuel economy standards that preempt similar state laws, including those that regulate GHG emissions from new passenger cars and light trucks. The Rule specifically identifies the state of California's GHG emission and ZEV standards, which have been adopted by 12 other states, as preempted laws because they conflict with NHTSA's fuel economy standards. Further escalating the matter, the Rule finalizes EPA's decision to rescind California's waiver from the federal Clean Air Act ("CAA") that allows California to set its own, more stringent GHG standards and a ZEV program.

Plaintiffs assert that Congress has never authorized NHTSA to issue a regulation, in EPCA or any other statute, declaring that state laws are preempted by EPCA. Plaintiffs also argue that the Rule is "wrong as a matter of law." According to plaintiffs, "NHTSA's position that the California standards—which regulate vehicle emissions, not fuel economy—are preempted by EPCA contravenes EPCA itself [and] the Clean Air Act." The complaint cites two federal court decisions, Green Mountain Chrysler Plymouth Dodge Jeep v. Crombie, 508 F. Supp. 2d 295 (D. Vt. 2007); Cent. Valley Chrysler-Jeep Inc. v. Goldstene, 529 F. Supp. 2d 1151 (E.D. Cal. 2007), "that held that California's decisions are not preempted by EPCA," as well as a Supreme Court decision, Massachusetts v. EPA, 549 U.S. 497 (2007), that "rejected the federal government's argument that greenhouse gas emissions standards under the Clean Air Act interfered with NHTSA's ability to set fuel economy standards under EPCA." Plaintiffs also allege that NHTSA failed to comply with the National Environmental Policy Act's requirement to analyze all potential environmental impacts the Rule might precipitate by preempting California's and other states' air pollution laws currently in effect.

According to plaintiffs, the federal government has historically and consistently looked to California's vehicle emissions laws as a paradigm for national standards, and in their view, the sudden shift in the federal government's willingness to work with the states on the issue is unprecedented. It remains to be seen how the federal government will respond to plaintiffs' arguments, but a long, intense legal battle between the sides appears imminent.

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