US Chamber of Commerce, National Automobile Dealers Association Seek Review of EPA Decision Allowing States to Regulate Emissions
The US Chamber of Commerce and National Automobile Dealers Association (NADA) have filed a petition seeking review of the EPA’s decision to allow states to regulate automobile emissions. In a Nonbinding Statement of Issues filed Oct. 13, 2009, the two groups outlined the questions to be addressed by the United States Court of Appeals for the District of Columbia Circuit in their lawsuit challenging the EPA’s decision to grant California’s request for a waiver of federal Clean Air Act preemption. The waiver allows California to regulate vehicle emissions and other states to adopt those regulations. A decision adverse to the EPA would limit the ability of individual states to regulate greenhouse gas emissions but does not implicate EPA’s efforts to set national emissions standards. However, some industry watchers predict that this is just the beginning of a “hurricane of lawsuits” challenging climate-related regulations. New York and 16 other states have recently filed a motion to intervene on the side of the EPA.
Chamber of Commerce and NADA Challenge
In its challenge to the EPA decision to grant the waiver to California, the Chamber and the NADA raised six issues for the Court to decide:
- Whether the EPA erred in reconsidering and reversing the denial of California’s request to waive preemption for its greenhouse gas emission standards under Section 209(b);
- Whether the EPA erred in concluding that the California determination that its own gas emissions standards satisfy the Clean Air Act’s “protectiveness” standard was not arbitrary and capricious;
- Whether the EPA erred in not denying California’s waiver request because California did not meet the requirement of showing that its standards were needed to meet compelling and extraordinary conditions;
- Whether the EPA erred in not denying California’s waiver request because it was inconsistent with Section 202(a) of the Clean Air Act [which addresses “Emission standards for new motor vehicles or new motor vehicle engines”];
- Whether the EPA complied with procedural requirements of the Clean Air Act and Administrative Procedure Act in reversing its earlier decision; and
- Whether California is precluded from obtaining a preemption waiver for its greenhouse gas emission standards under the Energy Policy and Conservation Act of 1975.
States, Environmental Groups Intervene in Support of EPA
Seventeen states, led by New York, have moved to intervene in the lawsuit on the side of EPA. The other states are Arizona, Connecticut, Delaware, Illinois, Iowa, Maine, Maryland, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, Washington, Florida, and Pennsylvania. The South Coast Air Quality Management District (California) also filed a separate motion to intervene in support of EPA and Administrator Jackson, as did the environmental organizations Environmental Defense Fund, Natural Resources Defense Council, the Sierra Club, and Environment California.
There has been no substantive briefing, but the EPA has filed a motion seeking an extension from the usual 30 days to respond to 90 days due to the complexity of the issues. The EPA previously stated that the decision to grant the waiver followed the law and was based on a comprehensive analysis of the science and that it is confident the courts will uphold the decision.
National Regulations
Earlier this year, the Obama administration reached consensus with the big three American automobile manufacturers on national regulation of greenhouse gas emissions from vehicles. On May 19, 2009, at a Rose Garden ceremony filled with representatives of major automobile manufacturers worldwide, President Obama announced that the EPA and National Highway Traffic Safety Administration will propose greenhouse gas emissions limits for cars and light trucks for model years 2012-16. The only way to reduce certain emissions is to increase fuel efficiency. Accordingly, the Administration’s proposal will require an average fuel economy standard of 35.5 mpg by 2016.
Then, on June 30, 2009, the EPA announced that it was reversing its decision under the Bush administration to deny California’s request for a waiver under the Clean Air Act. By reversing its decision and granting the waiver, the EPA is permitting California to enforce its own emission regulations. Fifteen states have already adopted the California plan. After 2011, compliance with the anticipated national regulations would satisfy the California standards, so assuming the national regulations are finalized in time, the waiver effectively allows states to impose regulations applicable to the model years 2009-2011. However, California could also impose more stringent restrictions after 2016.
The Chamber opposes such regulation because of the heavy burden it predicts will be placed on US businesses, and has previously attempted to slow or derail EPA regulation of greenhouse gas emissions under the Clean Air Act. The Chamber sought a hearing regarding the EPA’s decision to regulate GHGs under the CAA, and stirred controversy by characterizing the proposed hearing as a “Scopes monkey trial” on climate science. Some members have canceled their membership in the Chamber because of disagreement with the Chamber’s position on regulation of greenhouse gases. Meanwhile, advocates of increased regulation of greenhouse gas emissions have also excoriated the Chamber’s position on EPA regulations. Whatever their position, stakeholders on all sides of the issue will be closely watching the outcome of this lawsuit.
Preliminary injunction stops implementation of Albuquerque Energy Conservation Code provisions
On October 3, 2008, United States District Court for the District of New Mexico entered a preliminarily injunction in The Air Conditioning, Heating and Refrigeration Institute v. City of Albuquerque, barring enforcement of key provisions of Volume I and Volume II of the Albuquerque Energy Conservation Code, and the High Performance Building Ordinance. The code would have required, “either implicitly or explicitly, the installation of appliances with energy efficiencies greater than federal standards.”
The complaint was filed on behalf of manufacturers, distributors, sellers and installers of HVAC products. Chief District Court Judge Martha Vazquez found that plaintiffs faced irreparable harm from the implementation and enforcement of the code and that plaintiffs raised sufficiently serious questions that the code provisions were preempted by Section 6297 of the Energy Policy and Conservation Act and the Energy Policy Act of 1992.
The court noted that “Section 6297 contains a ‘general rule of preemption,’ which states that, subject to certain specified exceptions, when a federal energy conservation standard is established for a covered product, ‘no State regulation concerning the energy efficiency, energy use, or water use of such covered product shall be effective with respect to such product.’ 42 U.S.C. § 6297(c).”
The court focused on the example of a homeowner who chose to install a federally-compliant furnace that did not meet the more stringent efficiency requirements of the Albuquerque code. The Court explained:
If a homeowner chooses to replace an existing furnace with a federally-compliant furnace, the homeowner must make other revisions to the home to make up the energy differential between a federally-compliant furnace and a furnace that meets the requirements of the Code. The fact that the Code imposes additional expenses if federally-compliant products are used strongly suggests that the Code ‘concerns’ the energy efficiency of covered products. Consequently, the Code, and each of the alternatives within the Code, are preempted by EPCA and EPACT unless they qualify for a preemption exception.
The Code was developed based on options identified by a “Green Ribbon Task Force” of “builders, developers, architects, unions and various companies, organizations and individuals.” Apparently, the one thing the Task Force was missing was a lawyer with knowledge of EPCA. The court noted that when the Code was adopted “the Green Building Manager, by his own admission, was unaware of federal statutes governing the energy efficiency of HVAC products and water heaters and the City attorneys who reviewed the Code did not raise the preemption issue."
The Court Order is a preliminary injunction. The Court will determine the extent to which the Code and Ordinance are preempted “after development of a full record.”
