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Federal District Court Rejects Challenge by Automakers to California's Effort to Regulate Greenhouse Gases from Automobiles

By: Paul S. Weiland, Benjamin Z. Rubin
12/14/07

In a case that is building on a number of other key decisions by the federal courts this year, including the Supreme Court’s decision in Massachusetts v. EPA, the United States District Court for the Eastern District of California rejected key aspects of a challenge by automakers to regulations promulgated by the California Air Resource Board (CARB) requiring the substantial reduction of CO2 emissions from motor vehicles. (Central Valley Chrysler-Jeep, Inc. v. Goldstone, No. 04-6663 (E.D. Cal. Dec. 11, 2007)). The case reinforces the fact that it is – in all likelihood – only a matter of time before the federal and state governments will be imposing mandatory greenhouse gas emissions reductions on all sectors of the economy.

In 2002, the California Legislature enacted AB 1493, requiring CARB to develop and adopt regulations to reduce greenhouse gas emissions from motor vehicles, principally CO2. In 2004, CARB adopted regulations aimed at reducing the emission of greenhouse gases for all 2009 passenger cars and light trucks. Although not specifically aimed at regulating fuel economy standards, CARB’s regulations would require increased fuel efficiency. Plaintiff automakers challenged the legality of CARB’s regulations on numerous grounds, including on the grounds that the regulations are preempted by both the Energy Policy and Conservation Act (EPCA) and United States foreign policy.[1] While the Court found that CARB’s regulations would necessarily require an increase in motor vehicle fuel efficiency as measured in miles-per-gallon, it also found that CARB’s regulations were neither precluded nor preempted by the EPCA or United States foreign policy.

Relying on Massachusetts v. EPA, the Court concluded that the Clean Air Act (CAA) grants the U.S. Environmental Protection Agency (EPA) the ability to regulate emissions for the protection of public health and welfare notwithstanding the potential effect of those regulations on CAFE standards established under EPCA. The Court then applied the same reasoning to reach the conclusion that CARB could seek EPA approval to regulate greenhouse gas emissions for the protection of public health and welfare.[2]

EPCA provides that "a State or political subdivision of a State may not adopt or enforce a law or regulation related to fuel economy standards or average fuel economy standards…." 49 U.S.C. § 32919. The Court interpreted this provision narrowly, holding that because CARB’s emissions standards did not have a direct correlation with the fleet fuel efficiency standards, they were not related to fuel economy standards and for that reason not expressly preempted. The Court also held that the CARB’s emissions standards were not impliedly preempted, finding that the goals of the NHTSA and CARB do not conflict. Furthermore, the Court held that plaintiffs’ failed to present any evidence that CARB’s emissions standards would conflict or interfere with any recognized U.S. foreign policy.

Finally, the Court held that to the extent the enforcement of CARB’s regulations may be inconsistent with existing CAFE standards, EPCA provides the NHTSA with the authority to reformulate CAFE standards to harmonize them with the CARB regulations if, and when, such standards are granted waiver of preemption by EPA. This decision by the Court places added pressure on EPA to act upon California’s request for a waiver to enforce the CARB regulations at issue. It also reinforces the notion that there are legitimate public health and welfare grounds for reducing greenhouse gas emissions in an effort to address climate change.

To view a complete copy of the decision, click here.

Paul Weiland counsels clients regarding environmental and land use matters and litigates such matters in trial and appellate courts under a variety of statutes, including the Clean Air Act. He can be reached at (949) 833-7800 or pweiland@nossaman.com.

Ben Rubin is an Associate in the Land Use Practice Group and can be reached at (949) 833-7800 or brubin@nossaman.com.


[1] EPCA is administered by the National Highways Traffic Safety Administration (NHTSA) within the Department of Transportation, and, pursuant to EPCA, the NHTSA is required to establish corporate average fuel economy (CAFE) standards for passenger automobiles and light trucks.

[2] The court previously determined that the CARB regulations are preempted by the CAA, which only affords California the ability to regulate motor vehicle emissions upon receipt of a grant of waiver by EPA. California has requested a waiver, but EPA has not acted on California’s request at this time.

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