rejecting a challenge to EPA’s approval of California vehicle standards because the petitioners were “seeking improperly to engraft a type of constitutional Commerce Clause analysis onto EPA’s ... decision[ ] that is neither present in nor authorized by the statute” (internal quotation marks omitted)
How later courts described this case
- rejecting a challenge to EPA’s approval of California vehicle standards because the petitioners were “seeking improperly to engraft a type of constitutional Commerce Clause analysis onto EPA’s ... decision[ ] that is neither present in nor authorized by the statute” (internal quotation marks omitted)
- rejecting a similar attempt “improperly to engraft a type of constitutional Commerce Clause analysis onto”'an EPA waiver decision
Written by the judges who cited it.
The opinion
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 2, 2009 Decided April 2, 2010
No. 09-1090
AMERICAN TRUCKING ASSOCIATIONS, INC., AND THE
TRUCKLOAD CARRIERS ASSOCIATION,
PETITIONERS
v.
ENVIRONMENTAL PROTECTION AGENCY AND LISA JACKSON,
ADMINISTRATOR,
RESPONDENTS
CALIFORNIA AIR RESOURCES BOARD, NATURAL RESOURCES
DEFENSE COUNCIL, EAST YARD COMMUNITIES FOR
ENVIRONMENTAL JUSTICE, COALITION FOR A SAFE
ENVIRONMENT, AND CENTER FOR COMMUNITY ACTION AND
ENVIRONMENTAL JUSTICE,
INTERVENORS
On Petition for Review of a Final Action
of the Environmental Protection Agency
Anthony L. Michaels argued the cause for petitioners.
With him on the briefs were Robert Digges, Chief Counsel,
ATA Litigation Center, and Thomas Richichi.
2
David J. Kaplan, U.S. Department of Justice,
Environmental Defense Section, argued the cause for
respondents. With him on the brief were John C. Cruden,
Acting Assistant Attorney General, and Michael Horowitz,
United States Environmental Protection Agency, Office of
General Counsel.
Edmund G. Brown Jr., Attorney General of the State of
California, Matt Rodriquez, Chief Assistant Attorney General,
Mary E. Hackenbracht, Senior Assistant Attorney General,
Kathleen A. Kenealy, Deputy Attorney General, and Gavin G.
McCabe, Deputy Attorney General, were on the brief for
Intervenor California Air Resources Board.
Colin O’Brien, Aaron Colangelo, David Pettit, Melissa
Lin Perrella, and Bart Lounsbury were on the brief for
Intervenors Natural Resources Defense Council, et al.
Kurt R. Weise and Barbara B. Baird were on the brief for
amicus curiae South Coast Air Quality Management District
in support of respondents.
Before: BROWN and KAVANAUGH, Circuit Judges, and
WILLIAMS, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge
KAVANAUGH.
Opinion dissenting in part filed by Senior Circuit Judge
WILLIAMS.
KAVANAUGH, Circuit Judge: The Clean Air Act assigns
California – not any of the other states and not the federal
Environmental Protection Agency – the primary role in
3
setting limits on emissions from in-use non-road engines. An
example of a “non-road” engine is a truck’s transportation
refrigeration unit, which keeps perishable goods at the proper
temperature. Under the Act, each of the other 49 states may
adopt a rule identical to California’s. Otherwise, however, the
other states are prohibited from adopting any regulation of
emissions from in-use non-road engines. EPA’s only role is
to review California’s proposed rules under a narrowly
defined set of statutory criteria.
In 2004, California enacted a rule that regulates the
emissions from transportation refrigeration units in trucks.
EPA authorized California’s rule after reviewing it under the
relevant statutory criteria. The American Trucking
Associations (plural, not a typo) has challenged EPA’s
decision, arguing that EPA misinterpreted and unreasonably
applied the statutory criteria when approving the California
rule. We disagree, and we therefore deny the petition for
review.
I
A
Under the Clean Air Act, both the Federal Government
and the States exercise responsibility for maintaining and
improving air quality.
When it comes to regulating emissions from stationary
pollution sources like waste incinerators and power plants,
EPA sets national ambient air quality standards, and the
individual states develop and implement plans to achieve
those standards. 42 U.S.C. §§ 7409-7410.
4
As to regulating emissions from mobile pollution sources
like automobile engines, EPA and the States also share
responsibility depending on the kind of engine at issue. From
a regulatory perspective, and oversimplifying a bit for present
purposes, mobile engines fall into one of four categories:
(i) new on-road, (ii) new non-road, (iii) in-use on-road, and
(iv) in-use non-road.
This case concerns the fourth category – in-use non-road
engines. Congress has given California the primary role in
regulating emissions from those engines. Id. § 7543(e)(2)(A).
Each of the other 49 states has the choice either (i) to follow
California’s lead and adopt a rule identical to California’s or
(ii) to adopt no regulation at all with respect to emissions
from in-use non-road engines. Id. § 7543(e)(2); see Engine
Mfrs. Ass’n v. EPA, 88 F.3d 1075,1087-94 (D.C. Cir. 1996).
Under this statutory scheme, EPA applies three criteria in
reviewing California’s proposed in-use non-road engine rules.
EPA must approve a proposed California regulation unless:
(1) EPA finds that California unreasonably determined that its
rule is at least as protective of public health and welfare as the
relevant federal standards; (2) EPA concludes that California
does not need the proposed standard “to meet compelling and
extraordinary conditions” in California; or (3) EPA finds that
California’s standards “are not consistent with” § 7543. 42
U.S.C. § 7543(e)(2)(A)(i)-(iii). That third criterion – the
consistency criterion – requires EPA to assess whether the
California rule prevents other states from deciding to “adopt
and enforce” the California rule. Air Pollution Control;
Preemption of State Regulation for Nonroad Engine and
Vehicle Standards, 59 Fed. Reg. 36,969, 36,983 (July 20,
1994). The third criterion also dictates that EPA consider
“the cost of compliance” with the regulation. Id.
5
B
In 2004, acting under that statutory scheme, the
California Air Resources Board devised a plan to reduce
diesel particulate matter emissions and associated cancer risks
in California by 75% by 2010 and 85% by 2020. The Board
promulgated emissions standards for certain in-use non-road
engines – in particular, for transportation refrigeration units
(or TRUs) powered by diesel engines. TRUs are used to
control the temperature of trailers carrying perishable goods.
For any TRU operating in California that was manufactured
before December 31, 2001, California’s rule required
compliance by December 31, 2008. Thereafter, the rule’s
requirements are phased in by model year.
The California rule requires all TRUs carried on vehicles
operating in California – not just those carried on vehicles
based in California – to comply with California emissions
standards. CAL. CODE REGS. tit. 13, § 2477(b). The rule
means, in other words, that TRUs carried on vehicles based
primarily in another state must comply with the California
rule if and when those vehicles operate in California.
The rule affords TRU owners several compliance
options: (1) replace the old TRU with a compliant engine; (2)
show that the in-use TRU meets the necessary standards; (3)
retrofit the TRU with a device that will reduce diesel
particulate matter emissions to a compliant level; or (4)
choose an alternative technological option for transporting
perishable goods. Id. § 2477(e)(1)(A).
In 2005, as required by the federal statute, California
requested EPA’s authorization of the TRU rule. EPA
approved the rule and explained its reasoning in a lengthy
6
decision. In applying the first statutory criterion, EPA
concluded that California reasonably determined that the TRU
rule would be at least as protective of public health and
welfare as federal regulations. As to the second criterion,
EPA found that California had reasonably shown it needed
the rule to address “compelling and extraordinary conditions”
in the state – namely California’s well-known air pollution
problems. As to the third criterion, EPA addressed whether
the TRU rule conflicted with the statute’s “adopt and enforce”
provision that gives other states the choice of either following
California’s lead or declining to regulate emissions from in-
use non-road engines at all. EPA concluded that the TRU rule
satisfied that criterion because it applied only to TRUs
operating in California. Also under the third criterion, EPA
found that the cost of complying with the TRU rule was not
unreasonable.
The American Trucking Associations is a national trade
association representing the U.S. trucking industry. It
challenges EPA’s authorization of the California TRU rule.
Our narrow task is to determine whether EPA’s decision was
arbitrary and capricious. 5 U.S.C. § 706(2)(A). That standard
is deferential. See FCC v. Fox Television Stations, 129 S. Ct.
1800, 1810 (2009); Motor Vehicle Mfrs. Ass’n v. State Farm
Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
II
Under the relevant provisions of the Clean Air Act, EPA
was required to approve California’s proposed TRU rule
unless EPA concluded that (i) California unreasonably
determined that its rule is at least as protective of public
health and welfare as federal standards, (ii) California does
not need its rule to meet compelling and extraordinary
7
conditions in the state, or (iii) California’s rule precludes
other states from choosing not to regulate TRUs or imposes
excessive costs. 42 U.S.C. § 7543(e)(2)(A)(i)-(iii); see Air
Pollution Control; Preemption of State Regulation for
Nonroad Engine and Vehicle Standards, 59 Fed. Reg. 36,969,
36,983 (July 20, 1994). ATA does not challenge EPA’s
decision under the first criterion. ATA contends that EPA
erred in applying the second and third criteria.
A
ATA argues that EPA erred in applying the second
criterion. In particular, ATA argues that EPA erroneously
found that California “need[s]” the specific TRU rule at issue
“to meet compelling and extraordinary conditions” in
California. 42 U.S.C. § 7543(e)(2)(A)(ii). In advancing this
argument, ATA challenges EPA’s interpretation of the statute
and contends that EPA applied the statutory standard in an
arbitrary and capricious manner.
With respect to the statutory language, EPA concluded
that “compelling and extraordinary conditions” refers to the
factors that tend to cause pollution – the “geographical and
climatic conditions that, when combined with large numbers
and high concentrations of automobiles, create serious air
pollution problems.” J.A. 551. The expansive statutory
language gives California (and in turn EPA) a good deal of
flexibility in assessing California’s regulatory needs. We
therefore find no basis to disturb EPA’s reasonable
interpretation of the second criterion. See Chevron, U.S.A.,
Inc. v. Natural Res. Def. Council, 467 U.S. 837, 842-43
(1984).
8
ATA relatedly argues that EPA unreasonably determined
that California “needs” the TRU rule. But EPA explained that
California continues to suffer from “some of the worst air
quality in the nation.” J.A. 552. For purposes of our
deferential arbitrary and capricious review, EPA’s analysis of
this second criterion was reasonable and reasonably
explained.
B
ATA also contends that EPA erred in applying the third
statutory criterion, which requires that California’s proposed
rule not be inconsistent with the rest of the governing sections
of the statute. As relevant here, the third criterion requires
EPA to consider the California rule’s impact on the other
states’ ability to follow or to decline to follow California’s
lead. The third criterion also mandates consideration of the
costs associated with the California rule.
1
Section 7543(e)(2)(B) allows other states to “adopt and
enforce” in-use non-road engine standards that are “identical”
to California standards. 42 U.S.C. § 7543(e)(2)(B); see
Engine Mfrs. Ass’n v. EPA, 88 F.3d 1075, 1081-82 (D.C. Cir.
1996). A state may decline to follow California’s lead; if so,
however, the state may not regulate emissions from in-use
non-road engines at all.
ATA argues that California’s rule is a de facto national
rule because many trucks pass through California and will be
subject to the rule. As a result, ATA contends that other
states are effectively precluded from declining to follow
9
California’s lead, in contravention of those states’ rights
under the Act.
ATA’s argument on this point is weak. The California
rule does not require any other state to adopt California’s
approach, and it does “not apply anywhere but in California,
and only to vehicles that have entered California . . . .” J.A.
601. If ATA’s members operate trucks in California, they
must comply while operating in California. If they do not
operate in California, they need not comply. We find nothing
about this approach to be inconsistent with the federal
statutory scheme. As EPA correctly concluded, the statute
allows California to regulate emissions from in-use non-road
engines operating in California. ATA’s argument, by
contrast, would severely hinder California’s efforts to address
air pollution problems caused by in-use non-road engines
operating in California. The statute does not support ATA’s
position. We agree with EPA that ATA is seeking
“improperly to engraft a type of constitutional Commerce
Clause analysis onto EPA’s Section 7543(e) waiver decisions
that is neither present in nor authorized by the statute.” EPA
Br. at 45. ATA’s argument is best directed to Congress
because the problem it identifies is inherent in the
congressional decision to give California the primary role in
regulating certain mobile pollution sources.1
ATA also contends that EPA failed to properly explain its
reasoning on this interpretive point. But in its decision, EPA
1
If ATA is concerned that California’s rule unconstitutionally
burdens interstate commerce, ATA also could attempt to bring a
constitutional challenge directly to the California rule. We express
no view on that possibility.
10
discussed the relevant statutory provision and considered the
rule’s implications for states other than California:
The TRU regulations in question here do not apply
anywhere but in California, and only to vehicles that
have entered California, which is obviously a choice of
the operator. CARB has stated that the [rule] only
applies to TRU operations that occur in California and
does not apply to any TRU that operates totally outside
the state. CARB further concedes that it has no authority
to enforce the [rule] outside of California and cannot
directly compel out-of-state TRU owners and operators
to comply with the [rule]. Nor does the [rule] indirectly
compel other states to enforce its provisions. While other
states may elect to adopt the [rule] as their own pursuant
to section [7543(e)(2)(B)], that act is an independent
decision of the other states. EPA notes that under the
TRU [rule], California is only regulating vehicles which
enter California, which does not include all TRUs in the
U.S. To the extent that California has authority to
regulate TRU engines under its own laws, nothing in
section [7543] prevents such regulation or limits such
regulation to engines that operate solely or a majority of
their time in California.
J.A. 601-02 (emphasis added) (internal quotation and citation
omitted).
EPA’s review of California’s regulations under the third
statutory criterion is quite deferential, limited to judging
whether a regulation is “not consistent” with the terms of §
7543. See 42 U.S.C. § 7543(e)(2)(A)(iii). The quoted
passage from EPA’s decision responded to ATA’s argument
that the California rule creates a de facto national standard; it
11
did so by referencing the text of § 7543. EPA reasoned that
the California rule does not trample on the rights of other
states to “adopt and enforce” identical rules pursuant to §
7543(e)(2)(B). EPA further explained that the statute allows
California to regulate TRUs operating in California. No
further explanation was necessary.
2
ATA also asserts that EPA, in applying the third
criterion, failed to give “appropriate consideration to the cost
of compliance” with California’s TRU rule. 42 U.S.C. §
7521(a)(2). Under that provision, EPA must assess the
“economic costs” of California’s proposed emissions
standards, including the costs resulting from “the timing of a
particular emission control regulation.” Motor & Equip.
Mfrs. Ass’n v. EPA, 627 F.2d 1095, 1118 (D.C. Cir. 1979)
(emphasis omitted). In approving the California TRU rule,
EPA adequately considered those costs. EPA explained that
businesses can comply with the TRU rule for about $2,000 to
$5,000 per unit. J.A. 584. EPA also determined that the
phased implementation of the rule would help minimize its
cost. Although the costs of the TRU rule are not insignificant,
EPA’s duty under this portion of the statute is simply to
consider those costs. It did so here. EPA’s conclusion –
namely that California’s rule was consistent with § 7521(a)(2)
– was reasonable and reasonably explained.
III
In the realm of air quality regulation related to in-use
non-road engines, “Congress consciously chose to permit
California to blaze its own trail with a minimum of federal
oversight.” Ford Motor Co. v. EPA, 606 F.2d 1293, 1297
12
(D.C. Cir. 1979). We have no legal basis in this case to
disrupt that congressional scheme, overturn EPA’s decision,
or otherwise disturb the California rule.
***
We deny ATA’s petition for review.
So ordered.
WILLIAMS, Senior Circuit Judge, dissenting in part:
California can adopt a regulation of the sort at issue here only
if the federal Environmental Protection Agency authorizes it.
See 42 U.S.C. § 7543(e)(2)(A). EPA, in turn, can authorize
such a regulation only if it meets § 7543(e)(2)(A)(iii)’s
requirement that the rule be “consistent with” § 7543 as a
whole, including, of course, § 7543(e)(2)(B). Subsection (B)
provides that other states may—or may not—“adopt and
enforce” the California regulation as their own. Petitioner
American Trucking Associations argued to the agency that
California’s rule on “transportation refrigeration units”
(“TRUs”) isn’t “consistent with” subsection (B)’s “adopt and
enforce” option because it amounts to a de facto national
standard. While nominally directed only at vehicles or
engines (of the relevant type) that enter California, ATA
claimed, the regulation would have the practical effect of
requiring the vast majority of such machines to comply with
California’s law, and so would effectively vitiate other states’
prerogative to choose whether to embrace it themselves.
A logical EPA response to ATA’s claim would involve a
number of steps. First, it would address the threshold
question whether subsection (A)(iii), coupled with subsection
(B), actually proscribes EPA approval of California rules that
amount to de facto national standards. Whatever the agency’s
answer, it would normally be expected to explain its statutory
interpretation. See SEC v. Chenery Corp., 332 U.S. 194, 196-
97 (1947) (“It will not do for a court to be compelled to guess
at the theory underlying the agency’s action.”). If it exercised
its interpretative authority to find no such proscription, that of
course would be the end of the analysis (subject to judicial
review). But if it found such a proscription, the second step
would be to identify some principle by which to distinguish
impermissible de facto national standards from permissible
California rules with marginal spillover effects on other states.
Finally, having identified such a principle, EPA would then
2
need to apply that principle to ATA’s assertions, resolving
factual disputes to the extent necessary.
In fact, EPA conducted not a single step of the necessary
analysis. It did not even address the threshold question, let
alone explain its answer. While the agency acknowledges on
appeal that subsection (A)(iii)’s “consistent with this section”
criterion requires consistency with subsection (B)’s
requirement of preserving other states’ options (whatever the
implications of the requirement may be), see Appellants’ Br.
at 34-35, its decision document includes nothing resembling a
similar recognition.
The passage the majority reproduces addresses arguments
completely different from ATA’s. It explains that the TRU
rules do not “apply” outside California and that the California
authorities do not claim authority to enforce them outside
California or to force other state authorities to do so. See Maj.
Op. at 10 (quoting EPA’s discussion). Thus it refutes claims
that, as far as I know, have never been made by anyone in the
years during which this matter was pending before various
agencies.
The closest the EPA comes to considering ATA’s
argument is in the concluding passage, where it merely says
that nothing in the statute confines California to regulation of
“engines that operate solely or even a majority of their time in
California.” Id. Really? By this language, it would be
perfectly all right for the California rule to say that no vehicle
may enter California if any other vehicles, anywhere in the
United States and owned by the same firm, were non-
compliant with the California standard.
In short, EPA’s discussion here is a paradigmatic instance
of an agency’s failure to “examine the relevant data and
articulate a satisfactory explanation for its action including a
3
rational connection between the facts found and the choice
made.” See Motor Vehicle Manufacturers Ass’n v. State
Farm Mutual Automobile Ins. Co., 463 U.S. 29, 43 (1983)
(internal quotation marks omitted). Standard principles
require us to remand the case to the agency for the exercise of
reasoned decisionmaking. Allentown Mack Sales & Service,
Inc. v. NLRB, 522 U.S. 359, 374 (1998) (“The Administrative
Procedure Act, which governs the proceedings of
administrative agencies and related judicial review,
establishes a scheme of ‘reasoned decisionmaking.’ Not only
must an agency’s decreed result be within the scope of its
lawful authority, but the process by which it reaches that
result must be logical and rational. Courts enforce this
principle with regularity[.]” (quoting State Farm, 463 U.S. at
52)).