Petition for Writ of Certiorari — Volkswagen Group of America, Inc., et al., Petitioners v. The Environmental Protection Commission of Hillsborough County, Florida, et al.
Supreme Court briefJan 21, 2021
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No.
In the Supreme Court of the United States
VOLKSWAGEN GROUP OF AMERICA, INC., ET AL.,
PETITIONERS
v.
THE ENVIRONMENTAL PROTECTION COMMISSION OF
HILLSBOROUGH COUNTY, FLORIDA, AND SALT LAKE
COUNTY, UTAH, RESPONDENTS.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
MICHAEL H. STEINBERG
SULLIVAN & CROMWELL LLP
1888 Century Park East
Los Angeles, CA 90067
JUDSON O. LITTLETON
SULLIVAN & CROMWELL LLP
1700 New York Ave., N.W.
Washington, DC 20006
ROBERT J. GIUFFRA, JR.
Counsel of Record
DAVID M.J. REIN
MATTHEW A. SCHWARTZ
SULLIVAN & CROMWELL LLP
125 Broad Street
New York, NY 10004
(212) 558-4000
giuffrar@sullcrom.com
Counsel for Petitioners Volkswagen Group of America, Inc. and
Audi of America, LLC
[Additional parties and counsel listed on signature page]
QUESTION PRESENTED
Title II of the Clean Air Act (“CAA”) grants the U.S.
Environmental Protection Agency (“EPA”) broad and exclusive authority to enforce auto manufacturers’ compliance with CAA standards over the entire useful life of
their vehicles. To avoid conflicting regulation, Congress
directed that “[n]o State or any political subdivision
thereof shall adopt or attempt to enforce any standard relating to the control of emissions from new motor vehicles . . . .” 42 U.S.C. § 7543(a).
Exercising its authority, EPA reached a multi-billiondollar resolution with petitioners relating to, among other
things, post-sale software updates made to their vehicles
on a nationwide basis. Certain state and local governments nonetheless brought unprecedented lawsuits seeking billions more in penalties based on the same updates.
The Ninth Circuit below—in direct conflict with final decisions of the Alabama Supreme Court and intermediate
appellate courts in Tennessee and Minnesota—held that
all 50 states and thousands of local governments may
freely regulate manufacturers’ post-sale, nationwide updates to vehicle emission systems.
The question presented is whether the CAA preempts
state and local governments from regulating manufacturers’ post-sale, nationwide updates to vehicle emission systems.
(I)
PARTIES TO THE PROCEEDING
AND CORPORATE DISCLOSURE STATEMENT
Petitioners are Volkswagen Group of America, Inc.
(“VWGoA”), Audi of America, LLC, Porsche Cars North
America, Inc., and Robert Bosch LLC (“Bosch”).
VWGoA is a wholly owned subsidiary of Volkswagen
Aktiengesellschaft (“Volkswagen AG”). Audi of America,
LLC is a wholly owned subsidiary of VWGoA. Dr. Ing.
h.c. F. Porsche AG (“Porsche AG”) owns the stock of two
companies that own stock of a company that owns stock in
differing shares of Porsche Cars North America, Inc. and
has been described as an indirect parent corporation of
Porsche Cars North America, Inc. Volkswagen AG is a
publicly held German corporation that owns 10% or more
of the stock of VWGoA, and owns indirectly 10% or more
of the stock of Porsche AG.
Petitioner Bosch is an indirect wholly owned subsidiary of Robert Bosch GmbH, which is a privately owned
German company with 93.992% of its share capital being
held by Robert Bosch Stiftung GmbH, a charitable foundation.
Respondents are the Environmental Protection Commission of Hillsborough County, Florida and Salt Lake
County, Utah.
(II)
RELATED PROCEEDINGS
United States District Court (N.D. Cal.):
The Environmental Protection Commission of
Hillsborough County, Florida v. Volkswagen AG
et al., No. 16-cv-2210 (MDL No. 2672)
(Apr. 16, 2018)
Salt Lake County v. Volkswagen Group of America et
al.,
No.
16-cv-5649
(MDL
No.
2672)
(Apr. 16, 2018)
United States Court of Appeals (9th Cir.):
In re Volkswagen “Clean Diesel” Marketing, Sales
Practices, and Products Liability Litigation,
No. 18-15937 (June 1, 2020)
(III)
TABLE OF CONTENTS
Opinions below ...................................................................... 1
Jurisdiction ........................................................................... 1
Provisions involved .............................................................. 2
Statement .............................................................................. 3
A. Background ............................................................ 8
B. Facts and procedural history ............................. 11
Reasons for granting the petition .................................... 14
I.
The decision below directly conflicts with final
decisions of several state courts .............................. 14
II.
The question presented is
exceptionally important ............................................ 16
A. National uniformity in the regulation of
emission systems has been of critical
importance for decades....................................... 16
B. This issue has already arisen for another
auto manufacturer and is likely to arise
repeatedly going forward ................................... 20
III. The decision below is incorrect ................................ 22
A. The Ninth Circuit misconstrued the CAA’s
framework and history ....................................... 22
B. The Ninth Circuit’s interpretation of the
CAA’s express preemption clause is
incorrect and conflicts with settled law ............ 24
C. The Ninth Circuit’s interpretation of the
CAA’s savings clause is wrong and conflicts
with the D.C. Circuit’s and EPA’s
interpretations of that provision........................ 28
(IV)
V
D. The Ninth Circuit’s implied preemption
analysis is incorrect................................................ 31
Conclusion ........................................................................... 34
Appendix A: Court of Appeals Opinion,
June 1, 2020 ................................................................... 1a
Appendix B: District Court Opinion,
April 16, 2018 .............................................................. 47a
Appendix C: Court of Appeals Order Denying
Rehearing,
August 24, 2020 ........................................................... 88a
Appendix D: Relevant Statutory Provisions ................ 90a
Appendix E: Relevant Dictionary Definitions ........... 107a
TABLE OF AUTHORITIES
Page(s)
Cases:
Allway Taxi, Inc. v. City of New York,
340 F. Supp. 1120 (S.D.N.Y. 1972) ................. 25, 27
Altria Group, Inc. v. Good,
555 U.S. 70 (2008) ......................................... 6, 22, 24
Arizona v. United States,
567 U.S. 387 (2012) ................................................. 33
Atlantic Richfield Co. v. Christian,
140 S. Ct. 1335 (2020) ............................................. 34
Buckman Co. v. Plaintiffs’ Legal Comm.,
531 U.S. 341 (2001) ................................................. 34
Carchman v. Nash,
473 U.S. 716 (1985) ................................................. 16
In re Caterpillar, Inc.,
2015 WL 4591236 (D.N.J. July 29, 2015) ............. 23
Deal v. United States,
508 U.S. 129 (1993) ................................................. 30
DIRECTV, Inc. v. Imburgia,
577 U.S. 47 (2015) ................................................... 15
Engine Mfrs. Assn. v. South Coast Air
Quality Mgmt. Dist.,
541 U.S. 246 (2004) ....................................... 6, 23, 27
Engine Mfrs. Assn. v. EPA,
88 F.3d 1075 (D.C. Cir. 1996) ....................... passim
Geier v. Am. Honda Motor Co.,
529 U.S. 861 (2000) ................................................. 31
(VI)
VII
Cases—Continued:
Gustafson v. Alloyd Co.,
513 U.S. 561 (1995) ................................................. 30
Hillman v. Maretta,
569 U.S. 483 (2013) ................................................. 15
Jensen Family Farms, Inc. v. Monterey
Bay Unified Air Pollution Control
Dist.,
644 F.3d 934 (9th Cir. 2011) .................................. 23
Lagos v. United States,
138 S. Ct. 1684 (2018) ............................................. 30
Montana Dept. of Env. Quality v.
Volkswagen Aktiengesellschaft,
Cause No. DDV-2016-1045 (Mont. Dist.
Ct. Feb. 21, 2020).................................................... 16
Morales v. Trans World Airlines, Inc.,
504 U.S. 374 (1992) ........................................... 24, 25
Murphy v. Nat. Collegiate Athletic Assn.,
138 S. Ct. 1461 (2018) ............................................. 22
Nat. Assn. of Home Builders v. San
Joaquin Valley Unified Air Pollution
Control Dist.,
627 F.3d 730 (9th Cir. 2010) .............................. 8, 22
In re Office of Atty. Gen.,
269 A.D.2d 1 (N.Y. App. Div. 2000) ...................... 26
VIII
Cases—Continued:
People v. Volkswagen Aktiengesellschaft,
2018 WL 3384883 (Ill. Cir. Ct.
June 5, 2018) ..................................................... 16, 33
Riley v. California,
573 U.S. 373 (2014) ................................................. 16
Rutledge v. Pharm. Care Mgmt. Assn.,
141 S. Ct. 474 (2020) ..................................... 6, 24, 25
Sims v. Fla., Dept. of Hwy. Safety & Motor
Vehicles
862 F.2d 1449 (11th Cir. 1989) .............................. 26
State ex rel. Slatery v. Volkswagen
Aktiengesellschaft,
2019 WL 1220836 (Tenn. Ct. App.
Mar. 13, 2019) ................................................ passim
Smith v. City of Jackson,
544 U.S. 228 (2005) ................................................. 30
State v. Volkswagen AG,
279 So. 3d 1109 (Ala. 2018) .................... 3, 14, 16, 33
State v. Volkswagen Aktiengesellschaft,
2018 WL 3349094 (Mo. Cir. Ct.
June 26, 2018) ......................................................... 16
State ex rel. Swanson v. Volkswagen
Aktiengesellschaft,
2018 WL 6273103 (Minn. Ct. App.
Dec. 3, 2018) ................................................... passim
United States v. Locke,
529 U.S. 89 (2000) ................................................... 23
IX
Cases—Continued:
In re Volkswagen Clean Diesel Litig.,
Cause No. D-1-GN-16-000370 (Tex.
Dist. Ct. Feb. 21, 2018) .......................................... 16
State ex rel. Yost v. Volkswagen
Aktiengesellschaft,
137 N.E.3d 1267 (Ohio Ct. App. 2019) .................. 16
Statutes:
2 U.S.C. § 2163 .............................................................. 29
7 U.S.C. § 2262 .............................................................. 30
28 U.S.C. § 1254(1) ......................................................... 2
42 U.S.C.
§ 7507 ......................................................................... 7
§ 7521(a) ................................................................ 6, 9
§ 7521(d) ................................................................ 6, 9
§ 7522(a) .................................................................. 10
§ 7523(b) .................................................................. 10
§ 7524(a) .................................................................. 10
§ 7524(c) ................................................................... 10
§ 7541(a) .................................................................... 9
§ 7541(b) .................................................................... 9
§ 7541(c) ............................................................... 9, 18
§ 7541(h) .................................................... 7, 9, 28, 31
§ 7542 ......................................................................... 9
§ 7543(a) ......................................................... passim
§ 7543(b) .................................................................... 7
§ 7543(d) ......................................................... passim
§ 7543(e)................................................................... 20
Pub. L. No. 91-604, 84 Stat. 1676 (1970) .............. 10, 24
X
Rules and Regulatory Materials:
40 C.F.R.
§ 86.1805-04(a) .......................................................... 9
§ 86.1845-04 ............................................................... 9
§ 86.1846-01 ............................................................... 9
59 Fed. Reg. 31,306 (June 17, 1994) ..................... 26, 31
EPA, 2014-2017 Progress Report: Vehicle &
Engine Compliance Activities
(Apr. 2019) ..................................................... 5, 11, 18
EPA, Clean Air Act Mobile Source Civil
Penalty Policy—Vehicle and Engine
Certification Requirements (Jan. 16,
2009) ......................................................................... 10
EPA, Field Fixes Related to Emission
Control-Related Components, MSAPC
Advisory Circular No. 2B (Mar. 17,
1975) ......................................................................... 10
Miscellaneous:
A. Scalia & B. Garner, Reading Law (1st
ed. 2012) ............................................................ 28, 29
Black’s Law Dictionary (4th ed. 1968) (App.
108a) ......................................................................... 29
Bur. of Economic Analysis, Value Added by
Industry as a Percentage of Gross
Domestic Product ................................................... 17
Bur. of Labor Statistics, Automotive
Industry: Employment, Earnings, and
Hours ....................................................................... 17
Census Bur., Household Size by Vehicles
Available .................................................................. 17
XI
Miscellaneous—Continued:
H.R. Rep. No. 89-899 (1965) ........................................ 17
H.R. Rep. No. 90-728 (1967) ...................... 17, 25, 26, 32
Webster’s Third New International
Dictionary (2002) (App. 107a) ............................... 29
In the Supreme Court of the United States
No.
VOLKSWAGEN GROUP OF AMERICA, INC., ET AL.,
PETITIONERS
v.
THE ENVIRONMENTAL PROTECTION COMMISSION OF
HILLSBOROUGH COUNTY, FLORIDA, AND SALT LAKE
COUNTY, UTAH, RESPONDENTS.
ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PETITION FOR A WRIT OF CERTIORARI
OPINIONS BELOW
The opinion of the court of appeals (App., infra, 1a46a) is reported at 959 F.3d 1201. The opinion of the district court (App., infra, 47a-87a) is reported at
310 F. Supp. 3d 1030.
JURISDICTION
The judgment of the court of appeals was entered on
June 1, 2020. A timely petition for rehearing was denied
on August 24, 2020. App., infra, 88a-89a. On March 19,
2020, this Court extended the deadline to file petitions for
writs of certiorari in all cases due on or after that date to
150 days from the date of the lower court judgment, order
(1)
2
denying discretionary review, or order denying a timely
petition for rehearing. Order, 589 U.S. __ (Mar. 19, 2020),
https://tinyurl.com/March19Order. The jurisdiction of
this Court is invoked under 28 U.S.C. § 1254(1).
PROVISIONS INVOLVED
Pertinent statutory provisions are reproduced in the
appendix to this petition. App., infra, 90a-106a. Section
209(a) of the CAA, 42 U.S.C. § 7543(a), provides in relevant part:
No State or any political subdivision thereof shall
adopt or attempt to enforce any standard relating to
the control of emissions from new motor vehicles or
new motor vehicle engines subject to this part.
Section 209(d) of the CAA, 42 U.S.C. § 7543(d), provides:
Nothing in this part shall preclude or deny to any
State or political subdivision thereof the right otherwise to control, regulate, or restrict the use, operation,
or movement of registered or licensed motor vehicles.
Section 202(a)(1) of the CAA, 42 U.S.C. § 7521(a)(1),
provides in relevant part:
The Administrator shall by regulation prescribe (and
from time to time revise) in accordance with the provisions of this section, standards applicable to the emission of any air pollutant from any class or classes of
new motor vehicles or new motor vehicle engines,
which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare. Such standards shall be
applicable to such vehicles and engines for their useful
life (as determined under subsection (d), relating to
useful life of vehicles for purposes of certification),
3
whether such vehicles and engines are designed as
complete systems or incorporate devices to prevent or
control such pollution.
Section 207(h)(2) of the CAA, 42 U.S.C. § 7541(h)(2),
provides:
Nothing in section 7543(a) of this title shall be construed to prohibit a State from testing, or requiring
testing of, a motor vehicle after the date of sale of such
vehicle to the ultimate purchaser (except that no new
motor vehicle manufacturer or dealer may be required
to conduct testing under this paragraph).
STATEMENT
This case concerns a question of critical importance to
the automobile industry that has divided courts across the
country: whether Congress in the CAA, by vesting EPA
with exclusive authority to set and enforce emission
standards for vehicles during their entire useful life, also
intended to allow 50 states and thousands of local governments to regulate manufacturers’ post-sale, nationwide
updates to vehicle emission systems. The decision below
recognized such state and local authority for the first time
in the more than 50 years since Congress directed EPA to
regulate auto emissions. This Court’s review is warranted
for several reasons.
First, the Ninth Circuit’s decision squarely conflicts
with final decisions of the Alabama Supreme Court and
intermediate courts of appeals in Minnesota and Tennessee holding that the CAA preempts state and local government actions challenging manufacturers’ post-sale updates to emission systems. See State v. Volkswagen AG,
279 So. 3d 1109 (Ala. 2018) (“Alabama”); State ex rel. Slatery v. Volkswagen Aktiengesellschaft, 2019 WL 1220836
(Tenn. Ct. App. Mar. 13, 2019) (“Tennessee”); State ex rel.
4
Swanson v. Volkswagen Aktiengesellschaft, 2018 WL
6273103 (Minn. Ct. App. Dec. 3, 2018) (“Minnesota”).
Those courts addressed this legal question on the same
set of allegations brought against the same defendants,
yet reached the exact opposite conclusion from the Ninth
Circuit. This case presents the ideal vehicle to resolve this
conflict. At a minimum, petitioners respectfully submit
that this Court should call for the views of the Solicitor
General, who declined the Ninth Circuit’s request to participate as amicus “at this stage of the litigation.” C.A.
Dkt. 70, at 2.
Second, this issue is of urgent significance to the automobile industry, which contributes 2.1% to the U.S. Gross
Domestic Product and supplies products to 90% of U.S.
households. Since 1967, EPA has exclusively regulated
manufacturers’ post-sale changes, such as software updates, to their cars’ emission control systems. The decision below upends that longstanding history by concluding that all 50 states and thousands of localities can separately regulate such manufacturer updates.
Permitting thousands of governments to regulate
post-sale, nationwide updates will impose conflicting regulation on manufacturers. EPA’s evaluation of emissions
updates involves the highly technical exercise of judgment
over numerous potential tradeoffs, such as weighing one
type of pollutant against another and balancing emissions
reductions against the potential for engine or vehicle damage. Under the Ninth Circuit’s decision, if any state or
locality disagrees with EPA’s determinations, manufacturers could face what that court described as “staggering
liability” from state and local enforcement actions. App.,
infra, 45a. The threat of such state and local regulation
will discourage manufacturers from making beneficial
modifications to emission systems.
5
This is not a theoretical concern: the State of Ohio,
for example, has explicitly claimed that it has the authority to challenge EPA-approved updates. See infra at 19.
And, citing the Ninth Circuit’s decision, one of the respondents (Hillsborough County) has already brought an
analogous lawsuit against Daimler AG, petitioner Robert
Bosch LLC, and their affiliates seeking relief that conflicts with the careful balance that EPA struck in its resolution with Daimler over the same conduct. See infra at
20-21.
The Ninth Circuit mistakenly assumed that manufacturers’ post-sale emission updates are “rare.” App., infra,
45a. In fact, now that emission control systems are computer-operated, manufacturers apply post-sale software
updates to, on average, six million cars every year under
EPA oversight. EPA, 2014-2017 Progress Report: Vehicle & Engine Compliance Activities (Apr. 2019), at 7
(“EPA Recall Report”), https://tinyurl.com/EPARecallReport (manufacturer recalls affected over 24 million
cars between 2014 and 2017).
Third, the Ninth Circuit’s decision misconstrues the
CAA and conflicts with numerous decisions from this
Court and others interpreting its provisions. Congress
enacted Title II of the CAA to avoid exposing auto manufacturers to an “anarchic patchwork” of federal, state, and
local regulation, which would needlessly increase the cost
of vehicles to consumers. Engine Mfrs. Assn. v. EPA,
88 F.3d 1075, 1079 (D.C. Cir. 1996) (quotation omitted).
Congress included a sweeping express preemption provision in § 209(a) of the CAA, which provides that “[n]o
State or any political subdivision thereof shall adopt or attempt to enforce any standard relating to the control of
emissions from new motor vehicles or new motor vehicle
engines subject to this part.” 42 U.S.C. § 7543(a) (emphases added). The Ninth Circuit misinterpreted § 209(a) to
6
draw a bright-line between “new” and “used” cars, such
that preemption ends at the point of initial sale. See infra
at 24. This interpretation gives no effect to the expansive
phrase “relating to”—a phrase that this Court has recognized “indicates Congress’ intent to pre-empt a large area
of state law,” Altria Group, Inc. v. Good, 555 U.S. 70, 85
(2008), and to bar state regulation with any “connection
with or reference to” the relevant subject matter,
Rutledge v. Pharm. Care Mgmt. Assn., 141 S. Ct. 474, 479
(2020) (quotation omitted); see infra at 24-25. The Ninth
Circuit’s interpretation also contradicts the interpretation
of other federal courts and EPA, which have long interpreted § 209(a) to preempt state and local regulation of
post-sale conduct that “relates back” to the original design of a motor vehicle. The post-sale updates here necessarily relate back to the cars’ original (noncompliant)
software because the updates modified that factory-installed software.
Moreover, in interpreting § 209(a), the Ninth Circuit
did not follow this Court’s instruction in Engine Manufacturers Association v. South Coast Air Quality Management District to examine how EPA enforces CAA
standards to identify the “standard-enforcement efforts
that are proscribed by § 209.” 541 U.S. 246, 253 (2004).
The CAA commands EPA to regulate manufacturers’
emissions-related conduct throughout a car’s “useful life,”
42 U.S.C. § 7521(a)(1), (d)(1), through a number of obligations and enforcement provisions that expressly apply to
manufacturers after the sale of such cars, refuting the
Ninth Circuit’s conclusion that EPA’s exclusive role safeguarded under § 209(a) ends once a car is sold.1 The CAA
1
Congress gave California an exception from preemption and
allowed other states to adopt and enforce California’s EPA-approved
7
also expressly bars states from requiring emissions testing by manufacturers, an essential tool for enforcing emission compliance. 42 U.S.C. § 7541(h)(2).
The Ninth Circuit relied heavily on a novel and overbroad interpretation of § 209(d), which preserves state
and local authority to “otherwise” regulate the “use, operation, or movement” of vehicles, 42 U.S.C. § 7543(d). The
Ninth Circuit’s reading of “operation” to include manufacturer software updates cannot be squared with the plain
meaning of § 209(d)—which contemplates regulation of
how cars are driven or used—and conflicts with the D.C.
Circuit’s and EPA’s interpretation of § 209(d).
Finally, the Ninth Circuit erred in finding no implied
preemption. The comprehensive structure of the CAA
demonstrates Congress’s intent that EPA exclusively
regulate auto manufacturers’ emissions compliance before and after vehicles are sold. Multiple interrelated
CAA provisions grant EPA alone the authority to regulate every aspect of manufacturers’ nationwide conduct
throughout the “useful life” of their cars, including by setting federal emission standards, requiring manufacturers
to conduct testing of in-use vehicles, overseeing manufacturers’ post-sale warranty obligations, administering
post-sale recalls, and penalizing manufacturers’ post-sale
CAA violations. See infra, at 8-10. Conversely, Congress
stripped states of even basic enforcement tools like requiring manufacturer emissions testing. Overlapping
regulation by states and localities would conflict with that
clear congressional purpose.
standards. 42 U.S.C. §§ 7543(b), 7507. This exception is not relevant
here because local governments like respondents may not enforce
California’s standards.
8
Likewise, the Ninth Circuit’s decision hinders EPA’s
ability to achieve expedient, nationwide resolutions of future CAA violations, as manufacturers will know that settling with EPA could trigger copycat state and local government actions, as occurred here. Congress instructed
EPA to consider specific factors in assessing penalties,
and EPA has promulgated a comprehensive policy for doing so. The potential for innumerable state and local follow-on actions will make it infeasible for EPA to discharge
that mandate. That respondents—just two counties—
seek billions of dollars per year in penalties for conduct
that EPA comprehensively enforced vividly illustrates
this conflict. See infra at 32-33.
This Court should grant the petition.
A. Background
1. In the CAA, Congress allocated responsibility for
air pollution differently based on the source of emissions.
Title I governs stationary sources, like power plants,
which are subject to “federally encouraged state control.”
Engine Mfrs. Assn., 88 F.3d at 1079. Title II governs mobile sources, like cars, and provides that “the EPA, and
with the EPA’s permission California, are responsible for
regulating emissions from motor vehicles and other mobile sources.” Nat. Assn. of Home Builders v. San
Joaquin Valley Unified Air Pollution Control Dist.,
627 F.3d 730, 733 (9th Cir. 2010). Thus, pursuant to Title
II, EPA has been the exclusive regulator of auto manufacturers’ compliance with emission control laws for more
than 50 years.
2. Congress granted EPA authority to regulate manufacturers’ emissions-related conduct both before sale
and throughout their “useful life”:
Manufacturers must certify to EPA that their cars
will comply with federal standards throughout
9
their “useful life” (10 years or 120,000 miles).
42 U.S.C. § 7521(a)(1), (d)(1); 40 C.F.R. § 86.180504(a).
Manufacturers must provide EPA-specified warranties for emission control systems and bear the
cost of fixing them for years after sale. 42 U.S.C.
§ 7541(a)(1), (a)(3), (b)(2)(c).
EPA has “establish[ed] . . . methods and procedures” to test “whether, when in actual use” cars
“compl[y] with . . . emission standards.” 42 U.S.C.
§ 7541(b). EPA requires manufacturers to conduct
“in-use verification testing,” including of “high
mileage” post-sale cars. 40 C.F.R. §§ 86.1845-04,
86.1846-01.
Manufacturers must “establish and maintain records” of emissions testing on in-use cars during
their useful life and “make reports and provide information [EPA] may reasonably require.”
42 U.S.C. § 7542.
If EPA determines that “a substantial number of
any class or category of vehicles or engines” in use
do not conform to EPA standards at any point during their “useful life,” EPA may order a nationwide
recall. 42 U.S.C. § 7541(c)(1).
3. To protect EPA’s exclusive authority, Congress enacted a sweeping express preemption provision: “No
State or any political subdivision thereof shall adopt or attempt to enforce any standard relating to the control of
emissions from new motor vehicles or new motor vehicle
engines subject to this part.” 42 U.S.C. § 7543(a). Congress also barred states from requiring emissions testing
by auto manufacturers “after the date of sale.” 42 U.S.C.
§ 7541(h)(2).
10
4. Congress specifically authorized EPA to regulate
manufacturers’ tampering with emissions controls after
cars are sold. Pub. L. No. 91-604, 84 Stat. 1676, 1693
§ 7(a)(3) (1970) (making it unlawful “for any manufacturer
or dealer” to tamper with emission controls “after such
sale and delivery to the ultimate purchaser”), codified as
amended at 42 U.S.C. § 7522(a)(3)(A); see also 42 U.S.C.
§ 7523(b). Congress also imposed specific penalties for
tampering violations by manufacturers of “up to $25,000”
per violation. 42 U.S.C. § 7524(a). Congress further directed EPA to balance statutory factors in assessing penalties for CAA violations—including the “gravity of the violation,” “the economic benefit or savings (if any) resulting from the violation,” and “the effect of the penalty on
the violator’s ability to continue in business.” 42 U.S.C.
§ 7524(c)(2).
Starting in 1975, EPA has promulgated guidance outlining how manufacturers may modify emission systems
after sale without violating the CAA’s tampering prohibition. EPA, Field Fixes Related to Emission Control-Related Components, MSAPC Advisory Circular No. 2B, at
1 (Mar. 17, 1975), https://tinyurl.com/FieldFixGuidance.
Unsurprisingly, no state or locality has attempted to provide any such guidance to manufacturers. EPA has also
promulgated a detailed Civil Penalty Policy establishing a
framework to apply the CAA’s statutory penalty factors.
EPA, Clean Air Act Mobile Source Civil Penalty Policy—Vehicle and Engine Certification Requirements
(Jan. 16, 2009), https://tinyurl.com/EPAPenaltyPolicy.
5. As national and global auto manufacturers’ associations explained as amici below, post-sale software and
other updates have become “even more frequent and important” as cars have grown increasingly computerized.
C.A. Dkt. 34, at 8. Manufacturers now conduct dozens of
11
emissions recalls affecting, on average, six million cars annually. EPA Recall Report, at 7. Field fixes, post-sale
updates conducted outside of a recall, are even more frequent.
Manufacturers’ updates to emission systems raise
technical questions requiring scientific expertise and balancing of competing regulatory objectives, whereby the
update “reduc[es] some types of emissions while increasing others.” C.A. Dkt. 79, at 4. Updates may require accepting emissions increases under certain conditions to
prevent vehicle or engine damage, or to ensure proper
start-up. Ibid. Manufacturers work closely with EPA to
address these tradeoffs when remedying nonconformities
in emission systems. See EPA Recall Report, at 62.
EPA’s exclusive regulation of such updates has, so far,
avoided potentially conflicting determinations by different regulators about such updates.
6. Finally, § 209(d) reserves to states and localities the
authority “otherwise to control, regulate, or restrict the
use, operation, or movement of registered or licensed motor vehicles.” 42 U.S.C. § 7543(d) (emphases added). In
this provision, Congress preserved state authority over
local conduct that does not intrude on EPA’s authority,
such as through carpool lanes. See infra at 30-31.
B. Facts and Procedural History
1. In 2015, EPA issued notices of violation alleging
that Volkswagen installed software “defeat devices” in
new diesel cars that allowed them to emit higher levels of
nitrogen oxides (“NOx”) than allowed under EPA regulations. EPA, Notice of Violation (Sept. 18, 2015), https://tinyurl.com/SeptemberNOV; EPA, Notice of Violation
(Nov. 2, 2015), https://tinyurl.com/NovemberNOV.
In its civil action to enforce the notices of violation,
EPA alleged that during an EPA-overseen recall,
12
Volkswagen also installed software updates to refine the
factory-installed defeat device. D. Ct. Dkt. 2009-3, ¶¶ 115116, 136-141. Volkswagen installed these software updates in new vehicles still in production and in post-sale
vehicles during nationwide recalls conducted under EPA
oversight. Id. ¶¶ 115-116. EPA’s testing showed that
these updates reduced NOx emissions, although not by a
sufficient amount to bring the cars into compliance with
the originally certified emissions standard. Id. ¶ 141.
Volkswagen quickly acknowledged its wrongdoing. In
three consent decrees with EPA, Volkswagen agreed to:
(i) establish a $2.925 billion trust for use by all states for
environmental mitigation initiatives, which EPA determined will “fully mitigate” any environmental harm
caused nationwide by the affected vehicles; (ii) pay a
$1.45 billion civil penalty; (iii) pay up to $14 billion to compensate owners and buy back or repair affected vehicles
nationwide; (iv) invest an additional $2 billion in zeroemissions-vehicle technology; and (v) retain an independent compliance auditor. See D. Ct. Dkt. Nos. 2103-1, at
12-18, Apps. A-B, App. C, at 1 & App. D; 3155 ¶¶ 9, 27-29;
and 3228-1 at 5, 14-17, Apps. A-B & Initial 3.0 Liter Mitigation Allocation App. Volkswagen AG also pled guilty
and paid a $2.8 billion criminal penalty. C.A. Dkt. 29, at
89. In total, Volkswagen agreed to pay more than $23 billion and bought back or installed EPA-approved updates
in nearly all affected vehicles.
2. EPA’s notices of violation triggered a flood of lawsuits, including novel claims brought by ten states and 35
counties. Certain of those actions were transferred to a
multi-district litigation before the district court below.
Parroting EPA’s allegations, the two counties that are respondents here sued under their own state and local antitampering laws, challenging the factory installation of the
defeat device. After another state’s claims against
13
Volkswagen based on pre-sale conduct were dismissed as
preempted, respondents amended their complaints to include claims challenging the post-sale updates to that factory-installed defeat device. App., infra, 11a-12a. Respondents seek daily penalties of $5,000 per affected car
per day, totaling $11.2 billion annually for roughly 6,100
cars—more than EPA deemed appropriate for the
590,000 cars affected nationwide. Id. at 53a-54a.
3. The district court (Breyer, J.) dismissed respondents’ claims as preempted. First, the district court held
that respondents’ claims targeting pre-sale conduct were
expressly preempted under § 209(a). Id. at 64a.
Second, the district court held that respondents’
claims targeting post-sale conduct were impliedly
preempted, reasoning that where “a manufacturer’s actions affect vehicles model wide, the [CAA] manifests
Congress’ intent that EPA, not the states or local governments, will regulate that conduct.” Id. at 74a.
4. Respondents appealed. After oral argument, the
Ninth Circuit invited the Solicitor General and EPA to
submit amicus curiae briefs addressing the “significant
questions” at issue. App., infra, 4a n.4. The government
declined to participate “at this stage of the litigation,”
stating that its decision “should not be construed as an indication of the government’s views about the proper resolution of this case.” C.A. Dkt. 70, at 2.
The Ninth Circuit affirmed the dismissal of respondents’ pre-sale claims, but held that respondents’ claims
targeting post-sale software updates are not preempted,
twice citing the government’s decision not to file an amicus brief. App., infra, 4a n.4, 34a n.21.
Relying exclusively on the phrase “new motor vehicles,” and ignoring the phrase “relating to,” the Ninth Circuit summarily held that § 209(a) “does not apply to post-
14
sale vehicles.” Id. at 30a. The Ninth Circuit also concluded that “[n]othing in the CAA raises the inference
that Congress intended to place manufacturers beyond
the reach of state and local governments,” and that the
CAA’s overall “cooperative-federalism partnership” supported allowing additional local penalties for conduct EPA
comprehensively redressed. Id. at 39a, 42a. The Ninth
Circuit also broadly construed § 209(d) of the CAA—
which narrowly preserves state and local authority to regulate the “use, operation, or movement” of motor vehicles—to permit states to regulate any aspect of the postsale vehicle. Id. at 25a.
The Ninth Circuit denied rehearing, id. at 88a-89a, but
granted petitioners’ motion to stay the mandate pending
this Court’s review. C.A. Dkt. 86.
REASONS FOR GRANTING THE PETITION
I. THE DECISION BELOW DIRECTLY CONFLICTS WITH FINAL DECISIONS OF SEVERAL STATE COURTS.
1. In concluding that the CAA does not preempt respondents’ post-sale claims, the Ninth Circuit’s decision
directly conflicts with the final appellate determinations
of three state courts. Like respondents, the states of Alabama, Tennessee, and Minnesota sued petitioners under
their own anti-tampering laws, seeking penalties for the
same post-sale updates at issue in this case. Unlike the
Ninth Circuit, those state courts correctly held that the
CAA preempts such claims.
The Supreme Court of Alabama dismissed as
preempted the claims brought by the state of Alabama,
concluding that those claims “would stand as an obstacle
to the accomplishment and execution of the full purposes
and objectives of Congress.” Alabama, 279 So. 3d at 1129.
15
Similarly, the Minnesota Court of Appeals dismissed
the state of Minnesota’s claims as preempted, reasoning
that “Congress, by enacting the CAA, provided that the
federal government—rather than state or local governments—regulate the conduct at issue here.” Minnesota,
2018 WL 6273103, at *10. Minnesota’s petition for further
review of this decision was rejected as untimely. Dkt.,
Minnesota v. Volkswagen Aktiengesellschaft, Case No.
A18-0544 (Minn. Ct. App. Jan. 4, 2019).
The Tennessee Court of Appeals likewise dismissed
Tennessee’s claims as preempted, reasoning that Congress created this federal regime in part to “avoid the
problems that would result if automobile manufacturers
had to answer to a number of different regulators enforcing the same standard.” Tennessee, 2019 WL 1220836, at
*8 n.9. Tennessee did not appeal this decision.
The Ninth Circuit then considered the identical legal
question, involving the same defendants and conduct, but
reached the opposite conclusion. App., infra, 30a-46a.
The Ninth Circuit did not acknowledge or reconcile those
contrary state court opinions in its decision.
As a consequence, respondents and state and local
governments within the Ninth Circuit may regulate manufacturers’ post-sale updates to their vehicles’ emission
control software, whereas state and local governments in
Alabama, Tennessee, and Minnesota may not. This conflict warrants this Court’s review. See Hillman v.
Maretta, 569 U.S. 483, 489-490 (2013). The fact that two
of those decisions were from intermediate appellate
courts does not make this Court’s review any less warranted.2
2
See DIRECTV, Inc. v. Imburgia, 577 U.S. 47, 53 (2015) (resolving conflict between Ninth Circuit and intermediate California
16
2. A number of other courts have addressed this same
issue and likewise reached different conclusions. To date,
including non-final and trial-court decisions, five courts
have found analogous claims against petitioners to be
preempted; four courts, including the Ninth Circuit, have
held the opposite.3 Because the issue has been sharply
defined and briefed extensively in these courts, including
with input from automobile industry associations and the
U.S. Chamber of Commerce as amici, further percolation
is unnecessary.
II. THE QUESTION PRESENTED IS EXCEPTIONALLY IMPORTANT.
A. National Uniformity in the Regulation of Emission Systems Has Been of Critical Importance
for Decades.
1. This case presents a critically important question affecting EPA’s nationwide regulation of automobiles,
appellate court); Riley v. California, 573 U.S. 373, 378-381 (2014) (resolving conflict between First Circuit and intermediate California appellate court); Carchman v. Nash, 473 U.S. 716, 723-724 & n.3 (1985)
(resolving conflict involving intermediate appellate courts).
Compare Alabama, 279 So. 3d at 1129 (claims preempted; final); Tennessee, 2019 WL 1220836, at *13-14 (same); Minnesota, 2018
WL 6273103, at *10 (same); State v. Volkswagen Aktiengesellschaft,
2018 WL 3349094, at *3 (Mo. Cir. Ct. June 26, 2018) (same); and People v. Volkswagen Aktiengesellschaft, 2018 WL 3384883, at *19-20 (Ill.
Cir. Ct. June 5, 2018) (“Illinois”) (claims preempted, appeal pending);
with App., infra, 30a-46a; State ex rel. Yost v. Volkswagen Aktiengesellschaft, 137 N.E.3d 1267, 1275-1276 (Ohio Ct. App. 2019) (claims
not preempted, appeal pending); Order, Montana Dept. of Env. Quality v. Volkswagen Aktiengesellschaft, Cause No. DDV-2016-1045
(Mont. Dist. Ct. Feb. 21, 2020) (declining to dismiss analogous claims
as preempted in a non-final decision); and Order, In re Volkswagen
Clean Diesel Litig., Cause No. D-1-GN-16-000370 (Tex. Dist. Ct. Feb.
21, 2018) (same).
3
17
which play a central role in American life. More than 90%
of U.S. households have access to a car. Census Bur.,
Household Size by Vehicles Available, https://tinyurl.com/VehicleAccess. Tens of millions of people rely
on cars to travel to work and fulfill other basic needs. Approximately 4.3 million Americans work in the auto industry, including more than 900,000 in auto manufacturing,
see Bur. of Labor Statistics, https://tinyurl.com/AutoEEs,
which constitutes 2.1% of U.S. Gross Domestic Product,
see Bur. of Economic Analysis, Value Added by Industry
as a Percentage of Gross Domestic Product, https://tinyurl.com/PercentGDPValueAdded
(choose
“Value
added by Industry as a Percentage of Gross Domestic
Product (A)(Q)”) (lines 21 and 36).
More than 50 years ago, Congress recognized that the
tens of millions of cars on the road are a significant source
of pollution requiring “motor vehicle exhaust control
standards on a national scale.” H.R. Rep. No. 89-899, p. 5
(1965). But Congress also found that “[t]he ability of
those engaged in the manufacture of automobiles to obtain clear and consistent answers concerning emission
controls and standards is of considerable importance.”
H.R. Rep. No. 90-728, p. 21 (1967). Because cars are
mass-produced and “readily move across state boundaries,” Congress recognized the need for uniform, nationwide regulation. Engine Mfrs. Assn., 88 F.3d at 1079. Accordingly, Congress entrusted EPA with exclusive power
to regulate auto manufacturers’ emission compliance
throughout the useful life of their vehicles. Congress was
concerned that even “identical Federal and State standards, separately administered, would be difficult for the
industry to meet since different administration could easily lead to different answers to identical questions.” H.R.
Rep. No. 90-728, p. 22. Congress believed state and local
regulation of manufacturers would “lead to increased
18
costs to consumers nationwide, with benefit only to those
in one section of the country.” Ibid.
EPA’s authority includes the power to mandate and
supervise post-sale manufacturer recalls like those at issue here. 42 U.S.C. § 7541(c)(1). Recalls are a “critical
component[] of compliance” with emission standards.
EPA Recall Report, at 7. Contrary to the Ninth Circuit’s
mistaken assumption (without citation) that post-sale updates to emission systems are “rare,” App., infra, 45a,
manufacturers conduct dozens of recalls affecting, on average, six million cars every year, all coordinated with
EPA. See EPA Recall Report, at 7.
As the Alliance of Automobile Manufacturers, the Association of Global Automakers, and the U.S. Chamber of
Commerce explained in their amici brief below (which the
Ninth Circuit did not address in its decision), emission
control updates have become “vastly more common” in recent years because (i) engines and emission controls have
become more “complex and computerized,” and (ii) EPA’s
in-use testing requirements have increased the detection
of failures in in-use cars. C.A. Dkt. 34, at 8, 17, 20-21. “Inuse testing is an important aspect of EPA’s light-duty vehicle compliance program, identifying emissions concerns
and resolving them.” EPA Recall Report, at 58. Because
“[l]ight-duty emission standards are the most stringent of
any sector and light-duty vehicles have the most sophisticated and complex emission control systems,” there is “a
greater opportunity for defects to occur.” Id. at 7. Like
many computerized products, defective emission controls
often can be fixed by a software update.
2. The Ninth Circuit’s decision threatens to throw one
of America’s largest industries into regulatory chaos, to
the detriment of manufacturers, dealers, consumers, and
the environment. For decades, auto manufacturers have
relied on exclusive EPA regulation in making updates to
19
their vehicles. But the Ninth Circuit held that all 50 states
and 3,000 counties may separately regulate these updates
according to their own local policies, priorities, and preferences, and sue manufacturers for billions of dollars for
supposed violations of local anti-tampering laws. Under
the Ninth Circuit’s interpretation, every state and locality
can second-guess EPA’s expert determinations in this
complex, highly technical area.
For example, as part of EPA’s settlement with
Volkswagen, EPA allowed Volkswagen to substantially
reduce NOx emissions of affected cars, even if not by
enough to meet the originally certified standards, as long
as Volkswagen also offered to buy back those cars. App.,
infra, 79a n.7. EPA’s expert judgment was that removing
all affected vehicles from use, even if customers wanted to
keep their cars, would cause “undue waste and potential
environmental harm.” Ibid. (quotation omitted).
The Ninth Circuit’s decision would allow states and localities to penalize these EPA-approved modifications. As
the district court recognized (and respondents have never
disavowed), respondents’ theory would permit them to
challenge even EPA-approved updates, and the State of
Ohio has already claimed that it has such authority. See
Merit Br. of Appellee 40, State of Ohio ex rel. Yost v.
Volkswagen Aktiengesellschaft, Case No. 2020-0092 (Ohio
Aug. 10, 2020).
Facing potentially “staggering liability” for post-sale
updates to emission systems, App., infra, 45a, manufacturers may now need to take the entirely impractical step
of seeking the approval of all 50 states and thousands of
localities before implementing post-sale, nationwide updates. As a result, manufacturers may be forced either to
avoid maintaining or improving their cars’ emission control systems after sale (and resist EPA’s requests that
20
they do so voluntarily)—to the detriment of the environment and Congress’s objectives—or pass on the substantial increased costs to consumers.
The impact of the Ninth Circuit’s decision extends to
all types of automobile manufacturers (including passenger cars, motorcycles, heavy-duty trucks, and recreational vehicles), as well as to manufacturers of farm equipment, construction equipment, and locomotives, which are
likewise subject to uniform, federal regulation by EPA.
The relevant CAA preemption provision for those sources
mirrors § 209(a). See 42 U.S.C. § 7543(e)(1) (“No State or
any political subdivision thereof shall adopt or attempt to
enforce any standard or other requirement relating to the
control of emissions from either of the following new nonroad engines or nonroad vehicles subject to regulation under this chapter.”). This Court’s decision construing
§ 209(a) would thus also prevent the regulatory turmoil
that would result in these other industries if the decision
below were applied by lower courts to the analogous language of § 209(e).
3. Further, as explained below, CAA preemption safeguards the important enforcement powers that Congress
granted to EPA, such as its statutory role to set appropriate penalties for CAA violations and its ability to achieve
expedient resolutions and remediation of future harms.
See infra at 32-34.
B. This Issue Has Already Arisen for Another Auto
Manufacturer and Is Likely To Arise Repeatedly Going Forward.
1. The Ninth Circuit’s assumption that its decision
would have a limited impact because “this conduct will be
as rare as it is unprecedented,” see App., infra, 45a, has
already been proven wrong: the Ninth Circuit’s decision
21
emboldened one of the respondents to try to regulate another manufacturer’s alleged post-sale emission software
updates by piggybacking on another EPA settlement.
In September 2020, EPA announced a consent decree
with Daimler AG and its affiliates based on their alleged
installation of defeat devices that caused emissions to exceed legal limits. EPA, Daimler AG and Mercedes-Benz
USA, LLC Clean Air Act Civil Settlement (Sept. 14,
2020), https://tinyurl.com/EPADaimler.
Seizing on the Ninth Circuit’s decision in this action,
respondent Hillsborough County sued Daimler and petitioner Robert Bosch LLC, and their affiliates, challenging
their alleged installation of defeat devices and post-sale
tampering “through a program of newly created field
fixes and recall campaigns.” Env. Prot. Comm’n of Hillsborough Cty. v. Mercedes-Benz USA, LLC, No. 20-cv2238, Dkt. No. 7, ¶¶ 64-68, 90 (M.D. Fl. Sept. 25, 2020).
In addition to massive penalties, Hillsborough County
seeks an order requiring defendants to “completely repair” the affected vehicles. Id. ¶ 95. Such relief would
upset the careful balance that EPA struck in the consent
order: if Daimler fails to bring affected vehicles into full
compliance, the consent order permits those vehicles to
remain in use, provided Daimler pays money into a mitigation trust. EPA, Daimler AG and Mercedes-Benz USA,
LLC Clean Air Act Civil Settlement (Sept. 14, 2020),
https://tinyurl.com/EPADaimler (“Daimler will be liable
for stipulated penalties in the unlikely event that one or
more AEMs do not meet the appliable emission standards
. . . .”); see also United States v. Daimler AG, No. 20-cv2564, Dkt. No. 7-1 (D.D.C. Dec. 17, 2020), ¶ 53(c)(ii).
2. Hillsborough has publicly stated that it also may
bring similar claims against Fiat Chrysler Automobiles
and General Motors. Hillsborough Cty. Env. Protection
Comm’n, Comm’n Agenda, at 15 (Sept. 24, 2020),
22
https://tinyurl.com/HillsboroughCtyAgenda (requesting
“authorization for future related actions . . . (e.g. -Fiat
Chrysler Automobiles, GM, etc.)”).
This Court’s resolution of the scope of preemption regarding the six million vehicles updated every year is thus
imminently needed.
III. THE DECISION BELOW IS INCORRECT.
The Ninth Circuit’s holding contravenes decades of
precedent making clear that the CAA preempts respondents’ claims. “[T]he purpose of Congress is the ultimate
touchstone” in determining whether federal law preempts
state and local law. Altria, 555 U.S. at 76 (quotation omitted). All forms of preemption, “‘conflict,’ ‘express,’ and
‘field,’ . . . work in the same way.” Murphy v. Nat. Collegiate Athletic Assn., 138 S. Ct. 1461, 1480 (2018). Where
“Congress enacts a law that imposes restrictions or confers rights on private actors [and] a state law confers
rights or imposes restrictions that conflict with the federal law . . . the federal law takes precedence and the state
law is preempted.” Ibid.
A. The Ninth Circuit Misconstrued the CAA’s
Framework and History.
1. Congress structured the CAA to allocate regulatory
responsibility differently based on the source of emissions. The Ninth Circuit previously recognized that “the
[CAA] gives the states the job of regulating stationary
sources of pollution, but the EPA . . . [is] responsible for
regulating emissions from motor vehicles and other mobile sources.” Nat. Assn. of Home Builders, 627 F.3d at
733 (emphases added).
In its decision below, the Ninth Circuit did not adhere
to this critical distinction, erroneously relying on cases interpreting Title I (regarding stationary emission sources)
23
to assert that “[t]he CAA is a joint venture” between EPA
and the states where Congress “has consistently preserved the legitimacy of state regulations.” App., infra,
21a-23a (citing Gen. Motors Corp. v. United States,
496 U.S. 530, 532 (1990) (Title I); Comm. For a Better
Arvin v. EPA, 786 F.3d 1169, 1173 (9th Cir. 2015) (same);
and GenOn REMA, LLC v. EPA, 722 F.3d 513, 516
(3d Cir. 2013) (same)). Other decisions have rejected this
reasoning.4
Illustrating its erroneous premise, the Ninth Circuit
mistakenly invoked—six times—a supposed presumption
against preemption to justify its narrow interpretation of
the CAA’s preemptive scope. App., infra, 3a, 16a, 32a,
35a, 41a, 43a n.23. But this Court has already declined to
apply any such presumption in interpreting the scope of
preemption under § 209(a). In South Coast, this Court,
in a decision by Justice Scalia, declined to “invok[e] the
‘presumption against preemption’” when interpreting
§ 209(a). 541 U.S. at 256. And applying such a presumption would be particularly inappropriate for mobile source
emissions, which have always been principally regulated
at the federal level. See United States v. Locke, 529 U.S.
89, 108 (2000) (no presumption in areas with “a history of
significant federal presence”).
2. The CAA itself contradicts the Ninth Circuit’s core
rationale that Congress could not have intended to
preempt respondents’ claims because a manufacturer’s
4
See, e.g., Jensen Family Farms, Inc. v. Monterey Bay Unified Air Pollution Control Dist., 644 F.3d 934, 938 (9th Cir. 2011)
(regulation of “stationary sources is primarily left to the states,” but
“the federal government sets nationwide emissions standards for mobile sources”); In re Caterpillar, Inc., 2015 WL 4591236, at *14 n.19
(D.N.J. July 29, 2015) (so-called “cooperative structure” for stationary sources under Title I “irrelevant” to Title II framework for mobile sources).
24
tampering on a nationwide basis “could not have been anticipated by Congress.” App., infra, 45a. To the contrary,
Congress anticipated precisely such conduct more than 50
years ago when it empowered EPA alone to penalize “any
manufacturer” that “knowingly [] remove[s] or render[s]
inoperative” an emission-control device “after . . . sale.”
Pub. L. No. 91-604, 84 Stat. 1676, 1693 § 7(a)(3).
Because the statute potentially impacts post-sale conduct that EPA regulates, since 1975, EPA has provided
extensive guidance on how manufacturers may make
post-sale emission control changes without violating the
CAA’s tampering prohibition. See supra at 10.
B. The Ninth Circuit’s Interpretation of the CAA’s
Express Preemption Clause Is Incorrect and
Conflicts with Settled Law.
Contrary to the Ninth Circuit’s unduly narrow interpretation, § 209(a) broadly prohibits states and localities
from “adopt[ing] or attempt[ing] to enforce any standard
relating to the control of emissions from new motor vehicles.” 42 U.S.C. § 7543(a) (emphases added).
1. The decision below focused solely on the phrase
“new motor vehicles,” and thus construed § 209(a) as ending preemption at the point of initial sale. But as this
Court has recognized, the phrase “relating to,” which
means any “connection with or reference to,” Rutledge,
141 S. Ct. at 479, “express[es] a broad pre-emptive purpose,” Morales v. Trans World Airlines, Inc., 504 U.S.
374, 383 (1992), and “indicates Congress’ intent to preempt a large area of state law,” Altria, 555 U.S. at 85. The
Ninth Circuit did not follow this direction, and its exclusive focus on the phrase “new motor vehicles” resulted in
an interpretation that eliminates “relating to” from the
statute, as though § 209(a) merely barred states from
25
“controlling emissions from new motor vehicles.” See Morales, 504 U.S. at 385 (rejecting an interpretation that
“simply reads the words ‘relating to’ out of the statute.”).
The Ninth Circuit offered no interpretation of “relating
to,” let alone one that supports its conclusion that preemption ends at the point of initial sale.
The Ninth Circuit’s interpretation thus conflicts with
longstanding authority providing that preemption under
§ 209(a) continues past the point of sale. Because only
manufacturers produce new cars, Congress used “new” in
§ 209(a) to set up a different emissions compliance regime
for manufacturers. It did so to avoid “an anarchic patchwork of federal and state regulatory programs, a prospect
which threatened to create nightmares for [vehicle] manufacturers.” Engine Mfrs. Assn., 88 F.3d at 1079 (quotation omitted); see H.R. Rep. No. 90-728, p. 21 (broad
preemption “necessary in order to prevent a chaotic situation from developing” in regulation of manufacturers).
The seminal case Allway Taxi, Inc. v. City of New
York, 340 F. Supp. 1120, 1124 (S.D.N.Y.), aff’d, 468 F.2d
624 (2d Cir. 1972), held that state and local regulation of
vehicles post-sale must be “directed primarily to intrastate activities” and place “the burden of compliance . . .
on individual owners and not on manufacturers and distributors.” This avoids an illogical interpretation in which
states and localities can freely regulate emission control
standards the “moment after a new car is bought”—an
“obvious circumvention of the [CAA].” Ibid.; see Engine
Mfrs. Assn., 88 F.3d at 1086 & n.39 (endorsing “Allway
Taxi interpretation” of § 209(a), under which “the burden
of compliance [may] not fall on the manufacturer”); see
also Rutledge, 141 S. Ct. at 480 (construing ERISA’s express preemption clause by looking to “ERISA’s objectives ‘as a guide to the scope of the state law that Congress
understood would survive’”).
26
Likewise, EPA has long interpreted § 209(a) preemption as extending beyond initial sale: “certain state regulations that may be characterized as ‘in-use’ regulations
may be preempted” if they “amount to a standard relating
back to the original design of the engine by the original
engine manufacturer.” 59 Fed. Reg. 31,306, 31,313, 31,331
(June 17, 1994). EPA has endorsed Allway Taxi and considers “recall programs” (i.e., regulation of manufacturers’ post-sale updates) to “relate back” to the original design of the engine and thus fall within the scope of § 209(a)
preemption. Id. at 31,330 & n.28.
The Ninth Circuit deemed petitioners’ reliance on Allway Taxi “misplaced” because “[t]he Counties’ anti-tampering rules do not require Volkswagen to comply with a
local emission standard that is different from the federal
standard.” App., infra, 31a. But § 209(a) prohibits state
or local enforcement of “any standard,” not just different
standards. 42 U.S.C. § 7543(a) (emphasis added); see
H.R. Rep. No. 90-728, p. 22 (even “identical” standards,
interpreted by different regulators, “would be difficult for
the industry to meet”).
The Ninth Circuit’s interpretation thus conflicts with
the Eleventh Circuit’s decision in Sims v. Fla., Dept. of
Hwy. Safety & Motor Vehicles, which held that “any
standard” in § 209(a) means any standard, “federal or
state,” not solely “new or conflicting emission standards,”
and invalidated a state statute that merely required
“compl[iance] with the [CAA].” 862 F.2d 1449, 1455 (11th
Cir. 1989). It also conflicts with the decision of a New
York appellate court rejecting New York’s attempt to investigate a manufacturer’s emissions compliance, reasoning that § 209(a) preempts even a state’s attempt to “provide the manufacturer with additional incentive to comply
with Federal [defeat device] standards.” In re Office of
Atty. Gen., 269 A.D.2d 1, 10-11 (N.Y. App. Div. 2000).
27
2. Respondents’ claims targeting manufacturers’
post-sale, nationwide software updates necessarily
“relat[e] back to the original design,” just as updates to a
smartphone’s operating system necessarily relate back to
the original software. EPA itself viewed petitioners’ updates as inherently related to the pre-sale vehicle design
when the agency tested those updates by comparing emissions from post-update cars to emissions from cars as certified at the factory. See D. Ct. Dkt. 2009-3, ¶ 141 (finding
a “limited reduction in the rates of emission of NOx”).
Because the post-sale updates reduced emissions—albeit not enough to comply with the certified emission
standards—the only basis for penalizing the updates is
that they did not fully remedy the excess emissions caused
by the factory-installed software. Respondents’ claims
thus rest on the fact that, as manufactured, the vehicles
violated EPA standards.
By contrast, post-sale tampering with emission controls by mechanics and consumers within a state or locality does not “relate back” to the original design of the engine because such conduct does not place the “burden of
compliance” on the manufacturer. Engine Mfrs. Assn.,
88 F.3d at 1086 & n.39 (quoting Allway Taxi, 340 F. Supp.
at 1124). Thus, states and localities may regulate postsale tampering by mechanics and consumers. Indeed,
prior to this litigation, state and local anti-tampering laws
had only ever been used against mechanics and consumers. See C.A. Dkt. 79, at 5.
3. The Ninth Circuit did not heed this Court’s instruction in South Coast to look to how EPA enforces CAA
standards to identify the “standard-enforcement efforts
that are proscribed by § 209.” 541 U.S. at 263. The multiple CAA provisions granting EPA authority to enforce
manufacturers’ compliance with emission standards
throughout their cars’ “useful life”—including warranty,
28
recall, in-use testing, and defect-reporting obligations, as
well as the authority to determine and punish post-sale
tampering, see supra at 8-10—confirm that EPA’s exclusive enforcement authority over manufacturers does not
end at the point of sale. See A. Scalia & B. Garner, Reading Law § 24, p. 167 (1st ed. 2012) (Courts should “consider the entire text, in view of its structure and of the
physical and logical relation of its many parts.”).
4. Confirming that Congress sought to bar overlapping regulation of manufacturers, the CAA prohibits
states and localities from even requiring manufacturers to
conduct post-sale testing—an essential tool needed for
emissions regulation. See 42 U.S.C. § 7541(h)(2). It would
have made no sense for Congress to bar states and localities from requiring manufacturers to conduct such testing, and at the same time allow states to bring claims that,
at bottom, require such testing to establish a violation.
C. The Ninth Circuit’s Interpretation of the CAA’s
Savings Clause Is Wrong and Conflicts with the
D.C. Circuit’s and EPA’s Interpretations of that
Provision.
The Ninth Circuit relied heavily on its expansive interpretation of the CAA’s preemption savings clause in
§ 209(d), which reserves to states and localities the ability
“otherwise to control, regulate, or restrict the use, operation, or movement of registered or licensed motor vehicles.” 42 U.S.C. § 7543(d). The Ninth Circuit’s overbroad
interpretation of § 209(d) led it erroneously to conclude
that Congress expressly preserved authority that state
and local agencies have never had, and have never before
attempted to use, to regulate post-sale, nationwide updates by manufacturers.
29
1. The Ninth Circuit did not follow established and
common-sense interpretations of § 209(d). Instead, it selected two of nineteen definitions from a 2002 dictionary
(35 years after the provision’s enactment) to conclude that
“operation” refers to anything that “affects the vehicle’s
‘quality’ and ‘method’ of functioning,” and that § 209(d)
“preserves state and local governments’ authority to prohibit tampering with emission control systems in post-sale
vehicles.” App., infra, 25a.
In doing so, the Ninth Circuit overlooked the only definition in the same dictionary that refers to a vehicle: “the
operating of or putting and maintaining in action of something (as a machine or an industry),” exemplified by “careful [operation] of a motor car.” App., infra, 107a. Nor did
the Ninth Circuit address the definition in a legal dictionary from 1968, the year after § 209(d) was enacted, that
makes clear that “operate” in relation to automobiles signifies driving. App., infra, 108a (“when used with relation
to automobiles, [operate] signifies a personal act in working the mechanism of the automobile”). Thus, in context,
the dictionary definition of the word “operation”—like the
adjacent terms “use” and “movement”—is a reference to
driving and incidental acts (e.g., idling or occupancy), not
software updates. See Scalia & Garner, supra, App. A, at
418 (when dictionary provides “more than one meaning,
you must use the context [of the word] to determine its
aptest, most likely sense”).
Congress’s use of “operation” in relation to motor vehicles in other statutory provisions enacted around the
same time as § 209(d) to mean driving or the use of a vehicle confirms this meaning. See, e.g., 2 U.S.C. § 2163
(1976) (appropriating funds for “the purchase or rental,
maintenance and operation of passenger motor vehicles
to provide shuttle service for Members and employees of
30
Congress” (emphasis added)); 7 U.S.C. § 2262 (1965) (authorizing Secretary of Agriculture to obtain liability insurance covering acts committed “while operating a motor vehicle belonging to the United States in a foreign
country” (emphasis added)). As this Court has held,
“when Congress uses the same language in two statutes
having similar purposes, particularly when one is enacted
shortly after the other, it is appropriate to presume that
Congress intended that text to have the same meaning in
both statutes.” Smith v. City of Jackson, 544 U.S. 228,
233 (2005).
The Ninth Circuit’s analysis also violated the “fundamental principle of statutory construction” that “the
meaning of a word cannot be determined in isolation, but
must be drawn from” “context.” Deal v. United States,
508 U.S. 129, 132 (1993). Understood in the context of
“use” and “movement,” “operation” refers to the act of
driving or otherwise using a motor vehicle. The Ninth
Circuit’s interpretation that “operation” encompasses
everything affecting the “‘quality’ and ‘method’ of functioning,” App., infra, 25a, incorrectly “ascrib[es] to one
word a meaning so broad that it is inconsistent with its
accompanying words, thus giving unintended breadth” to
§ 209(d), Gustafson v. Alloyd Co., 513 U.S. 561, 575 (1995)
(quotation omitted); see also Lagos v. United States,
138 S. Ct. 1684, 1688-1689 (2018) (“[W]e find here both the
presence of company that suggests limitation and the absence of company that suggests breadth.”).
2. Unlike the Ninth Circuit, the D.C. Circuit has correctly construed § 209(d) as limited to preserving state
and local authority to regulate how car owners drive their
cars, for example via “carpool lanes, restrictions on car
use in downtown areas, and programs to control extended
idling of vehicles.” Engine Mfrs. Assn., 88 F.3d at 1094.
Other courts have recognized that § 209(d) does not give
31
states “‘carte blanche’ to regulate conduct after the initial
vehicle sale.” Minnesota, 2018 WL 6273103, at *9 (quoting App., infra, 83a-84a); Tennessee, 2019 WL 1220836, at
*10 (same). EPA has likewise explained that § 209(d) permits state regulation of local conduct such as “time of use
or place of use restrictions (e.g. high occupancy vehicle
lanes) [that] are typically very site specific” and “primarily [a]ffect local users.” 59 Fed. Reg. at 31,331.
D. The Ninth Circuit’s Implied Preemption Analysis Is Incorrect.
State law is conflict preempted when, “under the circumstances of th[e] particular case [it] stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Geier v. Am. Honda
Motor Co., 529 U.S. 861, 874 (2000) (quotation omitted).
1. The Ninth Circuit’s ruling marks the end of 50
years of exclusive EPA regulation of manufacturer postsale updates under the multiple, interrelating CAA provisions discussed above. Congress granted EPA alone the
tools to regulate manufacturers’ conduct both pre- and
post-sale, see supra at 8-10, yet prohibited states from
employing even the most fundamental among them—
emissions testing—against manufacturers, see 42 U.S.C.
§ 7541(h)(2), and intended states to regulate only local
conduct, see supra at 29-31. These statutory provisions
confirm that permitting 50 states and 3,000 counties to
regulate manufacturers’ post-sale updates would “significantly interfere” with Congress’s intention that EPA exclusively regulate manufacturers’ nationwide conduct
throughout their vehicles’ “useful life.” App., infra, 77a.
2. Under the Ninth Circuit’s decision, states and localities could potentially penalize even modifications that
EPA already approved, thereby imposing conflicting regulatory guidance over permissible post-sale modifications.
32
As the court recognized in Tennessee, these and other updates conducted under EPA oversight could be challenged and penalized by states and localities, even if (like
here), those updates reduce emissions. See 2019 WL
1220836, at *13 (if state’s claims could proceed,
Volkswagen would continue to owe penalties for “vehicles
with EPA-approved modifications”). As the court in Minnesota explained, allowing states and localities to freely
regulate post-sale updates could lead to numerous separate regulators taking different approaches to determining which updates are permissible and which are tampering—exactly the regulatory chaos that Congress sought
to prevent in the CAA. See 2018 WL 6273103, at *8; H.R.
Rep. No. 90-728, pp. 21-22 (broad preemption “necessary
in order to prevent a chaotic situation from developing”).
This conflicting regulation will discourage manufacturers from maintaining or improving emission systems
post-sale, undermining the CAA’s basic purpose of improving air pollution.
3. The threat of duplicative state and local government claims will make it impossible for EPA to discharge
its statutory mandate to quantify penalties. The CAA
prohibits post-sale tampering by manufacturers and establishes a penalty framework for such violations. See supra at 10. The CAA expressly directs EPA to consider
specified factors in determining penalties for CAA violations, and EPA’s detailed Civil Penalty Policy governs its
exercise of that authority. This comprehensive framework is futile now that states and localities may, after an
EPA resolution, pursue additional penalties based upon
EPA’s own enforcement work.
This concern is compounded by the massive penalties
authorized by state and local anti-tampering statutes.
For example, respondents alone—just two counties—
seek an additional $5,000 per affected car per day, totaling
33
$11.2 billion in annual penalties, which the district court
recognized “could dwarf those paid to EPA” and would
“undermine the congressional calibration of force for tampering by vehicle manufacturers” prescribed in 42 U.S.C.
§ 7524. App., infra, 40a, 78a.
The Ninth Circuit correctly recognized that its decision would result in “EPA’s inability to control the total
liability that may be imposed for a tampering violation,”
App., infra, 43a, but then ignored the conflict this creates
with congressional intent. See Alabama, 279 So. 3d at
1126 (such a result “would seriously undermine the congressional calibration of force for tampering by vehicle
manufacturers”); see also Arizona v. United States,
567 U.S. 387, 402 (2012) (“Permitting the State to impose
its own penalties . . . would conflict with the careful framework Congress adopted.”).
4. Permitting such state and local government claims
will likely prevent EPA from securing prompt and comprehensive resolution and remediation of future environmental harms. As an Illinois trial court emphasized, “[i]f
manufacturing companies knew States could sue them
based on admissions they made while settling civil and
criminal actions with the federal government, they would
be unlikely to make any admission with the federal government. This would certainly reduce the efficacy of the
federal prosecution.” Illinois, 2018 WL 3384883, at *13.
As a result of the Ninth Circuit’s decision, manufacturers may be unwilling to settle with EPA without coordinating that settlement with every state and local regulator that could try to second-guess the settlement. Manufacturers would need either to (i) obtain releases from
every state and locality (a nearly insurmountable task), or
(ii) litigate with EPA while polluting cars remain on the
road—even if the pollution could be abated with a postsale update. Either outcome would undermine EPA’s
34
ability to achieve quickly the type of nationwide environmental remediation it did here. As this Court explained
in Atlantic Richfield Co. v. Christian, 140 S. Ct. 1335,
1356 (2020), state-law claims “would interfere with [EPA’s
resolution]” and could “trigger a lack of cooperation between EPA and [manufacturers].”
5. Respondents’ claims are further preempted because they are, in essence, allegations of fraud on EPA,
which is the federal agency’s responsibility to address.
See Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S.
341, 346-352 (2001). In Buckman, this Court dismissed
state-law tort claims against a medical-device manufacturer based on misrepresentations to the FDA as impliedly preempted. Id. at 348. This Court explained that
“the FDA [] has at its disposal a variety of enforcement
options,” and that allowing “[s]tate-law fraud-on-theFDA claims [would] inevitably conflict with the FDA’s responsibility to police fraud consistently with the Administration’s judgment and objectives.” Id. at 349-350.
That is precisely the nature of respondents’ claims
here. Respondents allege that petitioners “duped” EPA
and other regulators “through a program of surreptitious
field fixes and fraudulent recall campaigns,” D. Ct. Dkt.
4457, ¶¶ 1, 5, and “fraudulently manipulated testing data,”
D. Ct. Dkt. 4456, ¶¶ 48-50. In other words, respondents
allege that Volkswagen misled a federal agency with
broad enforcement powers and now seek to second-guess
the penalty EPA already deemed appropriate. It is
EPA’s responsibility alone to address that conduct.
CONCLUSION
The petition for a writ of certiorari should be granted.
35
Respectfully submitted.
MICHAEL H. STEINBERG
SULLIVAN & CROMWELL LLP
1888 Century Park East
Los Angeles, CA 90067
JUDSON O. LITTLETON
SULLIVAN & CROMWELL LLP
1700 New York Ave., N.W.
Washington, DC 20006
ROBERT J. GIUFFRA, JR.
Counsel of Record
DAVID M.J. REIN
MATTHEW A. SCHWARTZ
SULLIVAN & CROMWELL LLP
125 Broad Street
New York, NY 10004
(212) 558-4000
giuffrar@sullcrom.com
Counsel for Petitioners Volkswagen Group of America, Inc. and
Audi of America, LLC
CARI K. DAWSON
ALSTON & BIRD LLP
One Atlantic Center
1201 West Peachtree St.
Atlanta, Georgia 30309
CARMINE D. BOCCUZZI, JR.
CLEARY GOTTLIEB STEEN &
HAMILTON LLP
One Liberty Plaza
New York, NY 10006
Counsel for Petitioner Porsche Cars
North America, Inc.
MATTHEW D. SLATER
CLEARY GOTTLIEB STEEN &
HAMILTON LLP
2112 Pennsylvania Ave., N.W.
Washington, DC 20037
Counsel for Petitioner
Robert Bosch LLC
JANUARY 2021
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.