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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APPENDIX

TABLE OF CONTENTS

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

2 U.S.C. § 2163 ........................................................... 90a

7 U.S.C. § 2262 ........................................................... 90a

42 U.S.C. § 7507.......................................................... 91a

42 U.S.C. § 7521(a) ..................................................... 92a

42 U.S.C. § 7521(d) ..................................................... 92a

42 U.S.C. § 7522(a) ..................................................... 93a

42 U.S.C. § 7523(b) ..................................................... 94a

42 U.S.C. § 7524(a) ..................................................... 94a

42 U.S.C. § 7524(c) ..................................................... 95a

42 U.S.C. § 7541(a) ..................................................... 96a

42 U.S.C. § 7541(b) ..................................................... 97a

42 U.S.C. § 7541(c) ..................................................... 99a

42 U.S.C. § 7541(h) ................................................... 100a

42 U.S.C. § 7542........................................................ 100a

42 U.S.C. § 7543(a) ................................................... 103a

42 U.S.C. § 7543(b) ................................................... 103a

42 U.S.C. § 7543(d) ................................................... 105a

42 U.S.C. § 7543(e) ................................................... 105a

Appendix E: Relevant Dictionary Definitions

Webster’s Third New International

Dictionary (2002) ................................................ 107a

Black’s Law Dictionary (4th ed. 1968) ................... 108a

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

__________

Case No. 18-15937

IN RE VOLKSWAGEN “CLEAN DIESEL” MARKETING, SALES PRACTICES, AND PRODUCTS

LIABILITY LITIGATION,

THE ENVIRONMENTAL PROTECTION COMMISSION OF

HILLSBOROUGH COUNTY, FLORIDA; SALT LAKE

COUNTY, PLAINTIFFS-APPELLANTS,

VOLKSWAGEN GROUP OF AMERICA, INC.; AUDI OF

AMERICA, LLC; PORSCHE CARS NORTH AMERICA,

INC.; ROBERT BOSCH, LLC; ROBERT BOSCH GMBH,

DEFENDANTS-APPELLEES.

__________

Argued and Submitted August 6, 2019

Anchorage, Alaska

Filed June 1, 2020

Before: TALLMAN, IKUTA, and N.R. SMITH, Circuit

Judges.

Opinion by Judge IKUTA.

(1a)

IKUTA, Circuit Judge:

Volkswagen, 1 a car manufacturer, installed defeat

devices in new cars for the purpose of evading compliance with federally mandated emission standards, and

subsequently updated the software in those cars so the

defeat devices would do a better job of avoiding and

preventing compliance. 2 Volkswagen settled EPA’s

criminal and civil actions for over $20 billion dollars—

but failed to obtain a release of liability from state and

local governments at the same time. When two counties

sought to impose additional penalties for violation of

their laws prohibiting tampering with emission control

systems, Volkswagen persuaded the district court that

these claims were preempted by the Clean Air Act.

We agree with the district court only in part. We

agree that the Clean Air Act expressly preempts state

and local government efforts to apply anti-tampering

laws to pre-sale vehicles.3 But we disagree with the district court’s ruling that the Clean Air Act impliedly

We use “Volkswagen” to refer to the parent company,

Volkswagen Aktiengesellschaft (“Volkswagen AG”) and its several subsidiaries, including Volkswagen Group of America, Inc.

(“Volkswagen USA”), Audi of America, LLC (“Audi”), and Porsche Cars North America, Inc. (“Porsche”).

The following background facts are taken from the “Statement of Facts,” to which Volkswagen stipulated pursuant to its

plea agreement with the federal government. See United States

v. Volkswagen AG, No. 16-cr-20394-SFC-APP-8, Dkt. 68 (E.D.

Mich. Mar. 10, 2017).

We likewise agree with the district court that the Clean Air

Act does not expressly preempt the application of state and local

anti-tampering laws to post-sale vehicles.

preempts state authority to enforce anti-tampering

laws against post-sale vehicles. In other words, the

Clean Air Act does not prevent the two counties here

from enforcing their regulations against Volkswagen

for tampering with post-sale vehicles.

We base this conclusion on Supreme Court precedent. A “high threshold must be met if a state law is to

be preempted for conflicting with the purposes of a federal Act.” Chamber of Commerce of U.S. v. Whiting,

563 U.S. 582, 607, 131 S.Ct. 1968, 179 L.Ed.2d 1031

(2011) (citation omitted). Volkswagen has not met that

high threshold here. The text and structure of the

Clean Air Act do not indicate any congressional intent

to prohibit states from enforcing anti-tampering laws

in this context. Moreover, the regulation of air pollution for health and welfare purposes “falls within the

exercise of even the most traditional concept of what is

compendiously known as the police power,” Huron

Portland Cement Co. v. Detroit, 362 U.S. 440, 442, 80

S.Ct. 813, 4 L.Ed.2d 852 (1960), so we must “assume

that ‘the historic police powers of the States’ are not

superseded ‘unless that was the clear and manifest

purpose of Congress,’” Arizona v. United States, 567

U.S. 387, 400, 132 S.Ct. 2492, 183 L.Ed.2d 351 (2012)

(citation omitted). No such purpose exists here.

We acknowledge that our conclusion—that the

Clean Air Act does not prevent the two counties from

enforcing their regulations against Volkswagen for

tampering with post-sale vehicles—may result in the

imposition of unexpected (and enormous) liability on

Volkswagen. But that result is caused by the unusual

and perhaps unprecedented situation before us. In

drafting the Clean Air Act, Congress apparently did

not contemplate that a manufacturer would intentionally tamper with the emission control systems of its vehicles after sale in order to improve the functioning of

a device intended to deceive the regulators. In other

words, Volkswagen faces liability due to the straightforward application of the Clean Air Act and the

preemption doctrine to its unexpected and aberrant

conduct. We may not strain to give Volkswagen the

equivalent of a release from state and local liability

(which it did not secure for itself) by engaging in a

“freewheeling judicial inquiry into whether a state

statute is in tension with federal objectives; such an endeavor would undercut the principle that it is Congress

rather than the courts that preempts state law.” Whiting, 563 U.S. at 607, 131 S.Ct. 1968 (internal quotation

marks and citation omitted). 4

In view of the federal government’s central role in bringing

comprehensive civil and criminal enforcement actions against

Volkswagen and ultimately obtaining a $20 billion settlement, and

given that “the agency’s own views should make a difference” on

the question of federal preemption, Williamson v. Mazda Motor

of Am., Inc., 562 U.S. 323, 335, 131 S.Ct. 1131, 179 L.Ed.2d 75

(2011) (citation omitted), we asked the Solicitor General of the

United States and the EPA for their views on whether the CAA

preempts a state or its political subdivision from enforcing state

or local anti-tampering laws with respect to post-sale vehicles and

whether their agreements to settle their federal claims against

Volkswagen were intended to foreclose subsequent state or local

civil financial penalties. Envtl. Prot. Comm’n of Hillsborough

Cty. v. Volkswagen Grp. of Am., Inc., No. 18-15937, Dkt. 64 (9th

Cir. Aug. 22, 2019). The federal government elected not to provide

its opinion on these issues to aid us in addressing these significant

questions. Id., Dkt. 70 (Nov. 4, 2019).

Under Title II, Part A of the Clean Air Act of 1990

(CAA), 5 car manufacturers cannot sell new motor vehicles in the United States unless the vehicles comply

with federal emission standards, including standards

for the emission of nitrogen oxide (NOx). See 42 U.S.C.

§§ 7521, 7525. The CAA gives the Environmental Protection Agency (EPA) the authority to establish emission standards for new motor vehicles, § 7521(a)(1), and

administer a certification program to ensure compliance with those standards, § 7525. To obtain a certificate of conformity from the EPA, a manufacturer must

submit an application to the EPA; the application must

be submitted for each model year and it must include

(among other things) test results from standardized

federal emission tests that demonstrate compliance

with the applicable emission standards. See 40 C.F.R.

§§ 86.1843-01, 86.1844-01, 86.1848-01. The CAA also

governs the use of emission control devices. 42 U.S.C.

§ 7521(a)(4)(A). A device “that reduces the effectiveness of the emission control system under conditions

which may reasonably be expected to be encountered

in normal vehicle operation and use” is called a “defeat

device,” 40 C.F.R. § 86.1803-01,6 and is prohibited, see

42 U.S.C. § 7522(a)(3)(B).

Title II of the CAA governs “Emission Standards for Moving

Sources.” 42 U.S.C. §§ 7521–7590. Part A of this title governs

“Motor Vehicle Emission and Fuel Standards.” §§ 7521–7554.

40 C.F.R. § 86.1803-01 provides:

Defeat device means an auxiliary emission control device

(AECD) that reduces the effectiveness of the emission control

system under conditions which may reasonably be expected to be

In 1998, the EPA established new federal emission

standards for light duty vehicles, the type of vehicles

at issue here,7 including stricter NOx emission standards. Manufacturers were required to comply with the

new standards beginning with model year 2007 vehicles. Volkswagen concluded that some of its diesel engine vehicles would not be able to meet the heightened

NOx emission standards while still operating at a performance level that could attract customers. Therefore, beginning in 2006, Volkswagen employees developed and installed two defeat devices that would enable

its diesel engine vehicles to pass federal emission tests,

even though the vehicles could not actually meet the

NOx emission standards while being driven on the

street.

Volkswagen installed different defeat devices in vehicles with a 2.0 liter diesel engine (the “2.0 Liter Vehicles”) and vehicles with a 3.0 liter diesel engine (the

“3.0 Liter Vehicles”). The defeat device in the 2.0 Liter

Vehicles comprised software designed to recognize

whether the vehicle was undergoing federal emission

testing on a dynamometer 8 or was being driven on the

road. When the software detected that the vehicle was

encountered in normal vehicle operation and use, unless: [listing

exceptions].

“Light-duty vehicle means a passenger car or passenger car

derivative capable of seating 12 passengers or less.” 40 C.F.R. §

86.082-2.

A “dynamometer” is an instrument that measures the power

output of an engine. Dynamometer, Webster’s Third New International Dictionary 711 (2002) (“an apparatus for measuring mechanical power (as of an engine, an electric motor, or a draft animal)”).

being tested, the vehicle performed in “dyno mode,”

i.e., in compliance with federal NOx emission standards. Otherwise, the vehicle would operate in “street

mode,” which substantially reduced the effectiveness

of the vehicle’s emission control system. When in street

mode, the vehicle’s NOx emissions were up to 35 times

higher than federal standards.

The defeat device installed in the 3.0 Liter Vehicles

was also designed to recognize when the vehicle was

undergoing emission testing, but rather than cause the

vehicle to switch between dyno mode and street mode,

the defeat device injected varying amounts of a solution, AdBlue, into the exhaust system. When the vehicle was being tested, the defeat device would inject

high amounts of AdBlue, reducing NOx emissions below federal standards. When the vehicle was being

driven on the street, the defeat device would inject less

AdBlue, causing NOx emissions to exceed federal

standards.

Between 2009 and 2015, Volkswagen installed these

defeat devices in approximately 585,000 new motor vehicles that were sold in the United States. During this

period, Volkswagen deliberately misled the EPA by

concealing the defeat devices and certifying that the

vehicles complied with federal NOx emission standards. Unaware of Volkswagen’s deception, the EPA issued certificates of conformity for these vehicles in

each model year. Volkswagen also misled consumers

by marketing the vehicles as “clean diesel” and “environmentally-friendly,” despite knowing that the vehicles “were intentionally designed to detect, evade and

defeat U.S. emissions standards.”

Around 2012, consumers who purchased a 2.0 Liter

Vehicle began reporting hardware failures. In investigating these failures, Volkswagen engineers theorized

that the defeat device failed to switch into street mode

when the vehicle was being driven on the street. Because the 2.0 Liter Vehicles were not designed to comply with NOx emission standards except during the

short periods of testing, the Volkswagen engineers suspected that the hardware failures were caused by the

increased stress on the exhaust system from being

driven too long in compliance with NOx standards, i.e.,

in dyno mode.

To prevent such hardware failures, Volkswagen developed two software updates for the 2.0 Liter Vehicles. The first software update would decrease stress

on the exhaust system by causing the vehicle to start

in street mode rather than dyno mode; the second update would improve emission-testing detection by adding a “steering wheel angle recognition” feature. If a

vehicle’s steering wheel was stationary, the updated

software would recognize that the vehicle was being

tested and the engine would switch to dyno mode. But

if the updated software detected that the steering

wheel was turning, it would allow the engine to operate

in street mode.

Volkswagen began installing the updated software

in new 2.0 Liter Vehicles in 2014. The same year,

Volkswagen took the following steps for its post-sale

2.0 Liter Vehicles. First, it issued voluntary recalls and

installed the software fixes without revealing their purpose. Second, it updated the software when customers

brought their cars in for normal maintenance, again

without revealing the purpose of the software updates.

In each scenario, Volkswagen deceptively told EPA

regulators and American consumers that the software

updates were intended to improve the operation of the

2.0 Liter Vehicles.

An independent study soon revealed that certain

Volkswagen vehicles emitted air pollutants at concentrations “of up to approximately 40 times the permissible limit.” The EPA commenced an investigation. In

August 2015, a Volkswagen whistleblower informed

federal regulators about the defeat device in the 2.0 Liter Vehicles. Eventually, Volkswagen disclosed the entire scheme affecting both the 2.0 and 3.0 Liter Vehicles to federal regulators.

The EPA subsequently issued notices of violation

and filed civil and criminal actions against Volkswagen

for violating the CAA. In the civil action, the EPA

charged Volkswagen with installing a defeat device on

new motor vehicles, in violation of 42 U.S.C. §

7522(a)(3)(B), and tampering with emission control

systems, in violation of § 7522(a)(3)(A), among other

things. In the criminal action, the EPA charged

Volkswagen with conspiracy, 18 U.S.C. § 371, obstruction of justice, § 1512(c), and introducing imported

merchandise into the United States by means of false

statements, § 542.

Volkswagen pleaded guilty to the criminal charges

and agreed to pay a $2.8 billion fine to the United

States. Pursuant to the plea agreement, Volkswagen

stipulated to a detailed statement of facts regarding

the defeat devices and agreed not to “contest the admissibility of, nor contradict” those stipulated facts “in

any proceeding.” The plea agreement did not give

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Volkswagen “any protection against prosecution” from

state or local governments.

Volkswagen also settled the civil CAA claims, entering into three consent decrees with the United States. 9

Other than California (which entered into the first and

second consent decrees), no other state or local government released Volkswagen from liability. To the contrary, each state expressly reserved its ability to sue

Volkswagen for damages. 10 In total, Volkswagen’s liability exceeded $20 billion.

While the EPA was litigating its civil and criminal

actions against Volkswagen, a number of states and

California was a party to both the first and second consent

decrees. At the time, California was authorized to “adopt and enforce” its own “standards relating to control of emissions from

new motor vehicles.” 42 U.S.C. § 7507; see also § 7543(b). But see

The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part

One: One National Program, 84 Fed. Reg. 51310 (Sept. 27, 2019)

(withdrawing the waiver previously provided to California for

certain emission standards, as applied to new motor vehicles).

Under this grant of authority, California, like the United States,

brought claims for injunctive relief against Volkswagen, alleging

violations of California environmental and unfair competition

laws.

Specifically, each state expressly reserved its right “to seek

fines or penalties” against Volkswagen in connection with being

named a beneficiary of a trust created by Volkswagen to help reduce the NOx emissions caused by Volkswagen’s noncompliant

vehicles. In re Volkswagen “Clean Diesel” Mktg., Sales Practices,

& Prods. Liab. Litig., No. 3:15-md-02672, Dkt. 2103-1, App’x D-3

at 2 (N.D. Cal. Apr. 16, 2018).

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counties brought separate lawsuits against the company for violating state and local laws that prohibit

tampering with vehicle emission control systems.

In 2016, the Multidistrict Litigation (MDL) judicial

panel transferred these actions to the district court for

the Northern District of California. 11 In 2017, the district court granted Volkswagen’s motion to dismiss a

suit brought by Wyoming, holding that the state’s

claim that Volkswagen violated Wyoming law by installing the defeat device in new motor vehicles was

preempted by the CAA. See In re Volkswagen “Clean

Diesel” Mktg., Sales Practices, & Prods. Liab. Litig.,

264 F. Supp. 3d 1040, 1052–57 (N.D. Cal. 2017). In light

of the district court’s ruling, several local governments

amended their respective complaints to allege facts relating not only to Volkswagen’s installation of the defeat device in new motor vehicles (i.e., pre-sale conduct), but also to Volkswagen’s modification to the defeat device in used vehicles (i.e., post-sale conduct).

Two of these complaints, one from Salt Lake

County, Utah, and one from Hillsborough County,

On December 8, 2015, pursuant to 28 U.S.C. § 1407, the MDL

judicial panel transferred 63 actions relating to Volkswagen’s defeat device as MDL No. 2672 to the Northern District of California for coordinated pretrial proceedings. The MDL judicial panel

noted that any other related actions were potential tag-along actions. See Rule 1.1(h), Rules of Procedure of the United States

Judicial Panel on Multidistrict Litigation (“‘Tag-along action’ refers to a civil action pending in a district court which involves

common questions of fact with either (1) actions on a pending motion to transfer to create an MDL or (2) actions previously transferred to an existing MDL, and which the Panel would consider

transferring under Section 1407.”). To date, the MDL judicial

panel has transferred over 1,500 actions as tag-along actions.

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Florida, (collectively, the “Counties”) are before us on

appeal.

Salt Lake County sued Volkswagen in Utah state

court. In its third amended complaint, Salt Lake

County alleged that Volkswagen’s installation of and

modification to the defeat devices violated Utah’s antitampering regulation, which provides: “[n]o person

shall remove or make inoperable the [emission control]

system or device or any part thereof, except for the

purpose of installing another [emission control] system

or device, or part thereof, which is equally or more effective in reducing emissions from the vehicle to the atmosphere.” Utah Admin. Code R. 307-201-4. 12 The complaint alleged that Volkswagen violated this regulation

by installing defeat devices in new vehicles to render

the emission control systems inoperable, and by modifying the software in post-sale vehicles to enhance the

defeat devices’ capabilities. The penalty for violating

Utah’s anti-tampering regulation is up to $5,000 per violation, with each day of violation constituting a separate offense. Utah Code Ann. § 19-1-303(1)(a), (3). The

complaint also brought common law claims for intentional misrepresentation and nuisance. Volkswagen removed the Salt Lake County action to federal court.

The Environmental Protection Commission of Hillsborough County (EPC), Florida, filed an action against

Volkswagen in Florida district court. EPC’s first

amended complaint alleged that Volkswagen violated

See also Utah Code Ann. § 26A-1-123(1)(a) (“It is unlawful

for any person, association, or corporation, and the officers of the

association or corporation to violate state laws or any lawful notice, order, standard, rule, or regulation issued under state laws

or local ordinances regarding public health or sanitation.”).

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two of the county’s anti-tampering and defeat device

regulations, which provide that “[n]o person shall tamper, cause, or allow the tampering of the emission control system of any motor vehicle,” and no person shall

“manufacture, install, sell or advertise for sale, devices

to defeat or render inoperable any component of a motor vehicle’s emission control system.” Rules of Envtl.

Prot. Comm’n of Hillsborough Cty., Rule 1-8.05(1),

(6).13 The complaint alleged that Volkswagen violated

these provisions by installing defeat devices in new vehicles, and by tampering with the emission control systems of used vehicles registered in the county through

a program of field fixes and recall campaigns. The penalty for violating Hillsborough County’s anti-tampering and defeat device regulation is up to $5,000 per violation, with each day of violation constituting a separate offense. See Hillsborough County Environmental

Protection Act, Fla. Laws 84-446 § 17(2) (as amended

by Fla. Laws 87-495 (2005)).

The Counties’ claims were transferred to the district court presiding over the MDL as tag-along actions. Volkswagen moved to dismiss the Counties’

claims for failure to state a claim. The district court

granted the motion. It first determined that, on their

face, the Counties’ anti-tampering rules applied to

Volkswagen’s conduct in installing and subsequently

As used in the Hillsborough County regulations, “emission

control system” means “the devices and mechanisms installed as

original equipment at the time of manufacture ... for the purpose

of reducing or aiding in the control of emissions,” Rules of Envtl.

Prot. Comm’n of Hillsborough Cty., Rule 1-8.03(2)(b), and “tampering” means “the intentional inactivation, disconnection, removal or other modification of a component or components of the

emission control system resulting in it being inoperable,” id.,

Rule 1-8.03(2)(h).

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enhancing the defeat devices. Volkswagen does not

challenge this conclusion.

Nevertheless, the district court dismissed the Counties’ actions with prejudice. It held that the Counties’

claims, as applied to new vehicles, were preempted by

§ 209 of the CAA, which precludes state and local governments from adopting or attempting to enforce “any

standard relating to the control of emissions from new

motor vehicles or new motor vehicle engines.” 42

U.S.C. § 7543(a). As to post-sale vehicles, the district

court concluded that the CAA preempts the Counties’

anti-tampering rules because Volkswagen made postsale software changes on a model-wide basis and Congress intended for model-wide tampering to be regulated exclusively by the EPA.

On appeal, the Counties argue that the CAA does

not preempt their claims for either pre-sale or postsale vehicles.

We have jurisdiction under 28 U.S.C. § 1291. We review the district court’s preemption analysis de novo.

Ting v. AT&T, 319 F.3d 1126, 1135 (9th Cir. 2003).

The question on appeal is whether the Counties’

regulations imposing penalties for tampering with

emission control systems in motor vehicles are expressly or impliedly preempted by the CAA’s motor vehicle emission standards. We begin with the framework

for considering whether Congress has preempted (or

displaced) state law. The Supremacy Clause provides

that federal law “shall be the supreme Law of the

Land; and the Judges in every State shall be bound

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thereby, any Thing in the Constitution or Laws of any

State to the Contrary notwithstanding.” U.S. Const.

art. VI, cl. 2. “The Clause provides a ‘rule of decision’

for determining whether federal or state law applies in

a particular situation.” Kansas v. Garcia, ––– U.S. –––

–, 140 S. Ct. 791, 801, 206 L.Ed.2d 146 (2020) (quoting

Armstrong v. Exceptional Child Ctr., Inc., 575 U.S.

320, 324, 135 S.Ct. 1378, 191 L.Ed.2d 471 (2015)). The

basic principle is as follows: “If federal law 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.” Id. (internal quotation

marks omitted) (quoting Murphy v. Nat’l Collegiate

Athletic Ass’n, ––– U.S. ––––, 138 S. Ct. 1461, 1480, 200

L.Ed.2d 854 (2018)).

Congress may expressly preempt state law by enacting a clear statement to that effect. Id. “If the statute contains an express pre-emption clause, the task of

statutory construction must in the first instance focus

on the plain wording of the clause, which necessarily

contains the best evidence of Congress’ pre-emptive intent.” CSX Transp., Inc. v. Easterwood, 507 U.S. 658,

664, 113 S.Ct. 1732, 123 L.Ed.2d 387 (1993).

Congress may also preempt state law implicitly. In

discerning whether there is implied preemption, our

analysis “must be guided by two cornerstones of ... preemption jurisprudence.” Wyeth v. Levine, 555 U.S. 555,

565, 129 S.Ct. 1187, 173 L.Ed.2d 51 (2009). “First, ‘the

purpose of Congress is the ultimate touchstone in

every pre-emption case.’” Id. (quoting Medtronic, Inc.

v. Lohr, 518 U.S. 470, 485, 116 S.Ct. 2240, 135 L.Ed.2d

700 (1996)). We must find such a purpose “grounded ‘in

16a

the text and structure of the statute at issue.’” Garcia,

140 S. Ct. at 804 (quoting CSX Transp., Inc., 507 U.S.

at 664, 113 S.Ct. 1732). “Second, in all pre-emption

cases ... we start with the assumption that the historic

police powers of the States” are not preempted “unless

that was the clear and manifest purpose of Congress.”

Wyeth, 555 U.S. at 565, 129 S.Ct. 1187 (alteration

adopted and internal quotation marks omitted) (quoting Lohr, 518 U.S. at 485, 116 S.Ct. 2240). Both of these

cornerstones support the same analytic approach: “a

high threshold must be met” before a court will conclude that a federal law has impliedly preempted a

state law. Whiting, 563 U.S. at 607, 131 S.Ct. 1968 (citation omitted).

The Supreme Court has articulated two circumstances—referred to as “field preemption” and “conflict preemption”—where Congress’s implicit intent to

preempt state law clears that high threshold. First,

“when federal law occupies a ‘field’ of regulation ‘so

comprehensively that it has left no room for supplementary state legislation,’” Murphy, 138 S. Ct. at 1480

(quoting R.J. Reynolds Tobacco Co. v. Durham Cty.,

479 U.S. 130, 140, 107 S.Ct. 499, 93 L.Ed.2d 449 (1986)),

a court may infer that Congress intended to preempt

state law.

Second, when a state law “actually conflicts with

federal law,” English v. Gen. Elec. Co., 496 U.S. 72, 79,

110 S.Ct. 2270, 110 L.Ed.2d 65 (1990), either because

“compliance with both state and federal law is impossible,” or because “the state law ‘stands as an obstacle to

the accomplishment and execution of the full purposes

and objectives of Congress,’” Oneok, Inc. v. Learjet,

Inc., 575 U.S. 373, 377, 135 S.Ct. 1591, 191 L.Ed.2d 511

17a

(2015) (quoting California v. ARC Am. Corp., 490 U.S.

93, 100–01, 109 S.Ct. 1661, 104 L.Ed.2d 86 (1989)), a

court may again conclude that Congress implicitly intended to preempt state law. To evaluate a claim based

on the second type of conflict preemption—referred to

as “obstacle preemption”—a court must identify the

“full purposes and objectives” of the federal law from

“the text and structure of the statute at issue.” Garcia,

140 S. Ct. at 804 (quoting CSX Transp., Inc., 507 U.S.

at 664, 113 S.Ct. 1732). “The Supremacy Clause gives

priority to ‘the Laws of the United States,’” not the priorities and preferences of federal officers, id. at 807, or

the “unenacted approvals, beliefs, and desires” of Congress, P.R. Dep’t of Consumer Affairs v. Isla Petroleum Corp., 485 U.S. 495, 501, 108 S.Ct. 1350, 99

L.Ed.2d 582 (1988).

The Supreme Court has found obstacle preemption

in only a small number of cases. First, where the federal legislation at issue involved a “uniquely federal

area[ ] of regulation,” the Court has inferred a congressional intent to preempt state laws “that directly interfered with the operation of the federal program.” Whiting, 563 U.S. at 604, 131 S.Ct. 1968. Such unique federal areas include exercising foreign affairs powers,

Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363,

373–74, 120 S.Ct. 2288, 147 L.Ed.2d 352 (2000), sanctioning fraud on a federal agency, Buckman Co. v.

Plaintiffs’ Legal Comm., 531 U.S. 341, 353, 121 S.Ct.

1012, 148 L.Ed.2d 854 (2001), and regulating maritime

vessels, United States v. Locke, 529 U.S. 89, 97, 120

S.Ct. 1135, 146 L.Ed.2d 69 (2000). Second, the Court

has inferred that Congress made “a considered judgment” or “a deliberate choice” to preclude state regu-

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lation when a federal enactment clearly struck a particular balance of interests that would be disturbed or

impeded by state regulation. Arizona, 567 U.S. at 405,

132 S.Ct. 2492. Thus, a state law imposing criminal penalties on aliens who sought or engaged in unlawful employment “would interfere with the careful balance

struck by Congress,” because “Congress made a deliberate choice not to impose criminal penalties” for the

same conduct. Id. at 405, 406, 132 S.Ct. 2492; see also

Geier v. Am. Honda Motor Co., 529 U.S. 861, 879–81,

120 S.Ct. 1913, 146 L.Ed.2d 914 (2000) (holding that

certain federal safety regulations “deliberately sought

a gradual phase-in” of airbags to give manufacturers

more time and increase public acceptance, and that

state tort law requiring the immediate installation of

airbags would have “stood as an obstacle” to the phasein program “that the federal regulation deliberately

imposed”); Int’l Paper Co. v. Ouellette, 479 U.S. 481,

494, 497, 107 S.Ct. 805, 93 L.Ed.2d 883 (1987) (holding

that the federal statute’s comprehensive regulation

“carefully addressed” the “balance of public and private interests,” giving rise to the inference that Congress did not intend to “tolerate common-law suits that

have the potential to undermine this regulatory structure”). Where Congress has determined the appropriate balance, state regulation involving a different

method of enforcement may upset that balance and be

displaced by federal law even where the state “attempts to achieve one of the same goals as federal law.”

Arizona, 567 U.S. at 406, 132 S.Ct. 2492.

Absent such circumstances, the Supreme Court has

frequently rejected claims of obstacle preemption. For

instance, the Court does not infer Congress intended

to preempt state enactments merely because they

19a

overlap with a federal act. “Our federal system would

be turned upside down if we were to hold that federal

criminal law preempts state law whenever they overlap, and there is no basis for inferring that federal

criminal statutes preempt state laws whenever they

overlap.” Garcia, 140 S. Ct. at 806.

This analysis is equally applicable in the civil context, especially when the federal statute expressly or

impliedly preserves state laws that might overlap with

a federal statute. See Whiting, 563 U.S. at 607, 131

S.Ct. 1968. The Court gives great weight to Congress’s

inclusion of a provision preserving states’ enforcement

authority. In Williamson, for instance, the Court concluded that a federal statute giving manufacturers a

choice to select a less effective car safety device did not

preempt a state tort suit that could require the manufacturer to select a more effective device. 562 U.S. at

332–36, 131 S.Ct. 1131. The Court reasoned that because Congress included “a statutory saving clause”

preserving state remedies, it foresaw “the likelihood of

a continued meaningful role for state tort law.” Id. at

335, 131 S.Ct. 1131. Similarly, in Whiting, the Court

concluded that federal law preempting “any State or

local law imposing civil or criminal sanctions” on employers who hire “unauthorized aliens,” did not impliedly preempt an Arizona law that authorized (and

sometimes required) the suspension or revocation of an

employer’s business license if the employer knowingly

or intentionally employed unauthorized aliens. 563

U.S. at 587, 131 S.Ct. 1968. The Court held that there

was no express preemption, because the state law fell

“comfortably within the saving clause.” Id. at 596, 131

S.Ct. 1968. The Court likewise concluded there was no

implied preemption of the Arizona law, because where

20a

“Congress specifically preserved such authority for the

States, it stands to reason that Congress did not intend

to prevent the States from using appropriate tools to

exercise that authority.” Id. at 600–01, 131 S.Ct. 1968.

Although a saving clause raises the inference that

Congress did not intend to preempt state law, the existence of a saving clause does not “foreclose or limit

the operation of ordinary pre-emption principles” that

are “grounded in longstanding precedent.” Geier, 529

U.S. at 869, 874, 120 S.Ct. 1913; see also Buckman, 531

U.S. at 352, 121 S.Ct. 1012 (broadening Geier‘s specific

holding to apply to all saving clauses). We may not interpret a saving clause as preserving a state law that

would so conflict and interfere with a federal enactment that it would defeat the federal law’s purpose or

essentially nullify it; rather, such a state law is

preempted under ordinary preemption principles. Said

otherwise, we infer that Congress did not intend the

saving provisions in a federal law to be interpreted in a

way that causes the federal law “to defeat its own objectives, or potentially, as the Court has put it before,

to destroy itself.” Geier, 529 U.S. at 872, 120 S.Ct. 1913

(internal quotation marks and citation omitted). But

this unremarkable principle means only that a court

must interpret a saving clause as it would any statutory

language: giving effect to its plain language and meaning in a way that best comports with the statute as a

whole. See FDA v. Brown & Williamson Tobacco

Corp., 529 U.S. 120, 133, 120 S.Ct. 1291, 146 L.Ed.2d

121 (2000) (explaining that courts must interpret statutes “as a symmetrical and coherent regulatory

scheme ... and fit, if possible, all parts into an harmonious whole” (citation and quotation marks omitted)); see

21a

also A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts 180 (2012) (“[T]here can be no

justification for needlessly rendering provisions in conflict if they can be interpreted harmoniously.”).

III

We apply these principles to the question whether

the Counties’ anti-tampering rules are preempted.

Some background is helpful to put our interpretation of the CAA and its relationship with states’ laws

and police powers into context. The CAA is a joint venture, one that makes “the States and the Federal Government partners in the struggle against air pollution.”

Gen. Motors Corp. v. United States, 496 U.S. 530, 532,

110 S.Ct. 2528, 110 L.Ed.2d 480 (1990). The basic division of responsibility in Title II of the CAA reflects the

cooperative federalism principles that have long informed this nation’s air pollution control laws. See

Comm. for a Better Arvin v. EPA, 786 F.3d 1169, 1173

(9th Cir. 2015) (“[T]he CAA has established a uniquely

important system of cooperative federalism in the

quest for clean air.”); GenOn REMA, LLC v. EPA, 722

F.3d 513, 516 (3d Cir. 2013) (“This ‘cooperative federalism’ structure is a defining feature of the [CAA].”).

Prior to 1955, the regulation of air pollution was the

sole responsibility of the states as a matter of public

health, and the states enacted various regulations pursuant to their historic police powers. See Arthur C.

Stern, History of Air Pollution Legislation in the

United States, 32 J. Air Pollution Control Ass’n 44, 44,

47 (1982); see also, e.g., 1947 Cal. Stat. 1640; 1911 Iowa

22a

Acts 27; 1887 Minn. Special Laws 623. The federal government first partnered with the states in the fight

against air pollution in 1955, enacting the Air Pollution

Control Act and espousing a national policy “to preserve and protect the primary responsibilities and

rights of the States and local governments in controlling air pollution.” Act of July 14, 1955, Pub. L. No. 84159, 69 Stat. 322, 322 (1955). In 1963, Congress enacted

the first version of the CAA, Act of Dec. 17, 1963, Pub.

L. No. 88-206, 77 Stat. 392 (1963), which was “[b]uilt on

a scheme of ‘cooperative federalism,’” MacClarence v.

EPA, 596 F.3d 1123, 1125 (9th Cir. 2010).

The current version of the CAA recognizes “that air

pollution prevention ... and air pollution control at its

source is the primary responsibility of States and local

governments.” 42 U.S.C. § 7401(a)(3). In regard to air

pollution from motor vehicles, Congress has taken a

stronger lead in enforcing emission standards. Nevertheless, it has consistently preserved the legitimacy of

state regulations. For instance, although Congress displaced state emission standards for new motor vehicles

in 1967, see Air Quality Act of 1967, Pub. L. No. 90-148,

§ 208(a), 81 Stat. 485, 501 (1967); Clean Air Amendments of 1970, Pub. L. No. 91-604, § 8(a), 84 Stat. 1676,

1694 (1970), it has maintained a substantial role for

states in post-sale implementation and enforcement

ever since, see 42 U.S.C. §§ 7416, 7543(d); see also

Ashoff v. City of Ukiah, 130 F.3d 409, 412–13 (9th Cir.

1997) (describing how the CAA’s citizen suit provision

enables citizens to “sue on the basis of more stringent

state standards”). In sum, the regulation of air pollution falls within the historic police powers of the states,

see Huron Portland Cement Co., 362 U.S. at 442, 80

23a

S.Ct. 813, and the modern CAA maintains a cooperative federalism approach, see Gen. Motors Corp., 496

U.S. at 532, 110 S.Ct. 2528.

We now turn to the relevant text of the CAA. Under

Title II, Part A of the CAA, the federal government has

authority to establish “standards applicable to the

emission of any air pollutant from ... new motor vehicles.” 42 U.S.C. § 7521(a)(1). This includes the authority to set emission limits for air pollutants, § 7521(b),

and to promulgate standards governing the use of

emission control devices, § 7521(a)(4)(A). Failure to

comply with the CAA and regulatory emission standards for new motor vehicles can result in civil penalties,

criminal penalties, or both. See §§ 7413(c), 7524.

The CAA expressly preempts certain state and local

laws regulating emissions from new motor vehicles.

Under § 209(a) of the CAA:

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.

No State shall require certification, inspection, or any other approval relating to the

control of emissions from any new motor

vehicle or new motor vehicle engine as condition precedent to the initial retail sale, titling (if any), or registration of such motor

vehicle, motor vehicle engine, or equipment.

24a

42 U.S.C. § 7543(a). A “new motor vehicle” is “a motor vehicle the equitable or legal title to which has

never been transferred to an ultimate purchaser,” §

7550(3), in other words, a pre-sale vehicle. Although

the CAA does not define a “standard relating to the

control of emissions,” the Supreme Court has provided

a definition. See Engine Mfrs. Ass’n v. South Coast Air

Quality Mgmt. Dist., 541 U.S. 246, 252–53, 124 S.Ct.

1756, 158 L.Ed.2d 529 (2004) (“South Coast”). In South

Coast, the Court first turned to the dictionary to define

“standard” as “that which ‘is established by authority,

custom, or general consent, as a model or example; criterion; test.’” Id. (quoting Webster’s Second New International Dictionary 2455 (1945)). The Court then

stated that “[t]he criteria referred to in § 209(a) relate

to the emission characteristics of a vehicle or engine.”

Id. at 253, 124 S.Ct. 1756. A vehicle meets the criteria

relating to emission characteristics in one of three

ways: by not emitting “more than a certain amount of

a given pollutant”; by being “equipped with a certain

type of pollution-control device”; or by having “some

other design feature related to the control of emissions.” Id. Accordingly, even a requirement “that certain purchasers may buy only vehicles with particular

emission characteristics” constitutes an “attempt to

enforce” a “standard.” Id. at 255, 124 S.Ct. 1756. In

light of this definition, § 209(a) precludes state or local

governments from imposing any restriction that has

the purpose of enforcing emission characteristics for

pre-sale, motor vehicles.

After a new motor vehicle is sold “to an ultimate

purchaser,” 42 U.S.C. § 7550(3), the express preemption clause no longer applies. Instead, the CAA preserves state and local governments’ authority over

25a

post-sale motor vehicles. Section 209(d) of the CAA

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.” 42 U.S.C. § 7543(d). A vehicle is registered

or licensed after sale to a consumer, so the saving

clause applies to post-sale vehicles. 14 The CAA does not

define “operation,” so taking South Coast’s lead, we

look to the dictionary, which defines it as “the quality

or state of being functional or operative” or the

“method or manner of functioning.” Operation, Webster’s Third New International Dictionary 1518 (2002).

Removing or making inoperable a vehicle’s emission

control system (i.e., tampering) affects the vehicle’s

“quality” and “method” of functioning (i.e., operation).

Therefore, the plain language of § 209(d) preserves

state and local governments’ authority to prohibit tampering with emission control systems in post-sale vehicles.

Despite the saving clause, the EPA retains some authority over post-sale vehicles. The CAA requires manufacturers of new motor vehicles to warrant the emission control system of the vehicle for the “useful life”

of the vehicle, with the useful life being 10 years or

100,000 miles. 42 U.S.C. §§ 7521(d), 7541(a)(1). Manufacturers must test post-sale vehicles for compliance

with EPA emission standards by performing “in-use

verification testing” on vehicles obtained from consumers at prescribed mileage intervals. See § 7541(b); 40

C.F.R. § 86.1845–04. If, pursuant to an EPA mandatory

See, e.g., Nev. Rev. Stat. § 482.423 (2019) (indicating that

the “certificate of registration and license plates for the vehicle”

will be issued only after “the sale of a new vehicle”).

26a

reporting regulation, a manufacturer reports that a

“specific emission-related defect exists in twenty-five

or more vehicles or engines of the same model year,”

40 C.F.R. § 85.1903(a)(2), then the EPA can require the

manufacturer to conduct a recall and remedy the defect, all at the manufacturer’s expense, 42 U.S.C. §

7541(c), (d). The EPA also has the authority to require

manufacturers to make post-sale “[c]hanges to the configuration of vehicles covered by a Certificate of Conformity,” including changes to vehicle software. See 40

C.F.R. § 86.1842–01(b). Failure to comply with any

EPA post-sale regulation can result in civil enforcement actions and other penalties. 42 U.S.C. § 7524.

Last, the CAA prohibits tampering with air pollution control devices in all motor vehicles, both pre-sale

and post-sale. See § 7522(a)(3)(A), (B). 15 These sections

make it a violation of the CAA “for any person to re-

42 U.S.C. § 7522(a)(3) provides that it shall be unlawful:

(A) for any person to remove or render inoperative any device

or element of design installed on or in a motor vehicle or motor

vehicle engine in compliance with regulations under this subchapter prior to its sale and delivery to the ultimate purchaser, or for

any person knowingly to remove or render inoperative any such

device or element of design after such sale and delivery to the

ultimate purchaser; or

(B) for any person to manufacture or sell, or offer to sell, or

install, any part or component intended for use with, or as part

of, any motor vehicle or motor vehicle engine, where a principal

effect of the part or component is to bypass, defeat, or render

inoperative any device or element of design installed on or in a

motor vehicle or motor vehicle engine in compliance with regulations under this subchapter, and where the person knows or

should know that such part or component is being offered for sale

or installed for such use or put to such use.

27a

move or render inoperative” an air pollution control device both before and after “sale and delivery to the ultimate purchaser,” or to install a defeat device on any

motor vehicle at any time. Id. In the event of a tampering violation, the CAA provides for the imposition of a

civil penalty not to exceed $25,000 per vehicle, with additional limitations on penalties for related offenses

committed by specified persons. § 7524(a). 16 The EPA

can give effect to the CAA’s penalty provision through

a civil or administrative action. § 7524(b), (c). When imposing a civil penalty through an administrative action,

the EPA must “take into account” a range of factors,

including “the gravity of the violation, the economic

benefit or savings (if any) resulting from the violation,

the size of the violator’s business, the violator’s history

of compliance with this subchapter, action taken to

remedy the violation, the effect of the penalty on the

42 U.S.C. § 7524(a) provides:

Any person who violates sections 7522(a)(1), 7522(a)(4), or

7522(a)(5) of this title or any manufacturer or dealer who violates

section 7522(a)(3)(A) of this title shall be subject to a civil penalty

of not more than $25,000. Any person other than a manufacturer

or dealer who violates section 7522(a)(3)(A) of this title or any

person who violates section 7522(a)(3)(B) of this title shall be subject to a civil penalty of not more than $2,500. Any such violation

with respect to paragraph (1), (3)(A), or (4) of section 7522(a) of

this title shall constitute a separate offense with respect to each

motor vehicle or motor vehicle engine. Any such violation with

respect to section 7522(a)(3)(B) of this title shall constitute a separate offense with respect to each part or component. Any person

who violates section 7522(a)(2) of this title shall be subject to a

civil penalty of not more than $25,000 per day of violation.

28a

violator’s ability to continue in business, and such other

matters as justice may require.” § 7524(c)(2). 17

We now consider the application of the preemption

doctrine to the Counties’ anti-tampering rules. We first

ask whether the CAA’s express preemption provision

preempts the Counties’ anti-tampering rules. To the

extent the CAA’s express preemption provision does

not apply, we ask whether the Counties’ rules conflict

with the CAA, and therefore are impliedly preempted.

See Williamson, 562 U.S. at 329–30, 131 S.Ct. 1131.

Volkswagen argues that § 209(a), the CAA’s express

preemption provision, preempts the Counties’ imposition of anti-tampering rules on pre-sale vehicles. We

agree. Section 209(a) precludes a local government

from enforcing “any standard relating to the control of

emissions from new motor vehicles.” 42 U.S.C. §

7543(a). The Counties seek to enforce rules prohibiting

persons from making changes to a motor vehicle’s

emission control system. See Rules of Envtl. Prot.

Comm’n of Hillsborough Cty., Rule 1-8.05(1); Utah Admin. Code R. 307-201-4. The EPC additionally seeks to

enforce a rule prohibiting the installation of any device

designed “to defeat or render inoperable any component of a motor vehicle’s emission control system.”

Rules of Envtl. Prot. Comm’n of Hillsborough Cty.,

Rule 1-8.05(6). Because these requirements relate to

When the EPA initiates a civil action, the district court must

“take into account” the same range of factors when assessing a

penalty. 42 U.S.C. § 7524(b).

29a

the emission control system of a vehicle, they constitute standards for purposes of § 209(a). Therefore, §

209(a) preempts the Counties’ enforcement of these

rules with respect to new motor vehicles. See 42 U.S.C.

§ 7543(a).

The Counties argue that their anti-tampering rules

are not “emission standards” for purposes of § 209(a)

because they do not attempt to enforce the limitations

on emissions of pollutants from new motor vehicles

that are set forth in § 202 of the CAA, 42 U.S.C. § 7521

(emission standards for new motor vehicles). In the

same vein, the Counties argue that the anti-tampering

rules are not “standard[s] relating to the control of

emissions” because they merely prohibit tampering

with emission control systems. According to the Counties, these anti-tampering rules do not relate to the

control of emissions because “[a] vehicle does not have

to exceed emission standards for a tampering violation

to occur; a violation occurs whenever there is ‘the act

of removing or rendering inoperative any emission control device or element of design.’” These arguments

fail, because South Coast defined “standard” as denoting not only “numerical emission levels with which vehicles or engines must comply, e.g., 42 U.S.C. §

7521(a)(3)(B)(ii),” but also “emission-control technology with which they must be equipped, e.g., §

7521(a)(6).” South Coast, 541 U.S. at 253, 124 S.Ct.

1756. Because the Counties’ rules attempt to enforce

the integrity of “the emission-control technology with

which” the pre-sale vehicles must be equipped, id.,

they attempt to enforce a “standard,” and are therefore

preempted by § 209(a).

30a

We turn to Volkswagen’s argument that § 209(a)

also expressly preempts the Counties’ anti-tampering

rules as applied to post-sale vehicles. It clearly does

not. By its terms, § 209(a) preempts state and local regulations “relating to the control of emissions from new

motor vehicles.” 42 U.S.C. § 7543(a) (emphasis added).

The provision does not apply to post-sale vehicles.

Nevertheless, Volkswagen argues that the preemptive effect of § 209(a) does not end as soon as the “equitable or legal title” to a vehicle has “been transferred

to an ultimate purchaser.” § 7550(3). According to

Volkswagen, a long line of federal authority recognizes

that § 209(a) would be a dead letter if a state or local

government could impose a different emission standard the moment after title is transferred to a purchaser. In the leading case of Allway Taxi, Inc. v. City

of New York, a district court upheld a local ordinance

requiring licensed taxicabs to use a certain type of gasoline and to be equipped with an emission control device, but stated that a state or locality is not necessarily

“free to impose its own emission control standards the

moment after a new car is bought and registered” because that “would be an obvious circumvention of the

Clean Air Act and would defeat the congressional purpose of preventing obstruction to interstate commerce.” 340 F. Supp. 1120, 1124 (S.D.N.Y. 1972).

Volkswagen further notes that the EPA cited Allway

Taxi with approval in the preamble to a regulation,

stating that the “EPA expects that the principles articulated in Allway Taxi will be applied by the courts.”

Control of Air Pollution, 59 Fed. Reg. 31306, 31330

(June 17, 1994).

31a

Volkswagen’s reliance on Allway Taxi is misplaced.

The Counties’ anti-tampering rules do not require

Volkswagen to comply with a local emission standard

that is different from the federal standard, nor do they

impose a standard that would effectively require car

manufacturers to alter their manufacture of new vehicles before sale. Rather, the anti-tampering rules prohibit post-sale tampering with federally mandated

emission control systems. In this context, the Counties

can regulate Volkswagen’s post-sale tampering with

vehicles’ emission control systems to make them less

effective just as it can penalize the local garage mechanic who disconnects vehicles’ emission control devices to improve performance or gas mileage. Such an

exertion of authority is not expressly preempted by §

209(a).

Because we reject Volkswagen’s argument that §

209 of the CAA expressly preempts the Counties’ antitampering rules as applied to post-sale vehicles, we

turn to the more difficult question raised by the parties: whether the CAA impliedly preempts the Counties’ anti-tampering rules as applied to post-sale vehicles.

Volkswagen’s theory of implied preemption is based

only on the doctrine of obstacle preemption. 18 Specifi-

Volkswagen does not argue that Congress intended to occupy the field of emission regulations, nor could it, given that

Congress contemplated that state and local governments would

play a role in implementing the motor vehicle controls mandated

32a

cally, Volkswagen claims that the Counties’ anti-tampering rules stand “as an obstacle to the accomplishment and execution of the full purposes and objectives”

of Title II, Part A of the CAA, and therefore they are

impliedly preempted. Oneok, 575 U.S. at 377, 135 S.Ct.

1591 (quoting ARC Am. Corp., 490 U.S. at 100–01, 109

S.Ct. 1661).

In considering Volkswagen’s obstacle preemption

arguments, we begin with the text and structure of the

CAA. See Garcia, 140 S. Ct. at 804. As directed by the

Supreme Court, we consider the impact of Congress’s

inclusion of a saving clause, see Williamson, 562 U.S.

at 335, 131 S.Ct. 1131; Whiting, 563 U.S. at 600–01, 131

S.Ct. 1968, in light of the presumption “that ‘the historic police powers of the States’ are not superseded

‘unless that was the clear and manifest purpose of Congress,’” Arizona, 567 U.S. at 400, 132 S.Ct. 2492 (citation omitted).

The CAA’s preemption clause (§ 209(a)) and saving

clause (§ 209(d)) allocate authority between the federal

government and state governments as follows: Section

209(a) gives the EPA exclusive authority to establish

standards for new vehicles, 42 U.S.C. § 7543(a), while §

209(d) preserves the authority of state and local governments over post-sale vehicles, 42 U.S.C. § 7543(d).

The plain language of § 209(d), providing that nothing

in Title II “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

by the CAA. See 42 U.S.C. § 7416. Nor does Volkswagen argue

that it is impossible to comply with both state and federal regulations, given that § 7522(a)(3)(A) and the Counties’ anti-tampering

rules prohibit the same conduct.

33a

registered or licensed motor vehicles,” appears to give

states substantial authority to enforce standards related to post-sale vehicles, including sanctioning tampering with emission control systems. Id.; see also

Whiting, 563 U.S. at 611, 131 S.Ct. 1968 (holding that

Congress’s express reservation of state authority to

impose certain civil sanctions means what it says). The

language of § 209(d) also indicates that Congress foresaw “the likelihood of a continued meaningful role” for

state enforcement. Williamson, 562 U.S. at 335, 131

S.Ct. 1131. Indeed, the vast majority of states have

laws prohibiting tampering with air pollution control

systems in motor vehicles. 19 We may presume that Con-

See Ala. Admin. Code r. 335-3-9.06; Alaska Admin. Code tit.

18, § 52.015; Ariz. Rev. Stat. Ann. § 28-1522; Ark. Admin. Code

014.01.5-7; Cal. Code Regs. tit. 16, § 3362.1; Colo. Rev. Stat. § 424-314; Conn. Gen. Stat. Ann. § 14-164c; Del. Code Ann. tit. 21, §

6701; D.C. Mun. Regs. tit. 18, § 750; Fla. Stat. Ann. § 316.2935;

Ga. Code Ann. § 40-8-130; Haw. Code R. § 11-60.1-34; Idaho Code

Ann. § 49-229; Ill. Admin. Code tit. 35, § 240.103; 326 Ind. Admin.

Code 13-2.1-3; Iowa Code Ann. § 321.78; La. Admin. Code tit. 55,§

817; Md. Code Ann. Transp. § 22-402.1; 310 Mass. Code Regs.

60.02; Mich. Comp. Laws Ann. §§ 324.6504, 324.6535; Minn. R.

7023.0120; Mo. Code Regs. Ann. tit. 10, § 10-5.381; Mont. Admin.

R. 17.8.325; 129 Neb. Admin. Code Ch. 36, § 001; Nev. Admin.

Code § 445B.575; N.H. Code Admin. R. Env-A 1102.01; N.J. Admin. Code § 7:27–15.7; N.Y. Comp. Codes R. & Regs. tit. 6, § 2186.2; 19a N.C. Admin. Code 3D.0542; N.D. Admin. Code 33.1-1508-02; Ohio Admin. Code 3745-80-02; Okla. Stat. Ann. tit. 47, § 12423; Or. Rev. Stat. Ann. § 815.305; 75 Pa. Stat. and Cons. Stat.

Ann. § 4531; 280-30 R.I. Code R. § 1.13.2; S.C. Code Ann. § 16-2190; Tenn. Comp. R. & Regs. 1200-03-36-.03; 30 Tex. Admin. Code

§ 114.20; Utah Admin. Code r. R307-201-4; 16-5 Vt. Code R. § 702;

9 Va. Admin. Code § 5-40-5670; Wash. Admin. Code § 173-42119

34a

gress was aware of these laws and did not intend to displace them, given that many of these state laws existed

during the period in which Congress amended the CAA

without making any changes to the preservation of

state authority. 20 See, e.g., Wis. Admin. Code NR §

154.17(2) (1972); Mont. Admin. R. 17.8.325 (effective

Dec. 31, 1972); see also Goodyear Atomic Corp. v. Miller, 486 U.S. 174, 184–85, 108 S.Ct. 1704, 100 L.Ed.2d

158 (1988) (“[Courts] generally presume that Congress

is knowledgeable about existing law pertinent to the

legislation it enacts.”).21 Congress’s “certain awareness

of the prevalence of state” law, coupled with its “silence

on the issue,” “is powerful evidence that Congress did

100; W. Va. Code Ann. § 22-5-15; Wis. Admin. Code NR § 485.06;

20.0002-13 Wyo. Code R. § 2.

Congress amended the CAA three times since enacting the

saving clause in 1967, see Clean Air Amendments of 1970, Pub. L.

No. 91-604, 84 Stat. 1676 (1970); Clean Air Act Amendments of

1977, Pub. L. No. 95-95, 91 Stat. 685 (1977); Clean Air Act,

Amendments, Pub. L. No. 101-549, 104 Stat. 2399 (1990), but the

language of the saving clause has never changed, see Air Quality

Act of 1967, Pub. L. No. 90-148, § 208(c), 81 Stat. 485, 501 (1967),

renumbered at 84 Stat. at 1694, and codified at 42 U.S.C. §

7543(d).

To the extent we give weight to the EPA’s interpretation of

the CAA in this context, it is clear that the EPA did not read the

CAA as preempting the states’ enforcement efforts. See Approval

and Promulgation of Air Quality State Implementation Plans

(SIP), 63 Fed. Reg. 6651-01, 6652 (Feb. 10, 1998) (“Even though

there is a federal [anti-tampering] law which provides for EPA

enforcement, many states [have enacted anti-tampering laws]

and use them successfully as enforcement tools for resolutions of

consumer complaints involving tampered vehicles, deterrence of

tampering, deterrence of selling tampered vehicles, and enforcement of tampering violations.”). We note, once again, that the

EPA declined to provide its opinion on this issue. See supra at

1206 n.4.

35a

not intend” to preempt local anti-tampering laws. Wyeth, 555 U.S. at 575, 129 S.Ct. 1187; see also Bonito

Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141,

166–67, 109 S.Ct. 971, 103 L.Ed.2d 118 (1989) (“The

case for federal preemption is particularly weak where

Congress has indicated its awareness of the operation

of state law in a field of federal interest, and has nonetheless decided to ‘stand by both concepts and to tolerate whatever tension there is between them.’” (alteration adopted and citation omitted)); Head v. N.M. Bd.

of Exam’rs in Optometry, 374 U.S. 424, 432, 83 S.Ct.

1759, 10 L.Ed.2d 983 (1963) (holding that a state law

did not stand “as an obstacle to the full effectiveness of

the federal statute” because the federal government

“apparently viewed state regulation of advertising as

complementing its regulatory function, rather than in

any way conflicting with it”). Accordingly, the CAA’s

text and structure, particularly in light of the presumption that Congress does not impliedly preempt states’

historic police powers, weigh against a conclusion that

Congress intended to preempt the Counties’ anti-tampering rules.

Nor are there other factors weighing in favor of obstacle preemption. The regulation of air pollution from

post-sale vehicles does not involve a “uniquely federal”

area of enforcement, Whiting, 563 U.S. at 604, 131

S.Ct. 1968, because the basic division of responsibility

in Title II of the CAA reflects the cooperative federalism principles that have long informed this nation’s air

pollution control laws, see supra Part III.A. And even

if the regulation of post-sale vehicles were an important area of federal concern, the EPA’s ability to

enforce the federal anti-tampering law, 42 U.S.C. §

7522(a)(3)(A), is not impeded by the Counties’ parallel

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rules, and so there is no basis to infer a congressional

intent to preempt them. See Whiting, 563 U.S. at 605,

131 S.Ct. 1968 (holding that a state law regulating unauthorized alien employment did not interfere with

federal immigration law where the federal program

“operates unimpeded by the state law”). We also see no

indication that Congress struck a balance in the enforcement of post-sale emission standards that would

be upset by state anti-tampering rules. Unlike Arizona

and Geier, where Congress “deliberately sought” a

particular policy goal at the expense of others, Geier,

529 U.S. at 879, 120 S.Ct. 1913; see also Arizona, 567

U.S. at 405, 132 S.Ct. 2492, the text and structure of

the CAA expresses a general policy to prohibit tampering by “any person” at any time. § 7522(a)(3)(A). Faced

with such a generalized congressional objective, and

the fact that Congress does not occupy the field of postsale emission regulations, see supra at 1219 n.18, we

cannot infer that Congress made a “deliberate choice”

to preclude state regulations that overlap with federal

law. Arizona, 567 U.S. at 405, 132 S.Ct. 2492.

Accordingly, we conclude that Congress intended to

allow states to enforce anti-tampering rules related to

post-sale vehicles, and that such rules are not impliedly

preempted.

Despite the strong indications that Congress did not

intend to preempt state efforts to prevent tampering in

post-sale vehicles, Volkswagen argues that interpreting the CAA as allowing such state enforcement efforts

would defeat the “purposes and objectives of Congress.” Oneok, 575 U.S. at 377, 135 S.Ct. 1591 (citation

omitted). Therefore, Volkswagen asserts, the Counties’

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anti-tampering rules are preempted under ordinary

preemption principles. Volkswagen relies on two distinct aspects of Title II to support its argument: (1) the

provisions requiring manufacturers to ensure that

post-sale vehicles comply with certain emission requirements on a model-wide basis, and (2) the provisions authorizing the EPA to impose civil penalties on

persons who tamper with vehicles. We consider each of

these arguments in turn.

Volkswagen first argues that Congress intended to

give the EPA exclusive oversight over post-sale compliance with emission standards on a model-wide basis,

and the Counties’ anti-tampering rules pose an obstacle to this goal. 22 Volkswagen’s argument proceeds in

three steps. First, Volkswagen points to the sections of

Volkswagen claims that the legislative history of the CAA

supports this theory because it indicates that Congress wanted to

avoid a patchwork of varying emission standards for vehicles nationwide, further supporting its argument that the Counties’ antitampering rules are preempted. Even if we consider this legislative history, however, it is inapplicable here. The Counties’ rules

(just like every other state anti-tampering rule) do not impose

unique emission standards; rather, they permit local governments to prohibit and penalize tampering with approved emission

control systems, which is exactly what the federal anti-tampering

law prohibits. The existence of identical federal and local laws

would not, as the district court put it, “create nightmares for the

manufacturers.” Therefore, Volkswagen’s concern about a patchwork of varying anti-tampering rules is unwarranted. And as the

Supreme Court has instructed, a mere overlap in federal and

state laws does not, without more, raise the inference that Congress intended to preempt the state laws. Garcia, 140 S. Ct. at

806.

38a

the CAA imposing post-sale obligations on manufacturers and tasking the EPA with ensuring compliance

with those obligations. For instance, the CAA requires

manufacturers to ensure that their vehicles’ emission

control system remains functional for at least 10 years

or 100,000 miles, see 42 U.S.C. §§ 7521(a)(1), (d),

7541(a)(1), (b), and to conduct a recall if certain modelwide defects are detected, see § 7541(c), (d). Second,

Volkswagen acknowledges that the CAA’s saving

clause preserves some state enforcement authority

over post-sale vehicles. Finally, Volkswagen argues

that the only way to harmonize the saving clause with

the EPA’s post-sale enforcement responsibilities is to

conclude that Congress intended the EPA to regulate

post-sale emission standards on a model-wide basis at

the manufacturer level without any interference from

the states, and that Congress also intended the states

to enforce the same standards only on an individualvehicle basis at the end-user level. In other words,

Volkswagen claims that Congress intended to prevent

state and local governments from enforcing their antitampering rules against manufacturers that engage in

post-sale tampering on a model-wide basis. The district

court concluded that such a division of authority between the federal and state governments would be sensible because the EPA was in a better position to regulate tampering when such conduct “involves thousands of vehicles, and the changes are made through

software updates instituted on a nationwide basis.”

We disagree. Whether such a division of labor is reasonable from a policy perspective (or is merely a reading of the CAA tailored to fit Volkswagen’s unique circumstances), this theory of partial preemption is not

39a

“grounded in the text and structure” of the CAA. Garcia, 140 S. Ct. at 804 (citation and internal quotation

marks omitted). Nothing in the CAA raises the inference that Congress intended to place manufacturers

beyond the reach of state and local governments.

Volkswagen itself concedes that the CAA does not afford “a wide-ranging grant of immunity [from state enforcement actions] based on the identity of the actor

(auto manufacturers).” As the district court put it, if “a

manufacturer were to tamper with a single in-use vehicle during vehicle maintenance, the Clean Air Act

would not bar a state or local government from bringing a tampering claim against the manufacturer if the

tampering occurred within its borders.” Nor does anything in the text or structure of the CAA raise the inference that Congress intended to shield a person from

state enforcement actions if that person tampered with

a large number of vehicles or engaged in systematic rather than sporadic tampering. The CAA prohibits “any

person” from tampering with an emission control device, manufacturers and dealers and local mechanics

alike. 42 U.S.C. § 7522(a)(3)(A). And contrary to

Volkswagen’s assertion, the CAA does not classify tampering by reference to its scope. See id. Indeed, the

CAA is entirely silent on this issue, probably because

Congress did not contemplate that a manufacturer

would systematically tamper with emission control devices on post-sale vehicles in order to ensure the devices were effectively (and illegally) disabled. Thus,

there is little textual evidence from which we can infer

that Congress made “a deliberate choice” to shield

such a manufacturer from state enforcement actions.

Arizona, 567 U.S. at 405, 132 S.Ct. 2492.

40a

In short, we cannot discern a congressional intent,

let alone a “clear and manifest purpose of Congress,”

to give the EPA exclusive authority over large-scale,

post-sale tampering by manufacturers, while giving

state and local governments concurrent authority only

when the tampering is conducted on a more casual, individual basis. Id. at 400, 132 S.Ct. 2492. Because we

see no indication that Congress intended to preempt

state and local authority to enforce anti-tampering

rules on a model-wide basis, we reject Volkswagen’s argument that interpreting § 209(d) according to its

terms would cause the CAA to “destroy itself.” Geier,

529 U.S. at 872, 120 S.Ct. 1913 (citation omitted).

Volkswagen next argues that the CAA’s penalty

provision, 42 U.S.C. § 7524, shows that Congress

struck a balance of interests with respect to the imposition of penalties, and this balance would be disturbed

if states could impose their own penalties for tampering with post-sale vehicles. By including a penalty provision in Title II of the CAA, so the argument goes,

Congress intended the EPA to have the exclusive authority to determine the appropriate penalty for every

tampering violation. Therefore, the potential for any

state penalties (large or small) “would seriously undermine the congressional calibration of force.”

To support its claim that the CAA gives the EPA

exclusive authority over the imposition of penalties,

Volkswagen first relies on a line of cases interpreting

the National Labor Relations Act as preventing states

from imposing any remedies for activities potentially

covered by the Act. See San Diego Bldg. Trades Council, Millmen’s Union, Local 2020 v. Garmon, 359 U.S.

41a

236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959); Amalgamated

Ass’n of Street, Elec. Ry. & Motor Coach Emps. of Am.

v. Lockridge, 403 U.S. 274, 91 S.Ct. 1909, 29 L.Ed.2d

473 (1971); Wis. Dep’t of Indus., Labor & Human Relations v. Gould Inc., 475 U.S. 282, 106 S.Ct. 1057, 89

L.Ed.2d 223 (1986). Volkswagen’s reliance is misplaced, because those cases involved a “special

preemption rule” applicable to “state laws regulating

matters that the National Relations Act ‘protects, prohibits, or arguably protects.’” Garcia, 140 S. Ct. at 807

(quoting Gould, 475 U.S. at 286, 106 S.Ct. 1057). Garmon and its progeny are based on “a presumption of

federal preemption,” Brown v. Hotel & Rest. Emps. &

Bartenders Int’l Union Local 54, 468 U.S. 491, 502, 104

S.Ct. 3179, 82 L.Ed.2d 373 (1984), “designed to prevent

‘conflict in its broadest sense’ with the ‘complex and interrelated federal scheme of law, remedy, and administration’” of the National Labor Relations Act, Gould,

475 U.S. at 286, 106 S.Ct. 1057 (quoting Garmon, 359

U.S. at 243, 79 S.Ct. 773). The Supreme Court has declined to extend this rule to other contexts. See Garcia,

140 S. Ct. at 807 (rejecting the argument that such a

rule is “operative or appropriate” in a context not involving the National Labor Relations Act). And it is

clearly not applicable here, where the federal law

makes “the States and the Federal Government partners in the struggle against air pollution,” Gen. Motors

Corp., 496 U.S. at 532, 110 S.Ct. 2528, and where we

assume that Congress did not intend to displace the

historic police powers of the states.

Volkswagen also offers textual arguments to support its claim. First, Volkswagen points to the list of

factors the EPA “shall take into account” before assessing a civil administrative penalty. 42 U.S.C. §

42a

7524(c)(2). According to Volkswagen, those factors

evince “the clear and manifest purpose of Congress” to

vest in the EPA the exclusive authority to penalize

post-sale tampering, Arizona, 567 U.S. at 400, 132

S.Ct. 2492, because those factors indicate that the EPA

has discretion to determine the appropriate punishment. Volkswagen also suggests that “it would be virtually impossible for the EPA to strike its preferred

balance in quantifying a penalty” if states were allowed

to enforce their own anti-tampering laws independently, because the EPA would have no control

over the total amount of penalties actually imposed.

Second, Volkswagen points to the CAA’s penalty ceiling, which places a cap on federal penalties for tampering, as evidence that Congress intended to preclude

states from enforcing their own anti-tampering rules,

or at least the penalty components of those rules. See §

7524(a) (limiting the penalties for tampering to no

more than $25,000 per vehicle, with additional limitations for related offenses committed by specified persons). If states could independently impose penalties,

Volkswagen argues, the penalty cap would be meaningless.

These arguments fail. An exclusive federal regime

(such as the regime created by the National Labor Relations Act, as explained in Garmon and its progeny)

may preclude the imposition of state penalties. But the

mere fact that a federal statute permits the imposition

of federal penalties, without more, does not raise the

inference that Congress created an exclusive federal

regime. Because the CAA is, and always has been, a

cooperative-federalism partnership, see supra Part

III.A., there is no basis for Volkswagen’s argument

that Congress’s authorization of federal penalties,

43a

along with guidance on how those penalties should be

imposed, expressly or impliedly forecloses state and local governments from enforcing their own rules or imposing sanctions of their choosing. To the contrary, the

statutory provisions guiding the EPA in developing an

appropriate penalty, including the non-exhaustive list

of assessment factors and the penalty cap, are directed

only at the EPA; there is no suggestion that Congress

wanted to exclude state and local anti-tampering remedies. While this gives the EPA the authority to control

only the amount of the federal penalty, we see nothing

inherently problematic about the EPA’s inability to

control the total liability that may be imposed for a

tampering violation. The potential for overlapping

state and federal penalties has never, without more,

raised the inference that Congress intended to

preempt state law. See Garcia, 140 S. Ct. at 806; California v. Zook, 336 U.S. 725, 737, 69 S.Ct. 841, 93 L.Ed.

1005 (1949). 23

In fact, the text and structure of the CAA provides

greater support to the Counties. “Given that Congress

specifically preserved” the states’ authority to engage

in post-sale enforcement, see § 7543(d), “it stands to

reason that Congress did not intend to prevent the

Volkswagen appears to argue that because Congress listed

certain factors that the EPA “shall take into account” when determining the appropriate federal penalty, but did not require the

EPA to consider the possibility that states might enforce their

own anti-tampering rules, we must infer that Congress intended

to give the EPA exclusive authority to penalize tampering. In

other words, Volkswagen wants us to presume that Congress intends to displace state enforcement authority unless it expressly

preserves it. This argument turns the presumption that Congress

intends to preserve historic police powers on its head, and we reject it.

44a

States from using appropriate tools to exercise that authority.” Whiting, 563 U.S. at 600–01, 131 S.Ct. 1968.

Indeed, a determination that the CAA did not preserve

state enforcement of anti-tampering rules as applied to

post-sale vehicles would be inconsistent with the congressional framework. For example, if the CAA’s penalty provision preempted state and local governments

from imposing any penalty for post-sale tampering,

then the EPA would be the sole enforcement authority

for every incident of tampering with air pollution control equipment, including illegal alterations by the local

garage mechanic or do-it-yourself efforts to disable a

catalytic converter. 24 But nothing in the CAA suggests

that Congress intended the EPA to take over such local

law enforcement issues, to the exclusion of state and

local governments, which would have the effect of

preempting anti-tampering rules in nearly every state.

See supra at 1219-20 & n.19. The Supreme Court has

warned against “setting aside great numbers of state

statutes to satisfy a congressional purpose which would

be only the product of [judicial] imagination.” Zook, 336

U.S. at 732–33, 69 S.Ct. 841. Given the prevalence of

state anti-tampering rules, we are especially mindful of

the Court’s warning.

As the district court correctly explained, in 1990, Congress

expanded the scope of its anti-tampering provision to include individuals, as well as manufacturers, dealers, service operators,

and local mechanics. Compare Clean Air Act, Amendments, Pub.

L. No. 101-549 § 228(b), 104 Stat. 2399 (1990), with Clean Air Act

Amendments of 1977, Pub. L. 95-95 § 219(a), 91 Stat. 685 (1977).

Notably, there is nothing in the 1990 amendments that would indicate a congressional intent to make the EPA the sole enforcer

of tampering.

45a

In sum, the CAA’s cooperative federalism scheme,

its express preservation of state and local police powers post sale, and the complete absence of a congressional intent to vest in the EPA the exclusive authority

to regulate every incident of post-sale tampering,

raises the strong inference that Congress did not intend to deprive the EPA “of effective aid from local officers experienced in the kind of enforcement necessary to combat” the evil of tampering with emission

control systems. Id. at 737, 69 S.Ct. 841. Therefore,

Volkswagen’s penalty-provision arguments are not sufficient to pass over the “high threshold” which “must

be met if a state law is to be preempted for conflicting

with the purposes of a federal Act.” Whiting, 563 U.S.

at 607, 131 S.Ct. 1968 (citation omitted).

***

We affirm the district court’s dismissal of the Counties’ complaints to the extent they sought to apply antitampering rules to new motor vehicles. However, we

reverse the district court’s dismissal of the Counties’

complaints regarding post-sale tampering. We are

mindful that our conclusion may result in staggering

liability for Volkswagen. But this result is due to conduct that could not have been anticipated by Congress:

Volkswagen’s intentional tampering with post-sale vehicles to increase air pollution. We assume that this

conduct will be as rare as it is unprecedented. In any

event, we may not strain our application of the Supreme Court’s preemption doctrine, or our interpretation of statutory language, to avoid this outcome. “Ordinarily, state causes of action are not pre-empted

solely because they impose liability over and above that

46a

authorized by federal law, and no clear purpose of Congress indicates that we should decide otherwise in this

case.” ARC Am. Corp., 490 U.S. at 105, 109 S.Ct. 1661

(citation omitted).

AFFIRMED IN PART; REVERSED IN PART. 25

Each party shall bear its own costs.

47a

APPENDIX B

UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT

OF CALIFORNIA

__________

IN RE: VOLKSWAGEN “CLEAN DIESEL” MARKETING, SALES PRACTICES, AND PRODUCTS

LIABILITY LITIGATION

Case Nos. 16–cv–2210, 16–cv–5649

ENVIRONMENTAL PROTECTION COMMISSION OF

HILLSBOROUGH COUNTY V. VOLKSWAGEN ;

SALT LAKE COUNTY V. VOLKSWAGEN.

__________

Signed: April 16, 2018

__________

ORDER RE: DEFENDANTS’ MOTIONS TO DISMISS HILLSBOROUGH AND SALT LAKE COUNTIES’ AMENDED COMPLAINTS

In approximately 585,000 new vehicles that it sold in

the United States, Volkswagen installed software that

caused the vehicles’ emission controls to perform one

way during emissions testing, and another (less effective) way during normal driving conditions. The software constituted a “defeat device,” and Volkswagen vi-

48a

olated the Clean Air Act and EPA regulations by installing it. See 42 U.S.C. § 7522(a)(3); 40 C.F.R. §§

86.1803–01, 86.1809–01, 86.1809–10,–12.

Certain states and counties have asserted that

Volkswagen’s defeat device also violated state and local

laws that prohibit tampering with vehicle emission controls. Last year, the Court considered Volkswagen’s

motion to dismiss one of these actions, which was a case

filed by the State of Wyoming. The Court held that, because the only alleged conduct by Volkswagen that

could have violated the State’s tampering law took

place during vehicle manufacturing, the State’s tampering claim was preempted by the Clean Air Act. See

In re Volkswagen “Clean Diesel” Mktg., Sales Practices, & Prod. Liab. Litig. (“Wyoming”), 264 F.Supp.3d

1040 (N.D. Cal. 2017).

Two counties—Hillsborough County, Florida and

Salt Lake County, Utah—have filed tampering claims

against Volkswagen that are similar to Wyoming’s, except the Counties also allege that Volkswagen modified

its defeat device to operate more effectively, and perhaps even added new defeat devices, through software

updates during vehicle maintenance and post-sale recalls. The central question addressed in this Order is

whether these new allegations save the Counties’ tampering claims from preemption.

Hillsborough County has also named Robert Bosch

LLC as a defendant, and Salt Lake County has also

filed three additional state law claims against

Volkswagen. The Court will also consider whether the

tampering claim against Bosch and Salt Lake’s additional claims are preempted.

49a

Volkswagen’s defeat device is able to detect whether

the vehicles in which it is installed are undergoing

emissions testing, or being driven normally on the

road. During emissions testing, the device causes the

vehicles’ emission controls to perform in a mode that

satisfies EPA’s emission standards. When the vehicles

are on the road, the device reduces the effectiveness of

the emission controls, causing the vehicles to emit nitrogen oxides (NOx) at levels that are sometimes 40

times higher than EPA’s standards. (Hillsborough

Compl. ¶¶ 2–3; Salt Lake Compl. ¶¶ 4–5, 39–41.)

Volkswagen installed its defeat device in 2.0–liter

and 3.0–liter TDI diesel engine vehicles, covering eight

model years (model years 2009 through 2016) and a variety of model types—including Volkswagen’s Jetta,

Beetle, Golf and Passat models, Audi’s A3, A6 and A8

models, and the Porsche Cayenne. (Audi and Porsche

are subsidiaries of Volkswagen.) For each model year,

Volkswagen misrepresented to EPA that these vehicles complied with the agency’s emission standards.

(Hillsborough Compl. ¶¶ 1–7, 36–37, 44; Salt Lake

Compl. ¶¶ 2–5.)1

The Counties have also named Audi of America LLC and Porsche Cars North America, Inc. as defendants. (Hillsborough

Compl. ¶¶ 16–17 & nn. 6–7; Salt Lake Compl. ¶¶ 28, 30.) Because

the parties have not made Audi or Porsche specific arguments in

their briefing on the motions to dismiss, and because Audi and

Porsche are subsidiaries of the Volkswagen Group, the Court

uses the umbrella term “Volkswagen” to refer to all defendants

other than Bosch LLC.

50a

After independent, on-road testing in 2014 called

Volkswagen’s representations into question, EPA began an investigation. Throughout 2014 and the first

half of 2015, Volkswagen employees responded to

EPA’s inquiries by offering software and hardware

fixes, without revealing the underlying reason for the

discrepancies. (Hillsborough Compl. ¶¶ 82–86.) By the

second half of 2015, however, it became clear that the

fixes had not worked; and with EPA threatening not to

certify model-year 2016 vehicles for sale in the United

States, Volkswagen finally explained, in the fall of

2015, that certain of its vehicles used defeat device software. EPA subsequently issued Notices of Violation of

the Clean Air Act, and Volkswagen admitted publicly

that it had deliberately cheated on emissions tests. (Id.

¶¶ 90–94, 102.)

The United States, on behalf of EPA, responded by

filing civil and criminal actions against Volkswagen for

violations of the Clean Air Act. The criminal charges

included conspiracy to defraud the United States by

making false statements in submissions to EPA, in violation of 42 U.S.C. § 7413(c)(2)(A); and the civil

charges included tampering with vehicle emission controls, and unlawfully installing a defeat device, in violation of 42 U.S.C. § 7522(a)(3). (See United States v.

Volkswagen AG, No. 16–CR–20394, Dkt. No. 32 (E.D.

Mich. Mar. 10, 2017); United States v. Volkswagen AG,

No. 16–CV–00295, Dkt. No. 1 (N.D. Cal. Jan. 4, 2016).)

Volkswagen pled guilty to the criminal charges and settled the civil claims. The resulting plea agreement and

civil consent decrees require Volkswagen to remove

from the road or fix at least 85 percent of the affected

vehicles, to pay $4.3 billion in criminal and civil penal-

51a

ties, to fund $2.0 billion in Zero Emission Vehicle investments, and to contribute $2.925 billion to a mitigation trust, the beneficiaries of which are the states and

federal Indian tribes. (See Volkswagen AG, No. 16–

CR–20394, Dkt. No. 68 (plea agreement); MDL Dkt.

Nos. 2103, 3155, 3228 (civil consent decrees).)

Volkswagen also settled related claims that were

brought by classes of consumers. (See Dkt. Nos. 2102,

3229 (2.0–liter and 3.0–liter consumer class action settlement approval orders).) The 2.0–liter settlement requires Volkswagen to establish a $10.033 billion funding pool to buy back its 2.0–liter TDI vehicles and to

pay the owners and lessees of those vehicles restitution. (Dkt. No. 2102 at 19.)

As part of Volkswagen’s plea agreement, the company agreed to a Statement of Facts that it stipulated

was “true and correct” and that it agreed to “neither

contest the admissibility of, nor contradict, ... in any

proceeding.” (Plea Agreement § 1.E.) Therein

Volkswagen admitted to, among other things, making

certain modifications to its defeat device in or around

April 2013. The Counties acknowledge in their joint opposition brief that their post-sale software change allegations are based on these admissions. The Counties

have also attached a copy of the Statement of Facts to

their joint opposition to Defendants’ motions to dismiss. (See Dkt. No. 4640–1.) For simplicity, the Court

cites to the Statement of Facts throughout this order

52a

in discussing the software change allegations, and addresses any additional or conflicting allegations from

the Counties’ complaints where necessary. 2

As relevant here, Volkswagen has admitted that it

modified its defeat device in order to remedy hardware

failures that developed in certain of its 2.0–liter TDI

diesel engine vehicles in or around 2012. (SOF ¶ 47.)

The company hypothesized that the failures were the

result of a glitch with the defeat device, whereby the

vehicles were staying in testing or “dyno” mode even

when driven on the road, which was placing increased

stress on the vehicles’ exhaust systems. (Id.) To solve

the problem, the company developed a “steering wheel

angle recognition” feature, which “interacted with the

[defeat device] by enabling the vehicles to detect

whether [they] were being tested on a dynamometer

(where the steering wheel is not turned), or being

driven on the road.” (Id. ¶ 49.) After a Volkswagen supervisor authorized activation of this feature, in or

around April 2013, Volkswagen employees “installed

the new software function in new 2.0 Liter Subject Vehicles being sold in the United States, and later installed it in existing 2.0 Liter Subject Vehicles through

software updates during maintenance.” (Id. ¶ 50.)

Volkswagen also modified these vehicles so that they

would start in “street mode,” and then shift to “dyno

Volkswagen AG, a German corporation, is the entity that was

charged and pled guilty in the federal criminal case, whereas

Volkswagen Group of America, Inc., a Volkswagen AG subsidiary,

is the defendant in this case. This distinction is not material for

purposes of this Order, as the Counties allege that both

Volkswagen entities engaged in the conduct at issue.

53a

mode” when the defeat device recognized that the vehicles were undergoing emissions testing. (Id.)

Deviating from Volkswagen’s plea agreement somewhat, Hillsborough alleges that Volkswagen not only

modified its defeat device, but also installed “[a]t least

two new defeat devices ... through post-sale recalls.”

(Hillsborough Compl. ¶ 88.) Yet Hillsborough describes these “new” defeat devices in a manner that

mirrors the defeat device modifications described in

Volkswagen’s plea agreement. (See id. (describing one

new defeat device as a “steering wheel angle function”

device, and another new defeat device as a “start function” device that started the vehicles in one mode and

switched them to the other mode during testing).)

Hillsborough also alleges that Bosch LLC, as an engineering and electronics company, assisted with developing the defeat device and with implementing the

post-sale software changes. (Id. ¶¶ 38–42, 89.)

The Hillsborough Environmental Protection Commission (EPC) and the State of Utah have both adopted

vehicle tampering laws. These laws generally prohibit

anyone from removing or rendering inoperable a vehicle’s emission control system. See EPC Rule 1–8.05(1),

(6); Utah Admin. Code R307–201–4. The Counties allege that Defendants violated these laws (1) by manufacturing the defeat device and installing it in vehicles

that were ultimately registered in the Counties; and (2)

by modifying the defeat device in vehicles that were in

use within the Counties. (Hillsborough Compl. ¶¶ 143–

44; Salt Lake Compl. ¶ 55.) A violation of either Hillsborough’s or Salt Lake’s tampering law is punishable

by a civil penalty of up to $5,000 per offense, with each

54a

day that a violation occurs constituting a separate offense. See Hillsborough EPC Enabling Act, Fla. Laws

84–446 § 17(2) (as amended by Fla. Laws 87–495

(2005)); 3 Utah Code Ann. § 19–1–303. As alleged, at

least 1,118 affected vehicles are registered in Hillsborough County, and at least 5,000 affected vehicles

are registered in Salt Lake County. (Hillsborough

Compl. ¶ 10; Salt Lake Compl. ¶ 47.)

Salt Lake’s complaint also includes three claims in

addition to its tampering claim. These additional claims

are for common law fraud, violation of Utah’s Pattern

of Unlawful Activity Act, Utah Code Ann. §§ 76–10–

1601 to –1609, and common law nuisance. (Salt Lake

Compl. ¶¶ 58–78.)

Before considering the preemption questions, the

Court first addresses Defendants’ statutory arguments—that their conduct does not come within the

terms of the Counties’ tampering rules. The parties

have not cited to any judicial decision in which these

rules have been interpreted, or any legislative history

with respect to the rules. The Court therefore looks

only to the text of the rules.

Salt Lake County alleges that Volkswagen violated

the following rule in the Utah Administrative Code.

Hillsborough has attached a copy of the EPC Enabling Act

and the EPC’s tampering rules to its complaint. (See Dkt. Nos.

4457–1, –2.)

55a

The Court has added italics to the terms and phrases

at issue.

Any person owning or operating any motor

vehicle or motor vehicle engine registered

or principally operated in the State of Utah

on which is installed or incorporated a system or device for the control of crankcase

emissions or exhaust emissions in compliance with the Federal motor vehicle rules,

shall maintain the system or device in operable condition and shall use it at all times

that the motor vehicle or motor vehicle engine is operated. No person shall remove or

make inoperable the system or device or

any part thereof, except for the purpose of

installing another system or device, or part

thereof, which is equally or more effective

in reducing emissions from the vehicle to

the atmosphere.

Utah Admin. Code R307–201–4 (emphasis added).

Volkswagen argues that its conduct, as alleged, does

not come within the terms of this tampering rule for

three reasons. First, Volkswagen contends that the

rule prohibits tampering only by those “owning or operating” a motor vehicle, not manufacturers. This argument is based on the first sentence of the rule: “Any

person owning or operating any motor vehicle ... on

which is installed or incorporated a system or device

for the control of ... emissions ... shall maintain the system or device in operable condition....” If Salt Lake’s

tampering claim was based on that portion of the rule,

Volkswagen’s argument would have merit, as the “own-

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ing or operating” modifier of “any person” can reasonably be read to limit the rule’s coverage to end users of

motor vehicles, not vehicle manufacturers. Salt Lake’s

claim, though, is based on the second sentence of the

rule, not the first. And unlike the first sentence, the

second does not include the “owning or operating”

modifier, but instead applies to any person that removes or makes inoperable an emission control system

or device. See id. (“No person shall remove or make inoperable [an emission control system or device]....”).

The broader scope of the second sentence is not surprising. While the conduct proscribed by the first sentence—failing to “maintain” a vehicle’s emission controls—would most naturally apply only to those who

use or are responsible for a vehicle that is in use, the

conduct proscribed by the second sentence—tampering with vehicle emission controls—could be taken by

mechanics, manufacturers, parts suppliers, or

strangers in the parking lot. Volkswagen is accordingly

within the universe of parties to which the second sentence of Salt Lake’s rule may apply, and Volkswagen’s

focus on the “owning or operating” modifier in the first

sentence is not persuasive.

Volkswagen next focuses on the language “remov[ing] or mak[ing] inoperative” in the second sentence of Salt Lake’s tampering rule. It suggests that

“the word ‘remove’ most naturally connotes extracting

a pre-existing emission control device from a used car,

and ‘mak[ing] inoperative’ contemplates a transformation from an operative emissions control system to

an inoperative one.” (Dkt. No. 4583 at 26.) It then contends that the allegations do not support that it performed either of these actions.

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Salt Lake is relying on the “mak[ing] inoperative”

prong, not the “remov[ing]” prong of the rule. For example, Salt Lake alleges that, due to post-sale software

changes, “the affected vehicles’ emission control systems were made inoperable most of the time the vehicles were being operated in Salt Lake County.” (Salt

Lake Compl. ¶ 42.) This conduct clearly comes within

the reach of the “mak[ing] inoperative” prong: the allegations just quoted specifically refer to making the

emission control systems inoperable. Salt Lake also alleges that, before the software changes, Volkswagen’s

defeat device could detect when emissions testing was

complete, and “would respond by relaxing emissions

controls to permit higher levels of emissions of NOx

and other pollutants.” (Id. ¶ 4.) Arguably, “relaxing”

emission controls is not the same as making emission

controls “inoperative,” as inoperative suggests that the

controls were not functioning, while “relaxing” suggests that the controls were functioning less effectively. Under the circumstances alleged here, however,

this is a distinction without a difference. Salt Lake alleges that Volkswagen’s defeat device reduced the effectiveness of emission controls in such a manner that

the vehicles in which it was installed went from complying with EPA’s emission standards to emitting as

much as 40 times the level of NOx permitted by those

standards. (See id. ¶ 43; cf. SOF ¶ 34 (referring to NOx

levels that were sometimes 35 times higher than U.S.

standards).) This was a drastic reduction in the effectiveness of the emission controls; so drastic that, for all

practical purposes, the emission controls in the affected vehicles were indeed rendered “inoperable”

when the defeat device began to operate. The Court

therefore concludes that Volkswagen’s initial installation of the defeat device in the affected vehicles, and

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subsequent post-sale software changes, come within

the scope of the “mak[ing] inoperative” prong of Salt

Lake’s tampering rule.

Finally, Volkswagen points to the following language in Salt Lake’s rule: “on which is installed or incorporated a system or device for the control of ... exhaust emissions in compliance with the Federal motor

vehicle rules.” Volkswagen contends that this clause indicates that Salt Lake’s tampering rule “does not apply

to the original installation or updating of a noncompliant system, as Salt Lake alleges here.” (Dkt. No. 4583

at 26 (emphasis added).) That is, Volkswagen suggests

that because Salt Lake alleges that Volkswagen installed the defeat device in its vehicles during manufacturing, the vehicles never had compliant emission

control systems, and therefore could not be tampered

with under Salt Lake’s rule.

The Court does not agree with this interpretation.

Salt Lake alleges that Volkswagen installed emission

controls in the affected vehicles that, during emissions

testing, were able to satisfy EPA’s standards. The defeat device then rendered the vehicles’ otherwise compliant emission controls noncompliant when the vehicles were driven on the road. The defeat device, then,

“ma[d]e inoperable [a] system or device” that was “installed or incorporated ... for the control of ... exhaust

emissions in compliance with the Federal motor vehicle

rules.” Utah Admin. Code R307–201–4.

Volkswagen’s alleged conduct comes within the

terms of Salt Lake’s tampering rule.

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Volkswagen and Bosch also contend that their conduct does not come within the bounds of the tampering

rules invoked by Hillsborough County. Hillsborough

relies on two mobile source rules, which read as follows:

No person shall tamper, cause, or allow the

tampering of the emission control system of

any motor vehicle.

EPC Rule 1–8.05(1).

No person shall manufacture, install, sell or

advertise for sale, devices to defeat or render inoperable any component of a motor

vehicle’s emission control system....

EPC Rule 1–8.05(6). As used in these rules, “tampering” is defined as “the intentional inactivation, disconnection, removal or other modification of a component

or components of the emission control system.” EPC

Rule 1–8.03(2)(h). An “emission control system” in turn

is defined in part as “the devices and mechanisms installed as original equipment at the time of manufacture ... for the purpose of reducing or aiding in the control of emissions.” EPC Rule 1–8.03(2)(b).

Defendants contend that EPC Rule 1–8.05(1) applies only to the modification of “pre-existing emission

control systems.” (Dkt. Nos. 4583 at 27; 4584 at 7–8.)

Similarly, Defendants contend that EPC 1–8.05(6) prohibits only the manufacture or installation of a device

“to defeat or render inoperable” a part of an existing

“emission control system,” i.e., one that was already

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“installed as original equipment at the time of manufacture.” (Dkt. No. 4583 at 27.) Defendants then assert

that their conduct, as alleged by Hillsborough, does not

come within these provisions, because Hillsborough alleges that they installed a defeat device in the affected

vehicles at the same time that they installed the emission control system. They therefore assert that they

did not modify or render inoperable a pre-existing

“emission control system” as required to violate Hillsborough’s tampering rules.

This argument is essentially the same as the third

argument addressed above with respect to Salt Lake’s

tampering rule. For the same reasons, it is unpersuasive. As alleged, Defendants equipped the affected vehicles with emission controls that could—and did—

meet EPA’s emission standards during testing. Defendants also equipped the affected vehicles with a defeat device, which reduced the effectiveness of the vehicles’ emission controls during normal on-road driving. Whether the defeat device was installed at the exact same time as the emission controls, or was installed

sometime later during the manufacturing process, the

defeat device reduced the effectiveness of the vehicles’

emission controls during normal vehicle use and therefore “modified” and “render[ed] inoperable” certain

“devices and mechanisms installed as original equipment at the time of manufacture ... for the purpose of

reducing or aiding in the control of emissions.” EPC

Rules 1–8.03(2)(b), 1–8.05(1), (6). The same is true of

the alleged post-sale software changes, which clearly

took place after the original emission control systems

were installed in the affected vehicles. (See SOF ¶¶ 47–

51; see also Hillsborough Compl. ¶¶ 87–88; Salt Lake

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Compl. ¶ 42.) The Court accordingly concludes that Defendants’ alleged conduct comes within the bounds of

Hillsborough’s tampering rules.

III

Turning to the preemption analysis, the Court

starts on familiar ground. Like the Counties, Wyoming

previously asserted that Volkswagen violated a local

tampering law by manufacturing and installing a defeat device in its vehicles. The Court held that Wyoming’s tampering claim was expressly preempted by

Section 209(a) of the Clean Air Act.

Section 209(a) provides that

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.

No State shall require certification, inspection, or any other approval relating to the

control of emissions from any new motor

vehicle or new motor vehicle engine as condition precedent to the initial retail sale, titling (if any), or registration of such motor

vehicle, motor vehicle engine, or equipment.

42 U.S.C. § 7543(a)(emphasis added).

The Act defines “new motor vehicle” as “a motor vehicle the equitable or legal title to which has never been

transferred to an ultimate purchaser.” Id. § 7550(3).

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The Act does not define a “standard relating to the control of emissions,” but the Supreme Court offered two

examples of such a standard in South Coast Air Quality. The first is a rule that a vehicle “not emit more than

a certain amount of a given pollutant.” Engine Mfrs.

Ass’n v. S. Coast Air Quality Mgmt. Dist., 541 U.S.

246, 253, 124 S.Ct. 1756, 158 L.Ed.2d 529 (2004). The

second is a rule that a vehicle “be equipped with a certain type of pollution-control device.” Id.

These “standards” are the same types of rules that

Congress requires EPA to enact and enforce in Title II

of the Clean Air Act. Specifically, Congress has tasked

EPA with setting emission limits for new vehicles introduced into commerce, 42 U.S.C. § 7521(a); setting

standards governing the use of emission-control devices in those vehicles, e.g., id. § 7521(a)(4)(A), (m);

running a certification and testing program to ensure

that new vehicles meet these standards, id. § 7525; and

enforcing these standards by refusing to certify vehicles that do not meet all regulatory requirements and

by bringing civil enforcement actions against violators,

see id. §§ 7522(a), 7524, 7525(a). Section 209(a) prohibits States and political subdivisions from doing the

same.4 Through this give and take, Congress has created a uniform regulatory regime governing emissions

The exception is California: Congress has allowed California

to set its own vehicle emission standards, and allows other states

to adopt California’s standards. See 42 U.S.C. §§ 7507; 7543(b);

Jensen Family Farms, Inc. v. Monterey Bay Unified Air Pollution

Control Dist., 644 F.3d 934, 938 n.3 (9th Cir. 2011). Because of

this exception, the California Air Resources Board (CARB) also

played an important role in investigating Volkswagen’s conduct,

as noted in Volkswagen’s plea agreement.

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from new vehicles, which it has done to avoid “the possibility of 50 different state regulatory regimes” governing vehicle emissions, which would “raise[ ] the

spectre of an anarchic patchwork of federal and state

regulatory programs” and would threaten “to create

nightmares for the manufacturers.” Engine Mfrs.

Ass’n v. EPA (“EMA”), 88 F.3d 1075, 1079 (D.C. Cir.

1996) (citation omitted).

In Wyoming, this Court held that EPA’s rule prohibiting the installation of defeat devices in new vehicles is a “standard relating to the control of emissions

from new motor vehicles.” Wyoming, 264 F.Supp.3d at

1052. In opposing Volkswagen’s motion to dismiss, Wyoming argued that its tampering claim was nevertheless not an “attempt to enforce” EPA’s rule, but rather

was only an attempt to regulate the use of

Volkswagen’s defeat device within the State’s borders.

It was on the roads of Wyoming, the State argued, that

the device reduced (and thereby tampered with) vehicle emission controls. Framed in this way, Wyoming asserted that its claim not only escaped the reach of Section 209(a)’s express preemption clause, but also was

protected by the Clean Air Act’s savings clause, Section 209(d), which provides that “Nothing in this part

shall preclude or deny 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.” 42 U.S.C. § 7543(d).

The Court did not find Wyoming’s in-use argument

persuasive. Yes, the defeat device operated in vehicles

within the State, but Volkswagen’s conduct took place

during manufacturing, when it installed the defeat de-

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vice in its new vehicles. Wyoming, then, was attempting to regulate Volkswagen’s conduct before its vehicles were sold to end users. And by doing so, the State

was attempting to enforce a standard relating to the

control of emissions from new motor vehicles. See Wyoming, 264 F.Supp.3d at 1056. The Court also noted

that, by definition, all defeat devices work by reducing

the effectiveness of emission controls during “normal

vehicle operation and use.” Id. (quoting 40 C.F.R. §

86.1803–01). Under Wyoming’s reading, then, “every

defeat device installed in a new vehicle that is later registered in the State will violate its tampering ... rule[ ],

without any additional action by the manufacturer who

installed the device.” Id. Thus, by regulating the use of

defeat devices, Wyoming would “effectively [be] regulating their installation.” Id.

To the extent the Counties’ tampering claims are

based on the manufacture and installation of a defeat

device in new vehicles that were later registered in the

Counties, their claims are expressly preempted by Section 209(a) for the same reasons identified in Wyoming.

Although the defeat device may operate in vehicles

within the Counties, Defendants are alleged to have

manufactured the device and installed it in these vehicles before the vehicles were sold to end users. To the

extent the Counties seek to regulate that conduct, they

are “attempt[ing] to enforce [a] standard relating to

the control of emissions from new motor vehicles,”

which states and local governments cannot do under

Section 209(a).

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The alleged post-sale software changes to the affected vehicles requires a different analysis. The Counties allege that Defendants modified the defeat device

in the affected vehicles during vehicle maintenance, or

installed new defeat devices during post-sale recalls. In

either case, this conduct affected vehicles that had already been sold to consumers and were in use within

the Counties, not “new motor vehicles.” The Counties’

attempts to regulate Defendants’ post-sale software

changes are therefore not expressly preempted by Section 209(a).

In arguing to the contrary, Defendants note that

Wyoming also attempted to base its tampering claims

in part on certain post-sale software changes, and the

Court rejected that attempt. The Court did so on statutory grounds, however, not on the basis of preemption

under Section 209(a). This was because Wyoming alleged that certain software changes by Volkswagen

brought emissions down relative to the emissions allowed by the original defeat device. On that basis, the

Court held that the changes “did not violate ... Wyoming’s tampering provision ... because the updates did

not ‘render ineffective or inoperative’ the emission control system.” Wyoming, 264 F.Supp.3d at 1057 n.8. In

contrast, the Counties’ allegations support that the

post-sale software changes increased emissions. (See

Salt Lake Compl. ¶ 42; see also SOF ¶¶ 50–51) (admitting that the steering wheel angle recognition feature

“improve[d] the defeat device’s precision” and marked

an “expansion of the defeat device,” as this feature reduced the likelihood that the vehicles in which it was

installed would inadvertently operate in testing or

“dyno” mode during normal driving conditions). Unlike

Wyoming’s allegations, then, the Counties’ are based

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on conduct that could constitute tampering under their

respective tampering rules. And because the software

changes were made to vehicles that had already been

sold to consumers, the Counties’ attempts to regulate

the changes are not expressly preempted by Section

209(a).

Defendants make one additional argument with respect to Section 209(a), asserting that the relation-back

concept discussed in Allway Taxi, Inc. v. City of New

York, 340 F.Supp. 1120 (S.D.N.Y. 1972), aff’d, 468 F.2d

624 (2d Cir. 1972), and cited favorably by EPA in a regulation implementing non-road vehicle emission standards, see 59 Fed. Reg. 31306–01 (June 17, 1994), brings

the Counties’ tampering claims within the scope of Section 209(a). It does not. The idea behind that concept is

that if a state were to adopt “in-use emission control

measures that would apply immediately after a new vehicle or engine were purchased,” this would amount to

“an attempt to circumvent section 209 preemption and

would obstruct interstate commerce,” as manufacturers would feel pressure to ensure that their new vehicles complied with the state’s in-use control measures.

59 Fed. Reg. at 31330. As a result, courts have reasoned that, even though such measures would be imposed on vehicles only after they were sold, the

measures would relate back to the vehicle manufacturing process, and would therefore be preempted by Section 209(a). See Allway Taxi, 340 F.Supp. at 1123–24;

EMA, 88 F.3d at 1086 (“The Allway Taxi interpretation, postponing state regulation so that the burden of

compliance will not fall on the manufacturer, has prevented the definition of ‘new motor vehicle’ from ‘nullifying’ the motor vehicle preemption regime.”). The

Counties’ attempt to regulate Defendants’ post-sale

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software changes does not raise the same concerns.

The Counties are not attempting to impose emission

measures that would require manufacturers to change

the way they construct new vehicles. Rather, the Counties are attempting to prevent manufacturers from

tampering with their vehicles after the vehicles are

sold to end users. Because the relation-back concept is

not implicated here, it does not bring the Counties’

claims within the preemptive scope of Section 209(a).

That Section 209(a) does not expressly bar the

Counties’ attempts to regulate Defendants’ post-sale

software changes does not end the preemption analysis, however. This is because “neither an express preemption provision nor a saving clause ‘bars the ordinary working of conflict pre-emption principles.’”

Buckman Co. v. Pls.’ Legal Comm., 531 U.S. 341, 352,

121 S.Ct. 1012, 148 L.Ed.2d 854 (2001) (quoting Geier

v. Am. Honda Motor Co., 529 U.S. 861, 869, 120 S.Ct.

1913, 146 L.Ed.2d 914 (2000)). The Court must therefore also consider whether, “under the circumstances

of [this] particular case, the challenged state law

stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.”

Atay v. Cty. of Maui, 842 F.3d 688, 699 (9th Cir. 2016)

(quoting Crosby v. Nat’l Foreign Trade Council, 530

U.S. 363, 372–73, 120 S.Ct. 2288, 147 L.Ed.2d 352

(2000)). Where a statute “regulates a field traditionally

occupied by states, such as health, safety, and land

use,” courts “assume that a federal law does not

preempt the states’ police power absent a ‘clear and

manifest purpose of Congress.’” Id. (quoting Wyeth v.

Levine, 555 U.S. 555, 565, 129 S.Ct. 1187, 173 L.Ed.2d

51 (2009)).

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The Counties allege that Volkswagen and Bosch

made the post-sale software changes at issue on a

model-wide basis in thousands of vehicles nationwide.

As a consequence, the congressional objective that the

Court must identify is how Congress intended for

model-wide tampering by vehicle manufacturers and

parts suppliers to be regulated. The Counties view Section 209 of the Clean Air Act as answering that question: When vehicles are tampered with when they are

new, they contend that Section 209(a) prohibits states

and local governments from attempting to regulate

that conduct; but when vehicles are tampered with

when they are in use, they contend that Section 209(d)

allows states and local governments to regulate that

conduct, regardless of the magnitude of the tampering

offense or the identity of the offender, without interfering with the federal regulatory scheme.

The Clean Air Act does not draw such a clear line.

For one thing, the Act requires vehicles to meet EPA’s

emission standards during their “useful life.” 42 U.S.C.

§ 7521(a)(1). The federal regulation of vehicle emissions therefore does not stop after vehicles are sold to

end users. And although Congress has looked to both

EPA and the states and local governments to enforce

these useful life standards, the enforcement roles of

these entities do not entirely overlap. Instead, it is evident from the statutory scheme and legislative history

that Congress intended for EPA and the states and local governments to serve specific and separate functions in regulating emissions from in-use vehicles.

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EPA’s primary role after vehicles are put in use is

to ensure that entire classes or models of vehicles remain in compliance with the agency’s emission standards. Similar to during the new vehicle certification

process, EPA works with vehicle manufacturers to accomplish this. For example, pursuant to 42 U.S.C. §

7541(b), EPA has established “[m]anufacturer in-use

verification testing requirements.” 40 C.F.R. §

86.1845–04. To comply, vehicle manufacturers must

procure and test a specific number of vehicles in each

test group (categorized by, among other things, engine

type) that have been driven at least 10,000 miles (lowmileage testing) and 50,000 miles (high-mileage testing). See id. §§ 86.1827–01; 86.1845–04(b), (c). If a manufacturer’s vehicles do not pass these in-use tests, or if

EPA otherwise determines that “a substantial number

of any class or category of vehicles or engines, although

properly maintained and used, do not conform to the

regulations prescribed,” EPA has authority to recall

those vehicles. 42 U.S.C. § 7541(c)(1). Either before or

after vehicles are sold to end users, EPA may also inspect vehicle manufacturers’ records related to emissions testing, and may observe activities at the manufacturers’ plants. 42 U.S.C. § 7542. EPA also requires

manufactures to report to the agency emission related

defects discovered in used vehicles if the defects affect

at least 25 vehicles of the same model year. 40 C.F.R.

§ 85.1903(a). Emission related defects include defective

“software ... which must function properly to ensure

continued compliance with emission standards.” Id. §

85.1902(b)(2).

While Congress has tasked EPA with enforcing useful life emission standards on a model-wide basis, other

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provisions in the Clean Air Act, and the Act’s legislative history, reveal Congress’ intent to have states and

local governments enforce these standards by inspecting individual vehicles for compliance. Since Congress

first adopted the modern vehicle emissions scheme, in

1967, it has intended that “States responsibility would

be to assume responsibility for inspection of pollution

control systems as an integral part of safety inspection

programs....” S. Rep. 90–403, at 35 (1967). To encourage states to adopt such programs, Congress included

a provision in the Air Quality Act of 1967 that authorizes EPA to “make grants to appropriate State air pollution control agencies in an amount up to two-thirds of

the cost of developing meaningful uniform motor vehicle emission device inspection and emission testing

programs.” Pub. L. 90–148, § 209, 81 Stat. 502 (1967)

(codified as amended at 42 U.S.C. § 7544). In commenting on minor amendments to this provision as part of

the Clean Air Act Amendments of 1970, Congress also

noted that “Effective State emission testing and inspection programs [are] essential ... to assur[e] that vehicles, once delivered to the ultimate and subsequent

purchasers, continue to conform to the standards for

which they were certified.” S. Rep. 91–1196, at 31

(1970).

As Congress has made further amendments to the

Clean Air Act, and in particular as it responded to increasing emissions from vehicles in the 1970s and ‘80s,

which resulted from the increasing use of vehicles

throughout the nation, it has made some of these state

inspection programs mandatory, at least for states

with particularly high levels of certain pollutants. See

Clean Air Act Amendments of 1977, Pub. L. 95–95 §

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172(b)(11)(B), 91 Stat. 685, 747; Clean Air Act Amendments of 1990, Pub. L. 101–549, § 182(b)(4), (c)(3), 104

Stat. 2399, 2426. Under the current Clean Air Act,

then, certain states must adopt in-use vehicle inspection programs. See 42 U.S.C. § 7511a(b)(4), (c)(3). And

these programs must comply with EPA-established

minimum standards with respect to the frequency of

inspection, the types of vehicles to be inspected, and

the test methods and measures used. See id. §

7511a(a)(2)(B)(i); EPA Inspection/Maintenance Program Requirements Rule, 57 Fed. Reg. 52950 (Nov. 5,

1992). In states that are required to adopt “enhanced”

inspection programs, enforcement through denial of

vehicle registration is required. See 42 U.S.C. §

7511a(c)(3)(C)(iv). Many states and local governments,

like the Counties in this case, have also adopted tampering laws to bolster state inspection programs, or as

standalone provisions. These tampering laws generally

“prohibit the operation of motor vehicles when air pollution devices have been removed, altered, or rendered

inoperative.” Arnold W. Reitze Jr., Air Pollution Control Law: Compliance and Enforcement § 10–5(d)

(2001); see also 57 Fed. Reg. 24370–01 (June 9, 1992)

(EPA’s approval of Florida’s anti-tampering program);

52 Fed. Reg. 4921–02 (Feb. 18, 1987) (EPA’s approval

of Utah’s inspection and anti-tampering programs).

By their nature, state inspection programs operate

on an individual vehicle basis. This is clear from, among

other things, the use of vehicle registration denial as a

means of enforcement—which is a penalty that affects

the owners of specific non-compliant vehicles. It is also

clear from Section 207(h)(2) of the Clean Air Act.

There, Congress has provided that “Nothing in [Section 209(a) ] shall be construed to prohibit a State from

72a

testing or requiring testing of, a motor vehicle after the

date of sale of such vehicle to the ultimate purchaser....” 42 U.S.C. § 7541(h)(2). But the same provision follows with this exception: “(except that no new

motor vehicle manufacturer or dealer may be required

to conduct testing under this paragraph).” Through

this exception, Congress has manifested its intent that

state inspection programs should not interfere with vehicle manufacturers.

At times, the federal scheme reveals overlap between federal, state, and local enforcement authority

of emission standards. As notable for present purposes, Congress has adopted a federal tampering provision, which prohibits “any person” from removing or

rendering inoperative emission control devices either

before or after the vehicles in which the devices are installed are sold to ultimate purchasers. See 42 U.S.C. §

7522(a)(3)(A). Until 1990, this provision applied only to

manufacturers, dealers, fleet owners, service stations

or garage operators, and those in the business of leasing vehicles. See Clean Air Act Amendments of 1977,

Pub. L. 95–95 § 219(a), 91 Stat. 685, 761. But in the

Clean Air Act Amendments of 1990, Congress expanded the reach of the federal tampering law to also

cover individual owners and operators of vehicles. See

Pub. L. 101–549, § 228(b), 104. Stat. 2399, 2507 (codified at 42 U.S.C. § 7522(a)(3)(A)). In this respect, EPA,

similar to states and local governments, can regulate

individual vehicle owners’ compliance with emission

standards. Although no similar provisions in the Clean

Air Act reveal a crossover going the other way, with

states and local governments given authority to supplement EPA’s enforcement authority over vehicle

manufacturers’ compliance with emission standards.

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Further, the legislative history of the 1990 amendments reveals that Congress amended the federal tampering law only to supplement state efforts to regulate

tampering by individual vehicle owners and operators,

as tampering by individuals was proving to be problematic in states with and without inspection and tampering programs. See S. Rep. 101–228, at 123 (1989) (citing

tampering statistics from a 1988 tampering survey).

And while the amendments authorized EPA to regulate tampering by individuals, Congress “[did] not require sweeping new enforcement initiatives to be undertaken by EPA.” (Id. at 124.)

The division of authority discussed above—with

EPA enforcing useful life vehicle emission standards

primarily on a model-wide basis, and at the manufacturer level, and states and local governments enforcing

the same standards on an individual vehicle basis at the

end-user level—is sensible, as it best utilizes the comparative advantages of EPA and the states and local

governments. EPA, as a federal agency, is best positioned to enforce emission standards on a model-wide

basis because model-wide emission problems will almost invariably affect vehicles in states and counties

throughout the country. Further, when investigating

model-wide emission issues, EPA can also rely on testing data it acquired from manufacturers during the

new vehicle certification process, which it can utilize to

understand how vehicle models are performing in use

as compared to how they were performing during assembly-line testing. Likewise, because the new vehicle

certification process requires EPA to work directly

with vehicle manufacturers, the agency has preexisting

relationships that it can rely on when addressing

model-wide emission defects in used vehicles.

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States and local governments, in contrast, are in a

better position than EPA to enforce emission standards at the individual user level. Although Congress

could theoretically task EPA with overseeing nationwide vehicle inspection programs—with the agency

running testing centers and requiring vehicle owners

to have their vehicles checked on a regular basis—

states and local governments can more efficiently do so

because they already oversee vehicle registration and

drivers’ licensing, and can use state police power to aid

enforcement. Indeed, when Congress first sought to

motivate states to create vehicle inspection programs,

it did so based on the belief that states would adopt

such programs “as an integral part of safety inspection

programs.” S. Rep. 90–403, at 35 (1967).

This is not to say that there is no conceivable scenario, consistent with the Clean Air Act, in which states

and local governments could regulate a vehicle manufacturer’s compliance with emission standards. If, for

example, a manufacturer were to tamper with a single

in-use vehicle during vehicle maintenance, the Clean

Air Act would not bar a state or local government from

bringing a tampering claim against the manufacturer

if the tampering occurred within its borders. In such a

scenario, the manufacturer is not acting on a modelwide basis, and therefore the enforcement advantages

that EPA has over the states and local governments

are not implicated. But when a manufacturer’s actions

affect vehicles model wide, the Clean Air Act manifests

Congress’ intent that EPA, not the states or local governments, will regulate that conduct.

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The model-wide nature of the post-sale software

changes alleged here makes them the type of conduct

that Congress intended EPA to regulate. And indeed,

EPA has regulated this conduct. EPA was instrumental in bringing Volkswagen’s emissions fraud to light,

as it began an investigation in 2014 to determine why

on-road emissions from the affected vehicles significantly exceeded emissions during testing. (See Hillsborough Compl. ¶¶ 82–86; SOF ¶¶ 52–63.) And it was

only after EPA threatened not to certify certain modelyear 2016 vehicles that Volkswagen finally admitted

that it had equipped the affected vehicles with a defeat

device. (See Hillsborough Compl. ¶ 90; SOF ¶ 59.) EPA

has also brought civil and criminal actions against

Volkswagen based not only on the company’s initial installation of a defeat device in its vehicles, but also as a

result of the company’s post-sale software changes.

(See SOF ¶¶ 47–51 (detailing Volkswagen’s defeat device modifications as part of the factual basis for the

company’s guilty plea); Volkswagen AG, No. 3:16–CV–

00295, Dkt. No. 32–3, EPA Am. Civil Compl. ¶¶ 114–16,

195–97 (detailing Volkswagen’s defeat device modifications as conduct that violated the Clean Air Act and

EPA regulations).) These criminal and civil actions

have resulted in Volkswagen paying penalties and remediation payments totaling $9.23 billion, which is in

addition to a $10.033 billion funding pool Volkswagen

agreed to establish to buy back its 2.0–liter TDI vehicles and to pay the owners and lessees of those vehicles

restitution.

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The model-wide nature of the post-sale software

changes also distinguishes them from the type of conduct that Congress intended for states and local governments to regulate. State and local tampering laws

are meant to be used as a tool by states and counties to

regulate vehicles within their borders. If a mechanic

removes or alters a vehicle’s emission control system

during routine maintenance, for example, states and

counties are in the best position to penalize that conduct. But when the tampering at issue involves thousands of vehicles, and the changes are made through

software updates instituted on a nationwide basis, EPA

is in a better position to regulate that conduct, as it can

rely on the tools Congress has given it to police vehicle

manufacturers’ compliance with emission standards

before and after vehicles are put in use.

Due to technological advances, manufacturers today

also have the ability to impact their vehicles well after

sale to end users. Vehicles are increasingly computerized, and similar to the types of a remote updates that

consumers may receive on their phones or computers,

manufacturers may be able to modify software installed in vehicles just as easily. This is not the type of

conduct that states and local governments are in the

best position to regulate. Although it may be characterized as conduct that takes place at least in part

within their borders, it is conduct on a much broader,

national scale. And it is not conduct involving an individual consumer’s vehicle; rather, it involves entire vehicle lines, makes, and models. This is the type of conduct that Congress intended EPA to regulate.

Not only is EPA better positioned than the Counties

to regulate Volkswagen’s post-sale software changes,

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but if the Counties were permitted to regulate this conduct, the size of the potential tampering penalties could

significantly interfere with Congress’ regulatory

scheme. “The obligation to pay compensation can be,

indeed is designed to be, a potent method of governing

conduct and controlling policy.” Cipollone v. Liggett

Grp., Inc., 505 U.S. 504, 521, 112 S.Ct. 2608, 120

L.Ed.2d 407 (1992) (quoting San Diego Building

Trades Council v. Garmon, 359 U.S. 236, 247, 79 S.Ct.

773, 3 L.Ed.2d 775 (1959)). This is because “[e]ven if [a]

regulated entity can comply with both state and federal

sanctions, the mere fact of ... inconsistent sanctions can

undermine the federal choice of the degree of pressure

to be employed, ‘undermining the congressional calibration of force.’” Compass Airlines LLC v. Mont.

Dep’t of Labor & Indus., No. CV 12-105-H-CCL, 2013

WL 4401045, at *13 (D. Mont. Aug. 12, 2013) (quoting

Crosby, 530 U.S. at 379–80, 120 S.Ct. 2288).

As relevant here, Congress has set specific penalties

for vehicle tampering by manufacturers. See 42 U.S.C.

§ 7524(a) (up to $25,000 per violation by manufacturers

and dealers, and up to $2,500 per violation by any other

person). And Volkswagen’s tampering has triggered

those penalties. The Counties now seek to impose additional, significant sanctions for the same conduct,

with a violation of either Hillsborough’s or Salt Lake’s

tampering rule punishable by a civil penalty of up to

$5,000 per offense per day of noncompliance. See Hillsborough EPC Enabling Act § 17(2); Utah Code Ann. §

19–1–303. With at least 1,118 affected vehicles allegedly registered in Hillsborough County, and at least

5,000 allegedly registered in Salt Lake County, and

with the tampering at issue occurring in or around

April 2013, and continuing for over a year until

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Volkswagen admitted to using a defeat device in the fall

of 2015, the potential penalties could reach $30.6 million per day and $11.2 billion per year—and that is just

for two counties. If other counties and states bring similar claims—and indeed some already have 5—the potential penalties could dwarf those paid to EPA, which

would seriously undermine the congressional calibration of force for tampering by vehicle manufacturers. 6

Even if actual penalties are lower, if tampering

claims like the Counties’ are allowed to proceed, vehicle manufacturers could be subjected to up to 50 state

and approximately 3,000 county regulatory actions

based on uniform conduct that happened nationwide.

The substantial nature of the potential penalties for the

Counties’ tampering claims, and the significant regulatory burden that would ensue if manufacturers were

subject to tampering claims throughout the United

States, further demonstrates the conflict that the

Counties’ claims create with federal policy. See Crosby,

Counsel for Volkswagen has represented that 28 counties in

Texas, and at least 8 states have asserted tampering claims

against the company that are based on its post-sale software modifications. (See Dkt. No. 4715 at 7 (Feb. 1, 2018 Hr’g Tr.); Dkt.

No. 4887 (Notice of Recent Decisions).) The Counties have not

contested these representations.

The penalties sought by the Counties would also be above and

beyond the remediation that consumers in the Counties have already received by way of the consumer class action settlements,

and beyond the payments that the Counties’ home states—Florida and Utah—have or are expected to receive as beneficiaries to

Volkswagen’s emissions mitigation trust. As beneficiaries, Florida is expected to receive approximately $166 million, and Utah is

expected to receive approximately $35 million. (Dkt. Nos. 2103–1

at 207; 3228–1 at 164.)

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530 U.S. at 380, 120 S.Ct. 2288 (“‘Conflict is imminent’

when ‘two separate remedies are brought to bear on

the same activity.’” (quoting Wis. Dept. of Indus. v.

Gould, Inc., 475 U.S. 282, 286, 106 S.Ct. 1057, 89

L.Ed.2d 223 (1986))). 7

The same analysis applies to Hillsborough’s tampering claim against Bosch. Hillsborough alleges that

Bosch assisted Volkswagen in developing the defeat

device that was ultimately used in hundreds of thousands of vehicles in the United States, and in implementing the post-sale software changes to these vehicles. EPA, not the states and counties, is in the best

position to regulate this conduct, as the conduct alleg-

The Counties’ tampering claims also threaten to interfere

with the injunctive relief obtained by EPA. At the time of the consent decrees, EPA and Volkswagen acknowledged that there

were “no practical engineering solutions that would, without negative impact to vehicle functions and unacceptable delay,” bring

the majority of the affected vehicles into compliance with existing

emission standards. (Dkt. Nos. 2103–1 at 5 ¶ 2; 3228–1 at 5 ¶ 2.)

Yet to “avoid undue waste and potential environmental harm that

would be associated with removing” the affected vehicles fro m

service, EPA agreed to allow Volkswagen to offer emissions modifications to the owners and lessees of the affected vehicles if the

modifications “would substantially reduce NOx emissions.” (Dkt.

Nos. 2103–1 at 6 ¶ 4; 3228–1 at 7 ¶ 4.) This approach reflected the

type of careful balancing that is required in responding to a nationwide environmental problem like the one at issue here. But

the Counties may jeopardize this balance by asserting that vehicles with EPA-approved modifications continue to violate their

tampering rules because the modifications do not bring the vehicles into compliance with the originally certified emission standards. This threat of inconsistent sanctions further demonstrates

the conflict between the Counties’ tampering claims and federal

policy.

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edly affected vehicles on a model-wide basis. And although EPA has not filed an enforcement action against

Bosch, it has the authority to do so under federal tampering laws. See 42 U.S.C. § 7522(a)(3)(A) (reaching

“any person” that removes or renders inoperative vehicle emission control devices). State and local tampering actions against Bosch also threaten to create the

same regulatory nightmare that would occur if the actions are allowed to proceed against Volkswagen. In either instance, the claims could subject companies that

are responsible for developing motor vehicles to enforcement actions throughout the country based on

uniform conduct that happened nationwide.

The Clean Air Act’s savings clause, Section 209(d),

does not alter any of the above analysis. That provision

does not give states and local governments carte

blanche to regulate any conduct that affects emissions

from vehicles that are in use. Rather, the provision provides that “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.” 42 U.S.C. § 7543(d) (emphasis added). The

use of the term “otherwise” indicates that state and local government regulation of in-use vehicles is subject

to the limitations otherwise imposed by federal law.

And those limitations include the division of authority

between EPA and the states and local governments

discussed above.

Bolstering this conclusion, the legislative history of

Section 209(d) reveals that Congress’ intent in enacting

this saving clause was to ensure that states and local

governments had authority to adopt transportation

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planning regulations, not to regulate vehicle manufacturers. In the Senate Report for the Air Quality Act of

1967, the Committee on Public Works noted the following with respect to Section 209(d):

This language is of particular importance.

While there has been a great deal of concern expressed regarding control of new vehicles little attention has been paid to control of used vehicles, either their emissions

or their use. It may be that, in some areas,

certain conditions at certain times will require control of movement of vehicles.

Other areas may require alternative methods of transportation. Unfortunately some

of these alternatives have been ignored and

the onus of control has been placed solely

on the automobile manufacturers.

It is clear that, if a pollution-free (or at least

minimized) rapid transit system reduced

commuter traffic there would be a corresponding decrease in automobile-related

air pollution. And any significant advance in

control of used vehicles would result in a

corresponding reduction in air pollution.

These are areas in which the States and local government can be most effective.

S. Rep. No. 90–403, at 34 (1967).

Section 209(d), then, was viewed as providing states

and local governments with the authority to “control

[the] movement of vehicles” so that they could “reduce[

] commuter traffic” and thereby “decrease ... automobile-related air pollution.” Id.; see also EMA, 88 F.3d

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at 1094 (recognizing that Section 209(d) “protect[s] the

power of states to adopt ... in-use regulations,” such as

“carpool lanes, restrictions on car use in downtown areas, and programs to control extended idling of vehicles”) (citation omitted). These are not the types of

measures that affect vehicle manufacturers and parts

suppliers. To the contrary, the legislative history reveals that the intent of Section 209(d) was to give states

and local governments a tool to lessen the burden on

vehicle manufacturers—as manufacturers are ultimately the ones that must develop and implement the

technology capable of meeting federal vehicle emission

standards.

Courts have “repeatedly ‘declined to give broad effect to saving clauses where doing so would upset the

careful regulatory scheme established by federal law.’”

Geier, 529 U.S. at 870, 120 S.Ct. 1913 (quoting United

States v. Locke, 529 U.S. 89, 106–07, 120 S.Ct. 1135, 146

L.Ed.2d 69 (2000)). Interpreting Section 209(d) in the

manner suggested by the Counties would have just

such a destabilizing effect. When the Clean Air Act is

considered as a whole, it is clear that Congress intended for EPA to regulate vehicle emission standards

on a model-wide basis, while states and local governments would regulate compliance with these standards

at the individual vehicle level. Section 209(d) does not

modify that framework.

***

The Counties’ tampering claims, based on post-sale

software changes to the affected vehicles by

Volkswagen and Bosch, are an attempt to enforce vehicle emission standards on a model-wide basis. Because

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Congress intended for only EPA to regulate such conduct, the Court concludes that these claims stand as an

obstacle to Congress’ purpose and are preempted by

the Clean Air Act.

Salt Lake County’s complaint includes three additional claims against Volkswagen. These claims are for

common law fraud, violation of Utah’s Pattern of Unlawful Activity Act, which is a state RICO statute, and

common law nuisance. Volkswagen argues that each of

these claims is preempted by the Clean Air Act. The

Court agrees.

The decision in In re Office of Attorney General of

State of New York (“Detroit Diesel”), 269 A.D.2d 1, 709

N.Y.S.2d 1 (2000), is instructive. Similar to here, that

case involved vehicle manufacturers’ use of a defeat device, and a state’s attempt to bring common law claims

against the manufacturers as a result. The dispute between the state and the manufacturers followed an

EPA investigation, lawsuit, and settlement. Id. at 3–4,

709 N.Y.S.2d 1. After the settlement was formalized in

a series of consent decrees, the New York Attorney

General subpoenaed the manufacturers—seeking testing data and other documents that the manufacturers

had provided to EPA. Id. at 4, 709 N.Y.S.2d 1. Although

the Attorney General initially represented that he

would use the requested material primarily to support

New York’s public comments on the consent decrees,

he later noted that he sought to bring “State commonlaw actions for damages, such as fraud, breach of warranty, public nuisance and conspiracy to restrain

trade,” which he asserted were “not preempted by the

Clean Air Act.” Id. at 5, 709 N.Y.S.2d 1.

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The state trial court held that the common law

claims were preempted, and the appellate court affirmed. Id. In the appellate decision, the court noted

that common law claims “may be preempted if such

claims would unavoidably result in serious interference

with the accomplishment and execution of the full purposes and objectives of Congress.” Id. at 10, 709

N.Y.S.2d 1 (internal quotation marks omitted). The

court then concluded that the Attorney General’s common law claims would create just such interference, because the Attorney General was “seeking to use [state]

common law to penalize the manufacturers for producing engines which failed to comply with the Federal

standards promulgated pursuant to the [Clean Air

Act].” Id. at 11, 709 N.Y.S.2d 1. For example, the court

reasoned that “the Attorney General’s claim sounding

in fraud has its genesis in the manufacturers’ purported concealment or misrepresentation of their violations of the Federal emissions standards, and liability would necessarily be based on the scope of those

standards.” Id. at 11–12, 709 N.Y.S.2d 1. Similarly, the

court reasoned that the Attorney General’s nuisance

claim, which was “based upon the notion that the manufacturers’ alleged circumvention of federal emission

control requirements ha[d] resulted in 1.3 million[ ] ...

tons of excess NOx emissions annually,” would require

“a determination of whether the manufacturers complied with the Federal emissions standard.” Id. at 12,

709 N.Y.S.2d 1 (internal quotation marks omitted). If

the Attorney General were allowed to bring these

claims, the court reasoned, the Attorney General would

be indirectly attempting to enforce the federal emission standards. The court concluded that such a result

would lead to “the chaotic situation which Congress

sought to avoid” under the Clean Air Act, as all 50

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states could bring similar actions against vehicle manufacturers to indirectly enforce EPA’s emission standards. Id. at 11, 709 N.Y.S.2d 1.

The situation here is the same. Through its fraud,

nuisance, and state RICO claims, Salt Lake County is

attempting to penalize Volkswagen for its failure to

comply with federal emission standards. Salt Lake’s

fraud claim, for instance, is based on the contention

that Volkswagen misrepresented the amount of pollutants emitted by its vehicles, and concealed the use of

a defeat device in its vehicles. (Salt Lake Compl. ¶¶ 58–

65.) This is the same conduct underlying EPA’s claims

against Volkswagen for violations of the Clean Air Act.

The same is true of Salt Lake’s state RICO claim,

which is based on a “pattern of unlawful activity” that

includes alleged violations of Utah’s tampering, fraud,

deceptive business practices, and computer crime laws.

(See id. ¶¶ 66–73.) Salt Lake does not offer any factual

allegations to support this claim other than the allegations underlying Volkswagen’s violations of the Clean

Air Act. The state RICO claim accordingly “has its genesis in the manufacturers’ ... violations of the Federal

emissions standards, and liability would necessarily be

based on the scope of those standards.” Detroit Diesel,

269 A.D.2d at 11–12, 709 N.Y.S.2d 1. Finally, Salt Lake

bases its nuisance claim on Volkswagen’s “use of defeat

devices on the vehicles [it] distributed and [its] modification of software on in-service vehicles,” which the

County alleges “created a public nuisance” that “rendered the air of Salt Lake County impure or unwholesome.” (Compl. ¶ 75.) As the focus on Volkswagen’s use

of a defeat device demonstrates, this claim too is an attempt by the County to indirectly enforce EPA’s emission standards.

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With respect to the fraud claim, it is worth noting

that the facts here are distinguishable from those in

several cases in which courts have recently held that

fraud claims based on a vehicle manufacturer’s use of a

defeat device are not preempted by the Clean Air Act.

See In re Chrysler–Dodge–Jeep Ecodiesel Mktg., Sales

Practices, & Prod. Liab. Litig., 295 F.Supp.3d 927,

990–1000 (N.D. Cal. 2018); In re Duramax Diesel

Litig., 298 F.Supp.3d 1037, 1056–66, 2018 WL 949856

TLL, at *10–17 (E.D. Mich. 2018); Counts v. General

Motors LLC, 237 F.Supp.3d 572, 588–92 (E.D. Mich.

2017); In re Volkswagen “Clean Diesel” Litig. (“VW

Va.”), CL–2016–9917, 2016 WL 10880209, at *2–6 (Va.

Cir. Ct. Aug. 30, 2016). In each of those cases, the fraud

claims at issue were filed by consumers who allegedly

purchased vehicles that contained a defeat device, and

who alleged that they were deceived by the manufacturers’ representations about the vehicles’ emissions,

or by the manufacturers’ concealment of the emissions

cheating software. Under those circumstances, the

courts concluded that the consumers’ fraud claims

were not preempted by the Clean Air Act because the

claims were not an attempt to enforce EPA’s emission

standards, but rather were an attempt to hold the manufacturers liable for their false promises and deceit.

See VW Va., 2016 WL 10880209, at *5 (“Plaintiffs’ fraud

and VCPA claims do not rely on emissions violations....

Instead, Plaintiffs’ claims rely upon allegedly false

promises of compliance, efficiency, and new technology; or concealment of the fact that compliance testing

was being circumvented.”); Counts, 237 F.Supp.3d at

591 (reasoning that “the gravamen of Plaintiffs’ claims

... focus on the deceit about compliance, rather than the

need to enforce compliance”) (internal quotation marks

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omitted); Chrysler, 295 F.Supp.3d at 998 (“[T]he gravamen of Plaintiffs’ complaint ... is Defendants’ deceit,

not the violation per se of federal emissions standards.”); Duramax, 298 F.Supp.3d at 1062, 2018 WL

949856, at *14 (“The gravamen of their state law claims

is that they purchased a vehicle which polluted at levels

far greater than a reasonable consumer would expect.”). Unlike the consumers in the cases cited, Salt

Lake has not alleged that it purchased a vehicle affected by Volkswagen’s defeat device scheme. The

County therefore cannot contend that it was deceived

into purchasing one of the affected vehicles. The impact of a manufacturer’s deceit of consumers on the

preemption analysis is therefore not relevant here.

Like the Attorney General in Detroit Diesel, Salt

Lake seeks to use its common law and state statutory

claims to penalize Volkswagen for its model-wide noncompliance with EPA’s emission standards. Because

Congress intended for EPA to regulate such conduct,

Salt Lake’s claims would “unavoidably result in serious

interference with the accomplishment and execution of

the full purposes and objectives of Congress.” Detroit

Diesel, 269 A.D.2d at 10, 709 N.Y.S.2d 1 (internal quotation marks omitted). Salt Lake’s claims are therefore

preempted.

Having concluded that the Counties’ claims are

preempted, the Court GRANTS Defendants’ motions

to dismiss the Counties’ complaints. Finding that an

amendment of the complaints would be futile, the

Court dismisses the complaints with prejudice.

IT IS SO ORDERED.

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APPENDIX C

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

__________

Case No. 18-15937

IN RE VOLKSWAGEN “CLEAN DIESEL” MARKETING, SALES PRACTICES, AND PRODUCTS

LIABILITY LITIGATION,

THE ENVIRONMENTAL PROTECTION COMMISSION OF

HILLSBOROUGH COUNTY, FLORIDA; SALT LAKE

COUNTY, PLAINTIFFS-APPELLANTS,

VOLKSWAGEN GROUP OF AMERICA, INC.; AUDI OF

AMERICA, LLC; PORSCHE CARS NORTH AMERICA,

INC.; ROBERT BOSCH, LLC; ROBERT BOSCH GMBH,

DEFENDANTS-APPELLEES.

__________

Filed:

August 24, 2020

__________

Before: TALLMAN, IKUTA, and N.R. SMITH, Circuit

Judges.

ORDER

The panel has unanimously voted to deny the Appellees’ Petition for Panel Rehearing or Rehearing En

Banc (ECF No. 78). Judges Tallman and N.R. Smith

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recommended denying the Petition for Rehearing En

Banc, and Judge Ikuta has voted to deny the Petition

for Rehearing En Banc.

The full court has been advised of the Petition for

Rehearing En Banc, and no Judge has requested a vote

on whether to rehear the matter en banc. Fed. R. App.

P. 35.

The Petition for Panel Rehearing or Rehearing En

Banc is DENIED.

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APPENDIX D

RELEVANT STATUTORY PROVISIONS

2 U.S.C. § 2163 provides:

Capitol Grounds shuttle service

Funds appropriated for any available account of the

Architect of the Capitol after October 1, 1976, shall be

available for the purchase or rental, maintenance and

operation of passenger motor vehicles to provide shuttle service for Members and employees of Congress to

and from the buildings in the Legislative group.

7 U.S.C. § 2262 provides:

Employee liability insurance on motor vehicles in

foreign countries

The Secretary of Agriculture is authorized to obtain insurance to cover the liability of any employee of the

Department of Agriculture for damage to or loss of

property or personal injury or death caused by the act

or omission of any such employee while acting within

the scope of his office or employment and while operating a motor vehicle belonging to the United States in

a foreign country.

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42 U.S.C. § 7507 provides:

New motor vehicle emission standards in nonattainment areas

Notwithstanding section 7543(a) of this title, any State

which has plan provisions approved under this part

may adopt and enforce for any model year standards

relating to control of emissions from new motor vehicles or new motor vehicle engines and take such other

actions as are referred to in section 7543(a) of this title

respecting such vehicles if—

(1) such standards are identical to the California

standards for which a waiver has been granted for

such model year, and

(2) California and such State adopt such standards at least two years before commencement of

such model year (as determined by regulations of

the Administrator).

Nothing in this section or in subchapter II of this chapter shall be construed as authorizing any such State to

prohibit or limit, directly or indirectly, the manufacture or sale of a new motor vehicle or motor vehicle engine that is certified in California as meeting California

standards, or to take any action of any kind to create,

or have the effect of creating, a motor vehicle or motor

vehicle engine different than a motor vehicle or engine

certified in California under California standards (a

“third vehicle”) or otherwise create such a “third vehicle”.

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42 U.S.C. § 7521(a) provides in pertinent part:

Emission standards for new motor vehicles or new

motor vehicle engines

(a) Authority of Administrator to prescribe by regulation

Except as otherwise provided in subsection (b)—

(1) 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), whether such vehicles

and engines are designed as complete systems or

incorporate devices to prevent or control such pollution.

42 U.S.C. § 7521(d) provides in pertinent part:

Emission standards for new motor vehicles or new

motor vehicle engines

(d) Useful life of vehicles

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The Administrator shall prescribe regulations under

which the useful life of vehicles and engines shall be

determined for purposes of subsection (a)(1) of this

section and section 7541 of this title. Such regulations

shall provide that except where a different useful life

period is specified in this subchapter useful life shall—

(1) in the case of light duty vehicles and light

duty vehicle engines and light-duty trucks up to

3,750 lbs. LVW and up to 6,000 lbs. GVWR, be a period of use of five years or fifty thousand miles (or

the equivalent), whichever first occurs, except that

in the case of any requirement of this section which

first becomes applicable after November 15, 1990,

where the useful life period is not otherwise specified for such vehicles and engines, the period shall

be 10 years or 100,000 miles (or the equivalent),

whichever first occurs, with testing for purposes of

in-use compliance under section 7541 of this title up

to (but not beyond) 7 years or 75,000 miles (or the

equivalent), whichever first occurs;

42 U.S.C. § 7522(a) provides in pertinent part:

Prohibited acts

(a) Enumerated prohibitions

The following acts and the causing thereof are prohibited—

(3)(A) for any person to remove or render inoperative any device or element of design installed on

94a

or in a motor vehicle or motor vehicle engine in compliance with regulations under this subchapter

prior to its sale and delivery to the ultimate purchaser, or for any person knowingly to remove or

render inoperative any such device or element of

design after such sale and delivery to the ultimate

purchaser; or

42 U.S.C. § 7523(b) provides:

Actions to restrain violations

(b) Actions brought by or in name of United States;

subpenas

Actions to restrain such violations shall be brought by

and in the name of the United States. In any such action, subpenas for witnesses who are required to attend

a district court in any district may run into any other

district.

42 U.S.C. § 7524(a) provides:

Civil penalties

(a) Violations

Any person who violates sections 7522(a)(1), 7522(a)(4),

or 7522(a)(5) of this title or any manufacturer or dealer

who violates section 7522(a)(3)(A) of this title shall be

subject to a civil penalty of not more than $25,000. Any

95a

person other than a manufacturer or dealer who violates section 7522(a)(3)(A) of this title or any person

who violates section 7522(a)(3)(B) of this title shall be

subject to a civil penalty of not more than $2,500. Any

such violation with respect to paragraph (1), (3)(A), or

(4) of section 7522(a) of this title shall constitute a separate offense with respect to each motor vehicle or motor vehicle engine. Any such violation with respect to

section 7522(a)(3)(B) of this title shall constitute a separate offense with respect to each part or component.

Any person who violates section 7522(a)(2) of this title

shall be subject to a civil penalty of not more than

$25,000 per day of violation.

42 U.S.C. § 7524(c) provides in pertinent part:

Civil penalties

(2) Determining amount

In determining the amount of any civil penalty

assessed under this subsection, the Administrator

shall take into account the gravity of the violation,

the economic benefit or savings (if any) resulting

from the violation, the size of the violator’s business, the violator’s history of compliance with this

subchapter, action taken to remedy the violation,

the effect of the penalty on the violator’s ability to

continue in business, and such other matters as justice may require.

96a

10.

42 U.S.C. § 7541(a) provides in pertinent part:

Compliance by vehicles and engines in actual use

(a) Warranty; certification; payment of replacement costs of parts, devices, or components designed for emission control

(1) Effective with respect to vehicles and engines

manufactured in model years beginning more than

60 days after December 31, 1970, the manufacturer

of each new motor vehicle and new motor vehicle

engine shall warrant to the ultimate purchaser and

each subsequent purchaser that such vehicle or engine is (A) designed, built, and equipped so as to

conform at the time of sale with applicable regulations under section 7521 of this title, and (B) free

from defects in materials and workmanship which

cause such vehicle or engine to fail to conform with

applicable regulations for its useful life (as determined under section 7521(d) of this title). In the

case of vehicles and engines manufactured in the

model year 1995 and thereafter such warranty shall

require that the vehicle or engine is free from any

such defects for the warranty period provided under subsection (i).

(3) The cost of any part, device, or component of

any light-duty vehicle that is designed for emission

control and which in the instructions issued pursuant to subsection (c)(3) of this section is scheduled

for replacement during the useful life of the vehicle

in order to maintain compliance with regulations

under section 7521 of this title, the failure of which

shall not interfere with the normal performance of

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the vehicle, and the expected retail price of which,

including installation costs, is greater than 2 percent of the suggested retail price of such vehicle,

shall be borne or reimbursed at the time of replacement by the vehicle manufacturer and such replacement shall be provided without cost to the ultimate

purchaser, subsequent purchaser, or dealer. The

term “designed for emission control” as used in the

preceding sentence means a catalytic converter,

thermal reactor, or other component installed on or

in a vehicle for the sole or primary purpose of reducing vehicle emissions (not including those vehicle components which were in general use prior to

model year 1968 and the primary function of which

is not related to emission control).

11.

42 U.S.C. § 7541(b) provides:

Compliance by vehicles and engines in actual use

(b) Testing methods and procedures

If the Administrator determines that (i) there are

available testing methods and procedures to ascertain

whether, when in actual use throughout its the warranty period (as determined under subsection (i)), each

vehicle and engine to which regulations under section

7521 of this title apply complies with the emission

standards of such regulations, (ii) such methods and

procedures are in accordance with good engineering

practices, and (iii) such methods and procedures are

reasonably capable of being correlated with tests conducted under section 7525(a)(1) of this title, then—

98a

(1) he shall establish such methods and procedures by regulation, and

(2) at such time as he determines that inspection

facilities or equipment are available for purposes of

carrying out testing methods and procedures established under paragraph (1), he shall prescribe regulations which shall require manufacturers to warrant the emission control device or system of each

new motor vehicle or new motor vehicle engine to

which a regulation under section 7521 of this title

applies and which is manufactured in a model year

beginning after the Administrator first prescribes

warranty regulations under this paragraph (2). The

warranty under such regulations shall run to the ultimate purchaser and each subsequent purchaser

and shall provide that if—

(A) the vehicle or engine is maintained and

operated in accordance with instructions under

subsection (c)(3),

(B) it fails to conform at any time during its

the warranty period (as determined under subsection (i)) to the regulations prescribed under

section 7521 of this title, and

of such vehicle or engine having to bear any penalty or other sanction (including the denial of the

right to use such vehicle or engine) under State

or Federal law,

99a

then such manufacturer shall remedy such nonconformity under such warranty with the cost thereof

to be borne by the manufacturer. No such warranty

shall be invalid on the basis of any part used in the

maintenance or repair of a vehicle or engine if such

part was certified as provided und

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