Petition for Writ of Certiorari — Volkswagen Aktiengesellschaft, et al., Petitioners v. Ohio, ex rel. Dave Yost, Attorney General
Supreme Court briefAug 27, 2021
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APPENDIX
TABLE OF CONTENTS
Appendix A: Supreme Court of Ohio Opinion,
June 29, 2021 ................................................................. 1a
Appendix B: Court of Appeals Opinion,
December 10, 2019 ...................................................... 27a
Appendix C: Trial Court Decision,
December 7, 2018 ........................................................ 47a
Appendix D: Relevant Statutory Provisions
42 U.S.C. § 7507.......................................................... 70a
42 U.S.C. § 7521(a) ..................................................... 71a
42 U.S.C. § 7521(d) ..................................................... 72a
42 U.S.C. § 7522(a) ..................................................... 72a
42 U.S.C. § 7523(b) ..................................................... 73a
42 U.S.C. § 7524(a) ..................................................... 73a
42 U.S.C. § 7524(c) ..................................................... 74a
42 U.S.C. § 7541(a) ..................................................... 75a
42 U.S.C. § 7541(b) ..................................................... 76a
42 U.S.C. § 7541(c) ..................................................... 78a
42 U.S.C. § 7541(h) ..................................................... 79a
42 U.S.C. § 7542.......................................................... 80a
42 U.S.C. § 7543(a) ..................................................... 82a
42 U.S.C. § 7543(b) ..................................................... 82a
42 U.S.C. § 7543(d) ..................................................... 84a
Ohio Rev. Code § 3704.16 .......................................... 84a
APPENDIX A
SLIP OPINION NO. 2021-OHIO-2121
THE STATE EX REL. YOST, ATTY. GEN., APPELLEE, V.
VOLKSWAGEN AKTIENGESELLSCHAFT, D.B.A.
VOLKSWAGEN GROUP AND/OR VOLKSWAGEN AG, ET
AL., APPELLANTS .
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as State ex
rel. Yost v. Volkswagen Aktiengesellschaft, Slip
Opinion No. 2021-Ohio-2121.]
Federal preemption—Vehicle-emissions anti-tampering claims—The federal Clean Air Act neither expressly nor impliedly preempts R.C. 3704.16(C)(3)
or precludes an anti-tampering claim against a vehicle manufacturer under Ohio’s Air Pollution
Control Act for the manufacturer’s post-sale tampering with a vehicle’s emissions-control system—
Court of appeals’ judgment affirmed.
(No. 2020-0092—Submitted January 26, 2021—Decided June 29, 2021.)
APPEAL from the Court of Appeals for Franklin
County, No. 19AP-7, 2019-Ohio-5084.
FISCHER, J.
{¶ 1} In this case, we are asked to decide whether
the federal Clean Air Act, 42 U.S.C. 7401 et seq.,
(1a)
2a
preempts Ohio law and precludes an anti-tampering
claim under Ohio’s Air Pollution Control Act, R.C.
3704.01 et seq. For the reasons that follow, we hold that
it does not and therefore affirm the judgment of the
Tenth District Court of Appeals.
I. BACKGROUND
{¶ 2} Starting around 2009, appellant Volkswagen
Aktiengesellschaft, d.b.a. Volkswagen Group and/or
Volkswagen AG (“Volkswagen”), 1 programmed vehicles manufactured and sold under its various labels
with software that would enable those vehicles to perform better than they otherwise would have on federal
emissions tests. The software, sometimes referred to
as a “defeat device,” would identify when a Volkswagen
vehicle was being tested by regulators for compliance
with federal emissions standards. Once the software
detected that an emissions test was in progress, the
software would trigger equipment within the vehicle
that would reduce the vehicle’s emissions to an acceptable level. In reality, of course, emissions from the
vehicle during everyday driving, i.e., under non-test
conditions, were well above the federally imposed legal
limit.
{¶ 3} Several years into that scheme, Volkswagen
learned that its emissions-control software was not
working properly and was causing certain performance
1
Other defendants named in the complaint and appellants
here are Audi AG; Volkswagen Group of America, Inc., d.b.a.
Volkswagen of America, Inc., or Audi of America, Inc.;
Volkswagen of America, Inc.; Audi of America, L.L.C.; Dr. Ing.
h.c. F. Porsche AG, d.b.a. Porsche AG; and Porsche Cars North
America, Inc.
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problems in its vehicles. Volkswagen updated the software to fix those problems and to continue skirting federal emissions standards. Starting around 2013,
Volkswagen installed the improved and updated software in new vehicles slated for sale in the United
States. Without telling its customers the true reason
why, Volkswagen also installed the updated software in
its older vehicles through a voluntary recall program
and when its customers brought their vehicles in for
routine maintenance.
{¶ 4} Eventually, the United States Environmental
Protection Agency (“EPA”) discovered Volkswagen’s
scheme. In a subsequent enforcement action,
Volkswagen admitted to all of this and agreed to pay a
$2.8 billion penalty in connection with its wrongdoing.
{¶ 5} In 2016, then Ohio Attorney General Mike
DeWine sued Volkswagen for its vehicle-emissions
tampering, alleging that Volkswagen’s conduct, which
impacted approximately 14,000 vehicles that had been
sold or leased in Ohio, violated Ohio’s Air Pollution
Control Act, R.C. 3704.01 et seq. As relevant here,
Volkswagen moved to dismiss the attorney general’s
claims on the grounds that Ohio’s anti-tampering statute was preempted by the federal Clean Air Act, 42
U.S.C. 7401 et seq., and that the attorney general’s
claims were therefore precluded. The trial court
agreed with Volkswagen’s preemption argument and
granted Volkswagen’s motion to dismiss.
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{¶ 6} On appeal to the Tenth District, appellee, Ohio
Attorney General Dave Yost, 2 argued that the trial
court erred when it determined that federal preemption principles barred the state’s claims against
Volkswagen, because the federal Clean Air Act draws
a critical distinction between new and used vehicles.
While the attorney general conceded below that federal law alone governs emissions from new vehicles, he
argued that the federal legislative scheme does not
preempt Ohio law and preclude state-based claims concerning post-sale tampering with a vehicle’s emissionscontrol system.
{¶ 7} The Tenth District agreed with the attorney
general, concluding that the federal Clean Air Act
evinces “no clear and manifest congressional purpose
to [expressly or impliedly] preempt the State’s in-use
motor vehicle emission control system tampering
claims.” 2019-Ohio-5084, 137 N.E.3d 1267, ¶ 29. As a result, the court of appeals reversed the trial court’s
judgment and remanded the matter for further proceedings. Id. at ¶ 35.
{¶ 8} Following the Tenth District’s decision,
Volkswagen appealed to this court and we accepted its
appeal to consider whether the federal Clean Air Act
either expressly or impliedly preempts state-law
claims against a manufacturer for its post-sale emissions control tampering. See 158 Ohio St.3d 1450, 2020Ohio-1090, 141 N.E.3d 985.
Attorney General Yost was substituted for former Attorney
General DeWine as a party during the appeal below to the Tenth
District. See App.R. 29(C)(1).
2
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II. ANALYSIS
A. Federal Preemption
{¶ 9} Before turning to whether federal law expressly or impliedly preempts Ohio’s anti-tampering
law and precludes the state-law claims involved here, it
is helpful to review some basic principles regarding
federal preemption.
{¶ 10} The doctrine of federal preemption originates from the Supremacy Clause of the United States
Constitution, which provides that the “the Laws of the
United States * * * shall be the supreme Law of the
Land; and the Judges in every State shall be bound
thereby, any Thing in the Constitution or Laws of any
State to the Contrary notwithstanding.” Article VI, cl.
2.
{¶ 11} Under the Supremacy Clause, the United
States Congress has the power to preempt state law.
In re Miamisburg Train Derailment Litigation, 68
Ohio St.3d 255, 259, 626 N.E.2d 85 (1994); see also Gibbons v. Ogden, 22 U.S. 1, 210-211, 6 L.Ed. 23 (1824)
(“the act of Congress, or the treaty, is supreme; and
the law of the State, though enacted in the exercise of
powers not controverted, must yield to it”). Congress
may do so either expressly or impliedly. Kansas v. Garcia, ___U.S. ___, 140 S.Ct. 791, 801, 206 L.Ed.2d 146
(2020); Girard v. Youngstown Belt Ry. Co., 134 Ohio
St.3d 79, 2012-Ohio-5370, 979 N.E.3d 1273, ¶ 14.
{¶ 12} When Congress expressly preempts state
law, it explicitly says so with clear statutory language.
English v. Gen. Elec. Co., 496 U.S. 72, 78-79, 110 S.Ct.
2270, 110 L.Ed.2d 65 (1990). When considering
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whether preemption is implied, courts look to congressional intent to determine whether Congress meant to
preempt state law without saying as much. See id. at
79. Identifying implied preemption is thus a little more
complicated than identifying express preemption, but
courts generally find this type of preemption in two circumstances.
{¶ 13} The first circumstance occurs when Congress
has enacted a legislative and regulatory scheme that is
so pervasive “‘that Congress left no room for the States
to supplement it’” or when the legislative and regulatory scheme “‘touch[es] a field in which the federal interest is so dominant that the federal system will be
assumed to preclude enforcement of state laws on the
same subject.’” (Brackets added in English.) Id., quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230,
67 S.Ct. 1146, 91 L.Ed. 1447 (1947). Implied preemption of this variety is referred to as “field preemption.”
English at 79. Volkswagen has not presented a fieldpreemption argument here, so we focus our analysis on
the second type of implied preemption, which is discussed below.
{¶ 14} The second circumstance in which implied
preemption is found occurs when a state law “actually
conflicts with federal law.” Id. This type of implied
preemption is fittingly referred to as “conflict preemption.” Id. at fn. 5. Conflict preemption may be broken
down further into subcategories depending on whether
the conflict exists because (1) compliance with both
state and federal law is impossible, id. at 79, citing
Florida Lime & Avocado Growers, Inc. v. Paul, 373
U.S. 132, 142-143, 83 S.Ct. 1210, 10 L.Ed.2d 248 (1963),
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or (2) the state law “‘stands as an obstacle to the accomplishment and execution of the full purposes and
objectives of Congress,’” id., quoting Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581
(1941).
B. Standard of Review
{¶ 15} Because the “purpose of Congress is the ultimate touchstone,” Retail Clerks v. Internatl. Assn.,
Local 1625, AFL-CIO v. Schermerhorn, 375 U.S. 96,
103, 84 S.Ct. 219, 11 L.Ed.2d 179 (1963), preemption—
whether express or implied—is primarily a question of
legislative intent and so our focus is on the text and
structure of the provisions involved. Ohio State Bldg.
& Constr. Trades Council v. Cuyahoga Cty. Bd. of
Commrs., 98 Ohio St.3d 214, 2002-Ohio-7213, 781
N.E.2d 951, ¶ 46; Malone v. White Motor Corp., 435
U.S. 497, 504, 98 S.Ct. 1185, 55 L.Ed.2d 443 (1978).
Preemption is thus a question of law, Pinchot v. Charter One Bank, F.S.B., 99 Ohio St.3d 390, 2003-Ohio4122, 792 N.E.2d 1105, ¶ 39, and we conduct a de novo
review of a judgment that was based on preemption
grounds. See Menorah Park Ctr. for Senior Living v.
Rolston, ___ Ohio St.3d ___, 2020-Ohio-6658, ___
N.E.3d ___, ¶ 12.
C. The Federal Clean Air Act and Ohio’s Air Pollution Control Act
1. The Federal Clean Air Act Does Not Expressly
Preempt Ohio’s Vehicle-Emissions Anti-Tampering
Law and Preclude the Attorney General’s Claims
{¶ 16} When it comes to preemption, Section 209 of
the federal Clean Air Act expressly provides that “[n]o
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State or any political subdivision thereof shall adopt or
attempt to enforce any standard relating to the control
of emissions from new motor vehicles or new motor vehicle engines subject to this part.” 42 U.S.C. 7543(a).
{¶ 17} Volkswagen contends that the Ohio statute at
issue here, R.C. 3704.16(C)(3), is expressly preempted
by 42 U.S.C. 7543(a) and that the attorney general’s
claims are precluded as a result. Specifically,
Volkswagen asserts that by prohibiting states from
adopting or enforcing standards relating to emissions
from new motor vehicles and new motor-vehicle engines, Congress has expressly precluded states from
regulating anything relating to a vehicle’s emissionscontrol system in any way, including post-sale tampering by the manufacturer. We disagree.
{¶ 18} Congress has told us exactly what it meant to
include within the scope of the Clean Air Act’s expresspreemption provision in 42 U.S.C. 7543(a): “new motor
vehicles” and “new motor vehicle engines.” It has also
defined both of those terms.
{¶ 19} A “new motor vehicle” is defined as “a motor
vehicle the equitable or legal title to which has never
been transferred to an ultimate purchaser.” 42 U.S.C.
7550(3). A “new motor vehicle engine” is defined similarly as “an engine in a new motor vehicle or a motor
vehicle engine the equitable or legal title to which has
never been transferred to the ultimate purchaser.” Id.
{¶ 20} Congress has also helpfully defined the term
“ultimate purchaser,” as it is used in 42 U.S.C. 7550(3),
as “the first person who in good faith purchases such
new motor vehicle or new engine for purposes other
than resale.” 42 U.S.C. 7550(5).
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{¶ 21} Taken together, the plain text of the applicable statutes indicates that after a new motor vehicle or
new motor-vehicle engine is first sold, the expresspreemption clause in 42 U.S.C. 7543(a) no longer applies. In re Volkswagen “Clean Diesel” Marketing,
Sales Practices, & Prods. Liab. Litigation (“In re
Volkswagen”), 959 F.3d 1201, 1216 (9th Cir.2020). Put
differently, the Clean Air Act expressly preempts only
state and local laws regulating or setting vehicle-emissions standards for new motor vehicles and new motorvehicle engines. See 42 U.S.C. 7543(a).
{¶ 22} In this case, the relevant Ohio statute, R.C.
3704.16(C)(3), provides that “[n]o person shall knowingly * * * [t]amper with any emission control system
installed on or in a motor vehicle after sale, lease, or
rental and delivery of the vehicle to the ultimate purchaser, lessee, or renter.”
{¶ 23} Notably, R.C. 3704.16(C)(3) does not create
or adopt any emissions-control standards and does not
apply to new motor vehicles or new motor-vehicle engines. Instead, it applies only to conduct (tampering)
that takes place after a vehicle has reached its “ultimate purchaser, lessee, or renter.” Consequently, R.C.
3704.16(C)(3) does not fall within the scope of the federal Clean Air Act’s express-preemption provision.
{¶ 24} In an attempt to get around the plain text of
these laws and to avoid the obvious conclusion that the
federal Clean Air Act does not expressly preempt R.C.
3704.16(C)(3) and preclude anti-tampering claims under Ohio’s Air Pollution Control Act, Volkswagen calls
our attention to the decisions in Allway Taxi, Inc. v.
New York, 340 F.Supp. 1120 (S.D.N.Y.1972), and Engine Mfrs. Assn. v. S. Coast Air Quality Mgt. Dist., 541
10a
U.S. 246, 124 S.Ct. 1756, 158 L.Ed.2d 529 (2004). Neither Allway Taxi nor Engine Mfrs. Assn., however,
supports Volkswagen’s arguments or requires a different conclusion regarding the applicability of the express-preemption provision in Section 209 of the Clean
Air Act, 42 U.S.C. 7543(a).
{¶ 25} To begin, the federal district court in Allway
Taxi upheld a local ordinance that required taxi cabs
operating in New York City to be equipped with emissions-control devices. 340 F.Supp. at 1122, 1124. In doing so, that court specifically stated that the definition
of “new motor vehicles” provided in the Clean Air Act
reveals a clear congressional intent to “preclude states
and localities from setting their own exhaust emission
control standards only with respect to the manufacture
and distribution of new automobiles.” (Emphasis
added.) Id. at 1124. In other words, the Clean Air Act
prohibits states and local governments from “setting
standards governing emission control devices before
the initial sale or registration of an automobile.” (Emphasis added.) Id. So, although the Allway Taxi court
cautioned that its decision should not be read to sanction the imposition of “emission control standards the
moment after a new car is bought and registered,” id.,
it nonetheless read the Clean Air Act’s expresspreemption provision as drawing a distinction between
pre- and post-sale emissions regulations.
{¶ 26} Next, nothing in the United States Supreme
Court’s decision in Engine Mfrs. Assn. calls into question this pre- and post-sale distinction. In fact, in determining whether the Clean Air Act preempted rules
regulating the types of commercial vehicles that could
be purchased or leased within a particular region in
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California based on different emissions criteria, the
court was careful to note that its decision did not answer whether 42 U.S.C. 7543(a) also preempts rules
that apply “beyond the purchase of new vehicles.” (Emphasis added.) Engine Mfrs. Assn. at 259. Thus, Engine Mfrs. Assn. does not help this court to decide this
particular case, which involves state-law claims under
a statute governing post-sale conduct and used vehicles.
{¶ 27} Accordingly, we hold that Section 209 of the
federal Clean Air Act, 42 U.S.C. 7543(a), does not expressly preempt R.C. 3704.16(C)(3) and preclude the
attorney general’s anti-tampering claims.
2. The Federal Clean Air Act Does Not Impliedly
Preempt Ohio’s Vehicle- Emissions Anti-Tampering
Law and Preclude the Attorney General’s Claims
{¶ 28} In addition to its arguments regarding express preemption, Volkswagen also argues that claims
brought under R.C. 3704.16(C)(3) are impliedly
preempted by the Clean Air Act. According to
Volkswagen, 42 U.S.C. 7543(a) impliedly preempts
Ohio law because R.C. 3704.16(C)(3) conflicts with and
stands as an obstacle to the federal government’s ability to ensure continued compliance with its vehicleemissions standards after a new motor vehicle or new
motor-vehicle engine is sold and interferes with the
federal EPA’s ability to bring and resolve enforcement
actions. As with our conclusion regarding its expresspreemption arguments, we find these arguments unpersuasive.
{¶ 29} Again, arguments calling for a finding of implied preemption, “like all preemption arguments,
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must be grounded ‘in the text and structure of the statute at issue.’” Garcia, ___ U.S. at ___, 140 S.Ct. at 804,
206 L.Ed.2d 146, quoting CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664, 113 S.Ct. 1732, 123 L.Ed.2d
387 (1993). It is therefore not enough to claim that a
state law is impliedly preempted by simply ascribing
“unenacted purposes and objectives to a federal statute.” Virginia Uranium, Inc. v. Warren, ___ U.S. ___,
139 S.Ct. 1894, 1907, 204 L.Ed.2d 377 (2020). Instead,
an actual conflict between the state and federal law is
required. Geier v. Am. Honda Motor Co., Inc., 529 U.S.
861, 884, 120 S.Ct. 1913, 146 L.Ed.2d 914 (2000), citing
English, 496 U.S. at 78-79, 110 S.Ct. 2270, 110 L.Ed.2d
65. For Volkswagen, the lack of an actual conflict is the
problem with its argument here.
{¶ 30} First, although it is true that the Clean Air
Act contains provisions that apply post-sale and provide the federal government with tools to ensure continued compliance after a new motor vehicle or new motor-vehicle engine is sold, Ohio’s anti-tampering law
does not stand as an obstacle to the federal scheme or
make it impossible to comply with that scheme.
{¶ 31} Indeed, Ohio’s law specifically makes it possible to comply with it and the federal scheme by stating that it is not a violation of R.C. 3704.16(C)(3) if the
conduct in question is “taken for the purpose of repair
or replacement of the emission control system or is a
necessary and temporary procedure to repair or replace any other item on the motor vehicle and the action results in the system’s compliance with the ‘Clean
Air Act Amendments.’” R.C. 3704.16(E)(1).
{¶ 32} Importantly, that means that Ohio’s law does
not conflict with the federal vehicle-warranty statute,
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42 U.S.C. 7541(a)(1), federal vehicle-recall procedures,
42 U.S.C. 7541(c)(1), or federal useful-life requirements, 42 U.S.C. 7521(a)(1) and (d). It also means that
Volkswagen’s fears that it will be punished for actions
taken in response to EPA guidelines or for modifications approved by the EPA are unfounded.
{¶ 33} The bottom line here is that as long as
Volkswagen complies with, rather than circumvents,
federal law it will have nothing to worry about in Ohio
regarding actions brought under R.C. 3704.16(C)(3).
By definition, under these circumstances, there is no
conflict between the relevant federal and state statutes
or any obstacle to Congress’s objectives.
{¶ 34} We also disagree with Volkswagen that there
is a conflict between federal and Ohio law merely because the Clean Air Act also prohibits emissions-control tampering, see 42 U.S.C. 7522(a)(3)(A), and punishes that conduct, see 42 U.S.C 7524(a). To begin, the
fact that there is some overlap between the state and
federal provisions does not automatically indicate that
the applicable state law is impliedly preempted. Garcia, ___ U.S. at ___, 140 S.Ct. at 806-807, 206 L.Ed.2d
146. Likewise, it is no problem for preemption purposes that emissions-control tampering is punished under both Ohio and federal law. As a matter of fact, it
has long been settled that a state government may punish conduct that the federal government also punishes.
California v. Zook, 336 U.S. 725, 731, 69 S.Ct. 841, 93
L.Ed. 1005 (1949), quoting United States v. Marigold,
50 U.S. 560, 569, 13 L.Ed. 257 (1850) (“‘the same act
might, as to its character and tendencies, and the consequences it involved, constitute an offence against
both the State and Federal governments, and might
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draw to its commission the penalties denounced by either, as appropriate to its character in reference to
each’”).
{¶ 35} Moreover, and perhaps most significantly,
the Clean Air Act does not suggest that Congress intended to shield vehicle manufacturers from state-law
emissions-control-tampering
liability.
In
re
Volkswagen, 959 F.3d at 1223. Certainly, if Congress
had wished to preclude states from punishing companies or persons for emissions-control tampering, it
could have said so. After all, as the Ninth Circuit
pointed out in In re Volkswagen, a number of states
had laws on their books prohibiting tampering with
emissions-control systems in motor vehicles during the
period in which Congress amended the Clean Air Act,
id. at 1219-1220, and Congress did not make “any
changes to the preservation of state authority,” id. at
1220. Because we can presume that Congress was
aware of those state laws when it amended the Clean
Air Act, see Goodyear Atomic Corp. v. Miller, 486 U.S.
174, 184-185, 108 S.Ct. 1704, 100 L.Ed.2d 158 (1988), its
silence on the issue is “‘powerful evidence that Congress did not intend’ to preempt local anti-tampering
laws,” In re Volkswagen at 1220, quoting Wyeth v. Levine, 555 U.S. 555, 575, 129 S.Ct. 1187, 173 L.Ed.2d 51
(2009).
{¶ 36} Finally, we reject Volkswagen’s argument
that the potential imposition of state-law penalties under R.C. 3704.06 makes it impossible for the federal
EPA to administer its vehicle-emissions program or interferes with the federal EPA’s ability to resolve enforcement actions.
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{¶ 37} First of all, it is not impossible for a violator
to pay federal penalties and state-law penalties relating to the same conduct, so exposure to liability at the
state level does not necessarily frustrate the purpose
of the federal scheme. See Silkwood v. Kerr-McGee
Corp., 464 U.S. 238, 257, 104 S.Ct. 615, 78 L.Ed.2d 443
(1984). The fact that such penalties might be considerable when aggregated, as Volkswagen contends, does
not change that conclusion. California v. ARC Am.
Corp., 490 U.S. 93, 105, 109 S.Ct. 1661, 104 L.Ed.2d 86
(1989) (“Ordinarily, state causes of action are not preempted solely because they impose liability over and
above that authorized by federal law”).
{¶ 38} Additionally, there is no evidence that the potential for liability under Ohio’s anti-tampering law actually frustrates or interferes with the federal government’s interests in any way. In fact, despite the likelihood of subsequent actions by states and local governments here, the federal EPA was tellingly able to resolve its case against Volkswagen. The mere possibility that future enforcement actions might be slightly
more difficult because of a defendant’s potential exposure to dual liability does not provide a basis for this
court to hold that Ohio’s anti-tampering law is
preempted and that the attorney general’s claims here
are precluded. Garcia, ___ U.S. at ___, 140 S.Ct. at 807,
206 L.Ed.2d 146, quoting United States Constitution,
Article VI, cl. 2 (“The Supremacy Clause gives priority
to ‘the Laws of the United States,’” not the “enforcement priorities or preferences of federal officers”).
{¶ 39} Since “as in any field of statutory interpretation, it is our duty to respect not only what Congress
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wrote but, as importantly, what it didn’t write,” Virginia Uranium, ___ U.S. at ___, 139 S.Ct. at 1900, 204
L.Ed.2d 377, we cannot ignore these realities and manufacture a conflict that has no basis in the text and
structure of the applicable state and federal statutes
just because it would be advantageous for a particular
party. We therefore conclude that Ohio’s anti-tampering law, R.C. 3704.16(C)(3), and the attorney general’s
claims under that provision are not impliedly
preempted by the federal Clean Air Act.
III. CONCLUSION
{¶ 40} For the reasons stated above, we hold that
the federal Clean Air Act neither expressly nor impliedly preempts R.C. 3704.16(C)(3) or precludes an
anti-tampering claim under Ohio’s Air Pollution Control Act for a manufacturer’s post-sale tampering with
a vehicle’s emissions-control system. Accordingly, we
affirm the judgment of the Tenth District Court of Appeals.
Judgment affirmed.
DEWINE, STEWART, and DELANEY, JJ., concur.
O’CONNOR, C.J., and KENNEDY, J., concur in judgment only.
DONNELLY, J., dissents, with an opinion.
PATRICIA A. DELANEY, J., of the Fifth District
Court of Appeals, sitting for BRUNNER, J.
_________________
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DONNELLY, J., dissenting.
{¶ 41} I respectfully dissent from the majority’s
holding that the federal Clean Air Act, 42 U.S.C. 7401
et seq., does not preempt the anti-tampering claim
brought by appellee, the Ohio Attorney General, pursuant to Ohio’s Air Pollution Control Act, R.C. 3704.01
et seq. I would hold that appellant Volkswagen Aktiengesellschaft, d.b.a. Volkswagen Group and/or
Volkswagen AG (“Volkswagen”), has met its burden of
showing that the state-law claim is impliedly
preempted by federal law.
{¶ 42} Generally, there are two ways in which federal law may impliedly preempt state law: (1) the federal law is so comprehensive in scope that it occupies
the entire field of the regulated activity (“field preemption”), or (2) the federal law and the state law are actually in conflict with each other (“conflict preemption”).
Norfolk S. Ry. Co. v. Bogle, 115 Ohio St.3d 455, 2007Ohio-5248, 875 N.E.2d 919, ¶ 7. Because the parties
here have framed their arguments around conflict
preemption rather than field preemption as a distinct
matter, I will focus on the conflict-preemption aspect
of the preemption doctrine.
{¶ 43} Within the category of conflict preemption
there are two subcategories: (1) “impossibility preemption,” which applies when it is impossible to comply
with both the state law and the federal law, and (2) “obstacle preemption,” which applies when the “state law
‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.’”
English v. Gen. Elec. Co., 496 U.S. 72, 79, 110 S.Ct.
2270, 110 L.Ed.2d 65 (1990), quoting Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581
18a
(1941). Regarding impossibility preemption, given that
the attorney general is seeking to penalize Volkswagen
for its fraud against the United States Environmental
Protection Agency (“EPA”) relating to motor vehicles
that were certified by the EPA, motor-vehicle-emissions standards that were set by the EPA, and actions
monitored by the EPA, and for violations that have already been penalized by the EPA, it is readily apparent
that it was possible for Volkswagen to have complied
with both the Ohio and federal laws that prohibit tampering with motor-vehicle-emissions systems. Thus,
obstacle preemption is the only type of conflict
preemption that might apply in this case.
{¶ 44} For Volkswagen’s violations of Title II of the
federal Clean Air Act, which spanned about a decade
and affected motor vehicles throughout the United
States, the EPA carefully crafted a multibillion-dollar
penalty that balanced a variety of financial and environmental factors pursuant to 42 U.S.C. 7524. In my
view, the attorney general’s decision to seek an additional judgment that could total more than $1 trillion
involves nothing more than the attorney general’s disagreement with the penalty that the federal government carefully crafted. In this immediate sense, I believe that there is a clear conflict between the federal
and state objectives. And when considering the possibility of similar lawsuits from other states and municipalities across the United States, a broader conflict is
apparent; such an action threatens to undermine the
enforcement power of the EPA and thereby the efficacy of the entire federal scheme. Because the attorney
general’s anti-tampering claims stand as an obstacle to
the execution of the full purposes of Congress in the
Clean Air Act, they are preempted by federal law.
19a
{¶ 45} The EPA plays a central role in the Clean Air
Act, and its enforcement and penalty powers are crucial to the effectiveness of the federal law. In Title II
of the Clean Air Act, Congress directs the EPA to “prescribe * * * standards applicable to the emission of any
air pollutant from any class or classes of new motor vehicles or new motor vehicle engines.” 42 U.S.C.
7521(a)(l). In order for it to be able to follow that mandate, the EPA is empowered to set emissions standards
for motor vehicles, 42 U.S.C. 7521(a)(l) and (3), establish emissions-control technology requirements, e.g.,
42 U.S.C. 7521(a)(6), and regulate the use of emissionscontrol devices, 42 U.S.C. 7521(a)(4)(A). These exclusively federal standards apply throughout a vehicle’s
“useful life,” 42 U.S.C. 7521(a)(1), and the EPA is authorized to monitor vehicles and their manufacturers
throughout that time, 42 U.S.C. 7541 and 7542.
{¶ 46} In order for it to enforce the standards and
regulations, the EPA is empowered by the Clean Air
Act to conduct testing to ensure that new motor vehicles comply with the federal law as a prerequisite to
certification and to refuse to certify vehicles that do not
meet the requirements. 42 U.S.C. 7521(m); 42 U.S.C.
7525. Even when a vehicle is no longer considered new
under the Clean Air Act, the EPA requires the manufacturer to report any emissions-related defect that affects 25 or more of the vehicles of the same model year,
40 C.F.R. 85.1903, including defects in “software * * *
which must function properly to ensure continued compliance with emission standards,” 40 C.F.R.
85.1902(b)(2). The EPA requires manufacturers to test
a portion of the in-use vehicles that they manufactured,
40 C.F.R. 86.1845-04 and 86.1827-01, and if the vehicles
fail those tests then the EPA may require the vehicles
20a
to be recalled, 42 U.S.C. 7541(c)(1). The EPA also has
the power to bring civil enforcement actions against
manufacturers for their violations of the federal law, 42
U.S.C. 7523 through 7525, including violations of the
federal statute prohibiting tampering with a motor vehicle’s emissions system either before or after the sale
of the vehicle, 42 U.S.C. 7522(a)(3)(A).
{¶ 47} The EPA’s central enforcement mechanism
is its power to impose civil penalties pursuant to 42
U.S.C. 7524. The EPA may begin the penalty process
either by filing suit in a federal court or by imposing an
administrative penalty that may later be subject to judicial review. 42 U.S.C. 7524(b) and (c). Through either
method, the goal is to determine an appropriate penalty amount by balancing various factors such as “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 * * *, 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.” 42 U.S.C. 7524(b) and (c)(2). It is in that method
of enforcing the Clean Air Act and, particularly in its
requirements for determining an appropriate penalty,
that the conflict between the federal and Ohio laws is
most apparent.
{¶ 48} In crafting an appropriate penalty for a violation of Title II of the Clean Air Act, the EPA’s goal is
to adequately deter future violations. But it must also
balance the need for deterrence with factors such as
the potential for the penalty to cause the manufacturer
to go out of business, the need to not create precedent
that adversely affects the EPA’s ability to enforce the
21a
law, and any relevant “competing public interest considerations.” United States Environmental Protection
Agency, Clean Air Act Title II Vehicle & Engine Civil
Penalty
Policy,
at
18-19,
available
at
https://www.epa.gov/sites/production/files/202101/documents/caatitleiivehicleenginepenaltypolicy011821.pdf
(accessed
June
9,
2021)
[https://perma.cc/95DE-8JMB]. Imposing a penalty so
steep that it causes a manufacturer to go out of business might have the immediate negative effect of rendering the manufacturer unable to pay any of its penalties and a wider negative effect of wiping out a large
swath of jobs from the United States automotive industry and making vehicles less affordable for United
States citizens. Such effects would certainly go against
the public’s best interests.
{¶ 49} Moreover, if states and municipalities are
permitted to sue motor-vehicle manufacturers based
on admissions made when settling civil actions with the
EPA, manufacturers will be deterred from making
such admissions. The efficacy of the EPA’s rulemaking
and enforcement powers would be severely reduced if
manufacturers were to be disincentivized from cooperating with the EPA and other federal governmental entities.
{¶ 50} Following Volkswagen’s cooperation with the
federal government, it entered into a plea agreement
and consent decrees with the EPA in 2017, which required Volkswagen “to pay $4.3 billion in civil and criminal penalties, to invest $2.0 billion in Zero Emission
Vehicle technology, to recall and/or repair the affected
vehicles, and to contribute $2.925 billion to an emis-
22a
sions mitigation trust.” In re Volkswagen “Clean Diesel” Marketing, Sales Practices, & Prods. Liab. Litigation, 264 F.Supp.3d 1040, 1044 (N.D.Cal.2017). Of
the $2.925 billion that Volkswagen paid into the emissions-mitigation trust, over $75 million was allocated to
the state of Ohio. The fact that the EPA was empowered by Congress through the Clean Air Act to reach
such a large-scale settlement with Volkswagen regarding its nationwide misconduct—and the fact that the
federal law obligates the EPA to craft a penalty that
thoughtfully balances a multitude of competing interests—indicates to me that the attorney general’s seeking a potential additional $1 trillion penalty pursuant
to Ohio’s Air Pollution Control Act, R.C. 3704.01 et
seq., for a local portion of that same misconduct conflicts both with the EPA’s immediate authority and the
longer-term goals underlying the federal law.
{¶ 51} Courts in Alabama, Minnesota, and Tennessee have concluded that similar anti-tampering claims
filed in their respective states conflicted with the Clean
Air Act, because the claims stood as an obstacle to the
EPA’s effective execution of the purposes and objectives of the Clean Air Act. See State ex rel. Slatery v.
Volkswagen Aktiengesellschaft, Tenn.App. No. M201800791-COA-R9-CV, 2019 WL 1220836, *13 (Mar. 13,
2019); State of Alabama v. Volkswagen AG, 279 So.3d
1109, 1128-1129 (Ala.2018) (“Alabama”); State by
Swanson v. Volkswagen Aktiengesellschaft, Minn.App.
No. A18-0544, 2018 WL 6273103, *6-9 (Dec. 3, 2018). I
recognize that one federal circuit court of appeals has
come to the opposite conclusion. See In re Volkswagen
“Clean Diesel” Marketing, Sales Practices, & Prods.
Liab. Litigation (“In re Volkswagen”), 959 F.3d 1201
(9th Cir.2020). But this court is not required to follow
23a
those rulings, including any ruling of a federal circuit
court. See State v. Burnett, 93 Ohio St.3d 419, 424, 755
N.E.2d 857 (2001). We are free to determine which ruling is better-reasoned and more persuasive, and I find
the decisions from the courts in Alabama, Minnesota,
and Tennessee more compelling.
{¶ 52} I disagree with the view of the United States
Court of Appeals for the Ninth Circuit, adopted by the
majority here, that any conflict between the federal
and state laws is rendered irrelevant by the fact that it
is perfectly permissible in other circumstances for the
same conduct to be punished by both the state and federal governments. In re Volkswagen at 1224-1225; see
also majority opinion at ¶ 34-35, citing California v.
Zook, 336 U.S. 725, 731, 69 S.Ct. 841, 93 L.Ed. 1005
(1949), and United States v. Marigold, 50 U.S. 560, 569,
13 L.Ed. 257 (1850). In Zook and Marigold, the United
States Supreme Court rejected the notion that federal
preemption of state law is implicated simply when the
federal and state laws prohibit the same conduct and
create the possibility of “double punishment.” Zook at
737 (regarding state and federal prosecutions for selling transportation of persons without an Interstate
Commerce Commission permit); Marigold at 568- 569
(regarding state and federal prosecutions for counterfeiting). But the concern here does not implicate the
mere possibility of double punishment; the concern is
that punishment by the state will undermine the ability
of the federal government to effectively enforce its environmental laws. In Marigold, the state criminal prosecution did not undermine any attempt by the federal
government to negotiate with counterfeiters across the
nation to reach a resolution that adequately penalized
the counterfeiters but that still took into account the
24a
public’s interest in not crippling the entire counterfeiting industry; the prosecution simply sought to punish
discrete conduct that was also punishable by federal
law. The context of Marigold and Zook render the
court’s holdings in those cases inapplicable to the case
at hand.
{¶ 53} The decisions by the courts in Alabama, Minnesota, and Tennessee more persuasively reason that
state emissions-tampering lawsuits (like that at issue
here) conflict with the federal Clean Air Act, because
the penalties sought in such lawsuits would upset the
balance that the EPA is both empowered and obligated
to achieve when penalizing manufacturers under the
federal law and undermine the
EPA’s ability to achieve such a balance in the future.
See Slatery at *13; Alabama at 1128-1129; Swanson at
*8. Rather than having only the effect of exacting a
double punishment against Volkswagen, the potential
state sanctions here are “at odds with achievement of
the federal decision about the right degree of pressure
to employ,” and the inconsistency of the potential sanctions “undermines the congressional calibration of
force,” Crosby v. Natl. Foreign Trade Council, 530
U.S. 363, 380, 120 S.Ct. 2288, 147 L.Ed.2d 352 (2000);
see also Alabama at 1126; Swanson at *8.
{¶ 54} The regulation of motor-vehicle emissions reflected in Title II of the Clean Air Act has been “a principally federal project,” and the exclusive federal regulation of motor-vehicle emissions is necessary in part
because “the possibility of 50 different state regulatory
regimes ‘raise[s] the spectre of an anarchic patchwork
of federal and state regulatory programs, a prospect
25a
which threaten[s] to create nightmares for the manufacturers.’” Engine Mfrs. Assn. v. United States Environmental Protection Agency, 88 F.3d 1075, 1079
(D.C.Cir.1996), quoting Motor & Equip. Mfrs. Assn.,
Inc. v. Environmental Protection Agency, 627 F.2d
1095, 1109 (D.C.Cir.1979). Allowing states like Ohio to
individually regulate and penalize manufacturers for
violations relating to motor-vehicle emissions undermines the EPA’s comprehensive and carefully balanced enforcement power and creates the anarchic
patchwork of federal and state regulatory programs
that the Clean Air Act is specifically designed to prevent. Accordingly, because the anti-tampering claims
brought by the attorney general pursuant to R.C.
3704.01 et seq. undermine the purpose and efficacy of
the federal Clean Air Act, they are preempted by federal law.
{¶ 55} Because I would hold that the attorney general’s state-law claims are impliedly preempted by federal law and would reverse the judgment of the Tenth
District Court of Appeals, I dissent.
_________________
David Yost, Attorney General, Benjamin M. Flowers, Solicitor General, Michael J. Hendershot, Chief
Deputy Solicitor General, and Aaron S. Farmer and
Karia A. Ruffin, Assistant Attorneys General, for appellee.
Reminger Co., L.P.A., Hugh J. Bode, and Jackie M.
Jewell; and Sullivan & Cromwell, L.L.P., Robert J.
Giuffra Jr., David M.J. Rein, Matthew A. Schwartz,
and Judson O. Littleton, for appellants Volkswagen
Aktiengesellschaft, d.b.a. Volkswagen Group and/or
26a
Volkswagen AG; Audi AG; Volkswagen Group of America, Inc., d.b.a. Volkswagen of America, Inc., or Audi of
America, Inc.; Volkswagen of America, Inc.; and Audi
of America, L.L.C.
Porter, Wright, Morris & Arthur, L.L.P., L. Bradford Hughes, and Elizabeth L. Moyo; and King & Spalding, L.L.P., and Joseph Eisert, for appellants Dr. Ing.
h.c. F. Porsche AG, d.b.a. Porsche AG; and Porsche
Cars North America, Inc.
Arnold & Porter Kaye Scholer, L.L.P., Jayce Born,
Jonathan S. Martel, and S. Zachary Fayne; and Kevin
D. Shimp, urging reversal for amici curiae, United
States Chamber of Commerce, Ohio Chamber of Commerce, and Alliance for Automotive Innovation.
_________________
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APPENDIX B
IN THE COURT OF APPEALS OF OHIO
TENTH APPELLATE DISTRICT
__________
STATE OF OHIO, EX REL. [DAVE YOST], OHIO ATTORNEY GENERAL, PLAINTIFF-APPELLANT,
V.
VOLKSWAGEN AKTIENGESELLSCHAFT, D.B.A.
VOLKSWAGEN GROUP AND/OR VOLKSWAGEN AG, ET
AL., DEFENDANTS -APPELLEES
No. 19AP-7
_______________________________________________
DECISION
Rendered on December 10, 2019
_______________________________________________
On brief: Dave Yost, Attorney General, Aaron S.
Farmer, and Karia A. Ruffin, for appellant. Argued:
Aaron S. Farmer.
On brief: Reminger Co., L.P.A., and Hugh J. Bode;
Sullivan & Cromwell, LLP, Robert J. Giuffra, Jr., David M.J. Rein, Matthew A. Schwartz, and Judson O.
Littleton, for appellees Volkswagen Aktiengesellschaft
d.b.a. Volkswagen Group and/or Volkswagen AG, Audi
AG, Volkswagen Group of America, Inc. d.b.a.
Volkswagen of America, Inc., or Audi of America, Inc.,
28a
Volkswagen of America, Inc., and Audi of America,
LLC. Argued: Matthew A. Schwartz.
On brief: Porter, Wright, Morris & Arthur LLP, Terrance M. Miller, and Elizabeth L. Moyo; King & Spalding LLP, and Joseph Eisert, for appellees Dr. Ing.
h.c. F. Porsche AG d.b.a. Porsche AG, and Porsche
Cars North America, Inc.
_______________________________________________
APPEAL from the Franklin County Court of Common Pleas
LUPER SCHUSTER, J.
{¶ 1} Plaintiff-appellant, State of Ohio, ex rel. Dave
Yost, Ohio Attorney General (the “State”), appeals
from a judgment of the Franklin County Court of Common Pleas granting the motion to dismiss of defendants-appellees, Volkswagen Aktiengesellschaft d.b.a.
Volkswagen Group and/or Volkswagen AG, Audi AG,
Volkswagen Group of America, Inc., d.b.a. Volkswagen
of America, Inc. or Audi of America, Inc., Volkswagen
of America, Inc., Audi of America, LLC, Dr. Ing. h.c.
F. Porsche AG d.b.a. Porsche AG, and Porsche Cars
North America, Inc. (collectively “Volkswagen”). For
the following reasons, we reverse and remand.
I. Factual and Procedural Background
{¶ 2} In October 2016, the State initiated this action
against Volkswagen under Ohio’s Air Pollution Control
Act, R.C. Chapter 3704, seeking relief for “the massive,
emissions-control-tampering scheme perpetrated by
[Volkswagen] in connection with their sale or lease to
29a
U.S. consumers of more than 550,000 vehicles, including approximately 14,000 in Ohio, from model year
2009 to 2016.” (Oct. 26, 2016 Compl. at 1.)
{¶ 3} In November 2016, and pursuant to 28 U.S.C.
1446, Volkswagen removed the matter to the United
States District Court for the Southern District of Ohio.
The matter was transferred to the United States District Court for the Northern District of California,
which served as the multi-district litigation (“MDL”)
court for various actions against Volkswagen. The
MDL court remanded this matter to Ohio state court
based on the court’s conclusion that Volkswagen had
failed to demonstrate “arising under” jurisdiction pursuant to 28 U.S.C. 1331.
{¶ 4} In August 2017, Volkswagen moved to dismiss
the State’s complaint pursuant to Civ.R. 12(B)(6) on
the basis that the State’s claims were preempted by the
federal Clean Air Act., 42 U.S.C. 7401 et seq. (“CAA”).
Additionally, Volkswagen moved to dismiss defendants
Volkswagen AG, Audi AG, and Porsche AG for lack of
personal jurisdiction.
{¶ 5} In September 2017, the State filed an amended
complaint seeking relief based on Volkswagen’s emission-control-tampering scheme. More specifically, the
State alleged Volkswagen tampered with the subject
vehicles, certain 2009-2016 Volkswagen, Audi, and Porsche model-year vehicles with 2.0 or 3.0 liter diesel engines, to effectively disable their emission control systems. The State’s first cause of action alleged
Volkswagen tampered with emission control systems
of the subject vehicles during normal driving operation
by factory installing a software-based device (known as
a “defeat device”) that increased the effectiveness of
30a
the emission control systems during laboratory testing
but reduced the effectiveness of those systems during
normal driving conditions (Count I). The State’s second
cause of action alleged Volkswagen tampered with the
emission control systems of the subject vehicles when
it recalled and updated the software-based defeat device on vehicles already in use (Count II). The State’s
third cause of action alleged Volkswagen tampered
with the emission control systems of the subject vehicles when the vehicles with updated defeat devises
were driven on Ohio’s roads (Count III). The State’s
final claim was that the named defendants engaged in
a civil conspiracy to violate R.C. Chapter 3704 (Count
IV).
{¶ 6} In October 2017, Volkswagen moved to dismiss the State’s amended complaint pursuant to Civ.R.
12(B)(1) and 12(B)(6) on the grounds that the CAA
preempted the State’s claims. Volkswagen also again
moved to dismiss the State’s claims against defendants
Volkswagen AG, Audi AG, and Porsche AG for lack of
personal jurisdiction.
{¶ 7} On December 7, 2018, the trial court granted
Volkswagen’s motion to dismiss. As to Count I of the
State’s complaint, the court reasoned that this claim
was based on Volkswagen’s alleged misconduct before
the subject vehicles were sold to end users, and therefore was expressly preempted by the CAA. As to the
State’s two claims regarding Volkswagen’s alleged
misconduct occurring after the sale of the subject vehicles (Counts II and III), the court determined that
such conduct was not expressly preempted by the
CAA. However, the court concluded that Congress intended only the federal government to regulate model-
31a
wide tampering of vehicle emission control devices, and
therefore the CAA preempted the State’s claims based
on Volkswagen’s post-sale changes to those devices on
the subject vehicles. Based on the trial court’s disposition of the State’s first three underlying tampering
claims, it concluded that the State’s civil conspiracy
claim also must fail. Because the trial court concluded
that the complaint must be dismissed pursuant to
Civ.R. 12(B)(6), it declined to address Volkswagen’s
personal jurisdiction arguments.
{¶ 8} The State timely appeals.
II. Assignment of Error
{¶ 9} The State assigns the following error for our
review:
The trial court erred as a matter of law when it
found that federal conflict preemption barred the
State of Ohio’s claims against Volkswagen
(Counts Two and Three) for tampering with
emissions controls on registered or licensed cars
during, and after, recall and maintenance activities in Ohio.
III. Discussion
{¶ 10} In the State’s sole assignment of error, it alleges the trial court erred in finding that federal law
preempted the State’s post-sale vehicle emission control system tampering claims against Volkswagen. We
agree.
{¶ 11} As outlined above, the State alleged
Volkswagen violated Ohio law by installing software-
32a
based emission control defeat devices on the subject
vehicles during manufacturing (Count I), and by tampering with the emission control systems after the sale
of those vehicles (Counts II and III). The trial court
concluded that, while Counts II and III were not
barred by express preemption, they were barred by
conflict preemption. Based on this disposition, the
court concluded that the State’s civil conspiracy claim
(Count IV) also failed. In this appeal, the State concedes the trial court properly dismissed Count I based
on federal preemption, but challenges the trial court’s
conclusion that federal preemption also barred Counts
II and III.
{¶ 12} Whether federal law preempts state law is a
question of law, and therefore we must apply a de novo
standard of review without deference to the trial
court’s decision. Bailey v. Manor Care of Mayfield
Hts., 8th Dist. No. 99798, 2013-Ohio-4927, ¶ 12. The
doctrine of federal preemption arises from the Supremacy Clause of the United States Constitution,
which provides that “the Laws of the United
States * * * shall be the supreme Law of the Land; and
the Judges in every State shall be bound thereby, any
Thing in the Constitution or Laws of any State to the
Contrary notwithstanding.” U.S. Constitution, Article
VI, cl. 2. Pursuant to the Supremacy Clause, the
United States Congress has the power to preempt
state laws. In re Miamisburg Train Derailment Litigation, 68 Ohio St.3d 255, 259 (1994).
{¶ 13} There are three ways federal law can
preempt state law: (1) where federal law expressly
preempts state law (express preemption); (2) where
33a
federal law has occupied the entire field (field preemption); or (3) where there is a conflict between federal
law and state law (conflict preemption). Norfolk S. Ry.
Co. v. Bogle, 115 Ohio St.3d 455, 2007-Ohio-5248, ¶ 7.
Express preemption occurs when Congress explicitly
defines the extent to which its enactments preempt
state law. English v. Gen. Elec. Co., 496 U.S. 72, 78
(1990). In the case of field preemption, “state law is
pre-empted where it regulates conduct in a field that
Congress intended the Federal Government to occupy
exclusively. Such an intent may be inferred from a
‘scheme of federal regulation * * * so pervasive as to
make reasonable the inference that Congress left no
room for the States to supplement it,’ or where an Act
of Congress ‘touches a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the
same subject.’” Id. at 79, quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947). Conflict preemption occurs “where it is impossible for a private party
to comply with both state and federal requirements,”
or “where state law ‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.’” English at 79, quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941). “What is a sufficient
obstacle is a matter of judgment, to be informed by examining the federal statute as a whole and identifying
its purpose and intended effects.” Crosby v. Natl. Foreign Trade Council, 530 U.S. 363, 373 (2000).
{¶ 14} In determining whether federal law
preempts state law, “‘[t]he purpose of Congress is the
ultimate touchstone.’” Malone v. White Motor Corp.,
435 U.S. 497, 504 (1978), quoting Retail Clerks Internatl. Assn. v. Schermerhorn, 375 U.S. 96, 103 (1963);
34a
see Riverside v. State, 190 Ohio App.3d 765, 2010-Ohio5868, ¶ 22 (10th Dist.) (“The Supreme Court has
framed preemption analysis as asking whether Congress intended to exercise its constitutionally delegated authority to set aside state laws.”). “Congress’
intent, of course, primarily is discerned from the language of the pre-emption statute and the ‘statutory
framework’ surrounding it. * * * Also relevant, however, is the ‘structure and purpose of the statute as a
whole,’ * * * as revealed not only in the text, but
through the reviewing court’s reasoned understanding
of the way in which Congress intended the statute and
its surrounding regulatory scheme to affect business,
consumers, and the law.” (Internal citations omitted.)
Medtronic, Inc. v. Lohr, 518 U.S. 470, 486 (1996).
{¶ 15} Additionally, a court reviewing possible
preemption must consider federalism as part of that
analysis. Federalism, which is “central to the constitutional design, adopts the principle that both the National and State Governments have elements of sovereignty the other is bound to respect.” Arizona v.
United States, 567 U.S. 387, 398 (2012). “[B]ecause the
States are independent sovereigns in our federal system,” the United States Supreme Court has “long presumed that Congress does not cavalierly pre-empt
state-law causes of action.” Medtronic at 485. The “historic police powers of the states are not to be superseded by federal law unless that is the clear and manifest purpose of Congress,” and therefore “a presumption exists against preemption of state police-power
regulations.” Darby v. A-Best Prods. Co., 102 Ohio
St.3d 410, 2004-Ohio-3720, ¶ 27; PNH, Inc. v. Alfa Laval Flow, Inc., 130 Ohio St.3d 278, 2011-Ohio-4398,
¶ 18, Wyeth v. Levine, 555 U.S. 555, 565 (2009); Rice at
35a
230. A traditional exercise of the states’ “police powers
[is] to protect the health and safety of their citizens.”
Medtronic at 475; see Huron Portland Cement Co. v.
Detroit, 362 U.S. 440, 442 (1960) (“Legislation designed
to free from pollution the very air that people breathe
clearly falls within the exercise of even the most traditional concept of what is compendiously known as the
police power.”). In view of these principles, there is a
“high threshold [that] must be met if a state law is to
be pre-empted for conflicting with the purposes of a
federal Act.” (Internal quotation marks omitted.)
Chamber of Commerce of United States of Am., v.
Whiting, 563 U.S. 582, 607 (2011) (plurality opinion).
{¶ 16} The dispute in this case centers on whether
the State’s post-sale motor vehicle emission control
system tampering claims against Volkswagen were
conflict preempted. There is no suggestion that it was
impossible for Volkswagen to comply with both state
and federal requirements; thus, our focus concerns
whether Ohio law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Ultimately, the issue is whether
Congress demonstrated a clear and manifest intent
that there is exclusive federal regulatory jurisdiction
over manufacturer conduct relating to model-wide
emission control system tampering of in-use motor vehicles.
{¶ 17} The CAA establishes a framework for the nationwide protection of air quality standards. While Title I of the CAA addresses fixed sources of pollution,
such as factories and power plants, 42 U.S.C. 74017431, Title II of the CAA addresses mobile sources of
air pollution, including motor vehicles. 42 U.S.C. 7521-
36a
7590. In declaring the purpose of the CAA, Congress
expressly stated that “[a] primary goal of the [CAA] is
to encourage or otherwise promote reasonable Federal, State, and local governmental actions, consistent
with the provisions of this [CAA], for pollution prevention.” 42 U.S.C. 7401(c). Regarding motor vehicle emission control systems, the CAA prohibits any “person”
from removing or rendering “inoperative any device or
element of design installed on or in a motor vehicle or
motor vehicle engine in compliance with regulations
under this title 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.” 42 U.S.C. 7522(a)(3)(A). The civil penalty for
violating this anti-tampering provision is up to $25,000
per violation for a manufacturer or dealer, and $2,500
per violation for any person other than a manufacturer
or dealer. 42 U.S.C. 7524(a). The Administrator of the
federal Environmental Protection Agency (“EPA”)
may commence in an appropriate federal district court
a civil action to assess and recover any civil penalty
available under 42 U.S.C. 7522(a)(3)(A). 42 U.S.C.
7524(b). Or, in certain circumstances, the federal EPA
Administrator may assess any civil penalty prescribed
in 42 U.S.C. 7524(a). 42 U.S.C. 7524(c)(1).
{¶ 18} The CAA contains an express preemption
provision. 42 U.S.C. 7543(a) states as follows:
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
37a
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.
Thus, the CAA expressly precludes the states from enforcing “any standard relating to the control of emissions from” any “new motor vehicle,” which means “a
motor vehicle the equitable or legal title to which has
never been transferred to an ultimate purchaser.” 42
U.S.C.S. 7550(3). While not expressly stated, this provision effectively nationalizes the standards for emission control devices in new motor vehicles, thereby preventing the existence of a patchwork of standards for
manufacturers to comply with as to vehicles they design and manufacture. In view of this provision, the
states are precluded from regulating manufacturer
conduct relating the manufacturing of emission controls systems in new motor vehicles. However, this
statute’s savings clause, subsection (d), provides that
“[n]othing in this part [42 USCS §§ 7521 et seq.] 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).
{¶ 19} The CAA’s express preemption provision
does not address the regulation of emissions of in-use
motor vehicles. “[A]n express definition of the preemptive reach of a statute * * * supports a reasonable
inference * * * that Congress did not intend to preempt other matters.” Freightliner Corp. v. Myrick, 514
38a
U.S. 280, 288 (1995). Thus, based on this provision, it
may be inferred that Congress did not intend to
preempt state law prohibiting manufacturers from
tampering with in-use motor vehicle emission control
systems. However, while the CAA’s express preemption provision may support this reasonable inference,
it “does not mean that the express clause entirely forecloses any possibility of implied pre-emption.” Id.
{¶ 20} The CAA also directs the federal EPA Administrator to “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.” 42
U.S.C. 7521(a)(1). These standards are “applicable to
such vehicles and engines for their useful life.” 42
U.S.C. 7521(a)(1). In view of the CAA, “[t]he sovereign
prerogatives to force reductions in greenhouse gas
emissions * * * and (in some circumstances) to exercise
the police power to reduce motor-vehicle emissions are
now lodged in the Federal Government.” Massachusetts v. E.P.A., 549 U.S. 497, 498 (2007).
{¶ 21} Like the CAA, Ohio’s Air Pollution Control
Act (“APCA”), R.C. Chapter 3704, governs air pollution control. The stated purposes of the APCA are “to
protect and enhance the quality of the state’s air resources” and “[t]o enable the state, through the director of environmental protection, to adopt and maintain
a program for the prevention, control, and abatement
of air pollution that is consistent with the federal Clean
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Air Act.” R.C. 3704.02(A)(1) and (2). The APCA prohibits certain acts to further its purposes. Here, the State
alleged Volkswagen violated R.C. 3704.16(C)(3), which
provides that “[n]o person shall knowingly * * * [t]amper with any emission control system installed on or in
a motor vehicle after sale, lease, or rental and delivery
of the vehicle to the ultimate purchaser, lessee, or
renter.” See also Ohio Adm.Code 3745-80-02(F) (“No
person shall knowingly tamper with any emission control system installed on or in a motor vehicle after sale,
lease, or rental and delivery of the motor vehicle to the
ultimate purchaser, lessee or renter.”). “Tamper with”
means “to remove permanently, bypass, defeat, or render inoperative, in whole or part, any emission control
system that is installed on or in a motor vehicle.” R.C.
3704.16(A)(1). Pursuant to R.C. 3704.06(C), a “person
who violates * * * 3704.16 of the Revised Code shall
pay a civil penalty of not more than twenty-five thousand dollars for each day of each violation.”
{¶ 22} Volkswagen generally argues that the CAA
contemplates comprehensive federal regulation of
manufacturers’ conduct relating to emission control
systems on new and in-use motor vehicles, and limits
state and local authority over emission control systems
tampering to those involving individual motor vehicles.
Volkswagen contends that duplicative enforcement by
every state regarding nationwide post-sale tampering
would undermine congressional intent as it relates to
the assessment of penalties for CAA violations, and
that an unduly burdensome patchwork of regulatory
schemes impacting manufacturers’ conduct relating to
emission control systems of in-use motor vehicles also
would be contrary to congressional intent. We are unpersuaded.
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{¶ 23} As set forth above, congressional intent that
federal law supersede state law as to standards relating to new motor vehicle emission control systems is
clearly expressed in 42 U.S.C. 7543(a). This preemption relates to the manufacturing of vehicles before
they are sold and placed on the roads. And this intent
is consistent with the idea that a patchwork of regulatory programs across the country would be unduly burdensome on vehicle manufacturers, as it relates to the
engineering and production of those vehicles. But this
concept is not entirely applicable as it relates to the
tampering of emission control systems in vehicles that
have been sold to end users. Given this substantive difference, we find that congressional intent that the federal government solely regulate emission control systems in new motor vehicles, as a means to mitigate obstructions to interstate commerce, does not also
demonstrate an intent that the federal government
solely regulate any tampering with those devices in
motor vehicles already placed in the stream of commerce.
{¶ 24} Further, by suing Volkswagen for post-sale
motor vehicle emission control system tampering, the
State is exercising its traditional police power to protect air quality within its jurisdiction. To preclude such
action, congressional intent to preempt must be clear
and manifest. The CAA’s Title II savings clause reflects congressional intent that the states maintain significant authority in regulating conduct affecting motor vehicle emissions. And the preemption of state action designed to curtail and discourage the type of inuse motor vehicle emission control system tampering
alleged here would be contrary to Congress’ stated
purpose for the CAA. A clear purpose of the CAA is to
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reduce air pollution, and the savings clause reflects an
intent that the states maintain authority in that endeavor.
{¶ 25} The trial court found that the use of the word
“otherwise” in the savings clause indicates that state
and local regulation of in-use motor vehicles is limited
by the division of authority between the federal EPA
and the states and local governments. We disagree.
This statute provides that “nothing” in 42 U.S.C. 7521
et seq. “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.” (Emphasis
added.) 42 U.S.C. 7543(d). But Congress’ use of the
word “otherwise” does not further define that division
so as to preclude overlap in the authority to regulate
manufacturer (but not non-manufacturer) tampering
of the emission control systems of in-use motor vehicles. Thus, while the CAA places exclusive authority to
regulate new motor vehicle emission control systems
with the federal government, the CAA does not draw
such a clear division of exclusive authority as it relates
to emission control systems of in-use motor vehicles.
{¶ 26} We also disagree with Volkswagen’s contention that imposition of State penalties would disrupt
the calibration of force reflected in the federal penalties. According to Volkswagen, the prospect of massive
penalties under Ohio law against Volkswagen could be
far more than the amount paid to the federal EPA, and
that this circumstance demonstrates an undermining
of the congressional calibration of force as to emission
control system tampering by vehicle manufacturers.
Relatedly, Volkswagen asserts that the factors that
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must be considered in assessing federal penalties
demonstrates congressional intent that the federal
penalties constitute the exclusive penalties for vehicle
emission systems tampering conduct.
{¶ 27} A manufacturer can be penalized up to
$25,000 per violation of 42 U.S.C. 7522(a)(3)(A). 42
U.S.C. 7524(a). In an administrative assessment of
penalties, 42 U.S.C. 7524(c)(2) directs the federal EPA
Administrator to consider “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 title, 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.” See 42
U.S.C. 7524(b) (directing a federal district court to consider the same factors in determining the amount of
any civil penalty). Thus, in fashioning the appropriate
penalty for violation of federal law, 42 U.S.C. 7524 directs either the Administrator of the EPA or the court
to consider various circumstances, including “such
other matters as justice may require.” This framework
does not preclude the consideration of possible additional state action against a violator.
{¶ 28} Furthermore, state law is not preempted
simply because it imposes a penalty for prohibited conduct that is also prohibited and penalized under federal
law. See Westfall v. United States, 274 U.S. 256, 258
(1927) (states may enact laws imposing penalties for
conduct that federal law also prohibits); see also Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984) (supporting same general principle). Here, the State seeks
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to impose penalties for violation of Ohio law, not federal law. The application of state law to supplement the
total potential financial penalty faced by a manufacturer aligns with the purpose of reducing air pollution
because it acts as an additional deterrent to misconduct.
{¶ 29} Based on our review of the CAA, we find no
clear and manifest congressional purpose to preempt
the State’s in-use motor vehicle emission control system tampering claims. In reaching this conclusion, we
are mindful of other courts reaching a contrary conclusion. In particular, Volkswagen relies heavily on the
federal MDL court’s conclusion that Congress intended for only the federal EPA to regulate post-sale
motor vehicle emission control system tampering. In re
Volkswagen “Clean Diesel” Marketing, Sales Practices, & Prods. Liability Litigation, 310 F.Supp.3d
1030 (N.D.Cal.2018) (“Counties”). Volkswagen also relies on appellate court decisions in Tennessee, Alabama, and Minnesota, wherein the courts, citing the
Counties decision with approval, concluded that the
CAA preempted post-sale motor vehicle emission control system tampering regulation by the states. State
ex rel. Slatery v. Volkswagen Aktiengesellschaft, App.
No. M2018-00791-COA-R9-CV, 2019 Tenn. App.
LEXIS 125 (Mar. 13, 2019); State v. Volkswagen AG,
No. 1170528, 2018 Ala. LEXIS 133 (Dec. 14, 2018);
State v. Volkswagen Aktiengesellschaft, App. No. A180544, 2018 Minn. App. Unpub. LEXIS 995 (Dec. 3,
2018).
{¶ 30} Ohio courts are not bound by decisions of
courts in other states, or even “rulings on federal statutory or constitutional law made by a federal court
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other than the United States Supreme Court,” but we
are free to consider the persuasiveness of such decisions. State v. Burnett, 93 Ohio St.3d 419, 424 (2001);
State v. Roberts, 137 Ohio St.3d 230, 2013-Ohio-4580,
¶ 33; State v. Chinn, 2d Dist. No. 16764, 1998 Ohio App.
LEXIS 3857 (Aug. 21, 1998). Here, we are unpersuaded
by the reasoning of the MDL court, and the Tennessee,
Alabama, and Minnesota state appellate courts that
largely followed that reasoning.
{¶ 31} The Counties court acknowledged the dual
authority of the federal government and the states to
prohibit in-use motor vehicle emission control systems
tampering by individuals, but then discerned a differentiation between conduct of individuals and manufacturers to support its conclusion that only the federal
government may take action against model-wide in-use
motor vehicle emission control system tampering by a
manufacturer. The Counties court reasoned that this
distinction aligns with the division of authority in the
enforcement of emission standards between the federal
EPA and the states and the practical advantages the
federal EPA has over the states in regulating modelwide emission issues that have a nationwide scope.
Counties at 1043. We agree that it is clear that Congress intended the federal EPA to regulate model-wide
emission control system tampering. And while we also
agree there is a difference in scale between an individual that tampers with one motor vehicle and a manufacturer that tampers with thousands of vehicles on a
nationwide scale, that difference does not, in and of itself, mean that there exists clear and manifest congressional intent to preempt state law regarding post-sale
tampering conduct of manufacturers (but not non-manufacturers). Likewise, we are unconvinced that the
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CAA’s provision authorizing the EPA to regulate motor vehicle emissions standards extending through
their useful life, 42 U.S.C. 7521(a)(1), demonstrates
congressional intent that States are precluded from independently sanctioning widespread cases of tampering with in-use motor vehicle emission control systems
occurring within their respective jurisdictions.
{¶ 32} In support of its finding that Congress intended manufacturer tampering of emission control
systems of in-use motor vehicles only to be regulated
by the federal government, the Counties court emphasized the difficulties potentially faced by manufacturers in being subject to many different regulatory
schemes relating to such conduct. While lessoning
manufacturer burdens relating to updates or other
changes to vehicles that are already in the stream of
commerce may constitute a legitimate congressional
concern, such a concern is reasonably diminished when
that conduct involves tampering with the existing emission control systems to reduce their effectiveness. Conversely, preserving traditional state police power to
protect the health of its residents, as it relates to the
tampering of existing in-use motor vehicle emission
control systems, aligns with the expressed purpose of
the CAA. As determined above, the CAA lacks clear
and manifest congressional intent to supersede that
state police power.
{¶ 33} Lastly, we note that, as an alternative argument in support of the trial court’s judgment,
Volkswagen argues the State’s claims based on postsale misconduct were expressly preempted by 42
U.S.C. 7543(a), which prohibits any “State or any polit-
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ical subdivision thereof [from] adopt[ing] or attempt[ing] to enforce any standard relating to the control of emissions from new motor vehicles or new motor
vehicle engines.” Volkswagen reasons that the postsale software tampering related back to the original
design of the motor vehicles by Volkswagen and therefore effectively related to the design of a new motor vehicle. The trial court rejected this argument. We agree
with the trial court on this issue because the State’s
regulation of post-sale software tampering does not
constitute an attempt to impose emission standards relating to the original design of the motor vehicles and
their emission control systems.
{¶ 34} Because the trial court erred in granting
Volkswagen’s motion to dismiss, we sustain the State’s
sole assignment of error.
IV. Disposition
{¶ 35} Having sustained the State’s sole assignment
of error, we reverse the judgment of the Franklin
County Court of Common Pleas and remand this matter to that court for further proceedings consistent
with law and this decision.
Judgment reversed;
cause remanded.
BROWN and BRUNNER, JJ., concur.
__________
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APPENDIX C
IN THE FRANKLIN COUNTY
COURT OF COMMON PLEAS
CIVIL DIVISION
__________
Case No. 16CVH10-10206
STATE OF OHIO, EX REL, MICHAEL DEWINE OHIO ATTORNEY GENERAL, PLAINTIFF,
V.
VOLKSWAGEN AKTIENGESELLSCHAFT D/B/A
VOLKSWAGEN GROUP AND/OR VOLKSWAGEN AG, ET
AL, DEFENDANTS .
__________
Filed:
December 7, 2018
__________
JUDGE HOLBROOK
DECISION AND ENTRY GRANTING DEFENDANTS’
MOTION TO DISMISS
This matter is before the Court on Defendants
Volkswagen AG, AUDI AG, Volkswagen Group of
America, Inc., AUDI of America, LLC, Porsche AG,
and Porsche Cars North America, Inc. (collectively,
“Defendants”) motion to dismiss Plaintiff State of
Ohio, ex rel, Michael De Wine, Ohio Attorney General's
(“Plaintiff”) amended complaint. Plaintiff opposed the
motion via memorandum in opposition to which Defendants' have replied. At the request of the parties,
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oral argument on the motion was held. Having fully and
carefully reviewed the amended complaint, the briefs,
the arguments of counsel, and the salient law, the
Court issues the following decision.
Background
Plaintiff brings this action for relief under Ohio's
Air Pollution Control Statute, R.C. Chapter 3704,
which establishes a comprehensive regulatory scheme
designed to prevent pollution from negatively impacting the environment and public health.
Pursuant to the amended complaint, for model years
2009 through 2016, Defendants designed, developed,
marketed, and ultimately sold a line of turbocharged
direct injection 2.0 and 3.0 liter, lite duty diesel vehicles
(the “Subject Vehicles”) throughout the United States,
including Ohio. Amended Complaint, ¶39. During the
design and development of the Subject Vehicles, Defendants faced numerous challenges in attempting to
engineer diesel engines that did not generate excessive
nitrous oxides (“NOx”) and soot. Id., ¶¶49-74. Instead
of altering the design, Defendants developed technology that activates or increases the effectiveness of the
vehicle's emissions controls when the device detects
that the vehicle is being tested under laboratory conditions, making it appear that the vehicle complies with
federal emission standards. Id. Then, when the vehicle
is operated under normal driving conditions the vehicle's air pollution control system is deactivated. Id.
This technology is known as a “defeat device” and is
defined as an auxiliary emission control device
(“AECD”) “that reduces the effectiveness of the emission control system under conditions which may rea-
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sonably be expected to be encountered in normal vehicle operation and use.” In re Volkswagen “Clean Diesel” Mktg., Sales Practices, & Prod. Liab. Litig., 264
F. Supp. 3d 1040, 1042-43 (N.D. Cal. 2017) (“Wyoming”), quoting 40 C.F.R. § 86.1803-01. Defeat devices
are prohibited in all new passenger vehicles under federal law. Id. at 1043.
In September 2015, Defendants publicly admitted
using this non-conforming technology to tamper with
the air pollution control systems in the Subject Vehicles from 2008 to 2015. Amended Complaint, ¶¶82, 8586. Defendants also admitted that the defeat devices
were modified on used vehicles to remedy hardware
failures that developed in some of the Subject Vehicles.
Id., ¶¶91-92. Defendants 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. To
solve the problem, the Defendants developed a “steering wheel angle recognition” feature, which enabled
Subject Vehicles to detect whether they were being
tested or being driven on the road. Id., ¶¶78, 91. In or
around April 2013, Defendants installed the steering
wheel angle recognition feature 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 and recalls. Id., ¶¶91-92.
Hundreds of lawsuits were filed against Defendants
for this admitted misconduct. Wyoming, 264 F. Supp.
3d at 1044. Cases included those like this one in states
filed suit in state-court based on the operation of the
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Subject Vehicles in their respective jurisdictions. In
addition, counties in Florida and in Utah filed tampering claims against Defendants in federal court alleging
that Defendants “perhaps even added new defeat devices, through software updates during vehicle maintenance and post-sale recalls.” In re Volkswagen “Clean
Diesel” Mktg., Sales Practices, & Prod. Liab. Litig.,
310 F. Supp. 3d 1030, 1032 (N.D. Cal. 2018) (“Counties”). The cases against Defendants were consolidated
in the United States District Court for the Northern
District of California as a part of a multidistrict litigation (“MDL”). Wyoming, 264 F. Supp. 3d at 1044.
In October 2016, Plaintiff initiated this action
against Defendants. The Original Complaint alleged
Defendants “tampered with the emissions control system installed on or in each of the Subject Vehicles before the sale and delivery to the ultimate purchaser or
lessee of each Subject Vehicle and/or knowingly tampered with the emissions control systems installed on
each or in each Subject Vehicle after the sale, lease,
rental and delivery to the ultimate purchaser, lessee,
or renter of each Subject Vehicle.” Complaint at ¶111.
Defendants filed a notice of removal of the case to the
United States District Court for the Southern District
of Ohio where it was consolidated into the MDL.
On June 6, 2017, this case was remanded back. In
the remand order, Judge Breyer found that Defendants' arguments for removal were insufficient to give
rise to §1331 “arising under” jurisdiction, but
amounted to no more than a preemption defense. In re
Volkswagen “Clean Diesel” Marketing, Sales Practices, & Prods. Liab. Litigation, N.D.Cal. No. 2672
51a
CRB (JSC), 2017 U.S. Dist. LEXIS 79778, at *1 (N.D.
Cal. May 23, 2017).
In August 2017, the MDL court also issued a ruling
granting Defendants' motion to dismiss the state of
Wyoming's claims. Wyoming, 264 F. Supp. 3d 1040,
1057 (N.D. Cal. 2017). In Wyoming, the only alleged
conduct by Defendants that could have violated the
state's tampering law took place during vehicle manufacturing. Id. at 1055, 1057. The MDL court recognized
that in enacting the CAA congress determined that the
EPA, and not the 50 states, was best situated to regulate the original design and manufacture of the emissions systems. Accordingly, the MDL court concluded
that Wyoming's tampering claim was expressly
preempted by the Clean Air Act (“CAA”). Id. at 1052,
1054, 1057, citing 42 U.S.C. § 7543(a).
Following the remand order and the MDL's dismissal of Wyoming's tampering claim, Plaintiff filed its
First Amended Complaint on September 25, 2017, to
which the underlying motion to dismiss is directed.
Plaintiff's amended complaint alleges three causes
of action for violation of Ohio's Air Pollution Control
Statute. In the first claim, Plaintiff alleges the originally installed defeat devices tamper with emissions
control systems during normal driving operation on
Ohio's roadways. The second claim for a violation stems
from the tampering with emissions control systems on
used vehicles during recalls, software updates, and
maintenance. Finally, the third cause of action, asserts
that the tampering occurred after the recalls and updates, and during normal driving operation.
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Defendants moved to dismiss this action on the
grounds that the claims are expressly and impliedly
preempted by the CAA. Defendants further assert and
that the Court lacks personal jurisdiction over the German parent defendants. In support of their motion, Defendants direct the Court to Wyoming, an Alabama
Circuit Court decision, and the supplemented authority from the MDL court in Counties and the Minnesota
Court of Appeals. Opposing the motion, Plaintiff argues that federal law does not preempt its claims for
tampering with used vehicles. Plaintiff also relies on
Wyoming, as well as Minnesota and Texas District
Court decisions to support its position. The parties' respective positions were heard at oral argument on
March 16, 2018.
Approximately one month after the oral argument,
the MDL court issued its ruling on the tampering
claims brought by the Florida and Utah counties regarding post sale modification of the defeat devices
during vehicle maintenance and recalls. Counties, 310
F. Supp.3d at 1030. Following an in-depth analysis of
the legislative intent regarding the scope of the CAA,
the MDL court concluded that the software updates to
the defeat devices on used vehicles was likewise
preempted, and dismissed the case. Id. at 1049-50.
Thereafter, the Minnesota Court of Appeals followed suit. State v. Volkswagen Aktiengesellschaft,
App. No. A18-0544, 2018 Minn. App. Unpub. LEXIS
995 (Minn. App. Dec. 3, 2018) (“Minnesota”). It also
undertook a detailed analysis of the legislative history
of the CAA, and scrutinized the Counties decision. Id.
Ultimately, the Minnesota court found Counties to be
53a
“compelling and well-reasoned.” Id. at *25. Accordingly, like the MDL court in Counties and Wyoming,
the Minnesota Court of Appeals concluded that the
state's original tampering claim as well as the recall
and update tampering claims were preempted by the
CAA and subject to dismissal. Id at *30.
Law and Analysis
Defendants have moved to dismiss Plaintiff's
amended complaint pursuant to Civ.R. 12(B)(6) and
12(B)(1). In order for a court to dismiss a complaint under Civ.R. 12(B)(6), it must appear beyond a doubt
from the complaint that the plaintiff can prove no set
of facts entitling him or her to recovery. VolbersKlarich v. Middletown Mgt., Inc., 125 Ohio St.3d 494,
2010-Ohio-2057, ¶12. A similar standard applies to
Civ.R. 12(B)(1) motions: the court must dismiss if the
complaint fails to allege any cause of action cognizable
in the forum. Blankenship v. Cincinnati Milacron
Chems., Inc., 69 Ohio St.2d 608, 611 (1982).
Preemption
The primary issue before the Court is whether
Plaintiffs claims are preempted by the CAA. The Constitution and laws of the United States are the supreme
law of the land, U.S. Const. art. VI, cl. 2 (the “Supremacy Clause”). Accordingly, where a state statute conflicts, or frustrates, federal law, the former must give
way. CSX Transp., Inc. v. Easterwood, 113 S. Ct. 1732,
1737 (1993), citing Maryland v. Louisiana, 451 U.S.
725,746 (1981).
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Under the supremacy clause, federal preemption
may occur in a number of ways. Preemption can be express or implied: “explicitly stated in the statute's language or implicitly contained in its structure and purpose.” Jones v. Rath Packing Co., 430 U.S. 519,525
(1977). First, when acting within constitutional limits,
Congress is empowered to preempt state law by so
stating in express terms. Id. at 525.
In the absence of express preemptive language,
Congress' intent to preempt all state law in a particular
area may be inferred where the scheme of federal regulation is sufficiently comprehensive to make reasonable the inference that Congress “left no room” for supplementary state regulation. Hillsborough County,
Fla. v. Auto. Med. Labs., 471 U.S. 707 (1985). Preemption of a whole field also will be inferred where the field
is one in which “the federal interest is so dominant that
the federal system will be assumed to preclude enforcement of state law on the same subject.” Id., quoting
Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230
(1947).
Even where Congress has not completely displaced
state regulation in a specific area, state law is nullified
to the extent that it actually conflicts with federal law.
Such a conflict arises when “compliance with both federal and state regulations is a physical impossibility,”
Florida Lime & Avocado Growers, Inc. v. Paul, 373
U.S. 132, 142-43 (1963), or when state law “stands as an
obstacle to the accomplishment and execution of the
full purposes and objectives of Congress,” Hines v. Davidowitz, 312 U.S. 52, 67 (1941).
Finally, the Supreme Court has repeatedly held that
state laws can be preempted by federal regulations as
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well as by federal statutes. Hillsborough County, 105
S. Ct. at 2375.
The Clean Air Act
As set forth above, the preemptive effect of one such
federal regulation, the CAA, is at issue here. The Act
contains both express preemption and savings clauses.
Section 209(a) sets forth the express preemption provision, and provides:
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) (“Section 209(a)”). The CAA 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). The Act does not define a “standard relating to the control of emissions,”
but the Supreme Court analyzed the phrase in South
Coast Air Quality. It started with the recognition of
definition of “standard,” i.e. that which “is established
by authority, custom, or general consent, as a model or
example; criterion; test.” Engine Mfrs. Ass'n v. S.
Coast Air Quality Mgmt. Dist., 541 U.S. 246, 253
(2004), quoting Webster's Second New International
Dictionary 2455 (1945). The Supreme Court then went
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on to offer two examples of such a standard. The first
is a rule that a vehicle “not emit more than a certain
amount of a given pollutant.” Id. 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 CAA. Specifically, Congress has tasked EPA
with setting emission limits for new vehicles introduced into commerce, 42 U.S.C. § 521(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. Through this give and take, Congress has created a uniform regulatory regime governing emissions
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, 88 F.3d 1075, 1079 (D.C. Cir. 1996) (citation omitted) (“EMA”).
Notwithstanding the forgoing, the savings provision
found in Section 209( d) of the CAA states, “[n]othing
in this part shall preclude or deny to any State or po-
57a
litical subdivision thereof the right otherwise to control, regulate, or restrict the use, operation, or movement of registered or licensed motor vehicles.” 42 U.S.
Code§ 7543(d) (“Section 209(d)”).
Ohio’s Air Pollution Control Statute
Pursuant to Section 209(d), Ohio enacted its own
Ohio's Air Pollution Control Statute in R.C. Chapter
3704. Together with the rules promulgated thereunder,
the Ohio statute establishes a comprehensive regulatory scheme designed to prevent pollution from air contaminants like NOx. Relevant to this action, R.C.
3704.16(C)(3) provides that, “[n]o person shall knowingly ... tamper with any emission control system installed or in a motor vehicle after sale, lease, or rental
and delivery of the vehicle to the ultimate purchaser,
lessee, or renter.” Tampering means “to remove permanently, bypass, defeat or render inoperative, in
whole or in part, any emission control system that is
installed on or in a motor vehicle.” R.C. 3704.16(A)(1).
Under R.C. 3704.06(C), “[a] person who violates section ... 3704.16 of the Revised Code shall pay a civil penalty of not more than twenty-five thousand dollars for
each day of each violation.”
The Director of the Ohio Environmental Protection
Agency, pursuant to his delegated authority, adopted
Ohio Administrative Code Section 3745-80-02. Such
regulation echoes the prohibitions found in R.C.
3704.16. See O.A.C. § 3745-80-02(F).
Count I – Original Tampering
With this legal framework, the Court turns its attention to Plaintiffs first cause of action. According to
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the amended complaint, “[f]rom 2008 through the present, Defendants knowingly tampered with the emission control system installed on or in each Subject Vehicle after the sale, lease, or rental and delivery of each
Subject Vehicle to the ultimate purchaser, lease, or
renter of each Subject Vehicle.” Amended Complaint,
¶109. The alleged violation occurred each day the originally installed defeat devices tampered with the emissions control systems during the Subject Vehicle's normal use or operation. Id., ¶111.
Defendants argue the forgoing allegations amount
to an original tampering claim that is expressly
preempted by Section 209(a). In opposition, Plaintiff
contends that the claim falls outside of Section 209(a)
as it specifically relates to used as opposed to new vehicles. Following the Wyoming decision, Plaintiff appears to all but have abandoned this claim. Nonetheless, the Court is compelled to address the parties' respective arguments.
In Wyoming, the MDL 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. Opposing Volkswagen's motion to dismiss, Wyoming argued that its tampering claim was nevertheless not an “attempt to enforce” the EPA's rule, but rather was only an attempt to regulate the use of
Volkswagen's defeat device within the State's borders.
Id. at 1055-56. Like the Plaintiff here, it was in used
vehicles on the roads of Wyoming, the State argued,
that the defeat device tampered with vehicle emission
controls. Id. Framed in this way, Wyoming asserted
that its claim not only escaped the reach of Section
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209(a)'s express preemption clause, but also was protected by the Clean Air Act's savings clause, Section
209(d). Id.
The MDL court did not find Wyoming's in-use argument persuasive. While the defeat device operated in
vehicles within the State, Volkswagen's misconduct
took place during manufacturing, when it installed the
defeat device in its new vehicles. Wyoming, 264 F.
Supp. 3d at 1056. 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. Id. The MDL
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.
Following the MDL court's decision in Wyoming,
courts in Alabama, Minnesota, Texas, and Tennessee
have all found the respective state's original tampering
claims were preempted by the CAA. State v.
Volkswagen AG, Ala.Cir. No. 01-CV-2016-903390.00
(Dec. 19, 2017); State v. VolkswagenAktiengesellschaft,
Minn. App. No. A18-0544, 2018 Minn. App. Unpub.
LEXIS 995 (Dec. 3, 2018); In re: Volkswagen Clean
Diesel Litig., Tx. Dist. D-1-GN-16-000370 (Feb. 21,
2018); State v. VolkswagenAktiengesellschaft, Tenn.
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Dist. No. 16-1044-I (Mar. 21, 2018). In doing so each
court adopted the reasoning in Wyoming. While Wyoming is not a binding case, it provides a compelling explanation of how the state and federal government interact with respect to control over air quality and the
emissions from vehicles. Thus, the Court finds the
same to be well-reasoned and persuasive.
Here, construing all the allegations in the amended
complaint as true, Plaintiff's first tampering claim is
clearly based on the manufacture and installation of a
defeat device. Although the defeat device may operate
in used vehicles within the Ohio, Defendants are alleged to have manufactured the device and installed it
in these vehicles before the vehicles were sold to end
users. As noted in Wyoming, the requirement that a
vehicle not contain a defeat device is a criterion or test,
compliance with which can readily be determined
thereby falling within the definition of “standards” announced in South Coast Air Quality, supra. Wyoming,
264 F. Supp. 3d at 1052. Thus, to the extent Plaintiff
seeks to regulate that conduct, it is “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).
Based on the forgoing, this Court finds that Plaintiff’s first cause of action is expressly preempted by the
CAA.
Counts II and III – Recall and Update Tampering
The post-sale software changes to the Subject Vehicles alleged in Counts II and III of the amended complaint require a different analysis. In these causes of
action, Plaintiff alleges that Defendants modified the
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defeat device in the Subject Vehicles during vehicle
maintenance, or installed new defeat devices during
post-sale recalls. In either case, this conduct occurred
after manufactures and affected vehicles that had already been sold to consumers and were in use within
Ohio. Thus, the Court finds that Ohio's attempts to regulate Defendants' post-sale software changes are not
expressly preempted by Section 209(a).
The Court recognizes Defendant’s argument concerning the relation-back concept discussed in Allway
Taxi, Inc. v. City of New York, and cited favorably by
EPA in a regulation implementing non-road vehicle
emission standards brings Ohio’s tampering claims
within the scope of the Section 209(a). 340 F. Supp.
1120 (S.D.N.Y. 1972), aff'd, 468 F.2d 624 (2d Cir. 1972).
However, it does not find the same to be persuasive.
The idea behind relation-back 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 [CAA] 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 the CAA. 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
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manufacturer, has prevented the definition of 'new motor vehicle' from 'nullifying' the motor vehicle preemption regime.”).
Ohio’s attempt to regulate Defendants' post-sale
software changes via its anti-tampering statute and
regulations does not raise the same concerns. Ohio is
not attempting to impose emission measures that
would require manufacturers to change the way they
construct new vehicles. Rather, Ohio is 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 Plaintiffs’ claims within the express
preemptive scope of the CAA.
This Court’s inquiry into the issue of preemption
does no end here though. This is because “neither an
express pre-emption 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 (2001), quoting Geier v. Am. Honda Motor Co., 529
U.S. 861, 869 (2000). Therefore, the Court must 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.” Crosby v.
Nat'l Foreign Trade Council, 530 U.S. 363, 372-73
(2000).
Plaintiff alleges Defendants made the post-sale software changes at issue on a model-wide basis in thousands of vehicles nationwide. Consequently, the congressional objective the Court must identify is how
Congress intended for model-wide tampering by vehicle manufacturers to be regulated. Plaintiff suggests
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that when vehicles are tampered with when they are
new the CAA prohibits states and local governments
from attempting to regulate that conduct. On the other
hand, when vehicles are tampered with when they are
in use, Plaintiff contends that Section 209(d) allows
states and local governments to regulate that conduct
without interfering with the federal regulatory
scheme. This is so regardless of the magnitude of the
tampering offense or the identity of the offender.
Neither the CAA nor the case law interpreting the
same draw such a clear distinction. For example, the
CAA requires vehicles to meet EPA's emission standards during their “useful life.” 42 U.S.C. § 7521(a)(1).
Therefore, the federal regulation of vehicle emissions
does not stop after vehicles are sold to end users. And
although Congress has looked to both the 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.
The 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. Counties, 310 F. Supp. 3d 1041. Conversely,
states and local governments are tasked with the enforcement these standards by inspecting individual vehicles for compliance. Id. at 1041-42. Indeed, in response to increasing emissions from vehicles in the
1970s and '80s resulting from the increasing use of ve-
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hicles throughout the nation, some of these state inspection programs became mandatory under the CAA.
Id. at 1042. However, by their nature, state inspection
programs operate on an individual vehicle basis.
Considering the legislative history, this Court
agrees with the MDL court which recognized that
“[t]he 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.” Counties, 310 F. Supp. 3d at 1043. Indeed, the 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 throughout the country. Further, when investigating model-wide emission
issues, the EPA can also rely on testing data it acquired from manufacturers during the new vehicle certification process. In turn, the EPA can utilize such information 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 the 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. Finally, due to increased computerization and
the potential for remote software updates the federal
government and the EPA are in the best position to
regulate the same. Although it may be characterized as
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conduct that takes place at least in part within their
borders, it is conduct on a much broader, national scale.
Ohio, in contrast, is in a better position than the
EPA to enforce emission standards at the individual
user level. While Congress could theoretically task the
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 as they already oversee vehicle registration and drivers' licensing, and can
use state police power to aid enforcement.
Furthermore, if Ohio were permitted to regulate the
post-sale software changes, the size of the potential
tampering penalties could significantly interfere with
Congress' regulatory scheme. This is because “inconsistency of sanctions undermines the congressional calibration of force.” Crosby, 530 U.S. at 379-80.
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 Defendants’ tampering triggered those
penalties.
Ohio now seeks to impose additional, significant
sanctions for the same conduct, for a violation of Ohio’s
Air Pollution Control Statute punishable by a civil penalty of up to $25,000 per offense per day of noncompliance. See R.C. 3704.06(C). With approximately 14,000
affected vehicles allegedly registered in Ohio, the potential penalties could reach $350 million per day. The
potential penalties for Ohio alone could dwarf those
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paid to the EPA, which would in turn result in undermining of the congressional calibration of force for
tampering by vehicle manufacturers recognized in
Crosby, supra.
Even if actual penalties are lower, if tampering
claims like Ohio’s are allowed to proceed, vehicle manufacturers could be subjected to up to 50 state regulatory actions based on uniform conduct that happened
nationwide. The substantial nature of the potential
penalties for the Ohio’s 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 Ohio’s claims create with federal policy. See
Crosby, 530 U.S. at 380, quoting Wis. Dept. of Indus. v.
Gould, Inc., 475 U.S. 282, 286 (1986) (“‘Conflict is imminent’ when ‘two separate remedies are brought to
bear on the same activity.’”).
Section 209(d) does not alter any of the above analysis. That provision does not give states and local governments absolute authority to regulate any conduct
that affects emissions from vehicles that are in use. Instead, the provision provides that “[n]othing 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). 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. Those limitations include the division of
authority between the EPA and the states and local
governments discussed above.
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To that end, like the MDL court, Minnesota Court
of Appeals, and Alabama District Court, this Court
finds the model-wide nature of the post-sale software
changes alleged in Counts II and III of the amended
complaint makes them the type of conduct that Congress intended EPA to regulate. And indeed, the EPA
has regulated this conduct. Amended Complaint, ¶¶8292. The actions taken by the EPA against Defendants
have resulted in Defendants paying penalties and remediation payments. Any further imposition of civil
penalties by Ohio under its Air Pollution Control Statute would necessarily conflict therewith. Thus, when
the CAA 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.
Based on the forgoing, the Court finds that Plaintiff’s tampering claims in Counts II and III of the
amended complaint, which are based on post-sale software changes to the Subject Vehicles by Defendants,
are an attempt to enforce vehicle emission standards
on a model-wide basis. Because Congress intended for
only the EPA to regulate such conduct, the Court concludes that these claims stand as an obstacle to Congress' purpose and are preempted by the CAA.
Count IV – Conspiracy
Defendants final cause of action is for civil conspiracy. As alleged in the amended complaint, “Defendants
purposefully acted in concert or participation with one
another to violate, cause, or allow violations of R.C.
Chapter 3704 and Ohio Admin. Code Section 3745-80-
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02.” Amended Complaint, ¶121. Defendants advance
two arguments in support of the dismissal of Plaintiff’s
conspiracy claim. First, Defendants argue a conspiracy
claim cannot be maintained where there is no underlying tort. Alternatively, Defendants contend the claim
fails because the alleged co-conspirators are part of the
same corporate entity.
Responding, Plaintiff claims that it has sufficiently
plead a tort claim in Counts I through III for the knowing violation of Ohio’s Air Pollution Control Statute.
Further, Plaintiff argues that the intra-corporate conspiracy defense bears no application to the allegations
in the amended complaint.
“The tort of civil conspiracy is ‘a malicious combination of two or more persons to injure another in person
or property, in a way not competent for one alone, resulting in actual damages.’” Williams v. Aetna Finance Co., 83 Ohio St.3d 464, 475, 1998-Ohio- 294, quoting Kenty v. Transamerica Premium Ins. Co., 72 Ohio
St.3d 415, 419, 1995-Ohio-61. “An underlying unlawful
act is required before a civil conspiracy claim can succeed.” Williams, supra, at 475, citing Gosden v. Louis,
116 Ohio App.3d 195, 219 (1996); Minarik v. Nagy, 8
Ohio App.2d 194, 195 (1963). See, also, Gosden, at 221
(“the ‘gist’ of a conspiracy action is not the conspiracy
itself, and the conspiracy becomes important only after
the wrong is committed”).
Because an underlying act is required before a civil
conspiracy claim can succeed, and no violation of R.C.
Chapter 3704 or Ohio Admin. Code Section 3745-80-02
can be maintained, the Court further finds Plaintiff’s
claim of civil conspiracy must likewise fail. See, e.g.,
Porter v. Saez, 10th Dist. No. 03AP-1026, 2004-Ohio-
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2498 (concluding that because fraudulent transfer
claim failed, as a matter of law, conspiracy claim also
failed).
Personal Jurisdiction
Having concluded that the entirety of Plaintiff’s
Amended Complaint must be dismissed pursuant to
Civ.R. 12(B)(6), the Court declines to address Defendants’ arguments related to personal jurisdiction.
Conclusion
Based on the forgoing, the Court concludes that
Plaintiffs’ Amended Complaint failed to state a claim
upon which relief may be granted. Accordingly, Defendants’ motion to dismiss is hereby GRANTED, and
Plaintiff’s Amended Complaint is DISMISSED.
Pursuant to Civil Rule 58(B), the Clerk of Courts is
directed to serve upon all parties notice and the date of
this judgment. This is a final appealable order; there
is no just reason for delay.
IT IS SO ORDERED.
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APPENDIX D
RELEVANT STATUTORY PROVISIONS
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1.
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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
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certified in California under California standards (a
“third vehicle”) or otherwise create such a “third vehicle”.
*
2.
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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.
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*
*
*
*
72a
3.
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
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;
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4.
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42 U.S.C. § 7522(a) provides in pertinent part:
Prohibited acts
(a) Enumerated prohibitions
73a
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
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
*
5.
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*
*
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.
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6.
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42 U.S.C. § 7524(a) provides:
Civil penalties
(a) Violations
74a
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.
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7.
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42 U.S.C. § 7524(c) provides in pertinent part:
Civil penalties
(c) Administrative assessment of certain 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,
75a
the effect of the penalty on the violator’s ability to
continue in business, and such other matters as justice may require.
*
8.
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*
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
76a
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
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).
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9.
*
*
*
*
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
77a
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—
(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
78a
(C) such nonconformity results in the ultimate purchaser (or any subsequent purchaser)
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,
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 under subsection
(a)(2).
*
10.
*
*
*
*
42 U.S.C. § 7541(c) provides in pertinent part:
Compliance by vehicles and engines in actual use
(c) Nonconforming vehicles; plan for remedying
nonconformity; instructions for maintenance and
use; label or tag
Effective with respect to vehicles and engines manufactured during model years beginning more than 60
days after December 31, 1970—
(1) If the Administrator 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 under
section 7521 of this title, when in actual use
throughout their useful life (as determined under
79a
section 7521(d) of this title), he shall immediately
notify the manufacturer thereof of such nonconformity, and he shall require the manufacturer to
submit a plan for remedying the nonconformity of
the vehicles or engines with respect to which such
notification is given. The plan shall provide that the
nonconformity of any such vehicles or engines
which are properly used and maintained will be
remedied at the expense of the manufacturer. If the
manufacturer disagrees with such determination of
nonconformity and so advises the Administrator,
the Administrator shall afford the manufacturer
and other interested persons an opportunity to present their views and evidence in support thereof at
a public hearing. Unless, as a result of such hearing
the Administrator withdraws such determination of
nonconformity, he shall, within 60 days after the
completion of such hearing, order the manufacturer
to provide prompt notification of such nonconformity in accordance with paragraph (2).
*
11.
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*
*
*
42 U.S.C. § 7541(h) provides in pertinent part:
Compliance by vehicles and engines in actual use
(h) Dealer certification
(2) Nothing in section 7543(a) of this title shall
be construed to prohibit a State from testing, or requiring testing of, a motor vehicle after the date of
sale of such vehicle to the ultimate purchaser (except that no new motor vehicle manufacturer or
80a
dealer may be required to conduct testing under
this paragraph).
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12.
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*
*
42 U.S.C. § 7542 provides:
Information collection
(a) Manufacturer’s responsibility
Every manufacturer of new motor vehicles or new motor vehicle engines, and every manufacturer of new motor vehicle or engine parts or components, and other
persons subject to the requirements of this part or part
C, shall establish and maintain records, perform tests
where such testing is not otherwise reasonably available under this part and part C (including fees for testing), make reports and provide information the Administrator may reasonably require to determine whether
the manufacturer or other person has acted or is acting
in compliance with this part and part C and regulations
thereunder, or to otherwise carry out the provision of
this part and part C, and shall, upon request of an officer or employee duly designated by the Administrator, permit such officer or employee at reasonable
times to have access to and copy such records.
(b) Enforcement authority
For the purposes of enforcement of this section, officers or employees duly designated by the Administrator
upon presenting appropriate credentials are authorized—
81a
(1) to enter, at reasonable times, any establishment of the manufacturer, or of any person whom
the manufacturer engages to perform any activity
required by subsection (a), for the purposes of inspecting or observing any activity conducted pursuant to subsection (a), and
(2) to inspect records, files, papers, processes,
controls, and facilities used in performing any activity required by subsection (a), by such manufacturer or by any person whom the manufacturer engages to perform any such activity.
(c) Availability to public; trade secrets
Any records, reports, or information obtained under
this part or part C shall be available to the public, except that upon a showing satisfactory to the Administrator by any person that records, reports, or information, or a particular portion thereof (other than
emission data), to which the Administrator has access
under this section, if made public, would divulge methods or processes entitled to protection as trade secrets
of that person, the Administrator shall consider the
record, report, or information or particular portion
thereof confidential in accordance with the purposes of
section 1905 of title 18. Any authorized representative
of the Administrator shall be considered an employee
of the United States for purposes of section 1905 of title
18. Nothing in this section shall prohibit the Administrator or authorized representative of the Administrator from disclosing records, reports or information to
other officers, employees or authorized representatives of the United States concerned with carrying out
this chapter or when relevant in any proceeding under
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this chapter. Nothing in this section shall authorize the
withholding of information by the Administrator or any
officer or employee under the Administrator’s control
from the duly authorized committees of the Congress.
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13.
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42 U.S.C. § 7543(a) provides:
State standards
(a) Prohibition
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.
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14.
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42 U.S.C. § 7543(b) provides:
State standards
(b) Waiver
(1) The Administrator shall, after notice and opportunity for public hearing, waive application of
this section to any State which has adopted standards (other than crankcase emission standards) for
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the control of emissions from new motor vehicles or
new motor vehicle engines prior to March 30, 1966,
if the State determines that the State standards will
be, in the aggregate, at least as protective of public
health and welfare as applicable Federal standards.
No such waiver shall be granted if the Administrator finds that—
(A) the determination of the State is arbitrary and capricious,
(B) such State does not need such State
standards to meet compelling and extraordinary
conditions, or
(C) such State standards and accompanying
enforcement procedures are not consistent with
section 7521(a) of this title.
(2) If each State standard is at least as stringent
as the comparable applicable Federal standard,
such State standard shall be deemed to be at least
as protective of health and welfare as such Federal
standards for purposes of paragraph (1).
(3) In the case of any new motor vehicle or new
motor vehicle engine to which State standards apply pursuant to a waiver granted under paragraph
(1), compliance with such State standards shall be
treated as compliance with applicable Federal
standards for purposes of this subchapter.
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15.
42 U.S.C. § 7543(d) provides:
State standards
(d) Control, regulation, or restrictions on registered or licensed motor vehicles
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.
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16. Ohio Rev. Code § 3704.16 provides in pertinent
part:
Prohibiting tampering with motor vehicle emission
control systems
(C) No person shall knowingly do any of the following:
(3) Tamper with any emission control system installed on or in a motor vehicle after sale, lease, or
rental and delivery of the vehicle to the ultimate
purchaser, lessee, or renter.
(E) Notwithstanding divisions (B)(1) and (3) and (C)(3)
of this section, it is not a violation of those divisions if
either of the following conditions is met:
(1) The action is taken for the purpose of repair or
replacement of the emission control system or is a
necessary and temporary procedure to repair or replace any other item on the motor vehicle and the
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action results in the system's compliance with the
"Clean Air Act Amendments[.]”
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.