Amicus Curiae Brief — Volkswagen Aktiengesellschaft, et al., Petitioners v. Ohio, ex rel. Dave Yost, Attorney General
Supreme Court briefSep 30, 2021
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No. 21-312
In the Supreme Court of the United States
VOLKSWAGEN AKTIENGESELLSCHAFT, ET AL.,
Petitioners,
v.
OHIO, EX REL. DAVE YOST,
ATTORNEY GENERAL,
Respondent.
On Petition for a Writ of Certiorari to
the Supreme Court of Ohio
BRIEF FOR PRODUCT LIABILITY ADVISORY
COUNCIL, INC. AND MOTOR & EQUIPMENT
MANUFACTURERS ASSOCIATION AS AMICI
CURIAE IN SUPPORT OF PETITIONERS
NICOLE A. SAHARSKY
Counsel of Record
ERIC A. WHITE
Mayer Brown LLP
1999 K Street, NW
Washington, DC 20006
(202) 263-3000
nsaharsky@mayerbrown.com
Counsel for Amici Curiae
QUESTION PRESENTED
Whether the Clean Air Act, 42 U.S.C. 7401 et seq.,
preempts state and local governments from regulating
manufacturers’ post-sale, nationwide updates to vehicle-emission systems.
ii
TABLE OF CONTENTS
Page
INTEREST OF THE AMICI CURIAE .......................1
INTRODUCTION AND SUMMARY OF
ARGUMENT ...............................................................3
ARGUMENT ...............................................................5
I. The Petition Presents An Important
Question Of Federal Law.......................................6
A. This Issue Is Of Tremendous
Importance To The U.S. Auto Industry ...........6
B. If Left Uncorrected, The Ohio Supreme
Court’s Decision Would Create An
Unworkable Patchwork Of Regulations ..........8
1. The Decision Below Would Create A
Patchwork Of Emission Regulations ..........9
2. The Decision Below Would
Encourage Expensive And Needless
Litigation ................................................... 10
3. The Decision Below Would
Dramatically Increase Costs For
Manufacturers ........................................... 13
4. The Decision Below Ultimately
Would Harm Consumers........................... 14
II. The Decision Below Is Wrong .............................. 16
A. The Clean Air Act Expressly Preempts
State And Local Regulation Of PostSale Emission-System Updates ..................... 17
B. The Clean Air Act Impliedly Preempts
State And Local Regulation Of PostSale Emission-System Updates ..................... 19
CONCLUSION .......................................................... 23
iii
TABLE OF AUTHORITIES
Cases
Page(s)
Allway Taxi, Inc. v. City of New York,
340 F. Supp. 1120 (S.D.N.Y. 1972) ................ 18, 20
Caplinger v. Medtronic, Inc.,
784 F.3d 1335 (10th Cir. 2015) ............................ 16
Center for Auto Safety v. Peck,
751 F.2d 1336 (D.C. Cir. 1985) ............................ 15
Engine Mfrs. Ass’n v. EPA,
88 F.3d 1075 (D.C. Cir 1996) ............... 9, 10, 15, 19
Geier v. American Honda Motor Co.,
529 U.S. 861 (2000) .............................................. 19
Morales v. Trans World Airlines, Inc.,
504 U.S. 374 (1992) ........................................ 17, 18
New Mexico v. Mescalero Apache Tribe,
462 U.S. 324 (1983) .............................................. 13
Rowe v. New Hampshire Motor Transp. Ass’n,
552 U.S. 364 (2008) ................................................ 9
Shaw v. Delta Air Lines, Inc.,
463 U.S. 85 (1983) ................................................ 18
Sims v. Florida Dept. of Hwy. Safety & Motor
Vehicles, 862 F.2d 1449 (11th Cir. 1989) ............ 17
In re Volkswagen “Clean Diesel” Mktg., Sales
Pracs., & Prods. Liab. Litig.:
959 F.3d 1201 (9th Cir. 2020) ..................... 3, 7, 8
310 F. Supp. 3d 1030 (N.D. Cal. 2018) ............. 12
iv
TABLE OF AUTHORITIES
(continued)
Statutes
Page(s)
Clean Air Act, 42 U.S.C. 7401 et seq.:
42 U.S.C. 7511...................................................... 20
42 U.S.C. 7511a.................................................... 20
42 U.S.C. 7521(a)(1) ................................... 6, 20, 21
42 U.S.C. 7521(d) ................................................... 6
42 U.S.C. 7521(a)(4)(B) ........................................ 21
42 U.S.C. 7541...................................................... 20
42 U.S.C. 7541(c)(1) ............................................. 20
42 U.S.C. 7541(h)(2) ............................................. 20
42 U.S.C. 7543...................................................... 20
42 U.S.C. 7543(a) ................................. 5, 17, 18, 20
42 U.S.C. 7550(3) ................................................. 18
Ariz. Rev. Stat. Ann. § 28-1522................................. 11
Colo. Rev. Stat. § 42-4-314 ........................................ 11
Conn. Gen. Stat. Ann. § 14-164c ............................... 11
Del. Code Ann. tit. 21, § 6701 ................................... 11
Fla. Stat. Ann. § 316.2935......................................... 11
Ga. Code Ann. § 40-8-130.......................................... 11
Idaho Code Ann. § 49-229 ......................................... 11
Iowa Code § 321.78 .................................................... 11
Mich. Comp. Laws § 324.6535 .................................. 11
Okla. Stat. Ann. tit. 47, § 12-423 .............................. 11
Or. Rev. Stat. Ann. § 815.305 ................................... 11
75 Pa. Stat. and Cons. Stat. Ann. § 4531 ................. 11
S.C. Code Ann. § 16-21-90......................................... 11
Utah Code Ann. §§ 76-10-1601 to -1609 ................... 12
v
TABLE OF AUTHORITIES
(continued)
Regulations and Rules
Page(s)
40 C.F.R.:
85.1903(a) ............................................................. 20
86.1845-04 ............................................................ 20
59 Fed. Reg. 31,306 (Jun. 17, 1994).......................... 18
Sup. Ct. R.:
37.2(a) ..................................................................... 1
37.6 ......................................................................... 1
Ala. Admin. Code r. 335-3-9.06 ................................. 11
Alaska Admin. Code tit. 18, § 52.015 ....................... 11
Cal. Code Regs. tit. 16, § 3362.1 ............................... 11
D.C. Mun. Regs. tit. 18, § 750 ................................... 11
Haw. Code R. § 11-60.1-34 ........................................ 11
Ill. Admin. Code tit. 35, § 240.103 ............................ 11
326 Ind. Admin. Code 13-2.1-3 ................................. 11
La. Admin. Code tit. 55,§ 817 ................................... 11
Md. Code Ann., Transp. § 22-402.1 .......................... 11
310 Mass. Code Regs. 60.02 ...................................... 11
Mo. Code Regs. Ann. tit. 10, § 10-5.381 .................... 11
Mont. Admin. R. 17.8.325 ......................................... 11
Nev. Admin. Code § 445B.575 .................................. 11
N.H. Code Admin. R. Ann. Env-A 1102.01............... 11
N.J. Admin. Code § 7:27-15.7.................................... 11
N.Y. Comp. Codes R. & Regs. tit. 6, § 218-6.2.......... 11
19A N.C. Admin. Code 3D.0542................................ 11
N.D. Admin. Code 33.1-15-08-02 .............................. 11
Ohio Admin. Code 3745-80-02 .................................. 11
280-30-15 R.I. Code R. § 1.13.2 ................................. 11
vi
TABLE OF AUTHORITIES
(continued)
Regulations and Rules (continued)
Page(s)
Tenn. Comp. R. & Regs. 1200-03-36-.03 ................... 12
30 Tex. Admin. Code § 114.20................................... 12
Utah Admin. Code r. R307-201-4 ............................. 12
16-5 Vt. Code R. § 702 ............................................... 12
9 Va. Admin. Code § 5-40-5670 ................................ 12
Wash. Admin. Code § 173-421-100 ........................... 12
W. Va. Code Ann. § 22-5-15 ...................................... 12
Wis. Admin. Code NR § 485.06 ................................. 12
Other Authorities
Martina Barash, VW Settles Two States’ Diesel
Software Update Cases, Bloomberg Law
(Sept. 27, 2021), https://perma.cc/2SXQP8QS ..................................................................... 12
BMW Grp., Press Release, BMW Group Rolls
Out Biggest Remote Software Upgrade in
Company History (Oct. 16, 2020),
https://perma.cc/4J8B-78NN ............................... 16
EPA, 2014-2017 Vehicle Engine Compliance
Activities Progress Report (Apr. 2019),
https://perma.cc/5HKD-JKG4................................ 6
H.R. Rep. No. 728, 90th Cong., 1st Sess. (1967) ........ 9
Kim Hill et al., Contribution of the Auto
Industry to the Economies of All Fifty
States and the United States, Center for
Auto. Rsch. (Jan. 2015), https://perma.cc/
TXT3-7NNU ........................................................... 8
vii
TABLE OF AUTHORITIES
(continued)
Other Authorities (continued)
Page(s)
Chris Isidore, Car Prices Are Soaring, and
They’re Not Going to Stop, CNN Bus.
(June 11, 2021), https://perma.cc/3NN5ZSG4 ..................................................................... 15
John R. Quain, With Benefits – and Risks –
Software Updates Are Coming to the Car,
Digital Trends (Oct. 29, 2018),
https://perma.cc/LVE6-VL5W ............................ 6, 7
U.S. Bureau of Lab. Statistics, Automotive
Industry: Employment, Earnings, and
Hours (Feb. 11, 2021), https://perma.cc/
37Q3-9HZU ............................................................ 8
Bill Vlasic & Nick Bunkley, Obama Is Upbeat
for GM’s Future, N.Y. Times (Jun. 1, 2009),
https://perma.cc/8PB8-2SBF8.............................. 14
BRIEF OF PRODUCT LIABILITY ADVISORY
COUNCIL, INC. AND MOTOR & EQUIPMENT
MANUFACTURERS ASSOCIATION AS AMICI
CURIAE IN SUPPORT OF PETITIONERS
INTEREST OF THE AMICI CURIAE
Amici are the Product Liability Advisory Council,
Inc. (PLAC) and the Motor & Equipment Manufacturers Association (MEMA).1
PLAC is a non-profit professional association of
corporate members representing a broad cross-section
of
American
and
international
product
manufacturers.2 Those companies seek to contribute
to the improvement and reform of law in the United
States and elsewhere, with emphasis on the law
governing the liability of manufacturers of products
and those in the supply chain. PLAC’s perspective is
derived from the experiences of a corporate
membership that spans a diverse group of industries
in various facets of the manufacturing sector. In
addition, several hundred of the leading productlitigation defense attorneys are sustaining (nonvoting) members of PLAC. Since 1983, PLAC has filed
more than 1,200 briefs as amicus curiae in both state
and federal courts, including this Court, presenting
the broad perspective of product manufacturers
Pursuant to Rule 37.6, amici state that no counsel for a
party authored this brief in whole or in part and that no person
other than amici and their counsel made a monetary contribution to its preparation or submission. Counsel for all parties received notice of amici’s intention to file this brief at least 10 days
before its due date and consented to the filing of this brief. Sup.
Ct. R. 37.2(a).
2
See https://plac.com/PLAC/Membership/Corporate_Membership.
aspx.
1
(1)
2
seeking fairness and balance in the application and
development of the law as it affects product risk
management.
MEMA represents manufacturers and remanufacturers of components and systems for use in passenger vehicles and heavy trucks. Those suppliers
provide original equipment to new vehicles and aftermarket parts used to service, maintain, and repair the
over 275 million vehicles on the road today. MEMA’s
supplier members are the largest manufacturers in
the United States. Together, they employ 907,000
Americans. And because of the economic activity that
those members generate, they contribute to 4.26 million American jobs. MEMA regularly files briefs as
amicus curiae to address matters important to the automotive industry.
The issue in this case is whether States and localities may prescribe rules for auto manufacturers’ nationwide post-sale updates to vehicle-emission control
software. In amici’s view, the answer is no. The Clean
Air Act gives the EPA the exclusive authority to regulate post-sale vehicle-emission system updates, and
its express preemption provision bars States and their
political subdivisions from setting or enforcing their
own regulatory standards. Even without the Act’s express preemption provision, the Act impliedly
preempts state and local regulation of post-sale updates because that regulation interferes with the Act’s
objective of creating a comprehensive, uniform
scheme for regulating vehicle emissions.
If allowed to stand, the Ohio Supreme Court’s decision in this case will encourage States and local governments to adopt their own post-sale auto emission
rules, which will harm members of the auto industry
and ultimately consumers. Amici urge this Court to
3
grant review in this case (and in the other pending
case presenting this issue) and confirm that the federal government has the exclusive authority to regulate fleet-wide vehicle emissions.
INTRODUCTION AND
SUMMARY OF ARGUMENT
The petition in this case is the second in a matter
of months seeking this Court’s review of a decision
that authorizes a State or locality to impose massive
financial penalties on petitioners for conduct already
addressed by the federal EPA. In the first case, the
Ninth Circuit held that the environmental protection
commission of a Florida county and a Utah county can
regulate auto manufacturers’ post-sale updates to vehicle-emission control software, despite the Clean Air
Act, which gives that authority exclusively to the
EPA. See In re Volkswagen “Clean Diesel” Mktg.,
Sales Pracs., & Prods. Liab. Litig., 959 F.3d 1201 (9th
Cir. 2020) (Counties), petition for cert. pending, No.
20-994 (filed Jan. 21, 2021). In the petition-stage
briefs in the Counties case, petitioners and their amici
warned that the court of appeals’ decision would
spawn additional litigation and create substantial
regulatory uncertainty.
That prediction has been borne out in this case
and in multiple other lawsuits brought by States and
their subdivisions. Here, the Ohio Supreme Court
held that the State of Ohio can regulate post-sale vehicle-emission system updates however it wishes,
without regard to federal law. The result is to authorize a patchwork of over 3,000 different enforcement
regimes – the EPA, fifty States and the District of Columbia, and every county in the country – with the
potential for truly astounding monetary penalties for
4
companies unable to comply. It is time for this Court
to step in.
The question presented is important. The decision below invites States and localities to regulate the
millions of instances each year in which manufacturers provide post-sale updates to vehicle-emission control systems – to the tune of billions, or even trillions,
of dollars in potential liability. Auto manufacturers
regularly make updates to the software in their vehicles after the vehicles are sold to consumers. Manufacturers do that to ensure that the software stays up
to date, to keep vehicles in optimal working condition.
Now any one of those commonplace software updates
could be the basis for liability under state or local law.
That would lead to an unworkable patchwork of
post-sale emission regulations. Even the largest manufacturers would struggle to comply. One predictable
consequence would be many more public and private
lawsuits, which would serve only to increase costs
with no corresponding benefit. And consumers ultimately would pay, through higher prices for their vehicles and less innovation through post-sale updates.
The United States, in its amicus curiae brief in the
Counties case, suggests that this problem is overstated and perhaps could correct itself. But the lower
courts have divided, and the question presented undoubtedly is important, because it affects a major segment of the U.S. economy, and it implicates billions
(or trillions) of dollars in potential liability.
The Ohio Supreme Court’s decision is wrong. Federal law preempts state and local efforts to regulate
nationwide post-sale updates to vehicle-emission systems. The plain language of the Clean Air Act expressly precludes state and local governments from
“attempt[ing]” to enforce against manufacturers “any”
5
standard “relating to” emission systems. The court
below failed to give effect to the Act’s broad language,
and it drew an unwarranted distinction between presale-to-consumer and post-sale system updates. And
even without the express preemption provision, state
and local authorities’ attempts to set or enforce standards for software updates are impliedly preempted by
federal law, because they interfere with the uniform
federal regime for regulating fleet-wide emissions.
ARGUMENT
The Ohio Supreme Court held that the Clean Air
Act does not preempt state-law anti-tampering claims
against manufacturers for post-sale updates to vehicle-emission software. Pet. App. 7a-16a. Specifically,
the court concluded that the Act’s express preemption
provision, 42 U.S.C. 7543(a), does not apply once a
new vehicle is sold. Pet. App. 10a-11a. The court also
held (over a dissent) that the Act does not impliedly
preempt state anti-tampering liability. Id. at 11a16a. The decision below builds on a Ninth Circuit decision from earlier this year, where that court similarly held that the Clean Air Act does not preempt liability under state and county anti-tampering regulations.
The Ohio Supreme Court’s decision further opens
the door to litigation and threatens to impose staggering penalties on manufacturers. If left uncorrected, it
would result in a patchwork of emission rules, and it
would be difficult (or impossible) for manufacturers to
comply with those rules. This Court should grant review and hold that federal law provides the exclusive
rules in this area.
6
I.
The Petition Presents
Question Of Federal Law
An
Important
The Ohio Supreme Court’s decision threatens to
impose potentially ruinous liability on the automotive
industry. It gives license to a patchwork of vehicleemission rules. Several States and localities already
have adopted and sued to enforce their own standards,
and the situation will get worse without this Court’s
intervention.
A. This Issue Is Of Tremendous Importance
To The U.S. Auto Industry
The sheer number of post-sale vehicle-emission
updates each year makes the potential liability here
enormous. Manufacturers apply post-sale software
updates to millions of light-vehicle-emission systems
each year. See EPA, 2014-2017 Vehicle Engine Compliance Activities Progress Report 7 (Apr. 2019),
https://perma.cc/5HKD-JKG4. For example, from
2014 to 2017, manufacturers applied updates to 24
million vehicle-emission systems. Ibid. Today, it is
the norm, not the exception, for manufacturers to offer
post-sale updates on their vehicles, including to vehicle-emission systems. Those millions of updates affect
millions of vehicles in every part of the United States.
Typically, post-sale updates are highly beneficial
to consumers. Manufacturers use post-sale updates
to keep vehicles in top working condition and ensure
they continue to meet federal regulatory requirements. See, e.g., John R. Quain, With Benefits – and
Risks – Software Updates Are Coming to the Car, Digital Trends (Oct. 29, 2018) (Quain, Benefits), https://
perma.cc/LVE6-VL5W; see also 42 U.S.C. 7521(a)(1),
(d) (requiring manufacturers to ensure that their vehicles’ emission-control systems remain functional for
7
at least 10 years or 100,000 miles). The updates extend the life of vehicles by making sure that vehicles
perform as designed and take advantage of technological advances. See, e.g., Quain, Benefits. The factual
circumstance in this case, where updates were used to
attempt to evade federal emission requirements, is
not typical. Neither the Ohio Supreme Court’s decision nor the Ninth Circuit’s decision is limited to that
atypical circumstance.
Under the Ohio Supreme Court’s rule, any one of
those routine, beneficial vehicle-emission updates
could be the basis for both public and private lawsuits.
In this case, respondent brought suit under a state
anti-tampering law authorizing penalties of $25,000
per violation, asserting that each day after the emission software update counts as its own separate violation, multiplied by all of the vehicles that received the
update. See Pet App. 65a. With 14,000 vehicles in the
State, that comes to a penalty of $350 million per day,
and $128 billion per year. See ibid. That is just for
Ohio, and just for Volkswagen. Add the two counties
from the Ninth Circuit case – each of which was authorized to seek $5,000 per violation per day – and
that adds $11.2 billion more per year, again just for
one manufacturer. Counties, 959 F.3d at 1210. Even
if only some other States and localities decided to regulate in this area, the liability easily could grow to trillions of dollars, which is potentially ruinous liability
for automobile manufacturers and parts suppliers.
In its brief in the Counties case, the United States
makes short shrift of the importance of the question
presented. It suggests that courts will “restrain overreaching claims.” U.S. Br. at 24, Counties, No. 20-994
(filed Sept. 27, 2021). But how, and when? It surely
8
is not happening now. The Ninth Circuit did not restrain itself; instead, it freely admitted that its decision could result in “staggering liability.” Counties,
959 F.3d at 1225.
The opinion below thus hangs a cloud of liability
over the auto industry – a major part of the U.S. economy. See Kim Hill et al., Contribution of the Auto Industry to the Economies of All Fifty States and the
United States 3, Center for Auto. Rsch. (Jan. 2015),
https://perma.cc/TXT3-7NNU (“[The auto industry]
historically has contributed 3.0 – 3.5 percent to the
overall Gross Domestic Product (GDP).”); U.S. Bureau
of Lab. Statistics, Automotive Industry: Employment,
Earnings, and Hours (Feb. 11, 2021), https://perma.cc/
37Q3-9HZU (noting that the auto industry as a whole
employs over 4 million people and indirectly supports
over 7 million private-sector jobs).
There is no reason to believe that the cloud of liability over the auto industry will dissipate of its own
accord. As the petition explains (at 15-17), the lower
courts have disagreed on the question presented,
which means that some States and localities currently
are able to regulate post-sale vehicle emissions, and
others are not. Only this Court can finally resolve
whether federal law gives the EPA the exclusive authority to regulate in this area.
B. If Left Uncorrected, The Ohio Supreme
Court’s Decision Would Create An
Unworkable Patchwork Of Regulations
In the petition-stage briefs in the Counties case,
petitioners and their amici warned that the Ninth Circuit’s decision would spur additional state and local
regulation of post-sale vehicle-emission updates. See
Pet. at 20-21, Counties, No. 20-994 (Jan. 21, 2021); see
9
also, e.g., PLAC & MEMA Amicus Br. at 16-19, Counties, No. 20-994 (Feb. 16, 2021). The Ohio Supreme
Court’s decision in this case confirms that that trend
already is well underway. As additional States and
localities follow suit, the patchwork of regulations will
become entirely unworkable.
1. The Decision Below Would Create A
Patchwork Of Emission Regulations
For decades, the federal government has exclusively regulated vehicle-emission systems. One of the
reasons Congress gave the EPA that authority in the
Clean Air Act is because a different regime would be
unworkable. Specifically, Congress “assert[ed] federal control in this area” because the “possibility of 50
different state regulatory regimes raised the spectre
of an anarchic patchwork of federal and state regulatory programs, a prospect which threatened to create
nightmares for the manufacturers.” Engine Mfrs.
Ass’n v. EPA, 88 F.3d 1075, 1079 (D.C. Cir. 1996) (internal quotation marks and citation omitted). Even if
state and local governments merely sought to enforce
federal standards, as opposed to formulating their
own standards, it “would be difficult for the industry”
to comply because “different administration could easily lead to different answers to identical questions.”
H.R. Rep. No. 728, 90th Cong., 1st Sess. 2 (1967). Accordingly, Congress vested exclusive authority over
vehicle emissions in the EPA.
Under the decisions of the Ohio Supreme Court
and the Ninth Circuit, state and local governments
are free to regulate post-sale vehicle-emission software updates however they wish. See Rowe v. New
Hampshire Motor Transp. Ass’n, 552 U.S. 364, 373
(2008) (“To allow Maine to insist that the carriers provide a special checking system would allow other
10
States to do the same. And to interpret the federal
law to permit these, and similar, state requirements
could easily lead to a patchwork of state service-determining laws, rules, and regulations.”). As a result, if
the EPA puts in place a new emission standard, and a
manufacturer pushes a software update to all of its
vehicles to comply with that standard, it could be held
liable under state and local laws.
Any of the 50 States, the District of Columbia, or
the over 3,000 counties in the United States could
start regulating post-sale updates to vehicle-emission
software. What might be perfectly acceptable under
Minnesota law could be a violation under Wisconsin
law. An update might run afoul of regulators in Hillsborough County (Tampa), but not Dade County (Miami). The prospect of so many different regulatory regimes, and the chaos that would follow, is precisely
why “[t]wo years after authorizing federal emissions
regulations, * * * Congress preempted the states from
adopting their own emissions standards.” Engine
Mfrs. Ass’n, 88 F.3d at 1079.
2. The Decision Below Would Encourage Expensive And Needless Litigation
One predictable response to the decision below
will be a flood of lawsuits – from States and localities
as well as from private parties. State and local governments not only could adopt new rules for post-sale
emission software updates, but they also could enforce
those rules through litigation. That is exactly what
happened here: Even though the EPA addressed petitioners’ conduct and negotiated a multi-billion-dollar settlement – $75 million of which was allocated to
Ohio, see Pet. App. 22a – respondent sued based on
the same conduct under a state anti-tampering law,
11
seeking an additional hundreds of millions of dollars
per day, id. at 65a.
And once a state or local government sues or takes
enforcement action, public or private follow-on lawsuits inevitably follow. If each software update in
each vehicle is a violation, the potential liability is
enormous. Bringing a me-too suit would be easy to do
if any state or local government already had taken
some enforcement action against an auto manufacturer.
Those suits could be premised on any number of
existing state or local laws. Options include anti-tampering laws like the Ohio law at issue here as well as
unfair or deceptive trade practices laws, products liability laws, and the common law of negligence. The
vast majority of States have anti-tampering laws or
regulations similar to Ohio’s.3 And there is no shortage of state statutes and common-law causes of action
that creative counsel could employ.
See, e.g., Ala. Admin. Code r. 335-3-9.06; Alaska Admin.
Code tit. 18, § 52.015; Ariz. Rev. Stat. Ann. § 28-1522; Cal. Code
Regs. tit. 16, § 3362.1; Colo. Rev. Stat. § 42-4-314; Conn. Gen.
Stat. Ann. § 14-164c; Del. Code Ann. tit. 21, § 6701; D.C. Mun.
Regs. tit. 18, § 750; Fla. Stat. Ann. § 316.2935; Ga. Code Ann.
§ 40-8-130; Haw. Code R. § 11-60.1-34; Idaho Code Ann. § 49-229;
Ill. Admin. Code tit. 35, § 240.103; 326 Ind. Admin. Code 13-2.13; Iowa Code § 321.78; La. Admin. Code tit. 55,§ 817; Md. Code
Ann., Transp. § 22-402.1; 310 Mass. Code Regs. 60.02; Mich.
Comp. Laws § 324.6535; Mo. Code Regs. Ann. tit. 10, § 10-5.381;
Mont. Admin. R. 17.8.325; 129; Nev. Admin. Code § 445B.575;
N.H. Code Admin. R. Ann. Env-A 1102.01; N.J. Admin. Code
§ 7:27-15.7; N.Y. Comp. Codes R. & Regs. tit. 6, § 218-6.2; 19A
N.C. Admin. Code 3D.0542; N.D. Admin. Code 33.1-15-08-02;
Ohio Admin. Code 3745-80-02; Okla. Stat. Ann. tit. 47, § 12-423;
Or. Rev. Stat. Ann. § 815.305; 75 Pa. Stat. and Cons. Stat. Ann.
§ 4531; 280-30-15 R.I. Code R. § 1.13.2; S.C. Code Ann. § 16-213
12
Salt Lake County, for instance, already pursued
similar relief under Utah’s Pattern of Unlawful Activity Act, common-law fraud, and common-law nuisance. In re Volkswagen “Clean Diesel” Mktg., Sales
Pracs. & Prods. Liab. Litig., 310 F. Supp. 3d 1030,
1034 (N.D. Cal. 2018), rev’d, 959 F.3d 1201 (9th Cir.
2020); see Utah Code Ann. §§ 76-10-1601 to -1609.
And New Hampshire and Montana recently settled
their own anti-tampering claims against Volkswagen.
See Martina Barash, VW Settles Two States’ Diesel
Software Update Cases, Bloomberg Law (Sept. 27,
2021), https://perma.cc/2SXQ-P8QS. Given the number of vehicles on the road and the frequency of postsale emission system updates, it is only a matter of
time before enterprising States, localities, and classaction plaintiffs target other manufacturers.
There is no public benefit to be had that would justify the enormous costs of follow-on liability. In the
short-term, it would serve only to impose potentially
ruinous liability on a manufacturer. And in the longterm, it would actually frustrate the public interest in
securing timely fixes to problems with vehicles. After
all, as the dissent noted, “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.” Pet. App. 21a (Donnelly, J.,
dissenting). And, of course, “[t]he efficacy of the EPA’s
rulemaking and enforcement powers would be se-
90; Tenn. Comp. R. & Regs. 1200-03-36-.03; 30 Tex. Admin. Code
§ 114.20; Utah Admin. Code r. R307-201-4; 16-5 Vt. Code R.
§ 702; 9 Va. Admin. Code § 5-40-5670; Wash. Admin. Code § 173421-100; W. Va. Code Ann. § 22-5-15; Wis. Admin. Code NR
§ 485.06.
13
verely reduced if manufacturers were to be disincentivized from cooperating with the EPA and other federal governmental entities.” Ibid.
The United States acknowledges “[t]he possibility
of follow-on state or local suits,” but suggests that
“any obstruction” to Congress’s purposes and objectives in the Clean Air Act resulting from state and local regulation “can be addressed on a case-by-case basis if and when they arise.” U.S. Br. at 19, 21, Counties, supra, No. 20-994. But the dominoes already
have started to fall, and this Court should step in before the liability continues to cascade. The government’s wait-and-see approach will provide cold comfort to the manufacturers that will be subjected to
case-by-case adjudication threatening bet-the-company liability.
3. The Decision Below Would Dramatically
Increase Costs For Manufacturers
It would be difficult, if not impossible, for manufacturers to comply with a new patchwork regulatory
regime for post-sale updates to vehicle-emission systems. Manufacturers sell their vehicles nationwide,
and vehicles often do not remain in the State of sale.
If every State and county were free to establish its
own rules for emission software updates, manufacturers would have to comply with each of them before
making any vehicle update. That might even require
state-specific updates to a vehicle when the owner
changes the place of registration, creating yet another
new requirement for manufacturers. In fact, it may
be an “insurmountable task” to comply with that
“patchwork” of different requirements. New Mexico v.
Mescalero Apache Tribe, 462 U.S. 324, 339-340 (1983).
14
Even if it were logistically feasible for large manufacturers and auto-parts suppliers to navigate such
a system, it would come at great cost. For example,
suppose a manufacturer wanted to ensure compliance
with state and local emission regulations in advance
of making a software update, so as not to risk massive
liability. That would require significant work by both
the company’s in-house legal team and its technical
team. It would take a great deal of coordination, not
only for the company but also for the relevant government officials, to ensure regulatory compliance with a
variety of different, potentially conflicting rules. Indeed, compliance with conflicting rules would be impossible.
Some of the scarce resources that manufacturers
could have spent on continuing to research and develop new post-sale updates instead would be spent on
attempting to comply with state and local emission
regulations. Auto manufacturers do not have limitless resources; the industry is cyclical and has high
overhead costs. See, e.g., Bill Vlasic & Nick Bunkley,
Obama Is Upbeat for G.M.’s Future, N.Y. Times (Jun.
1, 2009), https://perma.cc/8PB8-2SBF. Given finite
resources, a substantial increase in the cost and complexity of regulatory compliance would come at the expense of research and development.
4. The Decision Below Ultimately Would
Harm Consumers
The end result would be that consumers lose out.
Some manufacturers facing trillion-dollar liability
may have “to go out of business,” which would have a
“wide 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.” Pet. App. 21a (Donnelly, J., dissenting). For
15
those manufacturers that can comply, increased compliance costs ultimately would fall on consumers. Just
as manufacturer savings in the automotive industry
lead to lower consumer prices, see, e.g., Center for
Auto Safety v. Peck, 751 F.2d 1336, 1352 n.11 (D.C.
Cir. 1985), additional manufacturer expenditures lead
to higher prices. Adding hundreds or thousands of
new state and local regulations necessarily would increase those passed-on costs – and at a time when the
price for vehicles is skyrocketing. See, e.g., Chris Isidore, Car Prices Are Soaring, and They’re Not Going
to Stop, CNN Bus. (June 11, 2021), https://perma.cc/
3NN5-ZSG4 (noting that retail prices rose 12% yearon-year for new vehicles and 20% for used).
The decision below would impose costs on consumers in other ways, too. A patchwork regulatory regime
could, for example, negatively impact the value of customers’ vehicles. Americans move from jurisdiction to
jurisdiction and take their vehicles with them. See
Engine Mfrs. Ass’n, 88 F.3d at 1079 (Vehicles “readily
move across state boundaries.”). A vehicle might comply with emission regulations in one State and not in
another. Consumers who move to States or localities
with stricter regulations might be surprised to learn
that the value of their vehicles has decreased substantially. And if States and localities were free to set
their own emission standards on entire vehicle fleets,
consumers who move to new jurisdictions may not be
able to register their vehicles there at all.
Further, consumers could lose the benefit of receiving post-sale emission software updates that keep
their vehicles up to date. Auto manufacturers have
begun rolling out new and innovative features
through post-sale software updates to vehicle-emis-
16
sion systems. Just last year, for example, BMW released a remote update that, among other things,
added an emission functionality to its hybrid vehicles
that “automatically switches to pure electric drive
mode” when in designated green areas. BMW Grp.,
Press Release, BMW Group Rolls Out Biggest Remote
Software Upgrade in Company History (Oct. 16,
2020), https://perma.cc/4J8B-78NN. That provides
vehicle owners greater automated efficiency and the
public with vehicles that emit fewer pollutants in
dense urban areas. Ibid.
The threat of state and local regulation would
jeopardize continued innovation in this field. Even if
a manufacturer tried to comply with a patchwork regulatory regime, it still would risk significant liability
with each software update. That uncertainty could
very well lead a manufacturer to forego updates that
improve the vehicle’s performance or employ new
technologies. See, e.g., Caplinger v. Medtronic, Inc.,
784 F.3d 1335, 1346 (10th Cir. 2015) (Gorsuch, J.) (observing that unpredictable liability might cause manufacturers to “delay or abandon at least some number
of * * * innovations”). To continue to develop this field
to its full potential, manufacturers need to know that
they are not inviting lawsuits every time they send
out a software update to vehicle-emission systems.
II. The Decision Below Is Wrong
The exclusive federal authority to impose standards on manufacturers related to vehicle-emission
systems is clear and longstanding. The Clean Air
Act’s broad preemptive scope is set out in its text, and
state and local regulation of vehicle-emission software
updates plainly interferes with the objectives of the
Act. As the dissenting justice below explained, permitting state and local regulation “would upset the
17
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.” Pet. App. 24a
(Donnelly, J., dissenting).
A. The Clean Air Act Expressly Preempts
State And Local Regulation Of Post-Sale
Emission-System Updates
This is a classic case of express preemption. The
Clean Air Act’s preemption clause is broad and unambiguous: “No State or any political subdivision thereof
shall adopt or attempt to enforce any standard relating to the control of emissions from new motor vehicles or new motor vehicle engines subject to this part.”
42 U.S.C. 7543(a).
That provision applies expansively to any state or
local government that “adopt[s]” or “attempt[s] to enforce” “any” vehicle-emission standard, whether the
standard is the same as the EPA’s standard or different from the EPA’s standard. 42 U.S.C. 7543(a); see,
e.g., Sims v. Florida Dept. of Hwy. Safety & Motor Vehicles, 862 F.2d 1449, 1455 (11th Cir. 1989) (holding
that Section 7543(a) bars States’ attempts to enforce
any emission standards against manufacturers, even
federal standards). Further, the “relating to” language shows that the preemptive effect of federal law
is broader than standards specifying permissible vehicle emissions; it also applies to standards regarding
software updates “relating to” vehicle emission. See,
e.g., Morales v. Trans World Airlines, Inc., 504 U.S.
374, 383 (1992) (“relating to” “express[es] a broad preemptive purpose”). Accordingly, respondent’s attempts to enforce state standards regarding vehicleemission system updates fall within the text of Section
7543(a).
18
The Ohio Supreme Court distinguished between
manufacturer updates made before and after vehicles
are sold to consumers. See Pet. App. 8a-9a. The court
focused on the “new motor vehicle” language in Section 7543(a), explaining that a “new motor vehicle” is
a motor vehicle whose title has not yet been “transferred to an ultimate purchaser.” Id. at 8a (quoting
42 U.S.C. 7550(3)). The United States, too, seizes on
the word “new” to argue that the statute’s preemptive
effect cannot reach beyond the initial vehicle sale.
U.S. Br. at 13-14, Counties, supra, No. 20-994. The
fundamental problem with that approach is that it ignores the broad “relating to” language in the Act.
Standards about post-sale updates to new vehicles after they have been sold “relat[e] to the control of emissions from new motor vehicles,” because they update
the emission control systems in those vehicles. See
Morales, 504 U.S. at 383 (“relate to” means “concern”
(internal quotation marks omitted)); Shaw v. Delta
Air Lines, Inc., 463 U.S. 85, 96-97 (1983) (“relate to”
means “has a connection with”).
Further, the Ohio Supreme Court’s rule makes no
sense, because it would permit States and local governments to begin regulating federal emissions the
moment the vehicle is sold, even though (as explained
below) federal law gives the EPA exclusive authority
over vehicle-emission systems. The “new motor vehicle” language was not intended to reverse that clear
rule. Indeed, the EPA has long recognized that postsale state regulation of vehicle-emission control systems is preempted if it “relat[es] back to the original
design” by the manufacturer. 59 Fed. Reg. 31,306,
31,313 (Jun. 17, 1994) (discussing Allway Taxi, Inc. v.
City of New York, 340 F. Supp. 1120, 1124 (S.D.N.Y.),
aff ’d, 468 F.2d 624 (2d Cir. 1972)); see also U.S. Br. at
19
17, Counties, supra, No. 20-994 (“We agree with petitioners that Section 209(d) does not authorize States
to impose post-sale emission standards that would
have the practical effect of compelling manufactures
to modify the original design of their vehicles.”).
Here, the state and local regulation at issue
plainly relates to the original vehicle-emission system, because it updates that system’s software. Manufacturers apply updates to vehicle computer systems
to ensure that vehicles continue to perform as designed and to keep the vehicles in sound working condition. An exceedingly narrow reading of the Act’s express preemption provision cannot be squared with its
language or with common sense.
B. The Clean Air Act Impliedly Preempts
State And Local Regulation Of Post-Sale
Emission-System Updates
More broadly, state regulation of emission-system
updates is preempted because it “stands as an obstacle to the accomplishment and execution of the full
purposes and objectives of Congress.” Geier v. American Honda Motor Co., 529 U.S. 861, 873 (2000) (internal quotation marks omitted).
Congress’s primary purpose in enacting the Clean
Air Act was to regulate emissions nationwide. Maintaining uniform federal control of vehicle-emission requirements is a key feature of the Act. That is because
motor vehicles “readily move across state boundaries,”
and their emissions are not confined to one State. Engine Mfrs. Ass’n, 88 F.3d at 1079. An automobile manufactured in Michigan might be sold in Virginia, then
be taken by its owner to Texas, and so on. If all States
were allowed to set their own vehicle-emission standards, that would “defeat the congressional purpose” in
20
the Act of “preventing obstruction to interstate commerce.” Id. at 1083 (quoting Allway, 340 F. Supp. at
1124).
Congress therefore authorized only the federal
government to regulate “the emission of any air pollutant from any class or classes of new motor vehicles or
new motor vehicle engines” that “cause, or contribute
to, air pollution which may reasonably be anticipated
to endanger public health or welfare.” 42 U.S.C.
7521(a)(1). The EPA’s authority under the Act extends to ensuring that vehicles remain in compliance
with federal emission standards for a vehicle’s “useful
life.” 42 U.S.C. 7521(a)(1). For example, the agency
requires manufacturers to satisfy “in-use verification
testing requirements.” 40 C.F.R. 86.1845-04. If the
testing shows that a class of vehicles does not conform
to federal emission requirements, the EPA can order
a recall. 42 U.S.C. 7541(c)(1). Similarly, manufacturers must report to the EPA any emission-related defects that affect 25 or more vehicles in a model year.
40 C.F.R. 85.1903(a). In all events, the focus is on ensuring that manufacturers’ fleets remain in compliance with federal emission regulations.
The Act prescribes only a very limited role for
state regulation that touches on individual vehicle
emissions. For example, the Act permits States to
have emission inspection programs as part of their vehicle registration requirements. See 42 U.S.C. 7511,
7511a, 7541, 7543. But the Act prohibits States from
requiring manufacturers to conduct those tests. See
42 U.S.C. 7541(h)(2). Further, the Act expressly bars
States and localities from attempting to “adopt” or
“enforce” any “standard” related to vehicle emissions.
42 U.S.C. 7543(a). Nowhere does the Act bestow upon
21
States or localities a broad authority to impose emission-related liability on manufacturers for their fleets.
Instead, the Act specifies the opposite.
The Act requires the EPA to make complicated decisions about when and how to regulate vehicle emissions. In that role, the EPA often must make decisions about the levels of emissions allowed, including
making tradeoffs between different emissions, and
balancing the effects on manufacturers and the public. See, e.g., 42 U.S.C. 7521(a)(1) (authorizing EPA to
use its “judgment” in regulating emissions); 42 U.S.C.
7521(a)(4)(B) (charging the EPA to balance several
factors when developing rules, including the extent to
which a device or system “increases, reduces, or eliminates emissions,” any “available methods for reducing or eliminating any risk to public health [or] welfare,” and the availability of alternative devices that
might better “conform to requirements”).
The United States reasons that States and localities can impose liability for emission violations because assessing penalties is different from enforcing
standards. See U.S. Br. at 18-19, Counties, supra, No.
20-994 (“Respondents’ claims for civil monetary penalties * * * do not seek to enforce standards relating to
the control of emissions”). But the Act makes clear
that the EPA’s exclusive role in regulating fleet-wide
vehicle emissions extends to setting appropriate penalties for any violations. For example, similar to how
the agency decides whether to regulate, the EPA must
balance several financial and environmental factors
when assessing penalties for violations of its emission
rules. See 42 U.S.C. 7524(c)(2). The EPA considers
all of the facts and draws upon its vast experience to
put in place rules and craft penalties that it believes
workable and beneficial to consumers and the public.
22
Congress entrusted to the EPA decisions about
both what standards to set and what penalties to seek.
Permitting state and local regulation of vehicle emissions would directly interfere with Congress’s decision
to give the EPA exclusive authority in this area. Some
state and local regulators no doubt would strike a different balance than the EPA did. That means that
even if States and localities were to adopt the very
same emission standards as the EPA, having multiple
regulatory entities – each making its own separate demand for compliance with attendant penalties – still
would disrupt the uniform nationwide system of emission regulation intended under the Act.
This case proves the point. As the dissenting justice explained below, the EPA “carefully crafted a
multibillion-dollar penalty that balanced a variety of
financial and environmental factors” under federal
law, and the Ohio Attorney General’s “decision to seek
an additional judgment that could total more than $1
trillion” was based simply on his “disagreement with
the penalty that the federal government carefully
crafted.” Pet. App. 18a (Donnelly, J., dissenting). So
in an “immediate sense,” this case shows the real conflict between state and federal law. Ibid.
23
CONCLUSION
The petition for a writ of certiorari should be
granted.
Respectfully submitted.
NICOLE A. SAHARSKY
Counsel of Record
ERIC A. WHITE
Mayer Brown LLP
1999 K Street, NW
Washington, DC 20006
(202) 263-3000
nsaharsky@mayerbrown.com
SEPTEMBER 2021
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.