Petition — General Motors Corp. v. Costle

Saree ceet. US|

FILE)

FEB 14 1980

JR., CLERK)

IN THE .

Supreme Court of the Gnited States

OCTOBER TERM, 1979

No. 6 9- Q- 1 26 2

GENERAL Motors CorPORATION, et al., Petitioners,

Vv.

DouGLtas M. Coste, Administrator of the Environmental

Protection Agency, ENVIRONMENTAL PROTECTION AGENCY, AND

STATE OF CALIFORNIA, Respondents.

Petition For A Writ Of Certiorari To The United States

Court Of Appeals For The District Of Columbia Circuit

Petitioners

General Motors Corporation

Chrysler Corporation

Motor and Equipment Manufacturers Association

Automobile Importers of America, Inc.

Automotive Service Industry Association, ef al.

Of Counsel: WILLIAM T. COLEMAN, JR.

Otis M. SMITH DONALD T. BLISS

General Counsel CARL R. SCHENKER, JR.

WILLIAM L. WEBER, JR. O’MELVENY & MYERS

MAYNARD L. TIMM 1800 M Street, N.W.

GENERAL MOTORS Suite 500 South

CORPORATION Washington, D.C. 20036

3044 West Grand Blvd. (202) 457-5300

Detroit, Michigan 48202 Counsel for General Motors

Corporation

Additional Counsel Listed on Inside Cover

Press oF BYRON S. ADAMS PRINTING. ING). WASHINGION, DLC

HirRA D. ANDERSON, JR.

MICHAEL W. GRICE

Office of the General Attorney

CHRYSLER CORPORATION

P.O. Box 1919

Detroit, Michigan 48121

(313) 956-2075

Counsel for Chrysler Corporation

MARK R. JOELSON

MARrcC L. FLEISCHAKER

ARENT, FOX, KINTNER,

PLOTKIN & KAHN

1815 H Street, N.W.

Washington, D.C. 20006

(202) 857-6053

Counsel for Motor and Equipment

Manufacturers Association

MILTON D. ANDREWS

DONALD M. SCHWENTKER

is A. ADELSON

Savent SHERMAN and LEVY

900 17th Street, N.W.

Washington, D.C. 20006

(202) 347-6007

Counsel for Automobile Importers

of America, Inc.

HAROLD T. HALFPENNY

JAMES F. FLANAGAN

HALFPENNY, HAHN &

ROCHE

111 West Washington Street

Chicago, Illinois 60602

(312) 782-1829 .

Counsel for Automotive ©

Service Industry Association,

et al.

TABLE OF CONTENTS

PAGE

pee Fe ili

So Te 2

ET 2

Pe os) 2

STATUTORY AND CONSTITUTIONAL PROVISIONS

es cs cov ca cee es 3

SIATEMert OF THECASE ....................... 4

ee 4

SE 5

REASONS FOR GRANTING THE WRIT ............. 13

I. BY ACQUIESCING IN THE ADMINISTRA-

TOR’S ‘‘MINISTERIAL’”? REVIEW, THE

COURT BELOW SUBVERTED JUDICIAL

PRECEDENT COMMANDING THAT THE

ADMINISTRATOR AFFIRMATIVELY PRO-

TECT NATIONAL POLICIES RECOGNIZED

es hag ES SSS Sa ee 15

Il. THE COURT BELOW ERRONEOUSLY UP-

HELD THE ADMINISTRATOR’S REFUSAL

TO CONSIDER THE EFFECT OF PROPOSED

WAIVERS ON SUCH STATUTORILY RELE-

VANT POLICIES AS ‘PUBLIC HEALTH

AND WELFARE,”’ AUTOMOBILE SAFETY,

Bo Ge yy 6. A 18

III. THE COURT BELOW ERRED BY ALLOW-

ING THE ADMINISTRATOR TO IGNORE

FIRST AMENDMENT RIGHTS AND BY UP-

HOLDING THE CONSTITUTIONALITY OF

THE REGULATIONS CONTRARY TO THIS

COURT’S MANDATE IN VIRGINIA STATE

ee 21

IV. THE COURT BELOW ADOPTED AN EXTRA-

ORDINARY AND EXCESSIVE STANDARD

OF DEFERENCE TO THE ADMINISTRA-

TOR’S STATUTORY INTERPRETATIONS... 24

ss tiitinhepecvepongsagen oie he, NA Pe tile ae ye ee 26

ii

TABLE I—MAINTENANCE REQUIREMENTS

GENERAL MOTORS WOULD HAVE MADE IN

1980 ABSENT ARB REGULATIONS ........---. 28, 29

TABLE IiI—MAINTENANCE REQUIREMENTS

ALLOWED BY ARB REGULATIONS ......-.---

30, 31

nl, Sere aners 4 =

TABLE OF AUTHORITIES

Cases Cited PAGES

Baltimore and O.R. Co. v. United States, 386 U.S. 372

UE ou era Wad RECESS Ee eRe VERA ane eh 25

Bates v. State Bar of Arizona, 433 U.S. 350 (1977)....... 23, 24

Bowman Transportation, Inc. v. Arkansas-Best Freight

SE ie asthe ee CROPS oc ci OSG Sack oh aed abes 18

Brennan v. Occupational Safety and Health Review Com-

mission, 492 F.2d 1027 (2d Cir. 1974) .............. 15

Calvert Cliffs’ Coordinating Committee v. AEC, 449 F.2d

Pe ee, MD, so hio'ce cc ncdiceeankanen 16, 25, 26

Carey v. Population Services International, 431 U.S. 678

DU a alas pre atl oer Se Oe 23

Central Hudson Gas & Electric Corp. v. Public Service

Commission, No. 79-565, prob. jur. noted, 100

ye Re cls b co bs ee Cae s Wien ees ak 22, 23

Citizens Committee to Save WEFM vy. FCC, 506 F.2d 246

Stes. SD wreaths keris Kh cols eee ew 15

Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S.

EE bcs vali oe sau Uw eens oad A a ea eciew-y ap 18

Consolidated Edison Co. v. Public Service Commission,

No. 79-134, prob. jur. noted, 100 S. Ct. 41

Se chi ic Van russ an Pew od ee eke Oks 22, 23

Eisen v. Eastman, 421 F.2d 560 (2d Cir. 1969), cert.

es Sa Oe EUPO: f a cs ccs teccencasedseas 22

Engineers Public Service Co. v. SEC, 138 F.2d 936 (D.C.

Cir. 1943), vacated on other grounds, 332 U.S. 788

SES deta dla 4 oho RAAT RES FR RMR COMA OR es 21

Essex Chemical Corp. v. Ruckelshaus, 486 F.2d 427 (D.C.

Cir. 1973), cert. denied, 416 U.S. 969 (1974). ........ 18

Federal Maritime Commission vy. Aktiebolaget Svenska

Amerika Linien, 390 U.S. 238 (1968). ..........005. 20

iv

Ford Motor Company v. EPA, No. 78-1791 (D.C. Cir.

August 17, 1979)... cnc cc cccc cece ce sce nnseens 12

Greene County Planning Board v. FPC, 455 F.2d 412 (2d

Cir.), cert. denied, 409 U.S. 847 (1972) .........455: 15

Gulf State Utilities Co. v. FPC, 411 U.S. 747 (1973) ...... 20

International Harvester Co. v. Ruckelshaus, 478 F.2d 615

(D.C. Ct. UTD). ico nsdn 5 cacene Galen ed eee eke’ 18

Kennecott Copper Corp. v. EPA, 462 F.2d 846 (D.C. Cir.

BGTAD 5. vo vase cad dicen ens sdb eee renee ees 17

Linmark Associates, Inc. v. Township of Willingboro, 431

U.S. OS CIGTTD «oo. cnc ncds cp cceueeuee es cee 23, 24

Miami Herald Publishing Company v. Tornillo, 418 U.S.

261 C2OPAD gc widens ene ica cua y een cenewep eneeeen 22, 23

Midwest Video Corp. v. FCC, 571 F.2d 1025 (8th Cir.),

aff'd, 440 U.S. 689 (1978) .... cece cc cec cece sees 22

Moss v. CAB, 430 F.2d 891 (D.C. Cir. 1970) ............ 15

Motor and Equipment Manufacturers Association, Inc. v.

Costle, No. 78-1896 (D.C. Cir. Aug. 3, 1979) ....,. .passim

Office of Communication of the United Church of Christ

v. FCC, 425 F.2d 543 (D.C. Cir. 1969) ..........04- 15

Plano v. Baker, 504 F.2d 595 (2d Cir. 1974) ..........4.. 22

Richmond Power & Light v. FERC, 574 F.2d 610 (D.C.

Cir. 197BD. 0. ck acd nctunk cedekbeenen ee eneeieeees 20

SEC v. Wall Street Transcript Corp., 422 F.2d 1371 (2d

Cir.), cert. denied, 398 U.S. 958 (1970) ............. 21

South Terminal Corp. v. EPA, 504 F.2d 646 (Ist Cir. 1974) 18

Virginia State Board of Pharmacy v. Virginia Citizens |

Consumer Council, Inc., 425 U.S. 748 (1976) ....... 21, 22

23, 24

Volkswagenwerk Axtiengesellschaft v. Federal Maritime

Commission, 390 U.S. 261 (1968) ..........50 eee 24

Zuber v. Allen, 396 U.S. 168 (1969) ........ ccc ceceeeees 26

0 wheats peel

(a A a. wc

v.

FEDERAL STATUTES CITED

Clean Air Act, 42 U.S.C. § 7401 et seq..........0 0c cece 14

RS oe ae 14

CUM FEES os nas cs dvdvdceecccue 5, 6, 8, 19

pS Nl eo > a cas 5

PM so kc ody ouside vkeaub 5

oF of 43) oe i.” | Se 3, 5, 6, 7, 11, 14, 19, 21

DP © PND es vi nen ccveceecnnuccedes 3,4

8, 9, 12, 13, 14, 16, 17, 19, 20, 25

UN II 6s wisi gin tac uedceesdcacead 19, 20

PMN PUP soos cece cucwccacccceunes 2, 11

ee aS A Be: Se a 19

re ee oe eae ec non dec 2

Public Law No. 90-148, § 22, 81 Stat. 501 (1967),

renumbered and amended, Pub. L. No. 91-604,

a

CONGRESSIONAL MATERIALS CITED

H.R. Rep. No. 728, 90th Cong., Ist Sess. ENERO D 16

eee Ty) Ss 26

Sao ©. MOC. SIZITN-T2 (ISTO)... oo ccc ccc 26

MISCELLANEOUS Sources CITED

eer passim

i a ee 12

ABA, Commission on Law and the Economy, Federal

Regulation: Roads to Reform (Dec. Re 20

K. Davis, Administrative Law Treatise SE bo ais ocak 3 « 24

|

IN THE

Supreme Court of the GQnited States

OCTOBER TERM, 1979

Ps Weeds betas

GENERAL Motors CorRPORATION, et al., Petitioners,

Vv.

DouGLas M. CosTLe, Administrator of the Environmental

Protection Agency, ENVIRONMENTAL PROTECTION AGENCY, AND

STATE OF CALIFORNIA, Respondents.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

DISTRICT OF COLUMBIA CIRCUIT

Petitioners respectfully pray that a writ of certiorari issue

to review the judgment and opinion of the United States Court

of Appeals for the District of Columbia Circuit entered below in

the consolidated proceedings on the petitions for review. '

' The petitioners, and the respective docket numbers of their peti-

tions below, are: General Motors Corporation (CA No. 78-1944);

Chrysler Corporation (CA No. 78-1943); Motor and Equipment

Manufacturers Association (CA No. 78-1896); Automobile Importers

of America, Inc. (intervenor below); and Automotive Service Industry

Association, along with Tomadur Engine Company, Central

Automotive Wholesale Company, Benson & Zimmerman Co., Inc.,

Safeguard Automotive Corp., Del Wright D/B/A Palisades Garage,

and John Heyler D/B/A Heyler Automotive (CA No. 78-1901).

2

OPINIONS BELOW

The decision of the Administrator of the Environmental

Protection Agency (‘‘EPA’’) appears at 43 Fed. Reg. 32182

(1978). A subsequent modifying letter is not reported. The opin-

ion of the Court of Appeals is not yet reported. Copies of these

documents appear in the Appendix hereto. App. at 73a, 86a, la.

JURISDICTION

The jurisdiction of the Court of Appeals was invoked pur-

suant to Section 307 of the Clean Air Act, 42 U.S.C. § 7607.

The judgment of the Court of Appeals was entered on August 3,

1979. A timely joint petition for rehearing and suggestion for re-

hearing en banc was denied on September 17, 1979. On Decem-

ber 14, 1979, Mr. Chief Justice Burger granted petitioners’ time-

ly joint application to extend the time to file a petition for a writ

of certiorari until February 14, 1980. Copies of the referenced

orders appear in the Appendix hereto. App. at 70a, 71a, 72a.

The jurisdiction of this Court is invoked under 28 U.S.C.

§ 1254(1).

QUESTIONS PRESENTED

The Clean Air Act (‘‘Act’’) expressly preempts state regula-

tions governing air pollutants from new motor vehicles. But

with respect to the State of California, Congress established a

scheme under which California may apply to the EPA Adminis-

trator to conduct a hearing and thereafter to waive the Act’s

preemption for California regulations. Considering itself bound

to adopt EPA’s construction of the Act, the court below held,

however, that EPA’s waiver review is to be “‘largely minister-

ial’? and that EPA may not consider the impact of a waiver of

preemption on, inter alia, air quality, automobile safety, or con-

stitutional rights. Therefore the questions presented are:

1. Did the court below err by expressly endorsing the EPA

Administrator’s role in a waiver proceeding as ‘‘largely minis:

terial,”’ thereby allowing the Administrator to ‘‘rubber stamp”’

Ww aN Ne ets Pr tes

3

this and other waiver applications, contrary to the Act and the

fundamental principles of administrative law requiring agencies

affirmatively to protect federal interests confided to their care

by Congress?

2. Did the court below err by sanctioning the EPA Admin-

istrator’s refusal to consider whether the restrictions imposed by

California’s motor vehicle maintenance regulations will degrade

air quality, adversely affect the ‘‘public health and welfare,”’

compromise automobile safety, restrain competition, and un-

constitutionally restrict commercial free speech?

3. Did the court below err by concluding that the waiver

and California’s regulations do not violate free speech rights

even though the regulations severely restrict manufacturers’ dis-

semination of essential motor vehicle maintenance information

to the consumer?

4. Did the court below err by holding that petitioners

must show by ‘‘clear and convincing evidence’ that the EPA

Administrator’s statutory interpretations are not only erroneous

but also ‘‘unreasonable’’ ?

STATUTORY AND CONSTITUTIONAL PROVISIONS

INVOLVED

First and Fourteenth Amendments to the United States

Constitution, App. at 88a.

. Section 207(a), 42 U.S.C. § 7541(a), App. at 88a, which re-

quires manufacturers to warrant that emissions control systems

of new motor vehicles will be defect free for five years or 50,000

miles, whichever comes first.

Section 207(c), 42 U.S.C. § 7541(c), App. at 90a, which re-

quires manufacturers to provide ‘‘proper’’ maintenance instruc-

tions for the care of emissions control systems and authorizes

the Administrator to order the recall of vehicles that exceed

emissions standards although properly maintained and used.

Section 209(a), 42 U.S.C. § 7543(a), App. at 94a, which

preempts state regulation of emissions from new motor vehicles.

4

Section 209(b), 42 U.S.C. § 7543(b), App. at 94a, which de-

fines the circumstances under which the Administrator may

waive federal preemption for California regulations.

STATEMENT OF THE CASE

A. Nature of the Case

Petitioners represent a wide cross-section of the automobile

industry. The issues here, however, are of equal, if not greater,

importance to automobile purchasers, the citizens of California,

and the nation’s air quality. The Clean Air Act preempts state

regulations governing air pollutants from new motor vehicles in

Section 209(a). But in certain statutorily defined circumstances,

Section 209(b) requires the EPA Administrator to conduct a

hearing and empowers him thereafter to waive express federal

preemption for California’s regulations. Here the EPA Admin-

istrator waived federal preemption for California’s ‘in-use

maintenance regulations,’’ which prohibit manufacturers from

effectively communicating with their customers about the main-

tenance essential for the proper operation of their automobiles.

This case marks the first judicial construction of the Ad-

ministrator’s responsibilities under Section 209(b). It raises im-

portant questions of statutory interpretation about Section

209(b)—particularly, whether the Administrator has an affirm-

ative obligation in waiver proceedings to protect and preserve

certain federal policies set forth in the Act. Also at issue is an

important constitutional question—whether the court below

wrongfully upheld the waiver for California’s regulations even

though they substantially interfere with automakers’ free speech

rights to inform customers about proper and lawful preventive

maintenance and with consumers’ interest in receiving such in-

formation in a useful and factual manner. Finally, the case

raises the fundamental issue whether the court below met its du-

ty to inquire independently into the meaning of Section 209(b)

when it held it must defer to EPA’s statutory construction un-

less private petitioners demonstrate by ‘“‘clear and convincing”’

evidence that the agency’s construction is ‘‘unreasonable.”’

RPE D A Asi cS oe Fle it WO hee Catete he We

B. Proceedings Below

Section 203 of the Act, 42 U.S.C. § 7522, provides that an

automaker may not sell a new vehicle unless it certifies and war-

rants that the vehicle model will comply with applicable emis-

sions control standards for five years or 50,000 miles, whichever

comes first. The manufacturer bases its certification on the re-

sults of ‘‘certification testing,’’ in which prototype vehicles are

operated almost continuously for 50,000 miles over a period of

approximately four months to determine whether a particular

engine family meets applicable emissions standards. See Act

§§ 202, 203, 206, 207, 42 U.S.C. §§ 7521, 7522, 7525, 7541. Toen-

hance the predictive value of certification testing, EPA and Cal-

ifornia have limited the amount of vehicle maintenance that

manufacturers may perform during such testing. In this case,

however, California has sought to transfer such certification

maintenance limitations willy-nilly into the entirely different

area of the in-use maintenance instructions that automakers

give to the millions of individual drivers who operate their cars

under countless uifferent conditions over the five-year period.

This regulatory escapade suppresses essential communications

between manufacturers and customers, threatens consumers’

safe, economical, and pollution-free enjoyment of their cars,

and is expected to increase tne warranty burden imposed on

manufacturers far beyond what Congress intended.

The purchaser of a new automobile receives from the

manufacturer an owner’s manual, in-use maintenance sched-

ules, or both. These documents specify the maintenance opera-

tions that the automaker believes necessary for safe operation of

the vehicle, emissions control, fuel economy, vehicle durabiiity,

and generally satisfactory vehicle performance. (J.A. 1287,

3312-16.)* Studies have shown that routine and proper mainten-

ance operations contribute substantially to clean air because

emissions from properly maintained vehicles are well below

both existing federal emissions standards and the more stringent

* References to ‘‘J.A.’’ are to the Joint A ix i

PM won ppendix in the Court of

|e Aiea

6

California emissions standards for which the Administrator has

granted waivers of federal preemption. (J.A. 102-03, 1024,

1027, 1799, 2863-64.) Congress recognized this fact in Section

207(cX3) of the Act, 42 U.S.C. § 7541(c)(3), which requires

manufacturers to furnish maintenance instructions for emis-

sions control components. In addition, consumers are

‘*responsible in the proper maintenance of such vehicle or en-

gine to replace and to maintain, at [their] expense at any service

establishment or facility of [their] choosing, such items as spark

plugs, points, condensers, and any other part, item, or device

related to emission control.’’ Act § 207(g), 42 U.S.C. § 7541(g).

Section 207 further provides that the consumer’s failure to per-

form such maintenance is a defense to the manufacturer’s liabil-

ity under statutory emissions warranties imposed by Section

207.'

California Regulatory Proceedings. Despite the congres-

sional mandate for in-use maintenance instructions, California

launched a broad attack on such instructions. On May 26, 1977,

California promulgated its initial in-use maintenance regula-

tions. These regulations provided that automakers’ mainten-

ance instructions could recommend to consumers no more than

nine discrete maintenance operations for the first 50,000 miles

of a car’s life. App. at 96a-99a. That list was developed for cer-

tification testing maintenance and then simply transposed to the

context of in-use maintenance on the basis of the ‘‘gut feeling’’

of a member of the staff of California’s Air Resources Board

(‘‘ARB’’), not based upon any evidence, that restrictions on the

number of in-use maintenance recommendations would im-

> Section 207(a) provides that manufacturers of new motor vehicles

must warrant that each vehicle is ‘‘free from defects in materials and

workmanship”’ and designed to meet applicable emissions standards.

This defect warranty extends for the vehicle’s ‘‘useful life,’’ defined

by Section 202(d), 42 U.S.C. § 7521(d), to be 5 years or 50,000 miles,

whichever comes first. In addition, Section 207(c)(1) requires

manufacturers to recall vehicles if the Administrator determines that

such vehicles do not comply with emissions standards even though

maintenance instructions have been followed.

prove emissions performance. The ARB staff reasoned that if

owners did not bring their vehicles in for maintenance, mechan-

ics could not deliberately tamper with, or accidentally malad-

just, emissions controls and thereby cause higher emissions lev-

els. (J.A. A99; see J.A. 104, 109, 2760-61.)

The nine maintenance operations originally permitted to be

recommended are shown graphically infra at 30-31. The main-

tenance that petitioner General Motors believes is necessary,

specifies in the other 49 states, and would otherwise have speci-

fied in California is shown graphically infra at 28-29. Califor-

nia’s regulations were the first incursion of state or federal regu-

lations into the field of in-use maintenance instructions. These

procrustean regulations severely limited the strategies that auto-

makers may pursue to meet emissions standards, for the regula-

tions disregard variations between different kinds of engine

families and emissions hardware, variations that dictate differ-

ent maintenance patterns. (J.A. 105, 108, 140, 1284, 3420-21,

3430-31, 3468.) They also rearrange the balance that Congress

struck in Section 207 of the Act, increasing dramatically manu-

facturers’ liability exposure under the statutory warranties and

substantially reducing the maintenance obligations of consum-

ers. See supra at 6 & n.3. Moreover, given the diversity of envi-

ronmental conditions and driver habits encountered over 50,000

miles of usage and five years of life, manufacturers strongly

believed, on the basis of engineering and field experience, that

considerably more maintenance is necessary to ensure adequate

emissions control, safety, fuel economy, durability, and the

like. (J.A. 1300, 1303-05, 2890-91, 3008-13, 3312-20.)*

‘ For competitive reasons, automobile manufacturers have every in-

centive to reduce maintenance intervals io the minimum amount

possible and in fact have reduced scheduled maintenance substantially

over the past decade. (J.A. 2892-93, 3306-10.) Nonetheless,

automakers believed that the regulations did not allow them to specify

enough maintenance, especially since maintenance could be recom-

mended only on the basis of accumulated mileage, as opposed to

elapsed time. Petitioners presented evidence concerning the need to

make alternative maintenance recommendations based on ac-

cumulated mileage or elapsed time because real-life driving differs

8

Proceedings Before the Administrator. California applied

under Section 209(b) for a waiver of federal preemption. To

qualify for a waiver, California must first determine unequivo-

cally that its ‘‘State standards will be, in the aggregate, at least

as protective of public health and welfare as applicable Federal

standards.”’ (Emphasis added.)* To ensure that California prop-

erly discharges that responsibility, the Administrator must con-

duct a public hearing on every waiver request. He is to deny a

waiver if he finds that (1) California’s ‘‘will be .. . as protec-

tive’’ determination is arbitrary and capricious, (2) California

does not need the proposed standards to meet extraordinary

conditions, or (3) the state standards or accompanying enforce-

ment procedures are technologically infeasible, taking into con-

sideration the cost of compliance. See Act § 209(b), Subpara-

graphs (A)-(C).

The Administrator granted California’s waiver request, in

an opinion that eviscerated the statutory tests and transformed

the hearing process, set forth in the statute, into a hollow for-

mality. Because the lower court’s erroneous acquiescence in the

Administrator’s statutory interpretations is a central issue in

this case, those interpretations are set forth below:

(1) As the Administrator read Section 209(b), he has no

authority to require that California justify, or even explain, its

waiver request or to inquire into the record to ensure that the

policies of the Act are protected.* In his view, his sole obligation

from certification testing. (J.A. 1305, 3312-13.) That evidence was

never even addressed by California, EPA, or the reviewing court.

Manufacturer petitioners are left to wonder if the only adequate proof

of their contention would be to run a whole fleet of cars for five years

under widely diverse operating conditions. es

‘ The Act ordinarily requires far less categorical findings of fact.

See, e.g., § 202(aX 1), (b)(6)(A)(ii), 42 U.S.C. § 7521(a)(1), (b)(6)

(A)(ii).

¢ The Administrator stated, ‘‘[T]he manufacturer has the burden of

demonstrating the existence of grourcs upon which, under the criteria

enumerated in section 209(b), I must deny a waiver request.’ 43 Fed.

Reg. at 32184, App. at 80a (footnote omitted); see id. at 32182-83,

App. at 73a-74a, 76a.

9

under Section 209(b) is to adjudicate when private parties inter-

pose the very narrow range of objections that he deems relevant

in a Section 209(b) proceeding. Thus, as stated in the Govern-

ment’s brief to the court below, ‘“‘the Administrator must grant

a waiver for any unopposed request... ,’’ regardless of the

state of the record or the consequences for air quality and other

national interests protected by the Act. EPA Br. at 44. And

even when a private party objects that the regulations will ad-

versely affect the ‘‘public health and welfare,’’ the Administra-

tor persists in his passive, if not negative, role. He presumes the

validity of California’s application, even if unexplained and un-

supported by the record, and will deny a waiver only if opposing

private parties demonstrate to him that ‘‘clear and compelling”’

grounds exist on which the waiver should be denied. 43 Fed.

Reg. at 32183, App. at 76a. Moreover, because of his excessive-

ly narrow construction of the statutory tests, see infra para-

graphs (2)-(4), he will ignore altogether much of the evidence

presented by such parties, thereby making it impossible for op-

ponents to make the showing he requires of them.

(2) Even though private parties introduced evidence that

California’s regulations adversely affect air quality (J.A.

1281-82, 1803-06, 3312-13, 3413), the Administrator dismissed

such evidence as ‘‘beyond [his] narrow scope of review’’ under

Section 209(b)(1)(A)’s ‘‘arbitrary and capricious’’ test. 43 Fed.

Reg. at 32184 & n.41, App. at 81a-82a. In so doing, the Ad-

ministrator did not explain how he can perform his statutory

duty to evalutate the reasonableness of California’s ‘‘will be

. . . aS protective’ determination without considering the effect

of the underlying regulations on air quality.

(3) The Administrator refused altogether to consider,

under Section 209(b)(1)(B), whether California ‘‘needed”’ its in-

use maintenance regulations ‘‘to meet compelling and extraor-

dinary conditions’’ in the state, despite the evidence that the re-

strictions would degrade air quality. He said that regardless of

the potential effect on air quality, the Subparagraph (B) ‘‘need’’

test is inapplicable to ‘‘accompanying enforcement proce-

dures,’’ which he defined, without any Statutory basis, to in-

10

clude all regulations other than numerical emissions standards

(e.g., 3.4 grams of carbon monoxide per mile). /d. at 32182,

App. at 74a.’

(4) The Administrator refused to consider evidence per-

taining to the effect of the in-use maintenance regulations on

other ‘‘public health and welfare’? concerns which the Act

would require the Administrator to consider in promulgating

federal regulations (including automobile safety, fuel efficiency,

cost to the consumer, and preservation of competition in the au-

tomotive industry). Similarly, he dismissed, as beyond the scope

of his authority, petitioners’ constitutional contentions that

California’s regulations violated manufacturers’ and consum-

ers’ First Amendment interests and denied manufacturers a fed-

erally-prescribed defense against warranty claims. /d. at

32184-85, App. at 82a, 83a-84a.

The Administrator’s opinion is thus a litany of unfounded

statutory interpretations that allow him to avoid any indepen-

dent search of the record and prevent him from even considering

material evidence and legal concerns presenied by petitioners.

’ The court below sustained the statutory revisionism inherent in the

Administrator’s holding that when a regulation other than a

numerical standard is proposed for waiver, he may consider only two

questions: (1) whether the enforcement procedure is so lax that it

undermines the validity of the ‘‘will be. . .as protective’ determina-

tion for California’s numerical standards, and (2) whether the en-

forcement procedures are technologically feasible. He thus applies on-

ly the Subparagraph (C) test and a modified version of the Sub-

paragraph (A) test to any regulation categorized as an ‘*accompanying

enforcement procedure.’’ This formulation allows him to ignore the

need for such ‘‘enforcement procedures’ under Subparagraph (B)

and to ignore the direct impact of such ‘‘enforcement procedures’’ on

air quality under Subparagraph (A). For all practical purposes these

holdings of the court will supplant the express statutory tests of Sec-

tion 209(b) in future waiver proceedings because California has

established, and the Administrator has waived, numerical standards

applicable through 1985. For the foreseeable future, as here,

regulatory efforts will be to supplement those numerical standards

with further regulations.

1]

Amendment of the Regulations. Pursuant to Section 307 of

the Act, 42 U.S.C. § 7607, petitioners then sought judicial re-

view of the Administrator’s action.* But after petitioners filed

their opening brief, California, in a last ditch effort to save its

scheme, sua sponte adopted emergency amendments to the in-

use maintenance regulations. Those amendments continue to re-

strict manufacturers from effectively communicating what

maintenance is required for proper operation of the vehicle and

therefore is an appropriate prerequisite to warranty obligations

under Section 207(a). While the amended regulations provide

that manufacturers may ‘‘recommend’’ additional mainten-

ance, automakers may ‘‘require’’ performance of only the origi-

nal list of nine discrete maintenance operations. (J.A. A112.)

And only “‘required’’ maintenance may be made a prerequisite

to the manufacturers’ obligation to honor statutory warranties

for emissions parts. (J.A. Al117-18.) This hastily contrived dis-

tinction between ‘‘required’’ and ‘‘recommended’’ maintenance

instructions, unprecedented in industry custom or government

regulations, can easily confuse car owners and prevents auto-

makers from effectively disseminating information protected by

the First Amendment. It also destroys completely the initial ra-

tionale underlying California’s decision—that restrictions on re-

commended maintenance would reduce opportunities for tam-

pering and improper maintenance. See supra at 7. California

sought to rationalize this contradiction by contending that con-

sumers will ignore mere ‘‘recommendations.”’ (J.A. A119.)

Moreover, the amendments make it crystal clear that California

has set out to readjust the congressionally mandated balance be-

tween maintenance instructions and warranty requirements.’

* Petitioner Automobile Importers of America, Inc. was allowed to

intervene in support of the other automotive industry petitioners

below. Respondent State of California was allowed to intervene in

support of the federal respondents below.

* As numerical emissions standards have become more stringent

over the years, new and more sophisticated emissions hardware has

been developed. Common sense suggests that the need for preventive

maintenance increases as technology becomes more sophisticated.

12

California’s abrupt administrative flip-flop exposes the

shallowness and fickleness of its entire regulatory approach.

This is precisely the kind of ill-considered state action that Con-

gress sought to guard against by providing for EPA review of

California waiver requests. But despite these new alarm signals,

EPA simply ruled by letter that the amended regulations ‘‘fall

within the scope’’ of the original waiver. App. at 86a.

Decision of the Court Below. The central theme of peti-

tioners’ case in the court below was that the Administrator abdi-

cated his statutory responsibilities through erroneous construc-

tions of Section 209(b). However, starting from the premise that

the Administrator’s statutory interpretations must be upheld

unless there is ‘‘clear and convincing evidence’’ that they are

‘‘unreasonable,”’ slip op., App. at 17a, the court acquiesced in

each of the Administrator’s erroneous interpretations.

First, the court agreed, the Administrator’s review is to be

‘‘largely ministerial,’ and California’s waiver applications ‘‘are

presumed to satisfy the waiver requirements and . . . the bur-

den of proving otherwise is on whoever attacks them.’’ /d.,

App. at 49a, 55a n.56. In a companion case the court below

stated that the Administrator’s Section 209(b) review is to be

‘‘cursory.’’ Ford Motor Co. v. EPA, No. 78-1791, at 21 (Aug.

17, 1979). Second, the court confirmed, EPA is prohibited from

even considering the actual effect of the regulations on air qual-

ity, even though the court candidly acknowledged that the regu-

lations might adversely affect air quality. Slip op., App. at

56a-58a. Third, the court concurred, the Administrator must ig-

(J.A. 1284, 3420-21, 3430-31, 3468.) Yet California asks manufac-

turers simultaneously to reduce maintenance requirements and to

develop—and warrant—more sophisticated technology. At present

that warranty extends for 5 years or 50,000 miles. See supra at note a

But in a recent rulemaking EPA elongated the ‘‘useful life’’ over

which automakers must warrant the emissions performance of heavy-

duty engines. See 45 Fed. Reg. 4136, 4139-40 (1980). Manufacturers

must now fear that California may elongate the ‘‘useful life’’ defini-

tion for passenger cars, thereby further complicating the problem of

improving performance while reducing maintenance.

13

nore altogether the Section 209(b)(1)(B) test concerning Califor-

nia’s ‘‘need’’ for in-use maintenance regulations. /d., App. at

29a-35a. Fourth, the court agreed, Section 209(b) does not per-

mit consideration of federal policies other than pollution con-

trol even though such policies (e.g., competition) are embraced

in the Act and would be germane to the Administrator’s own

rulemaking proceedings. /Jd., App. at 38a-48a. Similarly, the

court agreed that the Administrator ‘‘operates in a narrowly cir-

cumscribed proceeding requiring no broad policy judgments on

constitutionally sensitive matters.’’ Jd., App. at 36a. Moreover,

the court summarily dismissed petitioners’ constitutional con-

tentions with the observation that the regulations were rational-

ly related to a legitimate interest of the state. /d., App. at

63a-6Sa.

REASONS FOR GRANTING THE WRIT

The court below acceded to the Administrator’s abdication

of his statutory and constitutional responsibilities in Section

209(b) proceedings, rather than taking a hard and independent

look at that abdication in the context of the policies intended to

be protected by the Act. The court further upheld the waiver

despite the infringement of the free speech rights of automakers

and customers. The review of this Court is needed to overturn

the lower court’s undue deference to the Administrator’s inter-

pretations and its contravention of constitutional principles, to

interpret properly Section 209(b), and to direct the conduct of

further proceedings in conformity with the Act.

The case primarily involves the proper Statutory interpreta-

tion of a novel experiment in federal preemption. If Congress

had completely trusted California’s judgment in promulgating

its own emissions regulations, it simply would have exempted

California from the preemptive effect of Section 209(a). Instead

Congress set up an elaborate mechanism for EPA review. Con-

trary to established precedent on administrative proceedings,

the court below has allowed the Administrator to act as a virtual

bystander in a waiver proceeding, rather than requiring him to

act as an administrative officer who must painstakingly assess

14

evidence and dig into the facts to determine whether congres-

sional and constitutional policies are being advanced. The Ad-

ministrator did not embark on such an inquiry because he be-

lieved he lacked the power under the Act to do so. Thus, the er-

roneous itramework for Section 209(b) proceedings tolerated by

the court below has fundamentally distorted the Administra-

tor’s waiver proceedings. Review by this Court is required to es-

tablish the Administrator’s obligation under Section 209(b) to

examine the record, to consider relevant evidence, and to make

a meaningful inquiry into the effect of California’s actions on

air quality and other relevant federal statutory and constitution-

al policies.

The seeds for the lower court’s errors of statutory interpre-

tation were sown by the court’s completely uncritical deference

to the Administrator’s untenable statutory interpretations. The

lower court’s abject deference to the Administrator’s abdication

of statutory responsibility is fundamentally contrary to princi-

ples previously announced by this Court. But the error of the

court below underscores the need for this Court to clarify the

law in this area of delicate interface between Congress, agencies,

and the courts. This Court’s review is also required to clarify the

application of free speech principles to communications be-

tween automakers and their customers. Those communications

are vital to consumers, are recognized by Congress in Section

207(c)(3) as essential to the policies of the Act, and are an inte-

gral aid to automakers in discharging their duty to certify and

warrant that cars will meet emissions standards for five years or

50,000 miles. In fact, Congress has made such communications

an essential part of manufacturers’ statutory obligations by pro-

viding that an owner’s failure to perform specified maintenance

is a defense to an automaker’s warranty and recall liability.

Left unchanged, the opinion of the court below will have

serious implications for constitutional policies and the policies

of the Act. California itself is a major market for new motor ve-

hicles. Moreover, Section 177 of the Act, 42 U.S.C. § 7507, as

amended in 1977, allows any other state that has not yet at-

tained compliance with national air quality standards to ‘‘adopt

15

and enforce,’’ without further federal review, California stand-

ards which have been waived by the Administrator. Thus, wai-

ver Proceedings for California regulations have the potential

significantly to effect national ambient air quality and other im-

portant national interests, among which are free speech, auto-

mobile safety, energy conservation, the economic interests of in-

dividual consumers, and the continued economic viability of the

automobile industry—including both manufacturers and sup-

pliers of parts and services (the ‘‘aftermarket’’).

I. BY ACQUIESCING IN THE ADMINISTRATOR’S

“MINISTERIAL” REVIEW, THE COURT BELOW

SUBVERTED JUDICIAL PRECEDENT COM-

MANDING THAT THE ADMINISTRATOR AF-

FIRMATIVELY PROTECT NATIONAL POLICIES

RECOGNIZED BY THE ACT.

The court below tolerated fundamentally distorted waiver

proceedings. It agreed with the Administrator that his review is

to be “largely ministerial,’’ so that he must grant unopposed

waivers and, in any event, may “‘sit back, ‘like an umpire, and

[merely] resolve adversary contentions,’’’ the ventilation of

which depends solely ‘‘‘upon the assiduousness’ of private par-

ties.’’ Slip. op., App. at 55a n.56. To reach such conclusions,

the court below disregarded the language of the Act, as well as

its own precedents and those of other courts forbidding agencies

to act like ‘‘umpires’’ and rely solely upon the ‘‘assiduousness’’

of private parties.'°

By requiring a hearing and commanding that waivers be de-

nied in statutorily defined circumstances, Congress has charged

'* See Citizens Committee to Save WEFM v. FCC, 506 F

262 n. 21 (D.C. Cir. 1974); Brennan v. Occupational Safety Ppt

Review Commission, 492 F.2d 1027, 1032 (2d Cir. 1974); Greene

County Planning Board v. FPC, 455 F.2d 412, 420 (2d Cir.),cert

denied, 409 U.S. 847 (1972); Moss v. CAB, 430 F.2d 891, 893, 900

(D.C. Cir. 1970); Office of Communication of the United Church of

Christ v. FCC, 425 F.2d 543, 546-48 (D.C. Cir. 1969).

16

the Administrator to represent and protect certain national in-

terests. In such contexts, the courts have always held that ad-

ministrative processes are designed to vindicate public policy,

not simply to adjudicate among adversaries, and that agencies

cannot leave to private parties the initiative to protect public

policy. See the cases cited in the preceding footnote. Until the

holding below, such a rule was thought to be imperative because

there is no guarantee that some private party will always have

the incentive, the knowledge, and the economic and other re-

sources to intervene and show the adverse effects of a proposed

action on the public policies intended to be protected by an

agency. Calvert Cliffs’ Coordinating Committee v. AEC, 449

F.2d 1109, 1119 (D.C. Cir. 1971). Fully aware of the need for a

public guardian, Congress required review by the Administrator

but nowhere assigned a role to private opponents of waiver re-

quests, much less placed upon them the sole responsibility to

police California’s waiver requests.''

The most striking instance of the Administrator’s pervasive

abdication of responsibility, and of the court’s sweeping toler-

ance thereof, involves the inexplicable conclusion that the Ad-

ministrator need not and cannot consider what effect regula-

tions proposed for waiver will have on air quality. See supra at

9-10, 12-13. When waiver is opposed by a private party under

Section 209(b)(1)(A), the court below held, the Administrator is

to consider only whether California’s ‘‘determination’’ con-

cerning air quality was ‘‘arbitrary and capricious,’’ without

considering the actual effect of the regulations themselves on air

quality. See supra at 9,12. Under Section 209(b)(1)(B), the court

insists, it is not relevant whether a regulation is needed to bene-

fit air quality unless that regulation is a numerical emissions

standard, as opposed to an ‘‘accompznying enforcement proce-

dure.’ See supra at 9-10, 12-13. Yet how can the Administrator

'' The most sal‘ent legislative history on this question appears in the

House Report accompanying enactment of the Administrator’s waiver

authority. It reads, simply: ‘‘{Under Section 209(b) t]he burden would

be on the Secretary [of HEW, now the Administrator] to show why

California. . .Shouid not be allowed to go beyond the Federal limita-

tions in adopting and enforcing its own standards.” H.R. Rep. No.

728, 90th Cong., Ist Sess. 96 (1967) (emphasis added).

17

evaluate California’s ‘‘determination’’ without a probing in-

quiry into the real-world effect of the regulations? How can the

Administrator conclude or a court agree that Congress intended

waiver to be granted for regulations that will adversely affect air

quality simply because those regulations are unopposed or are

conveniently pigeonholed as ‘‘accompanying enforcement pro-

cedures’’?

The lower court’s tolerance for the Administrator’s lack of

diligence was especially egregious here because petitioners of-

fered evidence that California’s regulations would adversely af-

fect air quality. See supra at 9. In fact, EPA conceded that

there was evidence of adverse effects on air quality. EPA Br. at

54. Even California admitted that it could not estimate any po-

tential beneficial effect on air quality from the regulations

alone. (J.A. 144-45.)'? And the couri below conceded that

'2 The Administrator, of course, never questioned whether Califor-

nia had adequately disclosed the basis for its determination, Ken-

necott Copper Corp. v. EPA, 462 F.2d 846, 849 (D.C. Cir. 1972),

even though California’s ‘‘will be. . .as protective’ determination

was made many months after it adopted the in-use maintenance

regulations and on a record containing no evidence on the issue.

Prior to August 1977, Section 209(b) imposed no factfinding duty

on California comparable to its present obligation to make ar un-

equivocal ‘‘will be. . .as protective’’ determination. California’s in-

use maintenance regulations were adopted under that version of Sec-

tion 209(b), when all factfinding resided with the Administrator. See

Pub. L. No. 90-148, § 22, 81 Stat. 501 (1967), renumbered and

amended, Pub. L. No. 91-604, §§ 8(a), 11(a)(2)(A), 15(c)(2), 84 Stat.

1694, 1705, 1713 (1970). In August 1977, while this waiver application

was pending, Congress amended Section 209(b), delegating to Califor-

nia the responsibility to determine that its regulations will be as pro-

tective of the ‘‘public health and welfare’’ as applicable federal regula-

tions, subject to the Administrator’s review. Because the 1977 amend-

ments applied to pending waiver proceedings, the ARB passed a pro

forma, omnibus resolution on September 30, 1977, purporting to

make the required determination for all regulations pending waiver.

(J.A. 276-80.) However, the ‘‘will be. . .as protective’’ determination

for the in-use maintenance regulations was not supported by evidence

or analysis. Nonetheless, neither the Administrator nor the court

below expressed any interest in whether California had in fact

discharged its specific responsibility under the Act or had simply gone

through the motions.

18

**[t]here is certainly room: for disagreement about the potential

benefits of the in-use maintenance regulations.’’ Slip. op., App.

at 57a. Petitioners are not the federal guardian of air quality,

commissioned, dedicated, and equipped to understand the

sometimes ellusive effects of emissions regulations on air qual-

ity—the Administrator is. Had the Administrator himself prob-

ed the record after being alerted to potential problems, he might

have found even more such evidence. The lower court’s toler-

ance of the Administrator’s refusal to even consider such evi-

dence was in stark conflict with this Court’s command in Citi-

zens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416

(1971), directing agencies to investigate all relevant factors.

Likewise, his failure, with the court’s acquiescence, to search

the record for any rational basis to support California’s deter-

mination was contrary to this Court’s holding in Bowman

Transportation, Inc. v. Arkansas-Best Freight System, 419 U.S.

281, 285 (1974), directing agencies and reviewing courts to

probe the facts thoroughly to determine whether there is any ra-

tional connection to the decision made. '°

Il. THE COURT BELOW ERRONEOUSLY UPHELD

THE ADMINISTRATOR’S REFUSAL TO CON-

SIDER THE EFFECT OF PROPOSED WAIVERS

ON SUCH STATUTORILY RELEVANT POLICIES

AS ‘“‘PUBLIC HEALTH AND WELFARE,”’

AUTOMOBILE SAFETY, AND COMPETITION.

The court below not only sanctioned the Administrator’s

indifferent attitude toward the protection of air quality, it also

acquiesced in the Administrator’s refusal to consider the impact

of California’s regulations on other national values, including

'* The Administrator and the court below thus conspired in creating

a process that runs afoul of the Act’s long recognized requirements for

procedural integrity and reasoned decisionmaking. See, e.g., South

Terminal Corp. v. EPA, 504 F.2d 646 (Ist Cir. 1974); Essex Chemical

Corp. v. Ruckelshaus, 486 F.2d 427 (D.C. Cir. 1973), cert. denied,

416 U.S. 969 (1974); International Harvester Co. v. Ruckelshaus, 478

F.2d 615 (D.C. Cir. 1973).

19

automobile safety, fuc: economy, and the economic welfare of

various segments of the automotive industry, the protection and

enhancement of which are required by the Act. See, e.g., §§

202(a)(2), (4), 207(c)(3), 317(a), (c), 42 U.S.C. §§ 7521(a){2),

(4), 7541(c)(3), 7617(a), (c).'* The court below thus condoned a

narrow categorical approach to regulatory decisionmaking,

contrary to Section 209(b), the policies of the Act, and judicial

precedent.

Congress has required EPA to take a broad view of regula-

tory impacts when it regulates new motor vehicle emissions in

~ the 49 states other than California. See the authorities just cited.

And Section 209(b) shows that Congress intended California to

do the same, subject to EPA review. California is to make, and

the Administrator is to review, a determination that its stand-

ards ‘‘will be ... as protective’ as federal standards of the

‘*public health and welfare.’’ The latter is defined to include, in

part, ‘‘damage to and deterioration of property, .. . hazards

to transportation, . . .[and] effects on economic values.” Act §

302(h), 42 U.S.C. § 7602(h). Section 209(b) thus fully autho-

rizes—indeed, directs—the Administrator to inquire into the ef-

fects of the proposed waiver on national values other than air

quality embraced within the Act.

The court below acquiesced in the Administrator’s conten-

tion that the phrase ‘‘public health and welfare’? embraces only

'* Section 202(a)(4) requires, inter alia, that emissions standards be

consistent with automotive safety. Section 207(c)(3) requires that the

statutorily required maintenance instructions leave intact the competi-

tion between manufacturers and the aftermarket to provide goods and

services. Sections 202(a)(2) and 317(a), (c) require that EPA consider,

inter alia, the cost of complying with a regulation and the effects of a

regulation on consumer costs and energy use. The court below, noting

that Section 209 also evidences the strong congressional interest in the

economic welfare of the automobile industry, found that Congress

had preempted state emissions regulations to prevent ‘‘the spectre of

an anarchic patchwork of federal and state regulatory programs, a

prospect which threatened to create nightmares for the manufac-

turers.’ Slip. op., App. at 24a (footnote omitted).

20

those aspects of the public interest directly affected by air pollu-

tion (e.g., health), not public interests adversely affected by reg-

ulation of pollution (e.g., competition in the automobile indus-

try). Slip op., App. at 38a-48a; 43 Fed. Reg. at 32184, App. at

82a; EPA Br. at 74-79. But at this crucial juncture of our his-

tory, neither an administrator nor a court should lightly con-

clude that Congress intended an agency to pursue its special

mandate oblivious to the consequences for competing national

priorities. See ABA Commission on Law and the Economy,

Federal Regulation: Roads to Reform 68-91 (Dec. 1979). Such

rigid ‘‘tunnel vision’’ perverts congressional intent by destroy-

ing the flexibility and informed discretion that Congress seeks in

the administrative process. It is nowhere more dangerous than

in regulation of the automobile industry—where competing na-

tional goals of air quality, automobile safety, energy conserva-

tion, economic stability of the automobile industry, and preser-

vation of competition (both among manufacturers and between

manufacturers and the aftermarket) all claim a high priority.

Absent an explicit congressional prohibition, the court

below should have presumed some limited discretion to consider

other affected policies, see Richmond Power & Light v. FERC,

574 F.2d 610, 616 n.22 (D.C. Cir. 1978),'* even if Congress had

not explicitly provided such authority by incorporating the

**public health and welfare’ test in Section 209(b), by defining

that test broadly in Section 302(h), and by indicating its interest

in such policies in the statutory provisions cited above. The

'S This Court has specifically held that competitive considerations

are relevant to a broad range of administrative proceedings. See, e.g.,

Gulf State Utilities Co. v. FPC, 411 U.S. 747 (1973); Federal Maritime

Commission v. Aktiebolaget Svenska Amerika Linien, 390 U.S. 238

(1968). Here the aftermarket petitioners contended that the regula-

tions in question would reduce the business available to them because

more maintenance would be performed under warranty. The court

below, however, held that neither the Administrator nor it was re-

quired to consider these claims of anti-competitive impact in Section

209(b) proceedings, despite the court’s recognition of congressional

concern over this issue. Slip. op., App. at 47a.

21

court’s obsessively narrow decision seems particularly inappro-

priate when Congress is debating radical solutions to the severe

problem of costly, single-purpose regulations (e.g., one House

vetoes of agency regulations, a burden of proof on agencies to

demonstrate the lawfulness of agency action, etc.).

fil. THE COURT BELOW ERRED BY ALLOWING

THE ADMINISTRATOR TO IGNORE FIRST

AMENDMENT RIGHTS AND BY UPHOLDING

THE CONSTITUTIONALITY OF THE REGULA-

TIONS CONTRARY TO THIS COURT’S MAN-

DATE IN VIRGINIA STATE BOARD.

Petitioners contended at the Administrator’s hearing that

California’s regulations were illegal and thus could not be waiv-

ed by the Administrator because they restricted constitutionally

protected free speech by forbidding manufacturers from recom-

mending to the consumer concededly lawful maintenance.

Leaving emissions control aside, petitioners wanted to inform

customers that such maintenance was necessary for safety, fuel

economy, and overall satisfactory vehicle performance. See

supra at 5 - 7. Customers desire and depend upon such assis-

tance. In addition, Section 207(c)(3) requires that automakers

provide ‘‘proper’’ instructions for the in-use maintenance of

emissions control equipment. All these communication interests

of automakers and consumers are constitutionally protected.

See, e.g., Virginia State Board of Pharmacy v. Virginia Citizens

Consumer Council, Inc., 425 U.S. 748 (1976).

The court below nonetheless sustained the Administrator’s

refusal to consider constitutional contentions on the ground

that he *‘operates in a narrowly circumscribed proceeding.’’ See

supra at 13. Such precedent is mischievous; it also conflicts with

decisions in other circuits.'* In SEC v. Wall Street Transcript

'* The Administrator’s refusal to consider constitutional issues can-

not be defended on the ground that an administrative agency may not

hold unconstitutional the very act administered by it. See Engineers

Public Service Co. v. SEC, 138 F.2d 936, 953 (D.C. Cir. 1943), vacated

on other grounds, 332 U.S. 788 (1947). Here the petitioners did not

22

Corp., 422 F.2d 1371, 1380 (2d Cir.), cert. denied, 398 U.S. 958

(1970), for example, the court held that First Amendment values

must be recognized in SEC investigations. In Midwest Video

Corp. v. FCC, 571 F.2d 1025, 1042 (8th Cir.), aff’d, 440 U.S.

689 (1978), the court said that ‘‘[e]very regulatory agency

should have all constitutional ‘goals’ and restrictions on govern-

ment in mind in carrying out its duties... .’’ At a minimum,

the Administrator’s inquiry would have provided important ad-

ministrative guidance on the factual inquiries relevant to subse-

quent free speech analysis by the court. Compare Eisen v. East-

man, 421 F.2d 560 (2d Cir. 1969), cert. denied, 400 U.S. 841

(1970), with Plano v. Baker, 504 F.2d 595 (2d Cir. 1974).

The court below also erred in rejecting on the merits peti-

tioners’ First and Fourteenth Amendments challenge to waiver

of the regulations. The court stated that California’s regulations

are constitutional if they have ‘‘a reasonable basis in a legiti-

mate governmental policy.’ Slip. op., App. at 64a. Such a ra-

tionally-related test, however, was specifically rejected by this

Court in Virginia State Board, 425 U.S. at 768-69, where this

Court stated the correct test as: whether California needed its

regulations to accomplish a legitimate state interest. See id. at

769-70; Linmark Associates, Inc. v. Township of Willingboro,

431 U.S. 85, 95 (1977). Moreover, in two other cases this Court

has noted probable jurisdiction and will address the justification

constitutionally required when a state restricts communications

between industry and consumers despite the importance of such

communications in our free enterprise economy. See Consoli-

dated Edison Co. v. Public Service Commission, No. 79-134,

prob. jur. noted, 100 S.Ct. 41 (1979); Central Hudson Gas &

Electric Corp. v. Public Service Commission, No. 79-565, prob.

Jur. noted, 100 S.Ct. 446 (1979). If this Court does not immedi-

ately issue the writ of certiorari in order to reverse the court

below for its disregard of the standard set forth in Virginia State

challenge the constitutionality of the Act. They simply contended that

the unconstitutional regulations proposed by California were invalid

and thus did not come within the Administrator’s waiver powers.

23

Board, petitioners respectfully request that the Court hold this

case pending further clarification and elaboration of that stand-

ard in Consolidated Edison and Central Hudson.

If the court below had applied the proper test, it would

have concluded that the in-use maintenance regulations violate

constitutional standards. California has sought to suppress the

exchange of legitimate information, thus attempting to solve in-

directly a problem that it could have addressed directly without

any infringement of speech (e.g., by expanding anti-tampering

regulations or vehicle inspection programs). See Bates v. State

Bar of Arizona, 433 U.S. 350, 363-79 (1977); Carey v. Popula-

tion Services International, 431 U.S. 678, 700-02 (1977); Lin-

mark Associates, Inc., 431 U.S. at 96-97; Virginia State Board,

425 U.S. at 769-70. In order to give their customers all relevant

information, manufacturers must issue two types of mainten-

ance instructions—those that are ‘‘required’’ and those that are

merely ‘‘recommended.’’ That duality will undermine consumer

confidence in the manufacturers’ instructions by telling pur-

chasers that the state believes that the manufacturers are recom-

mending ‘‘unnecessary’’ maintenance. The regulations there-

fore penalize manufacturers’ attempts to communicate impor-

tant information, contrary to First Amendment principles. See

Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241, 256-58

(1974).

The waiver also will frustrate completely the effectiveness

of automakers’ communications because the regulations create

powerful economic and psychological incentives for the con-

sumer to disregard manufacturers’ ‘‘recommendations.’’ If a

consumer performs ‘‘recommended’’ preventive maintenance

to maximize the safe and efficient use of his car, he must pay for

it; if he neglects it, the manufacturer may be obliged to pay for

the maintenance under the statutory warranties. California it-

self has stated that consumers will ignore mere

**recommendations.”’ (J.A. A119.) Thus, contrary to the Con-

stitution, the regulations will cause manufacturers to lose good-

will and suffer higher warranty expenses, while depriving con-

sumers of valuable information that would enhance the useful-

24

ness of their automobile investment. See Bates, 433 U.S. at

363-64, Virginia State Board, 425 U.S. at 769-70."’

IV. THE COURT BELOW ADOPTED AN EXTRAOR-

DINARY AND EXCESSIVE STANDARD OF DE-

FERENCE TO THE ADMINISTRATOR'S STATU-

TORY INTERPRETATIONS.

This Court has long held that in interpreting statutes,

courts should not be oblivious to the statutory interpretations of

agencies charged with administering the statute in question. In

the myriad of relevant cases, there is no set formulation of the

proper degree of judicial deference because courts carefully tai-

lor their decisions to the particular question of statutory inter-

pretation. See, e.g., K. Davis, Administrative Law Treatise Ch.

30 (1958). The one enduring principle, however, is that courts

retain the final, and independent, responsibility to interpret the

Statute:

‘‘(T]he courts are the final authorities on issues of statutory

construction, FTC v. Colgate-Palmolive Co., 380 U.S. 374,

385, and ‘are not obliged to stand aside and rubber-stamp

their affirmance of administrative decisions that they deem

inconsistent with a statutory mandate or that frustrate the

congressional policy underlying a statute.’ NLRB v.

Brown, 380 U.S. 278, 291. ‘The deference owed to an ex-

pert tribunal cannot be allowed to slip into a judicial inertia

.... American Ship Building Co. v. NLRB, 380 U.S.

300, 318.’’ Volkswagenwerk Aktiengesellschaft v. Federal

Maritime Commission, 390 U.S. 261, 272 (1968).

The court below exceeded the limits on a court’s deference

by announcing a breathtakingly broad standard of deference

'? See also Miami Herald Publishing, 418 U.S. at 256 (footnote

omitted) (‘‘{[The] argument that the Florida statute does not amount

to a restriction of appellant’s right to speak because ‘the statute in

question here has not prevented the Miami Herald from saying

anything it wished’ begs the core question. Compelling editors or

publishers to publish that which ‘ ‘‘reason’’ tells them should not be

published’ is what is at issue in this case.’’)

25

wholly inappropriate to questions of the kind at issue: ‘‘For us

to conclude that the Administrator misconstrued section 209 pe-

titioners must show by clear and convincing evidence that his

construction [of the statutory language] is unreasonable. ’’ Slip

op., App. at 17a (emphasis added). The court thus elevated the

Administrator’s interpretations to a pedestal above the plain

meaning of the statutory language, congressional intent, and the

court’s independent interpretation and required petitioners to

show that such interpretations were not only erroneous, but also

**unreasonable.’’

Such abject judicial deference is never appropriate, for it is

completely inconsistent with administrative subjugation to the

congressional will. Under the court’s test, the construing agen-

cy, not the enacting Congress, determines what the law shall be.

And this standard was particularly inappropriate for the issues

in this case. Here the Administrator has avowedly sought to

play the narrowest role possible under Section 209(b), creating

an acute danger that Congress’ intent to protect a federal inter-

est will be frustrated. Moreover, the court’s deference to that

view conflicts with analogous cases where courts have refused to

defer to agency interpretations. In Calvert Cliffs’ Coordinating

Committee v. AEC, 449 F.2d 1109 (D.C. Cir. 1971), for exam-

ple, the AEC promulgated licensing rules under which it would

consider certain environmental questions only when raised by

private intervenors. The court below brushed aside the AEC’s

attempted statutory justifications:

‘*In recent years, the courts have become increasingly strict

in requiring that federa! agencies !ive up to their mandates

to consider the public interest. They have become increas-

ingly impatient with agencies which attempt to avoid or di-

lute their statutorily imposed role as protectors of public in-

terest values beyond the narrow concerns of industries be-

ing regulated.’’ Jd. at 1119 n.21.

In short, until the decision below, the law was that a court could

not defer to an agency’s self-effacing interpretations of its basic

authority when such interpretations threaten the public interest.

See Baltimore & O.R. Co. v. United States, 386 U.S. 372, 438

at

26

n.32 (1967) (Brennan, J., concurring); see also the cases cited

supra at note 10. The lower court’s disregard of that principle

becries the need for this Court’s review.'*

The lower court’s failure to follow its own pronouncement

in Calvert Cliffs’ is especially troublesome because of the un-

avoidable suspicion that the court deferred to the agency more

readily when business interests sought judicial review than when

‘‘public interest groups’’ sought review. Cf. the cases cited

supra at note 10. No principled basis exists to support so much

deference in the one case and so little in the other. As Mr. Jus-

tice Black once said: ‘‘It does not matter who sues, if the court

decides an issue of statutory interpretation that decision should

remain the same even if the litigants change.’’ Zuber v. Allen,

396 U.S. 168, 205 (1969) (dissenting).

CONCLUSION

For the foregoing reasons, a writ of certiorari should issue

to review the judgment and opinion of the United States Court

of Appeals for the District of Columbia Circuit.

Respectfully submitted,

Of Cougsel: WILLIAM T. COLEMAN, JR.

Otis M. SMITH DONALD T. BLISS

General Counsel CARL R. SCHENKER, JR.

WILLIAM L. WEBER, JR. O’MELVENY & MYERS

MAYNARD L. 11MM 1800 M Street, N.W.

GENERAL MOTORS Suite 500 South

CORPORATION Washington, D.C. 20036

3044 West Grand Blvd. (202) 457-5300

Detroit, Michigan 48202 Counsel for General Motors

Corporation

~

'* Recently the Senate adopted the Bumpers“Amendment, S. 111,

96th Cong. Ist Sess. (1979). See 125 Cong. Rec. $12171-72 (1979). It

forbids any judicial deference to agency statutory interpretations. The

Senate’s action is evidence of the growing national concern that deci-

sions such as that below are turning our legislative democracy into a

bureaucracy.

February 14, 1980

27

HiRA D. ANDERSON, JR.

MICHAEL W. GRICE

Office of the General Attorney

CHRYSLER CORPORATION

P.O. Box 1919

Detroit, Michigan 48121

(313) 956-2075

Counsel for Chrysler Corporation

MARK R. JOELSON

MARC L. FLEISCHAKER

ARENT, FOX, KINTNER,

PLOTKIN & KAHN

1815 H Street, N.W.

Washington, D.C. 20006

(202) 857-6053

Counsel for Motor and Equipment

Manufacturers Association

MILTON D. ANDREWS

DONALD M. SCHWENTKER

DENNIS A. ADELSON

RIVKIN SHERMAN and LEVY

900 17th Street, N.W.

Washington, D.C. 20006

(202) 347-6007

Counsel for Automobile Importers

of America, Inc.

HAROLD T. HALFPENNY

JAMES F. FLANAGAN

HALFPENNY, HAHN &

ROCHE

111 West Washington Street

Chicago, Illinois 60602

(312), 782-1829

Counsel for Automotive

Service Industry Association,

et al.

28

TABLE I—MAINTENANCE REQUIREMENTS GENERAL

MOTORS WOULD HAVE MADE IN 1980 ABSENT ARB

REGULATIONS

DESCRIPTION OF MAINTENANCE*

THERMOSTATICALLY CONTROLLED AIR CLEANER—Check opera-

tion

CARBURETOR CHOKE—Check operation and lubrication

ENGINE IDLE SPEED ADJUSTMENT

EFE SYSTEM—Check operation

CARBURETOR—Torque attaching bolts or nuts to manifold

VACUUM ADVANCE SYSTEM AND HOSES—Check operation

CARBURETOR FUEL INLET FILTER—Replace

PCV SYSTEM—See Explanation of Maintenance Schedule

SPARK PLUG AND IGNITION COIL WIRES—Inspect and clean

IDLE STOP OR SPEED UP SOLENOID OR DASHPOT—Check operation

SPARK PLUGS—Replace

ENGINE TIMING ADJUSTMENT AND DISTRIBUTOR CHECK

CARBURETOR VACUUM BREAK INSPECTION AND ADJUSTMENT

ECS SYSTEM—See Explanation of Maintenance Schedule

FUEL CAP, TANK AND LINES—Check condition

AIR CLEANER ELEMENT—Replace

DRIVE BELTS—Check condition and adjustment

IGNITION DWELL

EXHAUST GAS RECIRCULATION SYSTEM

IDLE MIXTURE

VALVE LASH ADJUSTMENT

CATALYST

NO MAINTENANCE

RECOMMENDED

Note: *Based on General Motors Emission

Control Maintenance Schedule I.

(J.A. 3320)

29

MAINTENANCE FREQUENCY

7,500 Miles 15,000 Miles 22,500 Miles 30,000 Miles 37,500 Miles 45,000 Miles

e e @

e e e

6 * e

e @ e

® e e

e e e

e e e

e e @

e e

e ®

e *

® c

e e

6

e

e

@ 6 e

0 10 20 30 40 50

Vehicle Miles (in thousands)

Mileage of Vehicles Examined

by ARB Staff (12-19K Miles)

April 1977

30

TABLE II—MAINTENANCE REQUIREMENTS

ALLOWED BY ARB REGULATIONS

DESCRIPTION OF MAINTENANCE

THERMOSTATICALLY CONTROLLED AIR CLEANER—Check opera-

tion

CARBURETOR CHOKE—Check operation and lubrication

ENGINE IDLE SPEED ADJUSTMENT

EFE SYSTEM—Check operation

CARBURETOR—Torque attaching bolts or nuts to manifold

VACUUM ADVANCE SYSTEM AND HOSES—Check operation

CARBURETOR FUEL INLET FILTER—Replace

PCV SYSTEM—See Explanation of Maintenance Schedule

SPARK PLUG AND IGNITION COIL WIRES—Inspect and clean

IDLE STOP OR SPEED UP SOLENOID OR DASHPOT—Check operation

SPARK PLUGS—Replace

ENGINE TIMING ADJUSTMENT AND DISTRIBUTOR CHECK

CARBURETOR VACUUM BREAK INSPECTION AND ADJUSTMENT

ECS SYSTEM—See Explanation of Maintenance Schedule

FUEL CAP, TANK AND LINES—Check condition

AIR CLEANER ELEMENT—Replace

DRIVE BELTS—Check condition and adjustment

IGNITION DWELL

EXHAUST GAS RECIRCULATION SYSTEM

IDLE MIXTURE

VALVE LASH ADJUSTMENT

CATALYST

31

MAINTENANCE FREQUENCY

5,000 Miles 15,000 Miles 22,500 Miles 30,000 Miles 37,500 Miles 45,000 Miles

®

@

e

e@

_

&

@

@ @

“te 10 20 30 40 50

Vehicle Miles (in thousands)