Opposition — General Motors Corp. v. Costle

[ MAY 5 1980

No. 79-1262 , j

SCHERTETK, JR, CLERN

Iu the Suprenv Court of the United States

OCTOBER TERM, 1979

GENERAL Motors CORPORATION, ET AL., PETITIONERS

Vv.

DouGLAS M. COSTLE, ADMINISTRATOR OF THE

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENT

IN OPPOSITION

WADE H. MCCREE, JR.

Solicitor General

JAMES W. MOORMAN

Assistant Attorney General

EDWARD J. SHAWAKER

DAVID E. DEARING

Attorneys

Department of Justice

Washington, D.C. 20530

MICHELE BEIGEL CORASH :

General Counsel

GERALD K. GLEASON

BRUCE I. BERTELSEN

JAMES MCNAB III

Attorneys

Environmental Protection Agency

Washington, D.C. 20460

Opinions below

Jurisdiction

Statute involved

Question presented

Statement

Argument

INDEX

Gmmetie ee ee

CITATIONS

Cases:

Adamo Wrecking Co. v. United States,

434 U.S. 275 N a ss

Banzhaf v. FCC, 405 F.2d 1082, cert. de-

nied, 396 U.S. 842

Bates v. State Bar of Arizona, 433 U.S.

350 _. , ;

Carvey v. Population Services Interna-

tional, 481 U.S. 678 ..............-...--cccs-cesee--

Downen v. Warner, 481 F.2d 642 _.._

Eisen v. Eastman, 421 F.2d 560, cert.

denied, 400 U.S. 841 0.02022...

Federal Maritime Commi’n v. Aktiebolaget

Svenska Amerika Linien, 390 U.S.

238 cae

Gulf State Utilities Co. v. FPC, 411 US.

Wee cee

Hanover Township Federation of Teach-

ers v. Hanover Community School

Corp., 457 FBd 466 —ncccncccceciccenseccetccnios

JAI uw Ww WH NW

II

Cases—Continued Page

International Brotherhood of Teamsters

v. Daniel, 489 U.S. 551 _..._.. eae 17

Linmark Associates, Inc. v. Township of

Willingboro, 481 U.S. 85 17

Miami Herald Publishing Co. v. Tornillo,

S00 Ga Ie eh 17

Midwest Video Corp. v. FCC, 571 F.2d

1025, aff’d, 440 U.S. 689 15

Ocstereich v. ‘Selective Service Board, 393

tf Se ppeteter ek eee P En Seis UN en rer 14

Plano v. Baker, 504 F.2d 595 14

Public Utilities Comm’n of California v.

United States, 355 U.S. 584 14

Red Lion Broadcasting Co. v. FCC, 395

We GIR siciettmeteicectetinesaai canes 18

SEC v. Wall Street Transcript Corp., 422

F.2d 1371, cert. denied, 398 U.S. 958 _ 14

Smith v. Arkansas State Highway Em-

ployees, 441 U.S: 468 16

Spiegel, Inc. v. FTC, 540 F.2d 287 _.__. 15

Train v. Natural Resources Defense Coun-

on, int, Gi Gee 2.2 18

Union Electric Company v. EPA, 427 U.S.

DO nese csi eb velinccanelan ees 17-18

United States v. National Association of

Securities Dealers, Inc., 422 U.S. 694.... 18

Virginia State Board of Pharmacy v. Vir-

ginia Citizens Consumer Council, 425

Ck PINE ee ee sts Sy ae

Constitution, statutes, and regulations:

United States Constitution, First Amend-

Oe ohne Lissienscnbiastiillacelaeaaeabte 14, 15, 16

lit

Constitution, statutes and

regulations—Continued Page

Clean Air Act, 42 U.S.C. (Supp. I) 7401

I isch kecsiia irs hapkebedeshcntockeinanaieiastemiens 2

Section 177, 42 U.S.C. (Supp. I)

ERICA Ray MeN eA SE RRIETTN 8

Section 202, 42 U.S.C. (Supp. I)

ase ee ee rs 3

Section 202(a), 42 U.S.C. (Supp. I)

3, EASES SE eRe eran 3, 11

Section 202(a) (2), 42 U.S.C. (Supp.

UIE hic i a 11

Section 202(a) (4), 42 U.S.C. (Supp.

I octet renncncientconens 13

Section 206, 42 U.S.C.” (Supp. I)

BI eis chaghisl ca cintccaNltehnsotey a akees Sig seciticioe 3

Section 207, 42 U.S.C. (Supp. I)

a SES ed ease ge teleost Penna 5

Section 209(a), 42 U.S.C. (Supp. I)

| SESE ARREARS A econ oe coe once 3

Section 209(b), 42 U.S.C. (Supp. I)

MINE iaiciecsctescteieenncicesetin 2, 3, 8, 9, 10, 11, 19

Section 209(b) (1), 42 U.S.C. (Supp.

ih. | ') ¢) een Se ke

Section 209(b)(1)(B), 42 U.S.C.

(Supp. I) 7543(b) (1) (B) — 11

Section 307(b), 42 U.S.C. (Supp. I)

9, Ua SSI RSS ser PRS eee 18

13 Cal. Admin. Code §1960(b) _. 4

Poe AS! | ee ee 4

0 Gla eee 2 4

10

40 Fed. Reg. 30311, 30314 (1975)

IV

Miscellaneous: Page

H.R. Rep. No. 90-728, 90th Cong., 1st

Oy aI RAE ator atv RE 10

H.R. Rep. No. 95-294, 95th Cong., Ist

NI: SRI T D crseaecencanitncissenionenenibcimeca 3, 9,10, 14, 18

S. Rep. No. 90-403, 90th Cong., 1st Sess.

(1967) 10

Iu the Supreme Cont of the United States

OCTOBER TERM, 1979

No. 79-1262

GENERAL MoToRS CORPORATION, ET AL., PETITIONERS

Vv.

DouGLAS M. COSTLE, ADMINISTRATOR OF THE

ENVIRONMENTAL PROTECTION AGENCY, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENT

IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App.

la-66a) has not yet been reported. The decision

of the Administrator of the Environmental Protec-

tion Agency (Pet. App. 73a-85a) appears at 43 Fed.

Reg. 32182 (1978). A subsequent modifying letter

(Pet. App. 86a-87a) is unreported.

(1)

2

JURISDICTION

The judgment of the court of appeals was entered

on August 3, 1979. A petition for rehearing was

denied on September 17, 1979. The Chief Justice ex-

tended the time in which to file a petition for a writ

of certiorari to and including February 14, 1980,

and the petition was filed on that date. The juris-

diction of this Court is invoked under 28 U.S.C.

1254(1).

STATUTE INVOLVED

Section 209 of the Clean Air Act, 42 U.S.C. (Supp.

I) 7543, is set forth at Pet. App. 94a-95a.

QUESTION PRESENTED

Whether the court of appeals correctly refused to

set aside the Administrator’s waiver of federal pre-

emption, pursuant to Section 209(b) of the Clean Air

Act, in respect of regulations adopted by the State

of California that limit the amount of maintenance

that a manufacturer can require of motor vehicle

purchasers in the written instructions which accom-

pany new vehicles sold in that State.

STATEMENT

1. Sections 101-216 of the Clean Air Act, 42

U.S.C. (Supp: I) 7401-7550, set forth a scheme

for the regulation of emissions from new motor

vehicles. Section 202 empowers the Administra-

tor of the Environmental Protection Agency (EPA)

to prescribe standards limiting the emission of

3

certain air pallutants from new motor vehicles.

42 U.S.C. (Supp. I) 7521. Section 206 concerns cer-

tification, a procedure in which the Administrator

tests prototypes of new motor vehicles submitted by

manufacturers to determine whether such vehicles

conform with the standards prescribed under Section

202. 42 U.S.C. (Supp. I) 7525. If the tests show

that the prototype conforms to the standards and re-

lated regulations the Administrator must issue a cer-

tificate of conformity to its manufacturer.

In order to relieve manufacturers of the burden

of conforming to a multiplicity of emission standards

established by different jurisdictions, Section 209(a)

of the Act preempts states or local governments from

adopting or enforcing any requirement relating to

the control of emissions as a condition precedent to

the initial retail sale, titling or registration of new

motor vehicles or engines. 42 U.S.C. (Supp. I)

7543(a). But, in the special case of California, Sec-

tion 209(b) requires the Administrator to waive this

preemption unless he can make certain findings re-

garding California’s regulations. 42 U.S.C. (Supp.

I) 7543(b).”

1 Congress adopted and amended Section 209(b) as an ex-

ception to the preemption provision of Section 209(a), to

allow California to continue its pioneering role in the regula-

tion of automobile-related emissions. Congress recognized

that California’s efforts predated those of the federal govern-

ment in response to an air pollution problem which was, and

still is, the most pervasive and acute in the nation. H.R. Rep.

No. 95-294, 95th Cong., Ist Sess. 301 (1977). In 1977,

Congress reaffirmed the special consideration afforded Cali-

fornia by amending Section 209(b) “to ratify and strengthen

4

Under California law the State Air Resources

Board (CARB) is responsible for adopting regula-

tions controlling air pollution from new motor vehi-

cles. After a series of public hearings and workshops,

the CARB adopted regulations limiting allowable

maintenance applicable to 1980 and subsequent model

year gasoline-powered passenger cars and 1981 and

subsequent model year gasoline-powered light duty

trucks and medium duty vehicles. These regulations

limit the scheduled maintenance to be performed on

prototypes during certification. To help insure that

the in-use performance of production vehicles con-

forms to test vehicle performance during certifica-

tion, the regulations, as originally promulgated, in-

cluded provisions which limited the emissions-related

maintenance that a manufacturer could require or

the California waiver provision and to afford California the

broadest possible discretion in selecting the best means to

protect the health of its citizens and the public welfare.”

H.R. Rep. No. 95-294, supra, at 301-302.

2 One facet of certification is the durability testing of a

prototype over 50,000 miles to determine the effects of de-

terioration on the functioning of the emission control system.

Both federal and California certification procedures restrict

the maintenance that may be performed during durability

testing in order to encourage manufacturers to produce more

durable vehicles and components. 40 C.F.R. 86.078-23, 86.078-

26; Paragraph 3f, California Exhaust Emission Standards

and Test Procedures for 1980 and Subsequent Model Pas-

senger Cars, Light Duty Trucks and Medium Duty Vehicles,

incorporated by reference in 13 Cal. Admin. Code § 1960(b),

as amended September 30, 1977 [hereinafter 1980 Standards

and Test Procedures] (A. 1690; “A.” refers to the appendix

in the court of appeals).

5

recommend to a vehicle purchaser to the level of

maintenance permitted during certification® (A.

1204-1217). The regulations permit the CARB to

grant exceptions for recommended maintenance re-

lated to safety and extreme operating conditions.‘

The regulations limiting required or recommended

maintenance for in-use vehicles reflected California’s

belief that manufacturers’ maintenance instructions

were not being followed and that much of the main-

tenance being performed was being done incorrectly.

These factors, according to the State, led to inferior

emissions performance of in-use vehicles compared to

certification vehicles (A. 3, 1205-1206).°

8 “Required maintenance” refers to that maintenance which

the manufacturers require as a precondition to statutory war-

ranty coverage. “Recommended maintenance” refers to addi-

tional maintenance which the manufacturers advise but do not

require as a precondition to statutory warranty coverage. The

statutory warranties are mandated by Section 207 of the Act,

42 U.S.C. (Supp. I) 7541, which requires manufacturers to

warrant that each new vehicle or engine is “free from defects

in materials and workmanship” and will conform with ap-

plicable emission regulations throughout its useful life. As

subsequently amended, the California regulations permit the

manufacturers to recommend any maintenance they deem

appropriate.

* 1980 Standards and Test Procedures § 3g (A. 1691-1692).

5 Petitioners challenged only those portions of California’s

regulatory scheme that limited required or recommended in-

use maintenance; they did not challenge the limitations on

scheduled maintenance during certification. In other words,

the manufacturers did not claim that they cannot build a

prototype capable of meeting certification requirements;

rather, they claimed that they cannot build a production vehi-

cle capable of meeting similar requirements when subjected

to actual use,

6

2. California requested a waiver of federal pre-

emption with respect to the limitations on allowable

maintenance and in-use maintenance instructions.

Following public hearings,® the Administrator grant-

ed the waiver request (Pet. App. 73a-85a), conclud-

ing that there was no plausible evidence that the re-

strictions on allowable maintenance would cause Cali-

fornia’s emission standards (for which a waiver had

previously been granted) to be less protective of

the public health and welfare than the corresponding

federal standards (id. at 75a), and that the manu-

facturers had failed to show that adherence to the

regulations would be technologically infeasible (id.

at 76a-80a). In addition, the Administrator rejected,

as beyond the scope of his review under Section 209

(b) (1) of the Act, petitioners’ challenges to the con-

stitutionality of the regulations and to the procedures

by which California adopted the regulations (id. at

81a-82a, 83a-84a).

The CARB subsequently amended its regulations to

permit manufacturers to recommend any mainte-

nance they deem appropriate (Pet. App. 100a-101a) ;

however, a vehicle owner’s failure to have this addi-

tional recommended maintenance performed cannot

be a defense to a warranty claim. The EPA informed

California that these amendments fell within the

scope of the waiver that had previously been granted

(Pet. App. 86a-87a).

6 An initial hearing was held in August 1977. After enact-

ment of the Clean Air Act Amendments of 1977, a second

hearing was held to consider the effect of the amendments on a

number of pending waiver requests, including the one at issue

here (Pet. App. 75a).

7

The court of appeals denied the petition to set aside

the Administrator’s order (Pet. App. la-66a). The

court concluded that (7d. at 65a-66a) :

Congress has decided to grant California the

broadest possible discretion in adopting and en-

forcing standards for the control of emissions

from new motor vehicles. Section 209 of the

Clean Air Act requires the Administrator to

waive federal preemption of motor vehicle emis-

sion control standards and accompanying en-

forcement procedures for the State of California

unless he makes certain findings that such a

waiver is inappropriate. This power encom-

passes the power to waive federal preemption

for in-use maintenance regulations designed as

enforcement procedures for pre-existing stan-

dards. In evaluating whether a waiver is appro-

priate for enforcement procedures relating to

standards for which a waiver has already been

granted, the Administrator is required to ad-

dress whether the procedures endanger the pro-

tectiveness of California’s standards and whether

the procedures are consistent with section 202 (a)

of the Clean Air Act. Those favoring the denial

of the waiver carry the burden of demonstrating

that the waiver is inappropriate. The petitioners

here failed to carry that burden.

ARGUMENT

In a careful opinion, the court of appeals rejected

petitioners’ challenges to the Administrator’s deter-

mination granting California’s waiver request. The

decision below is correct, does not conflict with any

decision of this Court or other courts of appeals, and

8

concerns a statute bearing primarily on the right of

one state to seek the best means of protecting the

health and welfare of its citizens.’ Accordingly, re-

view by this Court is not warranted.

1. Petitioners argue (Pet. 8-10, 15-18) that the

Administrator failed to perform a sufficiently de-

manding review of California’s waiver application.

They assert that the Administrator was required by

Section 209(b) to conduct an intensive inquiry to de-

termine whether California’s regulations are arbi-

trary and capricious, whether the maintenance limi-

tations are as protective of public health and welfare

as applicable federal regulations, and whether Cali-

fornia demonstrated a need for such regulations.

Petitioners’ argument is simply an attempt to rewrite

the statute and is flawed in two major respects.

First, Section 209(b) does not impose a burden of

persuasion upon California to demonstrate that a

waiver is justified, nor does it impose a burden upon

the Administrator to make any affirmative findings

before granting a waiver. Rather, the statute is man-

datory, compelling the Administrator to grant a

waiver unl e can make one of the findings speci-

ROY

fied in subsections, (b) (1) (A)-(C). As the court

below observed (Pet. App. 49a) :

7 Section 177 of the Act, 42 U.S.C. (Supp. I) 7507, permits

certain states that have not yet attained compliance with

national air quality standards to adopt and enforce California

standards for which the Administrator has granted a waiver.

To date, no such state has adopted California’s regulations.

9

That [the Administrator] must deny a waiver

if certain facts exist does not mean that he must

independently proceed to make the opposite of

those findings before he grants the waiver re-

gardless of the state of the record.

Thus, a waiver proceeding contrasts sharply with

other administrative proceedings in which a federal

agency must make affirmative findings before taking

a given action. The cases cited by petitioners (Pet.

15 n.10, 16) involving agencies operating under dif-

ferent statutes are therefore inapposite. The court

of appeals correctly concluded (Pet. App. 49a) that

under Section 209(b), California’s regulations—and

that State’s determination that the regulations com-

ply with the statute—are presumed to satisfy the

waiver requirements; the burden of proving other-

wise is upon the parties who oppose the grant of a

waiver.

The legislative history of Section 209(b), as the

court below noted (Pet. App. 514n.51), “could not

be less ambiguous on this [point].”’ Congress’ express

purpose in providing for a waiver of federal pre-

emption was to afford California the broadest pos-

sible discretion in establishing regulations designed to

mitigate the effects of the State’s unique air pollution

problems. H.R. Rep. No. 95-294, 95th Cong., 1st Sess.

301-302 (1977). Indeed, in 1967 Congress spe-

cifically rejected a version of Section 209(b) that

would have placed upon California the burden of

demonstrating that a waiver was justified and re-

quired the Administrator to find affirmatively that

10

California had met that burden.’ Accordingly, the

Administrator has consistently placed the burden of

proof on the parties opposing waiver to demonstrate

grounds for making one of the findings necessary for

a denial of a waiver request. See, e.g., 40 Fed. Reg.

30311, 30314 (1975). «ss recently as 1977, Congress

approved the Administrator’s interpretation that Sec-

tion 209(b) places the burden of persuasion upon the

parties who oppose a waiver request. H.R. Rep. No.

95-294, supra, at 302.

Second, as the court of appeals concluded (Pet.

App. 29a-35a), Section 209(b) distinguishes between

“emission standards” and “accompanying enforce-

ment procedures,” intending the former to mean

quantitative levels of emissions and the latter to mean

methods for determining compliance with a stan-

dard. See S. Rep. No. 90-403, 90th Cong., 1st Sess.

32 (1967).° Section 209(b) does not require any pro-

tectiveness determination or demonstration of need

8 Compare S. Rep. No. 90-408, 90th Cong. 1st Sess. 33-34

(1967), which accompanied the proposal that is now Section

209(b), with H.R. Rep. No. 90-728, 90th Cong., 1st Sess. 21-

23, 69 (1967) ; see id. at 96-97 (separate views of Representa-

tives Moss and Van Deerlin). Petitioners cite as “[t]he most

salient legislative history on this question” (Pet. 16 n.11)

the discussion in the House Report that accompanied a pro-

posal which ultimately was rejected in favor of the Senate

version. The court of appeals provided a complete discussion

of the legislative history relating to this issue (Pet. App. 50a-

52a), and we rely on that discussion here.

® This distinction is consistent with this Court’s definition of

the word “standards” in Adamo Wrecking Co. v. United

States, 484 U.S. 275, 286 (1978).

11

with regard to accompanying enforcement proce-

dures.” The protectiveness determination pertains

only to emission standards, not to accompanying en-

forcement procedures such as the maintenance limita-

tions. Similarly, the “need” referred to in Section

209(b) (1) (B) refers only to standards.

With regard to accompanying enforcement proce-

dures, Section 209(b)(1) permits the Administra-

tor to deny a waiver only if such enforcement proce-

dures are inconsistent with Section 202(a)." The

section contains no other reference to enforcement

procedures. Thus, the Administrator was not re-

quired to consider whether the in-use regulations are

as protective of the public health and welfare as

applicable federal standards or whether the regula-

tions are needed to meet compelling and extraordi-

nary conditions, since these criteria apply only to

standards.

10 Section 209(b) provides that the administrator shall

grant the waiver request unless he finds that: (1) California’s

determination that its standards will be, in the aggregate, at

least as protective of public health and welfare as appiicable

federal standards is arbitrary and capricious; (2) California

does not need the standards to meet compelling and extraordi-

nary conditions; and (3) California’s standards and accom-

panying enforcement procedures are not consistent with Sec-

tion 202(a) of the Act.

11 California’s standards and enforcement procedures are

judged to be inconsistent with Section 202(a) if they provide

insufficient time for the development and application of the

requisite technology, giving appropriate consideration to the

cost of compliance. 42 U.S.C. (Supp. I) 7521 (a) (2).

12

To be sure, it is conceivable that enforcemen: pro-

cedures might, in some instances, have a direct bear-

ing upon the protectiveness of California’s emission

standards. The CARB considered this possibility,

but determined that the maintenance limitations

would not lessen the protectiveness of its standards.

(A. 279-280). In the waiver proceeding the Admin-

istrator was unable to find clear and compelling

evidence that this determination was arbitrary and

capricious (Pet. App. 73a-74a, 75a-76a).

Petitioners, however, assert (Pet. 9-10) that the

record contains some evidence that the maintenance

limitations will have an adverse effect upon air

quality. The court of appeals reviewed the materials

to which petitioners refer and upheld the Adminis-

trator’s ruling (Pet. App. 56a-59a). There is no

occasion for further review of this factual determi-

nation.

Contrary to petitioners’ contention (Pet. 12), the

court below was careful to note that in reviewing a

waiver request the Administrator’s “task is some-

thing more than ministerial” (Pet. App. 49a). The

court indicated that there must be a discernable

rational basis for the Administrator’s decision, and

that (Pet. App. 55a; footnote omitted) :

if the Administrator ignores evidence demon-

strating that the waiver should not be granted,

or if he seeks to overcome that evidence with

unsupported assertions of his own, he runs the

risk of having his waiver decision set aside as

arbitrary and capricious. His “burden” is the

burden of acting reasonably.

13

The opinion of the court of appeals reflects a care-

ful review of the record and the basis for the Ad-

ministrator’s decision. There is thus no basis for

petitioners’ contention that the lower court “acqui-

esced” in some sort of “ministerial” review. If peti-

tioners wish to challenge the substance of the Cali-

fornia regulations or the procedures under which

they were promulgated, they may do so in the state

courts of California.

2. Petitioners contend (Pet. 18-21) that the Ad-

ministrator improperly refused to consider certain

evidence which they presented to him in the course of

the waiver hearing. This evidence concerned alleged

consequences of the grant of a waiver upon auto-

mobile safety, fuel economy and competition within

the automotive industry. Petitioners argue that these

factors are embraced within the term “public health

and welfare,” as used in Sections 209(b)(1) and

202(a)(4). This contention is without merit.

As the court of appeals correctly concluded, the

phrase “public health and welfare” in the statute re-

fers to the effects of pollution on the environment

(Pet. App. 48a; footnote omitted) :

Congress enacted the Clean Air Act as an at-

tempt to improve the quality of the air. This

concern, with pollution was not confined to its

adverse effects on humans, but extended as well

to its impact on the economy. The terms “pub-

lic health and welfare’ thus encompass economic

values, but only to reflect the economic costs of

pollution, not the social costs of pollution control.

This is evident in every context in which the

terms appear.

14

See also H.R. Rep. No. 95-294, supra, at 34. The

question whether the social costs of pollution control

should be considered in a waiver proceeding is one

for Congress to decide in the first instance, and,

therefore, petitioners’ arguments on this point must

be addressed to Congress, rather than to the admin-

istrative agency or the courts.”

3. Petitioners argue (Pet. 21-22) that the Admin-

istrator should have ruled upon their constitutional

challenges to the waiver request. But “[n]othing in

section 209 requires [the Administrator] to consider

the constitutional ramifications of the regulations

for which California requests a waiver’ (Pet. App.

36a). Petitioners’ contention that an administrative

agency has the inherent power to rule upon con-

stitutional claims is unfounded. See Public Utilities

Comm'n of California v. United States, 355 U.S. 534,

539 (1958); Oestereich v. Selective Service Board,

393 U.S. 233, 242 (1968). he ruling of the court

below on this point is perfectly consistent with de-

cisions in other circuits." In any event, petitioners

12 Petitioners’ reliance (Pet. 20 n.15) on Gulf State Utilities

Co. v. FPC, 411 U.S. 747 (1978) and Federal Maritime

Comm’n Vv. Aktiebolaget Svenska Amerika Linien, 390 U.S.

238 (1968), is misplaced. As the court below pointed out

(Pet. App. 44a-46a), those cases involved agencies operating

under clear congressional mandates to consider antitrust im-

plications in their administrative determinations.

18 SEC v. Wall Street Transcript Corp., 422 F.2d 1871 (2d

Cir.), cert. denied, 898 U.S. 958 (1970), did not concern a

constitutional ruling by the SEC, but rather the SEC’s appli-

cation of a statutory exclusion based upon the First Amend-

ment. In Plano v. Baker, 504 F.2d 595 (2d Cir. 1974), the

Second Circuit, correcting any possible misconceptions con-

15

were not deprived of a forum in which to present

their constitutional claims, since those claims were

passed upon by the court of appeals.

4. Petitioners’ arguments (Pet. 22-24) on the

merits of the constitutional issue must also fail.

Their assertion that the California maintenance limi-

tations violate the First Amendment by restricting

communication between auto manufacturers and con-

sumers overlooks the settled rule that commercial

speech may be regulated if such regulation bears a

rational relationship to a legitimate state interest.

Banzhaf v. FCC, 405 F.2d 1082, 1102 (D.C. Cir.

1968), cert. denied, 396 U.S. 842 (1969), cited with

approval in Virginia State Board of Pharmacy v.

Virginia Citizens Consumer Council, 425 U.S. 748,

772 n.24 (1976). That is the case here. Studies con-

ducted by the CARB found that a relationship exists

between the failure of in-use vehicles to achieve emis-

cerning its decision in Eisen v. Eastman, 421 F.2d 560 (2d

Cir. 1969), cert. denied, 400 U.S. 841 (1970), stated that an

administrative agency may not consider constitutional chal-

lenges on the merits. 504 F.2d at 599 & n.6. In Downen V.

Warner, 481 F.2d 642, 648 (9th Cir. 1973), the Ninth Circuit

ruled that constitutional adjudications must be left to the

courts because such issues are beyond the expertise of admin-

istrative agencies. In Midwest Video Corp. v. FCC, 571 F.2d

1025, 1042-1043 (8th Cir. 1978), aff’d, 440 U.S. 689 (1979),

the Eighth Circuit struck down an FCC decision, ostensibly

based upon First Amendment considerations, and held that

without clear statutory authority the Commission had no

jurisdiction to advance perceived constitutional interests on

its own. Finally, in Spiegel, Inc. v. FTC, 540 F.2d 287, 294

(7th Cir. 1976), the Seventh Circuit ruled that federal admin-

istrative agencies cannot pass upon the constitutionality of

administrative or legislative action.

16

sion standards and the amount of maintenance (or

lack thereof) which a vehicle owner performs on

emission-related components. The CARB determined

that its maintenance regulations will force manufac-

turers to develop more durable engine components,

thereby reducing the number of necessary mainte-

nance operations; the CARB determined that this

will, in turn, reduce the frequency of component fail-

ures due to lack of, or improper, maintenance (A.

1205-1209, 1629-1674, 1815-1819). Thus, the regu-

lations are rationally related to the legitimate state

interest of reducing automobile emission levels and

are constitutionally permissible.

In any case, California’s regulations do not re-

strict the manufacturers’ communications with their

customers. The regulations, as amended, only dis-

tinguish between required and recommended main-

tenance. Manufacturers are free to recommend any

maintenance they deem appropriate; they simply may

not deny a warranty claim on the basis of a failure

to perform such recommended maintenance. Peti-

tioners’ assertion (Pet. 23-24) that automobile pur-

chasers may ignore the manufacturers’ recommenda-

tions does not implicate legitimate First Amendment

concerns. The First Amendment’s protection of free-

dom of speech “provides no guarantee that a speech

will persuade or that advocacy will be effective.”

Smith v. Arkansas State Highway Employees, 441

U.S. 463, 465 (1979), quoting Hanover Township

Federation of Teachers v. Hanover Community

17

School Corp., 457 F.2d 456, 461 (7th Cir. 1972).”

5. Lastly, petitioners argue (Pet. 24-26) that the

court below gave excessive deference to the Adminis-

trator’s construction of the waiver provision. We

disagree.

The court of appeals held (Pet. App. 17a) that it

could not “conclude that the Administrator miscon-

strued Section 209 [unless] petitioners * * * show

by clear and convincing evidence that his construc-

tion is unreasonable.” This ruling correctly articu-

lated the standard of deference which this Court has

typically applied to a nearly contemporaneous con-

struction of a statute by an agency charged with

administering it. See International Brotherhood of

Teamsters v. Daniel, 439 U.S. 551, 566 n.20 (1979) ;

Union Electric Company v. EPA, 427 U.S. 246, 256

14 The cases relied upon by petitioners (Pet. 22-23) are

readily distinguishable, since they each concerned a virtually

complete ban on the communication of certain information.

See Bates v. State Bar of Arizona, 433 U.S. 350 (1977);

Carey v. Population Services International, 481 U.S. 678

(1977) ; Linmark Associates, Inc. v. Township of Willingboro,

431 U.S. 85 (1977); Virginia State Board of Pharmacy v.

Virginia Citizens Consumer Council, supra. Consolidated

Edison Company of New York v. Public Service Comm’n of

New York, No. 79-134, and Central Hudson Gas & Electric

Corp. Vv. Public Service Comm’n of New York, No. 79-565

(argued Mar. 17 1980), are similarly inapposite. Consoli-

dated Edison involves an order prohibiting electric utili-

ties from including messages on controversial matters of

public policy with bills sent to consumers, and Central Hud-

son involves a ban on promotional advertising by such utili-

ties. Here, however, the manufacturers are not prohibited

from communicating with their customers. Moreover, unlike

Miami Herald Publishing Co. v. Tornillo, 418 U.S. 241 (1974),

this case does not concern the compelled publication of infor-

mation by a newspaper.

_ SS te Will ual Sth EN footy 2s =

,

;

:

’

18

(1976); United States v. National Association of

Securities Dealers, Inc., 422 U.S. 694, 719 (1975).

Thus, in Train v. Natural Resources Defense Council,

Inc., 421 U.S. 60, 75 (1975), this Court ruled that

EPA’s interpretation of the Clean Air Act should be

accepted so long as it is “sufficiently reasonable.”

And in Red Lion Broadcasting Co. v. FCC, 395 U.S.

367 (1969), the Court held that an agency’s inter-

pretation of a statute which it is charged with ad-

ministering “should be followed unless there are com-

pelling indications that it is wrong, especially when

Congress has refused to alter the administrative con-

struction.” Id. at 381 (emphasis added; footnotes

omitted).

The Administrator’s construction of the waiver

provision has been consistent.’° In 1977 Congress not

only declined to overturn that construction, but took

steps “to ratify and strengthen the California waiver

provision and * * * to afford California the broadest

possible discretion in selecting the best means to

protect the health of its citizens and the public wel-

fare.” H.R. Rep. No. 95-294, supra, at 301-302. In

these circumstances, the court below was fully justi-

fied in giving deference to the Administrator’s con-

struction.”

15 The Administrator has explained in detail the basis for

his interpretation (A. 1853-1855) and has consistently abided

by that interpretation.

16 There is no possibility that another court of appeals will

reach a different interpretation of Section 209, because exclu-

sive review of California waiver decisions rests with the

District of Columbia Circuit under Section 307(b) of the

Clean Air Act, 42 U.S.C. (Supp. I) 7607 (b).

19

Despite its deference to the Administrator’s in-

terpretation of Section 209(b), the court of appeals

nevertheless undertook its own thoroughgoing ex-

amination of the language, legislative history and

congressional purpose of this somewhat technical and

complex provision. It was only after completion of

that examination that the court of appeals conclud-

ed—correctly, we submit—that the Administrator’s

interpretation should be upheld.

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

WADE H. McCREE, JR.

Solicitor General

JAMES W. MOORMAN

Assistant Attorney General

EDWARD J. SHAWAKER

DAVID E. DEARING

Attorneys

MICHELE BEIGEL CORASH

General Counsel

GERALD K. GLEASON

BRUCE I. BERTELSEN

JAMES McNas III

Attorneys

Environmental Protection Agency

May 1980

* U. S. GOVERNMENT PRINTING OFFICE; 1980 319460 298