Amicus Curiae Brief — City of New York v. Metropolitan Taxicab Board of Trade

Supreme Court, U.S.

FILED

aes DEC 9 - 2010

\ (o) OFFICE OF THE CLERK

No. 10-618

IN THE

Supreme Court of the Gnited States

Cily OF NEW YORK, et al.,

Petitioners,

v.

METROPOLITAN TAXICAB BOARD OF TRADE, ef al.,

Respondents.

On Petition for a Writ of Certiorari to the

United States Court of Appeals for the Second Circuit

BRIEF OF AMICUS CURIAE PUBLIC CITIZEN,

INC., INSUPPORT OF PETITIONERS

SCOTT L. NELSON

Counsel of Record

ALLISON M. ZIEVE

PUBLIC CITIZEN

LITIGATION GROUP

1600 20th Street NW

Washington, DC 20009

(202) 588-1000

snelson@citizen.org

Attorneys for Amicus Curiae

December 2010

— —— —

TABLE OF CONTENTS

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INTEREST OF AMICUS CURIAE ....................0.08. ]

REASONS FOR GRANTING THE WRIT .................. 2

I. The Second Circuit’s Broad Conception of

“Relatedness” Is Directly Contrary to This

Court’s Preemption Jurisprudence and

Il. The Far-Reaching Effects of the Second

Circuit’s Decision Do Not Reflect Any Re-

cognizable Federal Policy and, Indeed,

Conflict With Federal Policy. .............0....00.000065 9

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TABLE OF AUTHORITIES

Page(s)

Cases:

Cal. Div. of Labor Standards Enforcement v.

Dillingham Constr., N.A., 519 U.S. 316

ae a daeetuas 4,5,8

Cent. Valley Chrysler-Jeep, Inc. v. Goldstene,

529 F. Supp. 2d 1151 (E.D. Cal. 2007) ................... 8

De Buono v. NYSA-ILA Med. & Clinical

Servs. Fund, 520 U.S. 806 (1999)........................... 5

Egelhoff v. Egelhoff, 532 U.S. 141 (2001)...........0.....2.. 5

Engine Mfrs. Ass’n v. S. Coast Air Quality

Regent. Dist. , S41 US. 266 (A004) oo. cccescccccssavessvesse: 7

Green Alliance Taxi Cab Ass’n v. King Coun

ty, 2010 WL 2643369 (W.D. Wash. June

Be seep ete cre eee ae hi inaenaedendenenes 8,9

Metro. Taxicab Bd. of Trade v. City of New

York, 615 F.3a 152 (2d Cir. 2010) ...................... 3, 4

N.Y. State Conf. of Blue Cross & Blue Shield

Plans v. Travelers Ins. Co., 514 U.S. 645

Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41

rate ae aay aay cen seacee oak ee vainvsadewins 5

Rush Prudential HMO v. Moran, 536 U.S.

Re ca ag eee aaa ee ce asda vse snabansviwas 5

Statutes and Rules:

ee ck sis Seudiustn bund wn'nwesnaowenss 5

a es Tig a dadacaamnuccadesuciowe 8

11]

49 U.S.C. § 3290 ita)... 6

49 U.S.C. 3 $2914 s)... ss G&G. i)

S. Ct. FR. ST Bla ccccc cee |

Other:

75 Fed. Reg. 25324 (May 7, ZO1Q)............000000+.05+. ee

Brief for the United States as Amicus Curiae,

Metro. Taxicab Bd. of Trade v. City of New

York, No. 09-2901-CV (2d Cir. filed Jan.

15, 2OIO) ....<cccsccocesse es Bee aE. 19

1 |

www.afdc.energy.gov/afdc/laws/...............c.cceeceeeeeeeeees

INTEREST OF AMICUS CURIAE'

Public Citizen, Inc., a national consumer-advocacy

organization founded in 1971, appears on behalf of its

approximately 225,000 members and supporters be-

fore Congress, administrative agencies, and courts on

a wide range of issues and works for enactment and

enforcement of laws protecting consumers, workers,

and the general public. Public Citizen often

represents the interests of its members in litigation

and regularly files amicus curiae briefs in cases in the

United States Supreme Court and the federal appel-

late courts.

Among Public Citizen’s particular concerns is

overbroad invocation of preemption arguments to

override state and local laws that seek to protect con-

sumers, workers, and the public—including laws

aimed at promoting safer, cleaner, and more economi-

cal automobiles. In many instances, as in this case,

such preemption arguments reflect distortions of the

policies and purposes of federal law that create a false

impression of conflict between federal and state law.

Often, the result of judicial acceptance of such overly

broad preemption arguments would be the creation of

regulatory gaps never intended by Congress, as states

and local governments would be disabled from ad-

dressing problems that the federal government has

' Counsel of record for the parties received timely notice of

amicus curiae’s intent to file this brief as required by this

Court’s Rule 37.2(a). Written consents to the filing of the brief

from all parties have been filed with the Clerk. This brief was

not. authored in whole or in part by counsel for a party. No per-

son or entity other than amicus curiae or its counsel made a

monetary contribution to preparation or submission of this brief.

neither addressed itself nor intended to prevent the

states from addressing. In some cases, including this

one, the effect of preemption would be to prevent

states and localities from taking actions that federal

law and policy affirmatively encourage.

In addition, Public Citizen has a longstanding in-

terest in promoting efficient use of energy and discou-

raging excessive consumption of gasoline and other

fossil fuels, which contributes to depletion of (and

higher consumer prices for) scarce natural resources

and is directly linked to unhealthy levels of air pollu-

tion and the discharge of greenhouse gases. The deci-

sion of the court of appeals in this case runs counter

to the broad societal interest in energy conservation

and, more specifically, to the shared interest of both

the federal government and state and local govern-

ments in providing incentives, through means other

than prescriptive regulations, for the adoption of fuel-

efficient vehicles.

REASONS FOR GRANTING THE WRIT

The City of New York, like other local govern-

ments, has long regulated taxicab service. For many

years, the City had policies that encouraged and even

required some cab companies to purchase cars that

were relatively inefficient in their consumption of

fuel. More recently, the City altered its regulations

regarding lease arrangements between taxicab fleet

owners and taxicab drivers to eliminate disincentives

to the purchase of more efficient hybrid vehicles by

fleet owners, and thus to encourage the eventual re-

placement of fuel-inefficient taxis by modern vehicles

that use less gasoline and cause less pollution. ‘The

City acted, however, not by imposing standards re-

quiring that taxicabs meet specified levels of fuel effi-

ciency, but by creating economic incentives for the

purchase of hybrids.

Nonetheless, the U.S. Court of Appeals for the

Second Circuit held that the City’s lease rules were

preempted by the Energy Policy and Conservation Act

(“EPCA”), which authorizes the federal government

to issue regulations requiring vehicles sold in the

United States to meet mandatory average fuel econo-

my standards and provides that a state or local gov-

ernment “may not adopt or enforce a law or regula-

tion related to fuel economy standards or average fuel

economy standards for automobiles covered by an av-

erage fuel economy standard under this chapter.” 49

U.S.C. § 32919(a). The Second Circuit reasoned that

because New York’s lease rules related to the “fuel

economy” of New York’s taxicabs, they were

preempted. See 615 F.3d at 157-58.

By holding that any state or local law broadly re-

lated to “fuel economy” has the prohibited relation-

ship to “fuel economy standards,” the Second Circuit,

took precisely the broad and simplistic approach to

preemption that this Court has repeatedly warned

against in its decisions construing similar preemption

provisions, particularly ERISA’s preemption clause.

The result, as the United States put it in its amicus

curiae brief supporting the City in the Second Circuit,

is one that “it is plain that Congress did not intend.”

Brief for the United States as Amicus Curiae 2, Metro.

Taxicab Bd. of Trade v. City of New York, No. 09-

2901-CV (2d Cir. filed Jan. 15, 2010) (“U.S. Br.”). In-

deed, the Second Circuit’s reasoning would broadly

disable state and local governments from taking ac-

tions to create incentives for the purchase of fuel-

efficient vehicles, a result Congress could not possibly

have intended and that, as the City has pointed out,

itself conflicts with federal policies promoting hybrids

and other fuel-efficient cars. The conflict between the

Second Circuit’s preemption analysis and that dic-

tated by this Court’s precedents, together with the

broad potential impact of the court’s reasoning,

strongly counsels in favor of a grant of certiorari in

this case.

I. The Second Circuit’s Broad Conception of

“Relatedness” Is Directly Contrary to This

Court’s Preemption Jurisprudence and

Disregards Critical Statutory Language.

The court of appeals treated the preemption ques-

tion in this case as one that required only a rote appli-

cation of what the court apparently saw as clear sta-

tutory language. According to the Second Circuit, the

words “related to” in EPCA’s preemption clause cover

all circumstances where “the challenged law contains

a ‘reference’ to the preempted subject matter or

makes the existence of the preempted subject matter

‘essential to the law’s operation.’” 615 F.3d at 156

(quoting Cal. Div. of Labor Standards Enforcement v.

Dillingham Constr., N.A., 519 U.S. 316, 324-25

(1997)). Because New York’s taxicab lease rules affect

fuel economy, the court went on to hold, they neces-

sarily refer to or depend on the existence of fuel econ-

omy standards.

Such a broad construction of “related to” is direct-

ly contrary to this Court’s repeated warnings, in the

context of ERISA, that preemption provisions based

on the “relatedness” of the subjects of federal and

state law cannot be given such sweeping effect. De-

spite its early recognition of the “expansive sweep” of

the ERISA provision preempting state laws that “re-

en

late to any employee benefit plan,” 29 U.S.C.

§ 1144(a), e.g., Pilot Life Ins. Co. v. Dedeaux, 481 U.S.

41, 47 (1987), this Court has emphasized that the very

expansiveness of the concept of “relatedness” is a

source of ambiguity and a reason to exercise caution

in construing the scope of preemption. As the Court

explained in New York State Conference of Blue Cross

& Blue Shield Plans v. Travelers Insurance Co., “lilf

‘relate to’ were taken to extend to the furthest stretch

of its indeterminacy, then for all practical purposes

pre-emption would never run its course ....” 514 U.S.

645, 655 (1995).

Thus, this Court has emphasized that the “relate

to” preemption language used in ERISA (and also in

EPCA) cannot be approached with “uncritical literal-

ism.” Id. at 656; accord Egelhoff v. Egelhoff, 532 U.S.

141, 147 (2001); Dillingham, 519 U.S. at 325. Instead,

the Court has repeatedly begun its analysis of the

scope of ERISA preemption with the admonition that

“the starting presumption that Congress does not in-

tend to supplant state law” applies. Travelers, 514

U.S. at 654; accord Rush Prudential HMO v. Moran,

536 U.S. 355, 365 (2002); De Buono v. NYSA-ILA

Med. & Clinical Servs. Fund, 520 U.S. 806, 813

(1997). And because of the indeterminacy of the statu-

tory language, the search for the requisite clear and

manifest congressional intention to supplant state law

requires consideration of both “the objectives of the

[federal] statute” and “the nature of the effect of state

law” on the preempted subject-matter. Dillingham,

519 U.S. at 325 (citations omitted).

Here, the Second Circuit overlooked the surest in-

dication of the objective of the federal statute: the

law's own language. EPCA’s preemption clause does

6

not, as the Second Circuit’s reasoning suggests, apply

generally to any state or local law that relates to fuel

economy, but much more specifically to laws that are

related to “fuel economy standards or average fuel

economy standards.” 49 U.S.C. § 32919(a) (emphasis

added). Critically, by making preemption turn on rela-

tedness not simply to the broad subject of “fuel econ-

omy,” but to “fuel economy standards,” Congress

used terms of art explicitly defined in the statute:

EPCA’s definition section provides that “‘average fuel

economy standard’ means a performance standard

specifying a minimum level of average fuel economy

applicable to a manufacturer in a model year.” Id.

§ 32901(a)(6).

Congress's deliberate use of this defined term in

establishing the scope of EPCA preemption makes

clear that the policy it was pursuing was not broad

preemption of anything relating to fuel economy.

Congress had a narrower objective: protection of ex:

clusive federal authority to establish performance

standards specifying minimum fuel economy levels

that automobile manufacturers must meet. Only laws

that relate to such standards are preempted by EPCA.

When the focus is properly placed on whether a

state or local law relates to a fuel economy standard,

the magnitude of the Second Circuit’s deviation from

this Court’s admonition that courts exercise caution

in construing preemption clauses based on “related-

ness” becomes apparent. Although the City’s taxicab

leasing regulations may “relate to” fuel economy, they

are not themselves mandatory performance standards

requiring manufacturers to achieve minimum levels

of fuel economy, they do not refer to such mandatory

performance standards, and mandatory performance

~

standards are not somehow essential to the operation

of the City’s rules. Indeed, the differential lease rates

adopted by the City have nothing to do with such

standards save that they both in some sense concern

fuel efficiency. The City’s rules merely affect the in-

centives of taxicab fleets to make voluntary purchases

from among the broad range of vehicles available in

the marketplace (all of which presumably satisfy ap-

plicable federal fuel efficiency standards),

This Court acknowledged the substantial differ-

ence between laws that create voluntary incentive

programs and laws that are (or relate to) standards in

Engine Manufacturers Ass’n v. South Coast Air Quali-

ty Management District, 541 U.S. 246 (2004). There,

the Court emphasized that the term “standard” en-

compasses “[a] command, accompanied by sanctions”

determining the characteristics of vehicles that may

permissibly be purchased or sold on the market. Jd. at

255. Put another way, the Court identified “stan-

dards” with “criteria” with which vehicles must comp-

ly. Id. at 253. The Court disclaimed any holding that

the statute at issue there (which preempted state or

local enforcement of vehicle emission “standards” dif-

ferent from federal standards) would preempt “volun-

tary incentive programs.” Jd. at 258. Such programs,

the Court stressed, “are significantly different from

command-and-control regulation.” Id.

Here, unlike in South Coast, the statute at issue

actually provides an express definition of the key term

on which preemption hinges—‘“average fuel economy

standard”—and that definition underscores the dis-

tinction recognized in South Coast between mandato-

ry standards and incentive programs. By ignoring the

express statutory language indicating the narrowness

8

of the scope of preemption and instead embarking on

the open-ended project of determining whether the

City’s rules “related to” fuel economy generally, the

Second Circuit strayed far from this Court’s command

that in construing the scope of “relatedness” preemp-

tion clauses, courts avoid taking the statutory lan-

guage to the “furthest stretch of its indeterminacy,”

Travelers, 514 U.S. at 655, and instead hold a state

law preempted only when the state law runs contrary

to Congress’s manifest objectives. Dillingham, 519

U.S. at 325.

The proper analysis of EPCA’s preemptive scope is

exemplified by the decision in Central Valley Chrysler-

Jeep, Inc. v. Goidstene, 529 F. Supp. 2d 1151 (E.D.

Cal. 2007), addressing whether California emissions

standards, which had effects on fuel economy as well,

were preempted by EPCA. Consistent with the pre-

sumption against preemption and EPCA’s language

and objectives, the court determined that “EPCA’s

express preemption of state regulations related to mi-

leage standards [should] be construed as narrowly as

the plain language of the law permits,” and that it en-

compassed “state regulations that are explicitly aimed

at the establishment of fuel economy standards, or

that are the de facto equivalent of mileage regula-

tion.” Jd. at 1175.’ Similarly, in Green Alliance Taxi

Cab Ass’n v. King County, 2010 WL 2643369 (W.D.

Wash. June 29, 2010), the court held that a program

* The court also mentioned a third category of preempted

regulations, not relevant here: emissions regulations that affect

mileage and “that do not meet the requirements established by

the Clean Air Act for waiver of preemption under [42 U.S.C.

§ 7543].” Id.

9

providing voluntary incentives for the purchase of hy-

brid vehicles by taxicab companies was not preempted

because “only a mandate can be a legal regulation ‘re-

lated to’ fuel economy standards and thus preempted

by EPCA.” Id. at *5. The Second Circuit’s decision, by

contrast, cannot be squared with the preemption

principles set forth in this Court’s opinions or with

the language of EPCA.

Il. The Far-Reaching Effects of the Second

Circuit’s Decision Do Not Reflect Any Re-

cognizable Federal Policy and, Indeed,

Conflict With Federal Policy.

The Second Circuit’s view that EPCA preempts

any state or local law that affects, or reflects any con-

cern regarding, automobile fuel economy, has re-

markably broad implications. Most directly, the

court’s reasoning would threaten preemption of any

economic regulation of the City’s taxicab industry

that seeks to promote energy conservation and com-

bat air pollution by providing incentives for the pur-

chase of hybrid or other fuel-efficient vehicles by taxi-

cab fleets.

As the United States pointed out below, the effect

of preemption in this case is to disable the City even

from removing disincentives to hybrid vehicle pur-

chases that are the result of the City’s preexisting

lease-rate regulations. Those rules effectively placed

all the fuel costs attributable to the purchase of less

efficient vehicles on taxicab drivers and thus encour-

aged fleet owners to purchase cars that are less ex-

pensive to buy but more expensive to operate because

of their relatively low gas mileage. See U.S. Br. 2-3. As

the brief of the United States stated, “The City should

not be held to have violated federal law when it

10

sought to modify the consequences of its earlier regu-

lations.” Jd. at 3.

Moreover, as the United States also observed be-

low, any economic regulation of taxicab lease rates

will inevitably have some impact on fleet fuel econo-

my, whether positive or negative. If, as the Second

Circuit’s reasoning suggests, any such effect has a

prohibited “relation” to fuel economy standards, it is

not clear what the City can permissibly do in this area

(short of dismantling its entire regulatory scheme).

But as the United States’ brief pointed out, there is

absolutely no indication that Congress ever would

have intended EPCA’s prohibition on meddling by

states and localities with fuel economy standards to

have such a far-reaching effect on economic regulation

of the taxicab industry, a matter traditionally of local

concern:

Although Congressional intent cannot be deter-

mined with certainty in other settings, it is plain

that Congress did not intend—by establishing

regulation of average fuel economy standards

and new motor vehicle emission standards—to

assert general federal control over the regulation

of taxi services, an area that had been the subject

of pervasive local regulation for decades prior to

passage of the Clean Air Act and EPCA in the

1960s and 1970s. New York City taxicab regula-

tions have long restricted vehicle choices and

equipment, with a consequent impact on the

overall fuel economy and emissions of taxi fleets.

And the City has also long regulated the econom-

ic relationship between taxicab fleet owners and

drivers. It has never been suggested that Con-

gress meant to preempt all such vehicle restric-

Li

tions and lease rate setting, and there is no clear

basis for concluding that the regulations at issue

in this case at issue crossed a line established by

federal law.

U.S. Br. 2.

Moreover, the potential effects of the Second Cir-

cuit’s decision are by no means limited to its unwar-

ranted interference with taxicab regulation. The

court’s view that states and localities are preempted

from taking actions that have the effect or objective of

encouraging the purchase of fuel-efficient vehicles or

that otherwise affect the overall fuel economy of the

mix of vehicles that buyers purchase cannot logically

be confined to regulation of taxicabs. After all, EP-

CA’s preemption clause applies to laws related to fuel

economy standards “for automobiles,” not just taxi-

cabs. 49 U.S.C. § 32919(a) (emphasis added). The

Second Circuit’s reasoning thus extends to any state

or local law that affects fuel economy by creating in-

centives for the purchase of more fuel-efficient ve-

hicles by consumers or businesses of any kind.

As the petition for certiorari explains, there are

literally hundreds of state and local laws that provide

such incentives. Pet. for Cert. 24-28. The federal gov-

ernment itself promotes such state and local efforts

not only through legislation that specifically encou-

rages them (see id. at 21-23), but also by, among other

things, providing a comprehensive list of those incen-

tives to allow consumers to take maximum advantage

of their benefits. See www.afdc.energy.gov/afdc/laws/.

It is nothing short of fanciful to suggest that such

state and local laws interfere with EPCA’s policies or

fall within the scope of its preemption clause, but that

is the necessary implication of the Second Circuit’s

decision.

Energy conservation and combating the environ-

mental effects of fossil-fuel consumption are critical

national priorities. Increasing the use of fuel-efficient

vehicles is an essential step in pursuing those priori-

ties. Federal fuel economy standards are one means of

decreasing gasoline consumption, limiting our re-

liance on foreign energy sources of increasingly uncer-

tain reliability, and reducing air pollution and green-

house gas emissions. See 75 Fed. Reg. 25324, 25326-27

(May 7, 2010) (establishing new corporate average

fuel economy standards). Equally important, however,

is encouraging vehicle buyers to select fuel-efficient

vehicles from within the “range of vehicle choices”

(id. at 25324) permitted by those standards. State and

local efforts to provide such encouragement—such as

the lease rules at issue in this case—complement the

objectives of the federal standards without conflicting

with them, referring to them or relying on them in

any prohibited way, or, indeed, affecting the federal

standards at all.

Tellingly, the federal government argued below

that the City’s rules and similar state and local laws

do not in any way conflict with federal law or policy

and that preempting such laws simply because they

have an effect on fuel economy would “create a regu-

latory void that Congress surely did not contemplate.”

U.S. Br. 12. Nonetheless, the Second Circuit issued a

decision that, in the guise of a wooden application of

statutory language aimed at vindicating the suprema-

cy of federal law, poses a potentially devastating

threat to vital national interests in addition to inter-

fering with the exercise of traditional powers of state

and local governments. The far-reaching negative ef

fects of the Second Circuit’s decision, together with

the opinion’s disregard of the teaching of this Court’s

decisions limiting the effect of preemption clauses us-

ing the same language at issue here, fully justify re-

view of this important case.

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be granted.

Respectfully submitted,

SCOTT L. NELSON

Counsel of Record

ALLISON M. ZIEVE

PUBLIC CITIZEN LITIGATION

GROUP

1600 20th Street NW

Washington, DC 20009

(202) 588-1000

Attorneys for Amicus Curiae

December 2010