How Can a State Regulate Emissions when the Federal Government Won’t?

By Jared Looper*

The Trump Administration’s push to roll back Obama era national fuel standards has set them up for another showdown with California. California has been at the head of a multi-state effort to oppose the Administration by creating its own environmental laws and regulations that impose much more stringent standards than the federal government. This is born out of a desire to fight potentially catastrophic climate change. The national fuel standards revisions are the latest battle in this ongoing war.

On August 24, 2018, the Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA) published a proposed rule freezing Obama-era emissions standards. Under this proposal, the standards that were designed to continue increasing until 2026 would max out at 2020 emissions levels.[i]The comment period closed on October 23, 2018,[ii]and the Trump Administration will likely publish a final rule rolling back these standards soon. The Administration also wants to treat California’s Advanced Clean Cars program, which seeks to reduce emissions by 34% by 2025 through a combination of vehicle emissions standards and vehicle greenhouse gas standards,[iii]as preempted by the new regulation and thus enjoin its application in California.[iv]Other work already examines the Administration’s preemption arguments.[v]The Administration posits that these acts are preempted both by the Clean Air Act (CAA) under the new regulation, and the Energy Policy and Conservation Act (EPCA) due to the fact that California’s program relates to fuel economy.[vi]These arguments are unlikely to succeed. California’s waiver will likely remain valid under the CAA, and various courts have held the EPCA does not preempt regulations made under the CAA.[vii]

California has two different options under the CAA to preserve the Advanced Clean Cars program. First, California could seek to preserve its program by saying the revocation of its waiver under the CAA is inappropriate.[viii]Second, California could seek to receive a new waiver under the CAA to establish this type of program.[ix]California also has several other options it could pursue in lieu of using the CAA to attempt to regulate climate change. This post will examine each response in turn.

California will likely make two arguments for the continued validity of its Advanced Clean Cars program. The first argument is that the waiver granted by the EPA for the program has not violated the statutory standards set out in the CAA. The portion of the act addressing waiver provisions holds that the EPA shall waive the preemption of state regulations of moving vehicles for states prior to March 30, 1966, unless it “finds that—(A) the determination of the state is arbitrary and capricious, (B) such State does not need such State standards to meet compelling and extraordinary conditions, or (C) such State standards and accompanying enforcement procedures are not consistent with section 202(a) of this part.”[x]The arguments under the third reason to deny waiver have been addressed elsewhere.[xi]The basic argument the Administration makes is that after EPA and NHTSA promulgate the final rule, California’s Advanced Clean Cars program will not be consistent with the rule and would invalidate the waiver.[xii]This will likely not work due to past court holdings that the EPA must grant waivers if the Administrator finds that the program is at least of protective of public health as the governmental program.[xiii]

Furthermore, the Administrator cannot meet the requirements of (A) and (B) above. The state determination is not arbitrary and capricious. California created regulations that gave effect to the Advanced Clean Cars program through a formalized process with significant evidence that mirrors the federal process.[xiv]Moreover, California needs these regulations to meet compelling and extraordinary conditions. California has eight of the ten most polluted cities in the United States in terms of ozone pollution and several more in the top 25.[xv]It additionally has some of the worst polluted cities in terms of year-round particle pollution and short-term particle pollution.[xvi]The program helps California address these extraordinary pollution problems. Since the Administration’s preemption arguments both under the EPCA and the CAA are unlikely to succeed, California will be able to maintain a program it views as necessary to fight climate change and stave off environmental catastrophe.

California is also seeking a new waiver pursuant to Section 209(b) of the CAA.[xvii]On November 13, Acting EPA Administrator Andrew Wheeler said California offered a new plan, different from the Advanced Clean Cars program, that could receive a waiver from the EPA.[xviii]Wheeler expressed that the discussions were “positive” and worked toward his desire to achieve “a fifty-state solution” for vehicle emissions.[xix]Should these negotiations succeed, California and the EPA will avoid litigation and instead will establish a new emissions plan that would presumably be adopted nationwide. Given California’s aggressive stance on maintaining strong standards for vehicle emissions, the new standards proposed by California would likely be more protective of public health the Administration’s current proposal.[xx]Wheeler has currently offered no information about the details of California’s program, however.[xxi]If California succeeds in receiving this waiver, other states could follow these same standards in lieu of the federal standards, per CAA Section 177.[xxii]This means California’s success at keeping its current standards or creating new standards is the success of the nation as a whole.

If the Trump administration succeeds in revoking the waiver for the Advanced Clean Cars program, does California have any options to regulate emissions? Various courts have upheld three different types of regulations addressing air pollution from moving vehicles, and California could easily undertake any of them. The first of these is entering into an interstate compact as described by the Clean Air Act. The Act provides that the EPA “shall encourage cooperative activities by the States and local governments for the prevention of air pollution.”[xxiii]Two or more can enter into these compacts by negotiating the terms of the compacts and then receiving approval from Congress, at which time the compact becomes valid law.[xxiv]Since the federal government has specifically provided that states should enter into these compacts, there are no issues with preemption by the Clean Air Act as a whole. The only restrictions upon these compacts are that they must not make it impossible to comply with both federal and state emissions standards.[xxv]

The second way California could seek to control emissions is through information forcing regulations. For example, courts have at times upheld regulations that required information about emissions but did not set emissions standards.[xxvi]Additionally, courts have upheld Texas laws giving incentives to taxis for adopting cleaner engines as not setting standards for emissions and thus not encroaching upon the exclusive territory of the CAA.[xxvii]These cases demonstrate that California can offer whatever carrots and sticks it wants to regulate emissions as long as it does not set standards for emissions from motor vehicles.

The third option for California to regulate emissions is through state tort law. Various courts have upheld state tort law claims for environmental damage on the grounds that such claims the intended sphere of preemption of the CAA. The Third Circuit, for example, has allowed state tort law claims concerning coal pollution to proceed since preemption of state common law requires a “clear and manifest” showing of Congressional purpose to do so.[xxviii]The Sixth Circuit has gone even further and said that the state’s rights savings clause of the CAA makes clear that states can adopt or enforce common law standards that apply to emissions.[xxix]The Fifth Circuit, however, has held that, in the context of the Federal Power Act of 1935, the general preemption by occupation of the field meant that the federal law, rather than state law, set the duty for state common law.[xxx]Similarly, a court could hold that the Clean Air Act occupies the entire field of emissions regulation,[xxxi]and thus that the federal law, rather than any state statutes or common law, sets the relevant duty. Thus, regulating emissions through state tort law is on less sure footing than through interstate compacts or tangential regulations, though all contemporary federal court decisions support the use of state tort law in this manner.

Although California’s Advanced Clean Cars program is in danger of being revoked by the Administration’s final rule,[xxxii]California has several other options to regulate emissions that the Trump administration is unable to prevent it from using. Even in the face of the Trump administration’s refusal to use regulatory measures to address vehicle emissions, California and states like it can innovate to respond to the modern environmental challenges this political environment poses. Emissions regulations will likely be addressed on the state level for the near future, but the states will certainly be able to find ways to make these regulations.

*Jared Looper is a Junior Editor with MJEAL. He can be reached at jrlooper@umich.edu.


The views and opinions expressed in this blog are those of the authors only and do not reflect the official policy or position of the Michigan Journal of Environmental and Administrative Law or the University of Michigan.

 

[i]The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks, 83 Fed. Reg. 42,986 (proposed Aug. 24, 2018) (to be codified at 49 C.F.R. pts. 523, 531, 533, 536, 537).

[ii]Id.

[iii]The Advanced Clean Cars Program,Cal. Air Resources Bd.(Nov. 9, 2011), https://www.arb.ca.gov/msprog/zevprog/factsheets/advanced_clean_cars_eng.pdf?_ga=2.13632050.424455741.1545946659-2128737871.1543540864.

[iv]Miranda Green, Top California Regulator: Emissions Rule Change ‘Blows a Hole’ in Air Pollution Standards, The Hill(Sept. 24, 2018),https://thehill.com/policy/energy-environment/408105-ca-air-pollution-head-new-epa-car-emissions-rule-turns-its-back-on.

[v]Envtl. & Energy L. Program, Harv. L. Sch., CAFE Standards and the California Preemption Plan(Aug. 24, 2018), http://environment.law.harvard.edu/2018/08/cafe-standards-california-preemption-plan/.

[vi]Id.

[vii]Id.

[viii]42 U.S.C. § 7543(b)(1) (2012).

[ix]John Lippert & Ryan Beene, California Counters Trump’s Car Emissions Rollback With New Plan, Automotive News (Nov. 13, 2018), http://www.autonews.com/article/20181113/OEM05/181119901/california-emissions-epa-regulation.

[x]42 U.S.C. § 7543(b)(1) (2012) (California was the only state with regulations prior to March 30, 1966, so it is the only state that can seek a waiver under this provision.).

[xi]Envtl. & Energy L. Program,supraat note 5.

[xii]Id.

[xiii]Id.

[xiv]Advanced Clean Cars – AB1085 Background Materials for Emissions Data, Economic Data and Public Health Impacts,Cal. Air Resources Bd.(Aug. 12, 2014), https://www.arb.ca.gov/msprog/clean_cars/clean_cars_ab1085/clean_cars_ab1085.htm.

[xv]Most Polluted Cities, American Lung Assn.,https://www.lung.org/our-initiatives/healthy-air/sota/city-rankings/most-polluted-cities.html (last visited Oct. 29, 2018).

[xvi]Id.

[xvii]42. U.S.C. § 7543(b) (2012).

[xviii]42 U.S.C. § 7521 (2012).

[xix]Id.

[xx]Supra, note 17.

[xxi]Id.

[xxii]42 U.S.C. § 7507 (2012).

[xxiii]42 U.S.C. § 7402(a) (2012).

[xxiv]42 U.S.C. § 7402(c) (2012).

[xxv]SeeFlorida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132 (1963) (holding a state statute not preempted because it was possible to comply with both the federal and state standard).

[xxvi]E.g., Jensen Family Farms. v. Monterey Bay Unified Air Pollution Control Dist., 644 F.3d 934 (9th Cir. 2011).

[xxvii]Ass’n of Taxicab Operators, USA v. City of Dall.,760 F. Supp. 2d 693 (N.D. Tex. 2010).

[xxviii]Bell v. Cheswick Generating Station, 734 F.3d 188, 198 (3d Cir. 2013).

[xxix]Merrick v. Diageo Ams. Supply, 805 F.3d 685, 690 (6thCir. 2015).

[xxx]Simmons v. Sabine River Auth., 732 F.3d 469, 476 (5thCir. 2013).

[xxxi]See42 U.S.C. § 7543(a) (2012).

[xxxii]83 Fed. Reg. 42,986 (proposed Aug. 24, 2018) (to be codified at 49 C.F.R. pts. 523, 531, 533, 536, 537)..

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