Diesel’s Day In Court

In what history may well mark as a landmark legal case in emissions regulations, as well as having a huge impact on the engine industry and the equipment it powers, the U.S. Supreme Court has ruled that federal clean air laws bar local regulations for the Los Angeles region that prohibit the purchase by fleet operators of new diesel-fueled vehicles.

The case in question was Engine Manufacturers Assn. Et Al v. South Coast Air Quality Management District Et Al (#02-1343). Oral arguments were held on January 14, with the court’s 8-1 decision announced April 29.

The Supreme Court’s ruling ended a nearly four-year legal battle that resulted from the California’s South Coast Air Quality Management District’s (SCAQMD) Fleet Rules that required various public and private operators of fleets of 15 or more vehicles in the SCAQMD basin (Los Angeles, Orange, Riverside and San Bernardino counties) to purchase alternative- fuel vehicles or certain cleaner-fuel vehicles authorized under California’s emissions standards program.

However, some vehicles certified for sale under California’s program, including all dieselpowered vehicles, were not eligible for purchase under the Fleet Rules, unless there were no “cleaner” vehicles available for purchase.

The industry said the district’s authority to do that was preempted by section 209(a) of the Clean Air Act. SCAQMD said it was not. In the end, the Supreme Court agreed with EMA et al.

As expected, EMA was pleased by the decision; SCAQMD was not.

“We are extremely gratified by this tremendous result,” said Jed Mandel, president of the Engine Manufacturers Assn. “The Court’s decision confirms the fundamental point that we have tried to make clear to the SCAQMD all along — local agencies cannot adopt emission control programs that dictate the types of new vehicles that can be bought or sold.

“The opinion clearly recognizes and affirms the intent of Congress to establish a national program governing emissions from mobile sources including trucks, buses and cars,” Mandel said. “The Court got it exactly right when it held that ‘a preempted standard is a standard even when not enforced through manufacturer — directed regulation.’ ” “We are disappointed in this decision by the court,” said Barry Wallerstein, executive officer of the South Coast Air Quality Management District.

However, SCAQMD said the decision may not be the end of the line for the infamous Fleet Rules. “We are determined to continue implementing the rules for publicly owned fleets,” Wallerstein said. “We will also consider asking the state and the U.S. Environmental Protection Agency to allow us to continue to regulate privately owned fleets.”

Apparently anticipating that response, Mandel said, “We look forward to the prompt withdrawal and amendment of the fleet rules. SCAQMD will not be able to circumvent the Court’s ruling by claiming that its rules can still apply to public fleets.”

The case was argued during a session when the Supreme Court has chosen to hear more environmental cases than at any time in its history. Some court watchers feel the collective rulings from this session, and possibly others, may lay the legal groundwork for environmental law for the next 20+ years.

While the role of diesel engines was central and highly publicized, the case was really about jurisdictions and definitions. The jurisdictional question before the court was whether a state or political subdivision, such as an air quality district, could enact emissions regulations.

The definition issue is whether the Fleet Rules purchase requirements are actually standards for the control of emissions and therefore not allowed by Section 209(a) of the federal Clean Air Act. That section specifically prohibits the adoption or attempted enforcement of any state or local “standard relating to the control of emissions from new motor vehicles or new motor vehicle engines.”

EMA said the Fleet Rules purchase requirements were de facto emissions regulations. SCAQMD said its rules were purchase requirements, not emissions regulations.

SCAQMD’s argument was rejected outright outright and specifically in the majority opinion. Writing for the majority, Justice Antonin Scalia said, “In addition to having no basis in the text of the statute, treating sales restrictions and purchase restrictions differently for pre-emption purposes would make no sense. The manufacturer’s right to sell federally approved vehicles is meaningless in the absence of a purchaser’s right to buy them. The decision, in which Justice David Souter dissented, also reaffirmed the federal government’s primary role in clean air regulation.

The majority opinion said, “But if one State or political subdivision may enact such rules, then so may any other; and the end result would undo Congress’s carefully calibrated regulatory scheme.”

It was this exact “worst case scenario” that many in the industry feared — a balkanized emissions landscape in which all 50 states and an untold number of towns, villages, cities or regions could set their own regulations. It was seen as the ultimate nightmare for engine manufacturers who would have to build products to meet hundreds of different regulations; an obvious practical and economic impossibility.

The emissions landscape now appears set with the federal government and California, which has always been treated as a special case in terms of emissions regulations, now being the only emissions standard setting bodies. The whole thing started in June 2000 when SCAQMD adopted the first of its Fleet Rules. The Rules, which eventually numbered six, governed operators of: street sweepers; passenger cars, light-duty trucks and mediumduty vehicles; public transit vehicles and urban buses; solid waste collection vehicles; airport transportation vehicles, including shuttles and taxis picking up airline passenger; and heavyduty on-road vehicles.

All six of the rules applied to operators of public fleets, as well as privately operated street sweepers, refuse trucks and airport vehicles.
 
In response, the Engine Manufacturers Association sued SCAQMD in August 2000, saying the Fleet Rules were preempted by Section 209(a). In August, 2001, the U.S. District Court for the Central District of California sided with SCAQMD.

In October 2002, the 9th Circuit Court of Appeals agreed with the district court. In June 2003, the U.S. Supreme Court accepted the case for review, leading to the April decision.

However, like many legal matters, the decision is not 100 percent final. The Supreme Court did remand a portion of the case back to lower courts, essentially Mandel said, for two reasons. One is to determine whether there is any application of SCAQMD’s fleet rules to other than new vehicles, such as leased or vehicles currently in use.

“The fleet rules explicitly apply to new vehicles, so I don’t think the district court can do anything on remand but say these rules don’t survive the Supreme Courts decision,” he said. The other issue Mandel said the court remanded on was to see if there was any aspect of the fleet rules that would fall under internal controls of the state.

“I think they’ve remanded to simply determine whether in fact, as a matter of state law, the South Coast controls the purchasing decisions, the budget decisions, of other governmental units. And I think the answer to that is they absolutely do not.”

“Importantly in all this, there will be no adverse air quality effects that will result from the Supreme Court’s decision,” Mandel said. “The fact is that the diesel engine technologies that the Fleet Rules attempted to ban are just as clean and low-emitting as other available technologies.”