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Automakers File Amicus Brief in the Ninth Circuit in the Volkswagen ‘Clean Diesel’ Suit Arguing for Federal Preemption

On December 13, 2018, the Alliance of Automobile Manufacturers Inc., the Association of Global Automakers, and the U.S. Chamber of Commerce filed its amicusbrief to support Volkswagen in its opposition against an appeal filed by the Environmental Protection Commission of Hillsborough County, Florida and Salt Lake City Utah (Counties). The Counties sued Volkswagen for violating state and local laws for tampering with emission control devices on vehicles they manufactured that ultimately allowed a car’s emissions to exceed the legal limits. The Counties seek to reverse an order dismissing their claims based on both implicit and explicit federal preemption by the Clean Air Act (CAA). [The Environmental Protection Commission, et al v. Volkswagen Group of America, et al., Case No. 18-15937 (9th Cir. 2018).]


Factual Background

In 2016, the U.S. government, on behalf of the U.S. Environmental Protection Agency (EPA), filed a federal Clean Air Act (CAA) suit against Volkswagen and its subsidiaries for installing defective devices in their vehicles and selling approximately 585,000 of the defective, new models to the U.S. The defective device contains software that tampers with the vehicle’s emission controls and effectively allows cars to pass government emissions test but also enables the vehicle to pollute by as much as 35 times the permissible emissions while the vehicle was being driven.

Volkswagen entered into a settlement with the federal government for $4.3 billion in criminal penalties, $2.0 billion to invest in Zero Emission Vehicles, and $2.925 billion in a mitigation fund to be used to remedy the environmental harm the company caused. Furthermore, Volkswagen also agreed to pay $10.033 billion to buy back certain defective vehicles and pay the owners and lessees of said vehicles restitution. Soon after the EPA’s suit, multiple class actions filed by consumers, dealerships, investors, and municipalities followed.


Disposition of the Counties’ Suit

The Counties filed suit in the U.S. District Court for the Northern District of California (District Court), against Volkswagen for violating state and local laws regarding the tampering of emissions controls in vehicles. These laws generally prohibit anyone from removing or rendering inoperable a vehicle’s emission control system. 42 U.S.C. §7522(a)(3)(A) specifically makes it unlawful for:


  • . . .any person to remove or render inoperative any device or element of design installed on or in a motor vehicle…or for any person knowingly to remove or render inoperative any such device or element of design after such sale and delivery to the ultimate purchaser.

In addition to the tampering claims, the Counties also alleged that Volkswagen updated its defeat device to increase the device’s efficiency and added new defeat devices during vehicle maintenance and post-sale recalls.

On April 16, 2018, the U.S. District Court granted Volkswagen’s motion to dismiss with prejudice, on the grounds that the Counties’ tampering claims were expressly preempted by § 209(a) of the CAA. It also concluded that the Counties’ claims based on subsequent tampering were impliedly preempted.

The District Court heavily relied on Wyoming’s disposition of a similar suit against Volkswagen. The District Court reviewed the relevant sections of the CAA. Section 209(a) provides:


  • No state or any political subdivision thereof shall adopt or attempt to enforce any standardrelating to the control of emissions from new motor vehiclesor new motor engines subject to this part. No State shall require certification, inspection, or any other approval relating to the control of emissions from any new motor vehicle as condition precedent to the initial retail sale, titling (if any), or registration of such motor vehicle, motor vehicle engine, or equipment.” (42 U.S.C. § 7543(a)) (emphasis added)


Section 209(d) states:


  • Nothing in this part shall preclude or deny to any State or political subdivision thereof the right to otherwise control, regulate, or restrict the use, operation,or movement of registered or licensed motor vehicles.” (42 U.S.C. § 7543(d)) (emphasis added)

Through § 209(a), Congress tasked the EPA to regulate emission-control devices on new vehicles and enforce these standards by its certification process. In effect, Congress created a uniform regulatory regime for governing emissions from new vehicles to avoid the possibility of 50 different regulatory standards in every state. The District Court ultimately held that the Counties claims are expressly preempted by 209(a) because the Counties, to an extent, sought to regulate Volkswagen’s conduct of manufacturing the device and installing it into new vehicles which equates to an “attempt to enforce [a] standard relating to the control of emissions from new motor vehicles,” which states are expressly preempted from under Section 209(a).

On the claims regarding subsequent tampering, the CAA requires vehicles to meet EPA emissions standards not just as a new vehicle but also throughout its “useful life.” (42 U.S.C. § 7521(a)(1)) This means that Volkswagen’s subsequent modifications to the defective devices will still continue to be federally regulated and state and local government regulation are subject to limitations imposed by federal law. The District Court also reviewed the legislative history regarding § 209(d). The District Court concluded that it was Congress’ intent to authorize state and local governments to adopt transportation planning regulations and not to regulate vehicle manufacturers.


The Counties’ Appellate Brief

On October 04, 2018, the Counties filed an appeal to the Ninth Circuit on the issue of whether the District Court erred in holding that all of their claims were preempted, even where Congress expressly authorized:


  • . . .any State of political subdivision thereof. . .[to]. . .control, regulate, or restrict the use, operation or movement of registered or licensed motor vehicles. (Section 209(d))

The Counties arguments can be placed into three categories: 1) that it was Congress’s intent for state and local governments to act as partners for air pollution control; 2) that the Counties’ claims are not expressly preempted because only conflicting emissions standards for new vehicles should be preempted and that the Counties are not attempting to enforce any standard relating to the control of emissions of air pollutants; and 3) the their claims are not impliedly preempted because they do not conflict with the Congressional purpose and objectives in the CAA.

Expanding on their arguments above, first, the Counties contend that Congress granted EPA the power to set emissions standards but preserved the power to assist with enforcing these standards to state and local governments. The Counties argue that this delineation is explicit in Section 209(d) of the CAA and further argues that subsection (d) “preserves the field of regulation of old motor vehicles to state control.”

Second, the Counties argue that their claims are not expressly preempted by the CAA because the language of § 209 is inapplicable to their regulations. The Counties’ anti-tampering regulations do not “adopt or attempt to enforce any “standards relating to the control of emissions” but instead, only prohibit anyone from tampering or disabling emissions control systems. Additionally, the Counties argue that § 209 only preempts claims relating to the manufacture, sale, or purchase of “new motor vehicle” and that the Counties’ regulations prohibit anyone from altering or disabling the emissions control of vehicles that already have been certified and placed “in-use.”

Lastly, the Counties contend that the regulations are also not impliedly preempted. They argue that Congress does not occupy the entire field because § 209 only encompasses “new motor vehicles” and that the claims are not barred by conflict preemption because it is not impossible to comply with both federal and state law—that Volkswagen designs a federal law-compliant emissions control system that is also subject to anti-tampering state laws.


The Amicus Brief

On December 13, 2018, the Alliance of Automobile Manufacturers Inc., the Association of Global Automakers, and the U.S. Chamber of Commerce (Amici) filed its amicus brief in support of affirming the District Court’s decision—that the Counties claims are preempted by the CAA in their entirety. The Amici provides perspective on the existing federally-regulated process for implementing post-sale software updates and the negative impacts of allowing individual states the authority to inject themselves into the process.

Theamiciemphasize that the EPA comprehensively regulates configurations of motor vehicles from their initial certification phase to the end of their useful lives. For example, the EPA heavily regulates “running changes” and requires a manufacturer to notify the EPA of these changes. 40 C.F.R. § 86.1842-01 (b)(1). Manufacturers often make “running changes” which is the regular modifying of vehicles already in-use to update or implement changes to improve their performance, reliability, and safety. In fact, the EPA monitors these changes for the duration of the vehicle’s useful life and may order a recall, or require additional testing to ensure that the vehicles remain compliant with emissions standards. 40 C.F.R. § 86.1842-01 (b)(2).

Theamiciend their brief by reminding the Court of Appeals of the impracticalities of allowing every state and local government the authority to regulate model-wide, post production changes. The Amici argues that such allowance would:


  • . . .destabilize EPA’s careful regulatory scheme and would inject unwarranted complication and confusion into the process.


Conclusion and Implications

Given the commonality of post-sale recalls and updates to software for in-use vehicles, it is unlikely for the Appellate Court to out-right define routine maintenance acts as acts of “tampering” under the regulations of individual states and local governments. The District Court’s ruling is a strong indication of a court’s propensity to defer to the EPA and its rules, given Congress’s intent to set a uniform regime regarding vehicular emissions control, as it did when it conferred to the EPA exclusive authority in setting the standards.

(Rachel S. Cheong, David Boyer)