Pacific Merchant Shipping Ass'n v. Goldstene

• Decision Date: 27 February 2008
• Docket Number: No. 07-16695.,07-16695.
• Citation: 517 F.3d 1108
• Parties: PACIFIC MERCHANT SHIPPING ASSOCIATION, a California Mutual Benefit Corporation, Plaintiff-Appellee, v. James GOLDSTENE,<SMALL><SUP>*</SUP></SMALL> Executive Officer of the California Air Resources Board, Defendant-Appellant, Coalition For Clean Air, Inc.; Natural Resources Defense Council, Inc.; South Coast Air Quality Management District; City of Long Beach, Defendant-Intervenors-Appellants.
• Court: U.S. Court of Appeals — Ninth Circuit

517 F.3d 1108

PACIFIC MERCHANT SHIPPING ASSOCIATION, a California Mutual Benefit Corporation, Plaintiff-Appellee, v. James GOLDSTENE,^* Executive Officer of the California Air Resources Board, Defendant-Appellant, Coalition For Clean Air, Inc.; Natural Resources Defense Council, Inc.; South Coast Air Quality Management District; City of Long Beach, Defendant-Intervenors-Appellants.

No. 07-16695.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 12, 2008.

Filed February 27, 2008.

Nicholas Stern, Deputy Attorney General of the State of California, Sacramento, CA, for the defendant-appellant.

Barbara Baird, District Counsel, Diamond Bar, California; David Pettit, Natural Resources Defense Council, Santa Monica, CA; Jay M. Spillane, Spillane Shaeffer Aronoff Bandlow LLP, Los Angeles, CA; Dominic T. Holzhaus, Principal Deputy City Attorney for City of Long Beach, Long Beach, CA, for the intervenors-appellants.

Erich P. Wise, Flynn, Delich & Wise LLP, Long Beach, CA, for the plaintiff-appellee.

Janice K. Raburn, American Petroleum Institute, Washington, DC; Kevin M. Fong, Pillsbury Winthrop Shaw Pittman LLP, San Francisco, CA, for the amicus.

Appeal from the United States District Court for the Eastern District of California; William B. Shubb, District Judge, Presiding. D.C. No. CV-06-02791-WBS.

Before: BARRY G. SILVERMAN, M. MARGARET McKEOWN, and RICHARD C. TALLMAN, Circuit Judges.

OPINION

SILVERMAN, Circuit Judge:

On January 1, 2007, the California Air Resources Board began enforcing state regulations, the "Marine Vessel Rules," limiting emissions from the auxiliary diesel engines of ocean-going vessels within twenty-four miles of California's coast. The Pacific Merchant Shipping Association, a group of companies that own or operate ocean-going vessels subject to the Marine Vessel Rules, filed suit to enjoin their enforcement because, they argue, the Rules are pre-empted by the Clean Air Act, 42 U.S.C. §§ 7401-7671q, and the Submerged Lands Act, 43 U.S.C. §§ 1301-1302. We affirm the district court's ruling that the Marine Vessel Rules are preempted by the Clean Air Act and we reinstate that court's injunction against enforcement of the Marine Vessel Rules.

I. Facts

The Clean Air Act Amendments of 1990 created a scheme for the regulation of emissions from nonroad sources such as lawnmowers, bulldozers, locomotives, and marine vessels. See Engine Mfrs. Ass'n v. U.S. Envtl. Prot. Agency, 88 F.3d 1075, 1078 (D.C.Cir.1996) ("EMA"). The amendments governing emissions from nonroad sources reflect the basic structure of the Clean Air Act, which "makes the States and the Federal Government partners in the struggle against air pollution," but sought to avoid "an anarchic patchwork of federal and state regulatory programs." EMA, 88 F.3d at 1078, 1079 (quotation omitted). The 1990 amendments granted the federal government the authority to promulgate "regulations containing standards applicable to emissions from . . . new nonroad engines and new nonroad vehicles." Clean Air Act § 213(a)(3), 42 U.S.C. § 7547(a)(3).¹ On the other hand, Congress expressly preempted state regulation of emissions from new engines used in construction and farm equipment, new engines smaller than 175 horsepower, and new locomotive engines. Clean Air Act § 209(e)(1), 42 U.S.C. § 7543(e)(1).²

For other nonroad engines and vehicles, § 209(e)(2) of the Clean Air Act allows California to seek authorization from the EPA to adopt "standards and other requirements relating to the control of emissions." Id. § 7543(e)(2)(A).³ Section 209(e)(2) provides in pertinent part:

In the case of any nonroad vehicles or engines other than those referred to in subparagraph (A) or (B) of paragraph (1), the Administrator shall, after notice and opportunity for public hearing, authorize California to adopt and enforce standards and other requirements relating to the control of emissions from such vehicles or engines if California determines that California standards will be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards.

Id. § 7543(e)(2) (emphasis added). Other states can adopt regulations identical to California's regulations approved by the EPA. Id. § 7543(e)(2)(B). The Board has neither sought nor obtained § 209(e)(2) authorization from the EPA for the Marine Vessel Rules.

Nonetheless, on January 1, 2007, the California Air Resources Board began enforcing the Marine Vessel Rules it promulgated regarding the emission of particulate matter ("PM"), nitrogen oxide ("NOx"), and sulfur oxide ("SOx") from ocean-going vessels on all waters within twenty-four nautical miles of the California coast. Cal. Code Regs. tit. 13, § 2299.1(a), 2299.1(b)(1).⁴ The Marine Vessel Rules apply to the emissions of "auxiliary diesel engines," which are engines "designed primarily to provide power for uses other than pro-pulsion" and used for on-board electricity needs. Id. § 2299.1(d)(2). Such engines are typically powered by residual fuel, commonly called bunker fuel in the maritime industry, which has an average sulfur content of 2.5 percent by weight. The Rules provide, in pertinent part:

(e) Requirements.

(1) Emission Limits.

Except as provided in subsections (c), (g) and (h), no person subject to this section shall operate any auxiliary diesel engine, while the vessel is operating in any of the Regulated California Waters, which emits levels of diesel PM, NOx, or SOx in exceedance of the emission rates of those pollutants that would result had the engine used the following fuels: [specified fuels omitted].

Id. § 2299.1(e)(1) (emphasis added).⁵ In sum, the emissions of any auxiliary diesel engine must not exceed "the emission rates . . . that would result had the engine used the [specified] fuels" with a sulfur content of no more than 0.5 percent by weight. Id.

Compliance with the Marine Vessel Rules is presumed where a vessel uses the specified fuels. Id. § 2299.1(e)(1)(C). However, a vessel owner may also comply by "alternative emission control strategies . . . [that] result in emissions . . . that are no greater than the emissions that would have occurred" using the specified fuels. Id. § 2299.1(g)(1)(A). The Marine Vessel Rules exempt, among others, vessels traversing the regulated waters but not entering or stopping at a port in California and vessels owned or operated by a local, state, federal or foreign government. Id. §§ 2299.1(c)(1), 2299.1(c)(3).

The Pacific Merchant Shipping Association ("PMSA") is a mutual benefit corporation organized to support the legislative, legal, and administrative interests of its members, who are companies that own or operate ocean-going vessels subject to the Marine Vessel Rules. PMSA filed suit against the Board in district court seeking to enjoin California from enforcing the Marine Vessel Rules. PMSA argued that the Marine Vessel Rules are invalid because the Board failed to obtain the EPA authorization required by the Clean Air Act prior to enforcing the Marine Vessel Rules, and the Submerged Lands Act preempts application of the Marine Vessel Rules outside of California's boundary.

The district court granted PMSA's motion for summary judgment on PMSA's Clean Air Act claim and did not rule on the Submerged Lands Act claim. The district court held that the Marine Vessel Rules are preempted by § 209(e)(2) of the Clean Air Act because the regulations are emission "standards" and not so-called "in-use requirements" that merely regulate how vehicles may be used. The district court found the regulations to be emissions standards "[b]ecause the regulations set numerical requirements for the reduction of emissions relating to particular emissions rather than a fleet as a whole." Pac. Merch. Shipping Ass'n v. Cackette, No. S-06-2791 (E.D.Cal. Aug. 30, 2007) (order granting summary judgment).

The Board and intervening parties Natural Resources Defense Council, Inc., Coalition for Clean Air, Inc., South Coast Air Quality Management District, and the City of Long Beach (collectively "Intervenors") appeal the district court's decision. We previously stayed the district court's order enjoining enforcement pending appeal. Pac. Merch. Shipping Ass'n v. Goldstene, No. 07-16695 (9th Cir. Oct. 23, 2007).

II. Analysis

We have jurisdiction to review the district court's final order granting summary judgment. 28 U.S.C. § 1291. A district court order granting summary judgment is reviewed de novo. See Padfield v. AIG Life Ins. Co., 290 F.3d 1121, 1124 (9th Cir.2002). Summary judgment is proper if the record, viewed in the light most favorable to the non-moving party, discloses "that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Universal Health Servs., Inc. v. Thompson, 363 F.3d 1013, 1019 (9th Cir.2004).

The parties agree that the ocean-going vessels regulated by the Marine Vessel Rules are nonroad vehicles for purposes of Clean Air Act § 209. Marine vessels are not expressly preempted under Clean Air Act § 209(e)(1). 42 U.S.C. § 7543(e)(1). For nonroad engines and vehicles not covered by § 209(e)(1), Clean Air Act § 209(e)(2) creates a sphere of implied preemption surrounding those regulations for which California must obtain authorization. See EMA, 88 F.3d at 1087-88. The issue in dispute here is whether the scope of the implied preemption of § 209(e)(2) includes the Marine Vessel Rules. We hold it does.

The Board contends that since the Marine Vessel Rules apply only to non-new engines, the Rules are not preempted if § 209(e)(2) only applies to new engines. In 1996, the D.C. Circuit directly addressed this issue when it considered whether the EPA's rules — which interpreted the implied pre-emption of § 209(e)(2) to apply only to new engines — were entitled to deference under Chevron, U.S.A., Inc. v. NRDC, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694...