American Auto. Mfrs. Ass'n v. Commissioner, Massachusetts Dept. of Environmental Protection

• Decision Date: 05 April 1994
• Docket Number: No. 93-2276,93-2276
• Citation: 31 F.3d 18
• Parties: , 29 Fed.R.Serv.3d 1186, 25 Envtl. L. Rep. 20,080 AMERICAN AUTOMOBILE MANUFACTURERS ASSOCIATION, et al., Plaintiffs, Appellants, v. COMMISSIONER, MASSACHUSETTS DEPARTMENT OF ENVIRONMENTAL PROTECTION, et al., Defendants, Appellees. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 18

31 F.3d 18

39 ERC 1037, 29 Fed.R.Serv.3d 1186,

25 Envtl. L. Rep. 20,080

AMERICAN AUTOMOBILE MANUFACTURERS ASSOCIATION, et al., Plaintiffs, Appellants, v. COMMISSIONER, MASSACHUSETTS DEPARTMENT OF ENVIRONMENTAL

PROTECTION, et al., Defendants, Appellees.

No. 93-2276.

United States Court of Appeals, First Circuit.

Heard April 5, 1994.

Decided Aug. 3, 1994.

Edward W. Warren, with whom Daniel F. Attridge, Stuart A.C. Drake, Gary E. Marchant, Kirkland & Ellis, Robert F. Sylvia, Eric F. Eisenberg, Hinckley, Allen & Snyder, Phillip D. Brady, V. Mark Slywynsky, Of Counsel, American Auto. Mfrs. Ass'n, Charles H. Lockwood, and John T. Whatley, Of Counsel, Ass'n of Intern. Auto. Mfrs., Inc., were on brief, for appellants.

James R. Milkey, Asst. Atty. Gen., Deputy Chief, Environmental Protection Div., with whom Scott Harshbarger, Atty. Gen. of the Com. of Massachusetts, and David G. Bookbinder, Asst. Atty. Gen., were on brief for appellee Comm'r, Massachusetts Dept. of Environmental Protection.

William H. Lewis, Jr., Hunter L. Prillaman, Morgan, Lewis & Bockius, Paul F. Ware, Jr., Michael J. Meagher, Scott L. Robertson, Goodwin, Procter & Hoar, G. William Frick, and David T. Deal, Of Counsel, American Petroleum Institute on brief, for appellee American Petroleum Institute.

Lois J. Schiffer, Acting Asst. Atty. Gen., David C. Shilton, Timothy J. Dowling, Attys., Environment and Natural Resources Div., Jean C. Nelson, Gen. Counsel, Alan W. Eckert, Associate Gen. Counsel, and Michael J. Horowitz, Atty., Office of Gen. Counsel, U.S.E.P.A., on brief for the U.S., amicus curiae.

Jacqueline M. Warren, and Berle, Kass & Case on brief for American Lung Ass'n, Natural Resources Defense Council, and Conservation Law Foundation, amici curiae.

G. Oliver Koppel, Atty. Gen. of State of N.Y., Peter H. Schiff, Deputy Sol., Val Washington, Joan Leary Matthews, Helene G. Goldberger, Asst. Attys. Gen., Michael E. Carpenter, Atty. Gen., of the State of Me., Sarah Roberts Walton, Asst. Atty. Gen., Jeffrey L. Amestoy, Atty. Gen. of the State of Vt., J. Wallace Malley, Jr., Deputy Atty. Gen., Jeffrey B. Pine, Atty. Gen. of the State of R.I., and Michael Rubin, Asst. Atty. Gen. and Environmental Advocate, on brief for the States of N.Y., Me., Vt., and R.I., amici curiae.

, SELYA, Circuit Judge, BOWNES, Senior Circuit Judge, and CYR, Circuit Judge

BOWNES, Senior Circuit Judge.

Plaintiffs-appellants, the Massachusetts State Automobile Dealers Association, Inc. and two trade groups of automobile manufacturers, appeal from an order denying their request for a preliminary injunction. Plaintiffs seek to stall the implementation of motor vehicle tailpipe emissions regulations adopted by defendant-appellee, the Commissioner of the Massachusetts Department of Environmental Protection (DEP). See Mass.Regs.Code tit. 310, Secs. 7.40-7.60. Defendant-appellee the American Petroleum Institute, intervened in support of the regulations.

Prior to oral argument, plaintiffs moved to dismiss their appeal as to all issues but one: whether DEP's 1995 model year requirements should be enjoined. DEP opposes the motion for partial dismissal and requests costs and attorney's fees. We grant the motion for partial dismissal. We award DEP costs, but not attorney's fees. With respect to the 1995 model year requirements, the order of the district court is affirmed.

I. BACKGROUND

A. Cars and the Clean Air Act

The exhaust from a gasoline-powered engine is a source of air pollution. Motor Vehicle Mfrs. Ass'n v. New York Dep't of Envtl. Conservation, 17 F.3d 521, 524 (2d Cir.1994) (hereinafter MVMA ). Emissions from car tailpipes include hydrocarbons and nitrogen oxides (NO subx ), constituents of ground-level ozone, a major component of smog. Id. at 526.

The Clean Air Act is the federal legislation governing tailpipe emissions. The Act directs the United States Environmental Protection Agency (EPA) to establish national ambient air quality standards (NAAQS) for pollutants such as ground-level ozone. Under the Act, states are responsible for developing and enforcing a plan, subject to EPA approval, for attaining and maintaining the NAAQS by regulating sources of air pollution. 42 U.S.C. Sec. 7410(a). States failing to meet the NAAQS risk sanctions, including the loss of federal highway funds. Id. Sec. 7509. EPA has designated the entire state of Massachusetts as a "serious" nonattainment area for the ozone NAAQS. See 56 Fed.Reg. 56,694, 56,776 (Nov. 6, 1991).

Mobile sources of air pollution such as cars and trucks are subject to EPA regulation under Secs. 202 and 207 of the Act, 42 U.S.C. Secs. 7521, 7541. EPA emissions standards for hydrocarbons and nitrogen oxides apply to a given vehicle based on its weight, use classification, and model year. See id. Secs. 7521, 7541; MVMA, 17 F.3d at 525-26.

State regulation of motor vehicle emissions is generally preempted by the Clean Air Act, 42 U.S.C. Sec. 7543(a), with one exception: California can enforce its own standards, subject to EPA approval by way of a waiver under Sec. 209(b) of the Act, id. Sec. 7543(b) (the waiver requirement). Consequently, there can be only two types of cars "created" under emissions regulations in this country: "California" cars and "federal" (that is, EPA-regulated) cars. See id. Sec. 7507. Other states cannot take any action that would force manufacturers to create a "third vehicle." ¹ Id. (the third vehicle requirement).

Section 177 of the Act allows other states to adopt standards "identical" to California's (the identicality requirement), but only if there is a two-year time lapse between the time the standards are adopted and the first model year affected by those standards (the leadtime requirement). Id. Similarly, Sec. 211 of the Act authorizes EPA to regulate motor fuels and preempts any unapproved state regulations, except for California, which may enact fuel standards without EPA approval. Id. Sec. 7545(c)(4)(B).

B. DEP's Adoption of California LEV Regulations

In September 1991, California enacted a novel set of vehicle emissions and clean fuels requirements called the "Low Emissions Vehicles/Clean Fuels" (LEV/CF) program. The LEV component of the program requires the creation of four categories of California cars to meet increasingly stringent emissions standards, to be phased in over time: Transitional Low-Emission Vehicles; Low-Emission Vehicles; Ultra-Law-Emission Vehicles; and Zero-Emission Vehicles, such as electric cars. California has also established annually descending "fleet average requirements," based on sales targets for each category of vehicles. A fleet average requirement is a cap on the average emissions attributable to all classes of vehicles produced by a particular manufacturer in a given year (in other words, the manufacturer's "fleet"). California's requirements provide manufacturers with "flexibility to develop varying emissions within their entire fleet to meet [an] overall goal." MVMA, 17 F.3d Meanwhile, on January 31, 1992, DEP adopted the LEV component of California's standards, intending to apply the standards beginning with 1995 models. DEP regulations allow new California cars to be leased, bought, sold, and registered in Massachusetts, but ban the acquisition, sale, and registration of new federal cars in the state. DEP's proposed regulations sent out for notice and comment contained fleet average requirements, but no such requirements appear in the final rule because DEP preferred to let the market determine the mix of new California cars in the state.

                at 535.   On January 7, 1993, EPA granted California a Sec. 209(b) waiver for the program
                

C. Prior Proceedings

Plaintiffs filed an action in the District Court for the District of Massachusetts, arguing that DEP's regulations are preempted by the Act because DEP allegedly failed to comply with Sec. 177 of the Act, 42 U.S.C. Sec. 7507. Plaintiffs moved for summary judgment and for a preliminary injunction, founding their motions on four claims: the regulations are not "identical" to California's, in that DEP did not adopt California's clean fuels rules; the regulations force manufacturers to create a "third vehicle" because of the higher sulfur content of gasoline in Massachusetts; the regulations were adopted by DEP before EPA granted California a Sec. 209(b) waiver; and the two-year leadtime requirement precluded DEP from applying the regulations to any 1995 models because two automakers planned to begin producing 1995 cars before two years passed after the regulations were adopted.

With the parties' consent, the court stayed the summary judgment proceedings and ruled first on the motion for a preliminary injunction. The court denied the motion without a hearing, ruling that while plaintiffs demonstrated a risk of irreparable injury given the cost of vehicle emissions controls, the balance of equities and the risk of harm to the public interest did not clearly favor granting an injunction. The court also found that plaintiffs failed to demonstrate a likelihood of prevailing on the merits, which is the "sine qua non" of the preliminary injunction test. Weaver v. Henderson, 984 F.2d 11, 12 & n. 3 (1st Cir.1993).

Three of the four Clean Air Act issues presented to the district court were later addressed by the Second Circuit in a case concerning a challenge to New York's adoption of the LEV standards. See MVMA, 17 F.3d at 521, aff'g in part and rev'g in part Motor Vehicle Mfrs. Ass'n v. New York Dep't of Envtl. Conservation, 831 F.Supp. 57 (N.D.N.Y.1993) (hereinafter New York DEC ). The Second Circuit held in favor of the state on the identicality and waiver claims, but held in favor of the automakers on the leadtime claim. Id. at 532-35. The court did not consider the merits of the "third vehicle" claim because the district court found material facts at issue and set the claim down for trial. Id. at 530.

II. PARTIAL DISMISSAL

Prior to oral argument, plaintiffs moved under ...