Center for Auto Safety v. Thomas

• Decision Date: 17 May 1988
• Docket Number: No. 85-1515,85-1515
• Parties: , 270 U.S.App.D.C. 80, 56 USLW 2662, 18 Envtl. L. Rep. 21,118 CENTER FOR AUTO SAFETY, et al., Petitioners, v. Lee M. THOMAS, Administrator, Environmental Protection Agency, et al., Respondents, Automobile Importers of America, Inc., Ford Motor Company, et al., Intervenors.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 843

847 F.2d 843

27 ERC 1697, 270 U.S.App.D.C. 80, 56

USLW 2662,

18 Envtl. L. Rep. 21,118

CENTER FOR AUTO SAFETY, et al., Petitioners, v. Lee M. THOMAS, Administrator, Environmental Protection Agency, et al., Respondents Automobile Importers of America, Inc., Ford Motor Company et al., Intervenors.

No. 85-1515.

United States Court of Appeals District of Columbia Circuit.

Argued En Banc June 4, 1987.

Decided May 17, 1988.

As Amended May 17, 1988.

Cornish F. Hitchcock, with whom Alan B. Morrison, William B. Schultz, and Clarence M. Ditlow, III, were on the brief, for petitioners.

Raymond B. Ludwiszewski, Sp. Counsel to the Asst. Atty. Gen., U.S. Dept. of Justice, with whom Francis S. Blake, General Counsel, Alan W. Eckert, Associate General Counsel, Peter Wyckoff, Acting Associate General Counsel, Gerald K. Gleason, Asst. General Counsel, Earl Salo, Acting Asst. General Counsel, and Nancy A. Ketcham-Colwill, Counsel, E.P.A., and John F. Cermak, Jr., U.S. Dept. of Justice, were on the briefs, for respondents.

Edward W. Warren, with whom Arthur F. Sampson, III, John G. Mullan, William L. Weber, Jr., and Thomas L. Arnett (for General Motors Corp.), Charles H. Lockwood, II (for Auto. Importers of America, Inc.), and James A. Brown (for Ford Motor Co.) were on the joint brief, for intervenors. Blake A. Biles, Paula Winkler-Doman, Hal D. Cooper, Dennis M. Kelly, Robert C. Kahrl and Charles P. Murdter also entered appearances, for intervenors.

Before WALD, Chief Judge, and ROBINSON, MIKVA, EDWARDS, RUTH BADER GINSBURG, BORK, ^* STARR, SILBERMAN, BUCKLEY, WILLIAMS, and D.H. GINSBURG, Circuit Judges.

Opinion PER CURIAM.

Opinion filed by Chief Judge WALD, in which Circuit Judges SPOTTSWOOD W. ROBINSON, III, MIKVA, HARRY T. EDWARDS, and RUTH BADER GINSBURG join.

Opinion filed by Circuit Judge BUCKLEY, in which Circuit Judges STARR and D.H. GINSBURG join and Circuit Judge WILLIAMS joins in part.

Opinion filed by Circuit Judge SILBERMAN.

Opinion filed by Circuit Judge WILLIAMS.

PER CURIAM:

The en banc court, convened to decide the question of whether petitioners have standing to challenge a rule of the Environmental Protection Agency (EPA) adopting new formulae for calculating automobile fuel efficiency, has divided evenly on whether the standing requirement has been met. In view of this even division, the court has decided to reinstate the original panel decision affirming in part and reversing and remanding in part the EPA's rule. This resolution accords with the policy recently adopted by this circuit that generally leaves intact panel decisions until they are vacated by a majority of the en banc court. However, in light of the division of this en banc court on standing, the court has agreed that neither the reinstatement of the panel decision, nor any of the separate opinions that follow, shall be considered as establishing precedent as to any aspect of standing.

The en banc court also recognizes that the considerable time it has taken for this appeal to proceed may make it unusually It is so ordered.

difficult for the manufacturers subject to the EPA's rule to satisfy fuel-economy standards as a result of the retroactively readjusted Corporate Average Fuel Economy credit ratings generated by the panel's decision. The court assumes that the National Highway Transportation Safety Board will within the limits of its discretion take this factor into account in its proceedings on remand.

WALD, Chief Judge, with whom ROBINSON, MIKVA, HARRY T. EDWARDS and RUTH BADER GINSBURG, Circuit Judges, join:

The only issue of this appeal being reheard en banc is whether the Center for Auto Safety and two other membership organizations that represent consumers of automobiles have standing to challenge an agency rule that compensates automobile manufacturers retroactively for changes in the testing procedures used to measure the fuel economy of each manufacturer's sales fleet. For reasons to follow, we conclude that they do.

In this regard, we differ with Judge Silberman, who would reopen the question of whether automobile consumers can suffer a cognizable injury-in-fact from the reduced production of fuel-efficient vehicles. See infra (opinion of Silberman, J.) (hereinafter "Silberman Opinion"). We also part ways with our four colleagues who have concluded that the petitioners fail to satisfy the causation and redressability prongs of the standing requirement. See infra (opinion of Buckley, J.) (hereinafter "Buckley Opinion"). On this score, we find no constitutionally relevant distinction that differentiates this case from Center for Auto Safety v. National Highway Traffic Safety Administration, 793 F.2d 1322 (D.C.Cir.1986) (CAS I ), a precedent which not only survives this en banc intact but is actively endorsed by all but two members of the en banc court.

CAS I held that the same petitioners who have brought this suit had standing to challenge an agency rule that lowered the minimum average fuel economy standards for light trucks promulgated under the Energy Policy and Conservation Act, Pub.L. No. 94-163, 89 Stat. 871 (1975) (codified as amended in 15 & 42 U.S.C.) ("the EPCA" or "the Act"). The panel in that case reasoned that because petitioners complained of vehicles that would be less fuel-efficient, and because the EPCA's standards are designed to make vehicles more fuel-efficient, "[t]he object of the agency's regulation and the injury are thus directly linked." 793 F.2d at 1334-35. Under challenge in today's case is a different agency rule but one that just as surely undermines fuel economy standards. It does so by relaxing fuel-efficiency testing procedures and thereby providing manufacturers with hundreds of millions of dollars in unearned fuel-economy "credits" that permit those manufacturers to fall below the EPCA's standards without fear of sanctions. In refusing to acknowledge that the effect of the agency's unjustified credit awards is the same as an unlawful lowering of the minimum standards, our colleagues repudiate a cause-and-effect relationship which Congress itself identified when after extensive hearings it selected a monetary incentive system as its means of inducing automobile manufacturers to provide for improved energy efficiency of motor vehicles.

Despite Congress' selection of a penalty-and-credit incentive system, and despite 12 years of regulatory experience under the Act that underscores the effectiveness of this legislative strategy in promoting fuel economy in automobiles, four of our colleagues conclude today that as a matter of constitutional law the unjustified provision of credits toward meeting the fuel economy minimum standards cannot affect the future availability of energy-efficient cars-- i.e., that no major automobile manufacturer will respond to these regulatory incentives and disincentives in the manner Congress expected. We, however, do not believe that Article III of the Constitution requires or even allows judges to substitute their own counterintuitive views of the economic dynamics at work in the automobile industry for those of Congress, any more than the Fourteenth Amendment "enact[s] Mr. Herbert Spencer's Social Statics,"

Lochner v. New York, 198 U.S. 45, 75, 25 S.Ct. 539, 546, 49 L.Ed. 937 (1905) (Holmes, J., dissenting). Accordingly, we find that these petitioners have identified a cognizable injury that is both caused by the challenged rule and redressable by this court, and we would hold they have standing to bring this appeal.

I. BACKGROUND

A. The Incentive Structure Established by the EPCA

The EPCA was a comprehensive legislative response to the energy shocks of the 1973 oil embargo. It sought "to conserve energy supplies through energy conservation programs" and "to provide for improved energy efficiency of motor vehicles, major appliances, and certain other consumer products." 42 U.S.C. Sec. 6201(4) and (5). Throughout its structure and provisions, the Act reflects Congress' firm conviction that economic actors would respond to economic stimuli.

The Act aimed at doubling the 1974 level of automobile fuel efficiency by 1985. ¹ Toward that end, Congress established mandatory fleetwide Corporate Average Fuel Economy ("CAFE") standards, which required manufacturers to improve by 50% the fuel economy of their fleets by model year ("MY") 1980 and to double that target by MY 1985. Congress delegated to the Department of Transportation (DOT) responsibility for setting annual CAFE standards for automobiles and light trucks in the intervening years. ²

To assure compliance with this statutory scheme, Congress imposed a system of financial penalties for companies which fell short of annual CAFE standards, which are measured in miles per gallon. 15 U.S.C. Sec. 2007 (defining as "unlawful conduct" failure to comply with average annual fuel economy standards). A manufacturer must pay a penalty of $5 for each tenth of a mile by which it falls short of the standard, multiplied by the number of automobiles in that manufacturer's sales fleet. 15 U.S.C. Sec. 2008(b)(1)(A).

Congress, however, also wanted to encourage manufacturers to exceed the annual minimum CAFE requirements, and so it provided them with flexibility in planning their production to meet the Act's increasing fuel economy standards. It allowed them to carry their surplus CAFE credits forward and backward to other model years. 15 U.S.C. Sec. 2002(l )(1)(A). Thus, if a manufacturer's CAFE rating for a given year exceeds the minimum requirement for that year, the manufacturer earns CAFE credits (one credit per tenth of a mile by which the standard has been surpassed, multiplied by the number of automobiles it has manufactured that model year). Those credits are then available to offset any penalties incurred in the preceding three model years, or as a cushion against future deficiencies in the subsequent three model years. 15 U.S.C. Sec. 2007(b). In sum, credits earned in any particular year have...