Minn. Auto Dealers Ass'n v. Minnesota
| Decision Date | 17 February 2021 |
| Docket Number | Case No. 21-cv-0053 (WMW/ECW) |
| Citation | 520 F.Supp.3d 1126 |
| Court | U.S. District Court — District of Minnesota |
| Parties | MINNESOTA AUTO DEALERS ASSOCIATION, Plaintiff, v. State of MINNESOTA, BY AND THROUGH the MINNESOTA POLLUTION CONTROL AGENCY, and Laura Bishop, as Commissioner of the Minnesota Pollution Control Agency, Defendants. |
Byron E. Starns, Jr., Claire Williams, Joshua Poertner, Stinson Leonard Street LLP, Jeremy P. Greenhouse, Greenhouse & Gram LLC, Minneapolis, MN, for Plaintiff.
Leigh K. Currie, Minnesota Office of the Attorney General, Saint Paul, MN, Oliver J. Larson, Peter N. Surdo, Office of the Minnesota Attorney General, St. Paul, MN, for Defendants.
ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS
This matter is before the Court on Plaintiff's expedited motion for a preliminary injunction and Defendants’ motion to dismiss Plaintiff's complaint. (Dkts. 13, 28.) Three third-party organizations also seek to intervene as Defendants in this case. For the reasons addressed below, Defendants’ motion to dismiss is granted and this matter is dismissed without prejudice for lack of subject-matter jurisdiction. Consequently, Plaintiff's expedited motion for a preliminary injunction and the pending motion to intervene are denied as moot.
Plaintiff Minnesota Auto Dealers Association (MADA) is a Minnesota corporation that advocates for the interests of retail motor vehicle dealerships in Minnesota. Defendant State of Minnesota, by and through the Minnesota Pollution Control Agency (MPCA), is a state governmental agency authorized to regulate air quality in Minnesota. Defendant Laura Bishop is the Commissioner of the MPCA.
MADA commenced this action seeking to enjoin Defendants from engaging in administrative rulemaking pertaining to motor vehicle greenhouse gas emissions standards in Minnesota. Defendants’ rulemaking conduct, MADA alleges, is preempted by two federal laws: the Clean Air Act, 42 U.S.C. §§ 7521 – 54, 7581 – 90, and the Energy Policy and Conservation Act (EPCA), 49 U.S.C. § 32902. It is undisputed that the Clean Air Act prohibits any state from adopting new motor vehicle emission standards that differ from those established under the Clean Air Act. See 42 U.S.C. § 7543(a). However, the Environmental Protection Agency (EPA) may waive the express preemption of state regulations for California and, thereafter, other states may adopt regulations that are identical to California's standards. See 42 U.S.C. §§ 7507, 7543(b)(2). In addition, the EPCA governs federal fuel economy standards for automobiles and preempts state laws or regulations pertaining to such standards. See 49 U.S.C. §§ 32902, 32919.
On September 27, 2019, the EPA revoked California's then-existing Clean Air Act preemption waiver, thereby invalidating California's motor vehicle emission standards. See 84 Fed. Reg. 51,310 (Sept. 27, 2019). In addition, the EPA and the Department of Transportation's National Highway Traffic Safety Administration (NHTSA) concluded that the EPCA, which governs fuel economy standards, also preempts motor vehicle emissions standards. Id. Several states, including Minnesota, have challenged these administrative actions in litigation that currently is pending before the United States Court of Appeals for the District of Columbia Circuit. See Competitive Enter. Inst. v. NHTSA , No. 20-1145 (D.C. Cir.); Union of Concerned Scientists v. NHTSA , No. 19-1230 (D.C. Cir.). In addition, the current presidential administration is considering suspending, revising, or rescinding the administrative actions of the prior presidential administration that pertain to fuel economy and motor vehicle emissions standards. See Exec. Order No. 13,990, 86 Fed. Reg. 7037 (Jan. 20, 2021).
In or about October 2019, Defendants published a request for comments on proposed rules governing motor vehicle emissions standards in Minnesota based on California's emissions standards. Defendants’ request for comments acknowledges that "[a]ny final rule in Minnesota would need to be made contingent on restoration of the state's ability to adopt these measures, including the existence of operative waiver authority under ... the Clean Air Act." On December 21, 2020, Defendants published the proposed motor vehicle emissions rules in the Minnesota State Register and scheduled public hearings to occur on February 22 and 23, 2021. The proposed emissions rules provide that, except for Part 7023.0300, subpart 4 (the Early Action Credit Provision), the rules will become effective only "after the [California] standards incorporated by reference ... are granted a waiver by the U.S. Environmental Protection Agency under [the Clean Air Act]." In a Statement of Need and Reasonableness (SONAR) dated December 14, 2020, Defendants similarly assert that the proposed emissions rules will "not go into effect until the waiver issue between California and the EPA is resolved," and that "even then, the rule[s] would become effective only after the MPCA publishes a notice to the State Register that would inform the regulated parties and the public that the waiver has been restored." The SONAR also contends that, because the Clean Air Act requires state emission standards to be adopted at least two years before the vehicle model year to which the standards will apply, compliance with Defendants’ proposed emissions rules, if adopted, would not be required until at least two years after their effective date.
Although Defendants’ proposed emissions rules have an effective date that is delayed indefinitely and contingent on the resolution of the ongoing federal preemption waiver dispute between California and the EPA, the Early Action Credit Provision in Defendants’ proposed rules will go into effect earlier. Specifically, according to the SONAR, "[t]he early action credit mechanism would go into effect five working days after the MPCA publishes a Notice of Adoption in the State Register following completion of the rulemaking process." Under the Early Action Credit Provision, motor vehicle manufacturers may begin to accrue credits for zero-emission vehicles delivered for sale in Minnesota before the Defendants’ proposed emissions rules go into effect. Defendants’ SONAR provides that "the early action credit system is a voluntary flexibility offered to manufacturers, not a requirement of the rule," and the intent of the Early Action Credit Provision "is to offer an early incentive to manufacturers to deliver [electronic vehicles] to Minnesota sooner than required by the rule."
MADA commenced this action on January 6, 2021. MADA alleges that Defendants’ proposed emissions rules are preempted by federal law and, as such, Defendants’ ongoing rulemaking conduct is illegal. According to MADA, Defendants’ illegal rulemaking conduct threatens imminent harm to MADA because its members will "(1) lose sales if they can stock and sell only California compliant vehicles and (2) incur costs from stocking increased numbers of [zero-emission vehicles]." Count One of MADA's complaint seeks an order enjoining Defendants from attempting to regulate motor vehicle emissions standards in violation of the preemption provisions of the Clean Air Act and the EPCA. Count Two and Count Three of MADA's complaint seek a declaratory judgment that Defendants lack the authority to regulate motor vehicle emissions standards because of the preemption provisions of the Clean Air Act and the EPCA, respectively.
On January 8, 2021, MADA moved for expedited preliminary injunctive relief, seeking an order preliminarily enjoining Defendants from conducting rulemaking proceedings pertaining to Defendants’ proposed emissions rules, including the public hearings scheduled to occur on February 22 and 23, 2021. On January 25, 2021, Defendants moved to dismiss MADA's complaint, arguing that MADA lacks standing, MADA's claims are not ripe for judicial review, and the complaint fails to state a claim on which relief can be granted. In the alternative, Defendants contend that MADA has not satisfied its burden to establish that a preliminary injunction is warranted.
On February 16, 2021, three third-party organizations—the Minnesota Center for Environmental Advocacy, Fresh Energy, and MN350 (collectively, "Proposed Intervenors")—moved to intervene as Defendants in this case to protect their interests in ensuring the adoption of Defendants’ proposed emissions rules.
Defendants move to dismiss MADA's complaint pursuant to Rules 12(b)(1) and 12(b)(6), Fed. R. Civ. P., on four alternative grounds: (1) MADA's claims are barred by sovereign immunity, (2) MADA lacks standing, (3) MADA's claims are not ripe for judicial review, and (4) MADA fails to state a claim on which relief can be granted.
A defendant may challenge a plaintiff's complaint for lack of subject-matter jurisdiction either on its face or on the factual truthfulness of its averments. See Fed. R. Civ. P. 12(b)(1) ; Titus v. Sullivan , 4 F.3d 590, 593 (8th Cir. 1993). In a facial challenge, as presented here, the nonmoving party "receives the same protections as it would defending against a motion brought under Rule 12(b)(6)." Osborn v. United States , 918 F.2d 724, 729 n.6 (8th Cir. 1990).
Under Rule 12(b)(6), a complaint must be dismissed if it fails to state a claim on which relief can be granted. Fed. R. Civ. P. 12(b)(6). To survive a Rule 12(b)(6) motion, the complaint must allege sufficient facts that, when accepted as true, state a facially plausible claim to relief. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). When determining whether the complaint states such a claim, a district court accepts as true all factual allegations in the complaint and draws all reasonable inferences in the plaintiff's favor. Blankenship v. USA Truck, Inc. , 601 F.3d 852, 853 (8th Cir. 2010). The factual allegations need not be detailed, but they must be sufficient...
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