Minn. Auto. Dealers Ass'n v. Minn. Pollution Control Agency

• Docket Number: A22-0796
• Decision Date: 30 January 2023
• Citation: 986 N.W.2d 225
• Parties: MINNESOTA AUTOMOBILE DEALERS ASSOCIATION, Petitioner, v. MINNESOTA POLLUTION CONTROL AGENCY, Respondent.
• Court: Minnesota Court of Appeals

986 N.W.2d 225

MINNESOTA AUTOMOBILE DEALERS ASSOCIATION, Petitioner,

v.MINNESOTA POLLUTION CONTROL AGENCY, Respondent.

A22-0796

Court of Appeals of Minnesota.

Filed January 30, 2023

Denied May 16, 2023

Douglas P. Seaton, James V. F. Dickey, Upper Midwest Law Center, Golden Valley, Minnesota (for petitioner)

Keith Ellison, Attorney General, Peter N. Surdo, Special Assistant Attorney General, Joseph T. Heegaard, Assistant Attorney General, St. Paul, Minnesota (for respondent)

Melissa L. Lorentz, Joy R. Anderson, Jay E. Eidsness, Minnesota Center for Environmental Advocacy, St. Paul, Minnesota (for amici curiae Fresh Energy, Minnesota Center for Environmental Advocacy, MN350, Clean Up the River Environment, Health Professionals for a Healthy Climate, and Sierra Club North Star Chapter)

Considered and decided by Segal, Chief Judge; Reyes, Judge; and Cleary, Judge.^*

OPINION

SEGAL, Chief Judge

This declaratory judgment action presents a challenge by petitioner Minnesota Automobile Dealers Association (MADA) to the validity of rules adopted by respondent MPCA that require automobile manufacturers to deliver for sale in Minnesota (1) only vehicles that meet specified air-pollutant emission standards and (2) a certain percentage of vehicles with ultra-low or zero tailpipe emissions. See Minn. R. 7023.0150 - .0300 (the Clean Car Rule). The Clean Car Rule was adopted under the authority of Minn. Stat. § 116.07 (2022) and pursuant to the federal Clean Air Act (the CAA), codified at 42 U.S.C. §§ 7401 - 7671q (2018).

MADA argues that the Clean Car Rule is invalid because it violates article I of the Minnesota Constitution by improperly delegating the MPCA's rulemaking authority to California or, in the alternative, that Minn. Stat. § 116.07 violates article III of the Minnesota Constitution by improperly delegating legislative authority to the MPCA without adequate guidance. MADA also argues that the Clean Car Rule is invalid because the MPCA lacks statutory authority to establish a uniform statewide standard and that Minnesota does not qualify for the provision in the CAA that allows states to adopt California motor-vehicle emission standards set out in 42 U.S.C. § 7507 (the opt-in provision).

We conclude that the incorporation by reference of California's motor-vehicle emission standards into the Clean Car Rule did not violate the nondelegation doctrine. The fact that the Clean Car Rule incorporates specific California regulations "as amended" does not alter this conclusion. The MPCA has represented, and we interpret, the "as amended" clause in the Clean Car Rule as incorporating only "minor housekeeping updates" and that, before a "major update" could be incorporated, the MPCA would need to initiate rulemaking. We also conclude that the MPCA acted within its statutory authority in adopting a uniform statewide motor-vehicle emission standard and that Minnesota is an eligible state to adopt the California standards. We thus determine that the Clean Car Rule is valid.

FACTS

The CAA vests exclusive authority in the federal government, specifically the Administrator of the Environmental Protection Agency (EPA), to establish "standard[s] relating to the control of emissions from new motor vehicles." 42 U.S.C. § 7543(a) ; see 42 U.S.C. § 7521 (setting forth administrator's authority); Am. Auto. Mfrs. Ass'n v. Cahill , 152 F.3d 196, 198 (2d Cir. 1998) (noting that states are generally preempted from establishing emission standards for new motor vehicles). The CAA, however, contains a waiver that allows California to impose its own, generally more stringent, emission standards on new motor vehicles sold in that state.¹ See 42 U.S.C. § 7543(b). The CAA provides that new motor vehicles that comply with California's standards under the waiver shall be treated as compliant with the federal emission standards. Id. (b)(3). And, as relevant here, the CAA allows states with approved nonattainment "plan provisions" to choose to be governed by either the national emission standards set by the Administrator of the EPA or the California standards.² 42 U.S.C. § 7507. If a state elects to adopt the California standards, that state's standards must be "identical to the California standards for which a waiver has been granted [by the EPA] for such model year." Id.

The MPCA is tasked by statute with, among other things, adopting standards "relevant to the prevention, abatement, or control of air pollution," including air-quality standards relating to the "emission of air contaminants from motor vehicles." Minn. Stat. § 116.07, subds. 2(a), 4. In 2019, the MPCA initiated rulemaking proceedings to adopt the more stringent California standards for vehicle emissions pursuant to the CAA waiver provision, 42 U.S.C. § 7543(b). The MPCA explained in its statement of need and reasonableness for the Clean Car Rule (the SONAR) that the change was needed because the federal government had provided notice that it would be weakening its air-pollutant emission standards for new motor vehicles.³ The EPA adopted the weakened standards in 2020. 85 Fed. Reg. 24174 (Apr. 30, 2020).

The MPCA explained in the SONAR that, historically, the EPA "required increasingly stringent emission reductions" for vehicles but that the EPA's new rule "roll[ed] back the emission standards." The MPCA stated that "[o]ne of the purposes of the [MPCA's] proposed [Clean Car Rule was] to maintain the [former, more stringent EPA] emissions standard in Minnesota." The MPCA also pointed out that Minnesota had failed to meet its statutory goal for the reduction of greenhouse gases for 2015 and was "not on track to achieve the 2025 or 2050 goals."⁴ The MPCA indicated that "[t]ransportation is the largest source of [greenhouse gas] emissions in Minnesota," and passenger cars, light-duty trucks, and medium-duty vehicles "are the largest source of [such] emissions within that sector." Finally, the MPCA stated that "the proposed rule is a necessary step toward achieving substantive emission reductions in Minnesota's transportation sector."

Following the conclusion of the formal rulemaking process, the MPCA adopted the Clean Car Rule in July 2021. See 46 Minn. Reg. 66 (July 26, 2021). It applies to new motor vehicles beginning with the 2025 model year.⁵ 46 Minn. Reg. 755 (Dec. 27, 2021). To ensure that Minnesota's standards are identical to the California standards as required by the CAA, the Clean Car Rule incorporates by reference the applicable sections of the California Code of Regulations, including both the air-pollutant emission standards (the low-emission vehicle (LEV) standards) and requirements for zero-emission vehicles (ZEVs). See Minn. R. 7023.0150.

The LEV standards, set out in Minn. R. 7023.0250, provide that new motor vehicles sold in Minnesota, with certain exceptions, must be "certified to the [California LEV air-pollutant emission standards]."

Minn. R. 7023.0250, subp. 1. The ZEV standards, set out in Minn. R. 7023.0300, require that a "manufacturer's sales fleet of passenger cars and light-duty trucks ... delivered for sale or lease in the state must contain at least the same applicable percentage of ZEVs required under California Code of Regulations, title 13, section 1962.2." Minn. R. 7023.0300, subp. 1.

The Clean Car Rule, however, did not just incorporate specific sections of the existing California regulations. The Clean Car Rule incorporates by reference those sections of the California regulations as they may be amended.⁶ See Minn. R. 7023.0150, subp. 2. It also notes that the California "regulations are not subject to frequent change." Id. In the SONAR, the MPCA explained that incorporating identified California regulations " ‘as amended’ improves administrative efficiency by reducing the need for rulemaking to maintain consistency with the California rules." The MPCA further observed in the SONAR that, "[h]istorically, California has made minor housekeeping updates to its rules every few years," but that when "California has conducted a major update ..., such as making them more stringent for future model years, California has done so in new rule parts." The SONAR stated that, consequently, only "minor housekeeping updates" would be automatically adopted through the "as amended" clause in Minn. R. 7023.0150, subp. 2, not "major updates."

In June 2022, MADA petitioned this court for a declaratory judgment under Minn. Stat. § 14.44 (2022), arguing that the challenged rules are invalid based on MADA's claims that: (1) the Clean Car Rule constitutes an unconstitutional delegation of rulemaking or, in the alternative, results from an unconstitutional delegation of legislative authority; (2) Minn. Stat. § 116.07 does not allow the MPCA to adopt emission standards on a statewide basis; and (3) Minnesota does not meet the eligibility requirements under the CAA to adopt California's motor-vehicle emission standards.

In August 2022, the MPCA moved to dismiss MADA's action, arguing that MADA lacked standing and failed to state a claim. We denied the motion and now reach the merits.⁷ Minn. Auto. Dealers Ass'n v. Minn. Pollution Control Agency , No. A22-0796 (Minn. App. Sept. 20, 2022) (order).

ISSUES

I. Does the Clean Car Rule involve an unconstitutional delegation of rulemaking

or lawmaking authority because it incorporates by reference California's motor-vehicle emission standards "as amended"?

II. Does Minn. Stat. § 116.07 allow the MPCA to adopt rules establishing a uniform set of motor-vehicle emission standards with statewide application?

III. Does Minnesota qualify under the CAA to adopt California's motor-vehicle emission standards?

ANALYSIS

MADA's challenge is in the form of a pre-enforcement challenge to the validity of the Clean Car Rule. The scope of review on such a challenge is circumscribed by Minnesota's Administrative Procedure Act, Minn. Stat. §§ 14.001 -.69 (2022). See Coal. of Greater Minn. Cities v. Minn. Pollution Control Agency , 765 N.W.2d 159, 164 (Minn. App. 2009) (noting...