Utah Physicians for a Healthy Env't v. Diesel Power Gear, LLC

• Citation: 21 F.4th 1229
• Decision Date: 28 December 2021
• Docket Number: No. 20-4043,20-4043
• Parties: UTAH PHYSICIANS FOR A HEALTHY ENVIRONMENT, Plaintiff - Appellee, v. DIESEL POWER GEAR, LLC ; B&W Auto, LLC d/b/a Sparks Motors, LLC; David W. Sparks; and Joshua Stuart, Defendants - Appellants, and 4x4 Anything LLC, Defendants.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

21 F.4th 1229

UTAH PHYSICIANS FOR A HEALTHY ENVIRONMENT, Plaintiff - Appellee,

v. DIESEL POWER GEAR, LLC ; B&W Auto, LLC d/b/a Sparks Motors, LLC; David W. Sparks; and Joshua Stuart, Defendants - Appellants,and4x4 Anything LLC, Defendants.

No. 20-4043

United States Court of Appeals, Tenth Circuit.

FILED December 28, 2021

Cole S. Cannon (Janet M. Conway, on the briefs), Cannon Law Group, Salt Lake City, Utah, for Defendants-Appellants.

Reed Zars (George E. Hays, Bellevue, Washington, with him on the brief), Laramie, Wyoming, for Plaintiff-Appellee.

Before HARTZ, BRISCOE, and CARSON, Circuit Judges.

HARTZ, Circuit Judge

Defendants' businesses focus on large diesel trucks and related parts, merchandise, and media. In 2017 Defendants were sued by Plaintiff Utah Physicians for a Healthy Environment (UPHE), a nonprofit organization that alleged, among other things, that Defendants were tampering with required emission-control devices and installing so-called "defeat devices" in violation of the Clean Air Act (CAA) and Utah's State Implementation Plan. After a bench trial the court entered judgment in favor of UPHE, finding Defendants collectively liable for hundreds of violations of the CAA and Utah's plan and assessing over $760,000 in civil penalties. On appeal Defendants challenge UPHE's Article III and statutory standing, the district court's inclusion of certain kinds of transactions in its tabulation of violations, and the court's penalty analysis. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm in part and reverse in part. Although we reject most of Defendants' arguments, we must remand to the district court for additional proceedings because (1) UPHE lacks Article III standing to complain of conduct by Defendants that has not contributed to air pollution in Utah's Wasatch Front and (2) the district court needs to reevaluate the seriousness of Defendants' violations of the Utah plan's anti-tampering provision.

I. STATUTORY FRAMEWORK

The CAA distributes responsibilities among the States and the federal Environmental Protection Agency (EPA) in what has been called a "cooperative-federalism approach." US Magnesium, LLC v. EPA , 690 F.3d 1157, 1159 (10th Cir. 2012). The EPA promulgates National Ambient Air Quality Standards (NAAQS), which set limits on maximum concentrations of various pollutants. See Nat'l Parks Conservation Ass'n, Inc. v. TVA , 480 F.3d 410, 412 (6th Cir. 2007) ; 42 U.S.C. § 7409. To date, the EPA has established NAAQS for six pollutants: carbon monoxide, lead, oxides of nitrogen, ozone, sulfur oxides, and particulate matter (with separate standards for PM10 (particles with a diameter less than 10 micrometers) and PM2.5 (particles with a diameter less than 2.5 micrometers)). See 40 C.F.R. §§ 50.4 – 12.

The States have the primary responsibility to ensure that those limits are satisfied. See 42 U.S.C. § 7407(a). Each State must submit to the EPA a state implementation plan (SIP) that "provides for implementation, maintenance, and enforcement of [NAAQS]." Id. § 7410(a)(1). The SIP is subject to approval by the EPA Administrator. See id. § 7410(k).

State SIP submissions must include "a list of all areas (or portions thereof) in the State, designating [them] as" (1) nonattainment (areas that fail to meet, or contribute to another area failing to meet, the NAAQS); (2) attainment (areas that meet, and do not contribute to another area not meeting, the NAAQS); or (3) unclassifiable (areas that cannot be classified on the basis of available information). See id. § 7407(d). The EPA may modify a State's proposed designations (including boundaries) as necessary but must first give the State an opportunity to respond. See id. § 7407(d)(1)(B)(ii). The consequences of being a nonattainment area are significant. The State must submit a corrective plan, see id. § 7502(c) (setting out requirements for nonattainment plan provisions); Ukeiley v. EPA , 896 F.3d 1158, 1161 (10th Cir. 2018), and federal assistance is unavailable for any activity that does not conform to the implementation plan, see 42 U.S.C. § 7506(c)(1), (5). Nonattainment areas may encompass territory in multiple states. See id. § 7407(d)(1)(A)(i) (defining nonattainment area as "any area that does not meet (or that contributes to ambient air quality in a nearby area that does not meet ) the national primary or secondary air quality standard for the pollutant" (emphasis added)). For example, several PM2.5 nonattainment areas cross state boundaries.¹

As a general rule, the States' principal responsibility is stationary sources like factories and power plants (governed by Title I of the CAA), while the EPA has primary responsibility over mobile sources (governed by Title II of the Act).² In particular, SIPs must provide for administration and enforcement of the permitting programs described in Title V of the CAA. See id. §§ 7410(a)(2)(C), 7661a(d). The permit programs contained in SIP proposals must cover "[a]ny major source." 40 C.F.R. § 70.3(a). "The general definition of ‘major source’ ... includes any source that emits or has the potential to emit 100 tons per year of any air pollutant. Lower thresholds apply to emissions of hazardous air pollutants and to sources located in certain nonattainment areas." David R. Wooley & Elizabeth M. Morss, Clean Air Act Handbook , § 8:7 n.1 (Sept. 2021 update); see 42 U.S.C. § 7602(j) ; 40 C.F.R. §§ 70.2, 70.3(a). "Because EPA and the states have taken steps to exclude smaller sources from the Title V permitting program, most Title V permits are issued to ‘major sources.’ " Wooley & Morss, Clean Air Act Handbook § 8:7.

In contrast, mobile pollution sources, such as motor vehicles, are primarily subject to EPA regulation under Title II of the CAA. "Th[is] regulatory difference" between stationary and mobile sources has been attributed to "the difficulty of subjecting motor vehicles, which readily move across state boundaries, to control by individual states," as well as Congress's concern that allowing each State to fashion its own regulations for motor vehicles would give rise to "an anarchic patchwork of federal and state regulatory programs, a prospect which threatened to create nightmares for the manufacturers." Engine Mfrs. Ass'n v. EPA , 88 F.3d 1075, 1079 (D.C. Cir. 1996) (internal quotation marks omitted). In fact, the CAA explicitly prohibits States and localities from "adopt[ing] or attempt[ing] to enforce any standard relating to the control of emissions from new motor vehicles or new motor vehicle engines subject to [Title II Motor Vehicle Emission and Fuel Standards]." 42 U.S.C. § 7543(a). The EPA has exempted only California from the prohibition against state or local emission standards for new motor vehicles. See Comm. for a Better Arvin v. EPA , 786 F.3d 1169, 1174 (9th Cir. 2015) ; 42 U.S.C. § 7543(a), (b)(1).

Of particular relevance to this litigation, Title II has two provisions to make sure that emission-control devices required for new vehicles will be effective after retail sale. One prohibits tampering with such devices. It makes it unlawful:

for any person to remove or render inoperative any device or element of design installed on or in a motor vehicle or motor vehicle engine in compliance with regulations under this subchapter prior to its sale and delivery to the ultimate purchaser, or for any person knowingly to remove or render inoperative any such device or element of design after such sale and delivery to the ultimate purchaser[.]

42 U.S.C. § 7522(a)(3)(A). The other prohibits "defeat devices" that prevent the original devices from performing as intended. It makes it unlawful:

for any person to manufacture or sell, or offer to sell, or install, any part or component intended for use with, or as part of, any motor vehicle or motor vehicle engine, where a principal effect of the part or component is to bypass, defeat, or render inoperative any device or element of design installed on or in a motor vehicle or motor vehicle engine in compliance with regulations under this subchapter, and where the person knows or should know that such part or component is being offered for sale or installed for such use or put to such use[.]

Id. § 7522(a)(3)(B).

States may, however, "control, regulate, or restrict the use, operation, or movement of registered or licensed motor vehicles." Id. § 7543(d). This "preserves state and local governments' authority over post-sale motor vehicles." In re Volkswagen "Clean Diesel" Mktg., Sales Pracs., & Prods. Liab. Litig. , 959 F.3d 1201, 1216 (9th Cir. 2020), cert denied sub nom. Volkswagen Grp. v. EPC of Hillsborough Cnty. , ––– U.S. ––––, 142 S.Ct. 521, ––– L.Ed.2d –––– (2021) [hereinafter Counties ] (emphasis added). In some circumstances a State SIP may be required to include regulations on post-sale motor vehicles, such as by providing for an emission-control inspection and maintenance program in certain ozone nonattainment areas. See 42 U.S.C. § 7511a. Otherwise, SIP regulation of post-sale vehicles, such as Utah's anti-tampering provisions, is voluntary. See Counties , 959 F.3d at 1219–21 (counties' post-sale anti-tampering rules neither expressly nor impliedly preempted by CAA); 42 U.S.C. § 7410 (specifying what must be included in a SIP); id. § 7509 (penalties for state noncompliance). As the EPA stated in disapproving the anti-tampering provisions in Texas's SIP: "Texas' statewide tampering prohibitions are part of the state SIP but are not required under [ 42 U.S.C. § 7509(a) ].... Since State tampering rules are not required by the [CAA ], this final disapproval action does not impose sanctions for failure to meet the Act requirements." Approval & Promulgation of Air Quality State Implementation Plans (SIP); Texas; Disapproval of Revisions to the State Implementation Plan, 63 Fed. Reg. 6651, 6652 (Feb. 10, 1998) (emphasis added).

Enforcement of clean-air law is also a joint federal-state responsibility, although with some assistance from...