Green Mountain Chrysler-Plymouth-Dodge et al v. Crombie et al

Sep 12: In the U.S. Federal District Court of Vermont (Case No. 2:05-cv-302), Chief Judge William Sessions III, issued a 244-page ruling upholding Vermont’s greenhouse gas (GHG) emissions (GHG) regulations for new motor vehicles. The Judge rejected the auto industry’s main claim that the emission standards are actually fuel economy standards that conflict with the Federal Energy Policy and Conservation Act. Judge Sessions also ruled that the GHG emissions standards do not interfere with the foreign policy powers of the President or Congress.

Vermont Attorney General William Sorrell said, “This is such a big win. For those concerned about a healthier environment and those concerned about global warming, this is indeed a day to celebrate.” Vermont's Governor Jim Douglas said, "Most of Vermont’s greenhouse gases are emitted by automobiles and for us to significantly reduce our carbon footprint the innovations that occur in states like Vermont are critical. Setting high -- but achievable -- standards for the reduction of greenhouse gas emissions from automobiles is a tool every state must have the option of employing. Now, thanks to our victory, every state will.”

Senate Environment and Pubic Works Committee Chair, Senator Barbara Boxer (D-CA), issued a brief statement saying, "Today’s decision in the Vermont case is a clear cut victory for cleaning up the environment and combating global warming. It’s a good day for the American people." David Doniger, policy director of the Climate Center at the Natural Resources Defense Council (NRDC) said, “This is a tremendous step forward for states trying to do everything they can to fight global warming. The ruling affirms the right of any state to choose the emission standard first set by California. This is an essential tool in the fight to prevent the worst impacts of global warming.” Environmental Defense, who helped argue the Vermont case said, “This ruling takes away the last excuse for delay -- it’s time for EPA to clear the way for cleaner cars. The U.S. auto industry should stop litigating and start innovating.”

Dave McCurdy, president & CEO of the Alliance of Automobile Manufacturers (Alliance) issued a statement saying, "Federal law is designed to ensure a consistent fuel economy program across the country. It makes sense that only the federal government can regulate fuel economy. Automakers support improving fuel economy standards nationally, rather than piecemeal and will continue to work with the Congress, NHTSA and EPA to reduce our oil dependence while increasing fuel economy. Concerning EPA's decision on whether to grant the requested waiver, the Alliance remains committed to working with policymakers to make certain that the EPA's judgment is based on credible, sound scientific data as to what policies truly impact California, its citizens and global climate concerns.The Alliance will continue studying the decision and considering the options, including an appeal." The Alliance is a coalition of 9 car and light truck manufacturers, including BMW Group, DaimlerChrysler, Ford Motor Company, General Motors, Mazda, Mitsubishi Motors, Porsche, Toyota and Volkswagen.

Vermont’s regulations incorporate by reference regulations adopted by California in 2005. To date, 11 other states have adopted California’s regulations. The regulations establish one set of GHG emission standards for passenger cars, small trucks, and small Sport Utility Vehicles (SUVs), and another set for large trucks and large SUVs. The standards require automobile manufacturers to decrease fleetwide emissions on a graduated basis for each model year between 2009 and 2016. Reductions can be achieved by: (1) use of alternative fuels; (2) air conditioning credits; (3) improved engine/powertrain efficiency, including hybrid vehicles; and (4) other factors (such as reduced tire resistance). When fully phased in, the regulations are expected to reduce motor vehicle GHG emissions by approximately 30%.

The Vermont case began in November 2005, when General Motors, Daimler-Chrysler, two auto industry trade groups, and three Vermont dealers filed two separate lawsuits challenging Vermont’s GHG regulations. The State of New York and a number of environmental groups intervened in the case in support of Vermont. The court held a 16-day trial in April and May of this year, and then accepted final briefs in the middle of June.

Under the federal Clean Air Act, the U.S. EPA must grant a waiver to California for its regulations in order for Vermont’s regulations and those of other states to be effective. California submitted its application to EPA in December of 2005, but EPA has not yet ruled on it. EPA's Administrator Stephen Johnson, has indicated that it will make a decision by the end of this calendar year. Environmental Defense has filed a notice of intent to sue EPA if they do not rule on the California waiver request by November 2007. Senator Bill Nelson (D-FL) has introduced legislation in Congress to require EPA to grant the waiver [See WIMS 5/30/07].

In his lengthy and highly organized opinion Judge Sessions discusses the recent Supreme Court decision in Massachusetts v. EPA [See WIMS 4/2/07] and how that opinion dealt with the arguments of EPA and the auto companies that the only practical way to regulate carbon dioxide emissions from motor vehicles is to require increased fuel economy, and that such regulation would overlap with DOT’s authority to set average fuel economy standards under EPCA [Environmental Policy and Conservation Act]. He said, "The Court rejected outright the argument that EPA is not permitted to regulate carbon dioxide emissions from motor vehicles because it would have to tighten mileage standards, which is the province of the Department of Transportation under EPCA."

In his overall conclusion, Judge Sessions said, "In Massachusetts v. EPA, the Supreme Court recognized for the first time the phenomenon of global warming and its potentially catastrophic effects upon our environment. The Supreme Court described human-generated contributions to global warming, including carbon dioxide emissions from motor vehicles, and concluded that EPA has the authority to monitor and regulate such emissions under Section 202 of the CAA... The Supreme Court concluded that EPA’s authority to regulate GHG emissions and NHTSA’s authority to set fuel economy standards overlap but do not conflict, and that the agencies have the duty to work together, particularly with regard to emissions standards that affect fuel economy..."

Regarding the specific question in the Vermont case, Judge Sessions says, "Assuming such a waiver is granted [California waiver request], do the California regulations become 'other motor vehicle standards of the Government' under Section 502 of EPCA? If so, Congress intended NHTSA to take such regulations into consideration when setting CAFE standards, and the question of federal preemption of a state statute does not arise. If EPA-approved California GHG regulations do not enjoy the status of other motor vehicle standards of the Government, or are not shielded from preemption analysis, are those standards preempted, either expressly or by implication, by EPCA’s Section 509(a)?"

He concludes: "...Congress intended California emissions standards for which EPA granted a waiver pursuant to Section 209(b) of the CAA to constitute 'other motor vehicle standards of the Government,' under Section 502 of EPCA. Such a finding is entirely consistent with the language of the statutes, the House and Senate reports that accompanied the legislation, and NHTSA’s practice of taking California standards into consideration when setting CAFE standards... The regulations set GHG emissions standards and are sufficiently unrelated to fuel economy standards not to be expressly preempted... In light of the public statements of industry representatives, history of compliance with previous technological challenges, and the state of the record, the Court remains unconvinced automakers cannot meet the challenges of Vermont and California’s GHG regulations."

Access the complete opinion and order (click here). Access a release from the Vermont AG (click here). Access a release from Governor Douglas (click here). Access links to various media coverage of the decision (click here). Access a release from NRDC (click here). Access a release from Environmental Defense (click here).Access a release from the Alliance (click here).[*Climate, *Air, *Energy]