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Motor & Equip. Mfrs. Ass'n v. Nichols

Citation: 28 ELR 21111
(04/24/1998)

The court upholds the U.S. Environmental Protection Agency's (EPA's) decision to grant California a Clean Air Act (CAA) § 209(b) waiver allowing the state to enforce its own on-board emissions diagnostic device (OBD) regulations, which contain OBD antitampering provisions. The court also upholds EPA's rule deeming compliance with the California OBD regulations to constitute compliance with the federal regulations (deemed-to-comply rule). The court first holds that petitioners — an organization of persons who manufacture, rebuild, or distribute parts that compete with the parts sold by original automobile manufacturers — have standing to challenge EPA's deemed-to-comply rule. The organization was injured because the deemed-to-comply rule has resulted in an almost unanimous decision by major manufacturers to install OBDs that comply with California's regulations. And vacating the rule could remedy the organization's injury by requiring EPA to undertake a new rulemaking. The court then holds that the organization's challenges based on the assumption that California's OBD regulations would require access to an off-site computer for maintenance are moot, because that requirement was eliminated. However, the court holds that the organization's challenge to the deemed-to-comply rule is not entirely moot because two sources of alleged regulatory injury remain in the California regulation. The court also holds timely all of the organization's challenges. The court then dismisses the organization's CAA § 202(b)(1)(C) challenge to the deemed-to-comply rule. The organization failed to mention § 202(b)(1)(C) in their comments to EPA and, thus, failed to give EPA an opportunity to consider their specific concerns.

The court next holds that EPA is not required to consider the mandates of CAA § 202(m) when deciding to grant a § 209(b) waiver. CAA § 209(b) sets forth the only waiver standards with which California must comply. In order to obtain a waiver, California's standards must be, in the aggregate, at least as protective of public health as applicable federal standards. Also, EPA's long-standing interpretation and the legislative history run counter to the organization's contention that, because §§ 202(a) and 202(m) cross-reference each other, California must also comply with § 202(m) to obtain a waiver. Further, it would appear virtually impossible for California to exercise broad discretion if it had to comply with every subsection of CAA § 202 that cross-referenced subsection (a). The state is not required to establish a one-to-one correspondence with the federal standards set forth in CAA § 202(m) to obtain its waiver.

The court then upholds EPA's interpretation of CAA § 202(m), which requires automobile manufacturers to make available all information needed to make emission control diagnostic systems, in concluding that California's OBD regulations comply with that section. The term "information needed" refers to information that mechanics can use to repair automobiles, and the availability of such information is not precluded by California's antitampering regulations. The court next holds that California is not required to comply with CAA § 207's warranty provisions in order to obtain a CAA § 209 waiver. Although EPA must be sensitive to the anticompetitive concerns Congress expressed in CAA § 207, it has no obligation under § 209(b) to guarantee that California's regulations are without anticompetitive implications. Last, the court holds that EPA did not fail to comply with two statutory provisions requiring the analysis of the effects of a proposed rule on certain small entities such as businesses.

Counsel for Petitioners
Michael J. Conlon
Conlon, Frantz, Phelan & Pires
1818 N St. NW, Ste. 700, Washington DC 20036
(202) 331-7050

Counsel for Respondents
Michael J. Horowitz
U.S. Environmental Protection Agency
401 M St. SW, Washington DC 20460
(202) 260-2090

Before Edwards and Wald, JJ.