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Daimler Trucks North America LLC v. Environmental Protection Agency

Citation: 43 ELR 20265
No. 12-1433, (D.C. Cir., 12/11/2013)

The D.C. Circuit vacated an EPA rule establishing nonconformance penalties (NCPs) for on-highway, heavy-duty diesel engines. NCPs are intended to protect "technological laggards" by allowing them to pay a penalty for engines temporarily unable to meet new or revised emission standards. EPA established the NCPs in the rule based on its conclusion that the three regulatory criteria for issuing such penalties were met for heavy heavy-duty diesel engines. Petitioners argued that EPA failed to provide adequate notice and comment before amending the regulatory definition of the “substantial work” criterion in 40 C.F.R. §86.1103-87. EPA characterized its amendments to the substantial work criterion as “clarifying” the regulatory text rather than as a substantive amendment. But the court agreed with petitioners that the revisions went beyond mere clarification. In the notice of proposed rulemaking, EPA did not propose, and offered no indication that it was contemplating, amendments to the substantial work criterion. Yet the final rule made a significant change because the test set forth in EPA’s regulations had always asked whether substantial work “will be required” to comply with a new or revised emission standard not, after the standard became effective, whether substantial work “was required” in the past. Because EPA failed to provide notice and comment, and because vacatur would not cause any harm, the court vacated the rule.