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Specialty Equip. Mkt. Ass'n v. Ruckelshaus

ELR Citation: 13 ELR 21080
Nos. Nos. 81-1047, -1072, 720 F.2d 124/19 ERC 2027/(D.C. Cir., 10/14/1983)

The court upholds in part and vacates in part Environmental Protection Agency (EPA) regulations promulgated under §207(a)(2) of the Clean Air Act establishing a motor vehicle emission control certification program for parts produced by manufacturers other than the automaker (after-market parts). First, the court observes that the parts certification program generally fulfills the Clean Air Act aim of reducing the anticompetitive effects of vehicle emission warranties while protecting the public from excessive pollution. The court rules that the regulations establish adequate parts-durability criteria. The court upholds the certification standard that requires after-market parts not to cause a vehicle to exceed emission standards. A stricter standard precluding certification of after-market parts that cause any increase in emissions would not be consistent with the Act and its legislative history. The court next upholds the application of the certification regulations to all parts "affecting" emissions, not just parts installed primarily for emissions control. The broader application is consistent with the scope of §207(b) performance warranty requirements and the competitive purposes of §207.

The court rules that EPA's exclusion from the program of specialty parts, those different from original parts, is arbitrary and capricious. The exclusion is not supported by §207(a)(2). Rejecting a "short test" of emissions as an indicator of compliance with emission standards was arbitrary because it effectively barred specialty parts, which could not otherwise be certified, and because EPA approved use of the short tests to trigger vehicle manufacturer performance warranties. EPA's additional express exclusion of specialty parts from the certification program is not supported by reasoned analysis and is inconsistent with EPA's own interpretation of the scope of the certification program.

The court also strikes down EPA's scheme for having parts manufacturers reimburse vehicle manufacturers who incur reasonable expenses in honoring emission performance warranty claims resulting from defective certified parts. The Clean Air Act allows a reimbursement scheme, but the EPA scheme is arbitrary and capricious because it fails to establish a mechanism to resolve disputes and does not define key liability terms. EPA reasonably concluded that the evidence did not support requiring after-market parts manufacturers to establish financial responsibility, but erred in not requiring them to affix durable labels identifying the manufacturer to their certified parts.

[Related decisions are published at 13 ELR 21063, 21069 — Ed.]

Counsel for Petitioners
Matthew A. Low, John Russell Deane III, Mark S. Allen
Deane, Snowdon, Shutler & Gherardi
1607 New Hampshire Ave. NW, Washington DC 20009
(202) 462-1155

Counsel for Respondent
James P. Clark, Gerald K. Gleason, Robert A. Weissman, Samuel I. Gutter
Office of the General Counsel
Environmental Protection Agency, Washington DC 20460
(202) 382-4134

David E. Dearing
Land and Natural Resources Division
Department of Justice, Washington DC 20530
(202) 633-5777

Before: WRIGHT and MIKVA, Circuit Judges, and MacKINNON, Senior Circuit Judge.