Coming soon: Legal brawl over Calif. standards

Source: Maxine Joselow, E&E News reporter • Posted: Friday, March 1, 2019

The Trump administration is poised to take a dramatic step to curtail liberal states’ authority to combat climate change.

Analysts say the move is unprecedented and could ratchet up planet-warming emissions from transportation. Lawyers are bracing for a drawn-out courtroom fight.

At issue is EPA’s proposal to revoke California’s Clean Air Act waiver for greenhouse gases, which comes as part of a larger rollback of Obama-era clean car rules.

The waiver dates back to the 1970s, when parts of California were suffering from severe smog. In recognition of the state’s unique air pollution problems, Congress wrote a special provision in the Clean Air Act allowing California to apply for the waiver from EPA.

Under Section 209 of the bedrock environmental law, California can set more stringent tailpipe pollution limits than the federal government. And under Section 177, other states can choose to adopt those tougher rules. Thirteen states and the District of Columbia have already done so; Colorado is set to become the 14th state soon (Climatewire, Nov. 19, 2018).

EPA under the George W. Bush administration did deny California a waiver in 2008, and California challenged the decision in the D.C. Circuit. But the case was never decided. And when the Obama administration took office, it promptly restored the waiver for model years 2009 through 2016.

But the Trump administration is now seeking to revoke the waiver that the Obama administration granted California in 2012. That’s new.

“The proposal is very aggressive and sweeping and unprecedented in its disdain for state authority,” said Sean Donahue, an attorney at Donahue, Goldberg & Weaver who is serving as outside counsel for the Environmental Defense Fund.

“They’re proposing to do something that’s never been done before,” Donahue said. “The theme for 50 years or so has been deference to states’ authority to implement their own standards.”

The Trump administration is hoping to finalize the car rules rollback ahead of a self-imposed March deadline. Once finalized, the proposal to revoke California’s waiver is sure to attract a host of legal challenges from blue states and environmental groups (Climatewire, Nov. 9, 2018).

Litigation would likely be brought in the U.S. Court of Appeals for the District of Columbia Circuit, which hears most Clean Air Act challenges. Court watchers say the case could ultimately reach the Supreme Court, where it would face a conservative majority.

Both sides are gearing up for the long fight.

Emissions and climate goals

Plaintiffs would likely argue that revoking California’s waiver would increase greenhouse gas emissions, threatening states’ ability to meet climate and clean air goals.

An analysis by the Rhodium Group, an economic consulting firm, found that dialing back the Obama-era car rules and revoking California’s waiver would lead to an additional 32 million to 114 million metric tons of carbon dioxide emissions.

That’s equivalent to adding as many as 24 million passenger cars to the nation’s roads, according to EPA’s Greenhouse Gas Equivalencies Calculator.

Uncertainty about future oil prices led to the wide range of estimates, said Kate Larsen, a director at the Rhodium Group.

“The price of oil really has a big impact on the types of vehicles people choose and the emissions reductions that would occur from these rules if they were in place,” Larsen said.

This uptick in carbon emissions would threaten California’s ability to meet federal ambient air quality standards, said Julia Stein, an attorney at the Emmett Institute on Climate Change and the Environment at UCLA School of Law.

“With air pollution, we’re going to suffer if the waiver is revoked,” Stein said. “The federal ambient air quality standards for ozone were recently tightened. And this is one of the areas we’re in nonattainment for. We also have some of the worst particulate matter pollution here in the San Joaquin Valley.”

The waiver revocation would also jeopardize California’s ability to meet the ambitious carbon reduction goals established by S.B. 100, which former Gov. Jerry Brown (D) signed into law last year, she said. The legislation calls for achieving net-zero greenhouse gas emissions by 2045.

Other states that follow California’s tougher tailpipe rules are also grappling with air pollution problems. For instance, Colorado’s Front Range has struggled to meet the tightened federal ambient air quality standard for ozone.

Still, lawyers for the Trump administration would likely counter that the car rules rollback would increase safety on the nation’s roads while having a negligible impact on emissions.

No statutory authority

Plaintiffs would also likely argue that revoking California’s waiver is illegal because the Clean Air Act doesn’t provide for such authority.

“EPA simply has no authority to withdraw this waiver under any circumstances. That’s just not the way the statute is constructed,” said Jack Lienke, regulatory policy director at New York University School of Law’s Institute for Policy Integrity.

He added, “Congress quite intentionally limited EPA’s ability to deny a waiver to California. There’s a great deal of deference to California baked into the statute.”

The Clean Air Act does allow the federal government to deny California’s initial request for a waiver. To justify its denial, the government must establish that California “does not need such standards to meet compelling and extraordinary conditions.”

But the Obama administration already granted the waiver five years ago, and if anything, California is seeing even more “compelling and extraordinary conditions” due to climate change, Lienke said. The state last year was ravaged by a string of deadly wildfires.

“Even if we assume for the sake of argument that you could withdraw the waiver under some conditions, those conditions are not present here,” Lienke said. “There’s ample evidence that California has unique vulnerability to the effects of climate change.”

But lawyers for the Trump administration would likely counter that California lacks “compelling and extraordinary conditions” because climate change is a global problem, said Jeff Holmstead, a partner with the law firm Bracewell LLP who headed EPA’s air office during the George W. Bush administration.

“The EPA argument will be when it comes to air quality, California does have compelling and extraordinary conditions,” Holmstead said. “But with climate change, what they face is no different from any other coastal state, or indeed any other country. Climate change affects everyone.”

No pre-emption

Finally, plaintiffs would likely push back on the Trump administration’s claim that California is pre-empted from setting tougher tailpipe pollution rules by a 1975 law.

The administration has argued that states can’t set their own vehicle efficiency standards because of the 1975 Energy Policy and Conservation Act, which gives that power solely to the Department of Transportation.

But lawyers for the George W. Bush administration already used that argument and failed, argued Donahue of the Environmental Defense Fund.

In the mid-2000s, Bush administration lawyers argued that EPA shouldn’t have to set vehicle efficiency standards because they would conflict with the Transportation Department’s corporate average fuel economy standards.

But in the landmark 2007 decision in Massachusetts v. EPA, the Supreme Court found that EPA was still on the hook for considering greenhouse gas regulations for cars and that the two agencies could harmonize their programs.

“It’s very similar to an argument that was made in the Massachusetts v. EPA case,” Donahue said. “And the court found that emissions standards are aimed at something different than fuel economy standards, and they operate differently.”

Two courts have also rebuffed that argument.

“There were also similar district court decisions from the end of that era,” Donahue said. “So we don’t think that argument has any merit. And again, with all these things, it’s kind of an extraordinary effort to prevent states from stepping in to act when the federal government is in full retreat.”

But Holmstead, the attorney who headed the Bush EPA’s air office, said he thinks the Trump administration’s strongest argument will revolve around pre-emption.

“The pre-emption there in EPCA [Energy Policy and Conservation Act] is really quite broad,” he said. “And the language pre-empts any state law or regulation that is related to fuel economy.”

He added: “I think their argument is ‘We’re not doing this for fuel economy; we’re doing this to reduce emissions of greenhouse gases and other pollutants.’ But regardless of their motivation for doing it, it is related to fuel economy. So I think the key here really is the EPCA language.”