Will Trump’s rollback survive in court?

Source: Maxine Joselow, E&E News reporter • Posted: Tuesday, November 13, 2018

Now that the Trump administration has stopped taking public comments on its rollback of Obama-era clean car rules, critics are obsessing over one question.

Will it survive in court?

EPA and the National Highway Traffic Safety Administration stopped soliciting public comments on their proposed rule last week. The proposal calls for freezing fuel economy requirements at 2020 levels through 2026 and revoking California’s ability to set tougher tailpipe emissions standards.

Critics say the proposal is riddled with technical errors and flawed assumptions. If the Trump administration keeps those mistakes in the final rule, they say, it will have a hard time defending it in court.

“I would say that the flaws in this [rollback] are deep and profound and many,” said Sean Donahue, counsel for the Environmental Defense Fund, on a call with reporters last week. “I think that creates a lot of legal problems.”

The Trump administration hopes to finalize the rule by the end of 2019. At that point, Democratic attorneys general and environmental groups would be sure to file lawsuits challenging its legality.

California Attorney General Xavier Becerra (D) announced plans this summer to lead 19 other attorneys general in a lawsuit against the Trump administration over the car rules rollback (Greenwire, Aug. 2).

Leading national green groups such as the Natural Resources Defense Council and the Environmental Defense Fund are also ready to go to bat for the Obama-era clean car rules. They filed a pre-emptive lawsuit in May, as did the Democratic attorneys general (E&E News PM, May 15; E&E News PM, May 1).

The challenges from blue states and green groups would probably be heard in the U.S. District Court for the District of Columbia. But they could reach the Supreme Court, where newly installed Justice Brett Kavanaugh is a big question mark.

The car rules were one of President Obama’s signature initiatives for combating climate change. While his Clean Power Plan targeted power plants, the car rules targeted the transportation sector, which recently eclipsed the power sector as the country’s largest source of greenhouse gas emissions.

Here’s a preview of the legal arguments that could be used in court to defend the Obama-era rules:

‘Classic arbitrary and capricious’

Plaintiffs would likely argue that the Trump administration’s proposal is “arbitrary and capricious” under the Administrative Procedure Act.

Pat Parenteau, an environmental law professor teaching this fall at Ireland’s University College Cork, said his first thought when reviewing the proposal was: “This is classic arbitrary and capricious.”

To justify their view, plaintiffs would point to a number of perceived flaws with the Trump administration’s modeling and technical analysis.

In particular, the Trump administration claims that the proposal would prevent 12,700 traffic deaths annually. But critics say a careful look at the administration’s math reveals significant errors and flawed assumptions.

Unpacking those assumptions is complicated. They’re related to something called the “scrappage model” — a projection of when consumers will “scrap” an older vehicle in favor of a newer model.

The Trump administration’s reasoning went like this: Weakening the car rules would lower the cost of a new car. That would encourage people to buy new cars and scrap their older vehicles, resulting in less driving and fewer traffic accidents overall.

But critics say that reasoning was flawed. They say research shows that people who bought new cars would likely still keep their older models and drive them occasionally. That would result in more driving and more accidents on the nation’s roads.

Two researchers whose work on the scrappage model was cited in the proposal have even said their findings were misinterpreted.

“All the evidence and economic logic points to a larger total vehicle fleet under a rollback, at odds with NHTSA’s fleet turnover model,” wrote Mark Jacobsen of the University of California, San Diego, and Arthur van Benthem of the University of Pennsylvania in regulatory comments. “This error alone would significantly change the benefit-cost analysis in the proposed rollback.”

The Trump administration also misunderstood something called the “rebound effect,” critics say. It’s the idea that under existing fuel economy standards, driving is less expensive, and thus people drive more.

When setting the Obama-era car standards, EPA and NHTSA estimated that the rebound effect was around 10 percent. But when crafting its proposal to roll back the standards, the Trump administration asserted that the rebound effect is closer to 20 percent.

That’s a glaring error, said Julia Stein, an attorney at the Emmett Institute on Climate Change and the Environment at UCLA School of Law. And it accounts for about half of the estimated prevented traffic deaths, she said.

“The agency is now estimating a 20 percent rebound effect with basically no justification,” Stein said. “It actually accounts for about half of the avoided traffic fatalities in the rule. So it’s a pretty big assumption to get wrong.”

Revoking Calif.’s waiver is illegal

Plaintiffs would also take issue with the Trump administration’s proposal to revoke California’s Clean Air Act waiver for greenhouse gases.

Under Section 209 of the Clean Air Act, California has the authority to set tougher greenhouse gas emissions standards for vehicles than the federal government. Congress handed the Golden State that authority in the 1970s due to its unique air pollution problems and smoggy skies.

Under Section 177 of the Clean Air Act, other states can choose to adopt California’s tougher rules. Thirteen states and the District of Columbia have done so, representing about 40 percent of all new cars sold in the United States. Colorado is set to soon become the 14th.

But the Trump administration is proposing to revoke California’s waiver that was granted five years ago. That’s never been done before.

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 litigated. And when the Obama administration took office, it promptly restored the waiver for model years 2009 through 2016.

Richard Revesz, director of the Institute for Policy Integrity at New York University, said plaintiffs would likely employ a two-pronged argument to defend the waiver from the Trump administration’s attack.

First, plaintiffs would argue that California and other states have relied on the waiver to meet federal air quality standards and their own air quality goals.

“California has a very strong reliance interest in keeping the waiver because otherwise it can’t actually carry out its environmental policy,” Revesz said. “And part of that involves compliance with federal standards.”

He added, “So California’s reliance interest is very strong and provides a very strong legal argument against revoking the waiver. This would be true if California were just a private company, but the argument is much stronger because California is a sovereign state, and as such, it deserves a certain degree of respect from the federal government.”

Second, plaintiffs would argue that revoking California’s waiver would create serious federalism concerns.

Courts have long recognized the principle of cooperative federalism, in which state and federal regulators work collaboratively without “one-size-fits-all” mandates from Washington. And when it comes to the regulation of air quality, the Supreme Court in Medtronic Inc. v. Lohr recognized the “historic primacy of state regulation of matters of health and safety.”

If plaintiffs played up the federalism concerns, their case could have a better chance of reaching the Supreme Court, Revesz said. It takes the votes of four justices for the high court to accept a case.

“It’s very hard to predict whether a particular case would reach the Supreme Court,” Revesz said. “It depends very much what the issue is. But the Supreme Court often grants cases involving federalism issues.”

Stein said Kavanaugh might be inclined to uphold California’s waiver, given his opinion in the 2010 case American Trucking Associations v. EPA.

The case dealt with a Section 209 waiver, and Kavanaugh wrote in the opinion: “The Clean Air Act assigns California — not any of the other states and not the federal Environmental Protection Agency — the primary role in setting limits on emissions from in-use non-road engines. … EPA’s only role is to review California’s proposed rules under a narrowly defined set of statutory criteria.”

EPA career staff were steamrolled

Plaintiffs would also likely point to tension between the two agencies responsible for promulgating the car rules.

EPA and NHTSA have joint jurisdiction over the car rules. It’s a unique situation that can occasionally lead to tension.

In August, allegations emerged that NHTSA political appointees strong-armed EPA career staffers in their rush to finalize the proposal (Greenwire, Aug. 2).

In addition, a memo from Bill Charmley in EPA’s air office shows that EPA career staffers raised numerous objections to the proposal and wanted their agency’s logo removed from the document (Climatewire, Aug. 16). But their objections went unheeded, and the logo remained.

Janet McCabe, who served as acting EPA air chief under Obama, said a court would look to ensure that the agencies resolved their differences. They never did that on the clean car rules.

“I think that litigants will certainly point out these disagreements in any legal challenge,” McCabe said, referring to EPA’s protests. “They’ll look to see how the agency responds to those comments. Agencies have to engage in rational decisionmaking. It’s going to be up to the agencies to explain how they resolve these disagreements.”

Parenteau, the law professor, said courts haven’t looked favorably on agency career staff being overridden. He pointed to the 1997 case Defenders of Wildlife v. Babbitt, which dealt with the Endangered Species Act.

In that case, the U.S. District Court for the District of Columbia found that the Fish and Wildlife Service’s refusal to list the Canada lynx as threatened or endangered was “arbitrary and capricious.”

The court was particularly concerned that FWS overrode the objections of its own biologists, most of whom were career staffers with expertise in the field.

“It is significant that not a single biologist or Lynx expert employed by the FWS disagreed with the recommendation of the Region 6 biologists that the Lynx be listed,” the court wrote.

“Superiors in an agency obviously have the authority to overrule the staff,” Parenteau said. “The question is why. Did you do it because their analysis was wrong? Well, then explain why it was wrong, not just that you want to do it differently.”