310 F. Supp. 3d 1030
N.D. Cal.2018Background
- VW installed software (“defeat device”) in ~585,000 diesel vehicles that caused emission controls to perform differently during EPA testing than in normal driving, producing NOx up to ~40x legal limits.
- EPA investigation (2014–2015) led to VW admitting the defeat device, criminal plea, and civil consent decrees requiring remediation and billions in penalties and remediation funds; VW's Statement of Facts admits post‑sale software modifications (e.g., steering‑wheel‑angle feature) installed via updates/recalls.
- Hillsborough County (FL) and Salt Lake County (UT) sued under local anti‑tampering laws; Hillsborough also sued Bosch; Salt Lake asserted additional claims (fraud, state RICO, nuisance).
- Defendants moved to dismiss, arguing state/local tampering and related common‑law claims are preempted by the Clean Air Act (CAA), principally § 209(a), and that the local rules do not cover defendants’ conduct.
- Court held initial installation (manufacturing)‑based claims are expressly preempted by § 209(a); it examined whether post‑sale, model‑wide software updates (maintenance/recalls) escape preemption and concluded they do not—they are field/conflict preempted because Congress intended model‑wide manufacturer conduct to be regulated by EPA, not by many state/local actions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do local tampering rules cover manufacturers and post‑sale software updates? | Counties: rules reach any person who "makes inoperative" emission controls, including manufacturers and post‑sale software changes. | Defendants: rules target only owners/operators or modification of preexisting controls; do not apply to initial installation or noncompliant systems. | Court: Rules cover manufacturers and post‑sale software changes; wording (e.g., "no person" and "make inoperative") encompasses alleged conduct. |
| Are tampering claims based on installation in new vehicles preempted by CAA § 209(a)? | Counties: they regulate in‑use effects, invoking § 209(d) savings for in‑use regulation. | Defendants: § 209(a) prohibits state standards relating to control of emissions from new motor vehicles; claims regulate pre‑sale manufacturer conduct and are expressly preempted. | Court: Claims based on manufacture/installation of defeat device in new vehicles are expressly preempted by § 209(a). |
| Are tampering claims based on model‑wide post‑sale software updates preempted? | Counties: post‑sale updates occur while vehicles are in use and § 209(d) preserves state/local authority to regulate in‑use vehicles. | Defendants: model‑wide, manufacturer‑initiated updates are the kind of conduct Congress intended EPA to police; state‑by‑state suits would conflict with federal scheme. | Court: Model‑wide post‑sale updates are preempted (conflict/field) because EPA is the proper regulator of model‑wide manufacturer conduct; county suits would obstruct federal objectives. |
| Are Salt Lake’s fraud, state RICO, and nuisance claims preempted? | Salt Lake: common‑law claims seek to redress deceit, public harm, and predicate unlawful acts distinct from federal enforcement. | Defendants: those claims would effectively penalize noncompliance with federal emission standards and interfere with the federal enforcement scheme. | Court: These claims are preempted because they would unavoidably interfere with federal objectives and effectively enforce EPA standards. |
Key Cases Cited
- Engine Mfrs. Ass'n v. S. Coast Air Quality Mgmt. Dist., 541 U.S. 246 (Sup. Ct.) (defines "standard relating to the control of emissions" and explains § 209 preemption rationale)
- EMA v. EPA, 88 F.3d 1075 (D.C. Cir.) (discusses Allway Taxi relation‑back reasoning and concerns about 50 different state regimes)
- Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341 (Sup. Ct.) (ordinary conflict‑preemption principles apply despite savings clauses)
- Geier v. Am. Honda Motor Co., 529 U.S. 861 (Sup. Ct.) (declines broad effect to saving clauses that would upset federal scheme)
- Allway Taxi, Inc. v. City of New York, 340 F. Supp. 1120 (S.D.N.Y.) (relation‑back concept for in‑use rules that would effectively regulate new‑vehicle manufacture)
- In re Office of Attorney Gen. of State of N.Y. (Detroit Diesel), 269 A.D.2d 1 (N.Y. App. Div.) (state common law claims preempted where they would indirectly enforce federal emissions standards)
- Wyeth v. Levine, 555 U.S. 555 (Sup. Ct.) (presumption against preemption in state police‑power fields)