New York v. National Highway Traffic Safety Administration, 974 F.3d 87

Congress created CAFE standards (EPCA) with a per-.1 mpg base penalty originally set at $5; NHTSA administers and applies a base-rate multiplier (adjustable by rule).
Congress enacted the Inflation Adjustment Act (1990) and amended it (1996); agencies, including NHTSA, treated the CAFE penalty as a “civil monetary penalty” and NHTSA raised the base rate to $5.50 in 1997.
The 2015 Improvements Act required an initial “catch-up” inflation adjustment by July 1, 2016; NHTSA issued interim/final rules raising the CAFE base to $14 (effective for model year 2019 per this Court’s earlier decision).
NHTSA delayed and ultimately issued a 2019 Final Rule rolling the rate back to $5.50, arguing the CAFE penalty is not a “civil monetary penalty” and, alternatively, that it could reduce the catch-up increase for negative economic impact. OMB issued an informal letter concurring with NHTSA’s view.
States and NGOs petitioned for review. The Second Circuit held (1) the CAFE penalty is a “civil monetary penalty” under the Improvements Act and (2) NHTSA’s 2019 reconsideration based on economic effects was untimely and unauthorized, vacating the 2019 Final Rule and leaving the $14 rate in force.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether CAFE penalty is a “civil monetary penalty” under the Improvements Act	It meets the statutory definition: a specific monetary amount (base dollar rate used as multiplier) assessed/enforced by an agency via administrative/civil process	Not a specific monetary amount because the penalty is a formula/aggregate, not a standalone fixed sum; agency interpretation supports that view	Held: Yes. The base rate is a specific dollar amount used as a multiplier, so CAFE is a civil monetary penalty.
Whether NHTSA could reverse the 2016 catch-up adjustment in 2019 on economic-impact grounds	Improvements Act set a narrow, time‑sensitive window for reducing the initial catch-up (must be done in 2016 and notify OMB), so 2019 reconsideration was unauthorized	The statute allows further consideration after an interim final rule; no explicit deadline for final reconsideration	Held: No. The statutory schedule is circumscribed; the window to reduce the initial catch-up closed well before 2019, so NHTSA exceeded its authority.

NRDC v. NHTSA, 894 F.3d 95 (2d Cir. 2018) (vacated NHTSA’s indefinite delay and held the 2016 catch-up increase was in force)
Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984) (framework for deference to reasonable agency statutory interpretations)
Skidmore v. Swift & Co., 323 U.S. 134 (1944) (weight of agency interpretations depends on persuasiveness)
Christensen v. Harris County, 529 U.S. 576 (2000) (opinion letters and informal guidance not entitled to Chevron deference)
Bragdon v. Abbott, 524 U.S. 624 (1998) (repetition of statutory terms carries implication of prior settled administrative meaning)
Motor Vehicle Mfrs. Ass’n v. State Farm, 463 U.S. 29 (1983) (agency actions reviewable under APA arbitrary-and-capricious standard)