IN RE VOLKSWAGEN “CLEAN DIESEL” MARKETING, SALES PRACTICES, AND PRODUCTS LIABILITY LITIGATION, THE ENVIRONMENTAL PROTECTION COMMISSION OF HILLSBOROUGH COUNTY, Florida; SALT LAKE COUNTY, Plaintiffs-Appellants, v. VOLKSWAGEN GROUP OF AMERICA, INC.; AUDI OF AMERICA, LLC; PORSCHE CARS NORTH AMERICA, INC.; ROBERT BOSCH, LLC; ROBERT BOSCH GMBH, Defendants-Appellees.
No. 18-15937
United States Court of Appeals for the Ninth Circuit
June 1, 2020
D.C. No. 3:15-md-02672-CRB
Before: Richard C. Tallman, Sandra S. Ikuta, and N. Randy Smith, Circuit Judges. Opinion by Judge Ikuta.
FOR PUBLICATION
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
IN RE VOLKSWAGEN “CLEAN DIESEL” MARKETING, SALES PRACTICES, AND PRODUCTS LIABILITY LITIGATION,
THE ENVIRONMENTAL PROTECTION COMMISSION OF HILLSBOROUGH COUNTY, Florida; SALT LAKE COUNTY, Plaintiffs-Appellants,
v.
VOLKSWAGEN GROUP OF AMERICA, INC.; AUDI OF AMERICA, LLC; PORSCHE CARS NORTH AMERICA, INC.; ROBERT BOSCH, LLC; ROBERT BOSCH GMBH, Defendants-Appellees.
No. 18-15937
D.C. No. 3:15-md-02672-CRB
OPINION
Appeal from the United States District Court for the Northern District of California
Charles R. Breyer, District Judge, Presiding
Argued and Submitted August 6, 2019 Anchorage, Alaska
Filed June 1, 2020
Before: Richard C. Tallman, Sandra S. Ikuta, and N. Randy Smith,
Opinion by Judge Ikuta
SUMMARY*
Clean Air Act / Preemption
The panel affirmed in part, and reversed in part, the district court‘s dismissal of complaints brought by two counties against Volkswagen after it installed defeat devices in new cars, and subsequently modified those devices post sale, for the purpose of evading compliance with federally mandated emission standards.
Volkswagen settled the Environmental Protection Agency (“EPA“)‘s criminal and civil actions for over $20 billion, but failed to obtain a release of liability from state and local governments. In this action, two counties sought to impose penalties for violation of their laws prohibiting tampering with emission control systems. The district court held that the counties’ actions were preempted by the Clean Air Act.
The panel agreed with the district court that the Clean Air Act expressly preempted state and local government efforts to apply anti-tampering laws to pre-sale vehicles. The panel disagreed with the district court‘s ruling that the Clean Air Act impliedly preempted state authority to enforce anti-tampering laws against post-sale vehicles. The panel held that the Clean Air Act did not prevent the two counties here from enforcing their regulations against Volkswagen for post-sale vehicles.
The panel rejected Volkswagen‘s assertions that the counties’ anti-tampering rules were preempted under ordinary preemption principles. First, Volkswagen argued that Congress intended to give the EPA exclusive oversight over post-sale compliance with emission standards on a model-wide basis, and the counties’ anti-tampering rules posed an obstacle to this goal. The panel saw no indication that Congress intended to preempt state and local authority to enforce anti-tampering rules on a model-wide basis. Second, Volkswagen argued that the Clean Air Act‘s penalty provision,
COUNSEL
Peter K. Stris (argued), Stris & Maher LLP, Los Angeles, California, for Plaintiffs-Appellants.
W. Daniel “Dee” Miles III, H. Clay Barnett, and Archie I. Grubb II, Beasley Allen Crow Methvin Portis & Miles P.C., Montgomery, Alabama; Luis Martinez-Monfort, Gardner Brewer Martinez-Monfort P.A., Tampa, Florida; Thomas L. Young, Law Office of Thomas L. Young P.A., Tampa, Florida; for Plaintiff-Appellant Environmental Protection Commission of Hillsborough County.
Bridget K. Romano, Deputy District Attorney, Office of the Salt Lake County District Attorney, Salt Lake City, Utah; Colin P. King and Paul M. Simmons, Dewsnup King Olsen Worel Havas Mortensen, Salt Lake City, Utah; for Plaintiff-Appellant Salt Lake County.
Robert J. Giuffra, Jr. (argued), Sharon L. Nelles, David M.J. Rein, and Matthew A. Schwartz, Sullivan & Cromwell LLP, New York, New York; for Defendants-Appellees
Cari K. Dawson, Alston & Bird LLP, Atlanta, Georgia, for Defendant-Appellee Porsche Cars North America, Inc.
Carmine D. Boccuzzi, Jr., Cleary Gottlieb Steen & Hamilton LLP, New York, New York; Matthew D. Slater, Cleary Gottlieb Steen & Hamilton LLP, Washington, D.C.; for Defendant-Appellee Robert Bosch, LLC and Robert Bosch GMBH.
Richard W. Mithoff, Sherie Potts Beckham, and Warner V. Hocker, Mithoff Law, Houston, Texas; Russell S. Post and Owen J. McGovern, Beck Redden LLP, Houston, Texas; Benny Agosto, Jr. and Muhammad S. Aziz, Abraham Watkins Nichols Sorrels Agosto & Friend, Houston, Texas; Debra Tsuchiyama Baker, Earnest W. Wotring, John Muir, and David George, Baker & Botring LLP, Houston, Texas; Vince Ryan, Robert Soard, Terence L. O‘Rourke, and Rock W.A. Owens, Office of the Harris County Attorney, Houston, Texas; for Amicus Curiae Harris County, Texas.
Jonathan S. Martel, Arnold & Porter Kaye Scholer LLP, Washington, D.C.; S. Zachary Fayne, Arnold & Porter Kaye Scholer LLP, San Francisco, California; Sarah Grey, Arnold & Porter Kaye Scholer LLP, Denver, Colorado; Steven P. Lehotsky and Michael B. Schon, U.S. Chamber Litigation Center, Washington, D.C.; for Amici Curiae Alliance of Automobile Manufacturers Inc., Association of Global Automakers, and Chamber of Commerce of the United States of America.
OPINION
IKUTA, Circuit Judge:
Volkswagen,1 a car manufacturer, installed defeat devices in new cars for the purpose of evading compliance with federally mandated emission standards, and subsequently updated the software in those cars so the defeat devices would do a better job of avoiding and preventing compliance.2 Volkswagen settled EPA‘s criminal and civil actions for over $20 billion dollars—but failed to obtain a release of liability from state and local governments at the same time. When two counties sought to impose additional penalties for violation of their laws prohibiting tampering with emission control systems, Volkswagen persuaded the district court that these claims were preempted by the Clean Air Act.
We agree with the district court only in part. We agree that the Clean Air Act expressly preempts state and local government efforts to apply anti-tampering laws to pre-sale vehicles.3 But we disagree with the district court‘s ruling that
the Clean Air Act impliedly preempts state authority to enforce anti-tampering laws against post-sale vehicles. In other words, the Clean Air Act does not prevent the two
We base this conclusion on Supreme Court precedent. A “high threshold must be met if a state law is to be preempted for conflicting with the purposes of a federal Act.” Chamber of Commerce of U.S. v. Whiting, 563 U.S. 582, 607 (2011) (citation omitted). Volkswagen has not met that high threshold here. The text and structure of the Clean Air Act do not indicate any congressional intent to prohibit states from enforcing anti-tampering laws in this context. Moreover, the regulation of air pollution for health and welfare purposes “falls within the exercise of even the most traditional concept of what is compendiously known as the police power,” Huron Portland Cement Co. v. Detroit, 362 U.S. 440, 442 (1960), so we must “assume that ‘the historic police powers of the States’ are not superseded ‘unless that was the clear and manifest purpose of Congress,‘” Arizona v. United States, 567 U.S. 387, 400 (2012) (citation omitted). No such purpose exists here.
We acknowledge that our conclusion—that the Clean Air Act does not prevent the two counties from enforcing their regulations against Volkswagen for tampering with post-sale vehicles—may result in the imposition of unexpected (and enormous) liability on Volkswagen. But that result is caused by the unusual and perhaps unprecedented situation before us. In drafting the Clean Air Act, Congress apparently did not contemplate that a manufacturer would intentionally tamper with the emission control systems of its vehicles after sale in order to improve the functioning of a device intended to
deceive the regulators. In other words, Volkswagen faces liability due to the straightforward application of the Clean Air Act and the preemption doctrine to its unexpected and aberrant conduct. We may not strain to give Volkswagen the equivalent of a release from state and local liability (which it did not secure for itself) by engaging in a “freewheeling judicial inquiry into whether a state statute is in tension with federal objectives; such an endeavor would undercut the principle that it is Congress rather than the courts that pre-empts state law.” Whiting, 563 U.S. at 607 (internal quotation marks and citation omitted).4
I
Under Title II, Part A of the Clean Air Act of 1990 (CAA),5 car manufacturers cannot sell new motor vehicles in the United
emission standards, including standards for the emission of nitrogen oxide (NOx). See
A
In 1998, the EPA established new federal emission standards for light duty vehicles, the type of vehicles at issue
here,7 including stricter NOx emission standards. Manufacturers were required to comply with the new standards beginning with model year 2007 vehicles. Volkswagen concluded that some of its diesel engine vehicles would not be able to meet the heightened NOx emission standards while still operating at a performance level that could attract customers. Therefore, beginning in 2006, Volkswagen employees developed and installed two defeat devices that would enable its diesel engine vehicles to pass federal emission tests, even though the vehicles could not actually meet the NOx emission standards while being driven on the street.
Volkswagen installed different defeat devices in vehicles with a 2.0 liter diesel engine (the “2.0 Liter Vehicles“) and vehicles with a 3.0 liter diesel engine (the “3.0 Liter Vehicles“). The defeat device in the 2.0 Liter Vehicles comprised software designed to recognize whether the vehicle was undergoing federal emission testing on a dynamometer8 or was being driven on the road. When the software detected that the vehicle was being tested, the vehicle performed in “dyno mode,” i.e., in compliance with federal NOx emission standards. Otherwise, the vehicle would operate in “street mode,” which substantially reduced the effectiveness of the vehicle‘s emission control system.
When in street mode, the vehicle‘s NOx emissions were up to 35 times higher than federal standards.
The defeat device installed in the 3.0 Liter Vehicles was also designed to recognize when the vehicle was undergoing emission testing, but rather than cause the vehicle to switch between dyno mode and street mode, the defeat device injected
Between 2009 and 2015, Volkswagen installed these defeat devices in approximately 585,000 new motor vehicles that were sold in the United States. During this period, Volkswagen deliberately misled the EPA by concealing the defeat devices and certifying that the vehicles complied with federal NOx emission standards. Unaware of Volkswagen‘s deception, the EPA issued certificates of conformity for these vehicles in each model year. Volkswagen also misled consumers by marketing the vehicles as “clean diesel” and “environmentally-friendly,” despite knowing that the vehicles “were intentionally designed to detect, evade and defeat U.S. emissions standards.”
Around 2012, consumers who purchased a 2.0 Liter Vehicle began reporting hardware failures. In investigating these failures, Volkswagen engineers theorized that the defeat device failed to switch into street mode when the vehicle was being driven on the street. Because the 2.0 Liter Vehicles were not designed to comply with NOx emission standards
except during the short periods of testing, the Volkswagen engineers suspected that the hardware failures were caused by the increased stress on the exhaust system from being driven too long in compliance with NOx standards, i.e., in dyno mode.
To prevent such hardware failures, Volkswagen developed two software updates for the 2.0 Liter Vehicles. The first software update would decrease stress on the exhaust system by causing the vehicle to start in street mode rather than dyno mode; the second update would improve emission-testing detection by adding a “steering wheel angle recognition” feature. If a vehicle‘s steering wheel was stationary, the updated software would recognize that the vehicle was being tested and the engine would switch to dyno mode. But if the updated software detected that the steering wheel was turning, it would allow the engine to operate in street mode.
Volkswagen began installing the updated software in new 2.0 Liter Vehicles in 2014. The same year, Volkswagen took the following steps for its post-sale 2.0 Liter Vehicles. First, it issued voluntary recalls and installed the software fixes without revealing their purpose. Second, it updated the software when customers brought their cars in for normal maintenance, again without revealing the purpose of the software updates. In each scenario, Volkswagen deceptively told EPA regulators and American consumers that the software updates were intended to improve the operation of the 2.0 Liter Vehicles.
An independent study soon revealed that certain Volkswagen vehicles emitted air pollutants at concentrations “of up to approximately 40 times the permissible limit.” The
EPA commenced an investigation. In August 2015, a Volkswagen whistleblower informed federal regulators about the defeat device in the 2.0 Liter Vehicles. Eventually, Volkswagen disclosed the entire scheme affecting both the 2.0 and 3.0 Liter Vehicles to federal regulators.
The EPA subsequently issued notices of violation and filed civil and criminal actions against Volkswagen for violating the CAA. In the civil action, the EPA charged Volkswagen with installing a defeat device on new motor vehicles, in violation of
Volkswagen pleaded guilty to the criminal charges and agreed to pay a $2.8 billion fine to the United States. Pursuant to the plea agreement, Volkswagen stipulated to a detailed statement of facts regarding the defeat devices and agreed not to “contest the admissibility of, nor contradict” those stipulated facts “in any proceeding.” The plea agreement did not give Volkswagen “any protection against prosecution” from state or local governments.
Volkswagen also settled the civil CAA claims, entering into three consent decrees with the United States.9 Other than
California (which entered into the first and second consent decrees), no other state or local government released Volkswagen from liability. To the contrary, each state expressly reserved its ability to sue Volkswagen for damages.10 In total, Volkswagen‘s liability exceeded $20 billion.
Efficient (SAFE) Vehicles Rule Part One: One National Program, 84 Fed. Reg. 51310 (Sept. 27, 2019) (withdrawing the waiver previously provided to California for certain emission standards, as applied to new motor vehicles). Under this grant of authority, California, like the United States, brought claims for injunctive relief against Volkswagen, alleging violations of California environmental and unfair competition laws.
B
While the EPA was litigating its civil and criminal actions against Volkswagen, a number of states and counties brought separate lawsuits against the company for violating state and local laws that prohibit tampering with vehicle emission control systems.
In 2016, the Multidistrict Litigation (MDL) judicial panel transferred these actions to the district court for the Northern
District of California.11 In 2017, the district court granted Volkswagen‘s motion to dismiss a suit brought by Wyoming, holding that the state‘s claim that Volkswagen violated Wyoming law by installing the defeat device in new motor vehicles was preempted by the CAA. See In re Volkswagen “Clean Diesel” Mktg., Sales Practices, & Prods. Liab. Litig., 264 F. Supp. 3d 1040, 1052–57 (N.D. Cal. 2017). In light of the district court‘s ruling, several local governments amended their respective complaints
Two of these complaints, one from Salt Lake County, Utah, and one from Hillsborough County, Florida, (collectively, the “Counties“) are before us on appeal.
Salt Lake County sued Volkswagen in Utah state court. In its third amended complaint, Salt Lake County alleged that Volkswagen‘s installation of and modification to the defeat devices violated Utah‘s anti-tampering regulation, which
provides: “[n]o person shall remove or make inoperable the [emission control] system or device or any part thereof, except for the purpose of installing another [emission control] system or device, or part thereof, which is equally or more effective in reducing emissions from the vehicle to the atmosphere.” Utah Admin. Code R. 307-201-4.12 The complaint alleged that Volkswagen violated this regulation by installing defeat devices in new vehicles to render the emission control systems inoperable, and by modifying the software in post-sale vehicles to enhance the defeat devices’ capabilities. The penalty for violating Utah‘s anti-tampering regulation is up to $5,000 per violation, with each day of violation constituting a separate offense.
The Environmental Protection Commission of Hillsborough County (EPC), Florida, filed an action against Volkswagen in Florida district court. EPC‘s first amended complaint alleged that Volkswagen violated two of the county‘s anti-tampering and defeat device regulations, which provide that “[n]o person shall tamper, cause, or allow the tampering of the emission control system of any motor vehicle,” and no person shall “manufacture, install, sell or advertise for sale, devices to defeat or render inoperable any component of a motor vehicle‘s emission control system.”
Rules of Envtl. Prot. Comm‘n of Hillsborough Cty., Rule 1-8.05(1), (6).13 The complaint alleged that Volkswagen violated these provisions by installing defeat devices in new vehicles, and by tampering with the emission control systems of used vehicles registered in the county through a program of field fixes and recall campaigns. The penalty for violating Hillsborough County‘s anti-tampering and defeat device regulation is up to $5,000 per violation, with each day of violation constituting a separate offense. See Hillsborough County Environmental Protection Act, Fla. Laws 84-446 § 17(2) (as amended by Fla. Laws 87-495 (2005)).
The Counties’ claims were transferred to the district court presiding over the MDL as tag-along actions. Volkswagen moved to dismiss the Counties’ claims for
Nevertheless, the district court dismissed the Counties’ actions with prejudice. It held that the Counties’ claims, as applied to new vehicles, were preempted by
the control of emissions from new motor vehicles or new motor vehicle engines.”
On appeal, the Counties argue that the CAA does not preempt their claims for either pre-sale or post-sale vehicles.
We have jurisdiction under
II
The question on appeal is whether the Counties’ regulations imposing penalties for tampering with emission control systems in motor vehicles are expressly or impliedly preempted by the CAA‘s motor vehicle emission standards. We begin with the framework for considering whether Congress has preempted (or displaced) state law. The Supremacy Clause provides that federal law “shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” U.S. Const. art. VI, cl. 2. “The Clause provides a ‘rule of decision’ for determining whether federal or state law applies in a particular situation.” Kansas v. Garcia, 140 S. Ct. 791, 801 (2020) (quoting Armstrong v. Exceptional Child Ctr., Inc., 575 U.S. 320, 324 (2015)). The basic principle is as follows: “If federal law imposes restrictions or confers rights on private actors and a state law confers rights or imposes
restrictions that conflict with the federal law, the federal law takes precedence and the state law is preempted.” Id. (internal quotation marks omitted) (quoting Murphy v. Nat‘l Collegiate Athletic Ass‘n, 138 S. Ct. 1461, 1480 (2018)).
Congress may expressly preempt state law by enacting a clear statement to that effect. Id. “If the statute contains an express pre-emption clause, the task of statutory construction must in the first instance focus on the plain wording of the clause, which necessarily contains the best evidence of Congress’ pre-emptive intent.” CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664 (1993).
Congress may also preempt state law implicitly. In discerning whether there is implied preemption, our analysis “must be guided by two cornerstones of ... pre-emption jurisprudence.” Wyeth v. Levine, 555 U.S. 555, 565 (2009). “First, ‘the purpose of Congress is the ultimate touchstone in every pre-emption case.‘” Id. (quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)). We must find such a purpose “grounded ‘in the text and structure of the statute at issue.‘” Garcia, 140 S. Ct. at 804 (quoting CSX Transp., Inc., 507 U.S. at 664). “Second, in
The Supreme Court has articulated two circumstances—referred to as “field preemption” and “conflict preemption“—where Congress‘s implicit intent to preempt state law clears that high threshold. First, “when federal law occupies a ‘field’ of regulation ‘so comprehensively that it has left no room for supplementary state legislation,‘” Murphy, 138 S. Ct. at 1480 (quoting R.J. Reynolds Tobacco Co. v. Durham Cty., 479 U.S. 130, 140 (1986)), a court may infer that Congress intended to preempt state law.
Second, when a state law “actually conflicts with federal law,” English v. Gen. Elec. Co., 496 U.S. 72, 79 (1990), either because “compliance with both state and federal law is impossible,” or because “the state law ‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,‘” Oneok, Inc. v. Learjet, Inc., 575 U.S. 373, 377 (2015) (quoting California v. ARC Am. Corp., 490 U.S. 93, 100–01 (1989)), a court may again conclude that Congress implicitly intended to preempt state law. To evaluate a claim based on the second type of conflict preemption—referred to as “obstacle preemption“—a court must identify the “full purposes and objectives” of the federal law from “the text and structure of the statute at issue.” Garcia, 140 S. Ct. at 804 (quoting CSX Transp., Inc., 507 U.S. at 664). “The Supremacy Clause gives priority to ‘the Laws of the United States,’ not the priorities and preferences of federal officers,” id. at 807, or the “unenacted approvals, beliefs, and desires” of Congress, P.R. Dep‘t of Consumer Affairs v. Isla Petroleum Corp., 485 U.S. 495, 501 (1988).
The Supreme Court has found obstacle preemption in only a small number of cases. First, where the federal
legislation at issue involved a “uniquely federal area[] of regulation,” the Court has inferred a congressional intent to preempt state laws “that directly interfered with the operation of the federal program.” Whiting, 563 U.S. at 604. Such unique federal areas include exercising foreign affairs powers, Crosby v. Nat‘l Foreign Trade Council, 530 U.S. 363, 373-74 (2000), sanctioning fraud on a federal agency, Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341, 353 (2001), and regulating maritime vessels, United States v. Locke, 529 U.S. 89, 97 (2000). Second, the Court has inferred that Congress made “a considered judgment” or “a deliberate choice” to preclude state regulation when a federal enactment clearly struck a particular balance of interests that would be disturbed or impeded by state regulation. Arizona, 567 U.S. at 405. Thus, a state law imposing criminal penalties on aliens who sought or engaged in unlawful employment “would interfere with the careful balance struck by Congress,” because “Congress made a deliberate choice not to impose criminal penalties” for the
Absent such circumstances, the Supreme Court has frequently rejected claims of obstacle preemption. For instance, the Court does not infer Congress intended to preempt state enactments merely because they overlap with a federal act. “Our federal system would be turned upside down if we were to hold that federal criminal law preempts state law whenever they overlap, and there is no basis for inferring that federal criminal statutes preempt state laws whenever they overlap.” Garcia, 140 S. Ct. at 806.
This analysis is equally applicable in the civil context, especially when the federal statute expressly or impliedly preserves state laws that might overlap with a federal statute. See Whiting, 563 U.S. at 607. The Court gives great weight to Congress‘s inclusion of a provision preserving states’ enforcement authority. In Williamson, for instance, the Court concluded that a federal statute giving manufacturers a choice to select a less effective car safety device did not preempt a state tort suit that could require the manufacturer to select a more effective device. 562 U.S. at 332-36. The Court reasoned that because Congress included “a statutory saving clause” preserving state remedies, it foresaw “the likelihood of a continued meaningful role for state tort law.” Id. at 335. Similarly, in Whiting, the Court concluded that federal law preempting “any State or local law imposing civil or criminal sanctions” on employers who hire “unauthorized aliens,” did not impliedly preempt an Arizona law that authorized (and sometimes required) the suspension or revocation of an employer‘s business license if the employer knowingly or intentionally employed unauthorized aliens. 563 U.S. at 587. The Court held that there was no express preemption, because the state law fell “comfortably within the saving clause.” Id. at 596. The Court likewise concluded there was no implied preemption of the Arizona law, because where “Congress specifically preserved such authority for the States, it stands to reason that Congress did not intend to prevent the States from using appropriate tools to exercise that authority.” Id. at 600-01.
Although a saving clause raises the inference that Congress did not intend to preempt state law, the existence of a saving clause does not “foreclose or limit the operation of ordinary pre-emption principles” that
III
We apply these principles to the question whether the Counties’ anti-tampering rules are preempted.
A
Some background is helpful to put our interpretation of the CAA and its relationship with states’ laws and police powers into context. The CAA is a joint venture, one that makes “the States and the Federal Government partners in the struggle against air pollution.” Gen. Motors Corp. v. United States, 496 U.S. 530, 532 (1990). The basic division of responsibility in Title II of the CAA reflects the cooperative federalism principles that have long informed this nation‘s air pollution control laws. See Comm. for a Better Arvin v. EPA, 786 F.3d 1169, 1173 (9th Cir. 2015) (“[T]he CAA has established a uniquely important system of cooperative federalism in the quest for clean air.“); GenOn REMA, LLC v. EPA, 722 F.3d 513, 516 (3d Cir. 2013) (“This ‘cooperative federalism’ structure is a defining feature of the [CAA].“). Prior to 1955, the regulation of air pollution was the sole responsibility of the states as a matter of public health, and the states enacted various regulations pursuant to their historic police powers. See Arthur C. Stern, History of Air Pollution Legislation in the United States, 32 J. Air Pollution Control Ass‘n 44, 44, 47 (1982); see also, e.g.,
The current version of the CAA recognizes “that air pollution prevention . . . and air pollution control at its source
B
We now turn to the relevant text of the CAA. Under Title II, Part A of the CAA, the federal government has authority to establish “standards applicable to the emission of any air pollutant from . . . new motor vehicles.”
The CAA expressly preempts certain state and local laws regulating emissions from new motor vehicles. Under § 209(a) of the CAA:
No State or any political subdivision thereof shall adopt or attempt to enforce any standard relating to the control of emissions from new motor vehicles or new motor vehicle engines subject to this part. No State shall require certification, inspection, or any other approval relating to the control of emissions from any new motor vehicle or new motor vehicle engine as condition precedent to the initial retail sale, titling (if any), or registration of such motor vehicle, motor vehicle engine, or equipment.
After a new motor vehicle is sold “to an ultimate purchaser,”
Despite the saving clause, the EPA retains some authority over post-sale vehicles. The CAA requires manufacturers of new motor vehicles to warrant the emission control system of the vehicle for the “useful life” of the vehicle, with the useful life being 10 years or 100,000 miles.
Last, the CAA prohibits tampering with air pollution control devices in all motor vehicles, both pre-sale and post-sale. See
and such other matters as justice may require.”
IV
We now consider the application of the preemption doctrine to the Counties’ anti-tampering rules. We first ask whether the CAA‘s express preemption provision preempts the Counties’ anti-tampering rules. To the extent the CAA‘s express preemption provision does not apply, we ask whether the Counties’ rules conflict with the CAA, and therefore are impliedly preempted. See Williamson, 562 U.S. 329-30.
A
Volkswagen argues that § 209(a), the CAA‘s express preemption provision, preempts the Counties’ imposition of anti-tampering rules on pre-sale vehicles. We agree. Section 209(a) precludes a local government from enforcing “any standard relating to the control of emissions from new motor vehicles.”
The Counties argue that their anti-tampering rules are not “emission standards” for purposes of § 209(a) because they do not attempt to enforce the limitations on emissions of pollutants from new motor vehicles that are set forth in § 202 of the CAA,
B
We turn to Volkswagen‘s argument that § 209(a) also expressly preempts the Counties’ anti-tampering rules as applied to post-sale vehicles. It clearly does not. By its terms, § 209(a) preempts state and local regulations “relating to the control of emissions from new motor vehicles.”
Nevertheless, Volkswagen argues that the preemptive effect of § 209(a) does not end as soon as the “equitable or legal title” to a vehicle has “been transferred to an ultimate purchaser.”
Volkswagen‘s reliance on Allway Taxi is misplaced. The Counties’ anti-tampering rules do not require Volkswagen to comply with a local emission standard that is different from the federal standard, nor do
V
Because we reject Volkswagen‘s argument that § 209 of the CAA expressly preempts the Counties’ anti-tampering rules as applied to post-sale vehicles, we turn to the more difficult question raised by the parties: whether the CAA impliedly preempts the Counties’ anti-tampering rules as applied to post-sale vehicles.
Volkswagen‘s theory of implied preemption is based only on the doctrine of obstacle preemption.18 Specifically, Volkswagen claims that the Counties’ anti-tampering rules stand “as an obstacle to the accomplishment and execution of the full purposes and objectives” of Title II, Part A of the CAA, and therefore they are impliedly preempted. Oneok, 575 U.S. at 377 (quoting ARC Am. Corp., 490 U.S. at 100-01).
In considering Volkswagen‘s obstacle preemption arguments, we begin with the text and structure of the CAA. See Garcia, 140 S. Ct. at 804. As directed by the Supreme Court, we consider the impact of Congress‘s inclusion of a saving clause, see Williamson, 562 U.S. at 335; Whiting, 563 U.S. at 600-01, in light of the presumption “that the historic police powers of the States’ are not superseded ‘unless that was the clear and manifest purpose of Congress,‘” Arizona, 567 U.S. at 400 (citation omitted).
The CAA‘s preemption clause (§ 209(a)) and saving clause (§ 209(d)) allocate authority between the federal government and state governments as follows: Section 209(a) gives the EPA exclusive authority to establish standards for new vehicles,
see also Goodyear Atomic Corp. v. Miller, 486 U.S. 174, 184-85 (1988) (“[Courts] generally presume that Congress is knowledgeable about existing law pertinent to the legislation it enacts.“).21 Congress‘s “certain awareness of the prevalence of state” law, coupled with its “silence on the issue,” “is powerful evidence that Congress did not intend” to preempt local anti-tampering laws. Wyeth, 555 U.S. at 575; see also Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 166-67 (1989) (“The case for federal pre-emption is particularly weak where Congress has indicated its awareness of the operation of state law in a field of federal interest, and has nonetheless decided to ‘stand by both concepts and to tolerate whatever tension there is between them.‘” (alteration adopted and citation omitted); Head v. N.M. Bd. of Exam‘rs in Optometry, 374 U.S. 424, 432 (1963) (holding that a state law did not stand “as an obstacle to the full effectiveness of the federal statute” because the
Congress intended to preempt the Counties’ anti-tampering rules.
Nor are there other factors weighing in favor of obstacle preemption. The regulation of air pollution from post-sale vehicles does not involve a “uniquely federal” area of enforcement, Whiting, 563 U.S. at 604, because the basic division of responsibility in Title II of the CAA reflects the cooperative federalism principles that have long informed this nation‘s air pollution control laws, see supra Part III.A. And even if the regulation of post-sale vehicles were an important area of federal concern, the EPA‘s ability to enforce the federal anti-tampering law,
Accordingly, we conclude that Congress intended to allow states to enforce anti-tampering rules related to post-sale vehicles, and that such rules are not impliedly preempted.
VI
Despite the strong indications that Congress did not intend to preempt state efforts to prevent tampering in post-sale vehicles, Volkswagen argues that interpreting the CAA as allowing such state enforcement efforts would defeat the “purposes and objectives of Congress.” Oneok, 575 U.S. at 377 (citation omitted). Therefore, Volkswagen asserts, the Counties’ anti-tampering rules are preempted under ordinary preemption principles. Volkswagen relies on two distinct aspects of Title II to support its argument: (1) the provisions requiring manufacturers to ensure that post-sale vehicles comply with certain emission requirements on a model-wide basis, and (2) the provisions authorizing the EPA to impose civil penalties on persons who tamper with vehicles. We consider each of these arguments in turn.
A
Volkswagen first argues that Congress intended to give the EPA exclusive oversight over post-sale compliance with emission standards on a model-wide basis, and the Counties’ anti-tampering rules pose an
Volkswagen‘s argument proceeds in three steps. First, Volkswagen points to the sections of the CAA imposing post-sale obligations on manufacturers and tasking the EPA with ensuring compliance with those obligations. For instance, the CAA requires manufacturers to ensure that their vehicles’ emission control system remains functional for at least 10 years or 100,000 miles, see
We disagree. Whether such a division of labor is reasonable from a policy perspective (or is merely a reading of the CAA tailored to fit Volkswagen‘s unique circumstances), this theory of partial preemption is not “grounded in the text and structure” of the CAA. Garcia, 140 S. Ct. at 804 (citation and internal quotation marks omitted). Nothing in the CAA raises the inference that Congress intended to place manufacturers beyond the reach of state and local governments. Volkswagen itself concedes that the CAA does not afford “a wide-ranging grant of immunity [from state enforcement actions] based on the identity of the actor (auto manufacturers).” As the district court put it, if “a manufacturer were to tamper with a single in-use vehicle during vehicle maintenance, the Clean Air Act would not bar a state or local government from bringing a tampering claim against the manufacturer if the tampering occurred within its borders.” Nor does anything in the text or structure of the CAA raise the inference that Congress intended to shield a person from state enforcement actions if that person tampered with a large number of vehicles or engaged in systematic rather than sporadic tampering. The CAA prohibits “any
In short, we cannot discern a congressional intent, let alone a “clear and manifest purpose of Congress,” to give the EPA exclusive authority over large-scale, post-sale tampering by manufacturers, while giving state and local governments concurrent authority only when the tampering is conducted on a more casual, individual basis. Id. at 400. Because we see no indication that Congress intended to preempt state and local authority to enforce anti-tampering rules on a model-wide basis, we reject Volkswagen‘s argument that interpreting § 209(d) according to its terms would cause the CAA to “destroy itself.” Geier, 529 U.S. at 872 (citation omitted).
B
Volkswagen next argues that the CAA‘s penalty provision,
To support its claim that the CAA gives the EPA exclusive authority over the imposition of penalties, Volkswagen first relies on a line of cases interpreting the National Labor Relations Act as preventing states from imposing any remedies for activities potentially covered by the Act. See San Diego Bldg. Trades Council, Millmen‘s Union, Local 2020 v. Garmon, 359 U.S. 236 (1959); Amalgamated Ass‘n of Street, Elec. Ry. & Motor Coach Emps. of Am. v. Lockridge, 403 U.S. 274 (1971); Wis. Dep‘t of Indus., Labor & Human Relations v. Gould Inc., 475 U.S. 282 (1986). Volkswagen‘s reliance is misplaced, because those cases involved a “special preemption rule” applicable to “state laws regulating matters that the National Relations Act ‘protects, prohibits, or arguably protects.‘” Garcia, 140 S. Ct. at 807 (quoting Gould, 475 U.S. at 286). Garmon and its progeny are based on “a presumption of federal pre-emption,” Brown v. Hotel & Rest. Emps. & Bartenders Int‘l Union Local 54, 468 U.S. 491, 502 (1984), “designed to prevent ‘conflict in its broadest sense’ with the ‘complex and interrelated federal scheme of law, remedy, and administration’ of the National Labor Relations Act,” Gould, 475 U.S. at 286 (quoting Garmon, 359 U.S. at 243). The Supreme Court has declined to extend this rule to other contexts. See Garcia, 140 S. Ct. at 807 (rejecting the argument that such a rule is
Volkswagen also offers textual arguments to support its claim. First, Volkswagen points to the list of factors the EPA “shall take into account” before assessing a civil administrative penalty.
These arguments fail. An exclusive federal regime (such as the regime created by the National Labor Relations Act, as explained in Garmon and its progeny) may preclude the imposition of state penalties. But the mere fact that a federal statute permits the imposition of federal penalties, without more, does not raise the inference that Congress created an exclusive federal regime. Because the CAA is, and always has been, a cooperative-federalism partnership, see supra Part III.A., there is no basis for Volkswagen‘s argument that Congress‘s authorization of federal penalties, along with guidance on how those penalties should be imposed, expressly or impliedly forecloses state and local governments from enforcing their own rules or imposing sanctions of their choosing. To the contrary, the statutory provisions guiding the EPA in developing an appropriate penalty, including the non-exhaustive list of assessment factors and the penalty cap, are directed only at the EPA; there is no suggestion that Congress wanted to exclude state and local anti-tampering remedies. While this gives the EPA the authority to control only the amount of the federal penalty, we see nothing inherently problematic about the EPA‘s inability to control the total liability that may be imposed for a tampering violation. The potential for overlapping state and federal penalties has never, without more, raised the inference that Congress intended to preempt state law. See Garcia, 140 S. Ct. at 806; California v. Zook, 336 U.S. 725, 737 (1949).23
In fact, the
would be the sole enforcement authority for every incident of tampering with air pollution control equipment, including illegal alterations by the local garage mechanic or do-it-yourself efforts to disable a catalytic converter.24 But nothing in the CAA suggests that Congress intended the EPA to take over such local law enforcement issues, to the exclusion of state and local governments, which would have the effect of preempting anti-tampering rules in nearly every state. See supra at 35-36 & n.19. The Supreme Court has warned against “setting aside great numbers of state statutes to satisfy a congressional purpose which would be only the product of [judicial] imagination.” Zook, 336 U.S. at 732-33. Given the prevalence of state anti-tampering rules, we are especially mindful of the Court‘s warning.
In sum, the CAA‘s cooperative federalism scheme, its express preservation of state and local police powers post sale, and the complete absence of a congressional intent to vest in the EPA the exclusive authority to regulate every incident of post-sale tampering, raises the strong inference that Congress did not intend to deprive the EPA “of effective aid from local officers experienced in the kind of enforcement necessary to combat” the evil of tampering with emission control systems. Id. at 737. Therefore, Volkswagen‘s penalty-provision arguments are not sufficient to pass over the “high threshold” which “must be met if a state law is to be
preempted for conflicting with the purposes of a federal Act.” Whiting, 563 U.S. at 607 (citation omitted).
***
We affirm the district court‘s dismissal of the Counties’ complaints to the extent they sought to apply anti-tampering rules to new motor vehicles. However, we reverse the district court‘s dismissal of the Counties’ complaints regarding post-sale tampering. We are mindful that our conclusion may result in staggering liability for Volkswagen. But this result is due to conduct that could not have been anticipated by Congress: Volkswagen‘s intentional tampering with post-sale vehicles to increase air pollution. We assume that this conduct will be as rare as it is unprecedented. In any event, we may not strain our application of the Supreme Court‘s
AFFIRMED IN PART; REVERSED IN PART.25
Notes
Defeat device means an auxiliary emission control device (AECD) that reduces the effectiveness of the emission control system under conditions which may reasonably be expected to be encountered in normal vehicle operation and use, unless: [listing exceptions].
(A) for any person to remove or render inoperative any device or element of design installed on or in a motor vehicle or motor vehicle engine in compliance with regulations under this subchapter prior to its sale and delivery to the ultimate purchaser, or for any person knowingly to remove or render inoperative any such device or element of design after such sale and delivery to the ultimate purchaser; or
(B) for any person to manufacture or sell, or offer to sell, or install, any part or component intended for use with, or as part of, any motor vehicle or motor vehicle engine, where a principal effect of the part or component is to bypass, defeat, or render inoperative any device or element of design installed on or in a motor vehicle or motor vehicle engine in compliance with regulations under this subchapter, and where the person knows or should know that such part or component is being offered for sale or installed for such use or put to such use.
Any person who violates sections 7522(a)(1), 7522(a)(4), or 7522(a)(5) of this title or any manufacturer or dealer who violates section 7522(a)(3)(A) of this title shall be subject to a civil penalty of not more than $25,000. Any person other than a manufacturer or dealer who violates section 7522(a)(3)(A) of this title or any person who violates section 7522(a)(3)(B) of this title shall be subject to a civil penalty of not more than $2,500. Any such violation with respect to paragraph (1), (3)(A), or (4) of section 7522(a) of this title shall constitute a separate offense with respect to each motor vehicle or motor vehicle engine. Any such violation with respect to section 7522(a)(3)(B) of this title shall constitute a separate offense with respect to each part or component. Any person who violates section 7522(a)(2) of this title shall be subject to a civil penalty of not more than $25,000 per day of violation.