UTAH PHYSICIANS FOR A HEALTHY ENVIRONMENT v. DIESEL POWER GEAR, LLC; B&W AUTO, LLC d/b/а Sparks Motors, LLC; DAVID W. SPARKS; and JOSHUA STUART; and 4x4 ANYTHING LLC
No. 20-4043
United States Court of Appeals for the Tenth Circuit
December 28, 2021
PUBLISH
Before HARTZ, BRISCOE, and CARSON, Circuit Judges.
Appeal from the United States District Court for the District of Utah (D.C. No. 2:17-CV-00032-RJS)
Cole S. Cannon (Janet M. Conway, on the briefs), Cannon Law Group, Salt Lake City, Utah, for Defendants-Appellants.
Reed Zars (George E. Hays, Bellevue, Washington, with him on the brief), Laramie, Wyoming, for Plaintiff-Appellee.
Defendants’ businesses focus on large diesel trucks and related parts, merchandise, and media. In 2017 Defendants were sued by Plaintiff Utah Physicians for a Healthy Environment (UPHE), a nonprofit organization that alleged, among other things, that Defendants were tampering with required emission-control devices and installing so-called “defeat devices” in violation of the Clean Air Act (CAA) and Utah‘s State Implementation Plan. After a bench trial the court entered judgment in favor of UPHE, finding Defendants collectively liable for hundreds of violations of the CAA and Utah‘s plan and assessing over $760,000 in civil penalties. On appeal Defendants challenge UPHE‘s Article III and statutory standing, the district court‘s
I. STATUTORY FRAMEWORK
The CAA distributes responsibilities among the States and the federal Environmental Protection Agency (EPA) in what has been called a “cooperative-federаlism approach.” US Magnesium, LLC v. EPA, 690 F.3d 1157, 1159 (10th Cir. 2012). The EPA promulgates National Ambient Air Quality Standards (NAAQS), which set limits on maximum concentrations of various pollutants. See Nat‘l Parks Conservation Ass‘n, Inc. v. TVA, 480 F.3d 410, 412 (6th Cir. 2007);
The States have the primary responsibility to ensure that those limits are satisfied. See
State SIP submissions must include “a list of all areas (or portions thereof) in the State, designating [them] as” (1) nonattainment (areas that fail to meet, or contribute to another area failing to meet, the NAAQS); (2) attainment (areas that meet, and do not contribute to another area not meeting, the NAAQS); or (3) unclassifiable (areas that cannot be classified on the basis of available information). See
As a general rule, the States’ principal responsibility is stationary sources like factories and power plants (governed by Title I of the CAA), while the EPA has primary responsibility over mobile sources (governed by Title II of the Act).2 In particular,
permit programs contained in SIP proposals must cover “[a]ny major source.”
In contrast, mobile pollution sources, such as motor vehicles, are primarily subject to EPA regulation under Title II of the CAA. “Th[is] regulatory difference” between stationary and mobile sources has been attributed to “the difficulty of subjecting motor vehicles, which readily move across state boundaries, to control by individual states,” as well as Congress‘s concern that allowing each State to fashion its own regulations for motor vehicles would give rise to “an anarchic patchwork of federal and state regulatory programs, a prospect which threatened to create nightmares for the manufacturers.” Engine Mfrs. Ass‘n v. EPA, 88 F.3d 1075, 1079 (D.C. Cir. 1996) (internal quotation marks omitted). In fact, the CAA explicitly prohibits States and localities from “adopt[ing] or attempt[ing] to enforce any standard relating to the control of emissions from new motor vehicles or new motor vehicle engines subject to [Title II Motor Vehicle Emission and Fuel Standards].”
Of particular relevance to this litigation, Title II has two provisions to make sure that emission-control devices required for new vehicles will be effective after retail sale. One prohibits tampering with such devices. It makes it unlawful:
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[.]
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[.]
States may, however, “control, regulate, or restrict the use, operation, or movement of registered or licensed motor vehicles.”
Enforcement of clean-air law is also a joint federal-state responsibility, although with some assistance from private citizens. An approved SIP “has the force and effect of federal law,” and, like the CAA itself, can be enforced in federal court. Espinosa v. Roswell Tower, Inc., 32 F.3d 491, 492 (10th Cir. 1994); see
(
Private citizens may sue for any “violation of . . . an emission standard or limitation under [the CAA].”
Utah‘s SIP was officially submitted in 1972. See
In addition to the substantive anti-tampering rules included in R307-201-2, Utah state law also provides for penalties of up to $5,000 per day for any violation of the State‘s Environmental Quality Code or the lawful orders or rules adopted thereunder. See
II. BACKGROUND
Defendant Diesel Power Gear, LLC (DPG) is a “lifestyle brand company” that sells apparel and other accessories that cater to “the diesel truck lifestyle.” Sparks affidavit, Aplt. App., Vol. 3 at 50. Defendant B&W Auto, LLC—which also goes by the trade name “Sparks Motors“—is a used-car dealership and repair shop in Bountiful, Utah, which specializes in buying and making custom modifications to large diesel trucks for resale. Defendant
operating officer. Keaton Hoskins, named as a defendant in the original complaint, has performed marketing for DieselSellerz.com, an online truck-classifieds website affiliated with B&W and DPG. Original defendant 4x4 Anything is merely a d/b/a of DPG.
B&W and DPG began to grow rapidly in 2013, “quickly bec[oming] established names in the diesel truck community.” Id. at 52. This growth was partly fueled by promotional videos posted to the internet and social-media platforms. The business was also promoted through a sweepstakes which awarded B&W custom-built trucks to the winners. In 2016 the Discovery Channel premiered “Diesel Brothers,” a reality television show starring Sparks, Stuart, Hoskins, and David Kiley, another part-owner and employee of DPG. The show “feature[d] diesel trucks being custom built for off-road recreational use,” Sparks affidavit II, Aplt. App., Vol. 10 at 94, and averaged over two million viewers per episode in its first season.
UPHE is a nonprofit organization of Utah healthcare professionals and concerned citizens. In July 2016 it provided written notice of its intent to sue DPG, B&W, Sparks, and Stuart under the citizen-suit provision of the CAA,
and sale of so-called “aftermarket defeat parts“—parts “that have the principal effect of bypassing, defeating, or rendering inoperative emission control devices on certified diesel vehicles,” Aplt. App., Vol. 1 at 76–77. UPHE also gave notice to the Administrator of the EPA and the State of Utah, as required by
In January 2017 UPHE filed suit in the United States District Court for the District of Utah. Its amended complaint asserted 25 claims under the CAA and Utah‘s SIP. The relevant claims can be grouped into five categories: (1) allegations that B&W and Sparks removed existing emission-control devices from at least 17 diesel vehicles; (2) allegations that DPG, Sparks, and Stuart sold or offered to sell aftermarket defeat parts; (3) allegations that B&W and Sparks installed aftermarket defeat parts; (4) allegations that B&W, DPG, Sparks, and Stuart sold or offered to sell vehicles with aftermarket defeat parts; and (5) allegations that B&W, DPG, and Sparks owned and operated Utah-registered vehicles “without maintaining all emission control systems and devices in operable condition,” id. at 146, in violation of Utah SIP Regulation R307-201-2. UPHE alleged that these violations resulted in “the excessive emission of harmful pollutants from diesel vehicles” into the airshed of the Wasatch Front, id. at 29, an area in northern Utah home to more than three-fourths of the State‘s population. It said that these emissions “contribute to the[] adverse [health] effects” experienced by its members, including impaired vision, reduced lung capacity, sinus irritation, and coughing spells, and that they “suffer from a reduced enjoyment of life when they are
The parties filed cross-motions for full or partial summary judgment. Defendants sought summary judgment on each of UPHE‘s 25 claims, arguing that UPHE “lack[ed] standing to maintain this citizen suit under the [CAA]” because “Defendants’ minimal contribution of increased emissions cannot be fairly traced to [UPHE‘s] injuries.” Aplt. App., Vol. 8 at 92. Alternatively, Defendants maintained that even if UPHE did have standing, summary judgment on most of the claims would still be appropriate on the merits. The district court denied Defendants’ motion. See Utah Physicians for a Healthy Env‘t v. Diesel Power Gear LLC (UPHE I), 374 F. Supp. 3d 1124, 1145 (D. Utah 2019). For its part, UPHE submitted summary-judgment motions on many of its claims. Some of the motions were successful, and the court then held a three-day bench trial to resolve the remaining liability issues and to assess civil penalties. See Utah Physicians for a Healthy Env‘t v. Diesel Power Gear LLC (UPHE II), No. 2:17-cv-00032-RJS-DBP, 2020 WL 4282148, at *1 (D. Utah Mar. 6, 2020). The court determined that it could impose statutory penalties totaling $117,290,620 against Defendants, but applying the seven factors set forth in
On appeal Defendants raise five challenges to the judgment. They argue (1) that UPHE lacked Article III standing to bring any of the claims; (2) that the court committed plain error in ruling that UPHE had statutory standing to pursue its claims under the CAA; (3) that Defendants were not liable for CAA violations with respect to vehicles awarded as sweepstakes prizes; (4) that Defendants were not liable for CAA violations with respect to vehicles sold “as is“; and (5) that the court made various errors in calculating the penalties.
We largely affirm the judgment of the district court. But we must remand for further factual findings on one issue. We hold that UPHE lacks standing to seek penalties for violations that did not cause the emission of pollutants in the Wasatch Front, but the record needs further development to determine what adjustment, if any, must be made to the penalty assessment. Remand is also required because we hold that the district court abused its discretion in weighing one of the penalty-assessment criteria (namely, seriousness of the violation) in imposing penalties for tampering under the SIP penalty provision.
A. Article III Standing
Article III of the Constitution limits the jurisdiction of the federal courts to “Cases” and “Controversies.”
In general, a plaintiff has standing when “(1) it has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.” Friends of the Earth, Inc. v. Laidlaw Env‘t Servs. (TOC), Inc., 528 U.S. 167, 180–81 (2000). “We refer to these three familiar requirements as injury in fact, causation, and redressability.” Habecker, 518 F.3d at 1224. Additional requirements must be satisfied when the plaintiff is an organization suing on behalf of its members, such as UPHE in this case. The organization has standing only “[1] when its members would otherwise have standing to sue in their own right, [2] the interests at stake are germane to the organization‘s purpose, and [3] neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.” Laidlaw, 528 U.S. at 181. Because the second and third conditions are unquestionably satisfied here (protecting the environment is a core purpose of UPHE and the relief it seeks does not require the participation of individual members, cf. Warth v. Seldin, 422 U.S. 490, 515–16 (1975) (homebuilders association lacked standing to seek damages on behalf of its members when injuries were “peculiar to the individual member[s] concerned, and both the fact and extent of injury would require individualized proof“)), we focus solely on whether members of UPHE would have standing in their own right.9
As for the standing of the individual members of UPHE, the first and third requirements are not in serious doubt. Defendants do not dispute (nor do we see a basis for them to do so) the district court‘s determination that UPHE members suffered injury in fact because of “adverse health effects from elevated air pollution in the Wasatch Front or exposure to diesel exhaust” and reduced participation “in outdoor recreational activities due [to] their concerns about fine particulate matter
pollution.” UPHE I, 374 F. Supp. 3d at 1132. Also, the members’ injuries are redressable through both injunctive relief and the imposition of penalties on wrongdoers whose violations were ongoing at the time UPHE filed suit. See Laidlaw, 528 U.S. at 186 (Environmental group had standing to seek not only injunctive rеlief, but also civil penalties because by “encourag[ing] defendants to discontinue current violations [of the Clean Water Act (CWA)] and deter[ring] them from committing
There remains the question of causation: Are the injuries of the UPHE members “fairly traceable to the challenged action[s]” of Defendants? Laidlaw, 528 U.S. at 180. Although “Article III does at least require proof of a substantial likelihood that the defendant‘s conduct caused plaintiff‘s injury in fact,” it “demands something less than the concept of proximate cause” found in tort law. Nova Health Sys. v. Gandy, 416 F.3d 1149, 1156 (10th Cir. 2005) (internal quotation marks omitted); see Pub. Int. Rsch. Grp. of N.J., Inc. v. Powell Duffryn Terminals Inc., 913 F.2d 64, 72 (3d Cir. 1990) (“A plaintiff need not prove causation with absolute scientific rigor to defeat a motion for summary judgment. The ‘fairly traceable’ requirement ... is not equivalent to a requirement of tort causation.“).
Defendants’ attack on UPHE‘s standing has a factual component and a legal component. Factually, they contend that their contribution to pollution in the Wasatch Front is a negligible fraction of the total pollution that comes from a myriad of sources. They assert: “The undisputed evidence at trial established the total combined miles driven within the State of Utah for all B&W trucks is less than 4,285 miles. The maximum total excess emissions as a result of all B&W violations over five years is less than .02 tons of NOx and .0004 tons of PM, compared to the millions of tons of the same pollutants from other sources.” Aplt. Br. at 8–9 (citation omitted); see also UPHE I, 374 F. Supp. 3d at 1134 (“[M]any sources contribut[e] to air pollution in the Wasatch Front, including on-road mobile sources, wildfires, and oil refineries.“). Legally, they claim that the fairly-traceable test for causation in the standing context has been replaced by the meaningful-contribution test in the context of air pollution. We begin with the legal component of Defendants’ argument.
The term meaningful contribution in the standing context first appeared in the Supreme Court decision in Massachusetts v. EPA, 549 U.S. 497 (2007). The Court determined that the Commonwealth of Massachusetts had standing to challenge the EPA‘s rejection of a petition for rulemaking to regulate greenhouse-gas emissions from new motor vehicles. See id. at 510–11, 517, 526. In the course of the discussion the Court observed that “[j]udged by any standard, U.S. motor-vehicle emissions make a meaningful contribution to greenhouse gas concentrations and hence, according to petitioners, to global warming.” id. at 525 (emphasis added). But it is far from clear how, if at all, the “meaningful contribution” language should affect our analysis here because Massachusetts arose in a context much different from that of the present litigation. The alleged injury to Massachusetts was the loss of coastal property. See id. at 522–23. The loss would be caused by rising sea levels (resulting from the melting of ice and snow on land) that in turn resulted from a warming climate. See id. at 521. The climate change would result from an increased concentration of carbon dioxide in the world‘s atmosphere. See id. at 523. The United States transportation sector “account[ed] for more than 6% of worldwide carbon dioxide emissions.” Id. at 524. The regulation sought by Massachusetts would apply only
In addition, to adopt Defendants’ requirement that standing be granted only for claims against the largest polluters would amount to major surgery on the CAA‘s citizen-suit provision. The purpose of citizen-suit provisions is to increase enforcement of public law when the government lacks the resources or will to handle the entire task. Without such provisions only the worst offenders are likely to fear sanctions. Uncommon would be the case in which mobile sources of air pollution, particularly a few motor vehicles, would be the target. This is an appropriate circumstance in which to heed the admonition that “[c]ourts must afford due respect to Cоngress‘s decision to impose a statutory prohibition or obligation on a defendant, and to grant a plaintiff a cause of action to sue over the defendant‘s violation of that statutory prohibition or obligation.” TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2204 (2021); cf. id. at 2204–05 (“Congress may elevate to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate in law.“).10
Our view also appears to be in keeping with the view of courts in other circuits that, except in one circumstance,11
Defendants suggest that causation is lacking because this is a case “‘[w]here the causal chain involves numerous third parties whose independent decisions collectively have a significant effect on plaintiffs’ injuries.‘” Aplt. Br. at 23 (quoting Wash. Env‘t Council v. Bellon, 732 F.3d 1131, 1142 (9th Cir. 2013)). But there is no such chain of causation here. The proposition relied on by Defendants can be traced to Supreme Court decisions denying standing to those challenging the grant of government tax exemptions on the ground that entities receiving the exemptions would halt their discriminatory practices if denied the exemptions. See, e.g., Allen v. Wright, 468 U.S. 737, 756-61 (1984). The discrimination was not “fairly traceable” to the grant of a tax exemption because the response to the denial of an exemption was too speculative. Id. at 758. In this case, there is no speculation that Defendants’ unlawful conduct would cause the emission into the atmosphere of harmful pollutants. The only relevant decisions
We therefore hold that UPHE has standing to challenge Defendants’ violations that contributed to the unhealthy air in the Wasatch Front. The EPA has determined that the Salt Lake City area, which includes where Defendants conduct business, is a nonattainment area for 24-hour levels of fine particulate matter (PM2.5).12 See
But what about CAA violations that did not cause the emission of pollutants in the Salt Lake City nonattainment area? The appellate courts have recognized that a plaintiff may lack standing to challenge actions by a too-distant polluter. In Friends of the Earth, Inc. v. Crown Center Petroleum Corp., 95 F.3d 358 (5th Cir. 1996), for instance, the Fifth Circuit held that a lake “located three tributaries and 18 miles downstream from [the defendant‘s] refinery” was too far away for one to infer a causal link between the defendant‘s discharge and the alleged injuries to the plaintiff‘s members’ use of the lake. Id. at 361. Deprived of this inference and having failed to offer any “competent evidence that [the defendant‘s] discharges ha[d] made their way to . . . or would otherwise affect” the lake, the court concluded that the plaintiff could not satisfy Article III‘s causation requirement. Id.; see also Ctr. for Biological Diversity v. EPA, 937 F.3d 533, 538-39 (5th Cir. 2019) (plaintiffs failed to show sufficient “geographic proximity between [their] interests and the discharges“; “[a] geographic area as big as the ‘Western and Central portions of the Gulf [of Mexico]’ cannot support Article III standing.“).
The Seventh Circuit reached a similar conclusion in Texas Independent Producers & Royalty Owners Ass‘n v. EPA (TIPROA), 410 F.3d 964 (7th Cir. 2005). In that case an environmental group sought to challenge an EPA General Permit prescribing limits on storm-water discharge from construction sites. See id. at 969-70. Attеmpting to establish standing, the group argued, among other things, that its members used various bodies of polluted water affected by the discharges allowed under the permit. See id. at 972. It pointed to notices filed by construction companies indicating their intent to “discharge under the General Permit in the bodies of water used by [three of the group‘s] affiants.” Id. at 973. The court rejected this argument, pointing out that “the water bodies at issue span, in some cases, hundreds of miles,” and concluding that, absent evidence of injury to “the portion of the river[s] used by the [members],” the group had failed to establish fairly-traceable causation. Id.
Likewise in Delaware Department of Natural Resources & Environmental Control v. EPA, 785 F.3d 1 (D.C. Cir. 2015), the D.C. Circuit held that Delaware lacked standing to challenge a portion of an EPA rule exempting generators “located in remote areas” of the country from national emission standards, as “Delaware [had] offer[ed] no evidence that backup generators in the remote-area subcategory are located
The need for geographic limitations as part of the traceability inquiry was persuasively discussed in the Fifth Circuit‘s Cedar Point decision, which limited the reach of the Third Circuit‘s expression in Powell Duffryn that the plaintiffs in that case had standing because the defendant had discharged an excessive amount of pollutant into a waterway in which thе plaintiffs had an interest that could be adversely affected by the pollutant, see Powell Duffryn, 913 F.2d at 72:
Douglas was the only affiant who expressed an interest in that part of Galveston Bay where Cedar Point‘s discharge is located. It is true that a strict application of the Powell Duffryn test does not demand that sort of specificity, because the plaintiff need only show an interest in the “waterway” into which the defendant is discharging a pollutant; nevertheless, such a literal reading of Powell Duffryn may produce results incongruous with our usual understanding of the Article III standing requirements. For example, some “waterways” covered by the CWA may be so large that plaintiffs should rightfully demonstrate a more specific geographic or other causative nexus in order to satisfy the “fairly traceable” element of standing. Therefore, while we find the Powell Duffryn test useful for analyzing whether Douglas‘s affidavit meets the “fairly traceable” requirement, we recognize that it may not be an appropriate standard in other CWA cases.
Cedar Point, 73 F.3d at 558 n.24 (emphasis added) (citations omitted); see also Gaston Copper, 204 F.3d at 161 (“Rather than pinpointing the origins of particular molecules, a plaintiff must merely show that a defendant discharges a pollutant that causes or contributes to the kinds of injuries alleged in the specific geographic area of concern.” (emphasis added) (internal quotation marks omitted)); Black Warrior Riverkeeper, 781 F.3d at 1280 (adopting the view of Gaston Copper); ExxonMobil, 968 F.3d at 370 (“Plaintiffs must demonstrate the existence of a specific geographic or other causative nexus such that the [CAA] violation could have affected their members.” (internal quotation marks omitted)); cf. Lujan, 504 U.S. at 558, 567 n.3 (petitioners had failed to demonstrate that they would suffer an injury in fact as a result of a Secretary of the Interior interpretation of the Endangеred Species Act limiting its application to the “United States or the high seas“; “[t]he dissent may be correct that the geographic remoteness of those members (here in the United States) from Sri Lanka and Aswan does not ‘necessarily’ prevent [a finding of injury]—but it assuredly does so when no further facts have been brought forward (and respondents have produced none) showing that the impact upon animals in those distant places will in some fashion be reflected here“). Of course, specific scientific data may establish a causal connection even to some distant sources. See ExxonMobil, 968 F.3d at 370; Crown Ctr., 95 F.3d at 361; cf. Lujan, 504 U.S. at 567 n.3.
Defendants contend that the district court erred by finding that UPHE had standing to pursue “violations that did not result in pollutants being discharged into the Wasatch Front.” Aplt. Br. at 27. (Although this passage speaks of discharge into the Wasatch Front, the line drawn by Defendants in much of its argument is
Defendants point to violations related to vehicles eventually sold out-of-state or to parts sold out-of-state or merely marketed and never sold. For vehicles eventually sold or transferred to customers out-of-state, Defendants argue that “there is simply no way to conclude that emissions from [these vehicles], which were only briefly operated in Utah, . . . has [sic] harmed the Wasatch Front airshed.” Aplt. Br. at 27-28.
We agree with the underlying principle stated by Defendants. Although molecules of a nitrogen oxide produced in Oregon may certainly drift over to Utah, greater geographical proximity is required to satisfy by itself the “fairly traceable” test. But in one respect, we reject their argument. If the vehicle was driven, however little, in the Salt Lake City area, UPHE has established that its members’ injuries from excessive pollution can be fairly traced to the CAA violation; so standing can be predicated on pollution from that vehicle.
But if the vehicle was never driven in Utah, or the defeat part was sold to someone out-of-state, UPHE has not established standing. It has presented no evidence of actual or imminent injury to its members caused by the emission of pollutants outside of Utah. Such evidence might be available if pollutants in, say, southern Wyoming were contributing to the failure of thе Salt Lake City area to meet EPA air-quality standards and the EPA designated that part of Wyoming as included in the Salt Lake City nonattainment area. See
But that is not the circumstance here. Because the nonattainment area including the Wasatch Front does not extend into any other State, we do not presume that pollutants emitted in another State contribute to injuries suffered by UPHE‘s members. Nor has UPHE produced any other type of scientific evidence that pollution outside of Utah contributes to unhealthful air in the Wasatch Front. We conclude that UPHE does not have standing to bring its claims based on vehicles never driven in Utah or defeat devices sold to persons outside Utah.
We also conclude, though for slightly different reasons, that UPHE lacks standing to pursue claims for civil penalties related to defeat parts marketed but not actually sold. UPHE cannot claim to have been actually injured by Defendants’ marketing (which plainly did not itself result in the emission of excess nitrogen oxides or particulate matter into the Wasatch Front) and any threatened harm—such as “the threat that consumers in Utah may be influenced by Defendants’ advertisements to buy and install the parts, resulting in an increase in emissions,” Aplee. Br. at 22—is too “conjectural or hypothetical” to satisfy the injury-in-fact requirement, particularly since Defendants apparently ceased marketing the defeat parts after receiving UPHE‘s notice of its intent to sue. See UPHE II, 2020 WL 4282148, at *9. It is not enough that there was a statutory violation. The claims based on unsold defeat parts are similar to the claims brought by plaintiffs against a credit reporting agency that allegedly failed to use reasonable procedures to ensure the accuracy of their credit files but that never disclosed the allegedly false information to third parties. See TransUnion, 141 S. Ct. at 2200. The Supreme Court held that those plaintiffs lacked standing to sue for actual or statutory damages. See id. at 2209-13. Because the only claims at issue on this appeal are those for civil penalties, we need not address whether UPHE had standing to sue for injunctive relief relating to unsold defeat devices.
To enable the district court to determine precisely which claims can be pursued by UPHE, we must remand for further proceedings.
B. Statutory Standing
Defendants argue that UPHE lacks statutory standing under the CAA‘s citizen-suit provision to pursue its claims under either the CAA or Utah‘s SIP because they seek enforcement of “general statutory prohibitions . . . not defined under the CAA as standards or limitations.” Aplt. Br. at 31. Because statutory standing is not jurisdictional and Defendants failed to raise this issue below, we review only for plain error. See Niemi v. Lasshofer, 728 F.3d 1252, 1262 (10th Cir. 2013) (issue of statutory standing, if forfeited, would be reviewed for plain error). “Plain error is (i) error, (ii) that is plain, which (iii) affects substantial rights, and which (iv) seriously affects the fairness, integrity, or public reputation of judicial proceedings.” Id. (internal quotation marks omitted). As we proceed to explain, the district court likely did not err, and certainly did not plainly err, in ruling Defendants’ various tampering and defeat-device violations actionable
The CAA‘s citizen-suit provision,
[A]ny person may commence a civil action on his own behalf—
(1) against any person (including (i) the United States, and (ii) any other governmental instrumentality or agency to the extent permitted by the Eleventh Amendment to the Constitution) who is alleged to have violated (if there is evidence that the alleged violation has been repeated) or to be in violation of (A) an emission standard or limitation under this chapter or (B) an order issued by the [EPA] Administrator or a State with respect to such a standard or limitation[.]
Definitions within the CAA itself, however, refute this argument. The CAA‘s citizen-suit provision defines emission standard or limitation under this chapter to include, among other things, an “emission limitation, standard of performance or emission standard,” and “any other standard [or] limitation . . . established . . . under any applicable State implementation plan approved by the [EPA] Administrator.”
UPHE argues that “[a]n anti-tampering requirement prohibiting the removal or defeat of an emission control device, such as a catalytic converter, that is designed to reduce emissions on a continuous basis, is plainly a requirement that ensures the reduction of emissions on a continuous basis,” and therefore satisfies the statutory definition of an emission standard or limitation. Aplee. Br. at 28-29. This argument has considerable force.
“Standard” is defined as that which “is established by authority, custom, or general consent, as a model or example; criterion; test.” Webster‘s Second New International Dictionary 2455 (1945). The criteria referred to in [
42 U.S.C. § 7543(a) ] relate to the emission characteristics of a vehicle or engine. To meet them the vehicle or engine must not emit more than a certain amount of a given pollutant, must be equipped with a certain type of pollution-control device, or must have some other design feature related to the control of emissions. This interpretation is consistent with the use of “standard” throughout Title II of the CAA (which governs emissions from moving sources) to denote requirements such as numerical emission levels with which vehicles or engines must comply, e.g.,42 U.S.C. § 7521(a)(3)(B)(ii) , or emission-control technology with which they must be equipped, e.g.,§ 7521(a)(6) .
Id. at 252-53 (emphasis added); see Counties, 959 F.3d at 1218 (applying South Coast to hold that the county anti-tampering regulations at issue were “‘emissions standards’ for purposes of [
Defendants rely on a Ninth Circuit decision that analyzed the term “emission standard or limitation” in the context of the CAA‘s citizen-suit provision and reasoned that it did not extend to “the generic statutory prohibitions in
For an example of an “emission standard,” consider
40 C.F.R. § 86.1811-04 . That regulation establishes permissible emission levels of nitrogen oxide (NOx) for “light-duty vehicles” like the vehicles at issue in this case. Seeid. § 81.1811-04(c) (“Exhaust emissions from Tier 2 vehicles must not exceed the standards in Table S04-1 of this section at full useful life .“). Unlike the statutory prohibitions in§ 7522 , which were enacted by Congress, the regulation is “a requirement established by the Administrator which limits the quantity, rate, or concentration of emissions of air pollutants on a continuous basis.”§ 7602(k) .
Id. at 1041-42 (ellipses omitted). This narrow reading appears to overlook that
Fleshman also seems to suggest that the anti-tampering provision of the CAA was not a requisite standard because the
In any event, we need not definitively resolve the question because if indeed there was error, it was not plain. See Niemi, 728 F.3d at 1262. “An error is plain if it is clear or obvious under current, well-settled law.” United States v. Faulkner, 950 F.3d 670, 678 (10th Cir. 2019) (internal quotation marks omitted). Because the district court‘s interpretation of the CAA‘s citizen-suit provision was reasonable, and a contrary result was not dictated by well-settled law, we reject Defendants’ plain-error challenge to UPHE‘s statutory standing.
C. Sweepstakes Giveaways
Defendants argue that the district court improperly imposed penalties with respect to trucks awarded through sweepstakes. They state: “The District Court‘s interpretation that giveaway sweepstakes trucks are a ‘sale’ is contrary to Utah law, and disregards the fact that a third to half of the sweepstakes entries are from free mail-in requests. The CAA requires a ‘sale’ of an emissions tampered vehicle to violate this section.” Aplt. Br. at 40.13 We reject the argument.
The tampering provision,
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[.]
For purposes of this provision, ultimate purchaser “means, with respect to any new motor vehicle or new motor vehicle engine, the first person who in good faith purchases such new motor vehicle or new engine for purposes other than resale.”
received by DPG does not preclude the existence of a sale.“). We review matters of statutory interpretation de novo. See Pound v. Airosol Co., Inc., 498 F.3d 1089, 1094 (10th Cir. 2007).
We have reservations about the district court‘s analysis. One may question whether a lottery winner who paid nothing to obtain a lottery ticket (either by paying cash or making a purchase of goods) has provided any consideration. See Albertson‘s, Inc. v. Hansen, 600 P.2d 982, 985-86 (Utah 1979). But we may reach the same result with a somewhat different analysis. See Orner v. Shalala, 30 F.3d 1307, 1310 (10th Cir. 1994) (“[W]e may affirm challengеd decisions of the district court on alternative grounds, so long as the record is sufficient to permit conclusions of law.“).
We affirm because, as we read the statute, there is no requirement that a violator sell the vehicle. The provision can be violated by someone who removes or renders inoperative a control device “prior to its sale and delivery to the ultimate purchaser” or by someone who knowingly removes or renders inoperative such a device after “sale and delivery to the ultimate purchaser.”
In short, we reject Defendants’ argument that vehicles awarded as part of the sweepstakes should have been excluded from the district court‘s tabulation of violations.
D. Sale of “As-Is” Vehicles
Under
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[.]
Defendants argue that the district court erred by including “pass-through sales of ‘as-is’ trucks” in its tabulation of their CAA violations. Aplt. Br. at 43. They contend that the provision “cannot be read as prohibiting the re-sale of a used vehicle containing a defeat part that was installed by the previous owner.” Id. at 44. Defendants point to other state and federal laws that exempt the sale of “as-is” vehicles, see, e.g.,
We recognize that the provision contains a scienter requirement—liability does not attach unless the manufacturer or seller “knows or should know that such part or component is being offered for sale or installed for such use or put to such use.”
E. Penalties
Defendants raise several challenges to the penalties imposed by the district court. We review for clear error “a district court‘s findings of fact in support of a CAA penalty.” Pound, 498 F.3d at 1094. “The district court‘s weighing of those facts, and its penalty determination, are reviewed for abuse of discretion.” Id. And “we review de novo the statutory interpretation behind the district court‘s decision.” Id. (internal quotation marks omitted).
Before addressing the specific challenges, however, we summarize the penalties imposed upon Defendants and the statutory bases for those penalties.
- The district court found that Defendants removed a total of 37 emission-control devices from eight trucks, giving rise to eight separate violations of the CAA‘s anti-tampering provision,
42 U.S.C. § 7522(a)(3)(A) , see UPHE II, 2020 WL 4282148, at *15-16; under§ 7524(a) and40 C.F.R. § 19.4 , it assessed Defendants’ maximum liability as $30,000 ($3,750 per violation), see id., but ultimately imposed a penalty of only $25,000, see id.*24. - It found that Defendants installed a total of 24 defeat parts in 14 trucks, giving rise to 24 separate violations of the CAA‘s defeat-device provision,
42 U.S.C. § 7522(a)(3)(B) , see id. at *16; under§ 7524(a) and40 C.F.R. § 19.4 , it assessed Defendants’ maximum liability as $90,985 (between $3,750 and $4,735 per violation, depending on the date), see id., but ultimately imposed a penalty of only $80,000, see id. at *24. - It found that Defendants advertised, sold, or offered to sell a total of 305 defeat parts, giving rise to 305 additional separate violations of the CAA‘s defeat-device provision,
42 U.S.C. § 7522(a)(3)(B) , see id. at *17; under§ 7524(a) and40 C.F.R. § 19.4 , it assessed Defendants’ maximum liability as $1,356,510 (between $3,750 and $4,735 per violation, depеnding on the date), see id., but ultimately imposed a penalty of only $407,218, see id. at *24-25. - It found that Defendants removed a total of 37 emission-control devices from eight trucks, giving rise to 37 separate violations of the Utah SIP‘s emission-control provision,
R307-201-2 ,see id. at *19; under § 7413(b) and40 C.F.R. § 19.4 , it assessed Defendants’ maximum liability as $1,387,500 ($37,500 per violation), see id., but ultimately imposed a penalty of only $138,700, see id. at *25. - It found that Defendants owned and operated multiple emissions-tampered vehicles between January 12, 2012, and July 20, 2017, giving rise to “numerous” additional violations of the Utah SIP‘s emission-control provision,
R307-201-2 , id. at *19; under§ 7413(b) and40 C.F.R. § 19.4 , it assessed Defendants’ maximum liability as $114,425,625 (between $37,500 and $99,681 per violation per day, depending on the date), see id., but ultimately imposed a penalty of only $114,426, see id. at *25.
Broken out by defendant, the district court ordered B&W to pay $114,426; B&W and Sparks (jointly and severally) to pay $333,700; B&W, Sparks, and DPG (jointly and severally) to pay $90,000; and DPG, Sparks, and Stuart (jointly and severally) to pay $227,218. See UPHE II, 2020 WL 4282148, at *27.
The district court arrived at these amounts via the “top down” approach to penalty analysis, first calculating Defendants’ maximum possible liability for violations of the CAA and Utah‘s SIP and then “determin[ing] what degree of mitigation, if any is proper” according to the penalty-assessment criteria set forth in
the size of the business, the economic impact of the penalty on the business, the violator‘s full compliance history and good faith efforts to comply, the duration of the violation as established by any credible evidence (including evidence other than the applicable test method), payment by the violator of penalties previously assessed for the same violation, the economic benefit of noncompliance, and the seriousness of the violation.
Weighing these factors separately for each category of violations, the court reduced the total penalty amount by more than 99%, from $117,290,620 to $765,344. See UPHE II, 2020 WL 4282148, at *23-25. By far the largest penalty reductions were made with respect to Defendants’ SIP violations (the owning-and-operating violations, in particular). Even so, the penalties imposed for violations of the Utah SIP‘s anti-tampering provision,
Defendants raise several challenges to the penalties imposed by the district court. Some apply to all the penalties. Others concern only the penalties for tampering imposed as violations of the Utah SIP. We begin with the challenges to the tampering penalties imposed as violations of the SIP.
1. Penalties for tampering
As repeatedly noted above, the CAA has a specific penalty provision for a violation of the anti-tampering provision,
Defendants present several theories for challenging the tampering penalty imposed under the SIP, all of which derive from the observation that the CAA itself imposes its own penalty for tampering with emission devices. First, Defendants argue “that imposing civil penalties for violations under the CAA and Utah SIP for the same statutory prohibited activity constitutes a double penalty.” Aplt. Br. at 45. They rely on two opinions by this court stating that “double recovery is precluded when alternative theories seeking the same relief are pled and tried together.” Id. at 46 (quoting Clappier v. Flynn, 605 F.2d 519, 530 (10th Cir. 1979), and Mason v. Okla. Tpk. Auth., 115 F.3d 1442, 1459 (10th Cir. 1997), overruled on other grounds by TW Telecom Holdings, Inc. v. Carolina Internet Ltd., 661 F.3d 495, 497 & n.2 (10th Cir. 2011)). Clappier can be distinguished because it concerned only compensatory damages and was merely recognizing that a plaintiff should not be permitted to recover more in compensatory damages than the loss incurred. Civil penalties, however, are not imposed to compensate a party but to penalize the defendant.
More in point is Mason, which considered the imposition of punitive damages, a remedy that is also not designed to compensate the victim but to penalize the defendant. We wrote:
Although the rule against double recovery arises most often in the context of compensatory damages, it applies to punitive damages as well. For instance, courts have held frequently that a plaintiff may not recover both punitive damages under a state tort law claim and treble damages under a federal statutory claim, where the state and federal claims arise from the same operative facts and merely represent alternative theories of recovery.
Mason, 115 F.3d at 1459 (footnote omitted);14 see also New York v. United Parcel Serv., Inc., 942 F.3d 554, 600 (2d Cir. 2019) (“Penalties cascading on a defendant from several statutory regimes must be applied with great care when they result from one underlying set of bad actions.“). But cf. Morse Diesel Int‘l, Inc. v. United States, 79 Fed. Cl. 116, 121-22 (2007) (“The court disagrees with the view that imposing civil penalties under the Anti-Kickback Act, and separate civil penalties and treble damages under the False Claims Act for the same acts, is either duplicative or prohibited.“).15
Defendants’ second theory is, in essence, that the penalties authorized for violations of a state SIP must yield to the specific penalties set forth in
Neither of Defendants’ arguments is frivolous. But we need not resolve them at this time. That is because another of their arguments—that the district court did not properly apply the statutory factors in evaluating the size of the penalty—is persuasive with respect to the SIP anti-tampering violations, so we must reverse and remand for reconsideration of those penalties. The analysis is straightforward.
The CAA provides assessment criteria to be used in judicial and administrative proceedings when imposing penalties. It states:
In determining the amount of any penalty to be assessed under this section or section 7604(a) of this title, the Administrator or the court, as appropriate, shall take into consideration (in addition to such other factors as justice may require) the size of the business, the economic impact of the penalty on the business, the violator‘s full compliance history and good faith efforts to comply, the duration of the violation as established by any credible evidence (including evidence other than the applicable test method), payment by the violator of penalties previously assessed for the same violation, the economic benefit of
noncompliance, and the seriousness of the violation.
We focus here on “the seriousness of the violation.” The district court noted that in evaluating the seriousness-of-the-violation factor, courts have considered “(1) the number of violations; (2) the duration of nоncompliance; (3) the significance of the violation (degree of exceedance and relative importance of the provision violated); and (4) the actual or potential harm to human health and the environment.” UPHE II, 2020 WL 4282148, at *22 (internal quotation marks omitted). The court determined that the seriousness of the violation “weigh[ed] against mitigating penalties.” Id. at *25 (emphasis added). But in so doing, the district court did not give proper weight, if it gave any weight at all, to the judgment of Congress regarding the severity of the tampering violations. We seek “objective indications of the seriousness with which society regards the offense.” Frank v. United States, 395 U.S. 147, 148 (1969) (holding that a “petty” offense, for which jury trial is not required, is one for which the maximum sentence is no greater than six months). And when considering the seriousness of an offense for purposes of federal law, there could be no better objective indication than the penalty authorized by Congress for the specific conduct. See United States v. 817 N.E. 29th Drive, 175 F.3d 1304, 1309 (11th Cir. 1999) (“Because Congress is a representative body, its pronouncements regarding the appropriate range of fines for a crime represent the collective opinion of the American people as to what is and is not excessive.“). For example, when assessing the propriety of a punitive-damages award, courts may compare the award to the civil penalties that could be imposed for comparable misconduct to “accord substantial deference to legislative judgments concerning appropriate sanctions for the conduct at issue.” BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 583 (1996) (internal quotation marks omitted). In this case we need look no further than the CAA itself. See Arizona v. ASARCO LLC, 773 F.3d 1050, 1058 (9th Cir. 2014) (en banc) (“Here, Congress has made a reasoned judgment not simply as to analogous criminal or civil penalties, but as to punitive damages awarded in cases like the one at hand. We need not search outside the statutory scheme Congress enacted for legislative guidance in other contexts.“).
For persons other than manufacturers or dealers, the maximum penalty for tampering with a motor vehicle, no matter what the aggravating factors, was set by Congress at $2,500. See
We therefore must hold that the district court abused its discretion in weighing the seriousness-of-the-violation factor against Defendants in calculating penalties for violations of the Utah SIP‘s anti-tampering provision. We vacate the penalties associated with those violations and remand for the district court‘s reconsideration.
Our remand for reconsideration of the SIP anti-tampering penalties, however, represents the only respect in which we agree with Defendants’ arguments regarding the penalties assessed against them.
To begin with, we see no other abuse of discretion in assessing the statutory factors for imposition of penalties. In all other respects, the district court‘s careful evaluation of the factors evinced the essence of judicial discretion. We do note, however, that after judgment was entered Defendants presented some evidence of financial reverses that led to a district-court order conditionally granting a motion staying execution of the judgment. Reconsideration of the penalties in light of any such developments is authorized on remand.
Finally, Defendants argue that the penalties imposed on them for violations of Utah‘s SIP are “excessive and disproportionate to the gravity of the violations,” and therefore unconstitutional under the Eighth Amendment. Aplt. Br. at 47. They attack what they call the “outrageously excessive” $114 million starting point calculated by the district court for owning-and-operating violations by B&W. Id. But that is not the penalty the court imposed. Although employing the top-down approach that starts with the statutory maximum, the court lowered the owning-and-operating penalties by more than 99.8%, to $114,426 for B&W. See UPHE II, 2020 WL 4282148, at *19, *25. The test for whether a fine is excessive under the Eighth Amendment is whether “it is grossly disproportional to the gravity of a defendant‘s offense.” United States v. Bajakajian, 524 U.S. 321, 334 (1998). In light of the flagrant misconduct by Defendants, we see no gross disproportion. They have brought to our attention no comparable case in which a civil penalty was held to violate the Eighth Amendment.
IV. CONCLUSION
The judgment of the district court is AFFIRMED IN PART and REVERSED IN PART. On remand, the court shall make findings regarding which, if any, of the vehicles sold or awarded to out-of-state customers were driven or operated in Utah before sale. The following categories of violations shall then be excluded from the total liability: (a) violations based on vehicles sold or awarded to out-of-state customers without first being driven or operated in Utah; (b) violations based on defeat parts sold to out-of-state customers; and (c) violations based on marketing (but not sale) of defeat parts. Finally, the court will need to reassess appropriate penalties under the CAA and Utah‘s SIP in a manner consistent with this opinion, taking into account the same factors as before, as well as any additional information the court deems relevant.