Car Emissions Rules Likely to Trigger Litigation

The EPA and the Department of Transportation on Thursday finalized the first-ever national greenhouse gas emission levels for cars and light trucks, a move that is likely to bring a gust of new lawsuits. The main target may not be the rule itself, which came after painstaking negotiations with the auto industry, but what it portends. The rules establish increasingly strict fuel economy standards and greenhouse gas emission standards for 2012 to 2016 model year vehicles.

Jenna Greene

The National Law Journal

2010-04-02 12:00:00 AM

The Environmental Protection Agency and the Department of Transportation Thursday finalized the first-ever national greenhouse gas emission levels for cars and light trucks, a move that is likely to bring a gust of new lawsuits.

The main target may not be the rule itself, which came after painstaking negotiations with the auto industry, but what it portends.

"It will trigger other requirements under the Clean Air Act that other companies outside the auto industry don't like," said Columbia Law School professor Michael Gerrard, director of the school's Center for Climate Change Law. "The Chamber of Commerce and other industry associations have been trying to fight this in every possible venue."

The rules announced today establish increasingly strict fuel economy standards and greenhouse gas emission standards for 2012 to 2016 model year vehicles. By 2016, new cars and trucks will average 35.5 miles per gallon. Carbon dioxide emissions will be reduced by about 960 million metric tons over the lifetime of the vehicles regulated.

"The standards themselves are noncontroversial, and EPA has done a strong job building consensus with other states, the auto industry, and environmental groups on those standards. Thus, it is unlikely industry would seek to challenge those standards themselves," said Roger Martella Jr., a partner in Sidley Austin's environmental practice group and former general counsel of the EPA, in an email. "The determining factor likely will be how EPA decides an upcoming rule, called the PSD tailoring rule, to mitigate the impacts on stationary sources."

Stationary sources of air pollution include facilities like factories and power plants.

EPA Administrator Lisa Jackson at a press conference Thursday stressed that "there will be no rulemaking on stationary sources this year." She acknowledged the concern that regulating mobile sources of greenhouse gases, like cars, "would trigger regulation for stationary sources literally today ... again and again, we've said the sky would not fall, there would not be Armageddon, on the day the [car] rule was finalized."

Jackson also said that the stationary source rules are not yet ready, and that "only a small number of sources will be impacted."

Gerrard of Columbia noted about 16 states as well as industry groups have already sued the EPA in the U.S. Court of Appeals for the D.C. Circuit over its "endangerment finding" that six greenhouse gases threaten the public health and welfare, opening the door to regulation under the Clean Air Act. But the endangerment findings themselves do not themselves impose any requirements on industry or other entities -- which raises the question whether the petitioners have standing to bring a case.

"There's a question of ripeness," said Gerrard of the cases to date. Challenging the car rule, however, brings the plaintiffs "closer to direct impact" to establish standing, he said.

Pillsbury Winthrop Shaw Pittman environmental law partner Peter Wyckoff predicted the court would consolidate the endangerment finding challenges with challenges to the car rules, but he wondered if standing might still be an obstacle.

The most legal traction may come when the EPA finalizes its PSD tailoring rule, which "would govern the scope of the Clean Air Act new source permit system," said Wyckoff.

Under the Clean Air statue as written, millions of small sources of greenhouse gases would be required to get EPA permits. Citing the doctrine of absurdity, the EPA has moved to "tailor" the scope of the rule by raising the thresholds so only major polluters would be affected.

"The agency's use of the absurdity doctrine is in my judgment a very big act of discretion," said Wykoff. "The D.C. Circuit is likely to be unhappy with EPA's efforts to craft an administrative solution to a difficult problem."

Jenna Greene can be contacted at jgreene@alm.com.