A federal lawsuit filed by trucking, oil and construction companies and related trade groups could have an outsized effect on environmental regulation during the Trump administration.

The lawsuit, which will be considered by the U.S. 9th Circuit Court of Appeals next year, challenges the Environmental Protection Agency’s granting of waivers that give California the ability to write environmental regulations that preempt federal rules.

The outcome could be critical for environmental regulation, as state agencies such as California’s powerful Air Resources Board, or CARB, work to maintain policies that reduce carbon emissions and increase vehicle fuel economy – initiatives that President-elect Donald Trump and his cabinet nominees are considering reversing.

Oklahoma Attorney General Scott Pruitt, Trump’s nominee to head the EPA, questions the degree and extent of global warming and is part of a coalition of state attorneys general suing to block the EPA’s Clean Power Plan.

Because of California’s recalcitrant air pollution conditions, the Clean Air Act of 1970 allows the state to issue its own vehicle emissions standards as long as they are as stringent as the federal standards and the EPA has granted a waiver. To earn the waiver, California has to demonstrate that it has “compelling and extraordinary conditions” that can only be mitigated by its own regulations.

California’s environmental rules – crafted by CARB – can be nearly as influential as EPA policy. The Clean Air Act allows other states to enact the same environmental regulations for vehicles and certain types of equipment if California already has a waiver for those rules. Nine states and the District of Columbia, for example, have adopted CARB’s zero-emissions vehicle mandate, which uses a complex environmental credit system that will require automakers to sell about 2 million electric cars and trucks by 2025.

Environmental groups believe California’s ability to issue rules that can be adopted by other states could act as an important check on a Trump administration looking to reverse regulation.

“CARB and California will become more important in an environment where climate change deniers and fossil fuel interests are running the EPA and the Department of Transportation,” said Michelle Kinman of Environment California, an environmental advocacy organization.

In their lawsuit, plaintiffs that include the Western States Trucking Association, Dalton Trucking Inc., Merit Oil Co. and Southern California Contractors Association argue that the EPA overstepped its powers when it allowed California to set separate emissions standards for so-called nonroad mobile sources of air pollution. The regulation sets limits on emissions from the diesel engines of farm tractors, construction and logging equipment, transportable diesel generators and similar equipment that is movable but generally is not used on highways. The state has told operators to retrofit their diesel-powered equipment to cut emissions of particulate matter and oxides of nitrogen, or NOx.

But the plaintiffs are arguing that the Clean Air Act actually preempts individual states from regulating air emissions standards from cars, trucks and mobile equipment because differing rules would impede interstate commerce.

The lawsuit asks the appeals court to vacate the nonroad waiver granted to California, according to plaintiffs’ attorney Ted Hadzi-Antich of the Texas Public Policy Foundation.

The “EPA violated the Clean Air Act by rubber-stamping California’s stringent standards without inquiring whether those standards were actually needed to protect the health and welfare of California residents, as required by the Act,” said Hadzi-Antich.

“Unfortunately, the EPA has become a law unto itself, as it seeks to regulate virtually every nook and cranny of our nation’s economic life, under the guise of protecting the environment,” Hadzi-Antich told Trucks.com.

The plaintiffs claim they, or their trade group members, would be financially harmed by the cost of complying with the CARB regulations.

The suit was filed in 2013, but has been delayed as the parties argued over where it should be heard. The EPA filed a motion to have its case heard before the U.S. Circuit Court of Appeals for the District of Columbia, while the plaintiffs argued the case should be heard by the U.S. 9th Circuit Court of Appeals in San Francisco.

If the plaintiffs prevail, the EPA would need to apply a more rigorous set of standards to approving waivers for CARB to establish its own regulations, said Joe Rajkovacz, director of governmental affairs for the WTSA.

“The current rubber-stamp approach used by the EPA allows CARB to become a de facto national regulator since they are allowed under the Clean Air Act to regulate ‘in-use’ equipment, a power the EPA does not possess,” Rajkovacz said.

The EPA declined to comment, telling Trucks.com that it doesn’t discuss pending litigation.

CARB spokeswoman Karen Caesar also declined to discuss the lawsuit. But Caesar said waivers granted by the EPA are “based on data and analyses that fully support the needs for California.”

“In almost every instance the California regulations are adopted a few years later by the federal government, demonstrating the necessity and feasibility of the regulations that received a waiver,” Caesar told Trucks.com.

Overturning the nonroad emissions EPA waiver could call into question the validity of 40 years of waivers granted to California, Hadzi-Antich said.

Environmental groups see that as the end-game for the Texas Public Policy Foundation, a conservative think tank, and the trade groups that are plaintiffs.

“There is an ideological point to the litigation that is more than just one trucking company that doesn’t want to abide by CARB regulations,” said David Pettit, senior attorney for the Natural Resources Defense Council.

But the plaintiffs in this lawsuit and others that might emulate it face an uphill battle, Pettit said.

“Whether Pruitt or anybody else is head of EPA, the court system will still apply the Clean Air Act as it is written and will apply judicial precedent,” Pettit said.

California would likely be successful getting the federal court system to reverse an EPA denial of a waiver request, he said.

In part, that’s because California continues to have the dubious distinction that first won the state the ability write its own environmental regulation – the worst smog of any state.

Related: California Should Stay the Course on Low Carbon Fuel Policy

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