The Environmental Protection Commission of Hillsborough County v. Volkswagen Group of America, Inc., No. 18-15937 (9th Cir. 2020)
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This appeal stemmed from Volkswagen's installation of defeat devices in new cars for the purpose of evading compliance with federally mandated emission standards, and subsequent updating of the software in those cars so the defeat devices would do a better job of avoiding and preventing compliance. After Volkswagen settled EPA's criminal and civil actions for over $20 billion dollars, two counties sought to impose additional penalties for violation of their laws prohibiting tampering with emission control systems. The district court concluded that the claims were preempted by the Clean Air Act (CAA).
The Ninth Circuit held that, although the CAA expressly preempts state and local government efforts to apply anti-tampering laws to pre-sale vehicles, the CAA does not prevent the two counties here from enforcing their regulations against Volkswagen for tampering with post-sale vehicles. Furthermore, the panel rejected Volkswagen's assertions that the counties' anti-tampering rules were preempted under ordinary preemption principles. In this case, the panel saw no indication that Congress intended to preempt state and local authority to enforce anti-tampering rules on a model-wide basis. Furthermore, 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 raised the strong inference that Congress did not intend to deprive the EPA of effective aid from local officers to combat tampering with emission control systems.
Court Description: 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. IN RE VOLKSWAGEN LITIGATION 3 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, 42 U.S.C. § 7524, showed that Congress struck a balance of interests with respect to the imposition of penalties, and this balance would be disturbed if states could impose their own penalties for tampering with post-sale vehicles. The panel held that the Clean Air Act’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 raised the strong inference that Congress did not intend to deprive the EPA of effective aid from local officers to combat tampering with emission control systems. 4 IN RE VOLKSWAGEN LITIGATION
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