Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_04-cv-06663/USCOURTS-caed-1_04-cv-06663-55/pdf.json

Nature of Suit Code: 950
Nature of Suit: Contitutionality of State Statutes
Cause of Action: 28:1331 Fed. Question

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IN THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF CALIFORNIA

CENTRAL VALLEY CHRYSLER- )

JEEP, INC. et al., )

 )

Plaintiffs, )

 )

v. )

 )

Catherine E. WITHERSPOON, in her )

official capacity as Executive Officer of )

the California Air Resources Board, )

 )

Defendant, )

 )

THE ASSOCIATION OF )

INTERNATIONAL AUTOMOBILE ) 

MANUFACTURERS, )

 )

Plaintiff-Intervenor, )

 )

SIERRA CLUB, NATURAL )

RESOURCES DEFENSE COUNCIL, )

ENVIRONMENTAL DEFENSE, )

BLUE WATER NETWORK, GLOBAL )

EXCHANGE, AND RAINFOREST )

ACTION NETWORK, )

 )

Defendant-Intervenors. )

____________________________________ )

CV F 04-6663 AWI LJO

MEMORANDUM OPINION

AND ORDER ON

DEFENDANTS’ MOTION FOR

SUMMARY JUDGMENT ON

THE ISSUE OF RIPENESS

AND/OR MOOTNESS AND

ORDER FOR STAY OF

FURTHER PROCEEDINGS

Doc. # 378

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INTRODUCTION

This is an action for injunctive and declaratory relief by plaintiffs Central Valley

Crysler-Jeep, Inc., et al. and Plaintiff-intervenors Association of International Automobile

Manufacturers (“AIAM”) (collectively, “Plaintiffs”) against defendant Catherine E.

Witherspoon, in her official capacity as Executive Director of the California Air Resources

Control Board (“CARB”) and defendant-intervenors Sierra Club, et al. (collectively

“Defendants”). Plaintiffs’ complaint seeks to enjoin enforcement of California state

regulations limiting automotive emissions of “greenhouse gases,” including carbon dioxide,

that were approved by CARB in 2004 pursuant to California Health and Safety Code, section

43018.5(b)(1). Plaintiffs’ complaint set forth five grounds for injunctive and declaratory

relief. Following the court’s order filed on September 25, 2006, three grounds for relief

remain: (1) preemption of the California regulations under section 209(a) of the Federal

Clean Air Act, 42 U.S.C. § 7543(a); (2) preemption under the Energy Policy and

Conservation Act of 1975 (“EPCA”), 49 U.S.C. §§ 32902-32919; and (3) preemption under

the foreign policy of the United States and the foreign affairs powers of the federal

government (“foreign policy” preemption).

In the instant motion, Defendants concede Plaintiffs’ first ground for relief,

preemption under the Clean Air Act, and seek to bring this proceeding to a permanent or

temporary halt by arguing that Plaintiffs’ remaining claims for relief are not now ripe for

adjudication or are now moot, or that the proceedings should be stayed pending the outcome

of the Supreme Court Case of Massachusetts v. EPA, 415 F.3d 50 (D.C. Cir. 2005), cert.

granted,126 S.Ct. 2960 (2006). For the reasons that follow, the court will stay further

proceedings pending the announcement of the Supreme Court’s decision, which is expected

within the next several months.

PROCEDURAL HISTORY

The currently operative pleading in this case is the First Amended Complaint

(“FAC”), which was filed February 16, 2005. On March 7, 2005, Defendants moved to

dismiss the complaint on the grounds of improper venue, lack of ripeness, and by application

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of the doctrine of primary jurisdiction. The parties subsequently stipulated to withdraw

Defendants’ motion on the grounds of ripeness, reserving the rights of the parties to renew

the motion at a later time. On October 21, 2005, the court denied Defendants’ motion to

dismiss on the remaining grounds of improper venue and primary jurisdiction.

On June 1, 2006, Defendants moved for judgment on the all claims in Plaintiffs’

complaint. On September 25, 2006, the court denied the motion with respect to Plaintiffs’

claims for preemption under the Clean Air Act, preemption under EPCA, and preemption

under United States foreign policy (the “September 25 Order”). The September 25 Order

granted judgment in favor of Defendants with respect to Plaintiffs’ claims under the Sherman

Act and the Dormant Commerce Clause.

Defendants’ instant motion for summary judgment on the grounds of ripeness was

filed on October 27, 2006. Plaintiffs’ opposition was filed on November 13, 2006. 

Defendants’ reply was filed on November 17, 2006. During the pendency of the instant

motion, Plaintiffs have filed a motion for summary judgment, and Defendants have filed

three motions for summary judgment on the issues of Plaintiffs’ foreign policy preemption

claim, the EPCA preemption claim, and on the issue of lack of associational standing. For

the reasons set forth below, the court will stay further proceedings as to issues of preemption

this case until the opinion in Mass. v. EPA issues. Defendants’ motion for dismissal of

AIAM on the ground of lack of associational standing will not be affected by the stay.

FACTUAL BACKGROUND

The factual background of this case was set forth in great detail in the court’s

September 25 Order. The factual background in the September 25 Order is briefly

summarized here for the purposes of establishing the necessary factual context for this ruling. 

This action concerns three statutory schemes, one California state agency and one

federal agency. In 2002 the California Legislature enacted Assembly Bill Number 1493,

codified at California Health and Safety Code, section 43018.5. The legislation required

CARB to “develop and adopt regulations that achieve the maximum feasible and costCase 1:04-cv-06663-AWI-GSA Document 606 Filed 01/16/07 Page 3 of 23
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The terms “regulations” or “regulatory requirements” as used hereinafter refer to

1

the regulations approved by CARB pursuant to California Health and Safety Code, section

43018.5. 

4

effective reduction of greenhouse gas emissions from motor vehicles.” The regulatory 1

requirements that were developed by CARB were finally approved on September 2004. The

regulations address four greenhouse gases: carbon dioxide, methane, nitrous oxide and

hydrofluorocarbons. The new regulations are codified at Title 13 of the California Code of

Regulations, section 1961.1. Section 43018.5 of the California Health and Safety Code

makes the new regulations applicable starting in 2009, with restrictions on greenhouse gas

emissions increasing through 2016. 

California Health and Safety Code, section 43018.5 provides civil penalties to

manufacturers if emissions standards are not met, provides for the ability of manufacturers to

credit current performance in excess of standards to later performance shortfall, and enables a

period of time for manufacturers to offset early failures to meet standards with later

performance in excess of regulatory standards.

The federal Clean Air Act, 42 U.S.C., section 7543(a), generally preempts state

regulation of motor vehicle emissions. Section 7543(b)(1) provides that California, at the

discretion of the director of the Environmental Protection Agency (“EPA”) may be granted a

waiver to impose standards more stringent than those imposed by the Clean Air Act, if

enumerated criteria are met. Although other states may not request waivers for standards

they develop, the other states may adopt standards that are set by California and for which

waivers are granted by EPA. On September 8, 2003, EPA concluded that “EPA does not

have authority to regulate motor vehicle emissions of [carbon dioxide] and other [greenhouse

gases] under the [Clean Air Act].” Control of Emissions from New Highway Vehicles and

Engines, 68 Fed.Reg. 52,922, 52,929 (September 8, 2003).

The Energy Policy and Conservation Act establishes federal fuel economy standards

for new vehicles. 49 U.S.C. §§ 32902(a), 32902(c). EPCA contains an express preemption

provision as follows:

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When an average fuel economy standard prescribed under this chapter is in

effect, a State or a political subdivision of a State may not adopt or enforce a

law or regulation related to fuel economy standards or average fuel economy

standards for automobiles covered by an average fuel economy standard under

this chapter.

42 U.S.C. § 32919.

Plaintiffs allege that there is no feasible way to limit carbon dioxide emissions from

automobiles except by reducing the consumption of fuel per unit of travel. Thus, Plaintiffs’

central contention with respect to EPCA preemption is that the new California regulations

limiting vehicle emissions of carbon dioxide are simply fuel economy standards by another

name and are therefore preempted by EPCA.

As noted briefly in the court’s September 25 Order, EPA’s decision that it lacked

authority to regulate greenhouse gas emissions in new motor vehicles under the Clean Air

Act was challenged and upheld in Massachusetts v. EPA, 415 F.3d 50 (D.C.Cir. 2005). The

Supreme Court granted certiorari in that case, 126 S.Ct. 2960, and oral arguments were heard

on November 29, 2006. Decision on the case is expected by the summer of 2007. As will be

discussed in some detail infra, the Massachusetts case now before the Supreme Court raises

issues that are identical, or closely related to, issues presented in Plaintiffs’ underlying action.

PARTIES’ ALLEGED UNDISPUTED MATERIAL FACTS

Defendants allege only five undisputed material facts. Of these, three are essentially

undisputed by Plaintiffs. First, Defendants allege CARB has applied for a waiver of Clean

Air Act preemption for California’s greenhouse gas regulations that are the subject of this

lawsuit. Second, Defendants allege EPA has not granted a waiver of preemption; and third,

Defendants allege EPA has not issued a notice of opportunity for public hearing on CARB’s

request for waiver. 

Plaintiffs vigorously dispute Defendants’ proffered undisputed material fact alleging

that CARB is not currently enforcing the greenhouse gas emissions regulations. In

opposition to the proffered fact, Plaintiffs offer a lengthy set of disputed material facts that, in

sum, seek to establish that the California legislature’s passage of Health and Safety Code

section 43018.5, combined with the existence of CARB’s application for waiver of

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preemption under the Clean Air Act, has the effect of forcing Plaintiffs to take action

immediately, and possibly unnecessarily. Plaintiffs assert that, in order to meet the 2009

deadlines imposed by California’s legislation, the automobile manufacturers must commence

compliance activities immediately because of the long lead time that is required to actually

integrate the necessary technology into the manufacturing process.

Defendants do not dispute Plaintiff’s claims with respect to the lead times necessary

to implement technological changes; they contend that such facts are irrelevant to the legal

issue of ripeness. If and when EPA schedules hearings preparatory to considering

California’s request for waiver of Clean Air Act preemption, Defendants contend the issue of

lead time will be a matter for EPA consideration. Defendants contend it is up to EPA to

address industry needs for lead time in the event a waiver is granted, and, by implication, that

the deadlines set forth in the application for EPA waiver are only non-binding illustrations of

preferred deadlines.

Plaintiffs also dispute Defendants’ proffered undisputed material fact that “CARB

will take no action to enforce the greenhouse gas emissions regulations unless and until EPA

issues a Clean Air Act preemption waiver for the regulations.” Plaintiffs challenge the

relevance of the statement in that it represents an assertion by an individual that is not

empowered to bind CARB to a particular course of action. Further, Plaintiffs undisputed

material facts in opposition to Defendants’ motion allege that CARB has indicated it may

seek to circumvent EPA’s waiver requirement by declaring the new regulations “within the

scope” of the waiver previously granted by EPA for California’s low emission vehicle

(“LEV”) program. With respect to Defendants’ proffered undisputed material fact, Plaintiffs

also repeat their contention that absent injunctive relief, Plaintiffs will be compelled to take

immediate action to meet future possible time deadlines, even if CARB enforcement of the

new regulations is not imminent. 

LEGAL STANDARD

Summary judgment is appropriate when it is demonstrated that there exists no

genuine issue as to any material fact, and that the moving party is entitled to judgment as a

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matter of law. Fed. R. Civ. P. 56(c); Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970);

Poller v. Columbia Broadcast System, 368 U.S. 464, 467 (1962); Jung v. FMC Corp., 755

F.2d 708, 710 (9th Cir. 1985); Loehr v. Ventura County Community College Dist., 743 F.2d

1310, 1313 (9th Cir. 1984).

Under summary judgment practice, the moving party always bears the initial

responsibility of informing the district court of the basis for its motion, and

identifying those portions of “the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any,”

which it believes demonstrate the absence of a genuine issue of material fact.

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). When the moving party has the burden

of proof at trial, that party must carry its initial burden at summary judgment by presenting

evidence affirmatively showing, for all essential elements of its case, that no reasonable jury

could find for the non-moving party. United States v. Four Parcels of Real Property, 941

F.2d 1428, 1438 (11th Cir.1991) (en banc); Calderone v. United States, 799 F.2d 254, 259

(6th Cir. 1986); see also E.E.O.C. v. Union Independiente De La Autoridad De Acueductos Y

Alcantarillados De Puerto Rico, 279 F.3d 49, 55 (1st Cir. 2002) (stating that if “party moving

for summary judgment bears the burden of proof on an issue, he cannot prevail unless the

evidence that he provides on that issue is conclusive.”) 

If the moving party meets its initial responsibility, the burden then shifts to the

opposing party to establish that a genuine issue as to any material fact actually does exist. 

Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); First Nat'l

Bank of Arizona v. Cities Serv. Co., 391 U.S. 253, 288-89 (1968); Ruffin v. County of Los

Angeles, 607 F.2d 1276, 1280 (9th Cir. 1979). In attempting to establish the existence of this

factual dispute, the opposing party may not rely upon the mere allegations or denials of its

pleadings, but is required to tender evidence of specific facts in the form of affidavits, and/or

admissible discovery material, in support of its contention that the dispute exists. Rule 56(e);

Matsushita, 475 U.S. at 586 n.11; First Nat'l Bank, 391 U.S. at 289; Strong v. France, 474

F.2d 747, 749 (9th Cir. 1973). The opposing party must demonstrate that the fact in

contention is material, i.e., a fact that might affect the outcome of the suit under the

governing law, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); T.W. Elec. Serv.,

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Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987), and that the dispute

is genuine, i.e., the evidence is such that a reasonable jury could return a verdict for the

nonmoving party, Anderson, 477 U.S. 248-49; Wool v. Tandem Computers, Inc., 818 F.2d

1433, 1436 (9th Cir. 1987).

In the endeavor to establish the existence of a factual dispute, the opposing party need

not establish a material issue of fact conclusively in its favor. It is sufficient that “the

claimed factual dispute be shown to require a jury or judge to resolve the parties' differing

versions of the truth at trial.” First Nat'l Bank, 391 U.S. at 290; T.W. Elec. Serv., 809 F.2d at

631. Thus, the “purpose of summary judgment is to ‘pierce the pleadings and to assess the

proof in order to see whether there is a genuine need for trial.’” Matsushita, 475 U.S. at 587

(quoting Fed. R. Civ. P. 56(e) advisory committee's note on 1963 amendments); International

Union of Bricklayers v. Martin Jaska, Inc., 752 F.2d 1401, 1405 (9th Cir. 1985).

DISCUSSION

I. Plaintiffs’ Claim Under the Clean Air Act

The court begins by noting a subtle but important shift in the focus of Plaintiffs’

desired remedy in this action between the prayer for relief as set forth in the FAC and the

relief Plaintiffs’ now urge the court to grant in their arguments against Defendants’ motion

for summary judgment. What the FAC seeks is this court’s declaratory judgment and related

injunctive order that the regulations promulgated pursuant to Health and Safety Code, section

43018.5 are unenforceable because regulation of carbon dioxide emissions is a field

preempted by federal law; including the Clean Air Act, EPCA, and foreign policy. Given the

conclusion reached by this court in its September 25 Order, the issue arises whether

Plaintiffs’ claims under the Clean Air Act are now essentially moot because this court’s

September 25 Order effectively declared that the new regulations could not be enforced

absent a waiver from EPA, a legal conclusion Defendants acknowledge and have conceded in

open court. 

Plaintiffs acknowledge both Defendants’ legal concession and the effect of the court’s

September 25 Order in preventing the enforcement of the California regulations. 

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Notwithstanding their acknowledgment of the effect of the court’s September 25 Order,

Plaintiffs now focus their argument on the prospect of being effectively forced to begin the

implementation of significant and costly changes now, or face the possibility of significant

penalties for non-compliance at some later date if EPA grants a waiver of federal preemption

and California seeks to enforce the new regulations according to the time schedule for

compliance that was set forth in the original California legislation. Thus, what Plaintiffs now

seek, in effect, is assurance by this court that they will not find themselves faced with the

possibility that they could be compelled at some uncertain future time to comply with a

regulatory scheme that forces major fuel efficiency improvements on a time scale that could

prove difficult or impossible to meet.

The court’s September 25 Order is significant in light of Plaintiffs’ request for

declaratory relief in the FAC in that the September 25 Order essentially supplies the extent of

remedy that Plaintiffs may receive with respect to Plaintiffs’ claims under the Clean Air Act. 

The FAC requests that the court declare that California’s legislation to institute regulations

setting limits on carbon dioxide emissions from automobiles preempted by federal law. The

court made that declaration, albeit not in formal terms – a deficit that will be remedied infra. 

Plaintiffs’ concerns with respect to the lead time necessary for regulatory compliance, as

expressed in their opposition to Defendants’ instant motion for summary judgment, cannot be

redressed by the court under Plaintiffs’ Clean Air Act claim because the FAC does not

request the court to mandate some particular lead time for compliance should an EPA waiver

become effective, and does not offer any legal basis for altering the California legislation to

require such a mandate.

Put simply and directly, this court has ruled, and the parties agree, that the Clean Air

Act prevents the enforcement of California’s proposed regulations absent a waiver of

preemption by EPA. There is no contention that California does not have the right under the

Clean Air Act to develop regulations regulating tailpipe emissions and to apply to EPA for

waiver of federal preemption. It is also self-evident that if and when EPA waives preemption

under the Clean Air Act pursuant to 42 U.S.C., section 7543(b)(1), then California’s

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proposed standards will not be preempted by the Clean Air Act. Thus, if EPA ever does

issue a waiver of preemption under the Clean Air Act, California will be empowered to

implement its regulations so far as the Clean Air Act is concerned under conditions specified

by EPA in the waiver. To the extent Plaintiffs seek assurance of a reasonable lead time to

implement regulatory changes, that concern is not addressed in the FAC, and Plaintiffs

present no basis for judicially-imposed relief.

Further, Defendants have alleged, and Plaintiffs do not dispute that EPA, in the

process of granting a waiver of preemption, considers the arguments and positions of affected

parties and makes adjustments to conditions, including effective dates, that EPA deems

appropriate. Thus, whatever California may seek to impose by way of an enforcement date, 

the final decision with respect to the establishment of reasonable enforcement dates rests with

EPA’s discretion, not with California or this court. EPA is not a party to this lawsuit, and

this court consequently has no authority to impose limits on EPA’s exercise of discretion,

should EPA choose to exercise that discretion at some time in the future.

A case is moot when the issues presented are no longer "live" or the parties lack a

legally cognizable interest in the outcome. City of Erie v. Pap's A.M., 529 U.S. 277, 277

(2000). With respect to Plaintiffs’ claim under the Clean Air Act, there is, so far as the court

can discern, no longer a live issue remaining between the parties with respect to the Clean Air

Act. With a formal declaration by this court that California’s regulations cannot be

implemented or enforced without a Clean Air Act waiver by EPA, Plaintiffs have been

granted as much relief as the court has authority to grant with respect to Plaintiffs’ request for

relief in the FAC regarding their claim for preemption under the Clean Air Act. The court

will therefore decree that California is without authority to enforce its regulations absent a

waiver of federal preemption under the Clean Air Act and will issue corresponding injunctive

relief. The court will thereafter dismiss any further action with respect to the Clean Air Act

as moot.

II. Plaintiffs’ Claims Under EPCA and Foreign Policy - Ripeness

While the court concludes that Plaintiffs’ claim under the Clean Air Act is, or will be,

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mooted by the court’s September 25 Order as formalized in this order, there is no similar

holding in that order that would have the effect of mooting Plaintiffs’ claims under EPCA or

foreign policy. Thus, Plaintiffs’ action is currently “live,” at least with respect to those two

claims. The issue presented by Defendants’ motion for summary judgment is whether

Plaintiffs’ claims under EPCA or foreign policy, while not moot, are nonetheless not ripe for

adjudication, or should be stayed.

“‘The ripeness doctrine seeks to separate matters that are premature for review

because the injury is speculative and may never occur from those cases that are appropriate

for federal court action.’ [Citations.]” Portman v. County of Santa Clara, 995 F.2d 898, 902

(9th Cir. 1993). “The ripeness inquiry has a constitutional component rooted in the ‘case or

controversy’ requirement of Article III, and a prudential component that focuses on whether

the record is adequate to ensure effective review. [Citation.]” City of Auburn v. Quest Corp.,

260 F.3d 1160, 1171 ( 9th Cir. 2001). The ripeness inquiry requires the court to determine

not only the “fitness of the issue for judicial opinion,” but also “the hardship to the parties of

withholding court consideration.” Abbot Laboratories v. Gardner, 387 U.S. 136, 148 (1967)

(overruled on other grounds in Califano v. Sanders, 430 U.S. 99, 97 (1977). The purpose of

the ripeness doctrine is twofold: “to prevent the courts, through the avoidance of premature

adjudication, from entangling themselves in abstract disagreements over administrative

policies, and also to protect the agencies from judicial interference until an administrative

decision has been formalized and its effects felt in a concrete way by the challenging parties.” 

Id. 

Under the Constitutional prong of the ripeness analysis, the court “may not hear a

case unless ‘there exists a constitutional “case or controversy,” that the issues presented are

“definite and concrete, not hypothetical or abstract.”’ [Citation.] This tenant of ripeness

requires the court to consider whether the plaintiffs face ‘a realistic danger of sustaining a

direct injury as a result of the statute’s operation or enforcement,’ or, by contrast, if the

alleged injury is to ‘imaginary’ or ‘speculative’ to support jurisdiction. [Citation.]” City of

Auburn, 260 F.3d at 1171. “[I]n the context of an administrative case, there must be ‘an

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administrative decision [that] has been formalized and its effects felt in a concrete way by the

challenging parties.’ [Citation.]” Charter Fed. Sav. Bank v. Office of Thrift Supervision, 976

F.2d 203, 208 (4th Cir. 1992). 

No “precise test” enables a court to distinguish an abstract or hypothetical question

from a case or controversy; the distinction is one of degree. See Babitt v. United Farm

Workers Nat’l Union, 442 U.S. 289, 297-298 (1979). A plaintiff “must demonstrate a

realistic danger of sustaining a direct injury as a result of the statute’s operation or

enforcement,” id. at 298, although “‘[o]ne does not have to await the consummation of

threatened injury to obtain preventive relief. If the injury is impending, that is enough.’” Id. 

Generally, in the context of imposition of regulatory requirements by a governmental

agency, an action is not subject to judicial review unless the regulation represents a “final

agency action.” See Abbott Laboratories, 387 U.S. at 149. An agency action is final where

the rule is promulgated in a formal manner following consideration of public comment. Id. at

151. The standard is flexible, however, id. at 150, and the constitutional prong may be

satisfied if the legal question before the court is fit for resolution and the plaintiff will suffer

hardship if resolution is delayed. Shalala v. Ill. Council on Long Term Care, Inc., 529 U.S. 1,

13 (2000). 

From this court’s perspective, the agency in question here is EPA, not CARB or the

State of California. Defendants have represented and provided substantial evidence to

establish that the process of consideration of a grant of waiver of federal preemption by EPA

involves the comprehensive examination of all facets of the proposed regulation, including

lead times, as well as the scope and extent of each part of the proposed regulation. See Doc.

# 580 (EPA’s grant of waiver as to California’s amendments to its LEV 1 regulations dated

December 21, 2006 (showing EPA’s consideration of issues such as appropriate lead time)). 

In essence, the regulations adopted by California that are the subject of this action constitute

an application to the EPA for a grant of waiver of federal preemption which, if granted by

EPA, will be granted on terms and conditions deemed proper by EPA based on its receipt of

opposition or comment by affected parties. Thus, this court finds there is no “final agency

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action” as that term is used in Abbot Laboratories. The court may nonetheless find that the

constitutional prong of the ripeness inquiry is satisfied if the court finds there is “hardship” if

decisions on either or both of Plaintiffs’ EPCA or Foreign Policy claims are delayed. Id. 

For purposes of this motion, the harm primarily alleged is that the Plaintiffmanufacturers will be forced into the hobson’s choice of committing substantial funds now to

implement the changes necessary to meet the California requirements only to find later that

the requirements cannot be enforced, or, if they choose not to commit resources to the

implementation of changes until the waiver is actually granted, the possibility they will be left

with too little time in which to implement the changes without incurring substantial penalties

for non-compliance. In short, the harm claimed by Plaintiffs is the economic uncertainty of

being faced with prospect of having to comply with a regulation whose adoption and

enforcement is not assured. 

Plaintiffs have emphasized, both in written and oral argument, the importance of their

claim for relief under EPCA. Because EPCA explicitly preempts any effort by any state

agency from regulating fuel efficiency, and because any regulation requiring reduction in 

tailpipe carbon dioxide emissions is equivalent to the regulation of fuel efficiency, Plaintiffs

claim California’s proposed regulation is preempted by EPCA independent of the preemptive

effect of the Clean Air Act. Thus, Plaintiffs contend that the issue of preemption under

EPCA would afford Plaintiffs more complete relief because CARB would be prevented from

the adoption or enforcement of any regulatory scheme, even if a waiver of federal preemption

was granted by EPA, because that scheme would necessarily intrude on the sole jurisdiction

of the federal government to set fuel efficiency standards. 

Thus, the harm Plaintiffs claim will result from a delay in deciding Plaintiffs EPCA

and Foreign Policy claims is that Plaintiffs will be unnecessarily subjected to uncertainty

stemming from the possibility that EPA could reverse its stance and grant a waiver, leaving

Plaintiffs exposed to hobson’s choice of costly compliance now or possible exposure to

penalties for non-compliance with the proposed regulations at some time in the distant future. 

The court recognizes the even if the actual probability that a waiver of federal preemption

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would be granted anytime before 2009 were both remote and contingent, the harm claimed in

this case, uncertainty in the business climate, is continuously present. 

The court finds Plaintiffs have made a sufficient showing of hardship, if resolution of

their EPCA and Foreign Policy claims are delayed, to satisfy the constitutional prong of the

ripeness inquiry. Shalala, 529 U.S. at 13. The court also finds that the record is sufficiently

developed at the present time to satisfy the prudential prong of the inquiry. The court

therefore finds that Defendants are not entitled to summary judgment on the ground of

ripeness.

III. Platintiffs’ Claims Under EPCA and Foreign Policy - Landis Stay

Defendants contend that even if the issues presented by Plaintiffs action are ripe for

adjudication, any further proceedings in this case should be stayed pending the outcome of

the Supreme Court’s decision in Massachusetts v. EPA. 

[T]he power to stay proceedings is incidental to the power inherent in every

court to control the disposition of the causes on its docket with economy of

time and effort for itself, for counsel, and for litigants. [. . . .] [T]he supplicant

for a stay must make out a clear case of hardship or inequity in being required

to go forward, if there is even a fair possibility that the stay for which he prays

will work damage to some one else.

Landis v. North American Co., 299 U.S. 248, 254-255 (1936).

A stay of proceedings is appropriate under Landis if (1) the decision in the pending

case or cases will settle or simplify some, but not necessarily all, issues of law or fact in the

case being stayed, id. at 256, and (2) the stay is reasonable in duration. Id. at 257. More

recently, the Ninth Circuit has restated the considerations appropriate to the decision to grant

or not grant a stay pursuant to Landis:

Where it is proposed that a pending proceeding be stayed, the competing

interests which will be affected by the granting or refusal to grant a stay must

be weighed. Among those competing interests are the possible damage which

may result from the granting of a stay, the hardship or inequity which a party

may suffer in being required to go forward, and the orderly course of justice

measured in terms of the simplifying or complicating of issues, proof, and

questions of law which could be expected to result from a stay.

Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9 Cir. 2005).

In an order filed on August 25, 2006, (the “August 25 Order”) this court denied

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reconsideration of the magistrate judge’s decision to deny a Landis stay pending the outcome

of the currently-pending case of Massachusetts v. EPA. Doc. #345; also available at 2006

WL 2473663. In that decision, the court noted there was evidence to support the magistrate

judge’s conclusion that Plaintiff auto manufacturers would suffer impairment of their ability

to “plan research, and implement changes necessary to comply with the regulations in later

years.” Doc. # 345 at 5:5-6. The court likewise found that evidence existed to support the

Plaintiff car dealers’ contention that they would suffer harm from a stay of proceedings

because of lowered potential sales of new cars and trucks because of lack of availability of

conforming vehicles. The court also found that the magistrate judge’s finding that a stay in

this case would not substantially result in the simplification of the legal issues before the

court was not erroneous. Id. at 7:12-26. 

The passage of time, the narrowing of issues remaining to be resolved in this case and

the availability of the pleadings currently before the Supreme Court in Massachusetts v. EPA,

persuade this court that a Landis stay is now appropriate. 

At the time the magistrate judge considered Defendants’ request for a Landis stay, all

five of Plaintiffs’ claims for relief were pending resolution. The court’s September 25 Order

dismissed Plaintiff’s claims under the Dormant Commerce Clause and the Sherman Act. As

of the filing of this order, Plaintiffs’ claim of preemption under the Clean Air Act will be

finally adjudicated in Plaintiffs’ favor. The only remaining claims under consideration by the

court are Plaintiffs’ claims for preemption under EPCA and under foreign policy. The issue,

then, is whether the Supreme Court’s decision in Massachusetts v. EPA is likely to simplify

the narrower scope of legal issues that remain before the court following resolution of all but

two of Plaintiffs’ claims. The other notable difference between the situation when the court

considered a Landis stay in its August 25 Order and the situation here is that the stay

contemplated in August of 2006 was on the order of one year. The term of the stay

contemplated here is on the order of six months.

In the August 25 Order, this court expressed doubt that the Supreme Court would

reach the merits of its case, and reasoned that even if the Supreme Court did reach the merits,

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the holding would not affect the disposition of Plaintiff’s EPCA or foreign policy preemption

claims in this case. Based on an examination of the pleadings filed before the Supreme Court

in Massachusetts v. EPA, this court finds cause to revisit its prior determination. 

The issues before the Supreme Court include: (1) whether the appellants (State of

Massachusetts and other states and state agencies) have Article III standing to bring a suit to

compel EPA enforcement of standards given that the remedy would not significantly reduce

worldwide greenhouse gas emissions, Respondents’ Brief, 2006 WL 3023028 at *1; (2)

whether the “Administrator of the EPA has authority to regulate air pollutants associated with

climate change under section 202(a)(1) of the Clean Air Act [. . . ],” Appellants’ Brief, 2006

WL 2563378; and, (3) whether “the EPA Administrator may decline to issue emissions

standards for motor vehicles based on policy considerations not enumerated in section

202(a)(1) of the clean air act.” Id. 

Although at first blush it appears the issues of EPCA preemption or foreign policy

preemption are not directly before the Supreme Court, closer examination reveals that the

legal issues in this case will be greatly simplified if the Supreme Court reaches the merits of

the Massachusetts v. EPA case. 

While the states have considerable power to regulate emissions from stationary

sources, the field of regulation of emissions from on-road motor vehicles is expressly

preempted by the Clean Air Act. 42 U.S.C., § 7543(a); see California ex rel. State Air Res.

Bd. v. Dep’t of Navy, 431 F.Supp. 1271, 1275 (N.D. Cal. 1977). Since the only entree for

states into the preempted field of regulation of emissions from on-road motor vehicle engines

is through the waiver provision of § 7543(b), states, including California, may only regulate

to the extent EPA grants a waiver of preemption. EPA can only grant such a waiver if it has

the power to regulate. Thus, if the Supreme Court holds on the merits that EPA lacks power

under the Clean Air Act to issue orders regulating greenhouse gas emissions from

automobiles, that decision appears likely to foreclose the possibility that any state, including

California, could successfully apply to EPA for a waiver of federal preemption to establish

state controls over greenhouse gas emissions because EPA would lack the power to issue the

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The issue may arise as to whether, if the Supreme Court holds EPA lacks 2

authority to regulate greenhouse gas emission, the states may be free to regulate greenhouse gas

emissions because the regulation of emissions that are not within the scope of EPA’s regulatory

power are not preempted under the Clean Air Act. Although the court need not decide this issue

here, as a preliminary matter it appears the states would continue to be preempted from the field

of automobile emissions regulations. 42 U.S.C., § 7521 defines the scope of regulatory power of

the EPA pursuant to the Clean Air Act as encompassing “standards applicable to the emission of

any air pollutant . . . .” Id. (emphasis added). The preemptive provision of section § 7543, on

the other hand, provides that “[n]o state or any political subdivision thereof shall adopt or attempt

to enforce any standard relating to the control of emissions . . . .” Id. (emphasis added). The

preemptive scope of the Clean Air Act is therefore broader than the potential scope of EPA’s

authority to control emissions with respect to automobiles. Congress’s apparent intent is to keep

the states out of the field of motor vehicle emissions regulation absent an express waiver.

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waiver.

2

If the Supreme Court decides on the merits that EPA lacks authority to regulate

greenhouse gas emissions pursuant to the Clean Air Act, and consequently that California

may not receive a waiver of preemption to regulate the same greenhouse gases, then the court

may not need to reach the issue of preemption under EPCA or foreign policy. The reason for

this is prudential. If the Supreme Court determines that the Clean Air Act, as currently set

forth, does not empower the EPA, and by extension California, to regulate greenhouse gas

emissions from automobiles, then it is self-evident that congressional amendment of the

Clean Air Act, or the creation of some other, currently non-existent statutory scheme, would

be required in order for states or the federal government to attempt regulation of greenhouse

gas emissions. Once the court assumes a scenario where the Supreme Court determines EPA

lacks authority under the Clean Air Act, logic dictates that the required amendment of the

Clean Air Act, or any new legislation to empower EPA or some other agency to regulate

carbon dioxide or other greenhouse gas emissions, will necessarily address and eliminate the

preemptive force of EPCA or foreign policy. In other words, any future legislation that

would empower EPA to issue waivers of federal preemption for the purpose of regulating

carbon dioxide emissions will necessarily address any preemptive impediment to such

regulation either directly by statutory language, or indirectly by the declaration of

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congressional intent to allow such regulation notwithstanding EPCA or foreign policy

considerations. 

The court concludes that if Supreme Court in the Massachusetts case were to hold that

EPA lacks authority to regulate greenhouse gases, California will likely be completely

foreclosed from the implementation of any controls on greenhouse gas emissions by

automobiles, absent enabling legislative changes. Thus, any decision by this court with

regard to EPCA or foreign policy preemption would likely be superfluous, unnecessary and

prudentially unsound. If, on the other hand, the Supreme Court should hold with respect to

EPA’s regulatory that EPA lacks regulatory authority and the states are not preempted under

the Clean Air Act, this court’s determination with respect to all of Plaintiffs’ remaining

claims, including Plaintiffs’ claim under the Clean Air Act, would be greatly affected and

simplified.

Similarly, if the Supreme Court were to decide on the merits that EPA does possess

the authority to regulate carbon dioxide and other greenhouse gas emissions, that decision

would necessarily have a clarifying effect on Plaintiffs claims of EPCA and foreign policy

preemption. 

The court has received and reviewed the briefs submitted to the Supreme Court in

Massachusetts by the petitioner states, the Federal Respondent (EPA) and by the respondent

automotive dealers and manufacturers associations. Copies of the briefs were submitted to

the court on December 21, 2006. Doc. # 573, attachments #1 (Petitioners’ Brief), #2 (Federal

Respondents’ Brief), and #3 (respondent Associations’ Brief). The same documents are

available at 2006 WL 2563378 (U.S.), 2006 WL 3043970 (U.S.), and 2006 WL 3023028

(U.S.), respectively. 

Both the federal and association respondents in the Massachusetts case supported

their arguments that congressional intent to regulate carbon dioxide emissions through the

Clean Air Act is lacking by pointing to the apparent decision by Congress to vest exclusive

authority to regulate fuel efficiency, and therefore carbon dioxide emissions, with the

Department of Transportation through EPCA. The Federal Respondent’s Brief in

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Massachusetts argues that the Clean Air Act cannot coherently be applied to greenhouse gas

emissions, in part because:

[T]he only practical way of meaningfully reducing motor-vehicle emissions of

the greenhouse gases at issue here by improving fuel economy. [. . . .] Because

the emissions limits that petitioners advocate would function in practical

effect as fuel-economy regulations, EPA’s adoption of such limits would

subvert the implementation by the Department of Transportation (DOT) of the

[EPCA]. ¶ In EPCA, Congress has already created a detailed set of

mandatory standards governing the fuel economy of cars and light duty trucks,

and has authorized DOT – not EPA – to implement those standards.

Federal Respondents Brief Massachusetts v. EPA, No. 05-1120 at p. 24-25; 2006 WL

3043970 (U.S.).

The association respondents make essentially the same argument, see Brief for

Respondents Alliance of Automobile Manufacturers, et al., Massachusetts v. EPA, No. 05-

1120 at p. 37, which is opposed by the petitioners in their brief at page 31. The arguments

presented by the parties in Massachusetts v. EPA, are not identical to the arguments in the

instant case in the sense that the arguments put forth by the parties in Massachusetts are

intended to underpin the respondents’ argument that Congress did not intend EPA to regulate

greenhouse gas emissions under the Clean Air Act. In contrast, the point of the argument

presented by Plaintiffs in this case is to show the preemptive force of EPCA or foreign

policy. Nevertheless, the elements of the arguments regarding EPCA that are set forth in

Massachusetts v. EPA exactly mirror the structure and elements of the arguments presented

by Plaintiffs in this case. Fundamentally, that argument is that the regulation of carbon

dioxide emissions from automobiles is tantamount to the regulation of fuel efficiency, which

is an area exclusively delegated by Congress to DOT through EPCA.

If the Supreme Court reaches the merits of the petitioners’ case in Massachusetts v.

EPA, the Supreme Court will necessarily be required to address the issues of whether the

regulation of carbon dioxide is, in fact, tantamount to regulation of fuel efficiency, and

whether Congress left no room for EPA to regulate such emissions through the Clean Air

Act. These issues, if decided, will greatly simplify the resolution of the issues now before the

court in this case.

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In this Court’s August 25 Order, the court agreed with the magistrate judge’s

determination that there is a substantial chance that the Supreme Court in Massachusetts v.

EPA will not reach the merits, but will instead base their decision on the Plaintiffs lack

standing to bring suit against EPA to regulate greenhouse gasses. The court’s August 25

Order observed that, if the Supreme Court declined, as some consider likely, to reach the

merits presented in Massachusetts v. EPA, the Court’s opinion would not serve to simplify

any of the issues that remain to be decided in this case. 

Based on this court’s recent review of the briefs now before the Supreme Court in

Massachusetts v. EPA, this court is now persuaded that even if the Supreme Court does not

reach the merits but dismisses the case on grounds of standing, such a decision may

nonetheless serve to simplify to some extent the resolution of Plaintiffs’ claim in this case

with respect to foreign policy preemption. In Massachusetts v. EPA Petitioners argue, inter

alia, that they have standing because the regulation of greenhouse gases by EPA under the

Clean Air Act would substantially reduce greenhouse gases in part because regulation would

engender parallel regulation by foreign countries that would have the effect of multiplying the

relatively small effect that regulation in this country alone would produce. Against this

argument, the Federal Respondent argued in their brief:

Petitioners’ forecasts concerning foreign governments’ likely responses to

EPA regulation are even more speculative. Foreign sovereigns are

paradigmatic “independent actors whose exercise of broad and legitimate

discretion the courts cannot presume either to control or predict.” [Citations.]

[. . . .] [¶] At least absent a treaty or similar binding arrangement whereby a

foreign government has committed to respond in specific ways to particular

United States actions, it is neither feasible nor appropriate for a federal court

to predict the likely response of a foreign sovereign to EPA regulation in the

domestic sphere. [. . . .] Moreover, those forecasts are directly contrary to

EPA’s expressed concern that “[u]nilateral EPA regulation of motor vehicle

[greenhouse gas] emissions could * * * weaken U.S. efforts to persuade key

developing countries to reduce the [greenhouse gas] intensity of their

economies . . . .”

Federal Respondents’ Brief Massachusetts v. EPA, No. 05-1120 at 17-18 (italics in original).

Consideration of United States foreign policy crop up in the parties’ briefs both with

respect to standing and with respect to Congress’s evident intent to authorize or not authorize

EPA to regulate greenhouse gas emissions through the Clean Air Act. Consideration of U.S.

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foreign policy was also evident in oral argument before the Supreme Court. Although the

probability is somewhat remote that the court will directly confront this issue if it declines to

reach the merits of the case in Massachusetts, the possibility remains that the Supreme Court

may at least touch on the issue of foreign policy in finding the petitioners lack standing and

thereby provide guidance for, if not resolution of, Plaintiffs’ foreign policy preemption claim

now before this court.

The court must balance the potential simplification of issues that may accrue as a

result of staying proceeding in this case pending the Supreme Court’s decision in

Massachusetts against the probable harm to Plaintiffs if the court does not proceed

immediately to decide the remaining EPCA and foreign policy preemption claims. Lockyer,

398 F.3d at 1110. The court will declare in favor of Plaintiffs that any attempt by Defendants

to regulate greenhouse gas emissions absent a waiver of federal preemption by EPA is

prohibited by the Clean Air Act. In light of this, the harm Plaintiffs can reasonably claim if a

stay is now imposed is limited to the differential between the protection afforded by

injunctive relief on Plaintiffs’ Clean Air Act claim, which will be granted, and the additional

quantum of relief Plaintiffs could receive if relief were to be granted under their EPCA and/or

foreign policy claims. The court concludes the additional quantum of relief is small and does

not warrant the sacrifice of whatever simplification of issues the Supreme Court’s decision in

Massachusetts may afford.

The reason that the additional benefit Plaintiffs can derive from injunctive relief under

either their EPCA or foreign policy claims small or non-existent is that such relief is unlikely

to be of any longer duration or greater extent than injunctive relief under their Clean Air Act. 

This is because any event that would foreseeably lead to the reversal of EPA’s decision that it

lacks authority under the Clean Air Act to regulate greenhouse gas emissions will also likely

reverse or invalidate any injunctive relief under either EPCA or foreign policy. If, for

example and as previously discussed, EPA’s decision is overridden by the Supreme Court

decision in Massachusetts, that decision will necessarily address and overcome Plaintiffs’

claims with respect to EPCA and foreign policy preemption. Similarly, if the ability of either

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states or EPA, or some other federal agency to regulate greenhouse gas emissions is granted

by Congress, Congress can remove any preemptive impediments to that end through the

legislative process. The same is true if there is an intervening fundamental change in

administrative philosophy with respect to global warming. 

In sum, the court finds that, as a practical matter, Plaintiffs are unlikely to suffer any

inequity or hardship from a six-month stay of proceedings in this case because any event that

is likely to negate injunctive relief based on the Clean Air Act is also very likely to sweep

away any injunctive protection Plaintiffs may enjoy under either their EPCA or foreign policy

preemption claims. Fundamentally, the amount of time that Plaintiffs will be free from the

specter of regulation of greenhouse gas emissions or fuel efficiency is very likely to be

determined by political currents that lie outside the judicial sphere. If the political process

determines the regulation of either greenhouse gases or fuel economy is necessary, no

injunctive relief granted by this court, whether on the grounds of Clean Air Act, EPCA, or

foreign policy, is likely to prevent that regulation. 

The court finds Plaintiffs’ exposure to potential inequity or hardship if injunctive

relief on their EPCA and foreign policy claims is delayed for six months is negligible and not

sufficient to warrant this court moving forward in these proceedings without the benefit of

whatever simplification of the issues the Supreme Court’s decision in Massachusetts may

afford. Having found that a stay pending the Supreme Court’s decision in Massachusetts

may simplify the issues in this case, and that the party opposing the stay is unlikely to suffer

appreciable inequity therefrom, and finding the extent of the stay is modest, the court finds

the criteria for imposition of temporary stay of proceedings set forth in Landis and Lockyer

are met. See Lockyer, 398 F.3d at 1110.

THEREFORE, in accordance with the foregoing discussion, it is hereby ORDERED

that:

1. The court hereby DECLARES that California’s program to regulate greenhouse gas

emissions pursuant to California Health and Safety Code, section 43018.5(b)(1), is

PREEMPTED by section 209(a) of the Federal Clean Air Act, 42 U.S.C. § 7543(a).

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2. The State of California, and/or any of its political subdivisions and agencies are

hereby ENJOINED from the enforcement of any provision of California Health and

Safety Code, section 43018.5(b)(1), such injunction to remain in effect until the

earlier of such time as EPA may issue a waiver of federal preemption to the State of

California or the time Congress may pass, and the President may sign into law,

legislation permitting California to carry out such regulation.

3. Further proceedings in this case are hereby STAYED pending decision by the

Supreme Court in Massachusetts v. EPA, No. 05-1120. Pursuant to this stay, any

petition for certification of interlocutory appeal of this court’s decision to grant relief

on Plaintiffs’ Clean Air Act claim will not be granted. Consideration by the court of

Defendants’ motion for summary judgment on the ground of lack of associational

standing is not stayed by this order.

4. All trial dates and orders relating to the trial currently set are hereby VACATED.

5. Defendants’ motion for dismissal of Plaintiffs’ claim under EPCA or foreign policy

preemption on the grounds such claims are either unripe or moot is DENIED.

IT IS SO ORDERED.

Dated: January 12, 2007 /s/ Anthony W. Ishii 

0m8i78 UNITED STATES DISTRICT JUDGE

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