Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_04-cv-06663/USCOURTS-caed-1_04-cv-06663-10/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., )

)

)

)

Plaintiff, )

)

vs. )

)

)

CATHERINE D. WITHERSPOON, )

)

)

Defendant. )

)

)

No. CV-F-04-6663 REC 

ORDER GRANTING ASSOCIATION

OF INTERNATIONAL AUTOMOBILE

MANUFACTURERS TO INTERVENE

(Doc. 14)

On July 25, 2005, the court heard the motion to intervene

filed by the Association of International Automobile

Manufacturers (hereinafter referred to AIAM).

Upon due consideration of the record and the arguments of

the parties, the court grants this motion for the reasons set

forth herein.

On December 7, 2004, plaintiffs filed a Complaint for

Declaratory and Injunctive Relief against defendant. On February

16, 2005, plaintiffs filed a First Amended Complaint (FAC). 

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Plaintiffs in the FAC include the following automobile

dealerships located in Modesto, Turlock, Merced, Madera, Lemoore,

Tulare, and Porterville: Central Valley Chrysler-Jeep, Inc.;

Kitahara Pontiac GMC Buick, Inc.; Madera Ford Mercury, Inc.;

Madera Chevrolet; Frontier Dodge, Inc.; Tom Fields Motors, Inc.;

Pistoresi Chrysler Dodge Jeep; Bob Williams Chevrolet; Courtesy

Oldsmobile Cadillac, Inc.; Merle Stone Chevrolet, Inc.; Merle

Stone Porterville, Inc.; Sturgeon and Beck Incorporated; and

Swanson Fahrney Ford, Inc. General Motors Corporation and

DaimlerChrysler Corporation are also plaintiffs. The Tulare

County Farm Bureau and the Alliance of Automobile Manufacturers

are also plaintiffs. The defendant is Catherine E. Witherspoon

in her official capacity as Executive Officer of the California

Air Resources Board.

The FAC alleges that it is an action for declaratory and

injunctive relief under the Supremacy Clause in Article VI of the

United States Constitution and 42 U.S.C. § 1983. The FAC

challenges the requirements of A.B. 1493, codified at California

Health and Safety Code § 43018.5, and the regulation proposed by

the California Air Resources Board (CARB) set forth in Resolution

No. 04-28, dated September 24, 2004. The FAC alleges that CARB

has interpreted the statute to require the adoption and

enforcement of rules to limit the release of carbon dioxide from

new motor vehicles sold in California beginning in the 2009 model

year, which starts in calendar year 2008. The FAC, which is very

verbose, alleges the following claims for declaratory and

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injunctive relief:

1. Count I - Preemption under the Energy

Policy and Conservation Act of 1975 (EPCA),

49 U.S.C. §§ 329021-32919, specifically

Section 32919(a).

2. Count II - Preemption under § 209(a) of

the Federal Clean Air Act, 42 U.S.C. §

7543(a).

3. Count III - Preemption under the foreign

policy of the United States and the foreign

affairs powers of the Federal Government.

4. Count IV - Violation of the Dormant

Commerce Clause of the United States

Constitution.

5. Count V - Violation of the Sherman Act,

15 U.S.C. § 1.

The FAC prays for a declaratory judgment that “the regulation

adopted by CARB and Defendant on September 24, 2004, in

Resolution 04-28 violates federal law” and for a preliminary and

permanent injunction enjoining Defendant “from implementing or

enforcing the regulation adopted by CARB in Resolution 04-28, or

any substantially similar regulation.”

The Association of International Automobile Manufacturers

(AIAM) has filed a motion to intervene pursuant to Rule 24,

Federal Rules of Civil Procedure. 

AIAM is a trade association of manufacturers, manufacturerauthorized importers, and distributors of motor vehicles. Its

members include American Honda Motor Company, Inc.; American

Suzuki Motor Corporation; Aston Martin Lagonda of North America,

Inc.; Ferrari North America, Inc.; Hyundai Motor America; Isuzu

Motors America, Inc.; Kia Motors America, Inc.; Maserati North

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America, Inc.; Mitsubishi Motors North America, Inc.; Nissan

North America, Inc.; Peugot Motors of America, Inc.; Renault, SA;

Subaru of America, Inc.; and Toyota Motor North America, Inc.

AIAM asserts that the its members account for approximately

40% of annual sales in California of passenger cars and light

trucks. AIAM contends that, in order to meet the new-California

specific standards on the time-table set by the proposed

regulation, it’s members will be forced to develop and implement

substantial motor vehicle design and manufacturing changes, which

changes require that AIAM members undertake immediate and

intensive capital investments in both research and development

and manufacturing.

A. Intervention As Of Right.

Rule 24(a), Federal Rules of Civil Procedure, which governs

intervention as of right, provides in pertinent part:

Upon timely application anyone shall be

permitted to intervene in an action ... when

the applicant claims an interest relating to

the property or transaction which is the

subject of the action and the applicant is so

situated that the disposition of the action

may as a practical matter impair or impede

the applicant’s ability to protect that

interest, unless the interest is adequately

protected by existing parties.

An applicant may intervene as of right pursuant to Rule

24(a) if the following elements are satisfied: (1) the motion

must be timely; (2) the applicant must have a “significant

protectable interest” relating to the property or transaction

which is the subject of the action; (3) the applicant must be

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situated such that disposition of the action may as a practical

matter impair or impede its ability to protect that interest; and

(4) the applicant’s interest must be inadequately represented by

the parties to the action. Smith v. Marsh, 194 F.3d 1045, 1049

(9 Cir. 1999). The court must interpret the rule broadly in th

favor of intervention. Forest Conservation Council v. U.S.

Forest Service, 66 F.3d 1489, 1493 (9 Cir. 1995). th

There is no dispute by defendant that this application for

intervention is timely, that the applicant has a significant

protectable interest in the subject of this action, and that the

disposition of this action may impair or impede the applicant’s 

ability to protect that interest.

The focus of this motion is on the final requirement, i.e.,

that the applicants’ interest will be inadequately represented by

the existing plaintiffs.

With respect to this factor, the Ninth Circuit sets forth

the following standards in Southwest Center for Biological

Diversity v. Berg, 268 F.3d 810, 822-823 (9 Cir. 2001): th

In determining whether a would-be

interveners’s interests will be adequately

represented by an existing party, courts

consider:

(1) whether the interest of a

present party is such that it will

undoubtedly make all the

interveners’s arguments; (2)

whether the present party is

capable and willing to make such

arguments; and (3) whether the

would-be interveners would offer

any necessary elements to the

proceedings that the other parties

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would neglect.

... The prospective interveners bears the

burden of demonstrating that the existing

parties may not adequately represent its

interest ... However, the burden of showing

inadequacy is ‘minimal,’ and the applicant

need only show that representation of its

interests by existing parties ‘may be’

inadequate. In assessing the adequacy of

representation, the focus should be on the

‘subject of the action,’ not just the

particular issues before the court at the

time of the motion.

A legal issue raised in connection with this motion to

intervene is whether a presumption of adequate representation

applies to its resolution. Defendant refers to cases referring to

such a presumption but AIAM takes the position that this

presumption applies only to applications for intervention on the

side of the public agency charged with enforcing or implementing

challenged regulations or laws. 

The court concludes that the standard is not limited as AIAM

contends. In Arakaki v. Cayetano, 324 F.3d 1078, 1086 (9th

Cir.), cert. denied, 540 U.S. 1017 (2003), further explained:

The most important factor in determining the

adequacy of representation is how the

interest compares with the interests of

existing parties ... When an applicant for

intervention and an existing party have the

same ultimate objective, a presumption of

adequacy of representation arises ... If the

applicant’s interest is identical to that of

one of the present parties, a compelling

showing should be required to demonstrate

inadequate representation ....

There is also an assumption of adequacy when

the government is acting on behalf of a

constituency that it represents ... In the

absence of a ‘very compelling showing to the

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contrary,’ it will be presumed that a state

adequately represents its citizens when the

applicant shares the same interest ... Where

the parties share the same ultimate

objective, differences in litigation strategy

do not normally justify intervention. ....

[Emphasis added]

While it appears that most of the cases discussing the

presumption of adequate representation involve challenges to

government action, as does Arakaki, the discussion by the Ninth

Circuit quoted above implies that the presumption of adequate

representation applies to any application for intervention

“[w]hen an applicant for intervention and an existing party have

the same ultimate objective ....” Furthermore, “[a] mere

difference of opinion concerning the tactics with which

litigation should be handled does not make inadequate the

representation of those whose interests are identical with that

of an existing party or who are formally represented in the

lawsuit.” Wright, Miller & Kane, 7C Federal Practice and

Procedure, § 1909, p. 344 (1986).

In contending that it has made the minimal showing of

inadequacy of representation by the existing plaintiffs required

by the Ninth Circuit, AIAM argues:

AIAM’s ability to protect the interests of

its members is not adequately represented ...

because those plaintiffs represent different

automobile manufacturers which may have a

different perspective when its comes to

automotive fuel economy and emissions

standards and different goals in this

litigation. As global manufacturers, AIAM’S

members have a critical need for both

national and international uniformity in

emissions and fuel economy standards that

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impact the design and manufacture of

automobiles. Accordingly, AIAM’s proposed

Complaint in Intervention is focused on this

need for uniformity, and how Congress

recognized the importance of uniform

standards in enacting the preemptive

provisions of both EPCA and the CAA. The

Central Valley Chrysler-Jeep plaintiffs may

not share the same international perspective

as AIAM, and their complaint raises issues

not espoused by AIAM. Therefore, the

arguments they will advance concerning the

constitutionality of the CARB Greenhouse Gas

Regulations will likely be framed differently

and have a different perspective than the

arguments AIAM will raise.

The court has reviewed the proposed Complaint in

Intervention. It appears to raise the same essential issues as

raised by the existing plaintiffs in the FAC. The proposed

Complaint in Intervention alleges only two claims: (1) a claim

for declaratory and injunctive relief for preemption under the

Federal Energy Policy and Conservation Act; and (2) a claim for

declaratory and injunctive relief under the Federal Clean Air

Act. As noted, both of these claims are alleged in the FAC. In

its reply brief, AIAM refers to its proposed opposition to

defendant’s Motion to Dismiss, for which leave has not been

granted to file. AIAM asserts that it felt compelled to file

this opposition because plaintiffs did not make “certain points

concerning the finality of the regulations and the immediate

burden on the automobile manufacturers that AIAM believed were

important for the Court to consider.” AIAM contends that there

is no reason to conclude that the existing plaintiffs will

provide more adequate representation of AIAM in the future stages

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of this litigation.

AIAM further contends that it has made the minimal showing

that the existing plaintiffs will not adequately represent its

interest:

[N]ot all automobile manufacturers are

similarly situated with regard to technology

and product mix, and some manufacturers will

consequently prioritize issues in this

litigation differently from others. Thus, in

the event that this matter is resolved

through a stipulated settlement between CARB

and the Central Valley Chrysler-Jeep

Plaintiffs - and without the involvement of

and input from AIAM - there is the potential

that AIAM’s members will be prejudiced by the

settlement. The only way for AIAM to protect

these unique interests of its members is to

participate in this action.

In opposing this motion to intervene, defendant points out

that the Alliance of Automobile Manufacturers (hereinafter

referred to as the Alliance), an existing plaintiff in this

action, is a trade association of nine car and light truck

manufacturers including BMW of North American, LLC;

DaimlerChrysler Corporation; Ford Motor Company; General Motors

Corporation; Mazda North American Operations; Mitsubishi Motor

Sales of America, Inc.; Porsche Cars North America, Inc.; Toyota

Motor North America, Inc.; and Volkswagen of America, Inc. 

Members of the Alliance accounted for approximately 78% of sales

in California in 2003 of all passenger cars, light duty truck and

medium duty vehicle sales. Defendant points out that Toyota

Motor North America, Inc. is a member of both AIAM and the

Alliance. Toyota’s market share of automobile and truck sales in

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California in 2003 was approximately 18.88%. Defendant also

notes that DaimlerChrysler and General Motors Corporation are

plaintiffs in this action. DaimlerChrysler’s market share of

automobile sales in California in 2003 was approximately 11.32%. 

DaimlerChrysler operates worldwide and sold 3.9 million units

worldwide in 2004. DaimlerChrysler’s strategy “rests on four

pillars: global presence, strong brands, broad product range, and

technological leadership” and has a “global workforce and a

global shareholder base”, being owned by “European, U.S. and

other international investors.” General Motors claims to be the

world’s largest automobile manufacturer and the “global industry

sales leader since 1931" with manufacturing operations in 32

countries and vehicle sales in 200 countries. In 2004, General

Motors sold nearly 9 million cars and trucks worldwide and its

market share of automobile and truck sales in California in 2003

was approximately 20.9%. Defendant asserts that General Motors

is a global partner with Fuji Heavy Industries, Ltd. [Subaru],

Isuzu Motors Ltd., and Suzuki Motor Corporation of Japan. Isuzu

Motors Ltd. and Suzuki Motor Corporation of Japan are the parent

companies of AIAM members Isuzu Motors America, Inc. and American

Suzuki Motor Corporation, which two companies accounted for

approximately 0.12% and 0.48% of AIAM’s members’ market share of

sales in California in 2003. General Motors also has technology

collaborations and vehicle manufacturing ventures with Toyota,

Suzuki and Renault, members of AIAM and General Motors owed 20.3%

of Suzuki in 2004. Mitsubishi Motor Sales of America, Inc., a

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member of both the Alliance and AIAM, accounted for approximately

1.89% of automobile and truck sales in California in 2003 and

DaimlerChrysler owns approximately 37% of Mitsubishi. AIAM

member Subaru of America, Inc. is owned by Fuji Heavy Industries,

Ltd., which has formed a “strategic alliance” with General Motors

Corporation that will allow “FHI to continue to enhance its

product lineup through joint development with GM”. Subaru

accounted for approximately 0.83% of sales for motor vehicles in

California in 2003. Aston Martin Lagonda of North America is

owned by Ford Motor Company, a member of the Alliance. In 2003,

Ford’s sales accounted for approximately 16.86% of California

sales.

Defendant relies on these statistics in arguing that

approximately half of AIAM’s members’ market share is already

represented by the Alliance, General Motors and DaimlerChrysler

and that the existing plaintiffs will adequately represent the

interests of AIAM.

However, as AIAM responds, even though Toyota and Mitsubishi

are members of both the Alliance and AIAM, there are ten other

automobile manufacturers in AIAM who are not members of the

Alliance, including such high volume manufacturers as Hond,

Nissan and Hyundai. AIAM argues that these members have just as

significant an interest in this challenge to the proposed

regulations as to the existing plaintiffs and have just as much a

right to have their interests represented in this litigation. 

Furthermore, AIAM contends, there is no reason to believe that

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the two common member companies will adequately represent the

interests of the ten other AIAM members.

AIAM further argues that the Alliance and AIAM represent

divergent interests in the automobile market and are, for the

most part, competitors. AIAM’s membership is limited to

international automobile manufacturers while the Alliance

welcomes all new car and light truck manufacturers. AIAM

contends that defendant’s analyses concerning the proposed

regulations demonstrate that foreign manufacturers are situated

quite differently from domestic manufactures in terms of green

house gas emissions and fuel economy.

The court concludes that AIAM is entitled to intervention as

of right. The existing plaintiffs and AIAM share the same

ultimate objective in this litigation, i.e., to overturn the

proposed regulation as preempted by federal law. However,

because the members of the Alliance and AIAM are to some extent

competitors, AIAM has demonstrated that the Alliance or the other

existing plaintiffs might not act in this litigation to protect

the interests of AIAM, particularly if the action is settled.

B. Permissive Intervention.

Even if the court’s conclusion that these applicants are

entitled to intervention as of right is erroneous, the court

concludes that these applicants are entitled to permissive

intervention.

Permissive intervention is governed by Rule 24(b):

Upon timely application anyone may be

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permitted to intervene in an action ... when

an applicant’s claim or defense and the main

action have a question of law or fact in

common ... In exercising its discretion the

court shall consider whether the intervention

will unduly delay or prejudice the

adjudication of the rights of the original

parties.

An applicant who seeks permissive intervention must demonstrate

that it meets three threshold requirements: (1) it shares a

common question of law or fact with the main action; (2) its

motion is timely; and (3) the court has an independent basis for

jurisdiction over the applicant’s claims. Donnelly v. Glickman,

159 F.3d 405, 412 (9 Cir. 1998). “Even if the applicant th

satisfies those threshold requirements, the district court has

discretion to deny permissive intervention ... In exercising its

discretion, the district court must consider whether intervention

will unduly delay the main action or will unfairly prejudice the

existing parties.” Id. 

There is no dispute that the applicants satisfy the three

threshold requirements. The issue is whether permissive

intervention will unduly delay the main action or unfairly

prejudice the existing parties.

As AIAM contends, permissive joinder will not unduly delay

the litigation because it is still in the preliminary stages and

no discovery has yet commenced. 

However, the court expresses its concern about the risk of

undue delay because of AIAM’s intervention be minimized by the

parties. The amount of paper already generated in this case is

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staggering and includes not only the briefs pro and con, but

numerous declarations and evidentiary submissions, objections to

those declarations and/or evidence, and responses to those

objections. In order to prevent the court and the parties from

being overwhelmed, the court will require AIAM to coordinate its 

positions with the existing plaintiffs and to only file separate 

motions and/or briefs if the existing plaintiffs refuse or cannot

factually make an argument AIAM considers relevant. In imposing

this requirement, the court cautions that merely because counsel

for AIAM believes he can word an argument better or that there

may be a case that could be cited but was not, counsel for AIAM 

should not file a separate motion or brief. The court also

requires that plaintiffs and AIAM coordinate scheduling and 

discovery with the other parties to this litigation to minimize

time and expense. 

ACCORDINGLY:

1. The motion to intervene filed by the Association of

International Automobile Manufacturers is granted.

IT IS SO ORDERED.

Dated: October 20, 2005 /s/ Robert E. Coyle 

668554 UNITED STATES DISTRICT JUDGE

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