Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-12-01270/USCOURTS-caDC-12-01270-0/pdf.json

Parties Involved:
Daimler Trucks North America LLC
Petitioner
Detroit Diesel Corporation
Petitioner
Environmental Protection Agency
Respondent
Mack Trucks, Inc.
Petitioner
Navistar, Inc.
Intervenor for Respondent
Volvo Group North America, LLC
Petitioner

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 11, 2013 Decided October 18, 2013

No. 12-1179

DAIMLER TRUCKS NORTH AMERICA LLC, ET AL.,

PETITIONERS

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

NAVISTAR, INC.,

INTERVENOR

Consolidated with 12-1270

On Petitions for Review of a Final Agency Action by 

The United States Environmental Protection Agency

USCA Case #12-1270 Document #1461839 Filed: 10/18/2013 Page 1 of 13
2

Christopher T. Handman argued the cause for the 

petitioners. R. Latane Montague, Sean Marotta, Kathryn L. 

Lannon, Julie R. Domike and William F. Lane were on brief. 

Alec C. Zacaroli entered an appearance.

Michele L. Walter, Attorney, United States Department 

of Justice, argued the cause for the respondent. Michael J. 

Horowitz, Attorney Advisor, United States Environmental 

Protection Agency, was on brief. 

Cary R. Perlman and Laurence H. Levine were on brief 

for intervenor Navistar, Inc. in support of the respondent. 

Before: HENDERSON, GRIFFITH and SRINIVASAN, Circuit 

Judges.

Opinion for the Court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: In January 

2012, the United States Environmental Protection Agency 

(EPA) promulgated an interim final rule (IFR) authorizing

EPA to issue certificates of conformity to diesel truck engine 

manufacturers for 2012 and 2013 model-year engines 

notwithstanding the engines did not conform to EPA’s 

emission standard for nitrogen oxides (NOx), promulgated 

under section 202(a) of the Clean Air Act (CAA), 42 U.S.C. 

§ 7521(a)—provided the manufacturer paid the government a 

non-conformance penalty (NCP) as established in the IFR. 

Nonconformance Penalties for On-Highway Heavy HeavyDuty Diesel Engines, 77 Fed. Reg. 4678 (Jan. 31, 2012). 

Pursuant to the IFR, EPA issued manufacturer Navistar, Inc. 

four 2012 model year certificates of conformity (Certificates),

requiring payment of the NCP for each engine produced. 

Four manufacturers of heavy-duty diesel engines and trucks—

petitioners Daimler Trucks North America LLC; Detroit 

Diesel Corporation; Mack Trucks, Inc.; and Volvo Group 

North America, LLC (collectively, Daimler)—petitioned for 

review of the IFR on both procedural and substantive grounds 

USCA Case #12-1270 Document #1461839 Filed: 10/18/2013 Page 2 of 13
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and, subsequently, for review of the four Certificates on the 

ground that they were impermissibly issued pursuant to the 

purportedly invalid IFR. In June 2012 this court vacated the 

IFR on the ground it was unlawfully promulgated without 

notice and opportunity for comment. Mack Trucks, Inc. v. 

EPA, 682 F.3d 87, 96 (D.C. Cir. 2012). Three months later, 

after notice and comment, EPA replaced the IFR with a final 

NCP rule establishing new—and higher—NCPs (Final NCP 

Rule). Nonconformance Penalties for On-Highway HeavyDuty Diesel Engines, 77 Fed. Reg. 54,384 (Sept. 5, 2012). 

Thus, with the publication of the Final NCP Rule in 

September 2012, the four Certificates ceased to require that 

Navistar pay the NCPs established in the IFR—the subject of 

Daimler’s challenge—and with their expiration at the end of 

the 2012 model year, the Certificates ceased to have any

effect whatsoever. Accordingly, we conclude Daimler’s 

challenge to the Certificates is moot and we dismiss the 

petitions for review thereof. 

I.

The CAA prohibits the introduction into commerce of 

any new motor vehicle engine unless it is covered by a 

certificate of conformity with emission standards prescribed 

pursuant to CAA section 202(a), 42 U.S.C. § 7521(a). 42 

U.S.C. § 7522(a)1

; see id. § 7525(a) (setting out procedure for 

 1

CAA section 203(a) provides in relevant part:

The following acts and the causing thereof are prohibited—

(1) in the case of a manufacturer of new motor 

vehicles or new motor vehicle engines for distribution in 

commerce, the sale, or the offering for sale, or the 

introduction, or delivery for introduction, into commerce, 

or (in the case of any person, except as provided by 

regulation of the Administrator), the importation into the 

United States, of any new motor vehicle or new motor 

USCA Case #12-1270 Document #1461839 Filed: 10/18/2013 Page 3 of 13
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testing engines and issuing certificates of conformity). At the 

same time, CAA section 206(g) authorizes EPA to issue a 

certificate of conformity for a vehicle or engine

“notwithstanding the failure of such vehicles or engines to 

meet such standard if such manufacturer pays a 

nonconformance penalty as provided under regulations 

promulgated by [EPA].” 42 U.S.C. § 7525(g)(1).

In January 2001, EPA promulgated the “2010 NOx

standard” requiring that NOx emissions from heavy-duty 

diesel engines be reduced by 95 per cent—to .20 grams of 

NOx per horsepower-hour—no later than model year 2010. 

IFR, 77 Fed. Reg. at 4680-81; Mack Trucks, 682 F.3d at 89.

“By delaying the effective date until 2010, EPA gave industry 

nine years to innovate the necessary new technologies.” 

Mack Trucks, 682 F.3d at 89. Most diesel engine 

manufacturers used the lag time to adopt, at substantial cost, a 

technology known as “selective catalytic reduction,” which 

converts NOx into nitrogen and water and has enabled them to 

timely meet the 2010 NOx standard. Id. Navistar, however, 

opted for an alternative technology—“exhaust gas 

recirculation”—that turned out to be less effective. As a 

result, Navistar’s NOx reductions fell short of the 2010 NOx

standard and when the standard took effect, Navistar was 

 

vehicle engine, manufactured after the effective date of 

regulations under this part which are applicable to such 

vehicle or engine unless such vehicle or engine is covered 

by a certificate of conformity issued (and in effect) under 

regulations prescribed under this part . . . .

42 U.S.C. § 7522(a)(1).

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forced to use its banked emission credits to continue 

producing engines.

2

In October 2011, Navistar informed EPA that its

emission credits were due to run out sometime in 2012 and it

would then have to stop producing its engines. In response,

EPA “hurriedly promulgated” the IFR on January 31, 2012—

without notice or comment—“to make NCPs available to 

Navistar.” Mack Trucks, 682 F.3d at 90 & n.3. Pursuant to 

CAA section 206(g), the IFR authorized issuance of a 

certificate of conformity for a non-conforming engine—

provided the manufacturer paid a NCP not to exceed $1,919 

and its engine’s NOx emissions did not exceed an upper limit

of 0.50 grams of NOx per horsepower-hour—two-and-onehalf times the emissions permitted under the 2010 NOx

standard. Id.; 77 Fed. Reg. at 4682–83. To support its failure 

to provide for notice and comment—required under the 

Administrative Procedure Act (APA), 5 U.S.C. § 553(b)—

EPA invoked the statutory “good cause” exception, which 

applies when an “agency for good cause finds . . . that notice 

and public procedure thereon are impracticable, unnecessary, 

or contrary to the public interest.” Id. § 553(b)(B). 

Simultaneously with the IFR, EPA published a “parallel”

Notice of Proposed Rulemaking, which gave notice of, and 

solicited comments on, a permanent final rule.

Nonconformance Penalties for On-Highway Heavy-Duty 

Diesel Engines, 77 Fed. Reg. 4736 (Jan. 31, 2012). EPA 

 2

EPA’s “Averaging, Banking and Trading” program “allows 

engine manufacturers who produce engines cleaner than those 

required by the regulations to generate ‘credits’ that they may then 

use to offset higher emitting engines (‘averaging’), save for future 

use (‘banking’), or sell to other manufacturers (‘trading’).” Nat’l 

Petrochem. & Refiners Ass’n v. EPA, 287 F.3d 1130, 1146 (D.C. 

Cir. 2002) (citing 40 C.F.R. § 86.004-15).

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expressly advised therein: “Should the Final Rule establish 

different NCPs for heavy heavy-duty engines than the interim 

NCPs, we could apply those new NCPs to any engines 

produced on or after [the Final Rule’s likely effective date] 

instead of the interim NCPs.” Id. at 4738. Daimler timely 

petitioned for review of the IFR.

Pursuant to the IFR, EPA subsequently granted 

Navistar’s applications for the four challenged Certificates—

two Certificates effective on February 13, 2012, one on April 

11, 2012 and one on April 16, 2012. Each Certificate 

remained in effect for the duration of the 2012 model year.3

 

The cover letters accompanying the Certificates advised:

Please note that calculation of the [NCP] rate is to 

be based on the interim final rule until such time as the 

final rule is effective. Once the final rule becomes 

effective, calculation of the NCP rate is to be based on 

the formula contained therein.

Letters from EPA to Navistar, Inc. (Feb. 14, 2012; Apr. 12, 

2012; Apr. 17, 2012) (JA 1, 9, 15). Daimler timely filed 

petitions for review of each of the Certificates.

We held this proceeding in abeyance pending a decision 

in Mack Trucks, which issued on June 12, 2012, vacating the 

IFR and remanding to EPA for further proceedings. We

rejected EPA’s reliance on the good cause exception to the 

APA’s notice-and-comment requirement, concluding the IFR 

 3

The duration of the model year is not clear from the record 

but under CAA section 202(b)(3), it had to end no later than the 

close of calendar year 2012. See 42 U.S.C. § 7521(b)(3)(A)(i)

(“The term ‘model year’ with reference to any specific calendar 

year means the manufacturer's annual production period (as 

determined by the Administrator) which includes January 1 of such 

calendar year. If the manufacturer has no annual production period, 

the term ‘model year’ shall mean the calendar year.”). 

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did not fit any of the three statutory good-cause criteria as 

notice and comment was not “impracticable, unnecessary, or 

contrary to the public interest.” Mack Trucks, 682 F.3d at 93-

95. Indeed, we observed that “the only purpose of the IFR” 

was, “as Petitioners put it, ‘to rescue a lone manufacturer 

from the folly of its own choices.’ ” Id. at 93. 

In light of our vacatur of the IFR, counsel for Daimler

requested that EPA “invalidate” the Certificates. Letter from 

Kilpatrick Townsend & Stockton LLP to EPA at 1 (June 19, 

2012); Letter from Hogan Lovells US LLP to EPA at 1 (Aug. 

8, 2012). On August 31, 2012, EPA denied the requests in 

light of the impending publication of its Final NCP Rule,

which established new, higher NCPs and by its terms

superseded the IFR. 77 Fed. Reg. at 54,385-87 (increasing 

maximum 2012 NCP to $3,775—to “apply for all engines 

introduced into commerce on or after September 5, 2012”). 

Daimler subsequently petitioned for review of the Final NCP

Rule. See Daimler Trucks N. Am. LLC v. EPA, No. 12-1433 

(D.C. Cir. Oct. 26, 2012).

II.

Daimler challenges the Certificates on the ground they 

were improperly issued based on the invalid and now-vacated 

IFR. In response, EPA argues, first, that the court is without 

subject-matter jurisdiction—because Daimler lacks standing

under Article III of the United States Constitution and 

because the challenge is now moot—and, on the merits, that 

the Certificates remain valid until EPA revokes them pursuant 

to its regulatory revocation process. We conclude Daimler’s

challenge is moot and therefore do not reach EPA’s 

alternative arguments. 

“Article III, Section 2 of the Constitution permits federal 

courts to adjudicate only actual, ongoing controversies.” 

United Bhd. of Carpenters & Joiners v. Operative Plasterers’

& Cement Masons’ Int’l Ass’n, 721 F.3d 678, 687 (D.C. Cir. 

USCA Case #12-1270 Document #1461839 Filed: 10/18/2013 Page 7 of 13
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2013). Courts “may not decide questions that cannot affect 

the rights of litigants in the case before them or give opinions 

advising what the law would be upon a hypothetical state of 

facts.” Chafin v. Chafin, 133 S. Ct. 1017, 1023 (2013)

(quotation marks and brackets omitted). Moreover, the case

“must remain live ‘at all stages of review, not merely at the 

time the complaint is filed.’ ” United Bhd. of Carpenters, 721 

F.3d at 687 (quoting Steffel v. Thompson, 415 U.S. 452, 459 

n.10 (1974)); see also Lewis v. Cont’l Bank Corp., 494 U.S. 

472, 477-78 (1990) (“Th[e] case-or-controversy requirement 

subsists through all stages of federal judicial proceedings, trial 

and appellate. To sustain our jurisdiction in the present case, it 

is not enough that a dispute was very much alive when suit 

was filed, or when review was obtained in the Court of 

Appeals.” (alteration added)). “For that reason, if an event 

occurs while a case is pending on appeal that makes it 

impossible for the court to grant ‘any effectual relief 

whatever’ to a prevailing party, the appeal must be 

dismissed.” Church of Scientology of Cal. v. United States, 

506 U.S. 9, 12 (1992) (quoting Mills v. Green, 159 U.S. 651, 

653 (1895)). In addition, “the mootness doctrine requires a 

federal court to refrain from deciding [a case] if events have 

so transpired that the decision will neither presently affect the 

parties’ rights nor have a more-than-speculative chance of 

affecting them in the future.” LaRoque v. Holder, 679 F.3d 

905, 907 (D.C. Cir. 2012) (quotation marks and brackets 

omitted) (brackets added). In this case, two such events 

combine to make us conclude that Daimler is unable to

demonstrate “a more-than-speculative chance” of obtaining 

redress.

First, in September 2012, EPA replaced the IFR with the 

Final NCP Rule—which adopted different NCPs from the 

IFR. Nonconformance Penalties for On-Highway HeavyDuty Diesel Engines, 77 Fed. Reg. 54,384, 54,385, 54,387 

(Sept. 5, 2012). From the start, Daimler had sought to prevent 

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EPA from allowing Navistar to market its nonconforming 

engines by paying the IFR’s lower NCP—which, as noted,

Daimler contended (successfully) was improperly 

promulgated (without the requisite notice and comment and in 

disregard of EPA’s substantive NCP regulations). See

Nonbinding Statement of Issues To Be Raised at 2, Daimler 

Trucks N. Am. LLC v. EPA, No. 12-1179 (D.C. Cir. Apr. 20, 

2012) (seeking vacatur of Certificates “because they were 

authorized solely on the basis of payment of nonconformance 

penalties made available through the IFR”); Nonbinding 

Statement of Issues To Be Raised at 1-2, Daimler Trucks N. 

Am. LLC v. EPA, No. 12-1270 (D.C. Cir. July 26, 2012) 

(“Pursuant to the Interim Final Rule, Navistar obtained

certificates of conformity that permitted it to produce and sell 

the otherwise unlawful engines in return for paying the 

penalty set by the Interim Final Rule. . . . [T]he certificates 

of conformity issued to Navistar must be vacated because the 

Interim Final Rule they were predicated on has been 

vacated.”); Pet’rs’ Br. 16-18, Mack Trucks, Inc. v. EPA, Nos. 

12-1078 et al. (D.C. Cir. Mar. 12, 2012). But as of September 

5, 2012, when the Final NCP rule took effect—with new and 

higher penalties—Daimler no longer faced any additional 

injury from the IFR’s NCP regime. As of that date, Navistar 

was subject instead to the new NCPs established in the Final 

NCP Rule, which by its terms “appl[ied] for all engines 

introduced into commerce on or after September 5, 2012.” 77 

Fed. Reg. at 54,387; see id. at 54,385 (increasing maximum 

2012 NCP to $3,775). And the Final NCP Rule, along with 

its new NCPs, is the subject of a separate challenge pending 

before the Court. See Daimler Trucks N. Am. LLC v. EPA, 

No. 12-1433 (D.C. Cir. filed Oct. 26, 2012; oral argument 

scheduled Oct. 22, 2013).

Second, the 2012 model year—the model year the

challenged Certificates covered—has ended. See 42 U.S.C. 

§ 7521(b)(3) (providing “model year” ends no later than close 

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of applicable calendar year; see supra note 4). Thus, the 

Certificates have now “expired”—as Daimler acknowledges,

Reply Br. 3. They can no longer profit Navistar or injure

Daimler. 

Daimler contends the controversy is not moot “because a 

decision voiding Navistar’s certificates will make it likely that 

Petitioners will receive redress for their past economic 

injuries”—either through an EPA enforcement action against 

Navistar under CAA sections 204 and 205(a), 42 U.S.C. 

§§ 7523, 7524(a), or in a citizen enforcement action brought 

by Daimler under CAA section 304(a), 42 U.S.C. § 7604(a). 

Reply Br. 17 (citing Reply Br. 14-16). According to Daimler, 

those actions could result in the award of monetary penalties

against Navistar that would divest Navistar of any competitive 

gain it would not have obtained in the absence of the 

improperly issued certificates, thus providing redress to 

Daimler and Navistar’s other competitors. Daimler’s 

rationale fails to persuade us. Even assuming arguendo that 

penalties awarded to the United States Treasury could qualify 

as redress to Daimler, the prospect of such relief in an EPA 

enforcement action or citizen suit by Daimler is unduly

speculative. See Univ. Med. Ctr. of S. Nev. v. Shalala, 173 

F.3d 438, 442 (D.C. Cir. 1999) (where redressability depends

on prevailing in ensuing action, court would be required to 

assess “how likely it was that [the party] would succeed in the 

second suit”).

First, with respect to the possibility of an EPA 

enforcement action, EPA has already rejected Daimler’s 

request to revoke the certificates, concluding that revocation 

is “not appropriate or necessary” in light of the issuance of the 

Final NCP Rule. Pet’rs’ Br. A34. In that light, it is difficult 

to suppose that EPA would bring an enforcement action

against Navistar. Indeed, the statute would require a court to 

take into account, inter alia, “the gravity of the violation” in 

considering whether, and in what amount, to grant relief. 42 

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U.S.C. § 7524(b). In its brief here, EPA notes that Navistar 

“relied in good faith” on the challenged certificates and that 

any enforcement action by EPA would be “highly unlikely.”

Resp. Br. 29. The circumstances thus are unlike those in 

Bennett v. Donovan, 703 F.3d 582 (D.C. Cir. 2013), on which 

Daimler relies. In Bennett, this Court concluded that the

plaintiffs established redressability because, if they prevailed, 

the defendant agency—there HUD—could subsequently take 

certain actions on its own to provide relief, thereby rendering

relief “likely, as opposed to merely speculative.” Id. at 589

(emphasis in original). 

Second, regarding Daimler’s possible pursuit of a citizen 

suit, the likelihood of monetary penalties is likewise 

speculative. Assuming that Daimler could in fact pursue a 

citizen suit under CAA section 304(a) in these 

circumstances—an issue we need not resolve—EPA could 

intervene in the action and present its views on the propriety 

of imposing penalties (presumably against their imposition). 

See 42 U.S.C. § 7604(c)(2). In assessing whether to award 

relief, the court in an action under section 304(a) considers, 

inter alia, “the violator’s full compliance history and good

faith efforts to comply,” the “seriousness of the violation,” the 

“duration of the violation” and any other “factors as justice 

may require.” 42 U.S.C. § 7413(e)(l). Here, to the extent 

Navistar could be found to have violated the CAA by 

operating under certificates that subsequently were found to 

have been issued improperly by EPA, Navistar acted in good 

faith reliance on the validity of the certificates, EPA’s brief 

acknowledges that it considers Navistar to have acted in good 

faith, the violation stemmed from the agency’s failure to 

follow its own procedural requirements and any violation took 

place for a limited time before issuance of the Final Rule. Cf.

Illinois v. Krull, 480 U.S. 340, 356-57, 360 (1987) (officer’s 

reliance on state statute later declared unconstitutional was 

“objectively reasonable” and in “objective good faith”).

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In support of its redress-through-penalties theory, 

Daimler relies on the United States Supreme Court’s recent 

decision in Decker v. Northwest Environmental Defense 

Center, 133 S. Ct. 1326 (2013). See Rule 28(j) Letter,

Daimler Trucks N. Am, LLC v. EPA, Nos. 12-1179 & 12-1270 

(filed Apr. 9, 2013). Its reliance thereon is misplaced. 

In Decker, the respondent environmental association 

brought a citizen action under section 505(a) of the Clean 

Water Act (CWA), 33 U.S.C. § 1365(a)—the CWA’s analog 

to CAA section 304(a)—against logging and paper-products

companies, as well as state and local governments and 

officials, alleging they violated EPA’s “Industrial Stormwater 

Rule”—and consequently the CWA—by causing stormwater 

runoff to be discharged into two waterways without obtaining 

permits. Decker, 133 S. Ct. at 1333. The petitioners argued 

that the controversy was mooted by an amendment to EPA’s 

Industrial Stormwater Rule (promulgated three days before 

the scheduled oral argument), which clarified that permits 

were not in fact required for the discharges at issue. The 

Supreme Court rejected the mootness argument, reasoning 

that, “despite the recent amendment, a live controversy 

continue[d] to exist regarding whether [the defendants] may 

be held liable for unlawful discharges under the earlier 

version of the Industrial Stormwater Rule.” Id. at 1335. The 

Court explained that on remand the district court “might order 

some remedy for their past violations,” noting that the CWA 

“contemplates civil penalties of up to $25,000 per day, as well 

as attorney’s fees for prevailing parties.” Id. (citing 33 U.S.C. 

§§ 1319(d), 1365(d)). Moreover, the Court observed, the 

plaintiff requested “injunctive relief for both past and ongoing 

violations, in part in the form of an order that petitioners incur 

certain environmental-remediation costs to alleviate harms 

attributable to their past discharges.” Id. Under such 

circumstances, the Court concluded, “the cases remain[ed]

live and justiciable, for the possibility of some remedy for a 

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proven past violation is real and not remote.” Id. As already 

explained, here, unlike in Decker, the prospect of redress for 

any past violation is remote and speculative.

For the foregoing reasons, we dismiss the petitions for 

review as moot.

So ordered.

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