O RAL A RGUMENT N OT Y ET S CHEDULED IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT
N O . 1 4
- 1 192

O WNER

- O PERATOR I NDEPENDENT D RIVERS A SSOCIATION , I NC
. P ETITIONER , V
. U NITED S TATES E NVIRONMEN TAL P ROTECTION A GENCY , R ESPONDENT
.

O N P ETITION F OR R EVIEW O F F INAL A GENCY A CTION O F T HE U NITED S TATES E NVIRONMENTAL P ROTECTION A GENCY

F INAL B RIEF F OR R ESPONDENT J OHN C. C RUDEN A SSISTANT A TTORNEY G ENERAL E NVIRONMENT AND N ATURAL R ESOURCES D IVISION M ICHELE L

. W ALTER E NVIRONMENTAL D EFENSE S ECTION U.S. D EPARTMENT OF J USTICE P.O. B OX 7611 W ASHINGTON , D.C. 200 44 T EL : (202) 514

- 2795 F AX : (202) 514

- 8865 Mich ele.Walter@usdoj.gov USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 1 of 63OF COUNSEL Winifred Okoye Office of General Counsel U.S. Environmental Protection Agency 1200 Pennsylvania Ave., N.W. Washington, D.C. 20460 Tel: (202) 564

- 5446

J UNE 16 , 201 5 USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 2 of 63i RESPONDENT’S CERTIFICATE AS TO PARTIES, RULING S, AND RELATED CASES Pursuant to Circuit Rule 28(a)(1), counsel for Respondent United States Environmental Protection Agency , submit s this certificate as to parties, rulings, and related cases. A. Parties and Amici i. Parties, Intervenors, and Amici Who Appe ared in the District Court This case is a petition for review of final agency action, not an appeal from the ruling of a district court. ii. Parties to These Cases Petitioner and Respondent appearing in this Court are listed in the Petitioner OOIDA’s Openi ng Brief

. In addition, Intervenor

- Respondent California Air Resources Board is appearing in this case.
B. Rulings Under Review The action under review is EPA’s final action entitled “California State Motor Vehicle Pollution Control Standards; Heavy

- Dut y Tractor

- Trailer Greenhouse Gas Regulations; Notice of Decision.” 79 Fed. Reg. 46,256 (Aug. 7, 2014)

. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 3 of 63ii C. Related Cases
Thi s case w as not previously before this Court or any other court. The undersigned counsel is not aware of any related case current ly pending in this or any other court. Respectfully submitted,
JOHN C. CRUDEN Assistant Attorney General
/s/ Michele L. Walter MICHELE L. WALTER , Attorney United States Department of Justice Environment & Natural Resources Division En vironmental Defense Section P.O. Box 7611 Washington, D.C. 20044 Tel: (202) 514

- 2795 Fax: (202) 514

- 8865 Michele.Walter@usdoj.gov

OF CO UNSEL Winifred Okoye Office of General Counsel U.S. Environmental Protection Agency 1200 Pennsylvania Ave., N.W. Washington, D.C. 20460 Tel: (202) 564

- 5446

June 16 , 2015 USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 4 of 63iii TABLE OF CONTENTS
TABLE OF AUTHORITIES

................................ ................................ ..................... v GLOSSARY

................................ ................................ ................................ .............. v i
JURISDICTIONAL STATEMENT

................................ ................................ .......... 1
STATUTES AND REGULATIONS

................................ ................................ ......... 2
ISSUES PRESENTED

................................ ................................ ............................... 2
STATEMENT OF THE CASE

................................ ................................ .................. 3
I. CLEAN AIR ACT BACKGROUND

................................ .............................. 3
II. FACTUAL BACKGROUND

................................ ................................ .......... 7
A. The Board’s Regulations

................................ ................................ ....... 7 B. EPA’s Waiver

................................ ................................ ........................ 9 SUMMARY OF ARGUMENT

................................ ................................ ............... 15
STANDARD OF REVIEW

................................ ................................ ..................... 21
ARGUMENT

................................ ................................ ................................ ........... 22
I. THE COURT SHOULD DISMISS THE P ETITION ON PRUDENTIAL GROUNDS BECAUSE THE ASSOCIATION’S DORMANT COMMERCE CLAUSE CHALLENGE IS MORE APPROPRIATELY BROUGHT IN A SUIT AGAINST THE BOARD IN A CALIFORNIA STATE OR FEDERAL DISTRICT COURT

................................ ................................ ................................ .......... 22 II. THE ASSOCIATION CANNOT BRING THIS DORMANT COMME RCE CLAUSE CHALLENGE TO CALIFORNIA’S REGULATIONS

................................ ................................ ........................... 27 USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 5 of 63iv A. Congress Can Provide That A State Action Should Be Immune From Attack Under The Dormant Commerce Clause

................................ ................................ ................................ .. 28
B. The Legislative History And Text Of CAA Section 7543(b) Preclude The Association’s Dormant C ommerce Clause Challenge To The Board’s Regulations

................................ .............. 30
III. EVEN IF THE COURT REACHES THE DORMANT CLAUSE CHALLENGE, THE ASSOCIATION’S CLAIM HAS NO MERIT

........... 39 CONCLUSION

................................ ................................ ................................ ........ 49 USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 6 of 63v T ABLE OF AUTHORITIES CASES

*

Am. Trucking Ass's, Inc. v. EPA,

600 F.3d 624 (D.C. Cir. 2010)

................................ ....................... 5, 15, 17, 26, 30 Bibb v. Navajo Freight Lines, Inc. , 359 U.S. 520 (1959)

................................ ................................ ....................... 48, 49 Catawba Cty v. EPA , 571 F.3d 20 (D.C. Cir. 2009)

................................ ................................ ................ 35 Central Valley Chrysler

- Jeep v. Witherspoon , 456 F. Supp. 2d 1160 (E.D. Cal. 2006)

................................ ................................ 35 Cooley v. Board of Wardens , 53 U.S. 299 (1851)

................................ ................................ ................................ 28

* Engine Mfrs. Ass'n v. EPA, 88 F.3d 1075 (D.C. Cir. 1996)

................................ ................................ ....... 4, 6, 7 Envt'l Tech. Council v. Sierra Club, 98 F.3d 774 (4 th Cir. 1996)

................................ ................................ ............ 36, 37

* Ford Motor Co. v. EPA

606 F.2d 1293 (D.C. Cir. 1979)

................................ ................................ ... 4, 5, 19 Hughes v. Oklahoma , 4 41 U.S. 322 (1979)

................................ ................................ .............................. 22

*

Motor & Equip. Mfrs. Ass'n v. EPA,

627 F.2d 1095 (D.C. Cir. 1979)

......... 4

- 6, 10, 12, 15, 16, 18

- 21, 24, 25, 27, 30

- 33

*

Motor & Equip. Mfrs. Ass'n v. Nichols,

142 F.3d 449 (D.C. Cir. 1998)

................................ ................... 3, 4, 5, 6, 7, 18, 19

* Authorities chiefly relied upon are marked with an asterisk USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 7 of 63vi New England Power Co. v. New Hampshire, 455 U.S. 331 (1982)

................................ ................................ .............................. 38

* Pike v. Bruce Church, Inc. ,

397 U.S. 137 (1970)

................................ ................................ ................. 20, 43, 44 Raymond Motor Transp. v. Rice , 434 U.S. 429 (1978)

................................ ................................ ....................... 28, 47

* South

- Central Timber Dev. v. Wunnicke ,

4 67 U.S. 82 (1984)

................................ ................................ ....... 28, 29, 30, 33, 36 Sporhase v. Nebraska , 458 U.S. 941 (1982)

................................ ................................ .............................. 37

* United Haulers Ass'n v. Oneida

- Herkimer Solid Waste Mgmt. Auth.,

550 U.S. 330 (2007)

................................ ................................ ..... 20, 39, 43, 45, 46

* Western & Southern Life Ins. Co. v. State Bd. of Equalization of Cal ifornia ,

451 U.S. 648 (1981)

................................ ................................ ................. 29, 34, 35

* White v. Massachusetts Council of Cont. Emp'rs Inc. ,

460 U.S. 204 (1983)

................................ ................................ ........... 18, 28, 29, 36 Wyoming v. Oklahoma , 502 U.S. 437 (1992)

................................ ................................ .............................. 22

CONSTITUTION U.S. Const. art. I, § 8, cl. 3

................................ ................................ ................ 18, 28

STATUTES 5 U .S.C. § 706

................................ ................................ ................................ .......... 21 5 U.S.C. § 706(2)(A)

................................ ................................ ................................ 21 USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 8 of 63vii 5 U.S.C. § 706(2)(B)

................................ ................................ ................................ 21 42 U.S.C. §§ 7401

- 7671q

................................ ................................ .......................... 3 42 U.S.C. § 7504

................................ ................................ ................................ ........ 3 42 U.S.C. § 7506

................................ ................................ ................................ ........ 3 42 U.S.C. § 7507

................................ ................................ ........................... 6, 34, 49 42 U.S.C. § 7511a(b)(4)

................................ ................................ ............................. 3 42 U.S.C. § 7511 (a)(2)(B)

................................ ................................ ......................... 3 42 U.S.C. § 7521(a)

................................ ................................ ................ 6, 11, 12, 34 42 U.S.C. § 75 43

................................ ................................ ............................... 18, 19 42 U.S.C. § 7543(a)

................................ ................................ ............................... 3, 4 42 U.S.C. § 7543(b)

................................ ................................ .... 2, 3, 7, 9, 15, 21, 34 42 U.S.C. § 7543(b)(1)

................................ ................................ ...................... 1, 5, 6 42 U.S.C. § 7607(b)

................................ ................................ ...................... 1, 22, 23 42 U.S.C. § 7607(b)(1)

................................ ................................ ............................... 1 Clean Air Act of 1965 Pub. L. No. 89

- 272, § 202, 79 Stat. 992

................................ .............................. 4, 31

FEDERAL REGISTERS 78 F ed. Reg. 51,724

................................ ................................ ................................ ... 9 79 Fed. Reg. 46,256

................................ ................................ .......................... i, 1, 9 79 Fed. Reg. 46,257

................................ ........................ 6, 7, 8, 9, 39, 40, 42, 43, 46 79 Fed. Reg. 46, 260

................................ ................................ ................................ 10 79 Fed. Reg. 46, 261

................................ ................................ ......................... 10, 11 USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 9 of 63viii 79 Fed. Reg. 46,262

................................ ................................ .......................... 11, 12 79 Fed. Reg. 46,263

................................ ................................ ........ 12, 13, 14, 44, 48 79 Fed. Reg. 46,264

................................ ................................ ........ 14, 15, 24, 44, 48 7 9 Fed. Reg. 46,265

................................ ................................ .......................... 17, 23 LEGISLATIVE HISTORY H.R. Rep. No. 95

- 294, 301

- 02 (1977), reprinted in 1977 U.S.C.C.A.N. at 1380

.... 4, 32 STATE REGULATIONS Cal. Code of Regs. tit. 17, § 95301(b)

................................ ................................ ..... 40 Cal. Code of Regs. tit. 17, § 95301(c)

................................ ................................ . 9, 40 Cal. Code of Regs. tit. 17, § 95302(a)(52)

................................ ............................... 41 Cal. Code of Regs. tit. 17, § 95302(14)

................................ ................................ ..... 9 Cal. Code of Regs. tit. 17, § 95302(34)

- (36)

................................ ............................. 9 Cal. Code of Regs. tit. 17, § 95302(52)

................................ ................................ ..... 9 Cal. Code of Regs. tit. 17, § 95302(54)

- (55)

................................ ............................. 9 Cal. Code of Regs. tit. 17, § 95305(a )

................................ ................................ ....... 9 Cal. Code of Regs. tit. 17, § 95305(b)

................................ ................................ ....... 9 Cal. Code of Regs. tit. 17, § 95305(c)

................................ ................................ ....... 9 Cal. Code of Regs. tit. 17, § 95305(d)

................................ ................................ ....... 9 MISCELLANEOUS About SmartWay Transportation & Air Quality, US EPA, http://e pa.gov/smartway/about/index.htm (last updated March 5, 2015)

.................. 9 USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 10 of 63ix GLOSSARY

APA Administrative Procedure Act
CAA Clean Air Act
EPA Environmental Protection Agency USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 11 of 631 JURISDICTIONAL STATEMENT On August 7 , 2014 , the United States Environmental Prote ction Agency (“ EPA ” or “Agency”) issued a final agency action entitled “California State Motor Vehicle Pollution Control Standards; Heavy

- Duty Tractor

- Trailer Greenhouse Gas Regulations; Notice of Decision.” 79 Fed. Reg. 46,256 (Aug. 7, 2014) (“Waiver”) [ JA454 ] , under the Clean Air Act (“CAA” or “Act”)

. EPA issued the Waiver under CAA Section 7543(b)(1) , 42 U.S.C. § 7543(b)(1), to grant a waiver of preemption to the California Air Resources Board (“Board”) to enforce certain provisions of California’s Hea vy - Duty Tractor

- Trailer Greenhouse Gas Regulations . Cal. Code Regs. tit. 17, §§ 95300

- 12

. [ ADD32

- 87 ]. The r egulations subject to the Waiver (“Regulations”) appl y to new model year 2011 through 2013 heavy

- duty sleeper

- cab tractors and to new 2011 and subs equent mode l year dry

van and refrigerated

- van trailers that are pulled by such tractors on California highways. On October 3 , 2014 , Petitioner Owner

- Operator Independent Drivers Association, Inc. (“Association”) timely filed its petition for review of EPA’s Waiver

. See 42 U.S.C. § 7607(b)

. Under CAA Section 7607(b) , a petition for review challenging “any other final action” taken by EPA under the Act or any “nationally applicable regulations,” may be filed “only in the United States Court of Appeals for the District of Columbia.” Id. § 7607(b)(1). Thus, jurisdiction over USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 12 of 632 a petition to review EPA’s action in granting a waiver is appropriate in this Court; however, as discussed below, because this particular challenge focuses exclusively
on t he legality of California State regulations, and not on the substance of EPA’s Waiver action, it is more appropriately brought against the State of California in either a California state or federal district court. Therefore, this Court should dismiss the petition without prejudice on prudential grounds, and allow the Association to pursue relief directly against the Board in a more suitable forum. STATUTES AND REGULATIONS All applicable statutory and regulatory materi als are provided in Responden t ’ s Addendum to Opening Brief (“ADD”)

. ISSUES PRESENTED
1. Should the Court dismiss the petition on prudential grounds because the merits of the Association’s challenge are directed solely at the constitutionality of the Board’s R egulations (and not at th e reasonableness of EPA’s Waiver ) and, thus, are more appropriately suited to review in a California state or federal district
court ?
2. Can the Association seek a vacatur of EPA’s Waiver on the basis of the dormant Commerce Clause when Congress s pecifically authorize d California’s adoption of motor vehicle emission standards under the Clean Air Act , 42 U.S.C. § 7543(b), even if those standards interfere with interstate commerce ? USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 13 of 633 3. A re the Board’s Regulations permissible under the dormant Commerce Clause , wh ere they are not discriminatory on their face and the benefits to California’s public health and welfare outweigh any burdens on interstate
commerce? STATEMENT OF THE CASE
IV. CLEAN AIR ACT BACKGROUND The Clean Air Act (“CAA” or “Act” ) , 42 U .S.C. §§ 7401

- 7671q, creates a comprehensive program for controlling and improving the nation’s air quality

. One aspect of that comprehensive program is the con trol of motor vehicle emissions under Subchapter II, which “ e stablishes a two

- pronged fe deral

- state approach

. . . .” Motor & Equip. Mfrs. Ass’n v. Nichols , 142 F.3d 449, 452 (D.C. Cir. 1998) (“ MEMA II ”). Under the first prong, S tates regulate vehicles “after they have been purchased by consumers through inspection and maintenance
programs. ” Id. (citing 42 U.S.C. §§ 7504, 7506, 7511a(b)(4), (a)(2)(B)). Under the second prong, EPA has authority to establish nationally applicable emission standards for new motor vehicles and the States generally are preempted from adopting their own standard s. 42 U.S.C. § 7543(a); see MEMA II , 142 F.3d at 452.
CAA Section 7543(b) , however, contains a provision allowing California to petition EPA for a waiver of federal preemption so that California can enforce its own motor vehicle em ission standards

. 42 U.S.C. § 7543(b) ; MEMA II , 142 F.3d USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 14 of 634 at 453. This exemption has a long and well

- established history, which Congress enacted “to afford California the broadest possible discretion in selecting the best means to protect the health of it s citizens and the public welfare.” Motor & Equip. Mfrs. Ass’n v. EPA , 627 F.2d 1095, 1 110 (D.C. Cir. 1979) (“ MEMA I ”) (citing H.R.Rep. No. 95

- 294 at 301

- 02 (1977), reprinted in 1977 U.S.C.C.A.N. at 1380)

. Since 1963, California has been at the frontier o f efforts to reduce air pollution through vehicle emission standards. See Engine Mfrs. Ass’n v. EPA , 88 F.3d 1075, 1079 (D.C. Cir. 1979) (“Congress recognized that California was already the “ lead [ er ] in the establishment of standards for regulation of au tomotive pollutant emissions ” at a time when the federal government had yet to promulgate any regulations of its own.”); see also (2008 Initial Statement of Reasons at ES1) [JA40 ]. In 1965, Congress first authorized EPA to issue federal emission standards for motor vehicles. Ford Motor Co. v. EPA , 606 F.2d 1293, 1295 & n.10 (D.C. Cir. 1979) (citing Pub. L. No. 89

- 272, 79 Stat. 992 (1965)). Two years later, realizing the possibility that automobile manufacturers could be subject to fifty different state s tandards, Congress issued CAA Section 7543(a) to preempt the States from adopting their own emission standards. 42 U.S.C. § 7543(a); Engine Mfrs. , 88 F.3d at 1079. Concerned about the “spectre of an anarchic patchwork of federal and state regulatory prog rams, a prospect which threatened to create nightmares for the manufacturers[,] . . . Congress in 1967 expressed its intent to USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 15 of 635 occupy the regulatory role over emissions control to the exclusion of all the states all, that is, except California.” MEMA I , 6 27 F.2d at 1109.
Th e preemption exemption for California in Section 7543(b) represents Congress’ recognition of California’s motor vehicle emission control efforts, the particularly difficult air pollution problems facing California, and the benefits to the entire nation of allowing California to continue those efforts. See MEMA I , 627 F.2d at 1111. Congress “intended the State to continue and expand its pioneering efforts at adopting and enforcing motor vehicle emission standards different from and in large measure more advanced than the corresponding federal program[.] ” Id. ; MEMA II , 142 F.3d at 453

. Indeed, “Congress consciously chose to permit California to blaze its own trail with a minimum of federal oversight.”
MEMA II , 142 F.3d at 463; Am. Tr ucking Ass’ns , Inc. v. EPA , 600 F.3d 624, 629 (D.C. Cir. 2010) (same); Ford , 606 F.2d at 1297 (same). In developing its own motor vehicle emission standards, C alifornia must make a determination that its “standards will be, in the aggregate, at least as protective of public health and welfare as applicable Federal standards.” 42 U.S.C. § 7543(b)(1). If California makes that determination, EPA “shall” issue a waiver of preemption, unless EPA makes one of three findings: (A) the determination of the State is arbitrary and capricious, USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 16 of 636 (B) such State does not need such State standards to meet compelling and extraordinary conditions, or (C) such State standards and accompanying enforcement procedures are not consistent with secti on 7521(a) of this title. Id. § 7543(b)(1). 1 EPA consistently has interpreted this waiver provision to provide EPA with a “narrow” review of California’s decision

- making, 79 Fed. Reg. at 46,257 [JA455] , and this Court has reinforced that narrow review st andard. See MEMA I , 627 F.2d at 1121. Indeed, California’s waiver determination is “presumed to satisfy the waiver requirements and . . . the burden of proving otherwise is on whoever attacks them.” Id. If EPA issues a waiver to California, other States then can adopt California’s standards. 42 U.S.C. § 7507. Those States that choose to adopt California’s standards for which EPA has granted a waiver may do so without any further authorization from EPA. Id. Thus, “new motor vehicles must be eith er federal cars designed to meet EPA’s standards or California cars designed to meet

1 CAA Section 7521(a), ref erenced in Section 7543(b)(1)(C), requires that regulations “shall take effect after such period as the Administrator finds necessary to permit the development and application of the relevant technology, giving appropriate consideration to considering the cos t of compliance within such period .” 42 U.S.C. § 7521(a). USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 17 of 637 California’s standards.” MEMA II , 142 F.3d at 453 (internal quotation marks omitted) (citing Engine Mfrs. Ass’n v. EPA , 88 F.3d 1075, 1080 (D.C. Cir. 1996))

. V. FACTUAL BACK GROUND C. The Board’s Regulations The California Global Warming Solutions Act of 2006 (Assembly Bill 32, Stats. 2006, chapter 488), directed the Board to take “discrete early action [greenhouse gas] emission reduction measures” to achieve cost

- effect ive emis sion reductions. 79 Fed. Reg. 46,257 [JA 455 ]. In response, California developed a suite of regulations that apply to new and in

- use 53

- foot or longer trailers and the new and in

- use tractors that pull them. Cal

. Code Regs. tit. 17 §§ 95300

- 12 [ ADD32

- 87 ]

. The Board adopted that broader set of r egulations on October 23, 2009, but subsequently issued amendments to provide for compliance flexibility, which were adopted on October 26, 2011, and became o perative on January 11, 2012. Support Document at 4

- 7 [ JA6

- 9 ]. That suite of regulations is “anticipated to reduce emissions of oxides of nitrogen (NO x ) by 3.1 and 1 ton per day in 2014 and 2020, respectively, which will help California in its efforts to attain the national and state ambient air quality stand ards for particulate matter and ozone.” Suppo rt Document at 1 [JA3 ]. On June 30, 2013, the Board submitted to EPA a waiver request under CAA Section 209(b) , 42 U.S.C. § 7543(b). Support Document [JA3

- 30 ] . The Waiver USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 18 of 638 Request did not encompass t he entire suite of r egulation s and was limited to new (not in

- use) model year 2011 through 2013 heavy

- duty tractors with sleeper

- cabs, and to new (not in

- use) 2011 and subsequent model year dry

- van and refrigerate d

van trailers that are 53

- feet or longer a nd are pulled by such tractors (“Regulations”)

. Suppo rt Document at 1

- 2, 8

- 9 [JA3

- 4, JA10

- 12 ]

. These
R egulations are a critical part of California’s broader set of regulations and both the tractor and trailer requirements cumulatively are projected to re duce greenhouse gas emissions in California by 2.34 6 million metric tons of carbon dioxide equivalent emissions between 2010 and 2020. Support Document at 2 [JA4]. The California Global Warming Act of 2006 declares that “global warming poses a serious th reat to the economic well

- being, public health, natural resources, and the environment of California, and requires a comprehensive multi

- year program to reduce California’s greenhouse gas (GHG) emissions to 1990 levels by 2020.” Board Resolution 08

- 44 at 1, December 12, 2008 [JA130 ]. The reductions in these Regulations will be achieved by requiring, for example, the use of certain aerodynamic technologies and low

- rolling resistance tires. 79 Fed. Reg. at 46,257 [JA455 ] . To that end, the r egulations inc orporate elements of EPA’s SmartWay Program, by requiring the covered heavy

- duty vehicles to be Smart Way certified or use SmartWay verified aerodynamic USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 19 of 639 technologies or tires. 2 Id. The Regulations apply to every covered tractor

- trailer driven on Californi a’s highways. 3 Importantly, t hese Regulations are a step toward addressing the significant air quality issues facing California. Board Dec. 12, 2013 Response to Comment at 10 [JA440 ].
D. EPA’s Waiver On August 21, 2013, pursuant to CAA Section 754 3( b ), 42 U.S.C. § 7543(b), EPA published a notice of opportunity for public hearing and comment

on the Board’s Waiver Request. 78 Fed. R eg. 51,724 (Aug. 21, 2013) [JA1 ]. After consideration of public comments, EPA issued its Waiver decisi on on August 7, 2014. 79 Fed. Reg. 46,256 [JA454 ]

. In granting the Waiver , EPA first determined under CAA Section 7543(b)(1)(A), whethe r the Board was arbitrary and capricious in determining that

2 EPA’s SmartWay Program is a “voluntary testing, verification, and designation program to help freight companies identify equipment, technologies and strategies that save fuel and lower emiss ions.” 79 Fed. Reg. at 46,257 n.7 (citing http://epa.gov/smartway/about/index.htm .) [JA455 ].

3 The Regulations exempt certain categories of tractor

- trailers: (1) local

- haul tractors and trailers, which are those that travel exclusively within a 100

- mile radius of their local

- haul base, 17 C.C.R. §§ 95302(34)

- (36); (2) short

- haul tractors and trailers, which are those that travel less than 50,000 miles per year (including both in

- state and out

- of

- st ate miles), id. § 95302(52); (3) drayage tractors and trailers that operate t hrough ports or intermodal rail yards, id. § 95302(14 ); (4) storage tractors and trailers; id. §§ 95302(54)

- (55); and (5) empty 53

- foot and longer trailers that are pulled by heavy

- duty tractors. Id. §§ 95301(c), 95305(a)

- (d). USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 20 of 6310 its R egulations will be, in the aggregate, at least as pr otective of public health and welfare as applicable Federal standards. 79 Fed. Reg. at 46,260 [JA458 ] . In making that protectiveness determination, the Board had noted that EPA had not issued regulations to control greenhouse gas emissions for these part icular tractor

trailers

. Id. at 46,260, n.52

- 53 (citing Board Resolutions 08

- 44 [JA130

- 172] and
10

- 11

- 3 [JA3 34

- 343]) [JA458 ]. Thus, the Board concluded that its Regulations, in the aggregate, were at least as protective of the public health and welfare a s applicable Federal standards. EPA agreed. “[A] finding that California’s protectiveness determination is arbitrary and capricious must be based on clear and convincing evidence that California’s finding was unreasonable .” 79 Fed. Reg. at 42,261 [JA45 9 ]; see MEMA I , 627 F.2d at 1122. “Where, as here, there are no federal standards directly comparable to the specific California standards under review, the analysis then occurs against the backdrop of previous waivers, which have determined that the Cali fornia program overall was at least as protective as the federal program.” 79 Fed. Reg at 46,260 [JA458 ]. Thus, EPA fou nd that the R egu lations would not “diminish the protectiveness of th e overall California program.” Id. ; i d. at 46,261 (“California sta ndards are most clearly ‘at least as protective’ when they are compared to the absence of fed eral emission standards.”) [JA459 ]. Next EPA considered the second criterion

– whether California needed USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 21 of 6311 “such . . . standards to meet compelling and extraord inary conditions.” 79 Fed. Reg. at 46,261 (quoting 42 U.S.C. § 7543 (b)(1)(B) ) [JA459 ] . In that regard, EPA (consistent with its past considerations of this criterion) considered “whether California needs its own mobile source pollution program ( i.e. , set of standards) for the relevant class or category of vehicles or engines to meet compelling and extraordinary conditions, and not whether the specific standard s that are the subject of the waiver requests are necessary to meet such conditions.” 79 Fed. Re g. at 46,261 [JA459 ]

. Based on the Board ’s findings concerning the continued climate conditions and vehicle growth in California, and the amount of nitrogen oxide and carbon dioxide reductions that the Board’s Regulations will achieve, EPA found there was no “change in circumstances or evidence to suggest that the conditions that Congress identified as giving rise to serious air quality problems in California no longer exist.” Id. at 46,262 [JA460 ] ; id. at 46,261 [JA459] ( “no evidence submitted to indicat e that California’s compelling and extraordinary conditions do not continue to exist.” ); i d. at 46,262 [JA460] (“In summary, EPA has not received any adverse comments suggesting that California no longer needs a separate motor vehicle emissions program to address the various conditions that led to serious and unique air pollution problems in California.”)

. Finally, as to the third criterion under CAA Section 754 3 (b)(1)(C), EPA found that the Board’s Regulations are consistent with CAA Section 7521 (a), 42 USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 22 of 6312 U .S.C. § 7521(a). Section 7521(a) requires that regulations “shall take effect” after a period of time “necessary to permit the development and application of the requisite technology, giving appropriate consideration to the costs of compliance within such time.” Id . This provision relates to the “timing of a particular emission control regulation rather than to its social implications.” MEMA I , 627 F.2d at 1118. EPA consistently has stated that its determination as to whether the Board’s standard s are consistent with Section 7521(a) “is limited to whether those opposed to the waiver have met their burden of establishing that California’s standards are technologically infeasible, or that California’s test procedures impose requirements inconsistent with the federal test procedure .” 79 Fed. Reg. at 46,262 [JA460 ]. “Infeasibility is shown by demonstrating that there is inadequate lead time to permit the development of technology necessary to meet the . . . regulations that are subject to the waiver reques t, giving appropriate consideration to the cost of compliance within that time.” Id. at 46,262

- 63 [JA460

- 61 ]. Although EPA did not receive any comments claiming that the Board’s Regulations “were infeasible when reviewed purely as a matter of technology, ” id. at 46,263 [JA461 ], the Association commented that the Regulations “impose large expenses on thousands of small and financially struggling carriers .” Id. In response, EPA explained that its “previous waiver decisions indicate that cost of compliance as it relates to lead time must be shown to be excessive in order to find that California’s standards are USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 23 of 6313 inconsistent with [Section 7521(a)].” Id. On that note, the Association simply did “not submit sufficient evidence to meet the opponents’ burden of proof to show that the costs of compliance with the . . . Regulations are so excessive as to constitute technological infeasibility.” Id. Specifically, with respect to the cost of the Regulations for tractors, the Board “estimated the average increment al capital cost of compliance in 2008 to be $2,100 per tractor, which would be recovered within 1.0 to 1.5 years through fuel savings.” Id. (citing Support Document at 21, [JA23 ]). The Association did not submit any evidence contrary to those estimate s. 79 Fed. Reg. at 46,263 [JA461 ]. For trailers, the Association simply disagreed with the Board’s cost estimates. The Board “calculated the average incremental cost of trailer compliance as $2,900 per trailer, plus an additional $125 annually for mainten ance and reporting costs.” Id. (citing Su pport Document at 24

- 25 [JA26

- 27 ] and 2008 Initial Statement of Reasons at 33

- 42, 60

- 62 [JA79

- 88, 106

- 08 ]). The costs would be recovered, i.e. , have a “payback period,” on average, within eighteen months through f uel saving s. 79 Fed. Reg. at 46,263 [JA461 ] (citing Support Document at 25 [JA27 ] and 2008 Initial Statement of Reasons at 42 [JA88 ]). The Board later decreased those cost estimates to $1,250 per trailer, which would be recovered
within eleven month s. 7 9 Fed. Reg. at 46,263 [JA461 ] (citing American Trucking
A ssociation comments at 5 [JA411 ]). USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 24 of 6314 The Association disagreed with these cost estimates and payback period, claiming that the cost per trailer would be from $7,520

- $9,325, and have a longer payback perio d. 79 Fed. Reg. at 46,263 [JA461 ]. EPA found that the Association failed to provide any evidence to support its higher cost estimates and, instead, simply had relied on an incorrect characterization of the Board’s cost estimates. Id. Once these mischaracterizations were correct ed , the Association’s “cost figures are in relative agreement with [the Board’s] original cost projections (which [the Board] now estimates are even lower).” Id. Ultimately, EPA found no evidence that the Board’s es timated cost of compliance for trailers was excessive or infeasible. Id. The Association provided further comments claiming that the costs of the Regulations outweigh the emission benefits, particularly for trailers. Id. at 46,263

- 64 [JA461

- 62 ]. The B oard disputed these arguments, finding that there was no evidence to support the Association’s claims. Id. at 46,264 [JA462 ] (citing Board Response to Comments at 15

- 16 [JA445

- 46 ]). EPA noted that these types of co st

effectiveness determinations are poli cy decisions on which “EPA has histo ri cally deferred to California. . . .” 79 Fed. Reg. at 46,264 [JA462 ]. Thus, because the evidence was “insufficient to show that the [Board’s Regulations] are technologically infeasible, considering costs of compliance . . .” the Regulations were not inconsistent with CAA Section 7521(a). Id. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 25 of 6315 EPA’s Waiver also discussed other issues, including the Association’s comments that the Board’s Regulations were unconstitutional because they disproportionately and unfair ly burdened out

- of

- state carrier s. 79 Fed. Reg. at 46,264 [JA462 ]. In addressing these comments, EPA noted that this Court previously concluded that “[t]he waiver proceeding produces a forum ill

- suited to the resolution of constitutional claims.” Id. (q uoting MEMA I , 627 F.2 d at 1114

- 20 ) . Moreover, because Congress has not included constitutional concerns within the list of criteria in CAA Section 7543(b), EPA could not rely on such concerns to deny a waiver request. 79 Fed. Reg. at 46,264 [JA462 ] . Fo r these reasons, EPA stated that “Constitutional challenges to [the Board’s] Regulation are more appropriately addressed by a legal challenge directly against the state.” Id. Thus, because the Board’s Regulations met all three criteria in Section 7543(b) , EPA issued the Waiver. SUMMARY OF ARGUMENT For over 40 years, EPA has issued waivers to California under CAA Section
7543 (b) , 42 U.S.C. § 7543(b)

. Congress explicitly adopted an approach to the issuance of new motor vehicle emission standards under the CAA t hat would allow California to continue “to blaze its own trail[,]” Am erican Trucking Ass’ns v EPA , 600 F.3d 624 629 (D.C. Cir. 2010) , and give California broad discretion in establishing its own motor vehicle emission standards that best pro tect the State’s USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 26 of 6316 public health and welfare

. MEMA I , 627 F.2d at 1110. This approach allow s California to continue to be an innovator in these standards for the entire country , addresses California’s unique air quality issues, and provid e s the regulated

c ommunity with the assurance that new motor vehicles need only meet either the California or federal emission standards. The Association’s merits brief takes issue with the Board’s exercise of this broad discretion in issuing these Regulations. Notab ly absent from the Association’s brief, however, is any direct attack on EPA’s Waiver itself

– in other words, the Association does not challenge, in any respect, EPA’s analysis of the three statutory criteria under CAA Section 7543(b). Instead, the Assoc iation effectively argues under the APA that EPA’s Waiver “fails to meet . . . constit utional requirements,” Petitioner OOID A ’s Opening Brief (“Pet’s Br.”) at 20, because the Board Regulations for which EPA granted the Waiver violate the dormant Commerce C lause. Thus, the Association focuses solely on whether the Board violated the dormant Commerce Clause in issuing its Regulations. This peculiar challenge to EPA’s Waiver must fail on several grounds. First, the Court should dismiss th e Association’s Pe tition on prudential grounds because the Association’s challenge

– which actually is against the Board’s Regulations rather than EPA’s Waiver

– should be brought against the Board in California state or federal district court rather than in this Court agai nst USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 27 of 6317 EPA. Normally, this Court has exclusive jurisdiction under CAA Section 7607(b)(1) , 42 U.S.C. § 7607(b)(1), to review petitions for review of EPA’s Waivers

. 4 Here, however, because the Association ’s specific arguments challenge only whether the Board’ s Regulations violate the d ormant Commerce Clause, there actually is no direct substantive challenge to EPA’s Waiver. T his particular situation therefore raises prudential concerns as to whether the D.C. Circu it is the most appropriate venue to adjudicate a case that actually challenges a state action. Although the Association is barred from bringing a dormant Commerce Clause challenge to the Board’s Regulations given Congress’ specific grant of authority to California, see infra at 27

- 39 , if any court is to proceed to consider the merits of this dormant Commerce Clause challenge, a California state or district court is better suited to do so in the context of a direct challenge to the Board’s Regulations. See Am. Trucking , 600 F.3d at 628, n.1 (“If [the American Trucking Association] is concerned that California’s rule unconstitutionally burdens interstate commerce, [it] also could attempt to bring a constitutional challenge directly to the California rule. We express no view on that possibility.”) (emph asis

4 T he Court has exclusive jurisdiction over a challenge to “any other final action” taken by EPA under the CAA or any “nationally applicable regulations.” 42 U.S.C. § 7607(b)(1). EPA’s Waiver has nationwide scope and applicability because it would affect persons in and outside California as well as States other than California that can adopt and enforce California’s Regulations once EPA issues the Waiver. 79 Fed. Reg. at 46,265 [JA463 ]. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 28 of 6318 added)

. That way, the state or federal district court could order direct relief against the Board, including any relief necessary to supplement the Board’s administrative record. Given these prudential considerations and the unique nature of the
Ass ociation’s challenge , the Court should dismiss the Petition on prudential grounds. Second, i f th e Court proceeds to consider the Association’s d ormant Commerce Clause challenge, the Court should deny the Petition. The dormant Commerce Clause pr events the States

– not the federal government

– from erecting barriers to the free flow of int erstate commerce. U.S. Const. a rt. I, § 8, cl. 3; see infra at 29

. Congress , however, s pecifically can authorize state or local government action that otherwis e would violate the do rmant Commerce Clause, even if the action ultimately interferes with interstate commerce. See White v. Massachusetts Council of Const. Emp’r , 460 U.S. 204, 213 (1983). Both the legislative history of CAA Section 7543 and the text of the statute itself show that Congress affirmatively contemplated the type of regulations that the Board has issued here, even where those r egulations would otherwise arguably interfere with interstate commerce. As this Court has recognized, the legislat ive history of CAA Section 7543 , 42 U.S.C. § 7543, shows that Congress intended to give California broad discretion in establishing motor vehicle emission standards that best protect the State’s public USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 29 of 6319 health and welfare. MEMA I , 627 F.2d at 1110 ; MEMA II , 142 F.3d at 46 3 (recognizing California is given the “broadest possible discretion in selecting the best means to protect the health of its citizens”); Ford , 606 F.2d at 1297 (“Congress consciously chose to permit California to blaze its own trail with a minimum of federal oversight.”)

. Congress specifically “understood the costs involved in making an exception for California” but nonetheless decided “to recommend that these costs be absorbed by allowing a waiver” given “the benefits for the Nation to be derived from permitting California to continue its experiments in the fie ld of emissions control. . . .” MEMA I , 627 F.2d at 1109

- 10.
T he text of Section 7543 (b) suppo rts th at legislative history. Under that Section, California has to ensure that its regulations will be, in the aggregate, at least as protective as applicable federal standards. EPA then has three narrow criteria under which to review California’s standards to determine whether to grant

a waive r and nothing in Section 7543(b) “requires [EPA] to consider the constitutional ramifications of the regulations for which California requests a waiver

. ” MEMA I , 627 F.2d at 1115. Further, n othing in Section 7543(b) precludes the type of Regulations at issue here that arguably could burden inters tate commerce. The Board’s waiver request is entirely consistent with and authorized by the purpose and text of Section 7543(b), even if those Regulations burden interstate commerce. Therefore, Congress itself has precluded the d ormant USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 30 of 6320 Commerce Clause ch allenge that the Association brings here against the Board’s Regulations

. Finally, e ven if the Court reaches the substance of the d ormant Commerce Clause challenge, it has no merit. As an initial matter, EPA did not address, nor was it required to addre ss, the dormant Commerce Clause challenge in its Waiver proceeding. See MEMA I , 627 F.2 d at 1115. EPA therefore provides a substantive discussion of the dormant Commerce Clause issue to the extent the Court is interested in EPA’s view and so as not to wa ive any substantive argument. The Court’s analysis of the dormant Commerce Clause challenge starts with whether the Regulations discriminate on their face against interstate commerce. United Haulers Ass’n v. Oneida

- Herkimer Solid Waste Mgmt. Auth. , 55 0 U.S. 330, 338 (2007). They do not. The Board’s Regulations do not treat covered tractor

trailers differently depending on whether they are from in

- state or out

- of

- state. Indeed, t he Regulations apply equally to all covered tractor

- trailers and do not benefit in

- state vehicles at the expense of burdening out

- of

- state vehicles. Because the Regulations do not discriminate on their fac e , the Court’s analysis must then proceed under the familiar balancing test of Pike v. Bruce Church, Inc. , 397 U.S. 137 ( 1970). Under that balancing test, any alleged burden that the Regulations may impose on out

- of

- state tractor

- trailers (to the extent there is any such burden) is outweighed by the benefits to California’ s public health and USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 31 of 6321 welfare. Specifically, t he Boar d’s Regulations are projected to re d uce green house gas emissions in California by approximately 2.346 million metric tons of carbon dioxide e quivalent emissions statewide between 2010 and 2020. 5 Support
Document at 2 [JA4 ]. A ny increased capital or maint enance costs for tractor or trailer m anufacturers would be recovered within one to one and a half years for covered tractors, and within eleven months for covered trailers. Id. at 21 ( tractors), 25 (trailers). [JA23, 27 ]. The Regulations therefore do no t violate the d ormant Commerce Clause under the Pike balancing test and the Court should uphold them if it reaches the merits. STANDARD OF REVIEW
T he Court’s r eview of EPA’s decision to grant California’s request for a waiver under the CAA, 42 U.S.C. § 7 543(b), is governed by S ection 706 of the Administrative Procedure Act (“APA”) , 5 U.S.C. § 706

. MEMA I , 627 F.2d at 1105

. The Agency’s decision must be uph eld unless it is “arbitrary, capricious

. . . or otherwise not in accordance with law” or is “contr ary to constitutional right, power, privilege, or immunity[.]” 5 U.S.C. §§ 706(2)(A), (B).

5 Carbon dioxide e missions equivalent is a metric measure used to compare various greenhouse gas emissions based on their global warming potential. Support Document at 1 [JA3 ]. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 32 of 6322 With respect to the Association’s d ormant Commerce Clause challenge there are two relevant standards. First, as to whether t he Association can even bring such a challenge to the Board’s Regulations here, EPA and the Board have the “burden of demonstrating a clear and unambiguous intent on behalf of Congress to permit the discrimination against interstate commerce . . . .” Wyoming v. Oklahoma , 502 U.S. 437, 458 (1 992). In other words, EPA and the Board have the burden to show that Congress intended to remove regulations such as those challenged here from the reach of the dormant Commerce Clause. Second, as to the substantive merits of the Association’s dormant Co mmerce Clause challenge, the “burden to show discrimination rests on the party challenging the validity of the statute. . . .” Hughes v. Oklahoma , 441 U.S. 322, 336 (1979). ARGUMENT
I. THE COURT SHOULD DISMIS S THE PETITION ON PRUDENTIAL GROUNDS BECAUSE THE ASSOCIATION’S DORMANT COMMERCE CLAUSE CHALLENGE IS MORE APPROPRIATELY BROUGHT IN A SUIT AGAINST THE BOARD IN A CALIFORNIA STATE OR FEDERAL DISTRICT COURT . The Association’s challenge is direct ed at the constitutionality of the Board’s Regul ations under the dormant Commerce Clause. The Association has not made any arguments that EPA was arbitrary and capricious in granting the Waiver based on any of the three criteria in CAA Section 7543(b). Although this Court normally has exclusive jurisd iction under CAA Section 7607(b), 42 U.S.C. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 33 of 6323 § 7607(b), to review EPA waivers, this Court is not the appropriate venue for the type of challenge that the Association brings here

– a challenge that, for all practical purposes, is directed at a state action . The Court therefore should dismiss the Petition on prudential grounds so that the Board can file suit in a California state or federal district court to directly challenge the Regulations under the dormant Commerce Clause (assuming any such challenge co uld even be brought, see infra at 27

- 39 ). CAA Section 7607 (b), 42 U.S.C. § 7 607(b), dictates that exclusive jurisdiction over a petition for review challenging a final agency action or any “nationally applicable regulations,” may be filed “ only in the United States Court of Appeals for the District of Columbia.” 42 U.S.C. § 7 6 07(b)(1) (emphasis added). In its Waiver, EPA expressly notified interested persons that: This decision will affect not only persons in California, but also manufacturers an d operators nationwide who must comply with California’s requirements. In addition, because other states may adopt California’s standards for which a section 209(b) waiver has been granted under section 177 of the Act if certain criteria are met, this dec ision would also affect those states and those persons in such states. For these reasons, EPA determines and finds that this is a final action of national applicability, and also a final action of nationwide scope or effect for purposes of section 307(b)( 1) of the Act. Pursuant to section 307(b)(1) of the Act, judicial review of this final action may be sought only in the [D.C. Circuit]. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 34 of 6324 79 Fed. Reg. at 46,265 [JA463 ]

. B ecause EPA’s Waiver has nationwide applicability, jurisdiction under Section 76 07(b) is appropriate only in the D.C. Circui t.
T he Association’s Brief, however, complicates th e Court’s review and poses a prudential question as to whether this Court, despite its jurisdiction, is the appropriate venue for a challenge to a State ac tion bas ed on the dormant Commerce Clause. EP A was not required to consider, and did not consider, the dorman t Commerce Clause issue in its W aiver proceeding. See MEMA I , 627 F.2d at 1115 (Section 7543(b) does not require EPA “to consider the constitutional rami fications of the regulations for which California requests a waiver”). Because EPA was not required to address the dormant Commerce Clause issue in the
W aiver proceeding, the Board is the real party in interest and its analysis of that issue during its ad ministrative proceeding provides the relevant administrative record. The Board therefore is much better

- suited to defend against the substance of the dormant Commerce Clause challenge in the context of a direct challenge to the Board’s Regulations (assumi ng it is proper for any court even to consider the substance of the dormant Commerce Clause challenge)

. A California state or federal district court may have jurisdiction and be the proper venue for any direct dormant Commerce Clause challenge to the Boar d’s Regulations in this particular
context

– a point that EPA even made during its Waiver proceedings. See 79 Fed. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 35 of 6325 Reg. at 46,264 (“Constitutional challenges to [the Board’s] Regulation[s] are more appropriately addressed by a legal challenge directly aga inst the state.”) [JA462 ]

. This Court als o seems to have recognized that such a direct challenge to California’s regulations could be the more appropriate path. For example, in
MEMA I , this Court specifically noted that “[i]f petitioners dislike the sub stance of the [Board’s] regulations, or if they believe the procedures the [Board] used to enact them were unsatisfactory, then they are free to challenge the regulations in the state courts of California.” 627 F.2d at 1105. The Court further explained, however, that although the “waiver proceeding produces a forum ill

- suited to the resolution of constitutional claims . . . petitioners are assured through a petition for review here that their contentions will get a hearing.” Id. at 1115. The Court then proceeded to consider the merits of the petitioners’ constitutional claims (which did not involve a dormant Commerce Clause challenge) along with many additional direct challenges to the waiver, and found that those particular constitutional claims had no merit. Id. at 1127

- 28. Although the MEMA I Court stated, in dicta, that petitioners’ constitutional challenges could be heard through a petition for review in the D.C. Circuit, the MEMA I Court was not confronted with a dormant Commerce Clause challenge like the Court is here, which fundamentally impacts the prudential considerations at issue. In this particular context, contrary to the situation in MEMA I , the relevant constitutional analysis was done by the USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 36 of 6326 Board (not by EPA) and the relevant administr ative record on that issue is the Board’s (not EPA’s). This Court in American Trucking further reiterated the notion that a direct challenge to California’s regulations could be more appropriate when it comes to Commerce Clause challenges. There , the Court rejected the petitioner’s attempt to “i mproperly . . . engraft a type of constitutional Commerce Clause analysis onto EPA’s . . . waiver decisions that is neither present in nor authorized by the statute.” 600 F.3d at 628. The Court went on to note that if a petitioner is “concerned that California’s rule unconstitutionally burdens interstate commerce,” the petitioner “could attempt to bring a constitutional challenge directly to the California rule. We express no view on that possibility.” Id. at 631 n.1. Thus, based on this Court’s prior statements, a California state or federal district court would be better suited to hear this dormant Commerce Clause challenge

– the Board would be able to submit its administrative record and the
state o r federal district court could order any additional relief to further supplement that record if necessary to address the constitutional issue. EPA therefore suggests that the proper remedy , in this particular circumstance, is to dismiss the Association’s Petition on prudential grounds , to allow the Association to file suit directly challeng ing the Board’s Regulations in an appropriate California state or federal district court

. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 37 of 6327 II. THE ASSOCIATION CANNOT BRING THIS DORMANT COMMERCE CLAUSE CHALLENGE TO CALIF ORNIA’S REGULATIONS. If the Court proceeds to consider the Association’s dormant Commerce Clause challenge, the Petition nonetheless should be dismissed. Although EPA did not analyze the merits of the Association’s dormant Commerce Clause claim during the Agency’s administrative process, and was not required to do so, see MEMA I , 627 F.2 d at 1115 , EPA provides the Court here with its position on the merits of that challenge, so as to assist the Court in its consideration of this constitutional issue, s hould it be reached by the Court. EPA also refers the Court
to the discussion of this issue by the Board in its Respondent

- Intervenor brief and in the Board’s administrative record compiled during its administrative process for the Regulations. See 2010 Final Statem ent of Reasons at 23

- 39 [JA366

- 82 ]. As an initial matter, EPA notes that the threshold issue here is not, as the Association claims, whether this Court “has plenary authority to review Petitioner’s constitutional challenge

. . . . ” Pet’s Br. at 2. In this particular c ase , EPA does not dispute that a court can review constitutional issues that an agency did not have authority to consider. Rather, the threshold issue is whether the
A ssociation can even bring this dormant Commerce Clause challe nge to the USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 38 of 6328 Board’s Regulations. For the reasons discussed below, it cannot. 6
It is well

- established “that Congress may redefine the distribution of power over interstate commerce by permitting the states to regulate the commerce in a manner which would otherwise not be permissible.” South

- Central Timber Dev. v. Wunnicke , 467 U.S. 82, 87

- 88 (1984) (citations and internal quotation marks omitted). In such cases, there is no d ormant Commerce Clause challenge available because Congress has specifical ly removed the state action from the reach of the Commerce Clause. As discussed below, that is the situation here with CAA Section 7543(b)

. A. Congress Can Provide That A State Action Should Be Immune From Attack Under The Dormant Commerce Clause . The Commerce Clause of the United States Constitution provides that “[t]he Congress shall have Power . . . [t]o regulate Commerce . . . among the several States . . . .” Art. I, § 8, cl. 3. “Long ago it was settled that even in the absence of
a cong ressional exercise of this power, the Commerce Clause prevents the States from erecting barriers to the free flow of interstate commerce.” Raymond Motor Transp. , Inc. v. Rice , 434 U.S. 429, 440 (1978) (citing Cooley v. Board of

6 EPA noted in the Waiver that “[c]onstitutional challenges to the [California regulations] ar e more appropriately addressed by a legal challenge directly against the state.” 79 Fed. Reg. 46,264 [JA462 ] . That statement, however, does not concede that the Association’s Dormant Commerce Clause challenge against the Board’s Regulations here is legal ly viable. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 39 of 6329 Wardens , 53 U.S. 299 ( 1851 ) ). This aspect is known as the “negative” or d ormant Commerce Clause.
“Th e Commerce Clause is a grant of authority to Congress, and not a restriction on the authority of that body.” White , 460 U.S. at 213 (citation omitted). Thus, as relevant here, “[ w]here state or local government action is specifically authorized by Congress, it is not subject to the Commerce Clause even if it interferes with interstate commerce.” Id. ; see Western & Southern Life Ins. Co. v. State Bd. of Equalization of California , 451 U.S. 648, 652 (1981) (“In the exercise of this plenary authority, Congress may confer upon the States an ability to restrict the flow of interstate commerce that they would not otherwise enjoy.”) ( internal quotation marks omitted)

. Over the years t he Supreme Court has clarified the kind of Congressional intent that must be found before determining that a state action is insulated from a d ormant Commerce Clause attack. In Wunnicke , the Supreme Court determined that there should be “a clear expressio n of approval by Congress” to allow a S tate to take action that will be removed from the reach of the d ormant Commerce Clause. 467 U.S. at 92. As the Court explained, “ [t]h e requirement that Congress affirmatively contemplate otherwise invalid state legi slation is mandated by the policies underlying dormant Commerce Clause doctrine.” Id. at 91

- 92. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 40 of 6330 T he “Commerce Clause was designed to avoid . . . tendencies toward economic Balkanization ” that could force unrepresented interest s in one state to “bear the brunt of regulations” imposed by another state. Id. at 92. But, where Congress acts, “all segments of the country are represented, and there is significantly less danger that one State will be in a position to exploit others.” Id. Further, even if a St ate is in a position to exploit another State, then a decision made by Congress to allow such action at least “is a collective one” that “reduces significantly the risk that unrepresented interests will be adversely affected by restraints on commerce.” Id

. These principles apply with full force here, where it is clear from the legislative history and text of the statute that Congress affirmatively contemplated the type of regulations at issue to allow California to continue to “blaze a trail,” Am. Truckin g , 600 F.3d at 629, even in face of increased costs on industry or potential burdens on interstate commerce.
B. The Legislative History And Text Of CAA Section 7543(b) Preclude The Association’s Dormant Commerce Clause Challenge To The B oard’s Regulations . This Court in MEMA I discussed at length the legislative history behind CAA Section 7543(b), see generally 627 F.2d at 1109

- 11, and this legislative history supports the conclusion here that the Association’s dormant Commerce Clause challenge is precluded. As MEMA I discussed, p rior to 1965, California was the only state that had implemented statewide air pollution control efforts for USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 41 of 6331 motor vehicles. Id. at 1109. I n 1965, Congress enacted the Motor Vehicle Air Pollution Control Act , part of which allowed the Secretary of Health, Education, and Welfare to prescribe federal emission standards. Id. at 1108 n.23 (citing Pub. L. No. 89

- 272, § 20 2, 79 Stat. 992 (1965)). That statute , however, did not contain any preemption provision and , thus , S tates were free to adopt emission regulations of their own. Id. This “raised the spectre of an anarchic patchwork of federal and state regulatory programs, a prospect which threatened to create nightmares for the manufacturers.” Id. at 1109. C onsequently , in 1967, Congress considered enacting a preemption provision. During the debates concerning a preemption provision, representative s of the State of California were clearly opposed to displacing the State’s right to set more stringent standa rds to meet peculiar local conditions. The auto industry conversely was adamant that the nature of their manufacturing mechanism required a single national standard in order to eliminate undue economic strain on the industry. Id

. Taking these consider ations into account, the Senate Committee “ that formulated the waiver provision understood the costs involved in making an exception for California and decided to recommend that these costs be absorbed by allowing a waiver not of part of the preemption pro vision, but of the entire [preemption provision].” Id. (emphasis added). The Committee and ultimately USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 42 of 6332 Congress therefore spoke on the issue of the costs associated with allowing California to proceed with its own standards and, in the end, concluded that the advantages of the California exception included the benefits for the Nation to be derived from permitting California to continue its experiments in the field of emissions control . . . and the benefits for the people of California to be derived from letting that State improve on its already excellen t program of emissions control. Id. at 1109

- 10.
In the 1977 CAA amendments , Congress further strengthened California’s waiver provision . The prior version of the waiver provision (enacted in 1967)
requ ired that California’s standards be “more stringent” than Federal standards. In the 1977 CAA amendments, Congress revised that language to require California
to ensure only that its standards will be “in the aggregate, at least as protective of public hea lth and welfare [as] applicable Federal standards

. ” MEMA I , 627 F.2d at 1110. Quoting the legislative history to the 1977 amendment , th e MEMA I Co urt emphasized that this “amendment [was] intended to ratify and strengthen the California waiver provision and to affirm the underlying intent of that provision,
i.e. , to afford California the broadest possible discretion in selecting the best means to protect the health of its citizens and the public welfare.” Id. (quoting H.R. Rep.
No. 95

- 294, 301

- 02 (1977), reprinted in 1977 U.S. C.C.A.N. at 1 380)). Thus, as stated in MEMA I , USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 43 of 6333 The history of congressional consi deration of the California waive r provision, from its original enactment up through 1977, indicates that Congress intended the State to continue and expand its pioneering efforts at adopting and enforcing motor vehicle emission standards different from and in large measure more advanced than the corresponding federal program; in short, to act as a kind of laboratory for innovation. 627 F.2d at 1110

- 1 1. This legislative history shows Congress’ transparent and explicit intent to give California a special seat at the table when it comes to formulating motor vehicle emission standards to protect the health and welfare of its own citizens because of the benefits not only for California, but for the N ation as a whole

. Congress weighed the issue of potential costs to manufacturers who have to comply with two sets of standards against the benefits the rest of the country would receive by allowing California to continue to “act as a kind of laboratory for innovation

. ” Id. at 1111. Ultimately , Congress made a collective decision that allowed California to elevate its i nterests in protecting public health and welfare above other States and above any concern o ver burdens on interstate commerce, thereb y showing “a clear expression of approval” to allow the Board’s Regulations here to be removed from the reach of the d ormant Commerce Clause. Wunnicke , 467 U.S. at 92. The clear Congress ional intent evident in the legislative history is likewise reflected in the actual text of Section 7543(b) . E P A must grant California a waiver USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 44 of 6334 if California determine s that its standards “will be, in the aggregate, at least as protective of public health and welfare as applica ble Federal standards .” Congress directed EPA to deny the waiver request only if (1) California’s determination is arbitrary and capricious; (2) California does not need such standards “to meet compelling and extraordinary conditions”; and ( 3 ) California’ s standards and accompanying enforcement provisions are not consistent with 42 U.S.C. § 7521(a) of the CAA. 42 U.S.C. § 7543(b). No thing in the text of Section 7543 (b) requires or suggests that California’s standards must not impose a ny barrier to the fr ee flow of interstate commerce. 7 Further, Congress specifically allowed other S tates to adopt California’s new motor vehicle emission standards, 42 U.S.C. § 7507, thereby recognizing that all other S tates could elect to be on an e ven footing with Californ ia should they wish to adopt the same standards. A more explicit expression of Congressional intent to allow a state to issue the type of regulations at issue here and, thus, to be insulated from the reach of the dormant Commerce Clause is hard to imag ine. If , as here, Congress ordains that the States may freely regulate an aspect of interstate commerce, “ any action taken by a State within the scope of the congressional authorization is rendered

7 There may be unidentified circumstances (that are not present here) where EPA’s consideration of the criteria in CAA Section 7543(b), which allow for limited consideration of costs and consistency with Section 7521(a), could effectively li mit the impact of California’s regulations on interstate commerce

. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 45 of 6335 invulnerable to Commerce Clause challenge.” Western & So uthern Life Ins. , 451 U.S. at 652

- 53.
T he Association has not argued (and cannot now argue) that the Board’s regulations were not within the scope of th at Congressional authorization, i.e. , that the regulations did not meet the criteria listed above in S ection 7543 (b) , and, thus, present dormant Commerce Clause vulnerabilities

. In fact, the Association’s argument has nothing to do with whether the criteria in Section 7543 (b) have been
met or whether the Regulations are within the scope of Section 7543 (b) . The Association therefore has waived any such argume nt

. See Catawba Cty v. EPA , 571 F.3d 20, 38 (D.C. Cir. 2009) (petitioners waived two of their arguments by failing to raise them in their opening brief). At least one federal district court has agreed that regulations issued by the Board under Section 7543(b) are immune from challenge under the dormant Commerce Clause. In Central Valley Chrysler

- Jeep v. Witherspoon , 456 F. Supp. 2d 1160 (E.D. Cal. 2006), plaintiffs challenged Californ ia regulations fo r which EPA subsequently granted a waiver. One of plaintiffs’ arguments was that the regulations violated the dormant Commerce Clause. Id. at 1183

- 86. Relying on the principles discussed above, as well as this Court’s discussion of the legislative histo ry behind Section 7543(b) in MEMA I , the Witherspoon court found that the plaintiffs failed to state a claim under the dormant Commerce Clause. Id. at 1186. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 46 of 6336 “The legislative history makes clear that both the House and the Senate considered that the Calif ornia regulations under the waiver would substantially burden interstate commerce. Nevertheless, realizing the benefits for California and for the nation from allowing the state broad authority, Congress enacted the waiver anyway.” Id. at 1185. In light of that legislative history, Congress gave “unmistakably clear permission to California to burden interstate commerce.” Id. at 1186 (internal quotation marks omitted). Although t he legislative history and text of Section 7543 are clear in this

r egard, they do not specifically use the phrase “ Comme r ce Clause

. ” The omission of that specific phrase, however, is irrelevant. Congress expressly address ed

commerce - related issues through its consideration of costs imposed on the regulated community and specifically allowed Californi a to proceed despite t hose
costs concerns. All that is required to remove a state action from the reach of the dormant Commerce Clause is that Congress “affirmatively contemplate[d] otherwise invalid state legislation.” Wun nicke , 467 U.S. at 91; see Wh ite , 460 U.S.
at 213 (upholding city executive order against dormant Commerce Clause challenge because the relevant federal regulations “ indicate [] that the

. . . executive order sounds a harmonious note; the federal regulation s for each program affirmatively permit the type of parochial favoritism expressed in the order. ” ); see also Envt’l Tech. Council v. Sierra Club , 98 F.3d 774, 782 (4 th Cir. 1996) USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 47 of 6337 (“Congress need not state that it intends to override the dormant Commerce Cl ause, but it must affirmatively have contemplated the otherwise invalid state legislation.”). Thus , although Congress did not expressly use the phrase “Commerce Clause” in CAA Section 7543 (b) and the legislative history , Congress nonetheless affirmatively contemplated

– through its consideration of a separate emissions program for California and the potential costs to industry

– t he type of regulations at issue here that may otherwise violate the dormant Commerce Clause. This cas e is easily disti nguishable from other cases where no such affirmative Congressional contemplation was found. For example, in Sporhase v. Nebraska , 458 U.S. 941 (1982), landowners who owned contiguous tracts of land in Colorado and Nebraska challenged the constitutionalit y of a Nebraska statute restricting the withdrawal of groundwater from any well in Nebraska that was intended for use in an adjoining state. Id. at 943. Relying on 37 different statutes and other interstate compacts, Nebraska argued “that Congress has au thorized the States to impose otherwise impermissible burdens on interstate commerce in ground water . . . .” Id. at 958. The Supreme Court found that those statutes and state compacts did “ not indicate that Congress wished to remove federal constitution al constraints on such state laws.” Id. at 959

- 60. The fact that Congress had let States settle their own differences through compacts rather than enacting a federal law, was not “persuasive evidence that Congress consented to USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 48 of 6338 the unilateral imposition o f unreasonable burdens on commerce.” Id. at 960. Here,
i n contrast to t h at situation ( where there was a lack of a federal statute affirmatively contemplating the otherwise invalid state action ) there is a specific federal statute

– CAA Section 7543 (b)

– which provides the requisite affirmative Congress ional contemplation to immunize the Board’s Regulations from the d ormant Commerce Clause

. Another distinguishable case is New England Po wer Co. v. New Hampshire , 455 U.S. 331 (1982)

. There, th e s tatute and legislative history were notably less explicit than the text of CAA Section 7543(b) and legislative history here. In that

case , New England Power challenged a New Hampshire statute that required New England Power to sell electricity to New Hamp shire utilities in an amount equal to the output of its in

- state hydroelectric facilities. Id. at 336. The Supreme Court found that the language of the federal statute at issue was not “an affirmative grant of power to the states to burden interstate com merce in a manner which would otherwise not be permissible[,]” and “[n]othing in the legislative history or language of the statute evince[d] a congressional intent to alter the limits of state power otherwise imposed by the Commerce Clause.” Id. (citatio ns and internal quotation marks omitted). That is not the case here where, again, there is such an affirmative grant of power to California

– both in the legislative history and USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 49 of 6339 statutory text

– to alter the limits of state power that otherwise would be i mposed by the dormant Commerce Clause. Given this clear Congressional intent, t he Board’s Regulations here are invulnerable from the d ormant Commerce Clause challenge the Association present s and the Court should dismiss the Petition

. III. EVEN IF THE COURT REACHES THE DORMANT CLAUSE CHALLENGE , THE ASSOCIATION’S CLAIM HAS NO MERIT. Even if the Court concludes that the dormant Commerce Clause applies to the Board’s Regulations, the Association’s claim still lacks merit. “To determine whet her a law violates [the] so

- called ‘dormant’ aspect of the Commerce Clause, [the Court] first ask[s] whether it discriminates on its face against interstate
commerce.” United Haulers , 550 U.S. at 338 (citations omitted). “‘[D]iscrimination’ simply means differential treatment of in

- state and out

- of

- state economic interests that benefits the former and burdens the latter.” Id. Here, the Board’s R egulations do not treat in

- state and out

- of

- state interests differently. The Board’s R egulations apply to ne w 53

- foot or longer tractors (for model years 2011

- 2013) and trailers (for model year 2011 and later) pulled by such tractors that travel on California highways

. 79 Fed. Reg. at 46,257 [JA455 ]. The
R egulations reduce greenhouse gas regulations by, inter alia , “requiring certain tractors and semitrailers on California highways to employ aerodynamic USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 50 of 6340 technologies and low

- rolling

- resistance tires.” Id . The Board determined that these upgrades would yield the greatest greenhouse gas reductions when tractors and trailers operate frequently at highway speeds. Id. The R egulations thus exempt certain types of tractors and trailers that the Board determined are less likely to travel frequently at those highway speeds. Id. ; 17 C.C.R. § 95301(b), (c). 8
The Asso ciation claims that these exemptions “ insulate[] California ‘in

state’ trucke rs fro m compliance, but require[] interstate long

- haul truckers to shoulder the full burden and expense of regulatory compliance.” Pet’s Br. at 3. The R egulations, however, do n ot exempt all in

- state tractors and trailers, nor do all of the exemptions cover only in

- state vehicles. For example, there may be local

- haul tractors and trailers (that travel within a 100

- mile radius of their base) exempt from the regulations that are l ocated out

- of

- state and merely cross the border into California. Also, as even the Association acknowledges, the short

- haul exemption is not “limited on its face to local interests[.]” Pet’s Br. at 7. Yet, the Association claims (without any support) t hat the short

- haul exemption would “exempt virtually all otherwise covered trucks and trailers that operate predominantly within the state.” Id. Although the Association offers no support for its vague reference s to

8 See supra n. 3

. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 51 of 6341 exempting “virtually all” in

- state tra ctors and trailers, it cites to a registry indicating that California

- based “interstate motor carriers average 42,243 miles in California, an amount that might qualify them for the short

- haul exemption when only their miles operated in California were fact ored in.” Id. at 8 (citing Association Comments) [JA421 ]. The mileage used to determine whether a tractor is “short

- haul,” however, includes in

- state and out

- of

- state miles, which have to equal less than 50,000 miles per year. 17 C.C.R. § 95302 (a) (52). Thus, any tractor or trailer that travels less than 50,000 miles

– whether it comes fr om Los Angeles or Las Vegas

– could qualify for the short

- haul exemption. The Association’s reliance solely on the in

- state miles of “interstate motor carriers” based i n California therefore misses the point. Further, a s stated by the Board, the purpose of the short

- haul exemption is to provide some regulatory relief for “trucks that will not substantially benefit from the use of aerodynamic devices” because they “eithe r infrequently operate at highway speeds or generate low mileage” and thus the technology would achieve lower fuel savings and be less cost

- effective. 20 08 Final Statemen t of Reasons at 126

- 27. [JA298

- 99 ]

. The Board fully responded to the Association’s s ame arguments on this exemption during the Board’s administrative proceedings for the Regulations. 2 010 Final Statement of Reasons
at 23

- 31, 50

- 52 [JA366

- 74, JA393

- 95 ]

. The short

- haul exemption therefore USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 52 of 6342 properly provides a level playing field in this re gard between in

- state and out

- of

state entities. Overall, t he R egulations cover long

- haul tractors and trailers (which include both in

- state and out

- of

- state tractors and tr ailers) that operate in California and do
not discriminate on their face against out

- of

- state commerce by benefitting in

- state economic interests and burdening out

- of

- state economic interests. First, “[t]he regulation provides a ‘level playing field,’ requiring all motor carriers involved in the long

- haul transport of freight in 53 fo ot or longer box

- type trailers to comply with the regulation’s equipment requirements when traveling on California highways

– whether they are based in California or out

- of

- state.” 2010 Final Statement of Reasons at 24 [JA367 ]. Each of the exemptions und er the Regulations are available to both in

- state and out

- of

- state entities that meet the eligibility criteria. Id. at 28 [JA371 ]. Thus, the exemptions do not benefit in

- state businesses at the expense of out

- of

- state businesses. Id. Second, California expressly stated that the justification for focusing on lon g - haul tractors and trailers was that the aerodynamic and other efficiency upgrades would yield the greatest results only when installed on vehicles that operate frequently at highway speeds (the l ong - haul tractors). 79 Fed. Reg. at 46,257 [JA455 ]

. T he exemptions for other types of tractors and trailers that will not travel at such highway speeds had nothing to do with trying to benefit in

- state USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 53 of 6343 economic interests over out

- of

- st ate interests. 201 0 Final Statement of Reasons at 30 [JA373 ] (“[S[hort

- haul tractors are exempted from the requirements, not because they travel fewer miles and as a result produce less [greenhouse gas] emissions than long

- haul tractors, but because, at the speeds they are operated, the aerodynamic devices installed on these vehicles provide minimal or zero [greenhouse gas] emission benefits.”). T he Association does not argue to the contrary ; instead, the Association takes issue with the technical basis for the Board’s regu latory exemption s . Pet’s Br. at 9

- 11. None of the Association’s substantive attacks on the Board’s technical determinations, however, deserves attention because the Association fails to make any argument that these determinations (and EPA’s acceptance of these determinations) were arbitrary and capricious. At any rate, those technical attacks fail to show how the R egulations are discriminatory on their face. All in

- state and out

- of

- state tractor

- trailers that are covered under the regulations are treate d exactly the same. See United Haulers , 550 U.S. at 345. Because the California R egulations are not discriminatory on their face, any dormant Commerce Clause analysis should proceed under the balancing test in Pike v. Bruce Church, Inc. , 397 U.S. 137 (1970). United Haulers , 550 U.S. at 346. That test applies to laws “directed to legitimate local concerns, with effects upon interstate commerce that are only incidental.” Id. (citation and internal quotation USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 54 of 6344 marks omitted). “Under the Pike test, [the Court] will uphold a nondiscriminatory statute like this one unless the burden imposed on interstate commerce is clearly excessive in relation to the putative local benefits.” Id . (quoting Pike , 397 U.S. at 142). Under this test, the Board’s R egulations are valid. In its brief, t he Association focuses largely on the alleged higher costs it claims will be borne by out

- of

- state tractor and trailer operators. Pet’s Br. at 12

- 14. The Association , however, creates a superficially large figure for complianc e by multiplying the small cost of compliance by the largest number of vehicles that could be subject to the Regulations, without noting that EPA and the Board estimated that the costs of compliance would be paid back through fuel savings in one to one and a half years or less for tractors and in less than eleven months for trailers. 79 Fed. Reg. a t 46,263 [JA461 ]. 9
The Association also mischaracterizes EPA’s statement during the Waiver
proce eding t hat “[a] disproportionate impact on out

- of

- state carri ers is supported by [the Board’s] data as well.” 79 Fed. Reg. at 46,264, n.103 [JA462 ] ; see id. (stating that “over 90% of the cost impact of California’s Regulations is expected

9 In calculating its cost estimates for trailer compliance, the Association also incorrectly uses the figure of $2,900 (which would have been recovered through fue l savings within eighteen months) , rather than the Board’s revised estimate of $1,250 (which will be recovered within an average of eleven months). See Pet’s Br. at 12; see also 79 Fed. Reg. at 46,263 (indicating Board’s decreased cost estimate for traile rs ) [JA461 ]

. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 55 of 6345 to occur outside California”); Pet’s Br. at 15. That contention, on its own , does not justify a finding under the Pike balancing test that the burden imposed on interstate commerce is clearly more excessive in relation to the putative local benefits. Any incidental burden on interstate commerce (which is recouped through the pay back periods through fuel savings) does not exceed the public health benefits of the Board’s Regulations. See United Haulers , 550 U.S. at 346 ( find ing it “unnecessary to decide whether the [regulations] impose any incidental burden on interstate

commerce because any arguable burden does not exceed the public benefits of the [regulations].” ). Specifically, California faces uniquely difficult challenges in meeting the national ambient air quality standards for ozone. California is the only state to ha ve any area classified as “extreme” nonattainment for ozone under the CAA, and it has two large areas and several other smaller areas in “severe” nonattainment. 40 C.F.R. § 81.305. Climate change is expected to exacerbate this problem. 74 Fed. Reg. 32,7 44, 32, 746, 32,760 (July 8, 2009) [JA464 , JA466, JA480 ]. Although these Regulations by themselves will not result (and are not required to result) in the attainment of the ozone standards, California needs to consider every possible emissions reduction to achieve the level of public health protection required by the CAA. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 56 of 6346 The air pollution issues facing California today are a continuation of the same issues that led California to regulate emissions from motor vehicles beginning in 1963 and that led Congre ss to authorize California to continue its own motor vehicle emission program. Moreover , the legislative history behind CAA Section 7543 (discussed above, supra at 29

- 31) shows Congress’ recognition of the difficulties facing California and the extreme im portance that Congress placed on California being able to exercise the broadest discretion in determining the emissions regulations that would enable it to achieve cleaner air and provide appropriate protection for the public health and welfare of its citi zens . L ike the county ordinances in United Haulers that addressed waste disposal, the Board’s
R egulations here can be viewed as an “exercise[] of [its] police power in an effort to address” air emissions, “a typical and traditional concern of local govern ment.”
550 U.S. at 347. Indeed, t he Board projects that the R egulations will reduce greenhouse gas emissions in California by “0.7 million metric tons of carbon

dioxide equivalent emissions by 2020” and “reduce nitrogen oxide . . . emissions in Californi a by 3.1 ton s per day in 2014, thereby helping California meet the national ambient air quality standards for particulate matter and ozone.” 79 Fed. Reg. at 46,257 [JA455 ]

. Those significant public benefits in contributing to the attainment USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 57 of 6347 of the nation al ambient air quality standards outweigh an y purported burden on interstate commerce. 10
None of the cases on which the Association relies undermines this result. For example, Raymond Motor Trans., Inc. v. Rice , 434 U.S. 429 (1978) is inapposite and, indee d, supports that the Board’s Regulations are constitutional.
Pet’s Br. at 25

- 26; 32. In Raymond , the Supreme Court held that Wisconsin regulations limiting the length of trucks operated in that state violated the Commerce Clause under the Pike balancing test. The Supreme Court found that Wi sconsin had produced virtually no evidence to demonstrate that its regulations contributed to highway safety, whereas the challengers had demonstrated that the regulations imposed a substantial burden on interstate com merce. Id. 444

- 45. In addition, although state regulations th at promote highway safety are entitled to a “strong presumption of validity,” id. at 444, n.19 the “great number of exceptions ” to th e Wisconsin regulation “weaken the presumption in favor of t he validity” of the regulation. Id. at 44 6

- 4 7. Importantly, the Court stated that its “holding is a

10 The Association incorrectly claims that there could be “runaway state regulation . . . if every one of the other 49 states also promulgated their own separate regulatory regime. . . .” Pet’s Br. at 33; id. at 33

- 34 (“such a scenario wou ld ‘wreak havoc’ on the nation’s interstate transportation system”). That is not possible under CAA Section 209(b). As explained above, see supra at 6

- 7 , there can be only two sets of motor vehicle emission standards: the federal standards or the Califo rnia standards (which other states can adopt under CAA Section 7507, 42 U.S.C. § 7507). USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 58 of 6348 narrow one” because the Court did “not decide whether laws of other States restricting the operation of trucks over 55 feet long, or of double

- trailer tru cks, would be upheld if the evidence produced on the safety issue were not so overwhelmingly one

- sided as in this case.” Id. at 447. Unlike in Raymond , the benefits of the Board’s Regulations here are well

supported

. See 2008 Initial Statement of Reaso ns at ES5

- 6, 52

- 66 [JA44

- 45, JA98

- 112 ]. Further, t he Association’s arguments focus only on t he costs the industry will bear. These arguments about costs, however, either lack evidentiary suppo rt, 79 Fed. Reg. at 46,263 [JA461 ], or were considered and rea sonably rejected by the Board, id. at 46,264 [JA462 ]; 2008 Final Stat ement of Reasons at 81

- 105 [JA253

- 77 ]. Moreover, the Board reasonably concluded that b ecause of improved fuel economy, t hese costs will be recovered within one to one and a half years fo r tractors, and within e leven months for trailers. Support Document at 21, 25 [JA23,
JA27 ]. Finally , the Board amply responded to comments that disputed the speeds at which short

- and l ong - haul tractors would travel, 2008 Final Statement of
Reasons at 44

- 52 [JA216

- 24 ] , which justified the exemptions the Board created. In short, the Association simply provides in sufficient evidence to contradict the well

- documented benefits of the Board’s Regulations or to raise any doubt as to whether these benefits outw eigh any incidental burdens that will be recouped through eventual fuel savings. USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 59 of 6349 Finally, Bibb v. Navajo Freight Lines, Inc. , 359 U.S. 520 (1959) does not support the Association’s argument. Pet’s Br. at 25. The Supreme Court in Bibb found an Illinois law unconstitutional because it required a certain kind of mudguards for trucks. This particular type of mudguard conflicted with an Arkansas law and, in fact, made a particular type of mudguard that was legal in at least 45 states, illegal in Illinois. Id. at 523. Here, there is no evidence of any such conflict between the Board’s Regulation and any other state regulation. To the contrary, other states are free under CAA Section 7507, 42 U.S.C. § 7507, to adopt the Board’s Regulation. For these reaso ns, even if a dormant Commerce Clause analysis is deemed to apply here, the Board’s Regulation s do not violate the d ormant Commerce Clause and EPA’s Waiver therefore is not contrary to constitutional right under the APA

. CONCLUSION For the foregoing reas ons, the Court should dismiss the Association’s petition for prudential reasons or deny the petition on the merits

. Respectfully submitted,
JOHN C. CRUDEN Assistant Attorney General __/s/ Michele L. Walter

__________ MICHELE L. W ALTER United States Department of Justice Environment & Natural Resources Division USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 60 of 6350 Environmental Defense Section P.O. Box 7611 Washington, D.C. 20044 Tel: (202) 514

- 2795 Fax: (202) 514

- 8865 Michele.Walter@usdoj.gov Counsel for Respondent
OF COUNSEL Winifred Okoye Office of General Counsel U.S. Environmental Protection Agency 1200 Pennsylvania Ave., N.W. Washington, D.C. 20460 Tel: (20 2) 564

- 5446
June 16 , 2015 USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 61 of 6351 CERTIFICATE OF COMPLIANCE WITH WORD LIMITS Pursuant to Fed. R. App. P. 37(a)(7)(C), and exclusive of the components of the brief excluded from the word limit pursuant to Fed. R. App. P. 32(a)(7)(B)(iii) and Circuit Rule 32 (a)(1), I certify th at the foregoing Final Brief for Respondent contains 11,239 words, as counted by the “word count” feature of my Microsoft Office Word software.
/s/ Michele L. Walter MICHELE L. WALTER USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 62 of 6352 CERTIFICATE OF SERVICE I hereby certify that all counse l of record who have consented to electronic service are being serv ed with a copy of the foregoing Final Brief for Respondent via t he Cou rt’s CM/ECF system on June 16 , 2015

. /s/ Michele L. Walter MICHELE L. WALTER USCA Case #14-1192 Document #1557976 Filed: 06/17/2015 Page 63 of 63