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TESTIMON

Y O F TH E SPECIALTY EQUIPMENT MARKE T ASSOCIATION AND TH E AUT O INTERNATIONAL ASSOCIATION ONCALIFORNI AWAIVE R REQUEST , OB D I I REGULATION S

Christophe r J . Kersting SEMA/AI ALega l Counse l OCTOBE R 17 , 199 5

I . Introductio

n The following statemen t i s submitte d o n behal f o f the Specialt yEquipmen t Marke t Associatio n (SEMA ) an d th e Aut o Internationa l Associatio n (AIA) . SEM Ai s mad e up o f ove r 280 0 membe r businesse s wh o manufacture , impor t an d distribut e automotiv e part s an d accessories . AI Ai s comprise d o f ove r 30 0 membe r companie s wh o import , manufactur e and distribut e automotiv e part s primaril yfo r foreign name-plat e vehicles . Fo r purpose s o f thi s testimon yI wil l refe r t o thes e organization s a s "the Associations. " Th e member s o f thes e organization s hel p mak e up the independen t automotiv e aftermarket , providing consumer s th e benefit s o f choice , qualit yan d competitiv e price s i n obtaining vehicl e servic e an d repairs . Th e Association s an d AI A appreciat e the opportunit yt o provid e th e following statement s o n a n issu e theyfee l i s critica l t o the industry' s future . Th e Californi a Ai r Resource s Boar d (CARB ) long ag o adopte d regulation s whic hhave a s thei r purpos e the contro l o f emission s frommoto r vehicles . Californi a i s rar e among th e state s i n bein g abl e t o adop t it s ow n emissio n contro l regulations , al l othe r state s being preempte d a s a matte r o f federa l law . Californi a mayestablis hemission s standard s bu t onl yi f i t complie s wit hstatutorywaive r procedure s se t fort hunde r Sectio n 20 9 o f th e Clea n Ai r Ac t (CAA) . Fo r some time now , California' s clea n ai r programha s establishe d standard s o f performanc e fo r ne wan d in-us e moto r vehicles . However , i t ha s become increasingl yapparen t tha t whil e ne wvehicle s can b e produce d t o mee t stringen t emissio n standards , i t i s mor e difficul t t o insur e tha t thos e standard s ar e me t during th e lif e o f th e vehicle . I n orde r t o dea l wit hin-us e compliance , CARB ha s adopte d an d enforce d regulation s requiring on-boar d diagnosti c system s fo r 199 4 an

d late r mode l yea r vehicle s (OB D II) . .Thes e regulation s hav e undergon e a serie s o f amendments , the mos t recen t o f whic hwa s formall yadopte d b yCARB o n Apri l 26 , 1995 . Th e Association s hav e provide d comment s an d testimon

ythroughou t CARB' s rulemaking procedures . During thi s time , CARB ha s bee nP. 3

Octobe r 17 , 199 5 Pag e 2

enforcing thes e regulations , boldl yignoring th e Sectio n 209(b ) requiremen t tha t i t obtai n a waive r prio r t o adopting an d enforcing OB D II . Bot hCARB an

d EPAacknowledg e tha t CARB ha s bee n enforcing it s OB D I I requirement s withou t a waiver . Now , two o r mor e year s sinc e beginning enforcement , CARB i s finall yseeking the waive r i t shoul d hav e requeste d thre e year s ago . Whil e CARB ha s bee n developin g and enforcing it s OB D I I requirements , EPAha s simultaneousl ybee n promulgating OB D regulation s pursuan t t o CA ASectio n 202(m) , establishe d wit hthe CA AAmendment s o f 1990 . EPA' s OB D programcreate s standard s fo r ne wmoto r vehicle s whic hwil l b e offere d fo r sal e i n al l state s excep t Californi a an d thos e state s having adopte d California' s emissio n contro l standards . Again , th e Association s hav e activel yparticipate d i n th e developmen t o f EPA' s OB D regulations . Th e Association s hav e bee n involve d becaus e OB D pose s a ris k t o the aftermarket , a ris k tha t Congres s sough t t o minimiz e i n drafting the languag e o f Sectio n 202(m) . Specifically , Congres s wa s concerne d tha t OB D system s coul d b e use d t o exclud e the aftermarke t fro m performin g vehicl e servic e an d repair . T o counte r thi s threat , Congres s provide d detaile d languag e requiring tha t OBD-relate d informatio n b e mad e availabl e t o th e aftermarke t an d tha t th e systemno t contai n feature s whic h coul d allo wvehicl e manufacturer s t o eliminat e aftermarke t service. 1 A s explaine d mor e full ybelow , whe n EPA' s regulation s hav e straye d fro

m the mandate s o f Sectio n 202(m) , SEMA , AI Aan d othe r aftermarke t organization s hav e challenge d the regulations . Mos t relevan t t o CARB' s waive r reques t i s th e aftermarket' s challeng e i n federa l appeal s cour t objecting t o certai n "antitampering " provision s w e fel t wer e contraryt o th e requirement s o f Sectio n 202(m) . A s a resul t o f th e petition , EPAagree d t o hav e th e cour t vacat e the antitampering provisions , including languag e tha t woul d hav e allowe d complianc e wit hth e federa l rul e through 199 8 b ydemonstrating complianc e wit hCalifornia' s OB D I I antitampering requirements." 2 I t i s agains t thi s background tha t CARB ha s no wdetermine d t o mov e forward wit hit s waive r request . B ylette r o f Jun e 14 , 1995 , CARB ha s state d tha t regardles s o f whethe r EPAview s th e

Se e CA ASees . 202(m ) (4) , 202(m ) (5 ) , 4 2 U.S.C . 7521(m)(4) , 4 2 U.S.C . § 7521(m)(5 ) (as amended , 1990 ) 5 9 Fed . Reg . 51114 , 51115 , (1994) .P. 4

Octobe r 17 , 199 5 Pag e 3

OB D I I regulatio n a s a n accompanying enforcemen t procedur e o r a s ne wstandards , th e requisit e finding s t o suppor t a gran t o f waive r o f federa l preemptio n have bee n met . Th e Association s disagre e an

d reques t tha t the waive r reques t b e denie d fo r th e reason s se t fort hbelow . II . Waive r Analysi s a . Th e AR B OB DRegulatio

ni s a "Standard " Sectio n 20 9 o f th e Clean Ai r Ac t require s EPAt o waiv e federa l preemptio n o f moto r vehicl e emissio n contro l regulation s fo r th e Stat e o f Californi a unles s EPAmake s certai n finding s tha t th e waive r i s inappropriate. 3 I f th e regulatio n i s viewe d a s a "standard " Californi a mus t firs t determin e tha t th e standar d wil l be , i n the aggregate , a t leas t a s protectiv e o f publi c healt han

d welfar e a s applicabl e federa l standards . Thereafter , EPAshal l no t gran t th e waive r i f i t find s (1 ) tha t th e state' s protectivenes s determinatio n i s arbitraryan d capricious , (2 ) tha t the stat e doe s no t nee d separat e stat e standard s t o mee t compelling an

d extraordinaryconditions , o r (3 ) tha t th e stat e standard s an

d accompanying enforcemen t procedure s ar e no t consisten t wit hSectio n 202(a ) o f th e CAA. 4 On the othe r hand , i f th e EPAdetermine s tha t the regulation s ar e "accompanying enforcemen t procedures " pertaining t o standard s fo r whic ha waive r ha s alread

ybee n granted , the EPAonl yconsider s whethe r the enforcemen t procedure s endange r a previousl ydetermine d protectivenes s determinatio n an d whethe r the enforcemen t procedur e i s consisten t wit hth e inten t o f Sectio n 202(a ) o f the CAA. 5 Th e Association s asser t tha t th e CARB OB D I I regulatio n i s a standard . CARB' s OB D I I woul d creat e a ne wleve l fo r in-us e emissions , requiring a malfunctio n indicato r lam p t o b e lighte d whe n th e OB D system predict s a vehicl e i s operating a t 1. 5 time s the allowabl e ne wvehicl e emissio n standards . Californi a wil l no t allo wth e registratio n o f a vehicl e prio r t o having a n MI L proble mcorrected . Vehicl e owner s wil l b e instructe d t o see k diagnosti c servic e an d repair s whe n th e MI L i s lit . Clearly , Moto r & Equipmen t Manufacturer s Association , (MEMA ) e t al . v . EPA . 62 7 F.2 d 1095 , 1100 . (D.C . Cir . 1979) . Id . a t 1111 . Id . a t 1114 .P. 5

Octobe r 17 , 199 5 Pag e 4

1.5xrequiremen t establishe s a ne wmaximu mtolerabl e emissio n level . O n thi s poin t the cour t i n MEM Areasoned : "The Administrato r ha s consistentl ymad e a distinctio n betwee n standard s an d accompanying enforcemen t procedures , confining th e forme r t o regulation s o n quantitativ e level s o f emissions . I n construing th e wor d "standards " i n anothe r sectio n o f th e Clean Ai r Act , the Supreme Cour t define d the ter ma s " a quantitativ e 'level ' t o b e attaine d b ythe us e o f 'techniques,''controls, ' an d 'technology. ' Adamo Wrecking Co . v . Unite d States . 43 4 U.S . 275 , 286 , 9 8 S.Ct . 566 , 573 , 5 4 L.Ed . 2 d 53 8 (1978) . I n ligh t o f thes e considerations , w e canno t conclud e the "Administrator' s definitio n i s unreasonable". 6 O n th e basi s o f th e foregoing the Association s asser t th e CARB OB D I I regulation s represen t a "standard. " Therefore , th e thre e par t analysi s I'v e note d abov e i s appropriat e i n reviewing the ARB waive r application . However , shoul d EPAdetermin e th e regulation s ar e accompanying enforcemen t procedures , the Association s submi t CARB ha s stil l faile d t o mee t th e requiremen t o f consistenc ywit hthe inten t o f Sectio n 202 . b . Arbitrar

y an dCapriciou s Determinatio na s t o Protectivenes s Unde r th e firs t pron g o f the waive r analysis , EPAmus t conside r whethe r California' s decisio n tha t it s OB D regulation s ar e a t leas t a s protectiv e o f publi c healt han d welfar e a s applicabl e Federa l standard s wa s arbitraryan d capricious . Congres s wa s carefu l t o craf t th e OB D requirement s i n Sectio n 2 02(m ) s o tha t implementatio n o f th e progra mwoul d no t hampe r th e opportunit yo f the independen t aftermarke t t o provid e servic e an

d repair. 7 Congres s di d s o recognizing tha t a competitiv e independen t aftermarke t i s critica l t o achieving th e

Id . a t 1113 . [footnot e omitted] . "Sectio n 202(m)(4)--Specifi c Requirements.-

- I n promulgating regulation s unde r thi s subsection , th e Administrato r shal l require-

-

. . . (B ) tha t acces s t o th e emission s contro l diagnostic s systemthroughsuc hconnector s shal l b e unrestricte d an d shal l no t requir e an yacces s cod e o r devic e whic hi s onl yavailabl e fro

ma vehicl e manufacturer;... "P. 6

Octobe r 17 , 199 5 Pag e 5

ai r qualit ygoal s o f th e Clea n Ai r Act . Providin g cleane r ai r i s a t th e hear t o f th e "protectiveness " issu e i n thi s analysis . EP Asubsequentl ypromulgate d OB D regulations , seekin g t o adher e t o th e statutor ycompetitivenes s requirements . However , th e regulation s containe d "antitampering " provision s a t subsection s 86.09 4 - 17(j ) an d 86.09 4 - 1 8 whic hclearl y contravene d th e requirement s o f 202(m). 8 Bot hsubsection s allowe d tha t complianc e wit hCaliforni a OB D I I regulations , includin g th e "tamperin g prevention " provision s o f CARB' s Sectio n 1968.1(d) , woul d b e acceptabl e t o EP Afo r federa l complianc e throug hth e 199 8 mode l year . A s note d previously , i n vie wo f th e foregoing , th e Association s an d other s file d a Petitio n fo r Review , a n actio n whic hle d t o a federa l cour t orde r vacatin g th e offendin g subsection s a t 86.09 4 - 1 7 (j ) an d 86.09 4 - 18 . Th e cour t orde r expressl yvacate d th e Californi a OB D I I antitamperin g provision s a t 1968.1(d ) fo r purpose s o f demonstratin g complianc e wit h federa l OB D requirements . I t i s reasonabl e t o conclud e tha t EP A agree d t o thi s cour t orde r becaus e thes e provision s directl y contraven e th e directive s o f Sectio n 202(m)(4) . Give n tha t CAR B ha d knowledg e o f th e foregoing , an d knowin g tha t it s OB D I I regulation s woul d nee d t o mee t th e Sectio n 202(a ) consistenc yreview , CARB' s refusa l t o reconside r o r alte r th e OB D antitamperin g regulation s i s plainl yarbitrar yan d capricious . Th e protection s Congres s buil t int o sectio n 202(m ) wer e mean t t o advanc e publi c healt han d welfar e bypreservin g th e contributio n t o clea n ai r provide d bya competitiv e aftermarket . A s argue d mor e full ybelow , federa l complianc e certificatio n wil l requir e a syste mtha t doe s no t violat e 202(m)(4) . EP Arecognize d thi s fac t an d agree d t o vacat e California' s antitamperin g regulations . Th e Association s raise d thi s matte r i n testimon yt o AR B submitte d Decembe r 8 , 1995 . AR B summaril yaddresse d th e Associations' s point s i n it s writte n respons e t o comment s notin g "AR B believe s tha t th e OB D I I regulation s ar e consisten t wit hth e OB D provision s o f Sectio n 202(M ) o f th e CA Aan d wil l b e consisten t wit hth e regulation s bein g develope d b yth e U.S . EPA. " I t i s difficul t t o discer n ARB' s basi s fo r th e foregoin g statemen t i n vie wo f EPA' s agreemen t t o vacate . Clearly , EP Aagree d wit hth e Association s tha t CARB' s specifi c antitamperin g requirement s ar e no t supportabl e unde r 202(m) , a provisio n Congres s fel t necessar y i n orde r t o achiev e improve d ai r quality . CAR B was , o f course , wel l awar e tha t EP Amaintain s th e authorit yt o gran t o r den yit s waiver . I n ligh t o f th e foregoing , CAR B ha s plainl yacte d i n a n

5 8 Fed . Reg . 9468 , 948 6P. 7

Octobe r 17 , 199 5 Pag e 6

arbitraryan

d capriciou s manne r i n it s protectivenes s determination . EPAi s therefor e require d t o den yth e AR B waive r request . c . Californi a ha s Failedto Demonstrat e Compellin g an d Extraordinar

y Condition s CARB ha s asserte d tha t the scop e o f th e "compelling an d extraordinaryconditions " inquiryshoul d no t b e directe d toward the nee d fo r specifi c element s o f it s clea n ai r program . However , the CARB programi s i n suc ha stat e o f flu xa s t o mak e the inquir

ymeaningles s i f consideratio n i s no t give n t o specifi c elements . Fo r example , Californi a ha s steadfastl yresiste d implementatio n o f a keyston e o f it s program , th e enhance d vehicl e inspectio n an

d maintenance(I/M ) program . I f condition s i n Californi a ar e suc htha t th e nee d fo r th e enhance d I/Mprogra m ha s diminished , i t i s certainl yappropriat e t o revie wth e nee d fo r ne wantitampering requirement s tha t ar e otherwis e contraryt o federa l law . A s a starting poin t i n thi s analysis , the Association s asser t tha t the antitampering provision s ar e unnecessarybecaus e bot hCaliforni a an

d federa l lawcurrentl yprohibi t an d mak e punishabl e unlawfu l tampering wit hvehicles . Th e existing antitampering provision s woul d certainl ycove r unlawfu l tampering wit hthe OBD system . Secondly , ARB ha s no t ye t demonstrate d suppor t fo r it s assertio n tha t electroni c tampering ha s bee n o r wil l b e a substantia l problem . Ignoring th e Associations ' specifi c comment s an

d request s i n th e past , ther e i s stil l n o evidenc e i n the record demonstrating tha t th e antitampering provision s ar e necessaryi n carrying ou t th e purpose s o f th e OB D I I regulations . Aprope r showing woul d includ e facts , studie s o r exper t opinio n indicating tha t unlawfu l tampering wit hth e OB D systemi s o r wil l become a significan t problem . Whil e AR B continue s t o mak e reference s t o "the highincidenc e o f compute r tampering" 9 i t respond s t o SEM

Acomment s b

ystating "Shoul d th e AR B simpl ydefe r the issu e unti l tampering i s eviden t i n th e field...year s o f leadtime woul d hav e t o b e provide d fro mtha t point." 1 0 Thi s statemen t plainl yindicate s ARB' s acknowledgemen t tha t th e tampering fea r i s speculative . Th e Association s ca n onl y

1 0 Se e ARB "Fina l Statemen t o f Reason s fo r Rulemaking, " a t p.1 4 (EP

AAi r Docke t II-A-39) . Id .P. 8

t i

Octobe r 17 , 199 5

Pag e 7

conclud e tha t CARB doe s no t provid e evidenc e o f electroni c tampering becaus e CARB ha s none . Th e antitampering provision s ar e als o unnecessaryfro ma practica l standpoint . AR B ha s mad e th e unsupporte d clai mtha t the antitampering provision s wil l b e particularl ynecessaryi n the futur e whe n AR B expect s t o rel yupo n OBD a s th e testing metho d a t I/M . However , a s th e Association s hav e commente d o n numerou s occasions , al l OB D system s utiliz e comple xprogramming . CARB OB D I systems , whic har e relativel ysimpl e compare d t o OB D II , hav e bee n i n us e fo r quit e some time an d AR B ha s ye t t o show dat a o r report s tha t unlawfu l electroni c tampering i s occurring t o an ysignifican t degree . Th e system s require d byOB D I I ar e eve n mor e complex . T o creat e functiona l OB D recalibration s wil l requir e tremendou s researc han

d development . Evidenc e o f thi s poin t i s apparen t i n the difficultie s experience d b ythe larg e an

d highl yqualifie d technica l team s o f the vehicl e manufacturer s seeking t o successfull ycalibrat e OB D systems . Withou t usefu l calibratio n changes , ther e wil l b e n o desir e b y"hackers " t o acces s the OB D systemt o conduc t reprogramming . T o th e exten t thos e i n th e aftermarke t successfull ycreat e recalibrations , fo r bot hservic e an d repair , the effor t wil l b e financiall yfeasibl e onl yi f the produc t ca n b e sol d o n a widesprea d basi s throughlegitimat e markets . I t woul d b e unproductiv e t o d o s o i n a manne r whic h woul d violat e existing anti-tampering regulations . I t i s plai n tha t recalibratio n by"hackers " wil l no t b e technicall yfeasibl e beyond some d i minimu s level , i f a t all . Th e lawalread

yprovide s tampering prohibition s an d penalties . No r ha s CARB provide d an ydata , fact s o r studie s indicating electroni c tampering wil l caus e significan t emission s problems . A t th e same time , Californi a ha s numerou s program s fo r reducing mobil e sourc e emission s an d i s resisting putting substantia l programs , suc ha s enhance d I/ Mint o effect . Ho wcompelling can the nee d fo r antitampering b e i n ligh t o f thi s relaxatio n o f fa r large r program s wher e significan t level s o f emission s hang i n the balance ? Suc htampering certainl ywil l no t occu r i n number s t o warran t overriding a CA Aprovisio n mean t t o preserv e th e positiv e rol e o f th e aftermarke t i n achieving ai r qualit ygoals . Fo r the foregoing reasons , th e Association s asser t CARB ha s faile d t o demonstrat e compelling an d extraordinarycondition s warranting thi s program . Accordingly , th e waive r shoul d b e denied .P. 9

Octobe r 17 , 199 5 Pag e 8

d . Th e CARB Regulation s Ar e No t Consisten t wit hSectio n 20 2 o f the Clea nAi r Act : Th e thir d waive r analysi s inquir yconsider s whethe r CAR B standard s (an

d accompanyin g enforcemen t procedures ) ar e consisten t wit hth e inten t o f Sectio n 202(a ) o f th e Clea n Ai r Act . Th e Association s asser t tha t asid e fro man yothe r aspec t o f th e waive r analysis , thi s inquir ymos t clearl ydemonstrate s tha t th e waive r reques t shoul d b e denied . Th e court s an d th e Agenc yhav e rule d tha t t o avoi d inconsistenc ywit h202(a) , CARB' s standard s an d procedure s mus t 1 ) provid e adequat e lea d tim e t o permi t th e developmen t o f technolog ynecessar yt o mee t th e requirement s an d (2 ) permi t manufacturer s t o mee t bot hth e federa l an d Californi a tes t procedure s wit hth e sam e vehicle. 1 1

1 . Th e CAR B Regulatio nDoe s no t Provid e Adequat e Lea d Time fo r Technology Developmen t A s argue d throughou t thi s testimony , CARB' s curren t antitamperin g requirement s ru n directl ycontrar yt o th e directive s o f CA

ASectio n 202(m) . Th e Associatio n submi t tha t i n it s hast e t o addres s a forecaste d problem , CAR B i s toda y requirin g tamperin g preventio n tha t th e OEM' s migh t otherwis e b e abl e t o addres s i n th e futur e withou t contravenin g Sectio n 202(m) . CAR B acknowledge s tha t th e nee d fo r th e antitamperin g mechanism s i s currentl yspeculativ e an d tha t appropriat e strategie s ca n onl yb e develope d ove r time . I n it s respons e t o th e Associations ' comment s o n thi s matter , CAR B notes :

"Th e staf f recognize s tha t manufacturer s nee d t o hav e adequat e leadtim e t o implemen t tampe r resistanc e requirements . Shoul d th e AR B simpl y defe r th e issu e unti l tamperin g i s eviden t i n th e field , an d thi s i n an d o f itsel f ma yb e difficul t t o detect , year s o f leadtim e woul d hav e t o b e provide d fro mtha t point . B yth e tim e tampe r resistanc e strategie s woul d g o int o production , a grea t numbe r o f OB D I I equippe d vehicle s woul d b e o n th e roa d wit hinadequat e on-boar d compute r security . . . " 1 2

n 4 6 Fed . Reg . 26371 , 26373 , Ma y12 , 198 1 1 2 CAR B "Fina l Statemen t o f Reason s fo r Rulemaking " a t p.1 6 (EPAAi r Docke t II-A-39) .P.1 0

Octobe r 17 , 199 5 Pag e 9

Thi s commen t indicate s tha t i n it s haste , CARB i s throwing th e bab you t befor e ther e i s an ybathwater . I t i s asking th e OEM s t o quickl yaddres s a problemtha t doe s no t ye t exis t an d t o d o i t b ya metno d tha t violate s th e Sectio n 202(m ) directive . I t i s inappropriat e t o requir e todaythe developmen t o f a system tha t mayb e inappropriat e o r unnecessaril yburdensome whe n waitin g a fe wyear s maymak e th e questio n o f bot hnee d an d approac hmor e clear . Holding of f o n specifi c requirement s fo r OB D antitampering i s the appropriat e course ; otherwise , OEM s wil l no t hav e th e time t o develop measure s whic har e allowabl e unde r the languag e o r inten t o f Sectio n 202(m) .

2 . Th e CAR B Reguirement s Ar e Inconsistent Wit h Sectio n20 2 of th

e Clea nAi r Ac t Th e Association s ar e mos t concerne d wit hthi s aspec t o f the analysis , believing strongl ytha t the CARB antitampering requirement s ar e inconsisten t wit hSectio n 2 02(a ) and run directl ycontraryt o Sectio n 202(m ) requirements . Prio r t o introducing a ne wvehicl e fo r sal e i n th e U.S. , vehicl e manufacturer s mus t issu e a "certificat e o f conformity " assuring tha t the vehicl e an d relate d engin e famil ycompl ywit h federa l emissio n requirements. 1 3 Likewise , vehicle s submitte d fo r sal e i n Californi a mus t b e certifie d a s t o complianc e wit h CARB requirements . I n previou s waive r decisions , EPAha s determine d tha t consistenc ywit hCA ASectio n 202(a ) require s tha t Californi a an

d federa l conformit ycertificatio n b e consistent . EPAha s furthe r hel d tha t th e tes t fo r consistenc yi n conformit y certificatio n i s whethe r vehicl e manufacturer s woul d b e abl e t o mee t bot hth e Californi a an d th e federa l requirement s wit hth e same tes t vehicle. 1 4 Th e Association s submi t tha t CARB' s antitampering provision s woul d mak e i t impossibl e t o mee t bot h CARB an d federa l certificatio n wit hth e same tes t vehicle . I n addressing thi s aspec t o f th e waive r analysis , CARB dismisse d thi s questio n i n superficia l fashion , noting :

"As explaine d i n th e Septembe r 199 3 letter , thi s problem[inconsistency ] doe s no t exis t fo r th e OB D regulation s i n tha t th e AR B an d th e U.S . EPAhav e worke d closel yi n developing thei r respectiv e OB D strategies . Th e federa l OB D rul e provide s tha t through th e 199 8 mode l yea r complianc e wit hth e Californi a OB D

1 3 4 2 U.S.C . § 752 2 (a ) (1 ) . 4 6 Fed . Re g 26371 , 2637 3 (1981) . 1 4P.1 1

Octobe r 17 , 199 5 Pag e 1 0

I I requirement s wil l satisf ythe requirement s o f th e

federa l rule . " 1 5 Th e Association s asser t tha t CARB i s plainl yi n error . A s note d above , i n vacating the federa l antitampering requirements , th e Cour t o f Appeal s wa s clea r i n als o vacating EPA' s adoptio n o f CARB' s sectio n 1968.1(d ) antitampering provision s fo r purpose s o f demonstrating complianc e wit hthe federa l regulations. 1 6 A s demonstrate d below , withou t uniformit ya s t o the antitampering requirement , th e same vehicl e canno t mee t Californi a an d federa l conformit ycertification . Th e court' s orde r wa s issue d May19 , 1994 , long befor e CARB submitte d it s mos t recen t waive r reques t t o EPA . CARB' s hollo wassertio n doe s nothing towar d demonstrating complianc e wit hth e consistenc yanalysis . T o th e contrary , the following analysi s o f EPAan d CARB OB D requirement s make s clea r ther e woul d b e inconsistency . Concurren t wit hCalifornia' s right s unde r waive r o f federa l preemption , EPAcontinue s t o b e responsibl e fo r complianc e certificatio n o f vehicle s t o b e sol d i n state s othe r tha n Californi a (an

d thos e adopting Californi a standards) . Instructiv e o n thi s poin t i s a federa l Appeal s Cour t decisio n involving nationwid e sale s o f California-certifie d car s whic h woul d otherwis e fai l t o mee t federa l requirements . Th e cour t noted : "I n th e wak e o f the 197 7 amendment s ther e aros e th e

possibilit ytha t California-equippe d car s woul d n o longe r compl ya s a matte r o f cours e wit hfedera l requirements . Tha t fac t lef t Congres s wit htwo choices ; i t coul d nonetheles s permi t thei r nationwid e sale , an

d thu s depar t fro

mthe practic e o f permitting suc hsal e onl yfo r car s complying wit hfedera l standards , o r i t coul d restric t thei r sale , an d thereb

y adher e withou t chang e t o th e prio r rul e permitting nationwid e distributio n onl yo f complying vehicles . W e think the forme r choic e woul d hav e amounte d t o an extraordinaryan

d dramati c departure , on e no t lightl y t o b e inferred . Accordingly , having found n o brea k wit hpas t practice , w e ar e a t a los s t o se e wh y Congress ' suppose d silenc e i n thi s regar d pose s an y

1 5 Waive r reques t lette r fro mJame s D . Boyd , Executiv e Officer , CARB t o Caro l M . Browner , Administrator , U.S . EPA , Jun e 14 , 1995 . (EP AAi r Docke t II-A-34) . 1 6 5 9 Fed . Reg . 51114 , 5111 5 (1994 )P.1 2

Octobe r 17 , 199 5 Pag e 1 1

difficult yfo r th e Administrator' s positio n [holdin g agains t nationwid e sales ] . " 1 7 I n reviewing conformit ywit hthe federa l OB D requirements , ther e i n n o questio n tha t EPAmus t enforc e th e directive s o f Sectio n 202(m) . Specifically , unde r 202(m)(4)(B )

"...the Administrato r shal l requir e - -

.. . (B ) tha t acces s t o th e emissio n contro l diagnostic s systemthroughsuc hconnector s shal l b e unrestricte d an d shal l no t requir e an yacces s cod e o r an yothe r devic e whic hi s onl yavailabl e fro ma vehicl e manufacturer; " I n contrast , sectio n 1968.1(d ) o f the CARB regulation s require s tha t vehicle s submitte d employ

"...dat a encryptio n using method s t o secur e th e encryptio n algorithm , an d writ e protec t feature s requiring electroni c acces s t o an off-sit e compute r maintaine d b

ythe manufacturer. " Clearl ya vehicl e OB D systemwhic hemploy s "writ e protec t feature s requiring electroni c acces s t o a n off-sit e compute r maintaine d b

ythe manufacturer " wil l no t mee t th e federa l directive requiring tha t th e system"no t requir e an yacces s cod e o r an ydevic e whic hi s onl yavailabl e froma vehicl e manufacturer. " Th e Californi a complianc e certificatio n requirement s woul d b e directl ycontraryt o thos e necessaryfo r certificatio n o f th e same tes t vehicl e byEPA . Fo r thes e reasons , the Association s asser t th e CARB regulatio n fail s th e sectio n 202(a ) consistenc yanalysis , thereb yrequiring tha t th e wave r b e denied . The Association s als o submi t tha t withi n th e Sectio n 202(a ) consistenc yanalysis , EPAi s require d t o conside r whethe r th e CARB antitampering provision s woul d den ythe aftermarke t the protection s specificall yafforde d b ySectio n 202(m ) o f th e Act . Wha t authorit yCaliforni a ha s t o creat e it s ow n emission s program ha s bee n delegate d t o i t b yCongress . I t defie s commo n sens e t o sugges t tha t Californi a mayno wadop t regulation s tha t woul d contraven e th e importan t protection s Congres s buil t int o Sectio n 202(m)(4 ) an

d 202(m)(5) . Th e Associations ' positio n i s supporte d b yAmerica n Motor s Corp . v . Blum , a waive r cas e involving the

1 7 For d Moto r Compan yv . EPA , 60 6 F.2 d 1293 , 130 1 (D.C . Ci r 1979) .P.1 3

Octobe r 17 , 199 5 Pag e 1 2

leadtime extension s grante d t o small-volume manufacturer s unde r Sectio n 202(b) . Th e cour t rule d tha t the requirement s o f consistenc ywit hsectio n 202(a ) ar e no t s o narro wa s t o allo w CARB' s regulation s t o contraven e the othe r provision s o f Sectio n 202. 1 8 Th e cour t noted :

"The Administrato r brushe s thi s argumen t asid e upo n th e ground tha t "Unde r sectio n 209(b)(1)(C ) o f the Act , .. . a waive r mus t b e denie d i f th e Californi a standard s ar e inconsisten t wit hsectio n 202(a) , no t sectio n 202(b)." " 1 9 The cour t rejecte d thi s assertio n noting :

"I f th e Administrator' s constructio n o f the statut e i s correc t an

ystate , b

yadopting th e standard s establishe d b

yCaliforni a unde r it s waive r fromEPA , mayden yt o a smal l manufacture r the lead time tha t Congres s ha s foun

d t o b e necessary . W e mus t rejec t a n interpretatio n tha t woul d permi t suc ha frustratio n o f Congressiona l purpose . Th e necessit yfo r lead time canno t b e obviate d b ya waiver." 2 0 Th e cour t i n Blu

mvacate d th e CARB waive r approval . Th e mai n issu e o f the case , involving an expres s provisio n grante d smal l volume manufacturer s unde r Sectio n 202(b) , i s analogou s t o th e matte r a t issu e unde r CARB' s antitampering provisions . Th e resul t shoul d b e the same . CARB' s regulation s woul d effectivel y den yexpres s protectio n carefull yprovide d unde r Sectio n 202(m ) fo r th e smal l businesse s comprising the aftermarket . T o allo w CARB t o cas t asid e thi s provisio n woul d wor k an injustic e vi a th e waive r allowance . Pe r th e ruling i n Blum , an d t o avoi d the analogou s injustice , th e CARB waive r reques t mus t b e denied . Althoughthe Association s believ e the foregoing Sectio n 2 0 2 consistenc yanalysi s stand s o n i t own , ther e ar e a fewadditiona l point s w e woul d lik e t o address . CARB ha s suggeste d tha t Sectio n 202(m)(4 ) intend s th e OB D systemt o b e unrestricte d onl ywit h respec t t o acces s t o th e diagnosti c informatio n generate d byth e

1 8

1 9 America n Motor s Corp . v . Blum , 60 3 F.2 d 97 8 (D.C . Cir . 1979 ) . AMC , 60 3 F.2 d a t 981 . Id .P. M

Octobe r 17 , 199 5 Pag e 1 3

OB D system(i.e . faul t code s an d vehicl e operatio n parameters). 2 1 CARB furthe r assert s it s antitampering restriction s woul d no t interfer e wit hthi s leve l o f aftermarke t servic e an

d repai r an

d therefor e d o no t contraven e Sectio n 202(m)(4) . W e disagree . Ther e ar e abundan t example s tha t demonstrat e OB D reprogramming ha s bee n an d wil l continu e t o b e necessaryi n servicing an d repairing vehicles . Further , i n correspondenc e t o aftermarke t informatio n providers , CARB ha s acknowledge d th e us e o f reprogramming , stating "furthermore , some manufacturer s hav e alread yimplemente d calibratio n change s t o correc t th e in-us e performanc e o f OBD-monitoring strategies . A s mor e vehicle s ar e quippe d wit hOBD systems , an incremen t o f OB D softwar e fixe s coul d materialize." 2 2 Unfortunatel yfo r th e aftermarket , the antitampering provision s require d i n Californi a coul d easil yb e use d b yth e vehicl e manufacturer s t o preven t aftermarke t servic e an d repai r usin g reprogramming o f the OBD . AlthoughEPAha s take n th e positio n tha t the onl yreprogramming t o b e performe d wil l likel y come from , an

d therefor e b e controlle d by , th e vehicl e manufacturer , the aftermarke t i s no t willin g t o conced e it s right s t o performreprogramming servic e independently . EPAdoe s no t hav e th e authorit yno r bea r the responsibilit yt o decid e ho w an d whethe r the aftermarke t ca n performotherwis e lega l servic e an d repair . T o th e contrary , Congres s drafte d 202(m)(4 ) directing EPAt o kee p the systemope n s o the aftermarke t wil l continu e t o hav e th e opportunit yt o provid e service . Th e vehicl e manufacturer s ar e fre e t o see k t o protec t an d enforc e right s i n wha t theybeliev e i s proprietaryintellectua l property . However , th e method s chose n mus t no t contraven e th e lette r o r inten t o f Sectio n 202(m ) an

d EPAan

d CARB ar e responsibl e t o ensur e th e statute' s enforcement .

e . I f EP

A Determine s CARB' s OBDI I Regulation s are "Accompanyin

g Enforcement Procedures, " A Waive r Should , Nonetheless , Be Denied A s argue d above , the Association s asser t th e OB D I I provision s fai l t o mee t Sectio n 20 2 consistenc yrequirements . W e believ e thi s hold s tru e regardles s o f whethe r the regulation s ar e

2 1 CARB "Fina l Statemen t o f Reason s fo r Rulemaking " a t p.1 6 (EP AAi r Docke t II-A-39) . 2 2 Lette r fro

mK.D . Drachand , Chief , CARB Mobil e Sourc e Divisio n t o TomGarrett , Mitchel l International , Septembe r 30 , 1994 .P.1 5

Octobe r 17 , 199 5 Pag e 1 4

deeme d a "standard " o r "accompanying enforcemen t procedures. " A waive r analysi s considering OB D I I a s a n enforcemen t procedur e shoul d yiel d the same resul t - - the waive r shoul d b e denied . f . Enforcement o f CAR B Regulation s Withou t Waiver ; I n closing , th e Association s woul d lik e t o commen t o n the enforcemen t o f CARB' s Regulation s i n absenc e o f a waiver . Th e Association s strongl yobjec t t o th e adoptio n an d enforcemen t o f th e CARB OB D I I regulation s prio r t o obtaining th e require d federa l waive r o f preemptio n unde r CA ASectio n 209(b) . Ther e i s n o questio n tha t CARB ha s bee n enforcing the regulations . Conside r fo r exampl e th e numerou s "waivers " CARB ha s grante d th e vehicl e manufacturer s base d o n claim s tha t aspect s o f th e regulatio n coul d no t b e complie d wit hwithi n prescribe d deadlines . Th e problem s create d b ybot hCARB' s an

d EPA' s disregar d o f th e federa l waive r statut e ar e substantial . Vehicl e manufacturer s hav e spen t significan t sum s preparing fo r complianc e wit hCARB requirement s tha t verylikel ywil l no t pas s muste r unde r thi s waive r review . The resulting vehicle s travelling the road s todayan d fo r th e foreseeabl e futur e wil l contai n antitampering mechanism s tha t ar e unnecessaryan d den y the aftermarke t the systemacces s Sectio n 202(m ) wa s mean t t o guarantee . The Association s hav e no t a s ye t attempte d t o calculat e the futur e damag e whic hthe aftermarke t wil l suffe r bu t i t i s significant . Th e Association s anticipat e addressing thi s issu e furthe r i n ou r writte n comments . Ill . Conclusio

n Fo r th e reason s se t fort habove , th e Association s asser t tha t EPAmus t den

ythe CARB reques t fo r waiver . Th e Association s anticipat e providing additiona l suppor t fo r th e foregoing positio n b

ywayo f additiona l writte n comments . Thank yo u fo r considering ou r views .