FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ENGINE MANUFACTURERS 

ASSOCIATION,

Plaintiff-Appellant,

v.

SOUTH COAST AIR QUALITY

MAINTENANCE DISTRICT,

(SCAQMD); WILLIAM A. BURKE,

SCAQMD Board Chairman;

NORMA J. GLOVER, SCAQMD

Vice-Chairman; MICHAEL D.

ANTONOVICH, SCAQMD Board

Member; HAL BERNSON, SCAQMD No. 05-56654

Board Member; JANE W. CARNEY,

D.C. No. SCAQMD Board Member;  CV-00-09065-FMC CYNTHIA P. COAD, SCAQMD

Board Member; BEATRICE J.S. OPINION

LAPISTOKIRTLEY, SCAQMD Board

Member; RONALD O. LOVERIDGE,

SCAQMD Board Member; JON D.

MIKELS, SCAQMD Board

Member; LEONARD PAULITZ,

SCAQMD Board Member;

CYNTHIA VERDUGO-PERALTA,

SCAQMD Board Member; S. ROY

WILSON, SCAQMD Board

Member; BARRY R. WALLERSTEIN,

SCAQMD Executive Officer;

Defendants-Appellees, 

10125
NATURAL RESOURCES DEFENSE 

COUNCIL; COALITION FOR CLEAN

AIR, INC.; COMMUNITIES FOR A

BETTER ENVIRONMENT;

PLANNING AND CONSERVATION

LEAGUE; SIERRA CLUB,

Defendants-Intervenors-  Appellees,

v.

WESTERN STATES PETROLEUM

ASSOCIATION,

Plaintiff-IntervenorAppellant. 

Appeal from the United States District Court

for the Central District of California

Florence Marie Cooper, District Judge, Presiding

Argued and Submitted

July 10, 2007—Pasadena, California

Filed August 20, 2007

Before: Barry G. Silverman, William A. Fletcher, and

Richard R. Clifton, Circuit Judges.

Opinion by Judge William A. Fletcher

10126 ENGINE MFRS. ASS’N v. SCAQMD
COUNSEL

Timothy A. French, Neal, Gerber and Eisenberg, Chicago,

Illinois, for the appellant.

Fran M. Layton, Shute, Mihaly and Weinberger, San Farncisco, California; Kurt R. Wiese, SCAQMD, Diamond Bar,

California; Daniel P. Selmi, Los Angeles, California, for the

appellees.

Julie Masters, Melissa L. Perrella, NRDC, Santa Monica, California, for the defendant-intervenors-appellees.

Michael R. Barr, Kevin M. Fong, Pillsbury Winthrop, San

Francisco, California; Mark E. Elliott, Pillsbury Madison, et

al., Los Angeles, California, for the plaintiff-intervenorappellant.

Kipp A. Coddington, Alston & Bird, Washington, D.C.;

Timothey J. Dowling, Community Rights Counsel, Washington, D.C.; Susan L. Durbin, Office of California Attorney

General, Sacramento, California, for the amici curiae.

OPINION

W. FLETCHER, Circuit Judge: 

Defendant-appellee South Coast Air Quality Management

District (“the District”) is a political subdivision of the State

of California responsible for air pollution control in the South

Coast Air Basin (“the Basin”), an area comprising the City of

Los Angeles and portions of surrounding counties. In 2000,

the District enacted six “Fleet Rules” that require operators of

various kinds of vehicle fleets — such as street sweepers, garbage trucks, and airport shuttles — to choose vehicles meeting specified emissions standards or containing specified

10130 ENGINE MFRS. ASS’N v. SCAQMD
alternative-fuel engines when adding to their fleets. Some

provisions of the Fleet Rules apply to state and local governmental agencies; others apply to federal governmental agencies and to private fleet operators. After a remand by the

Supreme Court, we consider for the second time whether

these Fleet Rules are preempted by the federal Clean Air Act

(“CAA”), 42 U.S.C. §§ 7401 et seq. 

We have jurisdiction under 28 U.S.C. § 1291. We review

de novo the district court’s grant of summary judgment,

including its preemption analysis. See Chamber of Commerce

v. Lockyer, 463 F.3d 1076, 1082 (9th Cir. 2006) (en banc).

We affirm the district court in part, reverse in part, and

remand for further proceedings. 

I. Background

The Basin is the only area in the United States classified by

the Environmental Protection Agency as an extreme nonattainment area for ozone. It is one of only five areas designated

as a serious non-attainment area for small particulate matter.

See 42 U.S.C. §§ 7511(a), 7513(b). 

The District is charged with developing and implementing

strategies to meet air quality standards within the Basin. See

Cal. Health & Safety Code §§ 40404, 40412, 40440. California Health and Safety Code § 40447.5, adopted in 1987,

authorizes the District to adopt regulations that 

[r]equire operators of public and commercial fleet

vehicles, consisting of 15 or more vehicles under a

single owner or lessee and operating substantially in

the south coast district, when adding vehicles to or

replacing vehicles in an existing fleet or purchasing

vehicles to form a new fleet, to purchase vehicles

which are capable of operating on methanol or other

equivalently clean burning alternative fuel and to

require that these vehicles be operated, to the maxiENGINE MFRS. ASS’N v. SCAQMD 10131
mum extent feasible, on the alternative fuel when

operating in the south coast district. 

Id. § 40447.5(a). 

Between June and October 2000, the District adopted six

rules (the “Fleet Rules” or “Rules”) pursuant to § 40447.5.

Each Rule applies only to fleet operators of 15 or more vehicles. The Rules variously refer to “purchasing,” “procuring,”

“leasing,” and “contracting for” vehicles and appear to use the

terms “purchasing” and “procuring” interchangeably. In order

to be as clear as possible in our holding, and at the risk of

awkward repetition, we adhere to the Rules’ terminology

throughout this opinion. 

Fleet Rule 1186.1 applies to fleet operators of street sweepers “when purchasing or leasing these vehicles for sweeping

operations undertaken by or for governments or governmental

agencies in the jurisdiction of [the District].”] The Rule

applies to (1) “any federal, state, county, city or governmental

department or agency, [and] any special district such as water,

air, sanitation, transit, and school districts” (hereinafter, “public fleets”); and (2) any “private individual firm, association,

franchise, contractor, user or owner who provides sweeping

services to a governmental agency” (hereinafter, “private

fleets with public contracts”). When purchasing or leasing

street sweepers, these fleet operators must “acquire

alternative-fuel or otherwise less-polluting sweepers.” An

“alternative-fuel sweeper” is one with “engine(s) that use

compressed or liquefied natural gas, liquefied petroleum gas

(propane), methanol, electricity, or fuel cells,” and “[h]ybridelectric and dual-fuel technologies that use diesel fuel are not

considered alternative-fuel technologies for the purposes of

[the] rule.” Fleet operators may obtain a waiver from the

Rule’s requirement if they “demonstrate the technical infeasibility of complying” either because no such sweepers are

commercially available, or because a fueling station for

alternative-fuel sweepers is “not available within five miles of

10132 ENGINE MFRS. ASS’N v. SCAQMD
the vehicle storage or maintenance yards.” Rule 1186.1 also

requires government agencies that contract for sweeping services to contract for sweeping services that use alternativefuel sweepers if possible. 

Fleet Rule 1191 applies to public fleets located in the

Basin. It “requires passenger car, light-duty truck, or mediumduty vehicle fleet operators to acquire low-emitting gasoline

or alternative-fuel vehicles . . . when procuring or leasing

these vehicles in the District.” The Rule defines compliant

vehicles by reference to emissions standards for low-emission

vehicles set by the California Air Resources Board (“CARB”)

pursuant to California’s preemption waivers under § 209(b) of

the Clean Air Act (discussed in greater detail below). The

Rule contains various exemptions, including an exemption for

emergency vehicles. The Rule also allows the public fleets to

continue to purchase gasoline- or diesel-fueled vehicles by

“offsetting” those purchases with purchases of low emission

vehicles. The Rule does not apply to “[p]rivately owned or

operated light- or medium-duty fleets that provide contract

services to [a] public agency.” 

Fleet Rule 1192 applies to fleets of “public transit vehicle[s] or urban buses, operated by government agencies or

operated by private entities under contract to government

agencies.” When procuring or leasing vehicles, these fleet

operators must choose “alternative-fuel heavy-duty vehicles,”

defined as vehicles “that use[ ] compressed or liquified natural gas, propane, methanol, electricity, fuel cells, or other

advanced technologies that do not rely on diesel fuel,” and

that meet the emissions requirements of the Urban Transit

Bus Rule adopted by CARB. The Rule contains various

exemptions, including for buses “not used for the express purpose of public transportation” and for buses “used for the

express[ ] purpose of providing long-distance service (out-ofDistrict).” 

Fleet Rule 1193 applies to both public and private fleets of

garbage trucks, regardless of whether the private fleets are

ENGINE MFRS. ASS’N v. SCAQMD 10133
under public contract. The Rule requires the “fleet operators

to acquire alternative-fuel refuse collection heavy-duty vehicles when procuring or leasing these vehicles” and defines

“alternative-fuel heavy-duty vehicles” in the same manner as

in Rule 1192. The Rule allows purchases of “dual-fuel” vehicles relying on both diesel and alternative fuels for certain

purposes, and operators are exempt from the Rule, inter alia,

when no alternative-fuel engine “is available commercially or

could be used.” 

Fleet Rule 1194 applies to public and private airport transportation fleets, also regardless of whether the private fleets

are under public contract. The affected vehicles include taxis,

limousines, commercial shuttles, and “courtesy shuttle transportation such as those provided by . . . rental agencies and

hotels.” When procuring, purchasing, or leasing vehicles, fleet

operators using passenger cars or medium-duty vehicles for

airport transportation must acquire a specified percentage of

vehicles that meet CARB’s standards for low-emission vehicles. Fleet operators purchasing and leasing heavy-duty vehicles must acquire alternative-fuel vehicles, defined as vehicles

“not powered by gasoline or diesel fuel.” The Rule also contains various exceptions, including exemptions where no such

vehicles are available or could be used and for taxi fleets if

“[the District] . . . has not provided sufficient funding to fully

offset the purchase cost . . . less $10,000 (paid by . . . the airport fleet operator).” 

Fleet Rule 1196 requires public fleet operators of heavyduty vehicles to acquire mostly alternative-fuel or dual-fuel

vehicles when procuring, purchasing, or leasing heavy-duty

vehicles. “Alternative-fuel vehicle” is defined in the same

manner as in Rules 1186.1, 1192, and 1193. A “dual-fuel”

vehicle is defined as a vehicle “equipped with a diesel engine

that uses an alternative fuel (such as compressed or liquefied

natural gas, liquefied petroleum gas, methanol, or other

advanced technologies) in combination with diesel fuel to

enable compression ignition.” Among other exceptions, the

10134 ENGINE MFRS. ASS’N v. SCAQMD
Rule does not apply to emergency and rescue vehicles, private

fleets with public contracts, and “[m]ilitary vehicles used for

tactical operations.” In addition, every fleet operator may

have as part of the fleet a certain number of “dedicated heavyduty gasoline vehicles” not meeting these standards depending on the size of the fleet. 

Each rule provides that a fleet operator must produce

records proving compliance with the Rules upon request from

the District. Each rule also contains a severability provision

stating that if any part of the rule is held invalid in a court

order, that order shall not affect the validity of the remainder

of the Rule. 

Soon after the adoption of the Fleet Rules in 2000, the

Engine Manufacturers Association (“EMA”) brought suit in

federal district court seeking declaratory and injunctive relief

from the Rules. EMA’s First Amended Complaint claimed

that the Rules were state emissions standards entirely preempted by § 209(a) and § 177 of the Clean Air Act. See CAA

§ 209(a), 42 U.S.C. § 7543(a) (“No State or any political subdivision thereof shall adopt or attempt to enforce any standard

relating to the control of emissions from new motor vehicles

or new motor vehicle engines subject to this part.”); CAA

§ 209(b), id. § 7543(b) (providing an exception to preemption

under § 209(a) whereby the State of California can obtain a

preemption waiver from the EPA to promulgate its own emissions standards); CAA § 177, id. § 7507 (providing that other

states may adopt the standards promulgated by California pursuant to § 209(b), but that the other states’ standards must be

“identical” to California’s). 

EMA named as defendants the District, its board members,

and its executive director. The Western States Petroleum

Association intervened as a plaintiff (hereinafter, together

with EMA, “Appellants”). Various environmental organizations intervened as defendants: Coalition for Clean Air, Inc.;

Natural Resources Defense Council, Inc.; Communities for a

ENGINE MFRS. ASS’N v. SCAQMD 10135
Better Environment, Inc.; Planning and Conservation League;

and Sierra Club (hereinafter included by reference to “the

District”). 

The district court granted summary judgment to the District. 158 F. Supp. 2d 1107 (C.D. Cal. 2001). The court held

that the Rules were not preempted by § 209(a) and § 177

because they did not compel manufacturers to meet new emissions standards; rather, they merely compelled fleet operators

to purchase vehicles from within classes of vehicles conforming to extant California standards lawfully promulgated pursuant to EPA-granted waivers of § 209(a) preemption under

§ 209(b). Id. at 1117 (“The Fleet Rules accept as given the

existing CARB vehicle standards; they merely require fleet

operators to choose from among the least polluting of CARBcertified, available vehicles.”); id. at 1119-20. This court

affirmed in a published order adopting the district court’s reasoning. 309 F.3d 550, 551 (9th Cir. 2002). 

The Supreme Court reversed. It rejected the argument that

the Rules “escape[d] pre-emption under § 209(a) . . . because

they address the purchase of vehicles, rather than their manufacture or sale.” 541 U.S. 246, 249 (2004). The Court held

that “standard-enforcement efforts that are proscribed by

§ 209 can be directed to manufacturers or purchasers.” Id. at

253. However, the Court did not decide whether the Rules

were actually preempted. See id. at 258. The Court stated that

it was “likely that at least certain aspects of the Fleet Rules

are pre-empted,” but allowed that “[i]t does not necessarily

follow . . . that the Fleet Rules are pre-empted in toto.” Id.

The Court therefore remanded for further proceedings consistent with its opinion. 

On remand in the district court, Appellants brought a “Motion for Order Implementing the Supreme Court’s Decision”

requesting declaratory and injunctive relief on the ground that

the Rules were preempted in their entirety. On May 6, 2005,

the district court denied Appellants’ motion. The court held

10136 ENGINE MFRS. ASS’N v. SCAQMD
that Appellants had brought an unsuccessful facial challenge

because they had not carried their burden of showing that all

applications of the Fleet Rules were preempted. Specifically,

the court held that the Fleet Rules were not preempted as

applied to state and local governmental entities. According to

the court, those applications of the Rules directed state proprietary action and were therefore protected from Clean Air Act

preemption under the market participant doctrine. Because the

facial challenge failed, the district court declined to address

the validity of other applications of the Rules. 

Appellants then moved in the district court for a judgment

under Federal Rule of Civil Procedure 54(c). They sought a

declaratory judgment that Rules 1186.1, 1193, and 1194 were

invalid as applied to federal agencies and to private fleet operators’ purchases of new vehicles, and sought an injunction

against enforcement of those provisions.1 Appellants contended that they were entitled to such a judgment based on the

District’s failure to defend those applications of the Rules in

their briefing in the district court on Appellants’ motion to

implement the Supreme Court’s decision. On September 22,

2005, the district court denied the motion, noting that since

Appellants were not the party “in whose favor [the judgment

was] rendered,” they were not entitled to a judgment under

Rule 54(c). Fed. R. Civ. P. 54(c). 

Finally, Appellants moved in the district court for entry of

final judgment under Federal Rule of Civil Procedure 58 in

accordance with the court’s orders of May 6 and September

22, 2005. On October 7, 2005, the district court entered a final

judgment dismissing Appellants’ suit with prejudice for the

reasons given in its order of May 6. Appellants timely

appealed.

1The requested declaratory judgment also included relief from Fleet

Rule 1195, pertaining to school buses. However, Appellants’ First

Amended Complaint did not request relief from this Rule, and Appellants

do not argue on appeal that they are entitled to such relief.” 

ENGINE MFRS. ASS’N v. SCAQMD 10137
II. Discussion

Appellants contend that the district court made two errors.

First, they contend that the district court erred in holding that

the market participant doctrine saved any applications of the

Rules from preemption. Second, they contend that, even if the

Rules are not preempted as applied to state and local government entities, the district court erred in dismissing Appellants’

suit rather than determining which applications were preempted and which were not. 

We affirm the district court’s holding that the Clean Air

Act does not preempt the Fleet Rules insofar as they direct the

procurement behavior of state and local governmental entities.

However, we agree with Appellants’ second contention and

remand to the district court for further proceedings to determine which, if any, of the Rules’ other provisions are preempted.2

A. Preemption and the Market Participant Doctrine

The Supremacy Clause “invalidates state laws that ‘interfere with, or are contrary to,’ federal law.” Hillsborough

County v. Automated Med. Labs., Inc., 471 U.S. 707, 712

(1985) (quoting Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 211

(1824)); see U.S. Const., art. VI, cl. 2. “Federal preemption

2We grant the District’s request for judicial notice of the transcript of

the Supreme Court’s oral argument in this case, a public report issued by

California’s Air Resources Board, and the municipal ordinance at issue in

Cardinal Towing & Auto Repair, Inc. v. City of Bedford, 180 F.3d 686

(5th Cir. 1999). The Los Angeles Taxi Industry, as amicus curiae, is alone

in opposing the request and opposes only our taking notice of the Cardinal

Towing ordinance. Municipal ordinances are proper subjects for judicial

notice. Santa Monica Food Not Bombs v. City of Santa Monica, 450 F.3d

1022, 1025 n.2 (9th Cir. 2006). The ordinance at issue in Cardinal Towing

is relevant given our adoption of that case’s analysis in Chamber of Commerce v. Lockyer, 463 F.3d 1076, 1084 (9th Cir. 2006) (en banc), the principal case on which Appellants’ preemption argument relies. 

10138 ENGINE MFRS. ASS’N v. SCAQMD
occurs when: (1) Congress enacts a statute that explicitly preempts state law; (2) state law actually conflicts with federal

law; or (3) federal law occupies a legislative field to such an

extent that it is reasonable to conclude that Congress left no

room for state regulation in that field.” Tocher v. City of Santa

Ana, 219 F.3d 1040, 1045-46 (9th Cir. 2000), abrogated on

other grounds by City of Columbus v. Ours Garage &

Wrecker Serv., Inc., 536 U.S. 424, 431-34 (2002). 

“Preemption analysis ‘start[s] with the assumption that the

historic police powers of the States were not to be superseded

by the Federal Act unless that was the clear and manifest purpose of Congress.’ ” City of Columbus, 536 U.S. at 438 (quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996)).

“Congressional intent, therefore, is the ultimate touchstone of

preemption analysis.” Tocher, 219 F.3d at 1045 (internal quotation marks omitted). “When . . . Congress adopts a statute

that provides a reliable indication of Congressional intent

regarding preemption, the scope of federal preemption is

determined by the statute. . . . ‘Congress’ enactment of a provision defining the pre-emptive reach of a statute implies that

matters beyond that reach are not pre-empted.’ ” Id. (quoting

Cipollone v. Liggett Group, Inc., 505 U.S. 504, 517 (1992)).

1. Market Participant Doctrine

[1] The market participant doctrine distinguishes between

a state’s role as a regulator, on the one hand, and its role as

a market participant, on the other. Actions taken by a state or

its subdivision as a market participant are generally protected

from federal preemption. The doctrine was originally developed in a series of dormant Commerce Clause cases. In

Hughes v. Alexandria Scrap Corp., 426 U.S. 794 (1976), the

Supreme Court held that Maryland did not violate the Commerce Clause by favoring in-state processors of scrap metal

when participating in the market for scrap metal. Id. at 809-

10. Subsequently, in Reeves, Inc. v. Stake, 447 U.S. 429

(1980), the Court held that South Dakota, as a seller of

ENGINE MFRS. ASS’N v. SCAQMD 10139
cement, was free to discriminate in a time of shortage by selling cement only to in-state users. The Court was moved by

“considerations of state sovereignty, the role of each State as

guardian and trustee for its people, and the long recognized

right of trader or manufacturer, engaged in an entirely private

business, freely to exercise his own independent discretion as

to parties with whom he will deal.” Id. at 438-39 (footnotes,

citations, and internal quotation marks omitted). “Evenhandedness suggests that, when acting as proprietors, States

should similarly share existing freedoms from federal constraints, including the inherent limits of the Commerce

Clause.” Id. at 439. The Court stated that in market participant

cases, courts undertake “a single inquiry: whether the challenged program constituted direct state participation in the

market.” Id. at 435 n.7 (internal quotation marks omitted);

accord White v. Mass. Council of Constr. Employers, Inc.,

460 U.S. 204, 208 (1983) (citing Reeves’ “single inquiry” in

upholding executive order requiring all Boston construction

projects funded by city funds to be performed by work forces

of at least half city residents). 

After the development of the market participant doctrine in

these dormant Commerce Clause cases, the Supreme Court

and the lower federal courts have applied the doctrine to protect proprietary state action from preemption by various federal statutes. See, e.g., Building & Constr. Trades Council v.

Associated Builders & Contractors (“Boston Harbor”), 507

U.S. 218, 226-27 (1993) (National Labor Relations Act);

Tocher, 219 F.3d at 1048-50 (Federal Aviation Administration Authorization Act of 1995 (“FAAA”)); Associated Gen.

Contractors v. Metro. Water Dist., 159 F.3d 1178, 1183 (9th

Cir. 1998) (Employee Retirement Income Security Act of

1974). 

[2] In the statutory preemption context, the market participant doctrine is based on the proposition that “pre-emption

doctrines apply only to state regulation.” Boston Harbor, 507

U.S. at 227. “Not all actions by state or local government enti10140 ENGINE MFRS. ASS’N v. SCAQMD
ties . . . constitute regulation, for such an entity, like a private

person, may buy and sell or own and manage property in the

marketplace.” Sprint Spectrum L.P. v. Mills, 283 F.3d 404,

417 (2d Cir. 2002). Thus, even where a federal statute preempts state regulation in an area, state action in that area is

not preempted so long as it is proprietary rather than regulatory. The Supreme Court has stated the rule in the negative:

“In the absence of any express or implied indication by Congress that a State may not manage its own property when it

pursues its purely proprietary interests, and where analogous

private conduct would be permitted, this Court will not infer

such a restriction.” Boston Harbor, 507 U.S. at 231-32. 

[3] In considering the scope of the market participant doctrine for purposes of preemption under the National Labor

Relations Act, we have adopted the Fifth Circuit’s test for distinguishing “proprietary” from “regulatory” action. In Lockyer, we held that state action qualifies as proprietary in either

of two circumstances. First, state action is proprietary if it “essentially reflect[s] the [governmental] entity’s own interest in

its efficient procurement of needed goods and services, as

measured by comparison with the typical behavior of private

parties in similar circumstances.” 463 F.3d at 1084 (quoting

Cardinal Towing, 180 F.3d at 693). In these circumstances,

the market participant doctrine “protects comprehensive state

policies with wide application from preemption, so long as the

type of state action is essentially proprietary.” Id. Second,

state action is proprietary if “the narrow scope of the challenged action defeat[s] an inference that its primary goal was

to encourage a general policy rather than address a specific

proprietary problem.” Id. (quoting Cardinal Towing, 180 F.3d

at 693). Thus, the doctrine also “protects narrow spending

decisions that do not necessarily reflect a state’s interest in the

efficient procurement of goods or services, but that also lack

the effect of broader social regulation.” Id. 

[4] Along with three other circuits, we have held that the

market participant doctrine’s protection of state proprietary

ENGINE MFRS. ASS’N v. SCAQMD 10141
action includes proprietary action by states’ political subdivisions. Big Country Foods, Inc. v. Bd. of Educ., 952 F.2d 1173,

1178-79 (9th Cir. 1992); accord Nat’l Solid Waste Mgmt.

Ass’n v. Williams, 146 F.3d 595, 599-600 (8th Cir. 1998);

Smith Setzer & Sons, Inc. v. S.C. Procurement Review Panel,

20 F.3d 1311, 1319-20 (4th Cir. 1994); Trojan Techs., Inc. v.

Pennsylvania, 916 F.2d 903, 911 (3d Cir. 1990); see also City

of Columbus, 536 U.S. at 437 (“The principle is well settled

that local governmental units are created as convenient agencies for exercising such of the governmental powers of the

State as may be entrusted to them in its absolute discretion.”

(quoting Wis. Pub. Intervenor v. Mortier, 501 U.S. 597, 607-

08 (1991)); Bldg. & Constr. Trades Dep’t, AFL-CIO v. Allbaugh, 295 F.3d 28, 34 (D.C. Cir. 2002) (upholding under

market participant doctrine a rule prohibiting federal agencies

and entities receiving federal construction funds from requiring contractors to enter, or prohibiting them from entering,

project labor agreements); id. at 35 (“[T]here is simply no

logical justification for holding that if an executive order

establishes a consistent practice regarding the use of [such

labor agreements], it is regulatory even though the only decision governed by the executive order are those that the federal

government makes as a market participant.” (internal quotation marks and alteration omitted)). But see W.C.M. Window

Co. v. Bernardi, 730 F.2d 486, 495-96 (7th Cir. 1984) (as

amended) (holding that state regulation did not fall within

market participant exception because it was not limited to the

state’s contracts, but also included those of local government

entities). 

The central question presented in this appeal is whether the

Clean Air Act preempts the Fleet Rules insofar as they apply

to state and local government entities. The answer turns on

the applicability and scope of the market participant doctrine

as it relates to preemption under the Act. Because the market

participant doctrine is not a wholly freestanding doctrine, but

rather a presumption about congressional intent, the doctrine

may have a different scope under different federal statutes. It

10142 ENGINE MFRS. ASS’N v. SCAQMD
is possible that some aspects of the doctrine have a constitutional dimension, protecting certain sovereign actions of the

states from unconstitutional interference by the federal government. Cf. Nat’l League of Cities v. Usery, 426 U.S. 833,

841-44, 854-55 (1976), overruled by Garcia v. San Antonio

Metro. Transit Auth., 469 U.S. 528, 557 (1985). But we need

not pursue the constitutional issue here, for — whatever the

precise scope of the market participant doctrine under the

Clean Air Act — we are presented with a statutory question

under the Act rather than a constitutional question under the

Tenth Amendment. 

2. Market Participant Doctrine Under the Clean Air Act

The district court’s decision in this case appears to be the

first of any court to analyze the market participant doctrine

under the federal Clean Air Act. Because congressional intent

is the key to preemption analysis, we must consider whether

the Act contains “any express or implied indication by Congress” that the presumption embodied by the market participant doctrine should not apply to preemption under the Act.

Boston Harbor, 507 U.S. at 231. 

The Clean Air Act largely preserves the traditional role of

the states in preventing air pollution. Cf. Exxon Mobil Corp.

v. EPA, 217 F.3d 1246, 1255 (9th Cir. 2000) (“Air pollution

prevention falls under the broad police powers of the states,

which include the power to protect the health of citizens in the

state.”). As we have previously noted, “[t]he overriding purpose of the Clean Air Act is to force the states to do their job

in regulating air pollution effectively so as to achieve baseline

air quality standards, the [national ambient air quality standards (‘NAAQS’)].” Id. (emphasis added); see also 42 U.S.C.

§ 7408(a). Indeed, the Act’s congressional findings state that

“air pollution prevention (that is, the reduction or elimination,

through any measures, of the amount of pollutants produced

or created at the source) and air pollution control at its source

ENGINE MFRS. ASS’N v. SCAQMD 10143
is the primary responsibility of States and local governments.”

42 U.S.C. § 7401(a)(3). 

States discharge their primary responsibility for attaining

and maintaining the NAAQS through their state implementation plans (“SIPs”). See id. § 7410. The section of the Act

concerning SIPs reaffirms the primary responsibility of the

states: “Each State shall have the primary responsibility for

assuring air quality within the entire geographic area comprising such State by submitting an implementation plan for such

State which will specify the manner in which national primary

and secondary ambient air quality standards will be achieved

and maintained within each air quality control region in such

State.” Id. § 7407(a). 

The Act also contains a provision titled “Retention of State

authority.” Id. § 7416. That section provides that, with certain

exceptions, “nothing in this chapter shall preclude or deny the

right of any State or political subdivision thereof to adopt or

enforce (1) any standard or limitation respecting emissions of

air pollutants or (2) any requirement respecting control or

abatement of air pollution.” Id. 

Appellants concede, and we agree, that the market participation doctrine applies to preemption under § 209(a) and

§ 177 of the Clean Air Act. Neither of these two provisions

indicates that Congress intended to extend the provisions’

reach to preempt state proprietary action. 

Section 209(a) provides, in its entirety:

No State or any political subdivision thereof shall

adopt or attempt to enforce any standard relating to

the control of emissions from new motor vehicles or

new motor vehicle engines subject to this part. No

State shall require certification, inspection, or any

other approval relating to the control of emissions

from any new motor vehicle or new motor vehicle

10144 ENGINE MFRS. ASS’N v. SCAQMD
engine as condition precedent to the initial retail

sale, titling (if any), or registration of such motor

vehicle, motor vehicle engine, or equipment. 

42 U.S.C. § 7543(a). 

[5] Section 209(a) prevents a state (absent a waiver granted

to the State of California under § 209(b)) from imposing

emissions standards more stringent than or otherwise different

from the federal standards. However, the section contains

nothing to indicate a congressional intent to bar states from

choosing to use their own money to acquire or use vehicles

that exceed the federal standards. Inferring such a limit on

state proprietary action would run afoul of the presumption

articulated in Boston Harbor, 507 U.S. at 231-32. It would

also run afoul of the Clean Air Act’s express reservation to

the states of primary authority over and responsibility for controlling air pollution. 

[6] Section 177 is a corollary to § 209(b) of the Act. Section 209(b) provides that the EPA “shall” grant the State of

California a waiver from § 209(a) preemption to adopt and

enforce its own emission standards, provided that California

has determined that the standards are, “in the aggregate, at

least as protective of public health and welfare as applicable

Federal standards.” Id. § 7543(b)(1); see also Motor & Equip.

Mfrs. Ass’n, Inc. v. EPA, 627 F.2d 1095, 1108-11 (D.C. Cir.

1979) (as amended) (discussing the history and purpose of

§ 209(b)); Am. Auto. Mfrs. Ass’n v. Cahill, 152 F.3d 196, 198-

99 (2d Cir. 1998) (describing the standards California has promulgated under § 209(b) waivers, codified at Cal. Code Regs.

tit. 13, §§ 1900 et seq.).3 Section 177 provides that states other

than California may require that vehicles sold in their state

comply with standards that are “identical to the California

standards for which a waiver has been granted [under

3There is no contention that California has obtained a waiver for the

Fleet Rules under § 209(b). 

ENGINE MFRS. ASS’N v. SCAQMD 10145
§ 209(b)] for such model year.” 42 U.S.C. § 7507. Like

§ 209(a), § 177 contains no language impliedly or expressly

limiting states’ proprietary action, and we decline to infer

such a limit for the reasons just stated regarding § 209(a). 

An amicus, the Los Angeles Taxi Industry (“LATI”),

argues that the market participation doctrine does not apply to

preemption analysis under any section of the Clean Air Act.

Another amicus, the American Automotive Leasing Association (“AALA”), argues that § 246 of the Act preempts the

Fleet Rules even as they apply to state and local governments.

“Generally, we do not consider on appeal an issue raised only

by an amicus.” Chaker v. Crogan, 428 F.3d 1215, 1220 (9th

Cir. 2005) (quoting Swan v. Peterson, 6 F.3d 1373, 1383 (9th

Cir. 1993)). However, because the central question in this

case is the applicability and scope of the market participant

exception under the Clean Air Act, and because there are

ready answers, we respond to LATI’s and AALA’s arguments. 

LATI argues that the market participant doctrine is not

applicable to preemption analysis under the Clean Air Act

based on our suggestion in dictum in Hydrostorage, Inc. v. N.

Cal. Boilermakers Local Joint Apprenticeship Comm., 891

F.2d 719, 730 (9th Cir. 1989), that the market participant doctrine does not exist outside the dormant Commerce Clause

context. We have since acknowledged, however, that our dictum in Hydrostorage was not the product of “deep consideration,” given that in Hydrostorage we held that the action was

regulatory rather than proprietary. Associated Gen. Contractors, 159 F.3d at 1184. Moreover, as we have also noted, our

dictum was abrogated by Boston Harbor, which applied the

market participant doctrine to preemption under the NRLA.

Id. (citing Boston Harbor). LATI asserts that Boston Harbor

is distinguishable because it “did not involve express preemption.” However, Boston Harbor does not support a distinction

between express and other forms of preemption. Boston Harbor holds that the Court will not “infer” preemption of propri10146 ENGINE MFRS. ASS’N v. SCAQMD
etary action unless Congress “indicat[es] . . . that a State may

not manage its own property when it pursues its purely proprietary interests.” 507 U.S. at 231. LATI does not point us to

any such indication by Congress in the Clean Air Act. See

also Tocher, 219 F.3d at 1050 (holding that market participant

doctrine protected portion of a city ordinance from express

preemption by 49 U.S.C. § 14501(c)). 

[7] AALA argues that § 246 of the Clean Air Act, 42

U.S.C. § 7586, precludes application of the market participant

doctrine. Section 246 requires that states with certain nonattainment areas adopt specified rules for “centrally fueled

fleets” as part of their SIPs. Section 246 does not mention

government-owned fleets, but under chapter-wide definitions

“covered fleets” include both private and government-owned

fleets. See 42 U.S.C. §§ 7581(5), 7602(e). AALA does not

argue that adhering to the Fleet Rules in procuring vehicles

would cause state and local entities to fail to meet SIPimposed fleet standards. Rather, AALA argues that the Rules

conflict with § 246 because, under SIPs promulgated by a

state pursuant to § 246, a fleet operator “shall” have “the

choice of clean-fuel vehicles and clean alternative fuels,” id.

§ 7586(d), whereas the Rules preclude fleet operators from

making that choice. This conflict between § 246 and the Fleet

Rules might support a holding that the Rules are preempted

as applied to private fleet operators. However, it does not support a holding that the § 209(a) and § 177 preempt the Rules

as applied to state and local governments acting in their

capacities as fleet operators. The requirement that a state’s

SIP give fleet operators a choice among fuels and vehicles is

entirely consistent with the state’s own ability to choose to

purchase particular fuels and vehicles in its proprietary capacity as a fleet operator. 

[8] We therefore conclude that § 209(a), § 177, and § 246

of the Clean Air Act do not contain any express or implied

indication of congressional intent that they should extend to

state proprietary action.

ENGINE MFRS. ASS’N v. SCAQMD 10147
3. Scope and Application of the Doctrine

Appellants contend that even though the market participant

doctrine protects a state’s proprietary action from Clean Air

Act preemption, the doctrine does not protect the Fleet Rules.

According to Appellants, all of the Fleet Rules’ provisions

constitute regulatory rather than proprietary action under

either of Lockyer’s two categories of state proprietary action.4

As an initial matter, we note that our analysis in Lockyer

addressed the market participant doctrine in the context of

preemption by the National Labor Relations Act (“NLRA”).

While the Clean Air Act expressly reserves to the states their

traditional police powers in regulating pollution except in a

few limited areas of express preemption, the NLRA preempts

broad swaths of state labor regulation. Compare Exxon Mobil,

217 F.3d at 1254-56, with Boston Harbor, 507 U.S. at 224-26

(describing the NLRA preemption doctrines “prohibit[ing

state] regulation even of activities that the NLRA only arguably protects or prohibits” and “of areas that [Congress] left

to be controlled by the free play of economic forces” (internal

quotation marks omitted; emphasis in original)). Due regard

for congressional intent requires that we not mechanically

apply our market participant analysis in Lockyer to preemption analyses of federal statutes other than the NLRA.

Depending on Congress’s intent, another statute might require

us to employ a definition of protected state “proprietary

action” different from the two definitions adopted in Lockyer

for purposes of preemption under the NLRA. 

Nevertheless, in the case before us, we need not consider

4Appellants’ arguments on this issue conflict with their counsel’s concessions at oral argument before the Supreme Court. Appellants’ counsel

conceded — as did the Solicitor General (as amicus curiae in support of

Appellants) — that the Rules were not preempted insofar as they applied

only to state and local government purchases. Transcript of Oral Argument at 6-8, 20-25, 28, 541 U.S. 246 (2004) (No. 02-1343). 

10148 ENGINE MFRS. ASS’N v. SCAQMD
other possible definitions of “proprietary action,” for the Fleet

Rule provisions governing purchasing, procuring, leasing, and

contracting for the use of vehicles by state and local governmental entities fall squarely within Lockyer’s first category of

state proprietary action. That is, these provisions “essentially

reflect the [state] entity’s own interest in its efficient procurement of needed goods and services, as measured by comparison with the typical behavior of private parties in similar

circumstances.” Lockyer, 463 F.3d at 1084 (quoting Cardinal

Towing, 180 F.3d at 693). 

As described in greater detail above, Fleet Rule 1186.1

directs state and local government entities to meet certain

criteria when purchasing or leasing street sweepers and, if feasible to do so, when contracting for use of street sweepers;

Rule 1191 directs the same state entities to choose vehicles

that meet certain criteria when procuring or leasing cars, lightduty trucks, and medium-duty vehicles; Rule 1192 directs

them to meet certain criteria when procuring or leasing vehicles for public transit fleets; Rule 1193 directs them to meet

certain criteria when procuring or leasing solid waste collection vehicles; Rule 1194 directs them to meet certain criteria

when procuring, purchasing, or leasing vehicles for transportation providing ground access to airports; and Rule 1196

directs them to meet certain criteria when procuring, purchasing, or leasing heavy-duty vehicles. 

We conclude that these provisions directing state and local

governmental entities to purchase, procure, lease, or contract

for use of vehicles meeting specified air pollution criteria constitute direct state participation in the market. We so conclude

even though not only the state, but also some of its political

subdivisions, are directed to take these actions. See Big Country Foods, 952 F.2d at 1179 (“A state should not be penalized

for exercising its power through smaller, localized units; local

control fosters both administrative efficiency and democratic

governance.”). 

ENGINE MFRS. ASS’N v. SCAQMD 10149
[9] Appellants object to this conclusion on three grounds.

First, they contend that the Fleet Rules are not concerned with

“efficient procurement” within the meaning of Lockyer, 463

F.3d at 1084, because the Rules’ purpose is to reduce air pollution. Appellants point to the legislative history of the statute

pursuant to which the Rules were adopted, California Health

& Safety Code § 40447.5, which makes this purpose clear.

We do not regard this purpose as fatal to the Rules. That a

state or local governmental entity may have policy goals that

it seeks to further through its participation in the market does

not preclude the doctrine’s application, so long as the action

in question is the state’s own market participation. See, e.g.,

Alexandria Scrap, 426 U.S. at 809 (“Maryland entered the

market for the purpose, agreed by all to be commendable as

well as legitimate, of protecting the State’s environment. As

the means of furthering this purpose, it elected the payment

of state funds in the form of bounties to encourage the

removal of automobile hulks from Maryland streets and junkyards.”); Boston Harbor, 507 U.S. at 229, 232 (upholding

against an NLRA preemption challenge a requirement that all

contractors on a public construction project adhere to a prehire labor agreement and noting that the Court had not held

in Wis. Dep’t of Indus., Labor & Human Relations v. Gould

Inc., 475 U.S. 282 (1986), that purchasing decisions “may

never be influenced by labor considerations”); Big Country

Foods, 952 F.2d at 1175 (upholding Alaska statute requiring

school districts to pay up to 7 percent more for milk in order

to purchase in-state milk rather than out-of-state milk); see

also N. Ill. Chapter of Associated Builders & Contractors,

Inc. v. Lavin, 431 F.3d 1004, 1007 (7th Cir. 2005) (“Federal

preemption doctrine evaluates what legislation does, not why

legislators voted for it or what political coalition led to its

enactment.”); id. (noting that in Boston Harbor, “Boston

wanted to clean up its harbor, but there can be little doubt that

it also wanted to shower benefits on workers who were the

incumbents’ political supporters”); cf. Gould, 475 U.S. at 288

(holding that Wisconsin law prohibiting state procurement

agents from purchasing products from repeat NLRA violators

10150 ENGINE MFRS. ASS’N v. SCAQMD
was not protected by the market participant doctrine because

the statute “function[ed] unambiguously as a supplemental

sanction for violations of the NLRA” rather than as state proprietary action); Lockyer, 463 F.3d at 1084-85 (holding state

action not proprietary where statute placed spending restrictions related to labor organizing on all private employers

receiving more than $10,000 in state funds). 

In arguing that the Fleet Rules are not concerned with “efficient procurement” by state and local governments within the

meaning of Lockyer, Appellants read the word “efficient” too

narrowly. “Efficient” does not merely mean “cheap.” In context, “efficient procurement” means procurement that serves

the state’s purposes — which may include purposes other

than saving money — just as private entities serve their purposes by taking into account factors other than price in their

procurement decisions. See Boston Harbor, 507 U.S. at 231

(“To the extent that a private purchaser may choose a contractor based upon that contractor’s willingness to enter into a

prehire agreement, a public entity as purchaser should be permitted to do the same.”); see also id. at 230-32 (comparing

state’s labor agreement to private construction firms’ agreements). 

[10] Tellingly, Appellants do not argue that the Fleet Rules

fall outside Lockyer’s first definition of state proprietary

action on the ground that private fleet operators do not take

air pollution concerns into account when making their procurement decisions. Such an argument would be contradicted

by evidence presented in this case that two prominent private

fleet owners, FedEx and UPS, have, for their own purposes,

adopted programs to introduce less-polluting vehicles into

their fleets. There is therefore no basis for concluding that

purchasing less-polluting vehicles is not a purpose that a state

may pursue as a market participant. 

Second, Appellants contend that the Fleet Rules do not constitute proprietary action because they “do not control the disENGINE MFRS. ASS’N v. SCAQMD 10151
position of any state funds or property.” That is, the Rules

direct not how the State of California shall spend its own

money, but rather how political subdivisions of the state shall

spend their money. This argument is largely foreclosed by Big

Country Foods, in which we held that the market participant

doctrine saved from a dormant Commerce Clause challenge

an Alaska statute that directed the purchase of milk by local

school districts. 952 F.2d at 1178-80. There, we rejected an

analogous argument that the market participant doctrine did

not apply because, although Alaskan school districts entered

into the milk contracts, federal funds ultimately paid for the

milk: “Federal funds provide the wherewithal to make the

milk purchases, but it is Alaska that is the direct participant

in the market. Accordingly, the market participant exception

applies.” Id. at 1180. In so holding, we rejected what we saw

as “strong public policy arguments to the contrary,” because

such arguments “extend the debate beyond the ‘single

inquiry’ the Supreme Court demands: ‘whether the challenged

program constituted direct state participation in the market.’ ”

Id. (internal quotation marks omitted) (quoting White, 460

U.S. at 208 (quoting Reeves, 447 U.S. at 436 n.7)); see also

Cardinal Towing, 180 F.3d at 696 (holding doctrine protected

towing ordinance from FAAA preemption where ordinance

governed city contracts for “nonconsensual” towing services

ultimately paid for by the people whose cars were towed). 

[11] Like Alaska’s milk ordinance, the Fleet Rules constitute direct state participation in the market. The Rules are a

state directive determining which vehicles the state and its

political subdivisions will procure. While it is true that the

local governments may spend their own money rather than the

state’s in complying with the Rules, this fact is not inconsistent with the doctrine. Appellants do not contend that the

State of California lacks the power under state law to compel

its political subdivisions to purchase particular vehicles and to

spend local funds in so doing. We cannot discern any reason

why the market participant doctrine should not apply merely

because the state, which has the legal right under state law to

10152 ENGINE MFRS. ASS’N v. SCAQMD
direct the actions of local governments, directs the expenditure of local rather than state funds.5

Third, Appellants contend that the Fleet Rules are regulatory rather than proprietary because they are enforceable by

criminal sanctions and fines. However, Appellants do not

explain why such enforcement provisions preclude the application of the market participant doctrine. They assert in their

brief only that in Lockyer we “emphasized the enforcement

provisions of the statute as reinforcing [its] regulatory character.” In fact, we merely mentioned the existence of enforcement provisions, 463 F.3d at 1085, and did so in the context

of a statute that quite plainly functioned as regulatory rather

than proprietary action, irrespective of any means chosen to

enforce it. Here, by contrast, the provisions of the Fleet Rules

directed to the procurement decisions of the state and local

governments clearly constitute proprietary action within the

meaning of the market participant doctrine. 

[12] We do not believe that the enforcement provisions

have the effect of transforming the Rules from proprietary to

regulatory action. It is unclear whether the criminal sanctions

and fines provided in the Fleet Rules are intended to be, or

5During oral argument in the Supreme Court, Appellants’ counsel

appears to have conceded this point, arguing only that the state could not

control criteria for fleet purchases by entities other than local governments: 

Q: And could [the state] also do that for all their governmental

subdivisions? The State of Nebraska says that the State and

all of its subdivisions will have some very strict standards —

A: I agree with the . . . way that the Chief Justice put it, that

that’s their own purchasing decisions, and it’s a matter of

State law as to whether they can — but that is not what this

case is about. This case is about whether the South Coast

district can impose those standards, including Federal Government vehicles, postal vehicles, FBI vehicles, private vehicles that go to the airports and so forth. 

Transcript of Oral Argument at 25, 541 U.S. 246 (2004) (No. 02-1343).

ENGINE MFRS. ASS’N v. SCAQMD 10153
are, enforceable against government entities, as distinct from

private parties. But even if they are so enforceable, we do not

see how action by a state or local government that is proprietary when enforced by one mechanism loses its proprietary

character when enforced by some other mechanism. 

As part of their argument that the Rules are regulatory,

Appellants contend that protecting the Fleet Rules from preemption under the market participant doctrine “would seriously undermine the uniformity contemplated by § 209(a).”

They assert that “purchases by government entities . . . in the

aggregate no doubt represent a very substantial segment of the

market.” However, Appellants cite no evidence from the

record in support of an argument based on the market share

of the state and local governments, and we see no such evidence. Nor do Appellants cite any case in which a court has

held that a state’s market power was so great as to preclude

the application of the market participant doctrine. Cf. Reeves,

447 U.S. at 437 (holding that South Dakota, as a seller of

cement, was free to discriminate in a time of shortage by selling cement only to in-state users). Congress is of course free

to amend § 209(a) to eliminate the market participant doctrine’s presumption of non-preemption if Congress finds that

state proprietary action has undermined § 209(a)’s purpose. 

[13] For the foregoing reasons, we hold that the Fleet Rule

provisions directing state and local governments to purchase,

procure, lease, and contract for use of vehicles meeting certain criteria fall within Lockyer’s first category of proprietary

state action because they “essentially reflect [California’s]

own interest in its efficient procurement of needed goods and

services.” Lockyer, 463 F.3d at 1084 (quoting Cardinal Towing, 180 F.3d at 693). The market participant doctrine therefore saves those provisions of the Fleet Rules from

preemption by the Clean Air Act, and we need not consider

whether the Rules also fall within Lockyer’s second category

of state proprietary action. See id. (classifying as proprietary

“narrow spending decisions that do not necessarily reflect a

10154 ENGINE MFRS. ASS’N v. SCAQMD
state’s interest in the efficient procurement of goods or services, but that also lack the effect of broader social regulation”). 

B. Other Provisions of the Fleet Rules

Appellants contend that the district court erred in refusing

to consider whether the Clean Air Act preempts the other provisions of the Fleet Rules that are not protected by the market

participant doctrine. 

The Supreme Court stated in United States v. Salerno, 481

U.S. 739 (1987) that “[a] facial challenge to a legislative Act

is, of course, the most difficult challenge to mount successfully, since the challenger must establish that no set of circumstances exists under which the Act would be valid.” Id. at

745; cf. Hotel & Motel Ass’n of Oakland v. City of Oakland,

344 F.3d 959, 971-72 (9th Cir. 2003) (following this rule

from Salerno but noting that a plurality of the Supreme Court

deemed it dictum and questioned its viability in City of Chicago v. Morales, 527 U.S. 41, 55 n.22 (1999)). We agree with

the district court’s conclusion that Appellants brought a facial

challenge to the Fleet Rules. Appellants’ First Amended

Complaint requested declaratory and injunctive relief on the

ground that the Rules were preempted in their entirety by the

Clean Air Act. Nothing in that complaint indicated that

Appellants were bringing an as-applied challenge; the complaint sought invalidation of the Rules in toto without reference to any particular application. 

At oral argument before the Supreme Court, counsel for

Appellants stated that they had brought “a facial challenge”

and were “claiming total preemption.” Transcript of Oral

Argument at 4, 541 U.S. 246 (2004) (No. 02-1343). On

remand, Appellants again reiterated their contention that the

Fleet Rules were wholly preempted in their “Motion for Order

Implementing the Supreme Court’s Decision.” The motion

requested (1) a declaration that the Fleet Rules “are preENGINE MFRS. ASS’N v. SCAQMD 10155
empted by Section 209(a) . . . and are invalid in their entirety”

and (2) an injunction preventing the District “from enforcing

or attempting to enforce any of the provisions of any of the

Fleet Rules.” 

[14] Given Appellants’ failure on remand to make a more

fine-grained preemption argument, we have sympathy for the

decision of the district court that, because certain Fleet Rule

provisions were protected by the market participant doctrine,

Appellants’ facial challenge entirely failed under Salerno.

Nevertheless, we conclude that the district court, after holding

that the market participant doctrine protects from preemption

the provisions governing procurement decisions by the state

and local governments, should have gone on to address

whether the remaining provisions were preempted. Where a

plaintiff challenges an enactment as prima facie invalid,

Salerno requires the plaintiff to show that there can be no

valid application of a particular challenged provision. However, Salerno does not require a plaintiff to show that every

provision within a particular multifaceted enactment is

invalid. “When a statute contains unobjectionable provisions

that are separable from those found to be unconstitutional, a

court reviewing the statute should maintain the statute in so

far as it is valid.” Nat’l Collegiate Athletic Ass’n v. Miller, 10

F.3d 633, 640 (9th Cir. 1993) (citing Alaska Airlines, Inc. v.

Brock, 480 U.S. 678, 684 (1987)). In other words, some of the

provisions might be facially invalid, and might not. 

[15] Each Fleet Rule contains multiple provisions, placing

restrictions on specific lists of public or private entities. Those

provisions within the Rules that constitute state proprietary

action are valid provisions, not valid applications of a single,

unseverable provision. Cf. Tocher, 219 F.3d at 1050 (holding

that one provision of towing ordinance was preempted, that

another provision escaped preemption under the market participant exception, and that “there [was] no need to strike

down the [ordinance] in its entirety” due to a severability

clause). We therefore remand to the district court for it to

10156 ENGINE MFRS. ASS’N v. SCAQMD
decide in the first instance whether the remaining provisions

of the Fleet Rules are preempted by the Clean Air Act.6

Conclusion

We affirm the district court’s holding that, under the market

participant doctrine, the Clean Air Act does not preempt those

provisions of the Fleet Rules directing state and local governmental entities’ purchasing, procuring, leasing, and contracting decisions. We vacate the district court’s dismissal of

Appellants’ claims with the respect to the Fleet Rules’ other

provisions. We also grant the District’s request for judicial

notice. We remand for further proceedings not inconsistent

with this opinion.

AFFIRMED in part; VACATED in part; and

REMANDED. Each side shall bear its own costs on appeal.

6We note that the record before us contains an “Advisory Notice to

Fleets Subject to SCAQMD Fleet Vehicle Rules 1186.1, 1191, 1192,

1193, 1194, 1195, and 1196,” dated July 20, 2005. The Advisory Notice

states that, following the district court’s May 6, 2005 order, the Fleet

Rules would be enforced only “as they apply to state and local public entities” or “private entities under contract to state or local public entities,”

and would not be “affirmatively enforce[d]” as applied “to private entities

that are not under contract to state or local public entities” or to “federal

public entities.” We cannot conclude, on the basis of this Advisory Notice

alone, that Appellants’ case is moot. Cf. City of Mesquite v. Aladdin’s

Castle, Inc., 455 U.S. 283, 289 (1982) (“Mere voluntary cessation of

allegedly illegal conduct does not moot a case . . . .” (internal quotation

marks omitted)). We leave it to the district court to determine whether any

other events not reflected in the record before us have rendered the case

moot. 

ENGINE MFRS. ASS’N v. SCAQMD 10157