Opinion ID: 3049718
Heading Depth: 3
Heading Rank: 1

Heading: Market Participant Doctrine

Text: [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 80910. Subsequently, in Reeves, Inc. v. Stake, 447 U.S. 429 (1980), the Court held that South Dakota, as a seller of 10140 ENGINE MFRS. ASS’N v. SCAQMD 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 entiENGINE MFRS. ASS’N v. SCAQMD 10141 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 10142 ENGINE MFRS. ASS’N v. SCAQMD 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, 60708 (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 ENGINE MFRS. ASS’N v. SCAQMD 10143 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 10144 ENGINE MFRS. ASS’N v. SCAQMD 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 ENGINE MFRS. ASS’N v. SCAQMD 10145 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, 19899 (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 3 There is no contention that California has obtained a waiver for the Fleet Rules under § 209(b). 10146 ENGINE MFRS. ASS’N v. SCAQMD § 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 propriENGINE MFRS. ASS’N v. SCAQMD 10147 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. 10148 ENGINE MFRS. ASS’N v. SCAQMD 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 4 Appellants’ 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). ENGINE MFRS. ASS’N v. SCAQMD 10149 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.”). 10150 ENGINE MFRS. ASS’N v. SCAQMD [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 ENGINE MFRS. ASS’N v. SCAQMD 10151 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 dis10152 ENGINE MFRS. ASS’N v. SCAQMD 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 ENGINE MFRS. ASS’N v. SCAQMD 10153 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 5 During 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). 10154 ENGINE MFRS. ASS’N v. SCAQMD 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 ENGINE MFRS. ASS’N v. SCAQMD 10155 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 pre10156 ENGINE MFRS. ASS’N v. SCAQMD 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 ENGINE MFRS. ASS’N v. SCAQMD 10157 decide in the first instance whether the remaining provisions of the Fleet Rules are preempted by the Clean Air Act.6