Court Opinion

ID: 9482588
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:55:11.46069+00
Date Added: 2024-06-11T17:49:05.540717
License: Public Domain

MIKVA, Chief Judge,
dissenting in part:
In 1989, the National Highway Traffic Safety Administration (“NHTSA”) terminated a rulemaking it had initiated to consider amending the statutory automotive fleet fuel economy standard for the 1990 model year (“MY 1990”). Competitive Enterprise Institute (“CEI”) and Consumer Alert challenge that decision, alleging that NHTSA underestimated the safety implications of failing to lower the statutory standard. Although I concur in the court’s standing analysis, I disagree on the merits. In deciding that NHTSA failed to evaluate the safety consequences of its action, the majority intrudes into the agency’s domain by substituting a judicial balancing of the evidence for NHTSA’s own considered judgment and then directing the agency to second-guess a standard set by Congress. Since I think this is a speculative and improper venture, I dissent.
The majority concludes that it must remand because NHTSA offered no adequate explanation as to why retaining the 27.5 mpg standard would not force carmakers to downsize their cars thus making it more difficult for consumers to obtain larger, safer cars. Maj.Op. at 324. I find that NHTSA did adequately address this concern.
When NHTSA terminated its rulemaking for MY 1990, thus leaving the 27.5 mpg standard in place, it specifically addressed safety-related comments submitted by CEI and other organizations that urged NHTSA to lower the CAFE standard for MY 1990 significantly. NHTSA agreed with these organizations that vehicle “downsizing” accompanied fuel economy gains during the 1970s and early 1980s, and that light cars are less safe than heavy cars in multi-vehicle collisions. See Fed.Reg. at 21,992-*32894 (1989). But NHTSA specifically concluded that “there is no evidence demonstrating adverse safety consequences that would be associated with retaining the 27.5 mpg standard in MY 1990.” See id. at 21,993. The agency predicted that automakers would not change their MY 1990 cars or marketing strategies regardless of its decision. In the longer term, NHTSA anticipated that automakers would meet CAFE obligations without further downsizing their cars. Even if a 27.5 mpg standard did restrict the larger car production for some manufacturers, NHTSA said, consumers who prefer big cars would not buy small, relatively unsafe vehicles; instead, they would buy large cars from other makers, purchase a minivan, or keep their current large cars. See id. at 21,991-94.
NHTSA’s termination of the MY 1990 rulemaking is appropriately tested against the APA’s familiar “arbitrary and capricious” standard, see 5 U.S.C. § 706(2)(A), which focuses our inquiry on whether “we can discern a reasoned path from the facts and considerations before the [agency] to the decision it reached.” Neighborhood TV Co. v. FCC, 742 F.2d 629, 639 (D.C.Cir.1984). At the same time, we must be mindful that NHTSA’s decision to terminate this rulemaking leaves the regulatory status quo intact, and therefore should be reviewed “somewhat more deferentially” than decisions to promulgate new rules. Williams Natural Gas Co. v. FERC, 872 F.2d 438, 443-44 (D.C.Cir.1989).
Under the Energy Policy and Conservation Act (“EPCA”), 15 U.S.C. § 2001 et seq. (1988), manufacturers earn CAFE credits by exceeding the fleet mileage standard in a given year, and they may use these credits to offset CAFE deficiencies incurred up to three years before or after the model year in question. 15 U.S.C. § 2002(Z). Thus, CAFE deficiencies in MY 1990 may be offset by credits earned in MYs 1987-1989 or MYs 1991-1993, but any MY 1987 credits not used by MY 1990 would be lost.
NHTSA concluded that instead of downsizing their fleets in response to its decision to retain the 27.5 mpg standard, carmakers would draw upon unused or “banked” CAFE credits. NHTSA based this decision on testimony by Ford that it would not change its production or marketing plans if NHTSA failed to lower the MY 1990 CAFE standard, but instead intended to use accumulated credits. See 54 Fed.Reg. at 21,-991. GM stated in the same hearing that it might slow production of large cars unless NHTSA lowered the MY 1990 standard to 26.7 mpg or less. However, two subsequent developments suggested, in NHTSA’s view, that GM would use accumulated credits to offset any anticipated CAFE deficiency rather than changing MY 1990 production or marketing strategies. See id. (noting implications of Center for Auto Safety v. Thomas, 856 F.2d 1557 (D.C.Cir.1988) (en banc), and citing most recent GM CAFE predictions).
The majority argues that requiring Ford and GM to use up credits in 1990 will have the same practical effect as raising the CAFE standard for later model years, resulting in a long-term shift to smaller, more dangerous cars. Maj.Op. at 323-24. This conclusion springs from NHTSA’s projection that Ford would use credits from both MY 1987 and MY 1988 to offset MY 1990 deficiencies, while GM would use MY 1988 credits exclusively. See, 54 Fed.Reg. at 21,991.
Ford’s use of MY 1987 credits to avoid liability in MY 1990 could not have long-term consequences because those credits would expire in MY 1990 if unused. The same is not true for MY 1988 credits, however: using credits from MY 1988 in MY 1990 would reduce car-makers' leeway to exceed CAFE standards in MY 1991, the last year when MY 1988 credits could be used. Finally, Ford and GM expected to achieve a CAFE level of better than 26.5 mpg in MY 1990, see id., meaning that both would likely have earned credits usable in MYs 1991-1993 had NHTSA chosen the lowest standard contemplated by its proposed rulemaking.
NHTSA recognized that its decision to terminate the MY 1990 rulemaking would affect the availability of CAFE credits in subsequent model years. See id. at 21,991, 21,994. Yet it anticipated that leaving the *329statutory standard for MY 1990 in place would not force Ford or GM to produce smaller, less safe cars in the 1991 model year or thereafter. NHTSA offered statistics showing that cars made by GM in MY 1988 were, on average, both heavier and more fuel efficient than cars made by Ford in the same year. “This example,” the agency said, “illustrates the point that not all CAFE gains come by reducing weight.” Id. at 21,993.
NHTSA also cited evidence that in recent years Ford and GM have in fact improved the fuel mileage of their cars by means other than weight reduction. Specifically, Ford’s MY 1990 cars weighed about 150 pounds more on average than its MY 1983 cars, even though they travelled nearly one mile farther on each gallon of gasoline. GM’s cars evolved in the same direction between MY 1986 and MY 1990, gaining almost 100 pounds while registering an efficiency improvement of 0.4 mpg. Id. “Clearly,” NHTSA concluded, “there are methods of improving fuel economy that do not depend on downsizing or weight reduction.” Id. Later in its notice NHTSA specifically listed technologies that could be incorporated more thoroughly into Ford and GM cars to improve fuel efficiency. Among these were several — including advanced transmission and engine technologies and improved aerodynamics and rolling resistance — that would have no apparent effect on vehicle weight or safety. See id. at 21,996. (Incorporating new technologies in cars built after MY 1990 could have cost implications not developed in the record before us, but that issue was not raised in the briefs or at oral argument.) This court need not agree with the agency’s position; it is enough that NHTSA’s view is not “so implausible that it could not be ascribed to a difference in view or the product of agency expertise.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2867, 77 L.Ed.2d 443 (1983). I would therefore decline to disturb the agency’s conclusion that termination of the MY 1990 rulemaking would have no safety impact.
The majority wants NHTSA to confront a perceived “trade-off” between human lives and fuel savings that its decision to retain the 27.5 mpg standard purportedly creates. Maj.Op. at 327. NHTSA did confront the trade-off and concluded that its decision would not necessarily result in a decrease in automobile safety. NHTSA admitted that reducing car weight is one option available to manufacturers constrained by CAFE standards to increase average fuel economy. See 54 Fed.Reg. at 21,993 (1989). It also conceded that vehicle weight bears on occupant safety. See id. at 21,993-94. But, exercising its expertise, the agency concluded that (as in recent years) those manufacturers who might shift production decisions in response to a MY 1990 CAFE standard of 27.5 mpg would not necessarily choose to downsize their cars. The majority concludes otherwise, emphasizing the inevitable link between CAFE standards, car size, and safety. In response to NHTSA’s point that consumers could get large cars elsewhere, my colleagues argue that the record is bereft of any evidence that “any of these [alternatives] will give consumers large-ear safety at the prices that would have prevailed if NHTSA had made a less stringent choice.” Maj.Op. at 326. But NHTSA need not guarantee that consumers have access to a plentiful selection of moderately-priced large American cars.
The majority’s predictions about effects on the behavior of both manufacturers and consumers and the likely safety consequences of these anticipated effects (e.g., fewer CAFE credits for MY 1991 which in turn will force down-sizing, and increased prices faced by consumers leading to the retention of older cars) represent musings that the agency considered and reasonably rejected. Once a court proceeds down such a path on its own initiative there is no limit to what it might accomplish in a fit of deregulatory zeal: a dramatically lower CAFE standard (let us say 15 mpg) would have allowed manufacturers to either sell more large cars at lower prices or shift to fleets containing some tank-like vehicles that might be demanded by particularly risk-averse customers. No doubt a world “absent CAFE regulation,” Maj.Op. at 325, *330would be very different, but such counter-factual exercises provide dubious grounds for upsetting NHTSA’s decision to abide by the CAFE standard chosen by Congress.
NHTSA’s decision not to amend the standard for MY 1990 was neither arbitrary nor capricious. The agency’s predictions about the behavior of automobile manufacturers, although necessarily imprecise, fall well within the broad bounds of reason. It may well be that the CAFE standards enacted by Congress have made large cars less affordable and harder to find; government regulations typically, and often intentionally, alter market behavior. While it might be hyperbole for the agency to find that a one mpg variance in the standard would have absolutely no direct or indirect effect on safety, NHTSA could well decide that the choice of a 27.5 mpg standard rather than a slightly lower one would have no adverse safety consequence. The majority, by engaging in its own speculative endeav- or, improperly second-guesses both Congress and the agency entrusted with this task.
Long before Chevron gave administrative agencies an expanded charter for using their statutory authority, our case lore made it clear that reviewing courts ought not indulge in their own preferences for regulatory action. If the agency has met its responsibilities for fact-finding and decision-making under the APA, we ought to restrain our temptation to tinker. NHTSA’s administrative determination (namely that a failure to reduce the MY 1990 CAFE standard by 1 mpg will not have an adverse effect on automobile safety) cannot be called an arbitrary or capricious decision on this record; hence we should not disturb it. See State Farm, 463 U.S. at 43, 103 S.Ct. at 2866-67. I dissent.