GM EV1 with NiMH Battery pack
GM may have prematurely mothballed its EV1 now that Judge Coyle's injunction may mean carmakers have to now meet the original 10% ZEV quota.

California Injunction Blues

Someone just shot himself in the foot last month, but the question is who?

By Bill Moore

With little fanfare but lots of weighty implications, Judge Robert E. Coyle of the US District Court for the Eastern District of California issued a preliminary injunction on June 11th against the California Air Resources Board (CARB) preventing the implementation of the 2001 amendments to the state's ZEV mandate.

CARB provided EV World with a copy of Judge Coyle's injunction and while we're not legal experts and certainly won't pretend to weigh the merits of the Court's decision, what he wrote is instructive. So, in the interest of clearing the air a bit -- since the 2001 amendments won't be doing it anytime soon -- we thought we'd highlight what we think are the salient points of the decision.

First some background.

The original Zero Emission Vehicle (ZEV) mandate stipulated that beginning in 1998 10% of all vehicles sold in the state would have to generate zero tailpipe emissions. The only vehicles that qualified at the time where battery electric vehicles like the GM EV1 and Honda EV Plus. Carmakers were successful in negotiating an extension to the year 2001. During the interim, they agreed to build and lease a limited number of EVs as part of a memorandum of understanding with the state.

In recognition of the limitations of BEV technology and its high costs, CARB proposed an elaborate system of credits and technology options that modified the original 10% mandate, effectively reducing the number of BEVs to as few as 2% of vehicles sold. In place of battery EVs, carmakers could substitute a variety of advanced-technology, near-zero emission vehicles. The idea was to allow some flexibility in how the major automakers met the mandate.

But CARB's flexibility proved its undoing according to Judge Coyle's findings.

According to the plaintiffs in the case (see list below), the new 2001 rules violated the Supremacy Clause of the US Constitution.

Carmaker attorneys successfully argued that when CARB included a provision that determined whether or not a vehicle qualified as an Advanced Technology Partial ZEV or AT PZEV it used the vehicle's fuel economy as one of the standards, in addition to reduced emissions. The court viewed this provision as interfering with or "contrary to the laws of (C)ongress."

The court ruled that the mileage requirement sought to supercede federal mileage requirements, which is the prerogative of the Congress alone. The plaintiffs pointed out to the court that the Energy Conservation Policy Act of 1975 statesÅ 

"When a average fuel economy standard prescribed under this chapter is in effect, a State or a political subdivision of a State may not adopt or enforce a law or regulation related to fuel economy standards or average fuel economy standards for automobiles covered by an average fuel economy standard under this chapter."

CARB's attorneys offered their own rebuttal by noting the federal waiver granted the state in the Clean Air Act. They contended the 2001 ZEV amendments "provide the latest in innovative solutions to our air quality problems (by) provid(ing) a flexibility in meeting the new regulations with one provision that allows credit for vehicles that are fuel efficient as well."

The attorneys also pointed out that fuel efficiency is not the only criteria because, "fuel efficiency must be achieved by advanced technology which promotes zero-emission technology."

The plaintiffs used a 1977 court decision of Bay vs. Atlantic Richfield Co. to counter CARB's position. In this ruling, the court sided with ARCO against the state of Washington who required tankers operating in Puget Sound to either meet stringent hull and safety design standards or they must operate with tug boat assistance. The idea, of course, was to prevent oil spills from poorly constructed, single-hull tankers run aground by unwary or hapless captains.

In the case of the tankers, the court ruled that while the state's tanker safety regulations violated the Supremacy Clause, the tug boat escort provision did not.

Here's the actually wording in the injunction.

"The Supreme Court held that this provision was invalid under the Supremacy Clause insofar as it imposed design requirements because Title II of the Ports and Waterways Safety Act mandates federal regulations for minimum standards for tanker design and construction.

"However, the Supreme Court held in pertinent part, the state provision imposing tug escort requirements for vessels failing to satisfy the state's design standards was not invalid under the supremacy clause because the tug escort provision was not an indirect method of requiring tanker owners to comply with the invalid state tanker design standards."

In essence the court said, Washington State could continue to require tugboat escort requirements for tankers that did not meet federal design and construction standards. The court reasoned that requiring tugboat escort offered ship owners a lower cost alternative than having to build new double-hull tankers or retrofit existing ones under Federal law.

Judge Coyle applied this case to the 2001 amendments by arguing that carmakers trying to meet the ZEV mandate at the least cost could only do so with advanced gasoline hybrid-electric designs. Other AT PZEV options available in the revised mandate would simply not be cost effective. According to this logic, mass-produced hybrid-electric vehicles are equivalent to Puget Sound tug boats when it comes to offering the plaintiffs a way to meet federal fuel economy standards.

The judge wrote in his decision, "while there are other AT PZEV options available to plaintiffs in the 2002 ZEV amendments, the court is persuaded that the other options are not a viable alternative to production of advanced gasoline hybrids.

In addition to the Supremacy Clause issue, the plaintiffs also raised issues including Status Quo Ante Litem, Severability and Loss of Money and Goodwill.

CARB contended that the plaintiffs could not prove "irreparable injury resulting from enactment of the 2001 ZEV amendment."

The injunction states, "The alleged harm from adoption of the 2001 ZEV amendments can only be compared to what would be the status quo if CARB had not adopted the 2001 amendments, i.e., the 1999 ZEV amendments would be in place and enforced, which amendments are more stringent economically."

But the court reasoned that because CARB didn't enforce the original 1999 mandate prior to the plaintiffs seeking the injunction that status quo ante litem (the status quo before the lawsuit) didn't apply.

Basically, the plaintiffs asserted that even though CARB failed to enforce the 1999 mandate, they were still entitled to claim irreparable damage if they tried to meet the 2001 amendment.

CARB argued that the 2001 amendments were severable, meaning that it could still apply the rest of the 2001 amendments if the courts required it to sever the AT PZEV portions. Again, this argument failed to persuade the court because the 2001 amendments contained no severability clause.

The injunction concludes with respect to severability that, "from the record before it that the AT PZEV portion of the 2001 ZEV amendments is not severable as that term is defined under California law."

Finally, the plaintiffs made their case for loss of money and good will by presenting "evidence that they will suffer substantial harm during the pendency of this litigation in the absence of a preliminary injunction. . ."

They alleged that given the uncertainties posed by the fluid nature of litigation against the 2001 amendments, the plaintiffs stood to lose "hundreds of millions of dollars" in investments and research on vehicles that might not be needed if the 2001 ZEV amendments mandate proved unconstitutional.

The injunction concludes. . .

"From the record before it that plaintiffs have demonstrated a strong likelihood of success on the merits of their claim that the AT PZEV option set forth in the 2001 ZEV amendments is completely preempted by the Energy Policy and Conservation Act of 1975 and that plaintiffs will suffer irreparable injury if the requested preliminary injunction is not granted because of the very substantial costs of compliance with the 2001 ZEV mandate."

So, where does this leave California's ZEV mandate?

CARB cannot enforce the 2001 amendments as they apply to model years 2003 and 2004, "pending final resolution of this litigation."

CARB spokeswoman, Gennet Paaurve, told EV World that the Air Resource Board has three options. It can appeal the decision. It can redraft the amendments. Or it can do nothing.

Doing nothing would, in CARB's view, mean that the more stringent 1998 amendment rules now apply. Carmakers and dealers will probably not see it that way.

So, one is left wondering who really won and who really lost by the issuing of this injunction. It could be argued that both parties shot themselves in the foot. CARB's efforts to be flexible in its enforcement of the ZEV mandate only resulted in creating a potentially fatal flaw that carmakers exploited.

But by preventing the implementation of the revised rules, carmakers may now find themselves having to meet the original 10 percent ZEV quota without the benefit of any previously accrued credits.

One thing is certain, the real losers here are the citizens of California, the state with the worst air quality in the United States. A law intended to improve the quality of their lives and their health finds itself the victim of a legal system that seems more concerned about the nuances of the law than on its intent.

List of Plaintiffs:

Central Valley Chrysler-Plymouth, Inc.
DaimlerChrysler Corporation,
Frontier Dodge, Inc.
General Motors Corporation
Hallowel Chevrolet Company, Inc.
Keller Motors, Inc.
Kitahara Pontiac-GMC-Buick, Inc.
Surroz Motors, Inc.
Tom Fields Motors, Inc.

Times Article Viewed: 9043
Published: 06-Jul-2002


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