Diversification of Automobile Emission Standards:
A Comparative Analysis of European Union and United States
Regulatory Spaces
Kyle Z. Varga
Email: kylezvarga@gmail.com Student Number: 12726052
Supervisor: Dr. Laurens Ankersmit Second Reader: Dr. Nikolaos Lavranos
Faculty of Law – European Union and International Law – European Union Law Date of Completion: July 24, 2020
Preemption, Harmonization, and Auto Emissions – Can Member States and States Exceed EU and US Federal Standards?
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Abstract
This master thesis sets out to examine what regulatory space is allotted to Members States by European Union (“EU”) institutions to enact stricter automobile emissions standards than those set by the EU. Specifically, NOx and CO₂ values as they relate to Directive 2007/46, and how this compares to a similar situation in the United States (“US”). A particular focus is paid to how preemption and harmonization relate to Article 114 TFEU and the Commerce Clause, how these systems are structurally different, but functionally have similar market making goals and effects.
There is an open debate about full and unwavering integration of the Member States into the EU Federal System or if there remains room for shared Member State and EU competences. In light of such a discussion, it is necessary to be critical of an overuse of preemption and harmonization that results in EU competence creep.
The analysis here takes a legal dogmatic approach while reviewing two cases, one from the EU and one from the US dealing with automobile emissions, EU and US legislation addressing environmental regulations, the EU Treaties, the US Constitution, and academic sources evaluating both legal structures. The method and aim of my approach is to evaluate,
from an external perspective, how the EU manages its internal market through Article 114 TFEU and, by way of the US and the Commerce Clause, explore the legal theory
of “super-regulatory” status in the US to expand on the available options for Member States to regulate auto emissions and protect the environment. Here, it is evident there are different structures used within the EU and US, but through legislation, both have a similar functional-institutional method of creating a uniformed market.
Section 1 lays the foundation of what it means to function under a “Federal System;” Section 2 addresses the legal concept of preemption and how it fits within the EU and United States legal systems; Section 3 explores harmonization and the interplay of Article 114 TFEU in the EU; Section 4 analyzes the existing framework surrounding environmental policies in the EU and US, which includes case studies from the EU and the US that are currently making their way through the appellate process dealing with this specific topic; Section 5 aims to answer the question: does the EU and US Federal Systems leave room for the States to enact
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stricter standards than set out by their respective Federal Systems?; and Section 6 concludes with a normative assessment.
Ultimately, there is a preference in the EU for field preemption and total harmonization under Article 114 TFEU, and even where there are cases of minimum, partial, or optional harmonization, there is quite little room for Member State action. Furthermore, Article 114 TFEU does not provide for a sufficient environmental waiver system, thus a framework such as the “super-regulatory” status seen in California may provide an opportunity for Member States to test innovative solutions to large scale problems, while providing the EU the ability to retain control over market interests.
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Table of Contents
Abstract ... 1
Introduction ... 4
Section 1: European Union vs. United States – “Federal Systems” ... 7
Section 2: Preemption in Federal Systems ... 8
2.1: The United States and Preemption... 9
2.2: The European Union and Preemption ... 11
2.3: Preemption Summation ... 13
Section 3: Harmonization ... 14
3.1: Harmonization and the Internal Market ... 15
3.2: Levels of Harmonization ... 18
3.3: ECJ Treatment of Minimum and Partial Harmonization ... 20
3.4: Harmonization and Preemption Summation ... 21
Section 4: The Environment... 22
4.1: Environmental Protection Agency – Pertinent Environmental Policies ... 22
4.2: European Environmental Agency - Pertinent Environmental Policies ... 23
4.3: Preemption, Harmonization, and the Environment ... 24
4.3.1: The US Explicitly Permits Two Systems, but Only Two Systems – Sometimes . 25 4.3.2: The EU Strictly Enforces One Internal Market Strategy – but Is There More? ... 28
Section 5: Comparative Analysis – What Can the European Union Learn From the United States System?... 30
Section 6: Conclusion ... 37
Bibliography ... 39
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Introduction
Climate change is one of the most important issues plaguing the world today,1 with specific challenges in the European Union (the “EU”)2 and United States (the “US”).3 Many governments, through numerous agreements and legislation, are attempting to set novel standards to help combat this issue with environmentally protective measures.4 One of the areas these standards are being proposed is in the automotive industry to combat air pollution, particularly regulating emissions such as carbon dioxide (CO₂) and nitrogen oxides (NOx).5
This paper sets out to analyze what regulatory space is allotted to Members States by EU institutions, subsequently interpreted by the European Court of Justice (the “ECJ”), to decree stricter automobile emissions standards, namely NOx and CO₂, according to Directive 2007/46 enacted under Article 114 TFEU (“Article 114”), and how this compares to the US and its States, as interpreted by the US Supreme Court (the “USSC”) under the Commerce Clause. There is a focus on how preemption and harmonization relate to Article 114 and the Commerce Clause, how these provisions are structurally different, but functionally
1 Yusuf Kahn, “Goldman Sachs released a 34-page analysis of the effects of climate change. And results are
terrifying,” Market Insider, September 25, 2019, https://markets.businessinsider.com/news/stocks/goldman-sachs-climate-change-threatens-new-york-tokyo-lagos-cities-2019-9-1028552494 and Borenstein, Seth and Lederer, Edith M., “UN chief says ‘total disaster’ if warming not stopped,” Assoc. Press, (May 8, 2019), https://apnews.com/5771645c622d4717bffc3e33fbc20df9
2 European Environmental Agency (“EEA”), “Average CO2 emissions from new cars and new vans increased in
2018” – (June 24, 2019), https://www.eea.europa.eu/highlights/average-co2-emissions-from-new; EEA, “Nitrogen Oxides (NOx) emissions,” (February 22, 2018),
https://www.eea.europa.eu/data-and-maps/indicators/eea-32-nitrogen-oxides-nox-emissions-1/assessment.2010-08-19.0140149032-3; and United Press International, “12 European nations urge EU for quicker climate goals,” Clyde Hughes, (March 3, 2020), https://www.upi.com/Top_News/World-News/2020/03/03/12-European-nations-urge-EU-for-quicker-climate-goals/2611583253026/
3 Environmental Protection Agency (“EPA”), “Carbon Pollution from Transportation,” (April 25, 2020),
https://www.epa.gov/transportation-air-pollution-and-climate-change/carbon-pollution-transportation; EPA, “Smog, Soot, and Other Air Pollution from Transportation,” (April 25, 2020),
https://www.epa.gov/transportation-air-pollution-and-climate-change/smog-soot-and-local-air-pollution; EPA, “Light Duty Vehicle Emissions,” (April 25, 2020), https://www.epa.gov/greenvehicles/light-duty-vehicle-emissions [hereinafter “EPA LDVE”]
4 United Nations Climate Change, “The Paris Agreement,” (2016),
https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement; EU Emissions Trading Systems, (2005), https://www.eea.europa.eu/data-and-maps/dashboards/emissions-trading-viewer-1; and International Carbon Action Partnership, (2007), https://icapcarbonaction.com/en/partnership/about
5 Directive 2007/46/EC – Framework for the approval of motor vehicles and their trailers, and of systems,
components and separate technical units intended for such vehicles (Framework Directive), (October 29, 2007), Official Journal of the EU L 263/1 and California Air Resource Board, “History,”
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have similar effects. More specifically, how the legal theories of preemption and harmonization are used to control automobile emissions regulations, and subsequently environmental initiatives, in the name of market making goals in both the EU and US.
As will be explored, the EU and US systems are constitutionally different;6 however, it is widely accepted that the use of a comparative legal analysis “extends and enriches the ‘supply of solutions’” and offers “the opportunity of finding the ‘better solution’”7 between that which is being compared. Since the EU and US in practice treat market making similarly, this thesis posits that the US may serve as a useful case-study when considering how a supranational organization, such as the EU, can manage internal market and environmental goals of its Member States and the EU simultaneously.
Accordingly, to critique such a situation, the analysis here takes a legal dogmatic approach while reviewing two cases, one from the EU and one from the US dealing with automobile emissions, EU and US legislation, the EU Treaties, the US Constitution, and academic sources evaluating both legal structures. Some normative observations will then be made regarding how two different legal systems deal with a similar challenge.
The method and aim of my approach is to evaluate, from an external perspective, how the EU manages its internal market through Article 114 and, by way of the US and the Commerce Clause, provide an example of a legal theory used in the US that may be of value for Member States ability to regulate auto emissions and protect the environment. Here, it is evident there are different structures used within the EU and US, but through legislation, both have a similar functional-institutional method of creating a uniformed market. The critical evaluation conducted herein is within the context of market integration vs. protection of the environment at the State/Member State level.
6 Robert Schütze, European Constitutional Law, at 43 – 76, Cambridge University Press – Cambridge (2nd ed.
2016 [hereinafter “Schütze (2016)”]
7 Konrad Zweigert and Hein Kötz, Introduction to Comparative Law, Clarendon Press – Oxford (1998), at 15
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Starting from the “normative conflict” model set forth by Schütze,8 the goal here is not to solve issues surrounding preemption categories, rather the purpose of this framework is to reflect on the interplay between Member States and EU competing interests and competences, and this context provides the platform to conduct such an observation. Under this model, I suggest that the EU legislature should consider “express saving” clauses, rule preemption, and partial harmonization more when drafting policies. Under partial harmonization, I propose that a similar “super-regulator”9 status, as seen in the California carve-out in the US, be applied in the EU FS through “express saving” clauses.10 Super-regulatory status permits California to exceed the US FS and other States are then able to adopt its policies. A system such as this would allow Member States to both address local environmental issues, as well as run large scale studies for innovative projects.
The details on scope, time-limit, requirements to justify need, and necessary oversight under a super-regulatory system should be explored and decided by relevant stakeholders, but will not be explored here. Though, as we will see in the California case here, there are a variety of issues that need to be considered before implementing such a framework. Nonetheless, Cross has written that these types of “express saving” clauses fit within the EU FS,11 thus an expansion to incorporate such an idea is much easier than integration of a completely foreign
8 Robert Schütze, Supremacy without emption? The Very Slowly Emergent Doctrine of Community
Pre-emption, at 1034, 43 Common Mkt. Rev. 1023, (2006) [hereinafter “Schütze (2006)”]
9 Ann E. Carlson, Iterative Federalism and Climate Change, at 1, (August 1, 2008), UCLA School of Law
Research Paper No. 08-09; Northwestern University Law Review, Vol. 103, (2009) [hereinafter “Carlson”]
10 Eugene Daniel Cross, Pre-emption of Member State Law in the European Economic Community: A
Framework for Analysis, at 456-7, 29 Common Mkt. L. Rev. 447 (1992), “Express saving occurs when Community legislation expressly authorizes Member States to legislate concurrently or exclusively in a certain area, thereby preventing courts from pre-empting Member State rules… Some community legislation preserves national legislative authority by providing that a particular Community provision shall be ‘without prejudice’ (See e.g. Regulation No. 171/83, Art. 20(1)) to the national provision of defined type. Alternatively, Community legislation may provide that it ‘[does] not affect the right of the Member States to lay down requirements” (The Draft Council Directive Relating to the Approximation of Requirements for Tobacco Advertising, [1989] 3 CMLR 165) within a particular field or area.” [hereinafter “Cross (1992)”] Robert Schütze, The European Community's Federal Order of Competences: A Retrospective Analysis, at 87-9, (2009). In, Dougan, Michael. & Currie, Samantha, 50 Years of the European Treaties: Looking Back and Thinking Forward, 63-92, Oregon: Hart Publishing, (2009): “From the beginning of the European project, certain provisions within the Treaty could be read as constitutional guarantees for national exclusive power… These clauses are not unknown in the internal law of treaties. They have also emerged in the US constitutionalism… they indicate the federal authority’s intention to leave the states’ powers within a certain field untouched.”
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concept. Moreover, enacting such environmental policy initiatives are justified pursuant to Article 191 TFEU and are in-line with the EU value of “cooperative-federalism.”
Section 1: European Union vs. United States – “Federal Systems”
Leading legal scholars have described the EU governmental system as sui generis, whereas the US is commonly understood to be a Federal system with shared sovereignty between the individual States and the overarching Federal government.12 Though some argue these two structures are inherently different, others describe the EU as a “Federation of States”13 or “federal union of states,”14 which helps explain the “Federal” power that the EU institutions exercise over its Members States. It has been further explained that “federalism can be conceived as an ‘in-between’ in a continuum amid international phenomena and national entities.”15 In addition, both the EU and US governments provide that those competences that are not specifically enumerated at the “Federal” level of government are retained by its States.16 Thus, both the EU and US at their core attempt to balance the interests of its larger framework vs. the sub-federal systems and interests from which it is comprised.
Though the EU and US were founded on different structures, various sets of treaties and a Constitution, respectively, in function they address a wide array of issues similarly, such as: freedom of movement of persons, goods, and services; representative democracy; standard of judicial review and redress; checks and balances amongst government institutions; and commitments to cooperate to further a common goal of a unified system.17 Accordingly, it is
12 Schütze (2016) (note 6), Chapter 2: Constitutional Nature – A Federation of States: discussing the history and
development of the US and EU structures of government
13 Id., at 75
14 John Law, How Can We Define Federalism?, at E-105, Centro Studi Sul Federalism, Perspectives on
Federalism, Vol. 5, issue 3, (2013)
15 Amedeo Arena, The Doctrine of Union Preemption in the E.U. Internal Market: Between Sein and Sollen, at
479 (2011), citing: Elisabeth Zoller, Aspects Internationaux du Droit Constitutionnel, Contribution ai une Thdorie de la Fiddration d'Etats, 294 Recueil Des Cours De L'academie De Droit International De Law Haye 41, 73, 149 (2002) [hereinafter “Arena”]
16 US Bill of Rights – 10th Amendment and Treaty on European Union Articles 3, 4, and 6
17 Brittany Stevens-Finlayson, “EU vs US Comparing the EU and US Federal Systems – Two Similar Systems
of Governance,” Gold Mercury International (2019), http://www.brandeu.eu/wp-content/uploads/2019/05/BEU_-EU-vs-US-.pdf
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appropriate, as well as necessary for this analysis, to label the place in which the EU and US governments operate as a “federal ‘middle ground’ between intergovernmentalism and statehood”18 and they can both be aptly described as a “Federal Systems.”19 Thus, the term Federal System (“FS”) will be used throughout this paper as a term of art to analyze and describe the EU’s and US’s actions surrounding preemption and harmonization of policies in the realm of interstate commerce and environmental regulations, as well as to critically reflect on the balance of Member States and States interest to enact stricter emission policies vs. the goals of free movement of goods and services found in Article 26 and 114 TFEU and the Commerce Clause. However, the use of FS is not intended to classify the EU system as a Federal governmental system in the strictest sense, as seen in the US.
Section 2: Preemption in Federal Systems
A vehicle in which the EU and US exercise control over their respective States is through preemption. Though, the EU alludes to the concept of preemption in Article 2(2) TFEU, and many EU scholars debated its underpinnings since its inception,20 there is no specific reference to the term preemption in its foundational Treaties and the word did not make its way into the official lexicon dealing with FSs until 2009.21 As a result, US jurisprudence and
18 Arena, at 487 (note 15), citing: Robert Schütze, On Federal Ground: The European Union as an
(Inter)national Phenomenon, 46 Common Mkt. L. Rev. 1069, 1102-1105 (2009) (arguing that, in combining international and national elements, the E.U. stands on a federal "middle ground" and can thus be classified, in accordance with the American tradition, as a "federal union" or a "federation of States"); Joseph H. H. Weiler, Community System: The Dual Character of Supranationalism, I Y.B. Eur. L. 267 (1981) (referring to the Community as a "federal model" in the widest sense of sharing in governance as defined by Daniel Elazar, Self Rule/Shared Rules 3(1979)) [hereinafter “Weiler”]
19 Id., citing: Ingolf Pernice, Harmonization of Legislations in Federal Systems: Constitutional, Federal and
Subsidiarity Aspects, in Harmonization of Legislation in Federal Systems: Constitutional, Federal, and Subsidiarity Aspects – the European Union and the Unites States of America Compared, 9, 15 (Ingolf Pernice ed., 1996) (“[A] ‘federal system’ is any legal entity comprised of states for the purpose of pursuing certain common ends and which has been given, to this effect, the power to exercise limited but direct jurisdiction over their citizens, but where for all other fields of public action the individual states maintain their full autonomy. This definition, therefore, includes federal states, but does not necessarily mean that only states can be a federal system.”)
20 Weiler (note 18); Schütze (2016) (note 6); and Arena, at 479 (note 15), citing: Michel Waelbroeck, The
Emergent Doctrine of Community Pre-emption: Consent and Redelegation, in 2 Courts and Free Markets: Perspectives from the United States and Europe, 548 (Terrance Sandalow & Eric Stein, eds., 1982)
21 Arena, at 479 (note 15), citing: Opinion of Advocate General Colomer, Case C-478/07, Budejovicky Budvar,
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academia will be used here to set the foundation of the development of preemption, and then we will shift to more modern scholars and case-law to focus on its current integration in both the EU and US legal orders.
2.1: The United States and Preemption
In the landmark 1824 case of Gibbons v. Ogden, the USSC ruled that the States could not interfere with the US Congress’ power to regulate commerce.22 In Perez v. Campbell the USSC reiterated that under the Supremacy Clause, State laws that are contrary to a valid Congressional act are impermissible,23 and per Altria Group v. Good, where a State law conflicts with a Federal law, that State law will be preempted.24
The Commerce Clause, addressed in Article I, Section 8 of the Constitution received much attention during the expansion of the New Deal. Case-law shifted from “formalistic distinctions” into a more realistic approach.25 Subsequent decisions concluded that the US government could regulate commerce both within and between the States.26 Though, this theory was later complicated by the landmark case of Rice v. Santa Fe Elevator, where it was established there is a presumption against preemption.27 In 2016, this presumption was modified to no longer include cases of express preemption.28
Ultimately, the above case-law is developed and examined by the US FS through Federal Courts and in the end adjudicated by the USSC. Subsequent rulings dealing with
here ultimately is the debate about Community ‘pre-emption’ of a measure and the situations in which the concurrent competences of the Member States in a particular field may have been displaced by the activity of the Community legislature” and Schütze (2006), at 1032 (note 8)
22 Gibbons v. Ogden, 22 U.S. 1, 9 Wheat. 1 (1824) 23 Perez v. Campbell, 402 U.S. 637 (1971), at 649 24 Altria Group v. Good, 555 U.S. 70 (2008)
25 Christine A. Klein, The Environmental Commerce Clause, at 23-6, 27 Harv. Envtl. L. Rev. 1 (2003),
[hereinafter “Klein”]
26 Wickard v. Filbum, 317 U.S. 111, 124 (1942): “The commerce power is not confined in its exercise to the
regulation of commerce among the states. It extends to those activities intrastate which so affect interstate commerce, or the exertion of the power of Congress over it, as to make regulation of them appropriate means to the attainment of a legitimate end, the effective execution of the granted power to regulate interstate commerce.”
27 Rice v. Santa Fe Elevator, 331 U.S. 218 (1947), at 241
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preemption established the boundaries in this area of law, specifically: express preemption involves Congress plainly stating that it has sole discretion in the area, and accordingly no further analysis is required into the Federal intent.29 While implied preemption can be inferred from the circumstances, either Congress intended to fully preempt, but did not explicitly state such, or a State law conflicts with the Federal mandate and frustrates the Federal law.30 Within both express and implied preemption, minimum standards set out the floor for States to follow, and uniform standards sets the ceiling and precludes deviation.31 In the area of implied preemption, field preemption occurs when Congress has saturated the area of law and effectively fully preempted the area,32 whereas conflict preemption arises when the State and Federal laws conflict with one another,33 either making the implementation of the Federal rule impossible or simply creates an obstacle when implementing the conflicting rule;34 however, both end up precluding the State from acting in the area of law.35
Klein has pointed out that when considering the balance between the US FS and States rights in the field of the environment, two possibilities can be seen, either: a zero-sum situation where when the FS acts the State must lose a proportional right; or an example of cooperation where certain actions can be complimentary and interwoven.36 Klein and Carlson land on the same assessment of “cooperative federalism” to explain the US FS and cite the Clean Air Act (“CAA”), Clean Water Act (“CWA”), and Resource Conservation and Recovery Act (“RCRA”) as examples of successful applications of this model.37 The idea of “cooperative federalism,” how it fits within the EU FS, and how it is comparable to the US FS is expanded upon below.
29 Arena, at 494 (note 15) and Congressional Research Service, “Federal Preemption: A Legal Primer,” (July 23,
2019), https://crsreports.congress.gov R45825 [hereinafter “CRS”]
30 CRS (note 29)
31 Geier v. American Honda Motor Co., 529 U.S. 861 (2000) and CRS (note 29) 32 Rice v. Santa Fe Elevator, 331 U.S. 218 (1947) and CRS (note 29)
33 Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142–43 (1963) and CRS (note 29) 34 Gade v. National Solid Wastes Management Association, 505 U.S. 88, 98 (1992) and CRS (note 29) 35 CRS (note 29)
36 Klein, at 53-4 (note 25)
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2.2: The European Union and Preemption
In 1992, Cross compared the EU system to the US system for the first time. He wrote there were four preemption types which mimic some of the US classifications: “express saving;” “express pre-emption;” “occupation of the field pre-emption;” and “conflict preemption” (and its subcategories: “direct conflict pre-emption” and “obstacle preemption”).38
Schütze has described that the preemption system may be better understood as a "federal theory of normative conflict [and] [c]onflicts arise where there is friction between two legal norms.”39 This fits into the “cooperative federalism” model that is the foundation of the EU,40 and entrusts the ECJ to apply the subsidiarity principle to balance the relevant EU and Member States competences and interests.41
Soares suggested that the subsidiarity principle “should caution against the use of field preemption as a common method for the judicial adjudication of conflicts of powers between the E.U. and the Member States.”42 Multiple academics, including Schütze and Soares, agree that “field preemption significantly impinges upon the vertical division of powers between the E.U. and Member States enshrined in the Treaties by transforming shared competences into E.U.-exclusive competences.”43
The aforementioned EU framework ultimately results in two opposing types of express intent, “express preemption” and “express saving,”44 and leaves the rest to be assessed on essentially a case-by-case basis, as Schütze indicated under the “federal theory of normative conflict,”45 where competing interests within a FS take place in the arena of conflicting
38 Cross (1992), at 448-9 (note 10) 39 Schütze (2006), at 1034 (note 8)
40 Arena, at 480 (citation omitted) (note 15) 41 Id.
42 Goucha Soares, Pre-emption, Conflicts of Powers and Subsidiarity, at 139, 23 Eur. L. Rev. 132, (1998): “I
would go so far as to say that subsidiarity was a legal instrument written into Community constitutional law with the aim of opposing certain centripetal tendencies caused by application of the material content of determined technical figures such as preemption. Subsidiarity and preemption were therefore figures that we may classify, at first glance, as being inspired by diametrically opposed reasons.” [hereinafter “Soares”]
43 Arena, at 517-8 (citation omitted) (note 15) 44 Id., at 480
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legislation, such as in the US.46 Per this “normative conflict” model, Schütze places EU preemption into three main categories “field preemption, obstacle preemption, and rule preemption,”47 but he emphasized that these categories are quite fluid.48 Worth noting that there is “at least one domain where the ECJ has consistently applied field preemption: that of ‘exhaustive harmonization’ within the internal market.”49
Schütze explains that preemption, “so conceived is a legislative phenomenon and represents a relative doctrine: the question to be asked is not whether Community legislation pre-empts national law but to what degree is national legislation preempted[?]”50 In addition, he wrote, preemption matters “are not strictly ‘constitutional’ claims, but legislative claims: the pre-emptive effects does not stem from the supremacy clause, but arises under the particular piece of federal legislation.”51
Important to highlight, and addressed further later, is that legislation enacted under Article 114 is subject to strict scrutiny by the ECJ, opposed to legislation enacted under another legal basis,52 as the ECJ takes the goal of market integration, namely elimination of trade barriers and tariffs quite seriously.53
46 Arena, at 485 (note 15)
47 Schütze (2006), at 1038 (note 8) and Arena, at 501 (note 15): “[T]he enactment of an E.U. act inevitably
precludes Member States from adopting or maintaining national legislation, but, depending on the
circumstances, such a preclusion may alternatively concern: i) only national rules expressly contradicting the E.U. act's provisions (rule preemption); ii) national measures that do not clash with a specific provision of the E.U. act, but hinder the attainment of the goals that act seeks to pursue (obstacle preemption); or iii) all national measures falling within the field occupied by the E.U. act (field preemption).”
48 Schütze (2006), at 1043 (note 8) 49 Arena, at 502 (note 15)
50 Schütze (2006), at 1039 (note 8) 51 Id., at 1044
52 C-573/12, Ålands Vindkraft AB v. Energimyndigheten, (2014), ECR 2037
53 Case C-210/03, Swedish Match AB and Swedish Match UK Ltd v. Secretary of State for Health, (2004), ECR
802; Case C-491/01, R v. Secretary of State ex parte British American Tobacco and Imperial Tobacco, (2002) ECR I-11543, and Case C-58/08, Vodafone, O2 et al v. Secretary of State, (2010) ECR 321, which can all be contrasted from, Case C-376/98, Germany v. European Parliament and Council (“Tobacco Advertising I”), (2000) ECR 544
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2.3: Preemption Summation
Based on the foregoing, it can be seen that the system outlined by Cross, which parallels US preemption, provides for the use of express intent of preemption, specifically “express preemption” and “express saving,” and when added to Schütze’s “normative conflict” model, we can observe an encompassing starting point for this analysis. Both the EU and US FS preemption discussions demonstrate that there is an underlying balance of competence interests, which stem from the subsidiarity principle in the EU and the presumption against preemption in the US. However, in practice, the EU and US both tend to defer to the FS and market integration when weighed against competing interests.
Yet, this framework is still able to respect “cooperative federalism” inherent in the EU FS,54 and at times present in the US FS. This can be seen in the examples of rule preemption where it is possible to allow for competence sharing between the EU and Member States. I posit that under this model, “express saving” clauses55 can and should be used to establish a super-regulatory status to allow Member States to experiment with novel solutions to largescale challenges.56 This strategy parallels the reasonably successful example of California and is also consistent with the duty of sincere cooperation under Article 4(3) TEU, so long as it is closely monitored and controlled as to ensure it does not disrupt the internal market writ large.57 Thus, the rest of this analysis focuses on how legislative preemption and harmonization work within the context of Article 114.
54 Robert Schütze, From Dual to Cooperative Federalism: The Changing Structure of European Law, Oxford
University Press, (2009) [hereinafter “Schütze (2009)”]
55 Supra Introduction (note 10) 56 Infra Section 5
57 Cross (1992), at 456-7 (note 10), Discussion of express saving clauses being used in EU legislation: “Thus,
the use of these clauses can help satisfy the goals of legislative clarity, efficiency, and predictability. By
providing explicit guidance on the respective spheres of legislative competence, the legislative institutions of the Community can clarify the roles of the Member States legislative and administrative bodies, and reduce
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Section 3: Harmonization
In regards to harmonization, the US FS does not have a meaningful comparison to the approach taken in the EU. Rather, the US Congress has the ability to make certain funds contingent upon compliance with FS programs58 or States can abdicate competences to the FS (see the Uniform Commercial Code);59 however, Congress has no ability to force States to adopt certain legislation, other than “federalizing” a specific area,60 thereby exercising some form of preemption and preventing States to act contrary to the FS.61 Accordingly, and as noted above, the US FS has adopted a system that assumes there is no preemption, unless there is “clear and manifest purpose of Congress[’]” intent to the contrary.62
Conversely, in the EU, harmonization in a legislative context is an extensively explored topic and represents a core idea underlying a functioning EU system, the principle of sincere cooperation,63 coupled with the doctrine of supremacy set out in Costa v. ENEL,64 represents one of the main linchpins in the EU FS. The ECJ has determined that this relationship entails a requirement that Member States give EU policy full force and effect within its borders, 65 even setting aside Member State law if it conflicts with EU law.66 Moreover, under the principle of legal certainty, Member States are under an obligation to remedy any conflict in their national legal order.67 This FS relationship between the EU and its Member States differs from the US and its States model in that Member States have a responsibility to comply with EU supremacy only if their law is contrary to EU law and “…the rule may continue to be applied in the cases where it is not inconsistent, or to cases which are not covered by Community
58 Arena, at 491 (citation omitted) (note 15) 59 Id.
60 Id. 61 Id.
62 Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947) at 230 63 Article 4(3) TEU
64 Case 6/64, Flaminio Costa v. ENEL, (1964) ECR 614
65 Case 106/77, Amministrazione delle Finanze v. Simmenthal SpA, (1978) ECR 629, at p. 14
66 Joined Cases C-10/97 to C-22/97 Ministero delle Finanze v. IN.CO.GE.'90 Srl, Idelgard Srl, Iris'90 Srl,
Camed Srl, Pomezia Progetti Appalti Srl (PPA), Edilcam Srl, A. Cecchini & C. Srl, EMO Srl, Emoda Srl, Sappesi Srl, Ing. Luigi Martini Srl, Giacomo Srl and Mafar Srl [1998] ECR I-06307, at p. 21
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norm…”68 Thus, Member State rules will remain in effect when dealing with purely internal matters.69
3.1: Harmonization and the Internal Market
Arena has noted that there is an ongoing debate about applying the concept of preemption and harmonization to the internal market, on one hand you have views such as Mastroianni who believes the internal market is an overarching principle of the EU that can only be achieved through the EU FS, namely harmonizing legislation.70 While on the other hand, you have views such as Schütze that maintain the internal market “will not, by definition, require the exclusion of all national action within their scope.”71 Nonetheless, Article 114 is used by the EU FS through its legislature to attempt to bridge the gaps it the internal market.
An additional layer to this debate involves whether legislation enacted under Article 114 requires a free movement clause in order to be valid. Barnard has written that these matters must include both a free movement and exclusivity clause,72 which results in two limits: “resort to Article 114 can be made where no other specific legal basis applies… [and] the measures adopted under Article 114 must be for approximation of laws (also known as harmonization).”73 In the case of Tobacco Advertising I the Court considered this matter and struck down the relevant Directive, some academics have opined that the reason was the absence of a free movement clause.74 As a result of this case, Barnard explained that if the effects of harmonization are too “remote and indirect” it would result in a breach of the
68 Schütze (2006), at 1032 (note 8), citing: De Wittee, Direct effect, supremacy and the nature of the legal order,
at 190, in Craig and de Burca, The Evolution of EU law (OUP, 1999), pp. 177-213
69 Id., at 1032
70 Arena, at 525 (citation omitted) (note 15) 71 Id.
72 Catherine Barnard, The Substantive Law of the EU – The Four Freedoms, at 658, Oxford University Press,
(4th ed. 2013) [hereinafter “Barnard (2013)”]
73 Catherine Barnard, The Substantive Law of the EU – The Four Freedoms, at 559, Oxford University Press,
(5th ed. 2016) [hereinafter “Barnard (2016)”]
74 Case C-376/98, Tobacco Advertising I, (2000), ECR I-8419, p. 99 - 101; Stephen Weatherill, The Internal
Market as a Legal Concept, at 212, Oxford Scholarship Online, (2017) [hereinafter “Weatherill (2017)”]; Lena Boucon, EU Free Movement Law and the Power Retained by Member States, at 227-8, European University Institute, (2014) [hereinafter “Boucon”]; and Barnard (2016), at 564 (note 73)
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principle of conferral,75 as this would mean that “the powers of the [Union] legislature would be practically unlimited.”76 Furthermore, a free movement clause has been said to be necessary to keep the EU FS in check and to avoid political creep into Member States competences.77
However, Barnard and Boucon have both also observed that the Court may be withdrawing from this strict position,78 as seen in Swedish Match79 and Arnold Andre,80 where “the Court said that a total ban on the marketing of oral tobacco products such as snuff… could be adopted under Article 114 TFUE, even though a ban might appear to fly in the face of a single market in goods.”81 In addition, in Österreichischer Rundfunk the Court found that the Directive complied with Article 114 despite the matter was confined within the Member State.82 Thus, the pursuit of “market-making” taken pursuant to Article 114 has been used by the legislature to broaden the EU FS through harmonization of sectors such as “environmental protection, consumer law, public health policy, [and] culture.”83 Weatherill has astutely opined:
“This is the true energy of Article 114. The EU legislature need not seek to disguise the re-regulatory dimension of its harmonization initiatives. It needs only to tie that re-regulatory dimension sufficiently tightly to the market-making function of harmonization. But that is not difficult to achieve, partly because the Court is generous in its interpretation of the scope of the legislative
75 Article 5(2) TEU
76 Barnard (2016), at 564 (note 73)
77 Stephen Weatherill, The Limits of Legislative Harmonization Ten Years after Tobacco Advertising: How the
Court’s Case Law has become a ‘Drafting Guide,’ at 848, University of Oxford, German Law Journal, Vol. 12 No. 03, (2011): “The Union may not extend its own competences. To trespass beyond the Treaty‐defined limits is to destroy the foundations of the compact: it is certainly not for the EU legislature to adjust those limits for reasons of political convenience.” [hereinafter “Weatherill (2011)”]
78 Barnard (2016), at 566-7 (note 73) and Boucon, at 109 (note 74): “As L. Azoulai puts it, ‘there is virtually no
area of economic and social life which escapes, in principle, the effect of the Treaty rules.’ In other words, any matter may potentially fall within the scope of application of the economic freedoms and/or European Union citizenship provisions. Accordingly, this approach goes against the commonly accepted idea that European integration is only a partial phenomenon, in the sense that it only covers limited sectors of activity. According to this view, it is not meant to encompass the entirety of the traditional roles of a state.” (Citations omitted)
79 Case C-210/03, Swedish Match AB and Swedish Match UK Ltd v. Secretary of State for Health, (2004), ECR
I-11893
80 Case C-434/02, Arnold André GmbH & Co. KG v. Landrat des Kreises Herford, (2004), ECR I-11825 81 Case C-376/98, Tobacco Advertising I, (2000), ECR I-8419, p. 99 - 101; Weatherill (2017), at 212 (note 74);
and Barnard (2016), at 564 (note 73)
82 Case C-465/00, Rechnungshof v. Österreichischer Rundfunk, (2003), ECR I-4989, p. 41 83 Weatherill (2011), at 834 (note 77)
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grant but mainly because the Treaty, and the concept of internal market in particular, simply is broad.”84
Accordingly, Article 114 has a long history as a vehicle of ensuring there is uniformity within the internal market of the EU, particularly the absences of trade barriers,85 and preventing Member States from maintaining conflicting rules, save for limited circumstances where deviations are permitted for public policy reasons.86 However, Article 114 has a few key provisions that allow Member States to petition the Commission for a waiver for various concerns under subsections (4) – (9).
Some may argue that the proposed super-regulatory status is not necessary, as a possible avenue for Member State deviation can be achieved through Article 114 (4) and (5) TFEU. However, contrary to some academics’ original concerns,87 these subsections are rarely used by Member States, aside from cases involving Genetically Modified Organisms (“GMO(s)”).88 Moreover, even in these few instances, we have examples such as the Austrian GMO’s that demonstrate how high the bar is to receive approval for derogation. There the Commission addressed the language in Article 114 (5) referring to “new scientific evidence” and a “problem specific to that Member State.” The Commission concluded “there was no new scientific evidence, in terms of risk to human health and the environment, to justify the prohibition [and] there was no scientific evidence to indicate that Upper Austria had unusual or unique ecosystems that required separate risk assessments from those carried out for Austria as a whole.”89 The ECJ ultimately agreed with the Commission’s findings, thereby affirming the
84 Id.
85 Case 121/85, Conegate Limited v. HM Customs and Excise, (1986), ECR 01007; C-320/03, Commission of
the European Communities v. Republic of Austria, (2004), ECR I-09871; Case 178/84, Commission of the European Communities v. Federal Republic of Germany, (1987), ECR 01227; and Case 120/78, Rewe-Zentral AG v. Bundesmonopolverwaltung fur Branntwein, (1979), ECR 00649
86 Case C-389/96, Aher-Waggon GmbH v. Bundesrepublik Deutschland, (1998), ECR I-04473 – public policy
concern here involved airplanes and air pollution; C-573/12, Ålands Vindkraft AB v. Energimyndigheten, (2014), ECR 2037– public policy concern here involved clean energy and the environment; and Case 302/86, Commission of the European Communities v. Kingdom of Denmark, (1988), ECR 04607 – public policy concern involved the environment and recycling practices.
87 Michael Dougan, Minimum Harmonization and the Internal Market, at 879, Common Market Law Review 37
(2000) [hereinafter “Dougan”]
88 Barnard (2016), at 577 (note 73) 89 Id., at 578
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Commission’s strict interpretation of the waiver provision.90 An important parallel to note is that the Commission’s position here resembles the position of the Environmental Protection Agency (“EPA”) and National Highway Traffic Safety Administration (“NHTSA”) in the California matter almost exactly, especially the uniqueness requirement.91
The history of Article 114 clearly demonstrates the ability of EU legislators to either limit or completely prevent Member States action within a given field. Despite the ongoing debate of the true intent of the EU and the internal market, particularly complete harmonization vs. Member States retaining some of the competences set out in the Treaties, Article 114 has been used to harmonize a variety of matters, and evidence of deviation from market uniformity seems sparse, even with the explicit waiver system found in subsection (4) and (5).
3.2: Levels of Harmonization
The most encompassing power for the EU FS comes in the form of exhaustive harmonization, in the form of field preemption, that renders “total” or “complete” harmonization of the area, generally found in an “exclusivity clause” which preclude any Member State derogation.92 This has been observed as the trend of the EU legislature,93 though it is settled there is no preclusion to minimum harmonization.94
A defining characteristic of minimum harmonization is that it provides the least amount of control for the EU FS, as it sets the proverbial “floor.” Thus, allowing Member States to enact stricter rules than those set out in the legislation so long as there is an “independent domestic policy objective” and the Member State measure does not “not exceed the ‘ceiling’ on free movement in the Treaty rules.”95 Generally these matters are not clear cut, and are left
90 Id., at 579 91 Infra Section 4
92 Weatherill (2017), at 854 (note 74)
93 Isidora Maletić, The Law and Policy of Harmonisation in Europe´s Internal Market, at 175, Edward Elgar
Publishing, (2013)
94 Barnard (2013), at 600 (note 72) 95 Arena, at 539 (note 15)
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for the ECJ to determine the extent of harmonization intended by the legislation,96 on a case-by-case basis.97
Two other important categories of harmonization that are worth nothing are partial and optional. In the case of partial harmonization, “the permissible Member State legislation must be aimed at regulating aspects of the harmonized matter other than those covered” by EU legislation, this is different than minimal harmonization where Member State are permitted to exceed the floor set by EU legislation.98 Thus, partial harmonization is present if Member State action regulates subject matter not covered by the EU legislation. Cross has noted that partial harmonization is usually evident where there is an “express saving” clause.99 Whereas, optional harmonization allows for two parallel rules to exist, “one, laid down in the E.U. measure, designed to regulate cross-border transactions; another, set by each Member State (and usually more lenient than E.U. rules) for purely internal situations.”100
In light of this Section and Section 1, the overall structure of preemption and harmonization exists on an “intensity scale” as follows, (1) representing greatest FS preemption and (7) being the least:101
• (1) Field Preemption
• (2) Exhaustive Harmonization Clauses • (3) Obstacle Preemption
• (4) Minimum Harmonization Clauses • (5) Partial Harmonization Clauses • (6) Optional Harmonization Clauses • (7) Rule Preemption 96 Id. 97 Id., at 547 98 Id., at 541 99 Cross (1992), at 456-7 (note 10) 100 Arena, at 542 (note 15) 101 Id., at 544
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3.3: ECJ Treatment of Minimum and Partial Harmonization
The case of Gallaher102 involved a preliminary question brought by the United Kingdom (“UK”) asking if it was permitted to require more strict warnings on tobacco products, to which the ECJ ultimately agreed, but only for domestic and not imported tobacco products that complied with the relevant Directive.103 The Court found that the Directive provided for an implied level of minimum harmonization, the UK could discriminate against domestic products due to the less strict harmonization used by the EU legislation; however, it could not affect the internal market by regulating imported products that complied with the minimum harmonized standards.104 This decision is significant because the Court ultimately allowed reverse discrimination against local products and permitted that they comply with a higher standard than the mandated by the EU FS, so long as they effect only to domestic production.105 The balance the Court made here is a prime example of the preference of rule preemption, where it weighed the benefit of a uniformed FS within the EU vs. Member State interest and method of enforcing a public policy matter, here health risks, 106 but also considered internal market repercussions.107
Shortly after Gallaher, the Court clarified the scope of reverse discrimination in the case of Compassion in World Farming.108 There the ECJ interpreted the Directive at issue restrictively and held that “within its territory” to mean that even though Member States were expressly granted under minimum harmonization to self-regulate a portion of the market, the Court found this phrase to refer only to the market within the Member State, and not that which it exported to, as this would be counter to the harmonization aim of the Directive.109
102 Case C-11/92, The Queen v. Secretary of State for Health, ex parte Gallaher Ltd, Imperial Tobacco Ltd and
Rothmans International Tobacco (UK) Ltd. (“Gallaher”), (1993), ECR I-03545
103 Id., p. 17 104 Id., p. 22 105 Id., p. 23 106 Id., p. 20 107 Id., p. 16
108 Case C-1/96, The Queen v. Minister of Agriculture, Fisheries and Food, ex parte Compassion in World
Farming Ltd. (“Compassion World Farming”), (1998), ECR I-01251
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On the other hand, the ECJ appears to be more accommodating for Member State initiatives in cases involving secondary legislation and partial harmonization, so long as the Member State action relates to areas that have not been harmonized. This can be seen the case of Phillip Morris where the Court held that Member States were prohibited from regulating packaging requirements that were addressed by the Directive, but were free to implement rules that regulated matters not covered in the Directive.110 An additional example of deferential treatment for Member State action was in Oil Company Sweden, where the Court allowed Member States to regulate substances outside the scope of the applicable Directive.111
The theme that these cases demonstrate is that in the context of Article 114 and minimum harmonization, if the aim of EU legislation is to harmonize the internal market, then the ECJ is inclined to push back against Member State initiatives that would be counter to its objective. Whereas, if the goal of EU legislation is for something other than internal market matters, such as consumer or environmental protection, or if it involves partial harmonization, then the ECJ appears more willing to allow stricter Member State initiatives that may have secondary effects on the internal market.112
3.4: Harmonization and Preemption Summation
The dynamic scale of preemption and harmonization illustrates the breadth under which the EU FS may operate, and conversely defines the area in which the Member States cannot. As noted above, due to the case-by-case nature of its progression, it has been criticized as lacking meaningful legal certainty for both Member States and their citizens.113 In matters involving express preemption, specifically field preemption and total harmonization, there is no room for deviation from the FS in both the EU and the US. Whereas with rule preemption
110 Case C-547/14, Philip Morris Brands SARL and Others v. Secretary of State for Health, (2016),
EU:C:2016:325, p. 66–84
111 Case C-472/14, Canadian Oil Company Sweden AB and Anders Rantén v. Riksåklagaren, (2016),
EU:C:2016:171, p. 26–41
112 Dougan at 876-7 (note 87) and Laurens Ankersmit, “Green Trade and Fair Trade in and with the EU,”
Cambridge University Press (2017), at 173 [hereinafter “Ankersmit”]
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and partial or optional harmonization, Member States retain some ability to enact policy that does not contradict the rule set by the EU legislature, and in some cases stricter standards, thereby further promoting “cooperative federalism.”
With the added layer of harmonization and the internal market, it has been shown that Article 114 and the Commerce Clause have both been used to expand their respective FS’s competences. The case law that sprung from Tobacco I and the watering down of the requirements of a free movement clause demonstrates the active competence creep at the EU level and is worth being mindful of. In addition, as observed in the EU, in the interest of market uniformity the ECJ tends to interpret legislation restrictively when affording for Member States ability to curb its obligations. Moreover, the process to apply for a derogation under Article 114 is onerous and therefore rarely used.
Accordingly, the use of partial harmonization and “express saving” clauses,114 plus the introduction of super-regulatory status, could provide both greater legal certainty, as well as a structured system for Member State differences. The use of optional harmonization is also another avenue to provide Member States discretion for internal policies; however, Member State control is limited to solely within its territory (both imports and exports). Each of these avenues of preemption and harmonization, and how they interact with environmental policy is explored further in the following Sections.
Section 4: The Environment
4.1: Environmental Protection Agency – Pertinent Environmental Policies
In 1967, California created the California Air Resource Board (the “CARB”) and tasked this institution with conducting air quality research in California and finding adequate solutions.115 Shortly thereafter, the CAA was passed by the US Congress pursuant to the
114 Supra Introduction (note 10) 115 CARB (note 5)
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Commerce Clause and was placed under the purview of the newly established EPA.116 This legislation created a national standard and was enacted through express preemption, thereby excluding State deviation, with a carve-out for California. During this same time, the National Environmental Policy Act (“NEPA”) was also created, which requires the preparation of an environmental-impact study before starting any project that may affect the environment.117
The pertinent section of CAA focused on here falls within 42 U.S.C. §7543, which allows for California to derogate from the FS system set by EPA, so long as it exceeds the set goals and are “at least as protective of public health and welfare.”118 Important to note is that the CAA allowed for the CARB to differ from the FS due to its previously enacted proactive steps and its particular history of struggling with clean air.119
In the early 1970’s, the CARB created the first regulation curbing NOx emissions in the nation, and for the next five decades under CAA, the CARB has led the push for clean air standards, which have been adopted by other States in the US and nations around the world.120
4.2: European Environmental Agency - Pertinent Environmental Policies
The most comparable agency to EPA present in the EU is the European Environmental Agency (the “EEA”), which was created in 1990, and is responsible for providing independent information about the environment. However, this institution is not tasked with a legislative function of administering environmental policy, and thus is not directly comparable to the present analysis.
116 EPA, “Clean Air Act Overview: Evolution of the Clean Air Act,” (Updated January 3, 2017),
https://www.epa.gov/clean-air-act-overview/evolution-clean-air-act [hereinafter “EPA CAA”]
117 EPA, “What is the National Environmental Policy Act?,” (Updated January 24, 2017),
https://www.epa.gov/nepa/what-national-environmental-policy-act
118 42 U.S.C. §7543, The Public Health and Welfare Chapter 85 – Air Pollution Prevention and Control
Subchapter II – Emission Standards for Moving Sources
119 CARB (note 5) 120 Id.
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Accordingly, the focus here is on the two most relevant policies enacted by the EU legislature. The first, Council Directive 70/156, put into effect February of 1970, “relating to the type-approval of motor vehicles and their trailers.” 121 This Directive was then amended extensively over the years, and eventually concluded with Directive 2007/46, which was enacted for the purpose of “establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles.”122
The second pertinent legislation is Directive 2008/50, the Air Quality Directive (the “AQD”). Directive 2008/50 was amended by Commission Directive 2015/1480; however, the provisions that were changed predominantly dealt with testing and measuring pollutants and the modifications do not affect the analysis conducted here, thus the more substantive AQD is referenced throughout. This line of Directives was enacted to address ambient air quality and set goals for cleaner air in the EU. Furthermore, the ECJ has ruled that individual citizens can bring a cause of action against their local municipality or Member State for failing to meet the standards set forth therein.123
4.3: Preemption, Harmonization, and the Environment
As indicated above, there are a multitude of possibilities when contemplating the preemption and harmonization frameworks used by the EU FS when legislating. In addition, the US has a similar fragmented structure and generally conducts a case-by-case analysis when dealing with preemption issues as well, save for cases of express and field preemption, which are dealt with similarly in both the EU and the US. However, when policies concern Article 114 or the Commerce Clause there appears to be an accepted practice of maintaining an open and free market at the expense of Member State/State control.124 The two case-studies below expand on this further.
121 Directive 2007/46 (note 5) 122 Id.
123 Case C-237/07, Dieter Janecek v. Freistaat Bayern, (2008), ECR I-06221 124 Supra Section 3
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4.3.1: The US Explicitly Permits Two Systems, but Only Two Systems – Sometimes
Generally, it is understood that EPA creates a floor with the standards it enacts; however, as noted above, the CAA explicitly states that there are two systems concerning air quality, one set by EPA and the other set by California.125 EPA is required to grant California a waiver, unless it can be determined that: “(1) the State’s determination of equivalency is arbitrary and capricious; (2) the State does not need its standards to meet a compelling and extraordinary conditions; or (3) such State standards and accompanying enforcement procedures are not consistent with section 7521(a).”126
For almost five decades, California has applied for and was subsequently granted every waiver from EPA that it applied for to combat air pollution in the State. The only exception was in 2008 when California first applied to regulate its Greenhouse Gases (“GHG(s)”) tailpipe emission, which was quickly reversed in 2009.127 Since bifurcation, thirteen other States have implemented, partially or in-whole, the standards set forth in California,128 and more recently, despite the issues discussed in this Section, Nevada joined the side of California and adopted its stricter emissions standards.129
In 2009, EPA and NHTSA created a federal standard for fuel economy and GHG standards, while allowing California the discretion to enforce its own goals. In 2012, California adopted the “Advanced Clean Cars” initiative, and subsequently applied for and was granted a
125 42 U.S.C. §7543, The Public Health and Welfare Chapter 85 – Air Pollution Prevention and Control
Subchapter II – Emission Standards for Moving Sources
126 42 U.S.C. §7543(b) Waiver, The Public Health and Welfare Chapter 85 – Air Pollution Prevention and
Control Subchapter II – Emission Standards for Moving Sources
127 American Bar Association, “The Trump administration’s withdrawal of California’s Clean Air Preemption
waiver in the SAFE Rule,” Trish McCubbin, (March 2, 2020),
https://www.americanbar.org/groups/environment_energy_resources/publications/trends/2019-2020/march-april-2020/trump-administration-withdrawl/
128 CARB, “States that have adopted California’s Vehicle Standards under Section 177 of the Federal Clean Air
Act,” (September 27, 2019), https://ww2.arb.ca.gov/resources/documents/states-have-adopted-californias-vehicle-standards-under-section-177-federal
129 Anna M. Phillips, “Nevada to adopt California’s stricter car pollution standards, rejecting Trump rollback,”
Los Angeles Times, (June 22, 2020), https://www.latimes.com/politics/story/2020-06-22/nevada-will-adopt-californias-car-pollution-standards
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waiver by EPA in 2013.130 The US government used the 2009 and 2013 regulations in conjunction to set a Federal program of GHG and fuel economy standards throughout the US to match those standards set in California, a clear example of “cooperative federalism” in the US.
However, in 2018, EPA and NHTSA implemented the Safer Affordable Fuel-Efficient Vehicles Rule Part One: One National Program (“SAFE”)131 undoing everything established under the previous presidential administration. As a result, in 2019 EPA and NHTSA jointly revoked California’s 2013 waiver, citing that it was improperly granted. 132 These two institutions justified their position noting that California’s rules were preempted by the Energy Policy and Conservation Act (the “EPCA”), it adversely affected a uniform fuel economy, and was overly restrictive for vehicle manufactures.133
EPA and NHTSA raised a number of arguments to support their 2019 action, but the crux of their position stemmed from preemption and primacy under EPCA134 and there lacks a “particularized nexus” regarding the “need” for a CAA waiver “to meet compelling and extraordinary conditions.”135 Here, EPA relies on the arguments that: (1) the environmental problems addressed by California are not unique; (2) that the conditions are not caused by emissions particular to California and therefore any remedy within the State will not have an impact; and (3) the CAA waiver exists to help California solely with ozone-forming pollutants.136 As a result of the revocation of the waiver, the State Attorney General of California, joined by twenty-three other Attorneys General, filed a suit against EPA and NHTSA for the repeal.137
130 CARB, “Advanced Clean Cars Program,”
https://ww2.arb.ca.gov/our-work/programs/advanced-clean-cars-program/about
131 Federal Register, Vol. 84, No. 188, Rules and Regulations, EPA 40 CFR Parts 85 and 86, Department of
Transportation – National Highway Traffic Safety Administration, “Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program,” (September 27, 2019) [hereinafter “SAFE”]
132 Id., at 51311 133 Id., at 51314 134 Id., at 51313 135 Id., at 51339 136 Id.
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One of the main issues to highlight for the sake of this analysis is that there is no codified process for EPA to withdraw a waiver once it has been issued, nor has the USSC dealt with this question. Though, it can likely be inferred that if a body has the ability to issue a waiver, it likely has the authority to revoke said waiver. But, this raises the question under what circumstances would this be permitted?
In the present case, California argues that if a revocation is permissible, “the agency must ‘provide a more detailed justification than what would suffice for a new policy created on a blank slate’… An agency must likewise provide ‘good reasons’ for departing from prior policies and precedents that have ‘engendered serious reliance interests that must be taken into account.’”138 The States also argue that EPA and NHTSA failed to coordinate with California on the repeal, as required by law,139 as well as neglected to conduct an environmental impact study required under NEPA to assess the effects.140 A similar issue was recently settled by the D.C. Court of Appeals, where the Court held that EPA repeal of guidelines covering hydrofluorocarbons failed to comply with the required notice and comment period, and thus vacated EPA’s decision.141
The final issue to note is that EPA and NHTSA claim California’s request lacks a “particular nexus” between its request and the curbing of GHGs. These agencies maintain that California’s climate problems are not substantially worse than similarly situated States and auto emissions do not make up a disproportionate percentage of GHG emissions.142 Thus, it does not “meet compelling and extraordinary conditions” to regulate GHG emissions under the waiver program.143
To shed light on the hollowness of this argument, shortly after EPA and NHTSA decision to revoke the waiver, EPA released a statement that California “must redouble its efforts to address the worst air quality in the United States and finally achieve compliance with
138 Id., at 104 139 Id., at 105
140 Id., at 111 and 112
141 Natural Resources Defense Council v. Andrew Wheeler, Administrator, U.S. EPA and EPA Agency, Case -
No. 18-1172, District Court, D.C., April 7, 2020
142 SAFE, at 51348 (note 131) 143 Id.
