Crete Carr Corp v. EPA ( 2004 )

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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 11, 2003 Decided April 9, 2004
No. 02-1089
CRETE CARRIER CORPORATION, ET AL.,
PETITIONERS
v.
ENVIRONMENTAL PROTECTION AGENCY AND
CHRISTINE TODD WHITMAN, ADMINISTRATOR,
ENVIRONMENTAL PROTECTION AGENCY,
RESPONDENTS
Consolidated with
02-1223, 03-1053
On Petitions for Review of Orders of the
Environmental Protection Agency
David P. Novello argued the cause and filed the briefs for
petitioners.
Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
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Eileen T. McDonough, Attorney, U.S. Department of Jus-
tice, argued the cause for respondents. With her on the brief
was Michael J. Horowitz, Attorney, U.S. Environmental Pro-
tection Agency.
Before: GINSBURG, Chief Judge, and SENTELLE and
HENDERSON, Circuit Judges.
Opinion for the Court filed by Chief Judge GINSBURG.
GINSBURG, Chief Judge: Operators of five large-haul truck
fleets challenge the Environmental Protection Agency’s refus-
al to reconsider the 2004 Standard for nitrous oxide (NOx)
and nonmethane hydrocarbon (NMHC) emissions from
‘‘heavy heavy-duty’’ diesel engines. Because the Trucking
Companies have failed to show their injury is fairly traceable
to the 2004 Standard, we dismiss their petition for lack of
standing under Article III of the Constitution of the United
States.
I. Background
In the 1990 Amendments to the Clean Air Act the Con-
gress authorized the EPA to promulgate regulations limiting
NOx and NMHC emissions from ‘‘classes or categories of
heavy-duty vehicles or engines.’’ 42 U.S.C. § 7521(a)(3)(A)(i).
The EPA identified three categories of heavy-duty diesel
engines for the purpose of regulating emissions: light, medi-
um, and heavy. See 40 C.F.R. § 86.090–2. The Trucking
Companies’ petition concerns only the EPA’s regulation of
emissions from heavy heavy-duty diesel engines (HHDDEs),
which are the engines used in large-haul tractors (truck cabs).
Section 7521(a)(3)(A)(i) provides that any requirements ap-
plicable to heavy-duty engines
shall contain standards which reflect the greatest degree
of emission reduction achievable through the application
of technology which the Administrator determines will be
available for the model year to which such standards
apply, giving appropriate consideration to cost, energy,
and safety factors associated with the application of such
technology.
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42 U.S.C. § 7521(a)(3)(A)(i). This is a technology-forcing
provision; it mandates regulations with which manufacturers
can comply only by adopting new technologies as they become
available.
The EPA promulgated three emissions standards for
HHDDEs. One standard, applicable to engine model years
1998 to 2003, implements the statutory maximum for NOx
emissions of ‘‘4.0 grams per brake horsepower hour [(g/bhp-
hr)].’’ See Control of Emissions of Air Pollution From 2004
and Later Model Year Heavy–Duty Highway Engines and
Vehicles, 65 Fed. Reg. 59,896, at 59,898 (Oct. 6, 2000). For
model years 2004 to 2006 the standard is a 2.5 g/bhp-hr of
NOx plus NMHC. See Control of Emissions of Air Pollution
From Highway Heavy–Duty Engines, 62 Fed. Reg. 54,694, at
54,699 (Oct. 21, 1997).
The third standard governs HHDDE emissions in model
years 2007 and beyond. See Control of Air Pollution From
New Motor Vehicles: Heavy–Duty Engine and Vehicle Stan-
dards and Highway Diesel Fuel Sulfur Control Requirements,
66 Fed. Reg. 5,002 (Jan. 18, 2001). The 2007 Standard, which
we upheld in National Petrochemical & Refiners Ass’n v.
EPA, 287 F.3d 1130 (D.C. Cir. 2002), limits NOx emissions to
0.20 g/bhp-hr and emissions of NMHC to 0.14 g/bhp-hr.
In October 1998 the EPA found manufacturers of the vast
majority of HHDDEs sold in the United States were attach-
ing ‘‘defeat devices’’ to their engines. See United States v.
Caterpillar, 227 F. Supp. 2d 73, 77 (D.D.C. 2002). These
devices enabled their engines to meet the 4.0 g/bhp-hr stan-
dard in laboratory testing by the EPA, but once disabled
resulted in NOx emissions as high as 7.0 g/bhp-hr.
In 1999 the six manufacturers that produce and sell the
vast majority of HHDDEs used in the United States entered
into Consent Decrees in which they agreed to end this
circumvention of the emissions standards. The manufactur-
ers also agreed to produce by October 2002 engines emitting
no more than 2.5 g/bhp-hr of NOx plus NMHC. See Cater-
pillar, 227 F. Supp. 2d at 76. This so-called ‘‘pull-ahead’’
provision of the Consent Decrees tracks but is not dependent
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upon the 2004 Standard, and would therefore bind the engine
manufacturers even if the 2004 Standard were relaxed or
rescinded. See, e.g., Caterpillar Consent Decree ¶ ¶ 20, 154,
available at http://www.epa.gov/compliance/resources/cases/
civil/caa/caterpilall.pdf, January 1, 1999. The engine manu-
facturers also agreed to be bound by the more stringent
emissions limits established for the ‘‘steady-state’’ and ‘‘not-
to-exceed’’ testing processes in 40 C.F.R. § 86.007–11, which
are otherwise applicable only to engines manufactured in 2007
and beyond. See, e.g., Caterpillar Consent Decree ¶ 20 &
App. C. As of January 2003 the EPA had certified 20 ‘‘engine
families’’ as complying with the 2.5 g/bhp-hr standard estab-
lished in the Consent Decrees.
In early 2001 the engine manufacturers petitioned the EPA
for a rulemaking to permit manufacturers that could not meet
the pull-ahead deadline of October 2002 for a limited time to
pay a ‘‘nonconformance penalty,’’ as contemplated in 42
U.S.C. § 7525(g). The EPA obliged and set NCPs in August
2002. See Non–Conformance Penalties for 2004 and Later
Model Year Emission Standards for Heavy–Duty Diesel En-
gines and Heavy–Duty Diesel Vehicles, 67 Fed. Reg. 51,464(Aug. 8, 2002).
The Trucking Companies, armed with the data the engine
manufacturers had provided to the EPA during the NCP
rulemaking, then asked the Administrator to reconsider the
2004 Standard itself. See 42 U.S.C. § 7607(d)(7)(B) (requir-
ing the EPA to ‘‘convene a proceeding for reconsideration of
the rule’’ if the petitioning party presents an objection
‘‘grounds for [which] arose after the period for public com-
ment (but within the time specified for judicial review) and if
such objection is of central relevance to the outcome of the
rule’’). They claimed the cost of complying with the 2004
Standard will be almost six times the EPA’s estimate.
The EPA denied the Trucking Companies’ petition in Feb-
ruary 2003. The Trucking Companies now seek judicial
review of that decision on the ground that the EPA’s refusal
to reconsider the 2004 Standard was arbitrary and capricious,
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an abuse of discretion, or otherwise not in accordance with
law. See 42 U.S.C. § 7607(d)(9)(A).
II. Analysis
The EPA argues the Trucking Companies lack Article III
standing to challenge its decision because, due to the Consent
Decrees and the looming 2007 Standard, HHDDE manufac-
turers will continue to produce engines meeting the 2.5 g/bhp-
hr emissions limit even if the 2004 Standard is rescinded.
The Trucking Companies respond that they suffer a concrete
and particularized injury from the 2004 Standard – increased
prices for tractors with engines meeting the 2.5 g/bhp-hr
emissions limit – but they completely ignore the EPA’s
central point about the independent constraint of the Consent
Decrees.
* * *
In order to satisfy the ‘‘irreducible constitutional minimum
of standing,’’ a petitioner must demonstrate: (1) it has suf-
fered (or is about to suffer) an injury-in-fact, that (2) was
caused by the conduct of the respondent and (3) would be
redressed by the relief sought from the court. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560-61 (1992); see also
City of Waukesha v. EPA, 320 F.3d 228, 233 (D.C. Cir. 2003).
The petitioners’ standing must be based upon ‘‘specific facts,
not ‘mere allegations.’ ’’ Florida Audubon Soc’y v. Bentsen,
94 F.3d 658, 667 (D.C. Cir. 1996) (en banc) (quoting Defenders
of Wildlife, 504 U.S. at 561); see also Sierra Club v. EPA, 292
F.3d 895, 898 (D.C. Cir. 2002) (‘‘Bare allegations are insuffi-
cient TTT to establish a petitioner’s standing to seek judicial
review of administrative action’’).
In order to establish their standing, the Trucking Compa-
nies need not demonstrate that if the EPA were to convene a
proceeding for reconsideration, then it would relax or rescind
the 2004 Standard. See Defenders of Wildlife, 504 U.S. at572 n.7; Florida Audubon Soc’y, 94 F.3d at 664. They need
only show ‘‘a causal connection between’’ the EPA’s failure to
convene a proceeding to reconsider the 2004 Standard and
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‘‘some reasonably increased risk of [the] injury’’ the Trucking
Companies claim they will suffer, namely, paying higher
prices for tractors with HHDDEs. Florida Audubon Soc’y,
94 F.3d at 664. To that end the Trucking Companies must
show it is ‘‘substantially probable’’ the 2004 Standard is
responsible for the increased tractor prices the Trucking
Companies will allegedly pay. Id. at 665; see also Sierra
Club, 292 F.3d at 899. Were it not for the Consent Decrees
lurking in the background, that would be the work of a
minute. Because of the Consent Decrees, however, the
Trucking Companies have not established the necessary caus-
al connection between the 2004 Standard and the increased
costs they will incur.
The six manufacturers that make the great majority of
HHDDEs are subject to consent decrees that independently
require them, from October 2002 to January 2005, to produce
engines that emit no more than 2.5 g/bhp-hr of NOx plus
NMHC. Because repeal of the 2004 Standard, which embod-
ies the same limit, would in no way affect the obligations of
the engine manufacturers under the Consent Decrees, the
entry of judicial relief favorable to the Trucking Companies
would have no effect upon the prices they pay for tractors
with HHDDEs made by any of those six companies. See
America West Airlines, Inc. v. Burnley, 838 F.2d 1343, 1344
(D.C. Cir. 1988) (airline lacks standing to challenge order
approving competitors’ merger where airline’s alleged injury,
lack of landing slots, arises from airport rules, not merger).
And although engine prices are ‘‘very close to the manufac-
turing cost,’’ Declaration of Steve Duley, V.P. of Purchasing,
Schneider National, Inc., at ¶ 3, and it costs less to manufac-
ture an engine that emits more NOx and NMHC, there is no
record evidence that any of the Trucking Companies do or
would purchase tractors with engines produced by a manufac-
turer that is not subject to a consent decree. The engines
produced by those manufacturers may be inappropriate for
the Trucking Companies’ use, qualitatively inferior, more
expensive to purchase, more expensive to operate, or some
combination of the above. In any event, the Trucking Com-
panies present record evidence regarding only one of their
number, Schneider National, and omit any explanation why
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that company does not purchase tractors with engines from a
manufacturer that is not bound by a consent decree or why it
would purchase from such a manufacturer in the future. On
the contrary, the implication of the Duley affidavit, confirmed
at oral argument, is that Schneider buys its tractors with
engines made by manufacturers subject to the Consent De-
crees, even though – and here the affidavit is express – it
must pay a surcharge to cover the cost of meeting the 2.5
g/bhp-hr limitation. See id. at ¶ 5.
It is possible, of course, that but for the 2004 Standard, the
Trucking Companies will be able to purchase tractors from a
manufacturer that is now bound by a consent decree but
might, after that constraint expires on January 1, 2005, decide
to produce a pre-October 2002 model engine; but that possi-
bility is sheer speculation. Its actualization depends upon a
number of predicate facts, including: (1) an engine manufac-
turer’s production and design schedule would permit it to
shift from producing a compliant 2005 engine to producing a
pre-October 2002 engine, notwithstanding the necessity of
meeting yet another standard by January 2007; (2) the
expected profit of shifting temporarily from producing 2005
engines to producing 2002 engines would exceed the cost of
altering production lines; and (3) the per unit price advantage
of 2002 engines would be more than sufficient to offset any
non-price advantages associated with the 2005 model so as to
induce the Trucking Companies to purchase 2002 engines in
2005. All these things may be true, but there is no record
evidence to support any of them.
In this regard, the present case is like Defenders of Wild-
life, in which the plaintiffs lacked standing to challenge an
agency’s failure to follow a consultative procedure allegedly
required by the Endangered Species Act before providing aid
for certain foreign development projects. The United States’
contribution was ‘‘only a fraction’’ of the cost of the projects,
however, and the plaintiffs ‘‘produced nothing to indicate that
the projects they have named will either be suspended, or do
less harm to listed species, if that fraction is eliminated.’’ 504
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U.S. at 571. Likewise, here ‘‘it is entirely conjectural wheth-
er the nonagency activity’’ (that is, the engine manufacturers’
production decisions) affecting the prices of tractors with
HHDDEs ‘‘will be altered or affected’’ should the EPA
rescind the 2004 Standard. Id.; cf. Duke Power Co. v.
Carolina Envtl. Study Group, 438 U.S. 59, 76–77 (1978)
(environmental groups have standing to challenge Price-
Anderson Act, but for which, evidence shows, company would
have withdrawn plans to build nuclear power plants).
The Trucking Companies offer only assertions, not facts, to
support their claims about the likely response of engine
manufacturers to repeal of the 2004 Standard. That will not
do. Speculative and unsupported assumptions regarding the
future actions of third-party market participants are insuffi-
cient to establish Article III standing. See Florida Audubon
Soc’y, 94 F.3d at 670 (noting difficulty of establishing stand-
ing where it ‘‘depends on predicting the acts of even a single
‘interest group’ who is unrepresented in the instant litigation,
especially when that group TTT is actually composed of dozens
of individual actors, each of whom must react to other market
or regulatory inputs’’) (quoting Simon v. E. Ky. Welfare
Rights Org., 426 U.S. 26, 42-46 (1976)); United Transp.
Union v. ICC, 891 F.2d 908, 911-13 (D.C. Cir. 1989) (‘‘[W]e
may reject as overly speculative those links which are predic-
tions of future events (especially future actions taken by third
parties)’’). Without actual evidence of how engine manufac-
turers would respond to relaxation or rescission of the 2004
Standard – and the Trucking Companies have proffered
none – we can not ‘‘wade into this morass of marketplace
analys[i]s,’’ Common Cause v. United States Dep’t of Energy,
702 F.2d 245, 252 (D.C. Cir. 1983), and emerge with the
conclusion the engine manufacturers would revert to produc-
ing pre-October 2002 engines. See Branton v. FCC, 993 F.2d
906, 912 (D.C. Cir. 1993) (‘‘A court is rightly reluctant to
enter a judgment which may have no real consequence,
depending upon the putative cost-benefit analyses of third
parties over whom it has no jurisdiction and about whom it
has almost no information’’).
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III. Conclusion
For the foregoing reasons, the Trucking Companies’ peti-
tion is
Dismissed.