DAVID L. FELIX VS. VOLKSWAGEN GROUP OF AMERICA,INC.EDUARDO DEANG VS. VOLKSWAGEN GROUP OF AMERICA, INC.(L-0053-16, UNION COUNTY AND L-0389-16, BERGEN COUNTYAND STATEWIDE)(CONSOLIDATED) ( 2017 )


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  •                         NOT FOR PUBLICATION WITHOUT THE
    APPROVAL OF THE APPELLATE DIVISION
    This opinion shall not "constitute precedent or be binding upon any court."
    Although it is posted on the internet, this opinion is binding only on the
    parties in the case and its use in other cases is limited. R.1:36-3.
    SUPERIOR COURT OF NEW JERSEY
    APPELLATE DIVISION
    DOCKET NO. A-0585-16T3
    A-0586-16T3
    DAVID L. FELIX and
    LUIS M. FELIX,
    Plaintiffs-Respondents,
    v.
    VOLKSWAGEN GROUP OF AMERICA,
    INC.,
    Defendant-Appellant,
    and
    JACK DANIELS VOLKSWAGEN,
    Defendant.
    ______________________________________
    EDUARDO DEANG,
    Plaintiff-Respondent,
    v.
    VOLKSWAGEN GROUP OF AMERICA,
    INC.,
    Defendant-Appellant,
    and
    JACK DANIELS VOLKSWAGEN,
    Defendant.
    ______________________________________________
    Argued May 23, 2017 – Decided July 17, 2017
    Before Judges Messano, Espinosa and Suter.
    On appeal from the Superior Court of New
    Jersey, Law Division, Union County, Docket No.
    L-0053-16, and Bergen County, Docket No. L-
    0389-16.
    Judson O. Littleton (Sullivan & Cromwell, LLP)
    of the District of Columbia bar, admitted pro
    hac vice, argued the cause for appellant
    (Chase, Kurshan, Herzfeld & Rubin, P.C., and
    Mr. Littleton, attorneys; Jeffrey L. Chase,
    on the briefs).
    Michael D. Power argued the cause                 for
    respondents   (Power   &    Associates,           PC,
    attorneys; Mr. Power, on the briefs).
    PER CURIAM
    We granted leave to appeal in these two cases and consolidated
    the appeals because they present a common question of law.                   In
    A-0585-16,    defendant    Volkswagen     Group   of   America,   Inc.   (VW),
    appeals from Judge Camille M. Kenny's order denying VW's motion
    to dismiss the complaint filed by plaintiffs David L. and Luis M.
    Felix; in A-0586-16, VW appeals from Judge Charles E. Powers'
    order denying its motion to dismiss the complaint of plaintiff
    Eduardo   Deang.      In   both   complaints,      plaintiffs     alleged    VW
    misrepresented its vehicles' high performance capabilities while
    asserting    each   vehicle   fully   complied    with   federal    emissions
    2                               A-0585-16T3
    standards set by the Environmental Protection Agency (EPA).             Both
    complaints included causes of action for common law fraud and
    violations of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -184 (the
    CFA), and the Magnuson-Moss Warranty Federal Trade Commission
    Improvement Act, 
    15 U.S.C.A. §§ 2301
     to 2312 (the MMWA), and breach
    of other implied warranties.
    Before filing answers, VW moved to dismiss the complaints,
    arguing they were expressly or impliedly preempted by provisions
    of the Clean Air Act (the CAA), 
    42 U.S.C.A. §§ 7401
     to 7671q.              In
    particular,   VW   cited   42   U.S.C.A.    7543(a),   which   provides    in
    pertinent part:     "No State or any political subdivision thereof
    shall adopt or attempt to enforce any standard relating to the
    control of emissions from new motor vehicles or new motor vehicle
    engines subject to this part."           (Emphasis added).     Judges Kenny
    and Powers concluded the CAA did not preempt plaintiffs' state law
    actions.   We agree and affirm.1
    1
    In the Law Division, VW moved for relief on grounds other than
    preemption, and it sought to compel arbitration of plaintiffs'
    claims. The motion judges denied those requests. Judge Kenny's
    order in the Felix matter generally denied VW's motion, but VW's
    motion for leave to appeal only sought our review on federal
    preemption grounds. VW did not seek leave to appeal from those
    portions of Judge Powers' order in the Deang lawsuit that
    specifically denied relief on other grounds.
    3                              A-0585-16T3
    I.
    For purposes of our review, the allegations in plaintiffs'
    complaints are treated "as uncontradicted[,] . . . accord[ed]
    . . . all legitimate inferences . . . [and] accept[ed] . . . as
    fact."   Banco Popular N. Am. v. Gandi, 
    184 N.J. 161
    , 166 (2005).
    The Felix plaintiffs purchased a 2014 Volkswagen Passat with 2.0-
    liter diesel engine, and Deang purchased a 2010 Audi Q7 with a
    3.0-liter diesel engine.   VW marketed both vehicles as "Good Clean
    Diesel Fun," because they "deliver[ed] performance" while "being
    environmentally   friendly,"   and    the   company   represented   "the
    performance of the vehicle . . . [was] achieved and achievable
    while complying with all vehicle emissions statutes, standards and
    regulations of the United States."
    In reality, VW had installed "defeat devices" on the vehicles.
    This computer software allowed the cars to meet emissions standards
    during testing, but, during the vehicle's normal operation, the
    software interfered with emission controls, resulting in actual
    emissions that exceeded EPA standards.         In fall 2015, the EPA
    issued formal Notices of Violation of the CAA to VW.       Plaintiffs'
    complaints cited VW's public acknowledgement of its actions and
    alleged any repairs to "fix" the problem would result "in a
    profound loss of vehicle performance" and "value."
    4                              A-0585-16T3
    Although not alleged in plaintiffs' complaints, we provide
    some additional information, which was known to the motion judges,
    is part of the appellate record and is largely undisputed.          In
    January 2016, the Department of Justice filed suit on behalf of
    the EPA against VW in federal district court in the Northern
    District of California.   Ultimately, that litigation resulted in
    a class action settlement approved by the court, which retained
    jurisdiction "to enforce, administer and ensure compliance" with
    the settlement.   In re: Volkswagen "Clean Diesel" Mktg., Sales
    Practices, & Prods. Liab. Litig., No. 15-MD-2672-CRB (JSC), 
    2016 U.S. Dist. LEXIS 14837
     (N.D. Cal., Oct. 25, 2016) (2.0-liter
    settlement), and 
    2017 U.S. Dist. LEXIS 76091
     (N.D. Cal., May 17,
    2017) (3.0-liter settlement).   The attorneys advised us at oral
    argument that plaintiffs have opted out of the settlement.
    II.
    Because the sole issue presented — whether the CAA preempts
    plaintiffs' state-court actions — requires an interpretation of
    federal law, our review is de novo.   In re Reglan Litig., 
    226 N.J. 315
    , 327-28 (2016), cert. denied,     U.S.   , 
    137 S. Ct. 1434
    , 
    197 L. Ed. 2d 648
     (2017); see also St. Peter's Univ. Hosp. v. N.J.
    Bldg. Laborers Statewide Welfare Fund, 
    431 N.J. Super. 446
    , 462
    (App. Div.) ("[T]he question of preemption is a legal issue that
    we review de novo."), certif. denied, 
    216 N.J. 366
     (2013).
    5                           A-0585-16T3
    "The doctrine of federal preemption finds its source in the
    Supremacy Clause of the United States Constitution. . . .             A state
    law that conflicts with a federal statute is naturally preempted."
    Reglan Litig., supra, 226 N.J. at 328 (citing Crosby v. Nat'l
    Foreign Trade Council, 
    530 U.S. 363
    , 372, 
    120 S. Ct. 2288
    , 2294,
    
    147 L. Ed. 2d 352
    , 361 (2000)).             "When Congress legislates in a
    field where states have traditionally exercised their historic
    police powers, the preemption inquiry begins with the assumption
    that Congress did not intend to supersede a state statute unless
    that   was    [Congress's]      clear   and   manifest   purpose."      
    Ibid.
    (alteration     in   original)    (internal     quotation    marks   omitted)
    (quoting Medtronic, Inc. v. Lohr, 
    518 U.S. 470
    , 485, 
    116 S. Ct. 2240
    , 2250, 
    135 L. Ed. 2d 700
    , 715 (1996)) (internal quotation
    marks omitted).      "Accordingly, '[t]he purpose of Congress is the
    ultimate     touchstone'   of    pre-emption    analysis."     Cipollone     v.
    Liggett Grp., Inc., 
    505 U.S. 504
    , 516, 
    112 S. Ct. 2608
    , 2617, 
    120 L. Ed. 2d 407
    , 422 (1992) (alteration in original) (quoting Malone
    v. White Motor Corp., 
    435 U.S. 497
    , 504, 
    98 S. Ct. 1185
    , 1190, 
    55 L. Ed. 2d 443
    , 450 (1978)).
    "Pre-emption may be either expressed or implied."             Gade v.
    Nat'l Solid Wastes Mgmt. Ass'n, 
    505 U.S. 88
    , 98, 
    112 S. Ct. 2374
    ,
    2383, 
    120 L. Ed. 2d 73
    , 84 (1992).                 "Express preemption is
    determined from an examination of the explicit language used by
    6                             A-0585-16T3
    Congress."    Gonzalez v. Ideal Tile Importing Co., 
    184 N.J. 415
    ,
    419 (2005) (citing Jones v. Rath Packing Co., 
    430 U.S. 519
    , 525,
    
    97 S. Ct. 1305
    , 1309, 
    51 L. Ed. 2d 604
    , 613 (1977)), cert. denied,
    
    546 U.S. 1092
    , 
    126 S. Ct. 1042
    , 
    163 L. Ed. 2d 857
     (2006).                  "A
    federal enactment expressly preempts state law if it contains
    language so requiring."      Bruesewitz v. Wyeth Inc., 
    561 F.3d 233
    ,
    239 (3d Cir. 2009), aff'd sub nom. Bruesewitz v. Wyeth L.L.C., 
    562 U.S. 223
    , 
    131 S. Ct. 1068
    , 
    179 L. Ed. 2d 1
     (2011).
    On the other hand,
    [t]here are two forms of implied preemption —
    field preemption and conflict preemption.
    Field preemption applies where the scheme of
    federal regulation is so pervasive as to make
    reasonable the inference that Congress left
    no room for the States to supplement it.
    Conflict preemption applies where compliance
    with both federal and state regulations is a
    physical impossibility, or where state law
    stands as an obstacle to the accomplishment
    and execution of the full purposes and
    objectives of Congress . . . .
    [Reglan Litig., supra, 226 N.J. at 328-29
    (citations omitted).]
    VW   argues   the   CAA    both    expressly    and   impliedly   preempted
    plaintiffs' claims.
    Consideration    of    VW's   preemption    argument   requires    some
    review of Title II of the CAA, 
    42 U.S.C.A. §§ 7521
     to 7554, which
    governs vehicle emissions and fuel standards.           Title II requires
    the EPA to test all new motor vehicles and engines and issue
    7                             A-0585-16T3
    certificates of compliance, see 
    42 U.S.C.A. § 7525
    (a)(2); 
    40 C.F.R. §§ 86.094-21
     to -30 (2015) (regulating the certification process),
    before a vehicle is introduced into commerce.                      
    42 U.S.C.A. § 7522
    (a)(1).       The CAA "provides a mechanism for the recall of
    engines when the EPA finds previously certified engines do not
    conform to emissions standards."               Navistar, Inc. v. Jackson, 
    840 F. Supp. 2d 357
    , 359 (D.D.C. 2012); see also 
    42 U.S.C.A. § 7541
    (c)(1); 
    40 C.F.R. §§ 85.1801
     to 1808 (2014).                       Title II also
    requires a manufacturer to warrant that engines of new vehicles
    are "designed, built, and equipped so as to conform at the time
    of sale with the applicable regulations . . . , and . . . [are]
    free from defects in materials and workmanship which cause such
    vehicle or engine to fail to conform with applicable regulations
    for its useful life."           
    42 U.S.C.A. § 7541
    (a)(1).
    As    noted,       §    7543(a)   prohibits    any    State       or   political
    subdivision      from       "adopt[ing]   or   attempt[ing]       to    enforce    any
    standard relating to the control of emissions from new motor
    vehicles or new motor vehicle engines subject to this part."
    (Emphasis added).           Congress enacted this section to ensure that
    "vehicle manufacturers not be subject to 50 sets of requirements
    relating    to    emissions        controls     which     would    unduly      burden
    interstate commerce."            Jackson v GMC, 
    770 F. Supp. 2d 570
    , 577
    (S.D.N.Y. 2011) (quoting H.R. Rep. No. 95-294, 95th Cong. (1977),
    8                                   A-0585-16T3
    as reprinted in 1977 U.S.C.C.A.N. 1077, 1388), aff’d sub nom.,
    Butnick v. GMC, 
    472 F. App'x 80
     (2d Cir. 2012).                 However, Title
    II also contains a savings clause which provides "[n]othing in
    this   part   shall   preclude   or   deny   to   any   State    or   political
    subdivision thereof the right otherwise to control, regulate, or
    restrict the use, operation, or movement of registered or licensed
    motor vehicles."      
    42 U.S.C.A. § 7543
    (d).2
    A.
    VW   argues    Congress   expressly    preempted     the       field    by
    prohibiting any State action to enforce a "standard relating to
    the control of emissions." 42 U.S.C.A. 7543(a).                 It argues the
    Supreme Court has recognized that "relating to," as used in other
    federal statutes, suggests "a broad pre-emptive purpose."               Morales
    v. Trans World Airlines, Inc., 
    504 U.S. 374
    , 383, 
    112 S. Ct. 2031
    ,
    2037, 
    119 L. Ed. 2d 157
    , 167 (1992).         VW contends that plaintiffs'
    2
    The CAA also permits private citizen suits: "Nothing in this
    section shall restrict any right which any person (or class of
    persons) may have under any statute or common law to seek
    enforcement of any emission standard or limitation or to seek any
    other relief (including relief against the Administrator or a
    State agency)."   
    42 U.S.C.A. § 7604
    (e)(1).   Plaintiffs make no
    specific argument regarding the effect of this provision on our
    analysis. Moreover, at least one federal court has specifically
    held that regarding "moving sources" of emissions, "although the
    citizen suit provisions of § [7604] do not preempt . . . state
    common law tort claims, the language of § [7543(a)] does so
    expressly." Jackson, 
    supra,
     
    770 F. Supp. 2d at 578
    .
    9                                 A-0585-16T3
    complaints are, in reality, attempts to enforce EPA's emission
    standards, because to succeed, plaintiffs must prove VW's vehicles
    exceeded those standards.      We disagree.
    In Cipollone, 
    supra,
     505 U.S. at 523-24, 112 S. Ct. at 2621,
    120 L. Ed. 2d at 427, the Court explained that consideration of
    whether the plaintiff's state law claims were preempted by the
    Cigarette Labeling and Advertising Act (the Labeling Act), 
    15 U.S.C.A. §§ 1331
     to 1341, required examination of "the legal duty
    that is the predicate" of the particular claim and whether it
    falls within the scope of the preemption provision.           Accordingly,
    the Court analyzed each claim in light of the Labeling Act's
    provision that expressly prohibited states from requiring a health
    warning to appear on all cigarette advertisements and containers.
    
    Id. at 514
    , 112 S. Ct. at 2616, 120 L. Ed. 2d at 421.
    Although the plurality found certain claims were preempted,
    the   Court   found   two   claims   could    go   forward.    First,   the
    plaintiff's breach of express warranty claim was not preempted
    because "[a] manufacturer's liability for breach of an express
    warranty derives from, and is measured by, the terms of that
    warranty. . . .       [T]he 'requirement[s]' imposed by an express
    warranty claim are not 'imposed under State law,' but rather
    imposed by the warrantor."       Id. at      525, 112 S. Ct. at 2622, 120
    L. Ed. 2d at 428 (second alteration in original) (emphasis in the
    10                            A-0585-16T3
    original); see also Am. Airlines, Inc. v. Wolens, 
    513 U.S. 219
    ,
    228-29, 
    115 S. Ct. 817
    , 824, 
    130 L. Ed. 2d 715
    , 725-26 (1995)
    (concluding the preemption provision of the Airline Deregulation
    Act, 
    49 U.S.C.A. § 41713
    (b)(1), did not bar plaintiffs' breach of
    contract claim because the "terms and conditions airlines offer
    and passengers accept are privately ordered obligations and . . .
    do not amount to a State's enact[ment] or enforce[ment] [of] any
    law, rule, regulation, standard, or other provision having the
    force and effect of law" (alterations in original) (internal
    quotations and citation omitted)).
    Second,     the   Court      held   the     plaintiff's     fraudulent
    misrepresentation claim, based on allegedly false statements of
    material fact made in advertisements, could proceed because the
    claims were not predicated on duties regarding smoking and health,
    which were presumptively preempted, but rather on a more general
    duty not to deceive.       Cipollone, supra, 505 U.S. at 528-29, 112
    S. Ct. at 2623-24, 120 L. Ed. 2d at 430-31.
    Similarly, in Altria Group, Inc. v. Good, 
    555 U.S. 70
    , 72-
    73, 
    129 S. Ct. 538
    , 541-42, 
    172 L. Ed. 2d 398
    , 403-04 (2008), the
    plaintiffs     contended    the    defendant     cigarette     manufacturer
    fraudulently marketed "light" cigarettes suggesting they were less
    dangerous than regular cigarettes.             The defendant invoked the
    preemption clause prohibiting states from requiring additional
    11                              A-0585-16T3
    statements relating to smoking and health.                  
    Ibid.
           The Court
    concluded, as did the plurality in Cipollone, that the phrase in
    the Labeling Act's preemption provision "'based on smoking and
    health' fairly but narrowly construed does not encompass the more
    general duty not to make fraudulent statements."                
    Id. at 87
    , 
    129 S. Ct. at 549
    , 
    172 L. Ed. 2d at 412
    .            As a result, the Court held
    the   Labeling      Act's   preemption   provision    did   not     preempt    the
    plaintiffs' state-law fraud claim.           
    Ibid.
    VW argues these cases are not persuasive because the language
    of    the   CAA's    preemption     provision    is   broader     and    reflects
    Congress's     intent       to   foreclose   plaintiffs'      state      actions.
    However, in In re Caterpillar, Inc., No. 1:14-cv-3722, 
    2015 U.S. Dist. LEXIS 98784
    , at *43 (D.N.J. July 29, 2015), the federal
    district court cited Cipollone and Wolens in interpreting the
    preemptive reach of § 7543(a) of the CAA.3                  There, the class
    action plaintiffs alleged their diesel engine vehicles with an
    emissions control system designed to comply with EPA standards
    were defective, causing the vehicles to experience repeated engine
    3
    We note that Rule 32.1(a) of the Federal Rules of Appellate
    Procedure does "not prohibit or restrict the citation of federal
    judicial   opinions,   orders,   judgments,   or   other   written
    dispositions that have been:    (i) designated as 'unpublished,'
    'not for publication,' 'non-precedential,' 'not precedent,' or the
    like; and (ii) issued on or after January 1, 2007."
    12                                 A-0585-16T3
    failures and shutdowns.         Id. at *2-3.     The plaintiffs further
    claimed the defendant manufacturer knew of the defects.                 Id. at
    *3.
    Although the court found the "plain wording" of § 7543(a) to
    be "specific and unambiguous," it also concluded the "provision
    does not foreclose all state common law actions involving alleged
    defects in engines manufactured and sold to comply with applicable
    emissions standards."        Id. at *30.   Distinguishing the case before
    it    from   others   that   interpreted    section   7543(a),    the     court
    concluded:
    Plaintiffs' claims which seek enforcement of
    express and implied warranties for defects in
    the Engines' emissions systems, as well as
    those based on consumer fraud and negligent
    design, are hardly comparable to efforts by
    state and local governments to adopt or
    enforce emissions standards or to require
    additional   certifications  or   inspections
    prior to sale.
    [Id. at *34-35 (emphasis added).]
    VW    argues   Caterpillar    is    distinguishable   because         the
    plaintiffs' claims there sought damages for defective engines and
    did not "relat[e] to the control of emissions."                  42 U.S.C.A.
    7543(a).     It argues two other cases, Jackson, supra, 
    770 F. Supp. 2d at 570
    , and In re Detroit Diesel Corp. v. Attorney General of
    New York, 
    709 N.Y.S.2d 1
     (App. Div. 2000), are more persuasive.
    13                                 A-0585-16T3
    In    Jackson,    the    plaintiffs      alleged      the   manufacturers     of
    diesel buses violated the emissions standards set by the EPA and
    negligently failed to warn them about the dangers of the diesel
    engine exhaust fumes.           Jackson, 
    supra,
     
    770 F. Supp. 2d at 572
    .
    The Jackson court interpreted the phrase "relating to" in § 7543(a)
    as reflecting an "expansive intent" and reasoned the CAA preempted
    any    "enforcement      actions       that    have   any    'connection    with     or
    reference to' the control of emissions from motor vehicles."                        Id.
    at 576-77 (quoting Morales, 
    supra,
     
    504 U.S. at 383-84
    , 112 S. Ct.
    at 2037, 
    119 L. Ed. 2d at 167
    ).                Therefore, "a state common law
    tort action that questions whether a defendant complied with
    standards promulgated under the CAA is an example of a state
    attempting      to    enforce    the    CAA,    and   is     therefore    subject    to
    preemption."         Id. at 575.
    In Detroit Diesel, 
    supra,
     
    709 N.Y.S.2d at 3
    , the court
    considered whether the CAA preempted a suit brought by New York's
    Attorney General against the manufacturer of heavy-diesel engines
    equipped with a defeat devices in the context of the manufacturer's
    motion to quash a subpoena duces tecum.                      The court concluded §
    7543(a) was "intended to have a broad preemptive effect," id. at
    7,    such   that     "[s]tates    are    barred      from    providing    their    own
    regulatory or judicial remedies for conduct prohibited or arguably
    prohibited by Federal law,"             id. at 8.      The court also determined
    14                                  A-0585-16T3
    any common law claims were preempted because they sought "to use
    [New York's] common law to penalize the manufacturers for producing
    engines    which       failed    to   comply    with     the   Federal     standards
    promulgated pursuant to the CAA. In doing so, the Attorney General
    [was] attempting to enforce those standards, and . . . he is
    expressly preempted from pursuing those claims."                  Id. at 9.
    We acknowledge that the plaintiffs' claims in Caterpillar
    centered on defective engines that violated express and implied
    warranties       and    failed    "to   perform     as    an   engine      at     all."
    Caterpillar, supra, at *33.             Those claims are not precisely the
    same as plaintiffs' claims in these cases.                      However, we find
    Jackson, which alleged direct violations of EPA standards as a
    predicate    for       claims    of   personal    injuries,      to   be    entirely
    distinguishable.          The Detroit Deisel court's overly expansive
    reading of § 7543(a), combined with the thinly-veiled nature of
    the Attorney General's enforcement action, limits the persuasive
    power of that opinion.
    Instead, we follow the more persuasive reasoning advanced by
    courts in two other cases, Counts v. GM, L.L.C., No, 16-cv-12541,
    
    2017 U.S. Dist. LEXIS 20277
     (E.D. Mich. Feb. 14, 2017), and In re
    Volkswagen "Clean Diesel" Litigation, 
    94 Va. Cir. 189
     (Cir. Ct.
    2016,)    both    of    which    involved     manufacturers'     installation          of
    defeat devices.
    15                                     A-0585-16T3
    In   Counts,   the   court   concluded    that   "to   the    extent
    [p]laintiffs are suing GM for manufacturing a vehicle that emits
    'more than a certain amount of [NOx or particulate emissions]' in
    violation of EPA regulations or that is not equipped with properly
    functioning and federally required 'emission-control technology,'
    their claims [were] preempted by the CAA."      Counts, supra, at *35
    (second alteration in original).       However, citing Caterpillar and
    In re Volkswagen, the court concluded that the plaintiffs' claims
    of fraud and misrepresentation were
    not, as GM contends, contingent on proving
    that GM is in noncompliance with EPA emissions
    regulations.    There can be no doubt that
    proving     noncompliance    would     bolster
    Plaintiffs' claims, but Plaintiffs need not
    make that showing to prevail. Accordingly,
    Plaintiffs' claims are not preempted by the
    [CAA].
    [Id. at *41.]
    Similarly, in In re Volkswagen, supra, 94 Va. Cir. at 189-
    90, the plaintiffs raised essentially the same claims about VW
    vehicles as do plaintiffs in these two appeals. The court rejected
    VW's preemption argument, reasoning,
    On   their   face,   Plaintiffs'   fraud   and
    [statutory consumer fraud] claims do not rely
    on emissions violations or enforcement to make
    out their claims. Instead Plaintiffs' claims
    rely   upon   allegedly  false   promises   of
    compliance, efficiency, and new technology; or
    concealment of the fact that compliance
    testing was being circumvented. Although
    16                              A-0585-16T3
    Plaintiffs reference the EPA violation notice
    in support of their allegations of falsehood
    and concealment, their claims ultimately rest
    on and seek remediation of injuries arising
    from misrepresentations and concealment of
    material facts made to (or hidden from) the
    Plaintiffs about the compliance, efficiency,
    and technology of their vehicles. This is
    distinguished from the claims in Jackson and
    Detroit Diesel, which sought to recover for
    injuries from the alleged noncompliance
    itself, or alleged fraud based on statements
    or representations made to federal regulators
    by manufacturers in procuring emissions
    compliance certificates.
    Plaintiffs' lack of reliance on emissions
    standards is further revealed when one
    considers whether Plaintiffs even need to
    assert lack of compliance in raising their
    fraud and [statutory consumer fraud] claims.
    Plaintiffs point to advertising materials and
    news releases promising not only compliance
    with regulations, but also describing new
    technologies developed by [VW] and offering
    improved fuel economy. Plaintiffs also point
    to [VW]'s public statement that it had been
    "dishonest" to consumers in such advertising.
    As such, and although emissions compliance or
    lack thereof may be further proof of deceit,
    it is the deceit about compliance, rather than
    the need to enforce compliance, that is the
    gravamen of Plaintiffs' claims.
    [Id. at 196-97.]
    Similarly, in the cases before us, plaintiffs do not seek to
    enforce an EPA emission standard or force the manufacturer to
    adopt   a   different   emission   standard.   It   may   well   be   that
    plaintiffs will prove their vehicles failed to comply with EPA
    emission standards, something VW has publicly acknowledged, but
    17                             A-0585-16T3
    the gravamen of plaintiffs' complaint centers on VW's alleged
    deceitful, fraudulent practices, and its          alleged breach of a duty
    not to mislead consumers. We conclude § 7543(a) does not expressly
    preempt plaintiffs' causes of action.
    We also conclude that the CAA does not impliedly preempt
    plaintiffs' complaints.       Implied preemption occurs either when
    "the scheme of federal regulation is 'so pervasive as to make
    reasonable the inference that Congress left no room for the States
    to supplement it,'" or when "compliance with both federal and
    state regulations is a physical impossibility."              Gade, supra, 505
    U.S. at 98, 112 S. Ct. at 2383, 120 L. Ed. 2d at 84 (citations
    omitted).
    We agree with the analysis of the Caterpillar court, i.e.,
    that "the savings clause suggests that Congress did not intend to
    occupy the entire field of motor vehicle regulation.             Instead, the
    [savings    clause]      explicitly        contemplates     continued     state
    involvement in the regulation of motor vehicles."               Caterpillar,
    supra, at *48.      Furthermore, because plaintiffs' claims do not
    hinge on compliance with EPA standards, there can be no direct
    conflict    with   the   federal   regulatory       scheme    that   requires
    compliance with those standards.           Id. at *51-53.
    Affirmed.
    18                                A-0585-16T3