Racing Enthusiasts and Suppliers Coalition v. EPA

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 11, 2022 Decided August 12, 2022
No. 16-1447
RACING ENTHUSIASTS AND SUPPLIERS COALITION,
PETITIONER
v.
ENVIRONMENTAL PROTECTION AGENCY AND MICHAEL S.
REGAN,
RESPONDENTS
On Petition for Review of an Action
of the Environmental Protection Agency
Shannon S. Broome argued the cause for petitioner. With
her on the briefs were Charles H. Knauss and Erin Grisby.
Sue Chen, Trial Attorney, U.S. Department of Justice,
argued the cause for respondents. With her on the brief was
Todd Kim, Assistant Attorney General.
Before: KATSAS and WALKER, Circuit Judges, and
GINSBURG, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge WALKER.
WALKER, Circuit Judge: Amateur race car drivers often
compete against each other after modifying ordinary cars to
2
increase their speed. The Petitioner in this case claims that an
EPA rule curtailed the practices of amateur racers and the
businesses that make and sell them car parts. But because the
Petitioner lacks standing for most of its claims, and because the
remaining claim does not challenge a final agency action, we
do not have jurisdiction.
I
A
On Thanksgiving Day in 1895, six drivers lined up on a
snowy Chicago morning for what is widely regarded as
America’s first car race. Two finished. The winner drove
54.36 miles in 7 hours and 53 minutes on 3.5 gallons of gas.
He went home $5,000 richer.1
Today, thousands of Americans continue that amateur-
racing tradition. The racers often modify their otherwise
ordinary street cars to make them go faster. And retail shops
across the country sell them the tools and aftermarket car parts
that make those modifications possible.
B
The Clean Air Act prohibits tampering with the emissions
systems of a “motor vehicle.” 42 U.S.C. § 7522(a)(3)(A). It
also prohibits the sale of defeat devices — tools and parts that
facilitate such motor vehicle tampering. Id. § 7522(a)(3)(B).
1
Keith R. Gill, Chicago Times-Herald Race of 1895, Encyclopedia
of Chicago, http://www.encyclopedia.chicagohistory.org/pages
/2380.html.
3
That raises the question: What is a “motor vehicle”? The
relevant statutory provision defines it as a “self-propelled
vehicle designed for transporting persons or property on a
street or highway.” Id. § 7550(2). Vehicles built by
manufacturers as race cars — think of cars built for the Indy
500 — are not considered motor vehicles because they are not
“designed for transporting persons or property on a street or
highway.” Id.
C
For decades, many amateur racers have believed that the
Clean Air Act permits them to modify the emissions systems
of ordinary cars they convert into race cars. According to them,
the converted cars are no longer designed for highway use and
thus are not “motor vehicles.”
But in 2015, the Environmental Protection Agency
proposed a rule with language to the contrary. NPRM,
Greenhouse Gas Emissions and Fuel Efficiency Standards for
Medium- and Heavy-Duty Engines and Vehicles—Phase 2, 80
Fed. Reg. 40,138 (July 13, 2015). It said that “there is no
exemption from the tampering and defeat-device prohibitions
that would allow for converting [an] engine or vehicle for
competition use.” Id. at 40,527. It added that “it is not
permissible to remove a motor vehicle or motor vehicle engine
from its certified configuration regardless of the purpose for
doing so.” Id.Commenters objected to the proposed language, and in
2016, the EPA retreated. It excluded that language from its
final rule. It explained — as an aside in the final rule’s
preamble — that the “proposed language was not intended to
represent a change in the law or in EPA’s policies or practices
towards dedicated competition vehicles.” Greenhouse Gas
4
Emissions and Fuel Efficiency Standards for Medium- and
Heavy-Duty Engines and Vehicles—Phase 2, 81 Fed. Reg.
73,478, 73,957 (Oct. 25, 2016).
In the same 2016 rule, the EPA promulgated several
cosmetic amendments regarding an exemption from certain
regulatory requirements for nonroad engines and equipment
(like snowmobiles and tractors). Greenhouse Gas Emissions,
81 Fed. Reg. at 73,972, 74,034, 74,104, 74,217, 74,223,
74,227; 40 C.F.R. § 1068.235(b). It also updated the regulatory
definition of motor vehicle. Under the new definition, even if
an individual removes certain safety features from a motor
vehicle, it remains a motor vehicle unless “absence of [those
safety features] would prevent operation on highways.”.
Greenhouse Gas Emissions, 81 Fed. Reg. at 73,972; 40 C.F.R.
§ 85.1703(b).
The Racing Enthusiasts and Suppliers Coalition, an
association that represents businesses that make and sell
aftermarket car products, now petitions for review. 42 U.S.C.
§ 7607(b)(1).
II
The Coalition challenges nine parts of the EPA’s 2016
rule. Those nine parts fall into three categories: (1) seven
cosmetic amendments regarding the competition exemption for
nonroad engines and equipment; (2) the update to the
regulatory definition of motor vehicle; and (3) the aside in the
rule’s preamble.
We have no jurisdiction to consider those challenges: The
Coalition lacks standing to challenge the cosmetic
amendments; it also lacks standing to challenge the revised
5
definition of motor vehicle; and the preamble’s aside is not a
challengeable final agency action.
A
The “irreducible constitutional minimum of standing
contains three elements.” Lujan v. Defenders of Wildlife, 504
U.S. 555, 560 (1992). A petitioner must suffer “an injury in
fact” that is “fairly traceable to the challenged action of the
defendant” and that “a favorable decision” will likely redress.
Id. at 560-61 (cleaned up). To meet that standard when seeking
our direct review of agency action, a petitioner must point to
“evidence sufficient to support its standing.” Utility Workers
Union of America Local 464 v. FERC, 896 F.3d 573, 578 (D.C.
Cir. 2018) (quoting Sierra Club v. EPA, 292 F.3d 895, 899
(D.C. Cir. 2002)).
1
The Coalition lacks standing to challenge the EPA’s seven
cosmetic amendments regarding the competition exemption for
nonroad engines and equipment like snowmobiles and tractors.
Before the 2016 rule, the competition exemption said, “If
you modify any nonroad engines/equipment after they have
been placed into service in the United States so they will be
used solely for competition, they are exempt without request”
from certain Clean Air Act requirements. 40 C.F.R.
§ 1068.235(b) (2011).
In the 2016 rule, the EPA made seven amendments to the
Code of Federal Regulations to reiterate that the competition
exemption applies only to “nonroad engines/equipment,” not
to motor vehicles. Greenhouse Gas Emissions and Fuel
Efficiency Standards for Medium- and Heavy-Duty Engines
6
and Vehicles—Phase 2, 81 Fed. Reg. 73,478, 73,972, 74,034,
74,104, 74,217, 74,223, 74,227 (Oct. 25, 2016). For example,
the EPA added an introduction to § 1068.235 that says, “The
following provisions apply for nonroad engines/equipment, but
not for motor vehicles or for stationary applications.” Id. at
74,227.
Because those amendments were merely cosmetic, they
had no effect on the rights and responsibilities of the
Coalition’s members. Before 2016, the competition exemption
applied only to “nonroad engines/equipment.” After the 2016
clarifications, it still applied only to “nonroad
engines/equipment.” So the Coalition’s members can continue
to rely on the previous scope of that exemption — if indeed
they ever relied on it, which the Coalition has failed to
demonstrate.
2
The Coalition also has not shown that it has standing to
challenge the EPA’s update to the regulatory definition of
motor vehicle.
Before the 2016 rule, the regulatory definition of motor
vehicle expressly excluded any vehicle that “lacks features
customarily associated with safe and practical street or
highway use.” 40 C.F.R. § 85.1703(a)(2) (2010).
In the 2016 rule, the EPA added a new subsection just after
that definition. It provides that “in applying the criterion in
paragraph (a)(2) of this section, vehicles that are clearly
intended for operation on highways are motor vehicles.
Absence of a particular safety feature is relevant only when
absence of that feature would prevent operation on highways.”
7
Greenhouse Gas Emissions, 81 Fed. Reg. at 73,972; 40 C.F.R.
§ 85.1703(b).
Because that update expands the regulatory definition of
motor vehicle, the update could potentially injure someone.
For example, a group of racers could marshal evidence that
they previously removed safety features from their cars to take
the cars outside the regulatory definition of motor vehicle, but
now they can’t. Or an auto-parts seller could point to evidence
that it previously sold defeat devices, but now it won’t be able
to sell them as often because more vehicles fall within the
regulatory definition of motor vehicle.
But the Coalition has not offered sufficient evidence of
that sort. Instead, it filed a declaration by the CEO of Turn 14
Distribution, “a wholesale automotive parts distributor of a
range of vehicle products, including products for niche vehicle
markets, such as vehicles used solely for racing.” Petitioner’s
Brief PDF p. 76. That declaration, which has no supporting
exhibits, says that the 2016 rule has:
• “called into question the legality of significant aspects
of the automotive aftermarket industry and cast a cloud
of uncertainty over the recreation activity of building
dedicated competition vehicles by hobbyists and
enthusiasts”;
• “caused an increase in compliance costs for Turn 14”;
and
• “adversely impacted Turn 14 Distribution’s sales due to
the chilling effect the Rule has had on car hobbyists and
enthusiasts that build dedicated competition vehicles,
diminishing their participation and, as a consequence,
their auto part purchases.”
Id. at 78.
8
Such “conclusory assertions” are not evidence of standing.
Utility Workers Union, 896 F.3d at 578. What are the affected
“aspects of the automotive aftermarket industry”? What
“compliance costs” have increased? Sales of what in particular
have been “adversely impacted”? The declaration offers no
details about the industry, or what Turn 14 sells, or the harm
inflicted on it by a new definition of motor vehicle that
encompasses vehicles with fewer safety features. In fact, the
phrase “safety features” is nowhere in the declaration. And
because we don’t know whether Turn 14 sells defeat devices,
we don’t know the connection between its sales and the EPA’s
new limit on which vehicles can use defeat devices.
Regardless of whether a different party might have
standing to bring this challenge — or whether this Coalition
with a different declaration could have had standing — the
Coalition has not met its burden to show that its member was
injured by the EPA’s updated regulatory definition of motor
vehicle.
B
“The Clean Air Act authorizes review only of ‘final
action,’ 42 U.S.C. § 7607(b)(1), a term synonymous with ‘final
agency action’ under the APA.” Valero Energy Corp. v. EPA,
927 F.3d 532, 536 (D.C. Cir. 2019).2 Bennett v. Spear held that
a final agency action must (1) “mark the consummation of the
agency’s decisionmaking process” and (2) “be one by which
rights or obligations have been determined, or from which legal
2
That requirement is jurisdictional. Id.; see also Moms Against
Mercury v. FDA, 483 F.3d 824, 828 (D.C. Cir. 2007) (“Petitioners
have failed to carry their burden of demonstrating that this Court has
subject matter jurisdiction over their claim.”).
9
consequences will flow.” 520 U.S. 154, 177-78 (1997)
(cleaned up).
To satisfy Bennett’s second prong, an agency action must
cause “direct and appreciable legal consequences.” U.S. Army
Corps of Engineers v. Hawkes Co., 578 U.S. 590, 598 (2016)
(quoting Bennett, 520 U.S. at 178). Determining those
consequences is a “pragmatic” inquiry that requires courts to
examine the “concrete consequences” of an agency action.
Sierra Club v. EPA, 955 F.3d 56, 63 (D.C. Cir. 2020). It turns
on “the unique constellation of statutes and regulations that
govern the action at issue.” California Communities Against
Toxics v. EPA, 934 F.3d 627, 631 (D.C. Cir. 2019); see also id.
at 637 (the inquiry depends on the concrete legal effect “an
agency action has or does not have as a result of the specific
statutes and regulations that govern it”).
In practice, the consummation of an agency’s decision-
making process has sufficient concrete consequences when it
reads “like a ukase,” Valero, 927 F.3d at 537 (quoting
Appalachian Power Co. v. EPA, 208 F.3d 1015, 1023 (D.C.
Cir. 2000)), or forces a regulated party to choose between
“costly compliance and the risk of prosecution at an uncertain
point in the future.” CSI Aviation Services, Inc. v. Department
of Transportation, 637 F.3d 408, 412 (D.C. Cir. 2011).
On the flip side, an agency action does not have sufficient
concrete consequences when it imposes “no obligations,
prohibitions, or restrictions” on a regulated party. Sierra Club,
955 F.3d at 63. That scenario often arises where an agency
action has no independent legal force and would not be entitled
to deference in future proceedings. See California
Communities, 934 F.3d at 637-38.
10
In this case, the aside in the 2016 rule’s preamble — which
stated that the proposed-but-not-promulgated provisions about
tampering with emissions systems were “not intended to
represent a change in the law or in EPA’s policies or practices
towards dedicated competition vehicles” — does not have
sufficiently concrete consequences for the Coalition to satisfy
Bennett’s second prong. Greenhouse Gas Emissions, 81 Fed
Reg. at 73,957.
For starters, the aside reads less “like a ukase” than like an
explanation of an administrative retreat by an agency that
declined to adopt a rule that would have had independent legal
force. Valero, 927 F.3d at 537 (quoting Appalachian Power,
208 F.3d at 1023). As such, “neither EPA nor regulated
sources can rely on it as independently authoritative in any
proceeding.” California Communities, 934 F.3d at 638. The
Coalition does not dispute that point, nor does either party say
that the aside is entitled to deference.
Perhaps that is why the EPA did not cite the preamble’s
aside as an authority in an enforcement action it brought after
issuing the 2016 rule. United States’ Response to Amicus
Brief at 27-28 n.21, United States v. Gear Box Z, Inc., No. 20-
8003 (D. Ariz. March 8, 2021). Instead, the EPA cited the
preamble’s aside only to show that, despite withdrawing the
2015 proposed rule, it still believes that converted racing
vehicles fall within the Clean Air Act’s purview. Id. That
treatment further indicates that the aside has no direct legal
consequences. See Valero, 927 F.3d at 538.
The Coalition responds that the preamble sets forth a novel
interpretation that subjects its members to the risk of
penalties. But the Coalition has not proven that the EPA’s
interpretation is in fact novel. Evidence of the EPA’s past
approach is mixed, and the aside itself says that the EPA has
11
not changed its view of what the Clean Air Act means. 81 Fed.
Reg. at 73,957 (the abandoned rule “was not intended to
represent a change in the law”).
To be clear, we are not saying with certainty that the EPA’s
position is unchanged — only that the Coalition has not shown
that it has changed. Nor do we decide whether, with more
evidence, the Coalition might have been able to demonstrate
that the preamble’s aside was final agency action. It has not,
however, done so in this case.3
* * *
We dismiss the petition for review.
3
There is an additional jurisdictional problem for the Coalition: It
has not pointed to any evidence showing that the preamble’s aside
caused it an injury-in-fact. Its conclusory declaration does not
explain with any specificity how the preamble’s aside has made it
choose between “costly compliance and the risk of prosecution at an
uncertain point in the future,” or how it has chilled the practices of
its businesses or their customers, or how it has otherwise had an
identifiable effect on the Coalition. CSI Aviation, 637 F.3d at 412.
For example, as mentioned above, we do not know from the
Coalition’s declaration whether any Coalition member even sells the
defeat devices prohibited under the understanding of the Clean Air
Act to which the preamble’s aside refers. See Utility Workers Union,
896 F.3d at 578.