State of Tennessee, Ex Rel. Herbert H. Slatery, III v. Volkswagen Aktiengesellschaft

03/13/2019
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
December 4, 2018 Session
STATE OF TENNESSEE, EX REL. HERBERT H. SLATERY, III, ET AL. V.
VOLKSWAGEN AKTIENGESELLSCHAFT, ET AL.
Appeal from the Chancery Court for Davidson County
No. 16-1044-I Claudia Bonnyman, Chancellor
No. M2018-00791-COA-R9-CV
At issue in this appeal is the breadth of federal preemption under Title II of the federal
Clean Air Act, 42 U.S.C. §§ 7521 to 7590, for claims that pertain to: (1) the initial
manufacture and installation of “defeat device” software in emissions control systems in
automobiles, and (2) post-sale software updates of emissions control systems during
manufacturer recalls. The State of Tennessee brought this action against several
automobile manufacturers for violating state anti-tampering laws by tampering with the
emissions control systems in more than 8,000 of their “clean diesel” vehicles that were
registered and operated in Tennessee from 2008 to 2015. The manufacturers responded
by filing Tenn. R. Civ. P. 12.02(6) motions to dismiss arguing that all of the claims were
preempted by the federal Clean Air Act. The trial court dismissed the claims that
pertained to the initial manufacture and installation of emissions control systems for
automobiles as expressly preempted by Section 209(a) of the act; however, the court
denied the manufacturers’ motions to dismiss the claims that pertained to the post-sale
software updates of emissions control systems during manufacturer recalls. We have
determined that all of the State’s claims are preempted by the federal Clean Air Act.
Therefore, we affirm the dismissal of the claims related to the initial manufacture and
installation of emissions control systems, reverse the decision to deny the Rule 12
motions to dismiss the post-sale software updates and installations, and remand with
instructions to dismiss all claims.
Tenn. R. App. P. 9 Interlocutory Appeal; Judgment of the Chancery Court
Affirmed in Part; Reversed in Part and Remanded
FRANK G. CLEMENT JR., P.J., M.S., delivered the opinion of the Court, in which ANDY D.
BENNETT and RICHARD H. DINKINS, JJ., joined.
Herbert H. Slatery, III, Attorney General and Reporter; Andrée Sophia Blumstein,
Solicitor General; Wilson S. Buntin, Senior Counsel; and Lauran M. Sturm, Assistant
General Counsel, Nashville, Tennessee, for the appellant, State of Tennessee, ex rel.
Herbert H. Slatery III, in his official capacity as the Attorney General and Reporter, and
Shari Meghreblian, Ph.D., in her official capacity as Commissioner of the Tennessee
Department of Environment and Conservation.
John R. Bibb, Jr. and Ryan N. Clark, Nashville, Tennessee; Robert J. Giuffra, Jr., David
M. J. Rein, and Matthew A. Schwartz, New York City, New York; and Judson O.
Littleton, Washington, DC for the appellees, Volkswagen Aktiengesellschaft d/b/a
Volkswagen AG, Audi AG, and Volkswagen Group of America, Inc.
James K. Vines, Atlanta, Georgia for the appellees, Dr. Ing. h. c. F. Porsche AG and
Porsche Cars of North America, Inc.
OPINION
On September 28, 2016, the State of Tennessee, by and through the Attorney
General and on behalf of the Tennessee Department of Environment and Conservation,
(“the State”) commenced this action against several automobile manufacturers:
Volkswagen Aktiengesellschaft (Volkswagen AG); Volkswagen Group of America, Inc.;
Audi AG; Dr. Ing. h. c. F. Porche AG; and Porche Cars of North America, Inc.
(collectively, “Defendants”). The complaint alleged that Defendants violated provisions
of the Tennessee Air Quality Act, Tenn. Code Ann. §§ 68-201-101 to -121 (“the
Tennessee Act”), by programming the computer software to function as a “defeat
device,” which illegally tampered with the vehicles’ emissions control systems as the
vehicles were driven.1
It was alleged that from approximately 2008 to 2015, Defendants knowingly
engineered, manufactured, and sold diesel engine vehicles equipped with electronic
control modules that adjusted the performance of the vehicles’ emissions control systems
to perform effectively during emissions testing and less effectively during normal
operation and use.2 Consequently, the vehicles purportedly met federal emissions
1
Because this case was dismissed by the trial court upon Defendants’ motions under Tenn. R.
Civ. P. 12.02(6), our only source of the relevant facts is the Amended Complaint. Therefore, the factual
history is taken from the allegations in the Complaint and Amended Complaint. The procedural history is
taken from the record provided by the trial court.
2
In 2014, West Virginia University completed a study commissioned by the International
Council on Clean Transportation and prepared a report (“ICCT report”), finding that Defendants’
vehicles, the 2012 Volkswagen Jetta (Generation 1) and the 2013 Passat (Generation 2), released up to 35
times the allowed amount of emissions when in normal, on-the-road use. When confronted by the
Environmental Protection Agency (the “EPA”) about the report, Defendants “waged a campaign to
mislead and confuse regulators and the public about the true cause of the findings in the ICCT report,
(continued…)
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standards when undergoing emissions tests; however, when driven, the vehicles emitted
nitrogen oxide (“NOx”) in excess of what is permitted under federal law.
As an additional “cheat,” it was alleged that Defendants programmed the vehicle’s
on-board diagnostic system (“OBD”) to falsely report that the vehicle’s emissions system
was working properly and compliant with all relevant emission requirements. The
complaint alleged that this action had particular significance in Tennessee because
Tennessee’s inspection and maintenance test for emissions (“emissions test”) does not
measure the vehicle’s emissions but instead relies on the vehicle’s OBD to relay the
information.
The emissions control systems at issue were installed in 12 Audi, Volkswagen,
and Porche models equipped with 2.0 liter and 3.0 liter diesel engines sold in the United
States between 2008 and 2015, which Defendants allegedly “marketed … to Tennesseans
as new ‘clean diesel’ vehicles that are not only quiet, fuel efficient, and high performing,
but also environmentally friendly by emitting low levels of [NOx].” It was further alleged
that more than 8,000 of these vehicles were licensed and registered in Tennessee during
the relevant time frame.
Defendants responded to the claims asserted in the original complaint (“pre-recall
claims”) by filing Tenn. R. Civ. P. 12.02(6) motions to dismiss for failure to state a claim,
arguing that the State’s claims were expressly preempted by Section 209(a) of the federal
Clean Air Act, which states 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.” 42 U.S.C. §
7543(a). Before the motions to dismiss were heard, the State was granted permission to
amend its complaint to include additional claims related to post-sale software updates and
installations of emissions control systems by the automotive manufacturers as a result of
manufacturer recalls of the vehicles in 2014 and 2015 (“post-sale recall claims”). In
paragraphs 76 and 77 of the amended complaint, it is alleged:
76. In 2015, despite issuing two software recalls for its Generation 1 and
Generation 2 vehicles to purportedly address the concerns raised by the
ICCT report, [Defendants] used these recalls instead as an opportunity to
refine the software in these vehicles to make it more efficient at rendering
certain emission control systems inoperative in normal driving conditions,
which was Volkswagen’s defeat device software.” In September 2015, Defendants admitted that they
equipped several of their vehicle models with defeat device software and testified to that effect before
Congress shortly following. In January 2017, the federal government resolved its civil penalty claims
against Defendants, and in March 2017, Defendants pleaded guilty to three federal offenses.
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resulting in NOx emissions that continued to exceed applicable emissions
standards.
77. The conduct described in paragraph 76 is commonly referred to as the
“Field Fix.” In 2014-2015, [Defendants] falsely told regulators and
consumers that it was updating software to improve the performance of the
vehicles subject to the recall, (which included existing, in-use vehicles sold
years before) when in fact, [Defendants’] recall/maintenance was a [ruse] to
improve the defeat device software. As Volkswagen AG admitted in its
federal guilty plea agreement in March 2017, “Volkswagen employees
knew that the update also used the steering wheel angle of the vehicle as a
basis to more easily detect when the vehicle was undergoing emissions
tests, thereby improving the defeat device’s precision in order to reduce
stress on the emissions control systems.”
The amended complaint further alleged that by installing and using defeat device
software and by updating such software in the “Field Fix,” Defendants violated three
provisions in the Tennessee Act and two implementing regulations. For one, the State
alleged that Defendants violated Tenn. Code Ann. § 68-201-120, which states:
It is unlawful for any person to remove or render inoperative any device or
element of design installed on or in a motor vehicle or motor vehicle engine
in compliance with regulations under the federal Clean Air Act … prior to
its sale and delivery to the ultimate purchaser, or for any person knowingly
to remove or render inoperative any such device or element of design after
such sale and delivery to the ultimate purchaser.
Second, the State alleged that Defendants violated Tenn. Code Ann. § 68-201-
112(a)(1), which provides that anyone who knowingly “[v]iolates or fails to comply
with…any duly promulgated air pollution control regulation” is guilty of a Class C
misdemeanor. The two regulations at issue are found at Tenn. Comp. R. & Regs. 1200-
03-36-.03 and read as follows:
No person shall cause, suffer, allow, or permit tampering of a motor vehicle
or motor vehicle engine that is in compliance with federal motor vehicle
standards except where the purpose of modification or removal of the air
pollution emission control device is to install another device which is
equally effective in reducing emissions from the vehicle.
Tenn. Comp. R. & Regs. 1200-03-36-.03(1).
No person shall manufacture, sell, offer to sell, or install any part or
component on a motor vehicle or motor vehicle engine where the purpose
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of the part or component is to bypass, defeat, or render inoperative any
device or element of design installed on or in a motor vehicle or motor
vehicle engine that is in compliance with the federal motor vehicle
standards.
Tenn. Comp. R. & Regs. 1200-03-36-.03(2).
Third, the State contended that Defendants violated Tenn. Code Ann. § 68-201-
112(a)(3), which provides that anyone who knowingly “[f]alsifies, tampers with, or
renders inaccurate any monitoring device or method required to be maintained or
followed” is guilty of a Class C misdemeanor.3
In its prayer for relief, the State asked the court to enter a judgment in its favor and
to assess civil penalties against Defendants in an amount not to exceed $25,000 per day
for each day of the violation in accordance with Tenn. Code Ann. §§ 68-201-116 and -
117.
In response, Defendants filed a second wave of Tenn. R. Civ. P. 12.02(6) motions
to dismiss for failure to state a claim. Defendants argued that the State’s claims were
expressly preempted by Section 209(a) of the federal Clean Air Act because the claims
related to “the control of emissions from new motor vehicles.” See 42 U.S.C. § 7543(a).
In the alternative, Defendants argued that the State’s claims were impliedly preempted.
In its response to Defendants’ motions, the State contended that its claims did not
relate to the control of emissions from new motor vehicles. To the contrary, the State’s
claims concerned the more than 8,000 vehicles already in use and registered in
Tennessee. Thus, the State was acting within the authority granted to the states by 42
U.S.C. § 7543(d) “to control, regulate, or restrict the use, operation, or movement of
registered or licensed motor vehicles.”
The trial court dismissed the State’s pre-recall claims as expressly preempted by
Section 209(a) of the federal Clean Air Act. However, the court denied Defendants’
motion to dismiss the post-sale recall claims found in paragraphs 76 and 77 of the
Amended Complaint, finding that “[t]here is conceivably a set of facts which would
allow [the State] to regulate the use of the vehicles in Tennessee during and after the
recall….” The trial court ruled:
3
Under the Tennessee Act, tampering includes, but is not limited to, “[i]stalling any electrical
device that is attached to the motor vehicle’s computer system that is designed to give false on-board
diagnostic readiness codes and is used as an attempt to pass the onboard diagnostic test,” and “[i]nstalling
high performance chips which reprogram or override the motor vehicle’s on-board computer system.”
Tenn. Comp. R. & Regs. 1200-03-36-.02(17)(h), (l).
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In summary, the Court is dismissing under Tenn. R. Civ. P. 12.02(6) [the
State’s] claims regarding tampering and [the emissions tests] before the
recall because the activities or the conduct that the Defendants were
involved in related back to the original design and manufacture of the
motor vehicles. But after 2014 and 2015, which the Court understands from
the [first amended complaint] were the years and the times when the recall
went out for the Defendants’ vehicles that are now owned by other people,
[the State] is alleging that the Defendants in recalling and field fixing these
vehicles violated state law, the anti-tampering and [the emissions tests]
claims, because these do not relate back to the original manufacturing and
insertion of the devices into the new cars. Therefore, the Court is not
dismissing under Tenn. R. Civ. P. 12.02(6) the State’s claims arising out of
and after Defendants’ recall and field fix of the vehicles in 2014 and 2015.
This Tenn. R. App. P. 9 interlocutory appeal followed in which the issue is
whether any or all of the State’s claims are preempted by the federal Clean Air Act.4
STANDARD OF REVIEW
The purpose of a Tenn. R. Civ. P. 12.02(6) motion to dismiss for failure to state a
claim upon which relief can be granted “is to test the sufficiency of the complaint.” Gore
v. Tenn. Dep’t of Correction, 132 S.W.3d 369, 373 (Tenn. Ct. App. 2003) (quoting Willis
v. Tenn. Dep’t of Correction, 113 S.W.3d 706, 710 (Tenn. 2003)). In determining
whether the pleadings state a claim upon which relief can be granted, only the legal
sufficiency of the complaint is tested, not the strength of the plaintiff’s proof. Stein v.
Davidson Hotel Co., 945 S.W.2d 714, 716 (Tenn. 1997). “Such a motion admits the truth
of all relevant and material averments contained in the complaint, but asserts that such
facts do not constitute a cause of action.” Id. “In considering a motion to dismiss, courts
should construe the complaint liberally in favor of the plaintiff, taking all allegations of
fact as true and deny the motion unless it appears that the plaintiff can prove no set of
facts in support of her claim that would entitle her to relief.” Id. In considering this
appeal, we take all allegations of fact in the plaintiff’s complaint as true and review the
lower court’s legal conclusions de novo with no presumption of correctness. Tenn. R.
App. P. 13(d); Stein, 945 S.W.2d at 716; Owens v. Truckstops of America, 915 S.W.2d
420, 424 (Tenn. 1996); Cook, 878 S.W.2d at 938. Preemption is a question of law, which
we review de novo. Lake v. Memphis Landsmen, LLC, 405 S.W.3d 47, 55 (Tenn. 2013).
4
All parties filed notices of appeal; by order of this court, the State was designated as the
appellant for the purposes of this appeal.
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ANALYSIS
I. FEDERAL PREEMPTION
The Supremacy Clause of the United States Constitution provides that the
“Constitution, and the Laws of the United States…shall be the supreme Law of the
Land….” U.S. Const. art. VI, cl. 2. Generally, the States govern “within their particular
spheres concurrent with the federal government,” subject to the power of Congress to
preempt state law. Pendleton v. Mills, 73 S.W.3d 115, 126 (Tenn. Ct. App. 2001) (citing
Tafflin v. Levitt, 493 U.S. 455, 458 (1990)). Consistent with this principle, a federal law
or regulation may preempt a state claim. See Lake, 405 S.W.3d at 56.
Courts recognize two types of preemption—express preemption, which occurs
when Congress explicitly provides that federal law supersedes state law, and implied
preemption, which falls into one of three categories: (1) field preemption, (2) direct
conflict preemption, or (3) “purposes and objectives” conflict preemption. Id. Field
preemption occurs when the federal government’s legislation in a specific area is “so
pervasive as to make reasonable the inference that Congress left no room for the States to
supplement it.” Leggett v. Duke Energy Corp., 308 S.W.3d 843, 853 (Tenn. 2010)
(quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)). Direct conflict
preemption arises when it is impossible for an individual to comply with both state and
federal law. Id. (quoting Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363, 372–73
(2000)). And, “purposes and objectives” conflict preemption results when a state law
“stands as an obstacle to the accomplishment and execution of the full purposes and
objectives of a federal law.” Lake, 405 S.W.3d at 56 (citations omitted).
Whether express or implied, two fundamental principles guide any preemption
analysis. Id. First, congressional intent is “the ultimate touchstone.” Id. (quoting Wyeth v.
Levine, 555 U.S. 555, 565 (2009)). And, that intent “may be ‘explicitly stated in the
statute’s language or implicitly contained in its structure and purpose.’” Riggs v. Burson,
941 S.W.2d 44, 49 (Tenn. 1997) (quoting Jones v. Rath Packing Co., 430 U.S. 519, 525
(1977)).
Second, any inquiry must begin “with the assumption that the historic police
powers of the States were not to be superseded by [federal law] unless that was the clear
and manifest purpose of Congress.” Id. (quoting Wyeth, 555 U.S. at 565). This principle
is particularly applicable here, because the federal Clean Air Act regulates health and
safety, which is traditionally a power reserved for the states. See Estrin v. Moss, 430
S.W.2d 345, 348 (Tenn. 1968). Moreover, “[t]he pertinence of this presumption against
federal preemption is clear enough from the terms of the [federal Clean Air Act] itself,”
which states that “‘air pollution…and air pollution control at its source is the primary
responsibility of States and local governments.’” Engine Mfrs. Ass’n v. S. Coast Air
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Quality Mgmt. Dist., 541 U.S. 246, 260 (2004) (Souter, J., dissenting) (quoting 42 U.S.C.
§ 7401(a)(3)).
This case solely concerns express and “purposes and objectives” conflict
preemption. Defendants argue that the State’s pre-recall claims are expressly preempted
by Section 209(a). As to the post-sale recall claims, Defendants primarily argue that those
claims are impliedly preempted because they conflict with the purposes and objectives of
the federal Clean Air Act. Therefore, each set of claims will require a different analysis.
II. PRE-RECALL CLAIMS
The State contends the trial court erred in concluding that the pre-recall claims are
preempted. As stated in the summary of its argument in the State’s brief:
The clear language of Section 209(a) of the [federal Clean Air Act]
indicates that States are preempted only from adopting or attempting to
enforce standards “relating to the control of emissions from new motor
vehicles,” 42 U.S.C. § 7543(a), not from regulating “registered, licensed”
vehicles, 42 U.S.C. § 7543(d). This distinction is plainly made both in the
legislative text and in the legislative history. The State’s pre-recall claims
involve only “registered, licensed” motor vehicles - not “new” motor
vehicles. Tennessee’s [emissions testing] program applies only to vehicles
that are at least one year removed from initial registration in the State, and
the State’s tampering claims are limited to the same set of vehicles.
In addition, the preemption in Section 209(a) of the [federal Clean Air Act]
applies only to the enforcement of state-specific, not federal, emissions
standards. The State is not seeking to enforce a state-specific emissions
standard. Indeed, Tennessee does not have state-specific tailpipe-emissions
standards for mobile sources. The State’s [emissions] program tests
registered, licensed vehicles for compliance with federal emissions
standards, and the State is specifically authorized by Congress and the EPA
to implement its [emissions testing] program. Defendants argue, and the
trial court found, that the State’s initial claims, the pre-recall claims are
expressly preempted by Section 209(a) of the federal Clean Air Act. The
State argues that Section 209(a) does not apply because the State’s claims
do not pertain to new motor vehicles.
Defendants argue that Section 209(a) expressly preempts states from “adopt[ing]
or attempt[ing] to enforce any standard relating to the control of emissions from new
motor vehicles.” See 42 U.S.C. § 7543(a). Defendants further contend in their brief that
the State asserted claims based on Defendants’ “installation during manufacturing of
‘defeat device’ software—prohibited by federal law—that caused their vehicles to meet
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federal emissions standards during testing, but to emit excess nitrogen oxides (“NOx”)
when the vehicle was being driven on the road.” Thus, and relying on the decision in
Wyoming v. Volkswagen Grp. (In re: Volkswagen “Clean Diesel” Mktg., Sales Practices,
& Prod. Liab. Litig.), 264 F. Supp. 3d 1040 (N.D. Cal. 2017) [hereinafter Wyoming],
Defendants insist the State’s pre-recall claims are preempted. The trial court agreed, and
so do we.5
The federal Clean Air Act was enacted in 1963 in response to “the growth in the
amount and complexity of air pollution brought about by urbanization, industrial
development, and the increasing use of motor vehicles,” which posed a significant danger
to the public health and welfare.6 42 U.S.C. § 7401(a)(2). While recognizing that air
pollution control was “the primary responsibility of States and local governments,” the
act sought to create a system of cooperative federalism to address the problem. Id. §
7401(a)(3), (4). Thus, the federal Clean Air Act “made the States and the Federal
Government partners in the struggle against air pollution.” Gen. Motors Corp. v. United
States, 496 U.S. 530, 532 (1990). The nature of that partnership is what is at issue in this
case.
To promote efficient and fruitful cooperation between the states and the federal
government, the federal Clean Air Act assigned different tasks to each in its
5
Defendants also insist the State of Tennessee has been adequately compensated for the
violations at issue because, as stated in their brief:
As Congress intended, the EPA has comprehensively addressed Defendants’ conduct
pursuant to its broad authority under the CAA, including through $4.3 billion in civil and
criminal penalties and substantial injunctive relief that the EPA determined will “fully
mitigate” any environmental harm caused by Defendants’ conduct. As part of that
nationwide enforcement, the EPA required Defendants to pay more than $46 million to
the State of Tennessee to address the environmental impact of excess NOx in Tennessee
specifically. Further, as required by the EPA and other federal settlements, Defendants
have offered “tangible, substantial benefits” to all eligible owners and lessees of the
affected vehicles—including Tennessee residents—that are “the equivalent of—or
superior to—those obtainable after successful litigation,” including the option either to
sell back their vehicles to Defendants or to obtain a free emissions modification to bring
the cars into compliance with federal emissions standards, plus substantial additional cash
restitution. In re: Volkswagen “Clean Diesel” Mktg., Sales Practices, & Prods. Liab.
Litig., 895 F.3d 597, 617 (9th Cir. 2018). For Tennessee residents alone, this relief
exceeded $280 million. In total, Tennessee and its residents (including dealers) have
already received roughly $30,000 per affected vehicle.
6
Congress noted that a study conducted of Nashville, Tennessee, revealed that sections of the
city “subject to heaviest air pollution were the areas of highest death rates from all respiratory diseases
and from such specific diseases as tuberculosis, influenza, and pneumonia.” H.R.Rep. 90-728 (1967), as
reprinted in 1967 U.S.C.C.A.N. 1938, 1942.
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implementation. See Gen. Motors Corp., 496 U.S. at 532-33. First, the EPA7 was to
promulgate national ambient air quality standards (“NAAQS”), and then each state had to
submit a state implementation program (“SIP”) “to implement, maintain, and enforce the
NAAQS.” Id. at 533 (citing 42 U.S.C. §§ 7409(a)(1), 7410(a)(1)). As each state
submitted its SIP, the EPA was tasked with reviewing the SIP and approving it upon a
determination “that it was adopted after reasonable notice and hearing and that it met
various substantive requirements.” Id. (citing 42 U.S.C. § 7410(a)(2)).
The Tennessee Act, Tenn. Code Ann. §§ 68-201-101 to -121, is Tennessee’s SIP.
The Tennessee Act implements, maintains, and enforces the NAAQS, as to mobile
sources of pollution, through emissions testing programs and anti-tampering laws. See
Tenn. Code Ann. § 68-201-105(a)(1)(A). Tennessee’s emissions testing program
provides for emissions testing in specified counties in the State as a requirement for
automobile registration. Tenn. Comp. R. & Regs. 1200-03-29-.03. Tennessee’s anti-
tampering laws, generally, seek to prevent persons from tampering with the emissions
control systems of automobiles in a way that would render those systems less effective.
E.g., Tenn. Code Ann. § 68-201-120.
In addition to emissions testing programs and anti-tampering laws, Congress
intended that the NAAQS, when realistically applied would “require that urban areas do
something about their transportation systems, the movement of used cars, the
development of public transit systems, and the modification and change of housing
patterns, employment patterns, and transportation patterns generally.” 116 Cong. Rec.
42,387 (1970) (Sen. Muskie). To facilitate the achievement of the foregoing objectives,
the federal Clean Air Act grants to state and local governments the right “to control,
regulate, or restrict the use, operation, or movement of registered or licensed motor
vehicles.” 42 U.S.C. § 7543(d) (emphasis added).
The NAAQS apply to both stationary and mobile sources of pollution. See Engine
Mfrs. Ass’n v. E.P.A., 88 F.3d 1075, 1079 (D.C. Cir. 1996). While the federal Clean Air
Act gives to the States primary control over stationary sources of pollution, “regulation of
motor vehicle emissions [has] been a principally federal project.” Id. “The regulatory
difference is explained in part by the difficulty of subjecting motor vehicles, which
readily move across state boundaries, to control by individual states.” Id. Additionally,
during the hearings leading up to the 1967 amendments, automobile manufacturers
expressed concern that adhering to 51 different emissions standards would place a severe
economic strain on the industry:
7
The Environmental Protection Agency was not created until December 2, 1970, which
coincided with the 1970 amendments to the federal Clean Air Act, discussed infra. United States
Environmental Protection Agency. Evolution of the Clean Air Act. EPA, http://www.epa.gov/clean-air-
act-overview/evolution-clean-air-act, (last updated Jan. 3, 2017).
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[t]he process of fixing and administering emission standards for new cars is
at best a complex one. Judgments must be made, often on the basis of
incomplete scientific evidence, on the question of which pollutants
endanger health and welfare and at what levels it is technologically and
economically feasible to fix emissions rates.
In a program of this kind many questions arise. What are the requirements
for testing new vehicles as they are produced each year? Precisely how are
the tests to be performed and under what conditions? What are the rules for
interpreting the scientific data developed in the testing process?
H.R. Rep. No. 90-728 (1967) (quoting Air Quality Act of 1967: Hearing on H.R. 728
before the H. Comm. On Interstate and Foreign Commerce, 90th Cong. 482–83 (1967)
(statement of Thomas C. Mann, president of the Automobile Manufacturers
Association)), as reprinted in 1967 U.S.C.C.A.N. 1938, 1957.
Legislators opined that
the problems faced by the automobile manufacturing industry arising out of
identical Federal and State standards, separately administered, would be
difficult for the industry to meet since different administration could easily
lead to different answers to identical questions. Similarly, the problems
arising out of different standards applicable nationwide…even though
identically administered, would also led to difficulties.
Id. While manufacturers could resolve the problem of multiple standards “by building
vehicles that meet whichever standard is the more stringent, this would lead to increased
costs to consumers nationwide, with benefit only to those in one section of the country.”
Id. at 1958.
Though concerned with minimizing costs to consumers, Congress was also
interested in promoting “one of federalism’s chief virtues”—the “role of States as
laboratories.”8 Therefore, recognizing that California was a leader and innovator in the
8
Justice O’Connor wrote, “One of federalism’s chief virtues, of course, is that it promotes
innovation by allowing for the possibility that ‘a single courageous State may, if its citizens choose, serve
as a laboratory; and try novel social and economic experiments without risk to the rest of the country.’”
Gonzales v. Raich, 545 U.S. 1, 42 (2005) (Connor, J., dissenting) (quoting New State Ice Co. v.
Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting)). In debates surrounding the federal Clean
Air Act’s emissions standards, Senator Murphy of California “convinced his colleagues that the entire
country would benefit from his state’s continuing its pioneering efforts, California serving as ‘a kind of
laboratory for innovation.’” Engine Mfrs. Ass’n, 88 F.3d at 1080 (citations omitted).
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fight against mobile sources of pollution, the federal Clean Air Act permitted California
to set its own emissions standards, separate from the federal standards. Engine Mfrs.
Ass’n, 88 F.3d at 1079–80. As a consequence, rather than allow 51 different emissions
standards, as manufacturers feared, the federal Clean Air Act dictated that “motor
vehicles must be either ‘federal cars’ designed to meet the EPA’s standards or ‘California
cars’ designed to meet California’s standards.” Id. at 1080.
As an additional compromise to the automobile industry, and central to the case
sub judice, Congress enacted Section 209(a), Engine Mfrs. Ass’n, 88 F.3d at 1080, which
provides:
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. No state shall
require certification, inspection, or any other approval relating to the
control of emissions from any new motor vehicle or new motor vehicle
engine as condition precedent to the initial retail sale, titling (if any), or
registration of such motor vehicle, motor vehicle engine, or equipment.
42 U.S.C. § 7543(a). “New motor vehicle” is defined as “a motor vehicle the equitable or
legal title to which has never been transferred to an ultimate purchaser.” Id. § 7550(3).
“Ultimate purchaser” means “with respect to any new motor vehicle or new motor
vehicle engine, the first person who in good faith purchases such new motor vehicle or
new engine for purposes other than resale.” Id. § 7550(5).
As to the regulation of emissions, Section 206(a) of the federal Clean Air Act
gives the federal government exclusive control over the new vehicle manufacturing
process. First, the EPA issues “certificates of conformity” to new motor vehicle
prototypes that meet federal emissions standards. Id. § 7525(a). After the vehicles are
manufactured, the EPA then determines whether those vehicles remain in compliance by
testing sample vehicles. Id. § 7525(b)(1). If the EPA discovers that some or all of the
vehicles fail to conform to emissions standards, the EPA will suspend the certificates of
conformity for the non-compliant vehicles until the manufacturer corrects the deficiency.
Id. § 7525(b)(2)(A)(i)–(ii).
Having identified the congressional purpose of the federal Clean Air Act and
Section 209(a), in particular, we turn to the State’s arguments for why its pre-recall
claims are not preemptively barred.
For one, the State contends that Section 209(a) does not apply because the State is
not seeking to enforce a state-specific emissions standard; in fact, it insists Tennessee
does not have a state standard for automobile emissions. We find this contention
misplaced because Section 209(a) provides in pertinent part: “No State…shall…attempt
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to enforce any standard relating to the control of emissions from new motor vehicles or
new motor vehicle engines[.]” Id. § 7543(a) (emphasis added). Here, the State is
attempting to enforce the federal standard, which Section 209(a) clearly states it may not
do.9
The State’s second contention is that even if Section 209(a) prohibits state
enforcement of federal standards, the State is not enforcing a “standard” because it is not
“impos[ing] quantitative levels of emissions.” Again, we respectfully disagree. The
United States Supreme Court held that “standard” in the context of Section 209(a) not
only means that “the vehicle or engine must not emit more than a certain amount of a
given pollutant,” but also means that the vehicle “must be equipped with a certain type of
pollution-control device, or must have some other design feature related to the control of
emissions.” S. Coast Air Quality, 541 U.S. at 253. Here, the State is seeking to punish
Defendants for installing software in the subject vehicles that tampered with the vehicles’
emissions control systems and caused the OBD to falsely report that the vehicles’
emissions control systems were working properly. Both allegations concern “design
feature[s] related to the control of emissions.” See id. Therefore, the State’s claims
concern a standard.
The foregoing notwithstanding, the State contends that too broad an interpretation
of Section 209(a), and particularly the meaning of “relating to” in Section 209(a), would
frustrate the states’ efforts in reducing air pollution and argues that Section 209(a) only
applies when states directly interfere with the new vehicle manufacturing process as
outlined in Section 206(a), 42 U.S.C. § 7525. Defendants counter by advocating a broad
interpretation of “relating to” in order to prevent the states from interfering directly or
indirectly with the manufacture of new vehicles.
While the Supreme Court has not defined “relating to” in the context of Section
209(a), it has defined those words in other preemption cases. In a preemption case
involving the Federal Aviation Act, for example, the Court stated that “[t]he ordinary
meaning of these words is a broad one —‘to stand in some relation; to have bearing or
concern; to pertain; refer; to bring into association with or connection with’…— and the
words thus express a broad preemptive purpose.” Morales v. Trans World Airlines, 504
U.S. 374, 383 (1992) (quoting Black’s Law Dictionary 1158 (5th ed. 1979)); see also
Ingersoll-Rand Co. v. McClendon, 498 U.S. 133, 139 (1990) (considering the
9
The legislative history reveals that Congress wanted to avoid the problems that would result if
automobile manufacturers had to answer to a number of different regulators enforcing the same standard.
H.R. Rep. No. 90-728 (1967), as reprinted in 1967 U.S.C.C.A.N. 1938, 1957. (“[T]he problems faced by
the automobile manufacturing industry arising out of identical Federal and State standards, separately
administered, would be difficult for the industry to meet since different administration could easily lead to
different answers to identical questions.”)
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Employment Retirement Income Security Act and holding that “relates to” means
“[having] a connection with” or “[in] reference to.”)
Considering the plain meaning of “relating to,” we agree with Defendants that
Congress intended to prevent states from directly or indirectly regulating emissions in
new motor vehicles. Moreover, this court need not split hairs regarding the precise
meaning of “relating to” because the State’s claims would be preempted by Section
209(a) even if we were to give the term a narrow reading. This is so because the State’s
pre-recall claims not only reference Defendants’ actions during the manufacturing
process, they are, in fact, premised on those actions. See Wyoming, 264 F. Supp. 3d at
1057.
Because the pre-recall tampering claims are premised on Defendants’ acts of
installing a defeat device in a new motor vehicle, prior to registration, in violation of
Section 209(a), they are expressly preempted. See id. at 1052, 1054 (citing 42 U.S.C. §
7543(a)). Accordingly, we affirm the decision of the trial court to dismiss the pre-recall
claims.
III. POST-SALE RECALL CLAIMS
Defendants contend the trial court erred by denying their motion to dismiss the
post-sale recall claims. Defendants rely principally on a federal decision that was filed
after the trial court rendered its decision in this matter, that being Salt Lake County v.
Volkswagen (In re: Volkswagen “Clean Diesel” Mktg., Sales Practices, & Prod. Liab.
Litig.), 310 F. Supp. 3d 1030 (N.D. Cal 2018) [hereinafter Counties],10 which is the only
federal ruling on post-sale recall claims, also referred to as “Update Tampering” claims.
Defendants also rely on a legal principle that the State does not dispute, that the decisions
of lower federal courts have persuasive force in Tennessee. See Howell v. Metro.
Sexuality Oriented Bus. Licensing Bd., 466 S.W.3d 88, 108 (Tenn. Ct. App. 2014); see
also Tennessee Clutch & Supply, Inc. v. Auto-Owners (Mut.) Ins. Co., 556 S.W.3d 203,
209 (Tenn. Ct. App. 2017).
The State counters, arguing that Defendants’ reliance on Counties is misplaced
because the claims at issue in Counties are distinguishable from the claims at issue here.
10
This case is cited in the briefs as Counties, because in addition to states, two counties—
Hillsborough County, Florida, and Salt Lake County, Utah—filed tampering claims against Volkswagen
that are similar to Wyoming’s, except in Counties the plaintiffs also alleged that Volkswagen modified its
defeat device to operate more effectively, and perhaps even added new defeat devices, through software
updates during vehicle maintenance and post-sale recalls. See Counties, 310 F. Supp. 3d at 1032. The
central question in Counties was whether the new allegations—post-sale modifications of software in
vehicles by automobile manufacturers—saved the tampering claims from preemption. Id. An appeal is
pending in the United States Court of Appeals, Ninth Circuit.
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The State also contends that Counties lends support to the State’s position in two ways:
(1) the court in Counties found that post-recall claims related to the defeat devices are not
expressly preempted under Section 209(a) of the federal Clean Air Act; and (2) the
Counties court found that the “relate-back” principle does not apply when plaintiffs are
not seeking to change any aspects of the manufacturing conduct. Furthermore, the State
insists that although Counties ruled that the post-sale recall claims were impliedly
preempted, implied preemption does not apply here because: (1) the State seeks no relief
that would interfere with the manufacturing process; (2) Congress specifically authorized
(and the EPA approved) Tennessee’s emissions testing program; (3) the State is obligated
to enforce its anti-tampering regulations and protect the integrity of its emissions testing
program as part of SIP compliance; and (4) the potential of state penalties in addition to
federal penalties does not constitute a basis for preemption, particularly when the state
seeks to punish different misconduct.
The post-sale recall claims at issue here are stated in paragraphs 76 and 77 of the
amended complaint. Briefly summarized, the State alleges that in 2014 and 2015,
Defendants recalled the non-compliant vehicles, purportedly to improve the vehicles’
performance level; however, in reality, Defendants used the recalls to improve the defeat
device software. Thus, the State contends that Defendants violated Tennessee’s anti-
tampering laws by tampering with the automobiles’ emissions control systems after sale
to bona fide purchasers and while the vehicles were licensed, registered, and in use in
Tennessee.
Without the benefit of the reasoning and decision in Counties, the trial court ruled
that the post-sale recall claims were not expressly preempted by Section 209(a). While
we agree that these claims are not expressly preempted, we have concluded that the recall
claims are impliedly preempted because they conflict with the purposes and objectives of
the federal Clean Air Act.
As Defendants’ correctly state in their brief, “Congress gave the EPA exclusive
and comprehensive authority to regulate nationwide, model-wide conduct by vehicle
manufacturers and distributors.” Therefore, by seeking to regulate tampering conduct that
occurred on a nationwide, model-wide basis, the State is interfering in an area that is
under the exclusive control of the federal government.
A “purposes and objectives” conflict preemption analysis of the post-sale recall
claims requires this court to delve again into the legislative history, language, and
structure of the act to determine the federal Clean Air Act’s purposes and objectives,
particularly as they pertain to the regulation of emissions in used motor vehicles.
Additionally, because a presumption against preemption applies, the purposes and
objectives of the act, and the conflict, if any, must be clear and unambiguous for the
State’s claims to be preempted. Morgan Keegan & Co., Inc. v. Smythe, 401 S.W.3d 595,
605 (Tenn. 2013) (citations omitted).
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A. Legislative History, Structure, and Language of the Clean Air Act
Significantly, Section 209(d) of the federal Clean Air Act, upon which the State
relies, does not grant to the states the authority to regulate in-use motor vehicles “carte
blanche.” Counties, 310 F. Supp. 3d at 1046. Section 209(d) states, “Nothing 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. § 7543(d) (emphasis added). The use of “otherwise” indicates
that “state…regulation of in-use vehicles is subject to the limitations imposed by federal
law.” Counties, 310 F. Supp. 3d at 1046. Therefore, we must determine to what extent the
federal Clean Air Act limits state emissions regulation of used motor vehicles. Because
the 1970 amendments to the federal Clean Air Act primarily concern the control of
emissions in used vehicles, those amendments and the legislative history surrounding
them are instructive. 11
In 1970, Congress discovered that the 1968 production-line cars met federal
emissions standards, on average; however by the winter of 1969, those same cars no
longer complied. See 116 Cong. Rec. 32,915 (1970) (quoting the Council on
Environmental Quality). Congress opined, “Standards for new cars will have little impact
if we cannot assure compliance with those standards over the useful life of those
vehicles.” Id. at 42,385 (quoting the Summary of the Provisions of Conference
Agreement on the Clean Air Amendments of 1970). Therefore, Congress intended to
“impose upon the manufacturer a responsibility and an obligation to build into these cars
a durability quality that will permit the cars to meet the performance standards required.”
Id. at 33,093 (Sen. Muskie). To that end, the 1970 amendments employed a more
comprehensive testing regime that would specifically address the problem presented by
in-use motor vehicles.
Subsequent amendments required manufacturers to equip each new vehicle with a
durable emissions control system that would cause the vehicle to meet the federal
emissions standard for a five-year period or 50,000 miles after sale. See Clean Air Act,
Amendments, Pub. L. No. 101-549, 104 Stat. 2399 (1990) (codified as amended at 42
U.S.C. § 7541(c)(4)(C)). The manufacturer also had to issue a warranty to that effect to
future owners. See Act of December 31, 1970, Pub. L. 91-604, 84 Stat. 1676, 1696
(codified as amended at 42 U.S.C. § 7541(a)(1)). If the owner maintained and operated
the vehicle as the manufacturer instructed and the vehicle did not comply with federal
emissions standards within the requisite time period, the manufacturer had to remedy the
nonconformity at the manufacturer’s expense. Id. at 1697 (codified as amended at 42
U.S.C. § 7541(b)).
11
We also occasionally reference the legislative history surrounding the 1977 amendments.
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Throughout the debates surrounding the 1967, 1970, and 1977 amendments
Congress consistently recognized that “as a national industry, automobiles required
national emission regulation.” 122 Cong. Rec. 23,859 (1976); see H.R. Rep. No. 90-728.
To that end, the federal Clean Air Act placed the primary responsibility for emission
control in motor vehicles “where it really should be, and that is with the manufacturer and
the EPA.” 123 Cong. Rec. 18,502 (1977) (Sen. Hatch);12 see Engine Mfrs., 88 F.3d at
1079 (“[R]egulation of motor vehicle emissions [has] been a principally federal project.”)
The reason for this is simple. Unlike stationary sources of pollution, motor
vehicles can and do move across state lines. As vehicles move from state to state, they
encounter different topographies and climates, both of which are factors that affect the
vehicles’ emissions. 116 Cong. Rec. 33,095 (1970) (Sen. Allott). Thus, legislators
recognized that emissions control in used automobiles, like new automobiles, needed
federal oversight.
Colorado Senator Gordon Allott explained:
[I]f I am delivered a car in Washington, D.C., which contains the so-called
proper emission controls, and it is in working condition…and I drive that
car to Denver, Colo., that car will no longer meet those qualifications which
held in Washington, D.C.
On the other hand, when I reach Denver, if I am fortunate enough to find a
garage in which I can get the emission controls on the car corrected…I still
have a problem when I leave and drive to, say, Vail or Dillon, and I cross
two mountain passes, one of which is few thousand feet, under 12,000 feet,
and the other is in excess of 11,000 feet, the car will not meet the emission
standards there.
Id.
To provide the necessary federal oversight for used motor vehicles, Congress
enacted Section 207(b) of the federal Clean Air Act, which mandates nationwide, in-use
motor vehicle emissions testing. 42 U.S.C. § 7541(b). And, subsequent to the enactment
of Section 207(b), the EPA implemented 40 C.F.R. § 86.1845-04, which outlines the
specific testing requirements for used vehicles. Under the implementing EPA regulation,
manufacturers must test emissions in a specified number of in-use motor vehicles at and
over 10,000 miles. See 40 C.F.R. § 86.1845-04(b)–(c). These tests take “geographical
12
Senator Hatch’s comments were made in the context of a debate surrounding a proposal that
states be permitted to test automobiles prior to sale.
- 17 -
limitations” into account, like climate and altitude, by requiring manufacturers to test
sample vehicles from different areas in the country. See id. § 86.1845-04(d)(3)(i)–(iii). If
the EPA “determine[s] that a substantial number of any class or category of vehicles or
engines, although properly maintained and used, do not conform to [federal standards],”
the EPA must inform the manufacturer. 42 U.S.C. § 7541(c)(1) (emphasis added).
Thereafter, the manufacturer is required to provide the EPA with a plan for correcting the
problem, which usually includes a recall and/or repair of the non-compliant vehicles. Id.
Thus, the federal Clean Air Act grants to the federal government exclusive control over
model-wide design issues in used motor vehicles.
When one considers the complexity of automobile engineering, having the
manufacturer answer to a single regulator when the nonconformity concerns the design of
the vehicle, whether new or used, makes the emissions control process more efficient and
less costly. See H.R. Rep. No. 90-728 (1967) as reprinted in 1967 U.S.C.C.A.N. at 1956–
57. As Congress stated in 1967, “The ability of those engaged in the manufacture of
automobiles to obtain clear and consistent answers concerning emission controls and
standards is of considerable importance….” Id. at 1957. Moreover, as the district court
explained in Counties,
EPA, as a federal agency, is best positioned to enforce emission standards
on a model-wide basis because model-wide emission problems will almost
invariably affect vehicles in states and counties throughout the country.
Further, when investigating model-wide emission issues, EPA can also rely
on testing data it acquired from manufacturers during the new vehicle
certification process, which it can utilize to understand how vehicle models
are performing in use as compared to how they were performing during
assembly-line testing. Likewise, because the new vehicle certification
process requires EPA to work directly with vehicle manufacturers, the
agency has preexisting relationships that it can rely on when addressing
model-wide emission defects in used vehicles.
310 F. Supp. 3d at 1043.
Nevertheless, Congress intended that the states would play a role when on-the-
road performance issues were related to the individual owner’s failure to maintain the
vehicle. Congress summarized the 1970 amendments, stating:
[B]y requiring the manufacturer to warranty performance, margins of safety
will be built into each vehicle to [e]nsure better than required performance,
systems will be designed to minimize deterioration, State vehicle emission
inspection programs can cause proper maintenance to be observed by the
motorists and the air quality objectives of this legislation will be
implemented.
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116 Cong. Rec. 42,385 (1970). Accordingly, 42 U.S.C. § 7541(h)(2) provides that states
are permitted to test “a motor vehicle after the date of sale of such vehicle to the ultimate
purchaser (except that no new motor vehicle manufacturer or dealer may be required to
conduct testing under this paragraph).” (Emphasis added). Significantly, nowhere in the
federal Clean Air Act are the states given authority to regulate an automobile
manufacturer’s compliance with emissions standards on a nationwide, model-wide basis,
whether the vehicle is new or used. See Counties, 310 F. Supp. 3d at 1043.
Thus, when considered in light of Congress’s express concern with preventing
obstruction to interstate commerce, see 1967 U.S.C.C.A.N. at 1956, state regulations
“directed primarily to intrastate activities” where “the burden of compliance [is] on
individual owners” would “cause only minimal interference with interstate commerce.”
Allway Taxi, Inc. v. City of New York, 340 F. Supp. 1120, 1124 (S.D.N.Y.) aff’d, 468
F.2d 624 (2d Cir. 1972). Similarly, if the state regulated manufacturer activities
conducted solely within that state’s borders, such regulation would likely not obstruct
interstate commerce. See Counties, 310 F. Supp.3d at 1043.13 However, a state’s assertion
of control over a manufacturer’s nationwide activities has nationwide economic
consequences. See Allway Taxi, 340 F. Supp. at 1124.
Here, the State is attempting to impose fines and penalties upon Defendants for
tampering conduct that took place during a national recall. Though, technically, the
State’s tampering claims only concern individual cars within the State, these claims are
most certainly part of widespread tampering conduct that occurred in specific vehicle
models in a number of states. Thus, the State’s claims could have nationwide economic
consequences. This is especially apparent when we consider the agreement Defendants
struck with the federal government concerning Defendants’ tampering conduct during
both the manufacturing process and the 2014/15 recall. As part of that agreement,
Defendants were required to repair non-compliant vehicles throughout the United States.
United States v. Volkswagen AG (In re Volkswagen “Clean Diesel” Mktg., Sales
Practices, & Prod. Liab. Litig.), No. 2672 CRB (JSC), 2016 WL 6442227, at *4 (N.D.
Cal. Oct. 25, 2016). However, the repair of the emissions control system would not make
the vehicles compliant with the federal standard. The federal district court that approved
the partial consent decree explained:
Despite the fact that a proposed Fix must undergo stringent test procedures
and receive EPA and CARB approval, the Fix still represents a
compromise. The United States recognizes there are “engineering
13
The court stated, “If, for example, a manufacturer were to tamper with a single in-use vehicle
during vehicle maintenance, the [federal] Clean Air Act would not bar a state or local government from
bringing a tampering claim against the manufacturer if the tampering occurred within its borders.”
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limitations faced by all parties—that a fully-compliant ‘fix’ that brings
these vehicles to their certified standard and has no detrimental impacts on
the vehicle performance is not achievable within a realistic timeframe.” For
that reason, Appendix B does not require any Fix to bring the subject
vehicles to the same standard to which they originally certified.
Id. at *5 (emphasis added).
Should this court allow the State’s claims to proceed, the State could assert “that
vehicles with EPA-approved modifications continue to violate [State] tampering rules
because the modifications do not bring the vehicles into compliance with the originally
certified emissions standards.” See Counties, 310 F. Supp. 3d at 1046 n.7. Defendants
would continue to owe penalties unless and until they further altered the vehicles to the
State’s satisfaction. It would be no different than if the State were to insert itself into the
model-wide, in-use testing and recall process outlined in Section 207 of the federal Clean
Air Act, 42 U.S.C. § 7541, which is exclusively under federal control. And, if other states
were to do the same, “the chaotic situation which Congress sought to avoid would
become an overnight reality.” See Jackson v. Gen. Motors Corp., 770 F. Supp. 2d 570,
576 (S.D.N.Y. 2011), aff’d sub nom. Butnick v. Gen. Motors Corp., 472 F. App’x 80 (2d
Cir. 2012) (quoting In re Office of Att’y Gen. of New York, 269 A.D.2d 1, 11 (1st Dep’t
2000)).
As a part of the plea agreement and consent decrees with the EPA, Defendants
were required to pay $4.3 billion in civil and criminal penalties, invest $2 billion in Zero
Emission Vehicle technology, recall and repair the non-compliant vehicles, and
contribute $2.925 billion to an emissions mitigation trust, of which the states, including
Tennessee, were the beneficiaries. Counties, 310 F. Supp. 3d at 1033. The State concedes
that this monetary award obtained by the federal government will fully mitigate the
environmental harm caused in Tennessee. However, the State argues that “the potential of
state penalties in addition to federal penalties does not constitute a basis for preemption.”
On that point, we agree.
This court takes seriously Congress’s intent to make the states and the federal
government “partners in the struggle against air pollution.” Gen. Motors Corp., 496 U.S.
at 532. Bringing a state action against Defendants will, no doubt, have a strong deterrent
effect and further the federal Clean Air Act’s purposes and objectives by reducing air
pollution.14 Nevertheless, while Congress enacted the federal Clean Air Act to curb air
14
Minnesota also filed state claims against Defendants for tampering conduct that occurred during
the national recall. State by Swanson v. Volkswagen Aktiengesellschaft, No. A18-0544, 2018 WL
6273103, at *2 (Minn. Ct. App. Dec. 3, 2018). Persuaded by the Counties decision, the Minnesota Court
of Appeals determined that the State’s claims were impliedly preempted. Id. at *9. However, Judge Tracy
(continued…)
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pollution and its deleterious effects, it is clear from the federal Clean Air Act’s legislative
history, structure, and plain language that Congress intended to do so in an efficient and
cost-effective manner to protect interstate commerce. Consequently, “as a national
industry,” automobile manufacturers require “national emission regulation.” 122 Cong.
Rec. 23,859 (1976). Because the State’s post-sale recall claims conflict with this
objective, they are preempted.
Accordingly, the State’s cause of action is preempted by the federal Clean Air Act.
IN CONCLUSION
The judgment of the trial court is affirmed in part and reversed in part, and this
matter is remanded with instructions to dismiss all claims. Costs of appeal are assessed
against the State of Tennessee.
________________________________
FRANK G. CLEMENT JR., P.J., M.S.
Smith dissented, contending that the State’s claims were harmonious with Congress’s purpose in enacting
the federal Clean Air Act, which was “to promote the states’ exercise of their authority in the fight against
air pollution.” Id. at *10–11. We agree with the majority.
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