A federal court on Monday ruled the Trump administration could not delay implementing a rule that boosts the fines given to automakers that do not comply with federal fuel efficiency standards. The ruling by the U.S. Court of Appeals for the 2nd Circuit means that the new higher penalty is officially now in effect.
Last September, New York Attorney General Eric Schneiderman and California Attorney General Xavier Becerra led a coalition of five attorneys general in a lawsuit against President Trump’s decision to indefinitely delay the higher penalties. Environmental groups also joined the states in arguing the U.S. Department of Transportation’s National Highway Traffic Safety Administration (NHTSA) lacked authority and violated a number of federal statutes in delaying implementation of the penalty rule.
The rule was originally set to take effect in July 2017 before the Trump administration delayed its implementation. The aim was to encourage automakers to produce vehicles that meet or exceed federal fuel efficiency standards.
The NHTSA imposes penalties for each one-tenth of a mile by which vehicles fall below corporate average fuel-economy (CAFE) standards. Automakers either install fuel- and pollution-saving technology or pay penalties, whichever is cheaper.
In a one-page order, the 2nd Circuit on Monday granted the petitions for review by the attorneys general and environmental groups. And the court said the Trump administration’s July 12, 2017 order delaying the penalty is overturned. The court order applies to automakers that do not comply with current fuel efficiency standards.
The transportation sector is now the largest carbon-emitting sector in the nation. Yet the Trump administration continues to try and weaken rules to limit transport’s environmental impact. In a separate effort, the Environmental Protection Agency (EPA) announced plans earlier this month to roll back tailpipe emissions standards established by the Obama administration for future models of vehicles.
The standards for cars, pick-up trucks, and sport utility vehicles for model years 2022-2025 are too aggressive, EPA Administrator Scott Pruitt argued when he announced the proposed rollback. As part of the proposal, the EPA opened a process with the NHTSA to develop a new rule setting greenhouse gas emission standards.
If the Trump administration follows through with its plan to weaken the fuel efficiency standards for new cars and light trucks, the New York attorney general’s office said it will take similar legal action again to block it, Schneiderman press secretary Amy Spitalnick said in an email to ThinkProgress.
The Obama-era regulation upheld by the court on Monday was an attempt to implement a 2015 law mandating that federal agencies update their penalties to align with inflation, going back years. In response, the NHTSA announced a rule that increased the penalty rate for violating fuel efficiency standards by $8.50, from $5.50 per tenth of a mile per gallon to $14 per tenth of a mile per gallon.
— Eric Schneiderman (@AGSchneiderman) April 23, 2018
However, last July, NHTSA announced it was indefinitely delaying the effective date of its updated penalty. The Trump administration said the $14 fine “will lead to a negative economic impact” and “could potentially drastically increase manufacturers’ costs of compliance.”
Industry groups such as the Auto Alliance and Global Automakers had petitioned the NHTSA not to implement the higher fuel efficiency non-compliance penalties, which take into account inflationary adjustments.
The attorneys general, however, argued the delay was unlawful because the NHTSA acted without notice and without taking comment, which violates the Administrative Procedure Act. In their lawsuit, they also argued the “arbitrary delay” reinstates the “outdated $5.50 penalty rate,” which violates the 2015 Federal Civil Penalties Inflation Adjustment Act.
The penalties provide increased incentive for automakers to achieve the Corporate Average Fuel Economy (CAFE) standards for upcoming model years. The standards — for model years 2016 through 2025 — would save approximately 1.8 billion metric tons of carbon dioxide emissions over the lifetimes of the vehicles sold.
For model years 2022 through 2025 alone, the standards would reduce carbon dioxide emissions by 40 million tons a year in 2025, and by more than 200 million tons a year in 2050, compared to indefinitely maintaining the 2021 standards, according to EPA estimates under the Obama administration.
#BREAKING: We have secured another favorable ruling against the Trump Administration. In a victory for our families’ health and our planet, car makers that fail to meet important fuel efficiency standards will now face increased penalties: pic.twitter.com/s2sq2pAdZU
— Xavier Becerra (@AGBecerra) April 23, 2018
“The fuel efficiency standards penalty rule is a common sense measure that would protect consumers’ pocketbooks while reducing the carbon emissions that harm our health and drive climate change,” Schneiderman said Monday in a statement.
In a separate filing, environmental groups also petitioned the court in September to reverse the Trump administration’s decision to delay implementing the higher standards. One of those groups, the Center for Biological Diversity, said cheap fines encourage automakers to produce “gas-guzzlers that fuel climate change and spew harmful pollutants.”
“This decision will deter automakers from flouting critical standards and stalling the transition away from dirty, dangerous fossil fuels,” Vera Pardee, senior counsel at the Center for Biological Diversity, said in a statement. “Our victory should send a message to the Trump administration that courts do not condone unlawful rollbacks of fundamental environmental protections.”