Appeals Court Backs Fuel Economy Rating Revisions

A federal appeals court, displaying a bitter ideological split, backed revisions Tuesday in government fuel economy ratings that could cost the nation’s two largest auto makers $300 million in penalties.

In an unusual 5-5 split, the U.S. Circuit Court of Appeals here affirmed a 1986 order by a three-judge panel of the court that directed the Environmental Protection Agency to recalculate fuel-economy ratings of 1980-1984 model cars.

The judges split along liberal and conservative lines over whether the Center for Auto Safety, a consumer activist group, had legal standing to challenge the way the EPA recalculated the Corporate Average Fuel Economy ratings for Ford and General Motors cars made during those years.

At issue is the EPA’s decision in 1985 to raise the fuel economy ratings for cars made between 1980 and 1984 to reflect seven changes in test procedures. Ford and GM contended the original methodology had unfairly lowered the ratings.

Set Under 1975 Law

The higher ratings recalculated by EPA lowered penalties that Ford and GM were assessed for falling short of the fuel-economy standards set under the Environmental Policy and Conservation Act of 1975.

Under the law, manufacturers are penalized $5 for each tenth of a mile a model falls short of the miles-per-gallon standard. The law also gives manufacturers credits for surpassing the standards.

The three-judge panel had unanimously held that in recalculating the ratings, EPA should also have factored in changes in several test procedures that had benefited manufacturers by raising the scores.

The full court later vacated the panel’s ruling and agreed to rehear the case.