Automakers challenge states’ emissions laws

Times Staff Writers

A swarm of lawyers hired by the world’s automakers is descending on a federal courthouse in the picturesque New England town of Burlington, Vt., to wage a proxy fight against a California law to curb global warming.

The 2002 law, which set stringent tailpipe standards for carbon dioxide emissions and other greenhouse gases, has been adopted by 10 other states including Vermont.

None of those emissions standards are in effect yet, but a federal lawsuit by automakers against the Vermont law is being closely watched as a test of states’ power to regulate carbon emissions.


“This trial is incredibly important for all parties,” said Jim Tripp, an attorney with Environmental Defense, an activist group granted legal permission to participate in the case.

Automakers argue that only the federal government can set fuel-efficiency standards and, by extension, carbon emissions standards for cars and light trucks.

The Vermont case is a warmup for the main event, an identical suit against the California law that isn’t scheduled to be heard until this summer.

California is the only state that can devise emissions rules that differ from federal standards. Other states can then choose between the California and federal regulations.

So although a decision in the Vermont case would apply only there, the ruling in the California case, if it goes to trial, would affect every state. A win by the automakers in California would overturn the state’s ability to regulate greenhouse gas tailpipe emissions.

Any court decision, however, could be short-circuited in June when the U.S. Supreme Court must decide whether the U.S. Environmental Protection Agency or California has any authority over greenhouse gas pollution.

The Vermont trial starts April 9, and the automakers have filed motions seeking to throw a veil of secrecy over some of the proceedings.

They want to limit media coverage of the trial because they say they need to protect trade secrets.

The Vermont judge, William K. Sessions III, has promised to rule on the confidentiality issue today.

Some industry analysts and environmental lawyers suggest that automakers might be leery that open testimony could reveal which carmakers would be able to meet the tough emissions standards.

“It probably would be embarrassing if it showed that Toyota, for instance, could meet the standards and others couldn’t,” said James Hossack at market research firm AutoPacific in Tustin.

Rules based on the 2002 law were first developed by the California Air Resources Board in 2004. Measures based on the California regulations have since been adopted by Vermont, New York, New Jersey, Pennsylvania and six other states.

Trade groups representing the Big Three domestic car companies, Japanese manufacturers and other international corporations that sell in the U.S. are eager to overturn the Vermont law to avoid facing a multitude of possibly conflicting regulations from all 50 states.

“That could lead to real nightmares in designing and engineering,” said David Cole, director of the nonprofit Center for Automotive Research in Ann Arbor, Mich.

But a successful defense of the Vermont law probably would bolster California’s chance of defeating the related automaker lawsuit in U.S. District Court in Fresno. The judge in the California case postponed the trial pending the U.S. Supreme Court ruling on the EPA’s authority.

In both cases, the automakers’ demand for secrecy is likely to loom large.

The automakers contend that any information that comes out in court that shows a company’s technological advances or weaknesses in meeting fuel-efficiency standards must be sealed.

“Vehicle manufacturers have spent millions and sometimes hundreds of millions of dollars developing new vehicle fuel-economy technologies in a highly competitive marketplace,” the automakers said in a Vermont court filing. “They have gone to great lengths to protect this information from their competitors.”

Environmentalists and the states counter that at least some of that information must be available for the public to gauge whether automakers can meet the new carbon dioxide tailpipe standards.

But UC Berkeley constitutional law professor Jesse Choper cautioned that in civil trials, unlike criminal cases, there’s no presumed right of access for the media or the public.

Nevertheless, the court will have a lot of leeway in determining what the public and the media ought to be able to look at, said James Spindler, a professor of business law at USC.

“Courts generally will protect businesses’ rights to protect their trade secrets, but they have to make a good argument that it is material that should be kept secret,” he said.

And most judges “start with a strong presumption that the proceedings before them will be open to public, and in general will make every effort to keep proceedings open even if there are trade secrets or other confidentiality issues,” said attorney Brian R. Socolow, a trade secrets specialist and partner at New York law firm Loeb & Loeb.

Although most observers expect the California case to ultimately decide the issues, automakers consider the Vermont case important because it will give them a chance to try out their principal argument that federal regulation trumps the states.

“The issues are the same, and the arguments we make here are the same ones we will make in California,” said Charles Territo, spokesman for the Alliance of Automobile Manufacturers, one of the two trade groups pursuing the two suits and a third complaint against the state of Rhode Island.

In briefs filed in California and Vermont, the two trade groups have added economic and technology issues to their arguments. The new regulations would force carmakers to raise sticker prices, stop selling many models and lay off tens of thousands of autoworkers, they say.

“States should not be allowed to set their own fuel economy standards,” Territo said.

“When they set fuel economy standards, federal regulators consider the cost, the technological feasibility, the impact on jobs, on automobile safety and on the companies themselves,” the industry spokesman added.

“None of that was considered in California.”

But weighing the automakers’ economic concerns against the public’s right to know and the state’s obligation to protect the environment is a tough balancing act, the Vermont judge said in a hearing this week.

“This is a significant constitutional issue,” Sessions said.