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Case number 11-1428 at L, Delta Construction Company at Inc.

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at L, Petitioners vs. Environmental Protection Agency.

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Mr. Conversor for Petitioner Plant Oil Powered Diesel Fuel Systems, Inc.

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Mr. Durkey for Respondent, DOJ.

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Mr. Hadzi Anik for Petitioner Delta Construction Company, Inc.

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at L. And Ms.

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Walter for Respondent, DOJ.

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I'm going to make

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You can go ahead.

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May it please the court?

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Clyde Convasser on behalf of Plant Oil Power Diesel Fuel Systems.

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The good news is that Pop Diesel's engine equipment offers singular benefits to new heavy-duty diesel engines to take steps to slow or reduce global warming by enabling them to operate on 100% plant or vegetable oil

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and this equipment and fuel can play a sizable part in replacing the use of fossil fuel use in the heavy-duty sector.

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The bad news is that the tailpipe rule injures pop diesel by disabling a pop diesel-equipped new engine from ever reaching the marketplace.

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A pop diesel engine, heavy-equipped engine running on 100% vegetable oil fuel

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produces more carbon out the tailpipe, and it also consumes more fuel, plant oil fuel.

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And that fact, first of all, the fact of the higher carbon emissions out the tailpipe is stated in the reply brief.

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The fact of the higher consumption of fuel is stated and discussed at the bottom of Pop Diesel's petition for reconsideration.

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on page two of that document, which appears at page three of Pat Diesel's supplemental appendix.

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Assuming you have Article 3, your client has Article 3 standing, assuming that for argument purposes, the line of cases in the Circuit, White, Stallion, and other cases, that suggests you're not within the zone of interest that would properly permit you to pursue.

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And I can find no exception to this in our Circuit law.

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And what's your answer?

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Well, I argue that Pop Diesel is peculiarly suited to assert the purposes of both statutes at issue here.

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No, but I'm not – I want to be a little bit more focused on the precedent.

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I don't have any doubt that you would want to assert that you think you can do this.

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The case law says

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It's too bad.

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You're not within the zone of this statute that would allow you to pursue this claim, assuming that you have Article 3 standing.

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I think that the only reason that Your Honor could say that, and please, of course, I'm sure you'll tell me if I'm wrong, is because of the fact that at the moment we are not producing new engines.

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But what I'm saying is that both statutes disable Pac Diesel from ever producing new entrants.

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No, I don't think that's not my understanding of the line of analysis.

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If I'm wrong, you can tell me the court is assuming that there is Article III standing in these cases.

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But they're assuming that the competitor-standing situation in which you're in doesn't put you in the class of litigants that Congress intended to pursue these claims.

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Even though your interests may be in some ways aligned to the federal government's interests, that's what that case law says.

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You're not within the zone.

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I believe that it does, Your Honor.

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And this has to do with an argument of congressional intent.

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as to what is meant by the Energy Act, Section 42 USC 39, I'm sorry, the 02K2.

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And the issue is, as I was starting to give the factual premise for this argument, Your Honor, is that plant oil fuel has lower energy content than petroleum diesel.

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And that fact is in the record as well in the emissions results from West Virginia University at pages 312 and 412 of the undersealed volume of Pop Diesel Supplemental Appendix.

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And the problem is that the tailpipe rule

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Contrary to statute, and I'll get into the statutory language in a moment, but what the tailpipe rule does, and this is most concisely stated on the third page of the Department of Transportation's denial of Pop Diesel's petition for reconsideration, the tailpipe rule calculates fuel consumption performance of heavy duty engines by measuring tailpipe carbon dioxide emissions and converting the measured value

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to an equivalent fuel consumption value.

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So the tailpipe rule measures fuel consumption.

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The statute does not mention fuel consumption.

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The statute directs DOT to maximize fuel efficiency.

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And efficiency, if you look it up in the dictionary, is a measure of energy input to a machine or an engine per unit of work per fed.

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I understand all that, but how is that responsive to Judge Edwards' question?

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You're really not responding to my question.

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What's the answer to his question?

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The person in white stallion understood the pecuniary interest you have and that your interest may align with the fed, the federal interest, the agency's interest, and said nonetheless, you're not within his own.

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Well, but there was an exception made for a petitioner whose particular situation is peculiarly aligned with the statutory purposes.

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And this is the point that I was getting to, is that the DOT has adopted fuel efficiency standards that don't measure fuel efficiency.

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They measure fuel consumption.

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And Pop Diesel is prejudiced by that because of the fact that our fuel has lower heat content.

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Therefore, it requires greater fuel consumption for an engine equipped with our equipment, which means that we will never possibly

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satisfy the tailpipe rules measure of fuel efficiency, which is, as they describe it, fuel consumption.

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But if you look to the plain meaning of the word efficiency, it's actually the measure not of fuel consumed to produce work output, but of energy consumed.

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So it requires looking at the energy content of the fuel.

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And if that is done, then pop diesel is not prejudiced at all, because a pop diesel-equipped engine will consume the same amount of energy going into the engine to produce a unit of work output as would a petroleum diesel engine.

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But we are prejudiced by the mis-

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aligning the standards, the fuel efficiency standards, to measure fuel consumption, which is not mentioned in the statute.

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And what I'm trying to suggest to you is that you are prejudiced as not the test.

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Right.

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I understand.

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I mean, you may be right, but I'm looking at the lives of the court, and they're assuming that

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In fact, there may be some prejudice to those who would want to pursue the claim because you've got interests and you're arguing that some of those interests are aligned with what the agency's doing.

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Of course, that's too bad.

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Well, all of our interests are perfectly aligned with both of the statutes.

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I understand, but the court is saying that's not enough.

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But in the case where they are peculiarly aligned, in our case, we are maybe perhaps the only situation in which we are prejudiced by the tailpipe's rule measure of both carbon emissions coming out the tailpipe, because our kind of engine will produce higher carbon emissions, yet we have singular benefits in actually reducing overall greenhouse gas emissions.

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as well as the fact that on the fuel efficiency side, that the standards aren't measuring fuel efficiency, they're measuring fuel consumption, which we are prejudiced by.

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So I stand here to inform you that the fuel efficiency standards are not meeting the plain meaning of the statutory directive to DOT to maximize fuel efficiency.

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And I'm trying to address Your Honor's question, and if there's another angle of... I hear your answer.

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You don't have much time left.

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Were you done with standing?

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Because I was just going to say... You want to say something about the merits quickly?

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Because you're almost out of time.

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And I would ask for permission to submit a standing declaration by Pop Diesel's Director of Engine Development.

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He could explain these issues more clearly than I can.

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I think that's untimely.

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That's untimely.

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I understand, Your Honor.

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It should have been done at the first opportunity, which would be either in response to a motion for summary dismissal, which did not occur, or in your opening – if there's an attachment to your opening brief.

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I understand, Your Honor.

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I know the Court has allowed – Your Honor, we just can't try factual questions here.

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Okay, it's a standing issue, that's all.

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It's not, it's not, it's not.

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But see, in the cases where we have allowed supplementary affidavits, they've always been in situations where, you know, the original filing and the affidavits raised all the issues, but the court had additional questions that had to be resolved.

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Whereas if you look at your brief, I'm looking at page

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On page 30 of your brief, you have one paragraph on the Article 3 injury.

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You don't have any cites and no affidavits.

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You have basically three sentences here.

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And so, you know, there isn't really anything, there aren't any factual assertions supported by admissible evidence that need supplementing.

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I understand, Your Honor.

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The courts I'm used to practicing in would look at the record, and there is record evidence.

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I'm sorry.

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What did you say?

[00:10:54] Speaker 04:
I'm sorry.

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I'm not accustomed to practicing in this court, and I apologize for that.

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All right.

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And I believe that there is evidence in the record addressed in the reply brief, and I've addressed some of it today, which would address the standing issue.

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May I have a moment to address the merits?

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You can take one minute.

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One more minute, that's it.

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What's the most important thing about the merits you want to tell us?

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Is that the tailpipe rule, that this set of regulations also is contrary to the Supreme Court's direction that EPA take measures to slow or reduce global warming.

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Under the particular provision of the Clean Air Act, that issue for mobile sources here, these regulations do not do that because they... That was an authorization, not a mandate, isn't it?

[00:11:44] Speaker 04:
No, it's a directive.

[00:11:45] Speaker 07:
Talking about EPA against Massachusetts?

[00:11:47] Speaker 04:
Yes.

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It's a directive subject to the endangerment finding that EPA must take steps to slow or reduce global warming.

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And it's global warming.

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It's not tailpipe emissions.

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That finding has been made.

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Okay.

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EPA has constructed regulations that only look at tailpipe emissions, and in fact they need to look at upstream emissions for all the different kinds of engines that can satisfy the heavy duty market, as well as opportunities to sequester carbon from the atmosphere, which biofuels can do.

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And in particular, our kind of equipment allows that to happen.

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Okay.

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Thank you.

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I'll give you a minute or two to rebuttal.

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Okay.

[00:12:30] Speaker 02:
Thank you.

[00:12:30] Speaker 02:
So we'll hear from the government at this point.

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Go ahead.

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May it please the court, my name is Dan Durkey with the U.S.

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Department of Justice.

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If I may, introduce my colleagues with me at the council table.

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In the center is Tom Byron, who's also with the U.S.

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Department of Justice.

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Although I am prepared to address Pop Diesel's arguments with regard to both EPA's action and NHTSA's action, Mr. Byron is available if the court has questions that exceed my familiarity with those specific issues.

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Beside him is Michelle Walter, also with the US Department of Justice.

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She's going to address the Delta construction petitioner's arguments at 11-14-28, as well as the California construction petitioner's arguments in the next case, 13-10-76.

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We also have Steve Silverman from EPA's Office of General Counsel, and Tim Goodman, NHTSA's Assistant Chief Counsel.

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And in the courtroom, although they're not going to present an argument, for the interveners, we have Elaine Meckinstock from the State Interveners, and Peter Zalzal from the Environmental Groups.

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Your time is up.

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Yeah.

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Your Honor, it's a large crowd for a large rule that addresses a large problem.

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Before I turn to standing, I would like to point out that the regulations under review were the first ever to address on a national basis greenhouse gas emissions from and fuel efficiency of new heavy duty vehicles and engines.

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These regulations that the agencies estimate will save over 22 billion gallons of gasoline and diesel fuel and reduce carbon dioxide emissions by 273 metric tons.

[00:14:07] Speaker 02:
But your government's theory is we can't get to any of that because they don't have standing, right?

[00:14:12] Speaker 02:
That's right.

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So why don't you talk about standing?

[00:14:14] Speaker 05:
Your Honor, the top diesel lacks standing both constitutional and on the zone of interest.

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You can address either one, I think as Judge Edwards pointed out.

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Which do you want to address?

[00:14:28] Speaker 07:
Why would we address the constitutional issue if we can resolve it on the statutory issue?

[00:14:33] Speaker 05:
Well, the zone of interest is now considered statutory, and I think it is... So why don't we discuss that?

[00:14:38] Speaker 05:
It is, I think, on all fours with White Stallion.

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As Judge Edward noted, Pop Diesel's interest might be incidentally aligned with the purpose of the statute, but there's no difference really between their situation and the petitioner,

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Why aren't they peculiarly a peculiarly suitable petitioner, which is what White Stallion said would be a

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For the same reason that Julander, who had an economic interest, was not peculiarly well-suited.

[00:15:12] Speaker 02:
For the same reason that... Well, but this is a company whose whole purpose is... I mean, their whole mission is... Well, it's very different from Whites Down.

[00:15:20] Speaker 02:
The whole mission of this company is to develop technology that reduces greenhouse gases.

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That's... Yeah, sure, they're going to make money eventually, but this is the core mission of this company.

[00:15:31] Speaker 05:
Well, I disagree.

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I think that is exactly like Joolander.

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Joolander's mission was to sell natural gas.

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And Pop Diesel's mission, as they say in their filings, is to sell more of their product.

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That's why they exist.

[00:15:44] Speaker 07:
Well, what better motivation than for a petitioner to bring the resources and knowledge to bear?

[00:15:50] Speaker 05:
Well, that is contrary to how the Court has analyzed parties in that position.

[00:15:57] Speaker 05:
That's how the Court analyzed it in Hazardous Waste Treatment Council, in Cement Comb Recycling, the cases that are cited in White Stallion, and in White Stallion itself, which was only decided, I think, two or three years ago.

[00:16:08] Speaker 05:
So the precedent is clearly against a party in Pop Diesel's position.

[00:16:14] Speaker 02:
Well, but there is the exception for petitioners that are unusually lined with the purposes of the statute, correct?

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Right.

[00:16:22] Speaker 05:
That's right.

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The test says so.

[00:16:25] Speaker 02:
And in White Stallion, what's the name of the company, Highlander, whatever it is?

[00:16:30] Speaker 02:
Juhlander.

[00:16:30] Speaker 02:
Yeah, Juhlander.

[00:16:31] Speaker 02:
I mean, sure, they were in the business of trying to sell natural gas, but they didn't go into the business because they had some mission to reduce greenhouse gases, whereas that's exactly what Pop Diesel is all about.

[00:16:44] Speaker 03:
But it's not unusually aligned.

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Did you mean to agree with Judge Sayle on that?

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That's not the test.

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It's peculiarly suitable.

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That's very different.

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And the only case I can find is Ethel, where Ethel was allowed to pursue it because they wanted to improve their own ability to comply with the statute.

[00:17:05] Speaker 03:
Right, and the court in White's Valley distinguished them.

[00:17:09] Speaker 03:
So your answer to Judge Tatel is there is no case other than Ethel, and they're not close to Ethel.

[00:17:14] Speaker 03:
Is that your answer?

[00:17:16] Speaker 03:
Is that your answer?

[00:17:18] Speaker 05:
That is my answer.

[00:17:20] Speaker 05:
I thought that was your answer.

[00:17:22] Speaker 02:
That's definitely the right answer.

[00:17:27] Speaker 02:
So let me ask you just about the Article III question.

[00:17:32] Speaker 02:
Judge Ginsburg is absolutely right.

[00:17:34] Speaker 02:
We could look at the statutory question first, but I'm curious about your theory of Article III.

[00:17:39] Speaker 02:
I mean, their argument seems to be extremely logical.

[00:17:43] Speaker 02:
They say, look, this regulation basically prohibits them, their product, from being certified, from getting subsidies.

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And therefore, they can't get any business.

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So they don't have any business.

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And so, I mean, how would a company like this ever have standing?

[00:18:03] Speaker 02:
How would a company who is challenging regulation that precludes its business under your theory ever have Article III standing to challenge that regulation?

[00:18:14] Speaker 05:
Well, first, Your Honor, the point is the rule does not preclude them from going to business.

[00:18:19] Speaker 05:
That's the essential reason why they don't have standards.

[00:18:21] Speaker 02:
Because of the small business exception?

[00:18:23] Speaker 05:
No, not because of that, Your Honor, because they concede in their reply brief that there's another reason why they can't sell their product.

[00:18:30] Speaker 05:
their reply brief at four, they concede that the only customers that they can sell the product to without running afoul of the Clean Air Act's tampering restrictions are model year 2008-2009 heavy duty trucks.

[00:18:47] Speaker 05:
Those are not regulated by the truck rule.

[00:18:50] Speaker 05:
there's no incentive that the truck rule could give that POP would like to see the agency's award that would have any effect on POP's customers.

[00:19:00] Speaker 05:
It's a completely separate barrier that's apart from the truck rule, so there's no traceability and there's no redressability from what the agencies might do differently in the truck rule.

[00:19:10] Speaker 05:
Now, if POP were to be an actual manufacturer, a manufacturer of a heavy-duty engine certainly would have standing, but that's not where they are.

[00:19:22] Speaker 05:
They raised in the reply brief arguments why they're not able to, and they said today that they're precluded from, but that's speculative.

[00:19:30] Speaker 05:
Putting aside that it was raised late, it was raised the first time in a reply brief.

[00:19:33] Speaker 05:
As you noted yourself, Your Honor, they didn't say anything about that in their opening brief.

[00:19:37] Speaker 05:
But even if the court were to look at those late assertions, they're pure speculation.

[00:19:42] Speaker 05:
There's nothing in what POP said, even in the reply brief, that there's no evidence they provided that other manufacturers would be willing to partner with them if the truck rule were different, or lending institutions would loan them money if the truck rule was different.

[00:19:56] Speaker 05:
It's all speculation, and it all comes back to their insurmountable standing barrier that they can't sell anyway.

[00:20:06] Speaker 05:
So that's why they don't have standard NK.

[00:20:10] Speaker 05:
I note that in response to the efficiency argument, to the extent the court gets to that, the agencies address that.

[00:20:20] Speaker 05:
If you look at the joint appendix at 368 and 386, the agencies

[00:20:25] Speaker 05:
did explain that efficiency can be measured by either fuel economy or fuel consumption and reasonably explained why the agencies went to fuel consumption.

[00:20:35] Speaker 05:
And then if the court doesn't have any other questions, we would rest on this written submissions on the other issues.

[00:20:42] Speaker 02:
Thank you.

[00:20:45] Speaker 02:
Mr. Congressman, you can take two minutes if you'd like.

[00:20:51] Speaker 04:
First of all, fuel economy, as far as I'm aware, is the same thing as fuel consumption.

[00:20:56] Speaker 04:
The statute directs EPA to develop a program to maximize fuel efficiency, which is the measure of energy going into the engine, not fuel consumption.

[00:21:08] Speaker 04:
This case is about new engines, and Pop Diesel will never be able to introduce a new engine based on the tailpipe rule.

[00:21:16] Speaker 04:
I would like to address the cases that Judge Edwards was asking about.

[00:21:22] Speaker 04:
White Stallion says that the zone of interest test is not meant to be especially demanding.

[00:21:29] Speaker 04:
And it says that this form of standing arises if there is some indicator that the planet is a peculiarly suitable challenger to support the influences that Congress would have intended eligibility to vindicate the purposes of the statute.

[00:21:45] Speaker 04:
And then Whitestein goes on to say that this indicator exists if there is some reason to believe that a business would be an unsuitably

[00:21:54] Speaker 04:
I'm sorry, an unusually suitable champion of Congress's ultimate goals.

[00:22:00] Speaker 04:
And as your honor was saying, but Pop Diesel is, that is what we exist for, is to vindicate the purposes of the Clean Air Act by having

[00:22:10] Speaker 04:
slowing and reducing global warming by allowing the use of 100 percent planned oil, fuel, and diesel-equipped engines.

[00:22:17] Speaker 04:
We also vindicate the purpose of the Energy Act for reasons that I've already stated, that the statute, the regulations do not

[00:22:26] Speaker 04:
are contrary to the plain meaning of efficiency, which is defined in any dictionary to include, to mean energy supply to the engine, not to fuel consume.

[00:22:37] Speaker 04:
If I may make one point in closing, Your Honor, a question left open by a case titled Center for Biological Diversity versus EPA, decided in January 2013.

[00:22:48] Speaker 04:
Judge Tatel wrote the opinion for the court, and

[00:22:52] Speaker 04:
There was a concurrence by Judge Kavanaugh which basically left open the question and Judge Kavanaugh raised the question with regards to that statutory provision which dealt with stationary sources.

[00:23:05] Speaker 04:
This case allows the court to make the broader point with regards to the Cleaner Act as a whole that EPA is required under the mandate given the fact that the Supreme Court has made its ruling in Massachusetts versus EPA.

[00:23:18] Speaker 04:
that the Supreme Court, that the EPA, when it is regulating emissions, has to look at the total net life cycle emissions, not just the tailpipe, but it has to include upstream emissions as well as sequestration.

[00:23:32] Speaker 04:
And I don't think that the Court is compelled to reach that broader issue with regards to other provisions of the Clean Air Act, but with regards to this particular provision, I believe that it is compelled to reach that issue

[00:23:46] Speaker 04:
by virtue of the fact that the other remedies for engines basically are arbitrary because they further the use of fossil fuels that are not correctly calculated by the measure of only tailpipe emissions.

[00:24:05] Speaker 04:
Okay, thank you.

[00:24:05] Speaker 04:
Thank you very much, Your Honor.

[00:24:20] Speaker 06:
Good morning.

[00:24:21] Speaker 06:
May it please the Court, my name is Theodore Hadjianicic and I represent Petitioners of Belt and Construction Company at Ball.

[00:24:30] Speaker 06:
Your Honors, this is a straightforward statutory interpretation case.

[00:24:36] Speaker 06:
about whether the Environmental Protection Agency, EPA, can ignore with impunity a non-discretionary statutory mandate to submit proposed rules to the Science Advisory Board, SAB, for peer review.

[00:24:52] Speaker 06:
There's a threshold issue here as to which standard of review applies, whether it's the unadulterated standard under the Administrative Procedures Act,

[00:25:03] Speaker 06:
or the more stringent standard under the Clean Air Act.

[00:25:07] Speaker 02:
Isn't there another, even more threshold issue, and that is the government's argument about standing?

[00:25:14] Speaker 06:
Yes.

[00:25:15] Speaker 02:
Why don't you start with that?

[00:25:16] Speaker 06:
Okay.

[00:25:18] Speaker 06:
With regard to standing, the petitioners have filed declarations stating unequivocally that they are injured by the rule because they cannot afford the costs of the new trucks mandated.

[00:25:35] Speaker 02:
All right.

[00:25:36] Speaker 02:
Let's assume we were to vacate the EPA rules.

[00:25:38] Speaker 02:
Wouldn't the NHTSA rules, which are identical, virtually identical still,

[00:25:44] Speaker 06:
No, Your Honor, for two reasons.

[00:25:48] Speaker 06:
Number one, the preamble to the regulations clearly states that the fuel economy standards of NHTSA and the greenhouse gas emission standards of EPA were developed together to act as one comprehensive national program.

[00:26:08] Speaker 06:
And where EPA's greenhouse gas emission standards fail, then NHTSA's standards must also fail.

[00:26:15] Speaker 02:
Where does it say that?

[00:26:16] Speaker 02:
I know you said that in your brief, but I didn't see any place.

[00:26:20] Speaker 02:
All I saw in the preamble was that compliance with the EPA rule, it says that compliance by a truck manufacturer with a NHTSA rule assures compliance with the EPA rule and vice versa.

[00:26:34] Speaker 02:
I mean, is there something in there which says that if one of them is vacated, the other will not be implemented?

[00:26:41] Speaker 06:
No, Your Honor, it doesn't say that specifically.

[00:26:44] Speaker 06:
What it says is that the two rules together constitute one integrated national program.

[00:26:50] Speaker 02:
But it says you can comply with one or the other, correct?

[00:26:54] Speaker 02:
That's correct.

[00:26:55] Speaker 02:
All right, so let's assume I'm right that

[00:26:59] Speaker 02:
If we were to vacate the EPA rule, the Nixon rule would still be in place.

[00:27:09] Speaker 02:
Let's just assume that's correct.

[00:27:12] Speaker 02:
then how do you have, how's there any redressability here?

[00:27:15] Speaker 02:
In other words, we can't, even if you do have an injury, there's no way this court can redress it.

[00:27:21] Speaker 06:
Your Honor, petitioners' injuries are redressable when a favorable decision would likely remove one regulatory cause of the injuries.

[00:27:33] Speaker 06:
So the Supreme Court held in the 1977 case of Arlington Heights v. Metro Housing Development Corporation

[00:27:40] Speaker 06:
and so the Supreme Court held in the 1982 case of Larson v. Valente, only one regulatory cause of the injury need be removed to satisfy the regressibility requirement.

[00:27:53] Speaker 06:
For the very same reason, it matters not that California has a similar standard.

[00:28:00] Speaker 06:
If the EPA standard is removed, that is the removal of one regulatory cause of the injuries.

[00:28:11] Speaker 06:
With regard to the injury in fact issue, the petitioners state unequivocally that they cannot afford the costs of the new trucks mandated by the rules, and that that will result either in their closing down their businesses or their reducing their trucks in their fleets.

[00:28:35] Speaker 06:
And in either event, that will result in layoffs of employees.

[00:28:39] Speaker 06:
A clearer injury, in fact, is difficult to imagine under article 3.

[00:28:46] Speaker 07:
Well, actually, there's some ambiguity about that.

[00:28:48] Speaker 07:
There's nothing in the declarations that tells us that any one of the members of the association is imminently going to be purchasing a vehicle affected by the rule.

[00:29:01] Speaker 06:
What the declaration state is that they cannot afford new trucks that are mandated by the rule and this rule The declarations state clearly that

[00:29:24] Speaker 06:
The petitioners are in business that requires them to use heavy duty trucks.

[00:29:30] Speaker 06:
And that at the end of the useful life of those trucks.

[00:29:33] Speaker 06:
Which may be when?

[00:29:35] Speaker 06:
Who knows?

[00:29:36] Speaker 06:
It's relevant as to when, because these standards, contrary to EPA's assertions, are not going to go away at the end of model year 2018.

[00:29:44] Speaker 06:
They form the baseline below which EPA will... So it could be after 2018, is that what you're saying?

[00:29:51] Speaker 06:
Before anyone needs to buy one?

[00:29:53] Speaker 06:
It may be, but the standards won't disappear after 2018.

[00:29:57] Speaker 06:
They're going to get more stringent.

[00:29:58] Speaker 07:
Why is that relevant unless you're saying that your members may be purchasing trucks after 2018?

[00:30:03] Speaker 07:
Is that what you're saying?

[00:30:05] Speaker 07:
Yes, well, that's possible.

[00:30:07] Speaker 07:
Well, possible isn't good enough, right?

[00:30:10] Speaker 07:
Under the case law starting with the Defenders of Wildlife against Lujan in the Supreme Court and innumerable cases here, you have to have some definite plan.

[00:30:21] Speaker 07:
In that case, it was to visit the animals that would have been harmed.

[00:30:25] Speaker 06:
Yes, that's correct, Your Honor.

[00:30:26] Speaker 06:
And the declarations do say that as a matter of staying in business, their definite plans require them to purchase new trucks at the end of the useful life of the existing trucks.

[00:30:39] Speaker 07:
Well, that's like saying, I want to go visit the animals sometime before I die.

[00:30:44] Speaker 06:
I don't believe this.

[00:30:45] Speaker 06:
Whereas the court said, well, let's see your ticket.

[00:30:48] Speaker 06:
I don't think that's analogous at all, Your Honor, with respect.

[00:30:53] Speaker 06:
Here, they're faced with a situation now.

[00:30:58] Speaker 06:
The injury now is they cannot afford the cost of new trucks, but they need new trucks.

[00:31:05] Speaker 07:
Well, that's the part that's missing.

[00:31:08] Speaker 07:
You have association

[00:31:12] Speaker 07:
have to have individual standing, correct?

[00:31:15] Speaker 06:
For a petitioner, California Construction Trucking Association.

[00:31:19] Speaker 06:
Oh yes, what else do we have?

[00:31:20] Speaker 06:
There are several petitioners, one of which is Delta Construction Company, which is a private company that uses heavy-duty trucks.

[00:31:27] Speaker 07:
So, taking the case of Delta then, if they haven't said they need to buy a truck, but they can't afford it,

[00:31:37] Speaker 07:
then they haven't adequately alleged an injury.

[00:31:41] Speaker 07:
We have all these cases involving

[00:31:43] Speaker 07:
environmental organizations where we used to have them, but they actually read the precedents and conformed to them, in which we said, look, telling us you want to preserve the forest isn't good enough.

[00:31:53] Speaker 07:
You've got to tell us you've got some members who hike in there or do something in there who will be prejudiced.

[00:31:58] Speaker 07:
And now they do that, right?

[00:32:00] Speaker 07:
They produce actual members who are injured by the regulation or the lack of regulation.

[00:32:08] Speaker 07:
And I don't see where you've done that.

[00:32:11] Speaker 06:
I would direct your honor to Joint Appendix page 1859, and it's paragraph 9 of Skip Brown's declaration.

[00:32:24] Speaker 06:
quote, Delta does not have the capital or the credit to invest in the expensive new trucks as the cost increases are prohibited.

[00:32:34] Speaker 06:
As a result, Delta will either go out of business or reduce the number of trucks in the fleet.

[00:32:39] Speaker 06:
Either way, the truck rule will involve layoffs of employees.

[00:32:44] Speaker 06:
In addition, the truck rule will result in fewer truck services, culminating in higher prices for construction and trucking.

[00:32:52] Speaker 07:
That's a very clear... I agree that that's the closest that you've come.

[00:32:55] Speaker 07:
That's your best bet.

[00:32:57] Speaker 07:
Yes, Your Honor.

[00:32:59] Speaker 07:
I'm just not sure whether this talks about anything that's imminent.

[00:33:05] Speaker 07:
What's imminent here?

[00:33:07] Speaker 06:
the Supreme Court's requirement, imminent, right?

[00:33:12] Speaker 06:
That's correct, Your Honor, but what is imminent here is that these rules apply now.

[00:33:18] Speaker 06:
These rules don't apply in the future.

[00:33:20] Speaker 06:
The future impact is that there are going to be even more stringent rules, which are going to make the trucks even less affordable, which will increase the likelihood of their going out of business.

[00:33:33] Speaker 07:
But here, Mr. Brown says... So it's the probability, is that the...

[00:33:38] Speaker 06:
No, Your Honor.

[00:33:39] Speaker 06:
Here Mr. Brown says that this rule makes the cost of the mandated new trucks prohibitive such that he is either going to go out of business or reduce the inventory of trucks and that will result in layoffs of employees.

[00:33:57] Speaker 07:
Let's assume for the moment that's sufficient.

[00:34:03] Speaker 06:
Okay your honor.

[00:34:04] Speaker 02:
Let me ask you just a follow-up question to our earlier discussion about the impact of the California and NHTSA rules.

[00:34:13] Speaker 06:
Yes.

[00:34:14] Speaker 02:
And my question that how can this be redressable if

[00:34:18] Speaker 02:
if those will remain in place.

[00:34:21] Speaker 02:
Your answer was the courts have said that for purposes of redressability, you only have to knock out one of several barriers.

[00:34:31] Speaker 02:
Is that what you said?

[00:34:32] Speaker 02:
Yes, Your Honor.

[00:34:33] Speaker 02:
And what's your best case that says that?

[00:34:35] Speaker 06:
There are actually two cases that say exactly that.

[00:34:39] Speaker 06:
Arlington Heights v. Metro Housing Development Corporation, 429 U.S.

[00:34:43] Speaker 06:
252 at 261, 1977 Supreme Court case.

[00:34:50] Speaker 06:
Also Larson v. Valente, 1982 Supreme Court case, 456 U.S.

[00:34:55] Speaker 06:
228 at 243, note 15.

[00:35:00] Speaker 06:
All right.

[00:35:02] Speaker 02:
Okay, thank you.

[00:35:02] Speaker 02:
We'll hear from the government.

[00:35:04] Speaker 06:
Thank you, Your Honor.

[00:35:15] Speaker 01:
Good morning, Your Honors.

[00:35:16] Speaker 01:
Again, I'm Michelle Walter with the Department of Justice, and I'm addressing these issues with respect to what we call the truck rule, and I'm also addressing these issues that come up again in the car rule.

[00:35:29] Speaker 01:
I do want to turn to the standing issue first and just follow up on a couple of points that opposing counsel and Your Honors made, and the first is with respect to the injury that's being alleged.

[00:35:43] Speaker 01:
And just following up Judge Taito on your point that it's again not only the NHTSA standards that are in place, but also the California standards, which intervenors just informed the court were recently adopted on December 5th, 2014.

[00:35:58] Speaker 01:
So NHTSA standards, California standards,

[00:36:01] Speaker 01:
and EPA standards are all separate, separately enforceable standards that provide one comprehensive program for manufacturers throughout the country to be able to comply with.

[00:36:14] Speaker 02:
Will the NHTSA rules remain in place if the EPA rules are vacated?

[00:36:20] Speaker 01:
Yes.

[00:36:22] Speaker 02:
And what about the two cases Council just cited, Arlington Heights and Larson, for the proposition that that's irrelevant?

[00:36:28] Speaker 01:
Yes, I would my memory on those cases a little sketchy, but I seem to recall that they wouldn't involve this type of situation where we have two distinct rules that do essentially provide the same requirements so that in this case virtually basically compliance with one is compliance with the other.

[00:36:47] Speaker 01:
And because they are separate regulations, even if the court were to vacate EPA's rule, the NISA standards would still be in place.

[00:36:56] Speaker 01:
And any alleged injury that petitioners claim to have is still going to exist.

[00:37:02] Speaker 01:
I also wanted to touch on the redressability point.

[00:37:04] Speaker 02:
I thought that's what we were just talking about.

[00:37:07] Speaker 01:
It does overlap a little bit.

[00:37:08] Speaker 01:
I was focusing more on the injury part of it.

[00:37:09] Speaker 01:
But also with redressability, or excuse me, not redressability.

[00:37:13] Speaker 01:
I'm sorry, Your Honor.

[00:37:15] Speaker 01:
The impending nature of it, I apologize.

[00:37:19] Speaker 01:
That impending nature of their injury, the lack of that is also highlighted by the fact that these standards apply fleet wide.

[00:37:27] Speaker 01:
In other words, they don't necessarily apply to one particular

[00:37:31] Speaker 01:
model of car.

[00:37:32] Speaker 01:
They apply to the manufacturer's entire fleet so that the manufacturer can average the standards for its fleet.

[00:37:40] Speaker 01:
So there's no evidence in the declarations either whether petitioners have purchased or imminently are going to purchase trucks that are actually going to have the new technology that would result in the increased costs.

[00:37:55] Speaker 02:
Well, they say in their affidavit, they say in the Delta affidavit, says council read it.

[00:38:05] Speaker 02:
It, quote, does not have the capital or credit to invest in the expense of new trucks.

[00:38:10] Speaker 02:
And that if these stay in place, it'll either go out of business or what.

[00:38:16] Speaker 02:
As a result, it will either go out of business or reduce the number of trucks in the fleet.

[00:38:21] Speaker 02:
I mean, why isn't that enough for injury purposes?

[00:38:23] Speaker 01:
Going back, actually, to causation, then, again, for the reasons that we've talked about because of the NHTSA rule and the California rule.

[00:38:29] Speaker 02:
I know, I know, but I was asking about the several elements to standing.

[00:38:33] Speaker 02:
We were talking about the injury.

[00:38:35] Speaker 02:
Isn't that enough?

[00:38:36] Speaker 02:
It may not be redressable, but isn't that enough for injury?

[00:38:38] Speaker 01:
No, I don't believe it is, Your Honor, because again, they haven't demonstrated that that's certainly impending, that they're actually going to purchase new vehicles, let alone purchase new vehicles that have new technology with the increased cost.

[00:38:49] Speaker 01:
These are the bare allegations that this Court has historically found insufficient to demonstrate that.

[00:38:53] Speaker 02:
So what should they have said?

[00:38:55] Speaker 01:
I'm sorry?

[00:38:55] Speaker 02:
What should they have said in this affidavit?

[00:38:58] Speaker 01:
They could very easily have said, given that these regulations cover model year 2014 to 2018, they could very easily say that they've already purchased a model year 2014 or even 2015 truck that had increased costs that's caused them to... But they said they can't afford it.

[00:39:15] Speaker 02:
They said they don't have the capital to buy one of these trucks.

[00:39:18] Speaker 01:
Again, then they could have said that they wanted to buy a particular car, but in fact weren't able to do so.

[00:39:23] Speaker 08:
That's what they're saying here.

[00:39:25] Speaker 01:
They've given up speculation that they would not be able to purchase these cars because of increased costs.

[00:39:31] Speaker 01:
But again, that's not something that we can know for certain because they haven't actually discussed any particular vehicle that the technology would apply to.

[00:39:38] Speaker 01:
And again, going back to the point.

[00:39:41] Speaker 02:
I mean, what's missing is they say, OK, they say, well, we don't have the money to buy

[00:39:44] Speaker 02:
a new truck, you're saying what they should have said is, well, you want to buy a new truck, but don't have the money.

[00:39:50] Speaker 01:
We are going to buy a new truck.

[00:39:52] Speaker 01:
But don't have the money.

[00:39:53] Speaker 01:
And we are going to buy a new truck that's going to have these increased costs that we cannot afford.

[00:39:58] Speaker 07:
So your point is that they may not buy a truck.

[00:40:01] Speaker 07:
It seems unlikely for 5,000 members.

[00:40:04] Speaker 07:
And when they do buy a truck, they may be buying one that doesn't conform, doesn't carry the new technology and the higher price tag.

[00:40:13] Speaker 01:
Correct.

[00:40:14] Speaker 02:
If they didn't want to buy one of these higher-priced trucks with the higher technology, why would they bring this challenge?

[00:40:22] Speaker 01:
I think that's a question opposing counsel would be better situated to ask.

[00:40:25] Speaker 01:
I'm sorry, Your Honor.

[00:40:27] Speaker 02:
All right.

[00:40:31] Speaker 01:
I didn't have anything else in addition to standing.

[00:40:32] Speaker 07:
It may be that they've got 5,000 members, some of whom may, in the course of the next few years, let them buy the truck.

[00:40:41] Speaker 07:
It does have the higher technology, right?

[00:40:43] Speaker 07:
They just haven't laid it out, but that may be why they're pursuing the matter.

[00:40:46] Speaker 07:
It almost certainly is.

[00:40:48] Speaker 01:
Right, and May wouldn't be sufficient.

[00:40:50] Speaker 01:
They have to show it's substantially probable.

[00:40:52] Speaker 07:
Well, with 5,000 members, isn't it a virtual certainty?

[00:40:55] Speaker 01:
It could be, but they haven't said that.

[00:40:58] Speaker 01:
I'm sorry?

[00:40:59] Speaker 01:
It could be, but they haven't given allegations that.

[00:41:01] Speaker 07:
Well, they said we have 5,000 members operating trucks, heavy duty trucks in California.

[00:41:08] Speaker 07:
So that they have said.

[00:41:10] Speaker 07:
So doesn't it necessarily follow that they will be buying or wanting to buy a truck if they could?

[00:41:17] Speaker 01:
That could follow.

[00:41:18] Speaker 01:
That could be an assumption you could make, yes, but again, no.

[00:41:20] Speaker 07:
Well, if we drew that inference, they would have standing, wouldn't they?

[00:41:23] Speaker 01:
No, because we saw the regressibility and causation hurdles together.

[00:41:26] Speaker 07:
Okay, this objection, however, will go away.

[00:41:28] Speaker 07:
The objection about the inadequacy of the Declaration of Paragraph 9, 1859.

[00:41:34] Speaker 01:
I'm sorry, I missed the first part, this objection.

[00:41:36] Speaker 07:
Your objection that their declaration, the portion that Council referred to earlier, is inadequate, that would be, your point there would be,

[00:41:51] Speaker 07:
You'd want to buy the inference that with all these people involved, that surely they'll be buying their stuff.

[00:41:57] Speaker 01:
For only the injury portion of that inquiry.

[00:41:58] Speaker 01:
Yes.

[00:41:59] Speaker 01:
Yes.

[00:42:00] Speaker 07:
And I do want to point out that... So that makes you with your first point on redressability.

[00:42:03] Speaker 01:
I'm sorry?

[00:42:03] Speaker 07:
Leaving your first point on redressability.

[00:42:05] Speaker 01:
Yes.

[00:42:06] Speaker 01:
And I do want to point out that the brown, that same declaration in paragraph eight, the paragraph directly above that,

[00:42:17] Speaker 01:
also acknowledges that the increase of new trucks, increased costs of new trucks, is attributable, at least in part, to the new fuel efficiency standard requirements, meaning the NHTSA standards.

[00:42:27] Speaker 01:
I just wanted to point that out for the Court's reference.

[00:42:31] Speaker 03:
Okay.

[00:42:31] Speaker 03:
You're going to cover your arguments with regard on the merits of the surety claim to have the Board involved in the next case?

[00:42:42] Speaker 03:
I'm sorry, in the next case on this case is about their claim that you should have submitted to the board.

[00:42:48] Speaker 03:
You're going to argue that in the next case.

[00:42:50] Speaker 03:
I don't know how we overlap these cases.

[00:42:54] Speaker 01:
There are two different rules and there are some different circumstances.

[00:42:58] Speaker 01:
Petitioners challenge in this case is directly to the rule itself, whereas their challenge in the next case, the car

[00:43:06] Speaker 01:
is to EPA's denial of reconsideration, but the same procedural argument is being made in both cases, and we do have an additional mootness argument in the next case.

[00:43:16] Speaker 03:
So I'm – Right.

[00:43:17] Speaker 03:
On your procedural argument, which one do you think is the best of your list – the formal review, the central relevance?

[00:43:27] Speaker 01:
I believe it would be the fact – what we're calling harmless error – that it's not something that is of central relevance and that would have been substantial.

[00:43:38] Speaker 01:
And it's the fact that it's not substantially likely to have significantly changed the rule that ties together with the central relevance question.

[00:43:45] Speaker 01:
So yes, I think that's our best argument because here we have a rule that was largely supported that petitioners themselves didn't challenge the cost analysis that EPA performed that they're saying caused them the injury now.

[00:44:02] Speaker 01:
And they haven't pointed to anything

[00:44:04] Speaker 01:
with respect to anything in the technology, the cost of those technology, or the effectiveness of that technology that they think the SAB would have actually commented on and provided any advice on.

[00:44:19] Speaker 01:
So without that, we have nothing to show that this rule would have actually been significantly changed.

[00:44:27] Speaker 02:
Under what circumstances would this deferential standard ever be met?

[00:44:32] Speaker 02:
Can you imagine one where, let's assume you had a case where it was very clear that a regulation had been circulated for formal, formally circulated for comment to other agencies.

[00:44:45] Speaker 02:
Not OMB, but statute actually required it, and the agency didn't do it.

[00:44:51] Speaker 02:
Can you imagine a situation when

[00:44:55] Speaker 02:
the standard review wouldn't be, could be satisfied?

[00:44:58] Speaker 02:
How could anybody show that it was of central importance?

[00:45:02] Speaker 01:
I think so.

[00:45:03] Speaker 01:
I mean, certainly if a petitioner had raised, for example, during the comment period, an issue that concerns the science or technical aspects, or in this case, the costs,

[00:45:17] Speaker 01:
And that was something that they claimed the SAB should have reviewed.

[00:45:20] Speaker 01:
I think that would be something that could be of central relevance.

[00:45:23] Speaker 01:
But here, those issues weren't raised.

[00:45:26] Speaker 01:
And so they weren't actually central to the inquiry.

[00:45:31] Speaker 01:
If there are no further questions, I will rest on the briefs and ask that the court either dismiss the petition on standing grounds or deny it.

[00:45:38] Speaker 01:
Thank you.

[00:45:40] Speaker 02:
OK, so now we're going to hear about the Carr rule, right?

[00:45:43] Speaker 02:
Is that next?

[00:45:46] Speaker ?:
OK.

[00:45:46] Speaker 02:
Oh, wait.

[00:45:48] Speaker 02:
Hold on.

[00:45:49] Speaker 03:
Yes.

[00:45:50] Speaker 02:
Yeah, you get somewhere about that.

[00:45:53] Speaker 02:
We're still in the.

[00:45:55] Speaker 02:
truck rule, right?

[00:45:56] Speaker 06:
Do I have a chance to revolve?

[00:45:58] Speaker 02:
Yes, you do.

[00:45:58] Speaker 02:
You absolutely do.

[00:45:59] Speaker 06:
So you can take two minutes.

[00:46:02] Speaker 06:
With regard to the Trade Association, the California Construction Trucking Association, the declaration on the standing issue of Lee Brown set forth on Joint Appendix page 1863 in paragraph 8

[00:46:22] Speaker 06:
says, again, unequivocally, few California Construction Trucking Association members have the capital or the credit to invest in the expensive new trucks as the cost increases are prohibited.

[00:46:37] Speaker 06:
As a result, member companies will either go out of business or will cut costs in other areas to afford the new trucks.

[00:46:44] Speaker 06:
This will likely mean layoffs of employees, higher prices for construction hauling, and fewer truck services.

[00:46:52] Speaker 06:
And as Judge Ginsburg pointed out, there would be no reason for these plaintiffs, either the individual companies or the trade associations, to have instituted this lawsuit unless they were severely injured by this rule.

[00:47:13] Speaker 06:
One final point.

[00:47:16] Speaker 06:
Standing here is not undercut if a particular truck might not be affected by the rule.

[00:47:25] Speaker 06:
We're talking about the fleet requirement here.

[00:47:28] Speaker 06:
The 2001 decision of this court in Wabash Valley Power Association v. FERC held that it is irrelevant to standing

[00:47:37] Speaker 06:
that increased competition might not occur, because parties suffer cognizable injury when an agency allows increased competition.

[00:47:47] Speaker 06:
And the Supreme Court held in the middle of last year, 2014, in the case of Susan V. Anthony Liske v. Driehaus,

[00:47:56] Speaker 06:
An allegation of future injury suffices if there is a substantial risk that the harm will occur.

[00:48:04] Speaker 06:
That's at 134 Supreme Court at 2341.