The trucking industry’s largest manufacturers that committed to meet California’s emissions standards have changed their minds.
Paccar, Volvo Group, International, and Daimler Truck North America filed a lawsuit against the California Air Resources Board and the state’s governor, requesting that courts nullify the Clean Truck Partnership.
The industry’s largest OEMs had entered the Clean Truck Partnership only two years ago, formally committing to meet California’s standards regardless of whether any other entity challenges the state’s authority. In addition to the lawsuit parties, the partnership also included Cummins, Ford, General Motors, Hino Motors, Isuzu, Stellantis, and the Truck and Engine Manufacturers Association.
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The about-face comes after the federal government revoked permission for CARB’s recent emissions standards in June—though the revocation has questionable legal authority. The Department of Justice is now ordering the manufacturers to cease following CARB’s standards immediately.
“Original equipment manufacturers have been placed squarely in the crossfire of an escalating battle between federal and state regulators, forcing us to operate in an environment where the rules change midstream and compliance targets shift with little warning,” International said in a statement following the lawsuit’s publication. “The reality is that OEMs are being asked to meet conflicting mandates while contending with sluggish battery-electric vehicle adoption, inadequate and slow-to-deploy charging infrastructure, rising electricity costs, and the sheer impracticality of the current sales targets.”
What does the lawsuit say?
The lawsuit requests that the court declare that all of CARB’s recent waiver submissions are invalid and that the Clean Truck Partnership is an “underground regulation,” freeing the OEMs from their previous commitments.
The complaint argues that, because the federal government revoked CARB’s latest emissions waivers, California’s attempt to enforce any emissions standards is a violation of the Clean Air Act. It says that CARB, regardless of the federal government’s move, still threatens the OEMs to comply with the standards.
The plaintiffs allegedly received cease-and-desist letters from the Department of Justice, ordering the OEMs to cease compliance with California’s mandates immediately.
“The OEMs are in an impossible position,” the complaint states. “On the one hand, California insists that plaintiff OEMs must follow CARB’s standards … On the other hand, the United States Department of Justice issued cease-and-desist letters to plaintiff OEMs stating that those same standards are invalid and unlawful … The OEMs are subject to two sovereigns whose regulatory requirements are irreconcilable and who are openly hostile to one another.”
Related to the suit, a legal battle between OEMs and the state of Nebraska reached a settlement. Nebraska had submitted an antitrust lawsuit in November against several Clean Truck Partnership manufacturers. The state and the manufacturers reached a settlement on the antitrust suit on Monday, agreeing that the partnership was voided by the federal waiver revocations.
What happens next?
The U.S. District Court for the Eastern District of California will decide the fate of the OEMs’ complaint and, perhaps, the Clean Truck Partnership.
There is a reasonable argument for the court to maintain the partnership’s requirements. For one, the federal government’s ability to revoke the CARB waivers is dubious—legislators used the Congressional Review Act to revoke the waivers, even though CRA does not apply to that type of waiver. California has a pending lawsuit against the federal government challenging this use of CRA.
The partnership’s text also includes strong language in preparation for this kind of scenario: the signing OEMs committed to comply with CARB’s standards, “irrespective of the outcome of any litigation that has been filed or may be filed challenging the waivers or authorizations for those regulations or CARB’s or any state’s overall authority to implement those regulations.”
There is also a reasonable argument for the court to nullify the OEMs’ obligations under the partnership. The federal government officially denounced the latest CARB emissions waivers by passing legislation to nullify those waivers. The Department of Justice is now aggressively pushing OEMs to cease their participation in the partnership immediately.
