This post was authored by Rajiv Tata, who currently serves as General Counsel for Utility Trailer Manufacturing Company:

California’s Heavy-Duty Greenhouse Gas Reduction Measure (GHG Measure) will affect the transportation of goods between California and other states, and will therefore impact interstate commerce. Although the federal government seems as though it will eventually regulate greenhouse gases, thereby possibly preempting state regulations like the GHG Measure, for now, the constitutionality of the GHG Measure will likely depend upon a dormant commerce clause analysis.

There is ample precedent under U.S. Supreme Court jurisprudence establishing that absent discrimination a state regulation affecting interstate commerce will be upheld unless the burden imposed on interstate commerce is clearly excessive in relation to the regulation’s putative local benefits. It is also well established that the power of the state to regulate the use of its highways is broad and pervasive. It is not surprising then that the Court’s recognition of the peculiarly local nature of safety issues, both in the context of highways and human health, resulted in such regulations being upheld despite their impact on interstate commerce.

Under dormant commerce clause analysis, the threshold inquiry is to determine whether a challenged law discriminates against interstate commerce. Here, the GHG Measure is not likely to be considered discriminatory against out of state transportation companies since the requirements actually increase the operating costs of companies domiciled within California.

Typically, if the challenged regulation is not discriminatory, it will be upheld unless there is an excessive burden on interstate commerce in relation to its “putative local benefits.” Therefore, any analysis involving the constitutionality of the TRU ATCM and GHG Measure will have to weigh their respective burdens and benefits. The Supreme Court applied a dormant commerce clause analysis to a state regulation in a factual context similar to that presented by California’s GHG Measure. In Bibb v. Navojo Freight Lines, Inc., the Court determined the constitutionality of an Illinois statute requiring the use of a specific rear fender mudguard on trucks and trailers operating on that state’s highways.

The Court’s analysis balanced the statute’s safety benefits against the burdens it imposed on interstate commerce. Initially, the Court noted that statutes pertaining to safety are afforded a strong presumption of validity because they often involve policy decisions that are best left to the discretion of state legislatures. In the Bibb case however, the Court found that the statute placed burdens on interstate commerce that were outweighed by its benefits. Specifically, the facts the Court found to be outcome determinative included the costs associated with the installation, maintenance, and replacement of mudguards, safety issues relating to decreasing the effectiveness of truck and trailer brakes, and mudguards’ susceptibility to fall off during use. In addition, the Court found that Illinois’ regulation conflicted with that of another state, thereby requiring interstate carriers to shift loads to differently designed vehicles when traveling between the states. Combined, the heavy burden on the interstate movement of trucks and trailers led the Court to strike down the regulation because it surpassed the permissible limits for safety regulations.

The GHG Measure imposes burdens on the movement of trucks and trailers in interstate commerce similar to those relied upon by the Court to strike down the Illinois statute in Bibb. Under the GHG Measure carriers will need to purchase side skirts, front and rear trailer fairings, low-rolling resistance tires, and incur the cost of installing, maintaining, and repairing these items on their fleets.
Similar to the statute in Bibb, the GHG Measure also presents a safety issue. Trailer side skirts can be easily damaged while crossing railroad tracks and driveways, and while loading and unloading at docks with tapered ramps. Truck drivers will need to remove the devices if damaged under such circumstances, resulting in down time, or bear the liability risk of the devices detaching from the trailer while driving. Moreover, the aerodynamic side skirts will likely operate in treacherous weather conditions, often bearing the additional weight of snow or ice that could compromise the devices’ safety and result in failure at high speeds.

The California regulations present a third burden identified in Bibb, requiring interstate carriers to shift loads to differently designed vehicles when traveling between the states. Entire out of state fleets will incur the costs of compliance with the California regulations because it is often not possible for carriers to know in advance which equipment will be used in a particular region on a particular day. Moreover, those carriers not wanting to incur these operating costs would need to expend time and resources in ensuring that cargo was transferred to designated trailers equipped to legally operate in California.

Based on the Bibb factors, a court analyzing the costs associated with complying with the California regulations might conclude that they impose too great a burden on interstate commerce to be upheld.

Notwithstanding the numerous burdens placed on interstate commerce by the California regulations, a thorough dormant commerce clause analysis will need to consider their respective benefits. California’s stated purpose in enacting the GHG Measure is to control major sources of GHG emissions to alleviate a serious threat to California’s public health, natural resources and environment. To accomplish its goal, ARB grouped sources of those emissions into various sectors. Not surprisingly, the GHG Measure is grouped under the transportation sector.

The GHG Measure seeks to alleviate the harm GHGs pose to public health by improving the fuel efficiency of heavy duty trucks and trailers. The GHG Measure’s perceived benefits are illusory in several ways however. Test data used to justify the adoption of the GHG Measure demonstrates that desired fuel efficiencies materialize at sixty five miles per hour or more. Such speeds are unattainable both legally and practically. First, the California Motor Vehicle Code prohibits a truck from exceeding fifty-five miles per hour on a highway. In addition, CalTrans data demonstrates that the average truck speed on California’s main commercial corridor is less than sixty five miles per hour. At these speeds the fuel savings used to justify the regulation’s adoption cannot be attained. If the fuel savings cannot be attained, the corresponding health benefits from reduced GHG emissions cannot be realized. Under such a scenario, the burdens imposed by the GHG Measure will significantly outweigh the regulation’s unobtainable benefits, thereby reducing the likelihood that it will survive legal challenge.

Even if the GHG Measure’s intended benefits are realized, the problem California might encounter in sustaining the validity of its regulations under a dormant commerce clause challenge is that air contaminants contributing to public health concerns are inherently fluid, and therefore global in nature. Indeed, the heads of the U.S. Departments of Agriculture, Commerce, Transportation, and Energy, in response to the U.S. Supreme Court’s decision in Massachusetts v. Environmental Protection Agency, agreed that the regulation of GHGs must take a different approach than that used to historically regulate air pollution:

the Clean Air Act is premised on the idea that controlling
emissions in the United States will improve air quality in the
United States, and that a state or region can improve its air
quality by controlling emissions in that area. This is not true
in the case of greenhouse gases. Controlling greenhouse gas
emissions in the United States will reduce atmospheric
concentrations of those gases only if our emission reductions are
not simply replaced with emissions increases elsewhere in the
world.

In adopting the GHG Measure, California is clearly attempting to address a global issue, which as discussed above, will have a significant impact on interstate commerce. Under such a factual scenario, courts may need to develop a new standard for analyzing the validity of state GHG regulation. Such analyses will need to not only evaluate the burdens and benefits of such regulation on interstate commerce, but whether those benefits are realized at a local, state, national, or even international level. The result of such an analysis will hopefully determine how to equitably apportion the burden associated with such benefits.

For more information, please visit http://climatechangelegal.blogspot.com/ or
http://rajivtata.com

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