`
`No. 20-994
`
`In the Supreme Court of the United States
`
`
`VOLKSWAGEN GROUP OF AMERICA, INC., ET AL.,
`PETITIONERS
`
`
`
`v.
`
`
`
`
`THE ENVIRONMENTAL PROTECTION COMMISSION OF
`HILLSBOROUGH COUNTY, FLORIDA AND SALT LAKE
`COUNTY, UTAH.
`
`
`ON PETITION FOR A WRIT OF CERTIORARI
`TO THE UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`BRIEF FOR THE RESPONDENTS IN OPPOSITION
`
`
`
`BRIDGET C. ASAY
`STRIS & MAHER LLP
`28 Elm Street, 2d Floor
`Montpelier, VT 05602
`
`PETER K. STRIS
` Counsel of Record
`RACHANA A. PATHAK
`DOUGLAS D. GEYSER
`JOHN STOKES
`STRIS & MAHER LLP
`777 S. Figueroa Street
`Suite 3850
`Los Angeles, CA 90017
`(213) 995-6800
`pstris@stris.com
`
`Counsel for Respondents
`
`
`
`
`276878.1
`
`
`
`
`
`QUESTION PRESENTED
`
`During recalls and routine maintenance on cars driven
`in respondents’ counties, petitioners
`(collectively,
`“Volkswagen”) installed software that illegally tampered
`with the cars’ emissions-control systems. Volkswagen did
`not disclose these defeat devices to the Environmental
`Protection Agency for the obvious reason that EPA never
`would have approved them. After Volkswagen got caught,
`respondents (the “Counties”) sued them for tampering.
`Volkswagen moved to dismiss based on preemption under
`the Clean Air Act (the “Act”).
`The Act recognizes that “air pollution control at its
`source is the primary responsibility of States and local
`governments.” 42 U.S.C. 7401(a)(3). It carves out limited
`areas of exclusive federal control—like enforcing “any
`standard relating to the control of emissions from new
`motor vehicles,” 42 U.S.C. 7543(a)—but otherwise pro-
`vides that “nothing in this chapter shall preclude or deny
`the right of any State or political subdivision” to enforce
`“any standard” or “requirement.” 42 U.S.C. 7416; see also
`42 U.S.C. 7543(d) (preserving local authority over “the
`use, operation, or movement of” cars).
`The Ninth Circuit rejected Volkswagen’s preemption
`defense. It expressly grounded
`its conclusion on
`Volkswagen’s “unusual” and “aberrant” misconduct,
`namely, “intentionally tamper[ing] * * * to deceive the
`regulators.” Pet. App. 3a-4a.
`The question presented is:
`Whether the Clean Air Act preempts states and local
`governments from penalizing car manufacturers for tam-
`pering with emissions systems on post-sale, in-use vehi-
`cles, where EPA did not approve the manufacturers’ ac-
`tions.
`
`
`276878.1
`
`(I)
`
`
`
`II
`
`TABLE OF CONTENTS
`
`Question presented .............................................................. I
`Introduction .......................................................................... 1
`Statutory provisions involved ............................................. 4
`Statement .............................................................................. 6
`A. Statutory background ...................................... 6
`B. Facts and procedural history .......................... 9
`Reasons for denying the petition ...................................... 16
`I. There is no conflict that warrants further
`
`review ...................................................................... 16
`A. The Ninth Circuit did not address the
`question posed by the petition....................... 16
`B. The question the Ninth Circuit decided
`
` is important only to manufacturers who
`
` plan on evading the Act’s regulatory
`procedures ....................................................... 17
`C. The actual conflict is weak and shallow ........ 22
`D. This is a poor vehicle to address the
`
` petition’s question ........................................... 25
`II. The Ninth Circuit’s decision is correct ................ 25
`A. The Ninth Circuit correctly understood
`
` the preemption framework and the Act’s
`structure .......................................................... 25
`B. The Act does not expressly preempt the
`Counties’ claims .............................................. 28
`C. The Act does not impliedly preempt the
`Counties’ claims .............................................. 31
`Conclusion ........................................................................... 35
`
`
`
`
`
`
`276878.1
`
`
`
`III
`
`TABLE OF AUTHORITIES
`
` Page(s)
`
`Cases
`
`Allway Taxi, Inc. v. City of New York,
`340 F. Supp. 1120 (S.D.N.Y. 1972) ........... 12, 13, 28, 29
`
`California v. Zook,
`336 U.S. 725 (1949) ....................................................... 15
`
`Chamber of Commerce of U.S. v. Whiting,
`563 U.S. 582 (2011) ....................................................... 31
`
`CSX Transp., Inc. v. Easterwood,
`507 U.S. 658 (1993) ................................................. 13, 31
`
`Dan’s City Used Cars, Inc. v. Pelkey,
`569 U.S. 251 (2013) ....................................................... 29
`
`Dep’t of Homeland Sec. v. MacLean,
`574 U.S. 383 (2015) ....................................................... 31
`
`Engine Mfrs. Ass’n v. S. Coast Air Quality
`Mgmt. Dist.,
`541 U.S. 246 (2004) ......................................................... 6
`
`Gamble v. United States,
`139 S. Ct. 1960 (2019) ................................................... 22
`
`Huron Portland Cement Co. v. City of
`Detroit, Mich.,
`362 U.S. 440 (1960) ......................................................... 6
`
`Kansas v. Garcia,
`140 S. Ct. 791 (2020) ............................................ passim
`
`
`276878.1
`
`
`
`IV
`
`Kingbird v. State,
`949 N.W.2d 744 (Minn. Ct. App. 2020) ....................... 24
`
`Motor & Equipment Mfrs. Ass’n v. EPA,
`627 F.2d 1095 (D.C. Cir. 1979) ...................................... 7
`
`Oneok, Inc. v. Learjet, Inc.,
`575 U.S. 373 (2015) ....................................................... 14
`
`Riegel v. Medtronic, Inc.,
`552 U.S. 312 (2008) ....................................................... 30
`
`Russello v. United States,
`464 U.S. 16 (1983) ......................................................... 30
`
`Salinas v. U.S. R.R. Retirement Bd.,
`141 S. Ct. 691 (2021) ..................................................... 30
`
`State ex rel. Slatery v. Volkswagen
`Aktiengesellschaft,
`No. M2018-00791-COA-R9-CV, 2019 WL
`1220836 (Tenn. Ct. App. Mar. 13, 2019) ......... 23, 24, 28
`
`State v. Volkswagen AG,
`279 So. 3d 1109 (Ala. 2018) .............................. 23, 24, 28
`
`State v. Volkswagen Aktiengesellschaft,
`No. 1622-CC10852-01, 2018 WL 3349094
`(Mo. Cir. Ct. June 26, 2018) ......................................... 23
`
`State ex rel. Swanson v. Volkswagen
`Aktiengesellschaft,
`No. A18-0544, 2018 WL 6273103 (Minn.
`Ct. App. Dec. 3, 2018) ....................................... 23, 24, 28
`
`
`276878.1
`
`
`
`V
`
`Union of Concerned Scientists v. Nat’l
`Highway Traffic Safety Admin.,
`No. 19-1230 (D.C. Cir.) ................................................ 18
`
`Virginia Uranium, Inc. v. Warren,
`139 S. Ct. 1894 (2019) ................................................... 31
`
`Washington v. Gen. Motors Corp.,
`406 U.S. 109 (1972) ......................................... 7, 9, 27, 34
`
`Watts v. Watts,
`519 S.W.3d 572 (Tenn. Ct. App. 2016) ........................ 24
`
`Wyeth v. Levine,
`555 U.S. 555 (2009) ........................................... 27, 28, 31
`
`State of Ohio ex rel. Yost v. Volkswagen
`Aktiengesellschaft,
`Case No. 2020-0092 (Ohio Aug. 10, 2020) .................. 19
`
`Statutes
`
`42 U.S.C. 1857h-2 ................................................................. 7
`
`42 U.S.C. 7401(a)(2).............................................................. 6
`
`42 U.S.C. 7401(a)(3).................................................. 6, 26, 27
`
`42 U.S.C. 7401(a)(4).............................................................. 6
`
`42 U.S.C. 7401(b)(1) ............................................................. 6
`
`42 U.S.C. 7401(b)(3) ............................................................. 6
`
`42 U.S.C. 7401(c) .................................................................. 6
`
`42 U.S.C. 7416 ............................................................ passim
`
`
`276878.1
`
`
`
`VI
`
`42 U.S.C. 7521 ....................................................................... 7
`
`42 U.S.C. 7521(d) .................................................................. 8
`
`42 U.S.C. 7522(a)(3)............................................ 8, 11, 22, 34
`
`42 U.S.C. 7524 ..................................................................... 33
`
`42 U.S.C 7524(a) ............................................................. 8, 22
`
`42 U.S.C. 7541 ....................................................................... 8
`
`42 U.S.C. 7541(a)(2)........................................................ 7, 30
`
`42 U.S.C. 7541(h) ............................................................ 7, 30
`
`42 U.S.C. 7541(h)(2) ........................................................... 26
`
`42 U.S.C. 7543(a) ....................................................... passim
`
`42 U.S.C. 7543(c) ...................................................... 7, 26, 30
`
`42 U.S.C. 7543(d) ................................................ 8, 26, 31, 32
`
`42 U.S.C. 7543(e)(1) ............................................................ 26
`
`42 U.S.C. 7550(3) .................................................................. 7
`
`42 U.S.C. 7604 ....................................................................... 7
`
`42 U.S.C. 7604(e) ................................................................ 34
`
`Rules and Regulatory Materials
`
`40 C.F.R. 86.1845-04 ............................................................ 8
`
`50 Fed. Reg. 30960 (July 31, 1985) ..................................... 8
`
`
`276878.1
`
`
`
`VII
`
`51 Fed. Reg. 10198-01 (Mar. 25, 1986) ......................... 9, 30
`
`59 Fed. Reg. 36969 (July 20, 1994) ..................................... 7
`
`63 Fed. Reg. 6651 (Feb. 10, 1998) ....................................... 8
`
`84 Fed. Reg. 51310 (Sept. 27, 2019) .................................. 18
`
`86 Fed. Reg. 7037 (Jan. 20, 2021) ..................................... 18
`
`Hillsborough Cty. EPC Rule 1-8.05 ................................. 12
`
`S. Ct. R. 10 .................................................................... 23, 24
`
`Utah Admin. Code R307-201-4 ......................................... 12
`
`Other Authorities
`
`EPA, 2018 Clean Air Act Enforcement Case
`Resolutions .................................................................... 30
`
`EPA, Daimler AG and Mercedes-Benz USA,
`LLC Clean Air Act Civil Settlement
`(Sept. 14, 2020) .............................................................. 20
`
`EPA, Derive Systems Clean Air Act
`Settlement (Sept. 24, 2018) ......................................... 30
`
`
`
`
`
`
`276878.1
`
`
`
`
`
`In the Supreme Court of the United States
`
`
`
`No. 20-994
`
`VOLKSWAGEN GROUP OF AMERICA, INC., ET AL.,
`PETITIONERS
`
`
`
`v.
`
`
`THE ENVIRONMENTAL PROTECTION COMMISSION OF
`HILLSBOROUGH COUNTY, FLORIDA AND SALT LAKE
`COUNTY, UTAH.
`
`
`ON PETITION FOR A WRIT OF CERTIORARI
`TO THE UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`BRIEF FOR THE RESPONDENTS IN OPPOSITION
`
`
`INTRODUCTION
`
`Volkswagen devotes most of its pitch for certiorari to
`a question the Ninth Circuit didn’t decide. The thrust of
`its argument is that states and local governments cannot
`be allowed to penalize EPA-approved conduct or “impose
`conflicting regulation[s] on manufacturers.” Pet. 4.
`Maybe so, but that has nothing to do with this case. The
`Counties do not seek to penalize anything EPA approved
`because Volkswagen “deceive[d]” EPA and evaded the
`very regulatory approval process it invokes. Pet. App. 3a-
`4a. There are no conflicting regulations because the Coun-
`ties’ anti-tampering rules prohibit “exactly what” the Act
`
`276878.1
`
`(1)
`
`
`
`2
`
`forbids. Id. at 37a n.22. Those critical facts form the ex-
`press
`foundation of the Ninth Circuit’s analysis.
`Volkswagen’s specter of regulatory anarchy therefore de-
`pends on a legal and factual scenario that the Ninth Cir-
`cuit neither addressed nor resolved.
`The Ninth Circuit’s actual holding is unremarkable le-
`gally and practically. It represents a “straightforward ap-
`plication” of well-settled preemption principles to
`Volkswagen’s “unexpected and aberrant conduct.” Pet.
`App. 3a-4a, 45a-46a. In short: the Act expressly preserves
`state and local authority over post-sale cars, and the
`Counties’ claims do not interfere with a regulatory pro-
`cess that Volkswagen deliberately bypassed.
`That narrow decision does not warrant further review.
`It is so obviously uncertworthy—Volkswagen’s own amici
`admit the facts are “not typical” (Product Liability Advi-
`sory Council Br. 6)—that Volkswagen tries to litigate a
`wholly distinct preemption case, one where EPA did ap-
`prove the post-sale modification and a state or locality re-
`jected that judgment. Volkswagen indeed flat-out mis-
`characterizes the court’s decision, wrongly claiming that
`the court called post-sale recalls “rare.” Pet. 5, 18. The
`Ninth Circuit called Volkswagen’s misconduct rare, and
`that misconduct is what the Counties may penalize with-
`out interfering with the Act. Pet. App. 2a-4a, 45a.
`Volkswagen resorts to speculating that other localities
`“could potentially penalize even modifications that EPA
`already approved.” Pet. 31 (emphasis in original); see, e.g.,
`id. at 19. The best Volkswagen can find are one page in
`another state’s brief (which it grossly misrepresents, in-
`fra pp. 19-20) and one county’s lawsuit (which it misunder-
`stands, infra pp. 20-21). Regardless, the fact that other,
`distinguishable cases could present harder preemption
`questions provides no reason to review this decision. Far
`from it, those other cases support denying certiorari to let
`
`
`276878.1
`
`
`
`3
`
`the issue percolate. Should a court somewhere sometime
`hold that states can forbid what EPA has permitted, this
`Court can review that decision. The Ninth Circuit, how-
`ever, addressed an entirely different question that carries
`no consequences for a post-sale, EPA-approved change.
`Any split on the issue the Ninth Circuit actually de-
`cided is similarly insignificant. All the decisions compris-
`ing the split involve Volkswagen, so those cases have no
`bearing on typical post-sale updates. Any divergence in
`outcome thus matters only to Volkswagen or another
`manufacturer who intends to evade EPA’s approval pro-
`cess.
`And Volkswagen overstates the conflict even on that
`limited question.
`Indeed, every appellate
`court
`Volkswagen cites rejected its primary argument of ex-
`press preemption. And on obstacle preemption, the “split”
`is shallow and likely to resolve itself. Two of the three
`state-court cases are unpublished decisions from interme-
`diate courts, and all three rested heavily on the district
`court’s now-reversed analysis here. That sparse caselaw
`confirms the propriety of additional percolation.
`In truth, the petition is little more than a veiled re-
`quest for error correction, which is no basis for certiorari
`at all. Regardless, the Ninth Circuit correctly decided the
`narrow issue before it. On express preemption, like every
`other appellate court, the court properly refused to re-
`write a clear statute to protect manufacturers in a way
`Congress did not contemplate. On obstacle preemption, it
`properly refused to “strain to give Volkswagen the equiv-
`alent of a release from state and local liability (which it did
`not secure for itself) by engaging in a ‘freewheeling judi-
`cial inquiry into whether a state statute is in tension with
`federal objectives.’” Pet. App. 4a (citation omitted). The
`petition should be denied.
`
`
`276878.1
`
`
`
`4
`
`STATUTORY PROVISIONS INVOLVED
`
`In addition to provisions reproduced in the petition ap-
`pendix, the Clean Air Act includes the following pertinent
`provisions.
`
`42 U.S.C. 7401(a) provides, in relevant part:
`
`(a) Findings
`
`The Congress finds—
`
`* * *
`
`(2) that the growth in the amount and complexity
`of air pollution brought about by urbanization, in-
`dustrial development, and the increasing use of
`motor vehicles, has resulted in mounting dangers
`to the public health and welfare, including injury to
`agricultural crops and livestock, damage to and the
`deterioration of property, and hazards to air and
`ground transportation; [and]
`
`(3) that air pollution prevention (that is, the reduc-
`tion or elimination, through any measures, of the
`amount of pollutants produced or created at the
`source) and air pollution control at its source is the
`primary responsibility of States and local govern-
`ments * * * .
`
`42 U.S.C. 7416 provides:
`
`Retention of State authority
`
`Except as otherwise provided in sections 1857c-10(c),
`(e), and (f) (as in effect before August 7, 1977), 7543,
`7545(c)(4), and 7573 of this title (preempting certain
`State regulation of moving sources) nothing in this
`chapter shall preclude or deny the right of any State
`or political subdivision thereof to adopt or enforce
`(1) any standard or limitation respecting emissions of
`
`
`276878.1
`
`
`
`5
`
`air pollutants or (2) any requirement respecting con-
`trol or abatement of air pollution; except that if an
`emission standard or limitation is in effect under an
`applicable implementation plan or under section 7411
`or section 7412 of this title, such State or political sub-
`division may not adopt or enforce any emission stand-
`ard or limitation which is less stringent than the stand-
`ard or limitation under such plan or section.
`
`42 U.S.C. 7541(a)(2) provides:
`
`In the case of a motor vehicle part or motor vehicle
`engine part, the manufacturer or rebuilder of such
`part may certify that use of such part will not result in
`a failure of the vehicle or engine to comply with emis-
`sion standards promulgated under section 7521 of this
`title. Such certification shall be made only under such
`regulations as may be promulgated by the Adminis-
`trator to carry out the purposes of subsection (b). The
`Administrator shall promulgate such regulations no
`later than two years following August 7, 1977.
`
`42 U.S.C. 7543(c) provides:
`
`(c) Certification of vehicle parts or engine parts
`
`Whenever a regulation with respect to any motor ve-
`hicle part or motor vehicle engine part is in effect un-
`der section 7541(a)(2) of this title, no State or political
`subdivision thereof shall adopt or attempt to enforce
`any standard or any requirement of certification, in-
`spection, or approval which relates to motor vehicle
`emissions and is applicable to the same aspect of such
`part. The preceding sentence shall not apply in the
`case of a State with respect to which a waiver is in ef-
`fect under subsection (b).
`
`42 U.S.C. 7550(3) provides, in relevant part:
`
`
`276878.1
`
`
`
`6
`
`As used in this part—
`
`* * *
`
`Except with respect to vehicles or engines imported or
`offered for importation, the term “new motor vehicle”
`means a motor vehicle the equitable or legal title to
`which has never been transferred to an ultimate pur-
`chaser * * *.
`
`STATEMENT
`
`A. Statutory Background
`1. “Legislation designed to free from pollution the
`very air that people breathe clearly falls within the exer-
`cise of even the most traditional concept of what is com-
`pendiously known as the police power.” Huron Portland
`Cement Co. v. City of Detroit, Mich., 362 U.S. 440, 442
`(1960). When Congress enacted the Clean Air Act “to pro-
`tect and enhance the quality of the Nation’s air resources”
`(42 U.S.C. 7401(b)(1)), it likewise recognized that control-
`ling pollution remains “the primary responsibility of
`States and local governments.” 42 U.S.C. 7401(a)(3); see,
`e.g., 42 U.S.C. 7401(a)(2), (4), (b)(3), (c); Engine Mfrs.
`Ass’n v. S. Coast Air Quality Mgmt. Dist., 541 U.S. 246,
`260 n.2 (2004) (Souter, J., dissenting) (explaining history
`of Section 7401).
`The Act’s substantive provisions reflect that shared
`federal-state authority. They preserve state and local pri-
`macy in most areas, while vesting the federal government
`with exclusive authority over particular issues. For in-
`stance, in a provision titled “Retention of State authority,”
`Congress instructed that, “[e]xcept as otherwise provided
`in” several express preemption provisions, “nothing in
`this chapter shall preclude or deny the right of any State
`or political subdivision thereof to adopt or enforce (1) any
`
`
`276878.1
`
`
`
`7
`
`standard or limitation respecting emissions of air pollu-
`tants or (2) any requirement respecting control or abate-
`ment of air pollution.” 42 U.S.C. 7416. And 42 U.S.C. 7604
`reinforces that “States[] and local governments may initi-
`ate actions to enforce compliance with federal standards
`and to enforce other statutory and common-law rights.”
`Washington v. Gen. Motors Corp., 406 U.S. 109, 115 n.4
`(1972) (citing 42 U.S.C. 1857h-2 (recodified as 42 U.S.C.
`7604)).
`2. The Act’s treatment of motor vehicles hews to that
`line. The Act imposes emissions standards for new motor
`vehicles. See 42 U.S.C. 7521. A “new motor vehicle” is “a
`motor vehicle the equitable or legal title to which has
`never been transferred to an ultimate purchaser.” 42
`U.S.C. 7550(3). To prevent “an anarchic patchwork of fed-
`eral and state regulatory programs,” Congress added an
`express preemption provision. Motor & Equipment Mfrs.
`Ass’n, Inc. v. EPA, 627 F.2d 1095, 1109 (D.C. Cir. 1979).
`That provision prohibits states from regulating emissions
`from new motor vehicles: “No State or any political sub-
`division thereof shall adopt or attempt to enforce any
`standard relating to the control of emissions from new
`motor vehicles or new motor vehicle engines subject to
`this part.” 42 U.S.C. 7543(a). And EPA has opined that a
`state could not apply an emissions standard “as soon as
`[the cars] are introduced into commerce,” for that would
`“effectively” regulate “the design of new engines.” 59 Fed.
`Reg. 36969, 36973, 36974 (July 20, 1994).
`Other express preemption provisions explicitly excuse
`“manufacturers” from certain state and local regulation.
`See 42 U.S.C. 7541(h), 7543(c) (referencing 42 U.S.C.
`7541(a)(2)). Volkswagen does not argue that those provi-
`sions expressly preempt state and local anti-tampering
`laws.
`
`
`276878.1
`
`
`
`8
`
`The Act also includes a non-preemption provision re-
`garding in-use vehicles. Echoing Section 7416, Section
`7543(d) provides: “Nothing in this part shall preclude or
`deny to any State or political subdivision thereof the right
`otherwise to control, regulate, or restrict the use, opera-
`tion, or movement of registered or licensed motor vehi-
`cles.”
`As the Ninth Circuit discussed, EPA also wields some
`authority over in-use cars. The Act and EPA’s regulations
`include provisions regarding the “useful life” of a vehicle
`and recall procedures to fix defects. See, e.g., Pet. App.
`25a-26a; 42 U.S.C. 7521(d), 7541; 40 C.F.R. 86.1845-04.
`The software defeat devices that Volkswagen installed
`here did not receive approval through those recall proce-
`dures. E.g., Pet. App. 8a-9a; C.A. E.R. 51-53.
`There is also undeniable overlap regarding anti-tam-
`pering laws. The Act forbids “any person to remove or
`render inoperative” any part of an emissions-control sys-
`tem, and forbids “any person * * * to bypass, defeat, or
`render inoperative” an emissions-control system. 42
`U.S.C. 7522(a)(3)(A), (B). It imposes monetary penalties
`for violating those prohibitions. 42 U.S.C 7524(a).
`Most states have also enacted anti-tampering laws.
`Pet. App. 33a & n.19. EPA has approved state anti-tam-
`pering laws with the same scope as the Counties’, and it
`has disapproved state anti-tampering laws for being less
`stringent than the federal anti-tampering rule. See, e.g.,
`50 Fed. Reg. 30960, 30961-30962 (July 31, 1985) (approv-
`ing Indiana law that “prohibits any person” from tamper-
`ing and imposes up to a $2,500 penalty); 63 Fed. Reg. 6651,
`6652 (Feb. 10, 1998) (disapproving anti-tampering law).
`EPA has even encouraged states to adopt anti-tam-
`pering rules: “A State or local government is free to adopt
`and enforce an anti-tampering law on its own, if it feels
`
`
`276878.1
`
`
`
`9
`
`that such a law would contribute to reducing motor vehicle
`emissions.” 51 Fed. Reg. 10198-01, 10206 (Mar. 25, 1986).
`Accordingly, the basic division of authority under the
`Act is clear: “Because federal motor vehicle emission con-
`trol standards apply only to new motor vehicles, States
`also retain broad residual power over used motor vehi-
`cles.” Washington, 406 U.S. at 115 n.4.
`B. Facts And Procedural History
`1. This case arises from Volkswagen’s multi-year ef-
`fort to avoid compliance with federal and state law and to
`deceive EPA to help its bottom line. Volkswagen tam-
`pered with new cars and post-sale, in-use cars. The Coun-
`ties sued to impose penalties based on both types of tam-
`pering, but only the claims based on in-use cars are at is-
`sue here.
`a. Volkswagen faced a dilemma. Effective 2007, it had
`to comply with new federal emissions standards. But sat-
`isfying those standards would hurt its cars’ performance,
`making them less attractive to buyers. Rather than
`“mak[e] beneficial modifications to emission systems”
`(Pet. 4), Volkswagen decided to cheat the emissions tests.
`Pet. App. 6a.
`Volkswagen installed software devices that could de-
`tect whether the vehicles were being tested or being
`driven on the road. Id. at 6a-7a. If they were undergoing
`testing (“dyno mode”), the devices caused the cars to op-
`erate in a way that would meet emissions limits. But if
`they were being driven (“street mode”), the software “re-
`duced the effectiveness of the vehicle’s emission control
`system” to produce emissions “up to 35 times higher than
`federal standards.” Id. at 7a. Volkswagen did not disclose
`these devices to EPA.
`Around 2012, drivers who had purchased these cars
`began reporting hardware failures. Id. at 8a. Volkswagen
`discovered that the software sometimes failed to detect
`
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`276878.1
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`that the car was being driven on the road, so the car oper-
`ated in compliance with emissions standards. That, in
`turn, “increase[d] stress on the exhaust system.” Ibid.
`Instead of either developing technology to maintain
`their vehicles’ reliability while obeying the law or simply
`handling more warranty claims, Volkswagen decided it
`needed to cheat better. It developed two new software de-
`vices. One caused the car to start in dirty street mode. The
`other aimed to better detect when the car was undergoing
`an emissions test. Ibid. The software’s fundamental pur-
`pose was to reduce the hardware failures caused by a com-
`pliant emissions system. See ibid.
`Beginning in 2014, during voluntary recalls and rou-
`tine maintenance, Volkswagen installed these new soft-
`ware defeat devices on cars that had already been sold
`and were being driven in the Counties. Ibid. Contrary to
`Volkswagen’s assertion that EPA oversaw the software
`installations (Pet. 12), “Volkswagen deceptively told EPA
`regulators and American consumers that the software up-
`dates were intended to improve the operation of the” cars.
`Pet. App. 9a.1
`EPA opened an investigation after an independent
`study showed that Volkswagen’s vehicles were emitting
`pollutants above the federal limit. Ibid. Volkswagen con-
`tinued to lie to EPA during this investigation, while also
`continuing to install the new software on in-use vehicles.
`C.A. E.R. 52-55.
`
`
`1 Volkswagen asserts that the new software somehow reduced
`emissions. Pet. 12, 27. On the contrary, as the district court explained,
`“the post-sale software changes increased emissions.” Pet. App. 65a.
`Volkswagen waived that determination by not challenging it before
`the Ninth Circuit. Cf. id. at 13a-14a. Regardless, Volkswagen’s guilty
`plea confirms both courts’ understanding of the facts. See id. at 8a-
`9a; C.A. E.R. 49-51.
`
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`276878.1
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`11
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`Finally, in August 2016, a Volkswagen whistleblower
`revealed, “for the first time to U.S. regulators and in di-
`rect contravention of instructions from supervisors,” that
`Volkswagen “had evaded emissions tests.” Id. at 55; see
`Pet. App. 9a. Then a supervisor, “while creating the false
`impression that he had been unaware of the defeat device
`previously, admitted that VW had installed a defeat de-
`vice.” C.A. E.R. 55. Volkswagen eventually “disclosed the
`entire scheme.” Pet. App. 9a.2
`The upshot is that the Counties seek to penalize only
`Volkswagen’s actions—installation of software defeat de-
`vices on used vehicles being driven in their jurisdictions—
`that EPA never approved.
`b. EPA brought civil claims against Volkswagen and
`criminal claims against Volkswagen AG.
` In the criminal action, Volkswagen AG pleaded guilty
`to multiple crimes and paid the United States a $2.8 billion
`fine. Pet. App. 9a. “The plea agreement did not give
`Volkswagen ‘any protection against prosecution’ from
`state or local governments.” Id. at 9a-10a.
`In the civil action, Volkswagen entered into three con-
`sent decrees to settle, among other claims, tampering vi-
`olations under 42 U.S.C. 7522(a)(3). It agreed to pay a
`$1.45 billion penalty to resolve EPA’s various civil claims.
`See D. Ct. Doc. 2758-1, at 8-9 (Jan. 11, 2017),
`https://www.epa.gov/enforcement/volkswagen-clean-air-
`act-civil-settlement. It also paid $2.925 billion into a miti-
`gation trust. Pet. App. 51a. “[E]ach state expressly re-
`served its right ‘to seek fines or penalties’ against
`Volkswagen in connection with being named a beneficiary
`of [the mitigation] trust.” Id. at 10a n.10.
`
`
`2 Volkswagen thus “quickly acknowledged its wrongdoing” (Pet.
`12) only after its years of deception had been irrefutably exposed.
`
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`276878.1
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`12
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`2. The Counties sued Volkswagen for tampering with
`the emissions systems on cars in their counties. Salt Lake
`County sued under a state anti-tampering regulation
`providing that “[n]o person shall remove or make inoper-
`able the [emissions-control] system” except to install an
`“equally or more effective” control system. Utah Admin.
`Code R307-201-4. Hillsborough County invoked two
`county rules, which provide that “[n]o person shall tam-
`per, cause, or allow the tampering of the emission control
`system of any motor vehicle,” and “[no] person shall * * *
`defeat or render inoperable any component of a motor ve-
`hicle’s emission control system.” EPC Rules 1-8.05(1), (6);
`see Pet. App. 12a-13a. These provisions prohibit “exactly
`what the federal anti-tampering law prohibits.” Pet. App.
`37a n.22.
`The district court held that the Clean Air Act
`preempted the Counties’ claims and dismissed them on
`the pleadings. The court held that 42 U.S.C. 7543(a) ex-
`pressly preempted the claims based on the software in-
`stalled when manufacturing new cars. Pet. App. 61a-64a.
`Section 7543(a), however, did not preempt tampering
`claims based on the software installed on post-sale vehi-
`cles. The cars were already “in use within the Counties,”
`so they were not “new.” Pet. App. 65a. The court also re-
`jected Volkswagen’s argument that the software related
`back to the original design under Allway Taxi, Inc. v. City
`of New York, 340 F. Supp. 1120 (S.D.N.Y. 1972). See Pet.
`App. 66a-67a.
`The court next held that obstacle preemption did ap-
`ply. But rather than analyze whether the Act shows “the
`clear and manifest purpose of Congress” to supersede the
`Counties’ traditional police power to regulate pollution,
`the court asked whether “state and local governments
`[were] given authority to supplement EPA’s enforcement
`
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`276878.1
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`13
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`authority.” Id. at 72a. After discussing the Act’s provi-
`sions for “useful life” testing, the court determined it was
`“sensible” to give EPA exclusive authority over “model-
`wide” emissions “at the manufacturer level.” Id. at 73a.
`That outcome “best utilizes the comparative advantages
`of EPA and the states and local governments.” Ibid.; see
`id. at 76a. The court also wrote that the Counties’ actions
`could “undermine the congressional calibration of force
`for tampering by vehicle manufacturers.” Id. at 78a. The
`court did not explain why that reasoning wouldn’t apply
`equally to tampering by non-manufacturers.
`3. The Ninth Circuit affirmed the district court’s dis-
`missal of the claims for tampering with new cars, but re-
`versed on the claims for post-sale tampering.
`The court first rejected express preemption. It ex-
`plained that the text of the clause “‘contains the best evi-
`dence of Congress’ pre-emptive intent.’” Pet. App. 15a
`(quoting CSX Transp., Inc. v. Easterwood, 507 U.S. 658,
`664 (1993)). The plain “terms” of Section 7543(a) govern
`“regulations ‘relating to the control of emissions from new
`motor vehicles,’” where
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