Natural Resources Defense Coun v. National Highway Traffic Safet

Filing 178

REPLY BRIEF, on behalf of Petitioner Center for Biological Diversity, Natural Resources Defense Council and Sierra Club in 17-2780, FILED. Service date 04/03/2018 by CM/ECF. [2271055] [17-2780, 17-2806] [Entered: 04/03/2018 08:12 PM]

17-2780(L)
17-2806 (Con)
IN THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
NATURAL RESOURCES DEFENSE COUNCIL, SIERRA CLUB, CENTER FOR
BIOLOGICAL DIVERSITY, STATE OF CALIFORNIA, STATE OF MARYLAND,
STATE OF NEW YORK, STATE OF PENNSYLVANIA, STATE OF VERMONT,
Petitioners,
v.
NATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION, JACK DANIELSON,
in his capacity as Acting Deputy Administrator of the National
Highway Traffic Safety Administration, UNITED STATES DEPARTMENT OF
TRANSPORTATION, ELAINE CHAO, in her capacity as Secretary of the
United States Department of Transportation,
Respondents,
ASSOCIATION OF GLOBAL AUTOMAKERS, ALLIANCE OF AUTOMOBILE
MANUFACTURERS, INC.,
Intervenors.
On Petition for Review of a Rule of the
National Highway Traffic Safety Administration

REPLY BRIEF OF ENVIRONMENTAL PETITIONERS

(additional counsel on inside cover)

Ian Fein
Irene Gutierrez
Michael E. Wall
Natural Resources Defense Council
111 Sutter Street, 21st Floor
San Francisco, CA 94104
[phone]
Counsel for Petitioner Natural
Resources Defense Council

Alejandra Núñez
Joanne Spalding
Sierra Club
2101 Webster Street, Suite 1300
Oakland, CA 94612
[phone]
Counsel for Petitioner
Sierra Club

Vera Pardee
Howard Crystal
Center for Biological Diversity
1212 Broadway, Suite 800
Oakland, CA 94612
[phone]
Counsel for Petitioner
Center for Biological Diversity

TABLE OF CONTENTS
TABLE OF AUTHORITIES .......................................................................ii
INTRODUCTION ....................................................................................... 1
ARGUMENT ............................................................................................... 2
I.

The Suspension Rule Does Not Evade This Court’s Review ........... 2
A.
B.

The petition is timely ............................................................... 8

C.
II.

Environmental Petitioners have standing .............................. 2

Petitioners’ challenge belongs in this Court ......................... 16

The Suspension Rule Violates Three Basic Principles .................. 21
A.
B.

Indefinitely suspending the final rule required notice and
comment ................................................................................. 25

C.
III.

The agency lacks authority to indefinitely suspend a final
rule subject to statutory deadlines ........................................ 21

The agency never explained why it did not leave the final
rule in place during the reconsideration ............................... 29

Vacatur Is The Appropriate Remedy.............................................. 33

CONCLUSION ......................................................................................... 35
CERTIFICATE OF COMPLIANCE ........................................................ 37
CERTIFICATE OF SERVICE.................................................................. 38

i

TABLE OF AUTHORITIES
Cases
Adams Fruit Co. v. Barrett,
494 U.S. 638 (1990) ......................................................................... 11
Am. Lung Ass’n v. Reilly,
962 F.2d 258 (2d Cir. 1992) ............................................................. 24
ASG Indus., Inc. v. Consumer Prod. Safety Comm’n,
593 F.2d 1323 (D.C. Cir. 1979) ....................................................... 22
Baur v. Veneman,
352 F.3d 625 (2d Cir. 2003) ............................................................... 3
Cal. Energy Comm’n v. Dep’t of Energy,
585 F.3d 1143 (9th Cir. 2009) ......................................................... 18
California v. BLM (California I),
277 F. Supp. 3d 1106 (N.D. Cal. 2017) ......................... 31, 33, 34, 35
California v. BLM (California II),
No. 17-cv-07186-WHO, 2018 WL 1014644
(N.D. Cal. Feb. 22, 2018). ................................................................ 30
Clark v. CFTC,
170 F.3d 110 (2d Cir. 1999) ............................................................. 19
Clean Air Council v. Pruitt,
862 F.3d 1 (D.C. Cir. 2017) ............................................................. 21
Clean Water Action Council v. EPA,
765 F.3d 749 (7th Cir. 2014), .......................................................... 15
Competitive Enter. Inst. (CEI) v. NHTSA,
901 F.2d 107 (D.C. Cir. 1990) ....................................................... 6, 7

ii

Ctr. for Auto Safety (CAS) v. NHTSA,
793 F.2d 1322 (D.C. Cir. 1986....................................................... 4, 6
Dunn-McCampbell Royalty Interest, Inc. v. Nat’l Park Serv.,
112 F.3d 1283 (5th Cir. 1997) ......................................................... 14
Encino Motorcars, LLC v. Navarro,
136 S. Ct. 2117 (2016) ..................................................................... 32
Envtl. Def. Fund v. EPA,
716 F.2d 915 (D.C. Cir. 1983) ................................................... 27, 34
Envtl. Def. Fund v. Gorsuch,
713 F.2d 802 (D.C. Cir. 1983) ......................................................... 26
Estate of Cowart v. Nicklos Drilling Co.,
505 U.S. 469 (1992) ........................................................................... 9
Fourco Glass Co. v. Transmirra Prod. Corp.,
353 U.S. 222 (1957) ......................................................................... 10
Friends of the Earth v. Laidlaw Envtl. Servs.,
528 U.S. 167 (2000) ........................................................................... 8
Guertin v. United States,
743 F.3d 382 (2d Cir. 2014) ............................................................. 33
Harris v. Carter,
515 F.3d 1051 (9th Cir. 2008) ......................................................... 16
Humane Soc’y v. Locke,
626 F.3d 1040 (9th Cir. 2010) ......................................................... 31
LaFleur v. Whitman,
300 F.3d 256 (2d Cir. 2002) ........................................................... 3, 6
Mack Trucks, Inc. v. EPA,
682 F.3d 87 (D.C. Cir. 2012) ........................................................... 29
iii

Matuszak v. Comm’r of Internal Revenue,
862 F.3d 192 (2d Cir. 2017) ............................................................. 14
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29 (1983) ............................................................... 31, 32, 33
Musacchio v. United States,
136 S. Ct. 709 (2016) ....................................................................... 14
Nat’l Venture Capital Ass’n v. Duke,
No. 17-cv-1912-JEB, 2017 WL 5990122
(D.D.C. Dec. 1, 2017) ....................................................................... 34
New York v. Abraham,
199 F. Supp. 2d 145 (S.D.N.Y. 2002). ............................................. 17
NRDC v. Abraham,
355 F.3d 179 (2004) ................................................................. passim
NRDC v. EPA,
489 F.3d 1250 (D.C. Cir. 2007) ....................................................... 35
NRDC v. EPA,
559 F.3d 561 (D.C. Cir. 2009) ......................................................... 12
NRDC v. EPA,
683 F.2d 752 (3d Cir. 1982) ................................................. 26, 27, 28
NRDC v. Reilly,
976 F.2d 36 (D.C. Cir. 1992) ..................................................... 22, 23
Open Communities All. v. Carson,
No. 17-cv-2192-BAH, 2017 WL 6558502
(D.D.C. Dec. 23, 2017) ..................................................................... 26
Pineros y Campesinos Unidos del Noroeste v. Pruitt,
No. 17-cv-03434-JSW (N.D. Cal. Mar. 21, 2018) ........................... 28

iv

Pub. Citizen v. NHTSA,
848 F.2d 256 (D.C. Cir. 1988). ...................................................... 4, 8
Pub. Citizen v. Steed,
733 F.2d 93 (D.C. Cir. 1984) ................................................... passim
Pub. Citizen v. Mineta,
343 F.3d 1159 (9th Cir. 2003) ......................................................... 11
Sebelius v. Auburn Reg’l Med. Ctr.,
568 U.S. 145 (2013) ................................................................... 15, 16
Sierra Club v. Pruitt,
No. 17-cv-06293-JSW (N.D. Cal. Feb. 16, 2018) ...................... 22, 24
Susan B. Anthony List v. Driehaus,
134 S. Ct. 2334 (2014) ....................................................................... 7
Sutton v. U.S. Dep’t of Transp.,
38 F.3d 621 (2d Cir. 1994) ............................................................... 20
Time Warner Cable, Inc. v. FCC,
729 F.3d 137 (2d Cir. 2013) ............................................................. 34
United States v. Kwai Fun Wong,
135 S. Ct. 1625 (2015) ............................................................... 15, 16
Wilderness Soc’y v. Griles,
824 F.2d 4 (D.C. Cir. 1987). .............................................................. 6
Zhang v. Slattery,
55 F.3d 732 (2d Cir. 1995) ............................................................... 12
Statutes
Pub. L. No. 103-272, 108 Stat. 745 (1994) ............................................... 10

v

5 United States Code
§ 553 ........................................................................................... 12, 27
§ 706 ................................................................................................. 33
28 United States Code § 2461 note
sec. 2 ................................................................................................... 4
sec. 4 ................................................................................................. 24
42 United States Code
§ 6306 ............................................................................................... 17
49 United States Code
§ 32902 ......................................................................................... 8, 20
§ 32909 ..................................................................................... passim
§ 32912 .............................................................................. 8, 19-20, 31
§ 32915 ............................................................................................. 19
Regulations
49 C.F.R. § 553.35 ..................................................................................... 11
Other Authorities
77 Fed. Reg. 62,624 (Oct. 15, 2012) ................................................... 2, 3, 6
Black’s Law Dictionary (10th ed. 2014) ..................................................... 8
Fed. Register, Pub. Inspection Documents, www.federalregister.gov/
reader-aids/office-of-the-federal-register-blog/2011/11/publicinspection-documents (last visited April 2, 2018). ............................... 13
Fed. Register, Pub. Inspection Issue, www.federalregister.gov/
public-inspection/current (last visited April 2, 2018). ......................... 13
Heinzerling, Lisa, Unreasonable Delays,
12 Harv. L. & Pol’y Rev. 13 (2018) ........................................... 21, 26, 32

vi

INTRODUCTION
The National Highway Traffic Safety Administration (the agency
or NHTSA) broke three bedrock principles of administrative law when
it indefinitely suspended an important final rule that updated the civil
penalty for violating fuel-economy standards. The agency identified no
statutory authority for its action; it failed to provide notice and an
opportunity for comment; and it did not justify suspending the penalty
increase, when it could (and should) have left the inflation adjustment
in place to deter fuel-economy violations during its reconsideration.
Numerous courts (including this one) have repeatedly struck down
similar suspensions on these grounds. And neither Respondents nor
Intervenors can identify any case supporting what the agency did here.
Respondents and Intervenors instead try primarily to evade this
Court’s review. But their arguments fail. Petitioners have standing; the
petition is timely; and, as in NRDC v. Abraham, 355 F.3d 179 (2d Cir.
2004), the case belongs in this Court. Indeed, their arguments also
contradict each other: Respondents attempt to question Petitioners’
standing by characterizing this case as insignificant, while Intervenors
acknowledge that the challenged suspension has altered automakers’
current and ongoing compliance decisions.
1

The challenged suspension leaves in place—indefinitely—an
inadequate, decades-old penalty that fails to deter harmful fueleconomy violations and flouts Congress’s command for prompt and
recurring inflation adjustments. The Court should reject Respondents’
untenable arguments and vacate the unlawful suspension.
ARGUMENT
I.

The Suspension Rule Does Not Evade This Court’s Review
A.

Environmental Petitioners have standing

Vehicle fuel consumption, and the production and refining of that
fuel, result in emissions of air pollutants that harm human health. See
77 Fed. Reg. 62,624, 62,901-07 (Oct. 15, 2012). Fuel-economy violations
increase fuel consumption and production and thus injure Petitioners’
members who live near busy highways and refineries where the
additional pollutants from those increases are emitted. NRDC24-27.1
These members include Kathleen Woodfield, who suffers from chronic
sinusitis and lives only blocks away from one of the nation’s most

This reply cites Environmental Petitioners’ opening brief as NRDC;
the addendum to that brief as ADD; Respondents’ brief as RESP;
Alliance of Automobile Manufacturers’ brief as AAM; Association of
Global Automakers’ brief as AGA; and Institute for Policy Integrity’s
amicus brief as IPI.
1

2

heavily travelled highways, ADD42-43, as well as Janet Dietzkamei,
who lives 1400 feet from a busy highway and suffers from asthma so
severe she cannot leave her home without a mask whenever air quality
levels drop from good to moderate, ADD54-55. These members’ “likely
exposure to additional [pollution] in the air where [they live] is certainly
an ‘injury-in-fact’ sufficient to confer standing.” LaFleur v. Whitman,
300 F.3d 256, 270 (2d Cir. 2002).
Alliance of Automobile Manufacturers (Alliance) appears to claim
that fuel-economy violations cause no additional air pollution and thus
do not harm anyone. AAM18-25. Respondents, notably, do not make
that claim, having previously acknowledged that residents near busy
roads experience elevated health risks from exposure to vehicle
pollutants, 77 Fed. Reg. at 62,907, and that compliance with fueleconomy standards results in significant declines in these adverse
health effects, id. at 63,062; see Baur v. Veneman, 352 F.3d 625, 637 (2d
Cir. 2003) (government statements acknowledging risk of harm “weigh
in favor of concluding that standing exists”).2

At least one member (ADD49-50) is also injured because she is
“interested in purchasing the most fuel-efficient vehicles possible” and
challenges an agency action that, by failing to deter fuel-economy
2

3

Respondents instead observe that this case addresses the
penalties for violating fuel-economy standards, rather than the
standards themselves. RESP10-12. But that observation ignores the
“important role” that penalties play in “deterring violations” of the
standards. 28 U.S.C. § 2461 note, sec. 2(a)(1). The “purpose of civil
penalties for non-compliance is to encourage manufacturers to comply
with the [fuel-economy] standards.” JA52. The standards are
meaningful only because of the penalties that enforce them: “Without
the threat of civil penalties, manufacturers will not be prodded to install
as many fuel-saving devices, nor to install them as promptly.” Ctr. for
Auto Safety (CAS) v. NHTSA, 793 F.2d 1322, 1332 (D.C. Cir. 1986).
Indeed, Intervenors themselves highlight the direct connection
between penalties and fuel-economy standards by admitting that
“increased penalties have the effect of making the [fuel-economy]
standard more stringent.” JA42; see also AGA9 (“penalties for failure to
comply with fuel economy standards” have “real bite” and “are the chief
tool of [fuel-economy] enforcement”). Nor do fuel-economy credits

violations, will “diminish the types of fuel-efficient vehicles and options
available.” Pub. Citizen v. NHTSA, 848 F.2d 256, 261 (D.C. Cir. 1988).
4

diminish the penalties’ importance. E.g., RESP11-12; AAM26-27.
Credits are earned solely from “over-compliance” with fuel-economy
standards, while penalties are assessed for “non-compliance.” JA78-79
& n.3. And Intervenors admit that, because the penalty amount directly
affects the price of credits, JA38, higher penalties will “force
manufacturers away from … using credits” to comply with the
standards, and toward implementing fuel-saving technology instead.
AGA55.3
The Suspension Rule therefore harms Petitioners’ members by
suspending—indefinitely—a penalty increase that would have
“accomplish[ed] [the] goal of encouraging manufacturers to apply more
fuel-saving technologies to their vehicles.” JA53. Instead, it replaced the
inflation-adjusted $14 penalty rate with an inadequate, decades-old
$5.50 rate that does “not provide a strong enough incentive for
manufacturers to comply” with the standards, JA13; NRDC27-28. And

Respondents also “significantly overstate[] the options available to
manufacturers for avoiding liability for civil penalties.” JA38. For
example, Intervenors acknowledge, “the domestic minimum passenger
car [fuel-economy] standard cannot be met by purchasing … credits.” Id.
And the overall “availability of credits will be significantly reduced as
[fuel-economy] standards rapidly increase over the next few years.” Id.
3

5

because automakers sell roughly 15 million new vehicles each year, see
77 Fed. Reg. at 62,679, the suspension’s effect on even some
automakers’ compliance decisions will meaningfully impact overall
emissions. See LaFleur, 300 F.3d at 270 (“The injury-in-fact necessary
for standing need not be large, an identifiable trifle will suffice.”
(internal quotation marks omitted)).
Respondents counter that Petitioners “cannot be certain” that the
suspension affects automakers’ “business decisions.” RESP15. But
“petitioners need not prove a cause-and-effect relationship with
absolute certainty,” even “where the injury hinges on the reactions of
third parties, here the auto manufacturers.” Competitive Enter. Inst.
(CEI) v. NHTSA, 901 F.2d 107, 113 (D.C. Cir. 1990). So long as
automakers’ “conduct is sufficiently dependent upon the incentives
provided by the [agency’s] action, then the resultant injury will be fairly
traceable to that action.” Wilderness Soc’y v. Griles, 824 F.2d 4, 17 (D.C.
Cir. 1987). And here, there is “no difficulty in linking the petitioners’
injury to the challenged agency action.” CAS, 793 F.2d at 1334.
Petitioners’ injuries stem from “less fuel-efficient vehicles,” and the
final rule that the agency suspended was “for the purpose of making

6

vehicles more fuel-efficient,” id., thereby demonstrating a causal link
through “the agency’s own factfinding.” CEI, 901 F.2d at 114.
Moreover, automakers confirm that the Suspension Rule affects
their business decisions, stating that the $14 penalty rate would
immediately “begin driving changes” to their compliance decisions for
the fleets they are currently designing. AGA53-55. Those compliance
decisions (and the resulting increased emissions over the vehicles’
lifetime) “cannot be undone once model years are finalized and move
towards production.” AGA53-54. Automakers’ own assertions thus also
establish the causal link and, at a minimum, a “‘substantial risk’ that
the harm will occur.” Susan B. Anthony List v. Driehaus, 134 S. Ct.
2334, 2341 (2014) (quoting Clapper v. Amnesty Int’l, 568 U.S. 398, 414
n.5 (2013)).4
For the same reasons, a favorable decision would redress
Petitioners’ injuries by “alter[ing] the manufacturers’ incentives to

The Tonachel declaration, ADD16-24, and the declaration
submitted by Amicus, see IPI10-11, further confirm causation here.
Intervenors, notably, do not produce any declaration to rebut
Tonachel’s, relying instead on an extra-record critique of an allegedly
“similar … analysis.” AAM29-30. And they do not address Amicus’s
declaration at all.
4

7

produce fuel-efficient vehicles” in the fleets they are currently
designing. Pub. Citizen v. NHTSA, 848 F.2d at 263. Reinstating the $14
penalty rate would have “a deterrent effect that ma[kes] it likely, as
opposed to merely speculative, that the penalties would redress
[members’] injuries by … preventing” fuel-economy violations. Friends
of the Earth v. Laidlaw Envtl. Servs., 528 U.S. 167, 187 (2000).
B.

The petition is timely

1.

The term “prescribe” in the Energy Policy and Conservation

Act (EPCA) refers to the action of developing and finalizing a rule. See,
e.g., 49 U.S.C. §§ 32902(a), 32912(c)(1) (the agency “shall prescribe by
regulation” various fuel-economy rules). This is consistent with the
term’s ordinary meaning. See Black’s Law Dictionary (10th ed. 2014)
(defining “prescribe” as “to establish authoritatively (as a rule or
guideline)”). And because the rulemaking process culminates with
publication in the Federal Register, deadlines in EPCA that run from
the date a rule is “prescribed” naturally start when the rulemaking
process ends—i.e., when the rule is published in the Federal Register.
That is precisely what this Court determined when construing
similar provisions of ECPA in Abraham. “Under the terms of the
EPCA,” the Court held, “publication in the Federal Register … is the
8

culminating event in the rulemaking process.” 355 F.3d at 196. And
where “Congress did not use the word ‘publish’ when setting a deadline
…, it instead used the word ‘prescribe,’ suggesting that the terms are
interchangeable.” Id. (citation omitted). The same interpretation also
applies to “the judicial review provisions of the EPCA,” the Court
explained, which begin the filing deadline when a “rule is prescribed.”
Id. at 196 n.8 (quoting 42 U.S.C § 6306(b)(1)).
Respondents never engage with this Court’s analysis in Abraham.
Instead, they (and Alliance) attempt to diminish its significance because
it involved different provisions of EPCA. RESP18-19; AAM48-49. But a
faithful application of this Court’s analysis dictates the outcome here.
See Estate of Cowart v. Nicklos Drilling Co., 505 U.S. 469, 479 (1992)
(describing the “basic canon of statutory construction that identical
terms within an Act bear the same meaning”). In the fuel-economy
provisions of EPCA, just like the provisions at issue in Abraham, “the
language of the statute … reflects the fact that Congress considered
publication as the terminal act effectuating” a rule. 355 F.3d at 196.
Indeed, the specific statutory history of section 32909 confirms
that reading. The current text reflects Congress’s non-substantive
consolidation of two earlier judicial review provisions regarding fuel9

economy rules, which began identical 59-day filing deadlines when a
rule was either “prescribed” or “published” in the Federal Register.
NRDC20-21. Neither Respondents nor Alliance explain why Congress
would have intended those deadlines to begin on different dates. And
Congress later confirmed that the terms meant the same thing when it
consolidated the provisions into section 32909(b). Alliance’s speculation
that the consolidation substantively altered one of those deadlines,
AAM54, runs afoul of the Supreme Court’s instruction that, when
Congress consolidates prior laws, “it will not be inferred that Congress
… intended to change their effect, unless such intention is clearly
expressed.” Fourco Glass Co. v. Transmirra Prod. Corp., 353 U.S. 222,
227 (1957). And here, Congress stated expressly that the consolidation
was “without substantive change.” Pub. L. No. 103-272, § 1, 108 Stat.
745 (1994).
Respondents and Alliance nonetheless suggest that “prescribed”
means something different in this context—and something quite
obscure. Instead of defining “prescribed” in section 32909(b), they
contend that—whatever the term means—the Suspension Rule in this
case was “prescribed” prior to publication, when it was “made available
for inspection” at the Office of the Federal Register. AAM57. In fact,
10

Respondents even acknowledge that “Federal Register publication …
may [be] when some rules are ‘prescribed,’” RESP19, but they suggest
that a different date should apply here. That ad hoc approach is no way
to interpret a statute—especially a filing deadline that requires clear,
administrable rules. In any event, their arguments against Petitioners’
straightforward interpretation all fail.
First, it is immaterial that the agency once asserted its belief that
“prescribe” means something other than publication in the Federal
Register. RESP15-16. Agency interpretations of judicial review
provisions warrant no deference. Cf. Adams Fruit Co. v. Barrett, 494
U.S. 638, 649-50 (1990). That is especially so here, where the agency’s
passing reference in an unrelated preamble did not actually define the
term “prescribe.” And contrary to Respondents’ current focus on public
inspection at the Office of the Federal Register, the agency notably
starts its own filing deadline for reconsideration petitions upon
“publication of [a] rule in the Federal Register.” 49 C.F.R. § 553.35(a).
Nor does Public Citizen v. Mineta provide any guidance here. 343
F.3d 1159 (9th Cir. 2003). The Ninth Circuit’s construction of when “an
order is issued” under the National Traffic and Motor Vehicle Safety
Act, id. at 1164, has no bearing on when a “rule is prescribed” under
11

EPCA, especially given this Court’s subsequent interpretation of the
latter phrase in Abraham. And Respondents ignore this Court’s very
sound reasons for its construction: e.g., only upon publication are rules
“considered final” for purposes of judicial review. 355 F.3d at 196 n.8.
Indeed, it would make little sense to define “prescribed” in section
32909(b) as the date of public inspection because—as Respondents and
Alliance acknowledge, RESP19; AAM51-52—many rules are not yet
final or effective at that stage. See, e.g., Zhang v. Slattery, 55 F.3d 732,
749 (2d Cir. 1995). “Agencies must publish substantive rules in the
Federal Register to give them effect.” NRDC v. EPA, 559 F.3d 561, 565
(D.C. Cir. 2009) (citing 5 U.S.C. § 552(a)(1); Morton v. Ruiz, 415 U.S.
199, 233 & n.27 (1974)). Thus, in many if not most cases, a petitioner
likely could not challenge a rule under EPCA unless and until it was
published in the Federal Register.
Respondents and Alliance nonetheless suggest that this rule is
different because it purported to take effect before it was published. But
whether the rule lawfully could take effect any earlier than 30 days
after publication depends on the agency’s “good cause” assertion,
5 U.S.C. § 553(d)(3), which—as explained below—clearly fails.
Regardless, this rule’s peculiarities provide no basis to interpret section
12

32909(b) in a way that would start the filing deadline before many rules
are final.
Alliance relies heavily on the concept of notice. AAM45. But when
Congress enacted section 32909(b), there was little reason to believe the
public actually knew of documents that were available for public
inspection, physically, at the Office of the Federal Register in
Washington, D.C. To the contrary, the Office itself explains that until
“[a] few years ago, our public inspection service was quite literally a
desktop piled high with paper documents,” which meant that, “as a
practical matter, public access was limited to a few Beltway insiders.”5
And while public inspection documents are now available online, the
website warns readers, in bolded lettering, that “[o]nly official
editions of the Federal Register provide legal notice to the
public and judicial notice to the courts.”6

Fed. Register, Pub. Inspection Documents, www.federalregister.gov/
reader-aids/office-of-the-federal-register-blog/2011/11/public-inspectiondocuments (last visited April 2, 2018).
5

Fed. Register, Pub. Inspection Issue, www.federalregister.gov/
public-inspection/current (last visited April 2, 2018).
6

13

In short, interpreting the filing deadline in section 32909(b) to run
from the date of publication is faithful to the statute’s text, to this
Court’s decision in Abraham, and to the provision’s statutory history. It
also provides a clear, readily administrable bright line that ensures
sufficient notice and finality for all petitioners. Indeed, it aligns section
32909(b) with the “general rule that the limitations period begins to run
from the date of publication in the Federal Register.” DunnMcCampbell Royalty Interest, Inc. v. Nat’l Park Serv., 112 F.3d 1283,
1287 (5th Cir. 1997). This interpretation of the statute is thus the far
more “logical,” “reasonable,” and “fair” approach. AAM57.
2.

Respondents and Alliance are also wrong in asserting that

the filing deadline in section 32909(b) is jurisdictional. Like an ordinary
claim-processing rule, the deadline “uses mandatory language, [but]
does not expressly refer to subject-matter jurisdiction or speak in
jurisdictional terms.” Musacchio v. United States, 136 S. Ct. 709, 717
(2016); compare Matuszak v. Comm’r of Internal Revenue, 862 F.3d 192,
196 (2d Cir. 2017) (identifying a “rare” filing deadline that does “speak
in clear jurisdictional terms”).
Rather than identify the required clear jurisdictional terms,
Respondents suggest a different test applies here because the filing
14

deadline is not a “statute of limitations.” RESP21. But the Supreme
Court regards all “filing deadlines,” not just statutes of limitations, as
“quintessential claim-processing rules.” United States v. Kwai Fun
Wong, 135 S. Ct. 1625, 1632 (2015) (quoting Henderson v. Shinseki, 562
U.S. 428, 435 (2011)); see also Sebelius v. Auburn Reg’l Med. Ctr., 568
U.S. 145, 154-55 (2013) (collecting other filing deadlines).
Respondents therefore err by “disregard[ing] the Supreme Court’s
many opinions discussing the difference between jurisdictional and
claim-processing rules,” Clean Water Action Council v. EPA, 765 F.3d
749, 751 (7th Cir. 2014), and relying instead on cases that predate the
Court’s recent, concerted effort to “ward off profligate use of the term
‘jurisdiction,’” Sebelius, 568 U.S. at 153. Indeed, the Supreme Court has
already rejected Respondents’ claim that the filing deadline is
jurisdictional simply because it appears within section 32909’s broader
grant of jurisdiction to this Court. RESP21. Rather, a deadline that
“would otherwise classify as nonjurisdictional … does not become
jurisdictional simply because it is placed in a section of a statute that

15

also contains jurisdictional provisions.” Sebelius, 568 U.S. at 155 (citing
Gonzalez v. Thaler, 565 U.S. 134, 146-47 (2012)).7
Neither Respondents nor Intervenors dispute that equitable
tolling is warranted here if section 32909(b) is not jurisdictional. See
Wong, 135 S. Ct. at 1631-32. Thus, were this Court to abrogate
Abraham’s interpretation that “prescribed” in the “judicial review
provisions of the EPCA” means “publication in the Federal Register,”
355 F.3d at 196 & n.8, the Court should still treat the petition as timely
because Petitioners relied “in good faith on then-binding circuit
precedent” in determining when to file. Harris v. Carter, 515 F.3d 1051,
1055 (9th Cir. 2008).
C.

Petitioners’ challenge belongs in this Court

Although Respondents and Alliance devote significant attention to
49 U.S.C. § 32909, Association of Global Automakers (Global) argues
that this case belongs in district court because section 32909 does not
apply here at all. AGA56-60. Global’s argument fails to properly account
for this Court’s opinion in Abraham.

Alliance’s “similar proximity-based argument,” Sebelius, 568 U.S. at
155—i.e., that the filing deadline and jurisdictional grant originally
appeared in the same paragraph, AAM58-59—fails for the same reason.
7

16

Like the present case, Abraham involved an agency’s attempt to
suspend the effective date of a final rule prescribed by the prior
administration. See 355 F.3d at 189-90. Some of the same petitioners as
here—including Natural Resources Defense Council (NRDC) and the
States of New York, California, and Vermont—wished to challenge
those suspensions as ultra vires, but were uncertain where to file. Thus,
they filed challenges in both this Court and the district court. Id.
Petitioners argued that the challenge more properly belonged in
district court because the agency “did not have authority to delay the
effective date of the Final Rule,” and thus the delays did not,
technically, constitute “rule[s] prescribed under [EPCA].” New York v.
Abraham, 199 F. Supp. 2d 145, 149-50 (S.D.N.Y. 2002). The district
court rejected that argument. Id. at 150-52.
This Court affirmed. The Court explained that the agency’s power
to prescribe the delays “derive[d], if at all, from Congress’s general
grant of authority [to the agency] in the EPCA.” Abraham, 355 F.3d at
194. The Court also explained that “when there is a specific statutory
grant of jurisdiction to the court of appeals,” as in the consumerappliance provisions of EPCA, 42 U.S.C. § 6306(b), “it should be
construed in favor of review by the court of appeals.” Id. at 193; accord
17

Cal. Energy Comm’n v. Dep’t of Energy, 585 F.3d 1143, 1148-50 (9th Cir.
2009) (determining that agency’s denial of preemption waiver fell
within direct review provision of EPCA). The Court therefore concluded
that “the delays should be treated as ‘rule[s] prescribed under [EPCA]’
for purposes of determining jurisdiction.” Abraham, 355 F.3d at 194.
Now, despite this Court having previously ruled that suspensions
of final rules “fall within the EPCA’s grant of jurisdiction to this court,”
id., Global argues—without discussing Abraham—that Petitioners
should have filed the instant challenge in the district court.
This case belongs in the court of appeals pursuant to Abraham.
Here too, because “there is a specific statutory grant of jurisdiction to
the court of appeals” in the fuel-economy provisions of EPCA, 49 U.S.C.
§ 32909(a), “it should be construed in favor of review by the court of
appeals.” 355 F.3d at 193. And like with the consumer-appliance
provisions in Abraham, the “statutory structure of the jurisdictional
provisions of the [fuel-economy] portion of the [Act] favors finding
jurisdiction in this court.” Id. Section 32909(a) broadly confers
jurisdiction in the court of appeals to challenge rules “prescribed in
carrying out any of sections 32901-32904 or 32908,” as well as rules

18

“prescribed under section 32912(c)(1).” Section 32915 also provides for
direct appellate review of any civil penalties assessed by the agency.
Therefore, as in Abraham, “most acts undertaken by [the agency]
under its grant of authority regarding [the fuel-economy program] are
subject to review by the court of appeals, and there is no clear
expression of legislative intent that amendments to the effective dates
of rules … are excepted from this requirement.” Id. Moreover, even if it
is ambiguous “whether jurisdiction lies with a district court or with
[the] court of appeals,” this Court “must resolve that ambiguity in favor
of review by a court of appeals.” Id. (quoting Nat’l Parks & Conservation
Ass’n v. FAA, 998 F.2d 1523, 1529 (10th Cir. 1993)); see also Clark v.
CFTC, 170 F.3d 110, 114 (2d Cir. 1999) (observing that this is
“especially true” where Congress conferred “extensive jurisdiction” on
the court of appeals to review related agency decisions).
Global devotes the bulk of its attention to whether the Civil
Penalties Rule was prescribed under section 32912(c)(1) of EPCA, or
instead under the Inflation Adjustment Act. AGA58-59. But Petitioners
have sought review of the Suspension Rule, not the Civil Penalties Rule.
And no one—not even Respondents—contend that the Suspension Rule

19

was prescribed under that other statute.8 To the contrary, the agency in
the Suspension Rule invoked its “statutory authority to administer the
[fuel-economy] standards program,” and cited sections 32902 and 32912
of EPCA as “[a]uthority.” JA78. Even now, the agency continues to
defend the Suspension Rule as purportedly authorized by EPCA.
RESP39 (“[EPCA] directs NHTSA to implement the [fuel-economy]
program, and the agency exercised that authority here.”).
Petitioners of course contest that authority, as they did in
Abraham. But this Court explained there that any such power “derives,
if at all, from Congress’s general grant of authority” over the relevant
regulatory program. 355 F.3d at 194 (emphasis added). Thus, as in

In any event, the Civil Penalties Rule was prescribed, at least in
part, under section 32912(c)(1) because the rule responded to a petition
for rulemaking under that provision. JA51-53; see JA1-14. The agency
also based much of that rule on section 32902(a)(2) and (b)(3). JA53.
Thus, even a challenge to that rule likely would fall within section
32909(a). See Sutton v. U.S. Dep’t of Transp., 38 F.3d 621, 625 (2d Cir.
1994) (where agency decision was “made in substantial part” pursuant
to statutory provision providing for direct review, “exclusive jurisdiction
to review that determination rests with this Court”). Notably,
Respondents have also suggested that challenges to “any new rule
setting [fuel-economy] penalty rates” would fall within section 32909.
Resp.’s Opp. to Mots., ECF 107, at 10.
8

20

Abraham, the Suspension Rule “should be treated” as a rule prescribed
under EPCA “for purposes of determining jurisdiction.” Id.
II.

The Suspension Rule Violates Three Basic Principles
A.

The agency lacks authority to indefinitely suspend a
final rule subject to statutory deadlines

Before suspending a final rule, an agency must point to something
in the governing statutes or the Administrative Procedure Act (APA)
that gives it authority to do so. Clean Air Council v. Pruitt, 862 F.3d 1, 9
(D.C. Cir. 2017). Respondents still have identified no such authority
here.
Instead, Respondents mischaracterize Petitioners’ argument as
urging a “categorical prohibition against delaying the effective date of
an earlier rule.” RESP35. But Petitioners do no such thing. Rather,
Petitioners merely observe that an agency lacks “inherent power” to
suspend a final rule and therefore must identify some statutory
authority for its actions. Clean Air Council, 862 F.3d at 9 (citing
Abraham, 355 F.3d at 202); see also Lisa Heinzerling, Unreasonable
Delays, 12 Harv. L. & Pol’y Rev. 13, 21-30 (2018) (explaining how
agencies, including NHTSA here, have failed to identify legal authority
for their recent delays or suspensions of final rules).

21

It is therefore neither relevant nor surprising that Respondents
and Intervenors identify instances over the years where agencies have
delayed the effective dates of some rules. RESP32-34; AGA37-39; see,
e.g., ASG Indus., Inc. v. Consumer Prod. Safety Comm’n, 593 F.2d 1323,
1334-35 & nn.48-49 (D.C. Cir. 1979) (identifying 15 U.S.C. § 2058(d)
(1976) as authority for the delay). Indeed, especially where delays are
brief and time-bounded (like the initial temporary delays in this case),
the public may have little incentive or ability to contest whether the
agency properly identified its statutory authority.
Far more telling is that neither Respondents nor Intervenors
identify any caselaw supporting an agency’s authority to do what
NHTSA has attempted here: to suspend—indefinitely—a final rule that
is subject to statutory deadlines. That is because agencies lack such
authority. See NRDC v. Reilly, 976 F.2d 36, 40-41 (D.C. Cir. 1992);
Sierra Club v. Pruitt, No. 17-cv-06293-JSW, slip op. at 7-11 (N.D. Cal.
Feb. 16, 2018). Even President Trump’s original Chief of Staff
understood this. JA55 (instructing agencies not to delay the effective
date of final rules that are “subject to statutory … deadlines”).
NRDC v. Reilly is directly on point. There, the Environmental
Protection Agency (EPA) suspended the effectiveness of final emissions
22

regulations while it reconsidered them. 976 F.2d at 38-39. NRDC sued,
challenging the agency’s authority to suspend the regulations. Id. at 40.
EPA claimed that its “general authority” to administer the regulatory
program “includes the power to stay regulations already promulgated.”
Id. The D.C. Circuit rejected that argument. It observed that the Clean
Air Act “mandated a highly circumscribed schedule” for the
promulgation of emissions regulations. Id. at 41. “In the face of such a
clear statutory command,” the court held, “we cannot conclude that [the
agency’s general authority] provided the EPA with the authority to stay
regulations that were subject to the deadlines established by [statute].”
Id. Because the court concluded that EPA lacked authority “to suspend
the [regulations],” it “grant[ed] the petition for review and vacate[d] the
[suspension].” Id.
The same outcome is required here. The agency’s general
“statutory authority to administer the [fuel-economy] program,” JA78,
does not allow it to suspend the long-overdue adjustment to its civil
penalties. Congress provided a “clear statutory command,” Reilly, 976
F.2d at 41, that the initial adjustment “shall take effect not later than
August 1, 2016,” followed by annual inflation adjustments “not later
than January 15 of every year thereafter.” 28 U.S.C. § 2461 note,
23

sec. 4(a), (b)(1)(B). This Court has explained that “when, as here, a
statute sets forth a bright-line rule for agency action, such as … ‘Not
later than December 31, 1980, and at five-year intervals thereafter’ …,
there is no room for debate—[C]ongress has prescribed a categorical
mandate that deprives [the agency] of all discretion over the timing of
its work.” Am. Lung Ass’n v. Reilly, 962 F.2d 258, 263 (2d Cir. 1992).9
Respondents again mischaracterize Petitioners’ argument as
suggesting that these deadlines preclude the agency’s reconsideration of
the penalty increase. RESP37-38. But as Respondents acknowledge, the
agency’s “ongoing reconsideration” is not before this Court. RESP4. This
case challenges only the indefinite suspension of the penalty increase.
Thus, Petitioners contend simply that the date-certain statutory
deadlines—including for subsequent annual adjustments, which

The “[e]xception” that Respondents reference, RESP37-38, is to the
“otherwise required amount” of the initial adjustment, 28 U.S.C. § 2461
note, sec. 4(c), not to the statutory deadlines. Respondents’ suggestion
that the exception somehow authorizes an agency to suspend the initial
adjustment indefinitely would violate the “clear purpose of the Act,”
which is to require “expeditious” and recurring adjustments, and lead to
the “absurd result of permitting the perpetual delay” of any adjustment
whatsoever. Sierra Club, slip op. at 11.
9

24

Respondents and Intervenors entirely ignore in their briefs—preclude
the agency from suspending the inflation adjustment indefinitely.
Finally, Global spends much of its brief critiquing the Civil
Penalties Rule. E.g., AGA30-36. But like the reconsideration, that
“earlier rule” is not before the Court. RESP4. In any event, if Global
thought that earlier rule should not take effect because it was unlawful,
Global could have challenged it and sought a stay under 5 U.S.C. § 705.
In fact, that clear statutory solution to Global’s purported problem,
AGA41-42, highlights the absence of any similar authority for the
agency’s suspension here. And to the extent Global complains about the
burdens of litigating the earlier rule, this Court rejected the same
argument in Abraham: There, the agency complained that, without its
asserted “inherent power,” “an aggrieved party’s only recourse, should it
believe [a rule flawed or unlawful], would be to petition the court of
appeals for review.” 355 F.3d at 203. “But,” this Court explained, “that
is precisely what the EPCA contemplates.” Id. So too here.
B.

Indefinitely suspending the final rule required notice
and comment

In any event, even if the agency had some authority to suspend
the penalty increase, the Suspension Rule is still unlawful because the

25

agency violated the APA by failing to provide notice and opportunity to
comment. NRDC33-41. Numerous courts, including this one, have
rejected the arguments Respondents put forth here.
First, contrary to Respondents’ suggestion, RESP39-40, the
indefinite suspension is not exempt from the APA’s notice-and-comment
requirement as some mere procedural rule. Rather, as courts have
consistently held, “agency action which has the effect of suspending a
duly promulgated [rule] …. constitutes rulemaking subject to notice and
comment requirements.” Envtl. Def. Fund v. Gorsuch, 713 F.2d 802, 816
(D.C. Cir. 1983); see Open Communities All. v. Carson, No. 17-cv-2192BAH, 2017 WL 6558502, at *10 (D.D.C. Dec. 23, 2017) (collecting cases);
Heinzerling, supra, at 31-34 (explaining why “delays of the effective
dates of final rules are not plausibly conceived of as procedural rules”).
Suspending the effective date of a final rule is tantamount to an
amendment or revocation, and substantively changes the law. See
NRDC v. EPA, 683 F.2d 752, 762-63 & n.23 (3d Cir. 1982). That is
especially so here, where the agency’s suspension “will remain in effect
indefinitely unless and until the agency completes a full notice and
comment rulemaking proceeding.” Pub. Citizen v. Steed, 733 F.2d 93, 98
(D.C. Cir. 1984); see also IPI17-23 (explaining how the Suspension Rule
26

changed the status quo). “Thus, on its face, the suspension” of the Civil
Penalties Rule was a substantive rule “subject to APA notice and
comment provisions.” Envtl. Def. Fund v. EPA, 716 F.2d 915, 920 (D.C.
Cir. 1983).
The agency’s reliance on the “good cause” exception of the APA
fares no better. That exception—which applies only where notice and
comment are “impracticable, unnecessary, or contrary to the public
interest,” 5 U.S.C. § 553(b)(B)—“should be narrowly construed and only
reluctantly countenanced.” Abraham, 355 F.3d at 204 (quoting Zhang,
55 F.3d at 744).
Respondents no longer seriously contend that the agency’s desire
to reconsider the Civil Penalties Rule on the eve of its (thrice delayed)
effective date rendered notice and comment “impracticable.” See
RESP44-45. This Court and others have repeatedly rejected the
argument. See Abraham, 355 F.3d at 205; NRDC v. EPA, 683 F.2d at
765 & n.25. Indeed, since Petitioners filed their opening brief, yet
another court has explained that an agency’s “desire to have time to
review, and possibly revise or repeal, its predecessor’s regulations falls
short of th[e] exacting standard” required to invoke the good cause

27

exception. Pineros y Campesinos Unidos del Noroeste v. Pruitt, No. 17cv-03434-JSW, slip op. at 6 (N.D. Cal. Mar. 21, 2018).
Courts have also consistently rejected Respondents’ argument
that notice and comment were “unnecessary” because the agency, after
suspending the penalty increase, “invit[ed] public comment about the
substantive issues in the related reconsideration proceeding.” RESP43.
Allowing subsequent comments on the rule’s reconsideration “cannot
replace” the requirement to solicit comments, beforehand, on the
separate question of “whether the rule should [have] be[en] postponed”
during the reconsideration. NRDC v. EPA, 683 F.2d at 768; see also
Abraham, 355 F.3d at 206 n.14. In fact, the agency’s failure to
adequately justify its suspension here (see infra § II.C) “highlight[s] the
need for notice and comment” before the “indefinite postponement” of
the final rule. NRDC v. EPA, 683 F.2d at 767.10
This very litigation—involving two industry Intervenors, five
States, three Environmental Petitioners, and an Amicus—also

The suspension was also expressly “indefinite[],” JA77, and thus
not “temporally limited [in] scope,” as Respondents erroneously suggest,
RESP41 (quoting Mid-Tex Elec. Coop. v. FERC, 822 F.2d 1123, 1132
(D.C. Cir. 1987)); see also AAM2 (erroneously describing the suspension
as a “temporary deferment”).
10

28

disproves Respondents’ further contention that notice and comment
were unnecessary because the suspension was purportedly
“inconsequential to the industry and to the public.” RESP43 (quoting
Util. Solid Waste Activities Grp. v. EPA, 236 F.3d 749, 755 (D.C. Cir.
2001)). In fact, Intervenors themselves flatly contradict that contention
by attempting to justify the suspension based on “immediate economic
consequences” to industry. AGA53-55.
Nor do the economic consequences cited by Intervenors provide
any basis to withhold notice and comment. Unlike an “imminent threat
to the environment or safety or national security,” industry compliance
costs do not constitute good cause. Mack Trucks, Inc. v. EPA, 682 F.3d
87, 93 (D.C. Cir. 2012). And here, implementing fuel-saving technology
to comply with governing fuel-economy standards “cannot constitute a
threat to the public interest.” Abraham, 355 F.3d at 205.
C.

The agency never explained why it did not leave the
final rule in place during the reconsideration

Finally, the Suspension Rule is also arbitrary and capricious
because the agency failed to “justify the indefinite suspension.” Steed,
733 F.2d at 100. The agency provided reasons why it wished to
reconsider the Civil Penalties Rule. JA80-81. But the agency never

29

justified the “separate” and “discrete action” of suspending that rule
during the reconsideration. California v. BLM (California II), No. 17-cv07186-WHO, 2018 WL 1014644, at *6 (N.D. Cal. Feb. 22, 2018). The
agency “did not explain” why the penalty increase “could not have
continued while the agency” reconsidered it. Steed, 733 F.2d at 102.
Attempting to provide some explanation now, Respondents and
Intervenors point to the agency’s assertion that the Civil Penalties Rule
“did not give adequate consideration to all of the relevant issues.”
RESP26 & AGA47 (quoting JA77). But they noticeably omit the first
half of that assertion, which makes plain that it purported to justify the
reconsideration, not the suspension. JA77 (“NHTSA is now
reconsidering the final rule because the final rule did not give adequate
consideration to all of the relevant issues.” (emphasis added)).
Moreover, the agency’s desire to further consider certain issues, and
possibly revise the penalty rate at some (unspecified) later date, does
not justify suspending the penalty increase altogether in the meantime.
The agency “cannot use” a possible “future revision, which has yet to be
passed, as a justification for the Suspension Rule.” California II, 2017
WL 1014644, at *6. Thus here, as in Steed, because the agency “did not
‘cogently explain’ why suspension was necessary” when the Civil
30

Penalties Rule “could have been retained” during the reconsideration,
“NHTSA’s ‘indefinite suspension’” of the rule is “arbitrary and
capricious.” 733 F.2d at 102.
Tellingly, Respondents now also rely on reasons the agency never
mentioned before—for example, a newfangled argument that the
monetary “civil penalty” for fuel-economy violations, 49 U.S.C. § 32912,
is not a “‘civil monetary penalt[y]’ at all,” RESP28. “The short—and
sufficient—answer to [this argument] is that the courts may not accept
appellate counsel’s post hoc rationalizations for agency action.” Motor
Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 50
(1983). Indeed, Respondents candidly acknowledge that this new (and
tortured) explanation is “not before the Court in this case.” RESP28.
Thus, Respondents’ “post hoc explanations serve only to underscore the
absence of an adequate explanation in the administrative record itself.” 
Humane Soc’y v. Locke, 626 F.3d 1040, 1050 (9th Cir. 2010).
Respondents’ related argument regarding “legal uncertainty,”
RESP29, is irrelevant for the same reason: the agency never invoked
that justification below. The justification would fail anyway. See
California v. BLM (California I), 277 F. Supp. 3d 1106, 1120 (N.D. Cal.
2017) (describing the harmful regulatory uncertainty that arises from
31

unilateral suspensions of final rules); Heinzerling, supra, at 37-39
(similar); IPI23-25 (similar). Nor can Intervenors justify the suspension
based on the penalty increase’s potential economic consequences.
AGA53-55. That justification would be inconsistent with the agency’s
assertion that there was purportedly “no … concrete impact from the
delay.” JA78; see Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117,
2126 (2016) (“[u]nexplained inconsistency” is “arbitrary and
capricious”).
In any event, even if the agency provided some valid reasons for
the suspension (which it did not), the suspension is still arbitrary and
capricious because the agency “failed to consider [other] important
aspect[s] of the problem.” State Farm, 463 U.S. at 43. First, the agency
never explained how the indefinite suspension was consistent with the
statutory deadlines for the initial and annual inflation adjustments,
despite having previously recognized that the agency was “required by
the Act to continue adjusting the civil penalty for inflation each year.”
JA53. Thus, “[i]n light of the express statutory command” for inflation
adjustments by particular dates, “NHTSA’s ‘indefinite suspension’ …
was arbitrary and capricious.” Steed, 733 F.2d at 105.

32

Second, the agency also failed to consider the benefits of leaving
the penalty increase in place to deter fuel-economy violations during the
reconsideration. See IPI6-17 (describing this failure). The agency
previously recognized that the Civil Penalties Rule “will accomplish
[the] goal of encouraging manufacturers to apply more fuel-saving
technologies to their vehicles.” JA53. But “the agency was too quick to
dismiss [those] benefits” when it later suspended the increase. State
Farm, 463 U.S. at 51. “[G]iven the judgment made” by the agency about
the Civil Penalties Rule’s beneficial effects, that rule “may not be
abandoned”—or suspended indefinitely—“without any consideration
whatsoever” of leaving it in place during the reconsideration. Id. By
ignoring those potential benefits, the agency’s suspension “failed to take
this ‘important aspect’ of the problem into account and was therefore
arbitrary [and capricious].” California I, 277 F. Supp. 3d at 1122.
III. Vacatur Is The Appropriate Remedy
The APA provides that a reviewing court “shall … set aside”
unlawful agency actions. 5 U.S.C. § 706(2). Thus, “[i]n the usual case,
when an agency violates its obligations under the APA,” this Court “will
vacate” the agency’s unlawful action. Guertin v. United States, 743 F.3d
382, 388 (2d Cir. 2014); see also, e.g., Time Warner Cable, Inc. v. FCC,
33

729 F.3d 137, 171 (2d Cir. 2013) (concluding a rule was “promulgated in
violation of the APA’s notice-and-comment requirements and, therefore,
… order[ing] that it be vacated”).
Respondents offer no reason why the Court should deviate from
this usual practice here. Instead, they simply assert that the Court
should remand without vacatur if it finds the Suspension Rule
unlawful. RESP31, 45 n.17. That unusual remedy would be entirely
inappropriate here.
First and foremost, the agency’s violations are fundamental. The
indefinite suspension directly contravenes clear and consistent caselaw,
including from this Court. And the agency has provided “no legitimate
reason whatsoever” for “ignor[ing] the commands of the APA.” Envtl.
Def. Fund v. EPA, 716 F.2d at 921. Nor would vacatur be particularly
disruptive: “vacating the [Suspension] Rule would simply allow the
[Civil Penalties] Rule to take effect, as the agency originally intended.”
Nat’l Venture Capital Ass’n v. Duke, No. 17-cv-1912-JEB, 2017 WL
5990122, at *12 (D.D.C. Dec. 1, 2017).
Moreover, remanding without vacatur would give the agency a
“free pass” for “exceed[ing] [its] statutory authority and ignor[ing] [its]
legal obligations under the APA.” California I, 277 F. Supp. 3d at 1126.
34

In fact, that remedy would reward the agency’s unlawful behavior by
allowing it to continue to leave the decades-old penalty in place
indefinitely. See, e.g., NRDC v. EPA, 489 F.3d 1250, 1264 (D.C. Cir.
2007) (Randolph, J., concurring) (“A remand-only disposition is, in
effect, an indefinite stay … and agencies naturally treat it as such.”).
Nor does the agency’s (very) recent proposed rule matter. Any new final
rule “is unlikely to go into effect for a number of months,” at the very
earliest. California I, 277 F. Supp. 3d at 1127. And given the agency’s
fundamental failures here, “there is no certainty that [the proposed
rule] will survive potential legal challenge.” Id.
In short, the Court should follow “the general rule in favor of
vacatur.” Id. And to provide clarity and regulatory certainty, the Court
should declare that the applicable penalty rate remains $14 for Model
Years 2019-and-after unless and until the agency issues a new final
rule changing that rate.
CONCLUSION
For the foregoing reasons, the Court should vacate the unlawful
Suspension Rule, reinstate the Civil Penalties Rule, and declare that
the fuel-economy penalty rate is $14 for Model Years 2019-and-after.

35

Dated: April 3, 2018

Respectfully submitted,
/s/ Ian Fein
Ian Fein
Irene Gutierrez
Michael E. Wall
Natural Resources Defense Council
111 Sutter Street, 21st Floor
San Francisco, CA 94104
[phone]
[e-mail]
Counsel for Petitioner Natural
Resources Defense Council
Alejandra Núñez
Joanne Spalding
Sierra Club
2101 Webster Street, Suite 1300
Oakland, CA 94612
[phone]
[e-mail]
Counsel for Petitioner Sierra Club
Vera Pardee
Howard Crystal
Center for Biological Diversity
1212 Broadway, Suite 800
Oakland, CA 94612
[phone]
[e-mail]
Counsel for Petitioner Center for
Biological Diversity

36

CERTIFICATE OF COMPLIANCE
Pursuant to Federal Rule of Appellate Procedure 32(g), I certify
that this Reply Brief complies with the type-volume limitations of
Second Circuit Rule 32.1(a)(4)(B) because it contains 6,918 words,
excluding parts of the document exempted by Rule 32(f).

Dated: April 3, 2018

/s/ Ian Fein
Ian Fein

37

CERTIFICATE OF SERVICE
I hereby certify that I electronically filed the foregoing with the
Clerk of the Court for the United States Court of Appeals for the Second
Circuit by using the appellate CM/ECF system on April 3, 2018.
I certify that all participants in the case are registered CM/ECF
users and that service will be accomplished by the appellate CM/ECF
system.
/s/ Ian Fein
Ian Fein

38