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Case 1:08-cv-07837-PAC Document 51 Filed 10/31/2008 Page 18 of 26 Defendants make several arguments against preemption. First, they urge that the 25/30 Rules do not “relate to” fuel economy standards because the 25/30 Rules do not interfere with the objectives of the EPCA. To support this argument Defendants quote a passage from a NHTSA rulemaking report, which states: “EPCA’s express preemption provision cannot be interpreted as preempting all State laws relating to a fuel economy standard, no matter how tangential the relationship.” See Average Fuel Economy Standards for Light Trucks Model Years 2008-2011, 71 Fed. Reg. 17566, 17670 (April 6, 2006). This quote is taken out of context. When the entire passage is read it becomes clear that the statement summarizes NHTSA’s view that not all emissions standards should be preempted under the EPCA, a position endorsed by this Court. See infra Part IV(B)(2). Defendants also argue that federal jurisprudence is moving toward an interpretation of the term “related to” in preemption cases as meaning “actually interfering” with the relevant federal regulation. See Abdu-Brisson v. Delta Airlines, Inc., 128 F.3d 77, 82 (2d Cir. 1997) (“‘Related to’ appears to be developing, to some degree, to mean whether state law actually ‘interferes’ with the purposes of the federal statute.”). Thus, Defendants urge, because the 25/30 Rules do not actually interfere with the purpose of the EPCA, the rules should not be preempted. This argument, however, is no longer tenable in light of the Supreme Court’s decision in Engine Manufacturers. The Court found that even though the emissions regulations at issue had a limited impact on the goals of the CAA, allowing one state to enact such a rule could have an unwanted aggregate effect if many states followed suit. See Engine Mfrs., 541 U.S. at 255 (“[I]f one State or political subdivision may enact such rules, then so may any other; and the end result would undo Congress’s carefully calibrated regulatory scheme.”). The teaching of Engine 18
Case 1:08-cv-07837-PAC Document 51 Filed 10/31/2008 Page 19 of 26 Manufacturers requires the rejection of Defendants’ argument that “related to” means “actually affecting” or “interfering.” Second, Defendants claim that the 25/30 Rules are exempted by the “own use” savings clause in § 32919(c) of the EPCA. Defendants argue that taxis are uniquely part of New York City’s public transportation system, and that the language of § 2300 of the New York Charter reflects the TLC’s role in regulating taxis as part of the City’s public transportation network. Defendants also claim that the City’s regulation of the taxicab industry through its licensing system transforms the City into a participant of the taxicab industry, and thus they are protected by the market participant doctrine. This argument tortures both language and logic. Defendants might be exempted from preemption if they could show that the City was a participant in the taxicab industry and that the imposition of the 25/30 Rules was not the act of a market regulator. In Boston Harbor, the Court found that the market participant exception could apply when a state act was more akin to proprietary conduct than to government regulation. 507 U.S. at 232. Likewise, the Court in Engine Manufacturers noted that its CAA preemption decision did not reach the question of whether some of the fleet restrictions were valid as internal state purchase decisions. 541 U.S. at 258-59. On remand, the Ninth Circuit held that the market participant doctrine allowed state and local government entities “to use their own money to acquire or use vehicles that exceed the federal standards.” Engine Mfrs., 498 F.3d 1031, 1043 (9th Cir. 2007). The Ninth Circuit found that the fleet restrictions, limited to the purchase and use of vehicles by the state and local government entities, were proprietary actions, rather than regulatory actions. Id. at 1045-46. Accordingly, the state could impose restrictions on vehicles procured by state municipalities under the market participant doctrine. 19
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