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Case 1:08-cv-07837-PAC Document 51 Filed 10/31/2008 Page 22 of 26 judgment of February 7, 2008 by the district court in California on final remand in Engine Manufacturers. The judgment was based upon a stipulated settlement that the fleet restrictions were “not preempted by the Clean Air Act Section 209(a), 42 U.S.C. § 7543(a), in so far as they direct the purchasing, procuring, leasing, and contracting decisions of state and local government entities . . . and private entities under contract to, or operating under an exclusive license or a franchise with, state and local government entities.” (See Pejan Decl. Corrected Ex. 3 ¶ 1) (emphasis added). There is absolutely no evidence of how this bargain was struck, what its true purpose is, or why the parties decided to settle. Nevertheless, the City claims that this settlement supports the position that since the taxicabs are exclusively licensed by the City, the 25/30 Rules are not preempted. The Court rejects this argument. To begin, a settlement is not a decision on the merits, thus this stipulated judgment from the California district court has no precedential value whatsoever. Secondly, while the TLC exclusively licenses the many private taxicab operators in New York City, that is not the same as saying that each private taxi operator is an exclusive licensee of the TLC. A plain reading of the EPCA preemption clause, § 32919(a), and the 25/30 Rules leads to the conclusion that the 25/30 Rules relate to fuel economy standards and are most likely expressly preempted by the EPCA. Defendants’ counterarguments—that the rules do not “relate to” fuel economy standards, that the City falls into the “own use” savings clause, that the City is a market participant—are unconvincing. Accordingly, Plaintiffs have shown a likelihood of success on the merits on this part of their claim. B. Preemption Under the CAA The Clean Air Act empowers the Environmental Protection Agency (“EPA”) to promulgate regulations necessary to prevent deterioration of air quality. 42 U.S.C. § 7601(a); 22
Case 1:08-cv-07837-PAC Document 51 Filed 10/31/2008 Page 23 of 26 Cent. Valley Chrysler-Jeep, Inc. v. Goldstene, 529 F. Supp. 2d 1151, 1156 (E.D. Cal. 2007). Part of the EPA’s mandate under the CAA is to set standards relating to emissions from new vehicles. 42 U.S.C. § 7521(a)(1). The CAA also contains a preemption provision at § 209(a): 42 U.S.C. § 7543(a). No State or any political subdivision thereof shall adopt or attempt to enforce any standard relating to the control of emissions from new motor vehicles or new motor vehicle engines . . . No State shall require certification, inspection, or any other approval relating to the control of emissions from any new motor vehicle or new motor vehicle engine as condition precedent to the initial retail sale, titling . . . or registration of such motor vehicle, motor vehicle engine, or equipment. While the CAA only relates to the regulation of vehicle and engine emissions, Plaintiffs argue that the TLC 25/30 Rules—which govern fuel economy—are a de facto regulation of emissions and that the purpose of the rules is to regulate emissions. (See Saylor Decl. Ex. A ¶¶ 100-02.) The issue here is whether Plaintiffs have a likelihood of success in demonstrating that TLC regulations imposing fuel economy standards are preempted by the CAA when the regulations at issue do not mention or target emissions. 1. Relevant Case Law A state or municipal law that clearly targets emissions in new vehicles is generally preempted under the CAA. For instance, courts have held that § 209(a) preempts states from requiring that a percentage of new vehicles certified for sale in that state be “zero emissions vehicles” (“ZEVs”). See Am. Auto. Mfrs. Ass’n v. Cahill, 152 F.3d 196, 200 (2d Cir. 1998) (finding that while the New York law did not “impose precise quantitative limits on levels of emissions,” the ZEV sales requirement nevertheless “must be considered a standard ‘relating to the control of emissions’” because the law had no purpose other than to effect a general 23
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