A federal court order is blocking the Trump administration’s delay of a rule that updates the penalties assessed to automakers for non-compliance with federal fuel efficiency standards.
In September, New York Attorney General Eric Schneiderman and California Attorney General Xavier Becerra led a coalition of five attorneys general (New York, California, Vermont, Maryland, and Pennsylvania) in filing a suit to block the Trump administration’s delay of the rule. On April 23, the U.S. Court of Appeals for the Second Circuit issued an order vacating the delay. The three-judge panel declined to elaborate on their thinking in the one-page document but are expected to issue a more detailed explanation of the case on a later date.
Originally set to take effect in July 2017, the rule would increase the penalty imposed on automakers whose vehicle fleets do not meet minimum fuel efficiency standards. The rule was intended to encourage automakers to produce vehicle fleets that meet or exceed federal fuel efficiency standards. All federal agencies were required to increase their civil penalty rates by an act of Congress, the 2015 Federal Civil Penalties Inflation Adjustment Act. In response, the U.S. Department of Transportation issued a rule to increase the penalty by $8.50 per tenth of a mile per gallon.
The Trump administration, however, delayed it and reverted back to the lower penalty rate.
The penalties, as originally envisioned by Congress, would provide increased incentives for auto manufacturers to achieve Corporate Average Fuel Economy (CAFE) Standards for upcoming model years. For model years 2016 through 2025, for example, the standards were estimated to save approximately 1.8 billion metric tons of carbon dioxide emissions over the lifetimes of the vehicles sold.
As the lawsuit filed by the attorneys general explains, in December 2016, the National Highway Traffic Safety Administration announced a rule that increased the penalty rate for violating fuel efficiency standards by $8.50—from $5.50 per tenth of a mile per gallon to $14 per tenth of a mile per gallon. In July 2017, however, the NHTSA announced it was indefinitely delaying the effective date of its updated penalty.
This is unlawful in two ways, the AGs claimed in their lawsuit. The NHTSA acted without notice and without opening a public comment period, a violation of the Administrative Procedure Act. Also, they argued, “this arbitrary delay reinstates the outdated $5.50 penalty rate, which violates the 2015 Federal Civil Penalties Inflation Adjustment Act.”
In a similar petition, the Natural Resources Defense Council, Sierra Club, and the Center for Biological Diversity also challenged the Trump administration’s delay of the rules.