FOR PUBLICATION UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT IN RE VOLKSWAGEN “CLEAN No. 18-15937 DIESEL” MARKETING, SALES PRACTICES, AND PRODUCTS D.C. No. LIABILITY LITIGATION, 3:15-md-02672- CRB THE ENVIRONMENTAL PROTECTION COMMISSION OF HILLSBOROUGH OPINION COUNTY, Florida; SALT LAKE COUNTY, Plaintiffs-Appellants, v. VOLKSWAGEN GROUP OF AMERICA, INC.; AUDI OF AMERICA, LLC; PORSCHE CARS NORTH AMERICA, INC.; ROBERT BOSCH, LLC; ROBERT BOSCH GMBH, Defendants-Appellees. Appeal from the United States District Court for the Northern District of California Charles R. Breyer, District Judge, Presiding 2 IN RE VOLKSWAGEN LITIGATION Argued and Submitted August 6, 2019 Anchorage, Alaska Filed June 1, 2020 Before: Richard C. Tallman, Sandra S. Ikuta, and N. Randy Smith, Circuit Judges. Opinion by Judge Ikuta SUMMARY* Clean Air Act / Preemption The panel affirmed in part, and reversed in part, the district court’s dismissal of complaints brought by two counties against Volkswagen after it installed defeat devices in new cars, and subsequently modified those devices post sale, for the purpose of evading compliance with federally mandated emission standards. Volkswagen settled the Environmental Protection Agency (“ EPA”)’s criminal and civil actions for over $20 billion, but failed to obtain a release of liability from state and local governments. In this action, two counties sought to impose penalties for violation of their laws prohibiting tampering with emission control systems. The district court held that the counties’ actions were preempted by the Clean Air Act. * This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. IN RE VOLKSWAGEN LITIGATION 3 The panel agreed with the district court that the Clean Air Act expressly preempted state and local government efforts to apply anti-tampering laws to pre-sale vehicles. The panel disagreed with the district court’s ruling that the Clean Air Act impliedly preempted state authority to enforce anti- tampering laws against post-sale vehicles. The panel held that the Clean Air Act did not prevent the two counties here from enforcing their regulations against Volkswagen for post- sale vehicles. The panel rejected Volkswagen’s assertions that the counties’ anti-tampering rules were preempted under ordinary preemption principles. First, Volkswagen argued that Congress intended to give the EPA exclusive oversight over post-sale compliance with emission standards on a model- wide basis, and the counties’ anti-tampering rules posed an obstacle to this goal. The panel saw no indication that Congress intended to preempt state and local authority to enforce anti-tampering rules on a model-wide basis. Second, Volkswagen argued that the Clean Air Act’s penalty provision, 42 U.S.C. § 7524, showed that Congress struck a balance of interests with respect to the imposition of penalties, and this balance would be disturbed if states could impose their own penalties for tampering with post-sale vehicles. The panel held that the Clean Air Act’s cooperative federalism scheme, its express preservation of state and local police powers post sale, and the complete absence of a congressional intent to vest in the EPA the exclusive authority to regulate every ...
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