ELR Citation: ELR 21118
No(s). 85-1515 (D.C. Cir. May 17, 1988)

The en banc court divides evenly on whether petitioners have standing to challenge the Environmental Protection Agency's (EPA's) new formulas for calculating automobile fuel efficiency. The court therefore reinstates the original panel decision, which affirmed in part and reversed in part EPA's rule. The court notes that neither the reinstatement of the panel decision nor any of the separate decisions in the en banc opinion have any precedential value on standing.

Five judges hold that petitioners, organizations that represent automobile consumers, have standing to challenge EPA's rule that compensates automobile manufacturers retroactively for changes in fuel economy testing procedures. The justices first hold that petitioners have suffered injury-in-fact. The alleged injury, that petitioners' members will likely face higher prices and will have greater difficulty finding fuel-efficient automobiles, was held a cognizable injury-in-fact in Center for Auto Safety v. National Highway Traffic Safety Administration, 17 ELR 20039. Petitioners do not only allege that they will encounter a diminished range of fuel-efficient cars, but also allege that they will face a diminished number of fuel-efficient cars. Since there will be less of these cars, the price will be driven up and consumers who purchased relatively less fuel-efficient cars will pay more for fuel. Such price increases are classically cognizable economic injuries. The judges hold that the reduction of options for automobile consumers, even before it is possible to identify precisely which model will be phased out, is also a cognizable injury. the judges next hold that petitioners have satisfied the causation and redressability prongs of the standing test. The court holds that EPA's decision to retroactively relax its testing procedures is substantially likely to lessen the availability of fuel-efficient cars. EPA's rule would give Ford and General Motors corporate average fuel economy (CAFE) credits worth hundreds of millions of dollars. The legislative history of the Energy Policy and Conservation Act (EPCA) shows that Congress intended that the availability of CAFE credits, which can be carried back or forward three years, would encourage automakers to exceed minimum fuel economy standards to make up for unanticipated deficiencies in other years. EPA's decision to retroactively reduce the automakers' debits for the 1984 and 1985 model years reduces their incentive to exceed fuel economy standards during the next six model years and thus makes it substantially likely that they will produce fewer fuel-efficient cars. Even if the automakers would not have enough lead time to design more fuel-efficient cars, they could have improved their fuel economy ratings by increasing the supply of fuel-efficient cars by installing more four-speed transmissions in certain models. The judges hold that petitioners' injuries remain redressable even though more than two-and-a-half years have passed since the suit was filed, since EPCA's credit system creates incentives for six years.

Four judges would hold that petitioners lack standing because they have failed to satisfy the causation and redressability prongs. The judges hold that petitioner Environmental Policy Institute's allegation that EPA's rule conflicts with its purpose of advocating a national policy favoring fuel conservation does not constitute injury-in-fact. The judges hold that the other three petitioners' allegation that EPA's action will diminish automakers' incentives to sell a wider range of fuel-efficient vehicles is a cognizable injury. The judges reject petitioners' other theories of injury, including allegations that the public will not receive the energy conservation benefits intended by EPCA and that increased gasoline consumption by the nation will increase the gasoline prices that their members pay. The judges hold that petitioners have failed to satisfy the causation and redressability tests, since there is not a substantial probability that the credit provisions would have induced the automakers to use more advanced technologies in their production models. The automakers have too little lead time to earn credits through technological improvements, which is likely to be the least available and most costly option. Automakers are more likely to restrict domestic production of larger cars and shift their production overseas, and could also elect to pay EPCA fines instead of redesigning their fleets.

One judge joins the four judges in holding that petitioners lack standing. He would hold, however, that petitioners have not alleged a cognizable injury-in-fact. Petitioners' allegation that they are injured because Ford and General Motors will not develop a wider range of fuel-efficient cars falls far short of the constitutional requirements. As long as consumers can choose among virtually interchangeable products, a reduction in supply or termination of one brand cannot constitute a cognizable injury. The theory that EPA's rule would increase the prices of fuel-efficient cars was never advanced by petitioners and is speculative. Recognition of petitioners' consumer injury would virtually eliminate the injury requirement for standing. Even if petitioners have alleged a sufficient injury, petitioners have not satisfied the causation or redressability requirements. Any action that the court may require of EPA will not necessarily cause the automakers to produce a wider variety of fuel-efficient cars. Since the automakers could plausibly take several actions in response to a court order invalidating EPA's rule, there is not a substantial likelihood that a favorable decision will redress the alleged injury.

One of the four judges that would have held that petitioners lack standing because they failed to satisfy the causation and redressability requirements also expresses reservations that petitioners have established injury-in-fact.

[The panel decision is published at 17 ELR 20712.]

Counsel for Petitioners
Cornish F. Hitchcock
Public Citizen Litigation Group
2000 P St. NW, Washington DC 20036
(202) 785-3704

Counsel for Respondents
Raymond B. Ludwiszewski, Assoc. Deputy Attorney General
Office of Deputy Attorney General
Department of Justice, Washington DC 20530
(202) 633-4238

Nancy A. Ketcham-Colwill
U.S. Environmental Protection Agency
401 M St. SW, Washington DC 20460
(202) 382-7606

Before WALD, Chief Judge, and ROBINSON, MIKVA, EDWARDS, RUTH B. GINSBURG, BORK,^[*] STARR, SILBERMAN, BUCKLEY, WILLIAMS, and D.H. GINSBURG, Circuit Judges.