ELR Citation: ELR 20832
No(s). 92-1403 (D.C. Cir. Apr 15, 1994)

The court holds that the U.S. Environmental Protection Agency (EPA) may assess manufacturers of light- and heavy-duty engines and vehicles fees calculated to recoup the costs of administering its emissions standards compliance programs authorized by Clean Air Act (CAA) §217(a), but remands to EPA for a clear explanation of the cost basis for its fee schedule. EPA's three-stage compliance program ensures that light- and heavy-duty engines meet emission standards, and the fees EPA charges manufacturers cover the full cost of administering the program.

The court first holds that EPA may charge manufacturers the full cost of the program. The manufacturers are identifiable beneficiaries of all three stages of the program. Their right to sell complying engines accrues at the first stage, and the second and third stages are integral to the compliance regime that manufacturers submit to when they apply for certification. Moreover, the engines must pass each of the program's tests for manufacturers to keep their products certified for sale and avoid the costs of a recall. The court next holds that EPA's 30-page cost analysis does not reasonably explain the costs basis for its fee proposal. The analysis is not understandable to the concerned public, does not support several key assertions, barely justifies EPA's determination of recoverable labor and labor-related costs, does not explain EPA's choice of method for determining the recoverable portion of any particular type of cost, and is inconsistent. The court remands to EPA for a more detailed justification of the fee schedule. Dismissing the rest of the plaintiff engine manufacturers association's claims, the court holds that CAA §207(c)(1) authorizes EPA to conduct in-use testing for heavy-duty vehicles. The court also upholds EPA's special methods for determining fees for heavy-duty vehicles because they satisfy Congress' intent that EPA charge these manufacturers less than other manufacturers. The court holds that a challenge regarding the possibility that EPA might include certain other costs in the fee schedule in the future is unripe. Finally, the court, believing that EPA will be able to justify the fee schedule, refuses to vacate it.

Counsel for Petitioner
Stephen Fedo
Neal, Gerber & Eisenberg
Two N. La Salle St., Ste. 2200, Chicago IL 60602
(312) 269-8000

Counsel for Respondents
Glen Freyer
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before WALD, BUCKLEY, and GINSBURG, Circuit Judges.