CASE SUMMARIES.

1. ENVIRONMENTAL QUALITY

   1. Clean Air Act

      1. In re Volkswagen "Clean Diesel" Mktg., Sales Practices, & Prod. Liab. Litig., Env't Prot. Comm'n of Hillsborough city of v. Volkswagen Grp. of Am., 959 F.3d 1201 (9th Cir. 2020)

      Various counties from different states (collectively, "Counties") (1) sued group company car manufacturer Volkswagen Aktiengesellschaft and its subsidiaries (collectively, 'Volkswagen") (2) in the United States District Court for the Northern District of California. (3) Counties sought to impose penalties on Volkswagen for violation of their laws prohibiting tampering with emissions control systems in vehicles. The district court agreed with Volkswagen that the Clean Air Act (CAA) (4) preempted Counties' claims. Counties appealed. The Ninth Circuit affirmed in part and reversed in part, ultimately concluding that the CAA does prevent Counties from enforcing their anti-tampering laws against Volkswagen for pre-sale vehicles but does not prevent such enforcement regarding post-sale vehicles.

      Between 2009 and 2015, Volkswagen installed "defeat devices" in new cars for the purpose of evading federally mandated emissions standards. Volkswagen later updated those devices post sale to better avoid detection and compliance. Volkswagen sold approximately 585,000 new vehicles containing a defeat device in the United States during this period. Meanwhile Volkswagen also deliberately misled regulators and consumers by marketing the cars as "clean diesel." After the U.S. Environmental Protection Agency (EPA) discovered the violations in 2017, Volkswagen settled with the EPA for civil and criminal violations of the CAA. Volkswagen's criminal plea agreement did not protect Volkswagen from prosecution by state or local governments. Volkswagen's civil settlement similarly did not release Volkswagen of liability from any state or local government (except California). Volkswagen's resulting liability exceeded $20 billion. Concurrent with the federal litigation, states and counties brought separate lawsuits against Volkswagen for violating state and local anti-tampering laws. In 2016, the multidistrict litigation judicial panel transferred these actions to the United States District Court for the Northern District of California. In 2017, the district court dismissed a suit brought by Wyoming and held that the CAA preempted the state's claim that Volkswagen violated Wyoming law by installing the defeat device in pre-sale vehicles. Subsequently, Counties amended their respective complaints to allege facts relating to both Volkswagen's tampering with pre-sale vehicles and post-sale vehicles. The district court then held (1) the CAA expressly preempts state and local government efforts from applying anti-tampering laws to pre-sale vehicles, and (2) the CAA impliedly preempts such efforts regarding post-sale vehicles. The Ninth Circuit reviewed the District Court's preemption analysis de novo.

      The main question on appeal was whether Counties' anti-tampering regulations were expressly or impliedly preempted by the CAA's motor vehicle emission standards. The Ninth Circuit began its analysis by iterating Supremacy Clause case law and noting that Congress may expressly preempt state law by enacting a clear statement to that effect. The court explained that Congress may also implicitly preempt state law if the federal legislation's stated purpose is so clearly preemptive as to overcome the presumption of retaining historic police powers to the states. Laws can clear this high threshold with "field preemption" and/or "conflict preemption." Conflict preemption may occur either where (a) compliance with state and federal law is impossible, or (b) where state law stands as an obstacle to the purposes of federal law, so-called "obstacle preemption." Further, the Ninth Circuit explained that the regulation of air pollution falls within the historic police powers of the states, and that the CAA maintains a cooperative federalism approach.

      In applying the CAA to the immediate case, the Ninth Circuit first explored whether the CAA's express preemption provision preempts the Counties' anti-tampering rules. Volkswagen argued that the express preemption provision under Section 209(a) (5) preempts Counties' imposition of antitampering rules on pre-sale vehicles. Counties argued that their anti-tampering rules are not "emission standards" under Section 209(a) because they do not attempt to enforce the limitations on emissions of pollutants from new motor vehicles set forth in Section 202 (emission standards for new motor vehicles). Similarly, Counties argued that the anti-tampering rules are not emissions standards because they merely prohibit tampering with emission control systems. The Ninth Circuit concluded that Section 209(a) expressly precludes state or local governments from imposing any restriction that has the purpose of enforcing emission characteristics for pre-sale vehicles. The court then turned to Volkswagen's alternative argument that Section 209(a) also expressly preempts the Counties' anti-tampering law as applied to post-sale vehicles. The Ninth Circuit quickly struck down this argument because the plain language of Section 209(a) preempts state and local regulations "relating to the control of emissions from new motor vehicles." (6) The court concluded that the express language of this provision only applies to pre-sale, and not post-sale, vehicles.

      Next, the Ninth Circuit considered whether the CAA impliedly preempts the Counties' anti-tampering rules as applied to post-sale vehicles. Based on the obstacle preemption theory, Volkswagen argued that the Counties' anti-tampering laws obstruct accomplishment and execution of the full purposes and objectives of the CAA and are therefore impliedly preempted. The court noted that the CAA's text and structure, particularly given the presumption that Congress does not impliedly preempt states' historic police powers, weigh against the conclusion that Congress intended to preempt local anti-tampering laws. The Ninth Circuit found no other factors supporting obstacle preemption. The court accordingly concluded that in enacting the CAA, Congress intended states to retain the power to enforce anti-tampering laws related to post-sale vehicles and that such laws are therefore not impliedly preempted.

      The Ninth Circuit then addressed Volkswagen's argument that the CAA preempts Counties' anti-tampering laws under ordinary preemption principles. Volkswagen first argued that Congress intended to give the EPA exclusive oversight over post-sale compliance with emission standards on a model-wide basis and that Counties' anti-tampering rules impede this goal. The court dismissed the first of these arguments on two grounds. The court found nothing in the CAA that raises the inference that Congress intended to (1) place manufacturers beyond the reach of state and local governments, or (2) shield a person from state enforcement actions if that person tampered with a large number of vehicles or engaged in systematic rather than sporadic tampering. The Ninth Circuit then turned to Volkswagen's second argument: that the CAA's penalty provision evidences Congress's careful balancing of interests regarding the imposition of penalties, and that states would disturb this balance if able to impose their own penalties. The court disagreed with Volkswagen's reading of the CAA because of the statute's (1) cooperative federalism scheme, (2) express preservation of state and local police powers post sale, and (3) absent congressional intent to grant EPA the exclusive authority to regulate every incident of post-sale tampering. The Ninth Circuit accordingly concluded that Volkswagen's penalty-provision arguments were not sufficient to pass the high bar to prove federal preemption of state law.

      In sum, the Ninth Circuit concluded that the CAA expressly preempts Counties from enforcing their anti-tampering laws regarding pre-sale vehicles but does not expressly or impliedly preempt such enforcement regarding post-sale vehicle tampering. The court made special note of the "staggering liability" (7) that this ruling may create for Volkswagen. But the court observed that this result does not warrant infidelity to the Supreme Court's preemption doctrine nor to the language of the CAA. The Ninth Circuit therefore affirmed the district court's dismissal of Counties' complaints to the extent they sought to apply anti-tampering laws to new vehicles, reversed the district court's dismissal of Counties' complaints regarding post-sale vehicle tampering, and remanded for further proceedings.

   2. Comprehensive Environmental Response, Compensation, and

      Liability Act

      1. Arconic, Inc. v. APC Investment Co., 969 F.3d 945 (9th Cir. 2020)

         Omega Chemical Potentially Responsible Parties Organized Group (OPOG) (8) brought an action against APC Investment Company and other entities (collectively, APC defendants) (9) in 2017 seeking to recover contribution costs under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). (10) The District Court for the Central District of California granted summary judgment for the APC defendants, finding that a 2007 settlement between OPOG and other parties triggered the three-year statutory limitations period, thus barring OPOG's contribution claims filed against APC defendants in 2017. (u) The district court also noted that the 2007 settlement likely judicially estopped OPOG from seeking contribution claims from APC defendants. OPOG appealed the district court's decision. The Ninth Circuit reversed the district court's ruling, holding that OPOG timely appealed and was not judicially estopped from doing so, and remanded for further proceedings.

         Omega Chemical Corporation operated a recycled solvents and refrigerants facility (Facility) in Whittier, California until 1991. In 1999, the United States Environmental Protection Agency (EPA) designated the...