California cannot enforce a 2023 agreement that would have subjected heavy-duty truck manufacturers to stringent state emissions standards and stiff penalties for noncompliance, after a federal judge signaled that federal law likely preempts the Golden State's standards.
U.S. District Judge Dena Coggins issued a partial preliminary injunction Friday enjoining the Golden State's air pollution regulator, the California Air Resources Board, from implementing, enforcing, attempting to enforce, or threatening to enforce the so-called Clean Truck Partnership while this litigation is pending.
Judge Coggins determined that Daimler Truck North America LLC, International Motors LLC, Paccar Inc. and Volvo Group North America LLC are likely to prevail on their claim alleging that the Clean Truck Partnership is preempted by the federal Clean Air Act.
Under the Clean Truck Partnership brokered in July 2023, various manufacturers committed to gradually adopt zero-emissions technology and eliminate the sale of heavy-duty diesel trucks in accordance with three CARB regulations: the Omnibus Low NOx regulations for heavy-duty engines and vehicles, the Advanced Clean Trucks rule, and the Advanced Clean Fleets rule.
Importantly, the Truck and Engine Manufacturers Association and various truck- and engine-makers committed to California's emissions-reduction goals, "irrespective of the outcome of any litigation challenging the waivers or authorizations for those regulations or of CARB's overall authority to implement those regulations."
President Donald Trump in June signed three Congressional Review Act resolutions introduced by Republican lawmakers to disapprove waivers that the U.S. Environmental Protection Agency had granted California for the Advanced Clean Trucks, Advanced Clean Cars II and the Omnibus Low NOx regulations. California withdrew its waiver request for the Advanced Clean Fleets rule shortly before Trump took office in January, so that regulation never secured a waiver. Meanwhile, it and other states promptly sued, challenging the revocation of the waivers.
Daimler Truck, International Motors, Paccar and Volvo filed this lawsuit Aug. 11, contending that California is wielding the Clean Truck Partnership agreement "as a backdoor" to force original equipment manufacturers, or OEMs, into compliance. The U.S. Department of Justice and the U.S. Environmental Protection Agency also intervened as plaintiffs, arguing that California is usurping exclusive federal authority to set uniform motor vehicle emissions standards.
CARB, the board's executive officer, Steven Cliff, and California Gov. Gavin Newsom countered that many of the emissions requirements being challenged are years away from taking effect, so an injunction wasn't warranted. But that's a disingenuous argument, Judge Coggins pointed out, especially since California on Oct. 27 filed a breach-of-contract lawsuit against Daimler Truck, International Motors, Paccar and Volvo in Alameda County Superior Court seeking specific performance of the Clean Truck Partnership.
In other words, California is seeking a court order requiring the OEM plaintiffs to "certify to CARB's standards — regardless of whether those standards were ever the subject of a preemption waiver," Judge Coggins noted.
"At the time defendants raised these arguments in their opposition brief, there may have been some persuasive weight to them. But whatever weight those arguments may have carried has since evaporated, and defendants' arguments now ring hollow," Judge Coggins said.
"Even if the validity of the resolutions of disapproval as to the ACT, Omnibus, and Advanced Clean Cars II regulations remain in doubt, CARB's filing of that lawsuit is clearly an attempt to enforce preempted standards [at] least in part, because the model year 2036 zero-emissions requirement is included in the Clean Truck Partnership yet CARB never obtained a preemption waiver for that requirement," Judge Coggins explained.
The judge was persuaded by the truck-makers' argument that they're caught in an impossible situation as California and the federal government battle over the emissions regulations. The manufacturers argued that without an injunction, they'd be forced to choose between spending tens of millions of dollars trying "to comply with ultimately preempted standards on the one hand, and risking significant liability (and a loss of customer goodwill) from regulatory noncompliance on the other hand."
"Plaintiffs have shown at a minimum that there are serious questions going to the merits of their claim that the Clean Truck Partnership is preempted, and there is concrete, irreparable harm due to the attempted enforcement by CARB through its recently filed lawsuit against the OEM plaintiffs," Judge Coggins said. "Moreover, as a result of that lawsuit seeking specific performance as a remedy, the harms identified by the OEM plaintiffs are no longer speculative."
A spokesperson for Daimler Truck North America said in a Monday statement to Law360 that the company and its co-plaintiffs filed this lawsuit to seek clarity on their legal obligations under federal law regarding the Clean Truck Partnership.
"While California directed industry to comply with the agreement, the United States instructed manufacturers to disregard it," the Daimler spokesperson said. "DTNA appreciates the court's prompt decision and is especially grateful for the court's attention to this matter during a time of limited judicial resources."
Judge Coggins, meanwhile, denied the manufacturers' request that CARB be enjoined from enforcing the ACT, Omnibus, and Advanced Clean Cars II regulations. The order noted that CARB "is not currently enforcing those regulations" and "the prospect of future enforcement is speculative" because CARB has already given manufacturers the option to sell vehicles in California by complying with federal EPA standards.
A CARB spokesperson said in a Monday statement to Law360 that the board is "pleased that the court rejected most of the manufacturers' claims and did not disrupt CARB's program to certify vehicles and engines sold in California."
"This means CARB can continue to protect public health and ensure Californians have clean air to breathe, and to provide much needed certainty for manufacturers who need and want it," the CARB spokesperson said in the statement. "Although CARB cannot seek, for now, to compel manufacturers to follow through on their commitments under a 2023 agreement, CARB can still press ahead with the remainder of its lawsuit against those manufacturers for reneging on their deal. Nearly 18 million California residents live in areas with unhealthy air and 1,500 die from air pollution every year in Southern California alone, and we will continue to pursue our legal and moral obligation to reduce harmful excessive soot from one of the largest pollution sources — heavy-duty trucks."
Representatives for Paccar and International Motors declined to comment Monday. Representatives for the other parties did not immediately respond to requests for comment.
The federal government is represented by John K. Adams and David D. Mitchell of the DOJ's Environment and Natural Resources Division.
Daimler Truck North America is represented by Benjamin Wagner, Rachel S. Brass, Stacie B. Fletcher, Miguel A. Estrada and Veronica J.T. Goodson of Gibson Dunn & Crutcher LLP.
International Motors is represented by Robin M. Hulshizer, Arthur Foerster, Kevin M. Jakopchek and Belinda S. Lee of Latham & Watkins LLP.
Paccar is represented by Eugene Illovsky and Kevin Calia of Illovsky Gates & Calia LLP and Joseph A. Ostoyich, William Lavery, Steve Nickelsburg, Danielle Morello and Dorothea R. Allocca of Clifford Chance LLP.
Volvo Group North America is represented by Jeffrey M. Goldman, T. Scott Mills, Jeremy Heep and Daniel J. Boland of Troutman Pepper Locke LLP.
The California Air Resources Board and Cliff are represented by Rob Bonta, Myung J. Park, Benjamin P. Lempert, David M. Meeker, Jonathan A. Wiener and Elaine Meckenstock of the California attorney general's office.
The EPA is represented by John K. Adams and David D. Mitchell of the U.S. Department of Justice's Environment and Natural Resources Division and Edward A. Olsen of the U.S. Attorney's Office for the Eastern District of California.
The case is Daimler Truck North America LLC et al. v. California Air Resources Board et al., case number 2:25-cv-02255, in the U.S. District Court for the Eastern District of California.
Nov 3
Deal Summary
