A rule regulating Southern California warehouse emissions that the state’s trucking industry considered similar to a zero-emissions vehicle (ZEV) mandate has been upheld by a federal district court.
In a ruling earlier this month, Judge John Kronstadt of the Central District of California dismissed claims in a lawsuit filed by the California Trucking Association (CTA) that a warehouse emissions rule was approved in May 2021 by the Southern Air Quality Management District Coast (SCAQMD). preempted by the Federal Aviation Administration Authorization Act (F4A). The law has been a key argument in several legal cases involving the transportation industry on the one hand and the state of California on the other, including the dispute over the AB5 independent contractor law.
CTA was later joined as a plaintiff by airline trade group Airlines for America (A4A). Its arguments were similar to those of the CTA, although it cited the Airline Deregulation Act (ADA) as an enactment of federal law that it believes prompted certain state actions. Her interest in the case is that airline cargo operations in Southern California make heavy use of the network of warehouses served by the region’s busy ports and airports.
In their lawsuit, both plaintiffs said they believed the depot’s emissions requirements would require changes to operations, primarily through the purchase of ZEVs or near-zero emission vehicles (NZEVs) that could affect “prices, routes or service,” standard in both F4A and the ADA that the respective federal laws say state action cannot affect.
“CTA and A4A argue that the rule is prejudicial because it relates to the control of emissions from vehicles and engines … and the purpose and effect is to force the purchase of ZE and (near) ZE trucks,” Kronstadt said, summarizing the main argument of the plaintiffs.
But CTA and A4A’s pleadings were denied, along with CTA’s and A4A’s motions for summary judgment in the suit.
The warehouse rule sets standards for facility emissions and then awards points for steps taken to meet those goals. There are points awarded for things like using ZEVs within the facility and its grounds, being visited by ZEVs making deliveries or picking up cargo, or installing solar panels on the roof. There is also an option to purchase points that can be used to fulfill the individual warehouse order. There is no ZEV command in the rule.
Each warehouse has a WAIRE Points Compliance Obligation (WPCO) under the scheme. WAIRE stands for Warehouse Actions and Investments to Reduce Emissions.
In his ruling, Kronstadt said there was evidence that warehouses are increasing ZEV use as a result of the warehouse rule by companies seeking to meet their WPCO target. “But many did not,” he wrote. The adjudicator’s decision includes a lengthy statistical summary of, among other things, how many warehouses earned WPCO points using ZEVs, how many points they earned when visiting ZEV vehicles, and how many met their WPCO goal in whole or in part by purchasing points.
There is no doubt that the rule seems to have given an incentive to buy ZEV or NZEV trucks. Kronstadt, citing government data, said preliminary reports show that more than 87 percent of the WPCO points earned by depots in the first months of the program came from using ZEV or NZEV vehicles. “But a significant minority of about 13% of the total points earned were earned by taking other actions,” Kronstandi wrote.
In a commenting on the decisionlaw firm Latham & Watkins noted that the court’s decision was that the WAIRE rule was not preempted by F4A or A4A because it “relates to a facility from the indirect source emission control facility.”
“The court reasoned that if the District sought to regulate truck emissions, (it) would make WPCO dependent on the number of miles traveled by trucks visiting the depot.” But the emissions rating given to an individual depot depends in part on the number of visits to a depot, not the miles the truck travels to get there. A truck visiting a warehouse from a port or airport one mile away is considered in WAIRE to be the same data point for compliance purposes as a truck originating 50 miles away, even though the emissions associated with the two trips are significantly different.
Ultimately, the law firm wrote, “the court recognized that trucking operations are an integral part of an air carrier’s integrated delivery system, but held that (the SCAQMD rule) is not preempted by F4A or the ADA because it has only an indirect connection to the airline’s prices, services and routes.”
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