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Gard News 190, May/July 2008

Ninth Circuit Court of Appeals reinstates permanent injunction.

An article in Gard News issue No. 1861 reported on litigation in California concerning regulations promulgated by the California Air Resources Board (CARB) to limit emissions of diesel particulate matter, sulfur oxides and nitrogen oxides from auxiliary diesel engines and diesel-electric engines on ocean-going vessels operating within 24 miles of the California coastline. These regulations came into force on 1st January 2007. However, on 30th August 2007, as the result of a suit commenced by the Pacific Merchant Shipping Association (PMSA), the United States District Court for the Eastern District of California issued a permanent injunction against their enforcement.2 The district court found that the CARB had exceeded its authority under the Clean Air Act because it had failed to obtain the approval of the Environmental Protection Agency (EPA). As a result of the injunction, enforcement of the regulations was suspended.

The CARB appealed the district court’s decision to the Ninth Circuit Court of Appeals and succeeded in having the injunction stayed by the Court of Appeals on 23rd October 2007, pending its decision on the appeal. In the most recent development, on 27th February 2008 the Court of Appeals issued its opinion on the merits of the case, agreeing with the district court’s decision, and vacating the stay of the permanent injunction it had earlier granted. The Court of Appeals, quoting from an earlier decision of the District of California Circuit Court, noted that the Clean Air Act Amendments of 1990 were structured to avoid “an anarchic patchwork of federal and state regulatory programs”.3

Immediately following this decision, the CARB temporarily suspended enforcement of the regulations. However, in a notice dated 10th March 2008, the CARB announced that it would resume enforcement of the regulations with immediate effect. The CARB further stated that it is authorised to continue to enforce the regulations because it intends to seek a rehearing of the Court’s decision. According to the CARB, this further appeal means that the Court’s earlier stay of the injunction remains in effect. The only vessels that will be exempted from the regulations will be those which departed their last port of call prior to 14th March 2008 and are currently en route to California.

If the CARB does not succeed in its further appeal, it may seek approval of the regulations from the EPA. It has also been suggested that the CARB may try to re-write the regulations as “in-use” regulations (for which approval of the EPA would not be necessary) instead of “emissions standards” (which both courts found them to be and for which EPA approval is required). As a practical matter, this would mean that the regulations would require vessels to use a prescribed low sulphur (e.g., 0.5 per cent) diesel fuel without allowing alternative means of compliance to achieve the same sulphur oxides, nitrogen oxides and particulate matter reductions as the low sulphur fuel.

Whether the regulations – so revised – would survive another challenge in the courts is not clear. It is noteworthy that because both the district court and the Court of Appeals determined that the CARB had exceeded its authority under the Clean Air Act, neither court addressed the other issue raised by the PMSA’s suit: whether California could permissibly extend its regulations to within 24 miles of the California coastline.

While the final outcome can not be predicted, it seems fair to assume that this chapter is not the final one. Watch this space for further developments!

1 See article “The new California Vessel Air Emission Regulations – Facing legal challenges “.
2 See Loss Prevention Circular No. 11-07.
3 Pac. Merch. Shipping Ass'n v. Goldstene, 2008 U.S. App. LEXIS 4171 (9th Cir. 2008).


Web-only update on California air emission regulations

As this edition of Gard News was being printed, the California Air Resources Board (CARB) announced that it would discontinue enforcement of the Ocean-Going Auxiliary Diesel Engine Regulations.

The Ninth Circuit Court of Appeals denied the CARB's petition for rehearing. On 7th May 2008, an advisory was issued stating that CARB intends to seek authorization from the EPA to enforce the regulations and that the enforcement of the regulations would be suspended pending approval from the EPA.

Gard News 190, May/July 2008

Any comments to this article can be e-mailed to the Gard News Editor.

Gard News is published quarterly by Gard AS, Arendal, Norway.