Utah Physic. for Healthy Env't v. Diesel Power Gear
Citation21 F.4th 1229
Date Filed2021-12-28
Docket20-4043
Cited24 times
StatusPublished
Full Opinion (html_with_citations)
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 1
FILED
United States Court of Appeals
PUBLISH Tenth Circuit
UNITED STATES COURT OF APPEALS December 28, 2021
Christopher M. Wolpert
FOR THE TENTH CIRCUIT Clerk of Court
_________________________________
UTAH PHYSICIANS FOR A HEALTHY
ENVIRONMENT,
Plaintiff - Appellee,
v. No. 20-4043
DIESEL POWER GEAR, LLC; B&W
AUTO, LLC d/b/a Sparks Motors, LLC;
DAVID W. SPARKS; and JOSHUA
STUART,
Defendants - Appellants,
and
4x4 ANYTHING LLC,
Defendants.
_________________________________
Appeal from the United States District Court
for the District of Utah
(D.C. No. 2:17-CV-00032-RJS)
_________________________________
Cole S. Cannon (Janet M. Conway, on the briefs), Cannon Law Group, Salt Lake City,
Utah, for Defendants-Appellants.
Reed Zars (George E. Hays, Bellevue, Washington, with him on the brief), Laramie,
Wyoming, for Plaintiff-Appellee.
_________________________________
Before HARTZ, BRISCOE, and CARSON, Circuit Judges.
_________________________________
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 2
HARTZ, Circuit Judge.
_________________________________
Defendantsâ businesses focus on large diesel trucks and related parts,
merchandise, and media. In 2017 Defendants were sued by Plaintiff Utah Physicians
for a Healthy Environment (UPHE), a nonprofit organization that alleged, among
other things, that Defendants were tampering with required emission-control devices
and installing so-called âdefeat devicesâ in violation of the Clean Air Act (CAA) and
Utahâs State Implementation Plan. After a bench trial the court entered judgment in
favor of UPHE, finding Defendants collectively liable for hundreds of violations of
the CAA and Utahâs plan and assessing over $760,000 in civil penalties. On appeal
Defendants challenge UPHEâs Article III and statutory standing, the district courtâs
inclusion of certain kinds of transactions in its tabulation of violations, and the
courtâs penalty analysis. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm in
part and reverse in part. Although we reject most of Defendantsâ arguments, we must
remand to the district court for additional proceedings because (1) UPHE lacks
Article III standing to complain of conduct by Defendants that has not contributed to
air pollution in Utahâs Wasatch Front and (2) the district court needs to reevaluate the
seriousness of Defendantsâ violations of the Utah planâs anti-tampering provision.
I. STATUTORY FRAMEWORK
The CAA distributes responsibilities among the States and the federal
Environmental Protection Agency (EPA) in what has been called a âcooperative-
federalism approach.â US Magnesium, LLC v. EPA, 690 F.3d 1157, 1159 (10th Cir.
2
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 3
2012). The EPA promulgates National Ambient Air Quality Standards (NAAQS),
which set limits on maximum concentrations of various pollutants. See Natâl Parks
Conservation Assân, Inc. v. TVA, 480 F.3d 410, 412(6th Cir. 2007);42 U.S.C. § 7409
. To date, the EPA has established NAAQS for six pollutants: carbon monoxide, lead, oxides of nitrogen, ozone, sulfur oxides, and particulate matter (with separate standards for PM10 (particles with a diameter less than 10 micrometers) and PM2.5 (particles with a diameter less than 2.5 micrometers)). See40 C.F.R. §§ 50
.4â
12.
The States have the primary responsibility to ensure that those limits are
satisfied. See 42 U.S.C. § 7407(a). Each State must submit to the EPA a state implementation plan (SIP) that âprovides for implementation, maintenance, and enforcement of [NAAQS].âId.
§ 7410(a)(1). The SIP is subject to approval by the
EPA Administrator. See id. § 7410(k).
State SIP submissions must include âa list of all areas (or portions thereof) in
the State, designating [them] asâ (1) nonattainment (areas that fail to meet, or
contribute to another area failing to meet, the NAAQS); (2) attainment (areas that
meet, and do not contribute to another area not meeting, the NAAQS); or
(3) unclassifiable (areas that cannot be classified on the basis of available
information). See id. § 7407(d). The EPA may modify a Stateâs proposed
designations (including boundaries) as necessary but must first give the State an
opportunity to respond. See id. § 7407(d)(1)(B)(ii). The consequences of being a
nonattainment area are significant. The State must submit a corrective plan, see id.
3
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 4
§ 7502(c) (setting out requirements for nonattainment plan provisions); Ukeiley v.
EPA, 896 F.3d 1158, 1161(10th Cir. 2018), and federal assistance is unavailable for any activity that does not conform to the implementation plan, see42 U.S.C. § 7506
(c)(1), (5). Nonattainment areas may encompass territory in multiple states. Seeid.
§ 7407(d)(1)(A)(i) (defining nonattainment area as âany area that does not
meet (or that contributes to ambient air quality in a nearby area that does not meet)
the national primary or secondary air quality standard for the pollutantâ (emphasis
added)). For example, several PM2.5 nonattainment areas cross state boundaries.1
As a general rule, the Statesâ principal responsibility is stationary sources like
factories and power plants (governed by Title I of the CAA), while the EPA has
primary responsibility over mobile sources (governed by Title II of the Act).2 In
particular, SIPs must provide for administration and enforcement of the permitting
programs described in Title V of the CAA. See id. §§ 7410(a)(2)(C), 7661a(d). The
1
See Air Quality Designations for the 2006 24-Hour Fine Particle (PM2.5), 74
Fed. Reg. 58688, 58696 (Nov. 13, 2009) (identifying 24-hour PM2.5 nonattainment
areas in, for instance, (1) âLogan, UT-ID,â (2) âNew York-N. New Jersey-Long
Island, NY-NJ-CT,â and (3) âPhiladelphia-Wilmington, PA-NJ-DEâ).
2
See Engine Mfrs. Assân v. EPA, 88 F.3d 1075, 1078â79 (D.C. Cir. 1996) (âThe CAA contemplated that the states would carry out their responsibility chiefly by regulating stationary sources, such as factories and power plants.â); Approval and Promulgation of Implementation Plans; California; California Mobile Source Regulations,83 Fed. Reg. 8403
, 8403 (proposed Feb. 27, 2018) (âEmissions sources
contributing to ambient air pollution levels can be divided into two basic categories:
Stationary emissions sources and mobile emissions sources. As a general matter, the
CAA assigns stationary source regulation and SIP development responsibilities to the
states through title I of the Act and assigns mobile source regulation to the EPA
through title II of the Act.â).
4
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 5
permit programs contained in SIP proposals must cover â[a]ny major source.â 40
C.F.R. § 70.3(a). âThe general definition of âmajor sourceâ . . . includes any source that emits or has the potential to emit 100 tons per year of any air pollutant. Lower thresholds apply to emissions of hazardous air pollutants and to sources located in certain nonattainment areas.â David R. Wooley & Elizabeth M. Morss, Clean Air Act Handbook, § 8:7 n.1 (Sept. 2021 update); see42 U.S.C. § 7602
(j);40 C.F.R. §§ 70.2
, 70.3(a). âBecause EPA and the states have taken steps to exclude smaller
sources from the Title V permitting program, most Title V permits are issued to
âmajor sources.ââ Wooley & Morss, Clean Air Act Handbook § 8:7.
In contrast, mobile pollution sources, such as motor vehicles, are primarily
subject to EPA regulation under Title II of the CAA. âTh[is] regulatory differenceâ
between stationary and mobile sources has been attributed to âthe difficulty of
subjecting motor vehicles, which readily move across state boundaries, to control by
individual states,â as well as Congressâs concern that allowing each State to fashion
its own regulations for motor vehicles would give rise to âan anarchic patchwork of
federal and state regulatory programs, a prospect which threatened to create
nightmares for the manufacturers.â Engine Mfrs. Assân v. EPA, 88 F.3d 1075, 1079(D.C. Cir. 1996) (internal quotation marks omitted). In fact, the CAA explicitly prohibits States and localities from âadopt[ing] or attempt[ing] to enforce any standard relating to the control of emissions from new motor vehicles or new motor vehicle engines subject to [Title II Motor Vehicle Emission and Fuel Standards].â42 U.S.C. § 7543
(a). The EPA has exempted only California from the prohibition
5
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 6
against state or local emission standards for new motor vehicles. See Comm. for a
Better Arvin v. EPA, 786 F.3d 1169, 1174(9th Cir. 2015);42 U.S.C. § 7543
(a),
(b)(1).
Of particular relevance to this litigation, Title II has two provisions to make
sure that emission-control devices required for new vehicles will be effective after
retail sale. One prohibits tampering with such devices. It makes it unlawful:
for any person to remove or render inoperative any device or element of
design installed on or in a motor vehicle or motor vehicle engine in
compliance with regulations under this subchapter prior to its sale and
delivery to the ultimate purchaser, or for any person knowingly to
remove or render inoperative any such device or element of design after
such sale and delivery to the ultimate purchaser[.]
42 U.S.C. § 7522(a)(3)(A). The other prohibits âdefeat devicesâ that prevent the
original devices from performing as intended. It makes it unlawful:
for any person to manufacture or sell, or offer to sell, or install, any part
or component intended for use with, or as part of, any motor vehicle or
motor vehicle engine, where a principal effect of the part or component
is to bypass, defeat, or render inoperative any device or element of
design installed on or in a motor vehicle or motor vehicle engine in
compliance with regulations under this subchapter, and where the
person knows or should know that such part or component is being
offered for sale or installed for such use or put to such use[.]
Id. § 7522(a)(3)(B).
States may, however, âcontrol, regulate, or restrict the use, operation, or
movement of registered or licensed motor vehicles.â Id. § 7543(d). This âpreserves
state and local governmentsâ authority over post-sale motor vehicles.â In re
Volkswagen âClean Dieselâ Mktg., Sales Pracs., & Prods. Liab. Litig., 959 F.3d
1201, 1216 (9th Cir. 2020), cert denied sub nom. Volkswagen Grp. v. EPC of
6
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 7
Hillsborough Cnty., No. 20-994, 2021 WL 5284826(U.S. Nov. 15, 2021) [hereinafter Counties] (emphasis added). In some circumstances a State SIP may be required to include regulations on post-sale motor vehicles, such as by providing for an emission-control inspection and maintenance program in certain ozone nonattainment areas. See 42 U.S.C. § 7511a. Otherwise, SIP regulation of post-sale vehicles, such as Utahâs anti-tampering provisions, is voluntary. See Counties, 959 F.3d at 1219â21 (countiesâ post-sale anti-tampering rules neither expressly nor impliedly preempted by CAA);42 U.S.C. § 7410
(specifying what must be included in a SIP);id.
§ 7509 (penalties for state noncompliance). As the EPA stated in disapproving the anti- tampering provisions in Texasâs SIP: âTexasâ statewide tampering prohibitions are part of the state SIP but are not required under [42 U.S.C. § 7509
(a)]. . . . Since State tampering rules are not required by the [CAA], this final disapproval action does not impose sanctions for failure to meet the Act requirements.â Approval & Promulgation of Air Quality State Implementation Plans (SIP); Texas; Disapproval of Revisions to the State Implementation Plan,63 Fed. Reg. 6651
, 6652 (Feb. 10, 1998)
(emphasis added).
Enforcement of clean-air law is also a joint federal-state responsibility,
although with some assistance from private citizens. An approved SIP âhas the force
and effect of federal law,â and, like the CAA itself, can be enforced in federal court.
Espinosa v. Roswell Tower, Inc., 32 F.3d 491, 492(10th Cir. 1994); see42 U.S.C. § 7413
(a)â(b). The CAA empowers the EPA to seek civil and administrative
penalties, issue orders requiring compliance, seek judicial injunctive relief, and even
7
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 8
request the Attorney General to pursue criminal sanctions for violations of the CAA.
See 42 U.S.C. § 7413. The maximum civil penalty for violation of a SIP was originally set at $25,000 per day per violation, seeid.
§ 7413(b), and has since been adjusted upward for inflation to more than $100,000.3 (Recall that the typical SIP violation concerns a major source, such as a factory or power plant.) But enforcement of Title II of the CAA (which concerns mobile sources such as cars and trucks), subject to âcertain limited exceptions,â is not covered âby the general enforcement provisions of [42 U.S.C. § 7413
].â Wooley & Morss, Clean Air Act Handbook, § 11:25. Instead, enforcement of the vehicle-related provisions in Title II is addressed in42 U.S.C. § 7524
, which provides that â[a]ny person other than a manufacturer or
dealer who violates [42 U.S.C.] section 7522(a)(3)(A) [the CAA anti-tampering
provision] . . . or any person who violates section 7522(a)(3)(B) [the CAA defeat-
device provision] . . . shall be subject to a civil penalty of not more than $2,500 [now
about $5,000].â4 Further, violations of the CAA anti-tampering provision
3
Under the Federal Civil Penalties Inflation Adjustment Act of 1990, Pub. L.
No. 101-410, 104Stat. 890, and the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015,Pub. L. No. 114-74, § 701
,129 Stat. 584
, 599, the EPA has substantially increased the CAA statutory penalty amounts. See Civil Monetary Penalty Inflation Adjustment,85 Fed. Reg. 1751
(Jan. 13, 2020). For SIP violations that occurred after November 2, 2015 and for which the penalties are assessed on or after December 23, 2020, the maximum allowable penalty is $102,638 per day for each violation. See40 C.F.R. § 19.4
tbl.1.
4
40 C.F.R. § 19.4sets forth inflation-adjusted penalty amounts for this section, too. For tampering or defeat-device violations that occur after November 2, 2015 and for which the penalties are assessed on or after December 23, 2020, the maximum allowable penalty is $4,876 for each violation. See40 C.F.R. § 19.4
tbl.1.
8
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 9
(§ 7522(a)(3)(A)) âshall constitute a separate offense with respect to each motor
vehicle or motor vehicle engineâ (as opposed to making each act of tampering a
separate offense), while violations of the CAA defeat-device provision
(§ 7522(a)(3)(B)) âshall constitute a separate offense with respect to each part or
component.â Id. § 7524(a).
Private citizens may sue for any âviolation of . . . an emission standard or
limitation under [the CAA].â 42 U.S.C. § 7604(a)(1). And the court may apply civil penalties. See id.; US Magnesium,690 F.3d at 1159
. A State, however, is confined to
seeking only state-law remedies for violation of a SIP.5
Utahâs SIP was officially submitted in 1972. See 40 C.F.R. § 52.2324. That
submission and a number of proposed revisions have been approved by the EPA. See
5
See Espinosa, 32 F.3d at 493(âThere is no language in the [CAA] that authorizes a state to bring a federal enforcement action.â);40 C.F.R. § 70.11
(establishing minimum requirements for state enforcement programs); Train v. Nat. Res. Def. Council, Inc.,421 U.S. 60
, 92 n.27 (1975) (noting availability, in addition
to federal enforcement by EPA and citizens, of âwhatever state [enforcement]
procedures are available under the [SIP]â); W. Richard Bidstrup, Gale F. Hoffnagle,
& David Patrick, Clean Air Permits: Managerâs Guide to the 1990 Clean Air Act, §
915 (2011) (âEach state has its own laws authorizing civil and criminal enforcement
of its air pollution control laws and regulations.â).
9
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 10
id. Relevant here, Utah SIP Regulation R307-201-26 prohibits tampering with
federally mandated emission-control devices.7
In addition to the substantive anti-tampering rules included in R307-201-2,
Utah state law also provides for penalties of up to $5,000 per day for any violation of
the Stateâs Environmental Quality Code or the lawful orders or rules adopted
thereunder. See Utah Code Ann. § 19-1-303.
II. BACKGROUND
Defendant Diesel Power Gear, LLC (DPG) is a âlifestyle brand companyâ that
sells apparel and other accessories that cater to âthe diesel truck lifestyle.â Sparks
affidavit, Aplt. App., Vol. 3 at 50. Defendant B&W Auto, LLCâwhich also goes by
the trade name âSparks Motorsââis a used-car dealership and repair shop in
Bountiful, Utah, which specializes in buying and making custom modifications to
large diesel trucks for resale. Defendant David Sparks is the manager and sole owner
of B&W and the chief executive officer and principal owner of DPG. Defendant
Joshua Stuart is a part-owner of DPG and its chief financial officer and chief
6
Although the version of the rule available on the EPAâs website (and
incorporated by reference into Utahâs SIP in 40 C.F.R. § 52.2324) is labeled R307-
201-2, it appears that a slightly different version of the rule labeled R307-201-4 has
since been adopted by the State of Utah, see Utah Admin. Code R307-201-4.
Although the differences between the two rules seem irrelevant to the issues on
appeal, R307-201-4 does not appear to have been approved yet by the EPA, so we
refer throughout the opinion to R307-201-2.
7
See Utah SIP: Table c, R307-201. Emission Standards: General Emission
Standards, EPA, https://www.epa.gov/sips-ut/utah-sip-table-c-r307-201-emission-
standards-general-emission-standards (last visited Nov. 1, 2021); 40 C.F.R.
§ 52.2324(c)(59)(i)(A).
10
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 11
operating officer. Keaton Hoskins, named as a defendant in the original complaint,
has performed marketing for DieselSellerz.com, an online truck-classifieds website
affiliated with B&W and DPG. Original defendant 4x4 Anything is merely a d/b/a of
DPG.
B&W and DPG began to grow rapidly in 2013, âquickly bec[oming]
established names in the diesel truck community.â Id. at 52. This growth was partly
fueled by promotional videos posted to the internet and social-media platforms. The
business was also promoted through a sweepstakes which awarded B&W custom-
built trucks to the winners. In 2016 the Discovery Channel premiered âDiesel
Brothers,â a reality television show starring Sparks, Stuart, Hoskins, and David
Kiley, another part-owner and employee of DPG. The show âfeature[d] diesel trucks
being custom built for off-road recreational use,â Sparks affidavit II, Aplt. App., Vol.
10 at 94, and averaged over two million viewers per episode in its first season.
UPHE is a nonprofit organization of Utah healthcare professionals and
concerned citizens. In July 2016 it provided written notice of its intent to sue DPG,
B&W, Sparks, and Stuart under the citizen-suit provision of the CAA, 42 U.S.C.
§ 7604.8 The notice alleged repeated and ongoing violations of the Act, including the
removal and circumvention of emission-control systems, as well as the advertisement
8
It also provided notice to and sued Kiley, DieselSellerz.com, 4x4 Anything,
LLC, and Hoskins, which are not named appellants because Kiley and
DieselSellerz.com were dismissed in district court; 4x4 Anything is merely a d/b/a of
DPG; and, after filing a notice of appeal, Hoskins settled with UPHE and the United
States and we dismissed his appeal.
11
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 12
and sale of so-called âaftermarket defeat partsââparts âthat have the principal effect
of bypassing, defeating, or rendering inoperative emission control devices on
certified diesel vehicles,â Aplt. App., Vol. 1 at 76â77. UPHE also gave notice to the
Administrator of the EPA and the State of Utah, as required by 42 U.S.C.
§ 7604(b)(1). In October 2016 UPHE sent a supplemental letter to the same persons
and entities, identifying additional violations of regulations included in Utahâs SIP.
In January 2017 UPHE filed suit in the United States District Court for the
District of Utah. Its amended complaint asserted 25 claims under the CAA and
Utahâs SIP. The relevant claims can be grouped into five categories: (1) allegations
that B&W and Sparks removed existing emission-control devices from at least 17
diesel vehicles; (2) allegations that DPG, Sparks, and Stuart sold or offered to sell
aftermarket defeat parts; (3) allegations that B&W and Sparks installed aftermarket
defeat parts; (4) allegations that B&W, DPG, Sparks, and Stuart sold or offered to
sell vehicles with aftermarket defeat parts; and (5) allegations that B&W, DPG, and
Sparks owned and operated Utah-registered vehicles âwithout maintaining all
emission control systems and devices in operable condition,â id. at 146, in violation of Utah SIP Regulation R307-201-2. UPHE alleged that these violations resulted in âthe excessive emission of harmful pollutants from diesel vehiclesâ into the airshed of the Wasatch Front,id. at 29
, an area in northern Utah home to more than three-
fourths of the Stateâs population. It said that these emissions âcontribute to the[]
adverse [health] effectsâ experienced by its members, including impaired vision,
reduced lung capacity, sinus irritation, and coughing spells, and that they âsuffer
12
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 13
from a reduced enjoyment of life when they are forced to avoid [recreational]
activities . . ., or are unable to see with clarity the beautiful scenery that once was
visible, due to high pollution levels.â Id. at 33. UPHE sought declaratory and
injunctive relief, as well as civil monetary penalties available for violations of both
the CAA and Utahâs SIP.
The parties filed cross-motions for full or partial summary judgment.
Defendants sought summary judgment on each of UPHEâs 25 claims, arguing that
UPHE âlack[ed] standing to maintain this citizen suit under the [CAA]â because
âDefendantsâ minimal contribution of increased emissions cannot be fairly traced to
[UPHEâs] injuries.â Aplt. App., Vol. 8 at 92. Alternatively, Defendants maintained
that even if UPHE did have standing, summary judgment on most of the claims
would still be appropriate on the merits. The district court denied Defendantsâ
motion. See Utah Physicians for a Healthy Envât v. Diesel Power Gear LLC (UPHE
I), 374 F. Supp. 3d 1124, 1145(D. Utah 2019). For its part, UPHE submitted summary-judgment motions on many of its claims. Some of the motions were successful, and the court then held a three-day bench trial to resolve the remaining liability issues and to assess civil penalties. See Utah Physicians for a Healthy Envât v. Diesel Power Gear LLC (UPHE II), No. 2:17-cv-00032-RJS-DBP,2020 WL 4282148
, at *1 (D. Utah Mar. 6, 2020). The court determined that it could impose statutory penalties totaling $117,290,620 against Defendants, but applying the seven factors set forth in42 U.S.C. § 7413
(e)(1), seeid. at *20
, it imposed much smaller
penalties than the maximum permitted, and ultimately ordered B&W to pay
13
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 14
$114,426; B&W and Sparks (jointly and severally) to pay $333,700; B&W, Sparks,
and DPG (jointly and severally) to pay $90,000; and DPG, Sparks, and Stuart (jointly
and severally) to pay $227,218. See id. at *27. It also granted injunctive relief, permanently enjoining Defendants âfrom: (1) removing or rendering inoperative federally-required emission control systems in diesel trucks; (2) installing parts or components in diesel trucks that bypass, defeat, or render inoperative federally- required emission control systems; (3) offering to sell or selling defeat parts; (4) removing or making inoperable a federally-required emission control system, device, or any part thereof; and (5) owning or operating vehicles with disabled emission-control systems.âId.
Finally, the district court awarded UPHE its litigation costs, including reasonable attorney fees. Seeid. at *28
.
On appeal Defendants raise five challenges to the judgment. They argue
(1) that UPHE lacked Article III standing to bring any of the claims; (2) that the court
committed plain error in ruling that UPHE had statutory standing to pursue its claims
under the CAA; (3) that Defendants were not liable for CAA violations with respect
to vehicles awarded as sweepstakes prizes; (4) that Defendants were not liable for
CAA violations with respect to vehicles sold âas isâ; and (5) that the court made
various errors in calculating the penalties.
We largely affirm the judgment of the district court. But we must remand for
further factual findings on one issue. We hold that UPHE lacks standing to seek
penalties for violations that did not cause the emission of pollutants in the Wasatch
Front, but the record needs further development to determine what adjustment, if any,
14
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 15
must be made to the penalty assessment. Remand is also required because we hold
that the district court abused its discretion in weighing one of the penalty-assessment
criteria (namely, seriousness of the violation) in imposing penalties for tampering
under the SIP penalty provision.
III. DISCUSSION
A. Article III Standing
Article III of the Constitution limits the jurisdiction of the federal courts to
âCasesâ and âControversies.â U.S. Const. art. III, § 2, cl. 1. An essential component
of a Case or Controversy is that the party bringing the action have standing. See
Habecker v. Town of Estes Park, 518 F.3d 1217, 1223(10th Cir. 2008). Because Defendants have raised serious questions about UPHEâs Article III standing to pursue the claims against them, we address the matter at some length. We review de novo the district courtâs determination at summary judgment that UPHE has Article III standing to pursue all its claims under the CAA and Utahâs SIP. Seeid.
In general, a plaintiff has standing when â(1) it has suffered an âinjury in factâ
that is (a) concrete and particularized and (b) actual or imminent, not conjectural or
hypothetical; (2) the injury is fairly traceable to the challenged action of the
defendant; and (3) it is likely, as opposed to merely speculative, that the injury will
be redressed by a favorable decision.â Friends of the Earth, Inc. v. Laidlaw Envât
Servs. (TOC), Inc., 528 U.S. 167, 180â81 (2000). âWe refer to these three familiar requirements as injury in fact, causation, and redressability.â Habecker,518 F.3d at 1224
. Additional requirements must be satisfied when the plaintiff is an organization
15
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 16
suing on behalf of its members, such as UPHE in this case. The organization has
standing only â[1] when its members would otherwise have standing to sue in their
own right, [2] the interests at stake are germane to the organizationâs purpose, and
[3] neither the claim asserted nor the relief requested requires the participation of
individual members in the lawsuit.â Laidlaw, 528 U.S. at 181. Because the second and third conditions are unquestionably satisfied here (protecting the environment is a core purpose of UPHE and the relief it seeks does not require the participation of individual members, cf. Warth v. Seldin,422 U.S. 490
, 515â16 (1975) (homebuilders
association lacked standing to seek damages on behalf of its members when injuries
were âpeculiar to the individual member[s] concerned, and both the fact and extent of
injury would require individualized proofâ)), we focus solely on whether members of
UPHE would have standing in their own right.9
As for the standing of the individual members of UPHE, the first and third
requirements are not in serious doubt. Defendants do not dispute (nor do we see a
basis for them to do so) the district courtâs determination that UPHE members
suffered injury in fact because of âadverse health effects from elevated air pollution
in the Wasatch Front or exposure to diesel exhaustâ and reduced participation âin
outdoor recreational activities due [to] their concerns about fine particulate matter
9
The Supreme Court in United Food & Commercial Workers Union Local 751
v. Brown Group, Inc., 517 U.S. 544, 554â56 (1996), concluded that the first two
prongs of the organizational-standing test have an Article III element, although the
third does not and is solely a matter of prudential standing.
16
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 17
pollution.â UPHE I, 374 F. Supp. 3d at 1132. Also, the membersâ injuries are redressable through both injunctive relief and the imposition of penalties on wrongdoers whose violations were ongoing at the time UPHE filed suit. See Laidlaw,528 U.S. at 186
(Environmental group had standing to seek not only injunctive relief, but also civil penalties because by âencourag[ing] defendants to discontinue current violations [of the Clean Water Act (CWA)] and deter[ring] them from committing future ones, [civil penalties] afford redress to citizen plaintiffs who are injured or threatened with injury as a consequence of ongoing unlawful conduct.â); Benham v. Ozark Materials River Rock, LLC,885 F.3d 1267, 1273
(10th Cir. 2018)
(âredressability element . . . handily metâ in CWA citizen suit, since âthe injunctive
relief and civil penalties sought by [the plaintiff] and ordered by the district court
w[ould] restore the unlawfully filled wetlands and deter future violationsâ).
There remains the question of causation: Are the injuries of the UPHE
members âfairly traceable to the challenged action[s]â of Defendants? Laidlaw, 528
U.S. at 180. Although âArticle III does at least require proof of a substantial likelihood that the defendantâs conduct caused plaintiffâs injury in fact,â it âdemands something less than the concept of proximate causeâ found in tort law. Nova Health Sys. v. Gandy,416 F.3d 1149, 1156
(10th Cir. 2005) (internal quotation marks omitted); see Pub. Int. Rsch. Grp. of N.J., Inc. v. Powell Duffryn Terminals Inc.,913 F.2d 64
, 72 (3d Cir. 1990) (âA plaintiff need not prove causation with absolute
scientific rigor to defeat a motion for summary judgment. The âfairly traceableâ
requirement . . . is not equivalent to a requirement of tort causation.â).
17
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 18
Defendantsâ attack on UPHEâs standing has a factual component and a legal
component. Factually, they contend that their contribution to pollution in the
Wasatch Front is a negligible fraction of the total pollution that comes from a myriad
of sources. They assert: âThe undisputed evidence at trial established the total
combined miles driven within the State of Utah for all B&W trucks is less than 4,285
miles. The maximum total excess emissions as a result of all B&W violations over
five years is less than .02 tons of NOx and .0004 tons of PM, compared to the
millions of tons of the same pollutants from other sources.â Aplt. Br. at 8â9 (citation
omitted); see also UPHE I, 374 F. Supp. 3d at 1134 (â[M]any sources contribut[e] to
air pollution in the Wasatch Front, including on-road mobile sources, wildfires, and
oil refineries.â). Legally, they claim that the fairly-traceable test for causation in the
standing context has been replaced by the meaningful-contribution test in the context
of air pollution. We begin with the legal component of Defendantsâ argument.
The term meaningful contribution in the standing context first appeared in the
Supreme Court decision in Massachusetts v. EPA, 549 U.S. 497(2007). The Court determined that the Commonwealth of Massachusetts had standing to challenge the EPAâs rejection of a petition for rulemaking to regulate greenhouse-gas emissions from new motor vehicles. Seeid.
at 510â11, 517, 526. In the course of the discussion the Court observed that â[j]udged by any standard, U.S. motor-vehicle emissions make a meaningful contribution to greenhouse gas concentrations and hence, according to petitioners, to global warming.âId. at 525
(emphasis added). But it is
far from clear how, if at all, the âmeaningful contributionâ language should affect our
18
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 19
analysis here because Massachusetts arose in a context much different from that of
the present litigation. The alleged injury to Massachusetts was the loss of coastal
property. See id.at 522â23. The loss would be caused by rising sea levels (resulting from the melting of ice and snow on land) that in turn resulted from a warming climate. Seeid. at 521
. The climate change would result from an increased concentration of carbon dioxide in the worldâs atmosphere. Seeid. at 523
. The United States transportation sector âaccount[ed] for more than 6% of worldwide carbon dioxide emissions.âId. at 524
. The regulation sought by Massachusetts would apply only to new vehicles, and the Court did not dispute that âpredicted increases in greenhouse gas emissions from developing nations, particularly China and India, are likely to offset any marginal domestic decrease.âId.
at 523â24. But in light of the significant percentage of worldwide carbon dioxide emissions arising from this countryâs transportation sector (a âmeaningful contribution to greenhouse gas concentrationsâ), the Court said that âreducing domestic automobile emissions is hardly a tentative step.âId.
at 524â25 (emphasis added). It appears to us that the
Courtâs use of the term meaningful contribution was to emphasize that despite the
length of the causal chain from regulation of new motor vehicles to the loss of coastal
property, the causal connection was a substantial one, not mere speculation. We
doubt that the Court was instituting a general meaningful-contribution requirement
that would apply even when the causal link is merely between the emission of
noxious gases and harm to those who breathe the air into which the gases are emitted.
19
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 20
In addition, to adopt Defendantsâ requirement that standing be granted only for
claims against the largest polluters would amount to major surgery on the CAAâs
citizen-suit provision. The purpose of citizen-suit provisions is to increase
enforcement of public law when the government lacks the resources or will to handle
the entire task. Without such provisions only the worst offenders are likely to fear
sanctions. Uncommon would be the case in which mobile sources of air pollution,
particularly a few motor vehicles, would be the target. This is an appropriate
circumstance in which to heed the admonition that â[c]ourts must afford due respect
to Congressâs decision to impose a statutory prohibition or obligation on a defendant,
and to grant a plaintiff a cause of action to sue over the defendantâs violation of that
statutory prohibition or obligation.â TransUnion LLC v. Ramirez, 141 S. Ct. 2190,
2204(2021); cf.id.
at 2204â05 (âCongress may elevate to the status of legally
cognizable injuries concrete, de facto injuries that were previously inadequate in
law.â).10
10
This admonition has particular force when the plaintiffâs claim is similar to a
common-law cause of action but does not satisfy the requirements for that cause of
action because of considerations that do not apply to the statutory claim. See
TransUnion, 141 S. Ct. at 2204 (observing that âhistory and tradition offer a
meaningful guide to the types of cases that Article III empowers federal courts to
considerâ and stating that âwith respect to the concrete-harm requirement in
particular, . . . courts should assess whether the alleged injury to the plaintiff has a
âclose relationshipâ to a harm âtraditionallyâ recognized as providing a basis for a
lawsuit in American courts,â though âan exact duplicateâ is not required (internal
quotation marks omitted)). For example, when, as here, there are multiple sufficient
sets of causes of an injury, the injured person has a claim against any negligent actor
responsible for one of the causes unless that actorâs ânegligent conduct constitutes
only a trivial contribution to a causal set.â Restatement (Third) of Torts: Phys. &
Emot. Harm § 36 (2010) (emphasis added); see June v. Union Carbide Corp., 577
20
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 21
Our view finds support, perhaps even a precedential mandate, in a decision of
this court handed down after the district court entered judgment. In Sierra Club v.
EPA, 964 F.3d 882, 887â88 (10th Cir. 2020), the plaintiff sued the EPA to compel it to object to a CAA permit issued by Utah for an industrial plant referred to as the âHunter Plant.â For standing, the Sierra Club âallege[d] that its members experience[d] air pollution because they live and work near the Hunter Plantâ and suffered from âhealth risks and diminished visibility of nearby national parks and wilderness areas.âId. at 888
. In support of the proposition that the Hunter Plant contributed to the pollution, the panel noted that the EPA had stated that air emissions from the plant âcause or contribute to visibility impairment in nearby national parks.âId.
(internal quotation marks omitted). The plant owner argued that
the Sierra Club could not establish causation because, among other reasons, âother
F.3d 1234, 1239â44 (10th Cir. 2009). But that common-law limitation on the cause
of action âhas developed as a matter of fairness, equitable-loss distribution, and
administrative cost.â Restatement (Third) of Torts § 36 cmt. b. Those (non-causal)
considerations do not apply to the claims against Defendants since they have violated
federal law (so that sanctions would hardly be unfair) and the only remedies sought
are an injunction and civil penalties. See also Restatement (Second) of Torts § 840E
cmt. b (1979) (âSituations may arise in which each of several persons contributes to a
nuisance to a relatively slight extent, so that his contribution taken by itself would
not be an unreasonable one and so would not subject him to liability; but the
aggregate nuisance resulting from the contributions of all is a substantial
interference, which becomes an unreasonable one. In these cases the liability of each
contributor may depend upon whether he is aware of what the others are doing, so
that his own conduct becomes negligent or otherwise unreasonable in the light of that
knowledge. It may, for example, be unreasonable to pollute a stream to only a slight
extent, harmless in itself, when the defendant knows that pollution by others is
approaching or has reached the point where it causes or threatens serious interference
with the rights of those who use the water.â).
21
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 22
sources contributed to the pollution.â Id. at 889. We rejected the argument, declaring
that âthe existence of other contributors wouldnât affect the Sierra Clubâs standing.â
Id. Following a Fifth Circuit opinion under the Clean Water Act, Sierra Club, Lone
Star Chapter v. Cedar Point Oil Co., 73 F.3d 546, 558 (5th Cir. 1996), we said that
â[e]ven with other contributors, standing would still turn on whether the Sierra Club
had adequately attributed the pollution at least partly to the [EPAâs failure to object
to the permit for the Hunter Plant].â Sierra Club, 964 F.3d at 889.
Our view also appears to be in keeping with the view of courts in other circuits
that, except in one circumstance,11 a person injured by air or water pollution has
11
Plaintiffs claiming injury from climate change caused by greenhouse gases
have been denied standing to sue nearby emitters of greenhouse gases because the
causal link is too attenuated: a nearby source has no greater impact on the plaintiff
than a source on the other side of the earth. See, e.g., Wash. Envât Council v. Bellon,
732 F.3d 1131, 1141â43 (9th Cir. 2013) (âthe chain of causality betweenâ Defendantsâ failure to limit greenhouse-gas emissions from Washingtonâs five oil refineries and the plaintiffsâ climate-change related injuries, including reduced recreational opportunities in the stateâs mountains and property damage caused by increased flooding along the stateâs rivers, was âtoo attenuatedâ to support standing); Ctr. for Biological Diversity v. U.S. Depât of Interior,563 F.3d 466, 476
, 478â79 (D.C. Cir. 2009) (rejecting plaintiffsâ substantive theory of standing, which was based on the reasoning that the Department of the Interiorâs âapproval of [a program allowing for leasing of offshore lands for oil and gas drilling would] bring[] about climate change, which in turn [would] adversely affect[] the species and ecosystems of those . . . areas, thereby threatening [the plaintiffsâ] enjoyment of [those] areas and their inhabitantsâ); WildEarth Guardians v. Salazar,880 F. Supp. 2d 77
, 83â86 (D.D.C. 2012) (although plaintiffs claimed ârecreational, aesthetic, and economic interests in the areas adjacent toâ tracts of land on which Bureau of Land Management (BLM) had authorized leasing for coal mines, plaintiffsâ injuries, to the extent based on impacts from climate change, were not fairly traceable to BLM action); Amigos Bravos v. U.S. Bureau of Land Mgmt.,816 F. Supp. 2d 1118
, 1135â
36 (D.N.M. 2011) (plaintiffsâ alleged climate-change injuries were not fairly
traceable to BLMâs approval of in-state oil-and-gas leases; â[w]ith [greenhouse
gases], every inhabitant of our planet is within the âzone of dischargeâ; consequently,
22
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 23
standing under the CAA or the Clean Water Act to seek a remedy from a defendant
that emits the injurious pollutant in the geographic vicinity of where the person is
injured. See Envât Tex. Citizen Lobby, Inc. v. ExxonMobil Corp., 968 F.3d 357, 370 (5th Cir. 2020) (no need for specific evidence of air pollutionâs âgeographic range when plaintiffs sit squarely in the discharge zone of a polluting facility such that their proximity speaks for itselfâ (brackets and internal quotation marks omitted)); Black Warrior Riverkeeper, Inc. v. U.S. Army Corps of Engârs,781 F.3d 1271
, 1276â77, 1280 (11th Cir. 2015) (membersâ recreational and aesthetic injuries from visible pollution were fairly traceable to coal-mining operations located upstream within the same watershed); Sierra Club v. TVA,430 F.3d 1337
, 1339â40, 1345 (11th Cir. 2005) (recreational and aesthetic harms suffered by members in âthe natural areas around the [defendantâs coal-fired electric power] plantâ were fairly traceable to plantâs violations of opacity standard included in Alabama SIP); Friends of the Earth, Inc. v. Gaston Copper Recycling Corp.,204 F.3d 149
, 158â61 (4th Cir. 2000) (injury to memberâs waterfront property from water pollution was fairly traceable to smelting facility four miles upstream when evidence indicated that discharge from the facility could âimpact the receiving waterway for a good distance downstreamâwell past the issue of geographical proximity to the source of pollution may not be a proper measure of the likelihood of oneâs injury having been caused by a particular polluter.â). The reasoning in these cases is consistent with the Supreme Courtâs reference to âmeaningful contributionâ in Massachusetts,549 U.S. at 525
, as
discussed above. But this appeal does not involve climate-change-related harms from
greenhouse gases, so the reasoning in these cases is inapplicable.
23
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 24
[the memberâs] propertyâ); Cedar Point, 73 F.3d at 558& n.24 (memberâs injury was fairly traceable to oil-and-gas wellâs discharge of âproduced waterâ into particular area of Galveston Bay where member canoed and participated in other outdoor activities); Powell Duffryn, 913 F.2d at 72â73 (plaintiff affidavits said that they suffered aesthetic injury from oily or greasy sheen on water which was fairly traceable to defendantâs discharge of oil and grease two miles upstream); WildEarth Guardians,880 F. Supp. 2d at 83
, 86â87 (plaintiffs had standing to challenge BLMâs approval of mining operations that would âlead to haze, smog, and dust clouds in areas immediately adjacent to [the land to be mined],â where plaintiffs âha[d] recreational, aesthetic, and economic interestsâ); Concerned Citizens Around Murphy v. Murphy Oil USA, Inc.,686 F. Supp. 2d 663, 669
, 672â73 (E.D. La. 2010) (CAA plaintiffsâ recreational and aesthetic injuries were fairly traceable to emissions from oil refinery located blocks away). By showing a close geographical connection, the plaintiff has âadequately attributed the pollutionâ to the source, Sierra Club, 964 F.3d at 889, and the injury is âfairly traceableâ to the polluter, Lujan v. Defenders of Wildlife,504 U.S. 555, 560
(1992) (brackets, ellipsis, and internal quotation marks
omitted).
Defendants suggest that causation is lacking because this is a case ââ[w]here
the causal chain involves numerous third parties whose independent decisions
collectively have a significant effect on plaintiffsâ injuries.ââ Aplt. Br. at 23 (quoting
Wash. Envât Council v. Bellon, 732 F.3d 1131, 1142 (9th Cir. 2013)). But there is no
such chain of causation here. The proposition relied on by Defendants can be traced
24
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 25
to Supreme Court decisions denying standing to those challenging the grant of
government tax exemptions on the ground that entities receiving the exemptions
would halt their discriminatory practices if denied the exemptions. See, e.g., Allen v.
Wright, 468 U.S. 737, 756â61 (1984). The discrimination was not âfairly traceableâ to the grant of a tax exemption because the response to the denial of an exemption was too speculative.Id. at 758
. In this case, there is no speculation that Defendantsâ
unlawful conduct would cause the emission into the atmosphere of harmful
pollutants. The only relevant decisions to be made by independent third parties would
be to drive the vehicles improperly modified by Defendants, and the decisions to do
so were virtually inevitable.
We therefore hold that UPHE has standing to challenge Defendantsâ violations
that contributed to the unhealthy air in the Wasatch Front. The EPA has determined
that the Salt Lake City area, which includes where Defendants conduct business, is a
nonattainment area for 24-hour levels of fine particulate matter (PM2.5).12 See 40
C.F.R. § 81.345. Those who reside in that area can fairly trace injuries they suffer
from the polluted air to any contributor of prohibited emissions in the area.
12
Fine particulate matter is one of the two main pollutants (the other being
nitrogen oxides) that UPHE alleges contribute to its membersâ injuries. See UPHE I,
374 F. Supp. 3d at 1132(âSome members are deterred from engaging in outdoor recreational activities due [to] their concerns about fine particulate matter pollution.â); see also UPHE II,2020 WL 4282148
, at *4 (finding that â[a] diesel
truck with all of its federally required emission control devices removed typically
emits . . . particulate matter at a rate of twenty-one times its original EPA certified
emission rateâ).
25
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 26
But what about CAA violations that did not cause the emission of pollutants in
the Salt Lake City nonattainment area? The appellate courts have recognized that a
plaintiff may lack standing to challenge actions by a too-distant polluter. In Friends
of the Earth, Inc. v. Crown Center Petroleum Corp., 95 F.3d 358(5th Cir. 1996), for instance, the Fifth Circuit held that a lake âlocated three tributaries and 18 miles downstream from [the defendantâs] refineryâ was too far away for one to infer a causal link between the defendantâs discharge and the alleged injuries to the plaintiffâs membersâ use of the lake.Id. at 361
. Deprived of this inference and having failed to offer any âcompetent evidence that [the defendantâs] discharges ha[d] made their way to . . . or would otherwise affectâ the lake, the court concluded that the plaintiff could not satisfy Article IIIâs causation requirement. Id.; see also Ctr. for Biological Diversity v. EPA,937 F.3d 533
, 538â39 (5th Cir. 2019) (plaintiffs failed
to show sufficient âgeographic proximity between [their] interests and the
dischargesâ; â[a] geographic area as big as the âWestern and Central portions of the
Gulf [of Mexico]â cannot support Article III standing.â).
The Seventh Circuit reached a similar conclusion in Texas Independent
Producers & Royalty Owners Assân v. EPA (TIPROA), 410 F.3d 964(7th Cir. 2005). In that case an environmental group sought to challenge an EPA General Permit prescribing limits on storm-water discharge from construction sites. Seeid.
at 969â 70. Attempting to establish standing, the group argued, among other things, that its members used various bodies of polluted water affected by the discharges allowed under the permit. Seeid. at 972
. It pointed to notices filed by construction companies
26
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 27
indicating their intent to âdischarge under the General Permit in the bodies of water
used by [three of the groupâs] affiants.â Id. at 973. The court rejected this argument, pointing out that âthe water bodies at issue span, in some cases, hundreds of miles,â and concluding that, absent evidence of injury to âthe portion of the river[s] used by the [members],â the group had failed to establish fairly-traceable causation.Id.
Likewise in Delaware Department of Natural Resources & Environmental
Control v. EPA, 785 F.3d 1(D.C. Cir. 2015), the D.C. Circuit held that Delaware lacked standing to challenge a portion of an EPA rule exempting generators âlocated in remote areasâ of the country from national emission standards, as âDelaware [had] offer[ed] no evidence that backup generators in the remote-area subcategory are located near enough to Delaware to pose a threat to the stateâs air quality.âId. at 8, 10
; seeid. at 10
(the âonly examplesâ Delaware provided âof these remote locations
are references to the Powder River Basin of Wyoming and fields of generators visibly
evident across Wyoming and Colorado, and throughout Nebraska and Californiaâ
(ellipsis and internal quotation marks omitted)).
The need for geographic limitations as part of the traceability inquiry was
persuasively discussed in the Fifth Circuitâs Cedar Point decision, which limited the
reach of the Third Circuitâs expression in Powell Duffryn that the plaintiffs in that
case had standing because the defendant had discharged an excessive amount of
pollutant into a waterway in which the plaintiffs had an interest that could be
adversely affected by the pollutant, see Powell Duffryn, 913 F.2d at 72:
27
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 28
Douglas was the only affiant who expressed an interest in that part of
Galveston Bay where Cedar Pointâs discharge is located. It is true that a
strict application of the Powell Duffryn test does not demand that sort of
specificity, because the plaintiff need only show an interest in the
âwaterwayâ into which the defendant is discharging a pollutant;
nevertheless, such a literal reading of Powell Duffryn may produce
results incongruous with our usual understanding of the Article III
standing requirements. For example, some âwaterwaysâ covered by the
CWA may be so large that plaintiffs should rightfully demonstrate a
more specific geographic or other causative nexus in order to satisfy the
âfairly traceableâ element of standing. Therefore, while we find the
Powell Duffryn test useful for analyzing whether Douglasâs affidavit
meets the âfairly traceableâ requirement, we recognize that it may not
be an appropriate standard in other CWA cases.
Cedar Point, 73 F.3d at 558n.24 (emphasis added) (citations omitted); see also Gaston Copper,204 F.3d at 161
(âRather than pinpointing the origins of particular molecules, a plaintiff must merely show that a defendant discharges a pollutant that causes or contributes to the kinds of injuries alleged in the specific geographic area of concern.â (emphasis added) (internal quotation marks omitted)); Black Warrior Riverkeeper,781 F.3d at 1280
(adopting the view of Gaston Copper); ExxonMobil, 968 F.3d at 370 (âPlaintiffs must demonstrate the existence of a specific geographic or other causative nexus such that the [CAA] violation could have affected their members.â (internal quotation marks omitted)); cf. Lujan,504 U.S. at 558
, 567 n.3
(petitioners had failed to demonstrate that they would suffer an injury in fact as a
result of a Secretary of the Interior interpretation of the Endangered Species Act
limiting its application to the âUnited States or the high seasâ; â[t]he dissent may be
correct that the geographic remoteness of those members (here in the United States)
from Sri Lanka and Aswan does not ânecessarilyâ prevent [a finding of injury]âbut it
28
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 29
assuredly does so when no further facts have been brought forward (and respondents
have produced none) showing that the impact upon animals in those distant places
will in some fashion be reflected hereâ). Of course, specific scientific data may
establish a causal connection even to some distant sources. See ExxonMobil, 968 F.3d
at 370; Crown Ctr., 95 F.3d at 361; cf. Lujan,504 U.S. at 567
n.3.
Defendants contend that the district court erred by finding that UPHE had
standing to pursue âviolations that did not result in pollutants being discharged into
the Wasatch Front.â Aplt. Br. at 27. (Although this passage speaks of discharge into
the Wasatch Front, the line drawn by Defendants in much of its argument is between
vehicles driven in Utah and those that were not. We take it that Defendants are in
essence conceding that we can assume that a relevant vehicle driven in Utah was
driven within the Wasatch Front.) Defendantâs contention is not barred by our
holding that UPHE has standing to bring a number of its claims. â[S]tanding is not
dispensed in gross; rather, plaintiffs must demonstrate standing for each claim that
they press and for each form of relief that they seek (for example, injunctive relief
and damages).â TransUnion, 141 S. Ct. at 2208; see Colo. Outfitters Assân v. Hickenlooper,823 F.3d 537, 551
(10th Cir. 2016) (â[A] plaintiff must demonstrate standing for each claim he or she seeks to press.â (original brackets and internal quotation marks omitted)). UPHE must demonstrate that each of Defendantsâ violations âcause[d] or contribute[d] to the kinds of injuries alleged,â Piney Run Pres. Assân v. Cnty. Commârs of Carroll Cnty.,268 F.3d 255, 264
(4th Cir. 2001)
(internal quotation marks omitted), or, as the district court put it, âshow [that]
29
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 30
Defendantsâ violations contribute[d] nitrous oxides (NOx) and particulate matter
(PM) to air in the Wasatch Front,â UPHE I, 374 F. Supp. 3d at 1135; see
ExxonMobil, 968 F.3d at 365â66 (â[O]ne injury does not entitle a litigant to right
other wrongs that did not injure it. . . . [A CAA] plaintiff needs standing for each
violation for which it seeks a penalty.â). We therefore examine Defendantsâ causation
objections to UPHEâs standing with respect to specific civil penalties.
Defendants point to violations related to vehicles eventually sold out-of-state
or to parts sold out-of-state or merely marketed and never sold. For vehicles
eventually sold or transferred to customers out-of-state, Defendants argue that âthere
is simply no way to conclude that emissions from [these vehicles], which were only
briefly operated in Utah, . . . has [sic] harmed the Wasatch Front airshed.â Aplt. Br.
at 27â28.
We agree with the underlying principle stated by Defendants. Although
molecules of a nitrogen oxide produced in Oregon may certainly drift over to Utah,
greater geographical proximity is required to satisfy by itself the âfairly traceableâ
test. But in one respect, we reject their argument. If the vehicle was driven, however
little, in the Salt Lake City area, UPHE has established that its membersâ injuries
from excessive pollution can be fairly traced to the CAA violation; so standing can
be predicated on pollution from that vehicle.
But if the vehicle was never driven in Utah, or the defeat part was sold to
someone out-of-state, UPHE has not established standing. It has presented no
evidence of actual or imminent injury to its members caused by the emission of
30
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 31
pollutants outside of Utah. Such evidence might be available if pollutants in, say,
southern Wyoming were contributing to the failure of the Salt Lake City area to meet
EPA air-quality standards and the EPA designated that part of Wyoming as included
in the Salt Lake City nonattainment area. See 42 U.S.C. § 7407(d)(1)(A)(i) (defining nonattainment area as âany area that does not meet (or that contributes to ambient air quality in a nearby area that does not meet) the national primary or secondary air quality standard for the pollutantâ (emphasis added)); Air Quality Designations for the 2006 24-Hour Fine Particle (PM2.5),74 Fed. Reg. 58688
, 58696 (Nov. 13, 2009)
(identifying 24-hour PM2.5 nonattainment areas that included parts of more than one
State, for instance, âLogan, UT-ID,â âNew York-N. New Jersey-Long Island, NY-
NJ-CT,â and âPhiladelphia-Wilmington, PA-NJ-DEâ). When the EPA has determined
that the plaintiff and the pollution emission are in the same nonattainment area, the
plaintiff could rely on that determination as adequate evidence (subject, of course, to
rebuttal by contrary evidence) that the emission is a cause of the harm to the plaintiff
from air pollution and therefore the plaintiff would have standing to seek sanctions
against the out-of-state polluter. Cf. Sierra Club, 964 F.3d at 889â90 (noting, in
support of its determination that the plaintiff had standing, that the EPA had stated
that air emissions from the polluter caused or contributed to impairment of visibility
at parks visited by plaintiffâs members).
But that is not the circumstance here. Because the nonattainment area
including the Wasatch Front does not extend into any other State, we do not presume
that pollutants emitted in another State contribute to injuries suffered by UPHEâs
31
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 32
members. Nor has UPHE produced any other type of scientific evidence that
pollution outside of Utah contributes to unhealthful air in the Wasatch Front. We
conclude that UPHE does not have standing to bring its claims based on vehicles
never driven in Utah or defeat devices sold to persons outside Utah.
We also conclude, though for slightly different reasons, that UPHE lacks
standing to pursue claims for civil penalties related to defeat parts marketed but not
actually sold. UPHE cannot claim to have been actually injured by Defendantsâ
marketing (which plainly did not itself result in the emission of excess nitrogen
oxides or particulate matter into the Wasatch Front) and any threatened harmâsuch
as âthe threat that consumers in Utah may be influenced by Defendantsâ
advertisements to buy and install the parts, resulting in an increase in emissions,â
Aplee. Br. at 22âis too âconjectural or hypotheticalâ to satisfy the injury-in-fact
requirement, particularly since Defendants apparently ceased marketing the defeat
parts after receiving UPHEâs notice of its intent to sue. See UPHE II, 2020 WL
4282148, at *9. It is not enough that there was a statutory violation. The claims based on unsold defeat parts are similar to the claims brought by plaintiffs against a credit reporting agency that allegedly failed to use reasonable procedures to ensure the accuracy of their credit files but that never disclosed the allegedly false information to third parties. See TransUnion,141 S. Ct. at 2200
. The Supreme Court held that those plaintiffs lacked standing to sue for actual or statutory damages. Seeid.
at
2209â13. Because the only claims at issue on this appeal are those for civil penalties,
32
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 33
we need not address whether UPHE had standing to sue for injunctive relief relating
to unsold defeat devices.
To enable the district court to determine precisely which claims can be pursued
by UPHE, we must remand for further proceedings.
B. Statutory Standing
Defendants argue that UPHE lacks statutory standing under the CAAâs citizen-
suit provision to pursue its claims under either the CAA or Utahâs SIP because they
seek enforcement of âgeneral statutory prohibitions . . . not defined under the CAA as
standards or limitations.â Aplt. Br. at 31. Because statutory standing is not
jurisdictional and Defendants failed to raise this issue below, we review only for
plain error. See Niemi v. Lasshofer, 728 F.3d 1252, 1262(10th Cir. 2013) (issue of statutory standing, if forfeited, would be reviewed for plain error). âPlain error is (i) error, (ii) that is plain, which (iii) affects substantial rights, and which (iv) seriously affects the fairness, integrity, or public reputation of judicial proceedings.âId.
(internal quotation marks omitted). As we proceed to explain, the
district court likely did not err, and certainly did not plainly err, in ruling Defendantsâ
various tampering and defeat-device violations actionable under the CAA and Utahâs
SIP. Accordingly, we need not continue to the third and fourth elements of plain
error.
The CAAâs citizen-suit provision, 42 U.S.C. § 7604, provides in relevant part:
[A]ny person may commence a civil action on his own behalfâ
33
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 34
(1) against any person (including (i) the United States, and (ii) any other
governmental instrumentality or agency to the extent permitted by the
Eleventh Amendment to the Constitution) who is alleged to have
violated (if there is evidence that the alleged violation has been
repeated) or to be in violation of (A) an emission standard or limitation
under this chapter or (B) an order issued by the [EPA] Administrator or
a State with respect to such a standard or limitation[.]
42 U.S.C. § 7604(a). This provision permits a plaintiff to sue only when there has been a violation of âan emission standard or limitation under this chapter [that is, the CAA]â or an order âwith respect to such a standard or limitation.âId.
§ 7604(a)(1). Defendants contend that UPHEâs underlying claims, brought under42 U.S.C. § 7522
(a) and Utah SIP Regulation R307-201-2, do not implicate any âemission
standard or limitationâ because both § 7522(a) and R-307-201-2 merely prohibit
various acts related to emission-control and defeat devices, rather than imposing
numerical limits on emissions. Defendants suggest that these prohibitions should not
be regarded as emission standards or limitations but as âenforcement mechanismsâ
enforceable only by the government and not by private citizens. Aplt. Reply Br. at
13.
Definitions within the CAA itself, however, refute this argument. The CAAâs
citizen-suit provision defines emission standard or limitation under this chapter to
include, among other things, an âemission limitation, standard of performance or
emission standard,â and âany other standard [or] limitation . . . established . . . under
any applicable State implementation plan approved by the [EPA] Administrator.â 42
U.S.C. § 7604(f). Section 7602 in turn defines emission limitation and emission
standard to mean âa requirement established by the State or the [EPA] Administrator
34
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 35
which limits the quantity, rate, or concentration of emissions of air pollutants on a
continuous basis, including any requirement relating to the operation or maintenance
of a source to assure continuous emission reduction, and any design, equipment,
work practice or operational standard promulgated under this chapter [the CAA].â
Id. § 7602(k) (emphasis added). And § 7602 defines standard of performance as âa
requirement of continuous emission reduction, including any requirement relating to
the operation or maintenance of a source to assure continuous emission reduction.â
Id. § 7602(l). Thus, § 7604 authorizes citizen suits against violations of any
ârequirement established by the State or the [EPA] Administrator . . . relating to the
operation or maintenance of a source to assure continuous emission reduction, and
any design, equipment, work practice or operational standard promulgated under [the
CAA],â and of any ârequirement relating to the operation or maintenance of a source
to assure continuous emission reduction.â
UPHE argues that â[a]n anti-tampering requirement prohibiting the removal or
defeat of an emission control device, such as a catalytic converter, that is designed to
reduce emissions on a continuous basis, is plainly a requirement that ensures the
reduction of emissions on a continuous basis,â and therefore satisfies the statutory
definition of an emission standard or limitation. Aplee. Br. at 28â29. This argument
has considerable force.
The Supreme Court has adopted essentially the same view, albeit when
interpreting a provision of the CAA to which the above statutory definitions did not
apply. In Engine Manufacturers Assân v. South Coast Air Quality Management
35
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 36
District, 541 U.S. 246(2004), the Court considered whether a provision of the CAA preempting state or local adoption or enforcement of ââany standard relating to the control of emissions from new motor vehicles or new motion vehicle enginesââ extended to local rules barring fleet operators from purchasing or leasing vehicles not in compliance with certain emission requirements.Id.
at 248â49, 252 (emphasis added) (quoting42 U.S.C. § 7543
(a)). The district and circuit courts had found no preemption, interpreting the statutory language to âinclude only regulations that compel manufacturers to meet specified emission limits.âId. at 252
. The Court
reversed, adopting a more expansive view:
â[S]tandardâ is defined as that which âis established by authority,
custom, or general consent, as a model or example; criterion; test.â
Websterâs Second New International Dictionary 2455 (1945). The
criteria referred to in [42 U.S.C. § 7543(a)] relate to the emission
characteristics of a vehicle or engine. To meet them the vehicle or
engine must not emit more than a certain amount of a given pollutant,
must be equipped with a certain type of pollution-control device, or
must have some other design feature related to the control of emissions.
This interpretation is consistent with the use of âstandardâ throughout
Title II of the CAA (which governs emissions from moving sources) to
denote requirements such as numerical emission levels with which
vehicles or engines must comply, e.g., 42 U.S.C. § 7521(a)(3)(B)(ii), or
emission-control technology with which they must be equipped, e.g.,
§ 7521(a)(6).
Id. at 252â53 (emphasis added); see Counties, 959 F.3d at 1218 (applying South
Coast to hold that the county anti-tampering regulations at issue were ââemissions
standardsâ for purposes of [§ 7543(a)]â). The language interpreted by the Supreme
Court is not identical to the language at issue here; but if an anti-tampering
requirement has been interpreted as a standard ârelating to the control of emissions,â
36
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 37
42 U.S.C. § 7543(a), one would think that it would also be a ârequirement relating to the operation or maintenance of a source to assure continuous emission reduction,âid.
§ 7602(l).
Defendants rely on a Ninth Circuit decision that analyzed the term âemission
standard or limitationâ in the context of the CAAâs citizen-suit provision and
reasoned that it did not extend to âthe generic statutory prohibitions in § 7522,â such
as those at issue here. In re Volkswagen âClean Dieselâ Mktg., Sales Pracs., &
Prods. Liab. Litig., 894 F.3d 1030, 1041 (9th Cir. 2018) [hereinafter Fleshman].
Respectfully, we question the following analysis in Fleshman of the scope of the
citizen-suit provision:
For an example of an âemission standard,â consider 40 C.F.R.
§ 86.1811-04. That regulation establishes permissible emission levels of
nitrogen oxide (NOx) for âlight-duty vehiclesâ like the vehicles at issue
in this case. See id. § 81.1811-04(c) (âExhaust emissions from Tier 2
vehicles must not exceed the standards in Table S04-1 of this section at
full useful life .â). Unlike the statutory prohibitions in § 7522, which
were enacted by Congress, the regulation is âa requirement established
by the Administrator which limits the quantity, rate, or concentration of
emissions of air pollutants on a continuous basis.â § 7602(k).
Id. at 1041â42 (ellipses omitted). This narrow reading appears to overlook that
emission standard and standard of performance are both defined to encompass âany
requirement relating to the operation or maintenance of a source to assure continuous
emission reduction.â 42 U.S.C. § 7602(k), (l). By removing or defeating emission-
control devices like oxidation catalysts or diesel particulate filters, a person is
violating a specific requirement to maintain the diesel truck to assure continuous
emission reductions.
37
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 38
Fleshman also seems to suggest that the anti-tampering provision of the CAA
was not a requisite standard because the § 7522 prohibitions were enacted by
Congress and therefore were not ârequirement[s] established by the State or the
[EPA] Administrator,â id. § 7602(k), as would be necessary to come within the
definition of emission standard. See 894 F.3d at 1041â42. But we note that standard
of performance is defined so that it need not be a requirement established by the State
or the EPA Administrator. See id. § 7602(l). In addition, UPHE, unlike the plaintiff
in Fleshman, based its tampering and defeat-device claims not only on the statutory
provision, id. § 7522(a)(3), but also on the EPA regulations, see 40 C.F.R. § 86.1854-
12(a)(3)(i), (ii), imposing the same requirements.
In any event, we need not definitively resolve the question because if indeed
there was error, it was not plain. See Niemi, 728 F.3d at 1262. âAn error is plain if it is clear or obvious under current, well-settled law.â United States v. Faulkner,950 F.3d 670
, 678 (10th Cir. 2019) (internal quotation marks omitted). Because the
district courtâs interpretation of the CAAâs citizen-suit provision was reasonable, and
a contrary result was not dictated by well-settled law, we reject Defendantsâ plain-
error challenge to UPHEâs statutory standing.
C. Sweepstakes Giveaways
Defendants argue that the district court improperly imposed penalties with
respect to trucks awarded through sweepstakes. They state: âThe District Courtâs
interpretation that giveaway sweepstakes trucks are a âsaleâ is contrary to Utah law,
and disregards the fact that a third to half of the sweepstakes entries are from free
38
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 39
mail-in requests. The CAA requires a âsaleâ of an emissions tampered vehicle to
violate this section.â Aplt. Br. at 40.13 We reject the argument.
The tampering provision, 42 U.S.C. § 7522(a)(3)(A), makes it unlawful:
for any person to remove or render inoperative any device or element of
design installed on or in a motor vehicle or motor vehicle engine in
compliance with regulations under this subchapter prior to its sale and
delivery to the ultimate purchaser, or for any person knowingly to
remove or render inoperative any such device or element of design after
such sale and delivery to the ultimate purchaser[.]
For purposes of this provision, ultimate purchaser âmeans, with respect to any new
motor vehicle or new motor vehicle engine, the first person who in good faith
purchases such new motor vehicle or new engine for purposes other than resale.â 42
U.S.C. § 7550(5).
The district court rejected Defendantsâ argument on the ground that the
sweepstakes awards were sales, reasoning that âDPG asked for and received valuable
consideration in exchange for the conveyance of the trucks, in the form of direct
monetary benefits (increased sales) and indirect benefits (promotion of its brand).â
UPHE I, 374 F. Supp. 3d at 1144â45 (footnote omitted); see id. at 1145 (âThe fact
that each particular winner contributed only a portion of the total consideration
13
The discussion of this issue in Defendantsâ opening brief never quotes, or
even identifies, statutory language on which it is basing this argument. But since the
opening brief speaks of âan emissions tampered vehicle,â we conclude that
Defendants are referring to 42 U.S.C. § 7522(a)(3)(A) and not the defeat-device
language in § 7522(a)(3)(B). We note that earlier in the brief, Defendants
distinguished between tampering violations and defeat-device violations. See Aplt.
Br. at 33 (referring to âviolations of the CAAâs tampering and defeat device
provisionsâ); id. at 37 (arguing that âonly the government can enforce the CAAâs
tampering and defeat device provisionsâ).
39
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 40
received by DPG does not preclude the existence of a sale.â). We review matters of
statutory interpretation de novo. See Pound v. Airosol Co., Inc., 498 F.3d 1089, 1094
(10th Cir. 2007).
We have reservations about the district courtâs analysis. One may question
whether a lottery winner who paid nothing to obtain a lottery ticket (either by paying
cash or making a purchase of goods) has provided any consideration. See Albertsonâs,
Inc. v. Hansen, 600 P.2d 982, 985â86 (Utah 1979). But we may reach the same result with a somewhat different analysis. See Orner v. Shalala,30 F.3d 1307, 1310
(10th
Cir. 1994) (â[W]e may affirm challenged decisions of the district court on alternative
grounds, so long as the record is sufficient to permit conclusions of law.â).
We affirm because, as we read the statute, there is no requirement that a
violator sell the vehicle. The provision can be violated by someone who removes or
renders inoperative a control device âprior to its sale and delivery to the ultimate
purchaserâ or by someone who knowingly removes or renders inoperative such a
device after âsale and delivery to the ultimate purchaser.â 42 U.S.C. § 7522(a)(3)(A).
The only relevance of the sale to the ultimate purchaser is that if the tampering
occurs after such a sale, the tampering must be performed âknowingly.â But since
there is no question that Defendantsâ actions were done knowingly, they are liable
regardless of when the sale to the ultimate purchaser has taken place or will take
place.
40
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 41
In short, we reject Defendantsâ argument that vehicles awarded as part of the
sweepstakes should have been excluded from the district courtâs tabulation of
violations.
D. Sale of âAs-Isâ Vehicles
Under 42 U.S.C. § 7522(a)(3)(B) it is unlawful:
for any person to manufacture or sell, or offer to sell, or install, any part
or component intended for use with, or as part of, any motor vehicle or
motor vehicle engine, where a principal effect of the part or component
is to bypass, defeat, or render inoperative any device or element of
design installed on or in a motor vehicle or motor vehicle engine in
compliance with regulations under this subchapter, and where the
person knows or should know that such part or component is being
offered for sale or installed for such use or put to such use[.]
Defendants argue that the district court erred by including âpass-through sales of âas-
isâ trucksâ in its tabulation of their CAA violations. Aplt. Br. at 43. They contend
that the provision âcannot be read as prohibiting the re-sale of a used vehicle
containing a defeat part that was installed by the previous owner.â Id. at 44. Defendants point to other state and federal laws that exempt the sale of âas-isâ vehicles, see, e.g.,Utah Code Ann. § 13-20-6
(2) (limiting motor-vehicle-dealer liability to written express warranties made apart from manufacturer warranties);16 C.F.R. § 455.2
(b)(1) (Federal Trade Commission regulation recognizing sales of
âvehicle[s] without any implied warranty, i.e., âas is,ââ), and suggest that extending
§ 7522 to as-is sales would conflict with these other provisions.
Defendantsâ argument is a nonstarter. The statute certainly does not explicitly
provide an exception for as-is sales. Nor does anything in the CAA provide a
41
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 42
rationale for such an exception. On the contrary, the as-is nature of a sale concerns
only the relationship between the seller and the buyer, whereas the CAAâs concern is
the relationship between the user of the vehicle and the public that must suffer from
that vehicleâs emissions. Defendants offer no rationale for excusing injury to the
public just because the buyer is willing to accept the vehicle without warranties
(presumably for a lower price).
We recognize that the provision contains a scienter requirementâliability does
not attach unless the manufacturer or seller âknows or should know that such part or
component is being offered for sale or installed for such use or put to such use.â 42
U.S.C. § 7522(a)(3)(B) (emphasis added). There may be occasions in which an as-is
seller could reasonably claim that it had no reason to know that the vehicle contained
an illegal defeat device, and thus escape liability under § 7522(a)(3)(B). But an
ignorance defense is independent of whether the vehicle is sold with any warranties;
and in any event, Defendants have not claimed such ignorance. We affirm the district
courtâs refusal to recognize an as-is defense for Defendants.
E. Penalties
Defendants raise several challenges to the penalties imposed by the district
court. We review for clear error âa district courtâs findings of fact in support of a
CAA penalty.â Pound, 498 F.3d at 1094. âThe district courtâs weighing of those facts, and its penalty determination, are reviewed for abuse of discretion.âId.
And âwe review de novo the statutory interpretation behind the district courtâs decision.âId.
(internal quotation marks omitted).
42
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 43
Before addressing the specific challenges, however, we summarize the
penalties imposed upon Defendants and the statutory bases for those penalties.
ďˇ The district court found that Defendants removed a total of 37 emission-
control devices from eight trucks, giving rise to eight separate violations of
the CAAâs anti-tampering provision, 42 U.S.C. § 7522(a)(3)(A), see UPHE
II, 2020 WL 4282148, at *15â16; under § 7524(a) and40 C.F.R. § 19.4
, it
assessed Defendantsâ maximum liability as $30,000 ($3,750 per violation),
see id.,but ultimately imposed a penalty of only $25,000, seeid. at *24
.
ďˇ It found that Defendants installed a total of 24 defeat parts in 14 trucks,
giving rise to 24 separate violations of the CAAâs defeat-device provision,
42 U.S.C. § 7522(a)(3)(B), seeid. at *16
; under § 7524(a) and40 C.F.R. § 19.4
, it assessed Defendantsâ maximum liability as $90,985 (between
$3,750 and $4,735 per violation, depending on the date), see id., but
ultimately imposed a penalty of only $80,000, see id. at *24.
ďˇ It found that Defendants advertised, sold, or offered to sell a total of 305
defeat parts, giving rise to 305 additional separate violations of the CAAâs
defeat-device provision, 42 U.S.C. § 7522(a)(3)(B), seeid. at *17
; under
§ 7524(a) and 40 C.F.R. § 19.4, it assessed Defendantsâ maximum liability
as $1,356,510 (between $3,750 and $4,735 per violation, depending on the
date), see id.,but ultimately imposed a penalty of only $407,218, seeid.
at
*24â25.
ďˇ It found that Defendants removed a total of 37 emission-control devices
from eight trucks, giving rise to 37 separate violations of the Utah SIPâs
emission-control provision, R307-201-2, see id. at *19; under § 7413(b)
and 40 C.F.R. § 19.4, it assessed Defendantsâ maximum liability as
$1,387,500 ($37,500 per violation), see id., but ultimately imposed a
penalty of only $138,700, see id. at *25.
ďˇ It found that Defendants owned and operated multiple emissions-tampered
vehicles between January 12, 2012, and July 20, 2017, giving rise to
ânumerousâ additional violations of the Utah SIPâs emission-control
provision, R307-201-2, id. at *19; under § 7413(b) and40 C.F.R. § 19.4
, it
assessed Defendantsâ maximum liability as $114,425,625 (between $37,500
and $99,681 per violation per day, depending on the date), see id., but
ultimately imposed a penalty of only $114,426, see id. at *25.
43
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 44
Broken out by defendant, the district court ordered B&W to pay $114,426;
B&W and Sparks (jointly and severally) to pay $333,700; B&W, Sparks, and DPG
(jointly and severally) to pay $90,000; and DPG, Sparks, and Stuart (jointly and
severally) to pay $227,218. See UPHE II, 2020 WL 4282148, at *27.
The district court arrived at these amounts via the âtop downâ approach to
penalty analysis, first calculating Defendantsâ maximum possible liability for
violations of the CAA and Utahâs SIP and then âdetermin[ing] what degree of
mitigation, if any is properâ according to the penalty-assessment criteria set forth in
42 U.S.C. § 7413(e). UPHE II,2020 WL 4282148
, at *20. Section 7413(e) directs
courts to consider, âin addition to such other factors as justice may requireâ:
the size of the business, the economic impact of the penalty on the
business, the violatorâs full compliance history and good faith efforts to
comply, the duration of the violation as established by any credible
evidence (including evidence other than the applicable test method),
payment by the violator of penalties previously assessed for the same
violation, the economic benefit of noncompliance, and the seriousness
of the violation.
Weighing these factors separately for each category of violations, the court reduced
the total penalty amount by more than 99%, from $117,290,620 to $765,344. See
UPHE II, 2020 WL 4282148, at *23â25. By far the largest penalty reductions were made with respect to Defendantsâ SIP violations (the owning-and-operating violations, in particular). Even so, the penalties imposed for violations of the Utah SIPâs anti-tampering provision, R307-210-2, ($138,700, see UPHE II,2020 WL 4282148
, at *25) far exceeded those imposed for violations of the anti-tampering provision contained in the CAA itself,42 U.S.C. § 7522
(a)(3)(A), ($25,000, see
44
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 45
UPHE II, 2020 WL 4282148, at *24), despite the fact that both sets of violations
arose from the same conduct.
Defendants raise several challenges to the penalties imposed by the district
court. Some apply to all the penalties. Others concern only the penalties for
tampering imposed as violations of the Utah SIP. We begin with the challenges to the
tampering penalties imposed as violations of the SIP.
1. Penalties for tampering
As repeatedly noted above, the CAA has a specific penalty provision for a
violation of the anti-tampering provision, § 7522(a)(3)(A). Under § 7524(a) the
penalty for persons âother than a manufacturer or dealerâ (which includes all
Defendants) is $2,500 (substantially increased for inflation) per vehicle and not per
day or per component tampered with. The Utah SIP, in contrast, treats as a separate
violation every component tampered with in a single vehicle. And the CAA penalty
for violation of a SIP is $25,000 (again increased for inflation) per day of violation.
See 42 U.S.C. § 7413(d)(1)(A).
Defendants present several theories for challenging the tampering penalty
imposed under the SIP, all of which derive from the observation that the CAA itself
imposes its own penalty for tampering with emission devices. First, Defendants argue
âthat imposing civil penalties for violations under the CAA and Utah SIP for the
same statutory prohibited activity constitutes a double penalty.â Aplt. Br. at 45. They
rely on two opinions by this court stating that ââdouble recovery is precluded when
alternative theories seeking the same relief are pled and tried together.ââ Id. at 46
45
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 46
(quoting Clappier v. Flynn, 605 F.2d 519, 530(10th Cir. 1979), and Mason v. Okla. Tpk. Auth.,115 F.3d 1442
, 1459 (10th Cir. 1997), overruled on other grounds by TW Telecom Holdings, Inc. v. Carolina Internet Ltd.,661 F.3d 495
, 497 & n.2 (10th Cir.
2011)). Clappier can be distinguished because it concerned only compensatory
damages and was merely recognizing that a plaintiff should not be permitted to
recover more in compensatory damages than the loss incurred. Civil penalties,
however, are not imposed to compensate a party but to penalize the defendant.
More in point is Mason, which considered the imposition of punitive damages,
a remedy that is also not designed to compensate the victim but to penalize the
defendant. We wrote:
Although the rule against double recovery arises most often in the
context of compensatory damages, it applies to punitive damages as
well. For instance, courts have held frequently that a plaintiff may not
recover both punitive damages under a state tort law claim and treble
damages under a federal statutory claim, where the state and federal
claims arise from the same operative facts and merely represent
alternative theories of recovery.
Mason, 115 F.3d at 1459 (footnote omitted);14 see also New York v. United Parcel
Serv., Inc., 942 F.3d 554, 600 (2d Cir. 2019) (âPenalties cascading on a defendant
14
Mason limited its double-recovery principle to circumstances in which both
theories of recovery were âpled and tried together.â 115 F.3d at 1459. On that ground
one could distinguish âdouble recoveriesâ from recoveries in multiple suits filed by
distinct plaintiffs. See Counties, 959 F.3d at 1223â24 (rejecting Volkswagenâs
argument that prior settlement agreement reached with federal government for
violations of § 7522(a)(3)(A) and (B) precluded further liability for the same conduct
in subsequent civil suit brought by counties for violations of overlapping state and
local prohibitions).
46
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 47
from several statutory regimes must be applied with great care when they result from
one underlying set of bad actions.â). But cf. Morse Diesel Intâl, Inc. v. United States,
79 Fed. Cl. 116, 121â22 (2007) (âThe court disagrees with the view that imposing
civil penalties under the Anti-Kickback Act, and separate civil penalties and treble
damages under the False Claims Act for the same acts, is either duplicative or
prohibited.â).15
Defendantsâ second theory is, in essence, that the penalties authorized for
violations of a state SIP must yield to the specific penalties set forth in § 7524(a) for
tampering with vehicle emissions controls. This theory may be in keeping with the
function of SIPs within the CAA framework. Their chief purpose is to regulate
stationary sources of pollution to attain air-quality standards established by the EPA.
They play only a limited role with respect to Title II of the CAA, which focuses on
mobile sources of pollution. Title II imposes just a few requirements on SIPs.16 To be
sure, a SIP may, as Utahâs does, establish further requirements on motor vehicles
(although only after sale to the ultimate purchaser), but the CAA does not generally
require them to. (Thus, when Texas adopted a SIP that, in the view of the EPA,
15
The government, by the way, had not sought double recovery in Morse,
stating that if it received the penalties and treble damages under the False Claims
Act, it would not pursue further penalties under the Anti-Kickback Act. See 79 Fed.
Cl. at 121.
16
See, e.g., 42 U.S.C. § 7545(m)(1)(A) (mandating oxygenated-gasoline requirements in SIPs for certain carbon monoxide nonattainment areas);id.
§ 7586(a)(1) (requiring SIPs to have clean-fuel vehicle programs for fleets in certain
nonattainment areas).
47
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 48
contradicted federal law governing tampering with motor-vehicle emission devices,
the EPA disapproved of the SIP but assessed no penalty on Texas because it had no
duty to address tampering in its SIP.17) One might infer that when Congress set the
penalty for violation of a SIP, it was contemplating violations by power plants and
factories, not motor vehicles. In particular, Defendantsâ apparent view is that a proper
understanding of the CAA requires interpreting the SIP penalty provision as not
permitting imposition of a penalty for violation of a SIP provision that duplicates the
CAAâs anti-tampering provision.18 Cf. Loving v. IRS, 742 F.3d 1013, 1020 (D.C. Cir.
2014) (Kavanaugh, J.) (rejecting interpretation of a general statutory penalty
provision as conveying to the IRS a âheretofore undiscovered carte blanche grant of
authority . . . to impose an array of penaltiesâ on tax-return preparers for conduct
already specifically targeted by a comprehensive penalty scheme in the Tax Code).19
17
See Approval & Promulgation of Air Quality State Implementation Plans
(SIP); Texas; Disapproval of Revisions to the State Implementation Plan, 63 Fed.
Reg. 6651 (Feb. 10, 1998).
18
As best we can tell, there is only one other circumstance in which a violation
of a SIP could also be a violation of a provision in Title II for which there is a
specific penalty in Title II. Penalties for violations of certain fuel regulations are
provided by 42 U.S.C. § 7545(d)(1). And a SIP may include a fuel regulation if the EPA finds that the regulation is necessary to achieve NAAQS. Seeid.
§ 7545(c)(4)(C)(i).
19
Even if this argument of Defendants is correct, it would not necessarily
foreclose States from setting their own penalty provisions for violation of their SIPs.
For instance, the Ninth Circuitâs decision in Counties suggests that defendants may
properly face liability under federal law for violation of anti-tampering provisions
included in the CAA and under state law for violation of the relevant Stateâs SIP. See
959 F.3d at 1223â25.
48
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 49
Neither of Defendantsâ arguments is frivolous. But we need not resolve them
at this time. That is because another of their argumentsâthat the district court did not
properly apply the statutory factors in evaluating the size of the penaltyâis
persuasive with respect to the SIP anti-tampering violations, so we must reverse and
remand for reconsideration of those penalties. The analysis is straightforward.
The CAA provides assessment criteria to be used in judicial and administrative
proceedings when imposing penalties. It states:
In determining the amount of any penalty to be assessed under
this section or section 7604(a) of this title, the Administrator or the
court, as appropriate, shall take into consideration (in addition to such
other factors as justice may require) the size of the business, the
economic impact of the penalty on the business, the violatorâs full
compliance history and good faith efforts to comply, the duration of the
violation as established by any credible evidence (including evidence
other than the applicable test method), payment by the violator of
penalties previously assessed for the same violation, the economic
benefit of noncompliance, and the seriousness of the violation.
42 U.S.C. § 7413(e)(1) (emphasis added).
We focus here on âthe seriousness of the violation.â The district court noted
that in evaluating the seriousness-of-the-violation factor, courts have considered
â(1) the number of violations; (2) the duration of noncompliance; (3) the significance
of the violation (degree of exceedance and relative importance of the provision
violated); and (4) the actual or potential harm to human health and the environment.â
UPHE II, 2020 WL 4282148, at *22 (internal quotation marks omitted). The court determined that the seriousness of the violation âweigh[ed] against mitigating penalties.âId. at *25
(emphasis added). But in so doing, the district court did not
49
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 50
give proper weight, if it gave any weight at all, to the judgment of Congress
regarding the severity of the tampering violations. We seek âobjective indications of
the seriousness with which society regards the offense.â Frank v. United States, 395
U.S. 147, 148(1969) (holding that a âpettyâ offense, for which jury trial is not required, is one for which the maximum sentence is no greater than six months). And when considering the seriousness of an offense for purposes of federal law, there could be no better objective indication than the penalty authorized by Congress for the specific conduct. See United States v. 817 N.E. 29th Drive,175 F.3d 1304, 1309
(11th Cir. 1999) (âBecause Congress is a representative body, its pronouncements regarding the appropriate range of fines for a crime represent the collective opinion of the American people as to what is and is not excessive.â). For example, when assessing the propriety of a punitive-damages award, courts may compare the award to the civil penalties that could be imposed for comparable misconduct to âaccord substantial deference to legislative judgments concerning appropriate sanctions for the conduct at issue.â BMW of N. Am., Inc. v. Gore,517 U.S. 559, 583
(1996) (internal quotation marks omitted). In this case we need look no further than the CAA itself. See Arizona v. ASARCO LLC,773 F.3d 1050, 1058
(9th Cir. 2014) (en banc)
(âHere, Congress has made a reasoned judgment not simply as to analogous criminal
or civil penalties, but as to punitive damages awarded in cases like the one at hand.
We need not search outside the statutory scheme Congress enacted for legislative
guidance in other contexts.â).
50
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 51
For persons other than manufacturers or dealers, the maximum penalty for
tampering with a motor vehicle, no matter what the aggravating factors, was set by
Congress at $2,500. See 42 U.S.C. § 7524(a). Such a clear signpost cannot be ignored. True, violations of requirements in SIPs are subject to a higher penalty cap. Seeid.
§ 7413(b) (ânot more than $25,000 per day for each violationâ). But the fact
that a factory or an industrial plant contaminating the atmosphere (and it cannot be
gainsaid that such stationary polluters are the bread-and-butter of a SIP) may merit a
much higher penalty is hardly ground for imposition of similar penalties for
tampering with an automobile emission system. The very fact that one of the
statutory assessment criteria is âseriousness of the violationâ testifies to the need for
an individualized assessment of each violation.
We therefore must hold that the district court abused its discretion in weighing
the seriousness-of-the-violation factor against Defendants in calculating penalties for
violations of the Utah SIPâs anti-tampering provision. We vacate the penalties
associated with those violations and remand for the district courtâs reconsideration.
2. Other challenges to the penalties
Our remand for reconsideration of the SIP anti-tampering penalties, however,
represents the only respect in which we agree with Defendantsâ arguments regarding
the penalties assessed against them.
To begin with, we see no other abuse of discretion in assessing the statutory
factors for imposition of penalties. In all other respects, the district courtâs careful
evaluation of the factors evinced the essence of judicial discretion. We do note,
51
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 52
however, that after judgment was entered Defendants presented some evidence of
financial reverses that led to a district-court order conditionally granting a motion
staying execution of the judgment. Reconsideration of the penalties in light of any
such developments is authorized on remand.
Finally, Defendants argue that the penalties imposed on them for violations of
Utahâs SIP are âexcessive and disproportionate to the gravity of the violations,â and
therefore unconstitutional under the Eighth Amendment. Aplt. Br. at 47. They attack
what they call the âoutrageously excessiveâ $114 million starting point calculated by
the district court for owning-and-operating violations by B&W. Id. But that is not the
penalty the court imposed. Although employing the top-down approach that starts
with the statutory maximum, the court lowered the owning-and-operating penalties
by more than 99.8%, to $114,426 for B&W. See UPHE II, 2020 WL 4282148, at *19, *25. The test for whether a fine is excessive under the Eighth Amendment is whether âit is grossly disproportional to the gravity of a defendantâs offense.â United States v. Bajakajian,524 U.S. 321, 334
(1998). In light of the flagrant misconduct by
Defendants, we see no gross disproportion. They have brought to our attention no
comparable case in which a civil penalty was held to violate the Eighth Amendment.
IV. CONCLUSION
The judgment of the district court is AFFIRMED IN PART and REVERSED
IN PART. On remand, the court shall make findings regarding which, if any, of the
vehicles sold or awarded to out-of-state customers were driven or operated in Utah
before sale. The following categories of violations shall then be excluded from the
52
Appellate Case: 20-4043 Document: 010110624784 Date Filed: 12/28/2021 Page: 53
total liability: (a) violations based on vehicles sold or awarded to out-of-state
customers without first being driven or operated in Utah; (b) violations based on
defeat parts sold to out-of-state customers; and (c) violations based on marketing (but
not sale) of defeat parts. Finally, the court will need to reassess appropriate penalties
under the CAA and Utahâs SIP in a manner consistent with this opinion, taking into
account the same factors as before, as well as any additional information the court
deems relevant.
53