Clean Air Act Doesn’t Preempt Dallas’ Green Taxi Program

The Fifth Circuit has upheld a Dallas ordinance that incentivizes taxi operators to convert to compressed natural gas (CNG) vehicles by allowing them to cut to the front of holding lines at municipally owned Love Field.  The Association of Taxicab Operators (ATO) had challenged the ordinance, claiming it was preempted under the Clean Air Act (CAA).

In its preamble, Ordinance 27831 says that Dallas and Tarrant counties are ozone nonattainment areas and that CNG vehicles emit less air pollution than traditional vehicles do.  To promote CNG, the ordinance allows taxis that are certified as CNG-powered, and that make unscheduled pickups at Love Field, to advance to the head of the airport’s taxicab holding area.  The ordinance doesn’t apply to taxis when operating outside the airport.

To qualify its vehicle as CNG, a taxi operator must submit an application to the City of Dallas that includes proof that the vehicle was either manufactured as CNG or converted to CNG, in line with federal regulations.  The city then gives the operator a nontransferable emblem identifying the vehicle as CNG.  (A factually similar ordinance giving head-of-line benefits to CNG taxis at airports was unsuccessfully challenged on state contract law grounds in California several years ago.  Cotta v. City and County of San Francisco, 157 Cal. App. 4th 1550 (Cal. Ct. App. 2007).)

The ATO sought declaratory judgment, a permanent injunction, a preliminary injunction and a temporary restraining order.  The district court issued the TRO before rejecting the preliminary injunction request and ultimately granting summary judgment on behalf of the city.

The ATO rested its argument on Section 209(a) of the CAA, 42 U.S.C. § 7543(a): “Prohibition.  State or any political subdivision thereof shall adopt or attempt to enforce any standard relating to the control of emissions from new motor vehicles or new motor vehicle engines subject to this part [42 USCS §§ 7521 et seq.]. No State shall require certification, inspection, or any other approval relating to the control of emissions from any new motor vehicle or new motor vehicle engine as condition precedent to the initial retail sale, titling (if any), or registration of such motor vehicle, motor vehicle engine, or equipment.”

ATO argued the ordinance was an emissions “standard” and thus preempted  The Fifth Circuit drew a definition of “standard” from Engine Manufacturers Association v. South Coast Air Quality Management District (EMA), 541 U.S. 246 (2004), which had found that within Section 209(a) that term referred to “a command, accompanied by sanctions.”

The Fifth Circuit concluded that Ordinance 27831 was not on its face a “command, accompanied by sanctions.”  “It is a compelling offer, not a compelled restraint.  All Dallas may ‘enforce’ under the law is compliance with the head-of-line privilege and the procedure for verifying dedicated CNG vehicles.”

The court then found that the ordinance did not indirectly amount to a command.  ATO cited to a Southern District of New York decision – Metropolitan Taxicab Board of Trade v. City of New York, 633 F. Supp. 2d 83 (S.D.N.Y. 2009) (Metro) – that held that the Energy Policy and Conservation Act of 1975  preempted a program to green New York’s taxi fleet.  That program allowed taxi owners to lease hybrid vehicles to taxi drivers at higher rates and non-hybrid vehicles at lower rates.  The Metro court found, as summarized by the Fifth Circuit, that the New York program “was so coercive as to indirectly mandate that cab owners purchase hybrids, constituting an offer which cannot, in practical effect, be refused.”

The Fifth Circuit distinguished Ordinance 27831 by observing that there was no evidence that CNG taxis would replace traditional taxis outside the airport or that traditional taxi cab drivers could not compensate for lost airport revenue by picking up extra fairs elsewhere in the city.

(Curiously, the court seemed swayed by the idea that Ordinance 27831 would not influence more than what it described as a small percentage of the city’s taxi fleet.  But the statistic that it cited in its support – no more than 7 percent of Dallas cabs operate as Love Field – is far from negligible; and the Ordinance 27831 preamble includes language about nonattainment and mobile sources that suggests the city wants the ordinance to have the broadest impact possible.)

The court thus held that Ordinance 27831 did not indirectly function as a Section 209(a) “standard.”  It declined “to parse precisely when an incentive program might turn sufficiently coercive to qualify as a de facto standard.”

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