The Car and Truck Fleet and Leasing Management Magazine

Federal Court Upholds South Coast Fleet Rules

September 11, 2007

DIAMOND BAR, CA – The 9th Circuit Court of Appeals has upheld the South Coast Air Quality Management District’s fleet rules as they apply to government fleets, according to the National Association of Fleet Administrators(NAFA).

The Engine Manufacturers’ Association and the Western States Petroleum Association had challenged the fleet rules as being in violation of the Clean Air Act.

The fleet rules have been through extensive litigation. In April 2004, the Supreme Court reversed the lower court’s decision and held that purchase mandates, such as the fleet rules, may be preempted under Section 209 of the Clean Air Act. The Court went on to note, however, that its holding did not resolve the validity of the fleet rules and it remanded the case to the District Court to consider whether some of the fleet rules could be characterized as internal state purchase decisions, and, if so, whether they would be preempted by the federal Clean Air Act. At that time, NAFA joined AALA in an amicus to the Supreme Court.

The decision for the first time affirmed the application of the “market participant doctrine” to the federal Clean Air Act. Under the market participant doctrine, when government agencies, such as AQMD, purchase goods and contract for services, their actions are not subject to preemption by federal statutes, such as the federal Clean Air Act. Further, as the court held in this case, the market participant doctrine applies not just when agencies seek to obtain the best price for goods and services, but also when they seek to further other goals, such as reducing or preventing air pollution, according to NAFA.

In the opinion written by Ninth Circuit Judge William A. Fletcher, the court upheld the AQMD’s fleet rules to the extent that they apply to state and local government purchase and contracting decisions. The court remanded the case to the U.S. District Court to determine whether any provisions of individual fleet rules are outside the scope of the market participant doctrine.

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