Skip Brown, owner of asphalt paving company Delta Construction, together with construction and trucking interests sued the Environmental Protection Agency to ease a diesel regulation and curtail California air pollution efforts. March 9, 2017. Ingrid Lobet, inewsource
Skip Brown, owner of asphalt paving company Delta Construction, together with construction and trucking interests sued the Environmental Protection Agency to ease a diesel regulation and curtail California air pollution efforts. March 9, 2017. Ingrid Lobet, inewsource

Governor Jerry Brown swore last December that if the federal government stopped collecting crucial climate data, the Golden State would launch its own satellite. Repeatedly since then California leaders have vowed to continue their pursuit of clean air and climate progress, no matter how the Trump administration proceeds.

The state has long cut a separate path from the federal government, enacting stricter rules to clean up the noxious air many residents still breathe. Many of those rules focus on cars and trucks, because vehicles are California’s largest source of air pollution.

[one_half][box type=”shadow this-matters”]Several states rely on California, preferring its stricter vehicle pollution standards to the federal ones as their path to healthier air. [/box][/one_half] But one asphalt paving contractor, together with trucking and construction groups, has quietly pursued a sweeping challenge to California’s authority to lead. Oral argument in the lawsuit, which was filed in 2013, is set for next month before the U.S. 9th Circuit Court of Appeals, and the changeover in Washington could strengthen the plaintiffs’ hand.

If they prevail, it could affect the air people breathe, particularly if they live, work or play near heavy traffic. The decision would be far reaching, because other states adopt California’s car and truck emissions rules. Car buyers across the country could find fewer zero emissions cars. Truckers could find fewer choices for ultraclean trucks.

The trucking and heavy construction industries that filed the lawsuit say it would save the livelihoods of small business operators and prevent domination of their industries by large, multistate enterprises. They say it would also right a longtime wrong.

In Sacramento, Skip Brown runs the asphalt paving business his father founded 73 years ago, Delta Construction Co.

“We build roads,” Brown said, in a geography that ranges from the Sacramento Valley east to the Sierra high country. Delta Construction has rolled out thousands of miles of blacktop pavement.

“Never do it second rate,” is what his dad taught him, he says, with a mix of warmth and seriousness. “I’ve had a lot of people I’ve worked for who didn’t deserve a good job for the way they treated me,” he said. “They got a good job.”

But several years ago, California turned its attention to diesel engines. Already it had reduced tailpipe pollution from passenger cars to less than a tenth of what it was in the 1980s. With cars so much cleaner, truck engine exhaust played an outsized role. One new truck emissions rule affected Delta Construction’s water tanker truck. The truck supplies water for Brown’s pavement rollers, to keep the asphalt from adhering to the steel. But it sits in one place.

“You drive it out to the job and it is parked,” Brown said. “You don’t run it. The main engine of the truck is used to get there and go home.”

California offers incentives to owners of older, dirty-burning trucks, to help ease the cost of replacing them, which can run more than $100,000.  But Brown said a state official examined his vehicle logs, and told him he did not qualify for an incentive payment because the truck operated too few hours per year. It wasn’t worth it to expend state funds.

“I said, ‘It’s not worth it to you, but it’s worth it to you to mandate me to replace that truck, even though you know I only put 5,000 miles a year on it.’ ”

Then came what Brown calls the death blow, and the rule that prompted this lawsuit.

It’s called the “in-use, off-road diesel rule.” In-use means the rule applies to equipment currently being operated, not just future purchases. The new rule covered Brown’s chip spreader, a piece of equipment used to build roads in the hinterland. It also affects his pneumatic compactors and a tractor. Beginning next year he will have to retrofit them with diesel particle filters, buy new, or sell some of his equipment.

Brown was a regular at the meetings – years of meetings – that preceded the imposition of this rule. He explained to state officials how it would be impossible to pass on the cost of new equipment to his customers by raising his bids to do jobs. He just wouldn’t win bids.

He explained the chain reaction of being forced to sell equipment. Already, he said, because of earlier diesel truck rules imposed by California, he’s had to sell six vehicles at what amounted to predatory auctions. Buyers know the vehicles can’t be used in the state. With fewer assets, the bonding company and the bank downgraded Delta’s worth. The next thing Brown knew, his line of credit was reduced.

“The entire asset base that I have built through 50 years of being in this business has been destroyed and that is causing me to have to close the doors,” he said.

But not without a fight. Brown said he approached the Pacific Legal Foundation, an advocacy nonprofit based in Sacramento that is known for its work on property rights, anti-regulatory and tobacco cases.

The foundation hooked him up with Ted Hadzi-Antich, who has since become senior attorney at the Center for the American Future, the litigation arm of the Texas Public Policy Foundation, a conservative think tank.

For half a century California has had the right to require stricter vehicle pollution controls than the federal government. Other states are permitted to follow; frequently a dozen states do so.

Hadzi-Antich filed a challenge to California’s in-use off-road diesel rule. It alleges the state devalued billions of dollars worth of equipment in 8,000 construction, landscaping, air travel, manufacturing and ski resort fleets.

Plaintiffs include the Western Trucking Association, the Loggers Association of California Inc. and Dalton Trucking, which is the named plaintiff, among others, including Delta.

Aside from this financial harm, the lawsuit argues that air quality is so markedly improved in much of California that there is no reason to burden “a construction company in San Francisco, Mendocino or Placer County” with the kinds of control measures still necessary for Los Angeles and the Central Valley.

But the lawsuit aims much higher than eliminating this one rule, significant as that might be.  It calls into question the way the Environmental Protection Agency has handled California’s special rights under the Clean Air Act for decades.

“EPA from the very beginning interpreted it incorrectly,” Hadzi-Antich said.

He believes the federal agency has been asking the wrong question, or in legal terms, using the wrong test, each time California proposes a rule to address a particular type of vehicle pollution and seeks a waiver.

“EPA determined from the very beginning that it was going to rubber stamp each California waiver application unless California no longer needed its own mobile source emissions regulatory program as a whole,” he said. “But that’s not what the Clean Air Act requires. The Act requires EPA  to deny a waiver application unless California shows that it has a compelling and extraordinary need for the specific emissions reductions set forth in the application.”

Hadzi-Antich makes no predictions about how the 9th Circuit justices will receive his arguments. “No one has brought this type of case before,” he said.

The plaintiffs ask the court to vacate the waiver that allowed California to pursue the rule and send the request back to the Environmental Protection Agency.

The Obama administration fought the case hard. Then there was an election. Now the question is: Does Ted Hadzi-Antich still have an adversary? Or could the Trump Justice Department and the EPA under Scott Pruitt decide not to defend it at all?

A rule crafted over years

The California Air Resources Board, one of the most powerful environmental agencies in the world, effectively sets vehicle pollution limits not only for California, but for the Northeast and Western states that follow California’s lead. In the late 1990s it realized diesel exhaust was a severe problem.

Diesel fuel is more powerful, gallon for gallon, than gasoline. Diesel engines burn the fuel under high pressure and generate millions of infinitesimal particles. Tiny carbon spheres of exhaust get coated in other tailpipe chemicals. People breathe them and the packages are delivered into cells in the body. A California scientific panel determined in 1998 that diesel particles cause cancer, in particular lung cancer.

For the 20 years since, cutting diesel pollution has been a priority. The chances you will get cancer in California from diesel exhaust have consequently dropped dramatically, yet diesel is still believed to be responsible for 70 percent of the cancer risk from air pollution in California. Large swaths of the central part of the state and the southern coast have harmful levels of particles in the air. Diesel exhaust is a high priority for environmental justice and health advocates in transportation corridors all over the country.

Kim Heroy-Rogalski is an environmental engineer and a branch chief at the Air Resources Board, where she has worked for 20 years. She ran the group that formulated the in-use off-road diesel rule.

Never, she said, did she want to put anyone out of business. She and the board wanted to help keep people alive.

“Our understanding of the science is such now that we realize that even at the lower levels of pollution that we have now, many people are harmed,” she said. “There is still a really long way to go.”

It was clear to her early on that the rule would fall hardest on small businesses like Skip Brown’s. Larger firms can retire equipment on a regular schedule, rather than holding onto it for decades. Firms that are multistate can move equipment to other states if it no longer complies in California. But when the regulators looked at who owned the oldest equipment, small fleets owned too large a share to simply exempt them.

“We wanted them to be able to have the most cost effective way that made sense for their fleet to comply. And we also didn’t want the reg to be such a shock to the system that we would put people out of business. We wanted to gradually push people to get clean equipment, but it would be gradual and built into the way they were doing business.”

There is technology capable of capturing nearly all the particles from diesel vehicles before they are dispersed – particle filters or traps. So the goal was to get people to add these filters to their equipment or buy new equipment that already included them.

The new rule was passed in 2007. Heroy-Rogalski said the Air Resources Board  deliberately made it less stringent for small businesses, as determined by their total horsepower, and delayed the date when they would have to comply. They are given until 2019 – 12 years after the rule passed. Heroy-Rogalski said the state agency offers staff to work with small businesses to match their equipment to filters that are state-verified. “If there is none, then you don’t have to do anything. But the most they would be required to do is put a filter on it,” she said.

The state handed out $170 million to businesses to replace and retrofit engines in off road diesel equipment between 2006 and 2015.

A possible change of adversary

The lawsuit against this diesel rule is more sweeping than most. It seeks to limit the state’s independent pollution rules once and for all. Still, for California, the suit is de rigueur, said Stanley Young, communications director for the Air Resources Board.

“It doesn’t stand out. We have been sued regularly on waiver issues over the years, probably more than 10 times, and in every case we have prevailed,” he said.

California and some experienced environmental attorneys reject Hadzi-Antich’s interpretation of the law.

“The way the waiver statute was written in the federal Clean Air Act it is very favorable to California,” said David Pettit, a senior attorney with the Natural Resources Defense Council. “Basically we get it unless they come up with one of the narrowly circumscribed reasons for denying it.” That was done deliberately, he said, to give California room to innovate on vehicles.

But this lawsuit is not against California. It is filed against the Environmental Protection Agency. What if the new administration decided to weaken the system that allows California to pioneer air pollution rules? Some have said that is their hope.

It could be difficult for the federal government to change legal positions, according to John C. Cruden who recently left the top job in environmental prosecution at the Justice Department.

The head of the Environmental Protection Agency, Scott Pruitt, “cannot simply say  ‘we agreed with California before and today we do not agree with California,’” Cruden said. It would look like the environmental agency had two different positions, “and courts do not like that.”

If the Environmental Protection Agency did stop defending the rule, Ted Hadzi-Antich believes California might not be able to pursue its side alone. It does have the status of intervenor. When a court grants intervenor status, it makes the intervenor a full party in the lawsuit.

“I’m not sure how that would affect the Air Resources Board’s standing as an intervenor. The defendant here is the EPA. It is EPA that applied the incorrect test, not ARB. So I think there would be a serious issue for ARB to stand in the shoes of EPA to defend an action that it did not take,” he said. The Justice Department declined to comment.

California Attorney General Xavier Becerra indicated in an interview courts are likely to give deference to EPA’s more than four decades of pattern and practice. “Those are the kinds of fights where, if I am the side with the 40 years of evidence that shows a reason for it, I feel pretty good.”

Cruden said it would be “very significant” if the truckers and heavy equipment operators “won on the issue that EPA is wrong now and is historically wrong.” But he said it is an uphill battle for them.

Ingrid Lobet is a reporter at inewsource specializing in the environment. To contact her with tips, suggestions or corrections, please email