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Tuesday, December 07, 2010

NYC Taxis, EPCA Preemption, and the Fruits of Textualist Madness

Textualism is supposed to make judging simple. The latest round of Energy Policy and Conservation Act ("EPCA") preemption cases, however, shows how textualist slogans quickly lead to absurdity unless they are tempered by purposivist reality. In particular, unless SCOTUS grants cert in Metro Taxicab Board v. NYC to clean up the mess left by Justice Scalia's 2004 textualist excursion in Engine Mfrs. Ass'n v SCAQMD, NYC might find itself unable to consider fuel costs when setting lease rates for cabs. Fleets that purchased expensive hybrid cabs would be required to lease out their more fuel-efficient cabs to drivers at the same rates as fleets using cheaper and clunkier Crown Victoria cabs, even though the hybrids are (obviously) much cheaper for the drivers to gas up. Given that lease rates are supposed to reflect the drivers' operation costs, this would mean that fleet owners who invested in hybrids would not be able to recover the extra cost in higher lease rates even though their drivers face lower fuel costs than the drivers of gas-guzzling Crown Victorias.

If you think that Congress could not possibly have wanted to mandate such an absurdity as a matter of federal law, you are, of course, correct. But if you want to know how Justice Scalia's textualist rhetoric led to such a pass, read on.

This particular strain of the textualist virus was introduced in 2004, when the SCOTUS held that the Section 209(a) of the Clean Air Act barred the South Coast Air Quality Management District ("SCAQMD") from requiring both public and private auto fleet owners to buy cars that meet certain emission standards. Section 209(a) has an apparently broad preemption clause specifying that stated that "[n]o 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 U.S.C. § 7543(a) (emphasis added).

Justice Scalia, of course, began with a dictionary, noting that the definition of "standard" -- "model or example; criterion; test" -- obviously include purchasing standards. Requiring fleet owners to buy cars that meet an emission standard (say, because they burn gasohol) is imposing a "standard relating to the control of emissions" on those fleet owners. Few could quarrel with this conclusion: SCAQMD was plainly imposing a regulatory standard on private fleet owners that explicitly specified the emissions for cars being purchased.

The problem, however, was the textualist literalism. It plainly went beyond any likely purpose of Congress to ban any state or local rule specifying automobile fuel emissions, even for the subnational governments' own purchases and even for voluntary incentive programs -- say, a subsidy for private persons who buy hybrids. Congress wanted to free manufacturers from conflicting regulatory standards -- that is, "coercive" rules forcing otherwise unwilling private sellers and private buyers to sell or buy vehicles that were cleaner than the buyers and sellers desired. But it is madness to think that Congress wanted to bar state and local governments from ever taking into account the fuel efficiency of cars.

Consider subnational governments' own purchasing decisions. Are subnational governments really stripped of the power that any private buyer enjoys of selecting their purchases based on (among other criteria) how much gas they guzzle? Must Mayor Bloomberg, for instance, ignore the mileage of possible purchases when selecting his official limo? Must NYC really not impose any fuel-efficiency standard on bidders seeking to supply squad cars to the city? Of course not: Not even Justice Scalia would bite that bullet in the name of textualism. Instead, Scalia airily remanded the case with the observation that

We have not addressed a number of issues that may affect the ultimate disposition of petitioners’ suit, including the scope of petitioners’ challenge, whether some of the Fleet Rules (or some applications of them) can be characterized as internal state purchase decisions (and, if so, whether a different standard for pre-emption applies), and whether §209(a) pre-empts the Fleet Rules even as applied beyond the purchase of new vehicles (e.g., to lease arrangements or to the purchase of used vehicles).

In other words, "standard" means "standard," plain and simple (just the text, Ma'am, just the text) -- except when it doesn't, as it might not with "state purchase decisions, for reasons that Justice Scalia left utterly opaque.

Likewise, Scalia side-stepped the problem of subnational incentive programs -- tax credits, grants, etc -- designed to promote fuel efficiency by encouraging the manufacture or purchase of fuel-efficient cars. If, for instance, the University of Michigan were to fund research into engine design in order to promote the creation of an engine that emitted less greenhouse gas, the University would plainly be imposing an "emission standard" on researchers, if one simply looked at the dictionary definition of "standard." So what does Justice Scalia say about such voluntary programs? Again, he airily declared that

"[v]oluntary programs are not at issue in this case, and are significantly different from command-and-control regulation. Suffice it to say that nothing in the present opinion necessarily entails pre-emption of voluntary programs. It is at least arguable that the phrase “adopt or attempt to enforce any standard” refers only to standards that are enforceable–a possibility reinforced by the fact that the prohibition is imposed only on entities (States and political subdivisions) that have power to enforce."

Huh? As a textual matter, how exactly is a "standard" for research proposals any less of a "standard" than a "standard" for a regulatory program? How is it that the University of Michigan -- a state actor -- does not "enforce" its specifications for research design when it turns down proposals that do not meet those specifications? The answer, of course, cannot be found in the textual meaning of "enforce": It is found, instead, in the purpose of the textually unambiguous statute. Everyone knows that Congress did not want to shut down research in fuel efficiency or require Mayor Bloomberg to be driven about in a Lincoln Towne car. But Justice Scalia neither embraced textualism's preposterous results nor abandon textualism: He simply left it for lower courts to figure out how exactly the standards for tax credit programs, state purchasing decisions, or state university research proposals were somehow not "standards" being "enforced" by the relevant state actors -- all the while proclaiming a fealty to dictionary definitions that patently did not do the work of drawing the distinctions that, as Justice Scalia himself admitted, must be drawn.

Scalia's Textualism, in short, is impressive in abstract but riddled with unexplained exceptions. It is this textualist rhetoric that has landed NYC's taxicab leasing rules in the zone of federal preemption. NYC regulates every aspect of cabs -- their number, their physical dimensions (from wheel base to color), the fares charged to customers, and the rates at which owners can lease the vehicles to drivers. Given this pervasive control, it would be odd if NYC did not take into account the vehicles' fuel efficiency: How can one decide what rate to charge drivers and passengers unless one has some notion of how much it costs to gas up the vehicle? Following this common-sense logic, NYC allowed owners of hybrid cabs to charge drivers more to lease the more fuel-efficient vehicle than owners of clunky Crown Victorias. The drivers, after all, pay less to gas up hybrids, and lease rates are supposed to be based (in part) on the costs that cabbies face in operating the cars: The more the cabbie has to pay to drive the vehicle, the less the owner is allowed to charge. On this regulatory logic, it only makes sense that the owners should be able to recoup their investment in more expensive hybrid vehicles, because that investment lowers cabbies' costs of operation.

Did Congress mean to preempt the Taxi & Limo Commission's consideration of fuel costs in setting rates? Of course not -- and such preemption is no less absurd than preempting NYC's consideration of fuel costs in their own purchasing decisions for squad cars. If a subnational government generally considers other sorts of costs in setting rates, then it would be silly to exempt fuel costs from the general rate-making scheme. Unfortunately, Justice Scalia never got around to dropping an ad hoc exception for cab regulation in Engine Mfrs Ass'n as he did for "states' internal purchasing decisions." So Judge Walker of the Second Circuit followed Scalia's textualist logic right off the cliff, holding in a mere seven-page decision that NYC's lease caps were preempted by EPCA's preemption clause, which specifies that "[A] State or a political subdivision of a State may not adopt or enforce a law or regulation related to fuel economy standards ... for automobiles covered by an average fuel economy standard under this chapter." 49 U.S.C. § 32919(a).

On textualist reasoning, this conclusion is sound enough. If one regulates taxi lease rates by taking into account taxis' fuel economy, then one has surely regulated in a way "related to" fuel economy. The problem is that, as a matter of statutory purpose, this interpretation is silly: Congress wanted to prevent states from interfering with aspects of cars that were already regulated by the feds. But the feds do not set taxi lease rates. Liberating only one cost -- fuel costs -- from rates that otherwise take costs into account is essentially requiring cab owners who pay more for hybrids to provide a special fuel subsidy to the operators of Victoria Crowns.

What can be done? The Federal Government submitted an amicus brief to the Second Circuit urging a "taxi-and-limo-regulation" exception to the Engine Mfrs Ass'n ban on subnational consideration of fuel efficiency. If accepted by the Court, this ad hoc exception would join the "market-participant" exception and the "voluntary incentive" exception in the parade of forlorn bastard consequences that that Scalia would grudgingly acknowledge but not bother to justify. (As Michael Burger has explained, lower courts seem to have taken Scalia's hint, adopting a "market-participant" exception on the basis of the unreasoned dicta in Engine Mfrs Ass'n).

Rather than grafting more ad hoc exceptions onto EPCA and the CAA, maybe it would be better to revert to the statute's basic purpose and assume that "fuel economy standards" in EPCA's preemption clause or "standard relating to the control of emissions" in the CAA are terms of art referring only to regulations imposed on willing private buyers and private sellers whose prices, services, and goods are not otherwise pervasively regulated by subnational governments. Such a reading would distinguish the sorts of regulations that Congress meant to preempt from state university's grants to researchers, cities' purchases of squad cars, and cities' regulation of taxi fares and lease rates.

As a textual matter, such a reading of the term is not overwhelmingly persuasive. But maybe it is time for a clean break with a textualism that the Court has not and should not honor when it leads to policy nonsense.

Posted by Rick Hills on December 7, 2010 at 09:39 AM | Permalink


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Excellent post. Wouldn't Scalia say that all judges can do is strive to do their best to apply the plain meaning of the language that the legislators used, even if it is undesirably ambiguous and leads to silly results, and that it is the obligation of the legislators to correct for any absurd results? So I would think, if he were holding to his textualist position, that he would not allow for or even hint at any exceptions not clearly provided for in the statutory text. I think his speculation about the possible limiting effect of the word "enforce" is curious, given that the preemption clause appears to apply to any standard that could be "adopt[ed]," whether or not it could be "enforce[d]." He seems to acknowledge this possible interpretation of the preemption clause by inserting the qualifier "It is at least arguable..."

Posted by: Anon | Dec 7, 2010 1:56:15 PM

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