Natural Resources Defense Council, Inc. v. National Highway Traffic Safety Administration

Petitioners filed a motion for voluntary dismissal after NHTSA repealed the challenged ruled and restored the statutorily required penalty rate.

On January 13, 2022, the Second Circuit Court of Appeals denied a motion by Tesla, Inc. to lift the abeyance and grant summary vacatur in proceedings challenging a January 2021 interim final rule that delayed an inflation adjustment to the civil penalty for violations of the Corporate Average Fuel Economy (CAFE) standards. Tesla filed the motion in August 2021, contending that removal of the cases from abeyance was warranted because the federal government had made “no tangible progress” in its review of the rule, which the government initially estimated would take six months. Tesla argued that the delays “significantly diminished” the value of credits “earned by over-performing companies like Tesla” and also affected the CAFE program’s stability, undermining “the public’s interest in cleaner air, climate protection, and energy conservation.” In its most recent status report to the court earlier in January 2022, the National Highway Traffic Safety Administration reported that it had submitted a draft final rule to the Office of Information and Regulatory Affairs for regulatory review.

The Second Circuit Court of Appeals granted the National Highway Traffic Safety Administration’s motion to hold in abeyance challenges to an interim final rule published on January 14, 2021 that delayed an inflation adjustment to the civil penalty for violations of fuel economy standards. Petitioners had moved for expedited review, but the court denied that request. The court also referred to the merits panel a motion by Tesla, Inc. for summary vacatur or a stay pending judicial review. Tesla originally sought to intervene in the proceedings, but then filed its own petition for review. The Second Circuit denied its motion to intervene as moot and granted a motion to intervene by Alliance for Automotive Innovation, which submitted the rulemaking petition to which the interim final rule responded.

Natural Resources Defense Council and Sierra Club filed a petition for review challenging an interim final rule published on January 14, 2021 that provided that a 2016 inflation adjustment to the civil penalty for violations of Corporate Average Fuel Economy standards would not go into effect until model year 2022. The National Highway Traffic Safety Administration adopted the interim final rule in response to an October 2020 rulemaking petition from the Alliance for Automotive Innovation. The Alliance submitted the rulemaking petition after a Second Circuit ruling in August 2020 reinstated the 2016 penalty increase.