The California Air Resources Board this week filed a lawsuit against four truck manufacturers alleging breach of contract over their agreement with the state on the Clean Truck Partnership.
CARB claimed in its suit that it believes Daimler Truck North America (DTNA), International Motors, PACCAR and Volvo Group North America (VGNA), "have already or will soon breach the terms of the contract requiring them to sell clean vehicles in California, but even if any Defendant has not yet or does not soon breach the terms of the contract, all defendants have unambiguously stated that they do not intend to comply with the sales commitment terms of the Contract."
[Related: OEMs file lawsuit over 'backdoor' enforcement of banned CARB regs]
PACCAR, Volvo Group and DTNA declined to comment when reached by CCJ Thursday. International did not respond before publication time.
"It is an effort by CARB to forum shop in California state court to further protect the failed polices of the unelected bureaucrats who refused to listen to the trucking manufacturers, fleets, and dealers who told them their regulations were unattainable," Clean Freight Coalition Executive Director Jim Mullen told CCJ of the suit. "This is what happens when political dogma is the foundation for policy. While California continues with this unnecessary and expensive political-turned-legal drama, the trucking industry will continue to move the country’s freight and collaborate with stakeholders on improving truck emissions."
Dueling lawsuits
The group of OEMs targeted in CARB's suit filed a lawsuit of their own in August seeking an injunction, arguing that when President Donald Trump in June walked back Biden-era Environmental Protection Agency waivers relating to California Truck Emission Standards (CARB's Omnibus rule) and California Truck NOx Emission Standards (CARB's Advanced Clean Trucks regulations), it also rendered the CTP moot.
Preliminary hearings in that case are set for Friday. CARB said it will seek to dismiss the case late next month.
[Related: Truck makers' challenge to Clean Truck pact a response to a bad deal]
The suit filed Monday with the Superior Court of California makes good on a statement earlier this summer from Craig Segall, who helped write the Advanced Clean Trucks (ACT) rules while working as Deputy Executive Officer at CARB and negotiated the terms of the CTP: "We're still going forward."
Other signatories of CTP but not included directly in the lawsuits are Cummins, Ford Motor Company, General Motors Company, Hino Motors Limited, Isuzu Technical Center of America, PACCAR, Stellantis N.V., and the Truck and Engine Manufacturers Association (EMA).
DTNA, PACCAR, International and VGNA claim in their lawsuit that California is trying to use the CTP "to compel an entire industry to follow California emissions standards that are now in conflict with federal law, and which have been expressly preempted by federal law... CARB cannot attempt to enforce through a misapplied Clean Truck Partnership what federal law prohibits it from doing as a regulator..."
CARB in its counterclaim argued it "performed all, or substantially all, of the significant actions that the contract required" and as a result of the OEMs' promises, "CARB has begun several rulemaking proceedings, some of which it has completed; has prepared for and conducted various meetings and workshops; has prepared for and presented items to CARB’s Board; and has carried out other contract obligations, resulting in costs that exceed $35,000."
In its suit, CARB is not directly seeking monetary damages as the benefits for which CARB bargained – especially emissions reductions from the sale of cleaner vehicles, the agency said – "are such that a money damages remedy would not make CARB whole," according to the agency.
The terms of the Clean Truck Partnership included:
- CARB would align with EPA’s 2027 regulations for nitrogen oxide emissions. CARB would modify elements of the 2024 NOx emission regulations for which manufacturers will provide offsets as necessary to maintain California’s emission targets.
- CARB committed to provide no less than four years of lead time and at least three years of regulatory stability before imposing new requirements.
- Truck manufacturers commit to meeting CARB’s zero-emission and criteria pollutant regulations in the state, regardless of any attempts by other entities to challenge California’s authority. As such, the OEMs and EMA have agreed that they will not legally challenge or support others’ legal challenges to any state’s adoption of CARB's regulations.
- OEMs also committed to putting "forth their best efforts to sell as many zero-emission trucks as reasonably possible in every state that has or will adopt CARB’s ACT regulations, even potentially exceeding any future U.S. EPA Phase 3 Greenhouse Gas requirements, irrespective of the outcome of any litigation that has been filed or may be filed challenging the waivers or authorizations for those regulations or CARB’s or any state’s overall authority to implement those regulations."
CARB's odds not good
CARB's odds to hold OEMs to the agreement are long.
The U.S. Department of Justice in June sent a letter to the OEMs reinforcing disapproval of California’s waivers by the federal legislative action that rendered California’s standards preempted, and further explained that it also preempted the CTP, calling the agreement “the regulatory mechanism by which CARB attempts to enforce preempted California emissions standards." The DOJ in August filed motions in to intervene in two lawsuits against CARB over the state’s enforcement of now-federally preempted emissions standards through the CTP.
