Original Source: http://www.dailycal.org/article.php?id=14851

No Environmental Review Needed From DOT For Mexican Trucks, Supreme Court Decides

June 10, 2004

By Rossella Brevetti, John H. Stam,
John Nagel, and Carolyn Whetzel

     In a victory for the Bush administration, the U.S. Supreme Court June 7 gave the go-ahead for Mexican trucks to operate in the United States without the preparation of a lengthy environmental impact statement (Department of Transportation v. Public Citizen, U.S. No. 03-358,6/7/04).

     The unanimous decision represents a defeat for the nongovernmental organization Public Citizen, the Teamsters union, and other groups (collectively Public Citizen) that had sought to block an expansion of Mexican trucking in the United States even though the North American Free Trade Agreement provided for it.

     Transportation Secretary Norman Y. Mineta welcomed the decision, saying it represented more opportunities for American firms, more jobs for American drivers, and better deals for consumers.

     "Today's decision by the Supreme Court opens the way for the U.S. Department of Transportation to continue working with Mexican authorities to move forward with long-haul bus and truck operations. We are committed to a comprehensive approach to guarantee that trucks and buses operating within the United States are in compliance with all applicable safety and environmental standards," Mineta said in a statement.

     The ruling reverses and remands a U.S. Court of Appeals for the Ninth Circuit decision of January 2003 that the DOT's Federal Motor Carrier Safety Administration (FMCSA) must prepare full environmental impact statements under the National Environmental Policy Act (NEPA). The environmental and labor groups claimed that as the last step before Mexican trucks are allowed into the United States, FMCSA must consider the impacts of the increased emissions from the trucks throughout the United States. The appeals court had also found that DOT must make state implementation plan conformity determinations under the Clean Air Act (CAA) before authorizing Mexican trucks to operate beyond the 20-mile border zones where they are currently limited (Public Citizen v. Department of Transportation, 316 F.3d 1002, 55 ERC 1737 (9th Cir. 2003).

     "Because FMCSA lacks discretion to prevent these cross-border operations, we conclude that these statutes impose no such requirement on FMCSA," Justice Clarence Thomas wrote in the court's opinion. The court found that FMCSA has limited discretion on motor vehicle registration under 49 U.S.C. § 13902(a)(1) and must grant registration to all carriers that comply with FMCSA's safety, vehicle fitness, and financial responsibility requirements. Under the court's ruling FMCSA must only evaluate the immediate impacts of the inspections it performs, typically minor emissions from idling vehicles during the testing and roadside inspections.

Mexico Expects More Delay

     In Mexico, the U.S. Supreme Court decision was welcomed, but Mexico's trucking industry continues to expect that implementation of NAFTA's trucking provisions will be delayed because of the U.S. operating rules for Mexican carriers.

     Oscar Moreno, director of international affairs with Mexico's National Cargo Chamber, an industry association representing truckers, downplayed the importance of the decision with respect to implementing NAFTA trucking provisions: "This decision does not modify the situation with respect to the real problem, which are the U.S. operating regulations," he told BNA.

     Moreno said that the opening of the border to Mexican trucks and vice versa is likely to be further delayed by what he called "discriminatory" provisions in the regulations, such as requirements that Mexican trucking companies have a representative office in each state in which their trucks travel; have insurance issued by U.S. companies; have drivers conversant in English; and have vehicles that meet U.S. manufacturing standards.

Delayed Border Opening

     This case arose from a 1982 moratorium limiting Mexican truck operations to narrow commercial zones where goods must be transferred to U.S. trucks for further transportation in the United States. NAFTA was to have lifted the moratorium in 2000, but the border opening was delayed because of safety concerns (17 ITR 16, 1/16/00).

     On Feb. 6, 2001, a NAFTA arbitration panel determined that the continued refusal by the United States to allow Mexican trucks throughout the United States violated NAFTA. The panel had reasoned that the United States must consider Mexican operators' applications on a case-by-case basis instead of imposing a blanket restrictions on Mexican trucks traveling beyond the border zones (18 ITR 222, 2/8/01). The Bush administration pledged to give Mexican trucks full access to U.S. highways by Jan. 1, 2002.

     However, in December 2001, Congress enacted the Department of Transportation and Related Agencies Appropriation Act. Section 350 of the act prohibited the expenditure of funds to review or process Mexican trucks until FMCSA promulgated specific application and safety-monitoring rules.

     FMCSA issued the three rules on March 19, 2002, to bring the United States into compliance with NAFTA (19 ITR 503, 3/21/02). President Bush lifted the moratorium Nov. 27, 2002.

     Under NEPA mandates, FMCSA conducted an environmental assessment (EA) for the proposed application and safety monitoring rules. However, it concluded that a full EIS was not necessary and that it did not need to perform a "conformity review" of the regulations because the increase in emissions from the regulations fell below the Environmental Protection Agency's threshold for triggering such a review.

     The court of appeals sided with Public Citizen in concluding that the EA was deficient and that a full EIS was necessary. Under NEPA, an agency is required to prepare an EIS only if it is undertaking a major federal action that significantly affects the quality of the human environment. The appeals court also directed FMCSA to prepare a full conformity assessment for the challenged regulations.

Supreme Court Arguments

     In arguments before the Supreme Court, the government argued that the decision frustrated the administration's ability to comply with NAFTA.

     Lawyers for Public Citizen countered that an EIS was needed because Section 350's expenditure bar made it impossible for Mexican trucks to operate in the United States until the rules were promulgated. The respondents criticized the EA's failure to take into account various environmental effects caused by an increase in cross-border operations of Mexican carriers (21 ITR 704, 4/22/04).

     The high court's 19-page opinion rejected the reasoning of the appeals court and the respondents. It noted that an agency's decision not to prepare an EIS can only be set aside if it is "arbitrary and capricious, an abuse of discretion, or otherwise not in accordance with law."

     Further, even though Section 350 restricted FMCSA's ability to authorize cross-border operations, FMCSA must still comply with 49 U.S.C. § 13902(a)(1)'s mandate to register any motor carrier willing to comply with various safety and financial responsibility rules, the court said. Specifically, the court noted, FMCSA has no authority to regulate emission controls or to establish environmental requirements unrelated to motor carrier safety.

     The Supreme Court held that under NEPA where an agency has no ability to prevent an effect due to its limited statutory authority over relevant actions, the agency is not the cause of the effect. The Mexican trucks entering the United States were caused by the president's discretionary decision to lift the moratorium, not the FMCSA performing its nondiscretionary duty to certify the safety of incoming vehicles, the Supreme Court said.

Limited Statutory Authority Key

     "We hold that where an agency has no ability to prevent a certain effect due to its limited statutory authority over the relevant actions, the agency cannot be considered a legally relevant 'cause' of the effect. Hence, under NEPA and the implementing [Council of Environmental Quality] regulations, the agency need not consider these effects in its EA when determining whether its action is 'major federal action.' Because the president, not FMCSA, could authorize (or not authorize) cross-border operations from Mexican motor carriers, and because FMCSA has no discretion to prevent the entry of Mexican trucks, its EA did not need to consider the environmental effects arising from the entry," the Supreme Court wrote.

     The respondents, the court said, forfeited any objection to the environmental assessment on the grounds that it failed to discuss possible alternatives because they never identified in their comments any rulemaking alternatives beyond those evaluated.

     Further, in rejecting the argument that an EIS was necessary, the court cited the "rule of reason," ensuring that agencies determine whether to prepare an EIS based on the usefulness of the information to the decisionmaking process. FMCSA lacks the power to act on any information contained in an EIS and could not act on public input since it has no ability to prevent the cross-border operations from taking place, the court said.

     The NEPA EIS requirement fulfills two purposes--to ensure that an agency has relevant information to help in its decisionmaking and that the public receives information so it can take part in the decisionmaking process, the court wrote. "Requiring FMCSA to consider the environmental effects of the entry of Mexican trucks would fulfil neither of these statutory purposes," the court wrote.

     EPA rules require a conformity determination under the CAA for each pollutant "where the total of direct and indirect emissions ... caused by a Federal action would equal or exceed" threshold levels established by the EPA, the court noted.

     Because the emissions from Mexican trucks are neither "direct" or "indirect" emissions caused by the issuance of the regulations, FMCSA did not act improperly by refusing to conduct a full conformity review analysis for its proposed regulations, the court reasoned.

Estimated 34,000 Mexican Trucks

     Jonathan Weissglass of Altshuler, Berzon, Nussbaum, Rubin & Demain in San Francisco represented the petitioners in oral arguments before the Supreme Court. He told BNA June 7 that the court's decision was narrow and procedurally based, stemming from the court's perception of the FMCSA's lack of statutory authority to control emissions. Weissglass said that "the court's opinion does not address the substantive effects of the decision, what will happen when tens of thousands of diesel trucks arrive in the states."

     He said that according to the agency's own estimate in the environmental assessment, there will be 34,000 Mexican trucks entering the United States in the first authorized year alone. The emissions from these trucks "will no doubt be dispersed throughout the country, but concentrated" most heavily on the four border states. Most heavily impacted, Weissglass predicted, would be Los Angeles and Houston, which are already taxed by poor air quality.

     "Diesel truck emissions are a serious health hazard," Weissglass said. The court's decision leaves states with making "after the fact reactions" instead of planning based on information from an environmental assessment performed before the truck emissions impact air quality, he said.

Range of Reactions

     Teamsters General President James P. Hoffa blasted the decision, saying it was a setback for advocates for safe roads, clean air, and a secure America. He said that the ruling was solely based on FMCSA's obligation to comply with the president's decision.

     "The Court, however, failed to consider the fact that the FMCSA still could have complied with the announcement after an environmental review was conducted. Instead, the Supreme Court decided to ignore the environmental health and welfare of U.S. citizens, including millions of Mexican American families living in the border region, who will be impacted the most by this decision," he said in a statement.

     California Attorney General Bill Lockyer (D) issued a statement calling the decision "much more than a legal loss."

     California and eight other states filed an amicus brief opposing the federal decision. The states argued that Mexican commercial trucks, which do not have to meet federal and California emission standards, would worsen local air quality.

     "Because this action will increase pollution, our state and local air quality officials now face the task of adopting new measures to counterbalance the harm," Lockyer said. "Unfortunately, California's businesses may end up shouldering that burden."

     California Air Resources Board spokesman Jerry Martin told BNA that the agency has "real concerns" about the Mexican-registered heavy-duty trucks operating in the state.

     Officials at the South Coast Air Quality Management District, which oversees air quality in the Los Angeles, estimated that opening the roadways to the trucks would increase nitrogen oxide emissions by 50 tons a day, Martin said.

     "We don't have 50 tons a day," he said, noting the state, particularly the Los Angeles region, could not handle the added emissions and meet federal air quality standards.

     The California Trucking Association told BNA it would seek state legislation to require that Mexican trucks that spend a majority of their time in the state be held to the same emission and fuel standards as California-registered vehicles.

     "We will try to move a California bill that will probably get litigated," Stephanie Williams, vice president of the association, said.

     The U.S. Chamber of Commerce said the decision to open U.S. borders was long overdue. "We have no credibility calling on other countries to fulfill their trade commitments, if we refuse to honor our own trade promises," Chamber President and Chief Executive Officer Thomas Donohue said.