September 24, 2021

Democratic AGs Seek Stiffer Penalties For CAFE-Standards Violations

Bernard Nash

Cozen O'Connor

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Cozen O'Connor

A group of 13 Democratic AGs, led by California AG Rob Bonta and New York AG Letitia James, sent a letter to the National Highway Transportation Safety Administration (“NHTSA”) to restore penalties for automakers that failed to meet corporate average fuel economy (“CAFE”) standards for model years 2019-2021 vehicles.
The letter calls on NHTSA to immediately reverse an interim final rule promulgated by the Trump administration just before President Trump left office, which reduced a 2016 inflation-adjusted penalty from $14 to $5.50 for every tenth of a mile-per-gallon that an automaker fell below the CAFE standards beginning for model year 2019 vehicles.
The letter argues that NHTSA has no reason to delay the restoration of the $14 penalty rate because any CAFE-standard violations for model years 2019-2021 occurred after the $14 penalty was announced in 2016, thus negating any retroactivity concerns, and because automakers were aware of the $14 penalty since at least July 2016 and could not have reasonably relied on the $5.50 rate, among other things. The letter notes that the Trump-era rule was successfully challenged in the Second Circuit in 2018 and 2020.

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