California and Key Stakeholders Join Warehouse Regulation Lawsuit | Green Energy Enthusiast

today is Aug 15, 2022

The State and eNGOs seek to defend an emissions rule that trucking and airline trade groups are challenging in federal court.

By Joshua T. Bledsoe and Jennifer Garlock

On October 13, 2021, the State of California, on behalf of the Office of the Attorney General and the California Air Resources Board (CARB, and together, the State), filed a motion to intervene in a federal lawsuit challenging the South Coast Air Quality Management District (SCAQMD or the District) adoption of Rule 2305. Rule 2305 is the Warehouse Indirect Source Rule (ISR) – Warehouse Actions and Investments to Reduce Emissions (WAIRE) Program. Plaintiff, the California Trucking Association (CTA), filed a complaint in the US District Court for the Central District of California on August 5, 2021, to which the District filed an answer on October 7, 2021.[i] In addition to the State, Airlines for America filed a motion to intervene as a proposed plaintiff, while a group of environmental NGOs seek to intervene as proposed defendants. Each proposed intervenor is discussed further below.

The case was brought by CTA, an association “devoted to advancing the interests of its motor-carrier members, which include warehouse owners and operators, who provide transportation services in California.”[ii] CTA brings this lawsuit on behalf of its members, who it claims would be irreparably harmed if Rule 2305 is allowed to take effect, and seeks declaratory relief that Rule 2305 (and the related Rule 316 governing administrative fees) is invalid and unenforceable, as well as a preliminary and permanent injunction barring SCAQMD from implementing Rules 2305 and 316.

As described in Latham’s previous reporting on the rulemaking[iii] and adoption[iv] of Rule 2305, the regulation applies to warehouses in the South Coast Air Basin[v] of 100,000 square feet or more and aims to reduce regional nitrogen oxide (NOx) emissions and local diesel particulate matter emissions. Beginning in 2022, applicable warehouses will accrue a WAIRE Points Compliance Obligation (WPCO), which is calculated based on the weighted annual number of truck trips to the warehouse. WAIRE Points may be earned to meet the WPCO in several ways, including: (1) taking actions defined in the WAIRE Menu (Table 3 of Rule 2305); (2) implementing an approved Custom WAIRE Plan; or (3) paying a mitigation fee. The WAIRE Menu lists action items that a warehouse operator may take, and the corresponding number of Points that such actions will earn. The Point values are determined based on the cost of the action, the regional emission reductions achieved (NOx), and the local emission reductions achieved (DPM). Any combination of WAIRE Menu items, a Custom WAIRE Plan, and the mitigation fee may be used to meet the WPCO.

The CTA complaint alleges that Rule 2305 is designed solely to accelerate the transition of truck fleets to zero-emission (ZE) and near-zero-emission (NZE) trucks, and that this regulation of mobile sources is outside the authority of SCAQMD. CTA claims that Rule 2305 is preempted by federal law, not authorized by state law, and is an unlawful tax.

See Latham’s Client Alert on the litigation for more detail about the CTA’s four claims and the intervenors to the litigation.


[i] Case No.: 2:21-cv-6341.

[ii] Complaint at ¶ 13.

[iii] Latham Clean Energy Law Report, “Air District Targets Southern California Logistics Industry,” November 25, 2019, available at: https://www.cleanenergylawreport.com/california/air-district-targets-southern-california-logistics-industry/#more-2252.

[iv] Latham Clean Energy Law Report, “Air Regulators Tackle Trucking at Southern California Warehouses,” June 1, 2021, available at: https://www.cleanenergylawreport.com/california/air-regulators-tackle-trucking-at-southern-california-warehouses/.

[v] The South Coast Air Basin includes all of Orange County, and the non-desert portions of Los Angeles, Riverside, and San Bernardino counties. A map of the District’s jurisdiction is available at: http://www.aqmd.gov/docs/default-source/default-document-library/map-of-jurisdiction.pdf.

 


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