CHRYSLER CORP. v. ENVIRONMENTAL PROTECTION AGENCY

Opinion for the Court filed by SPOTTSWOOD W. ROBINSON, III, Circuit Judge.

SPOTTSWOOD W. ROBINSON, III, Circuit Judge:

In these cases, petitioners challenge the validity of regulations promulgated for medium and heavy trucks1 by the Administrator of the Environmental Protection Agency (EPA) purportedly pursuant to the Noise Control Act of 1972.2 Because of jurisdictional limitations on review of these regulations,3 we find ourselves unable to rule on the merits of petitioners' arguments save in one respect. That exception is their attack on warranty provisions of the regulations,4 and these we find to be invalid under the Act.

I. BACKGROUND

The Noise Control Act of 1972 is another in the series of major congressional efforts to achieve at least a minimum acceptable level of environmental quality. A prominent and integral feature of the Act's regulatory scheme is the promulgation of noise emission standards,5 a function delegated to the Administrator of the Environmental Protection Agency.6 The Administrator is required to compile and publish a report identifying those products or classes of products which in his judgment constitute "major sources of noise."7 It thereafter becomes incumbent upon the Administrator to prescribe regulations covering identified products within four categories when noise emission standards are deemed feasible.8 The regulations must set standards limiting noise emission from such products, and may erect testing procedures to acquire compliance with the emission standards.9 With exceptions inapplicable here, distribution of noncomplying products in interstate commerce is prohibited.10

In 1974, responsively to these statutory mandates, the Administrator identified as major noise sources medium and heavy trucks with gross vehicle weight ratings in excess of 10,000 pounds, and proposed detailed regulations dealing with them.11 The proposals included not only noise emission standards but test methodology, enforcement programs and warranty requirements as well. After rulemaking proceedings, regulations on these subjects became final in 1976.12

Timely petitions for review were filed in this court by four major American truck manufacturers.13 While petitioners do not question the emission standards14 or the testing procedures15 thus established, they do assail the enforcement16 and warranty17 regulations.18 The enforcement program permits EPA to inspect and monitor regulated products and required records,19 to recall noncomplying products,20 and to put an end to distribution of vehicles by manufacturers disregarding specified regulations.21 The warranty provisions exact from the manufacturer responsible for production verification of the vehicle22 a warranty that it was "designed, built and equipped to conform at the time of sale . . . with all applicable U.S. EPA noise control regulations."23 On both statutory and constitutional grounds, petitioners say these administrative exertions are invalid.

II. THE ENFORCEMENT REGULATIONS

At the outset, we are confronted with a challenge to our jurisdiction to review the enforcement procedures.24 The Noise Control Act, in common with other environmental legislation,25 provides preclusively for direct review of the Administrator's performances in certain instances.26 Section 16(a), pursuant to which our jurisdiction is invoked, designates the one instance relevant here:

Since Sections 1728 and 1829 relate respectively to standards for railroads and interstate motor carriers30 and therefore are inapplicable to this litigation, we focus our attention on Section 6.

That section calls upon the Administrator to publish for each covered product31 proposed regulations which "shall include a noise emission standard" meeting enumerated specifications and which

Section 6 also establishes time limits for the publication of regulations proposed thereunder,33 and requires manufacturers to "warrant to the ultimate purchaser" that regulated products are in conformity with the regulations adopted.34

Petitioner Ford Motor Company contends that the narrow grant of Section 6 rulemaking authority does not afford a substantive basis for the enforcement regulations, and that resultantly we lack jurisdiction under Section 16(a) to pass on their validity. The Administrator argues, however, that a broad reading of Section 16(a) permits our consideration of these provisions because, he says, they are closely related to regulations that clearly would be authorized by Section 6, and therefore under Section 16(a) are "action[s] of the Administrator . . . in promulgating [a] standard or regulation under section 6."35 We disagree with the Administrator.36

The unequivocal language of Section 6 restricts legislative rulemaking to but three subjects: noise emission standards, testing procedures and manufacturers' instructions.37 Nothing in the legislative history of Section 6 suggests in any way that additional types of regulations were contemplated.38 More particularly, there is no indication in either the text or the history of Section 6 that it was meant to confer authority to establish an enforcement process, and additional considerations serve further to negate the possibility that Congress intended enforcement regulations to derive from Section 6.

Other provisions of the Noise Control Act deal overtly with the subject of enforcement.39 Moreover, the Clean Air Amendments of 197040 — on which the Noise Control Act of 1972 was modeled41 — expressly, and entirely apart from any general standard-setting or testing provision, licensed entry into a manufacturer's facility.42 It seems inconceivable that Congress would have been ever so clear in the one instance but would leave the authority to be sought between the lines in a closely related statute subsequently enacted. To boot, Section 6 does not lend itself to so broad an interpretation that enforcement regulations would be encompassed, for it lacks a grant of general rulemaking power43 — a grant that is explicit in other environmental statutes administered by EPA.44 Thus the plain language of Section 6, viewed in the context of the Act, its legislative history and a comparison of its provisions with those of other environmental enactments, would authorize promulgation of legislative regulations on no more than noise emission standards, testing procedures and manufacturers' instructions. Because EPA's enforcement regulations — which include provisions for entry and inspection, recall and stopped deliveries — do not fit within any of these categories, they would not appear to be "standard[s] or regulation[s] under section 6 . . . of [the] Act" within Section 16(a) review jurisdiction.45

In support of the claim that under the latter section we may nevertheless examine the enforcement procedures as "action[s] of the Administrator . . . in promulgating" Section 6 regulations,46 the Administrator cites the legislative history and case law on nearly identical review provisions found in the Clean Air Amendments of 197047 and the Federal Water Pollution Control Act Amendments of 1972,48 as well as policy arguments weighing in favor of immediate review.49 Nothing to which we are thus referred convinces us, however, that Section 16(a) gives us the jurisdiction the Administrator would have us exercise.50

We turn first to judicial interpretations of similar review provisions in other environmental statutes. Section 509(b)(1) of the Federal Water Pollution Control Act allows "[r]eview of the Administrator's action . . . in approving or promulgating any effluent limitation or other limitation under Section 301, 302, or 306" in federal courts of appeals.51 The Administrator contends that this language has been held to permit direct review of Section 304 effluent guidelines and urges us to give Section 16(a) a similar construction. An examination of the Water Act cases yields the sounder view that jurisdiction to review under Section 509(b)(1) depends upon whether the Administrator acted under Section 301, not on an exaggerated reading of its review grant.52 In E.I. Du Pont De Nemours & Co. v. Train,53 the Supreme Court recently approved this approach, first determining that effluent limitations for existing point sources had been promulgated under Section 301,54 and then concluding that therefore the plain wording of Section 509(b)(1) established review jurisdiction.55 Very significantly, the Court noted that

This court had previously taken the same tack in exploring its jurisdiction to review actions of the Administrator pursuant to Section 307(b)(1) of the Clean Air Amendments of 1970.57 In District of Columbia v. Train58 we stated:

Far from exhorting an expansive reading of Section 16(a), these decisions confirm our view that the appropriate inquiry is whether the enforcement rules are Section 6 regulations or standards — a question we have already answered in the negative.60

To be sure, language similar to "action of the Administrator . . . in promulgating"61 has occasionally been utilized to better demonstrate our jurisdiction to review an action beyond, but an indispensable forerunner of, one explicitly embraced by an environmental review provision. Those instances are, however, readily distinguishable from the situation before us. In Natural Resources Defense Council v. Train,62 we indicated that although not expressly designated as a subject of review, listing of a substance as toxic under the Federal Water Pollution Control Act would be a reviewable action because it was taken in the course of and was a necessary prerequisite to promulgation of final effluent standards.63 This suggestion was followed in National Asphalt Pavement Ass'n v. Train,64 in which we held reviewable the designation of a source category as a "significant contributor" under the Clean Air Amendments.65 It cannot seriously be contended that the enforcement rules in controversy were similarly a step that had to be taken before Section 6 emission standards or testing procedures could be devised. On the contrary, it was only with reference to the latter that the enforcement regulations could be formulated and addressed.66

The Administrator's argument that the legislative history of Section 16(a) supports his sweeping interpretation of that provision also is unpersuasive. In fashioning the Noise Control Act, Congress did not articulate any purpose behind Section 16(a) beyond those evident from its text. However, because Section 307(b) of the Clean Air Amendments of 197067 served as the model for the review provision of the Noise Control Act,68 the legislative history of that section is instructive:

Thus the congressional objective was "to limit judicial review as to forum and time so as to assure expeditious, authoritative and central judicial resolution of issues which were national in impact and which could hold up the timely accomplishment of the Act's objectives if not settled at the outset."70 The fact that, simultaneously with stating that aim, Congress expressly authorized review of only some of the Administrator's actions to which the congressional reasoning might apply casts considerable doubt on the Administrator's position that Section 16(a) aspires to review of more than the actions enumerated. The purpose Congress declared is much more easily fitted to standards and testing than to an enforcement scheme: Until national standards were finalized, the Act would be completely ineffective, but once standards were in place, uncertainty as to the enforcement scheme would not preclude environmental progress. That Congress viewed timely setting of countrywide standards as more important than timely creation of an enforcement process is apparent from its designation of time limits for accomplishment of the former but not the latter.71

A final consideration advanced by the Administrator is the judicial policy of avoiding bifurcation of review wherever possible. That factor comes into play, however, only when the jurisdictional provision reasonably lends itself to differing interpretations.72 In the legislation before us, Congress specifically listed, by section number, the provisions that are subject to our review. Assuming ambiguity arguably to be discerned in the phrase "action of the Administrator . . . in promulgating,"73 an application of judicial policy cannot justify an undertaking to overrule the unambiguous enumeration of the provisions reviewable. In this milieu, avoidance of bifurcated review would persuade us to no more than an exercise of ancillary jurisdiction to combine review of Section 6 provisions with indispensable review of other closely allied provisions.74

Moreover, even if the legislative history and the policy against bifurcated review were stretched to the point urged by the Administrator, their limited support for his broad interpretation of Section 16(a) would easily be outweighed by stronger policy considerations for declining to indulge in so expansive an interpretation. In order to effectuate the purpose of centralized and timely review of specified administrative actions,75 Congress not only conferred jurisdiction upon this court but it simultaneously withdrew jurisdiction from all other courts in all other related proceedings. Section 16(a) decrees that

So, once the period for seeking review in this court has expired, the facial validity of a provision reviewable under Section 16(a) is ostensibly beyond challenge.77 This phenomenon raises the spectre of possible unfairness, particularly to small manufacturers who may lack resources to monitor the Administrator's actions to assure protection of the opportunity to contest regulations affecting their interests.78 Indeed, the Administrative Conference of the United States has recommended amendment of the environmental statutes to allow the invalidity of a regulation to be raised as a defense in an enforcement proceeding:

And the Supreme Court has suggested that the constitutional validity of the preclusive review provision of the Clean Air Act Amendments merits serious consideration.80 Although, in Yakus v. United States,81 the Court sustained the constitutionality of a similar provision in the Emergency Price Control Act of 1942,82 that holding may be distinguishable on the ground that the Yakus provision was a "war emergency measure."83 The nagging presence of a substantial due process question indicates, then, at the very least, the propriety of a narrow interpretation of Section 16(a).

We are mindful that an agency's interpretation of the statute it administers is entitled to great deference.84 But, yielding that, it is ultimately for us to make the determination on our jurisdiction to hear a case.85 On its face, Section 16(a) limits us to review of standards and regulations promulgated under particular sections of the Act86 — in the present instance, Section 687 — and we find that the Administrator's enforcement procedures cannot rest on Section 6.88 While Section 16(a) might lend itself to an interpretation permitting review of some actions somewhat beyond Section 6 standards and regulations, the decisions construing identical provisions of the Clean Air Act and the Federal Water Pollution Control Act caution that, with minor apparent but not real exceptions, the scope of review is strictly limited by the precise language of Section 16(a).89 And though competing policy considerations bear on the jurisdictional question, on balance they too weigh in favor of a narrow interpretation of the Act's preclusive review provision.90 We conclude, then, that we are without jurisdiction to review the Administrator's enforcement procedures.

III. THE WARRANTY REGULATION

Section 6(d)(1) of the Noise Control Act of 1972 specifies that as soon as a regulation establishing a noise emission standard becomes effective,

However straightforward this provision may be for other contexts, the organization of the truck-manufacturing industry generates a potential problem for its operation therein. Not uncommonly, one manufacturer constructs the basic vehicle — the chassis, engine and operator's compartment, known as a chassis-cab — and a subsequent manufacturer independently conducts whatever additional production processes — for example, the mounting of a special-purpose body and equipment — are needed to adapt and ready the vehicle for its intended use. Thus, superficially at least, a question arises as to who, for purposes of the Act's warranty section, "the manufacturer" of that particular truck is.

When the Administrator originally proposed a body of noise control and related regulations, he included a provision placing liability upon both the manufacturer of the unfinished truck and the manufacturer who later rendered it functional.93 After notice and comment, however, the Administrator confined the warranty to the initial manufacturer. In relevant part, the final regulation called upon "[t]he vehicle manufacturer who is required to production verify"94 to warrant to the ultimate purchaser that the "vehicle was designed, built and equipped to conform at the time of sale to [him] with all applicable U.S. EPA noise control regulations."95 Petitioners General Motors Corporation and International Harvester Company attack this provision on the ground that it contravenes the language of the Act and the intent of Congress. They further assert that the regulation unlawfully holds manufacturers of incomplete trucks vicariously responsible for nonconformance by subsequent manufacturers who complete them.

We do not encounter a jurisdictional barrier to consideration of these claims. The Act does not direct the Administrator to fashion a warranty regulation, but that does not mean that he cannot issue a regulation interpreting Section 6(d)(1), the statutory warranty provision.96 In the regulations — both proposed and final — on that subject, the Administrator has endeavored to clarify the meaning of that section in its application to the truck-manufacturing industry. For better or for worse, he has articulated his understanding of the Section 6(d)(1) term "manufacturer" in its relation to that industry.97 We are authorized to review "action of the Administrator . . in promulgating [a] regulation under section 6 . . . of [the] Act,"98 and the warranty regulation is plainly of that nature.

A. Consistency With the Act

Reverting, then, to the merits, we first address the contention that the regulation is in conflict with the Act. The Administrator would relieve from any warranty obligation manufacturers who wind up the production of a theretofore unfinished truck, and would place full warranty liability upon the manufacturer of the basic vehicle, not only for his own departures from the noise emission standards but also for those of subsequent manufacturers.99 The Administrator thus has sharply restricted the tenor of the word "manufacturer" as used in Section 6(d)(1), and in doing so has come fatally into collision with it.

The Act levies the warranty upon "the manufacturer of each new product to which [a noise emission] regulation applies."100 The statutory definition of "manufacturer" includes "any person engaged in the manufacturing or assembling of new products."101 Even if the Act said no more, we would think it reasonably clear that the manufacturer who completes the basic truck for commercial use is intercepted by the warranty section.102 The fact is, however, that the Act does say significantly more. It ties the warranty to "each new product"103 and, with exceptions inapposite here, declares that "[t]he term `product' means any manufactured article or goods or component thereof."104 So, not only are those who "manufactur[e] . . . new products" "to which [a noise emission] regulation applies" subjected to the Act's warranty requirement but also those who produce similarly covered "new product[s]" through "assembl[y]" of newly "manufactured article[s] . . . or component[s] thereof." It follows that the Act fastens the warranty obligation upon the manufacturer who assembles the basic truck and other components into the finished product — the "new product to which [the] regulation applies."105

Our construction of Section 6(d)(1) does not suffer from any lack of a decisional parallel. In Rex Chainbelt, Inc. v. Volpe,106 regulations purportedly issued under the National Traffic and Motor Vehicle Safety Act of 1966107 commanded final-stage manufacturers of motor vehicles to make the sole certification of compliance of the entire vehicle, including portions produced and installed by the incomplete-vehicle manufacturer, with federal safety standards. One section of that legislation instructed "every manufacturer" to furnish the certification of compliance,108 and another defined "manufacturer" as including "any person engaged in the manufacturing or assembling of motor vehicles or motor vehicle equipment."109 To the court, the latter provision "plainly indicate[d] that an `incomplete vehicle manufacturer' is a `manufacturer' within the meaning of" the statute.110 The Administrator argues that Rex Chainbelt is distinguishable because the certification requirement there was laid on "every manufacturer." We are unable to detect the difference suggested since Section 6(d)(1) here imposes the warranty on "the manufacturer," who is "any person engaged in the manufacturing or assembling of new products."111 In sum, "any" "manufacturer" can mean no less than "every" manufacturer.112

We do not lose sight of the deference courts traditionally yield to an agency's interpretation of its governing statute,113 particularly when it "`involves a contemporaneous construction of a statute by the men charged with the responsibility of setting its machinery in motion; of making the parts work efficiently and smoothly while they are [as] yet untried and new.'"114 This principle, however, is much less an encumbrance to independent adjudication when, as here, the administrative ruling is interpretive rather than legislative in character.115 Moreover, courts simply cannot approve a reading of the statute that is contrary to its plain language.116 The Administrator's regulation undertakes to exempt one type of truck manufacturer from compliance with the statutory warranty provision, and in so doing it contravenes the Act's mandate on that score.

B. Imposition or Vicarious Liability

Even if Section 6(d)(1) were susceptible to the Administrator's interpretation, we would nonetheless be constrained to invalidate this regulation. The additional difficulty is encounters is that it seeks to cast liability on the incomplete-vehicle manufacturer for noise-emission violations — additional to those of his own making — attributable wholly to the subsequent independent manufacturer who finishes the vehicle. The Administrator's regulation explicitly requires that the Section 6(d)(1) warranty include the following statement:

Since the regulation would confine the warranty obligation to the chassis-cab manufacturer,118 the Administrator clearly contemplates that that manufacturer will bear the responsibility for any action of the subsequent manufacturer taking the vehicle out of compliance with the noise emission standards.

This allocation of warranty liability forebodes dire consequences for first-stage manufacturers. Section 6(d)(2) of the Act provides that "any cost obligation of any dealer incurred as a result of [the warranty requirement of Section 6(d)(1)] shall be borne by the manufacturer,"119 and in the Administrator's view that manufacturer is the one who completes the chassis-cab for marketing. We are aware that some protection from liability flows from Sections 10(a)(2)120 and 11(a),121 which ban alteration of noise-related systems in a complying though unfinished vehicle and impose substantial penalties for failure to observe that prohibition. The Administrator also asserts that "[t]he manufacturer of the basic truck can protect himself from the subsequent manufacturer's breaking that law through indemnification agreements and other contractual arrangements."122 To be sure, these provisions may reduce the incidence of liability, but most certainly they cannot entirely eliminate it.

The Administrator does not refer us to anything in the Act that might undergird a regulation imposing liability on first-stage manufacturers for noise-emission violations that are wholly the fault of second-stage manufacturers, and we search in vain for statutory authorization of that sort. Indeed, the legislative history of the Act is precisely to the contrary: the Senate Committee expressly stated that it intended that the manufacturer be liable only for those changes in noise emissions which are in fact within his control.123 Nor is there a common law basis upon which liability could be predicated vicariously, for in the situation complained of the chassis-cab manufacturer has no dominion whatsoever over the subsequent manufacturer. In decisionally indistinguishable circumstances we have twice held that the Administrator lacks power to impose liability upon a blameless party for the acts of another beyond his control.124 These rulings are fully binding upon us, and they dictate the same result here. We are fully cognizant of the difficulties of allocating the warranty burden between separate manufacturers, but we are confident that the Administrator can deal adequately with the problems through new regulations.125

We find that we have no jurisdiction to pass on the validity of the Administrator's enforcement regulations. We conclude that the challenged warranty provision is unauthorized. We remand this litigation to the Administrator for further proceedings not inconsistent with this opinion.

So ordered.