Independent Equipment Dealers Association v. Environmental Protection Agency

Since 1996, the Environmental Protection Agency (EPA) had regulated nonroad engines by requiring manufacturers to obtain a certificate of conformity indicating compliance with EPA emissions standards before selling or importing such engines into the United States. Manufacturers were required to obtain certificates of conformity for each engine family. An engine family was a group of engines with similar emission characteristics and designs. The application for a certificate of conformity had to include a certification that all engines in the engine family complied with EPA requirements and the Clean Air Act (CAA). EPA required manufacturers to affix an emissions-control information label to engines that identified the engine and its conformance with EPA emissions standards. Nonroad engines were engines used in heavy construction and industrial equipment. Many nonroad engines were manufactured outside of the United States. Engines covered by a certificate of conformity could be imported into the United States. Engines not covered by a certificate had to comply with the EPA’s Independent Commercial Importers (ICI) program. Compliance with emissions regulations under the ICI was expensive. Original engine manufacturers (OEMs) appealed to the EPA for increased enforcement of the regulatory requirements to ensure importers who were selling engines for lower prices were following regulations and obtaining the proper emissions-control labels. The EPA responded by vowing to enforce regulations and emphasized that all engines imported into the United States required an EPA-compliant emissions-control label. The EPA also emphasized that if an engine was intended for sale elsewhere than the United States, manufacturers would use destination-specific labeling to indicate that the engine is not covered by a certificate of conformity. Independent Equipment Dealers Association (IEDA) believed the destination-specific labeling program violated the EPA’s regulations because certificates of conformity applied to engine families, not individual engines, so EPA regulations applied to all engines, not only ones destined for United States import. IEDA wrote to the EPA to express this view. The EPA responded in a letter that it did not concur with IEDA’s view and stated that the requirements did not apply to manufacturers that “did not introduce or intend for introduction into U.S. commerce.” IEDA contended that the EPA letter added an element of manufacturer intent to the definition of an engine family and thus substantively amended the Part 89 regulations without satisfying the notice-and-comment requirements of the CAA.