CINCINNATI (CN) – A duty-free gas station situated near the Ambassador Bridge on the U.S.-Canadian border must comply with U.S. gasoline volatility requirements, the Sixth Circuit ruled Wednesday.
The Cincinnati-based appeals court upheld a lower court decision that required Ammex Inc., the gas station owner, to comply with Michigan’s so-called summer fuel law, which outlaws the sale of gasoline with a vapor pressure of greater than 7.0 psi between June 1 and September 15.
The law was eventually codified under the Clean Air Act, or CAA, and became part of the state’s improvement plan, abbreviated in court records as SIP.
Ammex argued in February the law is unconstitutional under the Foreign Commerce Clause and also violates the Supremacy Clause, but the district court found that because the CAA is federal in nature, the station’s constitutional claims would fail.
U.S. Circuit Judge Helene White wrote the Sixth Circuit’s majority opinion that upheld the lower court decision, and explained why the court considers the fuel law a federal regulation.
“Although the CAA places primary enforcement responsibility with the states, it vests ultimate enforcement power in the EPA. The EPA may enforce the law against non-compliant retailers…the EPA also holds the power to sanction Michigan for failing to enforce the SIP,” she wrote. “Additionally, the EPA has the ultimate authority over any changes to the summer fuel law. Because the Reid vapor pressure standard is part of Michigan’s SIP, Michigan cannot amend the standard without EPA approval.”
White said the fuel law had no effect until it was ratified by the federal government, and that SIPs have routinely been treated as federal laws by the court system.
Ammex argued that the state law, House Bill 5508, and the eventual EPA regulation are “parallel provisions,” but White rejected that theory.
“As an initial matter,” she wrote, “the Michigan statute and the federal regulation are not independent of each other. The two are interconnected because the EPA regulation incorporates by reference the state bill containing the statute setting the summer RVP standard, and the interpretation of one necessarily affects the interpretation of the other.”
The judge continued, “Moreover, the interconnectedness of the state statute and federal regulation is reinforced by the CAA’s enforcement scheme, allowing for enforcement of the same standard by both the EPA and the state and providing the state with the primary enforcement responsibility.”
White was joined in the majority by U.S. Circuit Judge Richard Griffin.
U.S. Circuit Judge John Bush wrote a partially concurring opinion, but disagreed with the majority regarding the federal nature of the gas vapor law.
He questioned White’s decision to label the restriction a federal law, and agreed with Ammex’s argument that the RVP laws are parallel regulations.
“When EPA ‘incorporat[ed] by reference,’ Michigan’s summer fuel law, that federal agency at most adopted a parallel federal regulation and thereby incorporated the requirements of the SIP into federal law,” Bush wrote. “Michigan officials’ enforcement of SIP itself, however, remains the enforcement of state law, though it is identical to a federal provision.”
Bush admitted that if Michigan sought to change the SIP and conflicted with federal law, the EPA’s regulations would likely preempt the enforcement of the state law, but called such a situation a “frequent occurrence” that does not transform state officials into “enforcers of federal law.”
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