## Facts

- The Energy Policy and Conservation Act of 1975 (EPCA) established escalating passenger-car CAFE standards that leveled at 27.5 mpg for model year (MY) 1985 and later, while authorizing NHTSA to amend standards for particular model years to achieve “maximum feasible average fuel economy.”
- EPCA directs NHTSA to consider technological feasibility, economic feasibility, the effect of other federal motor vehicle standards, and the nation’s need to conserve energy when setting CAFE levels.
- In earlier litigation, a reviewing court remanded NHTSA’s 1990 CAFE action for fuller consideration of safety effects.
- On remand, NHTSA reopened rulemaking, sought comments, and again set the 1990 passenger-car CAFE standard at 27.5 mpg.
- In the notice of proposed rulemaking, NHTSA asked manufacturers what actions they would take if the 1990 standard were 27.5 mpg or between 26.5 and 27.5 mpg, including whether they would downsize or refrain from upsizing vehicles.
- NHTSA found that no manufacturer claimed that lowering the standard below 27.5 mpg would change vehicle size or weight, or otherwise alter production or pricing in a way relevant to safety.
- Petitioners (nonprofit organizations) challenged the 1990 standard, arguing it inadequately accounted for safety impacts, relying in part on a study by Crandall and Graham associating vehicle weight reductions with increased fatalities and attributing weight reductions to CAFE standards.
- NHTSA considered the study but questioned whether CAFE standards, rather than consumer preference and technological change, caused observed fleet weight reductions, and concluded the record did not show meaningful safety differences attributable to a marginal change from 27.5 to 26.5 mpg for MY 1990.

## Issues

1. Whether NHTSA’s decision on remand to retain the 1990 passenger-car CAFE standard at 27.5 mpg was arbitrary and capricious under the APA for insufficiently addressing alleged adverse safety effects.

## Decision

- The D.C. Circuit denied the petition for review and upheld NHTSA’s rule maintaining the 1990 passenger-car CAFE standard at 27.5 mpg.
- The court held that NHTSA reasonably explained its decision and adequately grounded it in the rulemaking record.
- The court concluded NHTSA sufficiently addressed safety concerns, including those raised by the Crandall and Graham study, and complied with the prior remand.

## Legal Principles

- Under arbitrary-and-capricious review, a court asks whether the agency examined relevant data and articulated a rational explanation linking the record to its choice; it does not substitute its policy judgment for the agency’s.
- When a statute grants an agency discretion to set standards based on multiple factors, the agency may balance those factors so long as its reasoning is reasonable and record-supported.
- Even if a statute does not list safety as an explicit factor, an agency may account for safety within related statutory considerations (such as feasibility) if that approach is consistent with the statutory scheme and explained.
- An agency may credit or discount scientific studies if it acknowledges them and provides record-based reasons for accepting or rejecting their causal assumptions and applicability to the regulatory choice.
- The agency is not required to precisely quantify every asserted risk and benefit when the incremental regulatory change is small and the evidence is uncertain, provided it addresses significant comments and explains its conclusion.

## Conclusion

The court upheld NHTSA’s decision to keep the 1990 passenger-car CAFE standard at 27.5 mpg because the agency reasonably concluded, based on manufacturer responses and its assessment of the safety evidence, that lowering the standard would not materially change vehicle sizing decisions or safety outcomes, and the agency’s explanation satisfied arbitrary-and-capricious review.


Competitive Enter. Inst. v. Nat'l Highway Traffic Safety Admin., 45 F.3d 481 (D.C. Cir. 1995)