## Facts

- EPCA set a statutory passenger-car CAFE standard of 27.5 mpg for model year 1985 and later years, unless NHTSA set a different level as “maximum feasible.”
- In a final rule issued September 30, 1985, NHTSA reduced the model year 1986 passenger-car CAFE standard from 27.5 mpg to 26.0 mpg.
- NHTSA justified the reduction primarily on economic impacts to domestic automakers, citing falling gasoline prices and a resulting consumer shift toward larger, less fuel-efficient vehicles.
- The agency projected that requiring compliance with 27.5 mpg would cause large sales losses and significant job losses at major manufacturers.
- NHTSA estimated the rollback’s fuel-consumption effect as small relative to annual U.S. petroleum use.
- Public-interest organizations, joined by state and municipal petitioners, sought review, arguing the rollback conflicted with EPCA and was arbitrary and capricious under the APA because NHTSA overemphasized short-term industry costs and undervalued energy conservation and feasible technology.

## Issues

1. Whether the organizational and governmental petitioners had Article III standing to challenge the reduced CAFE standard.
2. Whether NHTSA’s reduction of the model year 1986 passenger-car CAFE standard to 26.0 mpg was arbitrary and capricious under the APA and inconsistent with EPCA’s “maximum feasible” requirement.

## Decision

- The court held that the organizational petitioners had standing to sue on behalf of their members based on alleged harms tied to increased fuel use and related environmental and economic effects.
- The court granted the petitions in substantial part, vacated the rule lowering the 1986 standard to 26.0 mpg, and remanded to NHTSA.
- The court concluded that, although EPCA affords NHTSA discretion to set “maximum feasible” standards, the agency failed to provide a reasoned, record-supported explanation showing balanced consideration of the statutory factors, including the nation’s need to conserve energy.
- The court found NHTSA’s analysis insufficiently supported and inadequately explained, including its treatment of technological feasibility, its assumptions and reliance on economic forecasts, and its limited consideration of alternatives.

## Legal Principles

- Public-interest organizations may establish representational standing when their members face concrete, traceable, and redressable injuries from an agency rule.
- Under the APA, a rule is arbitrary and capricious if the agency fails to examine relevant data or fails to provide a satisfactory explanation connecting the facts found to the choice made.
- Even when a statute requires the agency to balance multiple factors and grants discretion, the agency must show coherent, record-based consideration of all statutory factors and cannot allow one factor (such as short-term economic impacts) to dominate without adequate justification.
- When modifying a statutory scheme aimed at energy conservation, the agency must explain how its decision accounts for conservation objectives, technological feasibility, and practicability, and must address reasonable alternatives within the regulatory setting.

## Conclusion

The D.C. Circuit held that the petitioners had standing and vacated NHTSA’s rollback of the 1986 passenger-car CAFE standard because the agency did not provide a reasoned, record-supported explanation consistent with EPCA’s “maximum feasible” criteria and the APA’s arbitrary-and-capricious standard.


Public Citizen v. Nat'l Highway Traffic Safety Admin., 848 F.2d 256 (D.C. Cir. 1988)