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State regulation of Transportation Refrigeration Units (TRUs) increasingly requires additional compliance attention for owners and operators of TRUs, as well as other entities that use or house TRUs.  In particular, new TRU requirements for “brokers,” “forwarders,” “shippers,” “receivers,” “carriers,” and “drivers” go into effect on January 1, 2013.  (Cal. Code Regs., tit. 13, § 2477.1 et. seq.)

Background and Regulatory Overview

What Is a Transportation Refrigeration Unit?

TRUs are mobile, diesel internal combustion engines that refrigerate or heat perishable products transported on semi-trailers, vans, in shipping containers, and on rail cars.  Although TRUs generally have small engines (9-36 horsepower), vehicles carrying TRUs tend to congregate at distribution centers, rail yards, and other facilities.  TRUs emit diesel particulate matter (PM).  The California Air Resources Board (CARB) identified diesel PM as a toxic air pollutant in 1998.  As part of implementation of CARB’s Diesel Risk Reduction Plan (CARB’s comprehensive plan to reduce diesel PM), CARB adopted an Airborne Toxics Control Measure for TRUs in 2004.

The Regulation

CARB’s 2004 TRU rules can be found at section 2477 of title 13 of the California Code of Regulations .  The regulations apply to owners and operators of diesel-fueled TRUs and TRU generator sets, facilities located in California with 20 or greater loading dock doors and serving refrigerated areas with perishable goods, and any person in California who is in the business of selling, renting, or leasing new or used TRUs.

The 2004 regulation creates in-use performance standards for TRUs and sets a schedule for compliance based on the model year of the engine.  For example, the regulations required model year 2004 TRU engines to be in compliance by December 31, 2011.  Failure to comply with the TRU regulations may result in a citation and penalties up to $1,000 per unit.  Model year 2005 engines must be in compliance by December 31, 2012.

California-based TRUs must also have applied for a CARB registration number on or before January 31, 2009.  For TRUs purchased or acquired after January 31, 2009, the regulation allows 30 days for the new owner or operator to register the TRU with CARB.  The deadline for California-based TRU registration has passed.  Failure to apply for a registration number subjects the owner or operator to civil penalties.  Additionally, owners and operators are required to permanently affix a CARB identification number to the TRU.  TRU owners based outside of California need not apply for an identification number.

Brokers, Forwarders, Shippers, Receivers, Carriers, and Drivers

October 2011 amendments to the TRU regulation added requirements for brokers, forwarders, shippers, receivers, carriers, and drivers.  CARB issued a guidance document for the new regulations in August of 2012.  The guidance document may be found here.  The regulations go into effect on January 1, 2013.

Under the amendment, brokers and freight forwarders must require the carriers they hire to have compliant TRUs, and provide contact information so that dispatched drivers may display the contact information upon request from enforcement personnel.  California-based shippers must only dispatch trucks that are TRU compliant.  The same is true for California-based receivers if they arrange, hire, contract, or dispatch trucks; they must be TRU compliant.  Motor carriers that dispatch trucks equipped with TRUs must ensure that the trucks are compliant.  Drivers are prohibited from operating non-compliant TRUs on California roadways.

If TRUs are non-compliant, CARB may cite carriers, brokers, freight forwarders, shippers, receivers, and/or drivers.  To ensure compliance, CARB maintains an online database of registered TRUs.  Due diligence requires that those seeking to hire others, where TRUs will be used, should consult the registry and only hire 100 percent compliant carriers.  CARB maintains a “100 Percent Compliance Carrier List” in order to facilitate the hiring of compliant TRUs.  Carriers are required to update their status with CARB whenever compliance information changes, so the list can effectively guide those seeking to hire a compliant TRU.

CARB suggests that best business practices for those engaged in transport using TRUs include:  (a) sending an annual notice that the company will only hire/contract with “100 Percent Compliant Carriers”; (b) including contract language that requires only CARB-compliant TRU use on California roadways; (c) advertisements for perishable goods loads should specify that TRU compliant units are required if the loads will travel on California roadways; (d) the party should document all steps in the process, particularly notifications that TRU compliance is required; and (e) if a violation is known, the party should take affirmative action to ensure that no further hiring of non-compliant TRUs will occur.

CARB’s enforcement staff is authorized to inspect TRUs in California.  This may occur at a number of locations, including:  border crossings, distribution centers, scales, roadside inspection stations, agriculture inspections stations, ports, rail yards, and intermodal facilities.  Under a Memorandum of Understanding (MOU) with CARB, the Port of Los Angeles also may inspect TRUs.  Furthermore, CARB has MOUs with multiple local air pollution control districts that enable the districts to enforce the TRU rules.

Validity of the Regulations

In 2010, the District of Columbia Circuit Court of Appeals upheld the validity of California’s unique TRU regulations.  American Trucking Associations (ATA) argued that the Environmental Protection Agency (EPA) unreasonably applied statutory criteria when it approved the California rule.  The District of Columbia Circuit’s opinion can be found here.

The District of Columbia Circuit provided an overview of California’s authority to enact the TRU regulations under federal law.  States regulate emissions from stationary sources through state implementation plans that are designed to meet federal national ambient air quality standards.  (42 U.S.C. §§ 7409, 7410.)  For mobile sources, like TRUs, the Clean Air Act (CAA) includes specific provisions for different types of engines.  TRUs are in-use non-road engines, and the CAA provides California with the principal role in regulating such engines.  (Id. at § 7543(e)(2)(A).)  Other states may adopt California’s regulations for in-use non-road engines, or adopt no regulations at all.  (Id. at § 7543(e)(2).)  The statute provides three guidelines for EPA review and denial of California’s rules:  (1) EPA finds that California made an unreasonable determination that its rules were at least as protective of public health and welfare as federal standards; (2) EPA decides that California does not need the standard “to meet compelling and extraordinary” conditions in the state; or (3) EPA finds that the California rules “are not consistent” with CAA section 7543.

The court then described EPA’s review of the rules.  In 2005, California requested that EPA authorize the TRU rule and EPA approved.  First, the EPA determined that California acted reasonably in assessing that the TRU rule was at least as protective of public health and welfare as federal regulations.  Second, EPA determined that California was correct in believing that it needed to respond to “compelling and extraordinary conditions” due to its well-documented air pollution problems.  Finally, EPA approved the rule because it applied only in California with a reasonable cost of compliance.

The District of Columbia Circuit reviewed EPA’s decision under the administrative law deferential, arbitrary, and capricious standard.  ATA alleged that EPA failed to appropriately apply the CAA’s second and third criteria.  The court deferred to EPA’s finding of “compelling and extraordinary” conditions, summarily determining that serious PM pollution caused by a large number of automobiles was a serious concern for California.

On the third criterion, ATA argued that the rule was a “de facto national” rule because so many trucks pass through California.  The court dismissed ATA’s argument and held that the rules do not require any other states to adopt California’s requirement, and the rules only apply in California.  The court noted that if a TRU does not pass through California, the owner or operator need not comply and agreed with EPA’s argument that ATA was seeking to “improperly … engraft a type of constitutional Commerce Clause analysis onto EPA’s section 7543(e) waiver decisions that is neither present in nor authorized by the statute.”  In a footnote, the court mentioned the possibility of bringing a constitutional challenge to the statute; however, that issue was not before the court.

Finally, the court denied ATA’s argument that EPA failed to appropriately consider the costs of the TRU rule.  EPA reasoned that compliance would cost an operator $2,000 to $5,000, which the court held was within EPA’s discretion to approve.

The District of Columbia Circuit case upholds the validity of the TRU rules.  The TRU rules will be enforced in California, and even non-California based operators must comply if they plan to pass through California.

Conclusions & Implications

Regulation of TRUs as a component of CARB’s overall diesel PM strategy continues to increase.  Effective January 1, 2013, new rules apply not only to owners and operators of TRUs, but also to brokers, forwarders, shippers, receivers, carriers, and drivers.  The District of Columbia Circuit upheld the regulations and it is clear that anyone planning to be involved in transport using TRUs within or through California must comply.  Potential liability for TRU non-compliance can be managed with careful, early planning.

For further information on TRUs and CARB regulations, please contact Michael E. Vergara at (916) 446-7979 or by email at mvergara@somachlaw.com.

* Richard Deitchman is a law clerk with the firm as of September 2012, after previously clerking with the firm in 2011.  In May of 2012, Mr. Deitchman earned a J.D. from Lewis & Clark Law School, where he graduated cum laude and earned a Certificate in Environmental & Natural Resources Law.

Somach Simmons & Dunn provides the information in its Environmental Law & Policy Alerts and on its website for informational purposes only.  This general information is not a substitute for legal advice, and users should consult with legal counsel for specific advice.  In addition, using this information or sending electronic mail to Somach Simmons & Dunn or its attorneys does not create an attorney-client relationship with Somach Simmons & Dunn.