JUDICIARY: NADLER & CICILLINE STATEMENT ON DOJ ANTITRUST INVESTIGATION INTO AUTOMAKERS WHO STRUCK VEHICLE EMISSIONS DEAL WITH CA

Washington, D.C. – House Judiciary Committee Chairman Jerrold Nadler (D-NY) and Subcommittee on Antitrust, Commercial and Administrative Law Chairman David N. Cicilline (D-RI) released the following statement on reports that the Department of Justice opened an antitrust investigation into automakers who reached an agreement with California regarding state emissions standards:

“President Trump has repeatedly misused his office to punish perceived adversaries—in this case companies who cooperate with state government pursuing strong environmental protection policies. The Department’s antitrust investigation into the four major automakers who reached an emissions control agreement with California is only the latest in a profoundly troubling pattern of abuse of power that has flourished under the Trump presidency.

“As a policy matter, California’s agreement with the four major automakers to reduce emissions will safeguard the public and the environment while providing the industry with regulatory certainty.  The President sees that as a threat to his assault on the environment. So, it is no surprise that his Administration is again threatening to wield federal antitrust laws in response. There is virtually no antitrust theory that the Justice Department can use to prove that this agreement will unreasonably restrain trade or otherwise violate the antitrust laws.

“The House Judiciary Committee is examining allegations of obstruction of justice, public corruption, and other abuses of power by the President. Using the Department of Justice to investigate or attack perceived political enemies—whether they are individuals, states, or major corporations—is another example of this President’s disregard for the rule of law.  The Committee will broaden its investigation into the President’s unprecedented criminality, corruption, and cover-up to include these latest revelations and will take further investigative steps regarding this decision by the Department, including scheduling hearings and requesting documents from the Department and the White House. We look forward to hearing what rationale, if any, the Justice Department has for its latest attempt to score political points at the expense of the American people.”

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Cocktails & Popcorn: Ford, UAW & Antitrust - It's All About The Timing -- In Detroit

This is awkward.

Now, why would the feds launch an antitrust probe against Ford right at the beginning of UAW negotiations?

They eat each other alive.

#sayhisname

Feds launch antitrust probe into California mpg deal with Ford, others

Washington — The Trump administration is escalating its battle with California over gas-mileage rules by launching an antitrust investigation into Ford Motor Co. and three other automakers that have agreed to higher fuel-economy rules than President Trump has pushed for.

The U.S. Department of Justice is investigating Ford, Volkswagen AG, Honda Motor Co. and BMW AG for reaching a deal with California to voluntarily increase the average fuel economy of their fleets to about 50 miles per gallon by the end of the 2026 model year, Ford, Honda and BMW confirmed Friday. The Justice Department declined comment.

In a letter obtained by The Detroit News, the Justice Department said it is concerned the agreement between the auto companies and California "may violate federal antitrust laws." The agency said it is inviting the carmakers to meet with federal regulators "in order to help us determine whether that is a possibility and what are the appropriate next steps we should take" and is planning to review communication between the carmakers concerning the formation of the pact.

Additionally, the U.S. Environmental Protection Agency said in a letter sent Friday to the California Air Resources Board, which negotiated the deal with the carmakers, that the proposed agreement "appears to be inconsistent with federal law."

"Congress has squarely vested the authority to set fuel economy standards for new motor vehicles, and nationwide standards for [greenhouse gas] vehicle emissions, with the federal government, not with California or any other state," Steven Bradbury and Matthew Leopold, general counsels for the EPA, wrote in a letter to CARB Administrator Mary Nichols. 

EPA's lawyers urged CARB to immediately disassociate itself from the commitments made by the four automakers. "Those commitments may result in legal consequences given the limits placed in federal law on California's authority," the letter said.

The California Air Resources Board did not immediately respond to a request for comment. The office of California Attorney General Xavier Becerra declined to comment.

Ford said in a statement: "We have received a letter from the Department of Justice and will cooperate with respect to any inquiry.”

Honda said it will "work cooperatively with the Department of Justice with regard to the recent emissions agreement reached between the State of California and various automotive manufacturers, including Honda."

BMW said: "We can confirm receipt of an inquiry from the Department of Justice and will respond appropriately."

Volkswagen declined to comment, saying: “We are in regular contact with U.S. authorities on a number of matters, but do not comment on specific private communications we may or may not receive.”

The investigation, first reported by the Wall Street Journal, which cited anonymous sources, is the latest front in a battle over mpg rules between the Trump administration and California that has ensnared automakers in a fight that is likely to end up in a lengthy court battle.

The move by the carmakers to agree separately with California to higher mpg standards flew in the face of the Trump administration's two-year push to freeze fuel-mileage rules at about 39 mpg for model years 2021 to 2026.

The Trump administration has responded by moving forward with a plan to revoke part of California's right to set its own gas mileage rules for cars, setting up a likely protracted legal fight.

The Office of Management and Budget’s Office of Information and Regulatory Affairs is planning to submit a proposed "One National Program" rule that prohibits states from setting their own gas mileage rules in a bid to ensure a single national level for fuel economy standards that would directed by Congress, a source familiar with the interagency process who was not authorized to speak on the record said Thursday.

The "One National Program" rule will not be final until it is submitted to the Federal Register and approved under the federal government's traditional rulemaking process after the White House review process is complete.

At the same time, the U.S. Environmental Protection Agency is planning to revoke aspects of a Clean Air Act waiver that has been used for years by California to set its own emission standards, according to the source that is familiar with the internal administration discussions. That would undo California's Advanced Clean Car Rule, which calls for automakers to reduce pollution from new cars from 2012 model year levels by 40% by 2025.

The Trump administration's plan would leave in place California’s low-emission vehicle standards that have been in place since the 1990s.

The White House and California have locked horns over gas mileage rules since the earliest days of Trump's presidency. His administration announced last year its intention to ease stringent gas-mileage rules that would have required fleets averaging nearly 55 miles per gallon by 2025. The administration proposed a freeze in the mandate after 2020, touching off a fierce battle with California, which helped craft the Obama-era rules.

The two sides attempted to negotiate a potential agreement, but the White House announced in February it was pulling out of the talks and moving forward with its proposed freeze.

Thirteen states and Washington, D.C., have adopted California’s mileage rules, meaning automakers could be left with one set of rules for a quarter of the country and another set for the remaining states unless the Trump administration and California can come to an agreement. Congress gave California the right to set its own standards years ago under the Clean Air Act.

Carmakers have consistently pushed for one national fuel-economy standard. They have pressed the Trump administration to go back to the negotiating table with California.

Environmentalists have decried the Trump administration's efforts to roll back the Obama-era fuel economy standards as an attack on the environment from a hostile administration.

“The Trump administration is trying to bully automakers into accepting a rule rollback the companies don’t want,” said Luke Tonachel, director of clean vehicles and fuels at the Natural Resources Defense Council. “It’s bizarre — but not surprising — that this Environmental Protection Agency is attacking companies that want to cut pollution.”


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Radical Deregulation Won't Bring Real Growth

By John Conyers, Jr.

Dean of the U.S. House of
Representatives
John Conyers, Jr.

Throughout the 1920s, Congress was focused on slashing taxes on the wealthy and eliminating business regulations, arguing that a free market could govern itself and that a rising tide would lift all boats.

The results were devastating: Wall Street ran amuck, resulting in the 1929 stock market crash. Wealth became highly concentrated at the top, leaving everyday consumers with too few resources to fuel a meaningful post-crash recovery. Industrial pollution began accelerating, setting the stage for an era of smog and even flammable rivers.

Fast-forward 90 years, and you'll wonder: Why haven't we learned our lesson?

Today -- with majorities they've touted as their largest since the 1920s -- congressional Republicans are pushing the most aggressive deregulatory agenda in nearly a century. My colleagues in Congress should look to both history and to current affairs to learn a simple lesson: Smart regulation is not only necessary for society but can be good for growth.

This is something our constituents inherently understand -- with 70 percent of the general public supporting rules to protect our climate from greenhouse gases, including 56 percent of Republicans. They trust in the power of markets to deliver solutions when regulations properly incentivize reform.

House Republicans' headline bill for this week -- the deceivingly named Regulatory Accountability Act ("RAA") -- exemplifies the wrong-headed approach of the 1920s. The RAA (H.R. 185) would require that all laws implemented through federal regulations be implemented in the weakest and cheapest manner possible with maximum input from industry. The bill would decrease the effectiveness of our landmark environmental protections, create delays that are costly to both consumers and good corporate citizens, and derail many of our most dynamic domestic industries. This is to say nothing of the bill's awful impacts on workplace safety, financial protections, and consumer product safety
.

The laissez-faire environmental standards of the 1920s remained largely in place for decades until people could no longer afford to avert their eyes. In 1969 -- the same year of the famous Cuyahoga River fire -- the Rouge River in my own hometown also caught fire. These fires and others in several major cities across the country were a direct consequence of the failure to regulate the use of freshwater systems as sewers, harbors, and dumps. While it's troubling that it took such a conspicuous fiery accident to generate action, Congress finally came to its senses and adopted a smart regulatory response -- the Clean Water Act -- in 1972. Two years later, we passed the bipartisan Safe Drinking Water Act. Both were signed by Republican Presidents.

But the decades of neglect and abuse could not be cleaned up overnight. Thirteen years after the Clean Water Act was passed, a young man died of a rare waterborne disease after falling in the Rouge River and ingesting a mouthful of water. Now, 30 years after his death the Rouge River Basin is in vastly better condition, but it's still recovering -- in spite of decades of work and hundreds of millions of dollars in cleanup costs.

H.R. 185 could erase those decades of environmental progress by forcing agencies and courts to defer to the environmental regulations found in nations like China -- where air pollution cuts life expectancy by five years in the north of the country and 16,000 dead pigs recently filled one Shanghai River. These environmental hazards have direct economic consequences -- easily measured in the responses of the two-thirds of wealthy Chinese who have left China or a planning to do so.

So much money, time, and effort could have been saved with regulations that preempt or quickly address environmental impacts. Unfortunately, too many people want to govern by crisis -- acting only when they are forced to by a catastrophe like a flaming river. This is of course a natural inclination -- we all from time to time refuse to do more than the bare minimum. The GOP's bill this week exemplifies this sort of short-sighted thinking, preferring a pound of cure to an ounce of prevention.

The US public is paying for regulatory inaction with their lives, their health, and ultimately their taxes when the consequences become so egregiously apparent that Congress finally acts. The GOP's 1920s-style deregulation, including bills like H.R. 185, threatens our economy by reducing businesses' expected consequences when they take shortcuts and shirk responsibilities, instead placing the burden on citizens who pay for cancer treatment, and waterway clean-up, and other costs that the polluters should have picked up.

The GOP deregulation agenda also places good corporate citizens at a competitive disadvantage to the greedy and unethical. Every time the good corporate players clean up their mess, source responsible raw materials, and refuse to pass the buck, they fall behind the companies that cut corners to maximize profits. Many of those good guys are eventually forced to play dirty too, or they go out of business.

H.R. 185 and the GOP's broader deregulatory agenda aren't pro-business -- they're pro-bad business. They reward antiquated business models and intransigent managers. As Harvard Business School management guru Michael Porter hasdemonstrated, US firms have shown again and again that they can and will respond with hard work and innovation when regulations offer them flexibility and a fair playing field. Consider how increases in Corporate Average Fuel Economy (CAFE) standards have empowered Motor City to develop cleaner manufacturing processes, build aluminum F-150s, and develop a $30,000 plug-in hybrid that can drive from Detroit to Lansing on a single gallon of gas. Crucially in a global marketplace, adopting energy-efficiency and consumer safety standards ahead of foreign competitors secures an important first-mover advantage. Any company that can make it in a free market isn't going out of business because they -- and their competitors -- have to reduce ozone emissions or prevent fracking fluids from entering aquifers.

Smart environmental regulations are both good ethics and good economics.

The GOP deregulation agenda is about shifting the burden of responsibility from businesses to taxpayers. It's about shamefully low expectations for US industry. In short, it's about a return to the 1920s economic model that yielded unprecedented inequality, mass pollution, and the worst financial crisis of the 20th century.

H.R. 185 is just the beginning. In the months ahead, congressional Republicans will continue to build on their recent actions to approve the Keystone Pipeline (the perfect economic strategy for an aspiring Russian-style Petro-State) and to deregulate Wall Street derivatives (the recipe for an automatic taxpayer bailout for the riskiest gambling). Let's stand up for the lessons of history and defend the prudent role of government.

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