Small trucking companies and dealerships could be facing skyrocketing costs if regulations requiring them to follow California emissions laws aren’t changed.
Those increased costs will not only put a strain on the business’ bottom line, but consumers will see increased costs for goods and services.
Rebecca Olyer, president of the Pennsylvania Motor Truck Association, said a lawsuit has been filed in Commonwealth Court by two local small trucking companies and area dealerships to challenge the constitutionality of the regulations.
“This is very complicated,” Olyer said.
Luke Wake, an attorney with Pacific Legal Foundation, who is the lead attorney for the lawsuit, said the state Department of Environmental Protection’s (DEP) Bureau of Air Quality adopted California’s emissions standards in 2002.
“They wrote the regulations so that they are rolling, meaning when California changes their regulations, Pennsylvania automatically adopts them,” Wake said.
The regulations effectively increase emission requirements for heavy diesel engines and require extended warranties on all new trucks, he said.
The lawsuit, filed by Peters Brothers Inc. of Lenhartsville, Berks County, H.R. Ewell Inc. of East Earl, Lancaster County, and two dealerships, Carlisle-based Kenworth of Pennsylvania and Transteck Inc. of Harrisburg, along with the Pennsylvania Motor Truck Association, is seeking to invalidate the regulations.
Brian Wanner, president and CEO of Peters Brothers Inc., said his company joined the lawsuit because “I think this is unfair. We can’t give our rights to another state.”
Wanner said the California regulations put both Pennsylvania and trucking companies at a disadvantage because they add costs to operating the business.
Wake said the lawsuit claims the adoption of the California regulations unconstitutional because it represents an unlawful delegation of authority to an outside entity, bypassing the normal process of setting rules in Pennsylvania.
He explained that changes to emissions rules must be legislated.
“The process in the state laws is that if an agency proposes rule changes, it must be published in the Pennsylvania Bulletin, which gives the public time to file comments and perform cost/benefit analyses.
“We are challenging the constitutionality of the separation of power where the state is giving California the power to set the standards,” Wake said.
Olyer explained that 20 years ago, the Bureau of Air Quality signed on to the California regulations that, at the time, were in line with the federal Environment Protection Agency (EPA) rules.
California, which had air quality issues early on, created its own regulations prior to the EPA setting federal standards, so they were grandfathered in, allowing them to continue to set their own standards, she said.
However, since then, the California standards have surpassed the federal rules.
New standards that became effective last year have already increased the price of commercial vehicles anywhere from $2,500 to $5,000, Olyer said. And those trucks must carry extended warranties that further increase the cost.
“These standards are very difficult for manufacturers to meet and are making it difficult for companies to be able to deliver goods,” Wake said.
The result will be increased costs to consumers, he said.
DEP declined to comment, saying it does not comment on litigation.
Oyler said the DEP issued a publication in the Pennsylvania Bulletin that it suspended the regulations for emissions standards through 2026, but companies fear that would not stop companies from being sued by outside entities as long as the regulations remain on the books.
California’s rules are set to become more stringent in 2024 and again in 2027, Olyer said.
“Some classes of trucks won’t be available because manufacturers can’t comply,” Olyer said. “This is a real threat to the industry, particularly to small businesses, which most trucking companies are.”
Olyer said the emissions standards are built into the diesel engines and manufacturers are trying to figure out how they can build them to meet those standards.
Other states, which follow the federal regulations, are not subject to California’s rules, which Olyer said puts Pennsylvania at a disadvantage.
“This is so frustrating because we have more trucks on the road that are 2010 models and newer, which are super clean and have lower emissions. This is what we want to see on the road,” Oyler said.
Her fear is that with the increased cost of buying a new truck, many companies will try to keep older trucks on the road.
Further increasing the costs is the extended warranty rule. Wake said the California regulations, which are based on the gross weight of the truck, require the warranty to cover 100,000, 150,000 and 350,000 miles. From 2027 to 2031, warranties will increase from 150,000 to 450,000 miles and in 2031, they increase to from 210,000 to 610,000 miles.
“This is a great deal more coverage which is expensive for companies,” Wake said. “For some, it might make sense. But many companies have in-house mechanics, and they don’t need or want the warranties, but they have no choice.”
Peters Brothers’ Wanner said he is most upset over the regulations forcing his company to buy extended warranties.
“They are forcing us to buy warranties for engines we repair here,” he said. “We have to fix the engines, or we can’t drive the trucks. We want the opportunity to fix our own equipment.”
“These companies compete with companies all across the U.S. and this puts them at a competitive disadvantage,” Olyer said.
Companies that have hubs in other states can buy trucks there to keep costs down, but Olyer said that impacts Pennsylvania through the loss of vehicle tax and registration money.
“The cost to consumers will increase too,” she said. “Transportation is a huge part of the cost of consumer goods.”
Olyer said 70% of goods move by truck, many multiple times through the supply chain from raw materials to wholesalers to retailers.
“The costs increase at each step so Pennsylvania consumers will see increases in consumer goods and services,” she said.
Olyer and Wake said they would like to see the issue resolved before January 2024 before the increased regulations go into effect, but there is no timeline on when the court will hear the case.