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Court Rejects Shortcut Rule That Helped Navistar

6/12/2012 3:30:00 PM
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A federal court threw out a regulation Tuesday that allowed Navistar International Corp. to sell engines that do not comply with emissions regulations, saying the Environmental Protection Agency was not justified in skipping its normal rulemaking process.

EPA issued an “interim final rule� in January for the purpose of allowing Navistar to sell noncompliant engines, since the manufacturer expected to run out of the emissions credits it was using the next month.

Under the rule, now vacated by the U.S. Court of Appeals for the District of Columbia circuit, Navistar had to pay a $1,919 penalty for each noncompliant engine it sold.

Navistar disagrees with the ruling and will ask for the case to be heard again, a spokeswoman said.

“Navistar continues to make and ship engines and our customers will continue to receive the products they ordered with EPA certified engines,� she said.

Tuesday’s decision came as a result of a lawsuit that some of Navistar’s competitors filed against EPA in February. They argued that the Clean Air Act does not allow EPA to issue rules on emissions penalties without going through the full regulation process.

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Emil Estafanous, CPA, CFF, CGMA