Automakers appeal Vermont court decision on emissions

WASHINGTON (Reuters) - Major U.S. and overseas auto manufacturers on Friday appealed a Vermont court decision that upheld a stringent vehicle emissions law and handed a victory to states trying to regulate greenhouse gases.

The Alliance of Automobile Manufacturers is challenging regulations imposed by California and adopted by a handful of other states, including Vermont, that go beyond federal rules to limit tailpipe emissions and improve fuel economy.

The trade group represents General Motors Corp GM.N, Toyota Motor Co (7203.T), Ford Motor Co (F.N), Chrysler LLC and other companies. GM and Chrysler's predecessor Daimler-Chrysler and Vermont auto dealers initiated the case in 2005.

U.S. District Court William Sessions in Burlington ruled in September that federal regulations did not preempt a state law that would require a 30 percent reduction in carbon emissions by cars and light trucks starting with 2009 models.

Vermont, Connecticut, Maine, Massachusetts, New Jersey, New York, Oregon, Rhode Island and Washington adopted the rule, which must be approved by the U.S. Environmental Protection Agency (EPA).

Several states are considering the measure and watching legal developments closely. Cases are pending in California and Rhode Island. The Vermont challenge was the first to go to trial.

Sessions also rejected industry's claim that the Vermont measure would hurt their business.

But industry pressed ahead with its notice of appeal on Friday that was filed with the district court in Burlington. The case now shifts to the 2nd Circuit Court of Appeals in New York.

Dave McCurdy, the auto alliance chief executive, said in a statement that Vermont's regulation is tantamount to a fuel efficiency standard and "federal law is very explicit: states are preempted from adopting fuel economy laws."

"This appeal is urgent as this legislation applies to model year 2009 vehicles, which consumers will start seeing in early 2008 - just a few months from now," McCurdy said.

The Vermont attorney general's office had no comment on the appeal motion, which was anticipated.

But in September, state Attorney General William Sorrell called Sessions' ruling a "big win" for "those concerned about a healthier environment."

Concerned about energy security and high gasoline prices, Congress is considering a new fuel economy standard in Senate-passed energy legislation.

The bill would boost fleet-wide fuel economy by 40 percent to a combined average for cars and trucks of 35 miles per gallon by 2020. It is unclear, however, if lawmakers will finalize the measure since the House of Representatives did not include a fuel standard in its energy bill.