Court OKs Cutbacks in Car Mileage Standards : Environment: It says the federal traffic agency acted within the law, did not have to file an impact statement. Ruling is a blow to L.A. and California.

WASHINGTON — A federal appeals court ruled Friday that the National Highway Traffic Safety Administration did not break the law when it decided to relax the auto mileage standards spelled out in federal statutes.

The 2-1 decision was a defeat for the state of California and the city of Los Angeles, which were among the plaintiffs who argued that failure to implement higher standards would cause more air pollution and make it more difficult for local governments to meet the requirements imposed on them by the federal Clean Air Act.

Those who filed the suit contended also that the looser standards would contribute to global warming, and they insisted that the highway safety agency should have been required to prepare a formal environmental impact statement before issuing the regulations.

Other plaintiffs included New York City and a number of consumer and environmental groups.

The NHTSA, which sets the standards for average fuel efficiency that auto makers must achieve, had declared standards of 26 miles a gallon for the 1987 and 1988 model years and 26.5 miles a gallon for 1989.

Both were less stringent than the 27.5-miles-a-gallon level spelled out in the law, but the statute gave the agency leeway to set it as low as 26 miles a gallon if that were deemed the “maximum feasible average fuel economy level.”

The fewer miles per gallon a car achieves, the more carbon dioxide it releases into the atmosphere. In the Los Angeles area, for example, the fuel-efficiency standard rollback would increase the amount of volatile organic compounds--the fumes from gasoline that evaporate and contribute to the formation of smog--by 202.8 tons a year, the agency estimated.

Los Angeles and California noted that emissions of more than 40 tons a year are considered a significant increase under Clean Air Act requirements for areas, such as Los Angeles, that do not attain national air quality standards.

Still, the agency determined that the rule would not “significantly affect . . . the quality of the human environment.”

It based its evaluation on what it called an “environmental assessment.” Producing an environmental impact statement is a more exhaustive process of calculating the possible environmental consequences of government policy. Over the years, such statements have become increasingly complex and detailed.

The court said it was satisfied that, even without making a formal environmental impact statement, the NHTSA had conducted “extensive evaluation” of the effects its standards would have. “We hold that the agency’s action was not arbitrary, capricious or otherwise contrary to law,” Judge Douglas H. Ginsburg wrote for the majority.

Further, he noted, the agency is preparing a cumulative environmental impact statement to cover its entire fuel-efficiency standard program, which “should provide additional assurance . . . that the agency is not making decisions with environmental consequences that escape its full consideration.”

Chief Judge Patricia M. Wald dissented. She contended that the Natural Resources Defense Council had, in its arguments, “certainly identified enough data preliminarily to support its case that a full-scale (environmental impact statement) could produce grounds to make NHTSA change its mind.”

She urged that the agency be required to reconsider its standards and provide a better explanation for them.

Staff writer Larry Stammer in Los Angeles contributed to this story.