On October 27, the California Air Resources Board (CARB) filed a lawsuit in Alameda County Superior Court against Daimler Truck North America, International Motors, PACCAR, and Volvo Group North America (collectively referred to as the OEMs), alleging breach of contract and related claims stemming from California’s Clean Truck Partnership (CTP) agreement.

Newly appointed CARB Chair Lauren Sanchez commented in response to the legal filing by stating that “CARB and several other manufacturers have upheld their end of the deal, but these four manufacturers have reneged on theirs.”

CARB maintains that it has met its obligations under the agreement and has dedicated substantial time and resources in reliance on the OEMs’ commitments. However, CARB asserts that the OEMs “have unambiguously stated that they do not intend to comply with the sales commitment terms of the Contract.” CARB argues these commitments were essential to achieving California’s clean air goals, and the OEMs’ withdrawal undermines the state’s broader regulatory framework.

What is the Clean Truck Partnership?

Established in July 2023, the CTP is a voluntary agreement between the California Air Resources Board (CARB), the Truck and Engine Manufacturers Association (EMA), and several major truck manufacturers aimed to accelerate the transition to zero-emission technologies while providing regulatory stability and lead time for manufacturers. In exchange for the OEMs’ commitment to comply with California’s vehicle standards—regardless of federal challenges—CARB pledged to support infrastructure development and maintain predictable regulatory timelines.

While the CTP was designed as a collaborative framework to harmonize state and federal emissions standards and offer greater flexibility to manufacturers and fleets, the recent lawsuit represents a major escalation in the regulatory tensions between California and the trucking industry.

The same OEMs named in this lawsuit had previously filed a legal challenge in August 2025 seeking to invalidate the CTP, arguing that California is attempting to enforce heavy-duty truck emissions standards that were recently preempted by Congress under the federal Clean Air Act. Further complicating the issue, the Federal Trade Commission (FTC) became involved, prompting the named OEMs to formally declare in writing that they would no longer adhere to the agreement. This development has raised broader concerns about the enforceability of voluntary environmental agreements and the extent of federal oversight in shaping state-level climate policy.

Causes of Action Asserted

CARB’s complaint includes four main causes of action that seek either enforcement of the agreement or compensation for its reliance on the OEMs’ commitments:

• Breach of Contract – Specific Performance. CARB seeks a court order compelling the OEMs to fulfill their sales commitments for clean vehicles in California, arguing that monetary damages alone cannot compensate for the environmental harm caused by noncompliance.
• Breach of Contract – Reliance Damages. If specific performance is not granted, CARB requests reimbursement for the costs incurred in reliance on the OEMs’ promises, including rulemaking and public presentation efforts.
• Rescission of Contract. CARB asks the court to rescind the agreement if performance cannot be enforced, citing failure of consideration due to the OEMs’ refusal to comply.
• Breach of Implied Covenant of Good Faith and Fair Dealing. CARB alleges that the OEMs acted in bad faith by withdrawing from the agreement after CARB had substantially performed its obligations, causing additional harm beyond the breach itself.

What’s Next

A hearing on the OEM’s request for a preliminary injunction is scheduled for October 31, with another court date set for November 21, when CARB will seek to dismiss the case. The outcome of these legal battles could have wide-reaching implications for emissions regulation, OEM compliance, and the future of clean transportation in California and beyond.