The US Court of Appeals for the Ninth Circuit ruled Monday that Volkswagen AG may be liable to two US counties for tampering with diesel emission controls.

In 2015 the US Environmental Protection Agency (EPA) uncovered that Volkswagen was tampering with emission control systems to evade emission standards and filed criminal and civil actions against the company. In addition, numerous states and counties filed lawsuits against Volkswagen for violating state and local laws. The EPA and Volkswagen settled criminal and civil claims for more than $20 billion. However, Volkswagen did not seek a release of liability from state and local governments.

This appeal involves two counties—Salt Lake County, Utah, and Hillsborough County, Florida—that imposed penalties on Volkswagen for tampering with emission controls.

The court of appeals unanimously agreed that the Clean Air Act (CAA) expressly preempts anti-tampering laws as applied to pre-sale vehicles. However, the court found the CAA does not preempt the counties from imposing penalties for post-sale tampering. Judge Ikuta wrote:

The panel disagreed with the district court’s ruling that the Clean Air Act impliedly preempted state authority to enforce antitampering laws against post-sale vehicles. … Nothing in the CAA raises the inference that Congress intended to place manufacturers beyond the reach of state and local governments.

Overall, the court of appeals affirmed the dismissal of the counties’ complaints as applied to pre-sale tampering and reversed the dismissal of the counties’ complaint regarding post-sale tampering.