The Supreme Court on Wednesday heard oral arguments in a case over California’s authority to impose stricter vehicle emissions rules to help phase out gas-powered vehicles.
The case centers on whether fuel producers, including Diamond Alternative Energy, can sue the Environmental Protection Agency over a waiver it granted California, allowing the state to impose more stringent vehicle emission standards than federal standards.
Supreme Court justices will decide whether the challengers have legal standing to sue the EPA for its authority to grant California the waiver. The case will determine whether third parties could challenge similar federal regulations in the future.
California’s Clean Air Act vehicle waiver was reinstated by former President Joe Biden in 2022. However, critics have claimed the regulation creates a de facto national “electric vehicle mandate.” Over a dozen states follow California’s auto emission standards.
Mountain States Legal Foundation, which represents royalty owners, argues that the EPA waiver would limit the demand for liquid fuels, threatening rural economies and exceeding congressional authority.
“It doesn’t take much common sense to figure out that if California limits the number of cars that can run on gas, automakers will make fewer cars that run on gas,” Jeffrey Wall, Diamond Alternative Energy, told the high court.
Justice Amy Coney Barrett pressed Wall on whether his clients would still have standing if automakers immediately aligned with California and the EPA once the regulation is overturned, questioning whether that would impede the court’s ability to address the issue.
“Let’s assume, just for a moment, that it’s unlawful, but that the entire industry buys in,” Wall said.
“We still are harmed in a direct way,” he said. “The government has tilted the playing field and foreclosed us from being able to freely sell our product, and we ought to be able to make our arguments on the merits and get our day in court, regardless of whether the directly regulated industry cuts a deal or not, we have an injury.”
Joshua Klein, representing the California Department of Justice, told the high court that petitioners failed to establish a “non-speculative likelihood that automakers would sell more gas cars and petitioners sell more fuel without the waiver.”
In 2023, the U.S. Court of Appeals for the District of Columbia Circuit ruled that fuel petitioners did not have a legal right to challenge California’s waiver and lacked sufficient evidence. The petitioners then appealed to the Supreme Court.
California noted that it is unable to predict what happens in the market five to 10 years down the road, Wall said, adding, “That’s why the court should adopt our front-line rule. We should be allowed to compete in this marketplace, because we don’t know exactly what will happen down the road.”
President Donald Trump and Republicans have set their sights on California’s regulations that aim to boost the electric vehicle industry. Trump issued an executive order directing the DOJ to challenge state climate laws that conflict with federal policy, explicitly targeting California’s policies.
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Earlier this month, House Republicans introduced three Congressional Review Act (CRA) bills to undo California regulations on vehicles, including to reverse the EPA’s emission waiver. The proposed bills are part of a larger effort by Republicans to undo Biden-era energy and climate regulations through the CRA. The special legislative process allows lawmakers to take a simple majority vote in both chambers to undo a regulation.
A ruling in the case is expected by June.