On Friday, the U.S. Supreme Court ruled 7-2 that a lawsuit by fuel producers against the EPA could proceed, reversing a lower court’s ruling that the plaintiffs lacked standing to challenge an EPA waiver allowing California to require automakers to produce more electric vehicles and fewer gas-powered vehicles.
The Supreme Court decision reverses the D.C. Circuit's ruling that the fuel producers lacked standing to sue and sends the case back to the D.C. Circuit to consider the merits of the fuel producers' legal claims that the Environmental Protection Commission’s approval of the California regulations violated the Clean Air Act, since California’s law has nationwide, not just statewide, consequences.
Delivering the majority opinion on Diamond Alternative energy, LLC, et al vs. Environmental Protection Agency, et al, Justice Brett Kavanaugh detailed the hypocrisy, contradictions and inconsistencies of the challenge by the state of California on the behalf of the EPA.
For one, the EPA did not deny that the fuel producers had standing when it initially had the chance to do so. Now, with California’s support, it is claiming they lack standing to sue.
Likewise, California has “completely changed its tune,” Justice Roberts writes:
“After the D. C. Circuit granted California’s motion to intervene, however, California completely changed its tune about the continuing impact of the regulations. In its merits briefing in that court, California suddenly argued that the fuel producers lacked Article III standing because they had not ‘established any probability’ that automobile ‘manufacturers would change course if EPA’s decision were vacated.”
California argued that automobile manufacturers would not change course if EPA’s waiver was vacated because there’s “surging consumer demand” for electric vehicles.
“That is an odd argument for EPA and California to advance, Justice Roberts explains:
“After all, if invalidating the regulations would change nothing in the market, why are EPA and California enforcing and defending the regulations?
“The whole point of the regulations is to increase the number of electric vehicles in the new automobile market beyond what consumers would otherwise demand and what automakers would otherwise manufacture and sell. And EPA and California are presumably defending the regulations because they think that the regulations still make a difference in the market.”
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“California’s own estimates indicated the regulations would cause substantial reductions in demand for gasoline exceeding $1 billion beginning in 2020 and increasing to over $10 billion in 2030.”
“Simply put, EPA’s and California’s own actions—their statements, their enforcement decisions, their litigation positions—undermine the central premise of their redressability argument,” Justice Roberts writes:
“When as here a government seeks to justify its regulatory actions by, on the one hand, touting the consequences for fuel usage and emissions while, on the other, maintaining that those same regulations are unreviewable because there are no consequences, courts can appropriately be skeptical.”
California’s own words even contradict its claims, Roberts notes, pointing out multiple examples. “California’s own estimate that ‘its regulations would cause ‘substantial reductions in demand for gasoline exceeding $1 billion beginning in 2020 and increasing to over $10 billion in 2030,’” Roberts writes.
“Commonsense economic principles support the fuel producers’ standing,” Roberts writes. “The California regulations force automakers to manufacture more electric vehicles and fewer gasoline-powered vehicles.”
By affirming the fuel producers’ right to sue, the Supreme Court sends the case back to the D.C. Circuit to determine if the EPA exceeded its authority by approving California’s law discriminating against gas-powered vehicles.
On another front, a battle ensued earlier this month when Pres. Trump signed a joint resolution of Congress disapproving the EPA’s waiver:
“As the Congress’s joint resolutions make clear, California’s attempts to impose an electric vehicle mandate, regulate national fuel economy, and regulate greenhouse gas emissions are not eligible for waivers of preemption under section 209 of the Clean Air Act.
“This provision of the Clean Air Act authorizes the Environmental Protection Agency (EPA) to grant waivers to California to address only compelling and extraordinary localized issues.
“It can never again be misused to regulate greenhouse gas emissions, which inherently do not have localized effects, much less compelling and extraordinary local effects, or vehicle emissions across the Nation.”
The Supreme Court decision was cheered by the National Federation of Independent Businesses (NFIB).
“Small businesses have the right to challenge overreach by government agencies and seek relief from harmful regulatory actions.
“The D.C. Circuit’s opinion set an unreasonable standard for plaintiffs to prove that the court can remedy their injury. This would have made it nearly impossible for indirectly regulated parties to challenge regulating agencies.
“NFIB applauds the Court for reversing the lower court’s opinion and ensuring that small businesses have a clear course of action and a fair chance at proving that the court can provide suitable relief.”