The U.S. Supreme Court seemed inclined during an April 23 oral argument to revive a lawsuit filed by energy companies over California’s tough vehicle emissions standards.
The case is Diamond Alternative Energy LLC v. Environmental Protection Agency (EPA).
The lead petitioner, Diamond Alternative Energy, is a subsidiary of Valero Energy Corp.
Other petitioners include American Fuel and Petrochemical Manufacturers, Clean Fuels Development Coalition, Domestic Energy Producers Alliance, and Energy Marketers of America, as well as several agriculture industry organizations.
Much of the discussion during oral arguments focused on standing and redressability.
Standing refers to the right of someone to sue in court. The parties must show a strong enough connection to the claim to justify their participation in a lawsuit. Redressability, a key element of standing, is the ability of the courts to give a party the relief that it is seeking if it wins its case.
In April 2024, the U.S. Court of Appeals for the District of Columbia Circuit ruled that California had the authority to regulate tailpipe emissions. That court held that the energy companies bringing the legal action could not demonstrate that they had standing to sue.
California’s policy stances are influential, and several states have already adopted its regulatory framework for automobiles. California says its climate-action policies are needed to drive down demand for liquid fuel.
The petition states that California is mandating “100 percent electric vehicles by 2036” and that this policy has the effect of “forcing electrification of the country’s vehicle fleet.”
The state’s goal is supported by the EPA and the National Highway Traffic Safety Administration, whose emissions and fuel economy standards “impose de facto electric-vehicle mandates in violation of their governing statutes,” according to the petition, which was filed in the final year of the Biden administration.
The companies say it is a problem that the federal Clean Air Act allows a single state—California—to establish emissions rules for vehicles. To make its own rules, California has to be granted a federal waiver from the act’s requirements. The federal government has been granting those waivers to the state for years.
In the petition, the energy companies criticized the regulatory independence that the Clean Air Act effectively gives the Golden State.
The companies stated that the EPA’s position is that the federal statute allows California “to operate as a quasi-federal regulator on global climate change.”
“There are serious constitutional concerns with a statute that allows only California to act as a junior-varsity EPA,” the petition reads.
“The question whether California may set greenhouse-gas emission standards for itself and other States is undeniably major.”
President Donald Trump previously said he would block California’s ability to enforce its own vehicle emissions rules.
“The Biden Administration failed to send rules on California’s waivers to Congress, preventing Members of Congress from deciding on extremely consequential actions that have massive impacts and costs across the entire United States. The Trump EPA is transparently correcting this wrong and rightly following the rule of law,” Zeldin said.
“[Congress allowed] California to craft alternative emission standards in certain circumstances in recognition of that State’s experience regulating air pollution and its special pollution challenges,” the brief reads.
During the April 23 oral arguments, the companies’ attorney, Jeffrey Wall, said, “We’re here because California said it needs its own standards.
“California even intervened by telling the court below that its standards are likely to reduce fuel consumption.
“The government has tilted the playing field and foreclosed us from being able to freely sell our product.
“We ought to be able to make our arguments on the merits and get our day in court.”
Justice Elena Kagan said that because the government “tilts the market against you ... that seems like an easy thing to show and not one that would cause a lot of debate.”
Deputy U.S. Solicitor General Edwin Kneedler said the companies have not shown that they should be able to pursue their litigation.
They want a rule establishing redressability whenever a plaintiff “challenges government action that poses an impediment to the use of its product without any need for an evidentiary basis,” he said.
This proposal is “inconsistent with this court’s decisions, which require a factual basis for standing,” Kneedler said.
Justice Brett Kavanaugh said that the EPA “routinely raises standing objections when there’s ... even a hint of a question about it.”
California Deputy Solicitor General Joshua Klein said: “Federal courts don’t assume there’s standing. The presumption runs the other way.
“The party who brings a case must establish that it, in fact, meets each element of standing.”
He said that the companies’ case “had unique problems.”
During a discussion of whether a “common sense inference” suggests that the companies should be allowed to sue, Justice Amy Coney Barrett said that it is “not that high a burden.”
The Supreme Court is expected to rule on the case by the end of June.
