D.C. Circuit Court of Appeals Rejects Challenge to California's Limits on Automotive Greenhouse Gas Emissions

In Ohio et al. v. U.S. EPA, on April 9, 2024, the United States Court of Appeals for the D.C. Circuit upheld a decision by the U.S. Environmental Protection Agency ("EPA") to allow California's 2013 greenhouse gas emissions standards for light-duty cars and trucks to remain in effect. A coalition of U.S. states challenged EPA's decision, arguing that Section 209 of the Clean Air Act (42 U.S.C. § 7543), which authorizes EPA to waive federal preemption of California's automotive emission regulations, impermissibly discriminates against them, in violation of the constitutional principle of equal sovereignty between states, as articulated in Shelby County v. Holder. The Court of Appeals disagreed, holding that Congress has plenary authority under the Commerce Clause of the Constitution to set federal automotive emission limits while selectivelypreempting programs by some states but not others. The Court of Appeals also sidestepped statutory challenges to the California waiver, by finding that the states and other industry petitioners failed to prove they had standing to assert those challenges. Although the petitioners argued they suffered economic harms, including rising costs of conventional vehicles due to California's more stringent emission limits, the Court of Appeals held they failed to prove that vacating the waiver reinstatement would redress that harm by stemming the substantial industry movement towards low- and no-emission vehicles. 

Section 209(a) of the Clean Air Act establishes exclusive federal jurisdiction to set automotive emissions limits, but subsection (b) allows EPA to grant a waiver to California, and only California, provided it can meet several statutory requirements. California has a long history, dating back to 1967, of implementing its own emissions standards under waivers by EPA. In 2012, it adopted the Advanced Clean Cars Program, which sets greenhouse gas emission limits for cars through model year 2025, and requires manufacturers to increase production of zero-emission vehicles for sale in California. EPA granted a waiver in 2013, but rescinded that waiver in 2019. After the change of administration, in 2022, EPA reinstated the waiver, which prompted the current challenge.  

If it is not disturbed by the U.S. Supreme Court, the decision in Ohio could bolster other California waiver requests currently pending before EPA. In recent years, California has adopted a series of regulations aimed at reducing greenhouse gas and other emissions from cars and trucks, including the Heavy-Duty Omnibus (setting NOx and other emission limits from heavy-duty trucks); Advanced Clean Cars II (setting greenhouse gas emission limits and requirements for zero-emission vehicles); and Advanced Clean Fleets (requiring conversion of certain fleets to zero-emission vehicles). Waivers for these and other programs currently are pending before EPA. The Court of Appeals' decision in Ohio suggests that challengers to these or other waiver requests will need to meet stringent standing requirements, and state challengers may have an uphill battle asserting a constitutional challenge based on the equal sovereign doctrine. 

However, by refusing to reach the merits of the statutory challenges, the Court of Appeals left open several potential avenues of challenging future waiver decisions. The Ohio petitioners argued that California's waiver is inconsistent with a separate federal statute, the Energy Policy and Conservation Act of 1975, which gives exclusive federal jurisdiction to the National Highway Traffic Safety Administration to enact federal fuel economy standards. They also argued that EPA applied the wrong legal standard under Clean Air Act section 209(b) when it decided that California's program is consistent with the federal program, as required for a preemption waiver. It is likely that future challenges to California's automotive emission regulations will present these and other issues to the courts for full consideration on the merits.

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