Diamond Alternative Energy v. Environmental Protection Agency

The federal Clean Air Act (act) required the Environmental Protection Agency (EPA) (defendant) to establish standards limiting pollutant emissions by new vehicles. The act preempted any state emission standards for new vehicles, except for California, which it allowed to adopt stricter emission standards if California showed they were necessary to meet compelling and extraordinary conditions. Other states could follow either the EPA’s standards or California’s stricter standards but could not set their own standards. California routinely obtained approval for stricter standards to address state air-quality issues, such as smog. In 2005, seeking to address global climate change, California sought EPA approval for standards that required auto manufacturers to (1) limit greenhouse-gas emissions across new vehicles sold in California and (2) ensure that a certain percentage of new vehicles were electric vehicles as opposed to fuel-powered vehicles. The EPA originally rejected the standards, reasoning that California’s special authority was limited to addressing state problems. However, the EPA subsequently flip-flopped with changes in presidential administrations, approving the standards under Obama, rescinding approval under Trump, and reinstating approval under Biden. The standards then remained in effect and were adopted by 17 other states. Various fuel producers (plaintiffs) sued the EPA, arguing that its approval of California’s standards violated the Clean Air Act because the standards addressed global issues, not state-specific issues. California and other states intervened. They argued that the producers lacked standing because the consumer demand for electric vehicles meant that manufacturers were unlikely to manufacture more fuel-powered vehicles even absent California’s standards. Consequently, invalidating the EPA’s approval would not redress the producers’ alleged injury of decreased fuel sales. The District of Columbia Circuit agreed, holding that the producers lacked standing. The United States Supreme Court granted certiorari.