Supreme Court greenlights reckoning on California EV mandate

WASHINGTON (CN) — The Supreme Court cleared a path on Friday for fuel producers to challenge California’s electric vehicle mandate.

In a 7-2 ruling, the justices found that California’s push toward making vehicle fleets electric would likely result in downstream economic injuries to fuel producers, giving them standing to sue the Golden State.

“The government generally may not target a business or industry through stringent and allegedly unlawful regulation, and then evade the resulting lawsuits by claiming that the targets of its regulation should be locked out of court as unaffected bystanders,” Justice Brett Kavanaugh, a Donald Trump appointee, wrote for the majority.

Justice Ketanji Brown Jackson penned a blistering dissent, accusing her colleagues of inconsistently ruling on standing doctrine based on which plaintiff is before the court.

“It may sometimes be difficult to tell one marble façade from another — especially when some of them share a common architect,” Jackson wrote. “But those of us who are privileged to work inside the court must not lose sight of this institution’s unique mission and responsibility: to rule without fear or favor.”

Citing the inscription on the Supreme Court’s exterior, the Joe Biden appointee admonished the majority for not putting plaintiffs on equal footing, resulting in a lopsided justice system.

“[I]f the Court is not fastidious in maintaining consistency across its certiorari decisions and substantive rulings, its decisions will come to represent, like so many marble façades, another mere facsimile of justice,” Jackson wrote.

Delaware liquid fuel producer Diamond Alternative Energy led a pack of industry groups opposed to the Biden-era reinstatement of a once-granted, once-revoked federal government waiver allowing California to set its own vehicle emissions standards.

The U.S. Environmental Protection Agency sets vehicle emissions standards under the Clean Air Act, but states can apply for waivers to deviate from federal regulations. In 2012, California applied for an exception to implement its Advanced Clean Car Program, which set emissions standards to reduce carbon dioxide emissions from new cars and boosted manufacturing for electric vehicles.

The waiver was withdrawn during the first Trump administration and then reinstated during the Biden administration’s push to electrify the nation’s vehicle fleet.

The fuel producers tried to sue California and the federal government for lost sales in 2022, but the D.C. Circuit found no evidence to support their claims, dismissing the case for lack of standing.

In most cases, plaintiffs can establish standing by drawing a direct line between an action and an injury. Here, however, fuel producers were a third party to California’s regulations.

Kavanaugh said the fuel producers had to prove that their injury was a predictable result of the government’s action. The entire purpose of California’s emissions standards, the Donald Trump appointee said, was to reduce the use of gasoline and other liquid fuels in cars.

“The fuel producers make money by selling fuel,” Kavanaugh wrote. “Therefore, the decrease in purchases of gasoline and other liquid fuels resulting from the California regulations hurts their bottom line. Those monetary costs “are of course an injury.”

The EPA and California argued that there’s no proof gas-powered cars would come roaring back because of the market demand for electric vehicles.

Kavanaugh said the fuel producers only needed to show that rescinding the waiver would provide some relief to establish standing.

“Even ‘one dollar’ of additional revenue for the fuel producers would satisfy the redressability component of Article III standing,” Kavanaugh wrote.

The court’s ruling in no way resolves the dispute, only deciding that the fuel producers can sue, not whether their claims have merit. It’s unclear the lawsuit will survive much further, however.

Before the justices could weigh in, President Donald Trump signed congressional resolutions blocking California’s waiver. The Golden State challenged the resolutions in court, arguing that the authority used to challenge California’s waiver could only be applied to rules.

That litigation is ongoing, leaving the future of electric vehicles in California on uncertain ground.

Justices Sonia Sotomayor and Ketanji Brown Jackson said the case should have been vacated and remanded to reconsider the new circumstances at hand.

In similar cases, Jackson said, the court has refused to apply the same standing analysis that it greenlit for a soon-to-be-moot fuel industry lawsuit.

“This case gives fodder to the unfortunate perception that moneyed interests enjoy an easier road to relief in this court than ordinary citizens,” Jackson wrote.

Jackson contends that the fuel producers provided scant evidence that revoking California’s waiver would shift the automotive industry back to gasoline-powered vehicles. Instead, she points to declarations from automakers including Ford, Volvo, Honda, BMW and Volkswagen that say the opposite.

With little to work with, Jackson said the majority cobbled together an explanation for its ruling by relying on decade-old statements about defunct portions of the program.

“Whatever one thinks about the majority’s labored redressability analysis, the effort it expends on this endeavor is striking — especially when compared to the court’s approach to Article III standing in cases involving civil rights,” Jackson wrote.

Jackson cited a slew of cases, including Warth v. Seldin , where the court prevented low-income New Yorkers from challenging a zoning ordinance that barred construction of affordable housing; Allen v. Wright , where the court blocked Black parents from challenging discriminatory practices within the IRS; and Clapper v. Amnesty , where the court prevented a group of human-rights, media, labor and legal organizations from challenging government electronic surveillance practices.

“My point here is not that any of these particular standing decisions was wrongly decided,” Jackson wrote. “Instead, I am simply observing that the court seems inconsistent in its willingness to premise redressability on commonsense inferences about third-party behavior.”

Kavanaugh retorted that the court’s recent standing cases disprove Jackson’s claims, citing his own opinion in Alliance for Hippocratic Medicine v. FDA .

Jackson noted that Kavanaugh cited Alliance for Hippocratic Medicine  20 times in the majority opinion and questioned why the high court needed to rule on fuel producers’ case if it had recently weighed in on a similar dispute.

“This is not to suggest that no one will benefit from the court’s decision to dabble in error correction in this case,” Jackson wrote. “Our ruling will no doubt aid future attempts by the fuel industry to attack the Clean Air Act. But Article III requires a live case or controversy, not merely the potential that a favorable judgment will help the plaintiff in some future lawsuit.”

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