Auto week at D.C. Circuit raises ‘major questions’ for EPA

By Lesley Clark | 09/11/2023 06:54 AM EDT

“This is all really just an effort to try and get the Supreme Court’s attention,” a legal observer said.

Photo collage illustration of a hand with a gavel about to smash into a pile of cars

POLITICO illustration/Photos by Pixabay, iStock

A powerful federal appeals court will hear arguments this week in three challenges to the Biden administration’s efforts to curb the largest source of planet-warming pollution in the United States — and the battles have the potential to go all the way to the nation’s highest bench.

The cases before the U.S. Court of Appeals for the District of Columbia Circuit target both historic and contemporary efforts to clean up car and truck exhaust. They will test a 1960s-era waiver that allows California to impose stricter pollution controls than the federal government, and they’ll wield a new legal tool — used by the Supreme Court last year to constrain EPA control of power plant emissions — against a Biden administration initiative to reduce vehicle emissions.

“It certainly is the case that ‘major questions’ is the flavor of the day and that many practitioners are raising the doctrine,” said Jonathan Brightbill, a partner at the law firm Winston & Strawn LLP. The major questions doctrine says that Congress must clearly authorize agencies to regulate financially and politically consequential matters.


“Given the very significant economic and political implications of these issues,” said Brightbill, a leader in the Justice Department’s environment division during the Trump administration, “these are cases that are making very strong arguments that the major questions doctrine should apply.”

The lawsuits may strike out at the D.C. Circuit. Only one judge hearing the three auto cases this week is a Republican appointee. And that judge — Gregory Katsas, a Trump appointee — recently joined his colleagues to reject two conservative challenges to other EPA rules.

Still, environmental attorneys say the cases could eventually land at the Supreme Court amid a conservative push to challenge the limits of the executive branch.

They pointed to recent environmental decisions by the conservative-dominated high court, including the power plant emissions ruling, West Virginia v. EPA, and Sackett v. EPA, in which the justices erased protections for most U.S. wetlands.

“This is all really just an effort to try and get the Supreme Court’s attention,” said Robert Percival, director of the environmental law program at the University of Maryland.

He continued: “They’re kind of hoping that the Supreme Court’s supermajority of conservatives might be willing to take what they did with West Virginia and Sackett and boldly rewrite the Clean Air Act.”

Car rules

The first challenge the D.C. Circuit will hear Thursday — Texas v. EPA — targets the clean car rule that the Biden administration finalized in 2021.

The regulation — which applies to vehicles that are already on the road through 2026 — sought to reverse a Trump-era rollback and cut greenhouse gas emissions. Ken Paxton of Texas and 14 other Republican attorneys general say that their states would suffer “pocketbook injury” because the rule would reduce oil extraction, and they depend on revenue from fossil fuel development.

The states argue that EPA lacks “authority to take the comparably consequential action of substantially restructuring the American automobile market.”

They charge that the new rule presents a “major question” because it would “undermine both electric grid reliability and national security.”

But EPA argues that the major questions doctrine does not apply because its car rule broke no new legal ground.

Todd Kim, assistant attorney general for DOJ’s Environment and Natural Resources Division, has argued that the vehicle emissions rule “hews to the regulatory approach blessed” by the Supreme Court in West Virginia. The major questions doctrine, Kim wrote, “is reserved for a handful of ‘extraordinary’ cases.”

“That is not this case,” Kim said of the car rules. “Far from doing something unexpected or novel, EPA merely tightened existing standards.”

Soybean producers and corn growers from several Republican-led states, along with conservative groups, are supporting the lawsuit in a brief submitted by the Competitive Enterprise Institute. Citing West Virginia, the groups argue that “Congress nowhere provided clear authorization for EPA to effectively mandate electrification of the nation’s vehicles.”

One major player in the litigation is unlikely to participate in Thursday’s arguments. Paxton, the Republican stalwart who led the coalition of states suing over the EPA car rule, is in the middle of an unrelated impeachment trial in the Texas Legislature.

The Republican-controlled state House voted to impeach Paxton after an investigation turned up evidence showing he used his state office to help a campaign donor and conceal an extramarital affair — then retaliated against state employees who reported the misconduct.

The state Senate is acting as jury, and Paxton lost a series of test votes when the trial started Sept. 5. Senators voted 24-6 against Paxton’s motion to throw out the case and 22-8 to deny a motion limiting the evidence in the case. Under the rules of the trial, it only takes 21 votes to convict him.

The other case on the D.C. Circuit’s Thursday docket is a consolidated challenge to the National Highway Traffic Safety Administration’s tailpipe emissions standards for cars built from 2024 through 2026.

Opponents in the case — Natural Resources Defense Council v. NHTSA — include the American Fuel & Petrochemical Manufacturers, which argues that the rules are invalid in part because the agency relied on state-level emissions standards in California. Conservative states also argue that their tax revenues will suffer as a result of California’s zero-emissions vehicle standards, while environmental groups contend that the requirements are too lenient.

EPA’s clean car regulations apply to vehicles and model years that have already been sold or are being rolled out soon. But car companies could still benefit from a ruling that weakens those regulations because they typically comply by averaging their emissions and mileage over several years.

If the cases make it up to the Supreme Court and the justices uphold the rules, it would solidify the federal government’s authority to control vehicle pollution in future years, said Peter Huffman, an attorney at the Natural Resources Defense Council.

California waiver

The D.C. Circuit on Friday will hear arguments from Ohio Attorney General Dave Yost, legal officers in 16 other Republican-led states and industry groups that California’s authority to set strict tailpipe emissions rules violates the Constitution, which conservative challengers say should treat all states equally.

California has regulated vehicle emissions since the 1950s, before Congress introduced a federal program in 1965. Since that time, California has enjoyed a waiver from the program under the Clean Air Act, which allows the state to set stronger protections. The Trump administration revoked California’s exemption, but President Joe Biden reinstated it.

The fight over the California waiver — Ohio v. EPAhas been dubbed “SCOTUS bait” by some legal observers.

“It very well could draw the Supreme Court’s interest, given the broader implications of the California waiver and how it is now applied,” Brightbill said, adding that the provision was “more localized in terms of its effect” when it was enacted 50 years ago.

A ruling against EPA in the case would ripple across the country and the U.S. auto market: More than 15 states have adopted California’s standards, representing nearly 40 percent of the market.

Percival, though, characterized the lawsuit as part of the “political litigation that red states have brought against anything the Biden administration does that they don’t like.” He said the argument that the decades-old waiver has “suddenly been unconstitutional all along strains credulity.”

The Supreme Court in Shelby County v. Holder in 2013 invoked the equal sovereignty doctrine — the same legal theory at issue in the California waiver litigation — to declare part of the Voting Rights Act unconstitutional. The doctrine stipulates that states enjoy equal ability to govern themselves.

Ohio and other states cited Shelby in the California waiver case to argue that it underscores “just how strong the equal-sovereignty principle is.”

But EPA argues that the Clean Air Act waiver fight is different, saying the “principles of federalism that animated the heightened standard applied in the voting procedure context do not apply to the regulation of privately manufactured motor vehicles.”

In a brief filed in the D.C. Circuit, EPA calls Ohio’s complaint “unsupported by text, history or precedent” and accuses the states of inventing a legal theory by “twisting” various strands of constitutional law “into an unrecognizable new creation.”

EPA says the states don’t have standing because they are not regulated by the waiver, nor do they “seek to promote Congress’s objective of ameliorating air quality.”

Five of the world’s largest automakers sided with EPA in a brief last year, arguing that upholding California’s waiver would “promote stability and regulatory certainty while the industry goes electric.”

The outcome of the case could have “far-reaching consequences beyond the particular issues before the court,” Daniel Corbett, a Jones Day attorney, wrote in a post on JD Supra.

He noted that a decision in favor of Ohio and other challengers “could effectively invalidate many more of California’s current and planned vehicle emission and climate change programs.”

EPA pointed to waivers that could be affected, including carve-outs for Texas’ electric grid and Alaska’s jurisdiction over small hydroelectric projects.

Arguments at the D.C. Circuit will take place Thursday and Friday morning, beginning at 9:30.

Reporter Mike Lee contributed.