An effort by the Biden administration to curb tailpipe emissions — the largest source of planet-warming pollution in the country — seems likely to withstand review by a federal appeals court.
But another Biden initiative to boost fuel economy standards came in for a rockier reception during arguments Thursday before the U.S. Court of Appeals for the District of Columbia Circuit.
The two lawsuits — along with a third challenge set to be argued Friday — come as the Biden administration stakes much of its climate ambitions on bolstering electric vehicles. That’s sparked opposition from Republican-led states and the oil and gas industry, which accuse federal regulators of overstepping their authority.
In the first case, attorneys for conservative challengers argued that EPA rules that tighten tailpipe emissions standards run afoul of West Virginia v. EPA, a 2022 Supreme Court decision that said the agency did not have congressional approval to impose regulations forcing coal-fired plants to switch to renewable sources.
“This case is West Virginia all over again,” said Jeffrey Wall, a partner with Sullivan & Cromwell LLP who served as acting solicitor general during the Trump administration. He argued that the entire automobile industry will have to transition to electric vehicles to satisfy the standard.
Judges of the D.C. Circuit seemed unconvinced, questioning whether EPA — which has set similar standards for years — was using its power in a new way. West Virginia, said Judge Gregory Katsas, dealt with an EPA rule that redesigned the regulatory scheme for power plants.
In the case of the vehicle emissions standards, Katsas said, the Biden administration has simply increased the strength of the regulations.
“They’re turning the knob up from a four to an eight,” said the judge, a Trump appointee. “That’s very costly, but it’s not a sharp difference in kind.”
Judge Florence Pan said she read flexibility in the standard, noting at least one automaker — Subaru Corp. — does not have EVs but has said that it can comply with the Biden administration’s standards.
“There’s evidence that you can comply with it without electrification,” said Pan, a Biden appointee.
Wall argued that EPA is wielding power so as to force the transition to electric vehicles. But he said lawmakers have not granted the agency that level of authority.
“It’s looked at vehicles repeatedly; it’s said, ‘We’ll study them,” Wall said of Congress. “It’s rejected mandates.”
Chief Judge Sri Srinivasan noted, however, that it’s not clear that the challengers have legal standing to contest the rules because they did not raise their concerns during the rulemaking process.
Wall said courts have the ability to review the case independently.
Katsas, however, suggested it could mean that “no statutory argument is ever subject to exhaustion.”
Wall also argued that the car rules violate the “major questions” doctrine, as articulated in the Supreme Court’s West Virginia decision. The legal theory says Congress must clearly authorize agencies to regulate economically and politically significant issues.
If they are unsuccessful at the D.C. Circuit, conservative challengers are largely expected to take the cases all the way to the Supreme Court.
The EPA car rules at issue in the case apply to vehicles and model years that have already been sold or will be soon. But a ruling that favors the challengers’ arguments could still weaken the impact of the rules, since automakers usually comply by averaging emissions and mileage over several years.
Sue Chen, a Justice Department attorney representing EPA, argued that the rule does not require automakers to switch to EVs.
“What EPA is mandating is more emission-control technology,” she said. “It’s agnostic as to what kind it is.”
Wall said he was “floored” by Chen’s remarks, saying he had been trying the case for a year “on the belief that we’re in a mandate, and I got that from reading the rule.”
Texas Attorney General Ken Paxton (R) brought the case, and his Principal Deputy Solicitor General Lanora Pettit argued that forcing the industry to transition to electric cars meets the Supreme Court’s definition of a “major question” because it will affect the nation’s power grid, as well as oil companies.
“Balancing that is a fundamental legislative task that Congress hasn’t done yet,” she said, arguing that the court in West Virginia said agencies cannot circumvent the legislative process.
Fuel economy rules
The D.C. Circuit appeared more skeptical of the Biden administration’s position in the second case — a challenge to fuel economy standards for vehicles built between 2024 and 2026.
Eric McArthur, an attorney for the American Fuel & Petrochemical Manufacturers, told the court the regulation represented “another of the administration’s strategy to outflank Congress on a major policy question.”
McArthur, a partner at the law firm Sidley Austin LLP and Trump-era DOJ official, argued that the National Highway Traffic Safety Administration violated the law “in its zeal to facilitate the transition to an all-electric fleet.”
He argued that the formula includes emissions for electric vehicles — which Pan said seemed reasonable, countering that EVs were likely included because “the real world has electric vehicles.”
But McArthur argued that NHTSA is not allowed to take EVs into account and that the standards “cannot be met by a fleet of conventional gas-powered vehicles as Congress required.”
He said the provisions were enacted by a Congress that wanted to encourage use of alternative-fuel vehicles.
Joshua Koppel, a DOJ attorney representing NHTSA, said the agency sets its standards to a level that manufacturers can feasibly reach.
Srinivasan, the chief judge and an Obama appointee, said Koppel’s response was “totally coherent” but asked whether it was consistent with the language of the law.
Koppel asked the judges — if they were to rule against NHTSA — to avoid scrapping the standard, but allow the regulation to remain in place while the agency revises it.
“Vacating the rule would be destructive,” he said. “It would have serious adverse effects on energy conservation, increasing gasoline consumption and harm the environment and public health.”
The Natural Resources Defense Council argued that NHTSA had not gone far enough, claiming that the regulation excluded well-established technology that improves fuel efficiency for pickup trucks.
“The agency says if you tried to use it in pickup trucks, it wouldn’t work,” NRDC attorney Pete Huffman said. “There’s no data supporting that.”
‘Congress and the courts’
The D.C. Circuit arguments came as House Republicans on Thursday advanced legislation that would end California’s — and any other state’s — ability to phase out internal combustion engines.
The White House has said in a statement of administration policy that it “strongly opposes” the bill but stopped short of saying that President Joe Biden would veto the measure.
Environmental advocacy group Climate Power decried the two-pronged approach — the court challenge and the legislation — as an effort to deter clean energy.
“Big Oil and its MAGA allies are bringing their war on clean cars and consumer choice to Congress and the courts,” said Climate Power Deputy Executive Director Claire Moser. “Let’s be clear: Electric vehicles help create healthier communities and save on fuel costs — threatening Big Oil’s bottom line.”
The legislation and the litigation come as the Biden administration has pushed the auto industry to more quickly produce electric vehicles to meet its climate goals, which include electrifying half of all car sales by 2030.
Biden’s two major legislative accomplishments — the 2021 bipartisan infrastructure law and the 2022 Inflation Reduction Act — provide billions of dollars in consumer tax credits for purchasing electric vehicles, as well as for building a national network of charging stations.
Next up: California waiver
Threats to the Biden administration’s plans to tackle vehicle pollution resume Friday with a lawsuit that challenges EPA’s reinstatement of a decision to grant California the authority to set tailpipe emissions that are stricter than the rest of the country.
Ohio Attorney General Dave Yost, legal officers in 16 other Republican-led states and industry groups say California’s Clean Air Act waiver violates the Constitution, which they say should treat all states equally. EPA has countered that waivers for states are not uncommon.
Ahead of the D.C. Circuit arguments, Yost rejected environmentalists’ claims that the lawsuit is an attack on clean air standards.
In a post on X, the social media site formerly known as Twitter, Yost said the case is a “*defense* of the democratic process which is under attack by the Biden Administration’s habitual and flagrant abuse of executive power.”
Legal observers have described the case as “SCOTUS bait” — aimed at capturing the interest of the high court’s conservative majority. But challengers may be “overestimating” the Supreme Court’s appetite for such arguments, said Dan Farber, faculty director at the Center for Law, Energy & the Environment at the University of California, Berkeley.
“This seems to be kind of a Hail Mary lawsuit,” Farber wrote in a blog post, “predicated on the idea that the Supreme Court will buy just about any legal theory that advances conservative goals.”
D.C. Circuit arguments in the California waiver case begin at 9:30 a.m. Friday.