While nominally just a case concerning the Clean Air Act, Diamond Alternative Energy LLC v. EPA, currently pending before the U.S. Supreme Court, poses a question with broader implications for the fundamental Article III framework for assessing a party’s standing. Article III standing requires demonstrating that there is 1. an injury in fact, 2. causation, and 3. redressability. This case involves the third prong: redressability. At issue before the Court is whether a party may satisfy the redressability prong of Article III standing by relying on the coercive and predictable effects of regulation on third parties.
At the core of this dispute is petitioner’s challenge to the Environmental Protection Agency’s (EPA) 2022 decision reinstating a 2013 Clean Air Act preemption waiver for California, which allowed the state to set its own greenhouse gas emissions and adopt a zero-emission vehicle mandate, also known as California’s Advanced Clean Cars program. Under the Clean Air Act, states are generally preempted from adopting emission standards for new motor vehicles. 42 U.S.C. § 7543(a). An exception, however, allows California to set its own vehicle-emission standards under section 209(b) of the Act where the EPA grants the state a preemption waiver. 42 U.S.C. § 7543(b). The EPA must deny a waiver if the determination by California is arbitrary and capricious, does not address “compelling and extraordinary circumstances,” or is inconsistent with federal regulations regarding emission standards for new motor vehicles. Id.
The EPA reinstated the waiver for the Advanced Clean Cars program, which 1. includes standards limiting the carbon-dioxide emissions across fleets of vehicles, and 2. incorporates a “zero-emission vehicle” mandate that requires car manufacturers to increasingly produce and deliver for sale electronic cars in California or purchase regulatory credits. Cal. Code Regs. tit. 13, §§ 1961.3, 1962.2(b).
Petitioners, who are entities that produce or sell liquid fuels and raw materials used to produce liquid fuels, challenged the EPA’s waiver of Advanced Clean Cars program. In a per curiam opinion, the D.C. Circuit did not reach the merits of the EPA’s challenged action. Ohio v. EPA, 98 F.4th 288, 293 (D.C. Cir. 2023). Rather, it dismissed the case for lack of Article III standing because petitioners failed to demonstrate redressability. Id. at 294. It explained that redressability hinged on the actions of third-party car manufacturers and the record did not provide a basis for the court to conclude the manufacturers would change course in the relevant model years were the court to vacate the waiver. Id. at 302. It continued by highlighting that the duration of the waiver, which it understood to last until 2025, was “relatively short.” Id.
Petitioners filed a petition for a writ of certiorari to the U.S. Supreme Court on two issues: 1. whether the D.C. Circuit erred in dismissing the petitioners’ claim for failure to show redressability, and 2. whether the EPA erroneously granted California its waiver for the Advanced Clean Cars program—the merits of the case. The EPA opposed the petition, arguing that the petitioners’ redressability arguments constituted “guesswork” and the record in this case showed that third parties would likely not alter their conduct even if petitioners succeeded on the merits.
In December 2024, the Supreme Court granted certiorari on petitioners’ first question: whether petitioners had satisfied the redressability requirement. Since then, the administration has changed. Because of this shift, the EPA filed a motion to hold briefing in abeyance. The Court denied that motion.
In their opening brief, petitioners make three main arguments. First, petitioners assert that the redressability prong is satisfied because a favorable outcome would remove a regulatory hurdle to the sale of petitioners’ products—the ability to sell more fuel-powered cars results in an increase of liquid-fuel sales. Second, there is a predictable effect on third parties. In petitioners’ view, it is predictable that an electronic-vehicle mandate will decrease the number of liquid-fueled powered cars and thus the sales of liquid fuel; that is, after all, the point of California’s mandate. By both basic economic principles and common sense, petitioners argue, removal of the mandate would likely remedy at least one dollar of their economic injuries. Petitioners also assert the D.C. Circuit erred by overstating their burden and failing to apply precedent and common sense. Finally, petitioners assert that because the waiver is indefinite, as clarified by the EPA in its opposition, the D.C. Circuit’s opinion is wrong. Petitioners emphasize that the D.C. Circuit relied on the incorrect assumption that the waiver expired in 2025, making it “relatively short.” The D.C. Circuit’s reliance on this assumption improperly conflated redressability with mootness.
Both federal and state respondents argue that petitioners failed to carry their burden under Article III to demonstrate the judicial relief they sought, vacatur of the 2013 California waiver, would likely redress their asserted injuries. They first took issue with petitioners’ contention that whenever a favorable judicial ruling would remove an impediment to third-party conduct that would benefit the plaintiff, redressability should be established. That contention was challenged as unsound and inconsistent with the practical focus of Article III standing analysis.
Respondents also noted that petitioners’ theory of standing turns on an inference that if EPA’s reinstatement of the 2013 California waiver were set aside then vehicle manufacturers would alter their products or prices in ways that would benefit producers of liquid fuels; however, the record below indicates auto manufacturers would not likely change course and are already planning to exceed the emission standards at issue.
Finally, respondents objected to petitioners’ standing declarations as conclusory, and no substitute for meaningful, particularized evidence that manufacturers would change course if reinstatement were invalidated, a showing that petitioners failed to make in the proceedings below.
Diamond Alternative Energy is set for oral argument on April 23, 2025.
