Amicus Curiae Brief — Diamond Alternative Energy, LLC, et al., Petitioners v. Environmental Protection Agency, et al.

Supreme Court briefAug 7, 2024

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No. 24-7

IN THE

Supreme Court of the United States

DIAMOND ALTERNATIVE ENERGY, LLC, ET AL.,

Petitioners,

ENVIRONMENTAL PROTECTION AGENCY, ET AL.,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF OF AMICUS CURIAE THE

COMPETITIVE ENTERPRISE INSTITUTE IN

SUPPORT OF PETITIONERS

Devin Watkins

Counsel of Record

DAN GREENBERG

COMPETITIVE ENTERPRISE

INSTITUTE

1310 L St. NW, 7th Floor

Washington, D.C. 20005

(202) 331-1010

Devin.Watkins@cei.org

Dan.Greenberg@cei.org

August 7, 2024

Attorneys for Amicus Curiae

QUESTION PRESENTED

1. Whether a party may establish the

redressability component of Article III

standing by relying on the coercive and

predictable effects of regulation on third

parties.

2. Whether EPA’s preemption waiver for

California’s greenhouse-gas emission

standards and zero emission-vehicle mandate

is unlawful.

TABLE OF CONTENTS

QUESTION PRESENTED ...........................................I

TABLE OF CONTENTS............................................. II

TABLE OF CITED AUTHORITIES ......................... III

INTEREST OF AMICUS CURIAE ............................. 1

SUMMARY OF ARGUMENT ..................................... 1

ARGUMENT ................................................................ 3

I. This Court Should Grant Both Questions So That

a Matter of Enormous National Significance Can

Be Resolved ........................................................... 3

II. The EPE Essentially Ignored the Statutory

Requirement of “Compelling and Extraordinary

Conditions” ............................................................ 9

III. THE EPA’s Preemption Waiver for California Is

Unlawful Due to EPCA Preemption................... 11

CONCLUSION .......................................................... 15

iii

TABLE OF CITED AUTHORITIES

Statutes

42 U.S.C. § 7507........................................................... 7

42 U.S.C. § 7543(b) .............................................. 2, 5, 9

42 U.S.C. § 7543(b)(1) ................................ 2, 11, 13, 14

42 U.S.C. § 7607(b) ...................................................... 7

49 U.S.C. 32919(a) ................................................. 2, 11

Other Authorities

California Air Resources Board, California moves to

accelerate to 100% new zero-emission vehicle sales

by 2035 (August 25, 2022),

https://ww2.arb.ca.gov/news/california-movesaccelerate-100-new-zero-emission-vehicle-sales2035 ........................................................................... 3

S. Rep. No. 403, 90th Cong. 1st Sess. 33 [1967] ......... 10

Statista, Revenue from U.S. motor vehicle and parts

advanced retail trade between 2000 and 2023 (July

25, 2024),

https://www.statista.com/statistics/531522/revenueof-us-motor-vehicle-and-parts-retail-trade/ ............. 6

Rules

84 FR 51313 ............................................................... 12

84 FR 51346 ............................................................... 10

86 FR 74245 ............................................................... 14

California State Motor Vehicle Pollution Control

Standards; Advanced Clean Car Program;

Reconsideration of a Previous Withdrawal of a

Waiver of Preemption; Notice of Decision, 87 FR

14373-74 (Mar. 14, 2022) ....................................... 13

Corporate Average Fuel Economy (CAFE)

Preemption, 86 FR 74242 (Dec. 29, 2021) (“EPCA at

most only afforded NHTSA discretion to decide how

or even whether to speak on matters of preemption.

Thus,… EPCA still must be read to permit NHTSA

to remain silent on EPCA preemption.”) ............... 13

The Safer Affordable Fuel-Efficient (SAFE) Vehicles

Rule Part One: One National Program, 84 FR

51313 (Sept. 27, 2019) .......................................... 2, 3

INTEREST OF AMICUS CURIAE 1

The Competitive Enterprise Institute (CEI) is a

nonprofit organization headquartered in Washington,

D.C., dedicated to promoting the principles of free

markets and limited government. Since 1984, CEI has

carried out its mission through policy analysis,

commentary, and litigation.

SUMMARY OF ARGUMENT

This case highlights two problems. First, it concerns

an agency rule of great national importance—whether

California can eliminate commerce in gas-powered

vehicles—that would force radical change in the

Nation’s economy. If this Court does not grant a

reasonably rapid review of the merits of the agency’s

action, it is likely that California will unlawfully force

gas-powered vehicles out of the market in large

portions of the country before this Court encounters

the case at hand again. Second, the lower court’s

standing analysis—which would deny the parties their

opportunity to be heard by the tribunal—cannot be

reconciled with this Court’s precedents. This Court

should grant review of both questions presented: the

question of standing and the lawfulness of the

underlying agency action.

1 Pursuant to Rule 37.6, amicus affirms that the parties recieved

timely notice, no counsel for a party authored this brief in whole

or in part, that no such counsel or party made a monetary

contribution intended to fund the preparation or submission of

the brief, and that no person other than amicus, its members, or

its counsel made such a monetary contribution.

If this Court examines the lawfulness of the

agency’s action, it will discover that the agency has

made two fundamental mistakes. First, the position

that the agency has taken cannot be reconciled with 42

U.S.C. § 7543(b)’s statutory requirement of

“compelling and extraordinary conditions”; that is, the

grant of a waiver requires California’s circumstances

to be both highly unusual and (with regard to the

adoption

state-specific

standards)

highly

persuasive. The EPA claims that smog—which is not

created by greenhouse gasses—can be the basis for

waiving preemption of greenhouse gasses for the

extraordinary conditions of California. This is not only

wrong as a matter of law; it is contrary to what the

EPA argued just a few years ago.

Second, the EPA’s claims about the state standard

are indefensible because that standard is void ab initio

due to EPCA preemption. The EPA claims that the

state standards meet the statutory requirement of

being “at least as protective of public health and

welfare as applicable Federal standards,” 42 U.S.C. §

7543(b)(1); nonetheless, if they’re void, they can’t be.

EPCA preempts state regulations that are “related to”

fuel economy standards, 49 U.S.C. 32919(a), and the

EPA itself has taken the position that “a State

regulation of all tailpipe greenhouse gas emissions

from automobiles or prohibiting all tailpipe emissions

is also ‘related to’ fuel economy standards and

preempted by EPCA.” The Safer Affordable FuelEfficient (SAFE) Vehicles Rule Part One: One

National Program, 84 FR 51313 (Sept. 27, 2019). As

the EPA noted, “EPCA does not provide NHTSA with

any waiver authority whatsoever.” Id. This shows that

California’s standards that eliminate all greenhouse

gas emissions are void, and of course void statutes

cannot be protective at all. NHTSA now claims that it

has no authority to determine EPCA preemption.

However, EPA is required to determine if the state

standards are void in this litigation, and it has failed

to explain why EPCA preemption doesn’t apply.

These questions present important questions of

federal law that have not been settled by this Court.

They should be. This Court should grant both

questions presented.

ARGUMENT

I. THIS COURT SHOULD GRANT BOTH

QUESTIONS SO THAT A MATTER OF

ENORMOUS

NATIONAL

SIGNIFICANCE

CAN BE RESOLVED

California policymakers’ long-term goal is to end the

use of fossil fuels by vehicles. They don’t hide it, either:

their express goal, by 2035, is to eliminate the sale of

gas-powered vehicles in California. California Air

Resources Board, California moves to accelerate to

100% new zero-emission vehicle sales by 2035 (August

25, 2022), https://ww2.arb.ca.gov/news/californiamoves-accelerate-100-new-zero-emission-vehiclesales-2035.

California asserts that to eliminate fossil-fuel

vehicles, it needs a preemption waiver from the EPA

under the Clean Air Act. Pet.App. 6a. The fuel

producers have brought this case to court: they’re

challenging the issuance of the permit that is needed

for the preemption waiver. Pet.App. 3a.

Do the fuel producers have standing? The lower

court didn’t think so. However, as discussed just

below, the lower court’s analysis of standing was

mistaken in multiple respects.

First, the lower court manufactured an additional

standing requirement with no basis in law. The lower

court required Petitioners to prove that court action

would be “substantially likely to result in any change

to automobile manufacturers’ vehicle fleets by Model

Year 2025.” Pet.App 23a. The lower court’s insistence

on this temporal condition was erroneous. There is no

reason to artificially limit the harms the Petitioners

might suffer only to only those that come about by

Model Year 2025. Harm in any year from the agency

action gives the Petitioners standing, and the remedy

for such harm can be redressed by blocking the

preemption waiver.

Indeed, the lower court acknowledged “that

automobile manufacturers need years of lead time to

make changes to their future model year fleets.” Pet.

App. 23a. This means the California preemption

waiver issued by the EPA in this case would thus

substantially affect future vehicle fleets several years

later—even beyond the time that the waiver applies.

That future harm creates standing; if the lower court

rejected that waiver, it would redress that harm. The

precedent established in this case, if correctly decided,

will continue to protect Petitioners from such harm

many years after the waiver expires.

Second, the lower court alleged that it is “the

automobile manufacturers who are subject to the

waiver.” Pet. App. 22a. This is erroneous. It is

California that is the subject of the waiver. California

requested the waiver, and California’s state standards

would be preempted without the waiver. Those state

standards prohibit the sale of gas-powered vehicles,

and that prohibition harms the Petitioners—the

vendors of the fuel.

Millions of consumers regularly purchase fossil

fuels so that they can drive on the Nation’s roads. The

purpose of the California standards is to prevent these

consumers from buying fuel from, among others, the

Petitioners. Fuel manufacturers are thus harmed by

California laws that prohibit their products. A denial

of the waiver would redress this harm: indeed, that

denial would prevent the harms that the California

standards cause. There is no reason to believe that

California’s laws will end in 2025 or that the EPA will

stop approving waivers. The operation of those state

laws will continue to harm the Petitioners, and it is the

laws’ continued operation that will continue to create

standing to challenge their enforcement well beyond

2025.

Third, the lower court’s reasoning cannot be

reconciled with the EPA’s assessment of the effects of

the state standards. Under federal law, the EPA is

barred from granting a waiver if it determines that

California “does not need such State standards to meet

compelling and extraordinary conditions” to issue the

waiver. 42 U.S.C. § 7543(b). The EPA asserts that

California needs these standards; the Agency’s theory

is that the standards will help remedy the conditions

caused by Petitioners’ fuel products by reducing their

use. But for the EPA, this proves too much: it shows

that the California standards reduce the use of

Petitioners’ product. Therefore, there is harm;

therefore, there is standing.

Fourth, the lower court recognized that standing is

determined when the lawsuit is filed, Pet.App. 25a,

but it nonetheless failed to apply that principle to this

case. That principle obliterates any possible claim of a

failure of standing that would rest on the limited time

remaining for manufacturers to change their fleet

before the waiver expires. Had the court rejected the

waiver immediately, no harm by California would

have occurred. Of course lateness can create mootness

as a general matter, but this case isn’t moot because

both California and the EPA recognize that such

actions are continuing to occur and will do so in the

future. In short, there is no mootness argument

available here.

In short, the lower court’s standing analysis is

defective. If the lower court had gotten standing right,

this Court would be positioned to take action on an

issue of great national importance. It is hardly an

exaggeration to say that the $1.5 trillion national

automobile market rests on this case. Statista,

Revenue from U.S. motor vehicle and parts advanced

retail trade between 2000 and 2023 (July 25, 2024),

https://www.statista.com/statistics/531522/revenueof-us-motor-vehicle-and-parts-retail-trade/.

particular, if California is granted a waiver, then any

other state could replicate California’s program of gas-

powered vehicle elimination. 42 U.S.C. § 7507. This

case is so important that it would qualify for certiorari

before judgment. No other lower court can examine

these issues: the jurisdiction is confined to the D.C.

Circuit under the Clean Air Act. 42 U.S.C. § 7607(b).

We think this unusual situation is best framed in

this fashion: what is the proper way for the Supreme

Court to handle a case in which a lower court with

exclusive jurisdiction issues a tremendously flawed

procedural decision which involves an issue of great

national importance?

This Court could just accept certiorari on the

question of standing; it could then explain to the lower

court why its standing analysis is flawed. Given the

flaws in the standing analysis in the court below, the

action seems likely to come back before this Court in a

few years on some other basis than the merits—once

again avoiding this Court’s jurisdiction. Perhaps next

time it will be mootness, or perhaps the lower court

will discover that the petitioners lack prudential

standing. One can imagine all sorts of other lowercourt decisions that do not go to the merits of the

action. Meanwhile, massive changes in the internalcombustion vehicles marketplace are occurring right

now—just as many models are being unlawfully

banished from the marketplace. If this Court grants

certiorari solely on the question of standing, this larger

problem will remain unsolved.

This Court could grant, vacate, and remand—while

pointing to one of the numerous cases on standing that

the lower court failed to consider. That would save this

Court some time, but it would not prevent the action

at hand from returning to this Court for some reason

that has nothing to do with the merits. Meanwhile, the

national automobile market will continue to wither.

A better alternative is open to this court: it should

grant both questions presented. The second question

presented goes to the heart of the legality of the

underlying agency action. In addition to the

examination of that question, this Court could also

evaluate whether the standing arguments adopted by

the lower court are strong but incorrect. An evaluation

with that result would allow this Court to issue an

opinion that only addressed standing, and it could

then remand the substantive question back to the D.C.

Circuit. However, were this Court to find that the

standing arguments adopted by the lower court lacked

substantial merit, this Court could then reach the

substantive question. This choice would send a

message about proper judicial behavior: it would

emphasize that, for cases that have substantial

nationwide impact, this Court’s jurisdiction cannot be

indefinitely defeated by flimsy non-merits decisions

from lower courts. It would also encourage lower

courts to avoid conduct that resembles strategic

behavior—more precisely, behavior that resembles an

attempt to use legally unsound non-merits decisions to

avoid this Court’s jurisdiction.

Such curative choices by this Court would typically

be unnecessary: normally, there are many circuit

courts that could reach an issue with this kind of

nationwide impact, even when one circuit is delaying

action. However, the circumstances at hand are

atypical: no other circuit can hear this issue due to the

venue restrictions in the Clean Air Act. Were this

Court to adopt a new curative norm that would allow

it to step in, its scope could be limited to cases of great

national importance that have been canalized into a

single circuit. The D.C. Circuit had the opportunity to

weigh in on these merits questions: if its rejection of

that opportunity is essentially unjustifiable, then this

Court should not delay.

This Court should grant both questions presented.

II. THE EPE ESSENTIALLY IGNORED THE

STATUTORY

REQUIREMENT

“COMPELLING

AND

EXTRAORDINARY

CONDITIONS”

The proposed waiver is unlawful: it does not

properly take the statutory requirement for the

waiver—that the state face extraordinary conditions—

into account. Such extraordinary conditions cannot

exist, because the global warming at issue is

necessarily ordinary: it affects all states. 42 U.S.C. §

7543(b) requires that “No such waiver shall be granted

if the Administrator finds that such State does not

need such State standards to meet compelling and

extraordinary conditions.” In other words, this waiver

cannot pass the statute’s test—by definition.

Despite this statutory requirement, the EPA claims

that there’s no need to show anything extraordinary

about the impact of greenhouse gasses on California at

all. The EPA’s argument is that it only needs to find

that the program “as a whole” is needed to satisfy the

requirement of compelling and extraordinary

conditions. Pet.App. 281a. The EPA claims that

California needs the program because there are

criteria pollutants—such as smog—in that state, even

though no such pollutants are caused by greenhouse

gasses. Pet.App. 207a. That’s the wrong way to read

the statute’s requirement.

This provision was added to ensure that before a

state could be granted a waiver, it could show

“compelling

and

extraordinary

circumstances

sufficiently different from the nation as a whole to

justify standards on automobile emissions which may,

from time to time, need to be more stringent than

national standards.” S. Rep. No. 403, 90th Cong. 1st

Sess. 33 [1967].

This waiver was designed for local pollutants that

cause harm near the place they are emitted.

Greenhouse gasses do not cause such harm. The only

accounts of such harm rest on claims that these gasses

cause the entire planet to warm. Such claims of harm

are necessarily non-extraordinary, because they are

not confined to California.

This interpretation is not new. The EPA has not

always taken the position that its new interpretation

was an accurate reading of the Clean Air Act.

According to the EPA in 2019, the Clean Air Act

requires a “particularized nexus between the

emissions from California vehicles, their contribution

to local pollution, and the extraordinary impacts that

that pollution has on California due to California's

specific characteristics.” 84 FR 51346. That is a much

more faithful reading of the statutory requirement

than the one that the EPA now adopts, and this Court

should determine that the 2019 interpretation by the

EPA is correct. California should be required to prove

that this standard, not some other one, is based on

compelling and extraordinary conditions.

In short, application of the EPA’s correct 2019

interpretation of the Clean Air Act shows that the

waiver at issue is unlawful.

III. THE EPA’S PREEMPTION WAIVER FOR

CALIFORNIA IS UNLAWFUL DUE TO EPCA

PREEMPTION

This waiver is unlawful: the underlying state

statutes are unlawful under EPCA preemption and

therefore are necessarily void ab initio. It follows that

those state statutes cannot be “at least as protective of

public health and welfare as applicable Federal

standard” as required in the Clean Air Act. 42 U.S.C.

§ 7543(b)(1).

EPCA is clear that:

When an average fuel economy standard

prescribed under this chapter is in effect,

a State or a political subdivision of a

State may not adopt or enforce a law or

regulation related to fuel economy

standards or average fuel economy

standards for automobiles covered by an

average fuel economy standard under

this chapter.

49 U.S.C. 32919(a). As the EPA recognized when it

revoked the California waiver:

State or local requirement limiting

tailpipe carbon dioxide emissions from

automobiles has the direct and

substantial effect of regulating fuel

consumption and, thus, is “related to”

fuel economy standards. Likewise, since

carbon dioxide emissions constitute the

overwhelming majority of tailpipe carbon

emissions, a State regulation of all

tailpipe greenhouse gas emissions from

automobiles or prohibiting all tailpipe

emissions is also “related to” fuel

economy standards and preempted by

EPCA.

84 FR 51313. There is no dispute that California’s zero

emission vehicle and greenhouse gas emissions

standards would fall within the definition of what is

preempted by EPCA—according to the EPA and to

NHTSA’s 2019 final rule.

The EPA had two responses:

(1) “EPA also believes that, based on the foregoing,

EPA should not have deviated from its practice of

limiting its waiver review to the criteria in section

209(b)(1),” and

(2) “Because the landscape of federal law has changed

since SAFE 1 due to NHTSA’s repeal of its

regulatory text, appendix, and pronouncements

regarding EPCA preemption in SAFE 1, EPA

believes that it is appropriate to rescind its waiver

withdrawal actions in SAFE 1 that were predicated

on the federal law context created by NHTSA's

SAFE 1 action.”

California State Motor Vehicle Pollution Control

Standards;

Advanced

Clean

Car

Program;

Reconsideration of a Previous Withdrawal of a Waiver

of Preemption; Notice of Decision, 87 FR 14373-74

(Mar. 14, 2022) (reversing the order of the responses).

These responses fail.

First, Section 209(b)(1) requires the EPA to

determine that the state standards at issue are “at

least as protective of public health and welfare as

applicable Federal standards.” 42 U.S.C. § 7543(b)(1).

If those standards are void ab initio, as the EPA

claimed in 2019, they cannot be as protective as the

federal standards. Examining whether such state

standards are void ab initio is thus a critical part of

the review criteria that Congress required in section

209(b)(1).

Second, the EPA provided no explanation for why

California’s laws were not preempted and void ab

initio. As the EPA noted, “EPCA does not provide

NHTSA with any waiver authority whatsoever.” 84 FR

51313. But even assuming the EPA adopted NHTSA’s

views entirely, NHTSA now chooses to remain silent

about preemption. Corporate Average Fuel Economy

(CAFE) Preemption, 86 FR 74242 (Dec. 29, 2021)

(“EPCA at most only afforded NHTSA discretion to

decide how or even whether to speak on matters of

preemption. Thus,… EPCA still must be read to

permit NHTSA to remain silent on EPCA

preemption.”). NHTSA now claims that “the Agency

lacked the authority to promulgate regulations on

preemption.” 86 FR 74245.

NHTSA does not claim that there has been any

change in federal law based on its withdrawal of its

opinion on EPCA preemption. Thus, the second reason

given by the EPA is incorrect, according to NHTSA—

which the EPA is relying upon.

In short, the EPA provides no reason to believe that

the California statutes at issue are not preempted by

federal law, as it previously held, and thus are not “at

least as protective of public health and welfare as

applicable Federal standards.” 42 U.S.C. § 7543(b)(1).

Because it has not met the statutory standard for a

waiver, the EPA Clean Air Act preemption waiver is

unlawful.

CONCLUSION

For the foregoing reasons, this Court should grant

the petition for certiorari and consider both questions

presented.

Respectfully submitted,