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.,

Respondents.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE SULPHUR INSTITUTE AS

AMICUS CURIAE IN SUPPORT OF THE

PETITION FOR WRIT OF CERTIORARI

PATRICK F. PHILBIN

Counsel of Record

CHASE HARRINGTON

TORRIDON LAW PLLC

801 Seventeenth Street, N.W.

Suite 1100

Washington, DC 20006

(202) 249-6900

pphilbin@torridonlaw.com

August 7, 2024

TABLE OF CONTENTS

Page

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

BACKGROUND ............................................................. 2

Sulfur Supply Chains Are A Critical Component of

the Economy. ................................................................... 2

A. Sulfur Is Produced As A Byproduct of

Refining Gasoline and Natural Gas. .................. 3

B. Sulfur Is Critical To The U.S. Agricultural

And Fertilizer Sectors. ....................................... 6

SUMMARY OF ARGUMENT ..................................... 8

ARGUMENT .................................................................. 9

I. The D.C. Circuit’s Standing Decision Warrants

This Court’s Review. ................................................. 9

II. EPA’s Waiver Decision Also Warrants This

Court’s Review. ....................................................... 14

CONCLUSION ............................................................. 18

TABLE OF AUTHORITIES

Cases

Page(s)

Bennett v. Spear,

520 U.S. 154 (1997) ....................................................... 11

Corner Post, Inc. v. Board of Governors of

the Fed. Rsrv. Sys., 144 S. Ct. 2440

(2024) ............................................................................. 11

Dep’t of Commerce v. New York,

588 U.S. 752 (2019) ........................................... 10, 13, 14

FDA v. All. for Hippocratic Med.,

602 U.S. 367 (2024) ................................................. 10, 11

General Land Office v. Biden,

71 F.4th 264 (5th Cir. 2023) ......................................... 12

In re Idaho Conservation League,

811 F.3d 502 (D.C. Cir. 2016) ...................................... 13

Lujan v. Defs. of Wildlife,

504 U.S. 555 (1992) ................................................. 10, 11

NRDC v. NHTSA,

894 F.3d 95 (2d Cir. 2018) ............................................ 12

PHH Corp. v. CFPB,

881 F.3d 75 (D.C. Cir. 2018) ........................................ 14

Teton Historic Aviation Found. v. Dep’t of

Def., 785 F.3d 719 (D.C. Cir. 2015) (per

curiam) ..................................................................... 12, 13

iii

Statutes

42 U.S.C.

§ 7401 ................................................................................ 4

§ 7543 .......................................................................... 9, 15

Regulations

40 C.F.R. §50.4 ..................................................................... 4

84 Fed. Reg 51,310 (Sept. 27, 2019) .................................. 15

87 Fed. Reg. 14,332 (Mar. 14, 2022) ................................... 2

Other Authorities

B. G. Goar, Sulfur Recovery Technology

Conf-860447 (1986),

https://perma.cc/T98R-R7KH....................................... 4

“The Economic Impact of U.S. Soybeans

and End Products on the U.S.

Economy—2023 Update,” Report for

United Soybean Bd. & Nat’l Oilseed

Processors Ass’n (Aug. 2023),

https://perma.cc/PNH4-YCFE ..................................... 7

Eve-Lyn S. Hinckley & Charles T.

Driscoll, Sulfur fertilizer use in the

Midwestern US increases as

atmospheric sulfur deposition declines

with improved air quality, 3 Comm.

Earth & Environ. 324 (2022),

https://doi.org/10.1038/s43247-02200662-9 ............................................................................. 6

Other Authorities—continued

Federal Consortium for Advanced

Batteries, Nat’l Blueprint for Lithium

Batteries 2021-2030 (June 2021),

https://perma.cc/BN4F-Y73X ..................................... 17

The Fertilizer Inst., “TFI Releases

Fertilizer Industry Economic Impact

Study: Contributes $130 Billion to US

Economy,” (Sept. 24, 2020),

https://perma.cc/4L84-RLLZ ....................................... 7

James Q. Wilson, The Politics of

Regulation (1980) ......................................................... 14

Mark Maslin et al., Sulfur: A potential

resource crisis that could stifle green

technology and threaten food security

as the world decarbonizes, 188 The

Geographical J. 498 (2022),

https://perma.cc/23S8-XL2N ...................... 4, 15, 16, 17

Nat’l Corn Growers Ass’n, World of Corn

2024, https://perma.cc/BHB4-V8MR ........................... 8

S&P Global, Chemical Economics

Handbook: Sulfur (Mar. 2024),

https://tinyurl.com/mrj3dpy3 ........................................ 3

Sulfur Statistics and Information,

https://tinyurl.com/a223krdk ........................................ 5

TSI, FAQ, https://perma.cc/7RVX-5HZH......................... 4

TSI, Glossary “Sulphur uses,”

https://perma.cc/2DKM-M9HM ................................... 3

Other Authorities—continued

TSI, Sulphur – The Fourth Major Plant

Nutrient, https://perma.cc/6PQ8MCMU ............................................................................. 6

U.S. Dep’t of Transp., Bureau of Transp.

Statistics, “Daily Vehicle Travel During

the COVID-19 Public Health

Emergency,” (July 21, 2020),

https://tinyurl.com/4r8kk23h ........................................ 5

U.S. Geological Survey, Mineral

Commodity Summaries—Sulfur (Jan.

2024), https://perma.cc/YF43-Q6WE ........................... 4

“US Copper Supply to grow by 4% in

2024” Mining Technology (July 25,

2024), https://perma.cc/XEH2-ZRSJ ......................... 16

INTEREST OF AMICUS CURIAE

The Sulphur Institute (TSI) is a non-profit trade organization representing sixty global member companies

involved with producing, consuming, marketing, transporting, or otherwise adding value to elemental sulfur,

sulfuric acid, and sulfur-related agricultural products.1

Founded in 1960, TSI currently focuses on: (i) sharing and

promoting within TSI’s membership excellence in supply

chain operations, including the safe and efficient handling,

storage, and logistics practices for sulfur; (ii) providing information to governmental authorities in the U.S. and

abroad as they contemplate and develop regulatory

frameworks for sulfur and its value-added applications;

and (iii) expanding the public’s knowledge regarding the

benefits of sulfur and sulfur-related issues.

Sulfur is a valuable commodity and integral component of the U.S. and world economies. It is used to manufacture numerous products, including fertilizers, chemicals, paints, rubber products, medicines, fibers, sugar, detergents, plastics, paper, and many other products. Sulfur also is a vital nutrient for the crops making up much

of our Nation’s food chain. Without adequate sulfur supplies, stakeholders in supply and distribution chains in

these other industries, including the consuming public,

will be significantly affected.

America no longer mines sulfur. Rather, sulfur is recovered from oil and natural gas in the refining process to

1 Pursuant to Rule 37.2, TSI timely notified counsel of record of its

intent to file this brief. This brief was not authored in whole or in part

by counsel for any of the parties; no party or party’s counsel

contributed money for preparing or submitting this brief; and no one

other than amicus curiae and its counsel have contributed money for

preparing or submitting this brief. See Sup. Ct. R. 37.6.

reduce emissions of the chemical into the environment.

The Biden Administration has recently issued three rules

designed to force the motor vehicle industry to shift from

internal combustion engines to electric vehicles. As fuel

consumption plummets, so will sulfur supplies.

Petitioners challenge one of those rules: the EPA’s reinstatement of California’s preemption waiver under the

Clean Air Act which allows the State to impose strict

greenhouse gas tailpipe emissions standards and mandate

the sale of electric vehicles. See 87 Fed. Reg. 14,332 (Mar.

14, 2022). Other States are authorized to opt into California’s restrictions.

TSI, as the global advocate for sulfur and sulfur-related products, has a strong interest in the outcome of this

litigation. TSI is well-positioned to provide the Court with

insight into the industrial and social benefits of this chemical, as well as how the D.C. Circuit’s standing decision

will affect manufacturers (like the members of TSI) who

operate in integrated production streams. TSI can also

explain the adverse consequences of limiting sulfur supplies available to other industrial sectors—all factors that

were not adequately considered by EPA in its rulemaking.

Accordingly, TSI offers this amicus brief in support of

Petitioners’ petition for a writ of certiorari to challenge

EPA’s grant of California’s CAA waiver request.

BACKGROUND

Sulfur Supply Chains Are A Critical Component of

the Economy.

Sulfur is a critical commodity to many sectors of the

American and world economy. The most widely used derivative of sulfur is sulfuric acid (H2SO4). While sulfuric

acid is used as an industrial raw material for many

applications, its largest use is for the manufacture of phosphoric acid, a precursor to phosphate fertilizers and nonfertilizer phosphates.2 Sulfur and its derivatives are also

used in metallurgical ore leaching, caprolactam, pigments,

hydrofluoric acid, pulp and paper chemicals, sulfur fertilizers, petroleum refining, batteries, detergents, fungicides, pharmaceuticals, personal care products, cosmetics,

leather tanning, rubber vulcanization, plasticizers, dyestuffs, explosives, aramid fibers, construction materials,

sugar manufacture, dehydrating agent in organic chemical and petrochemical processes, water treatment, and

steel pickling.3

The array of industrial products derived from sulfur is

so vast that no comprehensive value estimates exist. Industries and product groups enabled by sulfur and sulfuric acid cut a large swath through the U.S. economy: construction materials, traditional batteries, rubber (vulcanization), pharmaceuticals, paper bleaching, water treatment, cosmetics/skin care, detergents, nylon, pigments,

leather tanning, explosives and, most importantly, fertilizers.

A. Sulfur Is Produced As A Byproduct of Refining

Gasoline and Natural Gas.

In the past, sulfur was primarily mined from native

sources in Texas and Louisiana. But the technique of extracting sulfur from underground deposits takes enormous energy to melt the sulfur and pump the molten product to the earth’s surface. This method, called the Frasch

process, ceased in America in 2000. In fact, this type of

2 See S&P Global, Chemical Economics Handbook: Sulfur (Mar.

2024), https://tinyurl.com/mrj3dpy3.

3 TSI, Glossary “Sulphur uses,” https://perma.cc/2DKM-M9HM.

sulfur extraction has declined over the last decade to less

than 2% of world production.4

Today, sulfur is principally extracted from oil and gas

refining. The Clean Air Act (CAA), 42 U.S.C. §7401 et

seq., requires the energy industry to reduce the amount of

“criteria pollutants,” emitted from motor vehicles and internal combustion engines. See id. at §§7408-7409. One

of the criteria pollutants subject to the CAA is sulfur dioxide (SO2), 40 C.F.R. §50.4, which is created by burning

off naturally occurring sulfur contained in oil. To prevent

SO2 from entering the atmosphere and to comply with the

CAA, the energy industry began recovering sulfur from

the oil refining process using the Claus Recovery Method.

This technique, implemented through a Sulfur Recovery

Unit, extracts naturally occurring liquid sulfur from oil

and gas streams to produce low-sulfur fuel used for internal combustion engines.5

Desulfurization of fossil fuels accounts for most sulfur

production. According to one study, “[m]ore than 80% of

the sulfur used industrially comes from the oil and natural

gas.”6 The United States Geological Survey (USGS) reports that sulfur recovery produced about 8 million metric

tons of sulfur in 2023.7

4 See TSI, FAQ, https://perma.cc/7RVX-5HZH.

5 See B. G. Goar, Sulfur Recovery Technology, Conf-860447 (1986),

https://perma.cc/T98R-R7KH.

6 See Mark Maslin et al., Sulfur: A potential resource crisis that could

stifle green technology and threaten food security as the world

decarbonizes, 188 The Geographical J. 498, 498 (2022),

https://perma.cc/23S8-XL2N.

7 U.S. Geological Survey, Mineral Commodity Summaries—Sulfur

(Jan. 2024), https://perma.cc/YF43-Q6WE.

Decrease in gasoline consumption results in a decrease in sulfur supplies. According to the Bureau of

Transportation Statistics, during the COVID-19 pandemic, there was a significant decrease in passenger

travel.8 With reduced demand for gasoline, there was

also a direct correlation between refinery output and sulfur supply necessary for the dozens of industries that require the chemical as an industrial raw material. According to the USGS, U.S. sulfur production during 2020

dropped by 800,000 tons—apparently due to scaled back

refining during the pandemic.9

Once extracted, the sulfur, now in molten form, is temporarily stored in a holding area at the refinery and then

transported by either railcar or cargo tank truck to industrial facilities that make sulfuric acid. These facilities include fertilizer plants, pulp and paper mills, copper smelters, sulfuric acid regeneration plants, and other chemical

processing facilities. In the form of sulfuric acid, sulfur

ranks as one of the more important elements used as an

industrial raw material. “It is of prime importance to major sectors in the world’s industrial and fertilizer complexes. Indeed, consumption of sulfuric acid has been regarded as one of the best indexes of a nation’s industrial

development.”10 In fact, “[m]ore sulfuric acid is produced

in America every year than any other chemical.”11

8 U.S. Dep’t of Transp., Bureau of Transp. Statistics, “Daily Vehicle

Travel During the COVID-19 Public Health Emergency,” (July 21,

2020), https://tinyurl.com/4r8kk23h.

9 U.S. Geological Survey, supra note 7.

U.S. Geological Survey, Sulfur Statistics and Information,

https://tinyurl.com/a223krdk.

11 Ibid.

B. Sulfur Is Critical To The U.S. Agricultural And

Fertilizer Sectors.

Sulfur is one of the 17 essential plant nutrients and is

indispensable to plant growth and crop development.12

Among other benefits, sulfur: (i) aids in the formation of

chlorophyll that permits photosynthesis through which

plants produce starch, sugars, oils, fats, vitamins, and

other compounds; (ii) serves as a building block for protein production; (iii) improves the synthesis of oils found

in oilseeds; and (iv) increases crop yields and improves

produce quality, which of course determine the market

price ultimately realized by farmers.13

Ironically, while the CAA is the reason this country

now has ample supplies of sulfur produced from oil and

gas refining, it also had the unintended effect of reducing

the amount of “free sulfur” available to farmers as a crop

nutrient. When sulfur was removed from fuel in the refining process, sulfur from atmospheric deposition created from internal combustion engine exhaust and other

industrial processes no longer fell from the sky onto farmers’ fields, creating a sulfur deficiency in many crops. As

atmospheric deposition decreased, there was not enough

free sulfur to aid in the growth of crops that feed the world

like wheat, canola, beans, and corn.14

Farmers had to replace these sulfur deficiencies, and

the TSI, academia, and the fertilizer industry responded

TSI, Sulphur – The Fourth

https://perma.cc/6PQ8-MCMU.

Major

Plant

Nutrient,

13 Ibid.

14 See generally Eve-Lyn S. Hinckley & Charles T. Driscoll, Sulfur

fertilizer use in the Midwestern US increases as atmospheric sulfur

deposition declines with improved air quality, 3 Comm. Earth & Environ. 324 (2022), https://doi.org/10.1038/s43247-022-00662-9.

accordingly. Throughout the 1980s and 1990s, TSI, in cooperation with other agricultural research entities, conducted studies on sulfur crop nutrition, and the studies established that sulfur-enhanced fertilizer substantially increases crop yields.

As a result, one of the major applications of sulfuric

acid is in the production of phosphate fertilizers. In 2019,

64% of all sulfur produced globally was used in the production of phosphate and other fertilizers.

All of this has a sizable impact on the U.S. economy.

In 2019, the fertilizer industry contributed about $130 billion and nearly 500,000 jobs to the U.S. economy.15 Likewise, major crops such as corn, wheat, and soybeans all

benefit from a healthy sulfur supply chain, which in turn

generates thousands of jobs and billions of dollars in economic output for the U.S. According to the United Soybean Board, the total economic impact from the soybean

sector is $124 billion, contributing 223,000 paid, full-time

equivalent jobs, as well as an additional 62,000 family

members, beyond growers themselves, who support and

are integral to soybean farming operations.16 The total

wage impact of the sector averaged $10 billion.17 Similar

economic benefits are seen with corn and wheat. The

See The Fertilizer Inst., “TFI Releases Fertilizer Industry

Economic Impact Study: Contributes $130 Billion to US Economy,”

(Sept. 24, 2020), https://perma.cc/4L84-RLLZ.

16 See “The Economic Impact of U.S. Soybeans and End Products on

the U.S. Economy—2023 Update,” Report for United Soybean Bd. &

Nat’l

Oilseed

Processors

Ass’n

(Aug.

2023),

https://perma.cc/PNH4-YCFE.

17 Ibid.

National Corn Growers Association reports that, in 2023,

the total U.S. corn crop value was $73.6 billion.18

Yet, without adequate sulfur stocks generated by the

petroleum and natural gas refining sector, such economic

benefits will be placed in jeopardy.

SUMMARY OF ARGUMENT

1. The D.C. Circuit’s ruling on standing warrants review in this Court. It is well established that Article III

standing can rest on causation of injury traced through

the predictable reactions of third parties to government

regulation. And the redressability prong of standing is

the flip side of the causation coin.

In this case, it did not require any speculative leap to

recognize that regulatory actions (like California’s zeroemission-vehicle mandate) expressly designed to steer

the Nation towards an all-electric vehicle fleet would

cause injury for those, like Petitioners, who produce liquid

fuel—and that the injury would be redressed by removing

the mandate. Indeed, EPA’s waiver allowing California

to adopt a zero-emissions-vehicle mandate was expressly

intended to force lower consumption of liquid fuels than

otherwise would have occurred. The D.C. Circuit’s decision requiring proof of redressability—especially in the

form of affidavits from the regulated entities themselves

explaining how they would react to lifting the California

mandate—conflicts with this Court’s standing jurisprudence, conflicts with the decisions of several other circuits, and will interfere with the ability of businesses in

integrated supply or production chains to challenge regulatory actions that affect them through the predictable

Nat’l Corn Growers Ass’n, World of Corn 2024 at 3,

https://perma.cc/BHB4-V8MR.

reactions of other regulated entities in the interconnected

chain.

2. The Court should also grant review to address the

merits of EPA’s decision granting California a waiver under section 209(b) of the Clean Air Act. That waiver determination is unmoored from the text of section 209(b),

which authorizes EPA to grant a waiver only upon a showing that California needs a separate emissions standard to

“meet compelling and extraordinary conditions.” 42

U.S.C. §7543. “Extraordinary conditions” necessarily

means conditions that are “out of the ordinary” conditions

faced by the rest of the Nation—that is, conditions that

are unique and local to California. Because California’s

mandate was expressly designed to address global climate

change, not local conditions, it does not meet the statutory

standard for the waiver. Besides this error of law, EPA’s

decision would have far-reaching consequences on the

U.S. economy. In particular, it will overstretch the sulfur

market by depressing domestic production while at the

same time increasing the demand for sulfur to produce

electric vehicles.

ARGUMENT

I. The D.C. Circuit’s Standing Decision Warrants this

Court’s Review.

The D.C. Circuit’s standing decision warrants review

because it upends settled principles of standing law. In

particular, it threatens to hobble the ability of myriad

companies that operate in linked production or supply

chains—like members of TSI—to establish standing to

challenge regulations that affect their interests by controlling the actions of others. In such situations, the challengers themselves are not immediately subject to the

regulations, but they nevertheless bear the effects of the

regulations through the predictable actions of regulated

third parties. Until now, such predictable effects have

clearly been sufficient to establish standing.

Under this Court’s familiar three-part standing inquiry, a plaintiff need only show (1) “injury in fact”; (2) a

“causal connection” making that injury “fairly traceable”

to the defendant’s action; and (3) a likelihood “that the injury will be redressed by a favorable decision.” Lujan v.

Defs. of Wildlife, 504 U.S. 555, 561 (1992).

Applying those factors, this Court’s decisions have

made clear that a plaintiff can establish standing based on

“the predictable effect of Government action on the decisions of third parties.” Dep’t of Commerce v. New York,

588 U.S. 752, 768 (2019). Indeed, it is well established that

government regulation may cause injury to others who

are economically interconnected with the directly regulated entity and that setting aside such a regulation satisfies the redressability prong of standing, especially given

that causation and redressability are “flip sides of the

same coin.” FDA v. All. for Hippocratic Med., 602 U.S.

367, 380 (2024).

As the Court recently explained, “the Court has identified a variety of familiar circumstances where government regulation of a third-party individual or business

may be likely to cause injury in fact to an unregulated

plaintiff.” Id. at 384. In particular, the Court has routinely recognized that, in the context of businesses in an

economically interconnected chain, “when the government regulates (or under-regulates) [one] business, the

regulation (or lack thereof) may cause downstream or upstream economic injuries to others in the chain, such as

certain manufacturers, retailers, suppliers, competitors,

or customers.” Ibid.

In such situations, the predictable effects that regulation on one entity will have for other entities has been

understood as sufficient to create standing—that is, it is

sufficient as to both causation and redressability. A plaintiff need only show that “‘third parties will likely react in

predictable ways’” due to the challenged regulatory action

and that their reactions “in turn will likely injure plaintiffs.” Id. at 387 (quoting California v. Texas, 593 U.S.

659, 675 (2021)); see also Bennett v. Spear, 520 U.S. 154,

169 (1997) (standing can rest on the “determinative or coercive effect” of the agency action on a third party); Corner Post, Inc. v. Board of Governors of the Fed. Rsrv. Sys.,

144 S. Ct. 2440, 2464 (2024) (Kavanaugh, J., concurring)

(“[E]ntire classes of administrative litigation . . . have traditionally been brought by unregulated parties.”).

In this case, the “predictable effect” of the EPA

waiver is straightforward. California’s greenhouse gas

emission standards and zero-emissions vehicle mandate

are designed to reduce consumption of liquid fuels. EPA

granted California a preemption waiver so that California

could address global climate change based on the link between the combustion of liquid fuels and greenhouse

gases. App.207a. The goal of the waiver and the mandate

are the same: to reduce the consumption of liquid fuels by

reducing the number of cars manufactured that use liquid

fuels. That necessarily impacts the business of Petitioners. And setting aside the waiver (and thereby blocking

California’s mandate) would redress the injury because it

would “likely” avert the predictable drop in demand for

liquid fuels that the waiver (and California mandate) are

expressly designed to create. See Lujan, 504 U.S. at 561.

The court of appeals’ requirement that Petitioners provide evidence from auto manufacturers that they would

produce fewer liquid-fuel automobiles cannot be reconciled with this Court’s prior decisions, which consistently

permit reliance on such “predictable effects.” See Pet. 1821.

The decision below also conflicts with decisions of

other courts of appeals. For example, in NRDC v.

NHTSA, 894 F.3d 95 (2d Cir. 2018), the Second Circuit

explained that causation and redressability need not be

proved “with absolute certainty” and that a “substantial

likelihood” is all that is required “even in cases where the

injury hinges on the reactions of . . . third parties . . . to

the agency’s conduct.” Id. at 104. The court found that

environmental groups had standing to challenge agency

action delaying an increase in civil penalties for thirdparty automakers without any affidavits and instead

based largely on the view that “common sense and basic

economics tell us that the increased cost of unlawful conduct will make that conduct less common.” Id. at 105 (citation omitted). In other words, the court relied on the

“predictable effect” of the agency action on the conduct of

third parties.

Similarly, the Fifth Circuit found that Texas had

standing to challenge DHS’s decision to divert funds from

border wall construction because of its predicable effect

on illegal immigration. General Land Office v. Biden, 71

F.4th 264, 273 (5th Cir. 2023).

The decision also conflicts with the D.C. Circuit’s own

prior rulings. The D.C. Circuit has previously held that,

“when redress for a plaintiff’s injury depends on a third

party’s independent action and the third party stands to

profit by doing as the plaintiff hopes, we have found that

the third party’s ‘pecuniary interests’ and the basic dynamic of ‘naked capitalism’ are enough to satisfy the redressability requirement.” Teton Historic Aviation

Found. v. Dep’t of Def., 785 F.3d 719, 728 (D.C. Cir. 2015)

(per curiam) (quoting Abigail Alliance for Better Access

to Development Drugs v. Eschenbach, 469 F.3d 129, 135

(D.C. Cir. 2006)). In other words, without any need for

affidavits, “financial incentives provide an independent

basis to find standing” because the court can “trust in [a

third party’s] economic self-interest to assume that it

would likely” behave in accordance with those interests.

Ibid.; see also, e.g., In re Idaho Conservation League, 811

F.3d 502, 510 (D.C. Cir. 2016) (explaining that the “court

has long relied on . . . economic and other incentives to find

standing”).

The court of appeals’ error will have a broad effect on

businesses operating in industries with linked production

chains or supply and demand relationships. Until now, it

was clear that if a regulation was designed to induce a particular action by a regulated entity and that action would

necessarily impact another company (for example, by reducing demand for its products), the company affected

would have standing to bring a challenge based on “the

predictable effect of Government action on the decisions

of third parties.” Dep’t of Commerce, 588 U.S. at 768. The

D.C. Circuit’s decision erroneously casts that basic principle in doubt.

The D.C. Circuit’s apparent requirement, see

App.30a-32a, that, to show standing, a potential challenger must secure affidavits from the companies directly

subject to a regulation—to prove how the regulated entities will react to setting aside the regulation—is particularly wrongheaded. Even where companies are inextricably linked in interconnected production chains or supply

relationships, their interests are not necessarily entirely

aligned. A regulated entity may have reasons for acquiescing in a particular action by its regulator, including an

effort to secure more favorable regulatory treatment on

some other matter. Requiring a company that inexorably

will be affected by a regulatory change to secure cooperation from the directly regulated entities—those who

have an ongoing relationship with the regulator—raises a

gatekeeping restriction that would stifle legitimate challenges to government action. It makes the gatekeeper a

regulated entity whose need to maintain a relationship

with the regulator necessarily gives it a different set of

incentives from others who may be affected by regulation.19

The decision below will also have a particularly significant chilling effect on regulatory challenges because the

D.C. Circuit is traditionally the court that handles a lion’s

share of administrative litigation. A novel requirement in

the D.C. Circuit dialing back on the ability of entities to

bring challenges based on the “predictable effects” of regulation, Dep’t of Commerce, 588 U.S. at 768, will have an

outsized effect insulating a broad swath of federal regulatory actions from review. For that reason as well, the decision warrants review in this Court.

II. EPA’s Waiver Decision Also Warrants This

Court’s Review.

The Court should also grant review on the second

question presented in the Petition addressing the merits

19 Indeed, the theory of regulatory capture suggests that the relation-

ship between regulator and regulated entity may, in some instances,

produce regulations that bend toward the interests of the regulated

entity. See PHH Corp. v. CFPB, 881 F.3d 75, 185 (D.C. Cir. 2018)

(Kavanaugh, J. dissenting) (“With every agency, the fear of regulatory capture is ever-present.”) (quoting Elizabeth Warren, Unsafe at

Any Rate: If It’s Good Enough for Microwaves, It’s Good Enough for

Mortgages. Why We Need a Financial Product Safety Commission,

Democracy, Summer 2007, at 8, 18); James Q. Wilson, The Politics of

Regulation 357-94 (1980). That possibility makes it particularly dangerous to make the regulated entity the gatekeeper for regulatory

challenges brought by other parties whose interests are affected

through the regulated entity’s actions.

of EPA’s waiver decision. EPA is authorized to grant California a waiver under Section 209(b) when a more stringent state-level emissions standard is “need[ed]” to “meet

compelling and extraordinary conditions.” 42 U.S.C.

§7543. As Petitioners explain, that standard requires a

showing of “compelling and extraordinary conditions”

unique to California to justify granting California an exemption from otherwise uniform, national standards. Pet.

29-30.

California’s regulations, however, fail to meet that

statutory standard. They are expressly “designed to address global climate change,” 84 Fed. Reg 51,310, 51,344

(Sept. 27, 2019); cf. Pet. 29-30, which is clearly not a condition unique to California.

EPA’s decision especially warrants this Court’s review not only because it is wrong on the law, but because

of the extraordinarily widespread impact it will have on

the U.S. economy. Indeed, its impact would go far beyond

the direct effect on the automobile and oil and gas industries that Petitioners have described. EPA’s waiver

would deliver a one-two punch to domestic sulfur supply

chains: it will both slash sulfur production (from diminished fuel refining) while simultaneously incentivizing the

manufacture of electric vehicles that depend on sulfur for

making electric batteries. The result will be an overstretch in the domestic sulfur supply that forces manufacturers to become dependent on foreign sources of sulfur.20

As explained above, see supra pp. 3-4, sulfur production in the United States is currently a direct product of

fuel production. Sulfur is no longer mined but recovered

from oil and gas as part of the refining process. By allowing California to set emissions standards, the EPA waiver

20 See Maslin et al., supra note 6.

will, by design, slash the rate of U.S. fuel refining by reducing demand for liquid fuel. And that will inexorably

slash the domestic production of sulfur.

At the same time, EPA’s waiver will substantially increase the demand for sulfur. Green technologies, like

electric vehicles, increase demand for cobalt, nickel, and

lithium—all of which are extracted with sulfuric acid.21

The U.S. copper industry is anticipated to grow by 4%

in 2024 and to continue to grow annually by over 3.4%.22

Sulfur is consumed by U.S. copper manufacturers who

burn sulfur to produce sulfuric acid for use in copper smelters. Approximately 1.4 million tons of sulfur is required

for current U.S. copper production.23 The increase in copper production just in 2022 and 2023 increased U.S. sulfur

consumption for copper by 85,000 tons, in part to make

electric batteries.

The production of lithium for use in batteries also depends on sulfur. Lithium is extracted from ore through a

leaching process that relies on diluted sulfuric acid. On

October 19, 2022, the White House launched the “American Battery Materials Initiative,” with a goal of developing enough battery-grade lithium to supply approximately 2 million electric vehicles annually. As one of the

key stakeholders for the President’s initiative, the U.S.

Department of Energy has set forth a “Vision for the

Lithium-Battery Supply Chain” in which “[b]y 2030, the

United States and its partners will establish a secure battery materials and technology supply chain that supports

21 Maslin et al., supra note 6, at 498, 501.

22 “US Copper Supply to grow by 4% in 2024” Mining Technology

(July 25, 2024), https://perma.cc/XEH2-ZRSJ.

23 This number is based on confidential data reported from TSI

member companies.

long-term U.S. economic competitiveness and equitable

job creation, enables decarbonization, advances social justice, and meets national security requirements.”24

Already, the lithium industry is expanding to meet this

goal. Today, there is one active lithium mine in the U.S.

and many other mines are in development to meet increasing demand for lithium-ion batteries in electric vehicles.

While the objective of the EPA waiver and the California mandate is to reduce consumption of liquid fuels in automobiles, sulfur recovered from the oil refining process

is necessary to produce the lithium needed for electric vehicle batteries. Regulatory mandates for electric vehicles

simultaneously increase demand for sulfur while they

force an ever-decreasing supply environment in the

United States. According to researchers, decarbonization

coupled with the expansion of the green economy could

result in a “shortfall in sulfuric acid between 100 and 320

million tonnes.”25

In short, putting California effectively in charge of

regulatory changes that mandate a transition to electric

vehicles will depress domestic sulfur production, making

the U.S. reliant on international supply chains.

A decision giving one State control over such farreaching implications for the national economy plainly

warrants review by this Court, especially where it appears on its face that the decision misapplied statutory

standards.

24 Federal Consortium for Advanced Batteries, Nat’l Blueprint for

Lithium

Batteries

2021-2030

https://perma.cc/BN4F-Y73X.

25 Maslin et al., supra note 6, at 501.

(June

2021),

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted.