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

No. 24-7

In the Supreme Court of the United States

DIAMOND ALTERNATIVE ENERGY, LLC, ET AL.,

Petitioners,

v.

ENVIRONMENTAL PROTECTION AGENCY ET AL.

Respondents.

ON 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 PETITIONERS

PATRICK F. PHILBIN

Counsel of Record

CHASE HARRINGTON

TORRIDON LAW PLLC

801 Seventeenth Street NW

Suite 1100

Washington, DC 20006

(202) 249-6900

pphilbin@torridonlaw.com

February 3, 2025

TABLE OF CONTENTS

Page

Interest of Amicus Curiae ............................................... 1

Background ........................................................................ 2

A. Sulfur Supply Chains Are A Critical Component

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

1. Sulfur Is Produced As A Byproduct of

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

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

And Fertilizer Sectors. ................................... 5

B. California Seeks to Curb Petroleum and

Natural Gas Refining. ........................................... 8

Summary of argument ...................................................... 9

Argument ......................................................................... 10

The D.C. Circuit’s Standing Decision Was Wrong...... 10

A. Challengers To Government Regulation

May Rely On the Predictable Effect

of Government Action On Third Parties. ......... 10

B. Requiring Downstream Entities To

Cooperate With Regulated Entities To

Establish Standing Raises an Improper

Barrier To Judicial Review that Would

Heighten the Harms of Regulatory

Capture. ................................................................ 17

Conclusion ........................................................................ 20

ii

TABLE OF AUTHORITIES

Page(s)

Cases

Abigail All. for Better Access to

Developmental Drugs v. Eschenbach,

469 F.3d 129 (D.C. Cir. 2006) ...................................... 15

Bennett v. Spear,

520 U.S. 154 (1997) ................................................. 12, 13

Buffington v. McDonough,

143 S. Ct. 14 (2022) ....................................................... 18

California v. Texas,

593 U.S. 659 (2021) ....................................................... 12

Clapper v. Amnesty Int’l USA,

568 U.S. 398 (2013) ....................................................... 12

Corner Post, Inc. v. Board of Governors of

the Fed. Rsrv. Sys.,

603 U.S. 799 (2024) ....................................................... 12

Dep’t of Com. v. New York,

588 U.S. 752 (2019) ..................................... 10, 12, 13, 15

FDA v. All. for Hippocratic Med.,

602 U.S. 367 (2024) ................................................. 11, 12

General Land Office v. Biden,

71 F.4th 264 (5th Cir. 2023) ......................................... 14

Goldfarb v. Virginia State Bar,

421 U.S. 773 (1975) ....................................................... 18

iii

Cases—continued

In re Idaho Conservation League,

811 F.3d 502 (D.C. Cir. 2016) ...................................... 15

Lujan v. Defs. of Wildlife,

504 U.S. 555 (1992) ................................................. 10, 13

Monsanto Co. v. Geertson Seed Farms,

561 U.S. 139 (2010) ....................................................... 12

Motor Vehicle Mfrs. Ass’n of U.S. v. State

Farm Mut. Auto. Ins. Co.,

463 U.S. 29 (1983) ......................................................... 11

Murthy v. Missouri,

603 U.S. 43 (2024) ......................................................... 12

N. Carolina State Bd. of Dental

Examiners v. FTC,

574 U.S. 494 (2015) ....................................................... 18

Nat’l Credit Union Admin. v. First Nat.

Bank & Tr. Co.,

522 U.S. 479 (1998) ....................................................... 11

NRDC v. NHTSA,

894 F.3d 95 (2d Cir. 2018) ...................................... 13, 14

PHH Corp. v. CFPB,

881 F.3d 75 (D.C. Cir. 2018) ........................................ 18

Teton Historic Aviation Found. v. Dep’t of

Def.,

785 F.3d 719 (D.C. Cir. 2015) ...................................... 15

iv

Cases—continued

Warth v. Seldin,

422 U.S. 490 (1975) ....................................................... 10

Statutes

42 U.S.C. §7401 ..................................................................... 3

42 U.S.C. §7543(b) ................................................................ 8

Regulations

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

74 Fed. Reg. 32,744 (July 8, 2009) ...................................... 8

78 Fed. Reg. 2,112 (Jan. 9, 2013) ........................................ 8

84 Fed. Reg. 51,310 (Sept. 27, 2019) ................................... 8

86 Fed. Reg. 7,037 (Jan. 25, 2021) ...................................... 8

87 Fed. Reg. 14,332 (Mar. 14, 2022) ............................... 2, 8

Other Authorities

B. G. Goar, Sulfur Recovery Technology

(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 ..................................... 8

v

Other Authorities—continued

Elena Kagan, Presidential Administration,

114 Harv. L. Rev. 2245 (2001) ..................................... 18

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) .............................................................................. 18

James Q. Wilson, The Politics of

Regulation (1980). ........................................................ 19

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

Commc’ns. Earth & Env’t. 324 (2022),

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

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

vi

Other Authorities—continued

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, 16

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

2024, https://perma.cc/BHB4-V8MR. .......................... 7

Randall S. Billingsley and Carl J. Ullrich,

Regulatory Uncertainty, Corporate

Expectations, and the Postponement of

Investment: The Case of Electricity

Market Deregulation (2011),

https://perma.cc/U83A-MULC ................................... 17

S&P Global, Chemical Economics

Handbook: Sulfur (Mar. 2024),

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

TSI, FAQ, https://perma.cc/7RVX-5HZH......................... 3

TSI, Glossary “Sulphur uses,”

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

TSI, Sulphur – The Fourth Major Crop

Nutrient,

https://perma.cc/6PQ8-MCMU ..................................... 5

vii

Other Authorities—continued

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. ....................................... 4

U.S. Geological Survey, Mineral

Commodity Summaries—Sulfur (Jan.

2024), https://perma.cc/YF43-Q6WE ....................... 4, 5

U.S. Geological Survey, Sulfur Statistics

and Information,

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

1

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

reduce emissions of the chemical into the environment.

1 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.

2

Regulations that curb petroleum fuel consumption reduce

America’s sulfur supplies.

Petitioners challenge the prior administration’s

decision to grant California a preemption waiver under

the Clean Air Act (CAA), allowing 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). This waiver would allow California

(and other states that opt into its emission standards) to

force the motor vehicle industry to shift from internal

combustion engines to electric vehicles. As fuel

consumption plummets, so will sulfur supplies.

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’ challenge to the EPA’s grant of California’s

CAA waiver request.

BACKGROUND

A. 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

3

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.

1. 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

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, 42 U.S.C. §7401 et seq., requires the energy industry to reduce the amount of “criteria pollutants,” emitted from motor vehicles and

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.

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

4

internal combustion engines. See id. §§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 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

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

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.

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.

5

supply necessary for the dozens of industries that require

the chemical as an industrial raw material. According to

the USGS, American 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

every sector of the world’s industrial and fertilizer complexes. Sulfuric acid production is the major end use of

sulfur, and 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 the United States every year than any other chemical.”11

2. 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

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

10

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

https://tinyurl.com/a223krdk.

11 Ibid.

12

TSI, Sulphur – The Fourth

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

Major

Crop

Nutrient,

6

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

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,

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 Commc’ns. Earth &

Env’t. 324 (2022), https://doi.org/10.1038/s43247-022-00662-9.

7

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 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.

15

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

at

3

(Aug.

2023),

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

17 Ibid.

18

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

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

8

B. California Seeks To Curb Petroleum and Natural Gas Refining.

For decades, California has sought to address global

climate change by imposing zero-emission mandates on

new vehicles sold in the State. These mandates depend on

EPA granting California a waiver from the (otherwise)

uniform federal emissions regime set by the Clean Air Act

(CAA). 42 U.S.C. §7543(b). In 2009, EPA granted California a waiver to adopt regulations setting fleet-average

greenhouse gas emissions for new cars. 74 Fed. Reg.

32,744, 32,783 (July 8, 2009). In 2013, EPA granted an additional waiver to California’s Advanced Clean Car regulations, designed to force the motor vehicle industry to

shift from internal combustion engines to electric vehicles. 78 Fed. Reg. 2,112, 2,137 (Jan. 9, 2013). This waiver

has been revoked and renewed over the last decade with

each change in presidential administration.

During the first Trump administration, EPA rescinded the 2013 preemption waiver on the grounds that

California’s preemption waiver authority was limited to

California-specific emission conditions like smog rather

than global climate change. 84 Fed. Reg. 51,310, 51,328,

51,339 (Sept. 27, 2019). When President Biden took office,

he directed EPA to consider “revising” the 2019 withdrawal of California’s 2013 waiver, 86 Fed. Reg. 7,037

(Jan. 25, 2021), which it did in 2022, 87 Fed. Reg. 14,332

(Mar. 14, 2022).19 To date, seventeen other States have

opted into California’s restrictions, and together they control over 40% of America’s new vehicle market.

The scope of California’s CAA waiver authority under

§7543(b) is therefore a recurring issue with important

19 Following the recent change in administration, EPA has again de-

termined to reassess California’s preemption waiver.

9

implications for the sulfur industry. If California is permitted to steer the nation towards an electric vehicle fleet,

fuel consumption will plummet and so will sulfur supplies.

SUMMARY OF ARGUMENT

The D.C. Circuit’s ruling on standing is wrong and

should be reversed. 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 very premise of allowing California to set its own rules was that California’s

rules would have a predictable effect in reducing combustion of liquid fuels and thereby reducing emissions.

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 if the special waiver for California were removed—

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 reactions of

other regulated entities in the interconnected chain.

10

ARGUMENT

The D.C. Circuit’s Standing Decision Was Wrong.

The D.C. Circuit’s decision 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 their interconnected industries. In such situations, the parties challenging the rule are not themselves directly 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.

A. Challengers To Government Regulation May

Rely On the Predictable Effect of Government

Action On Third Parties.

1. 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, 560-61 (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); see also Warth v. Seldin, 422 U.S.

490, 505 (1975) (“When a governmental prohibition or restriction . . . causes specific harm to a third party . . . the

indirectness of the injury does not necessarily deprive the

person harmed of standing to vindicate his rights.”). Indeed, it is well established that government regulation

11

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 typically “flip sides of the same coin.” FDA v.

All. for Hippocratic Med., 602 U.S. 367, 380 (2024) (quotation omitted).

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. For example, this Court has allowed challenges to certain government acts that give an

advantage to the plaintiff’s competitor, Nat’l Credit Union Admin. v. First Nat. Bank & Tr. Co., 522 U.S. 479,

488 (1998) (upholding standing of private banks to challenge agency’s decision to amend charter of federal credit

union); Monsanto Co. v. Geertson Seed Farms, 561 U.S.

139, 153-56 (2010) (conventional seed farms’ challenge to

deregulation of genetically modified alfalfa), or changes to

regulatory burdens on third parties that will have downstream effects on plaintiff’s business, see Motor Vehicle

Manufacturers Association of United States, Inc. v. State

Farm Mutual Automobile Insurance Co., 463 U.S. 29

(1983) (insurance company suing agency for recission of

vehicle safety regulation). Indeed, “entire classes of administrative litigation . . . have traditionally been brought

by unregulated parties.” Corner Post, Inc. v. Board of

12

Governors of the Fed. Rsrv. Sys., 603 U.S. 799, 833 (2024)

(Kavanaugh, J., concurring).

Where the plaintiff’s theory of standing depends on

an injury is indirectly caused by government action on

someone else, standing is sufficiently shown where there

is “a predictable chain of events leading from the government action to the asserted injury.” All. for Hippocratic

Med., 602 U.S. at 385. Standing cannot depend on “guesswork” or “speculation” about third parties’ actions. Clapper v. Amnesty Int’l USA, 568 U.S. 398, 413-14 (2013).

But it can rest on a showing that “third part[ies] . . . will

likely react in predictable ways to the defendants’ conduct.” Murthy v. Missouri, 603 U.S. 43, 58 (2024) (quoting Dep’t of Commerce, 588 U.S. at 768).

In such situations, the predictable downstream 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.” All. for Hippocratic Med., 602

U.S. at 383 (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).

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 tackle the “logical link” between local air pollution

from the combustion of liquid fuels and greenhouse gases.

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

13

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 businesses of Petitioners. It takes no “guesswork” or “speculation” to know

that if there are fewer cars that need liquid fuels to run,

then demand for Petitioners’ products will be reduced.

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’s mandate) are

expressly designed to create. See Lujan, 504 U.S. at 56061. 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 effect[s].”

Dep’t of Commerce, 588 U.S. at 768. This Court did not

require that plaintiffs prove by evidence that a biological

opinion would influence how a government agency set water-level restrictions, Bennett, 520 U.S. at 170, or that a

citizenship question would predictably reduce census responses by noncitizens, see Dep’t of Com., 588 U.S. at 76.

Rather, plaintiffs’ standing could draw upon commonsense inferences about how third parties behave in response to government action. The D.C. Circuit’s decision

to impose an artificial evidentiary barrier is inconsistent

with these cases.

Other courts of appeal illustrate the correct approach

under this Court’s precedents. 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

14

the agency’s conduct.” Id. at 104 (citation omitted). The

court found that environmental groups had standing to

challenge agency action delaying an increase in civil penalties for third-party 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 to hold that the environmental groups

had standing.

Similarly, the Fifth Circuit found that Texas had

standing to challenge DHS’s decision to divert funds from

border wall construction because of its predictable effect

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

F.4th 264, 273 (5th Cir. 2023). As the Fifth Circuit explained, border barriers both reduce illegal entries where

they are constructed and “increase the rate at which illegal aliens are detected and apprehended.” Id. at 272.

Those predictable effects of funding border barriers reduced costs for Texas associated with illegal border crossings. See id. Accordingly, diverting funding from border

barriers (so that fewer barriers would be constructed)

could logically be expected to increase illegal crossings by

migrants, which would predictably increase costs for

Texas. That logical inference based on predictable actions

by third parties (migrants seeking to cross the border illegally) was sufficient to sustain standing. Indeed, the

Fifth Circuit expressly explained that Texas’ standing argument “appropriately rel[ied] on the ‘predictable effect

of Government action on the decisions of third parties.’”

Id. at 273 (quoting Dep’t of Commerce, 139 S. Ct. at 2566).

Even the D.C. Circuit’s own prior rulings undermine

its decision in this case. The D.C. Circuit has previously

15

held that, “[w]hen 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 All. for Better Access to Developmental 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”).

2. 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.

Proper application of standing principles is vitally important for industries—like the sulfur industry—that exist in interconnected supply or production chains. Sulfur

producers are not directly regulated by agencies that

16

regulate vehicle emissions or petroleum refineries. But

because sulfur is recovered from oil and gas as part of the

refining process, regulations on those subjects have

major, predictable impacts on the supply of sulfur.

For example, by allowing California to set emissions

standards, the EPA waiver 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.20

EPA’s waiver, then, 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. According to researchers, decarbonization coupled with the

expansion of the green economy could result in a “shortfall in sulfuric acid of between 100 and 320 million

tonnes.”21 The result may be an overstretch in the domestic sulfur supply that forces manufacturers to become dependent on foreign sources of sulfur.

The D.C. Circuit’s novel and myopic focus in its standing analysis would effectively shut the courthouse doors

to any petitioner who is not directly regulated by an

agency, but who necessarily incurs injury from the predictable effects of the agency’s actions on the decisions of

others. It would hobble meaningful judicial review—and

insulate broad-reaching regulatory action from appropriate scrutiny—by prohibiting entire industries that are

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

21 Id. at 501.

17

logically and predictably affected by a government action

from bringing a challenge. Such a short-sighted approach

irrationally ignores the interconnected nature of many industries in our economy and, by limiting potential litigants, would improperly insulate agency action from

searching review.

B. Requiring Downstream Entities To Cooperate

With Regulated Entities To Establish Standing

Raises an Improper Barrier To Judicial Review

that Would Heighten the Harms of Regulatory

Capture.

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

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 the regulation (or 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 multiple reasons for acquiescing in a particular action by its regulator. The regulated entity may value certainty over reduced regulatory

burdens on a particular matter and thus may forego any

challenge to a rule.22 Or the regulated entity may accept

regulatory burdens in one area in an effort to secure more

favorable regulatory treatment on a different matter.

Worse, incumbents in a regulated industry may favor

22 See generally Randall S. Billingsley and Carl J. Ullrich, Regulatory

Uncertainty, Corporate Expectations, and the Postponement of Investment: The Case of Electricity Market Deregulation (2011),

https://perma.cc/U83A-MULC (finding government deregulation of

electric utilities resulted in diminished investment).

18

some regulatory burdens because they raise barriers to

entry that stymie competition. See N. Carolina State Bd.

of Dental Examiners v. FTC, 574 U.S. 494, 501 (2015)

(state dental licensing board); Goldfarb v. Virginia State

Bar, 421 U.S. 773, 791 (1975) (state bar).

Requiring a company that will be inexorably 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 to vital judicial review 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 the regulation.

Indeed, the theory of regulatory capture suggests

that the relationship between regulator and regulated entity may, in some instances, produce regulations that bend

toward the interests of the regulated entity. This can occur when well-heeled, sophisticated entities “exercise disproportionate influence over agency policymaking by virtue of the resources they commanded, the information

they possessed, and the long-term relations they maintained with agency officials.” Elena Kagan, Presidential

Administration, 114 Harv. L. Rev. 2245, 2265 (2001); cf.

Buffington v. McDonough, 143 S. Ct. 14, 20-21 (2022)

(Gorsuch, J., dissenting from denial of certiorari) (explaining that wealthy and influential entities “can lobby agencies for new rules that match their preferences.”).

“With every agency, the fear of regulatory capture is

ever-present.” See PHH Corp. v. CFPB, 881 F.3d 75, 185

(D.C. Cir. 2018) (Kavanaugh, J. dissenting) (quoting Elizabeth Warren, Unsafe at Any Rate: If It’s Good Enough

for Microwaves, It’s Good Enough for Mortgages. Why

19

We Need a Financial Product Safety Commission, Democracy, Summer 2007, at 8, 18); James Q. Wilson, The

Politics of Regulation 357-94 (1980). The possibility of

regulatory capture 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.

Here, for example, the world’s largest car manufacturers intervened to protect California’s “stricter” emissions standards. See Mot. to Intervene 8, Ohio v. EPA,

No. 22-1081, Doc. 1949658 (D.C. Cir. June 7, 2022). They

justified intervention on the ground that, because they

have committed to pay the costs of transitioning to electric vehicles, they have “significant interests in ensuring

that other automobile manufacturers” (i.e., their competitors) “are required to comply” as well. Id. at 14. Intervenors have determined they can absorb such costs.

Smaller companies whose supply chains rely on petroleum fuel consumption may not. Because downstream

producers have divergent interests from the directly regulated entities (like auto manufacturers) who may prefer

stricter regulations, it is crucial that other entities like Petitioners be permitted to demonstrate standing based on

rational inferences of predictable commercial behavior.

Under the D.C. Circuit’s misguided application of standing principles, however, downstream producers must cooperate with directly regulated entities before they can

challenge unlawful agency action.

*

The decision below upends previously clear principles

of Article III standing. It creates confusion concerning

the extent to which entities in integrated supply chains

can establish standing based on the predictable downstream effects of regulation.

And it will make

20

downstream producers like TSI depend on directly regulated entities with divergent interests in order to challenge unlawful regulations.

CONCLUSION

The Court should reverse the judgment below.

Respectfully submitted.

PATRICK F. PHILBIN

Counsel of Record

CHASE HARRINGTON

TORRIDON LAW PLLC

801 Seventeenth Street NW

Suite 1100

Washington, DC 20006

(202) 249-6900

pphilbin@torridonlaw.com

Counsel for Amicus Curiae

The Sulphur Institute