California Attempts To Catch a "Waive": State Leads 10 Others Suing Trump Administration Over Revocation of Vehicle Emission Waivers

On June 12, President Trump signed three joint resolutions passed by Congress, ostensibly under the authority of the Congressional Review Act ("CRA"), to revoke three Clean Air Act waivers the Environmental Protection Agency ("EPA") granted to California in the waning days of the Biden administration. Specifically, the joint resolutions would revoke California's waivers allowing California to implement: (i) the Advanced Clean Cars II regulation (phasing out the sale of new, gas-powered cars by 2035), (ii) the Advanced Clean Trucks regulation (mandating an increased mix of zero-emission trucks for sale in the state); and (iii) the Omnibus Low NOX regulation (implementing the state's updated nitrogen oxide emission standards).

The same day, California—joined by 10 other states—sued the administration in U.S. District Court for the Northern District of California, challenging the resolutions on the grounds that the waivers are not subject to the CRA, and that revocation of the waivers violates several provisions of the Constitution. It remains to be seen whether California or the federal government will seek any injunctive relief related to implementation of the three emissions programs during the litigation's pendency.

Key to California's challenge is whether the courts deem the EPA's waivers to be "rules" subject to the provisions of the CRA. Before Thursday's resolutions, the CRA had never been used to overturn any EPA waiver. Moreover, the EPA has consistently considered Clean Air Act waivers not to be a final rule, but rather an adjudicatory order, which could only be denied for statutorily enumerated reasons under the Clean Air Act. Prior to congressional passage of last week's resolutions, both the Senate parliamentarian and the U.S. Government Accountability Office issued opinions that EPA waivers are not subject to the CRA.

Clean Air Act Waivers, California's Strict Standards, and Recent Pushback

Each of California's emissions regulations and subsequent EPA waivers has been a routine occurrence since the passage of the Air Quality Act of 1967, amended and renamed the Clean Air Act in 1970. The Clean Air Act broadly preempts state governments from adopting independent emissions standards for motor vehicles but specifically allows California to set independent emissions standards upon application to the EPA for a waiver (based on California preexisting emissions regulations and the unique topography of the state).

Since Congress passed the Clean Air Act Amendments of 1990, other states may adopt all, or a subset of, California's regulations. To date, 17 states and the District of Columbia have adopted at least some of California's more stringent regulations. An applied-for waiver can only be disapproved on limited, statutorily enumerated grounds. Over the past 58 years, California has applied for and received over 100 waivers; during this time a waiver was only denied once (2008); and has only been revoked once, in the first Trump Administration, which was then reinstated in the Biden Administration.

And while approval of these waivers has often been somewhat routine at EPA, over the past 20 years, a growing number of federal lawmakers, state and local governments, industry groups, and other stakeholders have sought to curb or remove California's emissions regulation authority.

Pending Legislation and the Congressional Review Act: Our Takeaways

Accordingly, the revocation of these three waivers reflects a larger effort in Congress to curb California's ability to set emissions regulations for mobile sources. There are three bills currently pending in Congress—H.R. 346 and H.R. 2218 in the House, and S. 996 in the Senate—that would either limit California's ability to adopt emissions regulations where such regulations would directly or indirectly limit the sale or use of new gas-powered motor vehicles or would instead simply eliminate EPA's waiver authority.

The Trump Administration's unprecedented use of the CRA will create years of uncertainty until the courts finally resolve the matter. In the meantime, it is unlikely that the pending legislation has the requisite 60 votes in the Senate. Because if it did, the Administration and Congressional Republicans would not have resorted to trying to stretch the applicability of the CRA.

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If you have questions about the pending litigation, or its impact on your fleet, please reach out to DWT's experienced California environmental team or contact Dan Quinley or Kerry E. Shea.