The US Supreme Court appeared likely to give fuel producers a narrow win on whether they can challenge government auto emissions regulations while rejecting their broader argument for a categorical rule allowing certain parties to sue whenever a regulation affects their business indirectly.

At the heart of the dispute argued on Wednesday are California’s stringent pollution standards intended to tackle the climate crisis, which required a waiver of EPA emissions benchmarks. But the issue before the justices asks only whether energy companies can get their day in court.

In particular, the question is whether the fuel producers have shown that a ruling in their favor can actually “redress” their injury of lower fuel sales they say are caused by California standards. “Redressability” is one element of standing, meaning that the plaintiffs have the authority to bring a lawsuit.

Several justices suggested that the fuel makers would have standing under either the categorical rule, and the court’s usual one, which is fact specific.

“I’m not seeing a huge gap,” said Justice Brett Kavanaugh.

Justices Amy Coney Barrett wondered why producers care which rule the court applies, except that they “want to go for the big win.”

Ping Pong

One issue complicating the analysis is that new administrations have reversed course several times since 2013, when the EPA first approved a waiver for California to adopt it’s own standards.

Fuel producers have been “ping ponged” around for the past several years, said Sullivan & Cromwell partner Jeffrey Wall, who represents Diamond Alternative Energy and other energy companies.

The Trump administration has said it’s reassessing the Biden administration’s 2022 reinstatement of the waiver, after withdrawing it during Trump’s first term. It asked the justices to put the argument on hold while that process played out. The court declined.

Justice Department lawyer Edwin Kneedler agreed that producers may have had standing in 2013. Applying the court’s “common sense” rule, he said it was reasonable for a court to assume at the time that the EPA’s waiver allowing California’s more stringent standards for car manufacturers to go into effect would negatively affect fuel companies.

But that’s not the case now, Kneedler said. Automakers have adjusted to the new standards and aren’t expected to reverse course. Given that, a win for producers lifting California’s rules won’t actually increase the demand for fuel, he said.

Justice Clarence Thomas noted the point of reinstating California standards during the Biden administration was to reduce fuel demand. He suggested reinstatement would’ve been unnecessary—and perhaps unlawful—if it wasn’t meant to actually do anything.

Justice Elena Kagan went further in saying that California actually made the producers’ case for standing for them. The state’s own evidence said that reversal of California’s standards would result in higher greenhouse emissions.

That’s “out of your mouth,” Kagan told California Deputy Solicitor General Joshua Klein.

Playing Field

But the justices appeared overwhelmingly against the argument that they needed a categorical rule that applies whenever the government impedes participation in a specific market, regardless of whether the regulations are on third parties.

By requiring car manufactures to produce more clean cars, the government has “tilted the playing field” against fuel producers, Wall said.

Justices Sonia Sotomayor said an “absolutest” standing rule doesn’t make sense. The standing inquiry is “always a factual dispute,” she said.

Barrett suggested, for example, that producers would never have had standing if the auto companies were “on board” with lowering emissions standards even without government regulation.

Given that the case is likely to come out the same way, Kagan wondered why the court wouldn’t just “stick” with its usual rule rather than adopt a new one.

Modern Record

At the end of the argument, Chief Justice John Roberts noted that Kneedler had just completed his 160th argument at the court, calling it a modern record. Roberts also noted the argument was likely Kneedler’s last. The longtime DOJ attorney announced his retirement after several decades in the Solicitor General’s Office.

The case is Diamond Alternative Energy LLC v. Environmental Protection Agency, U.S., No. 24-7, argued 4/23/25.