High Court Flirts With Pro-Business Rule in Auto Emissions Case

When the US Supreme Court conducts its own, extra-record research after briefing and oral argument to bolster its finding that a powerful industry will be better off if a regulatory requirement (aimed at a different powerful industry) is lifted, one can’t help but feel that something is amiss.

Yet this is just one of the curious features of the Supreme Court’s decision in Diamond Alternative Energy v. Environmental Protection Agency. The court held that the fossil-fuel and ethanol industries have standing to challenge an EPA decision that allowed California to enforce a program regulating the greenhouse gas emissions of the automobile industry, based in part on post-argument media accounts of a declining market for electric vehicles.

It is strange the Supreme Court chose to review this case at all. The decision under review was the US Court of Appeals for the DC Circuit’s one-off, fact-bound ruling that the fossil-fuel and ethanol industries hadn’t proven their economic prospects would be improved if that court invalidated the EPA’s decision to reinstate a 12-year-old approval of a soon-to-be-obsolete iteration of California’s air pollution control program.

Even after President Donald Trump instructed the EPA to reverse that decision, the high court steamed full speed ahead with briefing and argument, giving itself the rare opportunity to issue a predictably advisory opinion based on a legal doctrine designed to prohibit advisory opinions.

Then, led by Justice Brett Kavanaugh, the court came within a hair’s breadth of creating a special, generous rule for conferring standing on business interests, one that would allow access to court for businesses whenever a government regulation might indirectly dampen demand for their products by regulating some other businesses.

The Supreme Court flirted intentionally with dropping—just for businesses asserting economic grievances—its long-held position, articulated in Lujan v. Defenders of Wildlife, that standing is “ordinarily” harder to show for parties that aren’t the direct “objects” of regulation.

Before taking too much comfort from the fact that this part of the court’s opinion wasn’t necessary to the outcome, recall that the same was true of the passage in Lujan that first observed a dichotomy between the objects and beneficiaries of government regulation. Supreme Court dicta have a way of becoming Supreme Court holdings.

Even where the court purported to be following settled precedent, its framing of the case is unsettling in more than one way.

In the Supreme Court’s telling, the automobile industry was a mere “conduit” for, and (by virtue of its failure to challenge the EPA’s approval of California’s rules) a collusive participant in, the government’s “targeting” of the fossil-fuel and ethanol industries with regulation that keeps them from fully competing in the “free market” and the “whole point” of which is to cause precisely the economic harm that the fuel industries allege.

This is quite a narrative. It is also a useful one for fossil-fuel producers in the era of climate change.

Virtually any government action to address climate change could be reframed as “targeting” the fossil fuels which are the primary drivers of climate change, thus entitling the fossil-fuel industry to the loosened, “commonsense”-based test for standing that the Supreme Court embraced for businesses that assert a “classic monetary injury.”

The court’s “commonsense” approach is impervious to reality. In the 12 years since the EPA first approved California’s regulation, automakers have committed to long-range compliance plans, many consumers have developed preferences for cleaner cars, and climate change itself has marched on in a way that has impelled the federal government and California to enact ever more stringent regulation of greenhouse gases from motor vehicles.

Perhaps conceding that these changes may have drastically reduced the present effects of the regulations first approved a dozen years ago, the court stressed that even “one dollar” of revenue missed due to the regulations is sufficient for finding standing to sue—and it didn’t even require the fuel industry to tell us exactly who will be out that dollar.

Imagine if environmental plaintiffs were eligible for this solicitude! Surely any environmental harm worth suing for is worth at least a dollar, and how wonderful to be spared the burden of finding the specific human being who is injured.

As Justice Ketanji Brown Jackson argued in her powerful dissent, however, the court’s jurisprudence on standing isn’t evenhanded: “The Court’s remarkably lenient approach to standing in this case contrasts starkly with the stern stance it has taken in cases concerning the rights of ordinary citizens. … for less wealthy individual plaintiffs, establishing redressability to the Court’s satisfaction is often harder to come by.”

The case is Diamond Alternative Energy v. Environmental Protection Agency, U.S., No. 24-7, decided 6/20/25.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Lisa Heinzerling is a law professor at Georgetown University. She was the head of the Office of Policy at EPA during the Obama administration.

Write for Us: Author Guidelines