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Case number 22-1081 Ed Al, State of Ohio Ed Al petitioners versus Environmental Protection Agency, and Michael S. Regan in his official capacity as Administrator of the U.S.

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Environmental Protection Agency.

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Good morning.

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I believe we hear first from Mr. Wall.

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Thank you, Judge Wilkins.

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May it please the court.

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As a general rule, EPA sets emission standards in this country.

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Congress drew an exception for California so that it could address local problems like smog in Los Angeles, but it did so subject to meaningful limits.

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One of them is that EPA must find that California needs its own emission standards to meet compelling and extraordinary conditions in the state.

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The waiver here doesn't satisfy either part of that test.

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First, climate change is a global problem.

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There's nothing extraordinary about the conditions in California.

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And second, EPA last found in 2019 that California standards will do nothing to impact climate change in the state or around the globe.

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But there's a larger problem.

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EPA is claiming the authority to let California be a climate change regulator and drive electrification of the nation's vehicle.

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That's a hugely significant question.

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So EPA needs clear congressional authority for the waiver.

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But is it your ultimate goal that you want the California waiver denied and then therefore everybody just goes back to the federal limits, which essentially serve as a ceiling and a floor?

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So it would take away the reinstatement of the waiver.

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So California would not be able to have greenhouse gas standards aimed at climate change.

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Only the EPA would have greenhouse gas standards aimed at climate change.

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And this court yesterday heard an argument on those federal standards.

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That's right.

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But you wouldn't want to promulgate your own standards.

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You're not asking to do that.

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Well, EPA is taking its own efforts.

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So EPA and NHTSA have two rules that were in front of this court yesterday that represent the federal efforts to get at this problem.

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So there is a federal effort underway.

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The third prong in the strategy that the EPA devised was to say not only would we have federal rules, but we would give a waiver to California in order that California could go even further and outstrip the federal efforts.

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And what we're here saying is that waiver under Section 209 is impermissible.

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California can aim at local conditions, like smog in Los Angeles.

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It has for a long time.

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But the waiver is only going with respect to California.

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Well, yes, California gets the waiver and then under Section 177, other states, if they have local air quality problems, can adopt California standards.

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But that gives you two opportunities then, California waiver and the federal standards.

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Well, but our point, Judge Childs, is that entire regime under 209 and 177 is meant for truly local problems.

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That's why Congress designed it.

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So if California has some truly local problem, like smog in Los Angeles, then it can adopt a standard.

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And if Columbia, South Carolina, finds that it has the same smog problem, it can, under 177, adopt the same standard.

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What the regime isn't meant to cover under the text of the statute are national and global problems.

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We expect the federal sovereign to deal with them.

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So this wasn't about climate change or global warming, things that affect to the extent that they do affect all of us.

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This was about state-specific problems and coming up with state-specific solutions that address those problems.

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But California did insert in the record its particular concerns about its global or about its climate change issues.

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If we're all agreed that it's really gotta be distinctive in the state, like the smog in Los Angeles, right, then you're right, there is this sort of rear guard effort to say, ah, but California just has a really bad climate change in a way that's different from all other states.

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And the problem for them, Judge Childs, is that the EPA, the last time it addressed this, said the opposite.

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So I'm reading from the JA, this is page 522,

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California's conditions are not, quote, not sufficiently different from the potential conditions in the nation as a whole to justify separate state standards.

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And then at page 528, this is really, I think, the key quote, California is not worse positioned in relation to certain other areas of the US.

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and indeed is estimated to be better position, particularly as regards the South East region of the country.

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EPA did not come back here, Judge Childs, in 2022 and make a different factual finding.

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Now, to be sure, it said California has it bad, but it didn't say what it needed to say, which is California has it worse.

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than other states.

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If it had, it would have been changing its view on key facts.

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And under the Supreme Court's opinion in FCC v. Fox.

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What about all of that language in the EPA's, that's cited in the EPA's brief, pointing out that the EPA found that California did have a need with respect to, specific needs with respect to climate change?

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so two separate questions in the 2022 restoration decision so two separate questions under the under uh 209 uh b1b one is need and one is whether you have the right kind of condition so what i was saying to judge shiles was they didn't reverse the factual finding on the conditions if they had under fox they would need according to the supreme court they quote more detailed justification

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So on the conditions, they didn't offer a sufficient detailed justification.

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I don't even think there's a finding, but if there is, it didn't match.

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To your question, Judge Wilkins, that's the second part of the statute is, okay, let's say that we grant that climate conditions in California are just worse than everywhere else in the United States, even the Southeast or the Southwest.

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Then do they need these standards to meet those conditions?

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That's the text of B1B.

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And what the EPA said, and I'm reading from 521,

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quote, Judge Wilkins, quote, the waiver would result in likely no change in temperatures or physical impacts resulting from anthropogenic climate change in California, end quote, likely no change.

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The agency did not come back in 2022 and try to make a contrary finding.

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And if it had, again, it wouldn't be able to satisfy Fox.

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And the problem that they have is,

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In the Obama administration, when NHTSA looked at this, it looked at standards that were more stringent than what California is doing, and said if you run that out to 2100, 75 years from now, more stringent standards,

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0.02 degrees Celsius, right?

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1.50th of one degree.

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And the agency relied on that in 2019 to say, these standards are not gonna make any difference to temperatures in California or across the globe.

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And then the agency didn't come back in 2022.

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You'll search this record in vain for some factual finding that says, no, no.

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If they get these- The problem that I have with that reasoning, and I guess it's kind of,

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EPA's argument puts it a little differently, you know.

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Those of us from the country have a saying that like when you're in a hole, kind of like the first rule of holes is like stop digging.

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So isn't EPA essentially

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in California saying that, well, at least if they're effectual to the extent that they will keep the problem from getting worse.

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And that is consistent with the language of the statute.

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So Judge Wilkins, I guess I sort of think of a different country saying, because what the EPA said here was, look, okay.

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We're not going to try to quantify what difference it would make.

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They're allowed to whittle away.

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They can do something.

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And if you came along as a young boy, and I said I was whittling on a stick, and you came along 75 years later, and I had the same stick and the same knife, and you couldn't tell whether I touched the stick, and I told you I was still whittling, you'd think either I didn't know what I was doing or I was pretty bad at my job.

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And so when the statute says you need the standards

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to meet extraordinary and compelling conditions, the Administrator has to make a finding of that.

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That's what the statute says.

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The EPA has to find that California needs them.

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And it's a pretty weird world, I think.

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If California just says, hey, we don't have to make a finding that it's actually going to get better.

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And EPA says we don't have to make a finding that it's actually going to get better.

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We're just going to say we need it because the problem is really serious.

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And if they tried to justify Judge Wilkins on your type rationale, like we need these in order to prevent them from getting worse, you'd still have to have a set of factual findings about what the world would look like factually absent the standard and all the rest.

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There's none of that.

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The last time the agency turned to this, it said, these standards will make no difference for climate change.

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And we shouldn't be surprised by that.

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That's a global problem.

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It is a national problem.

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We expect our federal sovereign to put in place standards to deal with that problem.

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This regime was never meant for that.

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Well, going to that issue then, you're not challenging the kind of the statutory scheme of 209B.

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You're just challenging the waiver.

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Oh, that's absolutely, so for a long time, Judge Childs, I mean for decades, right?

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California had its own emission standards, even zero emission and low emission standards aimed at criteria pollutants to try to improve smog in Los Angeles.

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That was no problem.

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What was new was that they came along in 2005 and they said, we wanna do this not for criteria pollutants, we wanna do this for greenhouse gases because of global warming.

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And the agency has gone back and forth on that from one administration to the next.

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The Bush administration denied the waiver.

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The Obama administration granted it.

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The Trump administration took it away.

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The Biden administration reinstated the waiver.

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So when the agency comes to you and says, there's a long historical practice of this, they're right for non-greenhouse gas.

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On the greenhouse gas side, this has been a political football over the last 20 years.

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The agency has never agreed on how to interpret the statute.

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And what we would say is, just turn to the text.

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The text says, the state has to show and the EPA has to find that it needs these standards to meet extraordinary and compelling conditions.

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This isn't the kind of condition that qualifies.

[00:11:05] Speaker 08:
And even if it were... The EPA brief points out that...

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The 2022 restoration decision did make findings with respect to greenhouse gas emissions impacting ozone and temperature rise and temperatures impacting ozone and that having a connection to particulate and other pollution.

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In other words,

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I don't know if I have a particular language right in front of me.

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No, I know what you're talking about.

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But the EPA says that essentially even kind of taking your view of the statute, the requisite findings were made.

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So Judge Wilkins, three quick points.

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The first is, I mean, this is remarkable.

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This is about pages 84 to 90 or so in there.

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That's right.

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It's sort of their last line argument.

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You were right.

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And the first point is, it is remarkable historical revisions.

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When California filed this waiver application, it doesn't say a word about criteria pollutants.

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It proclaims it is about climate change.

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And not only does it not say the greenhouse gas standards are needed to improve criteria pollutants and solve a problem with ozone, it actually says that it's ZEV mandate

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will have no criteria pollutant benefit.

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And that's at page 151 of the JA.

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So California specifically disclaims it for the ZEV mandate and doesn't claim it for the greenhouse gas.

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But I will grant you that now that it's in sort of litigation, everybody on that side of the V has made this backup argument about criteria pollutants, but it doesn't work for two reasons, Judge Wilkins.

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The first is the Supreme Court's opinion in Gade, which tells you if you aim at something that is preempted, it doesn't matter if you also have a non-preempted purpose.

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And here they aimed at climate change, and that's preempted.

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So it doesn't matter whether they had some other purpose.

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And even if you don't buy my legal argument, as a factual matter, they didn't satisfy the Fox standard because they didn't revisit that 2019 finding at page 521 of the JA that says this isn't gonna have any effect on California.

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They did, Judge Wilkins, and this is the language you're picking up on, they did say there's a logical link between reducing greenhouse gas emissions and improving criteria pollutants.

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But if you dig into what they mean by that, what they mean is,

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If you decrease greenhouse gas emissions, you will drive down temperatures.

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And if you drive down temperatures, that will improve ozone.

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So it's all piggybacked on the climate rationale.

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If it's right that the agency last found it wasn't gonna make a temperature change and they didn't revisit that, their logical link gets kind of blown up because the factual predicate is it's going to drive down temperatures.

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I think even the government will acknowledge that if this doesn't make a temperature change in California, it's not gonna improve smog in Los Angeles.

[00:14:10] Speaker 08:
I'm having a little trouble understanding your argument in the sense that under, I guess it's under,

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7521A1, which is the provision dealing with federal emission standards.

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EPA is allowed to promulgate standards for air pollutants that they find contribute to air pollution, which will endanger public health and welfare.

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And the EPA has said that greenhouse gases are those types of pollutants that can endanger public health and welfare.

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The Supreme Court upheld that interpretation in Massachusetts v. EPA.

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So for this whole waiver scenario, the first determination that California has to make that allows them to have a separate program at all

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is that their standards will in the aggregate be at least as protective of public health and welfare as the federal standards.

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So why is it then, let me just ask this first, does public health and welfare in 209B1 mean the same thing as it does in 7521A1?

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So I want to clearly draw the line between the case this court heard yesterday and this case, because I think the questions are pretty distinct.

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So under a separate provision, 202A, or what's 7521A, that's the standard setting authority for the federal government.

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It set a standard in this court heard a case about yesterday, whether the standard had gone too far in regulating various kinds of emissions.

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7543 or 209A is the preemption provision.

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So it says no state, and it's a general preemption provision, and everybody agrees.

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It puts this off limits to the states.

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And then B is the carve out.

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B says, ah, but you can give a waiver to California, effectively California.

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It's the only one grandfathered in under the standard.

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If the administrator finds three things,

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Finds that California's determination that its standards as a whole would be as protective as the federal standards.

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That's not arbitrary and capricious If the administrator finds that the state needs it to meet conditions and the administrator finds that they're otherwise consistent with the statute Which is to say that manufacturers comply with them and they are feasible and so it requires that you sort of make three findings

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that don't turn on the public health and welfare phrase that appears then in B2, which deals with the stringency of the state standards and which isn't at issue here.

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And our point is that in B1B, they can't satisfy either part of that.

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Now, their main move, Judge Wilkins, just so I get to it before I stop.

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I don't see how you answered my question.

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So I'm not talking about B2.

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I'm talking about the language in 209B1.

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Which language?

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California has to, California initially has to make a determination, right?

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Yes.

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And that determination are that the state standards will be in the aggregate, at least as protective of public health and welfare as applicable federal standards.

[00:18:03] Speaker 08:
That's right.

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And my question to you is, does public health and welfare in B1 mean the same thing as it does in 7521A1?

[00:18:20] Speaker 02:
Judge Wilkins, I'd have to look at 7521A1 to see, but the reason I don't know is that no one here has focused on that language in the statute as doing any of the work here.

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Because you're right, they do have to make a protectiveness determination.

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They've got to come in and say, our standards are as protective on the whole in the aggregate as the federal standards.

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And we haven't disputed that.

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We're not saying they messed up on the public health and welfare part.

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So California made that determination.

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The administrator determined under B1A that that wasn't arbitrary and capricious.

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And we haven't challenged that.

[00:18:58] Speaker 08:
So well, I mean, but you're saying that they can't determine California isn't allowed to determine that limiting greenhouse gases is protective of the public health and welfare.

[00:19:14] Speaker 08:
Isn't that your argument?

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Sorry, Judge Wilkins.

[00:19:16] Speaker 02:
No, there are two separate issues here.

[00:19:19] Speaker 02:
Yes, California has to determine, and I'm sorry I didn't understand this earlier, California has to determine that its standards are as protective of the federal standards of public health and welfare, and then the administrator's got to find that's not arbitrary.

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That's one set of determinations.

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Haven't challenged it, not on the table.

[00:19:37] Speaker 02:
We're not saying they cannot make that determination.

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Then, after you've done the protectiveness, you have to do the need under B1B.

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And there, you're not looking to what the state is bound.

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It says the administrator has got to find that the state needs them to meet the conditions.

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And that's separate.

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I think everybody agrees.

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I think even the government and the intervenors agree need and protectiveness are separate under the statute.

[00:20:01] Speaker 02:
Now, their argument, Judge Wilken, and I thought this might be where you were going, but it turned out it wasn't.

[00:20:06] Speaker 02:
Their main move in their brief, their primary statutory argument

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that in the aggregate that's in commas in B1 travels down the statute.

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So California and the administrator look at protectiveness on a whole program basis, not standard by standard.

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And their main argument is to say, well, you've got to do need the same way.

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And we need our program because we've got smog in Los Angeles.

[00:20:30] Speaker 02:
So you don't have to look at whether we need any particular standard.

[00:20:33] Speaker 07:
Sorry to interrupt.

[00:20:35] Speaker 07:
So I have some threshold questions about our jurisdiction.

[00:20:37] Speaker 07:
But just on this point, while we're on it, the state and EPA make an argument that if for the protectiveness determination, if that's done in the aggregate, the very purpose of that was to allow California to have some individual standards that are less stringent.

[00:20:56] Speaker 07:
their federal counterpart.

[00:20:58] Speaker 07:
If you then turn to B1B and ask, do you have a need for every individual standard, how can they ever justify a less stringent individual standard than there be?

[00:21:11] Speaker 07:
What's your response to that?

[00:21:12] Speaker 02:
So it's a great question Judge O'Rourke.

[00:21:13] Speaker 02:
They go to two different things.

[00:21:15] Speaker 02:
You're absolutely right about the statutory history.

[00:21:17] Speaker 02:
They used to have to determine protectiveness on a standard by standard basis.

[00:21:21] Speaker 02:
And then the problem was they couldn't drop one in order to make another more stringent.

[00:21:26] Speaker 02:
So they had this problem with the trade-off between nitrogen oxide and some of the other pollutants.

[00:21:31] Speaker 02:
So they said, we need to be able to do protectiveness on a whole program basis.

[00:21:36] Speaker 02:
And Congress agreed with that.

[00:21:37] Speaker 02:
So we don't take any issue with that.

[00:21:39] Speaker 02:
Exactly.

[00:21:39] Speaker 07:
So if you look at just, for example, the carbon monoxide standard, and the state is saying, we want to make this less stringent,

[00:21:48] Speaker 07:
It seems like they're suggesting that under your test, that would just, every time it would fail because you couldn't show you need that particular standard.

[00:21:57] Speaker 02:
Is that how your test works?

[00:21:58] Speaker 02:
No, that's not right.

[00:22:00] Speaker 02:
What the agency said in 2008 and then again in 2019 was, you do need on a standard by standard basis, and it is possible, Judge Garcia, that you need some standards in order to address localized problems, but you don't need others.

[00:22:15] Speaker 02:
You don't have to do need on a whole program basis.

[00:22:18] Speaker 02:
So it's just not true that they'll never be able to satisfy need for individual standards.

[00:22:24] Speaker 07:
But for the individual less stringent standard, how would they explain why they need that standard?

[00:22:31] Speaker 02:
If that still meets some condition in the state.

[00:22:34] Speaker 02:
In other words, if it still makes some meaningful improvement in the problem they're aiming at, be it criteria pollutants or what have you.

[00:22:41] Speaker 02:
then they would need that individual standard.

[00:22:43] Speaker 02:
And by the way, just so you think I'm not sort of nuts about the statutory interpretation, the such standards means the same thing in C, because you're asking whether the manufacturers can comply.

[00:22:55] Speaker 02:
It wouldn't make any sense to do that on a whole program basis.

[00:22:58] Speaker 02:
You wouldn't say, well, you've got a whole suite here.

[00:23:00] Speaker 02:
They can comply with some, but not others.

[00:23:01] Speaker 07:
But I think it might if you think of it as the following, basically, under feasibility or under need.

[00:23:09] Speaker 07:
Well, let's take feasibility.

[00:23:11] Speaker 07:
to know whether the new standards are feasible for manufacturers to comply with, you probably need to understand how they relate to all the other standards that California has in place, and in that sense, its whole program.

[00:23:23] Speaker 02:
Does that make sense under- Sure, and I don't think we're here arguing with if the standards interact in some way that affects need or feasibility.

[00:23:32] Speaker 02:
Like, look, it's not just what this standard does.

[00:23:35] Speaker 02:
You have to understand how it operates with some other to produce a combined effect.

[00:23:40] Speaker 02:
That would be different.

[00:23:42] Speaker 02:
They're taking a much stronger version of the argument, which is what they need to prevail, Judge Garcia, which is once they say that they need any standard, they need the program, and B1B is a blank check.

[00:23:54] Speaker 02:
California can dump in anything, and you always get the same answer.

[00:23:57] Speaker 02:
As long as there's smog in Los Angeles, the administrator will always, under B1B, say thumbs up.

[00:24:02] Speaker 02:
And I don't think on compliance, it would be sort of sensible to say, well,

[00:24:07] Speaker 02:
the manufacturers can comply with some but not others, they can comply with the whole program.

[00:24:11] Speaker 02:
And there's this footnote 10 in the government's brief where it seemed, I don't really know what the government means, but they seem to be saying that sometimes they've done a whole program under C and sometimes they haven't.

[00:24:22] Speaker 02:
But the last time the agency addressed this, and this is a page 525 of the JA, the EPA said, we don't do whole program under C because it wouldn't make sense.

[00:24:31] Speaker 02:
We look at whether manufacturers can comply with individual standards, same thing for need.

[00:24:35] Speaker 07:
Understood, thank you.

[00:24:36] Speaker 07:
And with the indulgence of my colleagues, I do have some threshold questions about jurisdiction.

[00:24:41] Speaker 07:
And so the first is just your petition in the waiver concerned model years 22 to 25.

[00:24:48] Speaker 07:
Is the petition now moot as to model years 22 and 23 just as a technical matter, those vehicles have been rolled out?

[00:24:55] Speaker 07:
Is that the right way to think about it?

[00:24:57] Speaker 02:
not sure judge Garcia because I think you would the mootness is for the claim and the claim is made against all the model years so I think the claim isn't moot whether whether we care enough fair enough so whether we could obtain relief for those model years I nobody has challenged that I'm honestly not sure okay so I think if we're thinking about standing

[00:25:18] Speaker 07:
and in particular redressability, at least the way to think about that is to focus on model years 24 and 25, because that's still what's in the future and plausibly affected.

[00:25:28] Speaker 02:
I mean, at a minimum, Judge Garcia, no one on the other side of the case, and they've made every argument I think they could, no one has said we cannot get effective relief

[00:25:39] Speaker 02:
through the end of the application of this waiver.

[00:25:41] Speaker 07:
No one is here sort of saying... That's respectfully not accurate.

[00:25:45] Speaker 07:
The states on page 15 of their brief make an argument that you haven't demonstrated redressability.

[00:25:51] Speaker 02:
I took the states to be challenging our Article 3 standing on harm grounds.

[00:25:56] Speaker 02:
Maybe they do also say something about redressability, but I think it is clear that we could get relief for the later model years under the rule.

[00:26:03] Speaker 07:
So let me ask the question then, because I think in the Chamber of Commerce case, which was a generally similar situation, the court addressed redressability and said there was no evidence that if the waiver were vacated, manufacturers would proceed on a different course more favorable to petitioners.

[00:26:23] Speaker 07:
And here we have statements from several of these manufacturers, not all of them, but many manufacturers saying they would not change their electrification plans.

[00:26:32] Speaker 07:
And we have a lot of evidence that in this industry, pricing and production plans are made years in advance.

[00:26:39] Speaker 07:
So the question is, what is the evidence in this record that any manufacturer would change its fleet

[00:26:49] Speaker 07:
in model years 24 and 25, if we were to rule in your favor?

[00:26:53] Speaker 02:
So I think the two things I'd point you to, Judge Garcia, the first is in page 477 of the Joint Appendix.

[00:27:00] Speaker 02:
Toyota said, and Toyota is not among the automakers coming in in this case, Toyota said it had designed around the withdrawal, strongly suggesting that it wanted the withdrawal of the waiver to stay in place because it had made decisions based on that.

[00:27:18] Speaker 02:
And the industry brief, I think, confirms this at page 17, because what they say is they, those automakers, the ones that filed the brief, have made investments in electrification in order to meet California standards.

[00:27:31] Speaker 02:
And they say they are worried that if the waiver is withdrawn, they'll be at a competitive disadvantage vis-a-vis their rivals.

[00:27:38] Speaker 07:
I think, so just as to the industry brief,

[00:27:44] Speaker 07:
think in context that particular statement is talking about the program as a whole mitigating competitive disadvantage risks, but probably more to the point, I think it's a little bit of a stretch to read that brief as a whole as supporting redressability.

[00:27:58] Speaker 07:
But the Toyota comment is important and to me it leaves open a question that seems material on redressability, which is lead time.

[00:28:09] Speaker 07:
One of the things that comment says is please don't make this effective until we have, it was about two years to plan ahead and make adjustments.

[00:28:18] Speaker 07:
So that to me leads to a question.

[00:28:21] Speaker 07:
If we rule in your favor, how quickly can manufacturers actually adjust their prices?

[00:28:27] Speaker 07:
And just to add one other thing here, the one direct piece of evidence we have on that, it seems to me, is California's expert on page 97 of their addendum says,

[00:28:38] Speaker 07:
pricing decisions for model years 24 and 25 have likely already been made.

[00:28:42] Speaker 07:
And that was earlier this year.

[00:28:44] Speaker 07:
And so I'm just left with the question of how much time do folks actually need to change their production and pricing plans in a way that would help your clients?

[00:28:55] Speaker 02:
So it seems to me, Judge Garcia, that where we've come in, and we've said we've got clear harm from the rule in an article of three cents,

[00:29:05] Speaker 02:
And we know the rule extends for several years, and we have at least one automaker in the record that has said it made its decisions in reliance on the withdrawal.

[00:29:13] Speaker 02:
It seems to me that government should bear a pretty heavy burden in trying to show

[00:29:18] Speaker 02:
that we somehow can't get any effective relief before the end of this rule.

[00:29:22] Speaker 02:
And if that were true, Judge Garcia, I think it would start to raise a pretty serious capable repetition problem because these are done by sets of model years.

[00:29:31] Speaker 02:
We came right in.

[00:29:32] Speaker 02:
We came to this court as quickly as we could.

[00:29:34] Speaker 02:
The answer now is you can't get effective relief.

[00:29:37] Speaker 02:
It seems to me we're going to be in a

[00:29:39] Speaker 02:
a real bind every time we do this.

[00:29:41] Speaker 07:
I appreciate that that might be the case in this particular case but sort of because of the long-term planning requirements in this industry these are generally set 10 years at a time right the 2013 waiver was for 2015 to 2025 and I'm candidly entirely with you common sense would just dictate that the whole point of this

[00:30:05] Speaker 07:
The rule is to reduce liquid fuel consumption over a 10-year period.

[00:30:08] Speaker 07:
That's certainly going to happen.

[00:30:10] Speaker 07:
But in this particular case, it seems like we're in a unique situation where now, my understanding is some Model Year 25 vehicles might be rolled out in six months or so, next spring.

[00:30:22] Speaker 07:
And it seems very speculative to say that when these manufacturers have produced these fleets,

[00:30:30] Speaker 07:
The fact that we vacate is going to somehow cause them to cannibalize their own sales on electric vehicles and redress this harm.

[00:30:38] Speaker 02:
It's just, Garcia, all of that information is outside the record.

[00:30:41] Speaker 02:
And it seems to me awfully unfair to the petitioners.

[00:30:45] Speaker 02:
I mean, if the government, if the EP wanted to come in and make an argument about redressability and build the record, we could have briefed it and addressed it.

[00:30:53] Speaker 02:
But it seems to me a little.

[00:30:54] Speaker 07:
You've got the burden on standing.

[00:30:56] Speaker 07:
I think going back to Lujan and in our Chamber of Commerce case itself, we say,

[00:31:01] Speaker 07:
we recognize it's more difficult to establish standing, in particular, redressability when it relies on the actions of third parties.

[00:31:08] Speaker 07:
So while I'm am sympathetic, I agree that it's pretty clear that it was your burden to come in with this evidence so that we're not just speculating about the effect of what we're doing here.

[00:31:19] Speaker 02:
So it seems to me, Judge Wilkins, we satisfied the burden.

[00:31:22] Speaker 02:
We came in with a number of, they're in the standing declarations.

[00:31:26] Speaker 02:
Obviously, Judge Garcia, the panels looked at them closely.

[00:31:29] Speaker 02:
saying that this will have an effect on fuel consumption in California in a way that harms all of the petitioners.

[00:31:35] Speaker 02:
And EPA did not fire back in its brief with, no, it won't.

[00:31:40] Speaker 02:
You can't get relief by the end of the model years.

[00:31:42] Speaker 02:
There's no way to get redressable judicial relief.

[00:31:46] Speaker 02:
It's just not in the EPA's brief.

[00:31:47] Speaker 02:
So it seems to me we satisfied our burden of coming forward and saying we would be harmed.

[00:31:52] Speaker 02:
in exactly the way, as Judge Garcia said, that common sense expects.

[00:31:56] Speaker 02:
And if they want to say, no, there is, even though the model years are still open for the rule, and you challenge it as quickly as you could, you can't get any effective relief, and it's somehow still not.

[00:32:06] Speaker 08:
Well, saying that you challenge it as quickly as you could is a little wretched when you didn't challenge it in 2013.

[00:32:13] Speaker 02:
Well, in fairness, Judge Wilkins, the earlier opinion you talked about in Chamber of Commerce in 2011 said we couldn't, because California had a provision that said you were deemed to comply with California standards if you complied with the federal standards.

[00:32:29] Speaker 02:
And you said in Chamber of Commerce that if there are two sets of standards that require you to do something, the second can be an independent barrier to your standing to challenge the first.

[00:32:38] Speaker 02:
It was California stripped the deemed to comply in 2018 and that's why we're here.

[00:32:43] Speaker 02:
California no longer wants to have a standard but say you can be you're deemed to comply with it if you meet what the feds.

[00:32:50] Speaker 02:
California wants standards now that far outstrip what the EPA is doing.

[00:32:54] Speaker 02:
And that created a problem for the industry.

[00:32:57] Speaker 02:
The EPA came in in 2019 and withdrew the waiver.

[00:32:59] Speaker 02:
And as soon as they reinstated in 2022, we filed our petition, which is, I would say, jurisdictionally proper and timely.

[00:33:06] Speaker 02:
We did it as quickly as we could.

[00:33:08] Speaker 02:
And I think the burden, by the way, of the sort of capable of repetition evading review, I think ultimately falls on them.

[00:33:14] Speaker 02:
If they want to say, look, you can't possibly get

[00:33:17] Speaker 02:
relief now but this isn't going to keep happening again and again and again.

[00:33:21] Speaker 02:
I think the government should have be put to the to its proof on it trying to explain why that's true that's never been briefed.

[00:33:26] Speaker 01:
But even if you show injury redressability wouldn't fall on the EPA wouldn't that still be your burden?

[00:33:31] Speaker 02:
There's separate elements of standing to be sure injury traceability and redressability are all distinct but

[00:33:37] Speaker 02:
Because the model years extend into the future, and automakers have said that they planned around the waiver, I think the government would need to come forward with some evidence that they've now planned around the restatement in a way that couldn't be withdrawn by 2025.

[00:33:53] Speaker 02:
And the government's never said anything like that.

[00:33:55] Speaker 02:
There's not one word about that in the briefs before this court, not from the government.

[00:34:01] Speaker 07:
I think, just to put on the table, I believe the only discussion of redressability

[00:34:07] Speaker 07:
At least the only evidence in this case is in the state's addendum.

[00:34:11] Speaker 07:
There's about a five page section of the expert declaration and nobody sought to address that.

[00:34:19] Speaker 07:
But I think what you were saying about basically the Toyota comment and how folks plan based on this, I think sort of reflects my concern here.

[00:34:30] Speaker 07:
What the Toyota comment says is we need about two years to plan.

[00:34:35] Speaker 07:
So for there to be injury,

[00:34:36] Speaker 07:
They have to make those plans and they have to hit the market.

[00:34:40] Speaker 07:
Now for us to come in 18 months after this waiver was granted and vacate, I think the natural inference without any other evidence is you need about two more years to plan and adjust how you're producing vehicles.

[00:34:55] Speaker 07:
And I don't see how we can assume that's gonna happen by model year 25.

[00:34:59] Speaker 07:
That's my concern.

[00:35:00] Speaker 02:
I take the point Judge Garcia, I think between the Toyota comment and between what you have in the state's, or the industry brief,

[00:35:07] Speaker 02:
is a concern that they've made investments in electrification that will be less valuable if the waiver is withdrawn.

[00:35:14] Speaker 02:
I think it is a very fair and reasonable inference that not all automakers are electrifying at the same pace.

[00:35:22] Speaker 02:
We pointed to some evidence of that in our brief, and I think what that all shows is

[00:35:26] Speaker 02:
This is not some sort of monolithic move.

[00:35:29] Speaker 02:
And if you pull back the waiver, there will be real world consequences.

[00:35:33] Speaker 02:
Automakers will make different sets of decisions about how to comply.

[00:35:37] Speaker 02:
And that's all as a result of your judicial relief that you'd be ordering in the case.

[00:35:41] Speaker 02:
So it would redress, at least in part, the petitioner's injuries.

[00:35:45] Speaker 07:
Thank you, counsel.

[00:35:49] Speaker 08:
All right, we'll give you some time on rebuttal.

[00:36:08] Speaker 06:
Can you hear me all right?

[00:36:11] Speaker 08:
Yes, Ms.

[00:36:11] Speaker 08:
Coleman.

[00:36:25] Speaker 06:
Many pieces of paper.

[00:36:37] Speaker 06:
May it please the court, my name is Chloe Coleman on behalf of the United States of America.

[00:36:41] Speaker 06:
With me at council's table are my co-council Eric Hostetler, David Dickinson of the United States Environmental Protection Agency, and Elaine Meckonstock on behalf of the state of California.

[00:36:51] Speaker 06:
I will be responding to fuel petitioners' challenges as just presented.

[00:36:56] Speaker 06:
Mr. Hostetler will be addressing state petitioners' challenges, and Ms.

[00:36:59] Speaker 06:
Meckonstock will be responding to both.

[00:37:02] Speaker 06:
Before I address the flaws in petitioners' interpretation of Section 209 and the factual allegations they've made here, I'd like to address EPA's conclusion that the 2019 waiver withdrawal was procedurally improper, which is a basis for decision that would resolve petitioners' challenges without the need for this court to address Section 209 at all.

[00:37:23] Speaker 06:
As your honors have seen in the briefs, this case comes before the court in a unique posture.

[00:37:27] Speaker 06:
EPA granted a preemption waiver to the state of California in 2013 under a Clean Air Act provision that preserves California's authority to set vehicle standards for in-state vehicles.

[00:37:38] Speaker 06:
That waiver was not challenged within the period for judicial review, and it remained in force uncontested for another six years.

[00:37:46] Speaker 06:
That changed in 2019 when EPA reopened the waiver adjudication and attempted to withdraw the portions of the waiver applicable to California's tailpipe greenhouse gas standards

[00:37:56] Speaker 06:
and California's regulatory program for zero emission vehicles.

[00:38:00] Speaker 06:
But EPA's 2019 attempt to reopen a six-year-old adjudication was procedurally improper because it crossed a red line in administrative law.

[00:38:10] Speaker 06:
It failed to address the reliance interest that had accrued since the waivers grant, both within the regulated community of automakers who have joined this case in support of EPA.

[00:38:20] Speaker 06:
and in California and other states that lawfully relied upon California's program of vehicle standards to advance air quality goals and comply with other specific obligations in the Clean Air Act.

[00:38:32] Speaker 07:
The Supreme Court explained in Department of... Council, can I ask, before we get to the reliance aspect of this, EPA in the order itself,

[00:38:42] Speaker 07:
pretty clearly advanced the position that the waiver withdrawal was improper because it was not based on new facts and instead was based on new legal interpretations.

[00:38:54] Speaker 07:
The petitioners say you've disclaimed that argument on appeal.

[00:38:58] Speaker 07:
Is that correct?

[00:39:00] Speaker 07:
Are you relying on that ground or just the reliance?

[00:39:02] Speaker 06:
Your Honor, we don't think you need to reach that ground at all.

[00:39:05] Speaker 06:
Because regardless of what the scope of the agency's reconsideration authority is, frankly, regardless of the legal interpretations it took in that reconsideration, it was not empowered to jump over alliance interests.

[00:39:16] Speaker 06:
And so we recognize there's a lot of dispute in the case law about agency reconsideration authority.

[00:39:22] Speaker 06:
And so we've asked this court to take the easiest flaw here and use that as we think a separate basis.

[00:39:28] Speaker 07:
That sounds like you are not asking us to rule.

[00:39:31] Speaker 07:
that EPA's inherent reconsideration authority is in fact limited to the discovery of new facts.

[00:39:38] Speaker 06:
No, Your Honor, we don't think you need to rule that to resolve this case.

[00:39:41] Speaker 06:
It's simply not necessary because long before you get to questions about the outer limits of the reconsideration authority, you run up against the regent's case.

[00:39:49] Speaker 06:
the Supreme Court case from 2020, which says that you cannot ignore serious reliance interests engendered by a prior agency policy.

[00:39:57] Speaker 06:
And if you look at what happened in 2019, there were six years in which both states and industry invested quite a bit of money, did quite a bit of long-term Clean Air Act planning on the basis of the waiver that was granted.

[00:40:11] Speaker 06:
And so the 2019 withdrawal really just said, we don't wanna deal with that.

[00:40:17] Speaker 06:
We'd like to skip over that and say that we're interested in these other statutory interpretations.

[00:40:22] Speaker 06:
You just can't do that.

[00:40:23] Speaker 06:
And so the question of reconsideration authority is undoubtedly something this court will deal with in other cases.

[00:40:29] Speaker 06:
It just doesn't need to do that here.

[00:40:33] Speaker 06:
If I may, Your Honor, I'll turn a little bit to the merits, but I want to address the statutory interpretation first, because Mr. Wall has spent a great deal of time talking about the underlying factual determinations with respect to greenhouse gases.

[00:40:47] Speaker 06:
But you'll only reach that question if you believe that petitioner's statutory interpretation of 209 is plausible.

[00:40:54] Speaker 06:
And we think the statutory interpretation advanced by petitioners in the 2019 withdrawal decision was contrary to the plain text of Clean Air Act Section 209B,

[00:41:03] Speaker 06:
and to more than 50 years of EPA practice.

[00:41:06] Speaker 06:
So EPA appropriately corrected itself here.

[00:41:11] Speaker 06:
Petitioners are venturing several different lines of attack in their brief on the plain text.

[00:41:15] Speaker 06:
But we think the heart of the interpretive question is relatively simple.

[00:41:19] Speaker 06:
The umbrella text in 209B1 states that EPA must grant a waiver to the state of California if the state determines that its vehicle emission standards in the aggregate are at least as protective as the federal standards.

[00:41:33] Speaker 06:
And the text then states that EPA can only reject a waiver under one of three specified criteria, second of which B1B is at issue here.

[00:41:41] Speaker 06:
And it states that EPA cannot grant the waiver if California does not need such state standards to meet compelling and extraordinary conditions.

[00:41:49] Speaker 06:
The phrase such state standards creates only one interpretive possibility because such state standards has only one possible antecedent, which is the vehicle standards previously referenced in 209B1, which is to say California's vehicle standards in the aggregate.

[00:42:07] Speaker 06:
This is what's known as the traditional interpretation or whole program review.

[00:42:10] Speaker 06:
And it allows EPA to reject a waiver under the second waiver criterion only where EPA can determine that California no longer needs a separate program of vehicle standards to address compelling and extraordinary conditions.

[00:42:23] Speaker 06:
And I would note that petitioners have no actual answer to the plain meaning of this text.

[00:42:28] Speaker 06:
The reply brief does not contain a single word addressing the grammatical effect of the word such in such state standards.

[00:42:35] Speaker 06:
We think the briefs show definitively that there's no construction of the plain text of the second waiver criterion that yields the result petitioners want, which is a standard specific review process that would require EPA to ask whether each individual standard California has proposed is necessary to meet compelling and extraordinary conditions.

[00:42:55] Speaker 06:
As Judge Darcy.

[00:42:55] Speaker 07:
Could you address the argument that one oddity with your approach is that B1B seemed to have very little meaning.

[00:43:04] Speaker 07:
You have a meaning, but as I understand it, the question basically has nothing to do with the particular standards that California comes forward with.

[00:43:15] Speaker 07:
And instead you just ask the abstract question about whether California still has air pollution problems that need to be addressed.

[00:43:25] Speaker 07:
Do I understand how you think the prong works?

[00:43:29] Speaker 07:
And then what do you say about this concern that that seems like a very small role to be playing?

[00:43:35] Speaker 06:
You're correct, Your Honor, that our interpretation of B1B is that so long as California needs its program as a whole, then B1B is satisfied.

[00:43:45] Speaker 06:
I think it's difficult for all of us sitting here today looking back and saying, well, California is never going to resolve its smog pollution.

[00:43:51] Speaker 06:
This is going to sort of exist in perpetuity.

[00:43:54] Speaker 06:
How can that be a reasonable constraint?

[00:43:56] Speaker 06:
I think we have to put ourselves in the shoes of Congress in 1967, which was creating essentially a legislative compromise.

[00:44:03] Speaker 06:
You know, it had, at the time that it adopted the preemption provision, federal standards, the federal standards program was getting on its feet, but states were empowered, all 51, including the District of Columbia, were empowered to have their own separate standards.

[00:44:17] Speaker 06:
And that became a real concern for the automotive industry to have 51 separate programs potentially to comply with.

[00:44:23] Speaker 06:
And so Congress sat down and said, OK, what is a reasonable compromise here?

[00:44:27] Speaker 06:
We don't want to go all the way to full federal preemption.

[00:44:30] Speaker 06:
And we don't want to do that because California already has a highly effective program.

[00:44:34] Speaker 06:
And in addition to the fact that California has these unusual pollutant conditions, it's also been sort of a valuable testing ground

[00:44:43] Speaker 06:
for new kinds of technology.

[00:44:45] Speaker 06:
And the Senate reports specifically said that the values behind this legislative compromise were both that it had these conditions to deal with, but also that this would allow for the advancement of new technologies without burdening the entire nation

[00:45:02] Speaker 06:
costs of that.

[00:45:03] Speaker 06:
So if you're coming into this situation and trying to say, well, what are the legislative terms of this compromise?

[00:45:09] Speaker 06:
That's where you get the three waiver criteria.

[00:45:11] Speaker 06:
The first is ensuring, of course, that California doesn't end up with worse air quality than what the federal standards would provide.

[00:45:17] Speaker 06:
The third is obviously making sure that automakers have a feasible program, not being asked to have a feasible.

[00:45:23] Speaker 06:
And what the second asks is, are we still in the world in which we need this dual system, where we need a California car that can sort of advance

[00:45:31] Speaker 06:
policies and take risks that the federal program is not going to?

[00:45:35] Speaker 06:
Or are we sort of at the point where there's no longer a distinction between California and other states, and we simply don't need a vehicle program?

[00:45:43] Speaker 08:
Here's why I have a problem with looking at it that way.

[00:45:47] Speaker 08:
I mean, I could say that I need to have a nutritious meal in order to sustain myself.

[00:45:57] Speaker 08:
Every meal, I'm going to have some protein and some vegetables and some fruits and a dozen donuts for dessert.

[00:46:09] Speaker 08:
I think that the doctor, my doctor, would say, yeah, you need the meal, but you don't need the dozen donuts at every meal.

[00:46:24] Speaker 08:
And what you seem to be saying is that EPA can just kind of like ignore the California plan that has a dozen doughnuts in it.

[00:46:37] Speaker 08:
Because, you know, in the aggregate, you know, the meal, you know, sustains itself.

[00:46:46] Speaker 08:
That doesn't make any sense.

[00:46:48] Speaker 06:
Well, Your Honor, I think the first answer to that is it's this court's obligation to apply the plain text.

[00:46:52] Speaker 06:
We do not think petitioners

[00:46:54] Speaker 06:
advanced to plain text meaning that would actually provide for standard specific review.

[00:46:58] Speaker 06:
But I think it's important to recognize here that this isn't a circumstance in which California then gets to do whatever it wants.

[00:47:05] Speaker 06:
This is a preemption provision and a preemption waiver.

[00:47:08] Speaker 06:
And so it's essentially asking EPA to judge whether California needs a separate program and then to take federal hands off that program.

[00:47:16] Speaker 06:
That doesn't mean that the state program is not subject to other constraints.

[00:47:20] Speaker 06:
As with any state acting under its sovereign authority, it's going to be subject to

[00:47:24] Speaker 06:
You know, state courts, it's going to be subject to state voters.

[00:47:26] Speaker 06:
There are a lot of things that still move in as a check and balance against what California is doing.

[00:47:32] Speaker 06:
But Congress.

[00:47:32] Speaker 08:
But there's no other federal check or balance.

[00:47:37] Speaker 08:
Once that determination is made, then in the aggregate, it's at least as protected.

[00:47:43] Speaker 06:
Well, there are still the other two criteria.

[00:47:45] Speaker 06:
And the feasibility criteria in particular would take care of a circumstance in which

[00:47:49] Speaker 06:
you know, California is doing something that's, you know, blatantly outrageous, right?

[00:47:53] Speaker 06:
I mean, you know, it doesn't, it doesn't constrain every exercise of California's discretion to the extent that California is putting forward feasible standards, but certainly some of the sort of parade of horribles of what might get through this waiver are gonna be resolved by B1C.

[00:48:06] Speaker 06:
But, but you're right.

[00:48:07] Speaker 07:
I mean- Council, doesn't that answer suggest that under C, you don't take a whole program approach?

[00:48:13] Speaker 07:
No.

[00:48:15] Speaker 07:
As I take it, one of their responses on the text, as you referenced, is that B and C both refer to such state standards.

[00:48:21] Speaker 07:
And they say you've always taken a standard by standard approach to feasibility under C. And there's some common sense appeal to that, which is,

[00:48:32] Speaker 07:
at least in the sense to know whether the program is feasible, you've got to look at each of the individual standards.

[00:48:37] Speaker 07:
Whereas your position on B is that you don't need to look at each individual standard when assessing need.

[00:48:44] Speaker 07:
So how do I, maybe to, in what sense is the analysis under C a whole program approach?

[00:48:53] Speaker 06:
Well, I want to clarify that it has always been EPA's position with the exception of the 2019 waiver withdrawal that C requires whole program review.

[00:49:01] Speaker 06:
And I want to address the meaning of the word feasibility, because I don't think it's true that a program can be feasible if one piece of it is not.

[00:49:09] Speaker 06:
And that's why you're looking at each individual standard.

[00:49:11] Speaker 06:
You have to ask the question of, is this individual standard?

[00:49:14] Speaker 06:
If any link in the chain is infeasible, you would say that the program is infeasible.

[00:49:18] Speaker 06:
But you can't look at V1C through standard specific review precisely because these are integrated machines.

[00:49:25] Speaker 06:
So if you're only asking the question, is this standard feasible, you're missing whether or not accomplishing that standard would be infeasible relative to other things that are also required from the same

[00:49:36] Speaker 06:
you know, vehicle and the same automakers.

[00:49:38] Speaker 06:
And so I would point your honors to the record at 87, Federag, 14, 361, and note 266, which is where you had vehicle manufacturers coming in and saying, oh, no, no, no, no.

[00:49:49] Speaker 06:
C cannot be standard specific review because what if we get into a circumstance where, for example, we can't comply with a stringent NOx standard and a stringent carbon monoxide standard?

[00:49:59] Speaker 07:
So this is where I get a little bit mixed up because I don't know what makes that standard by standard or whole program.

[00:50:06] Speaker 07:
Right, so what you're saying is obviously you have to look at every standard.

[00:50:10] Speaker 07:
You can do that by reference to the whole program.

[00:50:13] Speaker 07:
I could say the same thing about B. When you come in with a less stringent standard under B, we look at each one.

[00:50:20] Speaker 07:
Maybe the reason you need that less stringent standard is by reference to the rest of the program.

[00:50:26] Speaker 07:
But you're still looking at each standard to decide whether you need it.

[00:50:30] Speaker 07:
Does that make sense?

[00:50:31] Speaker 06:
I think need and feasibility work differently in that respect.

[00:50:35] Speaker 06:
I think if you're asking, is it feasible for me to buy a new vehicle, you need to make sure that every link in that chain is feasible.

[00:50:42] Speaker 06:
If you're asking, do I need to buy a new vehicle, you can't say, well, you don't need a new radio, so you must not need a new vehicle.

[00:50:48] Speaker 06:
There are ways in which these terms, I think, just apply differently.

[00:50:52] Speaker 06:
And ultimately, C is a program, a wide review.

[00:50:55] Speaker 06:
Now, it may be that you don't have to review the whole program.

[00:50:58] Speaker 06:
You look at the one standard, you say, oh boy, that's not gonna be feasible.

[00:51:01] Speaker 06:
There's no way we can find that the whole program is gonna be feasible.

[00:51:05] Speaker 06:
But the end of the analysis is always gonna be whole program.

[00:51:08] Speaker 06:
And that's simply just sort of not how need works.

[00:51:10] Speaker 06:
I don't think you can say California doesn't need this program because it doesn't need one individual standard.

[00:51:15] Speaker 06:
Now, of course, our brief has quite a bit of factual material as to why we think that's actually sort of

[00:51:21] Speaker 06:
not true, but petitioners have painted that factual material as a rearguard action here.

[00:51:26] Speaker 06:
And I think that reflects the fact that we have several additional bases before you even get to applying their interpretation of the statute.

[00:51:34] Speaker 08:
But isn't the assessment of whether something is as protective?

[00:51:38] Speaker 08:
I mean, I guess that's why it was kind of used, maybe it wasn't the best hypo for the bill.

[00:51:47] Speaker 08:
assessment of whether something is as protective is different than, a different type of assessment than whether something is needed.

[00:51:56] Speaker 08:
So you can say that, like, as a whole, you know, to go back to my meal hypo, it's at least as nutritious, whatever, as the federal or the typical meal.

[00:52:14] Speaker 08:
it may be that individual components of it are different.

[00:52:20] Speaker 08:
And that's why you have, I think, B2, right?

[00:52:25] Speaker 08:
B2 that wouldn't make sense if all of the individual components were always at least as stringent as the federal standards, right?

[00:52:39] Speaker 08:
You agree with that?

[00:52:40] Speaker 06:
Your Honor, I think there are two important things to keep in mind.

[00:52:43] Speaker 06:
One is what Judge Garcia has already

[00:52:44] Speaker 06:
asked about, which is how would the aggregate protectiveness test and B1B line up if you were going to bump out a standard that was not independently needed to address pollution challenges, right?

[00:52:56] Speaker 06:
I mean, that's the carbon monoxide example.

[00:52:59] Speaker 06:
It's exactly what Congress was dealing with in 1977 when it said, we know that you're not going to be able to meet the most stringent CO2 standards possible, the federal CO2 standards.

[00:53:11] Speaker 06:
We know that you can't do that and do the NOx standard simultaneously.

[00:53:14] Speaker 06:
If you were to really follow through on what petitioners are asking this court to do, you get into a circumstance where now you have a B1B analysis that says, is your CO standard required to meet compelling and extraordinary conditions?

[00:53:27] Speaker 06:
California is not gonna be able to say that because it is in fact loosening the emission standards for carbon monoxide.

[00:53:34] Speaker 06:
And that is yet another indicia that the same language here.

[00:53:36] Speaker 08:
See, I just don't agree.

[00:53:37] Speaker 08:
I don't think I agree with that way of looking at it because, you know, you can have some flexibility when you consider what does need mean.

[00:53:55] Speaker 06:
Well, I'll do respect, Your Honor.

[00:53:55] Speaker 06:
I'm not sure where that flexibility is coming from.

[00:53:57] Speaker 06:
The indicia we have are plain language says such state standards.

[00:54:02] Speaker 06:
And then we have a wealth of legislative history that is talking here about how Congress intended California to have the broadest discretion possible.

[00:54:10] Speaker 06:
And both in the 1967 promulgation and the 1977 amendments, and the ratification again in 1990, and the provisions that it has adopted in 42 USC

[00:54:22] Speaker 06:
7586 and 13212, which are places where Congress has continued to build on this framework on the assumption that California is, in fact, sort of exercising full program authority over this second vehicle.

[00:54:38] Speaker 06:
And I do want to just answer one other thing about B1B, and perhaps this is helpful, which is the phrasing of B1B is not that EPA has to find a need.

[00:54:46] Speaker 06:
It has to find that California does not need these standards.

[00:54:51] Speaker 06:
And I think that actually does some work here because what it's saying is we can't just say that California doesn't need this individual standard because we know such state standards refers to the standards in the aggregate.

[00:55:02] Speaker 06:
then the question is whether California does not need its program.

[00:55:06] Speaker 06:
And in a circumstance where you have 20 donuts, you still need that meal.

[00:55:10] Speaker 06:
If the phrasing is sort of do you need or do you not need, I think that really does affect the way the need test works here.

[00:55:17] Speaker 06:
And I would remind the court that we've been doing this uncontested for more than 50 years.

[00:55:22] Speaker 06:
California's regulations of ZEVs and greenhouse gases are not themselves new either.

[00:55:27] Speaker 06:
The greenhouse gas program dates back 15 years,

[00:55:30] Speaker 06:
The ZEV program dates back 30 years.

[00:55:32] Speaker 08:
But don't you make the point in your brief that yeah we have this you know the statute can be we think that the statute means that kind of whole program you don't look at any individual aspects but EPA did look at the individual aspects anyway and that that's the way that EPA normally operates.

[00:55:55] Speaker 08:
Isn't that what you argue in your brief?

[00:55:57] Speaker 06:
No, Your Honor, I mean, we do an alternative analysis because we know we're likely to be coming into litigation.

[00:56:02] Speaker 06:
And it's helpful to explain to a court and to our opponents that even if you walk all the way through the analysis they would prefer, we don't see a reason to do anything differently here.

[00:56:12] Speaker 06:
So I don't think the fact that we sort of in the alternative apply a standard specific review does anything other than shore up the agency's basis.

[00:56:20] Speaker 06:
But the traditional interpretation has been in place since 1967.

[00:56:24] Speaker 06:
There's a federal register notice from 1984 where EPA speaks at length about why the needs analysis is a whole program review and not a standard specific review.

[00:56:33] Speaker 06:
And that comes out of the legislative history.

[00:56:35] Speaker 06:
It comes out of the text.

[00:56:36] Speaker 06:
And Your Honor, this court in the MEMA 1 and MEMA 2 case has already spoken at length about the congressional purpose here.

[00:56:43] Speaker 06:
we don't think there is room to sort of identify a new congressional purpose with respect to B1B.

[00:56:49] Speaker 06:
There's quite a bit of precedent talking about what Congress was trying to do in this area.

[00:56:53] Speaker 06:
And that may not be with respect to the traditional interpretation under 209B1B specifically, but it certainly guides this court in thinking about what it was that Congress was seeking to accomplish and what reading of the text would do that.

[00:57:06] Speaker 08:
Before I forget, because I think I forgot to ask this question of Mr. Wall,

[00:57:11] Speaker 08:
Is there, in your view, any reason for us to wait to decide our case until we have the disposition of the cases argued yesterday?

[00:57:25] Speaker 06:
No, Your Honor, I don't think that's necessary.

[00:57:27] Speaker 06:
You know, the EPA standards here at issue are obviously

[00:57:32] Speaker 06:
you know, relevant to the waiver in the sense that California standards get measured against those in the aggregate protectiveness test, but that's obviously already happened with respect to sort of a comparison in 2013 when the waiver was granted.

[00:57:44] Speaker 06:
I don't see any reason why the authority that EPA has is gonna affect what California can do with its police power once it receives a preemption waiver.

[00:57:53] Speaker 06:
And I think that's sort of the most important thing to remember here, which is, you know, EPA is not in the position, it was not asked by Congress

[00:58:00] Speaker 06:
to assess the wisdom of California's policy.

[00:58:04] Speaker 06:
Congress said that outright in the legislative history, that EPA was intended to give the widest deference, the broadest discretion to California.

[00:58:13] Speaker 06:
And so regardless of what's happening on the federal side, the structure of 209B1B and 209 in general is to give California the opportunity to continue the program it already had before the federal program was enacted, and to give it an opportunity to be a laboratory for innovation.

[00:58:29] Speaker 06:
That was this court's word.

[00:58:30] Speaker 06:
a laboratory for innovation with respect to vehicle standards.

[00:58:35] Speaker 08:
Another procedural question.

[00:58:41] Speaker 08:
There are some points in the EPA brief where it appears that the EPA is relying upon a factual finding

[00:58:51] Speaker 08:
in a prior rulemaking proceeding.

[00:58:55] Speaker 08:
You know, you refer back to some fact that EPA found in 2009 or 2013 or whatever, 1984.

[00:59:06] Speaker 08:
Is it appropriate for us to consider any of those if they were not explicitly adopted

[00:59:19] Speaker 08:
in the restoration decision in 2022.

[00:59:22] Speaker 08:
I guess I'm just trying to understand what, if any, relevance do prior factual findings of EPA have?

[00:59:32] Speaker 08:
Factual findings, not statutory interpretation.

[00:59:35] Speaker 06:
Your Honor, I think EPA has been very good about adopting by reference its previous determination.

[00:59:40] Speaker 06:
So I do think that the rulemaking documents here incorporate where appropriate the factual determinations and do so explicitly.

[00:59:47] Speaker 06:
So the 2009 decision spoke a great deal about greenhouse gases.

[00:59:51] Speaker 06:
The 2013 decision talks about that, and I think pulls that indirectly.

[00:59:55] Speaker 06:
With respect to the 2013 versus 2019 factual determinations here, we are not in a circumstance where the 2022 decision was granting a waiver.

[01:00:05] Speaker 06:
It was not reviewing the waiver anew.

[01:00:07] Speaker 06:
It was reviewing a 2019 attempt to withdraw a settled adjudication.

[01:00:12] Speaker 06:
And so the factual findings here that are relevant are, in particular, those in the 2013 waiver, because that's the waiver grant.

[01:00:19] Speaker 06:
And so I do think it's very appropriate for this court to look back and ask what those factual findings were.

[01:00:23] Speaker 06:
The 2022 decision talks a great deal about why the 2019 decision was not actually barely reckoning

[01:00:30] Speaker 06:
with those factual determinations, and of course, in doing so, expresses the agency's opinion again about several of these factual issues.

[01:00:38] Speaker 06:
But 2022 is not a new waiver grant.

[01:00:41] Speaker 06:
It's merely sort of addressing an administrative complication posed by 2019.

[01:00:47] Speaker 08:
So how are we to consider these arguments made by your friends on the other side that, well, there were factual findings that were made in 2019 that weren't disturbed,

[01:01:00] Speaker 08:
in the 2022 restoration decision.

[01:01:03] Speaker 08:
So those factual findings are the ones that are operative for the purposes of our review.

[01:01:13] Speaker 06:
Well, I think the answer to that is multi-fold.

[01:01:15] Speaker 06:
I mean, in some instances, I do not think petitioners are fairly characterizing the record about what the 2022 decision actually said about those same factual findings.

[01:01:23] Speaker 06:
And so in many circumstances with respect to, for example, whether or not

[01:01:27] Speaker 06:
You know, ZEVs are going to reduce criteria pollutants.

[01:01:29] Speaker 06:
That's something that's very clear in the 2013 record.

[01:01:31] Speaker 06:
It's something that's very clear in the 2022 record.

[01:01:34] Speaker 06:
You know, we're in a circumstance where we have zero emission vehicles.

[01:01:37] Speaker 06:
They have no on-road emissions, or rather no tailpipe emissions of any pollutant that clearly includes criteria pollutants.

[01:01:44] Speaker 06:
And there's a great deal in our brief about why it is that the singular statement that petitioners are relying on is really not reflective of the record as a whole.

[01:01:51] Speaker 06:
So there are circumstances in which I think

[01:01:53] Speaker 06:
My colleague has merely misrepresented what is there.

[01:01:55] Speaker 06:
But many of the things they're relying on factually depend on buying into their legal interpretation.

[01:02:02] Speaker 06:
So, you know, with respect to sort of this issue about whether greenhouse gases are going to reduce temperature, you know, we're not here standing up suggesting that the California standards are going to reduce, you know, global temperature by one degree Celsius, right?

[01:02:14] Speaker 06:
I mean, these are a part of a much bigger problem.

[01:02:17] Speaker 06:
But we think legally that that's not a barrier to what's happening here, because the Supreme Court already described in Massey EPA that the regulation

[01:02:25] Speaker 06:
greenhouse gas emissions from vehicles is appropriate, even if you're in a circumstance where it is an incremental step, these would be a much larger global problem.

[01:02:33] Speaker 06:
So that's a circumstance where we just don't think the factual material that petitioners are citing is relevant.

[01:02:39] Speaker 06:
And of course, we don't even get to that question if the court sort of agrees with us that 209B does not actually require a standard-specific review of every standard that California adopts.

[01:02:53] Speaker 07:
Briefly on the major questions doctrine, the main argument, maybe the only argument in your brief, was that the doctrine just shouldn't apply because this is about preserving state authority.

[01:03:02] Speaker 07:
If we put that argument aside, do you believe or do you have an argument that this is not the type of question of vast economic and political significance in the way the Supreme Court's cases have framed that?

[01:03:17] Speaker 06:
Yes, Your Honor, and I do believe that is in our brief as well.

[01:03:19] Speaker 06:
This is a circumstance in which EPA is not adopting a new interpretation

[01:03:24] Speaker 06:
of the statute that would transform it into a fundamentally different regulatory regime.

[01:03:29] Speaker 06:
It's not an unheralded authority.

[01:03:30] Speaker 06:
It's not a long-extant statute.

[01:03:32] Speaker 06:
This is EPA following through on an interpretation it's had for more than 50 years.

[01:03:37] Speaker 06:
And even with respect to these particular standards, California is exercising the same scope of authority it's always had.

[01:03:44] Speaker 06:
It has always had the authority to regulate a second vehicle.

[01:03:47] Speaker 06:
And what standards it actually puts on that vehicle don't actually

[01:03:51] Speaker 06:
affect the scope of its authority.

[01:03:53] Speaker 06:
It is still sort of mandating a California car for California consumers in California.

[01:04:00] Speaker 06:
And so I think when we're looking at whether or not this is a major question, we're sort of failing at every test.

[01:04:06] Speaker 06:
As we say, I think the doctrine really shouldn't apply here where you're talking about, was EPA sort of appropriate in exercising the least possible authority as a federal agency?

[01:04:15] Speaker 06:
I think that's a very strange match with the major questions doctrine to begin with.

[01:04:19] Speaker 06:
But even looking at the sort of consequences here, California has been pushing ZEV penetration since 1990.

[01:04:25] Speaker 06:
It's in this set of regulations.

[01:04:28] Speaker 06:
10% to about 15% of penetration.

[01:04:31] Speaker 06:
These are all sort of incremental kinds of changes that I don't think the major questions doctrine speaks to at all.

[01:04:37] Speaker 06:
And in a circumstance where we have very clear statutory task text, congressional indicia, history, there's very little reason, I think, to apply the major questions doctrine.

[01:04:51] Speaker 06:
If Your Honors have no other questions, I would just close by reminding you that at every possible opportunity, Congress has affirmed that it intended 209b to afford California the broadest possible discretion to regulate vehicle emissions and to continue the state's experiments in the field of emission control to the benefit of the nation.

[01:05:08] Speaker 06:
EPA has abided by that principle for half a century.

[01:05:10] Speaker 06:
This Court has repeatedly affirmed it.

[01:05:13] Speaker 06:
And so the 2019 withdrawal of the 2013 waiver was a procedurally and substantively improper deviation from the text, history, and precedent governing Section 209.

[01:05:22] Speaker 06:
For those reasons, field petitioners' challenges should be denied.

[01:05:25] Speaker 01:
Just one other thing.

[01:05:26] Speaker 01:
Can you think of other examples where the Congress has allowed other states to essentially regulate a global issue?

[01:05:35] Speaker 06:
Well, Your Honor, I mean, there are a number of circumstances in which states are exercising authority with respect to climate change.

[01:05:41] Speaker 06:
I mean, I don't think that's sort of a controversial idea.

[01:05:43] Speaker 06:
States have mandates with respect to their own energy production.

[01:05:47] Speaker 06:
They have carbon pricing schemes.

[01:05:49] Speaker 06:
So in and of itself, those are not unusual, and they're not preempted directly by federal law in most cases.

[01:05:56] Speaker 06:
So having a state lay in this field, I don't think, is particularly strange.

[01:06:01] Speaker 06:
And in a circumstance where Congress was already making the big decision to let California regulate a second car, we don't see an inconsistency in allowing California to do that with respect to new technologies, new pollutants, new ideas, when that was really what Congress was anticipating in the first place.

[01:06:18] Speaker 06:
Thank you.

[01:06:34] Speaker 05:
Can you guys hear me okay?

[01:06:41] Speaker 05:
May it please the court, Elaine Meckonstock, correspondent, intervener, California.

[01:06:44] Speaker 05:
I wanna start, Judge Garcia, with your questions about something.

[01:06:48] Speaker 05:
Commissioners have not advanced any evidence of redressability.

[01:06:52] Speaker 05:
Their declarations refer only to California's analysis that it did in its original making back in 2011 or 2012, which provides no evidence about current market conditions.

[01:07:03] Speaker 05:
And to their point that, and then the Toyota comment, what Toyota was saying, what Toyota was asking of EPA was not to restore the waiver for the years during which the withdrawal had been in effect.

[01:07:17] Speaker 05:
Those years are in the past.

[01:07:18] Speaker 05:
Toyota said nothing.

[01:07:20] Speaker 05:
about its inability to meet California standards in the future model years that we are now dealing with, or indicated that it would not be able to meet them or would change its plans if the restoration decision was vacated?

[01:07:31] Speaker 07:
Well, their argument on standing certainly has pretty strong common sense appeal, right?

[01:07:36] Speaker 07:
The goal of this is to reduce liquid fuel consumption.

[01:07:40] Speaker 07:
If it's not gonna make any difference, why did California and EPA go through all this trouble?

[01:07:46] Speaker 07:
and by the same token, wouldn't vacating it reverse that effect?

[01:07:50] Speaker 07:
I mean, why isn't that the simple open and shut way to think about this?

[01:07:54] Speaker 05:
Well, so two points, Your Honor.

[01:07:55] Speaker 05:
And first, this is a threshold matter.

[01:07:57] Speaker 05:
The point of these standards is to reduce emissions, not reduce fuel consumption directly.

[01:08:01] Speaker 05:
The second thing I want to say is that when EPA looked at California's need for these standards under petitioners' interpretation of single standard review, it was looking at the entire model year period from 2017

[01:08:15] Speaker 05:
2025, because that's what it had looked at in 2013 and what it had withdrawn in 2019.

[01:08:21] Speaker 05:
So when we get to the restoration, it's looking at the same time period.

[01:08:25] Speaker 05:
Almost all of that time period is in the past.

[01:08:28] Speaker 05:
So essentially where we are now is the standards have had the effect, and they've actually had more effect than California wanted them to have.

[01:08:34] Speaker 05:
And we now are at the point where we have one model year left, and manufacturers are selling more clean vehicles in California than the standards require, and they're selling them at price

[01:08:45] Speaker 05:
And so petitioners need to provide some evidence that the manufacturers will stop selling these cars that consumers want and are buying beyond their legal obligations and are paying price premiums for.

[01:08:57] Speaker 05:
And I just don't think the evidence is there.

[01:08:59] Speaker 05:
And we're in this place, this temporal distinction between the standing inquiry and the need inquiry under petitioners' single standard review because of the odd procedural history here, because the waiver was granted in 2013,

[01:09:13] Speaker 05:
It was in effect for six years before it was withdrawn.

[01:09:15] Speaker 05:
That withdrawal was immediately challenged, so the automakers continued to plan to comply with it with the original waiver.

[01:09:23] Speaker 05:
And now here we are 10 years after the fact, and there just isn't any time left for them.

[01:09:29] Speaker 05:
And beyond that, it's their burden to show redress, and they literally didn't put in any evidence about market conditions now that could support the conclusion they need.

[01:09:39] Speaker 05:
And as to their point that they couldn't have challenged

[01:09:41] Speaker 05:
the original waiver in 2013, that's not true.

[01:09:45] Speaker 05:
They rely on the deemed to comply provision, but I think it's important for this court to understand deemed to comply provision only ever applied to the greenhouse gas emission standards.

[01:09:54] Speaker 05:
There's never been a deemed to comply provision in the zero emission vehicle standards.

[01:09:58] Speaker 05:
So they certainly could have challenged as to those.

[01:10:04] Speaker 05:
I wanna turn then to the statutory interpretation and EPA's whole program approach.

[01:10:10] Speaker 05:
And I wanna start at the very beginning of the statute with what it directs EPA to do, which is to waive application of preemption to the state.

[01:10:19] Speaker 05:
Not for particular standards, but to the state.

[01:10:21] Speaker 07:
I'm very sorry.

[01:10:23] Speaker 07:
One more question on standing.

[01:10:24] Speaker ?:
Sure.

[01:10:24] Speaker 07:
In your view, what evidence would they need to show redressability?

[01:10:32] Speaker 07:
Is it some version of that in a certain timeline,

[01:10:38] Speaker 07:
manufacturers would decide to reduce prices on conventional vehicles by model year 25?

[01:10:46] Speaker 05:
So fuels petitioners' arguments are not really about pricing, they're just about sales.

[01:10:51] Speaker 05:
So they would need evidence that manufacturers are gonna change their product lines and sell different vehicles in model year 2025, which starts as early as January 1st of next year.

[01:11:01] Speaker 07:
I think their injuries are redressed if more people buy gas-powered cars.

[01:11:07] Speaker 07:
And one way to do that would be to reduce the price on it, right?

[01:11:11] Speaker 05:
I suppose that manufacturers could do that.

[01:11:13] Speaker 05:
I was just trying to distinguish between the price injury that state petitioners assert.

[01:11:17] Speaker 07:
I appreciate that.

[01:11:18] Speaker 07:
Sorry, go ahead.

[01:11:18] Speaker 05:
No problem.

[01:11:19] Speaker 05:
All I'm saying is I think they would need some evidence establishing a substantial probability that automakers would stop selling the clean vehicles that consumers in California are demanding at levels above what the standards require.

[01:11:35] Speaker 05:
and that consumers are paying price premiums for.

[01:11:37] Speaker 05:
In other words, manufacturers are currently making the cars people want and people are willing to pay a lot for them.

[01:11:44] Speaker 05:
So I think they need a lot of evidence to show that manufacturers are gonna stop doing that.

[01:11:48] Speaker 07:
Thank you, please proceed to the statutory points.

[01:11:51] Speaker 05:
So as I was saying, the waiver provision directs EPA to waive application of preemption to the state, not for particular standards.

[01:12:00] Speaker 05:
And if Congress had intended the waiver to be standard specific,

[01:12:03] Speaker 05:
it would have used the language it used in 209b2, where it says each state standard.

[01:12:10] Speaker 05:
And as Council for EPA explained, Congress maintains that program level review by starting with the first criterion as an aggregate test and carrying through that aggregate language with such state standards.

[01:12:24] Speaker 05:
And there is no other set of standards to which such would refer other than the standards in the aggregate.

[01:12:32] Speaker 05:
And this is all consistent with Congress's intention that California have a complete program.

[01:12:37] Speaker 05:
And Judge Wilkins, to your point about 202A and EPA's program being comprehensive, you're right.

[01:12:44] Speaker 05:
EPA is required to regulate every pollutant it concludes is harmful.

[01:12:48] Speaker 05:
And it doesn't make sense that Congress would have said, compare that comprehensive program to a program from California that can only regulate smog and particulate matter.

[01:12:59] Speaker 05:
Because EPA regulates carbon monoxide, greenhouse gas emissions, and formaldehyde.

[01:13:04] Speaker 05:
And if California can't regulate those pollutants, how could its program ever be as protective, much less more protective?

[01:13:12] Speaker 05:
And if we have a question about whether that scope of pollution is covered by the word protectiveness, I would refer this court to the Finbin LLC versus Consumer Product Safety Commission case at 45F433.

[01:13:23] Speaker 05:
And then, as this court has repeatedly indicated, the statute creates a California car that is certified by California to California standards.

[01:13:36] Speaker 05:
and a federal car certified by EPA standards.

[01:13:40] Speaker 05:
And petitioners have never explained how the California car would be regulated as to greenhouse gas emissions or carbon monoxide or any other pollutants that they don't think we have extraordinary conditions for.

[01:13:52] Speaker 05:
And if the answer is that California cars are not regulated as to those pollutants, no one has explained why that would have been Congress's goal.

[01:13:58] Speaker 05:
That we would have millions of cars sold in California in the Section 177 states unregulated as to pollutants just because California doesn't have extraordinary conditions for that specific pollutant.

[01:14:10] Speaker 05:
So the whole program review makes perfect sense because Congress always intended California to have a complete program.

[01:14:17] Speaker 05:
And to your point, Judge Garcia, about the carbon monoxide.

[01:14:20] Speaker 08:
How is that inconsistent with saying that, yeah, you can have a complete program.

[01:14:26] Speaker 08:
And we look at the program as a whole.

[01:14:29] Speaker 08:
But as a whole, if there are 10 parts to the program, but really you only need nine of them, then your program can go forward with the nine, but not all 10.

[01:14:45] Speaker 05:
Well, my point, Your Honor, is they say we only need standards for a couple of different pollutants.

[01:14:51] Speaker 05:
And we can't have an adequately protective program if we can't regulate all of the harmful pollutants.

[01:14:57] Speaker 08:
I agree with that.

[01:14:58] Speaker 08:
But I guess I'm saying I don't know why it can't be something in between the two extremes of your argument.

[01:15:06] Speaker 08:
That's why I was trying to come up with something with my donut example.

[01:15:11] Speaker 08:
But you can need the meals for sustaining your health, but that doesn't mean that every meal has to have the donuts.

[01:15:23] Speaker 08:
And so that's what I'm getting at.

[01:15:24] Speaker 08:
You can look at everything as you can make an assessment as to whether you need it as a whole.

[01:15:31] Speaker 08:
while also saying that, well, maybe some of the parts of the whole need a program, but maybe some parts of the whole aren't needed.

[01:15:48] Speaker 08:
Why isn't that a perfectly reasonable way to read the text?

[01:15:51] Speaker 05:
Well, I think a couple points, Your Honor.

[01:15:53] Speaker 05:
So that reading makes the second criterion more or less overlap with the first, because it's the first where we're looking at the protection provided and the level of stringency, the relative level of stringency of the two programs.

[01:16:06] Speaker 05:
And if we're getting into does California need this standard versus that standard and asking the questions petitioners ask about how much improvement we will see from individual standards, then we're back talking about stringency

[01:16:19] Speaker 05:
just now in a much more strict way, as opposed to in the aggregate.

[01:16:23] Speaker 08:
Protectiveness, though, and need are two different things.

[01:16:26] Speaker 08:
I mean, I could say that in order for me to be as protective as someone else,

[01:16:46] Speaker 08:
I have the same number, at least the same number of soldiers as they have in their army or something to protect me.

[01:17:00] Speaker 08:
But that doesn't mean that I necessarily need to have a million more soldiers in my army than they have in theirs.

[01:17:10] Speaker 08:
I'm just trying to, the protectiveness is a different analysis than need.

[01:17:16] Speaker 08:
especially when you look at need to meet compelling and extraordinary conditions.

[01:17:25] Speaker 05:
Well, so, Your Honor, we think again that the program review carries down from productiveness to need through the word such, and that that makes sense because what Congress was effectively saying was asking EPA to make the same determination about need that Congress had made.

[01:17:42] Speaker 05:
Does California still need a separate program?

[01:17:45] Speaker 05:
Does it still have compelling and extraordinary conditions for which the second program is warranted?

[01:17:50] Speaker 05:
And you're absolutely right that because California does still have compelling and extraordinary conditions, that sub-provision doesn't do a lot of work, but that's by congressional design.

[01:18:01] Speaker 05:
Congress decided it wanted to have two programs, because two programs was better than one, and not just for California, but for the nation.

[01:18:09] Speaker 08:
And so, again, this criterion is under what circumstances would a California plan that was as protective of public health and welfare as federal standards.

[01:18:22] Speaker 08:
Under what circumstances would it fail be one being.

[01:18:29] Speaker 05:
It would fail B1B if we reach a point where California no longer has any compelling and extraordinary air pollution conditions, which I will admit is unlikely.

[01:18:39] Speaker 05:
We've struggled with smog.

[01:18:40] Speaker 08:
But that then just reads the word need out of the statute.

[01:18:47] Speaker 08:
It doesn't, Your Honor.

[01:18:48] Speaker 08:
Instead, it would just be written, it says, such state as no longer has compelling and extraordinary conditions.

[01:18:56] Speaker 05:
But the word needs.

[01:18:57] Speaker 08:
That's what you just described.

[01:18:59] Speaker 08:
not a statute that says the state does not need such standards to meet compelling and extraordinary conditions.

[01:19:06] Speaker 05:
So we read such state standards as a whole program.

[01:19:08] Speaker 05:
So does the state need a program to meet compelling and extraordinary conditions?

[01:19:15] Speaker 05:
That's the determination Congress made when it adopted the statute in 1967.

[01:19:19] Speaker 05:
And it reaffirmed that in 1977 because not only did it- So such state standards doesn't mean like

[01:19:29] Speaker 08:
these or this state standard.

[01:19:31] Speaker 08:
It just means any state standard.

[01:19:33] Speaker 05:
It means the state standards in the aggregate.

[01:19:35] Speaker 05:
Such refers back up to the standards in the aggregate in the header part of the text.

[01:19:41] Speaker 05:
And that is how EPA has interpreted the statute for half a century, and it did that before Congress amended the statute in 1977.

[01:19:50] Speaker 05:
There's a 1976 Federal Register notice to that effect, and it defended its interpretation in 1984, which was right before the 1990 amendments in which Congress copied this text almost virtually word for word into 209E2 for non-road vehicles.

[01:20:07] Speaker 05:
So there's not any question that Congress is comfortable with this interpretation, and the text supports it, because again, the waiver is granted to the state.

[01:20:15] Speaker 05:
It is not granted for a particular standard.

[01:20:17] Speaker 05:
And the phrase that petitioners want to be in that provision, each state standard, is not there.

[01:20:24] Speaker 05:
And it is in 209b2.

[01:20:26] Speaker 05:
So we know Congress knows how to tell us each state standard when that's what it means.

[01:20:32] Speaker 05:
And Judge Wilkins, to your donuts example, I think that could be resolved if there were a problem with California having a standard about donuts, to sort of extend your analogy, that that could be resolved on either protectiveness or feasibility.

[01:20:47] Speaker 05:
Because if we get to the point where California thinks donuts are good and EPA thinks they're bad,

[01:20:54] Speaker 05:
then that's going to cause a potential problem on the protectiveness end.

[01:20:57] Speaker 05:
Because if California is requiring people to eat donuts and EPA doesn't think that's protective, that's a basis on which EPA might decide that's arbitrary and capricious that you've determined your standards are as protective.

[01:21:10] Speaker 05:
And then if there's a problem for manufacturers in selling enough donuts, then that gets resolved under the feasibility criteria.

[01:21:17] Speaker 05:
And I will note that fat feasibility criterion is the one over which there is almost always the most dispute.

[01:21:23] Speaker 05:
In the half century that EPA has been implementing this provision, that is the one that has attracted the most attention.

[01:21:29] Speaker 05:
That's the one the automakers come in and say, California's moving too fast.

[01:21:34] Speaker 05:
We need more time.

[01:21:35] Speaker 05:
This is too expensive.

[01:21:36] Speaker 05:
That provision has teeth.

[01:21:38] Speaker 05:
So if we're worried about there being a federal check, that's the federal check Congress

[01:21:43] Speaker 05:
It's essentially the same one they put into 202A1 for EPA's own program.

[01:21:51] Speaker 05:
I also want to respond briefly to the question about the criteria of pollution.

[01:21:56] Speaker 05:
California never disavowed that zero emission vehicles

[01:22:00] Speaker 05:
don't produce criteria pollution.

[01:22:02] Speaker 05:
And Council for EPA, as Council for EPA explained, EPA concluded in 2013 that California had reasonably refuted, that's a quote, this exact argument about this exact isolated quotation.

[01:22:17] Speaker 05:
And in any event, the record has evolved substantially from then, and you can look at the appendix to California's comments on the restoration decision to see how much evidence there is of the criteria benefits of the zero emission vehicle standards.

[01:22:29] Speaker 05:
Moreover, and I think this is a really important point, EPA has approved both of these state standards, the GHG standard and the zero emission vehicle standard, into five state plans to attain criteria pollution standards set by the federal government.

[01:22:46] Speaker 05:
So if these standards, if the waiver goes away, those states don't have this measure to achieve that goal, but beyond that, that's an indication that EPA does believe and has found that these standards produce criteria benefits.

[01:22:59] Speaker 05:
And no one disputes that California has compelling and extraordinary conditions as to criteria pollution.

[01:23:10] Speaker 05:
I also want to just touch briefly, if I can, on the major questions doctrine.

[01:23:13] Speaker 05:
There's nothing novel here.

[01:23:14] Speaker 05:
As Council for EPA mentioned, we've had a zero emission vehicle program since 1990.

[01:23:19] Speaker 05:
The 2013 waiver was the third waiver we received for that program.

[01:23:23] Speaker 05:
And as I said, this is, you know,

[01:23:27] Speaker 05:
These are measures upon which many states are relying on and have chosen to rely on to improve public health and welfare in our states.

[01:23:34] Speaker 08:
I was going to ask you the same thing I asked your colleague.

[01:23:39] Speaker 08:
Do you see any reason why this panel should wait to see the disposition of the panel in the cases argued yesterday?

[01:23:52] Speaker 05:
No, Your Honor, what we're talking about here are standards California adopted in 2011 and 2012, for which the waiver was originally granted in 2013.

[01:23:59] Speaker 05:
There just isn't a connection between these standards and the standards that EPA promulgated in 2021 or 2022.

[01:24:08] Speaker 05:
I can't remember which, I apologize.

[01:24:10] Speaker 05:
So no, we don't think that you need to wait.

[01:24:14] Speaker 05:
Sorry, I'm just, there's a lot of issues in the case and I just want to make sure I cover everything.

[01:24:19] Speaker 05:
And I guess the last thing I would say is on the C criterion, on feasibility, there is petitioners claim that EPA can't look at our need in a collective matter under B. And I don't understand how, if that's true, EPA could look at standards collectively under C if, as they say, they have the same meaning.

[01:24:41] Speaker 05:
And I think this is concretely demonstrated here.

[01:24:44] Speaker 05:
because we're here talking about California's greenhouse gas and zero emission vehicle standards.

[01:24:49] Speaker 05:
But California also has standards for carbon monoxide and formaldehyde and particulate matter that are not at issue here because EPA didn't withdraw the waiver for those in 2019.

[01:25:00] Speaker 05:
And manufacturers have to comply with all of those standards in a given model year.

[01:25:04] Speaker 05:
And so feasibility always has to look at the whole program.

[01:25:08] Speaker 05:
And it may be that it sometimes looks like a single standard analysis, but that's largely because EPA is responding to evidence in the records, responding to manufacturers coming in and saying, I can't meet all of these standards at the same time, or I can't meet this particular standard for the following reason.

[01:25:25] Speaker 05:
So EPA's analysis is driven in the same way this court's analysis is driven and petitions for review by the issues brought forward by the participants in the proceeding.

[01:25:34] Speaker 05:
It doesn't make it not a whole program review.

[01:25:37] Speaker 05:
And EPA should not be constrained to looking at standards in isolation under C, because that would just not make sense.

[01:25:44] Speaker 05:
It would break the entire feasibility analysis.

[01:25:46] Speaker 08:
And so what happens if California agrees or EPA agrees with a manufacturer

[01:25:58] Speaker 08:
that it can't, it's not feasible to meet a particular standard within the time period set in the standard.

[01:26:09] Speaker 05:
So it would depend on the circumstances, but there would be some form of denial.

[01:26:14] Speaker 05:
So what EPA is looking at is California's revised program that it has submitted its waiver request.

[01:26:19] Speaker 05:
And if EPA decides this revised program is just completely infeasible, then it would deny the waiver.

[01:26:27] Speaker 05:
the California program that was previously waived would remain in effect.

[01:26:31] Speaker 05:
And that's kind of like what happens when this court vacates an amended rule.

[01:26:35] Speaker 08:
So the waiver can be denied if it is not feasible to adopt a new standard with respect to, let's say, one aspect of the standard, one criteria.

[01:26:53] Speaker 05:
Yeah.

[01:26:54] Speaker 05:
You know, sometimes the waiver, the revision to the program will just be for one standard.

[01:26:59] Speaker 05:
But if California's amended program contains revisions to multiple standards, and I take your question to be what happens if then only one of those is a problem, then what EPA has done in the past is deny the waiver as to that standard, granting it for the rest of the program.

[01:27:16] Speaker 05:
And that's essentially like this court's severability analysis, in that you do what Congress

[01:27:21] Speaker 05:
directed you to do, which is you waive application to the state for everything for which there is not a problem under the three criteria for denial.

[01:27:29] Speaker 05:
It's very similar, again, to what this court does if it finds a problem with a regulation, but there's a way to sever a portion of the regulation so that the amended rule is, the rest of it is valid.

[01:27:42] Speaker 08:
Then why wouldn't you do that under the need analysis under B1B?

[01:27:48] Speaker 05:
Because again, what you're looking at is the whole program.

[01:27:51] Speaker 05:
And there isn't a question, and petitioners don't even dispute, that you either need a whole program or you don't.

[01:27:57] Speaker 05:
So it's just that feasibility is a different animal subject to severability in a way that a whole program review isn't.

[01:28:05] Speaker 05:
And of course, this court faces those issues with severability as well.

[01:28:08] Speaker 05:
Sometimes parts of rules are severable, and sometimes they aren't.

[01:28:11] Speaker 05:
It's the same basic idea.

[01:28:13] Speaker 05:
But just as EPA is deciding that California's revised program satisfies the criteria and should get a waiver, even though sometimes what it's looking at is more granular than the program as a whole, that's the same as when this court looks at an amended rule.

[01:28:27] Speaker 05:
You sometimes have to look at the change between the previous pre-existing rule and the amended one.

[01:28:32] Speaker 08:
I guess the reason that I'm having trouble with this is that the statutory language is such state standards.

[01:28:39] Speaker 08:
Right.

[01:28:41] Speaker 08:
So it's not just like any state standards.

[01:28:44] Speaker 08:
It's particular state standards.

[01:28:47] Speaker 08:
Do you need these particular state standards, even as a whole?

[01:28:52] Speaker 08:
Not just, do you need standards?

[01:28:55] Speaker 08:
Do you see my problem?

[01:28:56] Speaker 05:
I do see your problem, Your Honor.

[01:28:57] Speaker 05:
But as the Supreme Court held in Culbertson v. Berryhill, which is 139 Supreme Court 517, such means of the kind or degree already described.

[01:29:09] Speaker 05:
And so what such state standards mean here is such as standards previously described, which are the standards that are in the aggregate, at least as protective.

[01:29:19] Speaker 05:
So we're just carrying down the aggregate language.

[01:29:22] Speaker 05:
So you're asking, you're doing protectiveness as an aggregate, you're doing need as an aggregate, and you're doing feasibility as an aggregate, because that's what such does.

[01:29:35] Speaker 08:
Any other questions?

[01:29:36] Speaker 08:
All right, thank you.

[01:29:47] Speaker 08:
Mr. Wall will give you five minutes, and we're going to take a 10-minute break after you finish before we go to part two.

[01:29:54] Speaker 02:
Thank you, Your Honor.

[01:29:55] Speaker 02:
So four points on addressability, reliance, major question and text.

[01:30:00] Speaker 02:
Judge Garcia, I've been sitting there kicking myself for not thinking of the obvious answer.

[01:30:04] Speaker 02:
was redressability, like all the elements of standing, is determined at the time of filing.

[01:30:09] Speaker 02:
When we filed this petition in May 2022, when we plainly could have gotten effective judicial relief, and I looked through the briefs and the comment letters sitting here, I couldn't think of, and I'm not aware of anybody who claimed otherwise.

[01:30:21] Speaker 02:
The question now isn't about redressability.

[01:30:23] Speaker 02:
It's about mootness.

[01:30:25] Speaker 02:
And as the Supreme Court said in West Virginia, the government bears the burden of showing mootness.

[01:30:30] Speaker 02:
So I tried to run down the breadcrumbs.

[01:30:32] Speaker 02:
and I went to the state's brief at page 15, and it cites the industry respondents brief at page 12.

[01:30:40] Speaker 02:
So I went to that brief, and it's very carefully worded.

[01:30:44] Speaker 02:
It says they have no plans to abandon their financial commitments, and it points to the JA at 370 and 371.

[01:30:50] Speaker 02:
So I went to the JA at those pages, and it's a comment letter from Tesla that it put in in July of 2021,

[01:30:57] Speaker 02:
It's not talking about the inability to give relief in the later model years.

[01:31:02] Speaker 02:
All it is saying is that automakers make decisions in reliance on what the EPA has done with respect to the waiver.

[01:31:08] Speaker 02:
Nobody disputes that.

[01:31:10] Speaker 02:
But it's not going to meet their heavy burden to show that there's no way to give us effective relief.

[01:31:15] Speaker 02:
And I just want to be clear, that's the government's burden, not ours.

[01:31:19] Speaker 07:
I'm glad you said that Mr. Walters I had the same question and why as whether this is redress ability or mootness and why isn't the burden on redress ability to come to court and say acknowledge the realities it's going to take a little time to get an order but

[01:31:40] Speaker 07:
Here's our showing that if you rule in a reasonable time on this, it will redress our entries, as opposed to strictly the date you filed this in May 2022.

[01:31:51] Speaker 07:
I'm just, it affects me as a difficult.

[01:31:53] Speaker 02:
Look, it could be a more common sense inquiry.

[01:31:55] Speaker 02:
I think the Supreme Court's pinned it down in cases like Caterpillar to time of filing.

[01:32:00] Speaker 02:
But I guess what I'd say is, I don't think you need to get into it here.

[01:32:03] Speaker 02:
Because when we went to court in 2022, everybody, and if you look at California's comment letter at 236, the JA, it says, do this now.

[01:32:12] Speaker 02:
It will immediately incentivize.

[01:32:13] Speaker 02:
It will make meaningful changes now.

[01:32:16] Speaker 02:
So everybody agreed that we could get at least some relief.

[01:32:19] Speaker 02:
And of course, against the backdrop of the toilet letter saying,

[01:32:22] Speaker 02:
you know, we made plans based in part on the withdrawal of the waiver.

[01:32:27] Speaker 02:
So it seems to me in that world, everybody knew that you could do something in the window, and the burden then is on them to come along and say, you can't, like, this case is moot, and I just don't see how based on, like, the comment record you have before you and the briefs, you could say they've satisfied that burden.

[01:32:45] Speaker 02:
On reliance, if you look at pages 21 and 22 of the JA, it's not an independent rationale.

[01:32:50] Speaker 02:
When they talk about it, it's always bound up with the merits, but in any event, I don't think it's fair for the government to say, as I think Council did, that in 2019 they jumped over reliance interests.

[01:33:01] Speaker 02:
If you look at page 514 of the JA, it says, and this is from the withdrawal, the EPA disagrees with some commoners' assertions that ostensible reliance interests foreclose withdrawal of the waiver for the model years, and then it goes on to explain that

[01:33:16] Speaker 02:
facts on the ground to change because California had taken away the deem to comply, and also that the EPA had said it was gonna do a mid-year review.

[01:33:25] Speaker 02:
The agency's free to think that it got Reliance wrong back then, but I don't think it's right to say, oh, in 2019 you just jumped over Reliance, and all we did in 22 was point out the fact that you hadn't taken into account Reliance.

[01:33:37] Speaker 02:
It's a far more complicated story than that, and so I don't think it's right that they didn't consider it at all, or that it's a standalone rationale.

[01:33:45] Speaker 02:
Where does that leave us?

[01:33:46] Speaker 02:
How should we resolve the case?

[01:33:48] Speaker 02:
The most straightforward way is as a major question.

[01:33:51] Speaker 02:
West Virginia OSHA student loans cases all have the same message.

[01:33:55] Speaker 02:
Look at the power that the government is asserting.

[01:33:58] Speaker 02:
Here the power that the government is asserting is to allow California

[01:34:03] Speaker 02:
to electrify the vehicle fleet to move to what California wants, which is 100% electrification.

[01:34:09] Speaker 02:
That is a major question, as the Supreme Court understands it.

[01:34:13] Speaker 02:
Economically, politically, and it is a new power that the agency has not previously asserted to give over all of this power to California to force a transition to electric vehicles.

[01:34:25] Speaker 02:
If we're right about that, if it's a major question,

[01:34:27] Speaker 08:
But what about the fact that there's been at least some sort of zero emission vehicle aspect of California plans for going back to 1990?

[01:34:37] Speaker 02:
That's right, but not with respect to greenhouse gases, with respect to criteria pollutants.

[01:34:42] Speaker 02:
This is not we need our own standards because we want to help smog in LA.

[01:34:48] Speaker 02:
It's not about criteria pollutants.

[01:34:50] Speaker 02:
It's not about local air quality.

[01:34:52] Speaker 02:
This is about what they've announced from this is about climate change.

[01:34:55] Speaker 02:
It's about global warming.

[01:34:57] Speaker 02:
That's why they want to set the standards.

[01:34:59] Speaker 02:
And the question is, can EPA let a state be a climate change regulator?

[01:35:04] Speaker 02:
That, as I understand it under the doctrine, is a major question.

[01:35:07] Speaker 02:
And if I'm right about that,

[01:35:08] Speaker 02:
I don't see any serious argument on the other side that the statute is clear in their favor.

[01:35:13] Speaker 02:
They assert it at page 2081 of their brief, Judge Garcia, but they don't actually try to show how they could satisfy a clear statement rule for purposes of 209.

[01:35:22] Speaker 02:
But let's say you disagree with me on all of that.

[01:35:24] Speaker 02:
You don't think it's a major question.

[01:35:26] Speaker 02:
Then we're finally at the text.

[01:35:28] Speaker 07:
Let me pause just briefly on major questions.

[01:35:30] Speaker 07:
The way you just framed it is essentially the major question is, can California target greenhouse gases?

[01:35:39] Speaker 07:
My question is about whether that actually tracks to the statutory interpretation question, which seems to be, is a whole program approach allowed?

[01:35:47] Speaker 07:
In other words, there would be a direct connection if there was some vague term, if emissions was somehow vague, and you were saying, well, you can't interpret that to include greenhouse gases.

[01:35:57] Speaker 07:
But that's not your argument.

[01:35:59] Speaker 07:
Does this make sense?

[01:36:00] Speaker 07:
You're saying there's a major question X, so use that to require a clear statement on why.

[01:36:06] Speaker 07:
How do they link up?

[01:36:06] Speaker 02:
So I don't think that's the right level of generality.

[01:36:09] Speaker 02:
In West Virginia, it was, can you force factories to shift from one power source to another?

[01:36:14] Speaker 02:
In the student loan case, it was, can you use this power that's formerly been fairly minor and wave hundreds of billions of dollars?

[01:36:21] Speaker 02:
I think framed at the right level of generality is here.

[01:36:24] Speaker 02:
Can they grant a waiver to the state of California so that California can have its own greenhouse gas program to regulate climate change, to address climate change?

[01:36:33] Speaker 02:
And framed at that proper level of generality, I don't see how it's not a major question.

[01:36:38] Speaker 02:
And if it's a major question, I think then it's pretty easy how to resolve the case.

[01:36:43] Speaker 02:
But if you disagree with us on that, then we're down to the text.

[01:36:46] Speaker 02:
And for all the reasons you were asking, Judges Wilkins and Garcia,

[01:36:50] Speaker 02:
I don't think this whole program approach stands up.

[01:36:53] Speaker 02:
The logical import of what they're standing here saying is that even if they stood before you today and said California does not need this standard at all, it will not do anything to temperatures in California.

[01:37:04] Speaker 02:
It will not affect global warming in the slightest.

[01:37:06] Speaker 02:
It won't even help with criteria pollutants.

[01:37:08] Speaker 02:
They would say, but that doesn't matter because we still got smog in LA and until that goes away and they're candid enough to admit that's not any time in our lifetimes, they get a program and it's a blank check.

[01:37:19] Speaker 02:
They can put into it whatever they want.

[01:37:21] Speaker 02:
And the right way to think about it, Judge Garcia, is exactly the way you put it.

[01:37:24] Speaker 02:
You look at need on the standard by standard basis.

[01:37:27] Speaker 02:
Now you can judge need based on how that standard interacts with other standards, of course.

[01:37:32] Speaker 02:
but you still have to ask whether you need that standard in practical operation.

[01:37:37] Speaker 02:
And once you strip away the whole program stuff and you understand that that's what the statute requires, then we're down to the basic question, which the other side said very little about today, which is, okay, the agency made findings back in the day in 2019

[01:37:53] Speaker 02:
that the climate change conditions in California were not sufficiently different from everywhere else in the United States, including most notably the Southeast, to trigger 209b1b, and even if they were, a regulation like this was not going to make any difference in California or anywhere else.

[01:38:10] Speaker 02:
So the only question on the text ought to be, okay, did they make contrary findings in 2022

[01:38:17] Speaker 02:
that are in the rule, and do they satisfy the more detailed justification of Fox?

[01:38:22] Speaker 02:
If they want to flip on key facts, the Supreme Court says, you've got to explain why your factual view is different from what you took before, and you've got to offer a quote, more detailed justification.

[01:38:33] Speaker 02:
And in the whole time I sat, I didn't hear a word from the other side pointing to the text of this rule to show you, look, here are the findings where we said California doesn't just have it bad, but has it really bad compared to everybody else.

[01:38:46] Speaker 02:
And here's where we showed you in 2022 exactly how this standard is going to make a difference.

[01:38:51] Speaker 02:
And here's how we satisfy the Fox standard because we laid all of this out in the rule.

[01:38:55] Speaker 02:
That's why they wanna keep pivoting to the whole program approach, Judge Wilkins, because when you dig down into the text of this rule and what they did,

[01:39:03] Speaker 02:
They can't satisfy it.

[01:39:04] Speaker 02:
And then all they keep coming back to is, but it says such standards.

[01:39:07] Speaker 02:
Well, of course it does.

[01:39:08] Speaker 02:
It's pointing up to B1 where it says such standards for the control of emissions from new motor vehicles or new motor vehicle engines.

[01:39:17] Speaker 02:
It's talking about the emission standards.

[01:39:19] Speaker 02:
They're up in B1.

[01:39:21] Speaker 02:
And then the only question is, okay, well, does that in the aggregate transfer all the way down?

[01:39:24] Speaker 02:
And for the reasons we've already explored, it's not textually right, because they put it only in B1, they didn't move it down to B, it's not a sensible way to read C, and it turns B into a nullity.

[01:39:35] Speaker 02:
The answer is always going to be, you need it, even if you don't need that particular standard, because once you ate your beans, you get as many donuts as you want, and that is not a sensible way to read B1B.

[01:39:47] Speaker 07:
Council, I have one last,

[01:39:49] Speaker 07:
Maybe last question about just how your standard by standard approach would work.

[01:39:54] Speaker 07:
Are you saying that we have to go through with a fine-tooth comb and ask, do they need, for example, a carbon dioxide standard of 196 grams per mile?

[01:40:05] Speaker 07:
Or is it the group of greenhouse gas standards together?

[01:40:10] Speaker 07:
How would you propose this be done?

[01:40:12] Speaker 02:
So it's the administrator that has to make the finding, and I'm not actually sure, Judge Garcia, because it didn't come up here and they didn't make the finding in 2022.

[01:40:20] Speaker 02:
I'm not sure whether the administrator could try to group standards in a way, but I think the right way to think about it textually, though I don't know what the agency's practice is and I don't think it's relevant here, would be you do it on a standard by standard basis, but when you are determining

[01:40:36] Speaker 02:
you ask how that standard interacts with the other standards.

[01:40:39] Speaker 02:
So I think it's fair for the state to come in and say, well, we need this standard and we need it because the standard will do this, and interacting with our other standard

[01:40:49] Speaker 02:
it will produce some combined or added benefit.

[01:40:52] Speaker 02:
That seems to me like a fair way to show need.

[01:40:54] Speaker 07:
But it would be the application says, here's why we need our CO2 standard, our methane standard, our nitrous oxide standard.

[01:41:00] Speaker 07:
And I think all the criteria pollutant standards as well, right?

[01:41:03] Speaker 02:
I think it has to be because once you start to group and you just get to say you need anything in the

[01:41:08] Speaker 02:
then you have the blank check problem, right?

[01:41:10] Speaker 02:
You can just group things in, dump things into the program that you don't really need.

[01:41:14] Speaker 02:
But I will say, I don't think there's a question of grouping here, because that's just not the way this case has come up.

[01:41:23] Speaker 02:
In this rule, they did not make a sufficient showing of need.

[01:41:26] Speaker 02:
Again, assuming you think it's not a major question, and assuming you think that this is the kind of condition that this statute was meant to address.

[01:41:33] Speaker 02:
It's not an extraordinary condition because it's global warming.

[01:41:37] Speaker 02:
This was meant to get at local problems in California, not global problems and global solutions.

[01:41:43] Speaker 02:
But as I say, even if you disagree with me on every one of those arguments and we're just down to needs to meet, it's still where in the rule did they say, here's why we got it wrong in 2019, sufficient to justify the Fox standard.

[01:41:55] Speaker 02:
I've read this rule multiple times.

[01:41:57] Speaker 02:
I don't see it.

[01:41:58] Speaker 02:
And I didn't hear anything from the other side about it this morning.

[01:42:01] Speaker 08:
All right, let's reconvene at 1125 by that clock.

[01:42:05] Speaker 04:
This honorable court is again in session.

[01:42:08] Speaker 08:
All right, we'll resume with part two of the argument.

[01:42:11] Speaker 08:
I believe first up is Mr. Flowers.

[01:42:20] Speaker 03:
Judge Wilkins may please the court and flowers for the states.

[01:42:23] Speaker 03:
I'll try to reserve a couple of minutes for a bottle.

[01:42:26] Speaker 03:
I think in light of this morning's argument, I'd like to actually begin with standing.

[01:42:30] Speaker 03:
Before I get to that, I do want to stress that as long as one party or one group has standing, Article 3 is satisfied.

[01:42:36] Speaker 03:
So if you think the private petitioners have standing, or you think we have standing, Article 3 is all taken care of and we can move to the merits.

[01:42:42] Speaker 08:
But without- Just on that, what about this

[01:42:48] Speaker 08:
Fuel petitioners standing give you standing on equal sovereignty claim, which is not a claim that they are bringing?

[01:42:58] Speaker 03:
I think they would under bond.

[01:42:59] Speaker 03:
So under the Supreme Court's decision in bond, private parties even can raise 10th Amendment arguments.

[01:43:04] Speaker 03:
They are standing to do so.

[01:43:06] Speaker 03:
And the reason for that is because a right held by the states against Congress is also a limit on congressional power.

[01:43:12] Speaker 03:
And so private parties are empowered to raise limits on congressional power.

[01:43:18] Speaker 03:
to protect themselves from financial harm of disorder.

[01:43:23] Speaker 03:
So with that wind up on standing, I guess I'll come to the pitch.

[01:43:27] Speaker 03:
I do want to convince you that the states do have standing.

[01:43:29] Speaker 03:
So we have two injuries here, one economic, one constitutional, and a vacature order here would address both.

[01:43:36] Speaker 03:
I'll start with the economic injury.

[01:43:38] Speaker 03:
We submitted a declaration by an economist whose expertise nobody questioned.

[01:43:42] Speaker 03:
explains that the manufacturers will respond to the zero emission vehicles program by cross-subsidizing.

[01:43:48] Speaker 03:
We'll charge more for the vehicles that we buy posing a dollar of cost and thus causing an injury.

[01:43:55] Speaker 03:
There is not a single piece of evidence in the record that contradicts that.

[01:43:58] Speaker 03:
The EPA for its part submits no evidence.

[01:44:01] Speaker 03:
The intervener states do submit two declarations, but neither get them where they need to go.

[01:44:05] Speaker 03:
Cunningham's declaration is an unscientific survey of car prices that has conclusions that are consistent with our theory.

[01:44:11] Speaker 03:
He shows people are buying these cars at high percentages.

[01:44:14] Speaker 03:
that they're paying above market price, all of that's consistent with cross-subsidization because the manufacturers are driving down the price of these things to sell more of them.

[01:44:23] Speaker 03:
So that's not at all surprising.

[01:44:24] Speaker 03:
Then they have the declaration from Gillingham, the economist, who says that, generally speaking, manufacturers can respond to technological requirements not by cross-subsidizing, but by actively investing in being a first mover in the industry.

[01:44:41] Speaker 03:
The problem he has is that

[01:44:43] Speaker 03:
He doesn't opine that they're in fact doing that here.

[01:44:46] Speaker 03:
He acknowledges cross-subsidization is a problem.

[01:44:49] Speaker 03:
And we have more evidence.

[01:44:50] Speaker 03:
We have a joint appendix 661 to 62, a statement from a former auto executive stating that they'll cross-subsidize.

[01:44:57] Speaker 03:
And then maybe most important of all, you have the dog that didn't bark.

[01:45:00] Speaker 03:
We have this large group of auto manufacturers here as respondents.

[01:45:04] Speaker 03:
If they weren't cross-subsidizing, they would have every reason in the world to tell you that.

[01:45:08] Speaker 03:
Number one, it could help undermine our standing argument.

[01:45:10] Speaker 07:
Number two- Council, if there was cross-subsidization, wouldn't it have occurred up through 2019?

[01:45:17] Speaker 07:
Yes, and so- Would there be something concrete to point to?

[01:45:20] Speaker 03:
Well, it wouldn't have been any more, we think our injury here is concrete, but it wouldn't have been different form of evidence because absent a statement from the car companies themselves that they're doing this, you're just not gonna have that, you'll have to rely on economic theory.

[01:45:32] Speaker 03:
So we submitted forward-looking evidence because we're seeking forward-looking relief.

[01:45:36] Speaker 03:
We submitted backwards-looking relief, presumably EPA would have said that that's not good enough.

[01:45:41] Speaker 03:
But it's telling that these car manufacturers don't deny cross-subsidizing.

[01:45:47] Speaker 03:
Number one, if they weren't, they could say that and it would help.

[01:45:49] Speaker 03:
the EPA's standing argument.

[01:45:51] Speaker 03:
Number two, just from a business perspective, one would think they would want to assure Ohio farmers who buy pickup trucks that they're not helping to subsidize electric vehicle purchases by professors in Berkeley.

[01:46:03] Speaker 03:
But there's not a whisper in their briefs about any of this.

[01:46:06] Speaker 03:
That is telling evidence in and of itself.

[01:46:09] Speaker 03:
On redressability, I'm sorry.

[01:46:12] Speaker 07:
That was going to be my question.

[01:46:13] Speaker 07:
Everything you've said right to now is about injury.

[01:46:17] Speaker 07:
Right.

[01:46:19] Speaker 07:
not a section in your expert's declaration about redressability.

[01:46:21] Speaker 07:
So I'm curious.

[01:46:22] Speaker 03:
And so it doesn't, he doesn't address it in, he doesn't say in model year 2025, if we prevail, the prices will.

[01:46:30] Speaker 03:
will be affected.

[01:46:31] Speaker 03:
But I think it's all implicit in his analysis, because he says the thing that's causing the cross-subsidization is this requirement.

[01:46:38] Speaker 03:
So if the requirement goes away, there will no longer be a need to cross-subsidize.

[01:46:41] Speaker 03:
They can make more money acting otherwise.

[01:46:42] Speaker 03:
And I think it's fair.

[01:46:43] Speaker 03:
If you can look at economic theory, you can look at the economic theory.

[01:46:46] Speaker 07:
But do you have any evidence about the timing of all this?

[01:46:48] Speaker 07:
Right.

[01:46:49] Speaker 07:
Because I think that's the difficulty.

[01:46:51] Speaker 07:
What we have

[01:46:51] Speaker 07:
For example, the statement from Tesla is referencing a statement from Mitsubishi that says, we make our product and pricing plans five years in advance.

[01:46:59] Speaker 07:
Ford says something similar.

[01:47:01] Speaker 07:
The Toyota thing statement says something like, we need two years to adjust our product and pricing.

[01:47:08] Speaker 07:
Well, so, you know, take some time for the price impact for the injury to occur.

[01:47:15] Speaker 07:
And presumably, this is just what we don't have any evidence about.

[01:47:19] Speaker 07:
It takes some time for it to unwind as well.

[01:47:22] Speaker 03:
Well, again, though, one can establish all aspects of standing with economic theory.

[01:47:28] Speaker 03:
And it's true they make decisions on what models to build.

[01:47:31] Speaker 03:
That may be tougher to turn the ship around on that.

[01:47:33] Speaker 03:
But in terms of pricing,

[01:47:35] Speaker 03:
firms exist and indeed have a fiduciary duty to maximize their returns.

[01:47:39] Speaker 03:
So if this waiver goes away, and we're talking when we sued, it was May 2022, I believe, we're talking about model year 2025, they would have ample time to make a change to give us relief.

[01:47:49] Speaker 03:
If there is any prospect that the injury would be addressed, then we think we've carried the burden there, and they certainly have not attempted to carry their burden.

[01:48:00] Speaker 07:
So this is going to venture into an area of not having evidence, which I think is part of the point.

[01:48:05] Speaker 07:
But I think what you just said is somehow that manufacturers would approach this by disaggregating production and pricing.

[01:48:15] Speaker 07:
And that might make sense.

[01:48:16] Speaker 07:
It also might make sense that the corporations, when they make a plan to build X amount of electric vehicles and the X amount of conventional vehicles,

[01:48:26] Speaker 07:
they then have prices that they need to stick to in order to maximize their profits and sell those.

[01:48:30] Speaker 07:
And so it just doesn't seem like there's, anyway, there's an equal intuition that it would take some time to adjust the prices that you're gonna want to get back for what you've made.

[01:48:40] Speaker 03:
So I don't think so, respectfully, because if the whole, the basis of our economist declaration is that this wouldn't otherwise happen but for the man.

[01:48:49] Speaker 03:
They have to do this to boost zero emission sales and,

[01:48:54] Speaker 03:
and offset the losses with traditional vehicles.

[01:48:56] Speaker 03:
So the reason it wouldn't happen otherwise is they would make – they're not making as much money doing it that way and they're being forced to.

[01:49:04] Speaker 03:
So if that's the case and they have time to adjust, I think we can reasonably infer the profit-maximizing firm to do it.

[01:49:10] Speaker 03:
But if you're skeptical on this, we also have a constitutional injury that I think seals the deal.

[01:49:15] Speaker 03:
To assume for the sake of argument that we're right

[01:49:18] Speaker 03:
on our equal sovereignty theory.

[01:49:20] Speaker 03:
We think we are, but put that to the side.

[01:49:22] Speaker 03:
Assuming that we are, we are denied equal treatment that's guaranteed to us by the Constitution.

[01:49:28] Speaker 03:
We are denied equal treatment.

[01:49:30] Speaker 03:
That's a constitutional injury.

[01:49:31] Speaker 03:
Constitutional injuries are per se Article III injuries.

[01:49:34] Speaker 03:
We know from Heckler v. Matthews, from this court's decision in Cutler v. HHS, that that injury can be redressed with an order taking the more beneficial treatment away from the other side.

[01:49:45] Speaker 07:
I just want to ask a version of Judge Wilkins' first question.

[01:49:48] Speaker 07:
Are you claiming that if you have standing on this constitutional theory for equal sovereignty claim, that then everybody has standing to raise all the statutory claims?

[01:49:59] Speaker 07:
I would have thought this is just tied to the equal sovereignty claim.

[01:50:03] Speaker 07:
Is that right?

[01:50:04] Speaker 03:
I don't think it's right.

[01:50:05] Speaker 03:
I think everyone would have it with respect to everything, because if we're suffering that constitutional injury, the order vacating the waiver would redress that injury, regardless of how it's done.

[01:50:16] Speaker 03:
So it's a bit counterintuitive, I'll admit that, but I do think it would extend to everybody.

[01:50:21] Speaker 03:
Now, I think Judge Childs, at the outset, you asked about, would the states even be interested in exercising sovereignty?

[01:50:27] Speaker 03:
Well, I think part of the misnomer here is that the only way you exercise sovereignty is by affirmatively regulating.

[01:50:33] Speaker 03:
Of course, you exercise sovereignty whether you decline to regulate or impose a regulation.

[01:50:38] Speaker 03:
deregulate or increase the regulation.

[01:50:41] Speaker 03:
Insofar as California has this power, we want it to because it's a very powerful bargaining chip they have.

[01:50:47] Speaker 03:
Look at the fact that you have a large group of auto manufacturers here begging the DC circuit to let California keep regulating.

[01:50:53] Speaker 03:
The reason that's happening is California gets an enormous stick that it can wield in negotiations with these companies.

[01:51:00] Speaker 03:
So that's a real concrete on the ground effect.

[01:51:04] Speaker 03:
But I think more fundamentally than that,

[01:51:06] Speaker 03:
We're, again, if we're right on our constitutional theory, then we came into the union with equal sovereignty and that's been taken from us by this law.

[01:51:15] Speaker 03:
And there is no case that says when something you are constitutionally entitled to is affirmatively taken away, you lack standing to sue to get it back.

[01:51:23] Speaker 03:
So with that, I'm happy to turn to the merits if there are no questions on standing.

[01:51:26] Speaker 01:
Well, the equal sovereignty piece just concerns me a little bit because I'm not really sure

[01:51:34] Speaker 01:
how you're articulating that term.

[01:51:37] Speaker 01:
There's a law review article there.

[01:51:40] Speaker 01:
You don't seem to rely on particular Supreme Court cases.

[01:51:43] Speaker 01:
I know there's the Shelby County, but there the feds go in and it's indicating that they're encroaching upon local state voting conditions as opposed to what

[01:51:56] Speaker 01:
you know, some of what you're articulating here.

[01:51:58] Speaker 01:
So I just want to get a better sense of that because I'm not sure that equal sovereignty is playing through as a thread through all the cases.

[01:52:06] Speaker 03:
Sure, and I totally understand that.

[01:52:07] Speaker 03:
Before I get there, I promise to answer.

[01:52:09] Speaker 03:
Sure.

[01:52:09] Speaker 03:
I do want to stress that if you agree with Mr. Wall on the statutory interpretation question, you can avoid all of these constitutional applications.

[01:52:16] Speaker 03:
If the waiver's struck down to that, you don't have to reach any of this.

[01:52:19] Speaker 03:
I'll come back to where the principle comes from.

[01:52:23] Speaker 03:
It is true that outside Shelby County, there is no case striking down a law.

[01:52:29] Speaker 03:
a post-admission law on equal sovereignty grounds.

[01:52:33] Speaker 03:
Part of the reason for that is there are vanishing few laws in the history of our republic that incorporate this, or that even potentially violate the doctrine, I should say.

[01:52:41] Speaker 03:
I went through the briefs of the amici, the briefs of the respondents, and identified a grand total, counting this law, of five that would clearly violate the equal sovereignty doctrine.

[01:52:51] Speaker 03:
Most of the laws they cite inarguably don't.

[01:52:54] Speaker 03:
For example, they cite

[01:52:55] Speaker 03:
tonnage laws where Congress under Article 1, Section 10 allows a state to impose a duty to bring ships into the port of Pennsylvania.

[01:53:04] Speaker 03:
That's not an equal sovereignty violation because the Congress gives every state exactly the same amount of sovereignty.

[01:53:11] Speaker 03:
They can all pass one of these laws and ask Congress for permission to enforce it.

[01:53:16] Speaker 03:
This is unique in that it's the rare law where California alone is being given power, sovereign power, really important sovereign power that no other state

[01:53:25] Speaker 03:
That's what violates the Equal Sovereignty Principle.

[01:53:28] Speaker 03:
It's unconstitutional, full stop.

[01:53:30] Speaker 01:
Now, even under the Constitution explicitly, for example, under Article 1, Section 8, Clause 1, all duties imposed and exercises shall be uniform throughout the United States.

[01:53:44] Speaker 01:
So you've got some explicit language there.

[01:53:47] Speaker 01:
But I'm not sure that there is an equal treatment regarding Commerce Clause, for example, or bankruptcy laws.

[01:53:53] Speaker 03:
Well, let me first.

[01:53:55] Speaker 03:
Take the uniformity point, and then I want to specifically stress the Commerce Clause point.

[01:53:59] Speaker 03:
So it's true that there are these uniformity guarantees.

[01:54:01] Speaker 03:
But those are guarantees of uniform substantive law throughout the nation.

[01:54:05] Speaker 03:
So the duties have to be the same throughout the nation under the clause you just read.

[01:54:09] Speaker 03:
They don't bear on unequally depriving the states of sovereignty.

[01:54:12] Speaker 03:
So I don't think that negative implication is there.

[01:54:14] Speaker 03:
It would be one thing if there were a provision in the original constitution that said, you must ensure all states have equal sovereignty with respect to navigable waters.

[01:54:23] Speaker 03:
And it didn't mention it anywhere else.

[01:54:24] Speaker 03:
I think then we would have the negative inference, but we don't have that here.

[01:54:28] Speaker 03:
Council, what about the compact clause?

[01:54:30] Speaker 07:
So that clause envisions that Congress can allow some states but not others to exercise sovereign authorities, like keeping troops, imposing tonnage duties.

[01:54:42] Speaker 07:
Does that give rise to the type of negative inference we're talking about?

[01:54:45] Speaker 03:
I don't think so, because there are two ways to look at that.

[01:54:48] Speaker 03:
One is that's just an experiment, and we open to either characterization.

[01:54:51] Speaker 03:
One, it's either an express allowance of some unequal sovereignty.

[01:54:54] Speaker 03:
We think the better way to look at it, though, is that every state has the same sovereignty.

[01:54:58] Speaker 03:
They can all pass those laws.

[01:54:59] Speaker 03:
They all just have to go to Congress to ask for permission to implement.

[01:55:03] Speaker 03:
That is unlike this law, which... But Congress can deny them, thereby according greater sovereign authority to some states and not others, right?

[01:55:10] Speaker 03:
Right.

[01:55:10] Speaker 03:
It can, but I don't... But none of them... In some sense, none of them have the sovereign authority at all because they're basically... They're acting with the permission of Congress.

[01:55:18] Speaker 03:
But I'm open to saying that those are express exceptions that prove the rule.

[01:55:24] Speaker 07:
Can I just ask about a specific case?

[01:55:26] Speaker 07:
Yes, please do.

[01:55:28] Speaker 07:
It's Alabama v. Texas in 1954.

[01:55:30] Speaker 07:
Yep.

[01:55:31] Speaker 07:
And this came after the three seabed cases that you do cite.

[01:55:36] Speaker 07:
And as you may know, it's the Submerged Lands Act.

[01:55:40] Speaker 07:
And after those seabed cases had said that Congress, that states, based on the equal footing doctrine, could not have control over the marginal seabed,

[01:55:52] Speaker 07:
Congress came back three years later and gave greater sovereign control, control over the seabeds, to Gulf states.

[01:56:01] Speaker 07:
And Alabama and other states challenged that law on equal footing grounds.

[01:56:06] Speaker 07:
And the result was a summary denial of the case with not a lot of reasoning.

[01:56:15] Speaker 07:
But it basically says this was pursuant to the Property Clause and enumerated power.

[01:56:19] Speaker 07:
And so the equal footing doctrine has no application.

[01:56:22] Speaker 07:
Were you aware of that case and how would you distinguish that?

[01:56:25] Speaker 03:
Yeah, I am glad you asked about it and a few distinctions.

[01:56:28] Speaker 03:
One, it was a Procurium opinion that has no analysis on points, so it just doesn't set any meaningful precedent.

[01:56:34] Speaker 03:
In a sense, the concurrence deal with it, but the opinion itself does not.

[01:56:39] Speaker 03:
The distinction between the property clause and other stuff, I think, actually is pretty relevant.

[01:56:44] Speaker 03:
Going back as far as to Stearns v. Minnesota, the Supreme Court has said that when you attach conditions to the cession of land, that's basically not an exercise of sovereign authority.

[01:56:53] Speaker 03:
So they distinguish that from more traditional exercises of sovereignty.

[01:56:56] Speaker 03:
I'm not sure that distinction makes sense, but it's one the Supreme Court is

[01:57:00] Speaker 03:
There is another case, though, I'd love to bring up, and it relates to Judge Child's question about the Commerce Clause.

[01:57:05] Speaker 03:
There's this notion floating around in the EPA's brief and one of the amicus briefs that it doesn't apply, that the Equal Sovereignty Doctrine doesn't apply when Congress acts pursuant to an enumerated power.

[01:57:20] Speaker 03:
Here's let me know that's wrong.

[01:57:21] Speaker 03:
There's a case called Escanaba, discussed at length in the amicus brief filed by American

[01:57:28] Speaker 03:
And in that case, the Supreme Court held was that it would violate the equal footing doctrine to admit Illinois pursuant to an act that gave Illinois less sovereign authority over the navigable waters than the other states had.

[01:57:40] Speaker 03:
The Court acknowledged that the Congress does have

[01:57:44] Speaker 03:
a commerce clause authority over the navigable waters.

[01:57:46] Speaker 03:
But nonetheless, in admitting the states to the union, it could not unequally deprive Illinois of that power.

[01:57:53] Speaker 03:
Now, the EPA may respond, well, that's an admissions case.

[01:57:56] Speaker 03:
That's not a post-admission case.

[01:57:58] Speaker 03:
And respectfully, I just don't think that distinction holds up.

[01:58:01] Speaker 03:
To say that the states come into the union on equal terms requires that the states already there are on equal terms themselves.

[01:58:07] Speaker 03:
So if Congress can initiate that equality, then there are no equal terms on which to enter.

[01:58:12] Speaker 03:
And I think that's a key reason why it cannot be limited to admissions act plus Shelby County.

[01:58:17] Speaker 03:
Noting Shelby County brings me to another point.

[01:58:21] Speaker 03:
Even if we accept the narrowest version of this doctrine, EPA's proposed test where they would just take the Shelby County test and incorporate it in all equal sovereignty cases, not just 15th Amendment cases.

[01:58:32] Speaker 03:
We don't think that's right, but even if it were right, we still win, because under Shelby County, any disparate geographic coverage has to be justified with respect to the problem the law targets.

[01:58:45] Speaker 03:
Now, you could maybe say 209B in some applications would pass that test, not when we're talking about COVID.

[01:58:50] Speaker 03:
As applied to this context,

[01:58:51] Speaker 07:
Can I ask about the more categorical version of your argument?

[01:58:55] Speaker 07:
So what Shelby County says is that when Congress is intruding on an area of traditional state control, voting, we're going to require some heightened showing before you deprive states of equal sovereignty.

[01:59:12] Speaker 07:
And what you're saying is when Congress intrudes into an area where states do not generally have control, vehicle emissions, interstate commerce,

[01:59:21] Speaker 07:
we apply a higher bar, a categorical bar, wouldn't the opposite make more sense and that you apply the more stringent test when you're intruding on an area of traditional state control?

[01:59:33] Speaker 03:
So two answers to that.

[01:59:34] Speaker 03:
The first is I don't think here we're dealing with an area that's actually less traditionally a matter of state control.

[01:59:40] Speaker 03:
Traditionally, states do and still are the primary environmental regulators.

[01:59:44] Speaker 03:
Even the Clean Air Act acknowledges that.

[01:59:46] Speaker 03:
When you look at voting,

[01:59:47] Speaker 07:
So you think under our constitution, interstate commerce is as much the province of states as voting?

[01:59:55] Speaker 03:
Interstate commerce is not, but environmental pollution, environmental protection is.

[02:00:01] Speaker 03:
It's also critical to note that under Article 1, Congress actually has immense authority over voting laws, at least with respect to federal elections.

[02:00:08] Speaker 03:
So it's not true that that was an area that was completely screened off from Congress before the 15th Amendment.

[02:00:13] Speaker 03:
Second point, I think this is really the key one, is that the 15th Amendment, all the Reconstruction Amendments, worked to see change for a constitutional order.

[02:00:21] Speaker 03:
So Congress did there get power that was immensely broader than it had previously had.

[02:00:27] Speaker 03:
So I think it's actually unsurprising that in the 15th Amendment context, Congress has broader power.

[02:00:34] Speaker 03:
Happy to take any more questions on that doctrine, but if there are not, I can shift to EPCA.

[02:00:38] Speaker 01:
Just wanted to say, Shelby County wasn't decided on unequal treatment of the states, though, right?

[02:00:46] Speaker 03:
Well, I think it was.

[02:00:48] Speaker 03:
When states are treated unequally, someone gets more favorable treatment, someone gets less favorable treatment.

[02:00:54] Speaker 03:
The laws there, I suppose, pose less favorable treatment, where you could argue here that California is getting more favorable treatment as to its sovereignty, but we are getting less favorable treatment.

[02:01:03] Speaker 03:
So I think that comes out in the wash.

[02:01:06] Speaker 07:
I'd like to just back up a little bit.

[02:01:08] Speaker 07:
And it's a version of where Judge Child started.

[02:01:11] Speaker 07:
But I think at a high level, the equality of the states was one of the most contentious issues at the founding, right?

[02:01:20] Speaker 07:
And what comes out of that?

[02:01:22] Speaker 07:
are a lot of very specific provisions.

[02:01:25] Speaker 07:
And for example, two forms of representation, one in the House, one in the Senate.

[02:01:30] Speaker 07:
Some explicit guarantees of equal treatment, like on bankruptcy law, naturalization law.

[02:01:35] Speaker 07:
I appreciate those aren't about equal sovereignty, but they are absolutely about equality of the states.

[02:01:41] Speaker 07:
And it just seems a little bit odd that if there was this fundamental limit on Congress's enumerated authorities,

[02:01:51] Speaker 07:
Not only is it not in the Constitution, but as far as I can tell, there's no mention of this type of principle at the founding debates or in any case sense.

[02:02:01] Speaker 03:
Well, I mean, we do have the Schooner case that talks about the perfect equality between sovereigns.

[02:02:07] Speaker 03:
readily concede that's not much.

[02:02:08] Speaker 03:
I think that actually flipped the inference is that because it was so fundamental, I'm not sure they would have seen a need to address it.

[02:02:15] Speaker 03:
And think about the context of the ratification of the Constitution.

[02:02:20] Speaker 03:
The founders also didn't think, many of them, did not think we needed the Bill of Rights at first because they thought it was patently obvious from Article 1 that Congress lacked those powers anyway.

[02:02:28] Speaker 07:
We have a very substantial historical record establishing what you just said.

[02:02:32] Speaker 07:
Right.

[02:02:33] Speaker 07:
But in none of the briefs here, is there any discussion

[02:02:36] Speaker 03:
of a categorical bar that would somehow apply to the new powers being given

[02:02:56] Speaker 07:
So what's the affirmative support for the idea that there's a concept of equal sovereignty among the states that cannot be violated for Congress?

[02:03:04] Speaker 03:
Sure.

[02:03:05] Speaker 03:
I mean, I think it traces back to international law, the meaning of the states.

[02:03:08] Speaker 03:
Our review article we cite lays that out.

[02:03:11] Speaker 03:
I think more relevant to this court maybe is just precedent.

[02:03:13] Speaker 03:
We have the equal footing.

[02:03:14] Speaker 07:
I'll just pause you on law of nations, right?

[02:03:17] Speaker 07:
Because I do think, as I read it, I'm trying to look at everything before us, that is the one piece of affirmative evidence.

[02:03:24] Speaker 07:
And Gibbons v. Ogden, back in 1824, sort of canonical decision on the Commerce Clause, discusses those law of nations principles.

[02:03:33] Speaker 07:
And what it says is that states do have equal sovereign authority in the sense

[02:03:40] Speaker 07:
that they have equal authority to regulate commerce until Congress acts.

[02:03:45] Speaker 07:
Here is what it says on page 70 and 71.

[02:03:48] Speaker 07:
They have equal authority until that authority is subjected to the superior power of Congress when actually exercised.

[02:03:56] Speaker 07:
Sort of goes back to my dog that didn't bark point.

[02:03:59] Speaker 07:
If actually there was a very important limit and equal sovereignty carried through to Congress's commerce power,

[02:04:07] Speaker 07:
Seems like they sure would have said that in Gibbons v. Ogden.

[02:04:12] Speaker 03:
Correct me.

[02:04:13] Speaker 03:
I admittedly have not looked at that case in a while.

[02:04:15] Speaker 03:
But if I'm not mistaken, that passage was not at issue a disparate treatment between states.

[02:04:22] Speaker 07:
It was about the- That is true.

[02:04:23] Speaker 07:
But it discusses what the law of nations told the founding era about the nature of the states and what it is.

[02:04:31] Speaker 07:
There's no analogy in international law

[02:04:34] Speaker 07:
to our federal government and their relation to the states.

[02:04:37] Speaker 07:
And what Gibbon says is that equality of states means they all have the default equal sovereign authority to regulate, but that that can be displaced by Congress.

[02:04:51] Speaker 07:
I'm not saying it resolves this question, but it discusses those law of nations principles.

[02:04:55] Speaker 03:
But I think one key point is the Supremacy Clause and our unique splitting of the atom of sovereignty

[02:05:01] Speaker 03:
does deprive the states of that equality vis-a-vis the federal government.

[02:05:05] Speaker 03:
I think it's vis-a-vis one another.

[02:05:07] Speaker 03:
There's nothing giving up that equality when they enter.

[02:05:10] Speaker 03:
But again, I think we also have to deal with the precedent.

[02:05:12] Speaker 03:
And I think the EPA basically wants to read Shelby County in a way that one of the amici does in a law review article, which is sort of an ad hoc, made up doctrine that was designed to apply in one particular context to no other.

[02:05:26] Speaker 03:
I just don't think that's a fair way to read Supreme Court precedent.

[02:05:29] Speaker 03:
We have to take it at its word as a fundamental background principle.

[02:05:33] Speaker 03:
And if that's the case, and again, at the very least, Shelby County's test applies outside the 15th Amendment.

[02:05:39] Speaker 03:
And we think we prevail under that because the problem being targeted, as you heard from Mr. Wall, is a global problem requiring global solutions where the geographic constraint can't be justified.

[02:05:51] Speaker 03:
I mentioned EPCA.

[02:05:52] Speaker 08:
But if we find it,

[02:05:54] Speaker 08:
that if we disagree with your view of what findings the EPA made in reviewing those findings in a fairly deferential fashion of substantial evidence, then doesn't that resolve the case even under that standard?

[02:06:12] Speaker 03:
I don't think so.

[02:06:13] Speaker 03:
And I think, let's look back at the context of Shelby County.

[02:06:17] Speaker 03:
And Shelby County, of course, had this long history of egregious voting rights violations.

[02:06:21] Speaker 03:
by some states affected by the Voting Rights Act.

[02:06:24] Speaker 03:
And even there, Congress said, no, looking at this data that establishes some historical connection isn't going to be enough.

[02:06:30] Speaker 03:
It's a more demanding testament.

[02:06:33] Speaker 03:
And under that sort of more demanding version of the appropriate inquiry, which I think is what they were doing in Shelby County, I'm not aware of anything in the record that establishes that kind of really strong connection between California in particular and climate change.

[02:06:51] Speaker 03:
Could you entertain questions on that?

[02:06:52] Speaker 03:
We've been here a while already, so I'll briefly go through.

[02:06:55] Speaker 03:
Can I ask a question about EPCA?

[02:06:56] Speaker 03:
As many as you'd like, yes.

[02:07:00] Speaker 07:
I appreciate the comparison you make to the Mima case.

[02:07:03] Speaker 07:
Essentially, you say maybe EPA didn't have to consider the constitutional claim there, but the court went on to address that on the merits, right?

[02:07:13] Speaker 07:
It seems like one potential distinction there is that

[02:07:17] Speaker 07:
question under EPCA here just seems incredibly fact intensive to decide whether individual standards are sufficiently related to fuel economy.

[02:07:29] Speaker 07:
For example, I think you were brief mentions carbon dioxide.

[02:07:33] Speaker 07:
I'm not sure where to look to find evidence about methane and nitrous oxide.

[02:07:40] Speaker 07:
And so it just makes me wonder

[02:07:43] Speaker 07:
whether the better vehicle for this is a district court case where that type of a record can be built.

[02:07:48] Speaker 07:
And anyhow, I just want to know what your response is to that concern and potential distinction.

[02:07:53] Speaker 03:
Yeah, no, I'm grateful for the question because it actually brings me right to where I want it to go anyway, which is begin by stressing what we're not arguing.

[02:08:00] Speaker 03:
We are not arguing that every emissions control limitation with any connection, no matter how tangential the fuel standards or average fuel standards is preempted.

[02:08:09] Speaker 03:
We are arguing that related to has some bite.

[02:08:11] Speaker 03:
It means something.

[02:08:12] Speaker 03:
And so there is a line to draw somewhere, and wherever you draw that line, the standards here are clearly on one side of it.

[02:08:19] Speaker 03:
And let me explain how we know that's true, even without the sort of record you might have filled up at a trial.

[02:08:25] Speaker 03:
It is conceded in this case, and the EPA has specifically found that there is an intrinsic mathematical relationship between CO2 emissions and fuel economy.

[02:08:34] Speaker 03:
So to regulate one is just to regulate the other by a different way.

[02:08:37] Speaker 03:
So when we look at the low emissions vehicles portion of the program,

[02:08:41] Speaker 03:
limits how much CO2 can be emitted from a vehicle.

[02:08:45] Speaker 03:
Well, that is a fuel economy standard by a different name, therefore relates to fuel economy.

[02:08:50] Speaker 03:
If you look at the zero emission vehicles program, we don't even need evidence.

[02:08:53] Speaker 03:
We have a statutory.

[02:08:54] Speaker 03:
So under the statute, when the government determines compliance with the average fuel economy standards, it has to assign a miles per gallon equivalent zero emission

[02:09:07] Speaker 03:
That means that percentage of your zero emission vehicles

[02:09:12] Speaker 03:
percentage of zero emission vehicles in your fleet will directly bear on your compliance as a manufacturer with average fuel economy standards.

[02:09:19] Speaker 03:
So again, we have that incredibly inextricable link between the two.

[02:09:23] Speaker 03:
And that's what makes this context different from other ones where, say, you require a reduction in carbon monoxide, it requires a catalytic converter.

[02:09:31] Speaker 03:
Well, maybe there can be a debate about what is the relationship there between the rule in fuel emission.

[02:09:37] Speaker 03:
But I don't think we have to worry about that.

[02:09:39] Speaker 03:
this case.

[02:09:40] Speaker 03:
I take your point it may be easier to deal with this at a district court level but I think the court has jurisdiction over it and therefore has a duty to consider it even if there might be some other forum in which I want to ask you the question I've asked earlier

[02:09:59] Speaker 08:
Do you see any point or benefit in us deferring our decision until the panel makes its determination from the argument yesterday?

[02:10:12] Speaker 03:
Judge Wilkins, I think this is one issue on which all the parties are aligned.

[02:10:15] Speaker 03:
We think there's no reason to wait for that decision and go ahead and issue a decision.

[02:10:21] Speaker 03:
Happy to reserve the rest of my time.

[02:10:23] Speaker 03:
I guess I'm over time, but some time for rebuttal.

[02:10:25] Speaker 03:
We'll give you some time.

[02:10:27] Speaker 03:
Thank you very much.

[02:10:34] Speaker 08:
All right, for EPA, Mr. Hofstetler.

[02:10:38] Speaker 09:
Good morning, Your Honors.

[02:10:39] Speaker 09:
Eric Hofstetler for the United States.

[02:10:42] Speaker 09:
Across more than 230 years of constitutional history, equal sovereignty principles have never been construed to limit plenary commerce power in the manner my friend suggests.

[02:10:52] Speaker 09:
But if I may, I would like to start with the standing defects, because I think you can start and stop there.

[02:10:59] Speaker 09:
Starting with the alleged constitutional injury,

[02:11:03] Speaker 09:
The problem here is that petitioners have not identified any particularized sovereignty harm.

[02:11:10] Speaker 09:
Crucially, these states are not seeking relief that would enable them to exercise any more power than they can presently exercise.

[02:11:18] Speaker 09:
Quite to the contrary, they're seeking relief that would only deprive them and other states of the ability to adopt the California level of stringency into their own state laws.

[02:11:30] Speaker 09:
And we think that any kind of cognizable sovereignty injury does require an alleged loss of power that the sovereign prefers to exercise.

[02:11:38] Speaker 09:
That's what sovereignty is all about, the exercise of power.

[02:11:42] Speaker 09:
Yet these states make clear that they accept, they embrace federal preemption in this regulatory space.

[02:11:48] Speaker 07:
So why aren't they right about the analogy to the equal protection cases, where you can resolve an inequality injury by leveling down?

[02:11:56] Speaker 09:
I think it's important to recognize that these states aren't advancing a 14th Amendment equal protection claim, such as an individual could assert.

[02:12:03] Speaker 09:
And we think the equal protection case law just is an opposite.

[02:12:07] Speaker 09:
In the equal protection context,

[02:12:09] Speaker 09:
You have alleged discrimination against a disfavored class of individuals.

[02:12:13] Speaker 09:
And in some instances, like where there's race or sex discrimination, that discrimination in and of itself can create a recognizable stigmatization injury that can be remedied through the withdrawal of benefits to the favored class.

[02:12:27] Speaker 09:
That's not the dynamic that's going on in the context of a 10th Amendment type sovereignty claim.

[02:12:33] Speaker 09:
There, it's all about an alleged loss of power.

[02:12:36] Speaker 09:
That's, again, what sovereignty is all about.

[02:12:40] Speaker 09:
It's not about stigmatization, per se.

[02:12:42] Speaker 09:
So we don't think that 14th Amendment equal protection case law carries over to this sort of 10th Amendment type claim.

[02:12:51] Speaker 09:
And I'll move on to their other theory of standing, the alleged monetary injuries.

[02:12:56] Speaker 09:
We don't think those fare any better.

[02:12:57] Speaker 09:
Their principal allegation here through their expert declaration is that they think they're going to pay higher prices for the vehicles in their state fleets over the remaining two model years of the waiver.

[02:13:11] Speaker 09:
We think that their experts

[02:13:14] Speaker 09:
Academic hypothesis is overly speculative and unsubstantiated, and we think it's disproved by the real-world empirical evidence that's contained in the declaration submitted by Mr. Cunningham that was appended to California's declaration.

[02:13:29] Speaker 09:
And just a few things to highlight regarding some of what we think are the deficiencies in this declaration.

[02:13:35] Speaker 09:
First, the declarant doesn't even acknowledge, much less grapple with, the redressability issue.

[02:13:41] Speaker 09:
They don't grapple with the fact that automakers have announced plans already to greatly expand their production of electric vehicles to meet market demand.

[02:13:52] Speaker 09:
Just look at what the automakers themselves have told you regarding their plans in their brief that supports California's waiver.

[02:14:02] Speaker 09:
Second, they're experts' core assumption that automakers are going to need to sell electric vehicles at a loss in California because otherwise consumers aren't going to be willing to buy them.

[02:14:12] Speaker 09:
is readily disproved.

[02:14:13] Speaker 09:
Look at the sales data in the Cunningham Declaration, reflecting that in fact electric cars in California are already selling at volumes greater than what California requires.

[02:14:25] Speaker 09:
It reflects that consumers in many cases are paying thousands of dollars in excess of the MSRP.

[02:14:32] Speaker 09:
All of which leads to the conclusion that their experts corollary ultimate assumption that manufacturers are going to have to raise prices on conventional vehicles nationwide is incorrect and unfounded.

[02:14:48] Speaker 09:
So we think their monetary theories of injury are overly speculative, that there's no redressability, and so we think you could stop at Article III standing with respect to state petitioners.

[02:14:59] Speaker 09:
We do think, since their claims are completely independent of industry petitioners' claims, that they need to demonstrate standing on their own.

[02:15:09] Speaker 08:
What about their citation of bond?

[02:15:12] Speaker 09:
I'm sorry, what was the question?

[02:15:14] Speaker 08:
The citation of bond?

[02:15:17] Speaker 08:
the bond case for the proposition that if fuel petitioners have standing and state petitioners do as well.

[02:15:30] Speaker 09:
Yeah, I'm unfamiliar with that particular case, but I think it's well established in the case law that where you have independent claims, standing needs to be demonstrated for each claim.

[02:15:40] Speaker 09:
So it doesn't matter what petitioner is asserting which claim.

[02:15:43] Speaker 09:
You have two independent claims here.

[02:15:45] Speaker 09:
Industry petitioners didn't advance these claims.

[02:15:48] Speaker 09:
Only state petitioners did.

[02:15:50] Speaker 09:
Therefore, we think they need to assert established standing, and it's their burden to do so.

[02:15:59] Speaker 07:
There was also a suggestion that if we believe they're standing for the constitutional claim on their theory of equal sovereignty, that that also gives them standing to raise all of these statutory arguments in the case, because those would eliminate the waiver and therefore redress, I suppose, part of the sovereign injury.

[02:16:27] Speaker 07:
Do you have a response to that?

[02:16:28] Speaker 09:
Yeah, that can't be correct, Judge Garcia, because let's assume for purposes of discussion that they do have standing based on the constitutional theory.

[02:16:36] Speaker 09:
Let's suppose you reject their constitutional claim.

[02:16:40] Speaker 09:
That theory of standing goes away.

[02:16:43] Speaker 09:
They need some other theory of injury to survive, to advance the separate EPCA statutory claim.

[02:16:49] Speaker 09:
So you would need to reach their monetary theory of injury regardless.

[02:16:57] Speaker 09:
Further questions about standing?

[02:16:58] Speaker 09:
If not, I'll move on to the merits.

[02:17:02] Speaker 09:
We think the constitutional claim falls short, both because, two reasons, both because equal sovereignty principles don't have application to routine, private regulation of commerce.

[02:17:14] Speaker 09:
but also because, regardless, we think these petitioners have forfeited any argument that Congress lacked a good enough reason for the waiver, even if you were to assume for the sake of discussion that equal sovereignty principles had some application.

[02:17:28] Speaker 09:
I want to start with the latter point because I think it's

[02:17:31] Speaker 09:
this positive in and of itself, that petitioners are resting their case entirely here on their theory that there's a per se bar on differential preemption treatment, categorical bar.

[02:17:45] Speaker 09:
I know my friend has offered some arguments this morning about why he thinks that bar wasn't met, but I didn't see those arguments in their brief.

[02:17:53] Speaker 09:
We think that those arguments are forfeited, that they have not made any case that Congress lacked a good enough reason.

[02:18:01] Speaker 09:
So we think you could stop there.

[02:18:03] Speaker 09:
But moving on to the

[02:18:06] Speaker 09:
Moving beyond the forfeiture problem, if you do want to address the merits, we do think that there's a sharp distinction between the kind of analysis the court did in Shelby County and what's going on here.

[02:18:20] Speaker 09:
The general context is that in agreeing to enter the union and abide by the Constitution, states from the founding agreed to compromise to federal supremacy in the realm of interstate commerce.

[02:18:34] Speaker 09:
That's a foundational principle that where Congress is acting under the Commerce Clause, it holds plenary power to decide how to do so, best meet regional needs.

[02:18:43] Speaker 09:
And that's how the Commerce Clause power has always been understood throughout history.

[02:18:48] Speaker 09:
Congress's choices, of course, are the result of a democratic process in which all states are represented.

[02:18:53] Speaker 09:
Not to put too fine a point on it, but I'm not aware of a single case throughout history where a court has ever applied equal sovereignty principles to routine regulation of private commerce, which is what's going on here.

[02:19:06] Speaker 09:
This is the regulation of privately manufactured automobiles.

[02:19:10] Speaker 09:
And in Shelby County, going back to a question you asked, Judge Garcia, the Supreme Court was concerned because there was an intrusion into a sensitive area of poor sovereign power, the state's ability to determine its own election procedures.

[02:19:26] Speaker 09:
This case doesn't involve anything like that kind of intrusion into a poor state sovereign power.

[02:19:31] Speaker 09:
Instead, there's just a displacement of regular police power.

[02:19:35] Speaker 09:
Emissions standards for privately manufactured automobiles aren't directly regulating the states.

[02:19:41] Speaker 09:
The states don't have a right to regulate those emissions that isn't displaced when the federal government acts and preempts them.

[02:19:49] Speaker 09:
So we don't think this is even a gray area.

[02:19:51] Speaker 09:
We think that everyone agrees here, including my friend, that petitioners can, that the federal government can properly preempt regulation in this field.

[02:20:03] Speaker 09:
And on a more practical level also, this is a novel theory that would be very disruptive and we think unworkable on the disruptive front.

[02:20:12] Speaker 09:
We think there are many more than five examples of where there's grandfathering in the US code or where states are exempted from preemption.

[02:20:20] Speaker 09:
Just to take one notable example, Texas has its own authority to regulate the electric grid, but no other state has that kind of authority.

[02:20:29] Speaker 09:
That's very significant and meaningful.

[02:20:30] Speaker 09:
That would go under under their theory.

[02:20:34] Speaker 09:
And we think their theory is also quite unworkable in as much as we don't think they've offered any particularly clear test as to when a statute should be deemed constitutional and when it should not be.

[02:20:45] Speaker 09:
We think it would create enormous line drawing problems, particularly when you start thinking about conflict exemption principles and how particular statutes, even where they don't explicitly differentiate between states, might have unequal preemptive effects.

[02:20:59] Speaker 09:
Were there any questions about the merits?

[02:21:01] Speaker 09:
If not, I can say a couple words about the epic.

[02:21:09] Speaker 09:
On EPCA, in section 209, Congress did specify the factors that it wanted EPA to consider for purposes of waiving preemption under the Clean Air Act.

[02:21:20] Speaker 09:
And we think this court has already sufficiently clarified its previous decisions, including MIMA 1 and MIMA 2, that EPA should not and need not go beyond the specified congressional criteria.

[02:21:32] Speaker 09:
So here, EPA was not obliged to consider, and appropriately did not consider,

[02:21:39] Speaker 09:
preemption principles arising under a statute that it does not administer.

[02:21:43] Speaker 07:
What about the point I raised with Mr. Flowers that in Mima 1 the court did go on to consider the constitutional plan?

[02:21:50] Speaker 07:
by analogy, why doesn't that mean that we're under an obligation to consider EPICA preemption even if EPA wasn't required to?

[02:22:00] Speaker 09:
Right.

[02:22:00] Speaker 09:
Well, Judge Garcia, I think your jurisdiction is under 7607, is to consider the validity of EPA's Clean Air Act action.

[02:22:08] Speaker 09:
And in some cases, EPA's Clean Air Act action itself may be closely tied to a constitutional plan, as it is with the Equal Sovereignty

[02:22:16] Speaker 09:
You know, if you agreed with their equal sovereignty claim, that would void this action.

[02:22:21] Speaker 09:
We think that's very different than a situation where someone is bringing a claim under an entirely different statute.

[02:22:28] Speaker 09:
And this isn't a constitutional claim.

[02:22:30] Speaker 09:
So hypothetically, there might be any number of claims someone might conceive of that they want to bring challenging a particular California state law.

[02:22:44] Speaker 09:
It's not your obligation.

[02:22:47] Speaker 09:
or tasked to go beyond your jurisdiction, applying on claims that aren't fairly presented.

[02:22:53] Speaker 09:
In this case, all your jurisdiction is just to assess whether Clean Air Act preemption was appropriately decided.

[02:23:00] Speaker 09:
And there's a sharp analytical distinction between EPCA preemption and Clean Air Act preemption.

[02:23:06] Speaker 09:
EPA's jurisdiction extends to the latter.

[02:23:08] Speaker 09:
Likewise, your jurisdiction, review jurisdiction, covers the latter.

[02:23:12] Speaker 07:
So I think what they point to is they would say in 7607,

[02:23:17] Speaker 07:
There's no limiting language.

[02:23:19] Speaker 07:
Yes, that's in the Clean Air Act, but it essentially says you can seek review.

[02:23:23] Speaker 07:
And then we look to the APA, which says we have to ask whether EPA's act, sorry, the APA, if I said EPA.

[02:23:31] Speaker 07:
We have to ask whether it was in accordance with law, just like we have to ask if it's in accordance with the Constitution.

[02:23:38] Speaker 07:
And why doesn't our review under the in accordance with law

[02:23:42] Speaker 09:
Well, that's based on the question of what law you're applying.

[02:23:47] Speaker 09:
The law you're applying here is the Clean Air Act.

[02:23:49] Speaker 09:
Did EPA appropriately exercise its authority under the Clean Air Act?

[02:23:54] Speaker 09:
You don't go out and try to dream up claims that are unrelated to what the EPA action that it actually took.

[02:24:01] Speaker 09:
And look, EPA didn't even address

[02:24:03] Speaker 09:
EPCA preemption in this record.

[02:24:06] Speaker 09:
And even if you wanted to go out and start thinking about an EPCA claim, you don't have a record before you that would allow you to do that.

[02:24:13] Speaker 09:
I mean, presumably, that would be a very fact-intensive inquiry.

[02:24:17] Speaker 09:
A trial court, which is where this claim should be brought, would have the ability to conduct an evidentiary hearing, et cetera.

[02:24:25] Speaker 09:
Your record is limited to the EPA record.

[02:24:27] Speaker 09:
EPA didn't address the issue.

[02:24:30] Speaker 09:
So the proper remedy

[02:24:31] Speaker 09:
It's not like someone doesn't have a remedy.

[02:24:33] Speaker 09:
If they wanna bring an EPCA claim, they can go to a trial court just like the litigants did in Green Mountain and Central Valley.

[02:24:43] Speaker 08:
All right, thank you.

[02:24:55] Speaker 05:
May it please the court, Elaine Meckonstock for Respondent Intervener, California.

[02:24:58] Speaker 05:
I'm just going to make a couple of points about petitioners' economic harm standing.

[02:25:04] Speaker 05:
I first want to make sure that the court does understand that state petitioners have not alleged any economic harm from the state's – from California's greenhouse gas emission standards.

[02:25:12] Speaker 05:
They only alleged any harm from zero emission vehicle standards, and they haven't met their burden there either.

[02:25:17] Speaker 05:
In addition to the timing concerns that Judge Garcia has raised about redressability, which are serious, there is no evidence of any press subsidization ever happening in the past, much less in the future.

[02:25:29] Speaker 05:
And in addition, although they submitted declarations from each of their states, there's nothing in those declarations that tells us when, how, and by whom the prices they pay for vehicles are established.

[02:25:41] Speaker 05:
So for all we know, they've already negotiated long-term contracts for model year 2025.

[02:25:47] Speaker 05:
There's just nothing in the record, and it was their burden.

[02:25:50] Speaker 05:
Moving on to constitutional standing, we agree with the U.S.

[02:25:55] Speaker 05:
that state petitioners have not identified any action they wish to take to which Section 209B1 is a barrier.

[02:26:02] Speaker 05:
To the contrary, they willingly accept application of federal emission standards in their state, meaning they don't desire to regulate new motor vehicle emissions themselves.

[02:26:12] Speaker 05:
And to the question about why the equal protection remedy of leveling up or leveling down doesn't establish injury for them, two things.

[02:26:22] Speaker 05:
One, the fact that that remedy exists, that remedy exists because it remedies the injuries of people who suffer a concrete harm.

[02:26:31] Speaker 05:
those who have been denied the opportunity or privilege that they want.

[02:26:36] Speaker 05:
These petitioners don't claim to want the opportunity or privilege, and the remedy doesn't expand the scope of who is actually injured.

[02:26:44] Speaker 05:
So the fact that someone else observing the unequal treatment who wasn't concretely injured might be happy about the leveling up or leveling down remedy that removes the equality.

[02:26:55] Speaker 05:
It doesn't expand the scope of injury to that person.

[02:26:58] Speaker 05:
So the fact that you

[02:26:59] Speaker 05:
don't want the thing that is being unequally denied and the fact that then other, you know, anyway, I'm not making sense, I'm sorry.

[02:27:08] Speaker 08:
Well, that leads me to a question that I meant to ask your friend on the other side forgot, but do you know whether any of the state petitioners have ever exercised section 177

[02:27:28] Speaker 08:
right privilege, et cetera, to adopt the California standard?

[02:27:33] Speaker 05:
I don't think so.

[02:27:34] Speaker 05:
I'd have to go back and look at exactly the full list.

[02:27:36] Speaker 05:
They're not currently exercising that opportunity, but I don't know for sure that they haven't in the past.

[02:27:43] Speaker 08:
If they have, do you think it would make any difference?

[02:27:48] Speaker 05:
I don't think so, because that still wouldn't necessarily be an indication that they currently want to adopt their own emission standards.

[02:27:54] Speaker 08:
No, I mean, do you think that that would undermine, if they have in the past, do you think that that undermines their equal sovereignty argument, if any of them have?

[02:28:04] Speaker 05:
I don't know whether it would cut one way or the other.

[02:28:06] Speaker 05:
They would simply have been exercising a right provided to them by Congress.

[02:28:10] Speaker 05:
I'm not sure that it would affect the standing analysis or the analysis on the merits.

[02:28:14] Speaker 05:
The other thing I wanted to say about the leveling up and leveling down is that in addition to not expanding the population of people who are injured, it also demonstrates what's wrong with this case, because the remedy in Shelby County wasn't leveling up or leveling down.

[02:28:29] Speaker 05:
There was no question that once the constitutional violation was identified, the only solution was to remove the federal intrusion into state for sovereignty.

[02:28:40] Speaker 05:
There was never a question about, well, let's just deprive everyone, all the states, of this sovereign authority.

[02:28:46] Speaker 05:
And so that whole leveling up and leveling down argument just doesn't work in this context.

[02:28:53] Speaker 05:
And this fundamentally goes to the merits as well, because where the federal government unconstitutionally infringes upon core sovereignty, the solution is to remove the intrusion.

[02:29:03] Speaker 05:
And we know that it is that infringement upon core sovereignty that triggers the equal sovereignty doctrine from Shelby County itself, from the equal footing cases, and from the federalism canon cases.

[02:29:15] Speaker 05:
And Shelby County talks about states retaining autonomy, quote, outside the strictures of the supremacy clause.

[02:29:22] Speaker 05:
It also talks about the Constitution allocating power between the federal government and the state power.

[02:29:28] Speaker 05:
And to Judge Garcia's point, that is what the court was recognizing, that the federal government has paramount sovereignty with its enumerated powers.

[02:29:38] Speaker 07:
And that what was happening in the- Because their answer to that, right, is that Congress has supreme authority pursuant to the Commerce Clause.

[02:29:45] Speaker 07:
But what it doesn't have

[02:29:47] Speaker 07:
is just that nobody would have assumed that includes the ability to take sovereign authority from some states, but not others.

[02:29:56] Speaker 07:
I do think it's fair to say that examples of this happening, something analogous happening, over the course of our history are a bit few and far between.

[02:30:05] Speaker 07:
So how do you respond to that argument?

[02:30:08] Speaker 05:
Well, they may be few and far between, but they're hardly non-existent.

[02:30:13] Speaker 05:
So in fact, if you look to Oklahoma v. Castro, which was a case we cited in our brief, that's a 2022 decision where the Supreme Court is describing Public Law 280, which allows certain states to enforce state law for offenses committed by or against Indians on Indian land.

[02:30:28] Speaker 05:
Other states can opt in to that authority, but they need tribal consent, which means other states may not get it.

[02:30:34] Speaker 05:
That's unequal sovereignty under petitioner's definition.

[02:30:38] Speaker 05:
My friend from EPA mentioned Texas's grid.

[02:30:42] Speaker 05:
Texas also has authority to regulate more submerged lands in other states.

[02:30:46] Speaker 05:
Ohio has some power over vehicles on its highways that other states lack.

[02:30:50] Speaker 05:
And then to the Compact Clause examples, there are myriad of those.

[02:30:54] Speaker 05:
And we know from the U.S.

[02:30:55] Speaker 05:
Steel case that Congress only has to approve compacts that enhance state power at the expense of federal supremacy.

[02:31:02] Speaker 05:
And so every time Congress approves a compact, it's changing state authority or the compacting states and not for everyone else.

[02:31:10] Speaker 05:
And we cited to the Northeast Dairy Compact in our brief, which is almost identical to the structure we have here.

[02:31:16] Speaker 05:
It was a group of states.

[02:31:18] Speaker 05:
who wanted to set their own price for dairy products that was different from the federal price that applied everywhere else.

[02:31:25] Speaker 05:
So just like here, where we have California and 177 states who follow one set of emission standards, and everyone else follows the federal standard.

[02:31:32] Speaker 05:
It's exactly the same.

[02:31:34] Speaker 05:
And petitioners have never explained how that could be constitutional, and this isn't.

[02:31:39] Speaker 05:
And there are a myriad other Compact Clause examples including the Red River Compact described in the Tarrant Regional Water District case at 569 U.S.

[02:31:47] Speaker 05:
614.

[02:31:49] Speaker 05:
And even if there were, and then I also just wanna come back to the fact that we know that it is this federal intrusion into core state sovereignty that is the trigger here, you can look to, for example, Coyle v. Smith, which Shelby County cited extensively.

[02:32:03] Speaker 05:
And that is a, it's an equal footing case, and so it's about state's admission into the union, but it distinguishes between conditions on admission that are, quote, within the scope of conceded powers of Congress, those are fine,

[02:32:16] Speaker 05:
And quote, those concerning matters which would otherwise be exclusively within the sphere of state power.

[02:32:21] Speaker 05:
And that's where we draw the line and Congress can't cross it.

[02:32:26] Speaker 05:
And the same is true in Gregory V. Ashcroft where the court considered a commerce clause legislation about age discrimination.

[02:32:32] Speaker 05:
And it was perfectly fine, perfectly constitutional, no concern whatsoever that it reached a large population of state employees.

[02:32:40] Speaker 05:
But the court drew the line at its application to high ranking state officials with policy making roles.

[02:32:46] Speaker 05:
because that would infringe upon core state sovereignty.

[02:32:49] Speaker 05:
So this is the consistent line we see through all of these cases, and there's certainly no reason to depart from that line here.

[02:32:56] Speaker 05:
And even if there were, as we talked about earlier this morning, the Section 209B1B finding that EPA makes confirms that every time it grants a waiver for California's revised program, someone is looking at whether California still has a need for that second program.

[02:33:13] Speaker 05:
That's exactly what Congress instructed EPA to do,

[02:33:16] Speaker 05:
to make the same finding it made when it passed this statute in 1967, amended it in 1977, and adopted it into 2019 and 1990.

[02:33:25] Speaker 05:
And then I just do want to make sure that I briefly touch on EPCA.

[02:33:29] Speaker 05:
I know I'm over time.

[02:33:30] Speaker 05:
On EPCA preemption, a couple of points.

[02:33:34] Speaker 05:
I agree with EPA that there is a distinction between constitutional claims and the statutory claim petitioners try to bring here.

[02:33:42] Speaker 05:
What I think in accordance with the law means here is did EPA follow Congress's direction under the Clean Air Act, which means did it look at the three criteria, which are the only basis on which EPA can deny a waiver.

[02:33:55] Speaker 05:
There's nothing in this Clean Air Act provision about EPCA preemption.

[02:33:59] Speaker 05:
So it was not an error for EPA not to look at it, and this court doesn't have jurisdiction over that claim.

[02:34:06] Speaker 05:
I also think it's important to mention if the court does decide to reach the claim, and sorry, just backing up one second.

[02:34:13] Speaker 05:
Judge Garcia, you're absolutely right that these can be fact-intensive claims.

[02:34:17] Speaker 05:
The Green Mountain Court, I think, called a two-week trial to resolve this preemption question under EPCA.

[02:34:23] Speaker 05:
And the Central Valley Chrysler case was resolved on summary judgment after massive evidentiary hearings.

[02:34:29] Speaker 05:
So this is not the appropriate forum for that to be resolved, and neither is the proceeding before EPA.

[02:34:35] Speaker 05:
I also want to mention my friend from Ohio said that EPA found that there was a mathematical relationship here.

[02:34:43] Speaker 05:
I don't see that anywhere in this decision or any other, even the 2013 decision.

[02:34:48] Speaker 05:
That's not in this record, and I'm not exactly sure what he was talking about.

[02:34:54] Speaker 05:
But even if EPA made that finding some many years ago, it is true now that most manufacturers are complying with California standards by selling zero emission vehicles.

[02:35:05] Speaker 05:
And those vehicles do not use fuel under the definition of the Energy Policy Conservation Act or have fuel economy.

[02:35:13] Speaker 05:
And whether or not they make it easier for automakers to comply or give automakers more options to comply with the fuel economy standards, it doesn't make California's zero emission vehicle standard related to a fuel economy standard.

[02:35:26] Speaker 05:
In fact, we had a whole day of argument yesterday, part of which was about NHTSA being unable

[02:35:31] Speaker 05:
to set a zero emission vehicle standard.

[02:35:34] Speaker 05:
And so our standard does exactly what NHTSA is prohibited from doing.

[02:35:38] Speaker 05:
So those standards cannot be related to each other.

[02:35:42] Speaker 07:
On the question of the record, could you just say a little bit about specifically what types of evidence California thinks is missing from this record that you would put in if there were a litigation over EPCA preemption?

[02:35:58] Speaker 05:
My understanding is that the two-week trial in Green Mountain involved a lot of record evidence about how automakers can reduce greenhouse gas emissions.

[02:36:06] Speaker 05:
Some of those technologies also improve fuel economy.

[02:36:10] Speaker 05:
Others don't.

[02:36:11] Speaker 05:
So I think there could be a whole evidentiary record about we're going to get down into, you know, the numbers if related to – I don't think related to – to be clear, I don't think related to turns on the number.

[02:36:22] Speaker 05:
Like, is it 60% or 70% of the technology?

[02:36:25] Speaker 05:
But if it did, we would need a trial to uncover all of that evidence and figure it out.

[02:36:30] Speaker 05:
But as I said, even the zero emission vehicles are now the technology that is predominantly being used to comply with our standards.

[02:36:38] Speaker 05:
And they haven't established standing for the GHG standard anyway.

[02:36:42] Speaker 05:
And there is no relationship between the zero emission vehicle standards and fuel economy standards.

[02:36:48] Speaker 05:
And if the court has no more questions, I thank the court for its time.

[02:36:51] Speaker 05:
Thank you.

[02:37:02] Speaker 03:
All right, Mr. Flowers, we'll give you four minutes.

[02:37:05] Speaker 03:
Thank you, Judge Wilkins, and I'll try to be brief.

[02:37:06] Speaker 03:
I'll begin by addressing your question.

[02:37:08] Speaker 03:
I have the same answer as California.

[02:37:10] Speaker 03:
I'm not aware of any exercise of 177 by the petitioner states, but I can't certify for certain that it's never happened.

[02:37:16] Speaker 03:
On the record point about the finding about the mathematical connection, it's 84 Fedreg 51315.

[02:37:23] Speaker 03:
It's also joint appendix 495.

[02:37:25] Speaker 03:
This is the joint rulemaking of NHTSA and EPA.

[02:37:29] Speaker 03:
The relationship between fuel economy standards and regulations that limit or prohibit tailpipe carbon dioxide emissions from automobiles is a matter of science and mathematics.

[02:37:38] Speaker 03:
Commenters did not and cannot dispute the direct scientific link between the two.

[02:37:42] Speaker 03:
And there's no, that's never disclaimed.

[02:37:45] Speaker 03:
Just a few additional points.

[02:37:47] Speaker 03:
I think one point I really want to emphasize is that if we have standing on any of our theories, you can address any claims in this case.

[02:37:54] Speaker 03:
I think my friend suggested that if we have constitutional standing and our constitutional claims fail, you can't reach the statutory arguments.

[02:38:02] Speaker 03:
Respectfully, that's wrong.

[02:38:04] Speaker 03:
Number one, it entangles standing and the merits.

[02:38:06] Speaker 03:
Two, maybe the more severe problem is that turns the constitutional avoidance

[02:38:11] Speaker 03:
notion on its head, it becomes constitutional collision.

[02:38:15] Speaker 03:
You would be required, I think, to adjudicate a constitutional claim to ensure that they're standing before reaching a statutory argument.

[02:38:22] Speaker 03:
That cannot possibly be correct.

[02:38:24] Speaker 03:
Now, on standing, I think the EPA suggested that if I understood it right, it's that nothing

[02:38:31] Speaker 03:
We're not being denied anything somehow, and that doesn't confer standing.

[02:38:35] Speaker 03:
It's important to realize, we're not here complaining that California gets something we don't have.

[02:38:39] Speaker 03:
Our main complaint is it's something taken from us, our sovereign equality.

[02:38:43] Speaker 03:
There is no case that says that if a right is taken from you, that's not enough to confer standing.

[02:38:48] Speaker 03:
If we have an easement, and we never use the easement, we have no plans to sell it, as a private property owner does, and the government takes that from them, they don't have to show that they plan to turn it into a bike path or plan to sell it to have standing.

[02:39:00] Speaker 03:
The taking of that right is it's not

[02:39:02] Speaker 03:
And they mentioned the stigmatic harm from the equal protection context.

[02:39:06] Speaker 03:
It's true that's an additional harm, but it's a harm that also applies here.

[02:39:09] Speaker 03:
The whole premise of the equal sovereignty doctrine is the equal dignity of the states.

[02:39:14] Speaker 03:
I think that's a direct quote from Shelby County.

[02:39:16] Speaker 03:
The dignitary interests are implicated here, too.

[02:39:19] Speaker 03:
Two additional points, both on the merits of equal sovereignty.

[02:39:22] Speaker 03:
First, I think they suggested that we forfeited an argument that we could prevail under the Shelby County test.

[02:39:27] Speaker 03:
Respectfully, that's not right.

[02:39:29] Speaker 03:
Forfeit claims, not arguments.

[02:39:30] Speaker 03:
Our claim all along has been that Section 209B is unconstitutional, both on its face and as applied.

[02:39:36] Speaker 03:
Now, we propose a test, which is a bright line rule.

[02:39:39] Speaker 03:
They disagree with that test and responded by proposing a test of their own, the Shelby County test.

[02:39:43] Speaker 03:
We are entitled, as we did in our reply brief, to respond by explaining why we win under that test also.

[02:39:49] Speaker 03:
see this all the time.

[02:39:50] Speaker 03:
The party argues that they win under strict scrutiny, and then the other side says it's not strict scrutiny, it's rational basis.

[02:39:56] Speaker 03:
They can still argue that even under rational basis, they prevail.

[02:39:59] Speaker 03:
And that brings me to the final point.

[02:40:01] Speaker 03:
I think my friend from California said that the equal sovereignty doctrine is limited to areas where the state's power is exclusive.

[02:40:10] Speaker 03:
We know for certain that's not right.

[02:40:12] Speaker 03:
States do not have exclusive power over election law, yet Shelby County applied it there.

[02:40:16] Speaker 03:
I mentioned Escanaba.

[02:40:17] Speaker 03:
That's a case about the Commerce Clause.

[02:40:19] Speaker 03:
And in that context, or I should say it's a case about the regulation of navigable waters, the Court recognized Congress's power under the Commerce Clause to regulate that and nonetheless applied equal footing doctrine.

[02:40:31] Speaker 03:
And my final point is that this is no run-of-the-mill

[02:40:34] Speaker 03:
violation.

[02:40:35] Speaker 03:
This is unlike anything you see in the history of our republic, where you give one state such immense power, particularly in the context of global warming, to regulate something of worldwide significance.

[02:40:46] Speaker 03:
So I don't think ruling for us jeopardizes many laws at all.

[02:40:50] Speaker 03:
And there are certainly very few, or in fact, none, of this magnitude.

[02:40:54] Speaker 03:
So if there are no further questions, I'm happy to rest.

[02:40:57] Speaker 03:
I'll be asked to vacate.

[02:41:03] Speaker 03:
Alright, thank you.

[02:41:04] Speaker 03:
We'll take the case under advisement.