Diamond Alternative Energy v. EPA

In Diamond Alternative Energy, LLC v. EPA (June 20, 2025), the United States Supreme Court held 7-2 that energy companies have standing to challenge pro-electric vehicle regulations in California. This decision has broad implications.

First Justice Kavanaugh explained the issue before the Court:

“

Pursuant to the Clean Air Act, the U. S. Environmental Protection Agency approved California regulations requiring automakers to alter their fleets of new vehicles. Under those California regulations, automakers must manufacture more electric vehicles and fewer gasoline-powered vehicles. The goal is to decrease emissions from the use of gasoline and other liquid fuels. Producers of gasoline and other liquid fuels sued EPA, arguing that EPA’s approval of the California regulations violated the Clean Air Act. The sole issue before this Court is whether the fuel producers have standing to maintain their suit.

”

Diamond Alt. Energy, LLC v. EPA, No. 24-7, 2025 U.S. LEXIS 2383, at *7 (June 20, 2025).

Justice Kavanaugh wrote for the Court:

“

As for injury in fact, the fuel producers make money by selling fuel. Therefore, the decrease in purchases of gasoline and other liquid fuels resulting from the California regulations hurts their bottom line. Those monetary costs “are of course an injury.” United States v. Texas, 599 U. S. 670, 676, 143 S. Ct. 1964, 216 L. Ed. 2d 624 (2023). As for causation, EPA’s approval authorized California (and ultimately 17 other States) to enforce regulations that require lower fleet-wide greenhouse-gas emissions and the electrification of automakers’ vehicle fleets, thereby reducing purchases of liquid fuels such as gasoline. The regulations likely cause fuel producers’ monetary injuries because the regulations likely cause a decrease in purchases of gasoline and other liquid fuels for automobiles. Indeed, that is the whole point of the regulations. As for redressability, invalidating the California regulations would likely redress at least some of the fuel producers’ monetary injuries.3 Even “one dollar” of additional revenue for the fuel producers would satisfy the redressability component of Article III standing. Uzuegbunam v. Preczewski, 592 U. S. 279, 292, 141 S. Ct. 792, 209 L. Ed. 2d 94 (2021). And as we will explain, it is “likely” that invalidating the California regulations would result in more revenue for the fuel producers from additional sales of gasoline and other liquid fuels. FDA v. Alliance for Hippocratic Medicine, 602 U. S. 367, 380, 144 S. Ct. 1540, 219 L. Ed. 2d 121 (2024).

”

Diamond Alt. Energy, LLC v. EPA, No. 24-7, 2025 U.S. LEXIS 2383, at *19-20 (June 20, 2025).

Justice Kavanaugh repeated but ultimated rejected California's argument of the following:

“

In this Court, neither EPA nor California meaningfully disputes injury in fact or causation. But they argue that the fuel producers did not establish redressability. According to EPA and California, even if the California regulations are invalidated, the fuel producers have not shown that vehicle manufacturers would reduce the percentage of their fleets that consist of electric vehicles (or otherwise stated, increase the percentage that consists of gasoline-powered vehicles). EPA and California suggest that the automobile market has changed—apparently permanently in their view—and strong consumer demand for (and manufacturers’ supply of) electric vehicles means that automakers are unlikely to manufacture or sell any additional gasoline-powered cars even if the California regulations are invalidated.

”

Diamond Alt. Energy, LLC v. EPA, No. 24-7, 2025 U.S. LEXIS 2383, at *19 (June 20, 2025)