Supreme Court Decides Diamond Alternative Energy, LLC v. EPA

On June 20, 2025, the Supreme Court of the United States decided Diamond Alternative Energy, LLC v. EPA, No. 24-7, holding that fuel producers had Article III standing to challenge the EPA’s approval of California regulations requiring automakers to manufacture more electric vehicles and fewer gasoline-powered vehicles.

In 2012, California requested that the EPA approve California regulations that generally require automakers to (i) limit average greenhouse-gas emissions across their new motor vehicles in the state and (ii) manufacture a certain percentage of electric vehicles as part of their new fleets. After the EPA approved these regulations in 2022, several fuel producers sued the EPA, arguing that the agency lacked authority to approve the regulations because they targeted global climate change rather than local California air quality problems as required under the Clean Air Act. California intervened, arguing that the fuel producers lacked Article III standing. The D.C. Circuit agreed, finding that the fuel producers failed to show that automakers would likely respond to invalidation of the regulations by producing fewer electric vehicles and more gasoline-powered vehicles.

The Supreme Court reversed, holding that the fuel producers had Article III standing to sue. The Court observed that standing has three elements: (1) injury in fact; (2) causation; and (3) redressability. The Court determined that the first two elements were undisputed and straightforward — the fuel producers established injury in fact because reductions in gasoline purchases hurt their bottom line, and they established causation because the regulations likely caused a decrease in purchases of gasoline and other liquid fuels. As for redressability, the Supreme Court reasoned that invalidating the regulations would likely redress some of the fuel producers’ monetary injuries because it would likely result in more gasoline-powered automobiles and, by extension, more revenue for fuel producers from additional sales of gasoline.

In reaching that decision, the Court rejected the argument that “surging consumer demand” for electric vehicles meant that invalidating the regulations would not cause automakers to manufacture more gasoline-powered vehicles. Relying on “commonsense economic principles” and record evidence, the Court reasoned that it was sufficiently “predictable” that invalidating California’s regulations would likely redress the fuel producers’ injury. The Court also rejected the argument that the fuel producers failed to produce sufficient evidence to establish redressability (such as affidavits from expert economists), noting that plaintiffs only need to “show a predictable chain of events” that would likely result from judicial relief and redress their injury.

Justice Kavanaugh delivered the opinion of the Court, which Chief Justice Roberts and Justices Thomas, Alito, Kagan, Gorsuch, and Barrett joined. Justice Sotomayor and Justice Jackson filed dissenting opinions.