California is leading a challenge by 17 states and the District of Columbia claiming that the Environmental Protection Agency's (EPA's) revised position on tailpipe exhaust standards for light-duty vehicles for model years 2022 to 2025 was arbitrary and capricious. Clean Air Act regulations had required the EPA to issue a mid-term evaluation of vehicle emission standards for model years 2022 to 2025 by 1 April 2018 in order to determine whether the standards were still appropriate.

The EPA issued its evaluation on 12 January 2017, shortly before the change of administration. It found that the 54.5 mile per gallon standard could be attained, despite being 10 miles more per gallon than the existing standard. More recently, the EPA revised its mid-term evaluation – in a decision signed on 2 April 2018 it found, among other things, that new information on fuel prices and technology meant that assumptions underlying the January 2017 evaluation had been unrealistically optimistic.

Although the revised mid-term evaluation stated only that the EPA would undertake a new rulemaking with the National Highway Traffic Safety Administration to evaluate setting new standards, the plaintiffs claim that the EPA's decision was a final agency action subject to review under the Administrative Procedure Act. Thirteen of the 18 jurisdictions filing suit have already adopted California's more stringent standards for model years 2022 to 2025.

For further information on this topic please contact Samuel B Boxerman or Jim Wedeking at Sidley Austin LLP by telephone (+1 202 736 8000) or email (sboxerman@sidley.com or jwedeking@sidley.com). The Sidley Austin LLP website can be accessed at www.sidley.com.

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