Last week, the Senate Environment Committee approved legislation to overturn the Environmental Protection Agency's denial of California's request for a waiver of preemption of the Golden State's regulation of greenhouse gas emissions from new motor vehicles sold in the state. As I have discussed before, under the language of the Clean Air Act, the EPA's decision was legally justified (even if debatable on policy grounds). The agency had no legal obligation to grant California's request for permission to impose the nation's first GHG emission controls. If members of Congress disagree with EPA's choice -- and some clearly do -- legislation revising the Act or granting the waiver is the proper recourse.

As the waiver legislation advances, so too does California's legal challenge to the waiver denial -- though it is not clear where the lawsuit will (or should) be heard. California would like to press its case in the U.S. Court of Appeals for the Ninth Circuit. The EPA and the auto industry, on the other hand, believe proper jurisdiction lies in the U.S. Court of Appeals for the D.C. Circuit. At the same time, there is a dispute over what, precisely, California is challenging: the EPA's letter to California giving notice of its decision, or the subsequent formal Federal Register notice. Resolution of these questions could determine the outcome of the suit.

Some background: On December 19, EPA Administrator Stephen Johnson sent California Governor Arnold Schwarzenegger a letter informing him that EPA would deny the waiver. California then filed suit in the Ninth Circuit. According to California, the case belongs in the Ninth Circuit because the waiver request concerns California (even though many other states wish to adopt California's regs), and Johnson's letter failed to include language indicating that the decision was "nationally applicable" or "based on a determination of nationwide scope or effect." Had such language been included, the Ninth Circuit would have no jurisdiction over the suit. Under CAA Section 307(b), challenges to such "national" regulatory decisions must be made in the D.C. Circuit.

Then, on February 29, EPA Administrator Johnson signed the agency's formal Notice of Decision denying California's waiver request. This notice contained a more detailed explanation for the EPA's decision and, unlike Administrator Johnson's December letter, included boilerplate language indicating that the decision was "a final action of national applicability for purposes of section 307(b)(1)," as were past wavier decisions. It was published in the Federal Register on March 6.

Since the March Federal Register notice, things have gotten interesting. Aware that the notice's 307(b) determination could defeat the Ninth Circuit's jurisdiction over the case, California filed another challenge to the EPA's decision in the D.C. Circuit, so as to preserve its claim. In both Circuits, California has argued that the "real" decision subject to judicial review is the December letter, rather than the Federal Register notice. The EPA had made its decision by the time the letter was issued, California argues, so the notice was just a post-hoc justification. This argument seems to prove too much, however, as an agency administrator will always make his or her decision well before the publication of a Federal Register notice, if for no other reason that it takes time to write and publish the notice. Even if California were successful with this argument, however, it would have to contend with the EPA's claim that prior waiver determinations, all of which dealt with more localized pollutants, were deemed to be "national' decisions subject to review in the D.C. Circuit.

Meanwhile, the EPA and auto industry both filed motions to dismiss California's claims in the Ninth Circuit. The auto industry also filed a motion under the All Writs Act seeking to bar California from pursuing its claims in the Ninth Circuit, as such claims would oust the D.C. Circuit of its proper jurisdiction. The EPA also filed a motion in the D.C. Circuit seeking to dismiss California's claims, on the grounds that California, in challenging the December letter, did not challenge a "final agency action" subject to review. According to the EPA, California could only properly challenge the actual decision, i.e. the Federal Register notice.

The current action is back in the Ninth Circuit. On April 10, Ninth Circuit Appellate Commissioner Peter L. Shaw denied the EPA's and auto industry's motions to dismiss California's claims for lack of subject matter jurisdiction, without prejudice to their ability to raise jurisdictional claims in their merits briefs. Later that month, both EPA and the autos filed motions to reconsider, arguing that resolution of the jurisdictional question is necessary to avoid potentially duplicative and wasteful litigation. In particular, they argue that the continuation of proceedings in the Ninth Circuit challenging the December letter could delay, and potentially prejudice, proceedings in the D.C. Circuit challenging the Federal Register notice, over which the D.C. Circuit indisputably has exclusive jurisdiction.

As I understand the state of play, these motions to reconsider are pending before the Ninth Circuit's motions panel. Not being a Ninth Circuit maven, I don't know how long the motions panel can sit on these latest motions, or what the role of the Appellate Commissioner is at this point. [I find it odd that the Commissioner, on his own (i.e. without the participation of a motions panel of Article III judges), can rule on a motion to dismiss.] The merits briefs are due in the coming weeks, however, so I would expect a decision soon.

How these motions are resolved could help determine the ultimate outcome of the waiver litigation. California clearly chose to file its challenge in the Ninth Circuit because of the Ninth Circuit's reputation as a more "green-friendly" court. In many areas, the Ninth Circuit has adopted greater scrutiny of federal regulatory agency decisions alleged to be insufficiently protective of the environment. By the same token, the EPA and auto industry believe the D.C. Circuit would be more willing to uphold the agency's determination, in part because the D.C. Circuit has more experience with the CAA generally, and challenges involving waiver petitions in particular. So stay tuned, as this little procedural determination could have a substantial substantive effect.

Today the U.S. Court of Appeals for the Ninth Circuit dismissed California's challenge to the Environmental Protection Agency's denial of California's request for a waiver of preemption of the state's greenhouse gas emission vehicle emission controls. In a brief order, the Court explained that the letter from EPA Administrator Stephen Johnson to California Governor Arnold Schwarzenegger informing him of the waiver denial was not, itself, a reviewable final action subject to judicial review. This does not end the litigation over California's waiver request, however. Rather the battle shifts to the U.S. Court of Appeals for the D.C. Circuit, where California may press its challenge to the EPA's Federal Register notice formally denying the waiver request. This is a defeat for California nonetheless, as the state surmised (with some reason) that the Ninth Circuit would provide a friendlier forum for the Golden State's claim.