Clean Fuels Development Coalition v. Kessler

Background

Clean Fuels Development Coalition, Minnesota Soybean Growers Association, ICM, Inc., Minnesota Service Station & Convenience Store Association, and National Association of Convenience Stores sued Minnesota officials in their official capacities. The plaintiffs sought to block enforcement of Minnesota Pollution Control Agency rules governing greenhouse-gas emissions from new passenger cars, light-duty trucks, and medium-duty passenger vehicles. The rules incorporate California’s low-emission vehicle and zero-emission vehicle standards and were scheduled to take effect January 1, 2024, for model year 2025 vehicles.

The complaint asserted two preemption claims. Count I alleged that the rules are preempted by the Energy Policy and Conservation Act, which limits states’ authority to adopt laws or regulations related to fuel-economy standards. Count II alleged that the rules are preempted by the Clean Air Act. The plaintiffs argued that the Clean Air Act’s provision allowing California to obtain a waiver from federal preemption is unconstitutional under the equal-sovereignty doctrine, and that Minnesota’s rules therefore fall within the Act’s preemption provision.

Motion and Analysis

Defendants moved to dismiss for lack of jurisdiction, arguing principally that plaintiffs’ injuries were not traceable to the Minnesota rules and could not be remedied by the court. They also argued that the court lacked jurisdiction over Count II because the Clean Air Act requires challenges to final Environmental Protection Agency actions to be filed in a federal court of appeals. Alternatively, defendants sought a stay, meaning a temporary pause in the proceedings, while the D.C. Circuit considered Ohio v. EPA.

The court exercised its discretion to stay the case. It emphasized that Ohio v. EPA involved the same underlying questions, including whether California’s emissions standards were preempted by the Energy Policy and Conservation Act and whether the Clean Air Act’s preemption-waiver system was unconstitutional. A ruling in that case could narrow or simplify the Minnesota litigation, affect the legal basis for Minnesota’s rules, and reduce the risk of conflicting rulings. The court also noted that briefing in Ohio v. EPA was complete and that oral argument was scheduled.

The court found additional support for a stay because the Minnesota case was in its early stages: discovery had not begun, no scheduling order had been set, and no trial date had been established. Although plaintiffs argued that their injuries would increase while the Minnesota rules remained in effect, the court found the likely prejudice minimal. It reasoned that comparable federal emissions standards, which plaintiffs did not challenge in this case, would cause similar harms, and that automakers had already finalized or were about to finalize many production and sales plans for model year 2025 vehicles.

Disposition

The court ordered that defendants’ Motion to Dismiss or Stay was granted in part. The proceedings were stayed until further order of the court. The parties must file letters on the docket within seven days after any decision by the D.C. Circuit in Ohio v. EPA or Texas v. EPA. The order did not decide the merits of the plaintiffs’ preemption claims.