The Supreme Court on Friday revived a lawsuit from fuel producers challenging California’s strict vehicle emission rules, allowing the companies to fight an on-again, off-again climate policy that President Donald Trump has previously opposed.

Justice Brett Kavanaugh wrote the opinion for a 7-2 majority. Liberal Justices Sonia Sotomayor and Ketanji Brown Jackson dissented.

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“The government generally may not target a business or industry through stringent and allegedly unlawful regulation, and then evade the resulting lawsuits by claiming that the targets of its regulation should be locked out of court as unaffected bystanders,” Kavanaugh wrote.

While the federal government generally sets vehicle emission standards, the Environmental Protection Agency has at times granted a waiver to California – because of its longstanding air-quality problems – to set tougher standards. Given the state’s size, automakers have long hewed to its tighter emissions controls even for cars sold in other states.

That waiver was challenged by Diamond Alternative Energy, a subsidiary of Valero Energy Corporation, and several other companies and groups that advocate on behalf of fuel manufacturers.

Although the fuel producers challenged the waiver itself, the Supreme Court specifically declined to review that question, denying an appeal in December that raised that issue. Instead, the only issue before the justices was whether the companies and trade associations had standing to sue.

A federal appeals court in Washington, DC, concluded that market forces are driving the national push toward electric vehicles far more than California’s tough regulations. Given that, the court ruled that the fuel makers could not proceed with the case.

One of the factors a party must demonstrate to establish standing is redressability, which essentially means that the court’s order can actually fix the problem the plaintiffs have raised. California said that even if courts eliminate the waiver, it wouldn’t help the fuel producers because consumer demand was motivating people to buy electric vehicles on their own.

During oral arguments both conservative and liberal justices seemed to be skeptical of that position, noting that the EPA had pointed to a reduce reliance on fossil fuels as part of the justification for the waiver.

Perhaps sensing a win in their case, the fuel producers advocated for a categorical rule that would have made it easier for companies challenging the federal government to sue over similar decisions in the future.

It’s not clear how much practical impact the court’s decision will have. President Donald Trump seems almost certain to withdraw the waiver, just as he did during his first administration. The waiver was later reinstated by President Joe Biden.

The conservative Supreme Court has repeatedly sided against the EPA and environmental groups in past cases. Last year, the court upended a Biden administration effort to reduce smog and air pollution wafting across state lines. In 2023, the justices cut back on the EPA’s ability to regulate wetlands under the Clean Water Act.

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