District Court Enjoins EPA From Reclassifying California’s Clean Air Act Waivers

On September 2, 2026, the U.S. District Court for the District of Columbia preliminarily enjoined the U.S. Environmental Protection Agency (EPA) from taking further action to reclassify California’s Clean Air Act (CAA) Section 209(b) preemption waiver orders as “rules” subject to the Congressional Review Act (CRA). The court also directed the agency to “restore the status quo, as it existed before EPA’s June 12, 2026 press release” including by withdrawing or correcting the press release it made as to the four waivers at issue.¹ The order is narrower than it may first appear: it runs against EPA alone, does not direct Congress, and leaves alone the congressional disapproval resolutions covering these waivers that remain pending in both chambers. The order thus likely will not prevent Congress from disapproving the waivers. It might, however, signal at least some courts’ willingness to read limitations on jurisdiction under the CRA more narrowly and take a more expansive view of standing to challenge actions related to that statute.

Background and Context

Section 209(a) of the CAA has preempted state emission standards for new motor vehicles since 1967, but Congress created a limited exception for California, which began comprehensive statewide vehicle pollution control a decade before the federal government entered the field. Section 209(b) directs EPA, “after notice and opportunity for public hearing,” to waive preemption for California standards where California determines that its standards will be, in the aggregate, at least as protective of public health and welfare as the applicable federal standards, absent an EPA finding that: (1) California’s determination is arbitrary and capricious; (2) California does not need the standards to meet compelling and extraordinary conditions; or (3) the standards and enforcement procedures are not consistent with the federal standards provision. Congress expanded the arrangement in 1977, allowing other states to adopt California standards for which a waiver has been granted. Seventeen states and the District of Columbia now follow at least some California standards.

The CRA requires an agency to submit a report to Congress before a “rule” takes effect and defines “rule” by reference to the Administrative Procedure Act (APA), excluding rules of particular applicability.² Submission opens a window in which Congress may disapprove the action by joint resolution under expedited procedures and not subject to Senate filibuster. A disapproved rule is null and cannot be re-promulgated in substantially similar form.³ Classification is the critical threshold: if a Section 209(b) waiver decision is a rule, the CRA submission requirement applies, but, if it is an adjudicatory order, the CRA process does not apply. Each of the four waiver notices at issue in the current litigation stated when EPA issued them that the CRA “does not apply because this action is not a rule.”⁴

It is worth keeping in mind that the CRA is not the source of Congress’ power to nullify an administrative rule. The CRA is a procedural statute that allows the Senate to bypass the filibuster when reviewing a rule on the CRA track. But Congress could nullify any administrative rule through the ordinary legislative process, even without the CRA.

Previously, in February 2025, EPA submitted three different Section 209(b) waivers in a report to Congress, describing them as rules. Congress passed joint resolutions disapproving those waivers and the president signed them into law in June 2025. California and 10 other states sued in the Northern District of California the same day, contending that EPA’s relabeling of those waiver orders was arbitrary and capricious and ultra vires, and that the resolutions themselves violated the separation of powers and the Tenth Amendment.⁵ That litigation, including the government’s motion to dismiss, remains pending.

On June 12, 2026, EPA announced that it had submitted another four California waivers in a report to Congress, again describing them as “rules” having “prospective, national effects.”⁶ California brought suit in federal district court in the District of Columbia and moved for a preliminary injunction.⁷ California challenged not EPA’s transmittal of the orders to Congress, but rather the reclassification of the orders as rules, alleging that the reclassification violated the APA — as arbitrary and capricious, in excess of statutory authority, and without observance of required procedure — and, in the alternative, that it was ultra vires (beyond EPA’s delegated powers). Meanwhile, on July 22, 2026, while the litigation was pending, EPA submitted a report to Congress describing two more California waivers as rules.

The Court’s Analysis

The district court found that EPA took final agency action to reclassify the waivers from orders to rules, and concluded that California is likely to succeed on its APA claims and, in the alternative, on ultra vires grounds. The court further stated that the waivers are adjudicatory orders under the APA, due to the agency procedure followed in issuing them, and because they are applicant-specific. Before reaching the merits, the cruxes of the decision were jurisdiction and standing.

Jurisdiction

Initially, the court addressed whether EPA took any reviewable action at all. EPA argued it had merely submitted the waivers to Congress, and that the reference to the waivers as rules in the transmittal letters did not have any independent legal effect. But since the original EPA waiver notices stated that they were not rules under the CRA, the court concluded that EPA had reclassified them (avoiding, in the court’s view, a conclusion that EPA was misleading Congress in the transmittal letters).

EPA also argued that if it had reclassified the waiver orders as rules, that action was not reviewable due to Section 805 of the CRA, which bars judicial review of any “determination, finding, action, or omission under” the CRA. EPA maintained that the “rule” description was inextricably intertwined with the submission to Congress. But California did not assert that EPA’s transmittal of the waiver orders to Congress was a violation of the CRA. Rather, the state challenged EPA’s determination that the orders are actually “rules” as an APA violation, or ultra vires. The court sided with California, determining that EPA had reclassified the waivers as rules under the APA (not the CRA), as a prerequisite for its submittal and characterization in the report to Congress, and therefore that Section 805 of the CRA did not bar review of the APA reclassification. The court also voiced concern that allowing orders issued up to 15 years ago to then enter the CRA process as rules was a “slippery slope,” and that “fudging” of rule classification would invite manipulation of the CRA.

The court further noted that the CAA waiver provision does not authorize reclassifying the waivers, adopted pursuant to the CAA’s procedural directive, as rules. The court therefore concluded that EPA’s “reclassification” was not an action under the CAA, which action would then be reviewable under Section 307(b) of that statute only in the courts of appeals. The court ultimately concluded that the APA likely does not authorize the reclassification, either. It is thus not entirely clear why the court found that the agency’s determination of whether a CAA waiver issued pursuant to procedures specified in Section 209(b) qualifies as a rule versus an order is an action under the CAA or APA (if it is not a determination under the CRA). EPA, for its part, maintained that its determination was to treat the waivers as rules under the CRA, not the CAA or APA. EPA therefore did not address whether the action otherwise was under the APA and reviewable in district court rather than under the CAA and reviewable only in the courts of appeals.

Standing

To establish standing, California had to show an injury in fact that is concrete, particularized, and actual or imminent, likely caused by EPA’s action, and likely redressable by judicial relief. The court noted that states have greater leeway in making that showing, given the “special solicitude” they receive in matters involving their “quasi-sovereign interests.”⁸ To demonstrate standing, California asserted three injuries: (1) the threat of waiver invalidation through the CRA process, (2) deprivation of licensee rights, and (3) resource expenditure directed at developing new regulations.

The court found that although the threat of waiver invalidation was not too speculative (citing the prior congressional disapprovals and the pending resolutions), such an injury was not redressable, because the court cannot interfere with congressional legislative activity. The court did find that California’s second and third purported injuries support standing. California argued that reclassification from order to rule stripped it of procedural protections it holds as a licensee. The court agreed that a waiver is a “statutory exemption or other form of permission” and therefore a license under the APA. Section 558(c) of the APA makes withdrawal of a license lawful only if the licensee has first received written notice and an opportunity to demonstrate or achieve compliance with all lawful requirements. The court found that reclassification cost California that procedural guarantee. As applied to the preemption waiver that simply authorizes California to implement and enforce emissions standards submitted to EPA, it is not clear what an opportunity for California to demonstrate compliance would involve. Nor is it clear how EPA reasonably could withdraw the waiver even as a rule without providing basic due process protections as specified in the APA for affected stakeholders (including California), such as notice and an opportunity to be heard, or what reasonable “good cause” circumstances might be anticipated for EPA to omit such procedures.

California also pointed to the resources it must expend planning for the possibility that the waivers are invalidated. The state maintained that it relies on the waivers to meet National Ambient Air Quality Standards, and their loss would force it to develop replacement regulations or risk sanctions, including the withholding of federal highway funds. (The opinion did not address which California standards at issue are more stringent than applicable federal standards and so would have any impact on the NAAQS.) Because identifying measures, modeling their effects, and incorporating them into state implementation plans takes years, the state maintained that it must begin that work now rather than wait. EPA answered that it had taken no action inconsistent with law and that any of California’s expenditures were a self-inflicted injury. The court rejected both of these arguments, assuming the facts as California pleaded them at the jurisdictional stage. The court observed that the self-inflicted injury cases turn on a party’s failure to pursue a safer available option, an option California lacks, since inaction would leave it out of compliance with federal law. Moreover, the court did not address how the CRA practically changes California’s circumstances, since Congress always may invalidate the waivers and preclude similar waivers through legislative action and the CRA simply governs legislative procedures for doing so that are always within Congress’ control.

* * *

EPA has not yet appealed the preliminary injunction order. As written, the injunction prohibits EPA from reclassifying additional waiver orders as rules. It is not clear that any such other waivers authorize California to implement emission standards that are more stringent than federal standards, and thus that would have any impact on California air quality or planning. The order also requires EPA to “restore the status quo,” a measure that could be meaningless considering the injunction does not prevent Congress from disapproving the waivers at this point. Disapproval resolutions covering the six submitted waivers were introduced before the order issued. The House and Senate will have to decide whether the waivers are validly before them in light of the preliminary injunction, but those congressional bodies are not bound by the court order.

Footnotes

1. California v. EPA, No. 26-cv-2185, Mem. Op. (D.D.C. Sept. 2, 2026), ECF No. 46.

2. 5 U.S.C. §§ 801(a)(1)(A), 804(3).

3. 5 U.S.C. § 801(b)(1)-(2), (f).

4. See 74 Fed. Reg. 32,744, 32,784 (July 8, 2009); 78 Fed. Reg. 2112, 2145 (Jan. 9, 2013); 87 Fed. Reg. 14,332, 14,379 (Mar. 14, 2022); 90 Fed. Reg. 640, 642 (Jan. 6, 2025).

5. California v. U.S., No. 4:25-cv-04966 (N.D. Cal. June 12, 2025).

6. Press Release, EPA, “EPA Fulfills Statutory Obligation by Transmitting Four California Waiver Rules to Congress” (June 12, 2026).

7. California v. EPA, No. 26-cv-2185 (D.D.C. June 22, 2026).

8. Mem. Op. at 47.