Calif. leads 23-state court fight vs. Trump

California is ready for a fight, and it's bringing 22 allies with it.

Two days after President Donald Trump moved to strip the state of its right to set its own pollution regulations — a policy in place for more than 50 years — California and a coalition of 22 other states filed suit late last week in federal court in Washington. Among the states are several that previously agreed to hold automakers to California's standards.

California contends the Trump administration has exceeded the authority Congress granted to NHTSA, the nation's top auto safety regulator. The state says the administration is ignoring repeated efforts by federal lawmakers to preserve California's power to improve its air quality by regulating automobile tailpipe emissions.

"Two courts have already upheld California's emissions standards, rejecting the argument the Trump administration resurrects to justify its misguided preemption rule," Xavier Becerra, the state's attorney general, said. "Yet, the administration insists on attacking the authority of California and other states to tackle air pollution and protect public health."

U.S. Secretary of Transportation Elaine Chao, who was named as a defendant in the suit, said the administration's action would ensure that there would be just one set of national fuel economy standards, "as Congress mandated and intended."

"No state has the authority to opt out of the nation's rules and no state has a right to impose its policies on everybody else in our whole country," she said.

The lawsuit is the latest development in what promises to be a yearslong legal battle.

Caught in the middle are automakers, which already face softening U.S. sales, U.S.-China trade tensions and pressure to invest billions in future-oriented technologies.

After Trump said he moved to revoke California's waiver, the EPA and NHTSA immediately announced a "One National Program Rule" for emissions and fuel economy that would weaken the standards set by the Obama administration and embraced by California.

"Many more cars will be produced under the new and uniform standard, meaning significantly more JOBS, JOBS, JOBS!" Trump wrote on Twitter last week. "Automakers should seize this opportunity because without this alternative to California, you will be out of business."

California Gov. Gavin Newsom accused Trump of a vendetta against his state and its environmental progress since receiving the waiver in 1967 to stiffen rules against thick smog that covered parts of Southern California. "Bad news for him — we will prevail. See you in court," Newsom wrote on Twitter.

The fights over emissions and fuel economy are deeply intertwined because burning more fuel creates more greenhouse gases. California's unique authority under the federal Clean Air Act has enabled it to create standards adopted across the auto industry, because manufacturers prefer to build vehicles for all 50 states for logistical reasons and to control costs.

The California Air Resources Board asserted during a meeting last week that decades of legal challenges to its emissions authority have failed because there is no mechanism in federal law to revoke the waiver.

"It's a bitter moment because I never thought I would see something like this," CARB Chairman Mary Nichols said.

The Trump administration argues that freezing fuel economy standards would save automakers money, reduce car prices and make it easier for consumers to afford newer, safer vehicles. Independent studies, including one by Consumer Reports, suggest the opposite: Higher fuel economy standards would save consumers more money over the life of the vehicle.

The Obama-era rules called for a fleetwide fuel efficiency average of 46.7 mpg by 2025, with average annual increases of about 5 percent, compared with 37 mpg by 2026 under the Trump administration's preferred option. The EPA and NHTSA have yet to finalize their proposal.

Automakers want a single set of standards for all states, but most have been careful not to take sides. The exceptions are Ford, Honda, BMW and Volkswagen, which in July reached a deal with California on standards that are slightly less stringent than the Obama-era rules.

Nichols said last week that the four automakers have not wavered even after the Trump administration announced an antitrust investigation into the agreement. All four confirmed their commitment to the California deal.

The Alliance of Automobile Manufacturers, which represents automakers such as Toyota and General Motors that build 70 percent of all light vehicles in the U.S., walked a fine line by saying last week that it is reviewing the situation.

"Automakers support year-over-year increases in fuel economy standards that align with market realities, and we support one national program as the best path to preserve good auto jobs, keep new vehicles affordable for more Americans and avoid a marketplace with different standards," said Dave Schwietert, interim CEO.

The National Automobile Dealers Association leaned more toward the Trump administration. "NADA believes that the regulation of fuel economy and greenhouse gas emissions should be done at the federal level for the entire country," said association President Peter Welch.

While NADA also supports fuel economy improvements, it suggested that keeping vehicles affordable was an important way to achieve that. "If we lose new-vehicle sales, all we do is keep Americans in older, less safe and less fuel efficient cars and trucks longer, and shift our nation's environmental objectives into reverse."

Bloomberg contributed to this report.