[Regulatory Update] US Federal Court Preliminarily Enjoins EPA's Reclassification of California Waivers as "Rules" — Dispute Over Congressional Review Act Treatment

On 2 September 2026, the US District Court for the District of Columbia (Judge Howell) granted a preliminary injunction sought by the State of California, and enjoined and stayed the EPA, under 5 U.S.C. § 705, from giving effect to its reclassification of four California Clean Air Act Section 209(b) waivers as "rules". On 12 June 2026, the EPA had announced that it had determined the four waivers to be rules under the Congressional Review Act (CRA) and had transmitted them to Congress. The court also rejected the motions to dismiss and found that California is likely to succeed on its Administrative Procedure Act (APA) claims. The court ordered the EPA to take all necessary steps within its control to restore the status quo as it existed before its 12 June press release, to withdraw or correct its reclassification of the four waivers in all public statements, including that press release, and to submit a status report by 21 September 2026. The four waivers include standards for passenger cars and trucks and for small off-road engines such as lawn and garden equipment. In July, the EPA also reclassified two waivers concerning vessels (ocean-going vessels at berth and commercial harbor craft) as rules in the same way; these two are not covered by the injunction.