The state of California and the Trump administration are on course for a major legal clash that could determine whether the state will continue to have unique authority to shape the American automotive market.

On Monday, California Attorney General Rob Bonta, a Democrat, filed a lawsuit challenging President Donald Trump’s attempt to roll back California’s vehicle emissions standards.

Since Trump took office last year, California’s regulatory power to set pollution standards stricter than federal law has been in his administration’s crosshairs. The state has long been granted waivers by the federal government to set its own regulations, due to its role in pioneering auto emissions rules and its unique topography that traps pollution in major population centers.

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Using the unique authority it was granted under federal clean air laws, California has received more than 100 waivers from the U.S. Environmental Protection Agency over the past 50 years, most with little pushback. About a dozen other states, representing a significant portion of the U.S. auto market, also follow the stricter emissions rules set by California regulators.

Speaking in November of 2024, following Trump’s election, Bonta predicted that Trump would try to target California’s longstanding waiver authority.

“It’s not just discretionary on the part of the EPA to grant the waiver,” he said in an interview with Stateline. “If there’s a determination that California’s actions are arbitrary or capricious, then those are the only justifiable reasons to deny the waiver. If there’s an attempt to revoke them by the Trump administration or a denial of them that’s unlawful, we’ll be very aggressive in taking action to protect California’s ability to seek its waivers.”

Rather than denying waivers outright, Trump’s EPA has taken a different approach. Earlier this month, the agency announced that it had determined that four of California’s waivers were rules and submitted them to Congress for review.

The Congressional Review Act, passed in 1996, requires federal agencies to submit new regulations to Congress before they can take effect. Congress then has 60 working days to review those regulations, and may vote to revoke them.

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That review authority was rarely invoked for 20 years, but Republicans under Trump have used it aggressively to target actions taken under the Biden administration. Congress has used the act to open up mining and drilling on public lands, overriding management plans that had not previously been considered rules subject to review.

Last year, Trump and Congress used the Congressional Review Act to rescind California’s electric vehicle sales mandates and diesel engine rules, a move the state has challenged in court.

Now, Trump’s administration has asserted that California’s emissions waivers are also rules that may be revoked by Congress. On June 12, the EPA submitted four waivers to Congress covering vehicle emissions and lawn and garden equipment.

“EPA is committed to promoting consumer choice and ensuring affordable vehicles for all Americans, while following the best reading of the law,” the agency said in a press release announcing the move.

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California is challenging that interpretation.

“No agency has the power to wave a magic wand and transform an action that was finalized as an adjudicatory order into a rule, and certainly not without a public process in which the agency acknowledges and explains its change in position,” the state wrote in its lawsuit.

The legal battle could determine whether Republicans in Congress can quickly cast aside decades of rulemaking and California’s longstanding power to shape the U.S. auto market. It could also determine whether Republicans’ unprecedented use of the Congressional Review Act has unlocked a powerful new tool to unravel environmental rules.