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The group who brought the action (including General Motors, Daimler-Chrysler, two auto industry trade groups and three Vermont car dealers) sought to establish that GHG emissions standards for new cars could only be set by Federal Government, rather than by each state.  At the heart of the matter was the claim that emission standards are actually fuel economy standards that conflict with the federal Energy Policy and Conservation Act.  In other words, the group were suggesting that Vermont was trying to introduce a law it had no powers to introduce.

Judge Sessions rejected this claim.  He also ruled that the GHG emissions standards do not interfere with the foreign policy powers of the President or Congress.

Vermont Attorney General William H. Sorrell, said:
"This is such a big win. For those concerned about a healthier environment and those concerned about global warming, this is indeed a day to celebrate."

Responding to the judgement, Dave McCurdy, President and CEO of the Alliance of Automobile Manufacturers, said:
"Federal law is designed to ensure a consistent fuel economy programme across the country. It makes sense that only the federal government can regulate fuel economy.  Automakers support improving fuel economy standards nationally, rather than piecemeal and will continue to work with the Congress, NHTSA and EPA to reduce our oil dependence while increasing fuel economy.

"Concerning EPA's decision on whether to grant the requested waiver, the Alliance remains committed to working with policymakers to make certain that the EPA's judgment is based on credible, sound scientific data as to what policies truly impact California, its citizens and global climate concerns.

"The Alliance will continue studying the decision and considering the options, including an appeal."

About the Regulations
Vermont's regulations incorporate by reference regulations adopted by California in 2005. To date, 11 other states have adopted California's regulations. The regulations establish one set of GHG emission standards for passenger cars, small trucks, and small Sport Utility Vehicles (SUVs), and another set for large trucks and large SUVS.

The standards require automobile manufacturers to decrease fleetwide emissions on a graduated basis for each model year between 2009 and 2016. Reductions can be achieved by: (1) use of alternative fuels; (2) air conditioning credits; (3) improved engine/powertrain efficiency, including hybrid vehicles; and (4) other factors (such as reduced tire resistance). When fully phased in, the regulations are expected to reduce motor vehicle GHG emissions by ~30%.

The Vermont case began in November 2005, when General Motors, Daimler-Chrysler, two auto industry trade groups, and three Vermont dealers filed two separate lawsuits challenging Vermont's GHG regulations. The State of New York and a number of environmental groups intervened in the case in support of Vermont. The court held a 16-day trial in April and May of this year, and then accepted final briefs in the middle of June.

Under the federal Clean Air Act, the U.S. Environmental Protection Agency (EPA) must grant a waiver to California for its regulations in order for Vermont's regulations to be effective. California submitted its application to EPA in December of 2005, but EPA has not yet ruled on it. EPA has indicated that it will make a decision by the end of this calendar year.<