California and 15 other US states have sued the federal government after the US Environmental Protection Agency (EPA) rejected the state's effort to curb greenhouse gases from cars and trucks. The lawsuit, filed in the US 9th Circuit Court of Appeals marks a new round in the five-year struggle between California and the federal government over whether states have the power to regulate CO₂ and other pollutants.

Under the federal Clean Air Act, California can enact stricter air pollution laws than the federal government as long as it gets a waiver from the EPA. On December 19, however, EPA denied a waiver for the state's landmark 2002 law, which seeks to cut greenhouse gas emissions from new vehicles by 30 per cent over the next eight years. EPA said that the new energy law will help raise fuel economy standards to an average of 35 miles per gallon (mpg) by 2020, which is a more effective approach to reducing greenhouse gases than a patchwork of state regulations. California says its more aggressive law would require the auto industry to cut emissions by one-third by 2016, boosting efficiency to 36.8 mpg. The other states who have joined in the lawsuit have adopted California's emissions standards.