A federal appeals court in San Francisco threw out the Bush administration's new fuel-economy standards for sport-utility vehicles, minivans, and pick up trucks, ruling that the standards were not tough enough.
A number of states and environmental groups sued the National Highway Traffic Safety Administration last year after it boosted fuel-efficiency requirements from 22.2 miles per gallon in 2007 to 23.5 in 2010.
The plaintiffs called the increase insufficient and said the government failed to consider the economic value of reducing tailpipe emissions that contribute to climate change.
The U.S. Court of Appeals for the Ninth Circuit in San Francisco agreed. It is the third federal court in less than a year to insist the standards aren't tough enough.
The court also asked the government to explain why SUVs and minivans were allowed to be less fuel efficient than cars.
Environmentalists and the states, including California, hailed the ruling.
Aaron Colangelo, attorney for the Natural Resources Defense Council, said the court told the administration to adopt new standards as soon as possible.
"The court actually said the government must act to consider the impact of global warming as expeditiously as possible, and that's unusual," Colangelo said. "The court not only ordered the government to act, but to act fast."
The Alliance of Automobile Manufacturers noted that new vehicles are already being developed based on increased mileage standards.
"Advanced technology vehicles, including hybrid, fuel cell, hydrogen internal combustion engines and clean diesel vehicles, offer the promise of significant increases in fuel efficiency without sacrificing consumer needs for safety, performance, comfort and utility," the group said in a statement.
It said adequate lead time is necessary in order to fully integrate these technologies into the marketplace."
The Bush administration has not yet indicated whether it will appeal.