A U.S. federal appeals court has upheld California's right to set emission and air pollution standards for automobiles that exceed federal standards.

Under the 1970 Clean Air Act, California can request waivers of federal standards to enact its own stricter laws, a right given to the state because it had its own pollution laws in effect before they federal government passed its laws, the Los Angeles Times reported Monday.

When the Obama administration issued such a waiver in 2009, it was challenged by the U.S. Chamber of Commerce and the National Automobile Dealers Association.

The three-judge panel of the District of Columbia circuit ruled Friday that neither the chamber nor the association had standing in the case.

"Because the Chamber has not identified a single member who was or would be injured by EPA's waiver decision, it lacks standing to raise this challenge," the panel ruled, saying the dealers association has also failed to prove economic harm.

Vickie Patton, general counsel of the Environmental Defense Fund, called the decision "a major victory ... to break our dependence on oil, save families money at the gas pump and reduce dangerous pollution."