The federal Clean Air Act gives the EPA authority to regulate air pollutants. In the case of Massachusetts v. EPA, Massachusetts and several other states are attempting to force the EPA to regulate the greenhouse gases emitted by vehicles in the United States. Vehicles in the U.S. emit approximately 6 percent of global annual GHG emissions. The CAA does mention carbon dioxide specifically, but it does not in this portion of the statute (emphasis mine), give the EPA the right to regulate it.

(g) Pollution Prevention and Emissions Control.- In carrying
out subsection (a), the Administrator shall conduct a basic
engineering research and technology program to develop, evaluate,
and demonstrate non regulatory strategies and technologies for
air pollution prevention. Such strategies and technologies shall
be developed with priority on those pollutants which pose a
significant risk to human health and the environment, and with
opportunities for participation by industry, public interest
groups, scientists, and other interested persons in the
development of such strategies and technologies. Such program
shall include the following elements:
(1) Improvements in nonregulatory strategies and technolo-
gies for preventing or reducing multiple air pollutants,
including sulfur oxides, nitrogen oxides, heavy metals, PM-
10 (particulate matter), carbon monoxide, and carbon
dioxide, from stationary sources, including fossil fuel
power plants. Such strategies and technologies shall include
improvements in the relative cost effectiveness and
long-range implications of various air pollutant reduction
and nonregulatory control strategies such as energy
conservation, including end-use efficiency, and fuel-
switching to cleaner fuels. Such strategies and technologies
shall be considered for existing and new facilities.

There are other portions of the statute which make it relatively clear that if a substance is determined to be a pollutant which has an adverse effect on human health or the environment, then the EPA has the authority to regulate it. The sticking point here is that the EPA has done nothing toward that determination. This suit clearly is an attempt to push the EPA forward.