The Environmental Protection Agency has been waging a regulatory war on Texas—and losing in the federal courts. On Tuesday the U.S. Court of Appeals for the D.C. Circuit struck down another misguided EPA rule.

Enacted in August 2011, the Cross-State Air Pollution Rule was supposed to reduce air pollution emitted in one state and carried downwind to another. Under the Clean Air Act, if pollution from the upwind state is causing the downwind neighbor to fail federal air quality tests, then the EPA can order the upwind state...