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Keywords

plaintiffinjunctionappealregulationclean air act
plaintiffinjunctionappealtrialregulationclean air act

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Rocky Mountain Farmers Union v. Corey, 730 F.3d 1070, 77 ERC 1077, 13 Cal. Daily Op. Serv. 10,463, 2013 Daily Journal D.A.R. 12,647

Facts

The case arose from challenges to California's LCFS regulations, which were designed to reduce greenhouse gas emissions from transportation fuels. Plaintiffs, including the Rocky Mountain Farmers' Union and the American Fuels & Petrochemical Manufacturers Association, argued that the regulations would harm the corn ethanol industry and violate the dormant Commerce Clause. The district court found that the LCFS discriminated against out-of-state ethanol and crude oil, leading to a preliminary injunction against the regulations.

The case arose from challenges to California's LCFS regulations, which were designed to reduce greenhouse gas emissions from transportation fuels. Plaintiffs, including the Rocky Mountain Farmers' Union and the American Fuels & Petrochemical Manufacturers Association, argued that the regulations would harm the corn ethanol industry and violate the dormant Commerce Clause. The district court found that the LCFS discriminated against out-of-state ethanol and crude oil, leading to a preliminary injunction against the regulations.

Issue

Did California's Low Carbon Fuel Standard regulations violate the dormant Commerce Clause and were they preempted by federal law?

Whether global warming is caused by carbon emissions from our industrialized societies is a question for scientists to ponder. Whether, if such a causal relationship exists, the world can fight or retard global warming by implementing taxes or regulations that deter carbon emissions is a question for economists and politicians to decide. Whether one such regulatory scheme, implemented by the State of California, is constitutional under the United States Constitution's Commerce Clause is the question that we consider in this opinion.

Rule

The court applied the dormant Commerce Clause principles, assessing whether the LCFS regulations discriminated against out-of-state commerce and whether they were preempted by the federal Renewable Fuel Standard.

We hold that the Fuel Standard's regulation of ethanol does not facially discriminate against out-of-state commerce, and its initial crude-oil provisions (the “2011 Provisions”) did not discriminate against out-of-state crude oil in purpose or practical effect.

Analysis

The Court of Appeals analyzed the LCFS regulations and determined that they did not facially discriminate against out-of-state commerce. It found that the regulations considered all sources of ethanol and that the factors affecting carbon intensity were critical in determining equal treatment. The court also concluded that the LCFS did not engage in extraterritorial regulation and fell within the exemption to the Clean Air Act's preemption provision.

The Court of Appeals analyzed the LCFS regulations and determined that they did not facially discriminate against out-of-state commerce. It found that the regulations considered all sources of ethanol and that the factors affecting carbon intensity were critical in determining equal treatment. The court also concluded that the LCFS did not engage in extraterritorial regulation and fell within the exemption to the Clean Air Act's preemption provision.

Conclusion

The Court of Appeals affirmed in part and reversed in part the district court's rulings, vacating the preliminary injunction and remanding the case for further consideration of whether the LCFS provisions discriminate in purpose or effect.

The Court of Appeals affirmed in part and reversed in part the district court's rulings, vacating the preliminary injunction and remanding the case for further consideration of whether the LCFS provisions discriminate in purpose or effect.

Who won?

The California Air Resources Board (CARB) prevailed in part, as the Court of Appeals found that the LCFS regulations did not facially discriminate against out-of-state commerce and upheld California's authority to regulate emissions.

The California Air Resources Board (CARB) prevailed in part, as the Court of Appeals found that the LCFS regulations did not facially discriminate against out-of-state commerce and upheld California's authority to regulate emissions.

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