Description: Challenge to California’s Low Carbon Fuel Standard on constitutional grounds.
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Rocky Mountain Farmers Union v. Corey
Case Documents:
Filing Date Type File Action Taken Summary 04/12/2019 Letter Download Letter from U.S. Supreme Court dated April 8, 2019 filed. Justice Kagan granted an application for an extension of time to file a petition for writ of certiorari. The deadline was extended to June 17, 2019. 01/18/2019 Opinion Download Opinion issued directing dismissal of challenges to 2011 and 2012 LCFS as moot and affirming dismissal of challenges to 2015 LCFS. Ninth Circuit Rejected Challenge to California’s Low Carbon Fuel Standard. The Ninth Circuit Court of Appeals upheld California’s Low Carbon Fuel Standard (LCFS), rejecting claims under the Commerce Clause that largely echoed unsuccessful arguments made before the Ninth Circuit in a previous appeal concerning only the 2011 and 2012 versions of the LCFS. The Ninth Circuit noted that although the LCFS had been repealed and replaced in 2015, the “core structure” of the regulations (with their emphasis on fuels’ lifecycle emissions) and claims was the same as it had been when the court decided the first appeal. The Ninth Circuit therefore ruled that its prior decision on the 2011 and 2012 versions of the LCFS precluded the plaintiffs’ claims that the 2015 LCFS constituted impermissible extraterritorial regulation and that it facially discriminated against interstate commerce in ethanol and crude oil. Regarding extraterritoriality, the court rejected the argument that the LCFS was motivated by a concern for environmental harms in other states, stating: “California did not enact the LCFS because it thinks that it is the state that knows how best to protect Iowa’s farms, Maine’s fisheries, or Michigan’s lakes.” The court said California’s interest in lifecycle emissions arose from its concern about climate change’s impacts on California and that the LCFS was therefore “a classic exercise of police power.” Regarding facial discrimination, the court said that California was attempting “to address a vitally important environmental issue with vast potential consequences” and that it could not offer “a potential solution to the perverse incentives that would otherwise undermine any attempt to assess and regulate the carbon impact of different fuels … without the ability to differentiate the different production processes and power generation that are used to produce those fuels.” The Ninth Circuit also held that the plaintiffs’ “structural federalism” claim was precluded by the court’s recent decision on Oregon’s Clean Fuel Program, in which the Ninth Circuit concluded that any such claim would be contingent on a finding that the program regulated extraterritorially. The Ninth Circuit emphasized that “[t]here is simply no reason to search beyond the Commerce Clause for the Constitution’s limits on the ability of states to affect interstate commerce.” In addition, the Ninth Circuit found that the plaintiffs had failed to take advantage of the opportunity given by its earlier decision on the 2011 and 2012 LCFS to show that the LCFS was actually intended “to prop up local fuel interests” and discriminate against interstate commerce. The court also dismissed claims against the 2011 and 2012 versions of the LCFS as moot because the challenged laws were no longer in effect and plaintiffs’ obligations under the earlier versions had been discharged. 09/26/2018 Not Available Oral argument held. -
Rocky Mountain Farmers Union v. Corey
Case Documents:
Filing Date Type File Action Taken Summary 08/14/2017 Order Download Plaintiffs' unopposed Rule 41(a) motion to dismiss remaining claims granted. 08/14/2017 Order Download AFFM plaintiffs' unopposed Rule 41(a) motion to dismiss remaining claims granted. 06/15/2017 Memorandum Decision Download Memorandum decision and order issued regarding defendants' motions to dismiss. California Federal Court Dismissed Preemption Claims Against Low-Carbon Fuel Standard but Allowed Commerce Clause Claim to Proceed. In a longstanding constitutional challenge to California’s low-carbon fuel standard (LCFS), a California federal court found that its prior ruling that challengers of the LCFS had stated a preemption claim was clearly erroneous. The court therefore dismissed preemption claims with prejudice. In addressing the plaintiffs’ dormant Commerce Clause claims, the court found that the Ninth Circuit’s decision in Rocky Mountain Farmers Union v. Corey foreclosed the plaintiffs’ claim that the LCFS’s ethanol provisions had a discriminatory purpose but found that the plaintiffs had stated a claim that the LCFS ethanol provisions discriminated in practical effect against Midwestern ethanols and had “plausibly alleged that that burden far outweighs the benefits California will obtain as a result of the LCFS.” The court dismissed, however, dormant Commerce Clause claims against the LCFS’s crude oil provisions, finding that the plaintiffs had not and could not state a claim that the provisions discriminated against foreign crude oils in practical effect. The court rejected the argument that claims against the original and 2012 versions of the LCFS were moot, noting that these earlier versions affected how credits were calculated under the 2015 version. The court said, however, that the plaintiffs’ relief would be limited to declaratory and injunctive relief to address the present and future effects of the original and 2012 versions. The court said recalculation of past credits would be barred by the Eleventh Amendment. 06/13/2016 Memorandum Decision Download Memorandum decision and order issued on plaintiffs' motions to amend. California Federal Court Allowed Plaintiffs to Amend Challenges to Low Carbon Fuel Standard. The federal district court for the Eastern District of California granted in part motions by two sets of plaintiffs to amend their complaints in their “years-long and complex challenge” to California’s Low Carbon Fuel Standard (LCFS). The plaintiffs sought to add constitutional challenges to the current version of the LCFS, which the California Air Resources Board (CARB) amended in November 2015 in response to a state court lawsuit. The court noted that the defendants had not objected to the amendments, except with respect to as-applied constitutional claims made by one set of plaintiffs. The court agreed with the defendants that, despite the intervening changes to the LCFS, the law of the case foreclosed standing for all but one of the plaintiffs wishing to add the as-applied claims. 05/13/2016 Order Download Court issued order for supplemental briefing. Federal Court Asked for Further Briefing on Whether As-Applied Challenges to California’s 2015 Low Carbon Fuel Standard Were Barred. The federal district court for the Eastern District of California asked the parties to an action challenging California’s Low Carbon Fuel Standard (LCFS) to provide additional briefing on the issue of whether the plaintiffs could make “as-applied” constitutional challenges to LCFS amendments finalized in November 2015. The plaintiffs had requested leave to amend their complaints to add challenges to the 2015 LCFS, but the defendants objected to addition of the as-applied constitutional claims based on the court’s prior rulings and statements made by the plaintiffs. The court determined that it would need additional briefing to understand whether the 2015 LCFS was materially different from the original LCFS, and to determine whether its prior rulings concerning the plaintiffs’ lack of standing to make certain claims applied and whether the law of the case or other doctrine barred the as-applied claims. 08/13/2015 Order Download Order issued re defendants' motion to dismiss and motion for summary judgment. Federal Court Put Most Claims Against California’s Low Carbon Fuel Standard to Rest. The federal district court for the Eastern District of California issued a ruling that narrowed to one the claims that survive against California’s Low Carbon Fuel Standard (LCFS) following the Ninth Circuit’s 2013 decision that reversed the district court’s earlier determination that the LCFS violated the dormant Commerce Clause. Finding that the Ninth Circuit’s mandate was “explicit and unambiguous,” the district court granted summary judgment to the defendants on the claim that the original LCFS that went into effect in 2011 was an impermissible extraterritorial regulation. The court further applied the law of the case doctrine to dismiss plaintiffs’ extraterritoriality claim regarding the LCFS as amended in 2012. The court noted that the basis for the extraterritoriality challenge to the amended LCFS was the same as for the unsuccessful challenge to the original LCFS—namely, that the use of a life-cycle analysis to determine a fuel’s carbon intensity regulated activities occurring wholly outside California. The court also determined that the plaintiffs could not state a claim that the amended LCFS for crude oil discriminated in purpose and effect. The court found no precedent to support a dormant Commerce Clause claim where a challenged law—like the amended LCFS crude oil provisions—burdened and benefitted in-state and out-of-state interests alike. The district court allowed plaintiffs to proceed with their claim that the original LCFS’s ethanol provisions discriminated against interstate and foreign commerce in purpose and effect. The court agreed with plaintiffs that they had not abandoned or disavowed this claim. The court dismissed claims against Governor Jerry Brown on immunity grounds, but granted plaintiffs leave to amend. 12/11/2014 Memorandum Decision Download Memorandum decision and order issued granting in part and denying in part plaintiffs' motion to amend complaint. The district court for the Eastern District of California granted in part and denied in part a motion by plaintiffs to amend their complaint in their constitutional challenge to California’s Low Carbon Fuel Standard (LCFS). The court will be addressing the remaining pieces of this challenge after the Ninth Circuit Court of Appeals largely rejected the contention that the LCFS violated the dormant Commerce Clause. The court rejected the request to amend claims of extraterritorial regulation in violation of the Commerce Clause as well as a claim of a violation of principles of interstate federalism embodied in the Constitution (plaintiffs called this latter theory their “horizontal federalism claim”). The court said the Ninth Circuit resolved any claim premised on extraterritorial regulation when it explicitly held that the LCFS did not regulate conduct outside California. The district court also found that the law of the case barred plaintiffs’ claim that the LCFS’s ethanol provisions facially discriminated. The court found, however, that law of the case did not bar the claim of discrimination in purpose and effect since the Ninth Circuit did not reach that issue. The court also held as a matter of law that the LCFS did not implicate the Import-Export Clause because it did not provide for anything that reasonably could be construed as a tax; the court therefore denied plaintiffs’ request to add a claim of impermissible discrimination in violation of the Import-Export Clause. The court granted leave to amend to challenge 2012 amendments to the LCFS crude oil provisions and to drop federal preemption and “Pike balancing” claims under the dormant Commerce Clause. 01/23/2012 Order Download Order issued denying motion to stay enforcement of the preliminary injunction and judgments of the court. A federal district court in California denied a motion by the California Air Resources Board (CARB) to lift an injunction blocking enforcement of the state’s low-carbon fuel standard, concluding that it lacked authority to do so because CARB appealed the orders and thus it was without jurisdiction to do so. 12/29/2011 Order Download Order issued granting in part Rocky Mountain Farmers Union plaintiffs' summary judgment motion and granting preliminary injunction. The court granted a preliminary injunction, holding that because the Low Carbon Fuel Standard assigned more favorable carbon intensity values to corn-derived ethanol in California than to ethanol derived outside California, it impermissibly discriminated against out-of-state entities. In addition, the court held that the standard impermissibly regulated channels of interstate commerce. The court further held that although the standard served a legitimate local purpose, that purpose could be accomplished through other nondiscriminatory means. In addition, the court held that the plaintiffs’ preemption claim raised a serious question as to whether the standard was preempted by the Clean Air Act. 12/29/2011 Order Download Order issued granting National Petrochemical & Refiners Association plaintiffs' motion for summary judgment. 12/29/2011 Order Download Order issued on defendants' summary judgment motion. 01/14/2011 Order Order issued on summary judgment motions. The plaintiffs subsequently moved for summary judgment. The defendants moved to deny or continue the motions pursuant to Federal Rule of Civil Procedure 56(d), seeking additional time to serve additional documents and interrogatories and to depose one additional individual. The district court granted the motion except as to one plaintiff and set a new discovery schedule. 06/16/2010 Order Download Order issued denying motion to dismiss. A federal district court in California denied California’s motion to dismiss lawsuits challenging the State’s Low Carbon Fuel Standard, finding that the Clean Air Act did not grant California unfettered authority to regulate fuels. The lawsuit alleged that that both the Commerce Clause and the Energy Independence and Security Act of 2007 preempted the LCFS. The standard was adopted by the California Air Resources Board in 2009 and established a methodology for calculating the life-cycle emissions of all vehicle fuels. The standard was designed to reduce the average carbon intensity of fuels by 10% over the next 11 years. 12/23/2009 Complaint Complaint filed. Industry and business groups filed a lawsuit challenging California’s low-carbon fuel standard, alleging that it violated the Commerce Clause of the U.S. Constitution because it interfered with interstate commerce, specifically because it discriminated against products made in other states such as corn-based ethanol.
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Rocky Mountain Farmers Union v. Corey
Case Documents:
Filing Date Type File Action Taken Summary 01/22/2014 Order Download Order issued denying rehearing. The Ninth Circuit denied the petitions for rehearing en banc over the dissent of seven judges, including the partial dissent of Judge Mary H. Murguia. She joined the portion of the dissent from the denial of rehearing that addressed facial discrimination. The dissent, authored by Judge Milan D. Smith, Jr., pointed to at least three ways in which the court had erred. One, the majority had found “at least facially constitutional a protectionist regulatory scheme that threatens to Balkanize our national economy.” Two, the majority “compound[ed] its error” by finding that the legitimate local concern of combating climate change justified the LCFS ethanol provisions when the state had admitted that they would have little to no effect on climate change. Three, the LCFS ethanol provisions clearly impermissibly sought to control conduct in other states. Although the court denied the petition for rehearing without an opinion, Judge Ronald M. Gould, who wrote the court’s September 2013 majority opinion, wrote a concurrence supporting the September opinion and countering the “overstatements” of the dissent. Of particular note to those who may be wondering what will happen next in this case, Judge Gould stated: “the tone and substance of the dissent is perhaps aimed at encouraging Supreme Court review. A petition for writ of certiorari from the parties who sought rehearing is likely forthcoming, but our court properly declines to give its judicial imprimatur to the dissent’s position. Because Supreme Court review is possible, however, I set forth my own views on that prospect. On the one hand, the Supreme Court’s considered judgment could be helpful to clarify as soon as practical what states may do of their own accord to deter or slow global warming.…On the other hand, the record in this case is incomplete and thus unsuitable for understanding the full scope of the issues presented.… The issues raised by the dissent … may be rendered moot by the district court’s decision [on remand], and in any event there will be a more complete record, including findings on purpose and effect, on which to make a ruling about the controlling legal principles.” 10/02/2013 Petition for Rehearing Download Petition for rehearing filed by Rocky Mountain Farmers Union plaintiffs-appellees. Two separate petitions for rehearing en banc were filed. The Rocky Mountain Farmers Union plaintiffs—representing farming and ethanol interests—filed one petition, in which they argued that the Ninth Circuit had contravened Supreme Court precedent by “invok[ing] the state’s purported nondiscriminatory purposes to avoid strict scrutiny of a facially discriminatory regulatory regime” and that the court “also failed to recognize that the LCFS by design impermissibly regulates conduct occurring in other states.” 10/02/2013 Petition for Rehearing Download Petition for rehearing filed by American Fuel & Petrochemical Manufacturers plaintiffs-appellees. The American Fuels & Petrochemical Manufacturers Association (AFPM) plaintiffs—representing petrochemical, energy, and trucking industry groups—argued in their petition that the Ninth Circuit had impermissibly abandoned the strict scrutiny framework for assessing “regulations that, on their face, impose discriminatory burdens on imported products based on ‘state boundaries’” and that the LCFS’s lifecycle analysis regulated “interstate and foreign commerce—the production and transportation of fuels—occurring wholly outside of California.” The AFPM plaintiffs also argued that the Ninth Circuit’s conclusion that the LCFS’s crude oil provisions did not violate the dormant Commerce Clause was in conflict with Supreme Court and other federal circuit court precedents. The AFPM plaintiffs contended that the crude oil provisions, which benefited a certain California crude oil while burdening imported and Alaskan crude oils, were not immune from challenge merely because they also burdened other California crude oils. 09/18/2013 Opinion Download Opinion issued. The Ninth Circuit reversed the portions of the 2011 district court decision that found California’s low carbon fuel standard (LCFS) to be in violation of the dormant Commerce Clause. The Ninth Circuit ruled that the LCFS’s ethanol regulation did not facially discriminate against out-of-state commerce, that its initial crude oil provisions did not discriminate against out-of-state crude oil in purpose or practical effect, and that the LCFS did not violate the dormant Commerce Clause prohibition on extraterritorial regulation. The Ninth Circuit vacated the preliminary injunction imposed by the district court and remanded for consideration of whether the LCFS’s ethanol provisions discriminate in purpose or practical effect and for application of the Pike v. Bruce Church, Inc. balancing test to determine whether the crude oil provisions impose a burden on interstate commerce that is “clearly excessive” in relation to their local benefits. The Ninth Circuit instructed that if the district court finds the ethanol provisions to be discriminatory in purpose or practical effect, it should apply strict scrutiny to those provisions, but that it must otherwise apply the Pike balancing test to the ethanol provisions. The Ninth Circuit affirmed the district court’s ruling that section 211(c)(4)(b) of the Clean Air Act did not foreclose Commerce Clause scrutiny of the LCFS. The Ninth Circuit did not express an opinion regarding whether the federal Renewable Fuel Standard preempts the LCFS. 04/23/2012 Order Injunction stayed. The Ninth Circuit ruled that California could continue to enforce its Low Carbon Fuel Standard pending the state’s appeal of a December 2011 district court decision holding that the standard was unconstitutional. The ruling in effect lifted an injunction issued by the district court pending appeal. -
Rocky Mountain Farmers Union v. Corey
Case Documents:
Filing Date Type File Action Taken Summary 06/30/2014 Order List Download Certiorari denied. The U.S. Supreme Court denied three petitions seeking review of the Ninth Circuit decision that reversed district court rulings that California’s Low Carbon Fuel Standard (LCFS) violated the dormant Commerce Clause. Two of the denied petitions were those filed by the parties who had challenged the LCFS; their petitions sought review of the Ninth Circuit’s conclusions that the LCFS did not facially discriminate against interstate commerce and did not constitute extraterritorial regulation. The third was the conditional cross-petition filed by the State of California defendants. 04/21/2014 Petition for Writ of Certiorari Download Conditional cross-petition for writ of certiorari filed. In a conditional cross-petition for writ of certiorari, the State of California defendants sought review on the issues of whether Section 211(c)(4)(B) of the Clean Air Act (authorizing California to set emissions requirements) barred petitioners’ challenges and whether changes to the Low Carbon Fuel Standard regulations’ treatment of 2011 California crude oil sales rendered some aspects of petitioners’ challenges moot.
03/20/2014 Petition for Writ of Certiorari Download Petition for writ of certiorari filed by Rocky Mountain Farmers Union plaintiffs. Two petitions for writs of certiorari were filed in the U.S. Supreme Court seeking review of the Ninth Circuit decision that revived California’s Low Carbon Fuel Standard (LCFS). The petition filed by the Rocky Mountain Farmers Union and other parties associated with the ethanol industry presents two questions: (1) whether the Ninth Circuit erred “in concluding that the [LCFS] does not facially discriminate against interstate commerce” and (2) whether the Ninth Circuit erred “in concluding that the [LCFS] is not an extraterritorial regulation.” 03/20/2014 Petition for Writ of Certiorari Download Petition for writ of certiorari filed by American Fuel & Petrochemical Manufacturers Association plaintiffs. The petition filed by the American Fuel & Petrochemical Manufacturers Association, American Trucking Associations, and Consumer Energy Alliance presented one question: “Whether [the LCFS] is unconstitutional because it discriminates against out-of-state fuels and regulates interstate and foreign commerce that occurs wholly outside of California.” -
National Petrochemical & Refiners Association v. Goldstene
Case Documents:
Filing Date Type File Action Taken Summary 02/02/2010 Complaint Download Complaint filed. Industry and business groups filed a lawsuit challenging California’s Low Carbon Fuel Standard (LCFS), alleging that it violated the Commerce Clause of the U.S. Constitution because it interfered with interstate commerce. The
California Air Resources Board adopted the standard in April 2009. The LCFS measured the level of greenhouse gas emissions associated with the production, distribution, and consumption of gasoline and diesel fuels and
their alternatives. It was designed to cut the average carbon intensity of fuels by 10% over the next 11 years.