ELR Citation: 50 ELR 20059
No(s). 2:19-cv-02142 WBS EFB (E.D. Cal. Mar 12, 2020) (Shubb, J.)

A district court denied summary judgment to the U.S. government in a lawsuit concerning California's cap-and-trade agreement with Quebec. The government argued the agreement violated the Treaty Clause of the U.S. Constitution because it was binding and "confederat[ed] the laws of the two jurisdictions in an important area of commercial policy." California countered that the agreement did not concern "a matter of substantial consequence to our federal structure," and was not binding because it permitted both jurisdictions to make changes to their own regulatory schemes and to withdraw if they so chose. The court found the agreement explicitly recognized that California and Quebec adopted their own greenhouse gas (GHG) emissions reduction targets, their own regulation on GHG emissions reporting programs, and their own regulations on their cap-and-trade programs, and thus that the agreement was not a treaty creating an alliance for purposes of peace or war, nor did it constitute a treaty for mutual government or represent a cessation of sovereignty. The government also argued the agreement violated the Compact Clause. The court found that the agreement did not require reciprocal action to take effect, did not impose a regional limitation, did not designate any regulatory authority, and did not contain an enforceable prohibition on unilateral modification or termination, and thus did not constitute a compact requiring congressional approval. It further found that it was well within California's police powers to enact legislation to regulate GHG emissions and air pollution, and thus that the agreement did not allow the state to exercise any power it would not normally have. The court therefore denied summary judgment to the government and granted summary judgment to California.