EDF’s Take on Friday's Ruling in California’s Cap-and-trade Lawsuit

Key Takeaways 

  • The court’s decision confirms that CARB has the legal authority to implement AB 32 Scoping Plan measures, including cap-and-trade, which is the cornerstone of the program and key to reducing pollution.  
  • EDF is confident that any further actions by the Petitioners and the State will be consistent with their goal of keeping AB 32 moving forward and achieving its goals.

Last Friday, a Superior Court judge in San Francisco issued a “Statement of Decision” requiring California to stop implementing its climate law, AB 32, until additional Environmental Quality Act work is completed and approved by the Court.

The decision supported certain assertions by the defendants, the California Air Resources Board (CARB), and assertions made by plaintiffs (the Association of Irritated Residents and other groups). 

In support of CARB’s defense of AB 32, the judge found that the state had the legal authority to determine what measures to pursue, including cap-and-trade, as part of the Scoping Plan developed to meet the law’s emissions reductions goals. It also found the state performed a sufficient analysis on the potential impacts of Scoping Plan measures. 

In support of the plaintiffs, the court reiterated concern with the length and breadth of the documents developed to assess alternatives to the cap-and-trade program, and that CARB began “implementing” the program through public workshops while comments to the program were still being considered. 

These concerns over the state’s procedure serve as the basis for a court order that commands CARB “to set aside its certification of the FED (CEQA Functional Equivalency Document) and enjoining any further implementation of the measures contained in the Scoping Plan…” until a new document is written, approved by the board and submitted to and approved by the court.

So what’s next? It is likely that a Writ of Mandate will be filed within 10 days of Friday’s decision. The Writ is the plaintiffs’ interpretation of the decision and will include their preferred remedies.

The judge will then decide on the final remedy. Any appeal to that decision would have to be filed within 60 days from the date the decision was entered. 

It is unclear exactly what the court-ordered remedy will consist of and whether it will affect all work on measures to reduce greenhouse gas pollution; most likely it will not. It is clear from examining arguments of both parties before the Court that CARB and the environmental justice groups bringing the action against the State are committed to improving California’s environment and fighting climate change and do not intend to bring AB 32 work to a halt.

EDF expects that the parties will work to narrow the remedy so that CARB can proceed with some or most of the work to implement AB 32 while a new analysis is finalized and approved by the Court. Such a narrowing of the Writ is possible under California Public Resources Code 21168.9(b) and will be critical to ensuring that CARB can pursue a plan that protects public health, grows the state’s clean energy economy and reduces pollution. 

Although the parties are the best arbiters of their legal strategy, either party can appeal Friday’s decision. As a general rule, for cases of this type in California, a lower court decision is immediately stayed (barred from being implemented) pending the outcome of the appeal – meaning more legal back-and-forth could be in the works. 

Stay tuned.  We will keep you posted.

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