American Free Enterprise Chamber of Commerce v. Nishida

The federal district court for the Western District of Michigan allowed environmental groups to intervene as defendants in a lawsuit challenging the Inflation Reduction Act’s methane waste emissions charge for petroleum and natural gas systems. The court denied the federal defendants’ motion to stay the proceedings, finding that an indefinite pause was not warranted. The court directed the parties to be prepared to address at a June conference why the case was not rendered moot by the Congressional Review Act resolution signed by President Trump on March 14, 2025 that disapproved the U.S. Environmental Protection Agency rule implementing the waste charge.

American Free Enterprise Chamber of Commerce and Michigan Oil and Gas Association filed a lawsuit in the federal district court for the Western District of Michigan challenging the constitutionality of provision of the Inflation Reduction Act that imposed the waste emissions charge, which the plaintiffs referred to as a “Methane Tax.” The plaintiffs contended that the provision did not provide an “intelligible principle” for applying a “regulatory compliance exemption” from the charge. The plaintiffs further asserted that the provision constituted an unlawful delegation of legislative power. In addition, the plaintiffs claimed that the waste emissions charge violated the Constitution’s Export Clause to the extent it applied to liquefied natural gas export facilities because it was “in effect” a tax on exports.