North Dakota v. Heydinger

The federal district court for the District of Minnesota enjoined the State of Minnesota from enforcing provisions of the Next Generation Energy Act (NGEA) that barred both importing energy from a “new large energy facility” outside Minnesota and entering into new long-term power purchase agreements, where such activities would contribute to statewide carbon dioxide emissions. The court ruled that these prohibitions were a “classic example” of extraterritorial regulation in violation of the dormant Commerce Clause. The court said that due to how the electricity industry operates, the law could require out-of-state entities to comply with Minnesota requirements and even seek regulatory approval from Minnesota before engaging in power transactions outside Minnesota. The court noted that “[u]nlike … tangible products, electricity cannot be shipped directly from Point A to Point B. MISO [the Midcontinent Independent System Operator, the regional transmission organization of which Minnesota is a member] does not match buyers to sellers, and once electricity enters the grid, it is indistinguishable from the rest of the electricity in the grid. Therefore, a North Dakota generation-and-transmission cooperative cannot ensure that the coal-generated electricity that it injects into the MISO grid is used only to serve its North Dakota members and not its Minnesota members. Consequentially, in order to ensure compliance with [the NGEA provisions], out-of-state parties must conduct their out-of-state business according to Minnesota’s terms—i.e., engaging in no transactions involving power or capacity that would contribute to or increase Minnesota’s statewide power sector carbon dioxide emissions.”

A federal district court affirmed a magistrate judge’s order denying several environmental groups’ motion to intervene in an action concerning a Minnesota law designed to reduce GHG emissions, holding that the groups could not intervene given that they could not demonstrate a sufficient interest in the outcome of the case and that generalized interests in the reduction of carbon dioxide emissions were not enough to confer standing.

Minnesota moved for partial judgment on the pleadings. The district court granted the motion in part, holding that North Dakota had stated a prima facie claim that the Next Generation Energy Act was preempted by federal law. However, it dismissed claims alleging violations of the Privileges and Immunities Clause, holding that the law did not discriminate against North Dakota residents in obtaining employment in Minnesota. In addition, the court dismissed claims alleging violations of the Due Process Clause, holding that North Dakota failed to establish a constitutionally protected property interest.