Rocky Mountain Farmers Union v. Corey

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.”

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.” 

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.