United States v. California

The United States filed an appeal from the judgment in favor of California and other defendants in the U.S. case challenging agreements linking California’s greenhouse gas emissions cap-and-trade agreement with the trading program of provincial government of Quebec, Canada. The district court rejected the U.S.’s claims that the linkage violated the Treaty and Compact Clauses and was preempted under the Foreign Affairs Doctrine.

The federal district court for the Eastern District of California ruled that California’s cap-and-trade program for greenhouse gas emissions was not preempted under the Foreign Affairs Doctrine. First, the court found that the United States failed to identify “a clear and express foreign policy that directly conflicts” with the cap-and-trade program. Second, although the court found that California’s regulations and an agreement linking its cap-and-trade program with Quebec’s program had a “broad purpose” that extends beyond the area of traditional state responsibility, the court concluded that the U.S. failed to show that the cap-and-trade program impermissibly intrudes on the federal government’s foreign affairs power. The court therefore granted the defendants’ motions for summary judgment on the Foreign Affairs Doctrine claim. Since the U.S.’s other claims under the Treaty and Compact Clauses had already been dismissed, the court entered judgment in favor of the defendants.

California and other defendants filed cross-motions seeking summary judgment against the United States on the U.S.’s claim that California’s linkage of its greenhouse gas cap-and-trade program with Quebec’s is preempted under the Foreign Affairs Doctrine. The defendants asserted that the U.S. had not established any conflict with U.S. foreign policy. In addition, the defendants argued that the scope of field preemption under the Foreign Affairs Doctrine was very narrow and did not apply here and that the U.S.’s “obstacle preemption” argument, even if properly raised, would fail because the U.S. could not establish that the linkage with Quebec’s program interfered with congressional delegation of authority to the President. Western Climate Initiative, Inc. (a nonprofit organization that provides administrative and technical services to any jurisdiction with a cap-and-trade program) and related defendants also contended that the Foreign Affairs Doctrine could not be applied to them. Other parties filed briefs opposing the application of the Foreign Affairs Doctrine to preempt the linkage between the cap-and-trade programs, including intervenor-defendant International Emissions Trading Association, as well as professors of foreign relations law, 14 states (led by Oregon), and the Nature Conservancy.

In its lawsuit challenging California’s agreements with Quebec regarding linkages between their greenhouse gas cap-and-trade programs, the United States filed a motion seeking summary judgment motion on its claim that the agreements violated the Foreign Affairs Doctrine. The U.S. argued that the agreements and related arrangements conflicted with and were an obstacle to U.S. foreign policy, including the U.S.’s decision not to participate in the Paris Agreement. The U.S. further contended that even if California’s activities did not conflict with U.S. foreign policy, they concerned an area of foreign affairs over which the federal government had exclusive domain. The United States also sought dismissal of its Foreign Commerce Clause claim, which the U.S. said was largely duplicative of the Foreign Affairs Doctrine claim.

The federal district court for the Eastern District of California ruled that an agreement between California and Quebec concerning the linking of their greenhouse gas cap-and-trade programs did not violate either the Treaty Clause or the Compact Clause of the U.S. Constitution. The U.S.’s claims under the foreign affairs doctrine and the foreign Commerce Clause are still pending. Regarding the Treaty Clause, the court concluded that “[b]y any metric, the Agreement between California and Quebec falls short of … consequential agreements” that the Supreme Court has identified as agreements that qualify as treaties such as “treaties of alliance for purposes of peace and war,” “mutual government,” the “cession of sovereignty,” and “general commercial privileges.” Regarding the Compact Clause, the court noted that the Supreme Court had limited the clause’s bar on compacts between a state and another state or foreign power to “agreements that encroach upon federal sovereignty.” In this case, the court found that the California-Quebec agreement did not contain indicia of a compact because (1) it “does not require reciprocal action to take effect”; (2) “does not impose a regional limitation”; (3) does not adopt a joint organization or body that exercises regulatory authority; and (4) does not include an “enforceable prohibition on unilateral modification or termination.” The court also concluded that the agreement did not increase California’s power so that it encroached on U.S. supremacy. In addition, it rejected the argument that the Clean Air Act’s explicit authorization of agreements and compacts between states implicitly precludes agreements between states and foreign powers.

The court—citing its interest in not resolving the case in a piecemeal fashion—directed the parties to supplement their summary judgment briefing with explanations of their reasons for not moving for summary judgment on the Foreign Affairs Doctrine and Foreign Commerce Clause claims. The parties’ summary judgment motions address only the U.S.’s Treaty Clause and Compact Clause claims.

The federal district court for the Eastern District of California declined to dismiss the Western Climate Initiative, Inc. (WCI) or its statutorily appointed voting board members from the federal government’s lawsuit challenging the constitutionality of California’s agreement with the governments of Quebec and Ontario related to cap-and-trade programs for reducing greenhouse gas emissions. The court found that the United States adequately alleged that WCI’s actions in implementing the agreement would cause or contribute to the U.S.’s injury. The court further found that the U.S. claims for injunctive relief were properly asserted against the voting board members—the heads of the California Air Resources Board (CARB) and the California Environmental Protection Agency (CalEPA). The court also declined to dismiss the head of CalEPA in his official capacity as secretary of the agency since CalEPA is the parent agency of CARB, which is delegated authority to implement the cap-and-trade program. The court did dismiss two non-voting board members of WCI from the action.

Along with Environmental Defense Fund, Natural Resources Defense Council, and International Emissions Trading Association, which intervened in support of the defendants, the following parties moved to file briefs as amici curiae in support of the defendants: 13 professors of foreign relations law; 13 former U.S. diplomats and government officials; the Nature Conservancy; and 14 states.

The court denied the defendants’ application to extend the schedule for briefing cross-motions for summary judgment. The court ordered briefing to be completed on March 2, 2020, and a hearing was scheduled for March 9.

The United States filed a lawsuit in the federal district court for the Eastern District of California seeking to bar California from continuing to implement a 2013 agreement with the provincial government of Quebec, Canada pursuant to which California and Quebec work to harmonize their greenhouse gas reporting and cap-and-trade programs. The U.S. contended that the agreement—along with a separate agreement between California and the Western Climate Initiative and certain supporting provisions of California law—violated the Constitution by intruding on federal powers to negotiate international agreements. The complaint alleged that “[a]llowing individual states in the Union to conduct their own foreign policy to advance their own narrow interests is … anathema to our system of government and, if tolerated, would unlawfully enhance state power at the expense of the United States and undermine the United States’ ability to negotiate competitive international agreements.” The U.S. asserted claims under the Treaty Clause, the Compact Clause, the foreign affairs doctrine, and the foreign Commerce Clause.