August 9, 2020

Volume X, Number 222

August 07, 2020

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August 06, 2020

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California Supreme Court Refuses to Take Up Challenge to Cap-and-Trade Program; CARB Confirms Board Hearing Will be Held in July

The California Supreme Court yesterday refused to take up the appeal in California Chamber of Commerce v. CARB, ending litigation that would have struck down a key element of the California Cap-and-Trade program (the “Program”).  The Third Appellate District Court of Appeal had previously ruled against the California Chamber of Commerce’s argument that the Program’s auction of allowances was an unconstitutional tax under state law.  The Court of Appeal’s ruling is now the final say on this issue.

The ruling will impact the current debate over climate change in the California Legislature.  Governor Brown has been pushing for legislation to protect the Program from challenge as an unconstitutional tax.  Such legislation would require a two-thirds majority vote.  Now that the litigation pressure is off, Brown may be more aggressive in negotiations to extend the Program beyond 2020. 

Earlier today, CARB adopted amendments to the Mandatory Reporting of Greenhouse Gas Emissions Regulation, and Chair of the Board Mary Nichols confirmed that a previously tentative July board hearing will be held.  We believe it likely that CARB will adopt some version of its proposed amendments at the July hearing, because, among other reasons, if CARB fails to do so these amendments will expire.  We will continue to alert you of developments in this area.

The ruling will impact the current debate over climate change in the California Legislature.  Governor Brown has been pushing for legislation to protect the Program from challenge as an unconstitutional tax.  Such legislation would require a two-thirds majority vote.  Now that the litigation pressure is off, Brown may be more aggressive in negotiations to extend the Program beyond 2020. 

Earlier today, CARB adopted amendments to the Mandatory Reporting of Greenhouse Gas Emissions Regulation, and Chair of the Board Mary Nichols confirmed that a previously tentative July board hearing will be held.  We believe it likely that CARB will adopt some version of its proposed amendments at the July hearing, because, among other reasons, if CARB fails to do so these amendments will expire.  We will continue to alert you of developments in this area.

*Jacob Duginski contributed to this article.

© 2020 Beveridge & Diamond PC National Law Review, Volume VII, Number 181

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About this Author

Brook Detterman Environmental Litigation Attorney Beveridge & Diamond Boston, MA
Principal

Brook's practice focuses on climate change, renewable energy, and environmental litigation.

Brook helps his clients to navigate domestic and international climate change programs, develop renewable energy projects, and generate carbon offsets.  He helps his clients to negotiate, structure, and implement transactions related to carbon offsets and renewable energy, and works with clients during all phases of renewable energy and carbon offset project development.  Brook also represents clients during complex environmental litigation, having served as litigation and appellate counsel...

617.419.2345
Kaitlyn D. Shannon Environmental Enforcement & Litigation Attorney Beveridge & Diamond San Francisco, CA
Associate

Kaitlyn Shannon focuses her practice on environmental enforcement and litigation across a range of industries and issues.

She is an experienced environmental litigator and regularly appears in California state and federal courts, and she is the deputy leader of the firm’s Litigation practice group. She has experience with the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), including defending against natural resource damages claims. She is also well-versed in California state-law claims, including California’s Superfund program,...

415-262-4020