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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.

© 2018 Beveridge & Diamond PC

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About this Author

Kenneth Finney, Beveridge Diamond Law Firm, Environmental Law Attorney
Principal

Mr. Finney’s 30-year career in California environmental law has given him extensive experience with California statutes and regulatory programs in the areas of hazardous materials, natural resources and worker safety. He also has extensive experience with land-use permitting and litigation and with environmental insurance recovery negotiations and litigation.

Mr. Finney’s environmental practice has included: Environmental, Health and Safety counseling; RCRA, CERCLA and Cal Hazardous Waste Control Act hazardous waste administrative actions and...

415-262-4007
Brook J. Detterman, Beveridge Diamond, Climate Change Lawyer, Liabilities Law
Associate

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

Brook helps his clients to negotiate, structure, and implement transactions related to climate change and environmental commodities markets.  He regularly counsels clients during transactions under the EU ETS, California’s cap and trade program (AB 32), and other U.S. and international emissions trading programs. Brook also supports clients in the renewable energy industry, providing advice on renewable energy policies, regulations, and incentive programs and counseling clients on the environmental aspects of renewable energy projects and transactions.  Brook’s experience also includes complex environmental litigation, and he has served as litigation and appellate counsel during dozens of proceedings in state and federal courts across the country.

Brook's climate change and renewable energy experience includes:

  • Providing advice to a broad range of clients on state and federal renewable energy policies, incentives, and regulations.
  • Advising clients during the structuring and development of numerous carbon offset and renewable energy projects and transactions, including U.S. forest offset projects, hydroelectric projects under the Clean Development Mechanism, domestic landfill gas-to-energy development, and a novel trans-border carbon offset generation project involving CFC destruction.
  • Representing Native American tribes and corporations during the development of large carbon offset projects on tribal forest lands.
  • Drafting model renewable portfolio standards.
  • Developing regulatory guidance and strategy for over 30 energy companies on a wide range of environmental issues, including state and federal greenhouse gas regulations.
  • Counseling clients on carbon accounting, social cost of carbon metrics, and climate risk disclosure.

Prior to joining the firm, Brook was an associate in the environmental department of a large international law firm.

Brook served as a law clerk at the U.S. Department of Justice, Environment and Natural Resources Division, where he worked on a range of legal issues arising under federal environmental law, including CWA wetlands jurisdiction, CERCLA liability, RCRA compliance, and NEPA requirements. Brook was Associate Editor of the Lewis & Clark Law School Environmental Law Review and served on the Moot Court Honor Board.  At Dartmouth College, Brook worked as a teaching assistant in Environmental Studies Department, and as a research assistant in the Biology Department.

(781) 416-5745
Kaitlyn Shannon, Beveridge Diamond Law Firm, Environmental Enforcement Litigation Attorney
Associate

Kaitlyn Shannon focuses her practice on environmental enforcement and litigation, including mass torts. Kaitlyn has experience with the Comprehensive Environmental Response, Compensation and Liability Act, Resource Conservation and Recovery Act, and the National Environmental Policy Act

415-262-4020