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Rocky Mt. Farmers Union v. Corey - 913 F.3d 940 (9th Cir. 2019)


California's 2011 Low Carbon Fuel Standard (LCFS) gave two different pathways for regulated parties to have the carbon intensity of their fuels assessed. Under Method 1, the California Air Resources Board (CARB) provided default values for different fuels with different production procedures from different parts of the country and the world. Regulated parties could also use Method 2, which provided different options aimed at giving a more individualized assessment of a fuel's carbon intensity. The 2015 LCFS abandons the Method 1 process and assigns an individualized carbon intensity to each fuel, streamlining the application process for some conventionally produced fuels that CARB had previous experience in evaluating. This change means that no part of the LCFS now refers to particular regions of origin, as the 2011 LCFS had.


Since 2006, the California Air Resources Board (CARB) acted under a mandate to reduce California's rate of greenhouse gas emissions in light of the California legislature's finding that global warming poses a serious threat to the economic well-being, public health, natural resources, and the environment of California. CARB issued multiple regulations aimed at accomplishing the goal of reducing the rate of greenhouse gas emissions in California's transportation sector. Plaintiffs Rocky Mountain Farmers Union and other fuel producers challenged three of these regulations: (1) the first Low Carbon Fuel Standard (LCFS), which went into effect in 2011, (2) the Low Carbon Fuel Standard, as amended in 2012 and (3) the 2015 Low Carbon Fuel Standard, which repealed the 2011 Low Carbon Fuel Standard and the 2012 amendments. After several decisions, appellant fuel producers appeal the district court's decision on claims challenging the 2015 version of the LCFS, as well as previous orders deciding the prior motions to dismiss. On appeal, the fuel producers claim that all three versions of the LCFS violated the constitutional protections of the Commerce Clause.


Should the Commerce Clause claims of Rocky Mountain Farmers and other fuel producers be granted?




The U.S. Circuit Court of Appeals held that fuel producers' challenges to the 2011 and 2012 versions of California's Low Carbon Fuel Standard ("LCFS”) were moot because the laws has been repealed and no longer in effect, the producers' obligations under them had been discharged, and it was not possible for the Court to grant any effectual relief. The producers' challenge to the 2015 LCFS on the basis that it regulated extraterritorially, violating the federal structure of the Constitution and the Commerce Clause, was precluded by the law of the case and recent precedent, Am. Fuel & Petrochemical Mfrs. v. O'Keeffe, 903 F.3d 903 (9th Cir. 2018). A state regulation is impermissibly extraterritorial under the Commerce Clause when the practical effect of the regulation is to control conduct beyond the boundary of the state. The 2015 LCFS used the same lifecycle analysis of the production of a fuel to assign credits and deficits for carbon emissions, which was permissible regulation, so the producers' extraterritoriality claims under the Commerce Clause were foreclosed by the earlier appeal. 

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