Superior Court's Injunction Preventing California's Cap and Trade Program Has Been Stayed...Right?

Until recently, Association of Irritated Residents v. California Air Resources Board proceeded along the litigation path as smoothly as any environmental challenge might. However, things took an unexpected twist last week that has left unanswered questions and many spectators baffled.

On March 18, 2011, Judge Ernest Goldsmith of the San Francisco County Superior Court suspended implementation of AB 32, California's landmark law to reduce greenhouse gas emissions. In Association of Irritated Residents v. California Air Resources Board, Judge Goldsmith determined that the California Air Resources Board (“ARB”) failed to properly consider alternatives to the highly touted, yet controversial, cap and trade program.

On May 20, Judge Goldsmith issued his final ruling (the “final order”), which is significantly narrower in scope than the March 18 statement of decision. The final order set aside ARB’s approval of the Climate Change Scoping Plan only “as it relates to the cap and trade” program and enjoined “any further rulemaking and implementation of cap and trade” until ARB is in compliance with the California Environmental Quality Act. While this mandate blocked any activity related to the cap and trade program, it left the other measures of AB 32 unaffected.

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