Today, the US Supreme Court denied certiorari regarding the constitutionality of California’s Low Carbon Fuel Standard (LCFS) in Rocky Mountain Farmers Union v. Corey. The Court’s decision effectively affirms the Court of Appeals for the Ninth Circuit’s recent ruling that the LCFS does not facially violate the dormant Commerce Clause of the US Constitution. Plaintiffs — including ethanol, farming, petrochemical, energy and trucking industry groups — had argued that the LCFS program’s “lifecycle analysis” impermissibly regulates beyond state lines and discriminates against ethanol and crude oil produced out-of-state, in violation of the dormant Commerce Clause.
The Supreme Court’s refusal to take the case comes after decisions in the Eastern District of California and the Ninth Circuit. In December 2011, the district court found that the LCFS violated the dormant Commerce Clause and enjoined the enforcement of the LCFS. The Ninth Circuit then stayed the injunction — which would have otherwise prevented implementation of the LCFS — pending resolution of the California Air Resources Board’s (ARB) appeal. On September 8, 2013, the Ninth Circuit rejected the plaintiffs’ arguments, overturned the lower court’s decision and vacated its injunction. Rocky Mountain Farmers Union v. Corey, 730 F.3d 1070 (9th Cir. 2013). The Ninth Circuit then denied a petition for rehearing en banc, in January of 2014. Rocky Mt. Farmers Union v. Corey, 12-15135, 2014 WL 223797 (9th Cir. 2014) (Denial of Request for Rehearing). The case likely will be remanded to the Eastern District of California for further review under a more relaxed dormant Commerce Clause standard, the “Pike balancing test.” ARB currently is working to readopt the LCFS in response to an adverse state court decision. In the meantime, the LCFS remains in force.
