Update – February 20, 2020 – California Seeks Summary Judgment in Case About Its Cap-and-Trade Linkage with Quebec

Last week, California asked a federal district court to dismiss two claims filed by the U.S. government about the state’s cap-and-trade program linkage with Quebec. California is supported by numerous parties, including professors of foreign relations law, fourteen states, and a group of former U.S. diplomats and officials.

In October, the U.S. Government filed a complaint alleging that California’s agreement with Quebec to link each jurisdiction’s greenhouse gas cap-and-trade program is unconstitutional. The U.S. argues that the linkage violates the Treaty Clause and Compact Clause, is preempted by the Foreign Affairs Doctrine, and discriminates among categories of foreign commerce in violation of the Commerce Clause. In December, the U.S. filed a motion for summary judgment on its Treaty Clause and Compact Clause claims, arguing that California has formed a “purely political pact” that has no “connection to a discernible local interest” and “usurp[s] part of the United States’ exclusive role in formulating this nation’s foreign policy.”

California’s response, filed last week, opposes the U.S. Government’s summary judgment motion and asks the court to grant summary judgment on these two claims in California’s favor. The state argues that its agreement with Quebec “does not implicate weighty matters, such as preserving national unity or protecting federal supremacy against an expansion of state power,” and therefore falls outside the scope of the Treaty and Compact Clauses. Moreover, the U.S. Government has failed to provide evidence about effects of the six-year old linkage between California and Quebec, “let alone any evidence of infringement on federal supremacy or threat to national unity.”

With regard to the Treaty Clause, California notes that the Supreme Court has only “applied it once and with little discussion—to the Civil War Confederacy.” Although there is little case law on the clause, an unconstitutional treaty must be limited to “those rare agreements risking serious consequences for the Nation, including threats to national unity.” The linkage agreement, according to California, presents no such threat. It “merely expresses California’s and Quebec’s good-faith intentions to continue communicating and collaborating” and does no more than “promote harmonization of the two programs.”

California argues that Supreme Court precedent on the Compact Clause establishes a clear functional test that determines whether a state agreement is invalid. Because it is not exercising any powers it could not in the absence of the agreement, has not delegated any “sovereign power” to another organization, and is free to withdraw from the linkage at any time, California contends that the linkage is not a “compact” under the Constitution.

Supporting California, thirteen professors of foreign relations law claim that the federal executive branch, acting alone, “offers no serious argument how California’s arrangement with Quebec impedes U.S. foreign relations” and instead “seeks to suppress state efforts on an issue of profound local concern simply by fiat.” The lawsuit attempts to “make the executive branch the gatekeeper to the Article I Compact Clause,” thereby “increasing the power of the presidency still further with regard to both the states and Congress.” Fourteen states, including all but one member of the Regional Greenhouse Gas Initiative (RGGI), argue that the linkage agreement is consistent with their “longstanding experience in designing and administering coordinated markets, which have a proven track record of success at effectively and efficiently facilitating achievement of policy goals in our States, including the goal of reducing greenhouse gas pollution.” Former U.S. diplomats and officials aver that the linkage agreement did not interfere with international climate negotiations and that state and local emission reduction efforts enhance the credibility of the United States as a negotiating partner.

The briefs are available on the California page.