Rocky Mountain Farmers Union v. Richard Corey

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ROCKY MOUNTAIN FARMERS UNION; No. 17-16881
REDWOOD COUNTY MINNESOTA
CORN AND SOYBEAN GROWERS; D.C. Nos.
PENNY NEWMAN GRAIN, INC.; REX 1:09-cv-02234-
NEDEREND; FRESNO COUNTY FARM LJO-BAM
BUREAU; NISEI FARMERS LEAGUE; 1:10-cv-00163-
CALIFORNIA DAIRY CAMPAIGN; LJO-BAM
GROWTH ENERGY,
Plaintiffs-Appellants,
and
AMERICAN FUEL & PETROCHEMICAL
MANUFACTURERS ASSOCIATION,
FKA National Petrochemical &
Refiners Association; AMERICAN
TRUCKINGS ASSOCIATIONS; THE
CONSUMER ENERGY ALLIANCE,
Plaintiffs,
v.
RICHARD W. COREY, in his official
capacity as Executive Officer of the
California Air Resources Board;
ALEXANDER SHERRIFFS; BARBARA
RIORDAN; HECTOR DE LA TORRE;
JOHN EISENHUT; JOHN GIOIA; MARY
D. NICHOLS; RON ROBERTS; DANIEL
2 ROCKY MOUNTAIN FARMERS UNION V. COREY
SPERLING; SANDRA BERG; JOHN R.
BALMES; PHIL SERNA; DEAN
FLOREZ; DIANE TAKVORIAN; JUDY A.
MITCHELL, in their official capacities
as members of the California Air
Resources Board; GAVIN NEWSOM,
in his official capacity as Governor
of the State of California; XAVIER
BECERRA, in his official capacity as
Attorney General of the State of
California,
Defendants-Appellees,
SIERRA CLUB; CONSERVATION LAW
FOUNDATION; ENVIRONMENTAL
DEFENSE FUND; NATURAL
RESOURCES DEFENSE COUNCIL,
Intervenor-Defendants-Appellees.
ROCKY MOUNTAIN FARMERS UNION V. COREY 3
ROCKY MOUNTAIN FARMERS UNION; No. 17-16882
REDWOOD COUNTY MINNESOTA
CORN AND SOYBEAN GROWERS; D.C. Nos.
PENNY NEWMAN GRAIN, INC.; REX 1:09-cv-02234-
NEDEREND; FRESNO COUNTY FARM LJO-BAM
BUREAU; NISEI FARMERS LEAGUE; 1:10-cv-00163-
CALIFORNIA DAIRY CAMPAIGN; LJO-BAM
GROWTH ENERGY,
Plaintiffs,
OPINION
and
AMERICAN FUEL & PETROCHEMICAL
MANUFACTURERS ASSOCIATION,
FKA National Petrochemical &
Refiners Association; AMERICAN
TRUCKINGS ASSOCIATIONS; THE
CONSUMER ENERGY ALLIANCE,
Plaintiffs-Appellants,
v.
RICHARD W. COREY, in his official
capacity as Executive Officer of the
California Air Resources Board;
ALEXANDER SHERRIFFS; BARBARA
RIORDAN; HECTOR DE LA TORRE;
JOHN EISENHUT; JOHN GIOIA; MARY
D. NICHOLS; RON ROBERTS; DANIEL
SPERLING; SANDRA BERG; JOHN R.
BALMES; PHIL SERNA; DEAN
FLOREZ; DIANE TAKVORIAN; JUDY A.
MITCHELL, in their official capacities
as members of the California Air
4 ROCKY MOUNTAIN FARMERS UNION V. COREY
Resources Board; GAVIN NEWSOM,
in his official capacity as Governor
of the State of California; XAVIER
BECERRA, in his official capacity as
Attorney General of the State of
California,
Defendants-Appellees,
SIERRA CLUB; CONSERVATION LAW
FOUNDATION; ENVIRONMENTAL
DEFENSE FUND; NATURAL
RESOURCES DEFENSE COUNCIL,
Intervenor-Defendants-Appellees.
Appeal from the United States District Court
for the Eastern District of California
Lawrence J. O’Neill, Chief Judge, Presiding
Argued and Submitted September 26, 2018
Pasadena, California
Filed January 18, 2019
Before: Dorothy W. Nelson, Ronald M. Gould,
and Mary H. Murguia, Circuit Judges.
Opinion by Judge Gould
ROCKY MOUNTAIN FARMERS UNION V. COREY 5
SUMMARY *
Civil Rights
The panel vacated in part and affirmed in part the district
court’s judgment on the pleadings and Fed. R. Civ. P.
12(b)(6) dismissal of an action alleging that the previous and
current versions of California’s Low Carbon Fuel Standard
violate the Commerce Clause and the “federal structure of
the Constitution.”
Plaintiffs challenged three iterations of California Air
Resources Board regulations aimed at accomplishing the
goal of reducing the rate of greenhouse gas emissions in
California’s transportation sector: (1) the first Low Carbon
Fuel Standard, which went into effect in 2011; (2) the Low
Carbon Fuel Standard, as amended in 2012; and (3) the 2015
Low Carbon Fuel Standard. The 2011 Low Carbon Fuel
Standard established a program for the regulation of
Californian transportation fuels based on a fuels’ “carbon
intensity.” The 2015 Low Carbon Fuel Standard repealed the
2011 Low Carbon Fuel Standard and the 2012 amendments.
The panel held that plaintiffs’ challenges to the 2011 and
2012 versions of the Low Carbon Fuel Standard were made
moot by their repeal. The panel therefore vacated the district
court’s judgment as to those challenges and remanded with
instructions to dismiss those claims.
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
6 ROCKY MOUNTAIN FARMERS UNION V. COREY
Affirming the district court’s decision as to the claims
challenging the 2015 Low Carbon Fuel Standard, the panel
held that the claims were largely precluded by this Court’s
prior decision in Rocky Mountain Farmers Union v. Corey,
730 F.3d 1070 (9th Cir. 2013). The panel held that,
practically speaking, the controlling substance at the crux of
the case had not changed since 2011. The panel noted that
the 2015 Fuel Standard still uses a lifecycle analysis to
assign credits and deficits, and although some details had
changed, plaintiffs did not and could not explain how their
extraterritoriality claims under the Commerce Clause
functioned differently against the new version of the
regulation.
The panel rejected plaintiffs’ assertion that their claims
were based on the “federal structure of the Constitution” and
therefore were not controlled by Rocky Mountain. The panel
held that plaintiffs had not identified which constitutional
provisions or doctrine outside the Commerce Clause
governed their structural federalism claims. Moreover, the
panel held that it was bound by recent Circuit precedent that
settled whether a program very similar to the Low Carbon
Fuel Standard was inconsistent with the structure of the
Constitution. See Am. Fuel & Petrochemical Mfrs. v.
O’Keeffe, 903 F.3d 903 (9th Cir. 2018). Finally, the panel
rejected plaintiffs’ claim that the 2015 Low Carbon Fuel
Standard facially discriminated against interstate commerce
in its treatment of ethanol and crude oil or that it
purposefully discriminated against out-of-state ethanol.
ROCKY MOUNTAIN FARMERS UNION V. COREY 7
COUNSEL
Paul J. Zidlicky (argued), Clayton G. Northouse, and Erika
L. Maley, Sidney Austin LLP, Washington, D.C.; John C.
O’Quinn, Kirkland & Ellis LLP, Washington, D.C.; John P.
Kinsey and Timothy Jones, Wagner Jones Helsley PC,
Fresno, California; for Plaintiffs-Appellants.
M. Elaine Meckenstock (argued), Jonathan Wiener, and
Myung J. Park, Deputy Attorneys General; Gavin G.
McCabe, Supervising Attorney General; Robert W. Byrne,
Senior Assistant Attorney General; Xavier Becerra,
Attorney General; Office of the Attorney General, Oakland,
California; Sean H. Donahue, Donahue Goldberg & Weaver
LLP, Washington, D.C.; Joanne Spalding, Sierra Club,
Oakland, California; David Pettit, Natural Resources
Defense Council, Santa Monica, California; for Defendants-
Appellees.
OPINION
GOULD, Circuit Judge:
In 2013, we decided the first appeal in a long-running,
complex challenge to California’s Low Carbon Fuel
Standard (LCFS) under the Commerce Clause in Rocky
Mountain Farmers Union v. Corey, rejecting some of
Plaintiffs’ claims and remanding for further proceedings on
others. Rocky Mountain Farmers Union v. Corey, 730 F.3d
1070 (9th Cir. 2013) reh’g en banc denied, 704 F.3d 507 (9th
Cir. 2014), and cert. denied, 134 S. Ct. 2875 (2014)
(hereinafter Rocky Mountain I). That challenge returns to us
today. In the intervening years, the LCFS has been repealed
and replaced, and Plaintiffs’ claims have changed form, but
8 ROCKY MOUNTAIN FARMERS UNION V. COREY
both the regulations and the claims have the same core
structure now as they did then. We hold that Plaintiffs’
challenges to previous versions of the LCFS have been made
moot by their repeal, and we affirm the dismissal of their
remaining claims against the present version of the LCFS as
largely precluded by our prior decision in Rocky Mountain I.
To the extent Plaintiffs raise new arguments on this appeal,
we conclude that they are without merit.
I
A
Since 2006, the California Air Resources Board (CARB)
has acted under a mandate to reduce California’s rate of
greenhouse gas emissions in light of the California
legislature’s finding that “[g]lobal warming poses a serious
threat to the economic well-being, public health, natural
resources, and the environment of California.” Cal. Health
& Safety Code § 38501. The California legislature is rightly
concerned with the health and welfare of humans living in
the State of California. These persons may be subjected, for
example, to crumbling or swamped coastlines, rising water,
or more intense forest fires caused by higher temperatures
and related droughts, all of which many in the scientific
communities believe are caused or intensified by the volume
of greenhouse gas emissions. 1 The California legislators and
1
See generally Intergovernmental Panel on Climate Change, Global
Warming of 1.5 °C (2018), http://www.ipcc.ch/report/sr15/; see also
Coral Davenport, Major Climate Report Describes a Strong Risk of
Crisis as Early as 2040, N.Y. Times (Oct. 7, 2018),
https://www.nytimes.com/2018/10/07/climate/ipcc-climate-report-
2040.html; Seth Bornstein & Frank Jordans, ‘Weirdness Abounds’ as
World Warms; Scientists Say Record Temps, Fires Made Worse by
ROCKY MOUNTAIN FARMERS UNION V. COREY 9
regulators who created the CARB regulation of greenhouse
gas emissions were clearly concerned with such dreadful
environmental impacts. 2 And, whatever else may be said of
the revolutionary colonists who framed our Constitution, it
cannot be doubted that they respected the rights of individual
states to pass laws that protected human welfare, 3 see, e.g.,
The Federalist No. 45 at 289 (James Madison) (Clinton
Rossiter ed., 2003) (“The powers reserved to the several
States will extend to all the objects, which, in the ordinary
course of affairs, concern the lives, liberties, and properties
of the people; and the internal order, improvement, and
Human-Caused Climate Change, Chicago Tribune, Aug. 1, 2018, at
C12.
2
See S. Rules Comm., A. Floor Bill Analysis on A.B. 32, 2005–2006
Leg., Reg. Sess. (Cal. 2006), http://leginfo.legislature.ca.gov/faces/bill
AnalysisClient.xhtml?bill_id=200520060AB32; (discussing passage of
a bill to inter alia authorize CARB to regulate greenhouse gas emissions
from transportation fuels, stating that “global climate change poses a
serious threat to California’s economic well being, public health, and
environment if aggressive actions to reduce GHG emissions are not
taken soon”), Cal. Envtl. Prot. Agency Air Res. Bd., Staff Report:
Initial Statement of Reasons for Proposed Rulemaking – Proposed Re-
Adoption of the Low Carbon Fuel Standard ES-1–2 (Dec. 2014),
https://www.arb.ca.gov/regact/2015/lcfs2015/lcfs15isor.pdf (“The
primary goal of the LCFS regulation is to reduce the carbon intensity of
transportation fuels used in California . . . thereby reducing GHG
emissions . . . .”).
3
Blackstone referred to the traditional authority of the police power
as the power to ensure “the due regulation and domestic order of the
kingdom.” 4 William Blackstone, Commentaries *162. Bentham’s work
on constitutional codes similarly defined the police power as “a system
of precaution, either for the prevention of crimes or of calamities.”
3 Jeremy Bentham, The Works of Jeremy Bentham *169 (John Bowring
ed., 1843) (later cited by Tennessee v. Davis, 100 U.S. 257, 300 (1879)).
We cannot doubt that the calamities considered in this context are a
central concern of the states as they wield this traditional power.
10 ROCKY MOUNTAIN FARMERS UNION V. COREY
prosperity of the State.”), and recognized their broad police
powers to accomplish this goal. See, e.g., Metro. Life Ins.
Co. v. Massachusetts, 471 U.S. 724, 756 (1985) (“The States
traditionally have had great latitude under their police
powers to legislate as ‘to the protection of the lives, limbs,
health, comfort, and quiet of all persons.’” (quoting
Slaughter-House Cases, 83 U.S. 36, 62 (1873))); Lewis v. BT
Inv. Managers, Inc., 447 U.S. 27, 36 (1980) (“[T]he States
retain authority under their general police powers to regulate
matters of ‘legitimate local concern,’ even though interstate
commerce may be affected.”); Huron Portland Cement Co.
v. City of Detroit, 362 U.S. 440, 442 (1960) (“Legislation
designed to free [the air] from pollution . . . clearly falls
within the exercise of even the most traditional concept of
. . . the police power.”).
We are presented with several versions of the challenged
CARB regulations that regulate fuel sales in California. This
case concerns three iterations of CARB regulations aimed at
accomplishing the goal of reducing the rate of greenhouse
gas emissions in California’s transportation sector: (1) the
first LCFS, which went into effect in 2011; (2) the LCFS as
amended in 2012; and (3) and the LCFS which replaced the
first LCFS in 2015.
The function of the 2011 and 2012 versions of the LCFS
was heavily discussed and analyzed in Rocky Mountain I and
no current factual allegations have disturbed our summary of
them. See Rocky Mountain I, 730 F.3d at 1078–86 (9th Cir.
2013). We reaffirm, finding Rocky Mountain I’s conclusions
binding here. Id. at 1106–07.
In brief, the 2011 LCFS established a program for the
regulation of Californian transportation fuels based on the
ROCKY MOUNTAIN FARMERS UNION V. COREY 11
fuels’ “carbon intensity.” 4 See Rocky Mountain I, 730 F.3d
at 1080–81. Parties who sell fuel in California are assessed
for the carbon intensity of those fuels, and parties who fall
below the carbon intensity standard gain tradeable credits
that can be used by parties who are above the carbon
intensity standard to meet their regulatory obligations.
CARB assigns carbon intensity differently for different
kinds of fuels, and the 2012 amendments to the LCFS, while
retaining this basic structure, changed the precise procedure
for assigning carbon intensity values to crude oil.
In 2013, after our decision in Rocky Mountain I, a
decision in California state court based on the state’s
administrative law required CARB to reconsider the LCFS.
See POET, LLC v. CARB, 218 Cal. App. 4th 681, 766–67
(2013) (requiring CARB to “[s]et aside its approval of the
LCFS”). This led to the currently-effective LCFS (the “2015
LCFS”) that repealed the 2011 LCFS and, of course, the
2012 amendments. The method and structure of the 2015
LCFS is identical to the 2011 LCFS, and it still contains the
central carbon intensity and lifecycle analysis elements. The
changes that are material for this appeal are limited to the
4
A fuel’s carbon intensity rating reflects the greenhouse gas
emissions associated with the fuel throughout its total “lifecycle.”
Rather than measuring carbon released during the fuel’s use, the
lifecycle analysis examines the environmental impact of a product
from “cradle to grave” by evaluating the resources consumed and wastes
discharged during the product’s production, distribution, use,
maintenance, and disposal. See generally U.S. Dept. of Energy, Ethanol:
The Complete Energy Lifecycle Picture (March 2007),
https://www1.eere.energy.gov/vehiclesandfuels/pdfs/program/ethanol_
brochure_color.pdf (providing an overview of the lifecycle analysis
model).
12 ROCKY MOUNTAIN FARMERS UNION V. COREY
process for assigning carbon intensity values to non-crude
oil fuels.
The 2011 LCFS gave two different pathways for
regulated parties to have the carbon intensity of their fuels
assessed. Under “Method 1,” CARB provided default values
for different fuels with different production procedures from
different parts of the country and the world. Rocky Mountain
I, 730 F.3d at 1082. Regulated parties could also use
“Method 2,” which provided different options aimed at
giving a more individualized assessment of a fuel’s carbon
intensity. Id. 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. See Rocky Mountain I, 730 F.3d at 1081–
84.
B
The first version of this case began in 2009 and 2010,
when Plaintiffs-Appellants Rocky Mountain Farmers’
Union et al. (“Rocky Mountain”) and American Fuels &
Petrochemical Manufacturers Association et al. (“American
Fuels”) separately challenged the 2011 LCFS under the
Commerce Clause and the Supremacy Clause, bringing Ex
Parte Young actions against CARB members, California’s
Governor, and California’s Attorney General seeking
declaratory and injunctive relief. Rocky Mountain argued
that the 2011 LCFS was preempted by the Energy
Independence and Security Act of 2007 (EISA), regulated
commerce extraterritorially, unduly burdened interstate
commerce, and discriminated against out-of-state fuel
interests. American Fuels made the same claims and added
ROCKY MOUNTAIN FARMERS UNION V. COREY 13
claims that the 2011 LCFS was preempted by the Energy
Policy Act of 2005 and the federal Renewable Fuels
Standard (RFS).
The district court granted summary judgment to the
plaintiffs on Rocky Mountain and American Fuels’s
Commerce Clause claims and granted Rocky Mountain’s
motion for a preliminary injunction. See Rocky Mountain
Farmers Union v. Goldstene (“Rocky Mountain Ethanol”),
843 F. Supp. 2d 1071, 1090, 1093 (E.D. Cal. 2011); Rocky
Mountain Farmers Union v. Goldstene (“Rocky Mountain
Preemption”), 843 F. Supp. 2d 1042, 1070 (E.D. Cal. 2011);
Rocky Mountain Farmers Union v. Goldstene (“Rocky
Mountain Crude”), Nos. CV-F-09-2234 LJO DLB, CV-F-
10-163 LJO DLB, 2011 WL 6936368, at *12–14 (E.D. Cal.
Dec. 29, 2011). The appeals of these orders were
consolidated and heard by the Ninth Circuit in Rocky
Mountain I. 730 F.3d at 1078.
In Rocky Mountain I, we reversed the district court,
holding that the 2011 LCFS did not facially discriminate
against interstate commerce in ethanol or crude oil, did not
regulate extraterritorially, and did not discriminate in
purpose or effect against crude oil. Id. at 1100, 1103–04,
1107. We also held that the LCFS permissibly regulated the
in-state behavior of selling different mixtures of fuel, and
that the use of lifecycle analysis did not amount to
discrimination against interstate commerce because it
disincentivized the purchase of a fuel only to the extent that
that fuel was relevantly different with respect to California’s
legitimate interest in curbing greenhouse gas emissions and
climate change. Id. at 1089–90. Plaintiffs’ petition for
rehearing en banc was denied, 704 F.3d 507 (9th Cir. 2014),
as were petitions for a writ of certiorari from both Plaintiffs
14 ROCKY MOUNTAIN FARMERS UNION V. COREY
and Defendants. See 134 S. Ct. 2875 (2014); Corey v. Rocky
Mountain Farmers Union, 134 S. Ct. 2884 (2014).
Our panel remanded on the following issues: (1) whether
the 2011 LCFS ethanol provisions discriminate in purpose
or in effect, (2) whether the 2011 LCFS ethanol provisions
unduly burden interstate commerce under Pike v. Bruce
Church, Inc., 397 U.S. 137 (1970), (3) whether the 2011 and
2012 LCFS crude oil provisions unduly burden interstate
commerce under Pike, (4) whether the LCFS is preempted
by the federal RFS and (5) whether the LCFS is preempted
by the federal EISA. Rocky Mountain I, 730 F.3d at 1107;
see also Rocky Mountain Farmers Union v. Goldstene, Nos.
1:09-cv-2234-LJO-BAM, 1:10-cv-163-LJO-BAM, 2014
WL 7004725, at *6 (E.D. Cal. Dec. 11, 2014) (hereinafter
Goldstene) (summarizing the questions the district court
received on remand).
C
On remand, Plaintiffs’ claims went through a series of
amendments and decisions to reach their current form. In
December of 2014, the district court granted in part a motion
to amend American Fuels’s complaint. This amendment
resulted in a complaint that also challenged the 2012
amendments to the LCFS’s crude oil provisions, added a
“horizontal federalism” aspect to its extraterritoriality claim,
and eliminated American Fuels’s Pike and federal
preemption claims. See Goldstene, 2014 WL 7004725, at
*18.
The district court then further clarified its position by
granting summary judgment for Defendants on Plaintiffs’
extraterritoriality claim against the original LCFS, granting
a motion to dismiss on Plaintiffs’ extraterritoriality claim
against the 2012 version of the LCFS, granting summary
ROCKY MOUNTAIN FARMERS UNION V. COREY 15
judgment for Defendants on Plaintiffs’ facial discrimination
claims against the original LCFS with respect to ethanol,
granting summary judgment for Defendants on all of
Plaintiffs’ discrimination claims against the original LCFS
and the 2012 version with respect to crude oil, and denying
a motion to dismiss Plaintiffs’ claim that the original ethanol
provisions discriminate in purpose and effect. Am. Fuels &
Petrochemical Mfrs. Ass’n v. Corey, Nos. 1:09-cv-2234-
LJO-BAM, 1:10-cv-163-LJO-BAM, 2015 WL 5096279, at
*38–39 (Aug. 28, 2015).
The complaints were amended again to reflect the 2015
version of the LCFS, and the district court heard motions to
dismiss and motions for judgment on the pleadings. The
amended complaints alleged that all three versions of the
LCFS are preempted by federal law, that all three versions
are impermissible extraterritorial regulations, and that all
three versions violate the Commerce Clause facially, in
purpose and effect, and under the Pike balancing test, which
remained in issue under the claims of Rocky Mountain
despite prior dismissal in the American Fuels case. The
district court held that Plaintiffs’ claims against the repealed
versions of the LCFS were not moot. Nevertheless, it
granted Federal Rule of Civil Procedure 12(c) motions for
judgment on the claims precluded by Rocky Mountain I and
granted 12(b)(6) motions to dismiss on most of the other
claims. The court denied the motions to dismiss on
Plaintiffs’ claims that the ethanol provisions of the 2011 and
2015 versions of the LCFS discriminate in practical effect
and that they violate Pike. Rather than contest these
remaining claims, Plaintiffs voluntarily dismissed them, and
the district court entered a final judgment.
Plaintiffs now appeal the district court’s decision on
claims challenging the 2015 version of the LCFS, as well as
16 ROCKY MOUNTAIN FARMERS UNION V. COREY
previous orders deciding the prior motions to dismiss.
Appellants claim that all three versions of the LCFS violate
the following constitutional protections:
the Commerce Clause and “the federal structure of
the Constitution” by regulating extraterritorially.
the Commerce Clause by facially discriminating
against interstate and foreign commerce in their
treatment of crude oil and ethanol.
the Commerce Clause by purposefully
discriminating against interstate and foreign
commerce in their treatment of crude oil and ethanol.
II
We review legal conclusions concerning mootness de
novo and factual findings concerning mootness for clear
error. In re Thorpe Insulation Co., 677 F.3d 869, 879 (9th
Cir. 2012). We review a district court’s dismissal of a
complaint under Federal Rule of Civil Procedure 12(b)(6) de
novo. United States v. Corinthian Colleges, 655 F.3d 984,
991 (9th Cir. 2011). We review a district court’s entry of
judgment under Federal Rule of Civil Procedure 12(c) de
novo. Yakima Valley Mem’l Hosp. v. Washington State
Dept. of Health, 654 F.3d 919, 925 (9th Cir. 2011).
III
First we examine whether Plaintiffs’ claims against the
repealed 2011 and 2012 versions of the LCFS are moot. The
district court held that, in light of a discussion of mootness
in a footnote in Rocky Mountain I, the repeal or amendment
of older versions of the LCFS did not render Plaintiffs’
claims against those regulations moot. Whatever the status
ROCKY MOUNTAIN FARMERS UNION V. COREY 17
of Plaintiffs’ claims in 2013, we now hold that no effective
relief can be provided for these claims, and that they are now
moot. We vacate the district court’s judgment on them and
remand with directions to dismiss them as moot.
As noted in Rocky Mountain I, a case is moot “only when
it is impossible for a court to grant any effectual relief.”
Rocky Mountain I, 730 F.3d at 1097 n.12 (quoting Decker v.
Nw. Envtl. Def. Ctr., 568 U.S. 597, 609 (2013)). However,
“the Supreme Court and our court have repeatedly held that
a case is moot when the challenged statute is repealed,
expires, or is amended to remove the challenged language.”
Log Cabin Republicans v. United States, 658 F.3d 1162,
1166 (9th Cir. 2011). Where there is nothing left of a
challenged law to enjoin or declare illegal, further judicial
action would necessarily be advisory and in violation of the
limitations of Article III. See, e.g., id. at 1165–66
(describing this doctrine as arising out of the case or
controversy requirements of Article III); Students for a
Conservative America v. Greenwood, 378 F.3d 1129, 1131
(9th Cir. 2004) (“This case is moot . . . because the
challenged rules have been changed and will not apply in
future elections.”); Native Vill. of Noatak v. Blatchford, 38
F.3d 1505, 1514 (9th Cir. 1994) (“Declaratory relief is
unavailable where [a] claim is otherwise moot . . . .”). To
test whether subsequent developments have mooted a suit,
we ask whether the claim could have been brought “in light
of the . . . statute as it now stands.” Hall v. Beals, 396 U.S.
45, 48 (1969).
Plaintiffs’ claims arising from the 2011 and 2012
versions of the LCFS fail this test. The laws challenged are
no longer in effect, Plaintiffs’ obligations under them have
been discharged, and it is not possible for the Court to grant
any effectual relief, as the 2011 and 2012 versions of the
18 ROCKY MOUNTAIN FARMERS UNION V. COREY
LCFS have been repealed. As such, Plaintiffs are in the same
boat as the plaintiffs in Log Cabin Republicans, in which we
said that “[i]f Log Cabin filed suit today seeking a
declaration that section 654 is unconstitutional or an
injunction against its application (or both), there would be
no Article III controversy because there is no section 654.”
658 F.3d at 1166.
Rocky Mountain I did not hold otherwise when it briefly
considered whether the 2012 amendments had made the
Plaintiffs’ 2013 challenge to the crude oil provisions of the
2011 LCFS moot. The court held that the amendments had
not mooted Plaintiffs’ claims, because “[c]redits awarded
based on [carbon intensity values calculated under the
challenged 2011 Provisions] will carry forward to
subsequent years and may be used by a regulated party” and
“[t]he propriety of the scheme under which those credits
were distributed remains a live controversy.” Rocky
Mountain I, 730 F.3d at 1097 n.12. This statement reflected
the fact that, as we were deciding this issue, the 2011 LCFS,
as partially amended in 2012, was good law and could have
been subject to any number of declaratory or injunctive
remedies. Although it is true that credits awarded under
prior versions of the LCFS could have future effects, it is no
longer true that the scheme under which those credits were
distributed remains a live controversy and challenges to it
can no longer be brought, as the 2011 and 2012 versions
have been repealed. If the present LCFS inherited any
constitutional infirmities from its predecessor, these must be
part of Plaintiffs’ challenge to the law as it currently stands.
Plaintiffs argued to the district court that they could seek
“the adjustment of the carry-forward credits calculated under
the prior version of the LCFS” as a remedy to save these
challenges from mootness. For good reason, Plaintiffs have
ROCKY MOUNTAIN FARMERS UNION V. COREY 19
since abandoned this claim. As the district court correctly
held, any such remedy would be barred for Plaintiff
associations by a lack of associational standing, and barred
for all Plaintiffs by the Eleventh Amendment. In order to try
to compensate parties for unconstitutionally low credits or
unconstitutionally high deficits awarded under prior
versions of the LCFS, the court would have to determine
how each party changed its behavior in response and how
much those changes cost each party, determinations that
would be impossible without “the participation of individual
members in the lawsuit.” United Food & Commercial
Workers Union Local 751 v. Brown Group, Inc., 517 U.S.
544, 553 (1996) (quoting Hunt v. Wash. State Apple Advert.
Com’n, 432 U.S. 333, 343 (1977)). Moreover, any such
relief could only be compensation for a state’s past violation
of law, which is barred by the Eleventh Amendment. See
Pennhurst State School & Hospital v. Halderman, 465 U.S.
89, 105–06 (1984) (“[A]n award of retroactive relief
necessarily falls afoul of the Eleventh Amendment.”); see
also Porter v. Jones, 319 F.3d 483, 491 n.7 (9th Cir. 2003)
(“[P]laintiff may not couch in terms of injunctive and
declaratory relief a compensatory, backward-looking
remedy.”). 5
The district court’s judgment on all of Plaintiffs’
challenges to the 2011 and 2012 versions of the LCFS is
VACATED with instructions to DISMISS those claims on
remand. See Log Cabin Republicans, 658 F.3d at 1167
(citing United States v. Munsingwear, Inc., 340 U.S. 36, 39
5
Assuming for sake of argument that we are incorrect in our
conclusion on mootness, and that the challenges by Plaintiffs to the 2011
and 2012 versions of the LCFS are not moot, then we would affirm as
against those challenges for the reasons stated by the majority in Rocky
Mountain I.
20 ROCKY MOUNTAIN FARMERS UNION V. COREY
(1950)) (describing this procedure as “the ‘established’
practice”).
IV
Plaintiffs assert that the 2015 LCFS regulates
extraterritorially, having amended their claims to include the
2015 LCFS and an allegation that the LCFS violates the
federal structure of the Constitution in addition to the
Commerce Clause. The district court granted Defendants’
motion to dismiss on the basis that this claim is precluded by
Rocky Mountain I. Plaintiffs contend that their appeals in
the current case include a claim based on the federal
structure of the Constitution that was not decided in Rocky
Mountain I. We hold that Plaintiffs’ extraterritoriality
claims against the 2015 LCFS are precluded by the law of
the case and by our recent circuit precedent in Am. Fuel &
Petrochemical Mfrs. v. O’Keeffe, 903 F.3d 903 (9th Cir.
2018) (hereinafter O’Keeffe). 6
A
The law of the case doctrine generally precludes
reconsideration of “an issue that has already been decided by
the same court, or a higher court in the identical case.”
United States v. Alexander, 106 F.3d 874, 876 (9th Cir.
1997) (quoting Thomas v. Bible, 983 F.2d 152, 154 (9th Cir.
1993)). In a circumstance like this, “a judgment of reversal
6
On September 12, 2018, the Plaintiffs-Appellants filed a Motion
to Dispense with Oral Argument, asserting that argument was not needed
because to the extent the appeal raised issues not governed by the rulings
in Rocky Mountain I, O’Keeffe resolved those issues. Plaintiffs said they
disagreed with that ruling, but that it was binding on the court in this
case. Our panel denied the motion on September 14, 2018, and we
address all pertinent issues in this opinion.
ROCKY MOUNTAIN FARMERS UNION V. COREY 21
by an appellate court is an adjudication only of matters
expressly discussed and decided, which become the law of
the case in further proceedings on remand and re-appeal.”
Hansen & Rowland v. C.F. Lytle Co., 167 F.2d 998, 999 (9th
Cir. 1948). To show that an issue is not controlled by the
law of the case, parties must show that it was not “decided
explicitly or by necessary implication” by a prior decision.
United States v. Garvia-Beltran, 443 F.3d 1126, 1129 (9th
Cir. 2006) (quoting Liberty Mut. Ins. Co. v. EEOC, 691 F.2d
438, 441 (9th Cir. 1982)). As a prudential rather than
jurisdictional doctrine, the law of the case doctrine does not
apply “if the court is convinced that its prior decision is
clearly erroneous and would work a manifest injustice.”
Pepper v. United States, 562 U.S. 476, 506–07 (2011)
(internal quotation marks and brackets omitted) (quoting
Agostini v. Felton, 521 U.S. 203, 236 (1997)).
Rocky Mountain I expressly decided Plaintiffs’
extraterritoriality claims against the 2011 and 2012 versions
of the LCFS. Because these claims are now moot, the only
extraterritoriality claims remaining are those against the
2015 LCFS. Strictly speaking, Rocky Mountain I did not,
for obvious reasons, address any claims Plaintiffs may have
had against the 2015 LCFS. Practically speaking, however,
the controlling substance at the crux of the case has not
changed. The 2015 LCFS still uses lifecycle analysis to
assign credits and deficits, and although some details have
changed, Plaintiffs do not and cannot explain how their
extraterritoriality claims under the Commerce Clause
function differently against the new version of the
regulation. Moreover, by deciding that California’s use of
lifecycle analysis “does not control the production or sale”
of out-of-state fuel and that “California may regulate with
reference to local harms, structuring its internal markets to
set incentives for firms to produce less harmful products for
22 ROCKY MOUNTAIN FARMERS UNION V. COREY
sale in California,” Rocky Mountain I necessarily implied
that an extraterritoriality challenge to a functionally identical
regulation would fail. Rocky Mountain I, 730 F.3d at 1104.
We are not convinced that our decision in Rocky
Mountain I is “clearly erroneous” such that its application
“would work a manifest injustice.” Pepper, 562 U.S. at 506–
07. Rocky Mountain I examined the LCFS under the test
provided by Healy, which holds that a regulation is
impermissibly extraterritorial when “the practical effect of
the regulation is to control conduct beyond the boundary of
the state.” Rocky Mountain I, 730 F.3d at 1101 (citing Healy
v. Beer Inst., 491 U.S. 324, 336 (1989)). By holding that
California may “regulate with reference to local harms,
structuring its internal markets to set incentives for firms to
produce less harmful products for sale in California,” Rocky
Mountain I properly respected the separate sovereignty of
the several states. Id. at 1104.
Rocky Mountain I followed a well-worn path of
precedent. States may seek to influence which products are
sold in-state, distinguishing impermissible statutes that
“regulate out-of-state parties directly” from those that
“regulate[] contractual relationships in which at least one
party is located in [the regulating state].” Gravquick A/S v.
Trimble Navigation Int’l Ltd., 323 F.3d 1219, 1224 (9th Cir.
2003). This is true even where the characteristics of the
products at market are not at issue. See Ass’n des Eleveurs
de Canards et d'Oies du Quebec v. Harris, 729 F.3d 937,
947–52 (9th Cir. 2013) (holding that a ban on selling foie
gras created by force-feeding did not discriminate against or
regulate out-of-state commerce); Pharm. Research & Mfrs.
of Am. v. Walsh, 538 U.S. 644, 669 (2003) (holding that
Maine may impose regulatory burdens on drug
manufacturers who do not have a rebate agreement with the
ROCKY MOUNTAIN FARMERS UNION V. COREY 23
state). The Commerce Clause also does not treat regulations
that have upstream effects on how sellers who sell to
California buyers produce their goods as being necessarily
extraterritorial. See Minnesota v. Clover Leaf Creamery Co.,
449 U.S. 456, 472 (1981); Exxon Corp. v. Maryland,
437 U.S. 117, 125–28 (1978). And as C&A Carbone, Inc. v.
Town of Clarkstown emphasized, local governments are
empowered to issue “uniform safety regulations” which
“would ensure that competitors . . . do not underprice the
market by cutting corners on environmental safety.”
511 U.S. 383, 393 (1994). In other words, subjecting both
in and out-of-jurisdiction entities to the same regulatory
scheme to make sure that out-of-jurisdiction entities are
subject to consistent environmental standards is a traditional
use of the State’s police power; it is not an extension of
“police power beyond its jurisdictional bounds.” Id. The
LCFS helps California and its citizens by ensuring that out-
of-state fuels do not benefit in Californian markets by
“cutting corners” and not being subject to California’s
regulations on the resulting greenhouse gases.
Rocky Mountain I reflects the commonplace proposition
that states may regulate to minimize the in-state harm caused
by products sold in-state, a central aspect of the state
sovereignty protected by the Constitution. See Clover Leaf
Creamery Co., 449 U.S. at 471–74; Sam Francis Found. v.
Christies, Inc., 784 F.3d 1320, 1324 (9th Cir. 2015) (en
banc) (commenting that Rocky Mountain I “concerned state
law[] that regulated in-state conduct with allegedly
significant out-of-state practical effects”); Brannon P.
Denning, Extraterritoriality and the Dormant Commerce
Clause: A Doctrinal Post-Mortem, 73 La. L. Rev. 979, 998–
99 (2013) (noting that a contrary expansive view of the
Healy doctrine “could have become a significant restriction
on state regulatory power” if the Court had adopted it). The
24 ROCKY MOUNTAIN FARMERS UNION V. COREY
LCFS does this without crossing into impermissible inter-
state regulation. See Edgar v. MITE Corp., 457 U.S. 624,
642–43 (1982) (holding an state statute conflicted with the
Commerce Clause because it regulated transactions in other
states); Nat’l Solid Wastes Mgmt. Ass’n v. Meyer, 63 F.3d
652, 653–54 (7th Cir. 1995) (holding a state statute violated
the Commerce Clause because it effectively required other
states to adopt similar regulations); Healy, 491 U.S. at 331–
39 (holding that a state statute violated the Commerce
Clause because it had the practical effect of establishing
scale of prices for use in other states); Brown-Forman
Distillers Corp. v. New York State Liquor Authority,
476 U.S. 573 (1986) (same); Baldwin v. G.A.F. Seelig, Inc.,
294 U.S. 511, 521 (1935) (same).
Finally, we squarely reject Plaintiff-Appellants’
arguments that California’s interest in the LCFS is merely a
concern for the environmental harms that are properly
subject to the police power of other states rather than of
California. As we held in Rocky Mountain I, the LCFS was
enacted pursuant to California’s view that “[g]lobal warming
poses a serious threat to the economic well-being, public
health, natural resources, and the environment of
California.” Cal. Health & Safety Code § 38501(a).
California did not enact the LCFS because it thinks that it is
the state that knows how best to protect Iowa’s farms,
Maine’s fisheries, or Michigan’s lakes. California’s interest
in the lifecycle of the fuels used by its consumers arises from
a concern for the effects of the production and use of these
fuels on California’s own air quality, snowpack, and
coastline. Here, the regulated parties, the regulated
transactions, and the harms California intended to prevent
are all within the state’s borders, making the LCFS a classic
exercise of police power. We cannot say that California is
doing anything other than legislating “with reference to its
ROCKY MOUNTAIN FARMERS UNION V. COREY 25
own jurisdiction” in promulgating the LCFS. Bonaparte v.
Appeal Tax Court of Balt., 104 U.S. 592, 594 (1881).
B
Having previously lost on their Commerce Clause
argument in Rocky Mountain I, Plaintiffs now advance their
new constitutional argument, contending that their claims
are based on the “federal structure of the Constitution” and
are not controlled by Rocky Mountain I. Plaintiffs have not
identified which constitutional provisions or doctrine
outside the Commerce Clause they believe govern their
structural federalism claims, if any do. However, our panel
need not linger on whether the Constitution could support
such a claim, because we are bound by recent circuit
precedent that has settled whether a program very similar to
the LCFS is inconsistent with the structure of the
Constitution. See O’Keeffe, 903 F.3d at 916–17. The
O’Keeffe court held that “irrespective of its constitutional
basis, any such claim is necessarily contingent upon a
finding that the [regulating state’s] program regulates and
attempts to control conduct that occurs in other states.” Id.
(quoting Goldstene, 2014 WL 7004725, at *13–14). As
discussed above, we settled this precise question for the
LCFS in Rocky Mountain I, and O’Keeffe is not materially
distinguishable from our current case.
There is simply no reason to search beyond the
Commerce Clause for the Constitution’s limits on the ability
of states to affect interstate commerce. While the Supreme
Court has frequently instructed us on the general principles
that “all States enjoy equal sovereignty,” Shelby County,
Ala. v. Holder, 570 U.S. 529, 534 (2013), and that states may
not “regulate and control activities wholly beyond [their]
boundaries,” Watson v. Emp’rs Liab. Assurance Corp.,
348 U.S. 66, 70 (1954), Commerce Clause jurisprudence is
26 ROCKY MOUNTAIN FARMERS UNION V. COREY
the relevant application of those general principles to this
context. The states, in forming the Union, “reserve[d] . . . a
substantial portion of the Nation’s primary sovereignty,”
and, because of this, constitutional restrictions on the police
power of the states should not be lightly inferred. Alden v.
Maine, 527 U.S. 706, 714 (1999). Our federalism doctrine
already has one “quagmire” of doctrine, independent of the
constitutional text, concerned with the effects of state
regulation on interstate commerce. West Lynn Creamery v.
Healy, 512 U.S. 186, 210 (1994) (Scalia, J., concurring). We
should decline to create another.
The district court’s decision as to Plaintiffs’
extraterritoriality claims against the 2015 LCFS is
AFFIRMED.
V
Plaintiffs contend for a second time that the LCFS
facially discriminates against interstate commerce in its
treatment of ethanol and crude oil, having amended their
claims to include the 2015 LCFS. The district court
concluded that Plaintiffs’ claims against the 2015 LCFS
should be dismissed based on Rocky Mountain I, and we
agree.
Rocky Mountain I rejected facial discrimination
challenges to the 2011 LCFS, holding that the “lifecycle
analysis used by CARB, including the specific factors to
which Plaintiffs object, does not discriminate against out-of-
state commerce” and that CARB’s decision to distinguish
between different fuels reflected its “expert regulatory
judgment” in aiming to produce “accurate carbon intensity
values.” 730 F.3d at 1093, 1096. These features remain in
the 2015 LCFS, and rather than contending that the new law
discriminates in some different way, Plaintiffs concede that
ROCKY MOUNTAIN FARMERS UNION V. COREY 27
their facial discrimination challenges are based on the same
premises. In fact, these claims have only been weakened by
intervening regulatory developments. The original LCFS
appealed to default pathways with regional characteristics,
which were a major source of the facial discrimination
claims in Rocky Mountain I. See id. at 1096. The 2015
LCFS eliminates the regional pathways and gives every
alternative fuel an individualized assessment, making no
default assumptions based on region of origin. 2015 LCFS
§ 95488(b), (c). It is not surprising then that Plaintiffs
concede that their facial discrimination claims are controlled
by Rocky Mountain I.
Because ruling in favor of Plaintiffs on their facial
discrimination claim would require rejecting Rocky
Mountain I on issues it expressly reached and decided, the
law of the case prevents us from endorsing Plaintiffs’ claims
against the 2015 LCFS unless we believe that “[our] prior
decision is clearly erroneous and would work a manifest
injustice.” Pepper, 562 U.S. at 506–07. As we do not, we
affirm the district court’s dismissal.
As Rocky Mountain I reflects, the Commerce Clause
respects both the concerns of the national marketplace and
the central value of local autonomy in our federal system.
See Rocky Mountain I, 730 F.3d at 1087. These principles
require us to take into account the potential indirect effects
of a state’s regulation of in-state activities insofar as they
may affect out-of-state commerce. However, the lens
through which we view this analysis must reflect the fact that
a state’s ability to control its internal markets and combat
local harms is squarely within its traditional police power.
Our Commerce Clause jurisprudence reflects the fact that
“the Framers’ distrust of economic Balkanization was
limited by their federalism favoring a degree of local
28 ROCKY MOUNTAIN FARMERS UNION V. COREY
autonomy.” Dep’t of Revenue of Ky. v. Davis, 553 U.S. 328,
338 (2008) (examining the history and rationale for the
Commerce Clause). Rocky Mountain I was correct to hold
that the LCFS was permissible local regulation under this
balance of considerations.
State autonomy in the regulation of economic and social
affairs is central to our system because of the recognized role
states have as laboratories, trying “novel social and
economic experiments without risk to the rest of the
country.” Rocky Mountain I, 730 F.3d at 1087 (citing New
State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932)
(Brandeis, J., dissenting)); see also Reeves, Inc. v. Stake,
447 U.S. 429, 441 (1980) (arguing that in light of State
experimentation in policy “[a] healthy regard for federalism
and good government renders us reluctant” to strike down a
state program under the dormant Commerce Clause).
Because any meaningful regulation of in-state commerce
may have indirect but significant interstate impacts, we
should be reluctant to subject states to unwarranted scrutiny
under the Commerce Clause for fear that we will frustrate
“the theory and utility of our federalism” by restricting the
ability of the states to “perform their role as laboratories for
experimentation . . . where the best solution is far from
clear.” United States v. Lopez, 514 U.S. 549, 581 (1995)
(Kennedy, J., concurring).
California has attempted to address a vitally important
environmental issue with vast potential consequences.
O’Keeffe, 903 F.3d at 913 (citing Massachusetts v. EPA,
549 U.S. 497, 522–23 (2007)) (recognizing that “[i]t is well
settled that states have a legitimate interest in combating the
adverse effects of climate change on their residents.”). It
seems clear beyond dispute that potential climate change
poses one of the most difficult challenges facing all
ROCKY MOUNTAIN FARMERS UNION V. COREY 29
civilizations worldwide for the twenty-first century. By
recognizing emissions that occur throughout the lifecycle of
different fuels, California has offered a potential solution to
the perverse incentives that would otherwise undermine any
attempt to assess and regulate the carbon impact of different
fuels. See Rocky Mountain I, 730 F.3d 1081. This
experiment cannot succeed without the ability to
differentiate the different production processes and power
generation that are used to produce those fuels. Moreover,
the value of California’s experimentation is reinforced by the
fact that other states can and will follow suit by using any
lawful procedure that proves effective as a model. That is
what happened in the Oregon Clean Fuels Program. Id. at
907–10.
The Constitution does not require California to shut its
eyes to the fact that some ethanol is produced with coal and
other ethanol is produced with natural gas because these
kinds of energy production are not evenly dispersed across
the country or because other states have not chosen to
regulate the production of greenhouse gases. If the states are
to remain a source of “innovative and far-reaching statutes”
that “supplemen[t] national standards,” they must be
permitted to submit the goods and services sold within their
borders to certain environmental standards without having
thereby discriminated against interstate commerce from
states with lower local standards. FERC v. Mississippi, 456
U.S. 742, 789 (1982) (O’Connor, J., concurring in part and
dissenting in part).
The district court’s decision as to Plaintiffs’ facial
discrimination claims against the 2015 LCFS is
AFFIRMED.
30 ROCKY MOUNTAIN FARMERS UNION V. COREY
VI
We previously remanded to the district court in Rocky
Mountain I on the Plaintiffs’ claim that the LCFS
purposefully discriminates against out-of-state ethanol. The
district court dismissed this claim, finding that “Plaintiffs
ma[de] no meaningful effort to differentiate the factual and
legal bases of their claims concerning the Original LCFS’s
ethanol provisions . . . and the bases of their pending claim
that the 2015 LCFS’s ethanol provisions have a
discriminatory purpose.” We agree and affirm.
In Rocky Mountain I, we left open the possibility that
Plaintiffs might have been able to show that the LCFS’s
treatment of carbon intensity, although it reflected facially
permissible differences between different kinds of fuels, was
actually enacted to prop up local fuel interests. Rather than
take advantage of the opportunity to develop this claim on
remand, however, Plaintiffs rely on the same basic set of
facts and alleged statements of bias that we heard in Rocky
Mountain I. As the district court found, “Plaintiffs have not
pointed to any portion of the LCFS’s legislative history that
the Ninth Circuit did not consider.”
Although we declined to foreclose Plaintiffs’ purposeful
discrimination claim, the district court is correct that “the
logic and record underlying all of Plaintiffs’ claims against
the ethanol provisions . . . has not changed.” The only new
material is a 2009 CARB press release that the district court
correctly held was a permissible “economic defense of a
[regulation] genuinely proposed for environmental reasons.”
Rocky Mountain I, 730 F.3d at 1100 n.13 (citing Minnesota
v. Clover Leaf Creamery Co., 449 U.S. 456, 463 n.7 (1981)
(“We will not invalidate a state statute under the Equal
Protection Clause merely because some legislators sought to
ROCKY MOUNTAIN FARMERS UNION V. COREY 31
obtain votes for the measure on the basis of its beneficial side
effects on state industry.”)).
As we noted in Rocky Mountain I, “[t]he party
challenging a regulation bears the burden of establishing that
a challenged regulation has a discriminatory purpose or
effect under the Commerce Clause.” 730 F.3d at 1097 (citing
Hughes v. Oklahoma, 441 U.S. 322, 336 (1979)). This
burden is all that much higher to meet in the face of our
holding that the structure of the LCFS does not show
evidence of discrimination. Under the LCFS, the relative
fate of in-state and out-of-state entities depends entirely on
the environmental properties of different fuel production and
transport processes. If the Midwest were to undergo a green
revolution in its energy production, the LCFS would act as a
competitive drag on California energy producers. In fact,
Rocky Mountain I recognized that it had already done so with
respect to portions of the market. See, e.g., Rocky Mountain
I, 730 F.3d at 1084 (“The individualized pathway with the
lowest carbon intensity was achieved by a Midwest producer
. . .[and] [t]he default pathway with the lowest carbon
intensity is . . . for Brazilian sugarcane ethanol . . . .”).
In light of these facts about the LCFS’s design, Plaintiffs
do not meet their burden of showing a discriminatory
purpose. Plaintiffs do not advance any evidence concerning
the purpose of the new regulation, the only law now subject
to challenge. Plaintiffs’ arguments rely primarily on
California’s motivations for passing the different versions of
the LCFS that were applicable in 2009 and 2010. This is
fatal to their case. In both its design and its legislative
justifications, the LCFS is a regulation aimed at salient
environmental differences between different types of fuels,
differences which genuinely reflect legitimate state interests.
We reject the bald suggestion that the California LCFS is
32 ROCKY MOUNTAIN FARMERS UNION V. COREY
disguised economic protectionism. Instead, we reaffirm the
conclusions that were set forth in part VI of Rocky Mountain
I because those conclusions remain pertinent to the claims
now presented:
The California legislature has determined
that the state faces tremendous risks from
climate change. With its long coastlines
vulnerable to rising waters, large population
that needs food and water, sizable deserts that
can expand with sustained increased heat,
and vast forests that may become tinderboxes
with too little rain, California is uniquely
vulnerable to the perils of global warming.
The California legislature determined that
GHG emissions from the production and
distribution of transportation fuels contribute
to this risk, and that those emissions are
caused by the in-state consumption of fuels.
Whether or not one agrees with the science
underlying those views, those determinations
are permissible ones for the legislature to
make, and the Supreme Court has recognized
that these risks constitute local threats. See
Massachusetts, 549 U.S. at 522.
To combat these risks, the California
legislature and its regulatory arm CARB
chose to institute a market-based solution that
recognizes the costs of harmful carbon
emissions. For any such system to work, two
conditions must be met. First, the market
must have full and accurate information
about the real extent of GHG emissions.
Second, the compliance costs of entering the
ROCKY MOUNTAIN FARMERS UNION V. COREY 33
market must not be so great as to prevent
participation. Plaintiffs attack the lifecycle
analysis and default pathways that fulfill
these conditions, relying on archaic
formalism to prevent action against a new
type of harm. It has been sagely observed by
Justice Jackson that the constitutional Bill of
Rights is not a “suicide pact.” See
Terminiello v. City of Chicago, 337 U.S. 1,
37 (1949) (Jackson, J., dissenting). Nor is the
dormant Commerce Clause a blindfold. It
does not invalidate by strict scrutiny state
laws or regulations that incorporate state
boundaries for good and non-discriminatory
reason. It does not require that reality be
ignored in lawmaking.
California should be encouraged to
continue and to expand its efforts to find
a workable solution to lower carbon
emissions, or to slow their rise. If no such
solution is found, California residents
and people worldwide will suffer great
harm. We will not at the outset block
California from developing this innovative,
nondiscriminatory regulation to impede
global warming. If the Fuel Standard works,
encouraging the development of alternative
fuels by those who would like to reach the
California market, it will help ease
California's climate risks and inform other
states as they attempt to confront similar
challenges.
730 F.3d at 1106–07.
34 ROCKY MOUNTAIN FARMERS UNION V. COREY
These potential risks to the people living in California
have only intensified in the past several years. Consider that
in the past year California saw its forest fires threat increase
in scope, intensity, duration, and damages, caused in part by
the extensive droughts throughout the state. See, e.g.,
Madison Park, California Fire Explodes in Size, Is
Now Largest in State History, CNN.com (Aug. 7,
2018), https://www.cnn.com/2018/08/06/us/california-fires/
index.html. California also saw more powerful storms
hitting its coastlines. See, e.g., Rong-Gong Lin II, Hurricane
Rosa Poses Risk of Flash Floods to Eastern California,
Las Vegas, Arizona, LATimes.com (Sep. 29, 2018),
http://www.latimes.com/local/lanow/la-me-ln-rain-20180929-
story.html.
The district court’s decision as to Plaintiffs’ purpose and
effect discrimination claims against the 2015 LCFS is
AFFIRMED.
VII
The district court’s decision as to the Plaintiffs’
challenges to the 2015 LCFS is AFFIRMED. We
VACATE its judgment as to the challenges to the 2011 and
2012 versions of the LCFS and REMAND with instructions
to dismiss them as moot.
Costs are awarded to the Defendants.