California Court Enjoins Implementation of Measures to Reduce Greenhouse Gas Emissions

March 23, 2011

A San Francisco County Superior Court Judge issued an order on March 17, 2011 (filed on March 18, 2011) granting a petition to enjoin the state of California from implementing the Global Warming Solutions Act (“A.B. 32”), including the greenhouse gas (“GHG”) emissions cap-and-trade program recently adopted by the California Air Resources Board (“CARB”), as well as other measures outlined in the scoping plan (the “Scoping Plan”) adopted pursuant to A.B. 32. A.B. 32 was enacted in 2006, and directed CARB to adopt measures that would result in a reduction of GHG emissions to 1990 levels by 2020. The case challenging CARB’s implementation of A.B. 32, Association of Irritated Residents, et al. v. CARB[1], was filed by a group of environmental justice organizations in 2009 claiming that CARB had failed to comply with the requirements of A.B. 32 and the California Environmental Quality Act (“CEQA”), and accordingly that CARB illegally approved the Scoping Plan.

Although the court held that CARB acted within its substantive authority under A.B. 32, it found that CARB did not comply with CEQA in adopting the Scoping Plan. Pursuant to California law, CARB regulatory programs have been designated as “CEQA-equivalent certified regulatory programs” and thus do not require a full environmental analysis under CEQA. However, CARB’s environmental analysis of proposed programs must comply with certain CEQA substantive requirements, including the preparation of the “functional equivalent document” (the “FED”) analyzing alternatives to the proposed program, which was described by the court as essentially the equivalent of preparing a programmatic Environmental Impact Report. The court found that CARB abused its discretion in certifying the FED for the Scoping Plan because the document failed to adequately describe and analyze alternatives to the proposed cap-and-trade program in a way that would allow for informed decision-making and public review. Further, the court found that CARB abused its discretion by implementing the Scoping Plan without responding to public comments prior to its final approval in contravention of the requirements of CARB’s certified regulatory program. The court did, however, find CARB’s impacts analysis sufficient to comply with CEQA.

Because the court determined that continued rulemaking and implementation of the cap-and-trade program would render CARB’s consideration of alternatives a “nullity,” as its next step the court will issue a writ of mandate (to be prepared by the environmental justice groups) commanding CARB to “set aside its certification of the FED and enjoining any further implementation of the measures contained in the Scoping Plan” until CARB completes the necessary CEQA analysis. Order, at page 35. It is interesting to note that while the court’s conclusions regarding the adequacy of CARB’s alternatives analysis and the justification for the injunction focused almost entirely on the cap-and-trade program, the court enjoined implementation of all Scoping Plan measures. We understand that CARB intends to seek clarification of the court’s order, apparently believing that the court may not have truly intended to halt efforts on all other programs identified in the Scoping Plan. It is also our understanding that CARB intends to appeal the decision and seek a stay in the appellate court to allow CARB to continue implementation of the Scoping Plan while it addresses the issues with the FED.

With several of the Scoping Plan measures already in place or partially in place, it remains to be seen how CARB will address compliance with those programs if it is unsuccessful in obtaining a stay or a clarification narrowing the all encompassing nature of the order.

[1] Ass’n of Irritated Residents v. CARB, Cal. Super. Ct., No. CPF 09-509562 (Mar. 18, 2011).