CA Cap-And-Trade Program Lawsuit Dismissed

On Thursday, a California Superior Court judge dismissed a CA Chamber of Commerce lawsuit challenging the State's cap-and-trade program auction as an unconstitutional tax. While the judge was less than categorical, he found that the auction process requiring entities to purchase emission allowances was more akin to a regulatory fee than a tax. The judge's lack of resolve will likely embolden opponents to consider appeal for political reasons, it is unclear whether there would be any actual legal benefit of pursuing such an appeal. As my MW colleague Dana Palmer says here, "[g]iven that any appeal would not be heard until an additional three or four auctions occur, the court of appeal may be discouraged from overturning the trial court's decision when considering the difficulties of crafting appropriate relief for successful appellants."