The Supreme Court denied a petition to review the Third Appellate District court decision on the California Chamber of Commerce, et al. v. California Air Resources Board, et al consolidated cases. In that decision, the Third Appellate District affirmed a Sacramento Superior Court judgment from 2013 that dismissed two consolidated lawsuits filed by the California Chamber of Commerce and Morning Star Packing Co against the California Air Resources Board (CARB). These cases attacked the sales of allowances under CARB’s Cap-and-Trade program. The California Chamber of Commerce suit alleged that the AB 32 (California Global Warming Solutions Act of 2006) did not authorize CARB to impose fees in the form of a cap-and-trade auction beyond those required to recover the costs of administering such a program. The Morning Star Packing suit alleged that even if CARB’s cap-and-trade auction was authorized, the sale of allowances constitute an illegal tax adopted in violation of Proposition 13’s 2/3 approval requirement for taxes. The parties appealed the superior court judgment. You can read more about the appellate decision in my previous post.
This now removes the most recent legal challenge to cap-and-trade but still leaves the question of authorizing the program beyond 2020. Whether the legislature and governor can muster the support to extend Cap-and-Trade program beyond 2020 is an open question. Assemblywomen Cristina Garcia’s (D-Bell Gardens) introduced AB 378 this year but it failed to pass the Assembly this session. This leaves 2018 as the next likely possible legislative opportunity unless parliamentary rules are used to revive this bill or its cap-and-trade authorization before September 15, 2017.