Rocky Mountain Farmers Union v. Corey

A selective comparison of important factors and relevant fuel pathways cannot support the district court's holding that the ethanol and crude oil provisions of California’s Low Carbon Fuel Standard, Cal Code Regs tit. 17, §§ 95480-90 (2011), violate the dormant Commerce Clause.

Rocky Mountain Farmers Union led a multi-party action ("Rocky Mountain") against California Air Resources Board ("CARB"), alleging that California’s Low Carbon Fuel Standard, Cal Code Regs tit. 17, §§ 95480-90 (2011), violated the dormant Commerce Clause and was preempted by Section 211(o) of the Clean Air Act, 42 USC § 7545(o). Upon review, the Ninth Circuit reversed in part the district court’s summary judgment in favor of Rocky Mountain, holding instead that the Fuel Standard (1) did not facially discriminate against out-of-state ethanol; (2) did not impermissibly engage in the extraterritorial regulation of ethanol production; and (3) did not discriminate in purpose and practical effect against out-of-state crude oil. The case was remanded to the district court for entry of partial summary judgment in favor of CARB on these issues. Additionally, the Ninth Circuit vacated the preliminary injunction and remanded the case to the district court to determine whether the Fuel Standard’s ethanol provisions discriminated in purpose or effect; and, if not, to apply the balancing test established in Pike v. Bruce Church, Inc., 397 US 137 (1970). The panel also instructed the district court to apply the Pike balancing test to the Fuel Standard’s crude oil provisions. Furthermore, the panel affirmed in part the district court’s conclusion that the Fuel Standard (1) did not facially discriminate against out-of-state crude oil and (2) was not insulated from scrutiny under the dormant Commerce Clause by California’s preemption waiver in the Clean Air Act. The panel did not express an opinion on Rocky Mountain’s claim that the Fuel Standard is preempted by the Renewable Fuel Standard (RFS); nor did it express an opinion on CARB’s claim that the savings clause in the Energy Independence and Security Act of 2007 precludes implied preemption by the RFS. AFFIRMED in part, REVERSED in part, VACATED, and REMANDED.