California’s Agreement With Quebec Is Not Preempted — At Least For Now

Last week, Judge William Shubb of the U.S. District Court for the Eastern District of California ruled that the Agreement between California and Quebec to jointly operate a GHG cap-and-trade market did not violate either the Foreign Affairs Doctrine.  Judge Shubb had previously ruled that the Agreement did not violate either the Treaty Clause or the Compact Clause.

As before, I think Judge Shubb got it right, but I wouldn’t bet that the Supreme Court will agree, if it gets that far.  This one does seem to be on firmer ground, though.

The most interesting part of the decision was the Court’s discussion of field preemption.  In order to establish field preemption, case law requires that the United States demonstrate that California:

(1) has no serious claim to be addressing a traditional state responsibility and (2) intrudes on the federal government’s foreign affairs power.

The Court actually sided with the Trump Administration on the first part of the test, concluding that the Agreement with Quebec “extends beyond the area of traditional state responsibility.”  The Administration lost because it failed to demonstrate that the Agreement “intrudes on the foreign affairs power.”  It had argued that the Agreement diminishes the President’s power to “engage in international deal making on behalf of the United States,” claiming that the Agreement would make it difficult for the President to negotiate a “better deal” than the Paris Accord.  The Court pointed to case law supporting its conclusion that “hypothetical or speculative fears cannot support a finding that this state program has more than an incidental effect on foreign affairs.” 

One almost has to admire this administration.  It takes a certain amount of chutzpah to challenge the Agreement between California and Quebec on the ground that it interferes with the Administration’s ability to get a better deal than Paris, when there’s not even a hint of a scintilla of evidence that the Administration has any interest in doing so.

And for a pretty good non sequitur, check out this Atlantic article that’s the source of the accompanying graph.