United States v. California

Acting under the California Global Warming Solutions Act, the California Air Resources Board (CARB) enacted a cap-and-trade program, capping emission levels and allowing market participants to trade permits to emit the restricted pollutants. CARB entered an agreement with Western Climate Initiative (WCI), a nonprofit that facilitated linkages with other cap-and-trade programs. CARB later entered a linkage agreement with Quebec and Ontario. The linkage agreement called for shared efforts to facilitate trading across programs. However, it expressly stated that it neither modified any party’s existing statutes and regulations nor required any party to adopt new statutes or regulations. It also stated that parties were free to withdraw from the agreement. Although the agreement called for notice prior to withdrawal, that provision was not mandatory, as evinced by Ontario’s withdrawal less than seven months later without notice to California or Quebec. During this period in which California was cultivating its cap-and-trade program and linkages, the United States government was also taking acts to mitigate emissions. For example, in 2016, the United States entered the Paris Accord, which required actions to mitigate global warming. In 2018, President Trump announced that the United States would withdraw from the Paris Accord with intent to negotiate new arrangements that better reflected US interests. In 2019, the United States government sued California and WCI, seeking a declaratory judgment that, among other things, the linkage agreement violated the Constitution’s Treaty Clause and Compact Clause. California and WCI moved for summary judgment.