CARB’s Low Carbon Fuel Standard Lives to Breathe Another Day

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Ninth Circuit rejects District Court’s conclusion that California Air Resources Board’s low carbon fuel standard violated dormant Commerce Clause and remands for additional proceedings. Citing a state’s ability to experiment with regulation, the Ninth Circuit determined that the low carbon fuel standard was not an impermissible extraterritorial regulation, and remanded to the District Court to consider whether the ethanol provisions discriminate in purpose or effect. “States may not mandate compliance with their preferred policies in wholly out-of-state transactions, but they are free to regulate commerce and contracts within their boundaries with the goal of influencing the out-of-state choices of market participants.” Rocky Mountain Farmers Union v. Corey, U.S. Ct. Apps (9th Cir.), Slip Opinion, September 18, 2013, p. 63.

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