A RISK WORTH RUNNING Dan Galpern Western Environmental Law Center

What is Minimally Necessary?

Compacts Clause 1 “No State shall, without the Consent of Congress... enter into any Agreement or Compact with another State, or with a foreign Power....” U.S. Const., Art. I, § 10, cl. 3 (Compact Clause)

Compacts Clause 2 Functional Test “[W]hether the particular compact enhances state power quoad* the Federal Government.” U. S. Steel Corp. v. Multistate Tax Commission, 434 U.S. 452 (1978). *with regard to

Compacts Clause 3 Categorical Test (1) Joint or regional organization to regulate (2) Actual cooperation between states (3) Action by one state is conditioned on action by other states (4) Relevant state statute’s require reciprocity by other participating states (5) A participating state is precluded or coerced from modifying or repealing its relevant statute Northeast Bancorp v. Federal Reserve, 472 US 159, 175 (1985)

Compacts Clause 4 Conclusion and Mild Caveat

From the “Compact” to State Statutes

Hard Hypo Greenhouse Gas Performance Standard CA SB 1368 (Chapter 598, 2006) and WA SB 6001 (Chapter 307, 2007)

Commerce 1 “The Congress shall have Power... To regulate Commerce... among the several States....” U.S. Const., Art. I, § 8, cl. 3 (Commerce Clause)

Commerce 2 Purpose or effect of state statute deemed discriminatory  Presumed unconstitutional. Dean Milk Co. v. City of Madison, Wisconsin, 340 U.S. 349 (1951)

But, where: (1)a state regulates “evenhandedly to (2)effectuate a legitimate local public interest” and (3)its effects on ITSC are “only incidental” and (4)burden is not clearly excessive compared to the legitimate local objective  Valid under the Commerce Clause Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970)

Commerce 3 A good purpose is not enough. “Whatever [a state’s] ultimate purpose, it may not be accomplished by discriminating against articles of commerce coming from outside the State unless there is some reason, apart from their origin, to treat them differently.” One state may not “isolate itself in the stream of interstate commerce from a problem shared by all.” Philadelphia v. New Jersey, 437 US 617, (1978) (no basis to distinguish out of sate waste from domestic waste)

Commerce 4 Here: (1) Facial neutrality. (2) Imposition on in-state generators as well. (3) Burden on ITSC will be outweighed by benefits to each regulating state (3)(a) Winners and Losers: all out of state? “The Commerce clause protects the interstate market, not particular interstate firms.” Exxon Corp v Maryland, 437 US 117, (1978)

Commerce 5 What if, in fact, the State regulation favors in- state industry over out-of-state industry? Minnesota v. Clover Leaf Creamery, 449 US 456, (1981) (a nondiscriminatory regulation serving substantial state purposes is not invalid simply because it causes some business to shift from a predominantly out-of-state industry to a predominantly in-state industry)

Conclusion: Risk is Moderate and Worth Running

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