Refiners told to clarify California LCFS case

Portland, 4 November (Argus) — A federal judge has ordered the American Fuels and Petrochemical Manufacturers (AFPM) to more fully explain its arguments against the California Low-Carbon Fuel Standard (LCFS), saying the group's recently revised legal brief is not clear.

US District Court judge Lawrence O'Neill ordered the expanded briefing from AFPM because "the nature of [one] claim is entirely unclear" and the group failed "to articulate the elements" of a second claim.

O'Neill is rehearing the case after the US Ninth Circuit Court of Appeals last year overturned his previous decision finding the LCFS unconstitutional. The appeals court ruled the LCFS does not explicitly discriminate against out-of-state fuels, but it sent the case back to O'Neill to determine whether the regulations are in effect discriminatory.

As part of the rehearing, AFPM had submitted a revised legal brief and sought to add two new claims to its case. The group said the program runs contrary to the federalism structure of the US Constitution and violates the import-export Clause. O'Neill said neither of the new claims was sufficiently explained in the revised brief from AFPM. He instructed AFPM to submit a supplemental brief by 12 November that explains how the federalism claim is not barred by the Ninth Circuit's finding that the LCFS regulates only the California fuel market.

The import-export clause prohibits states from applying tariffs or levies to international trade, and O'Neill said that in his understanding it only applies to "state taxation of imports and exports." Because the lawsuit does "not address any challenged state taxes" it is unclear how precisely the refiners' argument works, especially given the Ninth Circuit's decision, he said.

California will have until 21 November to respond to AFPM's supplemental brief.

The case is being heard in the US District Court for the Eastern District of California in Fresno.

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