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U.S. Still Weighing Next Steps in California Climate Pact Case

March 17, 2020, 10:01 AM

The Trump administration is still weighing how to proceed in a major constitutional challenge to California’s climate pact with Quebec, after a federal court last week scrapped two of the U.S. government’s main legal arguments.

Assistant Attorney General Jeffrey Bossert Clark, head of the Justice Department’s environment division, said it would be premature for him to comment on how the government plans to handle its remaining claims against the climate program, or whether it intends to appeal the recent ruling.

He spoke to an almost-empty room at Case Western Reserve University, with his comments webcast Monday to accommodate precautions about the new coronavirus pandemic. Clark was in Ohio ahead of oral arguments that had been set for March 19, but canceled, in an oil pipeline case.

“It feels a bit odd in the Covid-19 new world to be so socially distant that there are just a handful of people here,” he said at the event.

Clark’s appearance came just days after the U.S. District Court for the Eastern District of California rejected Trump administration claims that the cap-and-trade agreement violated a constitutional prohibition on states entering into treaties, and a prohibition on states joining compacts with foreign governments without congressional approval.

Clark stressed that he thinks the court got it wrong.

He pointed to language in the Supreme Court’s landmark decision in Massachusetts v. EPA in 2007 that noted that states lack authority, for example, to make an emissions treaty with China and India.

“It looks to us like this cap-and-trade agreement between California and Quebec—which are not contiguous, so it’s not something that seems to fall into older case law about just adjudicating small border issues—that looks like exactly the same kind of emissions treaty that the Supreme Court anticipated should be unconstitutional,” he said.

Supplemental Environmental Projects

Clark also responded to questions about his decision last week to prohibit Justice Department lawyers from using industry-favored settlement tools called supplemental environmental projects, or SEPs.

Businesses and individuals facing enforcement actions volunteer to do SEPs in communities affected by alleged violations of anti-pollution laws as part of a settlement with federal officials, often in exchange for lower fines.

In a March 12 memo, Clark announced that he determined SEPs unlawfully diverted money from the U.S. Treasury and violated the Miscellaneous Receipts Act. He said Congress has authorized SEPs only in one context: cases involving mobile sources of air pollution.

Clark’s memo applies only to attorneys in the Justice Department’s Environment and Natural Resources Division, who handle civil enforcement litigation.

Some of the Environmental Protection Agency’s enforcement work never reaches the Justice Department; agency officials work out their own administrative settlements with parties.

During Monday’s remarks, Clark noted that he’s learned “EPA is going to abide by [the SEP prohibition], even inside its own halls.” The agency confirmed in a statement that it will no longer include SEPs in settlement deals.

Clark noted that Congress has the power to authorize SEPs if desired.

“I’m certainly not saying that there’s a limitation on Congress’s power to make delegations that would authorize SEPs,” Clark said. “It’s just that they haven’t done it.”

Clark is now weighing the legality of “SEP-like devices” in criminal enforcement actions.

To contact the reporter on this story: Ellen M. Gilmer in Washington at egilmer@bloombergenvironment.com

To contact the editor responsible for this story: Gregory Henderson at ghenderson@bloombergenvironment.com

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