California Chamber of Commerce Sues ARB

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NIELSEN MERKSAMER PARRINELLO

GROSS & LEONI, LLP
STEVEN A. MERKSAMER (SBN 66838)
RICHARD D. MARTLAND (SBN 33162)
KURT R. ONETO (SBN 248301)
1415 L Street, Suite 1200
Sacramento, CA 95814
TELEPHONE: (916) 446-6752
FAX
(916) 446-6106
GROSS & LEONI, LLP
JAMES R. PARRINELLO (SBN 63415)
2350 Kerner Blvd., Suite 250
San Rafael, CA 94901
TELEPHONE: (415) 389-6800
FAX
(415) 388-6874
Email: srnerksarnernrngovlaw.com
Email: rmartlandnrn ovlaw. corn
Email: konetonrngoJaw.corn
Email: jparrinello nmgovlaw. corn
Attorneysfor Petitioners/Plaintiffs
CALIFORNIA CHAMBER OF COMMERCE,
a nonprofit business association, and LARRY DICKE,
a State of California Taxpayer
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SACRAMENTO
CALIFORNIA CHAMBER OF COMMERCE, a
nonorofit business association, and LARRY
DICIKE, a State of California Taxpayer,
Petitioners/Plaintiffs,
vs.
CALIFORNIAAIR RESOURCES BOARD,
MARCY NICHOLS, in her official caoacity as
Chair of the Air Resources Board, JOHN
BALMES, M.D., SANDRA BERG, DORENE
DADAMO, HECTOR DE LA TORRE, RONALD
0. LOVERIDGE, BARBARA RIORDAN, RON
ROBERTS, ALEXANDER SHERIFFS, M.D:,
DANIEL SPERLING, AND KEN YEAGER, in
their official capacities as members of the Air
Resources Board, JAMES GOLDSTENE in his
official capacity as Executive Officer of tfie
California Air Resources Board, and DOES 1
THROUGH 10, inclusive
Respondents/Defendants.
Case No.:
MEMORANDUM OF
POINTS AND
AUTHORITIES IN
SUPPORT OF
VERIFIED PETITION
FOR WRIT OF
MANDATE AND
COMPLAINT FOR
DECLARATORY
RELIEF
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF VERIFIED PETITION FOR WRIT OF MANDATE AND
COMPLAINT FOR DECLARATORY RELIEF
CASE NO.
TABLE OF CONTENTS
Page
2
3
I.
INTRODUCTION
II.
BACKGROUND
A.
The Statute
B.
The ARBs Regulations
III.
8
10
11
12
13
14
IV.
STANDARD OF REVIEW
A.
Statutory Interpretation
B.
Mandate
10
C.
Declaratory Relief
10
ARGUMENT
A.
AB 32 Did Not Confer Upon The ARB The Authority To Raise

$7o+ Billion In Fees/Taxes Through Self-Allocation And Sale Of
GHG Emissions Allowances
1.
15
16
17
18
11
2.
AB 32 does not impose a tax, and does not authorize the

imposition of any fee except one to cover ordinary
administrative costs
12
AB 32 does not authorize an unelected board to impose up

to $7o+ billion in new fees/taxes
13
a.
19
20
21
b.
22
23
24
25
26
27
11
c.
In adopting AB 32, the intent of the Legislature

was to reduce GHG emissions, not to permit an
unelected board to raise up to $7o+ billion in
new fees/taxes
13
AB 32s legislative history makes no mention of

any intent to grant an unelected board
authority to impose billions of dollars in new
fees/taxes; indeed, it contains statements that
contradict the ARBs position
15
That the language of AB 32 does not explicitly

forbid the ARB from raising up to $70+ billion
in new fees/taxes by allocating to itself and
selling GHG allowances does
mean the
ARB possesses such authority
17
28
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF VERIFIED PETiTION FOR WRiT OF MANDATE AND
CASE NO.
d.
1
2
e.
B.
8
9
C.
10
11
12
D.
14
15
To find AB 32 authorizes an unelected board to

impose up to $70+ billion in new fees/taxes on
California would violate multiple canons of
statutory construction
19
Construing a global warming statute as

allowing an unelected board to raise up to
$70+ billion in new fees/taxes would be an
absurd result that Courts are bound to avoid
22
To Find That AB 32 Authorized The ARB To Raise Billions In

New Fees/Taxes By Allocating To Itself And Selling Off GHG
Allowances To The Highest Bidder Would Render AB 32
Unconstitutional Or Raise Serious Constitutional Doubt
24
Because The Goal Of AB 32 Can Be Achieved Without The ARB

Allocating To Itself And Selling Off GHG Allowances For
Billions Of Dollars, It Cannot Be Implied That AB 32 Granted
Such Power
28
In The Alternative, If AB 32 Does Authorize An Unelected Board

to Impose Up To $7o+ Billion In New Fees/Taxes Through the
Self-Allocation And Sale of GHG Allowances, Then The ARBs
Regulations Are An Unconstitutional Tax
29
16
17
V.
CONCLUSION
29
18
19
20
21
22
23
24
25
26
27
28
11
CASE NO.
TABLE OF AUTHORITIES
Page(s)
CASES
5
ActionApartmentAssoc., Inc. v. City ofSanta Monica

(2007) 41 Cal.4th 1232
10
Addison v. Dept. ofMotor Vehicles,

supra, 69 Cal.App.3d
4,
11, 28, 29
AFL v. Unemployment Ins. Appeals Bd.
(1996)
10
11
12
14
15
16
13
Cal.4th
2, 11, 17
1017
Branczforte Heights, LLC v. City ofSanta Cruz

(2006) 138 Cal.App.4th 914
10
Calif. Chamber of Commerce v. Brown

(2011) 196 Cal.App.4th 233
19
Caljf Teachers Assoc. v. San Diego Community Coil. Dist.

(1981) 28 Cal.3d 692
Citizens Assoc. ofSunset Beach v. Orange Co. LAFCO

(2012) 209 Cal.App.4th 1182
17
Citizens to Save Calif. v. FPPC

(2006) 145 Cal.App.4th 736
12
17
18
19
County ofLos Angeles v. State Dept. ofPublic Health

20
21
22
23
24
25
26
27
(1958) 158 Cal.App.2d
11
Curtis v. County ofLos Angeles

(1985) 172 Cal.App.3d 1243
15
Diageo-Guiness USA, Inc. v. Bd. ofEqualization

(2012) 205 Cal.App.4th 901
11
Dyna-Med, Inc. v. Fair Emp. & Housing Com.

(1987)43 Cal.3d 1379
10, 24
Environmental Defense Project ofSierra County v. County ofSierra

(2008) 158 Cal.App.4th 877
28
111
CASE NO.
Harrott v. County ofKings

(2001) 25 Cal.4th 1138
10, 24
Henderson v. Mann Theatres Corp.

(i96) 65 Cal.App.3d 397
5
6
7
8
10
3,
Horwich v. Superior Ct.

(1999) 21 Cal.4th 272
19
22, 23
In re Jesusa V.
(2004)32 CaL4th 588
20
InreLukeW.
(2001) 88 Cal.App.4th 650
20
Miller v. Municipal Ct. of the City ofLos Angeles

(1943) 22 CaL2d 818
10, 24
11
12
National R.V., Inc. v. Foreman

(1995) 34 Cal.App.4th 1072
15
Palos Verdes Faculty Assoc. v. Palos Verdes UnWed Sch. Dist.

(1978) 21 Cal.3d 650
13
People v. Leong Fook

(1928) 206 Cal. 64
20
People v. McNarnee
(2002) 96 Cal.App.4th 66
22
Rancho Murieta Airport, Inc. v. County ofSacramento

(2006) 142 Cal.App.4th 323
10
Redwood Coast Watersheds Alliance v. Bd. ofForestry

(1999) 70 Cal.App.4th 962
10
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
Regents of Univ. of Calif v. East Bay Mun. Utility Dist.

(2005) 130 Cal.App.4th 1361
Sinclair Paint Co. v. Bd. ofEqualization
(1997) 15 Cal.4th 866
9,
10
passim
So. Calif. Gas Co. v. Public Util. Corn.

(1979) 24 Cal.3d 653
15
28
iv
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF VERIFIED PETITION FOR WPJT OF MANDATE AND
CASE NO.
State Bd. ofEqualization v. Bd. ofSupervisors

(1980) 105 Cal.App.3d 813
12
State Personnel Bd. v. Dept. ofPersonnelAdmin.

(2005) 37 Cal.4th 512
19
Terhune v. Superior Court

(1998) 65 Cal.App.4th 864
12
Walker v. County ofLos Angeles

(1961) 55 Cal. 2d 626
11
Yamaha Corp. ofAmerica v. Bd. ofEqualization

(1998) 19 Cal.4th 1
12
Yeager v. Blue Cross of Calif.

(2009) 175 Cal.App.4th 1098
22
5
6
10
11
12
13
STATUTES
14
Assembly Bill 32, Stats.
Childhood Lead Poisoning Prevention Act, Stats.

1990 Clean Air Act,
18
19
42
CA Code Civ. Proc.,
2006,
ch. 488 (AB
U.S.C.,
ch. 799, 3
24
21, 22
10
CA Code Civ. Proc., 1859
CA Gov. Code, 16428.8, Stats.
21
CA Health & Safety Code
2012,
ch. 39,
25
372.7
23
76510
1991,
1085
20
22
passim
32)
38500
25
et seq
38501
passim
26
38505
27
38530
28
38550
5
V
CASE NO.
38560.5
2
38562
38564
6,21
38565
38597
passim
39510
passim
6
7
39710,
10
Stats. 2012, ch. 807,
12
27
57001
Stats.2o12,ch.21,15.n
27
11
12
CALIFORNIA CODE OF REGULATIONS
Cal. Code Regs., Tit. 17
15
95801 et seq
16
95802
17
95810-95814
95811
95820
12
95840
22
95856
23
95870
20
21
24
25
95890-95892
95910
95911
26
95920
26
27
28
vi
CASE NO.
95921.8
2
CALIFORNL& CoNsTITuTIoN
Cal. Const., art. XIII A, 3
3, 12, 28
5
6
OTHER AUTHORITIES
7
10
11
12
13
14
76 Ops.Cal.Atty.Gen.
11 (1993)
11, 28
Directive 2008/87/EC of the European Parliament and of the Council of

13 October 2003 establishing a scheme for greenhouse gas emission
allowance trading within the Community and amending Council
Directive 96/61/EC, Article 10
21
Gillian Ku, Deepak Maihotra, and J. Keith Murnighan, Towards a

Competitive Arousal Model of Decision-Making: A Study of Auction Fever
in Live and Internet Auctions, Organizational Behavior and Human
26
Decision Processes, 96 (2005) 89-103
15
16
17
18
19
20
21
22
23
24
25
26
27
28
vu
CASE NO.
I.
INTRODUCTION.
This case is about one thing and one thing only
the lack of authority of
an unelected, politically-appointed regulatory board to engraft into a regulatory

4
program a revenue-raising device that would impose what in effect is an invalid tax
or an unconstitutional fee and would exact from taxpayers as much as
or more
$70
billion
a massive sum of tax/fee revenue that would be more than was sought
by the Proposition 30 tax initiative approved by voters on November 6,
2012.
This action by an unelected state board to use regulatory statutes to raise
tens of billions of dollars from taxpayers is unprecedented in our states history.

10
Even the elected and democratically accountable Legislature and Governors of
ii
California have never imposed such a massive tax/fee.

What is shocking about this money grab, in addition to the fact it exceeds
12
13
the authority granted to the regulatory agency by the Legislature, is the agencys
admission that this revenue-raising component of its regulations is unnecessary to
achieve the purposes of the regulatory scheme.

Californias Air Resources Board is the regulatory agency. The unauthorized
16
17
tax/fee device has been engrafted to the Boards regulatory program to reduce
18
greenhouse gas (GHG) emissions through, among other things, a cap and trade
program that (i) sets a statewide cap on the amount of GHG emissions that
20
entities covered by the program are allowed to emit,
21
emissions allowances that are applied to covered entities, i.e., determines, for each
22
covered entity, how many tons of GHG that the entity can emit in a given year, and
(2)
calculates individual
24
(3) allows an entity to trade, for compensation, any part of its GHG emissions
allowances the entity will not use in other words, permits another covered entity
25
to exceed the amount of its allocated GHG emissions allowances by acquiring GHG
26
emissions allowances from other covered entities.
23
27
28
///
///
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF VERIFIED PETITION FOR WRiT OF MANDATE AND
CASE NO.
The Air Resources Boards calculation of a statewide cap on the amount of
1
2
GHG that lawfully can be emitted each year, its calculation of individual emissions
allowances, and its creation of a cap and trade program to reduce GHG emissions
over time, were authorized when the Legislature enacted, and the Governor signed,
Assembly Bill 32 (AB
32)
in
2006.
What was not authorized by AB
32
is the Boards decision to withhold for
itself a percentage of the annual statewide GHG emissions allowances and to

8
auction or sell them off to the highest bidders, thus raising from taxpayers up to
$70
In this summary and in more detail in the analysis that follows, petitioners
io
ii
billion or more of revenue for the state to use.
explain why the Boards unprecedented action is unlawful.

The authority of the Air Resources Board to adopt and to implement the
12
13
GHG emissions regulatory program called for by AB
conferred on the Board by AB
13
16
Cal.4th
32.
32
is limited to the authority
(AFL v. Unemployment Ins. Appeals Bd.
(1996)
1017, 1042.)
Absent in AB
32
is any explicit authorization for the Air Resources Board
17
to raise billions of dollars of revenue for the state by withholding and auctioning
18
off or selling of a percentage of the statewide GHG emissions allowances adopted by
19
the Board. The only fee authorized by AB
20
ordinary administrative costs of implementing the GHG emissions regulatory
21
program.
22
Likewise absent from AB
32
32
is a regulatory fee limited to covering
is any implied authority for the Air Resources
23
Board to keep for itself a percentage of the statewide GHG emissions allowances
24
and then sell them to raise billions of dollars of revenue for the state. For starters,
25
in its Enrolled Bill report to the Governor, the Board flatly disavowed the notion
26
that AB
27
limited administrative fee explicitly authorized by AB
28
the Board changed its tune and adopted the massive tax/fee provision described
32
would give it the carte blanche power to raise revenue beyond the
32.
Despite this concession,
CASE NO.
above. Surely, if AB
been extensive debate (and opposition) by members of the Legislature who have
consistently opposed revenue-raising legislation. Yet, the legislative history says
absolutely nothing that even remotely suggests AB
32
intended to authorize the Board to do so, there would have
32
intended to give the Board
such a green light to raise tens of billions of dollars from taxpayers. Thus, it would
6
be absurd to read into AB
raising device of such magnitude.
The fact that AB
32
32
a grant of authority for the Board to utilize a revenue-
explicitly allows the Board to impose a regulatory fee
limited to ordinary administrative costs of implementing the program demonstrates

10
that the Legislature knew how to allow the Board to raise revenue
ii
including such authority in the bill. Accordingly, the lack of express authority for
12
the Board to withhold for itself and auction off GHG emissions allowances to raise
13
revenue for the state necessarily leads to the conclusion that the Legislature did not
14
intend to give the Board such an incredible power. (Henderson v. Mann Theatres
15
Corp. (1976) 65 Cal.App.3d 397,
16
necessarily involves exclusion of other things not expressed].)
17
403
by explicitly
[the expression of certain things in a statute
There is another reason why AB
32
cannot be read to allow the Air Resources
18
Board to raise billions of dollars of revenue as it is attempting to do. Courts must
presume that the Legislature did not intend to give the Board authority to take
20
unlawful action or action that raises serious doubts as to AB
21
Bills that impose or increase taxes must be adopted by a two-thirds vote in each
32s
constitutionality.
23
house of the Legislature. (Cal. Const., art. XIII A, 3.) Because AB 32 did not
receive such a super-majority vote, it cannot be interpreted as delegating to the
24
Board the power to impose a tax. And AB
25
impose an administrative fee by charging for GHG emissions allowances the Board
26
withholds and then sells at auction. This is so because such a fee would be an
27
unconstitutional tax since it does not comply with the test articulated in Sinclair
28
Paint Co. v. Bd. ofEqualization
22
(1997) 15
32
cannot be read to allow the Board to
Cal.4th 866.
3
CASE NO.
i
2
Lastly, as the Air Resources Board conceded and the Legislative Analyst has
found, the goals of AB
32
can be achieved by the Board allocating all the statewide
GHG emissions allowances free of charge. Therefore, it would be inappropriate to

imply that the Board has the authority to withhold and to sell at a profit a
5
percentage of the allowances, raising from taxpayers tens of billions of dollars of
revenue for the state. (Cf. Addison v. Dept. ofMotor Vehicles
486, 498 [the doctrine of implied powers is not without limitations.
to be justified under this doctrine, it must be essential to the declared objects and
purpose of the enabling act
10
(1977)
69 Cal.App.3d
.
For a power
not simply convenient, but indispensable].)
At this point, it is important to reiterate that this lawsuit is about one thing
and one thing only
12
Air Resources Board to engraft into a regulatory program a
13
revenue-raising device that would impose what in effect is an invalid tax or an
14
unconstitutional fee.
15
the lack of authority of the unelected, politically-appointed

$70
billion or more
The lawsuit does not challenge the merits of climate change science. It does
16
not challenge the Legislatures authority to regulate GHG emissions in California.
17
And it does not challenge the Air Resources Boards decision to use a so-called
18
cap and trade method of reducing GHG emissions. The only thing this lawsuit
challenges is the portion of the Boards regulatory program that seeks to permit
20
the Board to allocate to itself GHG emissions allowances and to profit by selling
21
them to GHG emitters, raising tens of billions of dollars of revenue for the state,
22
when the Board has no statutory authorization to do so and the charge would be
23
an unconstitutional tax.
24
Without this unlawful component, the cap and trade program can continue,
25
the states efforts to combat climate change can go on, and the Legislatures ability
26
to properly impose fees and charges will not be thwarted. The only thing that will
27
cease is the unauthorized and illegal tax/fee exaction scheme that the Air Resources
28
Board has impermissibly engrafted into its GHG emissions regulatory program.
4
CASE NO.
II.
BACKGROUND.
A.
On September
The Statute.
Statutes
2006,
seq.), AB
32s
27, 2006,
into law. Chaptered as
25.5
(section 38500 et
stated goal is to reduce GHG emissions in the state to
levels by
1990
38550.) AB 32 tasked the California Air Resources
Board (ARB) with responsibility to accomplish AB

8
32
chapter 488, Health and Safety Code Div.
(Health & Saf. Code,
2020.
the Governor signed AB
32s
objective of reducing GHG
emissions. (Health & Saf. Code, 38560 & 38562.) Specifically, AB
32
assigns the
ARB three straightforward tasks: (i) implement a GHG emissions monitoring

10
program (Health & Saf. Code, 38530);
ii
emissions level was in
12
emissions limit, to be achieved by 2020 (Health & Saf. Code, 38550); and
adopt a regulatory program that will achieve the mandated GHG reductions.
14
(Health & Saf. Code,
15
1990,
(2)
determine what the statewide GHG
and then adopt that level as the statewide GHG
()
38560 & 38562.)
In designing a regulatory program to accomplish the desired GHG emissions
16
reductions, the ARB is authorized to use a market-based compliance mechanism
17
to reduce GHG emissions in California. As defined in AB
18
compliance mechanism includes either of the following:
19
20
21
22
32,
a market-based
(i) A system of market-based declining annual aggregate emissions

limitations for sources or categories of sources that emit greenhouse gases.
(2) Greenhouse gas emissions exchanges, banking, credits, and other
transactions, governed by rules and protocols established by the state board (ARB),
that result in the same greenhouse gas emission reduction, over the same time
period, as direct compliance with a greenhouse gas emission limit or emission
reduction measure adopted by the state board pursuant to this division.
23
24
25
26
27
28
(Health & Saf. Code, 38505, subd. (k).)

AB
32
requires the ARB to design the regulations, including the distribution
of emissions allowancesl where appropriate, in a manner that is equitable, seeks to

emission allowance is defined in AB 32 as an authorization to emit, during a
specified year, up to one ton of carbon dioxide equivalent. (Health & Saf. Code, 38505,
subd. (a).)
1
5
CASE NO.
minimize costs and maximize total benefits to California, and encourages early
action to reduce greenhouse gases. (Health & Saf. Code, 38562, subd. (b)(i).)
The ARB is also instructed to consult with other governments on the most effective
strategies and methods to reduce GHG. (Health & Saf. Code,

In order to cover the costs of the new program, AB
32
38564.)
authorizes the ARB
to adopt a schedule of fees to be paid by the sources of greenhouse gas emissions
regulated by AB
(Health & Saf. Code, 38597.)3

B.
consistent with Health and Safety Code section 57001.2
The ARBs Regulations.
On January 1,
10
ii
32,
2012,
the ARBs regulations implementing AB
effect. (Cal. Code Regs., Tit.
17,
Div. 3, Ch.
1,
Subch.
10,
Art. 5
32
went into
[ 95801 et seq].)
The regulations primarily rely upon the aforementioned market-based
12
13
compliance mechanism approach. Commonly referred to as a cap and trade
14
model, the regulations place a cap on the aggregate GHG emissions from entities
responsible for roughly 8o percent of the states GHG emissions.
16
95810-95814.)
target, entities in specified industries that annually emit at least
18
19
(17
CCR,
While they are not assigned an individual emissions reduction

25,000
metric tons
/1/
/1/
20
21
22
23
24
25
26
27
28
Health and Safety Code section 57001 sets forth the California Environmental
Protection Agencys (EPA) fee accountability program applicable to all entities within the
EPA.
3 Beyond these key provisions, AB 32 contains a number of aspirational statements
expressing the Legislature s desire for the ARB s regulations to: avoid burdening lowincome communities; ensure proper credit is given to those who voluntarily reduce their
GHG emissions; take cost-effectiveness into account; avoid interference with state and
federal clean air programs; consider overall societal benefits; minimize administrative
burdens and leakage; ensure that the GHG reductions are real, permanent, verifiable, and
enforceable; consider the significance of each sources contribution to statewide GHG
emissions; rely on the best scientific and economic data available; and, where feasible,
direct public investment toward disadvantaged communities. (Health & Saf. Code,
38562 &38565.)
2
6
CASE NO.
of GHG are subject to the cap and trade regulation and are therefore considered to
be a covered entity.4
(17
CCR, 95802, subd. (a); 95811; & 95812.)
Under the regulations, the ARB will issue GHG allowances, with each
allowance representing the right to emit one ton of carbon dioxide equivalent.
CCR, 95802(a)(8),
(41),
& (5).) In order to comply with the regulation, an
(i
emission source that is subject to the regulation must possess, and then surrender
back to the ARB, one allowance for each ton of carbon dioxide emissions it produces
within a given compliance period.5
(17
CCR, 95856.) Under the ARBs cap and
trade program, GHG allowances are tradable.
(17
CCR,
95802,
subd. (a)(8);
subd. (c); & 95921.) Thus, a covered entity may increase its individual
10
95820,
ii
GHG emissions by acquiring additional allowances from other covered entities
12
without increasing overall statewide GHG emissions since the total number of
13
allowances in circulation is capped at a specified level. This cap on the overall
14
number of allowances in circulation, along with the ability to trade allowances
15
among covered entities, are the central features of a cap and trade program.
16
To this point, the ARBs regulatory program adopted pursuant to AB
fairly run-of-the-mill. The story gets interesting only when the issue of allocating
18
GHG allowances is introduced into the mix. For the most part, at least at the outset,
19
covered entities will receive GHG emissions allowances from the ARB free of
20
charge. The number of allowances freely allocated to a particular covered entity
21
will be based on a series of scientific and mathematical formulas set forth in the
22
regulations.
23
III
(17
CCR,
32
is
95890-95892.)
24
25
26
27
28
4 Covered industries include, but are not limited to, cement production,
cogeneration, glass production, hydrogen production, iron and steel production, lime
manufacturing, nitric acid production, petroleum and natural gas systems, petroleum
refining, electricity generating facilities, pulp and paper manufacturing, and other
consumers and suppliers of electricity, natural gas, and petroleum. (17 CCR, 95811.)
5 Under the ARBs regulations, there are three compliance periods: 2013-14, 201517, and 2018-20. (17 CCR, 95840.)
7
CASE NO.
However, the ARB has also decided to allocate to itself a portion of the GHG
i
2
allowances and then sell those allowances to the highest bidders via auction or
through reserve sales. (17 CCR,
95870, 95910-95914.)
The revenue generated
from these sales will be deposited into the Air Pollution Control Fund and will be
available for appropriation by the Legislature.
6 In the first sale, set to be conducted
6
via auction on November 14, 2012, the ARB will initially allocate to itself and sell off
10
2020.7 (17
Legislative Analysts Office (LAO) estimates that this initial sale of allowances will
10
percent of the total allowances available for use by covered entities in years 2015CCR,
95870, subd.
(b) & 95910, subd. (b)(2)(A).) The nonpartisan
generate between $660 million to $3 billion for the state.

8
The ARBs plan to allocate to itself and sell off GHG allowances at market
11
12
rates does not stop there. Over the course of the entire program, between 2012
13
and 2020, the ARB will allocate to itself and sell off approximately hJf of all the
14
GHG allowances that will ever be put into circulation as part of the cap and trade
15
program. (17 CCR, 95870 & 95910.) Cumulatively, the LAO estimates the ARBs
16
self-allocation and sale of GHG allowances as part of its cap and trade program will
produce between a low of $12 billion and high of $7o+ billion for the state.
9
18
19
/1/
III
20
Subsequent to the adoption of adoption of the ARBs regulations, Stats. 2012, ch.
(SB
1018) created a new Greenhouse Gas Reduction Fund in the State Treasury,
39,
and now requires all moneys collected by the State Air Resources Board from the auction
or sale of allowances to be deposited into that fund for appropriation by the Legislature.
(Gov. Code, 16428.8, subd. (a) & (b).)
7 The ARBs proposal to allocate to itself and then auction off GHG allowances is not
to be confused with the trading aspect of the cap and trade program. The rules
applicable to trading of GHG allowances between covered entities are set forth in
Subarticle ii of the regulations, Sections 95920 and 95921.
8 Legislative Analysts Office, The 2012-13 Budget: Cap-and-Trade Auction
Revenues, Feb. i6, 2012, at p. 3. Petitioners Request for Judicial Notice, at Exhibit. 1.
(Hereinafter Pet. RJN, at Exh.)
9 Legislative Analysts Office, Evaluating the Policy Trade-Offs in ARBs Cap-and
Trade Program, Feb. 9, 2012, at p. 13. Pet. RJN, at Exh. 2.
6
21
25
22
23
24
25
26
27
28
8
CASE NO.
This massive revenue generating scheme by the ARB to allocate to itself an
increasing portion of GHG allowances and then sell off those allowances at is the
only part of the AB
32
regulations challenged in this action.
Stated plainly, there is no authorization in law for the ARB to convert
GHG reduction statutes into one of the largest revenue generators in this state
6
by allocating to itself and selling a sizable portion of GHG allowances for profit.
AB
32
does not authorize the ARB, under the guise of regulation, to raise tens of
billions of dollars in new state money. In deciding to allocate to itself and sell off
GHG allowances, the ARB acted in excess of the authority granted to it by AB
10
Petitioners respectfully request this Court to invalidate this extra-legal
ii
administrative action taken by the ARB.
12
III.
32.
STANDARD OF REVIEW.
A.
Statutory Interpretation.
This case involves purely a matter of law: whether AB
14
32
granted to the ARB,
15
an unelected body, the authority to impose tens of billions of dollars in new state
16
fees/taxes from the sale of GHG allowances. Statutory interpretation is a question
17
of law which Courts decide de novo. (Regents of Univ. of Calzf. v. EastBayMun.
18
Utility Dist.
19
v. San Diego Community Coil. Dist.
20
Defense Project ofSierra County v. County ofSierra
21
889.)
(2005) 130
Cal.App.4th
1361, 1372
(1981) 28
(Regents); Calif Teachers Assoc.
Cal.3d 692, 699; Environmental

(2008)
158 Cal.App.4th 877,
22
In undertaking de novo review of a statute, the Courts primary objective is
23
to determine and give effect to the underlying legislative intent. (Regents, supra,
24
130
25
legislative intent is to scrutinize the actual words of the statute, giving them a plain
26
and commonsense meaning. (Regents, supra, at 1372.) Courts must give meaning
Cal.App.4th at p.
1372;
Code Civ. Proc., 1859.) The first step in determining
27
28
Under Health & Saf. Code section 39510, subdivision (b), the members of the
ARB are appointed by the Governor.
10
9
CASE NO.
to every word and phrase in the statute to accomplish a result consistent with the
legislative purpose. If the words of the statute are reasonably free of ambiguity and
uncertainty, the inquiry ends and the Court looks no further than those words to
determine the meaning of the language. (Id., at 1372-73.)

Further, a statute must be construed, wherever reasonably possible, so as to
5
6
preserve its constitutionality or to avoid serious constitutional doubt. (Dyna-Med,

Inc. v. Fair Emp. & Housing Corn. (1987) 43 Cal.3d
1379, 1387.)
Thus, if a statute
is reasonably susceptible of two constructions, one of which will render the statute
constitutional and the other will raise serious and doubtful constitutional questions,
io
the construction which will render the statute free from doubt as to its
11
constitutionality must be adopted, even if the other construction might also be
12
reasonable. (Harrott v. County ofKings
13
Municipal Ct. of the City ofLos Angeles
(2001) 25
(1943) 22
Cal.4th
1138, 1153;
Miller v.
Cal.2d 818, 828.)
14
B.
Mandate.
15
Because the ARB, and unelected body, has exceeded its authority by enacting
16
a regulation that imposes a multi-billion dollar fee/tax increase on Californians
17
despite a lack of authorization in law to do so, mandamus under Code of Civil
18
Procedure section 1085 is available to enjoin the illegal act. (Branczforte Heights,
20
Cal.App.4th 914, 933-34; see also Rancho

Murieta Airport, Inc. v. County ofSacramento (2006) 142 Cal.App.4th 323,
21
326
19
22
23
LLC v. City ofSanta Cruz (2006)
138
[A trial court may issue a writ of mandamus to a public body to compel the
performance of an act which the law specially enjoins. (Code Civ. Proc.,
subd. (a)] Bolding added.)
Declaratory Relief.
24
C.
25
The interpretation of ordinances and statues are proper matters for
26
declaratory relief. (Action Apartment Assoc., Inc. v. City ofSanta Monica
27
41
Cal.4th
1085,
1232, 1250,
(2007)
n. 5; Redwood Coast Watersheds Alliance v. Bd. ofForestry
28
10
CASE NO.
(1999) 70
626, 637.)
IV.
Cal.App.4th 962,
970;
Walker v. County ofLos Angeles
(1961)
55 Cal.2d
ARGUMENT.
A.
AB 32 Did Not Confer Upon The ARB The Authority To Raise

$7o+ Billion In Fees/Taxes Through Self-Allocation And Sale
Of GHG Emissions Allowances.
7
8
California courts have consistently held that administrative agencies have

only the authority that is conferred upon them by statute. Administrative actions in
excess of or contrary to the statutory authorization are void. [I]t is well settled that
10
administrative agencies have only the powers conferred upon them, either expressly
or by implication, by Constitution or statute. An administrative agency must act
12
within the powers conferred upon it by law and may not act in excess of those
13
powers. (AFL, supra,
14
exceeding express or implied delegated powers are void. (Diageo-Guiness USA,
15
Inc. v. Bd. ofEqualization
13
Cal.4th at p.
(2012) 205
1042;
internal citations omitted.) Actions
Cal.App.4th 901,
915.)
16
Implied administrative powers must be narrowly construed, and any
17
reasonable doubt as to the existence of the implied power is to be resolved against
18
the agency. (Addison, supra, 69 Cal.App.3d at p. 498 [{T]he doctrine of implied
19
powers is not without limitations.. .For a power to be justified under the doctrine,
20
it must be essential to the declared objects and purpose of the enabling act
21
not simply convenient, but indispensable. Any reasonable doubt concerning the
22
existence of the power is to be resolved against the agency. Underscoring added.]
23
See also 76 Ops.Cal.Atty.Gen.
24
ii,
i6
(1993).)
An administrative agencys interpretation of a statute is merely a weight in
25
the scale, to be considered but not to be inevitably followed. Agency
26
interpretations are never conclusive because administrative officers cannot make
27
a regulation that alters or enlarges the terms of the legislative enactment. (County
28
ofLos Angeles v. State Dept. ofPublic Health (1958)
158
Cal.App.2d,
425,
438,
11
CASE NO.
underscoring added; State Bd. ofEqualization v. Bd. ofSupervisors
Cal.App.3d 813,
73.) Moreover, the Courts do not defer to an agencys view when deciding whether
a regulation lies within the scope of the authority delegated by the Legislature. The
court, not the agency, has final responsibility for the interpretation of the law under
which the regulation was issued. (Citizens to Save Calif v. FPPC (2006)
Cal.App.4th 736, 747; Yamaha Corp. ofAmerica v. Bd. ofEqualization (1998)
Cal.4th
1, 11,
Terhune v. Superior Court (1998) 65 Cal.App.4th 864, 872-
145
19
fn. 4.)
1.
10
820;
(1980) 105
AB 32 does not impose a tax, and does not authorize the

imposition of any fee except one to cover ordinary
administrative costs.
11
12
Through its regulations, the ARB asserts that AB
32
provides the ARB with
13
the ability to raise tens of billions of dollars in new fees/taxes because AB
14
authorizes the ARB to allocate to itself and sell off GHG allowances. Not so.
15
32
There are two primary ways for the Legislature to raise revenues of this
16
magnitude for the state: the Legislature can enact a bill that imposes a tax, or the
17
Legislature can enact a bill that imposes a fee.h1
18
Bills that impose or increase taxes must be adopted by a two-thirds vote in
19
each house of the Legislature. (Cal. Const., art. XIII A, 3.) AB
20
a two-thirds vote in either house of the Legislature so, as a matter of constitutional
21
law, it could not have imposed a valid tax.

2
22
32
did not receive
Thus, the only remaining way that the ARB could be authorized under AB
23
to allocate to itself and sell off GHG allowances would be if AB
24
ARB to impose a fee of that type. The only fee expressly authorized by AB
32
32
authorized the
32is
25
The ARB has stipulated that the sale of GHG allowances is not the sale of
property. 17 CCR, 95820, subd. (c) states that a GHG allowance issued by the ARB does
not constitute property or a property right.
12 AB 32 received 23 affirmative votes versus 14 negative votes in the state Senate;
and received 47 affirmative votes versus 32 negative votes in the state Assembly. See
Assembly Bill No. 32, Complete Bill History. Pet. RJN, at Exh. 3.
11
26
27
28
12
CASE NO.
the one found in Health and Safety Code section 38597, which is strictly limited to
covering ordinary administrative costs. There is no discussion of any other fee-
raising authority anywhere else in the statute. Indeed, the ARB candidly admits
that the language of AB
32
does not direct ARB to allocate to itself allowances and
sell them at auction or through reserve sales.3
2.
does not authorize an unelected board to impose

up to $70+ billion in new fees/taxes.
AB 32
For the reasons set forth below, there is no legitimate way to read AB
providing the ARB authority to impose a fee/tax that will total between
10
and
$70+
as
billion
billion.
11
a.
12
13
14
$12
32
In adoptingAB 32, the intent of the Legislature

was to reduce GHG emissions, not to permit an
unelected board to raise up to $7o+ billion in new
fees/taxes.
Findings and declarations or other statements of intent included in statutes
15
by the Legislature can assist the Courts in determining the scope and meaning of
16
statutes. (Palos Verdes Faculty Assoc. v. Pubs Verdes UnWed Sch. Dist. (1978)
17
21
Cal.3d 650, 658.) The Legislature inserted substantial findings and declarations
18
in AB
19
harms posed by GHG and the need to reduce those potential adverse effects.
20
Nothing in AB 32s findings and declarations mentions any intent to authorize
21
the ARB to raise $70+ billion state fees/taxes by allocating to itself and selling off
22
GHG allowances.
23
32.
(Health & Saf. Code, 38501.) They focus exclusively on the potential
The findings and declarations state that global warming poses a threat to
24
Californias environment, economy, and public health, including air quality, water
20
supply, snow pack, and sea levels (Health & Saf. Code,
38501,
subd. (a)); global
26
27
28
3 Air Resources Boards October 2011 Final Statement of Reasons for Rulemaking,
Californias Cap-and-Trade Program, at p. 732. Pet. RJN, at Exh. 4. (AB 32 does not
direct ARB to use any particular method to distribute allowances).
13
CASE NO.
warming will adversely impact Californias agriculture, wine, tourism, skiing,
forestry, and fishing industries (Health & Saf. Code, 38501, subd. (b)); California
has long been an international leader on energy conservation and environmental
stewardship, and the program established by AB
(Health & Saf. Code, 38501, subd. (c)); action taken by California to reduce GHG
emissions will encourage other governments to act to similarly reduce GHG (Health
& Saf. Code, 38501, subd. (d)); by exercising a global leadership role, California wil
also position its economy and industries to benefit from national and international
32
will continue this tradition
io
efforts to reduce GHG emissions (Health & Saf. Code, 38501, subd. (e)); the ARB
should coordinate with other state agencies and stakeholders in implementing
ii
AB
12
(Health & Saf. Code, 38501, subd. (f)); electricity and natural gas providers
regulated by the Public Utilities Commission should not be required to meet
32
duplicative or inconsistent regulatory requirements (Health & Saf. Code, 38501,

subd. (g)); the ARB should design GHG emission reduction measures in a manner
15
that minimizes costs and maximizes benefits to Californias economy (Health & Saf.
13
16
17
Code, 38501, subd. (h)); and the Governors Climate Action Team should continue
its role in coordinating overall climate policy (Health & Saf. Code, 38501, subd. (i))
As can be seen, the Legislatures findings and declarations accompanying
18
19
AB
20
the need to reduce those emissions. GHG reduction was the Legislatures sole aim.
21
There is nothing indicating the Legislature intended to authorize the ARB to
22
construct a massive fee/tax program. If that was the intent, one would expect to
23
see language in AB
24
25
32
focus solely and exclusively on the dangers posed by GHG emissions and
32s
findings and declarations so indicating, but there is none.
/1/
/1/
26
27 ///
28
14
CASE NO.
b.
1
2
AB 32s legislative history makes no mention of

any intent to grant an unelected board authority
to impose billions of dollars in new fees/taxes;
indeed, it contains statements that contradict
the ARBs position.
In addition to findings and declarations, [s]tatements in legislative

6
committee reports concerning the statutory objects and purposes which are
in accord with a reasonable interpretation of the statute are legitimate aids in
determining legislative intent. (So. Calif. Gas Co. v. Public Util. Corn.
Cal.3d 653, 659; National R.V., Inc. v. Forernan
(1995)
(1979) 24
34 Cal.App.4th
1072, 1083.)
io
It will be presumed that the Legislature adopted the proposed legislation with
ii
the intent and meaning expressed in committee reports. (Curtis v. County of
12
Los Angeles (1985)
13
172
Cal.App.3d
1243, 1250.)
Seven separate legislative reports and analyses were prepared on AB
32.14
14
Not a single one of them contains any discussion whatsoever regarding any new tax
15
or fee-raising authority of the type the ARB alleges it possesses. The only revenue
16
powers that are discussed at all in any of the legislative committee reports are found
17
in the Senate Committee on Rules Third Reading Analysis, which states AB
18
[a]uthorizes ARB to impose administrative, civil, and/or criminal penalties
19
consistent with its authority under air quality statutes for violations of any rule,
20
regulation, or order adopted by ARB pursuant to the bills provisions; and AB
32
32
21
22
(i) Assem. Corn. on Nat. Res., analysis of Assem. Bill No. 32 (2005-06 Reg. Sess.)
as introduced Dec. 6, 2004; (2) Assem. Corn. on Appropriations, analysis of Assern. Bill
No. 32 (2005-06 Reg. Sess.) as amended Mar. 31, 2005; () Assem. Floor Analysis,
analysis of Assern. Bill No. 32 (2005-06 Reg. Sess.) as amended Mar. 31, 2005; (4) Sen.
Corn. on Environmental Quality, analysis of Assem. Bill No. 32 (2005-06 Reg. Sess.) as
amended Jun. 22, 2006; () Sen. Corn. on Appropriations, analysis of Assem. Bill No. 32
(2005-06 Reg. Sess.) as amended Aug. 7, 2006; (6) Sen. Corn, on Rules, Ofc. of Floor
Analyses, 3d reading analysis of Assem. Bill No. 32 (2005-06 Reg. Sess.) as amended Aug.
30, 2006; and () Assembly Floor Analysis, Concurrence in Senate Amendments to Assem.
Bill No. 32 (2005-06 Reg. Sess.) as amended Aug. 30, 2006. Pet. RJN, at Exh. 5 through
Exh. ii.
14
23
24
25
26
27
28
15
CASE NO.
[a]uthorizes ARB to adopt a schedule of fees to pay for the costs of implementing
the program established pursuant to the bills provisions.5

Even the ARBs own Enrolled Bill Report to the Governor on AB
32
is directly
at odds with the position it now takes. Page 3 of the ARBs Enrolled Bill Report
5
6 In that section, the ARB explains:

contains a section entitled Fee Authority.1
AB 32 grants ARB the authority to adopt a schedule of fees to be paid by

regulated GHG emission sources for program administration. Republicans
feel that the fee authority language provides ARB with carte blanche
authority to collect fees on anything including imposing a tax on sport utility
vehicles. To clear confusion, Speaker Nunez added a letter to the file to
clarify that the fee is limited to ARBs direct implementation costs only. 17
8
9
Thus, in its own Enrolled Bill Report, the ARB acknowledged that fears were
10
11
raised regarding whether AB
12
authority. The ARB dismissed those fears by directly stating that its fee and tax
13
raising authority is limited to direct implementation costs only. There is no other
14
mention by the ARB in its Enrolled Bill Report, prepared contemporaneously with
15
AB
16
32s
32
gave the ARB carte blanche fee or tax raising
passage, of any other tax or fee-raising powers being granted by AB
Surely, if AB
32
32.
intended to authorize the ARB to do so, there would have
17
been extensive debate (and opposition) by members of the Legislature who have
18
consistently opposed revenue-raising legislation. Yet, the legislative history says
19
absolutely nothing that even remotely suggests AB
20
a green light to raise tens of billions of dollars from taxpayers. Thus, it would be
32
intended to give the ARB such
21
22
23
24
25
26
27
28
5 Sen. Corn. on Rules, Ofc. of Floor Analyses, 3d reading analysis of Assem. Bill No.
32 (2005-06 Reg. Sess.) as amended Aug. 30, 2006, at pp. 4, 4 and 4-5, 9. Pet. RJN, at
Exh.io.
i6 Air Res. Bd., Enrolled Bill Report for Assem. Bill No. 32 (2005-06 Reg. Sess.) as
amended Aug. 30, 2006, at pg. 3. Pet. RJN, at Exh. 12.
17 In the letter referred to in ARBs Enrolled Bill Report, Speaker Nunezthe author
of AB 32stated that It is my intent that any funds provided by Health and Safety Code
Section 38597 are to be used solely for the direct costs incurred in administering this
division. This intent is further demonstrated by the fact that Section 38597 is contained
within Part 7 of the bill which related to ARBs administrative functions. (Hon. Fabian
Nunez, Letter to Assembly Journal, Aug. 31, 2006. Pet. RJN, at Exh. 13.)
16
CASE NO.
absurd to read into AB 32 a grant of authority for the ARB to utilize a revenue-
raising device of such magnitude.
The total silence in AB 32s legislative history regarding any large scale grant
of fee or tax raising authority to the ARBand the contradictory concession made
by the ARB itselfis further evidence supporting the conclusion that AB 32 did not
grant the ARB any authority to impose fees/taxes beyond that necessary to cover
ordinary administrative expenses.
In answering whether Proposition 218 (1996) applied to local annexations,

the Court of Appeal, Fourth Appellate District, recently explained, there is much
10
in the very structure of Proposition 218 that, if it had been intended to apply to
11
annexations, should have been there, but isnt. Just as the silence of a dog trained
12
to bark at intruders suggests the absence of intruders, this silence speaks loudly.
13
(Citizens Assoc. ofSunset Beach v. Orange Co. LAFCO (2012) 209 Cal.App.4th
14
1182, 1191.)
15
bestow upon the ARB the authority to impose tens of billions of dollars in new fees
16
or taxes, there is very much that would be in both AB 32s operative language and
17
its legislative history, but it is not there. Akin to the Sunset Beach case, this silence
18
speaks loudly.
19
The same is true here with respect to AB 32. If AB 32 intended to
c.
20
21
That the language of AB 32 does not explicitly

forbid the ARB from raising up to $70-I- billion in
new fees/taxes by allocating to itself and selling
GHG allowances does p mean the ARE possesses
such authority.
22
23
As already explained herein, administrative agencies have only the powers
25
by statute. (AFL, supra, 13 Cal.4th, at p. 1042.) The fact that

a statute does not expressly forbid an administrative agency from taking a particular
26
action does not constitute conferral of the power to take the action. Contrary to
27
these settled principles, the ARB has attempted to take the latter view; i.e., that it
28
has all powers except those expressly denied to it by AB 32.
24
conferred upon them
17
CASE NO.
In response to comments it received during its rulemaking process that
questioned the ARBs authority to allocate to itself and sell off GHG allowances,
the ARB claimed that AB
declining annual aggregate emission limits (i.e., cap and trade), and thus GHG
allowances must somehow be allocated to covered entities. On that particular
point, the ARB pointed to Health and Safety Code section 38562, subdivision (b)(i),
32
authorizes it to use a system of market-based
noted supra, which states the ARB is authorized to design regulations including
8
the distribution of emissions allowances where appropriate in a manner that is

equitable, seeks to minimize costs, and the like. The ARB went on to say that GHG
allowances could be distributed freely or sold at market rates, or a combination of
ii
the two, under cap and trade, and that AB
12
particular method and does not specify that some methods of allocation are
13
8 The ARB further stated that selling allowances is a

allowed and others are not.1
14
recognized approach, and that, in authorizing the ARB to distribute allowances, the
15
Legislature did not intend to forbid ARB from choosing this method.19 Completing
16
the legerdemain from a lack of an express prohibition into an explicit authorization,
17
the ARB said it believes that AB
18
auctions as a
32
32
does not direct ARB to use any
provides ARB with the authority to include
feature of a cap and trade program.
The ARBs argument regarding its authority to allocate GHG allowances to
20
itself, and then to sell them for profit, turns the doctrine of administrative
21
authorization on its head. The ARB argues that AB 32 provides it with authority to
22
allocate to itself and then sell off GHG allowances because AB
23
ARB to use any particular method to allocate allowances and does i specify
24
that some methods are allowed and others are not, and that the Legislature did
25
32
does not direct
intend to forbid ARB from choosing to allocate to itself and sell off GHG
26
27
28
i8 Air Resources Boards October 2011 Final Statement of Reasons for Rulemaking,
Californias Cap-and-Trade Program, at pp. 732 and 2189-90. Pet. RJN, at Exh. 4.
19
20
Ibid.
Ibid.
i8
CASE NO.
allowances. Thus, the ARB seeks to define its regulatory authority in the negative:
not what is conferred, but only what is denied. In its view, it has all conceivable
authority except that which is been expressly denied to it by the Legislature.

The ARBs analysis is flawed and improper. As multiple California appellate
court decisions make abundantly clear, administrative agencies have only those
6
powers the Legislature expressly conferred on them or that are necessarily implied
by legislation. A mere lack of explicit denial does not suffice. By reversing the
analysis, the ARB attempts to put itself on a level playing field with the California
Legislature. (See, e.g., State Personnel Bd. v. Dept. ofPersonnelAdmin.
(2005)
11
37 Cal.4th 512, 523 [the Legislature may exercise any and all powers which are
not expressly or by necessary implication denied to it by the Constitution].)
12
The ARB appears to view its authority in the same classan affirmative grant of
13
authority is not necessary; mere silence as to its authority will suffice to provide
14
the power sought. However, only the constitutionally-recognized sovereign
15
branches of state government are entitled to such deference.
10
d.
16
17
18
19
To find AB 32 authorizes an unelected board to

impose up to $70+ billion in new fees/taxes on
California would violate multiple canons of
statutory construction.
The canons of construction are among the aids the Courts can employ in
20
reaching a reasoned interpretation of a statute. (Calif. Chamber of Commerce v.
21
Brown
22
statute as authorizing the ARB to allocate to itself and sell of GHG allowances for
23
tens of billions of dollars would run directly contrary to several longstanding canons
24
of construction.
(2011) 196
Cal.App.4th 233,
258.)
With respect to AB
32,
interpreting the
A recognized rule of statutory construction is that the expression of certain
25
26
things in a statute necessarily involves exclusion of other things not expressed
27
expressio unius est exclusio alterius. (Henderson, supra, 6 Cal.App.3d at p.
28
In AB
32,
403.)
Health and Safety Code section 38597 gives the ARB express authority to
19
CASE NO.
adopt a schedule of f to be paid by the sources of greenhouse gas emissions for
the purposes of carrying out AB
the Legislature unmistakably demonstrated that, when it wants to empower the
32.
(Underscoring added.) Thus, in Section 38597,
ARB to impose a fee, it knows exactly how to do so. To conclude that some other
5
fee-raising authority is hidden in AB
the inclusion of the administrative fee in Section 38597 indicates the exclusion of
32
would be contrary to the presumption that
other fees or taxes.

8
On a related point, reading into the ARBs authority to engage in cap and
trade the power to allocate to itself and sell off GHG allowances would render
10
Health and Safety Code section 38597 as surplusage, which Courts will avoid
ii
wherever possible. (In re Luke W.
12
a statute, every word thereof is, if possible, to be given meaning so as to avoid
13
surplusage.]) If the authority to utilize market-based mechanisms provided in
14
Health and Safety Code section 38562, subdivision (c), or the authority to
15
distribute emissions allowances in Health and Safety Code section 38562,
16
subdivision (b)(i), actually grant the ARB authority to raise tens of billions of
17
dollars in fees/taxes through the sale of GHG allowances, then the authorization in
18
Section 38597 to raise a pittance in comparison would be meaningless.
19
(2001)
88 Cal.App.4th 650, 656 [In construing
Third, when engaging in statutory construction, California courts compare
20
and contrast California statutes with those from other states and jurisdictions. (See,
21
e.g., In re Jesusa V.
22
of the Uniform Parentage Act by comparison to New Jerseys version of the same];
23
and People v. Leong Fook (1928)
24
Legislature to legislative actions taken in other states]. Here, it is evident on the
25
face of AB
26
other jurisdictions.21 Nonetheless, the language used by the Legislature with
27
28
32
(2004) 32
Cal.4th 588,
206
613
Cal. 64,
[interpreting Californias version
72
[comparing actions of Californias
that the Legislature was cognizant of GHG reduction programs in
See, e.g., Health & Saf. Code, 38501, subd. (d) [declaring that national and
international actions are necessary to fully address global warming, and that Californias
GHG reduction efforts will encourage other states and countries to act]; and Health &
21
20
CASE NO.
respect to GHG allowance allocation is significantly different from that used in
other well-known cap and trade programs that predate AB
32.
At least two well-known cap and trade programs preceded the adoption of
AB
32:
the federal
1990
Clean Air Act; and the European Unions (EU) Emissions
Trading Scheme (ETS). The Clean Air Act contains an explicit authorization for
6
the administrative agency to auction off emissions credits.
subdivision (d)(2) states that the U.S. EPA administrator shall conduct auctions at
which the allowances referred to in paragraph
(i)
42
U.S.C.,
76510,22
shall be offered for sale.. .The
auction shall be open to any person. A person wishing to bid for such allowances
10
shall submit.. .to the [U.S. EPA] Administrator.. .offers to purchase specified
numbers of allowances at specified prices. In addition to explicitly authorizing an
12
auction, the Clean Air Act also expressly specifies how the proceeds from the
13
auctions are supposed to be allocated.
14
that auction proceeds are to be transferred back to entities from whom the
15
allowances sold at auction were originally withheld, and no funds from the auction
16
shall be treated for any purpose as revenue to the United States or the [U.S. EPA]
17
Administrator.
Likewise, Article
18
10
42
of EU Directive
U.S.C., 76510, subdivision (d)(3) states
2003/87
establishing a scheme for
19
greenhouse gas emission allowance trading states that Member States shall
20
allocate at least 95% of the allowances free of charge in the first three-year period,
21
and shall allocate at least 90% of the allowances free of charge in the succeeding
22
five-year period of the program. 23
23
III
24
25
26
27
28
Code, 38564 [instructing ARB to consult with other states, the federal government, and
other nations to identify effective GHG emission reduction strategies].

22 The o in 76510 is a letter and not a number. Pet. RJN, at Exh. 14.
23 European Parliament and Council of Europe, Oct. 13, 2003 Directive
2008/87/EC establishing a scheme for greenhouse gas emission allowance trading within
the Community and amending Council Directive 96/61/EC, Article 10. Pet. RJN, at Exh.
15.
21
CASE NO.
In stark contrast, AB
32
contains no similar language with respect to the sale
or auction of GHG allowances, or the percentage that must be freely allocated versus
that which may be allocated for charge. Nor does AB
auction proceeds as is done in the Clean Air Act. The most that the ARB can point
32
expressly direct the uses of
to is Health and Safety Code section 38562, subdivision (b)(i), which allows the ARB
6
to distribute emissions credits where appropriate in a manner that is equitable,
minimizes costs, maximizes benefits, and the like. However, this is a far cry from
providing the sort of explicit language used in the Clean Air Act and EU directive.
If the Legislature wanted to bestow the same fee/tax-raising authority on the ARB,
10
the Legislature could have used explicit language regarding the sale of GHG
11
allowances and the use of proceeds therefrom similar to that found in other GHG
12
reduction regimes. The fact that it did not speaks volumes. (See, e.g., Yeager v.
13
Blue Cross of Calif.
statute speak by inserting language the Legislature did not put in the legislation.])
(2009) 175
1103
[We may not make a silent
Construing a global warming statute as allowing

an unelected board to raise up to $7o billion in
new fees/taxes would be an absurd result that
Courts are bound to avoid.
e.
15
Cal.App.4th 1098,
16
17
There perhaps may be no better instance in which to apply the tried and true
18
19
maxim that a court interpreting a statute should avoid an interpretation that leads
20
to anomalous or absurd consequences. (People v. McNamee
21
66,
22
72;
Horwich v. Superior Ct.
(1999) 21
Cal.4th
(2002)
96 Cal.App.4th
272, 280.)
The attempt by an unelected board to use an environmental protection
23
statute to raise up to
24
unprecedented in the history of this state. Even the elected and democratically
25
accountable Legislature and Governors of California have never imposed such
26
a massive tax/fee. One has to at least give the ARB credit for thinking big: it has
27
stunningly set out to raise an amount of money that is nearly commensurate with
28
a years worth of State General Fund revenues. In fiscal year
$70
billion dollars or more in fees/taxes is completely
2010-11,
the General
22
CASE NO.
Fund took in $93 billion.24 If the higher of LAOs estimates proves true, the ARB
will generate 75 percent of that amount over the next eight years through the sale
of GHG allowances. That would represent, on an annual basis, approximately $9
billionfully a third more than the Governor sought to raise in income and sales
and use taxes through Proposition
30 (2012).25
In fact, at that amount, fees raised
through the sale of GHG allowances would most likely be the fourth single largest
state funding source, coming in only after the personal income tax
FY 2010-11), the sales and use tax
($27
billion in
billion in FY 2010-11), and the corporate
income tax ($9.8 billion in FY 2O1011).26 Such a craven attack on the publics
10
pocketbook has never before been attempted, much less permitted.

When one steps out of the halls of government where AB
11
32
was adopted
12
and where this lawsuit will be decided, and into the real world where everyday
13
Californians will ultimately have these costs passed on to them through increased
14
prices for goods and services, the notion that an unelected board could raise such
15
a breathtakingly massive sum of money on really nothing more than the argument
16
that GHG allowances must somehow be allocated27 is far more than anomalous
17
or absurdit is utterly preposterous. This Court should not countenance this most
18
absurd reading of AB
19
20
21
22
32.
III
/1/
/1/
/1/
23
24
25
26
27
28
Ballot Pamp., Gen. Elec. (Nov. 2012), Leg. Analyst analysis of Proposition 30, at
p. 13. Pet. RJN, at Exh. 16.
25 Id., at 17.
26 Id., at 13. See also State Controllers online report, Sources of State Taxes. Pet.
RJN, at Exh. 17.
27 Air Resources Boards October 2011 Final Statement of Reasons for Rulemaking,
Californias Cap-and-Trade Program, at pp. 732 and 2189-90. Here, in response to a
comment questioning ARBs authority to allocate to itself and sell off GHG allowances,
ARB responded that allowances must somehow be allocated. Pet. RJN, at Exh. 4.
24
23
CASE NO.
B.
To Find That AB 32 Authorized The ARB To Raise Billions In

New Fees/Taxes By Allocating To Itself And Selling Off GHG
Allowances To The Highest Bidder Would Render AB 32
Unconstitutional Or Raise Serious Constitutional Doubt.
2
3
Equally problematic is the fact that finding AB
32
authorizes the ARB to raise
billions in new fees/taxes by allocating to itself and selling off GHG allowances
6
would render AB
32
unconstitutional.
As noted above, under California law, a major tenet of statutory

8
10
interpretation commands that a statute should be construed wherever possible

so as to preserve its constitutionality. (Dyna-Med, supra, 43 Cal.3d at p. 1387.)
The basis of this rule is the presumption that the Legislature intended, not to violate
the Constitution, but to enact a valid statute within the scope of its constitutional
powers. (Harrott v. County ofKings, supra,
13
Cal.4th at p. 1153.) Therefore, if a

statute is susceptible of two constructions, one of which will render it constitutional
14
and the other unconstitutional in whole or in part, or raise serious and doubtful
15
constitutional questions, the Courts will adopt the construction which, without
16
doing violence to the reasonable meaning of the language used, will render it valid
17
in its entirety, or free from doubt as to its constitutionality, even though the other
18
construction may also be reasonable. (Ibid.; Miller, supra,
12
As already explained, AB
32
25
22
Cal.2d at p. 828.)
did not authorize the imposition of a tax given
20
that it was not enacted by a two-thirds vote, and it expressly authorized only a fee
21
covering ordinary administrative costs. For the additional reason that follows,
22
AB
23
generate
32
cannot be interpreted to impliedly authorize the ARBs fee/tax proposal to

$70+
billion in new fee/tax money for the state.
The rules applicable to the Legislatures adoption of fees at the time AB
24
25
was enacted are set forth in the Supreme Courts decision Sinclair, supra,
26
866. Fees that do not comply with Sinclair are unconstitutional.
Cal.4th
At issue in Sinclair was the Childhood Lead Poisoning Prevention Act of 1991,
27
28
15
32
Stats.
1991,
ch. 799, 3. Enacted by the Legislature on a simple majority vote, the

24
CASE NO.
Act provided for evaluation, screening, and medically necessary follow up services
for children deemed to be potential victims of lead poisoning. The Acts program
was supported entirely by fees assessed on manufacturers whose products
contributed to environmental lead contamination. (Sinclair, supra,
pp. 869-70.) The total amount of fees that could be collected in any single year was
capped in the statute at $16 million. (Stats. 1991, ch. 799, 3; Health & Saf. Code,
7
8
15
Cal.4th at
372.7, subd. (f).) The portion of the fees assessed upon each manufacturer was
determined based on the manufacturers market share of products contributing
to environmental lead contamination. Those able to show that their industry did
10
not contribute to environmental lead contamination, or that their lead-containing
ii
products did not result in quantifiably persistent lead contamination were exempt
12
13
from paying the fees. (Sinclair, supra, at p. 872.) The fee was challenged on the
ground it was actually a tax that could be legally imposed only upon a two-thirds
vote in each house of the Legislature. (Id., at 870 & 873.)
The Supreme Court held the fee was not a tax but was a regulatory fee that
15
16
the Legislature could impose under its police power. As described by the Supreme
17
Court, the fee was a bona fide regulatory fee because it required manufacturers
18
whose products had exposed children to lead contamination to bear a fair share
of the cost of mitigating the adverse effects of those products. (Sinclair, supra,
20
21
15
Cal.4th at p. 877.)
However, the Sinclair decision did not find the Legislatures ability to impose
22
regulatory fees under the police power to be unlimited. Quite to the contrary, the
23
Sinclair decision explained that, in order for a simple majority vote fee to qualify as
24
a regulatory fee enacted pursuant to the police power instead of an
25
unconstitutionally-imposed tax, three requirements must each be satisfied:
26
must be a reasonable relationship between the amount of the fee and the social or
27
economic burdens imposed by the fee payers operations (Sinclair, supra,
28
at pp. at 876 & 881);
(2)
(i)
15
there
Cal.4th
the fee cannot be imposed for unrelated revenue purposes

25
CASE NO.
(id., at 881); and (3) the remedial measures funded with the fee must have a causal
connection or nexus to the fee payers operations and their adverse effects (id., at
878 & 881). The fees/taxes the ARB seeks to impose by allocating to itself and
selling off GHG allowances run afoul of each Sinclair requirement.

As a matter of law, the ARBs regulations violate the first prong of Sinclairs
three-part test because there is no relationship between what covered entities will
pay to the State for GHG allowances in an auction format and the costs of mitigating
the harms caused by the covered entities GHG emissions. Rather, the price in an
auction format will be based on the perceived benefit to the purchaser in acquiring
10
8 There is no
the ability to emit additional tons of GHG, and other market forces.2
nexus between the harm caused by the winning bidder and the amount that
12
bidder pays to the State for a GHG allowance.
13
This is further borne out by the fact that the ARBs regulations do not attempt
14
to quantify the costs of mitigating the harms caused by the covered entities
15
emissions. This is a far cry from the statute in question in Sinclair, where the
16
Legislature itself determined the maximum cost of the program and capped the
17
amount of fees that could annually be raised at a commensurate amount. To the
18
contrary here, the ARB is simply attempting to capture as much money as it can
19
through an auction format. What a covered entity will pay in the auction is only
20
related to the benefit the purchaser perceives it is receiving; it is in no way related
21
to the harms caused by that purchaser, if any.
22
of having a reasonable relationship between the amount charged to a fee payer and
23
the harms caused by the fee payer, the ARBs plan has
24
two at all. Without a reasonable relationship between the fees charged by the ARB
25
in its GHG allowance auctions and the costs of mitigating the harms of GHG
26
27
28
(17
CCR,
95911,
subd. (d).) Instead
relationship between the
See, e.g., Gillian Ku, Deepak Maihotra, and J. Keith Murnighan, Towards a
Competitive Arousal Model of Decision-Making: A Study of Auction Fever in Live and
28
Internet Auctions, Organizational Behavior and Human Decision Processes, 96
(2005)
at 91 (Rational choice suggests that bidders will stop bidding when they hit their
limit (i.e., the price at which they value the item).) Pet. RJN, at Exh. i8.
89-103,
26
CASE NO.
emitted by the covered entities, the ARBs regulations cannot comply with the
Sinclair test as a matter of law.

Even beyond the fatal flaw that there is no relationship between the prices
3
4
paid for GHG allowances at auction and the costs of mitigating the harms of GHG
emissions, the fees the ARB seeks to impose pursuant to the authority it claims was
bestowed by AB
32
are deficient under the second and third prongs of Sinclair.
For example, even though the first auction has not yet been held, fee/tax proceeds
8
from the ARBs plan to allocate to itself and sell off GHG allowances are already
being used for unrelated revenue purposes. Desperate for budgetary relief in an era
10
of continual deficits, Section 15.11, subd. (a) of the
ch.
12
amount of at least
13
gas emission allowances, which are deposited to the credit of the Greenhouse Gas
14
Reduction Fund, and make commensurate reductions to General Fund expenditure
15
authority.29 (Underscoring added.) Additionally, other extremely recent proposals
16
to spend fees/taxes from GHG allowance auctions on state and local government
17
buildings, or to assist industries which are not even covered by the ARBs cap and
18
trade program, such as agriculture and forestry, are completely devoid of any nexus
19
or causal connection with any possible adverse effects caused by the entities who
20
will pay fees to the ARB. (Stats.
21
subd.
22
21
2012-13
Budget Act, Stats.
2012,
(AB 1464), authorizes the Director of Finance to allocate or otherwise use an
(c)(1),
$500,000,000
from money derived from the sale of greenhouse
2012,
ch. 807,
2;
Health & Saf. Code,
39710,
(3)().)
Regulatory fees that do not comply with Sinclairs three-part test are taxes
24
(Cal. Const., art. XIII A, 3) that must be approved by a two-thirds vote in each
house of the Legislature. (Sinclair, supra, 15 Cal.4th at p. 873.) The fees that
25
the ARB seeks to extract from entities subject to the cap and trade program,
26
pursuant to the authority purportedly granted by AB
27
tests. Since they fail the Sinclair tests, they are nothing more than taxes subject to
23
32,
fail the each of the Sinclair
28
29
Pet. RJN, at Exh.
19.
27
CASE NO.
i
2
the two-thirds vote threshold mandated by Cal. Const., art. XIII A, 3. AB 32 was
not adopted by a two-thirds vote in each house of the Legislature. Thus, to find that
AB
32,
a simple majority vote bill, authorized a charge that could be imposed only
upon a two-thirds vote would be to find that AB
32
was enacted in contravention of
the California Constitution.

C.
6
7
8
Because The Goal Of AB 32 Can Be Achieved Without The

ARB Allocating To Itself And Selling Off GHG Allowances For
Billions Of Dollars, It Cannot Be Implied That AR 32 Granted
Such Power.
Finally, an implied administrative authorization can be found only where the
9
10
power is essential and indispensable. Mere convenience is insufficient. (Addison,
11
supra, 6g Cal.App.3d, at p. 498; 76 Ops.Cal.Atty.Gen.
12
reasonable doubt as to whether the implied power exists must be resolved against
13
the agency. (Id.)
11,
16.) Further, any
On this score, the ARBs position is doomed to failure because the ARB has
14
15
conceded that allocating to itself and selling GHG allowances is not essential to the
16
purposes of AB
17
the regulatory comment period, the ARB responded to a comment questioning its
18
authority to sell GHG allowances. The ARB stated that in a cap and trade program,
19
allowances can be distributed free of charge, they can be sold at a predetermined
20
price, they can be auctioned off with competitive bidding, or by another allocation
21
method developed.3 The ARB also conceded that Traditionally, cap and trade
22
programs have favored freely allocating allowances to the covered entities.31
32
specifically or even to cap and trade programs generally. During
And both the nonpartisan Legislative Analysts Office and the ARB Economic
23
24
and Allocation Advisory Committee established by AB
25
/1/
26
27
28
32
independently confirmed
Air Resources Boards October 2011 Final Statement of Reasons for Rulemaking,
Californias Cap-and-Trade Program, at pp. 732 and 2190. Pet. RJN, at Exh. 4.
31 Air Resources Boards October 28, 2010 Proposed
Regulation to Implement the
California Cap-and-Trade Program, Appendix J, Allowance Allocation, at J. Pet. RJN,
5
at Exh. 20.
30
28
MEMORANDUM OF POINTS M4D AUTHORITIES IN SUPPORT OF VERIFIED PETITION FOR WRiT OF MANDATE AND
CASE NO.
that the GHG emission reduction goals set by AB 32 can be achieved just as easily
through ft allocation of GHG allowances.32

Given that the ARB and other authoritative sources have conceded that
the self-allocation and sale of GHG allowances is not essential or indispensable to

a cap and trade program, AB 32 cannot be found to grant implied authorization to
6
the ARB to allocate to itself and then sell off GHG allowances for billions of dollars.
(Addison, supra, 69 Cal.App.3d, at p. 498.)
D.
8
9
10
In The Alternative, If AB 32 Does Authorize An Unelected

Board to Impose Up To $70+ Billion In New Fees/Taxes
Through the Self-Allocation And Sale of GHG Allowances,
Then The ARBs Regulations Are An Unconstitutional Tax.
Notwithstanding the applicable rules of statutory interpretation, should the
11
12
Court find that the ARBs regulations permitting the ARB to allocate to itself and
13
then sell off GHG allowances are authorized under AB 32, then, for the reasons set
14
forth above at page 24, line 1 to page 28, line 5, the ARBs regulations are an
15
unconstitutional tax.
16
V.
17
CONCLUSION.
Through the enactment of AB 32, the Legislature properly authorized the
18
ARB to regulate GHG emissions. The ARB seeks impermissibly to expand that
19
grant of authority to extract literally billions upon billions of dollars from California
20
taxpayers by allocating to itself and then selling off GHG allowances as part of its
21
cap and trade program. Only the Legislature can raise such massive sums of money
22
and only through the enactment of taxes or fees. AB 32 was not enacted with
23
See Legislative Analysts Office, Letter to Hon. Henry T. Perea, Aug. 17, 2012, at
p. 2, Pet. RJN, at Exh. 21 [noting that an auction is not necessary and allowances can be
distributed entirely for free because it is the declining cap on emissions that will reduce
32
24
25
26
27
28
the states overall level of GHGsnot the manner in which allowances are introduced into
the market (emphasis added)]; and Economic and Allocation Advisory Committee,
Allocating Emissions Allowances Under a Cap-and-Trade Program, Recommendations to
the California Air Resources Board and the California Environmental Protection Agency,
March 2010, p. 2, Pet. RJN, at Exh. 22 [noting that allowances can be freely allocated
under a cap-and-trade program].
29
CASE NO.
enough votes to qualify as a tax. It does not expressly authorize the ARB to impose
any fees/taxes other than a minor administrative fee. And the language of AB
its legislative history, and applicable canons of statutory construction lead to the
unquestionable conclusion that AB
fees/taxes. Indeed, the fee that the ARB seeks to impose runs afoul of the
Supreme Courts Sinclair decision and thus would be an unconstitutional tax.
32
32,
did not authorize ARB to extract such
And the ARB concedes that allocating to itself and selling GHG allowances is not
8
essential to its cap and trade program. This is a compelling reason, among others,
that fatally undermines the ARBs position.
10
If the Legislature wants to authorize the ARB to impose fees or taxes on
ii
emitters of GHG, it has every power to do so through new legislation. But such
12
authority must come from the elected branches of government through the
13
democratic process, not slipped under the rug by an unelected board.
14
Efforts to combat climate change can continue. So can ARBs cap and trade
15
program. The only thing that must cease is the unauthorized, unnecessary, and
16
illegal attempt by an unelected board to cloak a multi-billion dollar tax increase in
17
an environmental regulation.
18
19
For the foregoing reasons, petitioners respectfully request that the relief
sought be GRANTED.
20
21
22
25
Dated: November
13, 2012

GROSS & LEONI, LLP
By:___
ames R. Parrinello
Attorneysfor Petitioners
26
27
28
30
CASE NO.

California Chamber of Commerce Sues ARB

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California Chamber of Commerce Sues ARB

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2

NIELSEN MERKSAMER PARRINELLO

The ARBs Regulations

AB 32 Did Not Confer Upon The ARB The Authority To Raise

AB 32 does not impose a tax, and does not authorize the

AB 32 does not authorize an unelected board to impose up

In adopting AB 32, the intent of the Legislature

AB 32s legislative history makes no mention of

That the language of AB 32 does not explicitly

To find AB 32 authorizes an unelected board to

Construing a global warming statute as

To Find That AB 32 Authorized The ARB To Raise Billions In

Because The Goal Of AB 32 Can Be Achieved Without The ARB

In The Alternative, If AB 32 Does Authorize An Unelected Board

ActionApartmentAssoc., Inc. v. City ofSanta Monica

Addison v. Dept. ofMotor Vehicles,

AFL v. Unemployment Ins. Appeals Bd.

Branczforte Heights, LLC v. City ofSanta Cruz

Calif. Chamber of Commerce v. Brown

Caljf Teachers Assoc. v. San Diego Community Coil. Dist.

Citizens Assoc. ofSunset Beach v. Orange Co. LAFCO

Citizens to Save Calif. v. FPPC

County ofLos Angeles v. State Dept. ofPublic Health

(1958) 158 Cal.App.2d

Curtis v. County ofLos Angeles

Diageo-Guiness USA, Inc. v. Bd. ofEqualization

Dyna-Med, Inc. v. Fair Emp. & Housing Com.

Environmental Defense Project ofSierra County v. County ofSierra

Harrott v. County ofKings

Henderson v. Mann Theatres Corp.

Horwich v. Superior Ct.

Miller v. Municipal Ct. of the City ofLos Angeles

National R.V., Inc. v. Foreman

Palos Verdes Faculty Assoc. v. Palos Verdes UnWed Sch. Dist.

People v. Leong Fook

Rancho Murieta Airport, Inc. v. County ofSacramento

Redwood Coast Watersheds Alliance v. Bd. ofForestry

Regents of Univ. of Calif v. East Bay Mun. Utility Dist.

So. Calif. Gas Co. v. Public Util. Corn.

State Bd. ofEqualization v. Bd. ofSupervisors

State Personnel Bd. v. Dept. ofPersonnelAdmin.

Terhune v. Superior Court

Walker v. County ofLos Angeles

Yamaha Corp. ofAmerica v. Bd. ofEqualization

Yeager v. Blue Cross of Calif.

Assembly Bill 32, Stats.

Childhood Lead Poisoning Prevention Act, Stats.

CA Code Civ. Proc.,

ch. 488 (AB

CA Code Civ. Proc., 1859

CA Gov. Code, 16428.8, Stats.

CA Health & Safety Code

Stats. 2012, ch. 807,

CALIFORNIA CODE OF REGULATIONS

Cal. Code Regs., Tit. 17

Cal. Const., art. XIII A, 3

Directive 2008/87/EC of the European Parliament and of the Council of

Gillian Ku, Deepak Maihotra, and J. Keith Murnighan, Towards a

Decision Processes, 96 (2005) 89-103

This case is about one thing and one thing only

the lack of authority of

an unelected, politically-appointed regulatory board to engraft into a regulatory

by the Proposition 30 tax initiative approved by voters on November 6,