States have, of late, become increasingly active in environmental regulation. Renewable energy standards, which commit utilities in states to purchase power from renewable sources, and climate-change mitigation requirements of various kinds, are just two recent manifestations of state (and sometimes local) regulatory activism. This article employs state renewable portfolio standards (RPS) as a case study to examine how some RPS might fare if challenged under three constitutional doctrines that restrain states--preemption, the Dormant Commerce Clause Doctrine (DCCD), and the Privileges and Immunities Clause of Article IV. Under current doctrine, it concludes, the DCCD poses the greatest threat to RPS programs, as many of those programs are currently constituted. This Article also assays prospects for judicial alteration of that doctrine in ways that would be favorable to state environmental innovations and suggests that the Ninth Circuit's recent decision in Rocky Mountain Farmers Union v. Corey could serve as a blueprint for designing or refining RPS that would be resistant to constitutional challenges.
CONTENTS INTRODUCTION I. FEDERAL CONSTITUTIONAL RESTRICTIONS ON STATE AND LOCAL REGULATION A. Preemption 1. Express Preemption 2. Implied Preemption a. Field Preemption b. Impossibility Preemption c. Obstacle Preemption B. The Dormant Commerce Clause Doctrine 1. The Basic Doctrine 2. Exceptions to the Doctrine a. Discrimination in Favor of Public Entities b. The Market-Participant Exception c. Congressional Redelegation C. The Privileges and Immunities Clause of Article IV II. RENEWABLE PORTFOLIO STANDARDS: A CASE STUDY IN ENVIRONMENTAL FEDERALISM A. An RPS Primer B. State Parochialism in RPS Programs 1. In-state and In-Region Restrictions 2. REC Multipliers for In-State Activities 3. SBC and Subsidy Programs C. The Constitutionality of RPS Programs D. The Future of the DCCD 1. "Similarly Situated" 2. Expand Existing Exceptions or Create New Ones 3. Further Restrict Scope of the DCCD E. Rocky Mountain Farmers Union v. Corey: A Harbinger? CONCLUSION INTRODUCTION
Though hardly quiescent in the past, states have become increasingly active in environmental regulation. Impatient with the perceived torpor or ideological hostility to regulation at the federal level, and despairing of any comprehensive, supranational solution to pressing issues like climate change, states have decided to fill the void. Renewable energy standards, which commit utilities in states to purchase power from renewable sources, and climate-change mitigation requirements of various kinds, are just two recent manifestations of state (and sometimes local) regulatory activism.
However, when states begin to regulate in ways that impact other states (and other countries), constitutional doctrines protecting federal interests from state action come into play. Part I of this paper offers a primer on three constitutional doctrines that restrain states--preemption, the Dormant Commerce Clause Doctrine (DCCD), and the Privileges and Immunities Clause of Article IV. Part II then uses state renewable portfolio standards (RPS) as a case study in how these doctrines could potentially limit state environmental initiatives. Under current doctrine, the DCCD poses the greatest threat to RPS programs, as many of those programs are currently constituted. But Part II also assays prospects for judicial alteration of the doctrine in ways that would be favorable to state environmental innovations.
FEDERAL CONSTITUTIONAL RESTRICTIONS ON STATE AND LOCAL REGULATION
This section offers an overview of the three main restrictions on state and local regulatory authority. I first discuss the ability of Congress to preempt conflicting state and local legislation by exercising the affirmative authority delegated to it under Article I of the Constitution. In addition, courts have long interpreted the delegation of regulatory authority over interstate commerce to contain implied restrictions on the states, prohibiting them from discriminating against or otherwise impermissibly burdening that commerce under the DCCD. Finally, state and local governments are forbidden by Article IV, section 2 from treating nonresidents differently from their own citizens under certain circumstance. Each of these doctrines or provisions has been invoked to limit state and local environmental regulatory schemes in the past; each has a continued role to play in current debates over state environmental policy, as we will see in Part II.
Under Article VI of the Constitution, the U.S. Constitution, treaties made by the United States, and "the Laws of the United States which shall be made in Pursuance" of the Constitution are the "supreme Law of the Land," notwithstanding contrary state laws or state constitutional provisions. (1) If Congress has exercised its valid legislative authority, conflicting state laws must give way. (2) Easy cases include those in which Congress included explicit language preempting contrary state law. (3)
But Congress's intent is not always so unequivocally stated. As the Court has noted:
Absent explicit pre-emptive language, we have recognized at least two types of implied pre-emption: field pre-emption, where the scheme of federal regulation is "so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it," ... and conflict pre-emption, where "compliance with both federal and state regulations is a physical impossibility," ... or where state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." (4) The Court's "ultimate task in any pre-emption case is to determine whether state regulation is consistent with the structure and purpose of the statute as a whole." (5)
Where Congress has not expressly preempted state legislation, then, the Court has found an implied intent to preempt in two broad categories of cases. Field preemption "reflects a congressional decision to foreclose any state regulation in the area, even if it is parallel to federal standards." (6) Conflict preemption, on the other hand, impliedly preempts state laws that either makes compliance with state and federal law impossible, or, if compliance with both is possible, nevertheless presents an obstacle to one or more congressional purposes.
United States v. Locke (7) furnishes an example of field preemption of a state environmental statute. Washington State had promulgated a number of regulations relating to oil tankers. The Supreme Court held that the inclusion of numerous provisions related to the design, construction, repair, equipping, and crewing of tankers in the federal Ports and Waterways Safety Act meant that "Congress has left no room for state regulation of these matters." (8)
Though a little long in the tooth, McDermott v. Wisconsin (9) provides an excellent illustration of "impossibility"-type conflict preemption. In McDermott, compliance with federal rules regarding the labeling of corn syrup would have resulted in the product's being mislabeled and subject to seizure under state law. The Court held that states could not pass laws that explicitly conflict with federal requirements, leaving the subject of the regulation incapable of complying with one regulatory regime without violating the other. In such cases, the state must give way. (10)
The other form of conflict preemption, termed "obstacle" preemption, is more subjective than impossibility preemption. In obstacle preemption cases, compliance with both federal and state regulatory regimes is possible, but in some cases the state regulatory choices are inconsistent with or harmful to broader federal policy objectives set by Congress. For example, in Crosby v. National Foreign Trade Council, (11) the Court invalidated a Massachusetts law prohibiting the Commonwealth from contracting with companies that did business with the government of Myanmar. Because Congress considered and rejected much more wide-ranging penalties for companies currently doing business in the country, choosing instead to prohibit only new investment, the Court concluded that "the state Burma law [was] an obstacle to the accomplishment of Congress's full objectives under the federal Act." (12)
Similarly, one provision of Arizona's controversial immigration law, which prohibited undocumented aliens from working, applying for, or soliciting work in the state, was invalidated because it "enact[ed] a state criminal prohibition where no federal counterpart exists." (13) Congress, the Court held, "made a deliberate choice not to impose criminal penalties on aliens who seek, or engage in, unauthorized employment." (14) Arizona's law, however:
[W]ould interfere with the careful balance struck by Congress with respect to unauthorized employment of aliens. Although [the law] attempts to achieve one of the same goals as federal law--the deterrence of unlawful employment--it involves a conflict in the method of enforcement. The Court has recognized that a "[c]onflict in technique can be fully as disruptive to the system Congress enacted [sic] as conflict in overt policy." ... The correct instruction to draw from the text, structure, and history of [federal law] is that Congress decided it would be inappropriate to impose criminal penalties on aliens who seek or engage in unauthorized employment. It follows that a state law to the contrary is an obstacle to the regulatory system Congress chose. (15) Given the enormous federal legislative and administrative footprint in environmental regulation, any new state environmental initiatives--especially those that are different in kind from or more stringent than existing federal requirements--will have to contend with arguments that they are either explicitly or impliedly preempted. Deciding...