The Judge ruled that the California-Québec agreement is neither a treaty nor a compact under Article I of the Constitution and therefore does not violate the Treaty and Compact clauses.
Some quick background. The governments of California, Québec, and Ontario signed an Agreement on the Harmonization and Integration of Cap-and-Trade programs, which took effect on January 1, 2018. On June 29, 2019, Ontario revoked its cap-and-trade regulations and formally repealed its program.
On October 23, 2019, the U.S. Department of Justice (DOJ) filed a complaint seeking declaratory and injunctive relief against the California-Québec agreement under the Constitution’s Treaty Clause, Compact Clause, and Foreign Commerce Clause, and the Foreign Affairs Doctrine. Judge Shubb limited his ruling to the parties’ dispute over the Treaty and Compact clauses, because both DOJ (on December 11, 2019) and California (on February 10, 2020) filed motions for summary judgment on those two clauses alone.
The Treaty Clause (Article I, Section 10, Clause 1) provides: “No State shall enter into any Treaty, Alliance, or Confederation.” The Constitution does not define “treaty,” nor distinguish “treaty” from “alliance” or “confederation.” Citing Virginia v. Tennessee, 148 U.S. 503, 519 (1893), Joseph Story’s Commentaries, and other case law, Judge Shubb concludes: “By any metric, the Agreement between California and Quebec” is insufficiently “consequential” to be a treaty. The agreement does not create an “alliance for purposes of peace and war,” does not provide for “mutual government,” does not represent a “cessation of sovereignty,” and does not confer “general commercial privilege[s]” such most-favored nation status.
The Compact Clause (Article I, Section 10, Clause 3) provides: “No State shall, without the Consent of Congress ... enter into any Agreement or Compact with another State, or with a foreign Power.” A literal reading would require states to obtain congressional approval before entering into any agreement among themselves, even if the arrangement affects no interest of the United States. “Rather than adopt that interpretation, the Supreme Court has limited its application to agreements that encroach upon federal sovereignty,” Judge Shubb observes.
However, before investigating that issue, the Court must first determine whether the California-Québec agreement is in fact a “compact” under Article I. Citing case law, Judge Shubb concludes the agreement contains none of the “classic indicia of a compact.” Specifically, there is no provision requiring reciprocal action for the agreement’s effectiveness, no regional limitation on potential membership, no joint organization or body exercising regulatory authority, and no prohibition on the agreement’s unilateral modification or termination.
Thus, according to Judge Shubb, the California-Quebec emission trading agreement does not violate the Treaty and Compact clauses because it is neither a treaty nor a compact under Article I.
Judge Shubb’s reasoning evokes the Obama administration’s argument that the Paris Agreement is not a treaty—a pact requiring the Senate’s advice and consent—because it is “non-binding” and “unenforceable” under international law. As the recent successful climate change lawsuits against the Dutch government and Heathrow Airport reveal, non-binding does not mean no legal consequence or risk.
Obama officials claimed Paris is the “most ambitious” climate agreement in history, yet somehow did not rise to the level of a treaty meriting Senate review. Climate campaigners have figured out how to keep treaty obligations fuzzy enough to evade constitutional challenge or scrutiny.
Suppose more, lots more, U.S. states and Canadian provinces establish cap-and-trade programs and join the California-Québec agreement. At what point would Judge Shubb acknowledge that such “harmonization” and “integration” affects “the interest of the United States”? How many subnational jurisdictions at home and abroad must coordinate their climate policies before he would acknowledge an encroachment on the President and Senate’s constitutional roles in treaty making?
“Soft treaties” of the sort popular with the Obama administration and California officials shape national policy while allowing the treaty makers to evade accountability to the national electorate. Paris bypassed the Senate’s constitutional role in treaty making. California’s climate diplomacy bypasses both the President and the Senate’s roles.
Not being a lawyer, I hesitate to advise DOJ how to proceed. This much seems clear. California wins if DOJ accedes to Judge Shubb’s view that the controversy is essentially definitional—a dispute over the meaning of “compact” and “treaty.” What DOJ needs to win—and it’s a heavy lift—is a jurisprudence of constitutional purpose. Simply put, the Framers did not create an accountable treaty making process so that states could weaken and negate it.