Toward a Principled Interpretation of the Commerce Clause

National Security Letters (NSLs) are administrative subpoenas that the FBI uses to demand information from Internet service providers without prior judicial approval. They almost always include nondisclosure orders, commonly called “gags,” which prohibit the recipient from discussing the letter’s contents or even its mere existence. Courts and commentators have expressed concern that these gags may be overbroad prior restraints that violate the First Amendment and shroud government surveillance in undue secrecy. On November 30, 2015, an NSL gag order was lifted in full for the first time after a federal district judge found no “good reason” to retain it. This Note considers the related rights of NSL targets. It argues that the FBI should provide notice of NSL investigations to targets and the public once government interests in secrecy abate. Specifically, once a nondisclosure order is lifted, thereby authorizing the recipient of the NSL to reveal any information about it that she desires, the government should disclose that same information. Enhancing transparency about government surveillance in this manner would not risk harm or cause undue administrative burden. It would harmonize with longstanding, closely related domestic criminal statutes. And it would advance core principles that underlie the Fourth Amendment. Moreover, the First Amendment offers ready balancing tests that can easily and reasonably be applied to guide government notice practices. DOI: http://dx.doi.org/10.15779/Z38DK0M © 2016 Rebecca Wexler. † Rebecca Wexler is a member of the Yale Law School J.D. Class of 2016 and a Fellow of the Information Society Project. This Note received the 2015 Judge William E. Miller Prize for best paper concerning the Bill of Rights at Yale Law School. It also won first place in the 2015 Berkeley Technology Law Journal student writing competition. The author is deeply grateful to Akhil Reed Amar for his inspiration and generous guidance. Orin Kerr, Jonathan Manes, Peter Swire, and Lee Tien provided thoughtful comments on earlier drafts. Jack Balkin, Philip Bobbitt, Cindy Cohn, Mark M. Jaycox, Daniel Solove, and Patrick Toomey offered helpful feedback over email and conversations, as did Jane Ostrager and Bradley Silverman. The author especially thanks Waqas Akmal, Erica Fisher, and the editors of the Berkeley Technology Law Journal for their support and excellent editorial suggestions. 326 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 31:1

I. INTRODUCTION II. THE CURRENT STATUS OF CALIFORNIA'S CAP-AND-TRADE PROGRAM III. THE BASICS OF LINKAGE IV. THE BENEFITS AND COSTS OF LINKAGE A. Benefits of Linkage B. Costs of Linkage 1. Costs Associated With Any Linkage 2. Costs Associated With Linking With a Poorly Designed Cap-and-Trade Market V. DESIGNING CALIFORNIA'S CAP-AND-TRADE MARKET A. California Should Link With Other Well-Designed Cap-and-Trade Markets B. California Should Seek to Avoid Linkage With Poorly Designed Cap-and-Trade Markets C. How to Avoid Linkage With Poorly Designed Cap-and-Trade Markets 1. Proposed Set Standards Law 2. Proposed Discretionary Discount Law 3. Evaluating Proposed Laws Under the Dormant Commerce Clause 4. Analyzing the Set Standards Law Under the Dormant Commerce Clause 5. Analyzing the Discretionary Discount Law Under the Dormant Commerce Clause 6. Seeking Congressional Approval to Enact the Set Standards Law or Discretionary Discount Law VI. CONCLUSION I. INTRODUCTION In the absence of federal leadership, states have banded together into regions to address the issue of climate change. (1) This patchwork approach has raised serious legal questions. As states seek to create independent cap-and-trade markets, they must avoid constitutional pitfalls. One issue that has yet to gain much attention is the question of how these independent regional cap-and-trade markets will, or will not, interact. Each of these regional groups has chosen to create its own cap-and-trade market that will trade in credits equaling one metric ton of C[O.sub.2]e. (2) Because these regional markets will trade in credits of equal carbon value, any carbon credit could be traded between regional markets and satisfy any regional market's carbon requirements. This trading between cap-and-trade markets--commonly referred to as linkage--is likely to take place through formal agreements. Yet it is possible that one state or regional group could refuse to link and refuse to honor another state's carbon credits. It is also possible that one state will honor another state's carbon credit only at a fraction of its stated carbon value. Given that carbon credits are, at first glance, a fungible good, (3) this type of restraint on interstate trade appears to be directly at odds with the Dormant Commerce Clause. And yet, there is a good reason why a state might want to avoid linkage with another state. The differences in the way regional markets are designed have a substantial effect on the value of the carbon credits. In a cap-and-trade scheme, the market auctions or distributes a certain number of carbon credits that equal a cap. Regulated entities can then conduct a cost-benefit analysis and choose to either purchase carbon credits or reduce their greenhouse gas emissions. If a cap-and-trade market is not well designed--due to poor monitoring and enforcement, low standards for carbon offsets, or through excessive use of safety valves--more greenhouse gases will be emitted than are allowed under the cap. This could undermine the market's ability to reduce greenhouse gases to the desired level and cause carbon credits to become undervalued, reducing the effectiveness of market signals. Linking with a poorly designed cap-and-trade market allows these deficient carbon credits to flood an otherwise sound market. The end result is to decrease the effectiveness of two cap-and-trade markets instead of one. This Comment will focus on issues that arise with linkage and poorly designed cap-and-trade markets. With one regional cap-and-trade market already in action, and several more in the planning and design phases, it is important to consider how to structure these markets in order to allow for beneficial trade while protecting market integrity. …

The US dormant commerce clause doctrine allows for a true balancing test between legitimate state objectives and the burdens placed upon commerce.However, the doctrine relies strongly on ‘pre–screening’ facts to determine whether or not a law is discriminatory. The difference between a law that is de facto discriminatory and one which is ‘even handed’ but incidentally burdens commerce is a fine line, and it is not clear in the US practice that the courts have been able to give the doctrine a consistent effect over time.

Our goal here is two-fold: first, to show that a climate change lens can make us understand that some apparently state treatment of like products is in fact differential treatment of different products, and, second, that there is precedential basis for courts to adopting the climate change lens and hence adopt a more deferential posture toward state climate change initiatives. We are focused on two kinds of state initiatives. The first is, as in California’s low carbon fuel standard, when a state assigns a cost of carbon to a fuel based on life cycle greenhouse gas emissions, with the near inevitable result that otherwise identical fuels produced far away and out-of-state will have a higher assigned carbon cost than fuels produced in-state. The second is, as in a number of state Renewable Portfolio Standards, where a state requires or incentivizes the satisfaction of the RPS by renewable fuel production in the state rather than through sole reliance on imports. Viewed outside the climate change lens, both these situations involve discrimination against like products. Viewed through a climate change lens, they do not. The climate change lens – and whether courts choose to see through it – matters a great deal.We view this lens as having three aspects. First, the GHG and hence climate change impact of any product depends on the lifecycle emissions associated with the product. A state’s residents do not confront merely an ideological or philosophical problem in climate change. It is instead a tangible — and for some states existential — problem in terms of the economic and environmental impacts associated with such fundamental health and welfare issues as coastal flooding, drought, wildfires, and invasive species. A court should understand that the lifecycle emissions of a product directly implicates traditional state police power concerns and in that sense should be understood as an integral characteristic of the product. Thus, ethanol from Ohio is not the same product as ethanol from California. California’s use of the Ohio ethanol means more net GHG emissions and a greater likelihood of real, material climate change impacts in California that will have impacts on the material circumstances of the lives of Californians. We believe this part of the climate change lens finds support in, even flows from, the reasoning adopted by the Supreme Court in Massachusetts v. EPA.Second, energy produced in-state is not necessarily the same or a like product as energy produced elsewhere and then imported because the production itself may have consequences for the environment within the state and hence for the health and welfare of state residents. When a state requires or incentivizes the production of a non-polluting renewable source within a state to meet part of state energy needs, a corresponding amount of dirtier, polluting energy production within the state is much more likely to cease as a consequence. Thus, imported wind power is different, is an unlike product, to locally required or incentivized wind power because a characteristic of the latter, but not the former, is that former it delivers a reduction in local air pollutants and consequent reduction in harms associated with local air pollutants.Third, local energy is a different product seen from a climate change lens because it is more robust with respect to climate-change-related interferences with transport and transmission — interferences from such things as extreme weather. This part of the climate change lens one might call a climate change adaptation lens. What would it mean if courts were to adopt the climate change lens? It would not mean that automatically all climate change or other environmentally-oriented state legislation would be upheld where distinctions were made between in-state and out-of-state products. Instead, the lens would free up courts not to impose the near strict scrutiny of facially discriminatory state legislation that has dominated much Dormant Commerce Clause jurisprudence. It would allow the courts to engage in a more contextual, and more deferential but not toothless, review — a balancing test that courts routinely use to decide Dormant Commerce Clause cases where discrimination does not amount to simple economic protectionism.

This piece considers the merits of applying the Mathews v. Eldridge balancing test when an elected judge threatens a litigant’s due process rights. We argue that this approach is particularly compelling in light of the Supreme Court’s 2009 decision in Caperton v. A.T. Massey Coal Co. In Caperton, the Supreme Court recognized that a litigant's due process may be violated if the judge harbors an objective probability of bias.” In perhaps his most vigorous dissent since joining the Court, Chief Justice Roberts posed over forty questions about the potential scope of the decision. Given the Court’s 2002 decision in Republican Party of Minnesota v. White, Justice Roberts has good reason to be concerned. In White, the Court ruled that once a state allows judges to be elected, it can’t muzzle them - candidates for judicial office have the right to announce their views on contentious issues of the day. Taken together, Caperton and White provide the makings of a constitutional crisis. On the one hand judges have a First Amendment right to say almost anything, even if it seems to effectively bind them in future cases. On the other hand, litigants have a due process right not to face a judge whom a reasonable person may deem biased given his previously advertised views. This Article argues that weighing the due process violation by using the reliable and flexible approach developed in Mathews v. Eldridge keeps both decisions intact, while protecting the rights of both the judicial candidates and the litigants.