The California Air Resources Board (CARB) asked Judge Lawrence O'Neill of the U.S District Court for the Eastern District of California to stay the injunction he issued on Dec. 29, 2011, that halted CARB's implementation and enforcement of the California Low Carbon Fuel Standard (LCFS). Judge O'Neill issued the injunction because he had determined that the LCFS violates the commerce clause of the U.S. Constitution. Earlier this month, on Jan. 5, CARB filed an appeal of Judge's O'Neill's decision with the U.S. Court of Appeals for the 9th Circuit.

"Judge O'Neill's ruling clearly established that the LCFS significantly overreaches by attempting to regulate commerce in states outside of California," said Renewable Fuels Association (RFA) President and CEO Bob Dinneen and Growth Energy CEO Tom Buis. "We are confident Judge O'Neill's ruling will stand, particularly as he outlined other specific actions the state of California could take to regulate carbon emissions that would not infringe upon the business practices of entities outside of California's borders."

In its December ruling, the District Court accepted two of the arguments challenging the constitutionality of the LCFS. Specifically, the court held:

• That the LCFS discriminates against interstate commerce in ethanol because it assigns worse carbon-intensity scores to Midwest ethanol than to California ethanol; and
• That the LCFS attempts to regulate conduct occurring wholly outside the borders of the state of California and is thus impermissibly extraterritorial.

In its opinion, the Court held that CARB "cannot take 'legal and political responsibility' of commerce occurring outside of California, even if the products of that commerce ultimately are sold in California."