In 2007, Minnesota enacted the Next Generation Energy Act (NGEA), which sets Draconian goals for greenhouse gas reductions; establishes one of the nation’s most aggressive array of renewable-energy standards; and provides that “no person” may contribute to or increase “statewide power sector carbon dioxide emissions.” Thus, the law directly affects the electric power industry, which is regulated by the federal government and operated cooperatively to ensure hourly accuracy as to supply and demand in such a manner that neither the supplier nor the consumer knows the destination or origins of the electricity it generates or uses.
North Dakota and others sued contending that the NGEA violates the “dormant Commerce Clause,” which bars states from unduly burdening interstate commerce. In April of 2014, a Minnesota federal district court ruled that the law’s “plain language applies to power and capacity transactions occurring wholly outside of Minnesota's borders[,]” and therefore is “a per se violation of the dormant Commerce Clause.”
On May 16, 2014, Minnesota filed a notice of appeal to the United States Court of Appeals for the Eighth Circuit. On May 29, 2014, North Dakota cross-appealed. On November 4, 2014, Minnesota filed its opening brief. On January 20, 2014, North Dakota filed its answer brief. On January 27, 2015, MSLF filed a friend of the court brief on behalf of the Montana Coal Council and MSLF’s members in support of North Dakota. The Eighth Circuit heard oral argument on October 21, 2015.
On June 15, 2016, the Eighth Circuit issued a decision affirming the district court. Judge Loken opined that Minn. Stat. § 216H.03 violates the dormant Commerce Clause because it has an extraterritorial reach—controls conduct in other states. North Dakota v. Heydinger, 825 F.3d 912, 913–23 (8th Cir. 2016). Judge Murphy wrote separately because she disagreed that Minn. Stat. § 216H.03 has an extraterritorial reach. Id. at 923–27 (Murphy, J., concurring). Rather, Judge Murphy opined that the Federal Power Act preempts Minn. Stat. § 216H.03. Id. Judge Colloton also opined that Minn. Stat. § 216H.03 is preempted by federal law, i.e., the Federal Power Act and Clean Air Act. Id. at 927–29 (Colloton, J., concurring)