WASHINGTON, April 4 – The New York Court of Appeals has rejected a challenge by three small business owners to the State’s involvement in RGGI, the Northeast Regional Greenhouse Gas Initiative.  The business owners had argued that the state legislature never authorized New York to join RGGI, and that therefore the governor had no authority to implement its cap-and-trade restrictions on carbon dioxide emissions from power plants.  They contended that the resulting increases in electricity prices amounted to an illegal tax.

Last December the Appellate Division ruled that, despite the constitutional basis of the case, it amounted to what is known as an “Article 78” proceeding and was therefore time-barred, since such cases must be brought within an extremely short time period.

The lead attorney for the plaintiffs, Mark W. Smith of Smith Valliere PLLC, stated: “Allowing the Governor to engage in a massive tax and spending program without legislative approval is improper on countless levels. It is a shame that the New York Court of Appeals chose not to address the merits of this clear abrogation of New York State’s Constitution."

Sam Kazman, general counsel of the Competitive Enterprise Institute and of counsel in the case, stated:  “RGGI itself is a very dubious policy measure, but to make matters worse in New York it’s become an illegal energy tax.  If this case becomes a precedent for avoiding such constitutional issues through questionable procedural loopholes, that may be the worst development of all.”