California has won the first lawsuit it filed against the Trump administration—without going to trial.
A federal judge issued summary judgment Wednesday that the Department of the Interior has illegally suspended an Obama-era rule that could increase costs for the coal industry, but the court won't require the rule's restoration.
The valuation rule, as it’s known, revised the formula under which fossil companies must pay royalties for the oil, natural gas or coal they extract from federal land. After it went into effect January 1st, it was expected to raise costs for those companies, and especially for coal.
The industry sued, arguing the new rule was too vague and complex, and the Department of the Interior said until the litigation resolved it would go back to the old formula. The judge found no legal basis or precedent for the administration to skip the official public process necessary to undo a federal rule from taking effect.
"Defendants' interpretation would allow the agency broad latitude to delay implementation long after a rule was formally noticed to the public as taking effect," the order says.
According to the lawsuit from California and New Mexico, states would stand to gain $18 million annually under the new formula.
But the court did not require the rule to re-take effect. The Department of the Interior is in the process of repealing the Obama valuation rule entirely, which could take effect next month. The judge said to require companies to comply with the rule for a matter of weeks would be "unduly disruptive."
The administration did not immediately respond to a request for comment about if it would appeal the ruling.
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