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Judge Denies NPCAs Motion for Preliminary Injunction in California Emissions Fee Case

August 16, 2005

Judge Denies NPCA’s Motion for Preliminary Injunction in California Emissions Fee Case
At a April 22 hearing in a California Superior Court in Sacramento, Judge Raymond M. Cadei denied NPCA’s motion for a preliminary injunction in NPCA v. CARB, thereby permitting the Air Resources Board to collect VOC emissions fees from NPCA members under the state’s AB10X Emissions Fee Program.
The fees—which range from $14,000 to $750,000—are assessed against manufacturers of architectural coatings and consumer products whose emissions are 250 tons or more per year and are assessed on an annual basis. Until the hearing—and at NPCA’s urging—CARB had voluntarily agreed not to collect these fees from NPCA members.
Procedurally, this is a ruling on the motion for a preliminary injunction and it is not the final decision on the merits of the case, according to NPCA. Although this is an “appealable” decision, NPCA contends that an appeal at this juncture would be futile because the standards the appellate court applies to a ruling on a motion for preliminary injunction are very deferential to the trial court, as opposed to the standard that will apply on appeal from a final judgment. Accordingly, NPCA plans to expedite the final adjudication of the case at the trial court level, working diligently to bring this case to a favorable resolution.
As a result of the ruling, NPCA members’ obligation to pay these fees is no longer suspended and member companies who have not paid the 2004–2005 fee must submit payment. In preliminary discussions with CARB, the agency indicated that these payments should be made in three to four weeks from the hearing date.
At the trial level, NPCA will remain steadfast in its argument that the VOC emissions “fee” is really a masked tax. Certain criteria must be met in order for the state to levy regulatory fees, and NPCA maintains that these “fees” eschew these criteria by a wide margin. NPCA is also arguing that even if

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