A lawsuit case was filled June 28, 2011 by litigation counsel, Smith Valliere, against Governor Cuomo, the Department of Environmental Conservation (DEC) and the New York State Energy and Research Development Authority (NYSERDA) for contracting an allegedly unconstitutional carbon emissions “cap-and-trade” program.
This program known as the Regional Greenhouse Gas Initiative (RGGI) aims to reduce greenhouse gas emissions. It regulates power plants activities and requires them to purchase allowances or credits to be allowed to emit a certain amount of carbon dioxide.The regional green alliance was formed by 10 northeastern states, including New York. Each state issues a number of allowances that is equal to their specific ceiling for that year and sells those allowances in a joint auction. Power facilities must acquire sufficient allowances to equal their actual carbon emissions. If the power generators do not successfully bid for the allowances they need in order to run their plants, they must purchase allowances from their competitors at a premium price.
This competitive bid price strategy can cause a lot of implications for the consumer. Many critics point out that the power generators pass the full cost of the allowances on to consumers by raising the cost of electricity. Implicitly, the states participating in RGGI imposed an unlawful and illegal tax on purchasers of electricity. The lawsuit estimates that New York State has collected over $320 million in unauthorized taxes from this massive regulatory program.
While 10 states signed the RGGI pact, New York State’s auction scheme differs from other states. Governor Cuomo is implementing this program without prior approval from his State legislature; an unlawful indiscretion that is going unnoticed by Mark W.Smith. It is no secret why media has been calling Smith, founder of Smith Valliere, “one of the fastest rising legal stars in the country.”
Commenting on the purpose of his firm’s lawsuit, Smith said that “our lawsuit is not cap-and-trade pro or against. What our lawsuit is about is pro-democracy, pro-representative government. Whether you like RGGI, whether you dislike RGGI, this is not the point. The point is that New York residents who pay this tax bill should be heard in a form of legislature either for or against by the New York State legislature.”
This lofty pursuit from Smith shows that he not only empowering the people in democracy but to empower democracy itself.