Washington Supreme Court Upholds Agricultural Fuel Exemptions Under Climate Law
On June 25, 2026, the Washington State Supreme Court issued a unanimous decision affirming the Department of Ecology’s authority to permit agricultural fuel exemptions within the state’s Climate Commitment Act framework. The ruling resolved a high-stakes legal battle brought by farming and trucking organizations, which had contended that fuel surcharges tied to emissions compliance were unfairly imposed on agricultural users despite statutory exemptions.
The case, *Washington Farm Bureau v. Department of Ecology*, stemmed from the 2021 Climate Commitment Act, which established a cap-and-invest program targeting major greenhouse gas emitters. While the law explicitly shields fuel used “exclusively for agricultural purposes by a farm fuel user” from emissions compliance obligations, fuel suppliers began adding surcharges to wholesale fuel prices—including for agricultural-grade fuel—to recoup their own compliance costs.
Legal representation for the plaintiffs came from Ballard Spahr LLP, with the Washington Farm Bureau and Washington Trucking Association jointly challenging Ecology’s implementation rules. They argued that the agency had not established a clear process for farmers to claim their exemption and offset the resulting financial strain. After Ecology declined a formal petition to revise the rules and provide refunds, the Farm Bureau filed suit, accusing the department of acting arbitrarily and overstepping its statutory mandate.
The Washington Attorney General’s Office defended the state’s position. Thurston County Superior Court Judge Christopher Lanese dismissed the case with prejudice in July 2024, prompting an automatic appeal to the state’s highest tribunal.
Justice Raquel Montoya-Lewis authored the opinion for the full court, affirming the lower court’s ruling. The justices concluded that the Climate Commitment Act designates fuel suppliers—not end-users—as the primary regulated entities. Because the law does not assign Ecology the power to set fuel prices or regulate sales, the department lacks authority to prevent suppliers from imposing surcharges to absorb compliance expenses.
“Suppliers retain discretion over how to distribute compliance costs,” Montoya-Lewis wrote, “including whether to apply surcharges across all fuel types or restrict them to nonexempt categories.”
The court emphasized that legislative action—not agency rulemaking—is the appropriate venue for broader policy choices, such as whether to limit surcharges on agricultural users or provide direct compensation. Earlier reporting noted that lawmakers had begun exploring fixes, with a 2025 Senate bill proposing to extend the current five-year sunset on agricultural exemptions and explore targeted relief mechanisms.
While the final vote was 9–0 on the legal questions, internal deliberations over a single footnote in the opinion revealed deeper philosophical divides. The footnote, which addressed judicial deference to agency interpretation, sparked discussion among justices with differing views on the proper scope of judicial intervention in administrative rulemaking. Its inclusion delayed the opinion’s release by over a month, though no justice dissented from the ultimate holding.
Court Delays Ruling Over Footnote Dispute
Concurring opinions attached to the ruling indicate the publication of the decision was postponed for more than a month due to a disagreement regarding a footnote. Justice Montoya-Lewis, who is departing the court at the end of her term in January 2027, had initially included a footnote acknowledging her law clerk, Bailey Warrior Pahang, for assistance in drafting the opinion. A majority of the sitting justices refused to sign the document unless the acknowledgment was removed, resulting in several pointed concurring opinions from the bench.
Justice Steven C. González filed a concurrence, joined by Justices Montoya-Lewis and Salvador A. Mungia, expressing regret that the footnote was excised. González opened his opinion with the Japanese proverb Deru kui wa utareru ("the post that protrudes will be hammered down") and criticized the Court’s rigidity regarding the expression of gratitude.
“I lament that we are not flexible enough to support a different cultural tradition,” González wrote. “Unfortunately, those who are exceptional, outspoken, or challenge conformity face criticism, jealousy, or pressure to conform. Not all of our traditions are venerable.”
Justice Pro Tempore Barbara A. Madsen authored a separate concurrence to defend the majority’s insistence on removing the footnote. Joined by Justice Pro Tempore Mary I. Yu, Madsen argued that an appellate majority opinion is an “institutional product” owned by the Court as a whole, not by any individual justice or clerk. She revealed that six justices had been prepared to formally file a concurrence and dissent over the issue before the footnote was removed.
“At best, attribution to a law clerk in a majority opinion may create confusion and invite questions that are left unanswered,” Madsen wrote, noting that it “may erroneously lead some to believe that the law clerk decided the case.”
Justice Sheryl Gordon McCloud expressed frustration regarding the internal dispute. “The debate in this court over a withdrawn footnote has now delayed the issuance of this opinion for more than a month,” she wrote in a concurrence signed by Justices Madsen and Yu.
“The debate about whether to adopt one particular academic convention for expressing gratitude... is certainly interesting. But there’s another debate going on in this case, and it is also interesting: whether a Department of Ecology rule implementing an aspect of the Climate Commitment Act is lawful. Our main job is to resolve that legal dispute.”
With the legal dispute now resolved, Ecology’s current rules stand, and Washington farmers seeking relief from CCA-related fuel surcharges will need to direct their efforts toward the state legislature.