The case centered on federal guidance documents — OMB's Circular A-4 and EPA's Guidelines for Preparing Economic Analyses — that direct agencies to apply 'discount rates' when analyzing the costs and benefits of proposed regulations. This economic tool translates future dollar values into present-day terms, based on the principle that 'a dollar today is generally more valuable than a dollar tomorrow.' The 18 plaintiffs, all California minors, alleged these policies systematically undervalue future environmental benefits, leading to weaker climate regulations that harm children disproportionately.
The court firmly rejected the plaintiffs' equal protection theory, finding no evidence of discriminatory intent. 'The record supplies no basis to infer that the Discounting Policies recommend positive discount rates "because of" their allegedly "adverse effects" on children,' Smith wrote. The court emphasized that children are present-day consumers just like adults, noting they 'hold jobs,' 'eat at restaurants,' and 'consume online content.' Smith explained that 'to the extent the Discounting Policies reflect a preference for present-day consumption over future consumption, they favor present-day consumption by children as well as adults.'
In particularly sharp language, the court dismissed the discrimination claim as legally baseless: 'The mere fact that the Government's facially neutral Discounting Policies have a disproportionate impact on children does not mean that they violate the Equal Protection Clause.' Smith noted that neither Circular A-4 nor the EPA Guidelines 'so much as mentions children in their discussions of discounting,' calling the plaintiffs' discrimination allegations 'mere legal conclusions couched as facts.'
The lawsuit began in 2023 in the Central District of California, where U.S. District Judge Michael W. Fitzgerald initially dismissed the case on redressability grounds. After granting the plaintiffs one opportunity to amend, Fitzgerald dismissed again in 2024, this time finding failures in injury-in-fact and causation. The judge warned that any future motion to dismiss would be 'granted without leave to amend.'
The court was equally skeptical of the plaintiffs' causation theory, which required a complex chain of assumptions about future EPA action. Smith outlined six speculative links needed to connect the discounting policies to the plaintiffs' alleged climate harms, including that 'the EPA will consider promulgating a rule regulating GHG emissions' and that it will 'promulgate the rule in reliance on the RIA's discounted future costs and benefits.' The court noted that current administration guidance actually directs the EPA to limit consideration of greenhouse gas emissions to 'the minimum amount necessary to satisfy statutory requirements.'
The Ninth Circuit also rejected the plaintiffs' request for declaratory relief, finding it foreclosed by circuit precedent in Juliana v. United States. In that 2020 decision, the court held that a declaration that federal climate policies violated constitutional rights was 'unlikely by itself to remediate the plaintiffs' alleged injuries absent further court action.' Smith wrote that if such a declaration wouldn't remedy injuries from the government's decades-long fossil fuel policies challenged in Juliana, 'the same is true of a declaration holding unconstitutional non-binding regulatory guidance encouraging federal agencies to discount future costs and benefits.'
The decision aligns with recent rulings by other circuits rejecting challenges to federal climate policies on standing grounds. The Fifth and Eighth Circuits have dismissed similar cases challenging Biden administration climate policies, finding they relied on 'a chain of hypotheticals' about future agency action. 'The same problems defeat Plaintiffs' standing theory here,' Smith wrote, noting that 'whether the EPA will take some future regulatory action in reliance on some future RIA containing GHG estimates to which Plaintiffs might object remains to be seen.'