1 Pub.L. 101–549, 104 Stat. 2399 (1990) (codified at 42 U.S.C. §7545(k) (“Reformulated gasoline for conventional vehicles”)); California Phase 3 Reformulated Gasoline Regulations, Cal. Code regs. tit. 13 §§2250–2273 (2003).

2 Releases of conventional gasoline typically do not threaten drinking–water supplies because the components are not highly soluble and biodegrade relatively quickly. By comparison, MTBE is highly soluble in water and biodegrades slowly, so it can reach deep and also relatively distant aquifers quickly. It has a foul turpentine–like taste and a smell detectable at extremely low levels. Its cleanup is costly and time–consuming.

3 Governor of California, Exec. Order D–5–99, March 25, 1999.

4 Methanex Corp. v. United States, Final Award, pt. IID, para. 3 (nafta Ch. 11 Arb. Trib. August 3, 2005) [hereinafter Final]. Except as noted, the NAFTA documents cited in this case report are available at <http://www.naftalaw.org>.

5 Statement of Claim, paras. 2–8 (Dec. 3, 1999), Final, supra note 4.

6 North American Free Trade Agreement, Dec. 17, 1992, Can.–Mex.–U.S., 107 Stat. 2006, 32 ILM 289 & 605 (1993).

7 Methanex Corp. v. United States, Partial Award on Jurisdiction and Admissibility (nafta Chap. 11 Arb. Trib. Aug. 7, 2002). At the time of the partial award, the arbitral tribunal comprised William F. Rowley, Warren Christopher, and Veeder V. V. (president).

8 See supra note 4. At this stage W. Michael Reisman had replaced Warren Christopher on the arbitral tribunal.

9 The Report to the Governor and Legislature of the State of California as Sponsored by SB 521 and associated materials are available at <http://tsrtp.ucdavis.edu/mtberpt/>.

10 See supra note 3.

11 Methanex alleged that the executive order was arbitrary and lacked substantive fairness because the University of California report on which it was based had reached “unfounded conclusions” and offered “unjustifiable recommendations.” Methanex Statement of Claim, paras. 31, 34.

12 Id., para. 35.

13 Statement of Defense of Respondent United States (Aug. 10, 2000), Final, supra note 4.

14 As evidence, Methanex documented that Gray Davis, during his campaign for governor, had dinner with top executives at ADM headquarters and thereafter received substantial campaign contributions from ADM. After the executive order, ADM announced plans to build an ethanol facility in California, characterizing ethanol as a “domestic American product” and methanol and MTBE as “foreign products.” Claimant Methanex Corporation’s Draft Amended Claim (Feb. 12, 2001), Final, supra note 4.

15 nafta Article 1101 provides, in pertinent part: “This Chapter applies to measures adopted or maintained by a Party relating to: (a) investors of another Party; (b) investments of investors of another Party in the territory of a Party . . . .”

16 See John, H. Knox, The 2005 Activity of the NAFTA Tribunals, 100 AJIL 429 (2006)Google Scholar.

17 See Robert, Collier & Glen, Martin, Canadian Firm Sues California over MTBE,Google Scholar Chron S.F.., June 18, 1999, at Al (reporting reaction of U.S. Sierra Club to Methanex notice of intent to file claim); NAFTA Suits Harm Environment, Critics Charge, Toronto Star, June 17, 1999, Business (Edition 1) (reporting reaction of Sierra Club of Canada).

18 Ethyl Corp. v. Canada, Award on Jurisdiction (NAFTA Chap. 11 Arb. Trib. June 24, 1998), 38 ILM 537 (1999). This case was settled. See National Round Table on the Environment and the Economy, Managing Potentially Toxic Substances in Canada:A State of the Debate Report, App. 1.C (“MMT Case Study”) (2001).

19 S.D. Myers, Inc. v. Canada, Partial Award on Liability (NAFTA Chap. 11 Arb. Trib. Nov. 13, 2000) (discussed in case report by Charles H. Brower II at 98 AJIL 339 (2004)); Metalclad Corp. v. United Mexican States, Award (NAFTA Chap. 11 Arb. Trib. Aug. 30, 2000) (discussed in case report by William S. Dodge at 95 AJIL 210 (2001)).

20 See, e.g., Int’l Inst. Sustainable Dev., Private Rights, Public Problems: A Guide to nafta’s Controversial Chapter on Investor Rights 15–36 (2001)Google Scholar. Moreover, one tribunal had reasoned that, on certain facts at least, a violation of the national treatment obligation of Article 1102 was also a violation of Article 1105. S.D. Myers, para. 266.

21 E.g., NOW with Bill Moyers: Trading Democracy (Public Broadcasting System Feb. 1, 2002) (transcript available at <http://www.pbs.org/now/transcript/transcript_tdfull.html>); Anthony VanDuzer, J., Investor–State Dispute Settlement Under NAFTA Chapter 11: The Shape of Things to Come? 1998 Can. Y.B. Int’l L. 263 Google Scholar.

22 U.S. Memorial on Jurisdiction and Admissibility 47–49 (Nov. 13, 2000), Final, supra note 4.

23 Article 1128 authorizes any NAFTA party, after written notice to the disputing parties, to make a submission to a tribunal on “a question of interpretation of this Agreement.”

24 United Mexican States, [Article 1128 Submission on Jurisdiction] (n.d.), Final, supra note 4; Canada, Second Submission Pursuant to NAFTA Article 1128 (Apr. 30, 2001), Final, supra note 4.

25 Methanex Counter–memorial on Jurisdiction 47–51 (Feb. 12, 2001), Final, supra note 4.

26 Pope & Talbot v. Canada, Motion to Dismiss ( Chap. 11 Arb. Trib. Jan. 26, 2000) (discussed in case report by David, A. Gantz at 97 AJIL 937 (2003)Google Scholar).

27 S.D. Myers, Sep. Op. Schwartz, Arb., paras. 47–64.

28 Although the Pope & Talbot Januzry 26, 2000, award (motion to dismiss) dealt with jurisdiction and the “relating to” language, the argument disposed of there was Canada’s assertion that measures regulating goods do not relate to an “investment.” In Methanex, the regulation of MTBE clearly addresses a good, but that is not the distinction on which the analysis turns.

29 The tribunal cites the amicus brief filed by the International Institute for Sustainable Development.

30 NAFTA Free Trade Commission, Notes of Interpretation of Certain Chapter 11 Provisions, pt. B (July 31, 2001) (“Minimum Standard of Treatment in Accordance with International Law”), at <http://www.dfait–maeci.gc.ca/tna–nac/NAFTA–Interpr–en.asp> [hereinafter Notes of Interpretation].

31 Article 1131 (2) provides: “An interpretation by the [Free Trade] Commission of a provision of this Agreement shall be binding on a Tribunal established under this Section.”

32 It should be noted in passing that the United States, in negotiating other free trade agreements, has hewed closely, but not precisely, to the NAFTA Free Trade Commission language. For example, Article 10.5 of the Central American–Dominican Republic–United States Free Trade Agreement, Aug. 5, 2004, at <http://www.fas.usda.gov/itp/CAFTA/cafta.html>, repeats the Free Trade Commission text almost verbatim but then adds specific subparagraphs defining “fair and equitable treatment” by reference to “the principle of due process,” and “full protection and security” by reference to a minimum international standard of police protection.

33 Most notably, the Methanex tribunal accepted briefs amicus curiae and opened tribunal proceedings to public observation. On amicus briefs, the tribunal decided (January 15, 2001) that it had discretionary authority to allow amicus submissions under Article 15(1) of the uncitral Arbitration Rules. Subsequently, a joint motion to the tribunal by Canadian and U.S. nongovernmental organizations petitioning for amicus curiae status (Jan. 31, 2003) prompted the NAFTA party governments to adopt a statement clarifying that nothing in Chapter 11 bars amicus participation and recommending procedures for tribunals to accept and rule on petitions for amicus status. NAFTA Free Trade Commission, Statement of the Free Trade Commission on Non–disputing Party Participation (Oct. 7, 2003)Google Scholar, at <http://www.dfait–maeci.gc.ca/nafta–alena/Nondisputing–en.pdf>. The parties to the arbitration agreed to allow public observation of tribunal hearings through closed–circuit television. See also Notes of Interpretation, supra note 30, pt. A (committing the NAFTA governments to make most documents publicly available unless subject to specific confidentiality protections, as in the case of confidential business information).