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Federal Courts Canít Regulate Greenhouse Gases under Common Law

By Katerina Milenkovski, Litigation News Associate Editor – September 9, 2011

For nearly 40 years, federal precedent has allowed states to sue others for air and water pollution coming across their borders under the federal common law of nuisance. An end of term decision from the U.S. Supreme Court curtailed this right, at least as far as complaints about greenhouse gases are concerned.

In Connecticut v. American Electric Power [PDF], the Court rejected claims by several states (and others) that courts may regulate greenhouse gas emissions from electric power plants as “nuisances” under federal common law. Instead, the Court left the matter to the Environmental Protection Agency (EPA).

Procedural History
The district court had originally dismissed the lawsuits [PDF], saying they presented non-justiciable political questions. On appeal, the Second Circuit reversed [PDF], finding that plaintiffs had stated a claim under the federal common law of nuisance. According to the Second Circuit, the Clean Air Act did not displace federal nuisance claims because the EPA had not yet taken action to regulate greenhouse gases.

The Court Splits on Standing
The first issue before the Court was whether the plaintiffs had standing to bring the lawsuit. The Second Circuit ruled that they did. The Supreme Court split 4–4 on this issue and thus upheld the appellate court’s exercise of jurisdiction. (See Editor Note.)

“The procedural wonk in me found it interesting that they couldn’t decide the standing issue,” says Robert L. Hines, San Francisco, a former cochair of the ABA Section of Litigation’s Environmental Litigation Committee. “The 4–4 split on standing means that the underlying ruling basically stands, but if you project Justice Sotomajor back into the mix, I think the majority would be in favor of standing,” continues Hines. “Obviously this is speculative, but it is significant in terms of future environmental cases.”

Court Unanimously Decides the EPA Should Regulate Greenhouse Gases
Turning to the merits, the members of Court participating unanimously held that the federal Clean Air Act gives the EPA the exclusive authority to regulate greenhouse gas emissions, and that the EPA is in a better position to do so than the courts. The Court said, “The Clean Air Act and the EPA actions it authorizes displace any federal common law right to seek abatement of carbon-dioxide emissions from fossil-fuel fired power plants.”

The Court went on to note that the Clean Air Act provides a means to set limits on emissions of carbon dioxide and the EPA is currently engaged in a rulemaking to do just that. This is the same relief the plaintiffs were seeking by invoking federal common law, and the Court saw “no room for a parallel track.”

The plaintiffs urged that federal common law remain in play until the EPA actually exercises its regulatory authority. The Court disagreed, noting that “the critical point is that Congress delegated to EPA the decision whether and how to regulate carbon dioxide emissions from power plants; the delegation is what displaces federal common law. Indeed, were EPA to decline to regulate carbon dioxide emissions altogether at the conclusion of its ongoing § 7411 rulemaking, the federal courts would have no warrant to employ the federal common law of nuisance to upset the agency’s expert determination.”

“This statement is consistent with an 8–0 ruling but is an interesting statement nonetheless,” observes Hines. “Even if the EPA declines to regulate greenhouse gases, the Court is saying that plaintiffs can’t fundamentally attack what the EPA decides to do.”

“I was not surprised by this opinion—it is very straightforward,” says John M. Barkett, Miami, former cochair of the Section’s Environmental Litigation Committee and former member of the ABA Standing Committee on Environmental Law. “One line in the opinion is critical and really set the tone for the ultimate conclusion—it’s the second sentence of the opinion, which says ‘[a]s relief, the plaintiffs ask for a decree setting carbon-dioxide emissions for each defendant at an initial cap, to be further reduced annually.’ As soon as I read that, it was unmistakably clear to me what the conclusion would be,” continues Barkett.

“The relief the plaintiffs sought was regulatory,” offers Barkett. He questions why a federal judge would ever set emission limits for individual power plants as, “that’s what EPA is supposed to do under the Clean Air Act.”

The Preemption Issue Remains Unresolved as It Pertains to State Law Claims
“The issue I see lurking in the background is whether or not state law claims could survive,” says Barkett. “In Section V of the opinion, the Court says ‘[n]one of the parties have briefed preemption or otherwise addressed the availability of a claim under state nuisance law. We therefore leave the matter open for consideration on remand.’”

Barkett is not ready to predict a flurry of state law actions. He believes people will wait to see what happens with respect to state law claims on remand to the Second Circuit. “My guess is that we’ll see plaintiffs looking for a different form of relief from what is addressed under the Clean Air Act,” to try to avoid the same outcome as in the Supreme Court case.

“Leaving the regulation of greenhouse gases first to Congress and then to the EPA was the right thing to do,” says Karen Aldridge Crawford, Columbia, South Carolina, cochair of the Air Subcommittee of the Section’s Environmental Litigation Committee. “Unfortunately, I do think there will be future law suits because of the open question regarding whether the Court’s ruling on preemption only affects interstate law suits or it affects state nuisance law suits as well. I suspect we’ve only just seen the beginning.”

Barkett notes that several other preemption cases have been decided recently. The standard that appears to have emerged is whether state nuisance claims stand as an obstacle to accomplishing the full purposes and objectives of federal law. That remains to be seen.


Editor Note: Justice Sotomayor did not participate in the decision because she was a member of the Second Circuit at the time it issued the opinion on appeal.


Keywords: litigation, environmental litigation, Supreme Court, greenhouse gases, climate change, carbon dioxide, federal common law of nuisance, preemption


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