Supreme Court Dismisses Federal Common Law Nuisance Suit for Greenhouse Gas Emissions

The Supreme Court has decided, 8-0, a case of great significance to industries that emit greenhouse gases (GHGs).  It ruled that the Clean Air Act (CAA) and recent initiatives by the Environmental Protection Agency (EPA) to regulate GHG emissions displace the federal common law of public nuisance for claims of injuries allegedly caused by emissions of carbon dioxide and other GHGs from large electric utilities.  American Electric Power Co. v. Connecticut, No. 10-174, issued June 20, 2011 (Connecticut).  The Court reversed a decision by the United States Court of Appeals for the Second Circuit, which had allowed such suits, but remanded the case to that court to consider whether the CAA also preempts the plaintiffs’ claims under state nuisance law.  Justice Sonya Sotomayor recused herself because she heard the case argued while she was a Second Circuit judge.

This decision is likely to have repercussions in the courts and Congress.  The Supreme Court’s rejection of the plaintiffs’ federal common law theory should cause the dismissal of similar federal nuisance law claims.  Moreover, because the Court’s decision rests in part on the EPA’s authority under the CAA to regulate GHGs emitted by stationary sources, it may impact the on going debate in Congress over such regulation.  In addition, whether the CAA preempts state law nuisance suits to remedy GHG emission remains an open question.  Furthermore, because the eight Justices were equally divided on jurisdictional issues, the Court’s decision left in place the Second Circuit’s holdings that plaintiffs had standing to assert climate change injuries in federal court, and that such claims are not “political questions,” which are beyond the constitutional authority of federal courts. 

HISTORY OF THE LITIGATION

In July 2004, eight states, the City of New York, and three private land trusts filed separate complaints in the federal district court in Manhattan against six major electric utilities.  The plaintiffs alleged that they were threatened with numerous climate change-related injuries caused by the defendant utilities’ carbon dioxide emissions.  They claimed that the defendants’ emissions constitute a “public nuisance” under federal common law or, alternatively, state common law, and sought an injunction controlling emissions from the defendants’ electric generating facilities. 

The district court dismissed the case in 2005, holding that the claims present a “political question” that the court lacks jurisdiction to decide.  Connecticut v. American Electric Power Co., 406 F. Supp. 2d 265 (S.D.N.Y. 2005), rev’d, 582 F.3d 309 (2d Cir. 2009).  On plaintiffs’ appeal, the Second Circuit reversed.  The two-judge panel (Judge Sotomayor having been elevated to the Supreme Court before the case was decided) rejected the utilities’ contentions that the litigation presented a non-justiciable “political question”; that the plaintiffs lacked standing to sue; that plaintiffs failed to articulate a valid claim under federal common law; and that federal statutes or regulations precluded plaintiffs from bringing climate change-related claims under federal common law (see VNF Alert of September 24, 2009).  The Supreme Court subsequently granted the defendants’ request that it review the Second Circuit’s decision.

THE SUPREME COURT’S DECISION

Although the eight participating Justices left intact the threshold jurisdiction rulings by the Second Circuit because of their equal division on the questions of standing and justiciability, they were unanimous in holding that the CAA “displaces” the federal common law of public nuisance with respect to plaintiffs’ claims.  Acknowledging that state governments have previously invoked federal common law to mitigate pollution from other states, the Court cautioned that it has never decided whether private citizens or city governments (such as the plaintiffs in Connecticut) can bring similar claims, and has never held that a state “may sue to abate any and all manner of pollution originating outside its borders.”  Moreover, the Court emphasized that federal common law exists only to address “areas of national concern” in the absence of federal legislation.  Where Congress has enacted statutes resolving issues previously addressed under federal common law, the Court noted, that legislation has been regarded as eliminating or “displacing” the common law.  The Court has previously held, for example, that the Clean Water Act (CWA) displaced the federal common law of public nuisance as it applied to water pollution. 

The Court then ruled that the CAA, like the CWA, represents a comprehensive scheme of pollution control that displaces federal common law.  It rejected the plaintiffs’ contention that displacement could not occur until the EPA actually exercises its authority to regulate the utilities’ GHG emissions under the CAA—an action the EPA has not yet taken specifically with respect to utilities.  The Court found that displacement occurs when Congress has granted authority over a common law issue through legislation, even if that legislation gives an agency discretion as to whether to take further regulatory action.  In this case, the Court regarded this requirement as satisfied because section 111 of the CAA provides EPA with authority to issue “New Source Performance Standards” (NSPS) for new and existing power plants.  Even if EPA ultimately declines to issue such standards, the Court reasoned, “the federal courts would have no warrant to employ the federal common law of nuisance” because “the delegation [of authority to EPA] is what displaces federal common law.”  The Court concluded that the plaintiffs’ federal common law claims “cannot be reconciled with the decision making scheme Congress enacted” by authorizing EPA to regulate GHG emissions under the CAA.

Justices Samuel Alito and Clarence Thomas issued a brief concurring opinion stating that their support for the Court’s judgment in this case assumed only “for the sake of argument” that the Court correctly held in Massachusetts v. EPA, 549 U.S. 497 (2007) (Massachusetts), that the CAA authorizes GHG regulation.  The Court’s holding in Massachusetts was not otherwise questioned or disturbed by either the parties in Connecticut or the other Justices of the Court, including the other two Justices—John Roberts and Antonin Scalia—who dissented in Massachusetts. 

IMPLICATIONS

The Court’s decision in Connecticut appears certain to lead to the dismissal of claims in similar pending lawsuits in which plaintiffs have invoked federal nuisance law to pursue relief for climate change-related harms.  These lawsuits include Native Village of Kivalina v. ExxonMobil Corp., which is currently on appeal to the United States Court of Appeals for the Ninth Circuit, as well as two recent complaints filed in federal district courts in the Northern District of California and the District of Montana, respectively.  Another much-watched nuisance case, Comer v. Murphy Oil, which was based on state nuisance law, ended earlier this year when the Supreme Court refused to consider a Fifth Circuit decision dismissing the case after a quorum to rehear the appeal could not be impaneled.  Connecticut may also be invoked in the various ongoing challenges to EPA’s recent actions finding that GHG emissions endanger public health and welfare, and establishing the first CAA limitations on GHG emissions from motor vehicles as well as new and modified stationary sources. 

The impact of the Connecticut decision may also be felt in Congress, where there is intense debate over whether and to what extent EPA’s authority to regulate GHG emissions should be curtailed.  If Congress were to enact legislation simply removing EPA's GHG regulatory authority without also addressing federal common law nuisance suits, it theoretically could leave GHG-emitting industries exposed once again to such claims.  Less clear is whether congressional decisions to place partial limitations on EPA GHG regulatory authorities, to delay EPA’s GHG regulations, or to remove funding for the implementation of those regulations, would have the same consequences.  The reasoning of Connecticut implies, however, that mere delays in EPA’s exercise of regulatory authority would not by themselves prevent the CAA from displacing federal common law.

Equally important is what the Connecticut decision does not do.  The Court explicitly declined to address whether the plaintiffs’ claims based on state nuisance law should be dismissed, leaving the Second Circuit to decide that issue upon remand.  The outcome of the Second Circuit’s decision will turn on an analysis of whether the CAA preempts state common law claims, in addition to displacing federal common law.  One precedent that may prove influential in deciding this issue is North Carolina v. Tennessee Valley Authority, 615 F.3d 291 (4^th Cir. 2010), in which the Fourth Circuit determined that the CAA preempts state common law nuisance claims for non-GHG pollutants.  In addition, the Connecticut decision itself includes a discussion of the practical and institutional limitations that the federal courts face in applying principles of nuisance law to GHG emissions; the Court’s clear reluctance to apply nuisance law to GHG emissions may dissuade the Second Circuit (and other federal courts) from proceeding with climate change lawsuits premised on state nuisance law.     

Further, the Court left intact the Second Circuit’s determination that both the government and private plaintiffs in the case had satisfied constitutional standing requirements.  For the time being, then, the Court’s decision in Connecticut does not alter current law on the general issue of whether federal courts may entertain claims brought by litigants who allege harms attributable to climate change.  Neither does the Court’s decision express a view as to whether such claims could constitute “political questions” that the courts have no jurisdiction to decide.