Supreme Court Agrees to Hear Landmark Climate Change Tort Case
By Howard Shapiro, Kyle Danish, Tomás Carbonell
December 7, 2010 INTRODUCTION On December 6, 2010, the United States Supreme Court agreed to review the decision of the federal court of appeals in New York authorizing an action to enjoin the emissions of greenhouse gases (GHGs) from certain power plants on the ground that such emissions are a nuisance under federal common law. The decision is Connecticut et al., v. American Electric Power Corp., 582 F.3d 309 (2d Cir. 2009). The lawsuit was brought by eight states, the City of New York, and three private land trusts. Their complaint alleges that GHG emissions from six of the nation's largest electric utilities are causing climate change that harms each entity. American Electric Power and four other defendant utilities petitioned the Supreme Court to hear the case. They were supported by the Obama Administration, which filed a separate brief on behalf of the Tennessee Valley Authority (TVA), one of the defendant utilities. The case will likely be heard by the Supreme Court next spring, and a decision can be expected in June, near the end of the Court's current term.
PRIOR PROCEEDINGS The Connecticut litigation commenced in July 2004 with two separate complaints filed against six major electric utilities-one complaint filed by eight states and the City of New York, and the other filed by three private land trusts. Citing a variety of climate change-related injuries, the plaintiffs' coalitions claimed that the defendant utilities' CO2 emissions constitute a "public nuisance" under federal common law or, alternatively, state common law, and sought an injunction requiring emissions from the defendants' facilities to be reduced.
The United States District Court for the Southern District of New York 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). The court did not reach the questions of plaintiffs' standing to sue or the viability of a common law claim premised on climate change impacts.
In September 2009, a two-judge panel of the United States Court of Appeals for the Second Circuit reversed the district court. Then Circuit Judge Sonya Sotomayor was also a member of the panel but was nominated to the Supreme Court before the court of appeals issued its opinion. In a 139-page opinion, the Second Circuit rejected defendants' claims that the litigation presented a "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 our September 24, 2009 Alert).
ISSUES BEFORE THE COURT The Court's review of the Second Circuit's decision will be limited to threshold issues related to the jurisdiction of Federal courts over the dispute and the viability of the plaintiffs' claims under Federal law. The actual merits of the nuisance claims are not before the Court. The key legal issues before the Supreme Court appear to be:
Displacement of Federal Common Law Claims. The petitioning utilities claim that the Clean Air Act "occupies the field" of Federal regulation of GHG emissions, leaving no place for Federal common law claims involving climate change-related injuries. This argument relies on a previous Federal common law case involving water pollution, City of Milwaukee v. Illinois, 451 U.S. 304 (1981), where the Supreme Court held that the comprehensive reach of the Clean Water Act indicated Congress' intent to "displace" Federal nuisance claims. The Court also may separately consider (as argued by defendant TVA) whether the recent steps EPA has taken to regulate GHG emissions from mobile and stationary sources under the Clean Air Act displace Federal common law claims based on climate change. Yet the Court may be persuaded by a contrary argument that regulation of GHG emissions under the Clean Air Act is too uncertain or too incomplete to "occupy the field" and displace Federal common law claims.
Political Question Doctrine. The Supreme Court will be asked to revisit the district court's holding that Connecticut would involve the Federal courts in "political questions" best left to Congress or the Executive Branch. Applying a six-factor test set forth in Baker v. Carr, 369 U.S. 186 (1962), the Second Circuit determined that proceeding with the case would not interfere with domestic or foreign policymaking, contradict any established national policies, or require the court to make a decision constitutionally committed to the elected branches. However, petitioners argue that the process of determining whether tort liability exists, and crafting an appropriate remedy, entails policy decisions regarding the relative costs and benefits of GHG-emitting activities and appropriate emission levels for individual sources and industry sectors.
Standing. Lastly, the petitioners will argue that the plaintiffs lack standing to bring these claims because the claimed injuries are not "fairly traceable" to the defendants and could not be redressed through judicial action. Although the Court's decision in Massachusetts v. EPA, 549 U.S. 497 (2007) held that states alleging climate change-related injuries have standing to challenge Federal government action (or inaction) under the Clean Air Act, the petitioners argue that plaintiffs bringing common law claims should be subject to a more stringent standard for standing. In opposition, the Connecticut plaintiffs argue that standing precedents do not distinguish between statutory and common law claims, and that it is premature to resolve the issue of standing until evidence on plaintiffs' climate change-related injuries is presented to the trial court.
Validity of Claims. The petitioners will also argue that even if the Clean Air Act has not displaced Federal common law, the Federal common law of nuisance only recognizes "simple" claims for direct harms caused by localized pollutants. In opposition to the petition, however, the plaintiffs noted that previous Federal common law claims have also involved similarly complex pollution problems caused by multiple parties.
LOOKING AHEAD Briefing of the case will now proceed under the Supreme Court's rules, and is likely to be complete in time for oral argument in April 2011.
Due to her earlier participation in the case as an appellate judge, Justice Sotomayor has recused herself from the Supreme Court proceeding. The case will be heard by eight Justices instead of nine, which opens the possibility of a divided court, at least on the issue of standing. Four of the eight Justices who will hear the case dissented in Massachusetts v. EPA, which held that GHGs could be subjected to regulation under the CAA if EPA makes the appropriate findings. Such a split would leave unmodified the Second Circuit's decision upholding the plaintiffs' standing. In that event, the Court might proceed to consider the remaining issues outlined above.
Alternatively, the Court could decide to remand the case to the Second Circuit for further briefing on the issue of whether EPA's recent moves to regulate GHG emissions from stationary sources, all of which were finalized after the Second Circuit's opinion in this case, displace the federal common law of nuisance with respect to climate change-related harms. This narrow ground for decision could attract support from a majority of the Court.
The Court's disposition of the case is likely to impact other pending climate change litigation. A decision by the Court that the Second Circuit lacks jurisdiction to decide Connecticut (either on political question grounds or on standing) would likely prompt the dismissal of most current and future climate change tort lawsuits in Federal court, including Comer v. Murphy Oil, No. 07-60756 (5th Cir.) (plaintiffs are currently pursuing a mandamus petition in the Supreme Court to compel the Fifth Circuit to decide their appeal of dismissal), and Native Village of Kivalina v. ExxonMobil Corp., No. CV-08-1138 (N.D. Cal.) (currently on appeal to the Ninth Circuit). However, a narrower decision on the issue of displacement could leave room for continued litigation over whether state common law claims - such as those brought by plaintiffs in Comer and Kivalina - are similarly precluded by Federal law. In this connection, the Fourth Circuit recently ruled in North Carolina v. TVA, No. 09-1623 (4th Cir. July 26, 2010) that the Clean Air Act preempts state common law claims based on conventional pollutants under certain circumstances.
Van Ness Feldman closely monitors congressional and executive branch developments on climate change and energy policy, and is in a strong position to provide expert analysis and advice on emerging legislation and regulatory activity, the surrounding policy and political debate, and the implications for your organization. If you would like more information, please contact Kyle Danish, Stephen Fotis, Doug Smith, or any member of the firm's Climate Change practice at (202) 298-1800.