On June 20, 2011, the Supreme Court issued its opinion in American Electric Power, a key climate change lawsuit.  Significantly, the Court reversed in part the decision of the Second Circuit Court of Appeals and barred federal nuisance claims that seek to enjoin greenhouse gas emissions. 

The Second Circuit had resurrected previously dismissed claims brought by New York City, several states, and private land trusts against electric utilities that allegedly emit 10% of America's man-made greenhouse gases.  Premising their lawsuit on alleged harms resulting from climate change, the plaintiffs sought an injunction forcing the utilities to cap and then reduce their greenhouse gas emissions.

Only eight of the nine Justices took up the case as a result of Justice Sotomayor's recusal (she heard argument before the Second Circuit panel before she was confirmed to the Supreme Court).  By an equally divided Court, the Justices, in an opinion delivered by Justice Ginsburg, affirmed the Second Circuit's opinion that the plaintiffs had standing to bring the suit—their claims were not barred by political question or prudential considerations, as some lower courts had ruled and the defendants, including the United States, had contended.  This ruling leaves open the door to future climate change suits.

But the Court went on to rule on the merits of the federal nuisance claims.  The Court held the plaintiffs' federal nuisance claims were displaced by the federal Clean Air Act's grant of jurisdiction to the EPA to regulate greenhouse gases—regulatory authority previously confirmed by the Court in its 2007 Massachusetts v. EPA decision.  According to the Court, "[t]he test for whether congressional legislation excludes the declaration of federal common law is simply whether the statute ‘speak[s] directly to [the] question' at issue."  The Court found that EPA's statutory enforcement and other regulatory authority pertaining to greenhouse gases, regardless of whether it had promulgated rules that had gone into effect, spoke directly to the curbing of the defendants' greenhouse emissions.  As a result, as long as the EPA has the authority to regulate greenhouse gases, federal nuisance claims will be barred.  Should Congress remove this authority (as some have proposed), such federal nuisance claims could be revived.  The Court remanded the plaintiffs' state law nuisance claims, leaving an open question as to whether such state claims are preempted by the Clean Air Act.

Meanwhile, the EPA continues to roll out its greenhouse gas regulations.  Challenges to both the EPA's endangerment finding, that greenhouse gases pose a danger to human health and welfare, and its tailoring rule, that only larger emitters should be subject to regulation, remain under review by the United States Court of Appeals for the D.C. Circuit, so stay tuned for further developments.

Related IndustriesNew Energy, Clean Technology and Climate Articles20-June-2011 - Supreme Court Decides "Global-Warming Case": American Electric Power Co., Inc. v. Connecticut 12-May-2011 - Renewable Energy Certificates and Renewable Portfolio Standards 04-January-2011 - Get Set for GHG Regulation: The Tailoring Rule and Reporting Rule in 2011 10-December-2010 - Who's to Blame for Climate Change: What Will the Supreme Court Decide?

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