A recent case from the Third Circuit has muddied the waters for emissions facilities complying with Clean Air Act (“CAA”) permits. In Bell v. Cheswick Generating Station, 2013 WL 4418637 (Aug. 20, 2013), the Third Circuit held that the Clean Air Act did not preempt a state law nuisance class action suit brought against a coal power plant by neighboring residents. That decision is in considerable tension with a 2010 Fourth Circuit decision, North Carolina v. Tennessee Valley Authority, 615 F.3d 291, which found that coal power plants were shielded from a state law nuisance suit by complying with their CAA permits.

In Bell, the Third Circuit purported to follow the Supreme Court’s decision in International Paper Company v. Oullette, 479 U.S. 481 (1987), which found that the Clean Water Act preempted a Vermont state law nuisance suit filed by Vermont residents in Vermont court against a paper mill in New York. The sole problem with that cause of action, the Third Circuit indicated, was that it was not brought under the law of the source state, New York. In contrast, the causes of action before the Third Circuit in Bell did not conflict with the CAA because they were brought against an emissions facility in Pennsylvania alleging nuisance under Pennsylvania law. While acknowledging that subjecting source emissions to the nuisance law of innumerable states would frustrate the purpose of the CAA, the Third Circuit argued that the problem of indeterminate standards is resolved if the emissions source need only look to a single additional authority: the nuisance law of its own state “whose rules should be relatively predictable.”

The Third Circuit’s approach to this problem is fundamentally different from that of the Fourth Circuit’s in North Carolina v. Tennessee Valley Authority, which rejected a public nuisance suit by the state of North Carolina against power plants in Alabama and Tennessee on several bases, including that it would frustrate the Clean Air Act’s permitting regime. The Fourth Circuit’s decision took a broader view of Oullette’s holding, finding that nuisance law was an “ill-defined omnibus tort of last resort,” and North Carolina’s lawsuit was an attempt “to replace” the carefully crafted CAA regime with nuisance law’s “vague and indeterminate” standards. The Court explained that the savings clause of the CAA “may allow for some common law nuisance suits,” but not where they interfere with the methods by which the CAA was designed to reach its goal.

This recent development in the Third Circuit is important for regulated entities because it calls into question the degree to which their CAA compliance will shield them from liability under state common law. While the Third Circuit expects that its decision will have limited practical effects because of its view that state nuisance law should be “relatively predictable,” it is questionable whether or not this will be the case, as the balancing of societal interests inherent in deciding nuisance claims may well preclude the certainty necessary for regulated entities to make business investments. Accordingly, it will be important to watch how future litigation on this issue unfolds.