On June 20, 2011, the Supreme Court decided American Electric Power Co., Inc. v. Connecticut, No. 10-174, holding that the Clean Air Act, which authorizes the Environmental Protection Agency (EPA) to regulate carbon-dioxide emissions from fossil-fuel fired power plants, displaces any federal common-law claim seeking abatement of those emissions. Whether state-law claims on the issue are preempted by federal law is an open question.
Two groups of plaintiffs, which included eight states and New York City as well as nonprofit land trusts, sued five major electric-power companies in federal court in New York. The plaintiffs alleged that the defendants' emissions of carbon dioxide created a "substantial and unreasonable interference with public rights," in violation of the federal common law of interstate nuisance or, alternatively, state tort law. The plaintiffs sought injunctive relief requiring each defendant to cap its carbon-dioxide emissions and then reduce them by a specific percentage each year for at least a decade.
The district court dismissed the lawsuits on the ground that they presented non-justiciable political questions under Baker v. Carr, 369 U.S. 186 (1962), and other cases. But the Second Circuit reversed, holding that the suits were not barred by the political-question doctrine and that the plaintiffs had stated a valid claim under the federal common law of nuisance under Supreme Court cases holding that states may maintain suits to abate air and water pollution produced by other states or by out-of-state industries. See, e.g. Illinois v. Milwaukee, 406 U.S. 91 (1972). The Second Circuit also held that the Clean Air Act did not displace the federal common law nuisance remedy because the EPA had not yet promulgated any rule regulating greenhouse gases under the Clean Air Act, making it speculative whether the EPA would ultimately regulate greenhouse gases in the way that the plaintiffs wanted.
The Supreme Court unanimously reversed. The Court split four-to-four on the question whether plaintiffs had standing to pursue their claims, so the Court affirmed the Second Circuit's exercise of jurisdiction by an equally-divided Court without further explanation.
On the merits, the Court held that the Clean Air Act and the EPA actions that it authorizes displace any federal-common-law right to seek abatement of carbon-dioxide emissions from fossil-fuel-fired power plants. Under the Massachusetts v. EPA case, the Clean Air Act speaks directly to emissions of carbon dioxide and therefore supplants any common-law action seeking abatement of those emissions. And this is true even though EPA has not yet promulgated specific emissions limits. Illinois v. Milwaukee, 451 U.S. 304 (1981) ("Milwaukee II"), held that Congress had displaced a federal-common-law action by adopting amendments to the Clean Water Act that established an all-encompassing regulatory program administered by EPA. And while these cases are different from Milwaukee II because the EPA has not yet promulgated specific emissions limits, the Court held that the question is whether the field has been occupied, not whether it has been occupied in a particular manner. The Clean Air Act permits emissions until the EPA acts, and that represents Congress's considered judgment about how air pollution should be regulated. It would be inconsistent with that judgment to permit private lawsuits that essentially regulate emissions until the EPA takes some sort of action. Indeed, it is possible that EPA could conclude its rulemaking by deciding not to regulate carbon-dioxide emissions at all. In that case, the federal courts could not abrogate EPA's determination in that regard by allowing nuisance lawsuits under the federal common law.
The Court recognized that the plaintiffs also sought relief under state law. The Court held that the availability of a state-law claim would depend on the preemptive effect of the Clean Air Act and left that subject open to the lower courts on remand.
Justice Ginsburg delivered the opinion of the Court in which Chief Justice Roberts and Justices Scalia, Kennedy, Breyer, and Kagan joined. Justice Alito filed an opinion concurring in part and concurring in the judgment, in which Justice Thomas joined. Justice Sotomayor did not participate in the case.