In American Electric Power Co. v. Connecticut, the U.S. Supreme Court held that federal common-law public-nuisance claims seeking injunctive relief against emitters of greenhouse gases were displaced by the Clean Air Act and the Environmental Protection Agency’s regulatory implementation of the act’s provisions.1 In hindsight, this holding seems an inevitable outgrowth of Massachusetts v. Environmental Protection Agency, 549 U.S. 497 (2007), which held that GHGs are pollutants subject to CAA regulation. Building on that precedent in a unanimous 8-0 opinion, the AEP court gave the defendant utility companies a clear-cut victory by precluding judicial direct regulation of GHG through tort litigation.2
Despite the Supreme Court’s mandate, it is premature to declare victory over all climatechange litigation based on common-law public nuisance. The high court’s ruling was conspicuously narrow and, it left many important issues unresolved. These issues include:
- What is the import of the court’s unusual 4-4 deadlock regarding whether the claim was justiciable in the first place: whether those questions arise from a lack of standing or the presence of a “political question” constitutionally reserved to the executive or legislative branches of government?
- Does the court’s “displacement” ruling also dispose of suits seeking damages under the federal common law or only those invoking equitable abatement?
- Are public-nuisance claims that are based upon state common law, rather than the displaced federal common law, preempted by the CAA and its regulatory framework?
- What is the precedential value of AEP, if any, in other pending climate-change tort cases that seek damages rather than injunctive relief directly regulating GHG emissions? These cases include Native Village of Kivalina v. ExxonMobil Corp., currently awaiting oral argument in the 9th U.S. Circuit Court of Appeals.
Given these troubling issues, AEP may ultimately be remembered more for the vagaries it left unresolved than for the victory it gave to a few electric utility companies.
Eight states, three nonprofit land trusts and the city of New York filed the AEP publicnuisance case in 2004. They sued four private utilities3 and the Tennessee Valley Authority and claimed that their GHG emissions tortuously contributed to the effects of global warming. Allegedly, the defendants were the five largest emitters of carbon dioxide in the United States, and their GHG emissions substantially and unreasonably interfered with public rights “in violation of the federal common law of interstate nuisance, or alternatively, under state tort law.”4 The plaintiffs did not seek to recover damages. Instead, they sought injunctive relief to cap and reduce the defendants’ GHG emissions.5
The U.S. District Court for the Southern District of New York dismissed the case in 2005. It held that the controversy raised non-justiciable “political questions” because the claims could not be adjudicated without first making impermissible policy determinations about the level at which to cap the defendants’ GHG emissions and the appropriate amount of yearly emission reductions. The court also found that to adjudicate the plaintiffs’ claims, it would have to “determine and balance the implications of [the requested] relief on the United States’ ongoing negotiations with other nations concerning global climate change … assess and measure available alternative energy resources,” and “determine and balance the implications of such relief on the United States’ energy sufficiency and thus its national security.”6
The plaintiffs appealed to the 2nd U.S. Circuit Court of Appeals, which heard oral arguments in 2006 but refrained from issuing an opinion until after the Supreme Court issued its decision in Massachusetts v. Environmental Protection Agency, 549 U.S. 497 (2007), a case in which the high court would decide whether Congress authorized the EPA to address climate change under the CAA.
In 2007 the Supreme Court changed the climate change legal landscape, ruling in Massachusetts v. Environmental Protection Agency that EPA had the authority and a duty under Section 7401 of the CAA to determine whether GHGs were an “endangerment” and, if so, how they should be regulated. Because the EPA had neither exercised that authority nor offered any “reasoned explanation” for failing to do so, the high court concluded that the EPA violated the law when it denied the requested GHG rule-making.7 Subsequently, the Obama administration determined that climate science was well settled, that mankind’s impact on a dangerously shifting climate could not be denied, and that climate change posed an endangerment to both public health and the environment. Accordingly, beginning in 2009, the EPA began taking steps toward national, comprehensive GHG regulation. To date, the EPA has promulgated regulations requiring GHG reporting, and regulations on GHGs from light-duty vehicles, and it is moving toward implementing a scheme for regulating major industrial plants.
In 2009 (three years after oral argument), the 2nd Circuit reversed the District Court’s dismissal of the case and concluded that:
- The case was not barred by the politicalquestion doctrine and that the plaintiffs had adequately alleged standing.
- All plaintiffs had stated a claim under the federal common law of nuisance.
- The CAA did not displace their claims.8
The defendants filed a petition for certiorari, arguing that the plaintiffs lacked standing to raise nuisance claims, that the CAA grants the EPA the exclusive authority to regulate GHG emissions and that climate change regulation presents a non-judiciable political question. The U.S. solicitor general filed a separate brief on behalf of the Tennessee Valley Authority, supporting the utilities’ request for certiorari, arguing that the case ought to be dismissed pursuant to prudential standing because the EPA had issued a number of new GHG regulations. The Supreme Court granted certiorari in 2010 and unanimously reversed the 2nd Circuit on the narrowest ground possible.
THE SUPREME COURT’S ‘DISPLACEMENT’ RULING
Writing for the court, Justice Ruth Bader Ginsburg stressed that the mere enactment of federal legislation can displace federal common-law claims. Although finding that environmental protection is “undoubtedly an area ‘within national legislative power,’ one in which federal courts may fill in ‘statutory interstices’ and, if necessary, even ‘fashion federal law,’”9 she cautioned that “[r]ecognition that a subject is meet for federal-law governance, however, does not necessarily mean that the federal courts should create the controlling law.”10
She explained that “when Congress addresses a question previously governed by a decision rested on federal common law, the need for such an unusual exercise of lawmaking by federal courts disappears. Legislative displacement of federal common law does not require the ‘same sort of evidence of a clear and manifest [congressional] purpose’ demanded for preemption of state law.”11 The test for whether legislation excludes federal common law is simply “whether the statute ‘speak[s] directly to [the] question’ at issue.”12
On the basis of these precedents, the court concluded that Massachusetts v. Environmental Protection Agency “made plain that emissions of carbon dioxide qualify as air pollution subject to regulation” under the CAA and that it is “equally plain that the act ‘speaks directly’ to emissions of carbon dioxide from the defendants’ plants.”13 Therefore, the CAA and the EPA actions it authorizes displaced “any federal commonlaw right to seek abatement of carbon dioxide emissions from fossil-fuel-fired power plants.”14
STANDING AND ‘POLITICAL QUESTION’ ISSUES
The court affirmed the 2nd Circuit’s decision to exercise Article III standing, but it did so only by a 4-4 deadlocked vote. The holding is not precedent but merely binds the parties to the individual case. Nevertheless, it raises intriguing questions regarding how the complete compliment of justices might rule when the issues are once again presented.
In AEP, four justices held that at least “some” plaintiffs had Article III standing under Massachusetts and, further, that “no other threshold obstacle” (i.e., political question) barred review. Four other justices held that none of the plaintiffs had Article III standing by adhering to a dissenting opinion in Massachusetts or distinguishing that decision. Consequently, the equally divided court declined to disturb the appellate court decision, finding that the case should not be dismissed on that basis and affirming the 2nd Circuit’s exercise of jurisdiction.15
The split arguably resembles the 5-4 vote in Massachusetts v. Environmental Protection Agency, in which the majority afforded states “special solicitude” standing in cases involving the federal government or, as in AEP, where the adverse effects being complained about originate from other states.
Given AEP’s cryptic affirmance of standing for “some” plaintiffs, defendants in cases involving non-state plaintiffs may argue that standing to pursue climate change litigation is limited to states. Although the 2nd Circuit ignored Massachusetts’ “special solicitude” reasoning and specifically permitted suits by non-state parties, the Supreme Court’s language suggests some degree of disagreement.16 Thus, even in the 2nd Circuit on remand, it is unclear whether non-state parties, as opposed to states, have standing to pursue climate change litigation. Even more clearly, defendants in other jurisdictions (e.g., Kivalina in the 9th Circuit) remain free to challenge the standing of nonstate plaintiffs.
The disposition of AEP’s “political question” argument is equally problematic. By the same 4-4 vote, the court also found that “no other threshold obstacle bars review.” If one examines the court’s “displacement” reasoning, however, the holding echoes arguments championed by “political question” proponents — namely that courts are particularly ill-suited to decide climate change disputes.
The appropriate amount of regulation in any particular GHG-producing sector cannot be prescribed in a vacuum. As with other questions of national or international policy, informed assessment of competing interests is required. Along with the environmental benefit that is potentially achievable, our nation’s energy needs and the possibility of economic disruption must weigh in the balance.17
It is altogether fitting that Congress designated an expert agency, here, the EPA, as best suited to serve as primary regulator of GHG emissions. The expert agency is surely better equipped to do the job than individual district judges issuing ad hoc, case-by-case injunctions. Federal judges lack the scientific, economic and technological resources an agency can utilize in coping with issues of this order. See generally, Chevron U.S.A. Inc. v. Natural Res. Defense Council, 467 U.S. 837, 865-866 (1984). Judges cannot commission scientific studies, convene groups of experts for advice, issue rules under notice-andcomment procedures inviting input by any interested person, or seek the counsel of regulators in the states where the defendants are located. Rather, judges are confined by a record comprising the evidence the parties present. Moreover, federal district judges, sitting as sole adjudicators, lack the authority to render precedential decisions binding other judges or even members of the same court.
Notwithstanding these disabilities, the plaintiffs proposed that individual federal judges determine, in the first instance, what amount of carbon dioxide emissions is “unreasonable” and then decide what level of reduction is “practical, feasible and economically viable.” These determinations would be made for the defendants named in the two lawsuits launched by the plaintiffs. Similar suits could be mounted, counsel for the states and New York City estimated, against “thousands or hundreds or tens” of other defendants fitting the description “large contributors” to carbon-dioxide emissions.18
Given this reasoning, it seems clear that the two primary justiciability arguments in AEP remain viable, for now, waiting only for the vote of a recused justice.
Moreover, especially in the Kivalina case pending in the 9th Circuit, plaintiffs may argue that AEP’s “displacement” ruling only applies to suits seeking to abate GHG emissions directly, rather than to actions seeking damages for harm already sustained. Although both types of cases require courts to determine the “reasonableness” of GHG-emission levels, damage suits seek retrospective relief, rather than prospective regulation. Arguably, damage awards serve a “regulatory” purpose because they affect defendants’ future behavior, but that impact is less immediate, less coercive and more speculative than direct regulation via equitable relief punishable by contempt. These arguable distinctions probably will be explored if Kivalina is found justiciable.
ARE STATE LAW PUBLIC NUISANCE CLAIMS PREEMPTED?
The plaintiffs asserted state law public nuisance claims in AEP under the law of each state where the defendants operated their power plants, but the 2nd Circuit did not address their validity.19 After the Supreme Court held the plaintiffs could not pursue their federal common- law claims because they had been displaced by the EPA’s GHG regulations, it remanded the case to the 2nd Circuit to address whether the state law claims were preempted by the same federal laws that displaced the federal causes of action.20
Pursuant to Article VI of the Constitution, “any state law, however clearly within a state’s acknowledged power, which interferes with or is contrary to federal law, must yield.”21 Courts have found that preemption of state law claims occurs in three situations. First, preemption may occur when Congress explicitly provides for that effect. Second, preemption may be implied when “federal law so thoroughly occupies a legislative field as to make reasonable the inference that Congress left no room for the states to supplement it.” Third, preemption may be found where state law “actually conflicts” with federal law.22
At this stage in the proceedings, it is premature to speculate regarding the outcome of the preemption analysis, but it is obvious that the problem is substantially different than a simple “displacement” test. In International Paper Co. v. Ouellette,23 for example, the Supreme Court held that the Clean Water Act did not preempt all state law nuisance claims but merely restricted claims to those based upon “the law of the state in which the point source is located.”24 It is unclear whether the same result will obtain under the CAA, which differs from the CWA in many aspects.
If the 2nd Circuit determines that state law claims remain viable, and if that decision is affirmed by the Supreme Court, industry may face the prospect of litigation based upon the substantive laws of 50 states. Moreover, even if the courts determine that the CAA preempts state law claims for injunctive relief, the Supreme Court may find that the CAA does not preempt damage claims under state law. Such claims have been asserted in both Kivalina and in the recently refiled Comer v. Murphy Oil lawsuit in Mississippi. These issues will probably remain unresolved until they are fully developed for Supreme Court review.
Although the decision in AEP is undeniably a victory for defendants against those seeking to use the tort system to regulate GHG emissions directly, the victory is merely Round 1 in an ongoing struggle over the use of public nuisance to prevent and redress global climate change. Difficult and dangerous questions remain unanswered, and they will probably remain so until the Supreme Court confronts them in different contexts. Cases such as Kivalina in the 9th Circuit, and the remanded AEP case in the 2nd Circuit are the best candidates for high-court review, but new actions, such as the refiled Comer suit, promise continued controversy. AEP’s failure to deliver a definitive “knockout” probably encourages public nuisance advocates to persist in their quest, not only in climate change litigation, but also in other contexts where the ancient doctrine might apply.