The U.S. Supreme Court has issued an 8-0 decision holding that the Clean Air Act (CAA) authorizes EPA to regulate carbon-dioxide emissions from power plants, thereby reversing a Second Circuit Court of Appeals decision that had allowed eight states, New York City and three environmental groups to proceed with federal common-law nuisance suits against the owners and operators of several coal-fired power plants. Am. Elec. Power Co., Inc. v. Connecticut, No. 10-174 (S. Ct. 6/20/11).

The initial lawsuits were filed in 2004 and alleged that defendants, five major electric power companies, were the largest emitters of carbon dioxide in the United States and that their air emissions “substantially and unreasonably interfered with public rights, in violation of the federal common law of interstate nuisance, or, in the alternative, of state tort law.” The complaints sought a decree that would cap carbon-dioxide emissions for each defendant, with further annual reductions.

The district court dismissed the lawsuits, finding that they presented non-judiciable political issues, and the Second Circuit reversed, ruling that plaintiffs had stated a claim under the “federal common law of nuisance,” and thus had standing to sue. The appeals court also held that the CAA did not “displace” federal common law; defendants then sought U.S. Supreme Court review.

The Supreme Court held that the CAA “provides a means to seek limits on emissions of carbon dioxide from domestic power plants—the same relief plaintiffs seek by invoking federal common law. There is no room for a parallel track, . . . ” Although the Court agreed 8-0 that the CAA authorized EPA to regulate carbon dioxide emissions from power plants, it split equally on whether the Second Circuit properly exercised jurisdiction in the case.