In an 8-0 decision, the Supreme Court recently foreclosed the possibility of plaintiffs bringing federal common law public nuisance claims against those who allegedly contribute to global warming by emitting carbon dioxide. Am. Elec. Power Co. v. Conn., No. 10-174, 6/20/11.

Two groups of plaintiffs (eight States, New York City and three nonprofit land trusts) brought suit against five major electric power companies operating various fossil-fuel fired power plants. The plaintiffs argued that the companies’ carbon dioxide emissions “created a ‘substantial and unreasonable interference with public rights’ in violation of federal common law interstate nuisance, or, in the alterative, of state tort law.” The complaints sought an injunction requiring each defendant to “cap its carbon dioxide emissions and then reduce them by a specified percentage each year for at least a decade.”

After the plaintiffs filed their suits in 2004, the Supreme Court held in Massachusetts v. EPA, 549 U.S. 497 (2007), that the Clean Air Act authorizes the Environmental Protection Agency (EPA) to regulate carbon-dioxide emissions and other greenhouse gases. Subsequently, the EPA began a rulemaking under process § 111 of the Clear Air Act (42 U.S.C. § 7411) to set limits on greenhouse gas emissions from new, modified, and existing fossil fuel-fired power plants. The EPA has committed to issuing a proposed rule by July 2011, and a final rule by May 2012.

The district court dismissed the plaintiffs’ suits on the basis that they presented non-justiciable political questions. The Second Circuit reversed, holding that the plaintiffs had stated a claim under the “federal common law of nuisance” and concluded that the plaintiffs could maintain their suits until the EPA actually exercised its regulatory authority.

The Supreme Court unanimously reversed. In an opinion authored by Justice Ginsburg, the Court held that the Clean Air Act “displace[d] any federal common law right to seek abatement of carbon-dioxide emissions from fossil-fuel fired power plants.” The Court rejected the Second Circuit’s reasoning that the plaintiffs’ claims are not displaced until the EPA actually regulates emissions from the defendants’ power plants. The Court concluded that the “relevant question for purposes of displacement is ‘whether the field has been occupied, not whether it has been occupied in a particular manner.’” Thus, when Congress delegated to the EPA authority to regulate greenhouse gases emitted from power plants, the plaintiffs’ federal common law claims were displaced. The Court further noted that the EPA was better equipped than federal judges to be the “primary regulator of greenhouse gas emissions” because federal judges “lack the scientific, economic, and technological resources” of an expert agency such as the EPA. While the Court held that the plaintiffs’ federal common law public nuisance claims had been displaced by the Clean Air Act, it remanded the case to the Second Circuit to determine whether the Clean Air Act preempts the plaintiffs’ claims under state nuisance law.

Justices Alito and Thomas, two of the dissenters in Massachusetts v. EPA, concurred in judgment, stating that they agreed with the Court’s analysis “on the assumption” that the Court’s interpretation of the Clear Air Act in Massachusetts is correct.

The decision is a clear victory for public utilities seeking to limit their exposure to extensive— and expensive—litigation over their alleged contributions to global warming.