Although the result was anticipated by most U.S. Supreme Court observers, many of those observers still feel a sense of relief today as they read about the Court’s decision in American Electric Power Co., Inc. v. Connecticut, No. 10-174 (U.S. June 20, 2011, http://www.supremecourt.gov/opinions/10pdf/10-174.pdf). In AEP v. Connecticut, plaintiffs asserted a federal common law claim (based on public nuisance theory) seeking the curtailment of greenhouse gas (GHG) emissions from various utilities due to the emissions’ alleged contribution to global warming. The Supreme Court reversed the Second Circuit decision, finding instead that the federal common law claim was “displaced” by Congress’s passage of the Clean Air Act and the U.S. Environmental Protection Agency (EPA)’s ongoing actions to regulate GHG emissions as authorized by the Act.

Interestingly, the Supreme Court was evenly split on the issue of whether to exercise jurisdiction over the case (i.e., there was a 4-to-4 split because Justice Sotomayor did not participate). Thus, with the Second Circuit’s decision to exercise jurisdiction affirmed (just barely), the Supreme Court considered the merits of the case as opposed to dismissing it for lack of standing or as a political question beyond the courts’ ability to decide. While the threshold jurisdictional question did not dispose of the AEP case, the sharp division of the Supreme Court on this issue provides another reminder for plaintiffs (and environmental non-governmental organizations in particular) that Article III standing before the courts remains a paramount consideration before filing suit.

By contrast, the Supreme Court was unanimous in finding that the federal Clean Air Act and the EPA’s regulatory action on GHG emissions together displaced the plaintiffs’ federal common law claim. The Court rejected the plaintiffs’ claim that because the EPA has not yet established GHG standards, federal common law nuisance theories could fill the gap; in fact, the Court said that even if the EPA’s rulemaking ultimately declined to regulate carbon emissions, Congress’s “delegation [of Clean Air Act authority to regulate these emissions] is what displaces federal common law.” Although a brief dissent hints that some of the justices may not agree with the conclusion reached in Massachusetts v. EPA, 549 U.S. 497 (2007), which held that the Clean Air Act authorizes the EPA to regulate GHGs, the unanimous majority had no problem finding that the EPA’s regulation of GHGs pursuant to the Clean Air Act made far more sense than tasking individual district court judges, in individual jurisdictions, with the unenviable task of fashioning appropriate GHG emission standards on an ad hoc basis.

Finally, the Supreme Court expressly identified the potential for plaintiffs to still pursue nuisance claims based on state law (rather than federal common law) when the case is remanded to the lower courts. On the other hand, the Supreme Court opinion noted the potential for federal preemption of state nuisance cases by the Clean Air Act, an issue that was not properly before the Court. Thus, it remains possible that plaintiffs, on a state-by-state basis, could still pursue nuisance claims against some of the utilities despite the various impediments to successfully maintaining such a case.

As a result, expect more of what is already underway, i.e., EPA regulations for GHG emissions that emerge from hotly contested rulemakings only to face administrative petitions for reconsideration and/or petitions for review to the U.S. Circuit Court of Appeals for the District of Columbia.