The plaintiffs in this case (several states, New York City, and three private land trusts) had brought public-nuisance claims against entities that emitted large amounts of carbon dioxide (four private power companies and the Tennessee Valley Authority). The plaintiffs had requested abatement of the alleged nuisance conditions and had asked the court for a decree setting carbon-dioxide emission limits for each defendant at an initial cap, to be further reduced annually.
The district court had dismissed the suit as presenting a non-justiciable political question, but the Second Circuit had reversed, finding that the state plaintiffs had adequately alleged article III standing and that the suits were not barred by the political-question doctrine.
Initially, the Supreme Court affirmed the Second Circuit’s exercise of federal court jurisdiction by an equally divided court. Four members of the Court held that at least some plaintiffs have article III standing under the Court’s prior holding in Massachusetts v. EPA, 549 U.S. 497 (2007), which permitted a state to challenge the EPA’s refusal to regulate GHGs. The other four members of the Court held that none of the plaintiffs has article III standing. Therefore, the Court affirmed the Second Circuit’s exercise of jurisdiction.
As for the merits, the Court held unanimously that the plaintiffs could not state a federal common-law claim for limiting GHG emissions because of their alleged contribution to global warming because the act, as implemented by the EPA, displaces any federal common-law right to seek abatement of carbon dioxide emissions from fossil-fuel-fired power plants. The Court noted that “[t]he test for whether congressional legislation excludes the declaration of federal common law is simply whether the statute ‘speak[s] directly to [the] question’ at issue.” 546 U.S. __ at *10 (2011). Here, the Massachusetts v. EPA case made it clear that emissions of carbon dioxide are subject to regulation under the act. Because the act directs the EPA to establish emissions standards and performance standards, and provides for enforcement of those standards, the act itself provides a means to seek limits on emissions of carbon dioxide from domestic power plants—the same relief that the plaintiffs sought by invoking federal common law. Accordingly, the Court held that the act displaced federal common-law nuisance claims—at least where the relief requested is abatement.
In reversing the Second Circuit, the Supreme Court held that the federal common-law claims had been replaced by the act despite the fact that the EPA has not yet issued emission standards for GHGs. The Court reasoned that because the act sets into place the procedures for the EPA to promulgate GHG standards—as well as the procedures for judicial coercion if the EPA fails to do so—is ample evidence that Congress has “occupied the field” and the use of federal common law should be foreclosed. As the Court explained, “[i]f the plaintiffs in this case are dissatisfied with the outcome of EPA’s forthcoming rulemaking, their recourse is to seek Court of Appeals review, and, ultimately to petition for certiorari in this Court.” 546 U.S. __ at *13 (2011). The Court also reasoned that courts setting emission standards with judicial decrees was inappropriate given that experts at the EPA are more qualified to develop and promulgate standards given their knowledge of science, economics, and technological resources. How this decision impacts Congress and EPA regulation of GHGs will be important to follow in the coming months.
As to the future of climate-change litigation, some have speculated that the Supreme Court’s decision preventing the AEP case from going forward will put an end to climate-change-related tort litigation. Others have opined that this outcome is only a temporary setback, and additional legal theories will be developed and tested. The Supreme Court specifically did not decide whether the act preempts state public-nuisance litigation over GHGs. Thus, some plaintiff groups likely will press state common-law claims in the future, but still may be met with defenses of “political question” and “preemption” based on the AEP case and other precedent. The implications of this decision on other environmental toxic-tort litigation where there are statutory programs addressing the contested conduct also will be important to watch.
Christina M. Landgraf and Joel T. Bowers are associates with Barnes & Thornburg LLP.