The litigation and appeal process

The complaint in Kivalina was filed in February 2008, by the governing bodies of an Alaskan tribal village. They alleged that their village is being threatened by the effects of climate change—specifically, by the reduction in protective sea ice and an increase in storms and flooding—and asserted that the 24 oil, energy, and utility companies named as defendants should be held liable for the costs of relocating the village, estimated at $400 million, because they had allegedly contributed to the risks of climate change through their greenhouse gas emissions. The plaintiffs styled their cause of action as a “nuisance” claim under federal common law, although they asserted in the alterative that their claims might also proceed as a matter of state common law.

The defendants raised three principal objections. First, they argued that the plaintiffs lacked standing to bring the claims because they could not show that climate change or its effects were “fairly traceable” to these individual defendants, as required under Article III of the Constitution. Second, they asserted that the claims were not justiciable under the political question doctrine because, in order to determine a “reasonable” level of greenhouse gas emissions for a particular company or industry, a court would need to make decisions regarding national policy with respect to appropriate greenhouse gas levels that are reserved under the Constitution for the legislative and executive branches. Third, the defendants argued that the court lacked authority to recognize the asserted “nuisance” claims as a matter of federal common law—without express congressional authorization—and that such claims would in any event be displaced by the CAA.

The district court dismissed the federal common law claims in October 2009, holding that the plaintiffs lacked standing and, further, that the claims presented non-justiciable political questions. Native Vill. of Kivalina v. ExxonMobil Corp., 663 F. Supp. 2d 863, 879–80 (N.D. Cal. 2009). The court found it unnecessary, in light of these holdings, to address whether the claims could properly be recognized under federal common law or, if so, whether they would be displaced by the CAA. Id. at 882–83. The court also did not address whether the claims might be brought under state common law, after declining to exercise jurisdiction over those claims following dismissal of the federal issues. Id.

The plaintiffs appealed to the Ninth Circuit. After initial briefing was completed, but before argument was scheduled, the Supreme Court issued its decision in AEP, holding that federal common law claims seeking injunctive relief against sources of greenhouse gas emissions were displaced by the CAA. 131 S. Ct. at 2537–38. In supplemental briefs, the defendants argued that AEP compelled dismissal of the claims in Kivalina, while the plaintiffs asserted that AEP was distinguishable because the claims in that case sought injunctive, not monetary, relief. The appeal was argued in November 2011, before Ninth Circuit Judges Sidney Thomas and Richard Clifton and District Judge Phillip Pro of the District of Nevada, sitting by designation.

Ninth Circuit decision

On September 21, 2012, the panel unanimously affirmed the district court’s judgment. Kivalina, 696 F.3d at 858. It did not, however, rely upon or even address the two issues on which that judgment was based—standing and political question. Rather, the panel’s opinion focused exclusively on federal common law and displacement. Id.

The panel found, first, that the “climate change” claims asserted by the plaintiffs were potentially “viable under federal common law in the first instance.” Id. at 855–56. It acknowledged the principle that federal courts generally cannot develop common law causes of action without express authorization from Congress, id. at 855 (citing Erie Railroad Co. v. Tompkins, 304 U.S. 64, 78 (1938)), but it said that courts may nevertheless do so when necessary to resolve “federal questions that are not answered by statutes,” id. In support, the panel cited the Supreme Court’s opinion in AEP, which—although it explicitly declined to resolve this particular question—noted at one point that “[w]hen we deal with air and water in the ambient or interstate aspects, there is a federal common law.” 131 S. Ct. at 2535 (quoting Illinois v. City of Milwaukee, 406 U.S. 91, 103 (1972)). For that reason, according to the panel, “federal common law can apply to transboundary pollution suits. . . . [which] often, as in this case, . . . are founded on a theory of public nuisance.” Kivalina, 696 F.3d at 855.

However, the panel then concluded that, even if the claims might have been viable at one time, they are now displaced by the CAA. Id. at 858. A federal common law claim is displaced by federal statute, the panel explained, when the statute “speaks directly to the question” addressed by the claim. Id. at 856 (quoting AEP, 131 S. Ct. at 2537). While this analysis may sometimes be “complex” and “fact-specific”—in order to determine “whether Congress has provided a sufficient legislative solution to the particular [issue] to warrant a conclusion that the legislation has occupied the field to the exclusion of federal common law,” id. (quoting Michigan v. U.S. Army Corps of Eng’rs, 667 F.3d 765, 777 (7th Cir. 2011))—the panel said it was simple in this case, given the Supreme Court’s holding in AEP that the CAA displaced the climate change claims presented there. Id. That holding, the panel concluded, was directly applicable to the plaintiffs’ claims. Id. at 858.

The panel acknowledged but quickly rejected the plaintiffs’ argument that AEP was distinguishable because it addressed claims for injunctive relief, rather than monetary damages. Id. at 856–58. The panel noted that the Supreme Court had previously “rejected similar attempts to sever remedies from their causes of action,” id. at 857 (quoting Exxon Shipping Co. v. Baker, 554 U.S. 471, 489 (2008)), and had found federal common law “nuisance” claims based on water pollution to be displaced by the Clean Water Act whether the relief sought was injunctive or monetary in nature, id. (citing City of Milwaukee v. Illinois, 451 U.S. 304, 314,25 (1981); Middlesex Cnty. Sewage Auth. v. Nat’l Sea Clammers Ass’n, 453 U.S. 1, 4 (1981)). Finding these decisions controlling, the panel held that the federal common law claims in Kivalina were displaced. Id. at 858.

Judge Pro issued a separate concurring opinion, to address two separate points. First, he suggested that there was “tension” in the Supreme Court’s displacement jurisprudence. Id. In particular, he posited that Exxon Shipping may represent a “departure” from other displacement cases, insofar as it seemed to suggest (in holding that the Clean Water Act did not displace common law claims for punitive damages linked to an oil spill) that “the right and the remedy may indeed be severed when the particular claim at issue seeks injunctive relief versus damages.” Id. at 862–63. Nevertheless, he found that AEP and prior “nuisance” decisions of the Supreme Court in the water pollution context were sufficiently clear to control the outcome and compel displacement in this case. Id. at 866. Second, Judge Pro opined that the plaintiffs lacked standing to bring their claims in federal court under Article III of the Constitution, because in his view the alleged link between defendants’ greenhouse gas emissions and the effects of climate change was too “attenuated” to support the necessary finding of causation. Id. at 867–69. He distinguished Massachusetts v. EPA, 549 U.S. 497 (2007), in which the Supreme Court upheld a state’s standing to challenge EPA’s refusal to regulate greenhouse gas emissions, on grounds that Massachusetts had been brought by a state pursuant to an express statutory right of action. Kivalina, 696 F.3d at 869.

Neither the panel opinion nor Judge Pro’s concurrence addressed whether the plaintiffs’ claims might proceed as a matter of state law, as that question was not presented on appeal. Nevertheless, the implications of the panel’s opinion may suggest that such claims would be preempted by the CAA. Although the standard for preemption of state law is traditionally regarded as more demanding than that for displacement of federal common law, in either circumstance a federal statute that sets forth a “comprehensive” method for regulating in a particular area will generally be deemed to preclude all common law claims in the field, whether under federal or state common law. See, e.g., Int’l Paper Co. v. Ouellette, 479 U.S. 481 (1987). Insofar as both AEP and Kivalina imply that the CAA is precisely this type of statute, as applied to issues relating to greenhouse gas emissions and climate change, see Kivalina, 696 F.3d at 866, they would seemingly also bar the plaintiffs’ claims as a matter of state law (as at least one district court has recently held, Comer v. Murphy Oil USA, Inc., 839 F. Supp. 2d 849, 868 (S.D. Miss. 2012)). But the opinion does not actually resolve the preemption question, and for that reason, as Judge Pro noted in his concurrence, Kivalina, 696 F.3d at 866, it is possible that other plaintiffs may attempt to repackage such claims in state court.

A new hurdle for climate change tort claimants

The decision in Kivalina, given its heavy reliance on AEP, might be viewed as simply affirming existing law, as opposed to announcing any new legal principle. But the panel’s holding, even if pre-ordained, is nevertheless important: it confirms that the displacement analysis of AEP applies to all federal common law “climate change” claims, whatever the nature of the relief sought. That holding, assuming it does not categorically bar all such claims, at the least presents another large hurdle to future plaintiffs who would seek to address issues relating to greenhouse gases and climate change through federal common law litigation, rather than the legislative and regulatory process.