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U.S. Supreme Court holds that Clean Air Act displaces federal common law on greenhouse gas emissions


On June 20, 2011, the U.S. Supreme Court issued a decision in American Electric Power Co. v. Connecticut barring state and private parties from bringing federal common law nuisance actions based on alleged contribution to climate change through greenhouse gas (GHG) emissions. The Court found that the federal Clean Air Act displaces any federal common law cause of action that may have existed against GHG emitters.
The plaintiffs in the case were several states, New York City, and three private land trusts. The defendants were five power companies. The plaintiffs sought injunctive relief setting a cap on carbon dioxide emissions from the defendants’ power plants, with a request for an annual percentage decrease in emissions for at least the next decade. The district court dismissed the lawsuit in 2005, holding that the claims were nonjusticiable political questions that could not properly be adjudicated by federal courts. In 2009, the Second Circuit Court of Appeals reversed the decision.

At the Supreme Court, the main issue was whether the federal common law nuisance cause of action for GHG emissions had been displaced by the Clean Air Act’s delegation of authority to EPA to regulate those emissions. On the merits, the Court began by noting that the Supreme Court had never decided whether private citizens or political subdivisions of a state could “invoke the federal common law of nuisance to abate out-of-state pollution.” The Supreme Court elected not to reach the issue of whether such a federal common law cause of action could exist, holding that regardless, such a claim would be displaced by the Clean Air Act, which the Supreme Court, in Massachusetts v. EPA, held authorizes EPA to regulate GHG emissions. The Supreme Court concluded that the various statutory provisions of the Clean Air Act governing pollutant emissions from existing stationary sources covered the very type of emitters that plaintiffs had sought to enjoin in the case.

In reaching its decision, the Court determined that federal judges lacked the scientific, economic, and technological resources available to EPA in regulating GHG emissions. Additionally, the Court stated that if federal judges were allowed to rule on all matters concerning the regulation of emissions, the courts would be overcome with requests for controls. Ultimately, the Supreme Court held that EPA was in a far better position than the federal courts to regulate GHG emissions.

As a secondary matter in the case, the initial complaints filed by the plaintiffs in the Southern District of New York also included state law based tort claims. The Court of Appeals did not reach the state law based tort claims because the court held that tort action for public nuisance could be brought under federal common law. On appeal to the Supreme Court, the state law tort claims were not heard because the Supreme Court was not briefed on the matters. Because this issue was left undecided, the question remains whether GHG claims may be brought under state tort law.

The Supreme Court's decision will impact other pending climate change litigation. For example, in Native Village of Kivalina v. ExxonMobil Corp., a native Alaskan village brought a suit against two dozen defendants (including some of the same utilities named as defendants in American Electric Power) alleging that severe weather generated by climate change caused injuries related to coastal erosion. Unlike American Electric Power, the Kivalina plaintiffs seek damages rather than injunctive relief. The district court dismissed the case as involving a nonjusticiable political question and for lack of standing. The village appealed to the Ninth Circuit Court of Appeals. While the American Electric Power decision should mandate affirmance for lack of a federal common law cause of action, the Kivalina appellants have requested an opportunity to brief the impact of the Supreme Court’s decision.

In addition, the Comer v. Murphy Oil case, a heavily-litigated case involving claims for money damages for GHG emissions under state nuisance law, was re-filed in the Southern District of Mississippi before the American Electric Power decision. The outcome of this case may ultimately provide an answer to the question left unanswered by the U.S. Supreme Court, i.e., whether state law nuisance claims are also displaced by the Clean Air Act’s delegation of regulatory authority to EPA.

The ruling in American Electric Power is a victory for business and industry groups subject to GHG regulation. It limits the avenues through which an entity may bring suit for GHG emissions impacts under federal common law. Though it leaves open the questions of whether claims can be brought under state tort law and whether American Electric Power will apply to claims for money damages, it ultimately reduces industry’s exposure to potential litigation over GHG emissions.

To view a complete PDF of the Second Quarter 2011 issue of the Air Quality Letter, click HERE.


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