Update: More on Today’s American Electric Power Decision

Today, the United States Supreme Court ruled that federal courts cannot use the federal common law of nuisance to regulate greenhouse gas emissions. In American Electric Power v. Connecticut, No. 10-174, 540 U.S. ___ (2011), the Court reversed the decision of the Second Circuit Court of Appeals and held that the Clean Air Act and the EPA actions it authorizes displace any federal common law right to seek abatement of greenhouse gas emissions.

This litigation began in July 2004 when eight states, a municipality, and three land trusts filed two separate actions against five electric power generating companies, alleging that the companies – as the five largest emitters of carbon dioxide in the U.S. – contributed to global warming and created a “substantial and unreasonable interference with public rights” in violation of the federal common law of interstate nuisance or, in the alternative, in violation of state tort law.

At the time of the Second Circuit’s decision, the EPA had not yet promulgated any rule regulating greenhouse gases. In argument to the Court, the States and other plaintiffs argued that federal common law could not be displaced until EPA actually exercises its regulatory authority, e.g., by actually setting standards governing emissions from the defendants’ plants. The Supreme Court disagreed because, by passing the Clean Air Act, Congress delegated to EPA the decision of whether and how to regulate carbon-dioxide and other emissions from power plants and other air emissions sources. According to the Court, this Congressional authorization of EPA’s actions is what displaces federal common law.

Moreover, the Supreme Court further found that, should EPA decline to regulate carbon dioxide or other emissions altogether, the federal courts would have no authority to rely on the federal common law of nuisance to upset the agency’s expert determination. This is because Massachusetts v. EPA made clear that EPA’s judgment would not escape judicial review entirely.

Plaintiffs’ complaints also sought relief under the common law of the States in which each defendant operates its power plants. However, because none of the lower courts reached this issue and the parties did not brief it, the Supreme Court left the issue open for consideration on remand.

In addition to the potential availability of state common law claims in this and future lawsuits, the other issue left open by today’s decision is whether the Second Circuit’s ruling on the Plaintiffs’ standing to sue will be adopted by other federal courts in the wake of the divided (4-4) decision of the Supreme Court on this issue:

The petitioners contend that the federal courts lack authority to adjudicate this case. Four members of the Court would hold that at least some plaintiffs have Article III standing under Massachusetts, which permitted a State to challenge EPA’s refusal to regulate greenhouse gas emissions; and further, that no other threshold obstacle bars review. Four members of the court, adhering to a dissenting opinion in Massachusetts, or regarding that decision as distinguishable, would hold that none of the plaintiffs have Article III standing. We therefore affirm, by an equally divided Court, the Second Circuit’s exercise of jurisdiction and proceed to the merits.

Although the Court did not identify the members on each side, it is reasonable to assume that Justices Ginsburg, Breyer, Kagan, and Kennedy would have held that some of these Plaintiffs had standing to sue and that Justices Roberts, Scalia, Thomas, and Alito disagreed. What remains to be seen – given the Court’s decision in Massachusetts focusing on a State’s standing to sue – is whether, in follow-on litigation, there might be a 5-4 majority against a non-state actor’s standing to sue for greenhouse gas-based common law nuisance claims.