Supreme Court Observations: AEP v. Connecticut

Guest Commentary

Peter Glaser and Douglas A. Henderson, Troutman Sanders LLP

Climate change tort litigation – at least based on federal common law – collapsed under its own weight Monday in an 8-0 Supreme Court decision written by Justice Ginsburg in AEP v. Connecticut (Justice Sotomoyaor recusing because she had been on the Second Circuit panel from which the case originated). Eight states, New York City and environmental interest groups had sued five electric utilities in 2004. The suit alleged that the utilities’ electric generating stations’ greenhouse gas (GHG) emissions were contributing to climate change which they alleged was an actionable nuisance under common law.  The District Court dismissed, finding that the case entailed a non-justiciable political question, but the Second Circuit reversed.

These same states, however, had been petitioners in Massachusetts v. EPA, 549 U.S. 497 (2007), in which the Supreme Court decided that GHGs constitute “air pollutants” under the Clean Air Act (CAA) which the Environmental Protection Agency (EPA) could regulate if it found that GHGs pose a danger to the health and welfare.  EPA subsequently made such an “endangerment finding” and has commenced regulating GHGs both from automobiles and from factories and electric generating stations.  Moreover, EPA has entered into a consent decree committing it to issue further GHG regulations both of new and existing electric stations next year.  Thus, by the time the AEP case reached the Supreme Court, the petitioners were in the position of having already convinced the Court that the CAA provides a regulatory scheme to address GHGs, and of now seeking Supreme Court sanction of another remedy under tort law.

The Supreme Court declined to give them two paths to address the same alleged climate change injuries.  Finding that the CAA “‘speaks directly’ to emissions of carbon dioxide from the defendants’ plants,” the Court held that the Act “and the EPA actions it authorizes displace any federal common law right to seek abatement of carbon-dioxide emissions from fossil-fuel fired power plants.”  According to the Court, “the plaintiffs propose that individual federal judges determine, in the first instance, what amount of carbon-dioxide emissions is ‘unreasonable’ … and then decide what level of reduction is “practical, feasible and economically viable.’”  Moreover, “[s]imilar suits could be mounted, counsel for the States and New York City estimated, against “thousands or hundreds or tens” of other defendants fitting the description ‘large contributors’ to carbon-dioxide emissions.’” 

The Court found that “[i]t is altogether fitting that Congress designated an expert agency, here, EPA, as best suited to serve as primary regulator of greenhouse gas emissions.”  Said the Court, “[t]he expert agency is surely better equipped to do the job than individual district judges issuing ad hoc, case-by-case injunctions.  Federal judges lack the scientific, economic, and technological resources an agency can utilize in coping with issues of this order.”

Unfortunately, the case is not likely to end climate change tort litigation.  In the first place, the Court only decided plaintiffs’ tort allegations under federal common law and did not resolve their state common law claims because those claims had not been addressed in the Court of Appeals.  The Court suggested that the validity of the state common law claims would depend on, among other things, whether they are preempted by the CAA, which the Court said required a different analysis than displacement.  The Court remanded on this issue, and whether the plaintiffs will seek to press their state common law claims on remand is unknown.  Although preemption and displacement are technically different doctrines, the same logic that underlay the Court’s displacement analysis – that the CAA provides a complete regulatory framework for addressing GHG emissions – would seem to inexorably point to the difficulties state common law claims will have if they reach the Supreme Court.

In addition, other pending tort law claims alleging climate change damage, including the Kivalina case in the Ninth Circuit and the Comer case that was recently refilled in the Southern District of Mississippi, seek damages, whereas the plaintiffs in AEP sought an injunction.  The attorneys for the plaintiffs in Kivalina have already been quoted in the press that this provides a basis to distinguish their case from AEP.

Four other quick notes about the decision.  First, the Court split four-to-four on standing, suggesting both that Justices Roberts, Alito, Scalia and Thomas have not moved off their position in Massachusetts that plaintiffs alleging climate change injuries do not have standing, but also suggesting that Justice Kennedy found no basis to distinguish his holding in Massachusetts that at least state plaintiffs do have standing. 

Second, Justices Alito and Thomas filed a concurring opinion suggesting that they might have voted to overrule Massachusetts had a party raised the argument. 

Third, the Court’s reliance on the displacement doctrines might indicate that the courthouse door would be reopened to federal common law nuisance suits if Congress adopts legislation to nullify EPA’s authority to regulate GHGs.  A bill that would do so recently passed the House of Representatives.  On the other hand, the Court left open the question as to whether, regardless, of displacement, there is such a thing as a federal common law cause of action based on climate change.  Thus, the Court’s decision cannot be read as saying that enactment of the House bill into law would automatically create a federal common law cause of action, just that the issue would become once again uncertain.

Fourth, lest there may be any mistake as to whether the Court has somehow endorsed the necessity of GHG regulation by EPA under the CAA, the Court ruled that displacement occurs simply because Congress delegated to EPA the authority to regulate.  The Court said that displacement would still occur even if EPA determined, in its judgment, not to regulate, although the exercise of that judgment of course would be subject to judicial review.  And in discussing EPA’s “endangerment finding,” the Court was moved to include the following footnote:  “For views opposing EPA’s, see, e.g., Dawidoff, The Civil Heretic, N.Y. Times Magazine 32 (March 29, 2009). The Court, we caution, endorses no particular view of the complicated issues related to carbon-dioxide emissions and climate change.”  The subject of that article is Freeman Dyson, a famous scientists and noted climate change skeptic.

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