Supreme Court Rejects Climate Change Suit

Those in the finishing industry will recall how recently the U.S. Environmental Protection Agency was snubbed in its effort to impose new rules on companies that use ‘burn-off’ ovens in their daily operations.

Now the U.S. Supreme Court has weighed in on an issue involving lawsuits over greenhouse gas (GHG) emissions from power companies and whether they cause a public nuisance.

In June, the Supreme Court dealt a blow to parties suing power companies over GHG emissions, finding that the Clean Air Act and EPA’s authority displace federal common law nuisance claims over the emissions. However, the narrow opinion likely will not end these climate change nuisance cases. (American Electric Power Co. v. Connecticut, U.S., No. 10-174, 6/20/11).

Although federal common law has been used to settle interstate air pollution disputes in the past, when Congress decides to weigh in, “the need for such an unusual exercise of law-making by federal courts disappears,” Justice Ruth Bader Ginsburg explained.

The court pointed out that its ruling in Massachusetts v. EPA, 549 U.S. 497 (2007) confirmed that Congress gave the U.S. EPA the power to regulate emissions of GHGs under the CAA. This took the issue out of the hands of federal judges who are ill-equipped to deal with such a highly technical and policy-laden subject.

The suit was brought by several states and the City of New York against four private power companies and the Tennessee Valley Authority, a federally-owned corporation that operates power plants in several states. The plaintiffs claimed that these companies account for 25 percent of carbon dioxide (CO₂) emissions from U.S. utilities. By contributing to climate change, these emissions created a “substantial and unreasonable interference with public rights,” in violation of the federal common law of interstate nuisance. In other words, the emissions contributed to climate change, which in turn contributed to changed weather patterns, that caused nuisance damages., The Plaintiffs sought injunctive relief requiring each company to cap its CO₂ emissions and then reduce them by a certain percentage each year.

Additionally, the Court dismissed the idea that federal common law is not displaced until the EPA actually issues rules governing emissions from the defendants’ plants. It is not the act of regulating something that displaces federal common law, the court said. Rather, it is the delegation of the authority that matters, and in this case that delegation was to an expert agency equipped to handle these issues. In this instance, the EPA gets the first shot at regulating GHG emissions, the court pointed out.  The EPA is tasked with balancing an array of important policy decisions ranging from economic considerations, to energy needs, to foreign relations,  things the courts can’t really do according to the decision..

One key issue is whether public nuisance claims can proceed under state law or if they are trumped by federal laws and regulations.  It is likely many state courts faced with these cases will immediately look to the Supreme Court decision for guidance, although the court did not address any state law claims. Thus, the next battleground for climate change tort litigation likely will be in state courts.  Whether the CAA preempts all common law causes of action will be a critical issue.

So what does this mean for all of us in the trenches?  Well first, you would expect that this decision will spur EPA on to some action to further regulate GHG emissions.  At present, all they have done is establish a reporting mechanism for the largest emitters, and ensure GHG emissions are considered in Best Available Control Technology (BACT) determinations for large emitters constructing new or modified facilities.  They will likely see this case as a reinforcement, or mandate, to continue on with regulations.  Depending on the size of your facility, those regulations may or may not directly impact you.  Indirectly, you can expect to see higher power and transportation costs with such regulation.

Citizen groups will look to a strategy of filing suit under the citizen suit provisions of the CAA, as they have done with other issues in the past.  Depending on your facility size or industry group, you could be a target. 

You will also potentially see an influx of cases in state court based on nuisance alleging that industries’ GHG emissions are causing climate change.  In theory, one could point to any facility that emits CO or other GHGs.  These cases could target an industry group (i.e., foundries) or a region of the state (i.e., all CO emitters in Boston).  So a facility that has been watching from the sidelines could potentially be pulled into a suit.  What is interesting about these cases (or frustrating might be a better word), is that climate change is a global phenomenon; one cannot simply point at one source and say “you’re it.”  Motor vehicle emissions, natural emissions (think volcanoes) natural warming and cooling trends, they all contribute to climate change.  To attempt to control climate change in a piecemeal fashion one facility at a time only benefits lawyers, not the environment.

 

Attorney Bill Hayes is a partner at Vorys, Sater, Seymour and Pease in Cincinnati and is a member of the energy, environment and utilities practice group.  His work focuses on air quality issues.  Hayes provides strategic advice to manufacturing clients regarding plant expansions and processing changes.  He also provides enforcement defense in matters brought by local, state and federal environmental agencies and advises clients on TSCA compliance matters, including nanotechnology regulatory developments. He can be reached at 513-723-4000, or WDHayes@Vorys.com.