Supreme Court Decides Global Warming Case

In the third of our trilogy this week, let's take a look at the Supreme Court's decision in  American Electric Power Co. v. Connecticut, No. 10-174 (U.S. 6/20/11).

Readers may recall from our previous posts that in 2004, two groups of plaintiffs, one consisting of eight states and New York City, and the other consisting of three land trusts, sued six electric power corporations that own and operate fossil-fuel-fired power plants, seeking abatement of defendants' alleged ongoing contributions to the "public nuisance of global warming." Plaintiffs claimed that global warming, to which the defendants allegedly contributed as large emitters of carbon dioxide, is causing, and will continue to cause serious harm affecting human health and natural resources.

Plaintiffs brought these actions under the federal common law of nuisance to force defendants to cap and then reduce their carbon dioxide emissions. The district court held that plaintiffs' claims presented a non-justiciable political question and dismissed the complaints. On appeal, plaintiffs argued that the political question doctrine does not bar adjudication of their claims; that they had standing to assert their claims; that they had properly stated claims under the federal common law of nuisance; and that their claims were not displaced by any federal statutes.

In a lengthy opinion, the Second Circuit held that the district court erred in dismissing the complaints on political question grounds; that all of plaintiffs had standing; that the federal common law of nuisance governs their claims; that plaintiffs had stated claims under the federal common law of nuisance; that their claims were not displaced. In a very minimalist interpretation of what is needed for standing, the Second Circuit distinguished multiple precedents of the Supreme Court which held that to have standing a plaintiff must allege an injury that is concrete, direct, real, and palpable -- not abstract. Injury must be particularized, personal, individual, distinct, and differentiated -- not generalized or undifferentiated.

An equally divided Court affirmed the Second Circuit’s exercise of jurisdiction. (Justice Sotomayor took no part in the consideration or decision of this case because of her participation in the 2d Circuit.). But the Court then held that  the Clean Air Act displaces any federal common law right to seek abatement of carbon-dioxide emissions from fossil-fuel fired power plants. It was an academic question whether, in the absence of the Clean Air Act and the EPA actions the Act authorizes, the plaintiffs could state a federal common law claim for curtailment of greenhouse gas emissions because of their alleged contribution to global warming -- because any such claim would be displaced by the federal legislation authorizing EPA to regulate carbon-dioxide emissions.

When Congress addresses a question previously governed by a decision rested on federal common law, the Court explained, the need for such an unusual exercise of law making by federal courts disappears. Legislative displacement of federal common law does not require the same sort of evidence of a clear and manifest Congressional purpose demanded for preemption of state law.  The Court thus held that the Clean Air 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. Precedent made plain that emissions of carbon dioxide qualify as air pollution subject to regulation under the Act, and it was equally plain that the Act “speaks directly” to emissions of carbon dioxide from the defendants’ plants.

If EPA did not set emissions limits for a particular pollutant or source of pollution, States and private parties could always petition for a rulemaking on the matter, and EPA’s response would be reviewable in federal court. The Act itself thus provides a means to seek limits on emissions of carbon dioxide from domestic power plants—the same relief the plaintiffs were seeking by invoking federal common law. The Court saw no room for "a parallel track."

The plaintiffs argued that federal common law should not be displaced until EPA actually exercises its regulatory authority, i.e., until it sets standards governing emissions from the defendants’ plants. The Court disagreed. The critical point was that Congress delegated to EPA the decision whether and how to regulate carbon-dioxide emissions from power plants; the delegation is what displaces federal common law.

Interestingly, although the split-court did not change the jurisdictional ruling, the Court did note that the appropriate amount of regulation in any particular greenhouse gas-producing sector cannot be prescribed in a vacuum: as with other questions of national or international policy, informed assessment of competing interests is required. Along with the environmental benefit potentially achievable, our Nation’s energy needs and the possibility of economic disruption must weigh in the balance.  The Clean Air Act entrusts such complex balancing to EPA in the first instance, in combination with state regulators. It was "altogether fitting" that Congress designated an expert agency, here, EPA, as best suited to serve as primary regulator of greenhouse gas emissions. "The expert agency is surely better equipped to do the job than individual district judges issuing ad hoc, case-by-case injunctions."  A statement that sounds alot like defendant's jurisdictional argument. 

The Court went on: federal judges lack the scientific, economic, and technological resources an agency can utilize in coping with issues of this order. Judges may not commission scientific studies or convene groups of experts for advice, or issue rules under notice-and-comment procedures inviting input by any interested person, or seek the counsel of regulators in the States where the defendants are located. Rather, judges are confined by a record comprising the evidence the parties present. Moreover, federal district judges, sitting as sole adjudicators, lack authority to render precedential decisions binding other judges. 

Notwithstanding these disabilities, the plaintiffs proposed 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.” These determinations would be made for the defendants named in the litigation, and then similar suits could be mounted against thousands of other defendants fitting the plaintiffs' description “large contributors” to carbon-dioxide emissions.

Thus, since the decision turned on the displacement by Congressional designation of EPA as the prime decision-maker on regulation of emissions, if efforts underway in Congress to take away EPA's authority succeed, this may affect future global warming cases.  The Court also declined to decide the plaintiffs’ state-law claims, leaving that battle for another day.  Nevertheless, the issues of judicial competence and discretion highlighted by the Court may serve to deter federal judges from making environmental policy under any substantive law.  Also left open is whether a State may sue to abate any and all manner of pollution originating outside its borders.

Defendants in Second Circuit Climate Change Case Seek Cert

Several electric power companies have asked the Supreme Court to review a Second Circuit ruling that Connecticut and several other states may seek greenhouse gas emissions reductions under a federal common law nuisance claim.  American Electric Power Co. v. Connecticut, No. 10-174 (U.S. 8/2/10). The petition for certiorari was filed by American Electric Power Co., Duke Energy Corp., Southern Co., and Xcel Energy Inc.

Readers may recall that in 2004, two groups of plaintiffs, one consisting of eight states and New York City, and the other consisting of three land trusts, sued six electric power corporations that own and operate fossil-fuel-fired power plants, seeking abatement of defendants' alleged ongoing contributions to the "public nuisance of global warming." Plaintiffs claimed that global warming, to which the defendants allegedly contributed as large emitters of carbon dioxide, is causing, and will continue to cause serious harm affecting human health and natural resources.

Because of the procedural posture (motion to dismiss), the court did not really describe the other side of the story, but readers of MassTortDefense know that change is what the climate is always doing as a result of the planet's orbital eccentricities, axial wobbles, solar brightness changes, cosmic ray flux, and multiple other factors. There are numerous plausible terrestrial drivers of climate changes too. While global warming is a serious topic worthy of scientific study and political discussion, plaintiffs' alleged "consensus" on this issue ignores the fact that global mean temperature is only one part of climate, and may not even be the best metric. Moreover, the most important driver of the greenhouse effect are water vapor and clouds. Carbon dioxide is only about 0.038% of the atmosphere, and humans are responsible for only about 3.4% of carbon dioxide emitted to the atmosphere annually, the rest of it being natural.  When thinking about "global climate" changes, we have to be cognizant of the fact that humans have been trying to measure the temperature consistently only since the1880s, during which time even advocates think the world may have warmed by about +0.6 °C -- which is less than the margin of error on our ability to measure the Earth's temperature. 

Anyway, plaintiffs brought these actions under the federal common law of nuisance or, in the alternative, state nuisance law, to force defendants to cap and then reduce their carbon dioxide emissions. The district court correctly held that plaintiffs' claims presented a non-justiciable political question and dismissed the complaints. On appeal, plaintiffs argued that the political question doctrine does not bar adjudication of their claims; that they had standing to assert their claims; that they had properly stated claims under the federal common law of nuisance; and that their claims were not displaced by any federal statutes.

In a lengthy opinion, the court of appeals held that the district court erred in dismissing the complaints on political question grounds; that all of plaintiffs had standing; that the federal common law of nuisance governs their claims; that plaintiffs had stated claims under the federal common law of nuisance; that their claims were not displaced.  In a very minimalist interpretation of what is needed for standing, the Second Circuit distinguished multiple precedents of the Supreme Court which held that to have standing a plaintiff must allege an injury that is concrete, direct, real, and palpable -- not abstract. Injury must be particularized, personal, individual, distinct, and differentiated -- not generalized or undifferentiated. The Supreme Court has further stated that the asserted injury must be actual or imminent, certainly impending and immediate --not remote, speculative, conjectural, or hypothetical. The court of appeals rejected defendants challenge that these vague contentions of future injury at some unspecified future date are not the kind of “imminent” injury required. The court also gave short shrift to the argument that plaintiffs could neither isolate which alleged harms will be caused by defendants' emissions, nor allege that such emissions would alone cause any future harms. 

This petition raises the important, recurring question whether states and private plaintiffs have standing to seek, and whether federal common law provides authority for courts to impose, a non-statutory, judicially created regime for setting caps on greenhouse gas emissions based on vague and indeterminate nuisance concepts.  It also asks the Court to decide whether judges, in addition to Congress and the EPA, may regulate greenhouse gas emissions at the behest of states and private parties and, if so, under what standards.  Under the Second Circuit's ruling, a single judge could set emissions standards for regulated utilities across the country—or, as here, for just that subset of utilities that the plaintiffs have arbitrarily chosen to sue. Judges in subsequent cases could set different standards for other utilities or industries, or conflicting standards for these same utilities.

While the Second Circuit called this an ordinary tort suit, this litigation seeks to transfer to the judiciary nearly standardless authority for some of the most important and sensitive economic, energy, and social policy issues presently before the country.  Thus, at stake is the financial health and security of numerous sectors of the economy. Indeed, virtually every entity and industry in the world is responsible for some emissions of carbon dioxide and is thus a potential defendant in climate change nuisance actions under the theory of this case. The threat of litigation, and the indeterminate exposure to monetary and injunctive relief that it entails, could substantially impede and alter the future investment decisions and employment levels of all affected industries, and ultimately every sector of the economy.

Chamber of Commerce Requests Open Debate on Science of Global Warming

The U.S. Chamber of Commerce last week filed a supplemental request for an “on-the-record” hearing to debate the evidence behind the Environmental Protection Agency’s expected finding that greenhouse gases endanger the public health and welfare.

Readers of MassTortDefense may recall that in 2007, in Massachusetts v. EPA, 549 U.S. 497 (2007), the Supreme Court found that greenhouse gases could be regarded as air pollutants, and held that EPA must determine whether or not emissions of greenhouse gases from motor vehicles cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, or whether the science is too uncertain to make a reasoned decision. In making these decisions, the agency is required to follow the language of section 202(a) of the Clean Air Act. The Supreme Court decision resulted from a petition for rulemaking under section 202(a) filed by more than a dozen environmental, renewable energy, and other organizations.

The EPA is proposing to find that the current and projected concentrations of the mix of six key greenhouse gases — carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), and sulfur hexafluoride (SF6) — in the atmosphere threaten the public health and welfare of current and future generations. This is typically referred to as an "endangerment finding."  EPA is further proposing to find that the combined emissions of CO2, CH4, N2O, and HFCs from new motor vehicles and motor vehicle engines contribute to the atmospheric concentrations of these key greenhouse gases and hence to the threat of climate change.  While an endangerment finding under the Clean Air Act would not by itself automatically trigger extensive regulation under the entire Act, many observers expect such regulations.  Moreover, the finding could prod the Congress to pass controversial climate legislation.  Finally, it may impact the pace and weight of climate change litigation.

The Chamber argues that the informal notice-and-comment process employed here has not worked to air the issues, and the only real solution is an on-the-record hearing for a transparent review of all the evidence.  Having reviewed the evidence in EPA’s endangerment docket, the Chamber observes flaws and omissions in the reasoning underlying the proposed endangerment finding. The Chamber is thus asking for more transparency in this process, as the ruling could ultimately cause a "regulatory train wreck" with inescapable economic consequences, as well as an impact on mass tort litigation. The agency has apparently ignored evidence contradicting its preliminary conclusions on a wide range of issues, such as the alleged effect higher temperatures will have on net mortality and on the levels of other pollutants.  Media reports have surfaced that EPA ignored a study by two members of its staff concluding that the agency had relied on outdated studies and that the current state of climate science refutes the proposed endangerment finding.



 

Climate Change Litigation and Legislation Update

Although we haven't posted about it much, a number of environmental groups, states and private citizens have brought litigation, seeking to turn climate change issues into mass torts. Thus far, the litigation, which has focused principally on greenhouse gas emissions, has not been very successful. Unlike typical mass tort litigation, some of these plaintiffs admit that part of the goal of the cases is to encourage Congress to act on legislation (leading to regulation) that would achieve some of the same goals.

One example is the mass tort suit filed in 2008 by residents of a small Alaskan village against two dozen energy companies, claiming that carbon dioxide and other greenhouse gases have left their town uninhabitable. Native Village of Kialina v. Exxon Mobil Corp., et al., 2008 WL 2951742 (C.D.Cal.)

Now comes word that a number of studies will be released in the near future, examining the potential impact of pending climate-change legislation, including its effect on food prices. Under the proposed climate-change legislation, a carbon offset, or credit, can be generated when a company reduces the amount of greenhouse gas emitted into the atmosphere. The resulting offsets can then be sold to other polluters or used by the producer to reduce its overall emission totals. Certain companies would have to pay penalties if they emit more than allowed without offsets.The House passed a bill, the American Clean Energy and Security Act of 2009, in late June. There is concern the bill doesn't provide sufficient incentives for food and agricultural companies to receive and generate carbon credits to offset their carbon emissions. The Senate is expected to take up its own climate bill next month. Critics say that the House bill also risks an increase in food and feed prices, and a reduction in the international competitiveness of U.S. businesses.

Again, the legislation and any resulting regulation may have a significant impact on whether the courts will breathe life into mass tort litigation relating to alleged climate change issues.