Second Circuit Allows Federal Nuisance Claims for Global Warming to Proceed

In a decision that may place even greater pressure on Congress to enact climate change legislation, the Second Circuit Court of Appeals has allowed a nuisance case against five of the nation’s largest utilities to proceed because no federal climate change laws “preempt the field.” Eight states and the City of New York brought federal common law nuisance claims against the utilities, based on their emissions of greenhouse gases. The Circuit Court’s lengthy opinion[1] in the case of Connecticut et al v. American Electric Power Co., Inc.[2] also affirmed that three environmental land trusts could press similar claims. A copy of the opinion may be viewed at this link.

The plaintiffs’ claims were initially dismissed in 2005, after a federal district court held that they raised political questions which were so intertwined with national domestic and foreign policy on global warming that they were non-justiciable. Reversing that decision, the Second Circuit held that while the claims had political implications, they remained justiciable in the federal courts and that the states, the City and the land trusts all had standing to pursue those claims. While acknowledging that the EPA or Congress could still issue regulations or adopt legislation that pre-empted the field, neither has done so. Therefore, the Court held that the plaintiffs’ claims were not displaced by other federal law or regulation.

Background

The initial lawsuits were brought by the States of Connecticut, New York, California, Iowa, New Jersey, Rhode Island, Vermont, Wisconsin, the City of New York, the Open Space Institute, the Open Space Conservancy, and the Audubon Society of New Hampshire. The plaintiffs sought an injunction curbing the carbon dioxide emissions of six major power producers: the American Electric Power Company, the American Electric Power Service Company, the Southern Company, the Tennessee Valley Authority, XCel Energy, Inc., and the Cinergy Corp.[3] The plaintiffs maintained that the defendants constituted the “five largest emitters of carbon dioxide in the United States and … among the largest in the world.” The plaintiffs alleged that the defendants’ combined annual emission of over 650 million tons of carbon dioxide contributed to global warming and, as a result, constituted a public nuisance. Part of the plaintiffs’ nuisance claim rested on their assertion that the defendants had “practical, feasible and economically viable options for reducing carbon dioxide emissions without significantly increasing the cost of electricity.”[4]

The plaintiffs identified a broad list of threatened injuries, including increased fatalities due to intensified and prolonged heat waves, increased respiratory problems due to smog, inundation of costal land, and increased droughts and floods resulting in property damage and threats to human safety.

District Court Judge Loretta A. Preska dismissed both lawsuits on September 16, 2005 on the grounds that the claims were non-justiciable political questions because the plaintiffs’ claims could not be adjudicated without the court making wide-sweeping initial policy determinations regarding: (1) the level at which to cap the defendants’ carbon dioxide emissions; (2) the emission reductions to impose upon the defendants and a schedule for doing so; and, (3) determining and balancing the implications of such relief on the United States’ ongoing negotiations with other nations concerning global climate change and the implications of the requested relief on the United States’ energy sufficiency and national security.[5]

After taking more than three years to review Judge Preska’s decision, the Second Circuit concluded: (1) that the case did not present non-justiciable political questions; (2) that federal common law on nuisance governs the plaintiffs’ claims and that the plaintiffs had stated claims under the federal common law; and (3) that the plaintiffs’ claims were not preempted by either EPA regulation or Congressional action.[6]

A Case with Political Implications Does Not Necessarily Present Non-Justiciable Political Questions

The political question doctrine is “primarily a function of the separation of powers,”[7] “designed to restrain the Judiciary from inappropriate interference in the business of the other branches of Government.”[8] In the seminal case of Baker v. Carr, the Supreme Court set out six “formulations” which “may describe a political question:”

Prominent on the surface of any case held to involve a political question is found (1) a textually demonstrable constitutional commitment of the issue to a coordinate political department; or (2) a lack of judicially discoverable and manageable standards for resolving it; or (3) the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or (4) the impossibility of a court’s undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or (5) an unusual need for unquestioning adherence to a political decision already made; or (6) the potentiality of embarrassment from multifarious pronouncements by various departments on one question.[9]

In dismissing the plaintiffs’ claims as non-justiciable political questions, Judge Preska relied primarily on the third formulation. The Second Circuit began its review of that approach by noting that Baker set a “high bar for justiciability: ‘Unless one of these formulations is inextricable from the case at bar, there should be no dismissal for nonjusticiability on the ground of the political question’s presence.”[10] While acknowledging that there are cases presenting “controversies which revolve around policy choices and value determinations constitutionally committed for resolution to the halls of Congress or the confines of the Executive Branch,”[11] the Court stated that the “[d]efendants’ characterization of this lawsuit as implicating ‘complex, inter-related and far-reaching policy questions about the causes of global climate change and the most appropriate response to it’ magnifies to the outer limits the discrete domestic nuisance issues actually presented.”[12]

Limiting its focus to the legal rather than the political issues, the Court relied heavily on the relief sought by the plaintiffs: “The Plaintiffs [do not] ask the court to fashion a comprehensive and far-reaching solution to global climate change, a task that arguably falls within the purview of the political branches.”[13] Instead, the Court read the complaint to present a nuisance claim that fell within a “long line of federal common law … nuisance cases where federal courts employed familiar public nuisance precepts, grappled with complex scientific evidence, and resolved the issues presented based on a fully developed record.”[14]

The Court rejected the notion that, just because a case has political connotations it necessarily presents non-justiciable political questions, relying on a previous Second Circuit opinion in Klinghoffer v. S.N.C. Achille Lauro.[15] Klinghoffer was a wrongful death case where an American passenger on an ocean liner was killed by a Palestinian Liberation Organization operative, and where the Second Circuit looked beyond “[t]he fact that the issues [in the case] arise in a politically charged context” and found that the actual cause of action was “an ordinary tort suit.”[16] Quoting from the States’ brief, the Court agreed “[t]hat Plaintiffs’ injuries are part of a worldwide problem does not mean Defendants’ contribution to that problem cannot be addressed through principled adjudication.”[17]

Standing

Because she dismissed the underlying case on political question grounds, Judge Preska did not reach the issue of standing. Having rejected the political question argument, the Circuit Court had to explore whether the states and environmental trusts have standing to assert their nuisance claims.

Standing for the states rested largely on the grounds of parens patriae. For parens patriae standing to exist, “[a] state: (1) ‘must articulate an interest apart from the interests of particular private parties, i.e., the State must be more than a nominal party’; (2) ‘must express a quasi sovereign interest’; and (3) must have ‘alleged injury to a sufficiently substantial segment of its population.’”[18] In finding that the states had effectively asserted quasi sovereign interests, the Court relied on the Supreme Court’s opinion in Massachusetts v. EPA,[19] where the Supreme Court held that the State of Massachusetts had Article III standing, in part, based on its proprietary interest as a property owner.[20] The Trusts were also found to have sufficient standing based on their alleged proprietary interests.[21]

In addition, the Court found that the states were “more than nominal parties” based on their interest in safeguarding the public health, which the Court found to be “an interest apart from any interest held by individual private entities. Their quasi-sovereign interests involving their concern for health and well-being – both physical and economic – of their residents in general are classic examples of a state’s quasi-sovereign interest.”[22]

The Court found that that the plaintiffs had asserted both current injuries (e.g., reduced snowpack in California and potential property damage from flooding) and future injuries (e.g. rising sea levels which could cause flooding, harm infrastructure and cause billions of dollars in damages).[23] As to the requirement that the alleged injuries be “imminent,” the Court noted that “Defendants are currently emitting large amounts of carbon dioxide and will continue to do so in the future. Due to Plaintiffs’ exposure to the emissions, the future injuries complained of are ‘certainly impending,’ … because the processes producing them have already begun.”[24]

Responding to the argument that the plaintiffs’ claims lacked causation, the Court noted that, at this stage of the case, “tort-like causation is not required by Article III” and the plaintiffs “need only show that there is a substantial likelihood that defendants’ conduct caused plaintiff’s harm.”[25] Finally, with respect to “redressability” the Court once again pointed to the Supreme Court’s opinion in Massachusetts v. EPA, where the Supreme Court “recognized that regulation of motor vehicle emissions would not ‘by itself reverse global warming,’ but that it was sufficient for the redressability inquiry to show that the requested remedy would ‘slow or reduce it.’”[26]

Federal Common Law Nuisance Claim

Having found that the plaintiffs have standing, the Court adopted Restatement § 821B(1) as an appropriate definition of public nuisance for purposes of federal common law. Under the Restatement, a public nuisance has two elements: an “unreasonable interference” and “a right common to the general public.” The states claimed that, by contributing to global warming, the defendants’ emissions:

constitute a substantial and unreasonable interference with public rights in the plaintiffs’ jurisdictions, including, inter alia, the right to public comfort and safety, the right to protection of vital natural resources and public property, and the right to use, enjoy, and preserve the aesthetic and ecological values of the natural world.

According to the Second Circuit, “[t]hese grievances suffice to allege an ‘unreasonable interference’ with ‘public rights’ within the meaning of § 821B(2)(a).”[27] The Court also found that the City of New York stated a valid claim, as “the federal common law of nuisance had been extended beyond cases brought by states” and citing cases that “explicitly held that a municipality could assert a claim under the federal common law of nuisance.”[28] With respect to the trusts, the Court noted that “in order to give full effect to the federal common law of nuisance, ‘private parties should be permitted, and indeed encouraged, to participate in the abatement of such nuisances.’”[29]

Congress’ Refusal to Regulate Greenhouse Gas Emissions and EPA’s Endangerment Finding Does Not Preclude Judicial Action

In her ruling, Judge Preska had found it significant that the political branches had declined to regulate carbon dioxide emissions. Instead of precluding the plaintiffs’ claims, the Second Circuit saw the lack of political action as providing an avenue for the use of the common law. “Congress’s mere refusal to legislate … falls far short of an expression of legislative intent to supplant the existing common law in that area. … [Instead,] if regulatory gaps exist, common law fills those interstices.”[30]

Similarly, the Court rejected the argument that the Clean Air Act and EPA’s proposed endangerment finding provided sufficient regulation in the area to pre-empt the plaintiffs’ common law nuisance claim. With respect to the Clean Air Act, the Court noted that EPA has set National Ambient Air Quality Standards for only six pollutants.[31] Recognizing that the Supreme Court’s opinion in Massachusetts v. EPA[32] held that “EPA has the statutory authority to regulate the emission of [greenhouse] gasses from new motor vehicles,”[33] the Court noted that even EPA’s recent proposed endangerment finding has not resulted in actual regulation in the area. “EPA has proposed to find that greenhouse gases endanger public health and welfare. … As EPA notes succinctly on its website: ‘This proposed action, as well as any final action in the future, would not itself impose any requirements on industry or other entities.’”[34] As a result, “[w]e cannot say … that EPA’s issuance of proposed findings suffices to regulate greenhouse gases in any way that ‘speaks directly’ to Plaintiffs’ problems and thereby displaces Plaintiffs’ existing remedies under the federal common law.”[35]

Conclusion

Recognizing that either Congressional action or EPA’s issuance of regulation may supplant the claims that it had sanctioned, the Court concluded its opinion by paraphrasing the Supreme Court’s earlier opinion in Illinois v. City of Milwaukee,[36] in which the Supreme Court anticipated subsequent regulation under the Clean Water Act: “It may happen that new federal laws and new federal regulations may in time pre-empt the field of federal common law of nuisance. But until that comes to pass, federal courts will be empowered to appraise the equities of the suits alleging creation of a public nuisance by greenhouse gases.”[37]

For more information, contact Steve Jones or any member of our Climate Change or Environmental Litigation practice groups.