Solicitor General Sides With Utilities, Asking Supreme Court to Block Common Law Climate Change Lawsuit

In a brief filed last week, the Solicitor General has urged the Supreme Court to accept review of the Second Circuit’s decision in American Electric Power v. Connecticut (AEP).[1] In AEP, the Second Circuit allowed a nuisance case against five of the nation’s largest utilities to proceed because no federal climate change laws “preempt the field.” The defendants in the case include the Tennessee Valley Authority (TVA), which is both a federal agency and the operator of a number of coal-fired power plants. AEP was brought by eight States, three nonprofit land trusts, and the City of New York, seeking to hold the five named defendants “jointly and severally liable for … global warming.”[2] American Electric Power and the other defendants (the Utilities) filed a petition for certiorari on August 2, maintaining that the States and other plaintiffs lacked standing to raise nuisance claims. The Utilities argued that certiorari was appropriate because the Clean Air Act directs that regulation of climate change emissions be undertaken by the EPA and also because climate change regulation presents a non-judicial political question.[3]

The Obama Administration’s brief, which was filed on behalf of TVA, joined in the request for certiorari. This position caught the plaintiffs in the case and some environmental groups off guard. Based on the EPA’s recent issuance of a number of climate change rules, many had expected the Solicitor General to sit this case out. Ironically, Acting Solicitor General Neal Kumar Katyal grounded his request for certiorari on EPA’s new regulations, maintaining that the newly-finalized regulations on greenhouse gases have displaced the type of common-law claim that the Second Circuit had sanctioned. Katyal urged the court to vacate the Second Circuit’s decision and remand the case for further proceedings, this time taking into account the Administration’s push to regulate greenhouse gases under the Clean Air Act.

Background

The Second Circuit’s AEP Decision

The AEP lawsuits (two consolidated actions) were originally brought in the Southern District of New York 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, TVA, XCel Energy, Inc., and the Cinergy Corp.

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]

District Court Judge Loretta A. Preska dismissed both lawsuits on the grounds that the cases raised non-justiciable political questions. Judge Preska found that 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]

Ninth Circuit Currently Considering a Similar Case

A similar suit, Native Vill. of Kivalina v. ExxonMobil Corp.,[7] is currently making its way through the Ninth Circuit. Kivalina was brought in 2008 by the Alaskan coastal village of Kivalina, which maintained that a loss of sea ice caused by climate change threatened the land where the village is located. Kivalina sued numerous oil and power companies, asserting federal common law claims of public nuisance, as well as private and public nuisance claims under California state law. The Northern District of California dismissed the suit on political question grounds.[8]

Fifth Circuit Would Have Allowed Similar Claims in Comer v. Murphy Oil, Only to Later Vacate That Decision

On October 16, 2009, the Fifth Circuit joined the Second Circuit in reversing a dismissal of common law tort claims based on actions alleged to have caused climate change. This initial ruling would have allowed the common law nuisance claims to proceed against greenhouse gas emitters on similar grounds to the Second Circuit’s AEP decision. The Fifth Circuit vacated that opinion and agreed to rehearing en banc, but then dismissed the appeal on grounds that it lacked a quorum to transact judicial business based on the disqualification and recusal of one of the nine judges who had vacated the panel opinion and judgment.[9] This decision had the effect of reinstating the district court’s dismissal of the Comer case on political question grounds. As a result, there is technically a circuit split on the issue of whether common law nuisance claims may be brought against greenhouse gas emitters.

Fourth Circuit Decision in TVA Case Supports the Administration’s Position

The Obama Administration’s position is consistent with the Fourth Circuit’s ruling last month in another case involving TVA, North Carolina v. Tennessee Valley Authority.[10] In that case, the State of North Carolina and other plaintiffs had argued that emissions of conventional air pollutants (nitrogen oxides, sulfur dioxide, and particulates) from TVA’s power plants constituted a public nuisance. The district court agreed and issued an injunction that would have required TVA to immediately install additional air pollution controls on a number of power plants. TVA appealed, and the Fourth Circuit reversed the district court’s decision and vacated the injunction.

The Fourth Circuit recognized that a complex body of regulations have been developed at the federal and state level under the federal Clean Air Act that are specifically designed to control these same air pollutants, including air quality standards designed to protect public health.[11] It concluded that allowing public nuisance doctrine to overturn this comprehensive regulatory scheme could actually threaten air quality, as well as economic activity, by creating a “balkanization of clean air regulations and a confused patchwork of standards.”[12]

AEP’s Petition for Certiorari

In their petition for certiorari, the Utilities reiterated their argument before the Second Circuit that climate change is the type of political question that must be answered by Congress. They also argued that, because EPA is moving forward with regulations under the Clean Air Act, there is no basis for judicial intervention into the controversy: “The ramifications of this holding, if it is allowed to stand, are staggering. 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.”[13] Because there are “over six million [stationary] sources of greenhouse gas emissions [that] would be subject to permitting requirements under the Clean Air Act … [e]ach case gives rise to a new opportunity for federal judges to make regulatory judgments that conflict with those of the political branches and eventually with regimes imposed by other judges.”[14]

While any congressional action on climate change this year appears doubtful, AEP spokeswoman Melissa McHenry said the utility still wants Congress to explicitly address greenhouse gases. The company supported the economy-wide cap-and-trade program that was included in the energy and climate bill passed by the House, though it opposed the utility-only approach that was preferred by some in the Senate. McHenry was quoted as saying, “Ideally, legislation would be passed and that would make it kind of a moot point.”[15]

The Solicitor General Joined AEP’s Request for Remand to Allow the Second Circuit to Take Account of EPA’s Regulatory Efforts

The Administration’s brief was filed on behalf of TVA, one of the defendants in the AEP case. As noted above, the TVA was also a party in the case in which the Fourth Circuit vacated a district court’s injunction regarding conventional air pollutants based on concerns that allowing a nuisance case to proceed would threaten the comprehensive regulatory scheme already in place for those pollutants under the Clean Air Act.

In his brief, the Solicitor General urged the Court to vacate the Second Circuit’s decision and remand the case so that the Circuit Court could take into account the Administration’s push to regulate greenhouse gases under the Clean Air Act. “The court of appeals held that plaintiffs’ federal common-law actions for public nuisance had not been displaced by the CAA because ‘EPA does not currently regulate carbon dioxide under the CAA,’ and does not regulate such emissions from stationary sources.”[16] The Solicitor General argued that the facts have changed since the decision:

Since this court held in 2007 that carbon dioxide falls within that regulatory authority, EPA has taken several significant steps toward addressing the very question presented here.… That regulatory approach is preferable to what would result if multiple district courts – acting without the benefit of even the most basic statutory guidance – could use common-law nuisance claims to sit as arbiters of scientific and technology-related disputes and de facto regulators of power plants and other sources of pollution both within their districts and nationwide.[17]

EPA’s Regulatory Efforts Since the Second Circuit Decision

While climate change legislation is currently stalled in Congress, the EPA has taken a number of steps since the Second Circuit issued its decision in AEP to implement the directive in Massachusetts v. EPA to regulate greenhouse gas emissions under the Clean Air Act. In 2009, EPA found that greenhouse gas emissions from motor vehicles “endanger public health or welfare” and should be regulated under the Clean Air.[18] EPA has also issued a final rule establishing emissions standards for motor vehicles, requiring (among other mandates) that new models meet an estimated combined average emissions level of 250 grams of carbon dioxide per mile.[19] Earlier this summer, EPA issued rules addressing greenhouse gas emissions by “stationary sources,” which, if finalized, would govern sources such as those operated by the Utilities.[20]

Plaintiffs and Environmental Groups Surprised by the Solicitor General’s Position

The EPA’s push during the Obama Administration to advance regulation of greenhouse gases under the Clean Air Act has been taken as a signal that the Administration intended to reverse the course set by the Bush Administration and move aggressively on climate change. For this reason, the Solicitor General’s decision to side with the Utilities in this case was very troubling to Matt Pawa, an attorney representing plaintiffs in the AEP case. Mr. Pawa was quoted as saying that the plaintiffs “feel stabbed in the back.… This was really a dastardly move by an administration that said it was a friend of the environment. With friends like this, who needs enemies?”[21] Representatives of environmental groups voiced similar sentiments – David Bookbinder, who until May was the Sierra Club’s chief climate counsel, stated that “This reads as if it were cut and pasted from the Bush administration’s briefing in Massachusetts.”[22] The plaintiffs appear not to have considered the effect that having a federal defendant in the case – TVA – had on the Solicitor’s decision to weigh in.

Conclusion

The Supreme Court typically agrees to hear less than one percent of the petitions for certiorari filed each year. It remains to be seen if having the Solicitor General advocate acceptance of certiorari will generate interest from the Court. If so, it is possible that the Court might simply remand the case to allow the Second Circuit to take account of EPA’s regulatory efforts, since the Circuit Court was clear that is was stepping into a void left by both Congress’ inability to legislate and EPA’s (then) proposed endangerment finding: “We 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.”[23]

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