The US Supreme Court’s decision in AEP v. Connecticut has incredible implications—implications on the state, national, and international levels. Environmentalist groups and court commentators are keenly aware of how certain justices may vote. Chief Justice Roberts and Justices Scalia, Thomas, and Alito all dissented in Massachusetts v. EPA, which clarified the EPA’s authority to regulate GHGs and pollutants; they are not likely to allow AEP v. Connecticut to expand the ability to address climate change through the courts. Justice Sotomayor recused herself because she sat on the Second Circuit panel that decided the case (although she took no part in the decision). If the Court were to split 4-4, the Second Circuit decision would stand.

The AEP decision could have major implications for future environmental regulation, with the Court agreeing to address the question of standing, whether the claim presents a non-justiciable political question, and whether the public nuisance claim is displaced by the Clean Air Act, or by pending regulations. A Court favorable to the origional Plaintiffs, now Respondents—a collection of states, a city, and two land trusts—would need to open the door to similar claims in three ways: 1) a relaxed redressability and causation standard applies and is met to give standing; 2) climate change is an issue for which the court has enough guidance to avoid second-guessing the Legislative or Executive branches; and 3) the emission of greenhouse gasses is not displaced by the Clean Air Act, or the EPA’s commitment to regulate greenhouse gases with the Clean Air Act in the coming months.

The case includes several pegs upon which the Court could hang a decision for the Petitioner power companies; each option before for the Court would limit future litigation to different degrees. Finding that the existence of upcoming regulations, by the EPA in this case, sufficiently displaces a common law public nuisance claim would give government agencies a powerful new ability to stifle lawsuits. Dismissing the case based on the standing, the Court would limit the relaxed standing requirement from the only other climate change case, Massachusetts v. EPA, to cases based only on a procedural right specifically afforded by Congress.

A Glimmer of Hope for Environmentalists

In 2009, a district court decision to issue an injunction against the Tennessee Valley Authority regarding emissions from four coal-fired power plants sparked a flurry of hope for environmentalists. An avenue for legal redress of major environmental damage once thought to be wrought with potholes and dead-ends was renewed and paved in gold. North Carolina v. TVA, 593 F.Supp.2d 812 (W.D.N.C 2009). Common law public nuisance was once again a viable pathway for environmental lawyers to seek justice—no longer would the political question doctrine or the burden of proving causation stand as roadblocks.

Fewer than two years later, however, the viability of major environmental public nuisance claims became uncertain again. North Carolina’s injunction against four Tennessee Valley Authority power plants in Alabama and Tennessee required the immediate installation of emissions controls costing around $1 billion. The U.S. Court of Appeals for the Fourth Circuit lifted the injunction in July 2010. Judge Harvie Wilkinson, writing the unanimous opinion for the Fourth Circuit stated:

“This ruling was flawed for several reasons. If allowed to stand, the injunction would encourage courts to use vague public nuisance standards to scuttle the nation’s carefully created system for accommodating the need for energy production and the need for clean air. The result would be a balkanization of clean air regulations and a confused patchwork of standards, to the detriment of industry and the environment alike.” North Carolina v. TVA, 615 F.3d 291, 296 (2010).

As of December 2010, that same glimmer of hope for environmentalists following North Carolina v. TVA resurfaced once again—the Second Circuit’s decision in Connecticut v. American Electric Power Company (AEP), involving a federal common law nuisance claim based on the effects of greenhouse gases (GHGs), was granted certiorari by the Supreme Court. Eight states, a city, and three land trusts separately sued the six electric power corporations that own and operate fossil-fuel-fired power plants in twenty states, seeking abatement of defendants’ ongoing contributions to the public nuisance of climate change.

The United States District Court for the Southern District of New York held that Plaintiffs’ federal common law nuisance claims were non-justiciable under the political question doctrine, and dismissed the case. The Plaintiffs appealed to the Second Circuit, which, in a lengthy opinion, held that the Plaintiffs had standing to seek an injunction restricting GHG emissions.  The implications of the Court’s decision go well beyond those seen in North Carolina v. TVA.

The Defendant corporations petitioned for review, and the Supreme Court agreed to address the following questions: (1) Do the Plaintiffs have standing? (2) Does the Plaintiffs’ claim present a non-justiciable political question? (3) Is the Plaintiffs’ public nuisance claim displaced by the Clean Air Act?

Standing: Does Climate Change Warrant A Relaxed Standard?

One of the primary issues the Court may decide to address is whether the origional Plaintiffs have standing—finding the states and other plaintiffs lack standing could overrule or substantially limit Massachusetts v. EPA. At the same time, the Court finding that the Plaintiffs have standing would likely require the Court to extend its decision in Massachusetts.

In Massachusetts, the Court ruled that the Commonwealth of Massachusetts did in fact have standing to challenge the EPA’s decision not to regulate carbon dioxide and other GHGs from the transportation sector. Ordinarily, to demonstrate standing, a litigant must show that it has suffered a concrete and particularized injury that is either actual or imminent, that the injury is fairly traceable to the defendant, and that a favorable decision will likely redress that injury. Massachusetts v. E.P.A., 549 U.S. 497, 518, 127 S.Ct. 1438 (2007). As the Court noted, however, “a litigant to whom Congress has accorded a procedural right to protect his concrete interests can assert that right without meeting all the normal standards for redressability and immediacy.” Id.

Here, in AEP v. Connecticut, Petitioners argue that Massachusetts v. EPA, on which the Second Circuit Court of Appeals relied to establish causation and redressability, is distinguishable from this case. In Massachusetts, the Court considered whether the petitioner had standing to pursue a statutory cause of action enacted by Congress, not a common law nuisance claim as in Connecticut. Respondents contend that this distinction is of “critical importance” to the standing inquiry because, in a statutory cause of action, “Congress has the power to define injuries and articulate chains of causation that will give rise to a case or controversy where none existed before.” [Read the Petitioner's Brief here.] The Massachusetts Court found that Congress’s decision to create a specific legal right relaxes the causation and redressability analysis for standing to enforce that right. Here, Congress has not created a statutory right authorizing the Plaintiffs’ cause of action—Plaintiffs did not invoke the Clean Air Act’s (CAA) citizen suit provision, and no federal statute authorizes federal courts to enjoin unreasonable emissions of GHGs. Thus, Petitioners argue, the Respondents may not rely on Massachusetts v. EPA and must instead satisfy traditional causation and redressability requirements.

The States and New York City counter this argument by arguing that their chain of causation and redressability are actually shorter than was the case in Massachusetts v. EPA—they seek judicial relief directly from the entities responsible for the emissions, rather than through an agency that regulates emissions. The “procedural right” afforded by Congress played a central role in the Massachusetts Court’s decision, while the issue in Connecticut, by contrast, does not involve agency action nor a statute giving the Plaintiffs the right to seek judicial review of agency action. [Read the Respondent's Brief here.]

Should the Court agree with the Petitioners, the holding in Massachusetts would be limited to its facts. The relaxed causation and redressability analysis would apply specifically to cases involving a statutory cause of action enacted by Congress, severely limiting federal common law nuisance claims. Such a decision would, in essence, leave climate change advocates having to bring their claims under the standard and more difficult causation and redressability requirements that have frustrated climate change suits in the past. On the other hand, should the Court hold that the origional Plaintiffs do in fact have standing, whether or not they ultimately bypass the political question doctrine or win on the merits, environmentalists would have a new avenue for challenges. The obvious and most direct implication is that climate change could be addressed on a massive scale with large-scale legal challenges; the largest contributors to climate change with the emission of GHGs could be held liable for billions of dollars in federal common law nuisance claims or for abatement costs. A less obvious and indirect consequence of such a decision could be the opportunity for several other environmental causes to open up. Environmental hazards the political process has left unattended could be addressed through federal common law nuisance claims, likely ending in settlements similar to that resulting from the North Carolina v. TVA suit.[1]

Political Question: The Issue is Political, But is it Ripe For the Courts?

Perhaps the largest barricade climate change suits have faced thus far is the political question doctrine. District Courts addressing previous climate change nuisance claims have relied heavily on the political question doctrine to dismiss the cases. As the Respondents in AEP point out, application of the doctrine is limited to matters of foreign affairs or constitutional law and has generally deprived the courts of jurisdiction only where they were attempting to second-guess the elected branches. The Petitioners argue, however, that a political question exits if, based on the precise facts and posture of a particular claim, adjudication would require the courts to make initial policy determination of a kind clearly for non-judicial discretion, to decide a case in the absence of judicially discoverable and manageable standard, or to otherwise to resolve a question that has been or should be decided by the other branches.

The Petitioners argue that judicially discoverable and manageable standards do not exist for a judge to “determine the ‘reasonable’ level for many aspects of the climate change issue: the level of global emissions in light of the global risks of climate change; the global costs and benefits of GHG-emitting activities, like power generation, heavy manufacturing or transportations; the cost and benefit of GHG reduction and abatement measures.” In response, Respondents argue that a district court, in crafting a remedy for the case, would focus on facts specific to the parties in the litigation, not broad policy issues. The question of what is a reasonable level of global emissions, or emissions from sources that are not from the named Defendants, is simply not pertinent.

In its ruling, the Second Circuit maintained that traditional common law provides a sufficient basis for judicial decision. The Court observed, and Respondents argue to the Supreme Court, that courts have a long history of crafting common law answers to environmental nuisance cases, and that existing common law provides basic policy parameters to apply to new and evolving circumstances. The Respondents run with the Circuit Court’s finding, emphasizing that just because the case raises politically charged issues that may be difficult to resolve, that is not a basis for abdicating the judicial responsibility to adjudicate such complex nuisance claims.

Ultimately, the Supreme Court’s determination of whether the political question doctrine bars the Plaintiffs’ claim will depend which test for justiciability the Court uses. Courts have applied a variety of tests stemming from the Supreme Court’s Baker test,[2] proceeding along two theoretical frameworks. As important as the Supreme Court’s articulation of the correct justiciability test will be, the crucial determination for the parties involved in the case, as well as environmentalists and GHG emitters, is whether or not the common law nuisance claim is barred as a political question.[3] Should the Court find that the claim is barred, it would leave environmental protection advocates exactly where they were before the case was decided by the Second Circuit—having their claims dismissed at the trial court. In the end, the Supreme Court may simply use the political question doctrine to sidestep the issue of GHGs and climate change, allowing the EPA’s new emission standards to deal with the problem.

Displacement: If Regulations are Promised, Do They Displace Nuisance Claims?

A final issue to be resolved by the Court, assuming it holds that the origional Plaintiffs have standing and the claim presented is not a political question, is whether the Clean Air Act displaces the Plaintiffs’ federal common law public nuisance claim. In Massachusetts v. EPA, the Supreme Court held that the EPA has the authority to regulate carbon dioxide as a pollutant. However, when the Second Circuit decided AEP in September, 2009, the EPA had yet to adopt GHG controls on stationary sources of pollution, like electric power facilities. In that sense, the EPA had not “spoken directly” to the concerns raised by the Plaintiffs. The Second Circuit therefore concluded that the common law had not been displaced by regulation, though the Court left open the possibility that future EPA action could displace it. According to Jonathan Zasloff, a professor of law at UCLA, “this holding is potentially significant, because it can put polluters in a real bind. Their normal strategy is to tie up new regulations in the courts for several years—maybe until they can get a more friendly administration. But now, the Second Circuit has told them that the only way to get rid of the public nuisance lawsuit is to let those regulations go into effect. The judges have told the power companies to choose their poison.”[4]

Whether the Supreme Court may determine whether the common law nuisance claim in AEP has been displaced becomes more interesting considering the EPA’s pending regulations. Following multi-year litigation, the EPA signed consent decrees with several parties[5] in December of 2010, obligating the Agency to propose GHG new source performance standards (NSPS) for coal-fired power plants and refineries. [Read the EPA settlement fact sheet here.]Those two sources together produce about 40 percent of the nation’s GHG emissions. Under the schedule outlined in the decrees, the Agency must propose standards for coal-fired power plants by July 26, 2011, and finalize them by May 26, 2012; the Agency must propose emission standards for refineries by December 15, 2011, with the those standards finalized by November 15, 2012. The expectation that there will be GHG regulation before the end of 2012 could lead the court to determine that the nuisance claim will soon be displaced; how the court addresses this possibility could have implications for other types of nuisance claims.

The Petitioners argue that the Clean Air Act, even without specific EPA regulations on power plant emissions, displaces federal common law nuisance claims on climate change.[6] The Solicitor General, arguing on behalf of the Tennesse Valley Authority, one of the origional Defendants, contends that while EPA authority to regulate GHG emissions is not sufficient to displace the Plaintiffs’ claims, the EPA’s draft of planned regulations is sufficient.[7] An extraordinary precedent would be set if the Court agrees with defense arguments—the mere authority to regulate, or a future plan to regulate, despite a lack of actual regulation, would suffice to displace common law nuisance claims. If the Court is not persuaded, however, the courts become a fertile ground for climate change litigation, at least as long until the EPA’s NSPS regulations are finalized.

A Lot at Stake for Future Litigants

For the environmental protection plaintiffs, the worst-case scenario would be for the Court to hold that the political question doctrine bars their complaint completely. After several years of promising litigation, plaintiffs would simply be left no further recourse but to hope that the EPA’s new regulations are sufficient to address climate change. While it is obvious that the Plaintiffs in this particular case would be disappointed, such a holding would prevent similarly-situated plaintiffs from ever filing a similar nuisance claim.

Another discouraging scenario for plaintiffs would be for the Court to rule that they do not have standing and the Massachusetts relaxed causation and redressibility standard is limited to cases involving a statutory cause of action enacted by Congress. While it would substantially limit a plaintiff’s ability to address environmental hazards such as climate change, the door is theoretically still open. Although a plaintiff would still need to establish causation and redressibility under the more difficult standard, their claim is not completely barred.

Assuming the Court finds standing and does not bar the claim as nonjusticiable, the best case scenario for environmental protection plaintiffs involves the Court holding that the Clean Air Act, as it currently stands, does not displace the federal common law claim for nuisance by emission of GHGs. While such a holding would indeed be a landslide victory for those seeking immediate action to curb climate change, the real impact of that decision would end once the EPA finalizes its new GHG emission standards for coal-fired power plants and refineries.

Even though such a stellar victory on the displacement issue may simply be overcome by new regulation, the ultimate result is still encouraging. Although the new EPA regulations would undoubtedly displace common law nuisance claims, the end result is GHG regulation on a national scale, covering the largest single sources of GHG emissions in the country. A ruling in favor of the Petitioners, however, would be especially disconcerting, significantly expanding the displacement theory and would, in effect, close the door on numerous similar claims where a federal agency has the authority to regulate but has not done so.

AEP v. Connecticut promises to be a closely-decided case with major implications for climate change and environmental protection litigation, regardless of the outcome. In the end, the United States is undoubtedly going to see new regulation for greenhouse gas emissions, whether at the direction of the Supreme Court or through the Environmental Protection Agency.

– Adam R. Long