Two recent federal appeals court decisions allowing global warming-related suits to proceed likely will result in more litigation against emitters of greenhouse gases accusing them of creating a public nuisance, legal experts say.

To the extent that policyholders tap their commercial general liability underwriters to bear the cost of defending and indemnifying them in these suits, a second wave of coverage litigation is inevitable, they say.

At least one global warming-related public nuisance case already has resulted in litigation over the scope of a CGL insurer's duty to defend.

Experts caution, however, that even though the underlying suits recently passed some legal challenges, significant hurdles remain that ultimately could curtail the suits.

In recent months, panels of the 2nd and 5th U.S. Circuit Courts of Appeals have ruled that various oil, chemical and utility companies can be sued under the federal common law of “nuisance” for their alleged contributions to global warming via their greenhouse gas emissions.

In State of Connecticut et al. vs. American Electric Power Co. Inc. and Ned Comer et al. v. Murphy Oil USA et al., the 2nd and 5th Circuits, respectively, overturned lower court decisions that the global warming nuisance suits raised political questions that were not appropriate for judicial review.

Defendants in the AEP case since have filed a petition seeking a rehearing before the entire 2nd Circuit Court of Appeals.

Attorneys say that while the rulings may embolden more plaintiffs to bring similar suits against more emitters, enormous challenges remain.

“It's likely that if the (full) 5th Circuit and 2nd Circuit do not overturn Comer and AEP, respectively, there is going to be a significant influx of climate change-related litigation,” said Bill Stewart, co-chair of the climate change and renewable energy practice of Cozen O'Connor P.C. in West Conshohocken, Pa.

But there “are a number of things that could happen that could put a halt to that,” he said. If Congress passes climate change legislation, for instance, that could have a “significant impact” on the viability of the public nuisance litigation, he said.

One issue associated with the political question doctrine defense is the degree to which the government has weighed in on the subject. The 2nd and 5th Circuits looked to the lack of governmental action on global warming in their analysis, he said. As such, “if Congress passed legislation that specifically directed how much levels of greenhouse gases can and can't be emitted, that vacuum no longer exists and the political question doctrine argument becomes a much stronger argument,” he said.

The American Clean Energy and Security Act of 2009, which would cap greenhouse gas emissions among other things, is pending in Congress.

“There are lots of problems in putting together these types of cases even if certain claims pass the political question doctrine,” agreed Laura A. Foggan, a partner at Wiley Rein L.L.P. in Washington. “There are so many causation and damage issues that are very, very difficult” to prove.

For example, in Comer, can plaintiffs prove “that Hurricane Katrina was caused by global warming as opposed to natural forces, even if they can show in general that global warming has increased the intensity, severity and frequency of adverse weather events?” Ms. Foggan asked.

Attorneys note that if the public nuisance litigation continues to survive and further litigation is filed, coverage disputes are likely to ensue.

At least one insurer, Steadfast Insurance Co., a Schaumburg, Ill.-based unit of Zurich Financial Services Group, already has filed a motion for summary judgment in Virginia state court seeking a declaration of no coverage for global power company AES Corp.

Arlington, Va.-based AES is among 24 oil, energy and utility companies named in a public nuisance suit brought by the Native Village of Kivalina, a governing body of an Inupiat Eskimo village in Alaska, over alleged damage to the village caused by global warming.

Steadfast argued in its March motion that it has no duty to defend or indemnify AES because the global warming damage alleged in the underlying suit was not caused by an accident, which is required to trigger the liability coverage. It also argues that coverage is barred under the CGL policy's pollution and loss-in-progress exclusions.

Although the U.S. District Court for the Northern District of California dismissed the underlying Kivalina suit Sept. 30 on political question doctrine grounds, the case has been appealed to the 9th U.S. Circuit Court of Appeals.

“A lot of people are watching to see what happens with Steadfast,” said John G. Nevius, a shareholder in the New York office of Anderson Kill & Olick P.C. “It's a bellwether case.”

One of the big questions that will have to be addressed in the case is whether greenhouse gases are “pollutants” as it relates to Steadfast's broad pollution exclusion, attorneys say.

Among its arguments, Steadfast relies on the 2007 U.S. Supreme Court ruling in Massachusetts v. Environmental Protection Agency, in which the high court ruled that greenhouse gases are pollutants under the Clear Air Act. It has asked the Virginia court to adopt the same holding.

But as policyholder attorney Marc S. Mayerson of Hollingsworth L.L.P. in Washington noted, “It's hard for me to think that the content of any individual emitter's emission would be considered itself an irritant or a contaminant because if it was the only (company), there would be no global warming problem. It's only because everybody else is also emitting carbon dioxide that we have the problem.”