High court limits emissions lawsuits

WASHINGTON—Although the U.S. Supreme Court ruled that the Clean Air Act “displaces” any federal common law public nuisance suit seeking to reduce greenhouse gas emissions, legal experts say it left open the door to state law claims and other types of litigation.

One such public nuisance suit is pending in federal court in Mississippi under that state's law. Many legal experts had thought Ned Comer et al. vs. Murphy Oil USA et al. was done when it was dismissed on procedural grounds last year, but the suit was resurrected in late May.

In addition, weeks after oral arguments in American Electric Power Inc. et al. vs. State of Connecticut et al. on which the Supreme Court ruled last week, another type of climate change suit was filed based on a public trust theory.

“These cases are not going to go away,” said Paul Blume, senior vp of state government affairs and acting general counsel for the Des Plaines, Ill.-based Property Casualty Insurers Assn. of America, which filed an amicus brief in AEP. Still, Mr. Blume is hopeful that the ruling will make plaintiffs and state attorneys general think twice before using courts to address climate change.

In AEP, the Supreme Court ruled unanimously that the 2nd U.S. Circuit Court of Appeals erred in 2009 when it allowed a 2004 federal common-law nuisance suit by eight states and three land trusts to go forward against five electric utilities. The high court relied on its 2007 decision in Massachusetts et al. vs. Environmental Protection Agency et al., where it found that the Clean Air Act gives the U.S. EPA the authority to decide whether to regulate emissions of carbon dioxide and other greenhouse gases.

“Congress delegated to EPA the decision whether and how to regulate carbon-dioxide emissions from power plants; the delegation displaces federal common law,” Justice Ruth Bader Ginsberg wrote for the court.

Since the 2007 ruling, the EPA began a rule-making process to set limits on greenhouse gas emissions from new, modified and existing power plants that use fossil fuels and committed to issuing a final rule by May 2012.

Despite the ruling, “the doors remain open on the state suits,” PCI's Mr. Blume noted.

Some attorneys expect the issue could follow a trajectory similar to tobacco litigation, which resulted in the payment of billions of dollars in claims extending from states to individuals in massive class actions.

“The takeaway for industries is these cases aren't going away,” Joanne Zimolzak, a partner at McKenna Long & Aldridge in Washington, said in an interview. “The court decided the case on the narrowest possible grounds of displacement and remanded for consideration whether state law claims can go forward.”

“This really kicked the can down the road because now it's a state-by-state thing,” said John Nevius, a partner at Anderson Kill & Olick P.C. in New York.

J. Wylie Donald, a partner at McCarter & English in Wilmington, Del., said plaintiff lawyers already are testing other legal theories. “What is the purpose of climate change lawsuits? If it is to limit emissions and force a change in policy, then Our Children's Trust is doing that,” he said.

Our Children's Trust is a nonprofit based in Eugene, Ore., that filed lawsuits May 4 in 50 states and the District of Columbia, asking courts to declare that the atmosphere should be held “in trust” for the future. So far, one state—Montana—has rejected the argument.

“All of these cases are still standing on their two legs, albeit a little more shakily,” said Richard Faulk, chair of the litigation department at Gardere Wynne Sewell L.L.P. in Houston, noting that another climate change nuisance suit is pending in the 9th U.S. Circuit Court of Appeals.

“The difference is the Native Village of Kivalina et al. vs. ExxonMobil Corp. case is a lawsuit for damages—relocation expenses and other damages—as opposed to asking a court to set regulatory limits and impose by injunction,” he said. Plaintiffs in the case “are going to say that is a very significant distinction.”

“AEP was a big victory for the energy industry, but it's not over and the dust hasn't settled,” said John P. Krill Jr., a partner at law firm K&L Gates L.L.P. in Harrisburg, Pa.

“My expectation will be more litigation,” he said.