American Electric Power Co. v. Connecticut (10-174)

Oral argument: Apr. 19, 2011

Appealed from: United States Court of Appeals for the Second Circuit (Sep. 21, 2009)

POLLUTION, LEGISLATION, ENERGY, FEDERAL COMMON LAW

Several states brought suit against various power companies, arguing that the companies’ carbon emissions create a public nuisance – i.e. harm the public welfare – by contributing to global warming and damaging the environment. The district court dismissed the claim before trial, holding that disputes concerning global warming are “political questions” that should be resolved by the legislature, not the courts. However, the Second Circuit Court of Appeals held that courts are allowed to hear such cases, and that such disputes are not restricted to resolution in the political arena. Furthermore, the Second Circuit held that allowing such cases does not alleviate a plaintiff’s heavy burden of proving its side of the dispute in court. The decision will depend on whether the Supreme Court feels that the judiciary can properly handle such claims, or whether the complexity, controversy, and volume of such cases counsel in favor of dismissing this initial suit.

Questions presented

1. Whether States and private parties have standing to seek judicially-fashioned emissions caps on five utilities for their alleged contribution to harms claimed to arise from global climate change caused by more than a century of emissions by billions of independent sources.

2. Whether a cause of action to cap carbon dioxide emissions can be implied under federal common law where no statute creates such a cause of action, and the Clean Air Act speaks directly to the same subject matter and assigns federal responsibility for regulating such emissions to the Environmental Protection Agency.

3. Whether claims seeking to cap defendants' carbon dioxide emissions at "reasonable" levels, based on a court's weighing of the potential risks of climate change against the socioeconomic utility of defendants' conduct, would be governed by "judicially discoverable and manageable standards" or could be resolved without "initial policy determination[s] of a kind clearly for nonjudicial discretion." Baker v. Carr, 369 U.S. 186, 217 (1962).

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Issue

Whether a party can assert a federal common claim challenging a company’s carbon dioxide emissions as a public nuisance, or whether such efforts to curb emissions should be brought solely through the legislative process.

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Facts

In July 2004, the States of Connecticut, New York, California, Iowa, New Jersey, Rhode Island, Vermont, and Wisconsin, and the City of New York (collectively “Connecticut”) filed a complaint against American Electric Power Company, Southern Company, the Tennessee Valley Authority, Xcel Energy, and Cinergy (collectively “American Electric”). See American Electric Power Co. v. Connecticut, 582 F.3d 309, 316 (2d Cir. 2009). Connecticut sought to curb the amount of carbon dioxide emitted by American Electric, arguing that it was a public nuisance that harmed citizens by contributing to global warming, which in turn has led to serious environmental consequences. See id.

The United States District Court for the Southern District of New York dismissed the complaint on the grounds that Connecticut’s claim raised a non-justiciable political question. See American Electric Power Co., 582 F.3d at 319. Under the political question doctrine, courts should avoid decisions which threaten the U.S. Constitution’s separation of powers. See id. at 321. The district court found that Connecticut’s suit was “impossible to decide without an initial policy determination of a kind clearly for nonjudicial discretion.” See id. at 319. Connecticut appealed to the Second Circuit, where American Electric argued that Connecticut did not have the right to file such a suit because the political question doctrine, a lack of standing, the absence of a veritable nuisance claim, and the doctrine of displacement all counseled against allowing such a suit to proceed. See id. at 314–15.

Political Question Doctrine

 

American Electric argued that Connecticut failed the six-factor political question test set out in Baker v. Carr. 369 U.S. 186 (1962). First, American Electric argued that the decision to regulate carbon dioxide emissions belonged to the legislative and executive branches, not the judicial branch. See American Electric Power Co., 582 F.3d at 324. American Electric also claimed that there was “a lack of judicially-discoverable and manageable standards for resolving this case.” See id. at 325. American Electric reiterated the district court’s finding that the judiciary would have to make an initial policy decision before deciding the case. See id. at 329. Finally, American Electric argued that allowing the suit to go forward would disrespect the other branches of government and create confusion in the law. See id. at 331.

 

The Second Circuit held that the political question doctrine did not apply because (1) the other branches of government did not have sole authority over this area, (2) federal courts have handled sophisticated nuisance claims in the past, (3) courts can resolve common law claims on global warming even when the other political branches have yet to take decisive action on the issue, and (4) there is little threat to the authority of the other political branches because they have yet to develop a comprehensive global warming policy. See American Electric Power Co., 582 F.3d at 325, 32932.

Standing

 

American Electric also challenged Connecticut’s standing to bring the suit, alleging that the states did not suffer a sufficient injury. See American Electric Power Co., 582 F.3d at 332. The Second Circuit held that Connecticut had standing under the doctrine of parens patriae, under which a state can act on behalf of its citizens in order to protect them. See id. at 334. The Second Circuit also held that Connecticut met the traditional requirements of standing: injury, traceability, and redressability. See id. at 340; Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). Connecticut met the injury requirement in alleging that carbon dioxide already harmed the state’s climate, and threatened to do so in the future. See American Electric Power Co., 582 F.3d at 341. Connecticut satisfied traceability because it sufficiently alleged that American Electric contributed to pollution – it was no defense that other companies polluted as well. See id. at 347. Redressability was met since forcing American Electric to decrease emissions would allegedly reduce global warming, even if it would not eliminate the problem. See id. at 349.

 

Federal Common Law of Nuisance

American Electric further challenged Connecticut’s suit on the grounds that it did not state a valid public nuisance claim. See American Electric Power Co., 582 F.3d at 349. The Second Circuit disagreed, holding that Connecticut sufficiently pled an “unreasonable interference” with “public rights.” See id. at 352. In doing so, the Second Circuit rejected American Electric’s arguments for limiting nuisance based on “constitutional necessity” and “the character of the alleged nuisance,” finding that the courts could appropriately handle a nuisance case of this size and type. See id. at 353–358.

Displacement

Finally, American Electric argued that the case should be dismissed under the doctrine of displacement because federal statutory law, rather than federal common law, governs this case. See American Electric Power Co., 582 F.3d at 371. In particular, American Electric argued that the Clean Air Act displaced the federal common law of nuisance in the area of carbon emissions. See id. at 375. The Second Circuit held that, at the time of its decision, the Environmental Protection Agency had not regulated greenhouse gases such that it “spoke directly” on this issue, and therefore Connecticut’s claim was not displaced. See id. at 381, 387.

American Electric appealed the Second Circuit’s ruling to the Supreme Court, and the Supreme Court granted certiorari on December 6th, 2010. See American Electric Power Co. v. Connecticut, 131 S. Ct. 813 (2010).

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Discussion

In this case, the Supreme Court will determine whether states and private citizens may bring common law nuisance claims in order to regulate greenhouse gas emissions. American Electric argues that the legislature, not the judiciary, should make important policy decisions, especially concerning a contentious topic such as climate change. Connecticut counters that states and private citizens have the right to file lawsuits concerning global warming since there is a recognized federal common law suit against public nuisances.

Undermining the political process

The CATO Institute argues that the legislature, not the court system, should resolve questions concerning climate change. See Brief of Amicus Curiae CATO Institute in Support of Petitioners at 23. The CATO Institute believes that Connecticut is forcing the court system to act because the legislature has refused to do so. See id. The CATO Institute adds that regulation concerning climate change is particularly difficult to enact, and that the judiciary should not be used to rush through a complicated process. See id. at 23–24.

In contrast, a group of law professors argues that allowing courts to hear nuisance claims will not harm the political process. See Brief of Amici Curiae Law Professors in Support of Respondents at 35. The professors assert that judges will not usurp the power of the legislature to make public policy; rather, they will merely decide the legal question of whether a common law nuisance is present. See id. Moreover, court decisions have often had policy implications, even if that was not the main goal of the decision. See id. at 36.

Alternatively, the North Coast Rivers Alliance and other environmental groups argue that courts have successfully stepped in several times in the past to decide important policy issues which the legislature refused to confront. See Brief of Amici Curiae North Coast Rivers Alliance et al. in Support of Respondents at 18. Past examples include environmental claims concerning asbestos and oil spills, demonstrating that the judiciary is a perfectly viable means of solving major environmental problems. See id. at 19. The North Coast Rivers Alliance concludes that carbon dioxide emissions are no exception. Id.

Overwhelming the judiciary

The U.S. Chamber of Commerce argues that affirming the Second Circuit’s decision will open the floodgates to global warming litigation across the country, overwhelming an already strained federal judiciary. See Brief of Amicus Curiae U.S. Chamber of Commerce in Support of Petitioners at 24. The Chamber of Commerce expresses further concern that these cases will be heard by a wide variety of courts around the country, resulting in a muddle of different results which would compound the severity of the problem. See id. at 25.

The North Coast Rivers Alliance argues that the judiciary is perfectly capable of handling this sort of litigation. See Brief of North Coast Rivers Alliance in Support of Respondents at 17. North Coast also argues that once all of the major polluters have been targeted by lawsuits, the number of suits will dwindle dramatically, since there will be nobody else to sue. See id. at 18. Furthermore, the fact that only one other lawsuit is pending in the court system suggests that, if the decision is affirmed, the immediate increase in the number of lawsuits might not even be very high at all. See id.

Threats to the Environment

While this case will only decide whether Connecticut may bring its suit against American Electric, two competing briefs from climate scientists debate the role of carbon emissions in global warming. One group of scientists, led by James G. Anderson, asserts that the injuries claimed by Connecticut are real, that it is a “scientific certainty” that American Electric’s carbon emissions contribute to those injuries, and that Connecticut’s suit will reduce global warming. See Brief of Amici Curiae James G. Anderson, Ph.D., et al. in Support of Respondents at 12, 25, 33. Anderson concludes that “the science of climate change shows that the planet is headed for a shipwreck.” See id. at 36.

However, not all researchers agree on this point. Another group of scientists, including Ross McKitrick, argues that the climate reports on which Connecticut relies contain “substantial and pivotal uncertainties in climate science.” See Brief of Amici Curiae Southwestern Legal Foundation et al. in Support of Petitioners at 21. The group thus urges to Supreme Court to dismiss this case on political question grounds, so as to allow further debate on climate change in the legislative and executive branches. See id. at 37.

Costs to industry

The Business Roundtable argues the nature of climate change is not amenable to resolution via litigation because it will cause undue harm to the energy industry. Brief of Amicus Curiae Business Roundtable in Support of Petitioners at 4. The Business Roundtable expresses concern that forcing business to base their decisions on the rulings of individual cases will lead to economic uncertainty and, consequently, decreased trade and commercial activity. See id. at 6. The Business Roundtable argues that the particular issue of climate change can cause extremely deleterious effects on the business environment since it will have a substantial impact on national and international business decisions. See id. at 21.

AllEarth Renewables and other renewable energy groups (“AllEarth”) counter that allowing this suit will encourage the use of renewable energy sources, such as solar and wind power. See Brief of Amici Curiae AllEarth Renewables, et al. in Support of Respondents at 13. AllEarth argues that current cost models for coal and other carbon-based energy sources fail to account for the costs of environmental damage; even if costs were a factor in the Court’s decision, they weigh in favor of allowing Connecticut’s suit to proceed. See id. at 15, 19–20.

In sum, this case will primarily affect the amount of litigation regarding carbon dioxide emissions, which in turn could lead to increased costs to the energy industry and could eventually affect the amount of carbon dioxide that companies are allowed to emit.


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Analysis

Connecticut and other states (“Connecticut”) sued American Electric Power Company and other power companies (“American Electric”) in order to enjoin their current levels of greenhouse gas emissions, which Connecticut claimed were negatively affecting the state and its people. The Second Circuit allowed Connecticut’s suit to proceed, ruling that Connecticut’s suit (1) met the standing requirements, (2) was properly pled under the federal common law of nuisance, (3) was not displaced by federal regulation on the issue, and (4) did not raise a political question because the nuisance question can be answered by the courts and need not be left to the political branches. See American Electric Power Co. v. Connecticut, 582 F.3d 309, 315 (2d Cir. 2009).

 

Constitutional and Prudential Standing

 

American Electric argues that the Supreme Court should dismiss the case because Connecticut lacks the core requirements for constitutional standing: injury, traceability, and redressability. See Brief for Petitioners, American Electric Power Company, Inc., et al. at 16–17. First, American Electric argues that there is no causal connection between the harm alleged and the challenged conduct. See id. at 17–18. American Electric argues that the alleged harm was caused over centuries from billions of different sources and therefore the conduct is not “fairly traceable” to the power companies’ carbon emissions; to rule otherwise would give a right of action for anyone on the planet to sue any party that outputs greenhouses gases at any time. See id. at 18–19. Second, American Electric contends that the causal chain impermissibly depends on the actions of independent third parties that are not a party to this lawsuit. See id. at 21. American Electric argues that Connecticut had admitted that climate change has already begun and will continue with or without the specific contribution of the power companies. See id. at 22. American Electric contends that because of this, the harm alleged by Connecticut would not be cured by a favorable court decision. See id. at 23.

 

American Electric further argues that Connecticut does not have standing based on prudential grounds, arguing that the case is a prototypical “generalized grievance” best resolved by the other branches of government because the alleged harm of the power companies’ emissions is shared by all persons and states and cannot be differentiated from other pollution. See Brief for Petitioners at 30.

 

Connecticut argues that it has both constitutional and prudential standing to sue. See Brief for Respondents, Connecticut, et al. at 11. Connecticut argues that there is a concrete and specific harm done to the state land as well as increased health risks for its citizens. See id. at 12. Connecticut argues that the harm is fairly traceable to the injury, as set out in Massachusetts v. EPA, 549 U.S. 497 (2007), where the Court stated that the carbon emissions only had to “meaningfully contribute” to the harm. See id. at 14. Connecticut also argues that an award of injunctive relief would redress its injuries because, under Massachusetts v. EPA, its suit does not need to reverse global warming; rather, a slowing or reduction of global warming would be sufficient to meet the redressability requirement. See id. at 16–17. Connecticut also contends that although global warming affects numerous people and is caused by myriad sources through an extremely complex interaction of forces, the harms suffered by the states and their citizens are concrete and therefore are not generalized grievances. See id. at 25.

Federal Common Law

 

Federal common law is the judge-made law resulting from multiple past decisions that does not have a basis in any statutes. In Erie Railroad Co. v. Tompkins, 304 U.S. 64(1938), the Supreme Court declared that there was no “general federal common law”; instead, federal courts were to apply the applicable state common law. Despite this proclamation, there remain some specialized pockets of federal common law where judicial law making continues to this day. See Jay Tidmarsh & Brian J. Murray, Northwestern University Law Review, A Theory of Federal Common Law, at 585–86.

 

American Electric argues that there is no federal common law cause of action for public nuisance. See Brief for Petitioners at 31. American Electric contends that after the landmark decision of Erie, where the Court stated “there is no general federal common law,” the areas where federal courts can create a cause of action are extremely limited. See id. at 32. American Electric argues that the Supreme Court has fashioned federal common law only when the necessity of such action can be inferred from the Constitution, which cannot be done for public nuisance claims. See id. at 38. American Electric also contends that the complexity of global warming and pollution makes this a very unfit area for judicial law making. See id. at 38–39.

Connecticut responds by noting that the pre-Erie Supreme Court established a federal common law right for interstate public-nuisance suits. See Brief for Respondents at 37–38. Connecticut elaborates that although Erie removed the general federal common law, the federal common law of public nuisance continues to exist and has been upheld in subsequent decisions. See id. at 39. On this point, the parties essentially disagree over the binding nature of Illinois v. City of Milwaukee, 406 U.S. 91 (1972): Connecticut argues that the case established a federal common law of nuisance, whereas American Electric characterizes that portion of the case as nonbinding dicta. Compare Brief for Respondents at 40 with Brief for Petitioners at 36.

Displacement

Under the doctrine of displacement, judge-made common law is preempted by a relevant statute on the same topic. In this case, American Electric argues that even if the federal common law of public nuisance existed, it has been displaced by the Clean Air Act and by the regulatory actions of the EPA. See Brief for Petitioners at 40–41. American Energy contends that along with a comprehensive statute dealing with this issue, there is also the regulatory structure which allows respondents and all other interested parties access to the decision making process through petitions. See id. at 44. American argues that once Congress has given rule-making authority to a regulatory agency, there is nothing that agency can do or not do which would create a federal common law cause of action. See id. at 45.

 

Connecticut argues that the Clean Air Act does not displace this common law cause of action because it merely granted regulatory power to the EPA and the EPA has not acted upon its grant of authority. See Brief for Respondents at 46–47. Connecticut points out that the Clean Air Act does not by itself prohibit any form of pollution; this means that it cannot displace the federal common law. See id. at 49.

Connecticut notes that the EPA has recently announced plans to regulate this type of pollution by May 2012 and concedes that if the EPA follows through on that agreement, it would in fact displace the federal common law. See id. at 50–51. Connecticut suggests that the Supreme Court should delay resolving this case and instead send it back to the district court to stay these proceedings until May 2012. See id. at 50–51.

Political Question

 

American Electric contends that this case ultimately presents a political question that should be dealt with by the representative branches of the government. See Brief for Petitioners at 31. American Electric asserts that this case deals with questions that require the court to make policy decisions that would not be governed by any standard other than how much pollution the decision maker believes to be too much pollution. See id. at 47. American Electric also contends that the standard set out by nuisance common law leaves judges far too much discretion about extremely complex matters. See id. at 47–48. Finally, American Electric contends that these types of cases have the potential to become some of the largest and most complex cases in history. See id. at 50.

Connecticut responds by asserting that the political question defense only really applies in two categories of cases: foreign affairs and constitutional questions. See Brief for Respondents at 27. Connecticut continues that the Supreme Court has never held that a common law tort case outside of these two categories was barred under the political question doctrine. See id. at 30. Further, Connecticut argues that the political branches are always free to displace common law by further legislation if they so choose. See id. at 31. Connecticut argues that nuisance is a long-established part of common law and is a matter that was not thought to be improper for courts to determine. See id. at 31–32. Finally, although Connecticut agrees that this problem would best be solved by a single piece of federal legislation, the Court still has the power and authority to hear this case and should do so. See id. at 36.

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Conclusion

The Court will decide whether states may bring common law public-nuisance suits seeking to enjoin certain energy companies’ current levels of carbon emissions. This case will primarily affect the role of federal courts in the global warming debate. If the states do in fact have the right to sue, many states may choose to use this power to slow or diminish global warming absent comprehensive federal legislation or regulation dealing with the issue. If American Electric wins, attempts to limit carbon emissions must be done through the legislative and executive branches.

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Authors

Prepared by: Alexander Malahoff and Eli Kirschner

Edited by: Christopher Maier

Additional Sources

· Middletown Press: High Court will Review Climate Change Lawsuit (Dec. 6, 2010)

· UCLA Law Review, Jonathan Zasloff: The Judicial Carbon Tax: Reconstructing Public Nuisance and Climate Change

· Pacific Legal Foundation: Greenhouse Gas “Nuisance” Lawsuits Are an Abuse of Tort Law

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Edited by