In 2004, before the Environmental Protection Agency (“EPA”) had initiated a rulemaking process to regulate greenhouse gas emissions, two groups of plaintiffs (including a number of states, New York City, and several non-profit land trusts) filed suit against five major electric power companies; the plaintiffs requested injunctive relief requiring the defendants to gradually reduce their carbon dioxide emissions. The U.S. District Court for the Southern District of New York dismissed the suits as presenting political questions best resolved by a legislative body. The Second Circuit Court of Appeals reversed, holding that the plaintiffs had standing, had stated a claim under the federal common law of nuisance, and that the Clean Air Act did not displace the federal common law.
In American Electric Power Company v. Connecticut (10-174), the Supreme Court, sitting without Justice Sotomayor, held that the Clean Air Act and the EPA rulemaking activity authorized by the Act displaced any federal common law right to seek abatement of greenhouse gas emissions. Justice Ginsburg delivered the Court’s opinion acknowledging that past decisions of the Court have recognized a “specialized” federal common law governing air and water, while also emphasizing the need for prudence and caution by federal courts in contributing to this law. In this case, she argued, recognition of Congress’ decision to delegate the field of greenhouse gas emission regulation to the EPA compelled a finding that the federal common law had been displaced. She emphasized that this conclusion doesn’t depend on final rulemaking by the EPA: even if the EPA declined to issue final rules, its sphere of expert decision-making would displace the federal common law. However, if the EPA declined to issue final rules, the “prescribed order of decisionmaking” under the Clean Air Act would at that point enable federal judges (and ultimately the Supreme Court) to review the decision. Although Justices Alito and Thomas concurred in the judgment, their concurrence was based on an “assumption…for the sake of argument” that a 2007 case (Massachusetts v. EPA) was correctly decided; this case held that the EPA possesses authority under the Clean Air Act to regulate greenhouse gas emissions.