Co-authored by Robert Brown
The U.S. Supreme Court put an abrupt end on Monday to what might have become the next large-scale mass tort. In an 8-0 decision, the Court ruled in favor of the petitioners in American Electric Power Co., et al. v. Connecticut, et al. (“AEP”), a case we have followed very closely (most recently, here, here, and here).
In AEP, the plaintiffs (eight States, New York City, and several nonprofit land trusts) brought suit against four private power companies and the Tennessee Valley Authority alleging that their carbon-dioxide emissions violated the federal common law of interstate nuisance, or, in the alternative, state tort law. The plaintiffs sought injunctive relief requiring the defendants to adhere to emissions caps to be set by the district court. The central issue before the Court was whether the Clean Air Act and EPA’s regulatory authority under the Act displace federal common law claims against carbon-dioxide emitters—that is, whether the Clean Air Act precludes federal courts from setting greenhouse gas standards. The Second Circuit Court of Appeals held that the Act did not displace federal common law; the Supreme Court disagreed. Writing for the Court, Justice Ginsburg first dealt with the issue of standing. The Court was evenly divided on whether the plaintiffs had Article III standing under Massachusetts v. EPA, a case that determined that EPA has regulatory authority over greenhouse gas emissions. As a result of this split, the Court affirmed the Second Circuit’s ruling that the plaintiffs had Article III standing.
Proceeding to the merits of the case, the Court was unconvinced that federal district judges—who “lack the scientific, economic, and technological resources” of an expert agency—should become the primary regulators of greenhouse gas emissions. The Court reiterated that “[t]he test for whether congressional legislation excludes the declaration of federal common law is simply whether the statute ‘speak[s] directly to [the] question’ at issue.” Since carbon-dioxide emissions qualify as air pollution under the Clean Air Act, the regulation of emissions falls well within the purview of the statute. The Court thus reasoned that federal courts are precluded from designating emission caps; if EPA fails to set emissions limits under its regulatory power, States and private parties may petition for a “rulemaking,” and EPA’s actions in response to the petition are reviewable in federal court. The Second Circuit was convinced by the plaintiffs’ argument that the Act does not displace federal common law “until EPA actually exercises its regulatory authority,” but the Court disagreed, concluding that “the delegation [of regulatory authority to EPA] is what displaces federal common law.” (emphasis added).
The implications of this decision are significant. As the Court acknowledged, to allow federal common law claims against carbon-dioxide emitters would open the floodgates for litigation against thousands of other “large contributors.” Instead, the Court has made clear that EPA should set national policy on greenhouse gas emissions pursuant to its legislative authority, and that such is not for the courts.
Note: Robert Brown is a summer associate in Weil’s litigation department.