2nd Circuit Opens Door to Climate Change Lawsuits

In a landmark decision, the Second Circuit Court of Appeals on Monday denied a motion to dismiss Connecticut v. American Electric Power (“AEP”), a lawsuit brought by a collection of states, the City of New York, and several nonprofit organizations against six of the largest U.S. electric power producers. The plaintiffs argued that carbon dioxide emissions from the defendants’ coal-fired power plants are contributing to a public nuisance—global climate change. The Second Circuit rejected defendants’ argument that this was a political question, not suitable for decision by the courts, and remanded the case to the lower court for trial.

Global climate change as public nuisance
Common-law public nuisance claims have a long history in the environmental law. Public nuisance lawsuits allege that an individual or entity is causing a substantial and unreasonable interference with public rights (such as the right to public comfort, safety, or enjoyment of natural resources). Prior to the passage of the major U.S. environmental laws, nuisance suits were often used to challenge actions that polluted air or water.

The AEP plaintiffs alleged a wide variety of negative impacts of climate change, ranging from diminished snowpack to sea-level rise and loss of shoreline territory to destruction of economically significant species habitat. These impacts, they argued, are caused by defendants’ carbon dioxide emissions, and are of the type that constitute a public nuisance. The Second Circuit agreed, rejecting defendants’ claim that the doctrine of public nuisance is meant to address only simpler, more limited types of harm.

Global climate change not a “political question”
The defendants’ most significant argument was that the case should be dismissed because it presented a “political question.” The political question doctrine states that certain types of questions should be left to the determination of the political branches of government, namely, Congress and the President.

The District Court in this case held that AEP presented just such a question, concluding that resolving the case would require a policy judgment regarding the appropriate balancing of ecological and economic concerns. Such a judgment, the court found, was far beyond the capacity of the judicial branch of the federal government. The District Court further noted that Congress had, as yet, refrained from taking comprehensive action regarding climate change.

In rejecting this argument, the Second Circuit framed the suit not as an effort to force a comprehensive solution to global warming, but rather as a limited action to control the behavior of the defendants. The court concluded that Congress’ failure to take statutory action cannot deprive the plaintiffs of their common-law remedies. Thus, the Second Circuit held, the suit did not present a political question.

States and nonprofits have standing to sue over damages caused by climate change
AEP was argued prior to the Supreme Court’s decision in Massachusetts v. EPA, in which the Supreme Court held that states had standing to sue for damages caused by climate change. The Second Circuit relied heavily on Massachusetts to find that the states have the right to sue in their sovereign capacity for damages occurring within their territory. In addition, the Second Circuit found that the states, New York City, and the nonprofits also have the right to sue in their capacity as landowners.

The defendant power producers further argued that, given the global scope of the carbon dioxide emissions problem, any order to control their own emissions would fail to remedy the injuries suffered by the plaintiffs. Once again relying heavily on the Supreme Court’s reasoning in Massachusetts v. EPA, the Second Circuit held that the suit could be maintained because, while an order to limit the emissions of these defendants would not, alone, eliminate global climate change, it could reduce the problem or slow its progress. Therefore, the court held, the plaintiffs can continue the suit.

Existing environmental laws do not “displace” the plaintiffs’ common-law nuisance claim
The defendant power producers argued that even if the plaintiffs’ claim was not a political question, it had been “displaced” by existing environmental laws. Specifically, the defendants argued that the Supreme Court’s Massachusetts v. EPA decision indicated that the Clean Air Act and five other environmental laws constituted a complete legislative scheme intended to provide a remedy for claims associated with pollution related to carbon dioxide emissions. The Second Circuit, however, found that EPA had not yet issued an endangerment finding, a necessary prerequisite to regulating carbon dioxide under the Clean Air Act. The Second Circuit also noted that EPA’s proposed finding, which was issued in April 2009, applies only to emissions from new motor vehicles. Therefore, the court found that the Clean Air Act and related statutes did not displace plaintiffs’ common-law cause of action.

What happens next?
The Second Circuit panel remanded the case to the Southern District of New York for further proceedings. However, the defendants may request a rehearing by the full Second Circuit Court. In the alternative, the defendants may petition the Supreme Court to review the case. It should be noted that this case was decided by a two-judge panel because the third judge, Sonia Sotomayor, was elevated to the Supreme Court prior to the issuance of the decision.

What does AEP mean for other power producers?
Connecticut v. AEP should not be viewed as a single, isolated decision. Rather, AEP is part of a nationwide strategy to attack carbon dioxide-emitting industries via tort litigation.

In June, the Northern District of California dismissed a nuisance case, California v. General Motors, on the ground that it presented a political question. California dropped its appeal to the Ninth Circuit on the ground that federal action on climate change was pending and that there was a strong possibility of bankruptcy by the automakers.

An appeal is pending at the Fifth Circuit in Comer v. Murphy Oil, Inc., a nuisance case filed by Gulf Coast property owners against a number of oil companies, arguing that their activities contributed to climate change, which allegedly increased the intensity of Hurricane Katrina. The Southern District of Mississippi dismissed the case on standing and political question grounds.

A complaint was filed in early 2008 in the Northern District of California in Native Village of Kivalina v. ExxonMobil, a nuisance suit arguing that the activities of defendant oil companies and power producers contribute to global warming, thereby forcing the relocation of the village.

By bringing a variety of suits in a range of jurisdictions, plaintiffs may create a split among the Circuit Courts of Appeal on the nuisance issue. Such splits greatly increase the likelihood that the Supreme Court will grant a petition for review, unless Congress steps in first.

In the meantime, power producers, oil and gas companies, auto manufacturers, and other industries that emit substantial quantities of carbon dioxide should be aware that they may become the target of such litigation.