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The Supreme Court reversed a very troubling decision by the U.S. Court of Appeals for the 2nd Circuit that allowed 8 states to sue 6 major electric utility companies under a public nuisance theory. The theory is that each state is adversely affected by climate change caused in part by the utilities’ electricity-generating plants, and the courts should impose emissions limits.

The NAM and other business groups filed an amicus brief urging review of the case. We argued that only the political branches of government are equipped to resolve the complex and dynamic issues relating to climate change regulation, that the plaintiffs’ legal claims exceed the boundaries of public nuisance litigation, and that judges and juries are not empowered or competent to exercise extraordinary regulatory powers without clear boundaries and guiding principles.

Our brief argued that this case is far from the "ordinary tort suit" that the lower court thought it was. Instead, it is quite extraordinary, and the judiciary "has no experience dealing with public nuisance litigation created by a global phenomenon resulting from the release of greenhouse gases by millions, if not billions, of sources (including natural events) worldwide -- very few of which are subject to the jurisdiction of American courts or under the control of these defendants." It is inappropriate for courts to entertain standardless public nuisance litigation in an area that should be addressed by the political branches of government.

Click here for a summary of the Second Circuit's decision and the NAM brief in that court.

The Supreme Court's decision to review this case was announced on Dec. 6, 2010.

On 2/7/11, we filed a brief on the merits, arguing that courts cannot resolve political questions like this because there are no judicially discoverable and manageable standards to handle them, and courts have neither the expertise nor the authority to make those judgments. Public nuisance claims have been limited by geographical boundaries and defined circumstances, and courts should not step into legislative and executive branch issues to try to address public nuisance cases of global dimensions. A public nuisance is "the right thing in the wrong place, like a pig in the parlor instead of the barnyard." But were courts to impose judicial limits on electricity generating plants, they would be removing the geographic limitation and would be acting without a standard. In addition, public nuisance cases involve defined circumstances where the controversy can actually be resolved by an abatement order. Such an order in this case cannot be designed with any standard that would project or evaluate its efficacy. This litigation is not an "ordinary tort suit," but rather involves wholly new claims that are unbounded by any rational constraints, and courts should leave their resolution to the legislative and executive branches.

On June 20, 2011, the Court ruled that EPA action to regulate greenhouse gases displaces any federal common-law right to seek abatement of GHG emissions. There is no need for the courts to develop federal common law when Congress addresses a question of national concern, such as the regulation of air and water. It does not matter whether EPA actually exercises its authority to regulate GHGs; as long as the field of GHG regulation has been delegated to EPA, federal common law is displaced.

The NAM had urged the Court to overturn the lower court’s extreme ruling, and the Court agreed, up to a point. While it rejected the federal common-law claims, it left open the possibility that such a suit could be brought under state nuisance law. It sent the case back for the lower court to consider whether the Clean Air Act preempts state-law suits as well.

The NAM joined with 10 other major business groups to urge the Second Circuit to reject lawsuits brought by 8 states against 6 major electric power utility companies over global warming. The states claim that the utilities, by emitting carbon dioxide from the process of burning fuel to produce electricity, contribute to global warming and create a public nuisance in their states. Our brief argued, and the lower court judge found, that this issue is a political question unsuitable for resolution in the courts. We warned that this suit, if allowed, would open the door to nuisance suits targeting any activity that uses fossil fuel for energy, such as companies using a fleet of cars or trucks, and that global warming and energy usage are international and national issues that are not amenable to solution through the case-by-case, patchwork approach of nuisance suits.

This suit basically seeks to have the judiciary decide how fossil fuel energy should be used in this country. This issue is a political question that should be decided only after the kind of full debate and public participation that the political, legislative and administrative processes of government can provide. Energy-intensive industries include aluminum, chemicals, forest products, glass, metal casting, mining, petroleum refining and steel. Even farming and road building could be subject to nuisance suits. A second brief filed in the Open Space Institute case is virtually identical. See also: Open Space Institute, Inc. v. American Electric Power Co.

On Sept. 21, 2009, two judges of the Second Circuit issued an opinion reversing the trial court and sending the case back for trial. They ruled that the claims are not political questions, that the plaintiffs have standing, and that they have stated claims under the federal common law of nuisance. The court found that a decision by a single federal court concerning a common law nuisance action brought by domestic plaintiffs against domestic companies for domestic conduct does not establish a national or international emissions policy. The court said that the relief sought in this case "applies in only the most tangential and attenuated way to the expansive domestic and foreign policy issues raised by Defendants." It said that well-settled principles of tort and public nuisance law provide guidance on how to handle the case. Until Congress steps in to preempt the field of the federal common law of nuisance, courts can decide cases involving such claims. The court found that there is no unified U.S. policy on greenhouse gas emissions, and that a court case would not interfere.

With respect to standing, the court said that at this point in the litigation the plaintiffs "need not present scientific evidence to prove that they face injury or increased risk of injury, that Defendants' emissions cause their injuries, or that the remedy they seek will redress those injuries." It is enough that the states have an interest in safeguarding the public health and their own resources. The court found that the plaintiffs sufficiently alleged that their claimed injuries (global warming) are "fairly traceable" to the defendants' emissions.

The judges also ruled that private parties are allowed to bring federal common law public nuisance suits, although the case precedent for this is limited. In addition, federal environmental law does not displace this common law nuisance action, since neither Congress nor the EPA has yet regulated greenhouse gases "in any real way."

This litigation will now continue, but the case is being appealed to the Supreme Court. Major producers of electricity must go through lengthy and expensive governmental emission permitting procedures, and even when fully approved, plants will still be subject to suits challenging their emissions. This is an untenable situation that will lead to increased costs, conflicting court judgments and more expensive energy for manufacturers and the American public.

This is a consolidated case with Connecticut v. American Electric Power Co. Click here for the full summary.