Environmental -- 2015

Merrick v. Diageo Americas Supply, Inc.   (6th Circuit)

Whether public nuisance claim is preempted by EPA regulation of factory emissions

This case presents another opportunity for the courts to resolve whether public nuisance claims under state law are preempted by the Clean Air Act. There are serious conflicts between the federal courts of appeals and within state courts concerning this preemption issue.

The case arose when private property owners brought claims of nuisance, negligence and trespass based on ethanol emissions from Diageo's whiskey production facilities in Louisville, Kentucky. They allege that ethanol emitted from the facilities cause a fungus to germinate and grow on their property, and they seek damages and emissions controls that exceed those required under the company's Clean Air Act operating permits.

The issue is important because public nuisance litigation threatens one of the Clean Air Act's most important methods of pollution control -- permitting. Permits specify clear standards that guarantee certainty, predictability, and evenhandedness to the regulated community, and allowing public nuisance litigation threatens to substitute ad hoc decisions for considered regulatory policy, a result completely at odds with the goals and purposes of the Clean Air Act.

The NAM and two other business groups filed an amicus brief urging the Sixth Circuit to reject the claims, arguing that they directly conflict with and are preempted by the Clean Air Act. In addition, a provision in the Clean Air Act that allows states to adopt standards for air pollution control allows such controls only when they are established through statute or regulation, not claims under state common law. The goals and policies of the Clean Air Act were intended to establish and enforce uniform standards for air quality, developed by EPA through an extensive regulatory scheme that is fundamentally inconsistent with common law adjudication that would allow for the imposition of liability based on standards developed by a judge or jury and retroactively applied against a facility.

On November 2, 2015, the Sixth Circuit affirmed the district court’s order that such state common law air pollution claims are not preempted by the Clean Air Act. Though it acknowledged the suggestion that it is unduly burdensome for industries to be subject to both federal law and state common law, the court left that concern to Congress.

Related Documents:
NAM amicus brief  (December 3, 2014)


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