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Supreme Court Rules States Cannot Sue Under Federal Common Law to Reduce Greenhouse Gas Emissions

The U.S. Supreme Court, in American Electric Power Company LLC v. Connecticut, held that the plaintiffs, which include several states and the City of New York, could not maintain their federal common law action against utility companies seeking to impose limitations on greenhouse gas emissions.

In summarizing the decision, Justice Ginsburg, writing for the majority, stated:

“We address in this opinion the question whether the plaintiffs (several States, the city of New York, and three private land trusts) can maintain federal common law public nuisance claims against carbon-dioxide emitters (four private power companies and the federal Tennessee Valley Authority). As relief, the plaintiffs ask for a decree setting carbon-dioxide emissions for each defendant at an initial cap, to be further reduced annually. The Clean Air Act and the Environmental Protection Agency action the Act authorizes, we hold, displace the claims the plaintiffs seek to pursue.”

After noting that this action was commenced before the EPA began to take action to set rules governing the emission of greenhouse gases, the decision notes:

“it is an academic question whether, in the absence of the Clean Air Act and the EPA actions the Act authorizes, the plaintiffs could state a federal common law claim for curtailment of greenhouse gas emissions because of their contribution to global warming. Any such claim would be displaced by the federal legislation authorizing EPA to regulate carbon-dioxide emissions….The 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. Mobil Oil Corp. v. Higginbotham, 436 U. S. 618, 625 (1978); see Milwaukee II, 451 U. S., at 315; County of Oneida v. Oneida Indian Nation of N. Y., 470 U. S. 226, 236–237 (1985).
We hold that the Clean Air Act and the EPA actions it authorizes displace any federal common law right to seek abatement of carbon-dioxide emissions from fossil-fuel fired power plants.”

The Court also disagreed with the holding of the Second Circuit and the Plaintiffs’ argument that federal common law claims are not displaced until the EPA exercises its rule making authority:

“Congress delegated to EPA the decision whether and how to regulate carbon-dioxide emissions from power plants; the delegation is what displaces federal common law. Indeed, were EPA to decline to regulate carbon-dioxide emissions altogether at the conclusion of its ongoing §7411 rulemaking, the federal courts would have no warrant to employ the federal common law of nuisance to upset the agency’s expert determination. EPA’s judgment, we hasten to add, would not escape judicial review….EPA may not decline to regulate carbon-dioxide emissions from power plants if refusal to act would be “arbitrary, capricious, an abuse of discretion, or other-wise not in accordance with law.” §7607(d)(9)(A). If the plaintiffs in this case are dissatisfied with the outcome of EPA’s forthcoming rulemaking, their recourse under federal law is to seek Court of Appeals review, and, ultimately, to petition for certiorari in this Court.”

Finally, the Court noted that the Second Circuit had not addressed the issue of using State common law claims to impose limitations on emissions, since it had held that federal common law applied. As the issue of the preemptive effect of the Clean Air Act upon State common law claims had not been briefed, the Court left that issue for remand.

-Steven Silverberg