Connecticut v. AEP: Three Comments

The Second Circuit’s recent decision in Connecticut v. AEP, in which a coalition of state attorneys general sued electric power producers to cap and then reduce their carbon emissions, allows the public nuisance case to proceed and gave the environmental plaintiffs virtually everything they wanted.  It should also give pause to those of us tempted to see judges as purely political: it was decided by Judges Peter W. Hall, a George W. Bush appointee from Vermont, and Joseph McLaughlin, a George H.W. Bush appointee from New York.  (Damn liberals.) (The third panel member, one Sonia Sotomayor, is now busy with other things and did not sign the decision.).

A few aspects of the case stand out (aside from the obviously correct decision that a common-law tort suit is not a nonjusticiable political question).  Most importantly, the Court’s holding on “displacement,” i.e. whether the Clean Air Act “displaces” the common law suit, actually makes EPA’s regulations somewhat more likely.

1) The case jumps out for a very expansive ruling on “standing,” i.e. which parties can bring suit.  The Second Circuit held not only that states can bring climate change lawsuits (pretty much a slam dunk after Massachusetts v. EPA), but so can municipalities, and even private nonprofits.  This is waving a red flag in front of the bull that is Chief Justice John Roberts.

2)  The Court held that the suit is properly brought under federal, not state, common law.  I have argued that this is a bad idea, because it essentially tells one federal district judge to take large swathes of the power grid into receivership.  (My view is that the best tack is to make it a matter of state common law, with individual state Supreme Courts deciding on damages).  Ruling this way on the federal v. state question means that lawsuits against automakers, which would have been pre-empted if the case was based on state law, can now go ahead.  California’s own lawsuit against the automakers was settled, but other plaintiffs will, like California’s Governor, be bock.

3)  By holding that the nuisance claims came under federal law, it had to determine whether the Clean Air Act “displaces” federal common law, thereby making it a dead letter.  Dicta in previous decisions suggest that it is far easier for federal law to displace federal common law than it is for the same statutes to pre-empt state law, but there is also contrary dicta, and the Second Circuit used the latter to hold that there was no displacement.

But wait a minute, you might say: didn’t the Supreme Court already hold in Massachusetts v. EPA that EPA has the authority to regulate carbon dioxide?  And hasn’t Obama’s EPA already proposed finding that carbon dioxide is a threat to human health?

No matter, replied the Second Circuit: the finding is only “proposed” and in any event, the EPA’s regulation only applies to mobile sources, not stationary sources like power plants.  Thus — and here is the kicker — until the EPA actually starts regulating all sources of carbon dioxide, the Court said that it can’t really determine whether or not displacement has occurred.

This holding is potentially significant, because it can put polluters in a real bind.  Their normal strategy is to tie up new regulations in the courts for several years — maybe until they can get a more friendly administration.  But now, the Second Circuit has told them that the only way to get rid of the public nuisance lawsuit is to let those regulations go into effect.  The judges have told the power companies to choose their poison.

To the extent that you think regulation is better than common-law remedies, you should like this posture.  Had the Second Circuit just held that the Clean Air Act does not displace the common law, it would have given the power companies no incentive to back off challenging new EPA regulations.  The Court has provided them with a sort of carrot to let the rulemaking process run its course.  It’s not as strong a carrot as one might like, because the Second Circuit hinted strongly that the Clean Air Act would not displace even if EPA begins to regulate.  But it leaves open the possibility.

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What now?  It would be over-optimistic to claim that the decision will have an immediate impact.  But it does help to ratchet up the pressure on those forces opposing federal climate change legislation.

Reader Comments

9 Replies to “Connecticut v. AEP: Three Comments”

  1. I am one of the attorneys (representing California) in this landmark case. I have been arguing with Jonathan about these issues a bit since he wrote a law review article on the subject about a year ago. The 2d Cir. decision is one hundred percent in line with the view taken by California in the Cal. v. GM case (and by all 7 states in the CT v. AES case), so it’s hard not to crow a bit.

    Jonathan assumes that litigants can make a choice between federal common law and state common law. Not so. Interstate pollution is governed by federal common law, unless it is displaced. At the point it is displaced, state common law still exists and may apply if it is not preempted. This is probably too arcane a point to spend much time on.

    More to the point: If Congress doesn’t act, courts have jurisdiction, and litigation may proceed. We now have a clear path to present evidence that global warming is real, human caused, and that coal-fired power plants contribute to the problem significantly. If Congress won’t act on this issue, let’s get to it in court.

  2. Now Ken: next time try decaf.

    “Jonathan assumes that litigants can make a choice between federal common law and state common law.” I don’t assume anything of the kind: instead, I assumed that this decision is for judges to make, that it is a hard call, and that several political and institutional factors make state common law a better call.

    The scope of federal common law is actually unclear, although the more decisions of this type that we get the clearer it will become. But more to the point for this litigation, everyone seemed to accept that it was a federal common law claim (except me!), so the judges really had no briefing on the other side. California had very good reasons for promoting the federal common law claim: without it, there would have been no lawsuit against the automakers. But that doesn’t mean that it makes sense in the broader scheme of things.

    I am actually quite concerned that once Roberts gets his hands on this, it’s all over. And a broad federal common law claim will make Kennedy’s vote more likely to move to the right and give Roberts that opportunity, especially given the Second Circuit’s extremely aggressive standing decision. Kennedy’s Mass. v. EPA rested on state authority; he is unlikely to be moved by federal common law claims, especially given the displacement argument. I’m hope I’m wrong.

    So now file another lawsuit!

  3. Not quite sure where the decaf comment is coming from.

    At any rate, it’s not at all clear to me that this case is Supreme Court material. Most commentators agree that the political question doctrine should not apply. The 2d Cir. nicely applied the law. Does the Supreme Court want to address displacement while Congress is debating climate change legislation?

    If Congress does its job, we can move out of the courts on this issue. That’s the best solution.

  4. Ken said;

    “…If Congress does its job, we can move out of the courts on this issue. That’s the best solution…”

    It is becoming increasingly clear that Congress is unlikely to pass climate change legislation anytime soon. In the absence of Congressional authorization, it is doubtful that the courts and EPA will be able to successfully construct and implement a legitimate, coherent and functional CO2 regulatory program.

    Next year, ordinary citizens will be able to vote for their preferences on the climate change issue. The 2010 election is far more critical to achieving a successful resolution of this controversy than litigation in federal courts.

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Jonathan Zasloff

Jonathan Zasloff teaches Torts, Land Use, Environmental Law, Comparative Urban Planning Law, Legal History, and Public Policy Clinic – Land Use, the Environment and Loc…

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