Developments in Climate Change Litigation: AEP v. Connecticut, Related Cases

In the absence of federal legislative action on climate change, climate regulation remains an untidy amalgam of actions and programs by states, individuals, the Environmental Protection Agency, and other federal, regional, and state agencies. Both funding and political capital for regulating greenhouse gas emissions have waxed and waned, and are now—along with public interest in and acceptance of the necessity of a collective response to climate change—in rhetorical freefall.

Indeed, many legislative efforts are designed to combat governmental responses to fight climate change. There have been numerous efforts to de-fund or decommission EPA authority to regulate greenhouse gases. Some states have postponed or abandoned initiatives to reduce greenhouse gas emissions. Many proponents of action on climate change have thus turned to the courts.

Accordingly, judicial consideration of climate change-related claims is now commonplace, with more than 200 cases percolating through the federal system alone. This article reports on three of the more prominent among them, beginning with the case the U.S. Supreme Court heard April 19, American Electric Power Co. v. Connecticut (AEP),¹U.S., No. 10-174, oral arguments 4/19/11; (76 DER A-26, 4/20/11). Because AEP and the other utilities filed the request for Supreme Court review, their name comes first in the Supreme Court citation. In federal district court, the case name, Connecticut v. AEP, reflects the fact that the states and other plaintiffs filed the lawsuit against AEP and the other utility defendants. A complete transcript of the Supreme Court oral arguments is available at http://op.bna.com/env.nsf/r?Open=jsun-8hmnuc. in which several states, the city of New York, and a land trust organization sued the nation’s five largest fossil-fuel-burning electric utility companies to reduce their emissions of greenhouse gases, arguing that these emissions constitute a public nuisance under federal common law.

In addition to the AEP case, this article will recap developments in a couple of related common law cases involving climate change, as well as a new fusillade of cases brought under the public trust doctrine that are likely to be influenced by the outcome in AEP.

Connecticut v. AEP

The action in AEP commenced in 2004 in an entirely different judicial, administrative, and legislative landscape. In Connecticut v. AEP,²406 F. Supp. 2d 265 (S.D.N.Y. 2005), vacated & remanded, 582 F.3d 309, 69 ERC 1385 (2d Cir. 2009); (156 DER A-26, 8/15/05). a collection of states representing 77 million citizens and private conservation organizations sued the nation’s five largest emitters of carbon dioxide in the United States under federal common and state public nuisance law, asking the court for injunctive relief to “cap” defendants’ emissions, develop a schedule for reducing defendants’ emissions on a percentage basis over time, assess and measure available alternative energy resources, and reconcile its relief with U.S. foreign and domestic policy.

The utility defendants, on the other hand, contended that federal courts should exercise judicial restraint in “resolving questions of high policy, which are for the political branches.” ³Connecticut v. AEP, 406 F. Supp. 2d 265, at 271.

The U.S. District Court for the Southern District of New York agreed with the defendants and dismissed the case as a nonjusticiable political question. The court concluded that it was impossible for it to make the “initial policy determination” “that must be made by the elected branches before a non-elected court can properly adjudicate a global warming nuisance claim.” ⁴Id. at 273. It concluded that plaintiffs’ allegations were “extraordinary,” ⁵Id. at 271 n.6 “patently political,” ⁶Id. and “transcendently legislative.” ⁷Id. at 272. The district court reasoned that the case’s soup of environmental, economic, foreign policy, and national security ingredients “present non-justiciable political questions that are consigned to the political branches, not the Judiciary.” ⁸Id. at 274.

In 2009, the U.S. Court of Appeals for the Second Circuit reversed, finding climate claims in tort law to be justiciable (182 DER A-5, 9/23/09).⁹582 F.3d 309, 69 ERC 1385 (2d Cir. 2009). The court held that no aspect of the political question doctrine applied to enjoin judicial review. In particular, the circuit court found that climate change is neither constitutionally consigned to the elected branches, nor prudentially left to them.

The circuit court rejected the lower court’s determination that there is in fact national climate change policy deserving deference under the political question doctrine: “Lurking behind Defendants’ arguments is this salient question: What exactly is U.S. ‘policy’ on greenhouse gas emissions?” ¹⁰Id. at 331. Dismissing defendants’ position that it is either to reduce emissions or promote research, the court said: “These variegated pronouncements underscore the point that there really is no unified policy on greenhouse gas emissions.” ¹¹Id. at 331-32.

In December 2010, the U.S. Supreme Court granted American Electric Power and the other utility defendants’ petition for certiorari¹²American Electric Power Co. Inc. v. Connecticut, U.S., No. 10-174, certiorari granted 12/6/10 on multiple issues (233 DER A-9, 12/7/10). Those issues were whether: the states and other plaintiffs lacked standing, federal law displaces plaintiffs’ claims, and the case raises nonjusticiable political questions.¹³The Supreme Court previously has decided that there are certain “political questions”—including matters that are demonstrably committed to a coordinate branch of government, require an initial policy determination, lack ascertainable standards, or could otherwise result in judicial embarrassment—that are nonjusticiable. Baker v. Carr, 369 U.S. 186, 217 (1962). See James R. May, Climate Change, Constitutional Consignment, and the Political Question Doctrine, 85 Denv. U. L. Rev. 919, 958 (2008). For example, the Court has recognized executive power over foreign affairs, impeachment, and treaty abrogation as political questions into which courts ought to decline jurisdiction, finding them to be consigned to the elected federal branches of government under the “political question doctrine.” James R. May, Constitutional Law and the Future of Natural Resource Protection, in The Evolution of Natural Resources Law and Policy 124, 146 (Lawrence J. MacDonnell & Sarah F. Bates eds., 2009).

The Obama administration filed a brief on behalf of defendant Tennessee Valley Authority—on the same side as the utility defendants—arguing that plaintiffs lack prudential standing, and that federal law displaces the need for common law causes of action for climate change (22 DER A-17, 2/2/11).¹⁴Brief for Tenn. Valley Auth. in Support of Petitioner, Connecticut v. AEP, U.S., No. 10-174. In its brief, the U.S. Solicitor General’s Office argued that plaintiffs lack prudential standing under the standard articulated in the Elk Grove Unified Sch. Dist. v. Newdow ¹⁵542 U.S. 1 (2004) decision—and largely for the same non-justiciability reasons that the defendants argued in favor of applying the political question doctrine. The solicitor general also argued that various EPA activities displace the need for common law causes of action under the standards set in the Court’s decisions in Middlesex County Sewerage Auth. v. Nat’l Sea Clammers Ass’n ¹⁶453 U.S. 1 (1981). and Milwaukee v. Illinois.¹⁷451 U.S. 304 (1981).

At oral argument, none of the justices seriously questioned that climate change is occurring, that human activity is playing a role in that dynamic, that the Clean Air Act, 42 U.S.C. §§7401-7671q, bestows upon EPA the authority to regulate greenhouse gases as a “pollutant” under Massachusetts v. EPA,¹⁸549 U.S. 497, 516; 63 ERC 2057 (2007). that at least the states possess both constitutional and prudential standing¹⁹That said, one Justice had some fun with the idea whether standing would exist to sue farmers for greenhouse gas emissions from farm animals:JUSTICE SCALIA: You’re—you’re lumping them all together. Suppose you lump together all the cows in the country. Would—would that allow you to sue all those farmers? I mean, don’t you have to do it defendant by defendant?MS. UNDERWOOD: Courts sometimes … JUSTICE SCALIA: Cow by cow, or at least farm by farm?MS. UNDERWOOD: Yes. And in terms of determining what—who is a substantial contributor, there are—because I do think that at some point a company’s emissions or a cow’s would be too small to give rise to a standing … or that the political question doctrine consigns climate cases to the political branches (76 DER A-26, 4/20/11).

On the other hand, a strong and perhaps unanimous majority of the Court seemed to accept the notion that the authority the Clean Air Act bestows upon EPA to regulate greenhouse gas emissions displaces federal common law.

Indeed, the goal posts have shifted significantly since the initial case was filed in 2004. Since then, the Court has held that EPA has statutory authority to regulate greenhouse gas emissions. In addition, EPA has, among other climate regulatory activities, determined that greenhouse gases “endanger” public health and welfare and are thus a “pollutant” subject to regulation under the Clean Air Act, issued rules requiring utilities and others to report their greenhouse gas emissions,²⁰The greenhouse gas reporting rule, 74 Fed. Reg. 56,260 (Oct. 30, 2009), requires annual reporting of greenhouse gas emissions from identified source categories, beginning with a 2011 report on data from 2010. said that new or modified major sources of greenhouse gases may be subject to new source review,²¹The tailoring rule, 75 Fed. Reg. 31,514 (June 3, 2010). The tailoring rule established de minimis thresholds for regulation of greenhouse gases, at least as a first step toward a comprehensive regulatory program. and said that other new sources may be subject to new source performance standards for greenhouse gas emissions.²²EPA’s greenhouse gas rules have withstood legal challenge thus far. For example, in the consolidated case of Coalition for Responsible Regulation, Inc. v. EPA, the U.S. Court of Appeals for the D.C. Circuit denied all the pending motions to stay EPA’s regulations of greenhouse gases from mobile and stationary sources, some of which were scheduled to take effect Jan. 2, 2011. The challenged EPA rule requires new and modified sources already required to control emissions of other air pollutants under the federal Clean Air Act to control greenhouse gas emissions for six months. After the six-month period, new sources with emissions exceeding 100,000 tons a year and modified existing sources with emissions of more than 75,000 tons per year must control emissions. The per curium order by Judges Ginsburg, Tatel, and Brown declared that the petitioners (several industry groups and states opposed to climate regulation) “have not shown that the harms they allege are ‘certain,’ rather than speculative, or that the ‘alleged harm[s] will directly result from the action[s] which the movant[s] seeks to enjoin.’ ” Coalition for Responsible Regulation, Inc. v. EPA, 2010 U.S. App. LEXIS 26980, 8 (D.C. Cir. Dec. 10, 2010; (237 DER A-23, 12/13/10). At oral argument, the Supreme Court seemed to accept that these activities implicitly displace federal common law.

In particular, the more “liberal” wing of the court—Justices Ruth Bader Ginsburg, Stephen Breyer, Elena Kagan, and Sonia Sotomayor—upon whom Respondents were counting to support their common law claims—expressed skepticism during oral arguments about the propriety of using federal common law in this case. For example, Justice Breyer said, “If the courts can set emission standards, why can’t they also set carbon taxes, which are likely to be more effective? What’s the end of it?” Justice Kagan said, “this sounds like the paradigmatic thing that administrative agencies do rather than courts.” Even Justice Ginsburg seemed dubious, remarking to respondents’ attorney: “Congress told EPA to set the standards; you’re setting up a district judge as a kind of ‘super’ EPA.”

Summing up the Court’s sentiment, Justice Kagan, the Court’s newest member and the former solicitor general, observed, “Much of your argument depends on this notion that this suit is really like any other pollution suit. But all of those other pollution suits that you have been talking about are much more localized affairs, one factory emitting discharge into one stream. They don’t involve these kinds of national, international, policy issues of the kind that this case does. I mean there is a huge gap, a chasm, between the precedents you have and this case, isn’t there?”

Sometimes there is a chasm between oral argument and written decisions. Here, prognostication is a dangerous business, particularly given the amalgam of standing, political question doctrine, supremacy clause, separation of powers, congressional authority, and federalism issues that AEP presents, not to mention the prominent role of big business and the fact that climate change is the defining issue of our day. Yet the Supreme Court has recently displayed a penchant for reversing controversial circuit court decisions in environmental cases, including out of the Second Circuit.

This case makes for strange jurisprudential bedfellows. For example, “strict textualists,” who look only to the ordinary meaning of the Constitution’s text for guidance, might question the basis for the political question doctrine to stem judicial review under Article III, while “originalists,” who also consider the original intent behind the Constitution, might call the Second Circuit’s ruling “activist.” On the other hand, “activist” might be an expression some use to describe a result to overturn the Second Circuit’s ruling. States’ rights advocates might be inclined to uphold the states’ lawsuit, except for the fact that this is an environmental case involving what some might consider to be progressive state action which state rights advocates often reject and that often fails when brought before the Supreme Court. And those on the bench who have been skeptical of federal authority in environmental issues might paradoxically find that EPA’s actual or potential regulation of greenhouse gas emissions displaces the common law.

Yet the tea leaves suggest that a strong and perhaps unanimous majority of the court will hold that the Clean Air Act displaces the federal common law of public nuisance when it comes to climate change. The court’s reasoning may boil down to a certain imperfect syllogistic zeitgeist:

1. Federal common law claims are displaced by statutory authority, whether exercised or not, whether congressionally de-funded or suffocated or not; and,

• 2.  The Clean Air Act, as the Supreme Court has held, provides EPA with discretionary authority to regulate greenhouse gases; therefore,

• 3.  The Clean Air Act displaces respondents’ federal common law claims.²³Several of the justices mentioned that the existence of state common law claims was not before the court, suggesting a more stringent preemption inquiry.

It is expected that the Court will issue a ruling in AEP this month.

Native Village of Kivalina v. ExxonMobil

AEP leaves open the extent to which federal courts may calculate monetary damages attributable to carbon dioxide emissions in a public nuisance action.

In 2008, the City of Kivalina and the Alaska Native Village of Kivalina—a federally recognized tribe (collectively, Kivalina)—brought a federal lawsuit against a dozen petroleum refining, energy producing, and coal-extracting companies (companies).²⁴Native Vill. of Kivalina v. ExxonMobil Corp., 663 F. Supp. 2d 863, 876 (N.D. Cal. 2009); (182 DER A-5, 9/23/09). Kivalina claims that the companies’ legacy and ongoing greenhouse gas emissions cause and contribute to climate change that is causing the Arctic sea ice that protects the Kivalina coast from storms to melt into the Arctic Ocean, and it seeks to recover the estimated $400 million it will cost to relocate the community.

Adding to those that have found tort-based climate cases nonjusticiable under the political question doctrine, the U.S. District Court for the Northern District of California in Kivalina held that “neither Plaintiffs nor AEP offers any guidance as to precisely what judicially discoverable and manageable standards are to be employed in resolving the claims at issue … [other] cases do not provide guidance that would enable the Court to reach a resolution of this case in any ‘reasoned’ manner.” ²⁵Id. at 876. Kivalina is currently before the U.S. Court of Appeals for the Ninth Circuit and awaits the outcome in AEP.²⁶See e.g., Appellant’s Opening Brief, Native Vill. of Kivalina v. ExxonMobil Corp., No. 09-17490 (9th Cir. 2010).

Comer v. Murphy Oil

The Supreme Court recently declined to issue a writ of mandamus in another climate case. In Comer v. Murphy Oil,,²⁷585 F.3d 855, (5th Cir. 2009). plaintiff property owners filed a class action against several oil, coal, power, and chemical companies and two industry trade associations, alleging that they were liable for property and other damage inflicted by Hurricane Katrina (230 DER A-14, 12/3/09).

Under the plaintiffs’ theory, the companies caused or exacerbated climate change by going about their business without “currently available mitigation technologies,” despite warnings from scientists and government agencies. This business methodology purportedly caused or exacerbated Hurricane Katrina, which then caused plaintiffs’ injuries. As in AEP, the federal district court dismissed the claims in 2007 on political question and standing grounds from the bench, without a written opinion.

In 2009, a panel of the U.S. Court of Appeals for the Fifth Circuit reversed, finding—as the Second Circuit did in AEP—that plaintiffs’ claims were not committed to a coordinate branch of the government (230 DER A-14, 12/3/09). Specifically, according to the Fifth Circuit, “There is no federal constitutional or statutory provision making such a commitment, and the defendants do not point to any provision that has such effect.” ²⁸Id. at 870. The panel held that state common law claims for harm attributed to climate change are legally cognizable.²⁹The panel wrote: “Until Congress, the president, or a federal agency so acts, however, the Mississippi common law tort rules questions posed by the present case are justiciable, not political, because there is no commitment of those issues exclusively to the political branches of the federal government by the Constitution itself or by federal statutes or regulations.” Id.

In a bizarre twist, the Fifth Circuit then vacated the panel’s decision and reinstated the district court’s dismissal of the case. On May 28, 2010, the Fifth Circuit announced that it had vacated on the ground that the court could not muster a quorum after it had granted a motion for rehearing en banc (104 DER A-25, 6/2/10).³⁰See Comer v. Murphy Oil, 607 F.3d 1049 (5th Cir. 2010). The necessary nine of the court’s 16 members voted to hear the matter en banc. (The other seven had recused themselves.) After granting the motion for hearing en banc, one more judge recused herself, leaving the court one judge short of a quorum. Instead of reinstituting the panel decision, five of the remaining eight “eligible” judges applied local rules and voted to vacate the appeal altogether, without reaching the merits, and to reinstate the district court’s dismissal.³¹In dismissing the case, the reconstituted panel wrote:

In sum, a court without a quorum cannot conduct judicial business. This court has no quorum. This court declares that because it has no quorum it cannot conduct judicial business with respect to this appeal. This court, lacking a quorum, certainly has no authority to disregard or to rewrite the established rules of this court. There is no rule that gives this court authority to reinstate the panel opinion, which has been vacated. Consequently, there is no opinion or judgment in this case upon which any mandate may issue. Because neither this en banc court, nor the panel, can conduct further judicial business in this appeal, the Clerk is directed to dismiss the appeal.

Id. at 1055. Three judges strongly disagreed.³²Judge Dennis, for one, wrote in dissent:

I respectfully dissent from the decision by the majority of this en banc court to refuse to hear oral argument or to decide this appeal on its merits, but to take the shockingly unwarranted actions of ruling that the panel decision has been irrevocably vacated and dismissing the appeal without adjudicating its merits. The majority’s decision to declare that we no longer have a quorum, and to take the drastic action of dismissing the appeal without hearing its merits, but with the intention of reinstating the district court’s judgment, is manifestly contrary to law and Supreme Court precedents. The majority’s action is deeply lamentable because it was forewarned of the reasons militating against its erroneous rush to judgment by the parties’ letter briefs and by internal memoranda. If the five-judge en banc majority’s precipitous summary dismissal of the appeal is not corrected, it will cause the sixteen-active judge body of this United States Court of Appeals to default on its absolute duty to hear and decide an appeal of right properly taken from a final district court judgment.

Id. at 1056 (Dennis, J., dissenting).

The Supreme Court subsequently denied plaintiffs’ writ of mandamus asking it to direct the Fifth Circuit to reinstate the panel’s unanimous decision that the case is justiciable, thus letting stand the federal district court’s initial dismissal of that case.³³In re Ned Comer, Pet’r’s Writ of Mandamus, Civil Action No. 10-294. The Fifth Circuit recently proposed a rule to prevent future “Comers” from occurring, although any such rule will not change the outcome in that case.

Public Trust Cases

The outcome in AEP could have an effect on climate litigation in other contexts, including the public trust doctrine. For example, on May 4, 2011, the group Our Children’s Trust filed lawsuits or administrative actions against the federal government and all 50 states under the Public Trust Doctrine, a theory which proclaims that the government holds natural resources in trust for public use.³⁴The main complaint was filed in the U.S. District Court for the Northern District of California (Loorz v. Jackson, N.D. Cal., No. CV11-2203, 5/4/11; (87 DER A-30, 5/5/11) These cases and actions contend that climate change reflects an actionable governmental failure to hold the atmosphere in public trust for future generations. The actions aim to reduce greenhouse gas emissions and promote reforestation to offset the effects of climate change.

The public trust doctrine is very different from the public nuisance claims pursued by the plaintiffs in AEP, Kivalina, and Comer. Yet these cases would seem to raise similar but not identical separation of powers, federalism, justiciability, and standing defenses raised in those cases. Thus, the outcome in AEP likely will have a profound effect on the course of litigative events in the public trust cases.

Conclusion

Oral argument in AEP was a fascinating, crowded event. It seems as though the Supreme Court is inclined to reverse on displacement ground, perhaps unanimously. Even Justice Ginsburg seemed to be receptive to the notion that the common law claims raised by respondents involve items already within EPA’s regulatory grasp under the Clean Air Act, and that’s that. The court also sounded quite skeptical about AEP’s constitutional standing argument and the solicitor general’s position on prudential standing. No one on the court seemed inclined to reverse under the political question doctrine.

Then again, it’s hard to make assumptions based upon 80 minutes of argument by three sides before eight people. We’ll find out soon enough.

Regardless, AEP could be one of the most important decisions ever issued in the field of environmental law. AEP stands astride several junctures: public and private law; environmental, constitutional, and international law; injunctive and legal relief; state and federal action; and judicially, legislatively, and administratively fashioned responses. With its cornucopian issues—separation of powers, federalism, standing, displacement, political question, tort, and prudence—it has something for nearly all legal tastes, temperaments, and talent.

To complicate the picture, the 112^th Congress has made blocking EPA action on climate change a priority, which informs the cases and actions above. If, for example, Congress suspends or upends EPA’s authority, then the displacement issue discussed above would seem once again to be on the table. Whatever the Court decides in AEP is sure to rock the foundation of climate law and policy for many years, perhaps generations, to come.