Today, the U.S. Supreme Court released their opinion in AEP v. Connecticut in which the Court held that the Clean Air Act ("CAA") and the EPA actions on regulating greenhouse gas emissions displaced any federal common-law right to seek greenhouse gas emission reductions. The suit was filed by Eastern States and non-profit land groups against coal-fired power plants in an attempt to have court order emission reductions. Businesses were deeply concerned that if the Court allowed the nuisance case to proceed, the courts would be flooded with climate change litigation.
The States had argued their nuisance claims were not displaced because EPA had not yet established final emission standards. The Court stated the displacement test is simply "whether the statute speaks directly to the question at issue." In other words, if the statute give authority to act that is enough to displace federal common law.
The Court noted that in Massachusetts v. EPA it had previously held:
- Emissions of carbon dioxide qualify as air pollution subject to the CAA.
- CAA Section 111 gives authority to EPA to list categories of stationary sources that cause or contribute significantly to air pollution that "endangers public health and welfare" (categories would include coal-fired power plants)
- Once a category is listed under Section 111, EPA must establish performance standards for new or modified sources within that category
- CAA also will require regulation of existing sources in the category
- If EPA fails to act in setting standards, States and private parties may petition for a rulemaking on the matter, and EPA’s response will be reviewable in federal court.
For these reasons, the Court held it was clear the CAA "speaks directly" to the emission of carbon dioxide from the defendant’s coal-fired power plants.
Implications of Today’s Ruling
- Prevents "Flood" of Federal Nuisance Claims- Obviously today’s ruling is very good news for those who feared the courts could be flooded with climate change litigation under federal common law.
- Possible State Nuisance Claims– The Court notes that the issue before them was limited to actions under federal nuisance, it does not address nuisance claims based upon state law. The Supreme Court sent the case back to the Second Circuit to determine if state nuisance claims are pre-empted by the CAA. This leaves open a huge issue that could likely result in yet another Supreme Court ruling.
- EPA v. Courts- In its opinion the Supreme Court stated its preference for EPA to decide appropriate emission reductions, not the courts. The Court said EPA, with all its expertise, is in a better position to balance competing interests and establish standards.
- Tacit Endorsement of EPA Regulatory Authority- The key battle right now are EPA’s regulatory actions to move forward with emission standards for greenhouse gases. Some have asserted EPA’s actions demonstrate the Agency is "out of control." The Supreme Court’s decision makes clear, once again, EPA has the authority to regulate greenhouse gases. Also, the Court notes repeatedly, if EPA fails to act in establishing those standards it can be compelled to act by private parties.