On Sept. 21, 2009, a two-judge panel of the 2nd Circuit Court of Appeals
sounded a second significant shot in the complicated climate change litigation
fight, ruling that defendants can be sued on a public nuisance theory for
greenhouse gas emission.
A U.S. district court in New York previously ruled that whether carbon
dioxide released as part of fossil-fueled utility stack emissions could be a
public nuisance was a "political question," and thus beyond the reach of the
federal courts. This 2nd Circuit reversal follows on the heals of the landmark
2007 U.S. Supreme Court decision, Massachusetts v. EPA, in which the
court found carbon emissions to be a "pollutant" under law, compelling EPA to
make a finding if greenhouse gases endangered human health. A proposed EPA
“endangerment finding,” now out for comment, concludes in the affirmative.
In 2004, eight states (California, Connecticut, Iowa, New Jersey, New York,
Rhode Island, Vermont and Wisconsin) and New York City sued five electric
utility companies. Connecticut v. American Electric Power Co., Civ. No.
04 CV 05669 (S.D.N.Y. filed July 21, 2004). Plaintiffs brought the claim both on
their own behalf – to protect state-owned property (e.g., the hardwood forests
of the Adirondack Park in New York) – and as the parens patriae protecting the
public health and well-being of citizens and residents.
The district court, following the precedent of other related decisions, had
dismissed the case on political question grounds, noting the "the impossibility
of deciding [the case] without an initial policy determination of a kind clearly
for non-judicial discretion.”
A rare two-judge panel of the 2nd Circuit disagreed, holding that: (1) the
district court erred in dismissing the complaints on political question grounds;
(2) all plaintiffs have standing; (3) plaintiffs have stated claims under the
federal common law of nuisance; and (4) plaintiffs’ claims are not displaced by
federal legislation. In doing so, the court reinstated the suit and remanded to
the district court for further proceedings.
Judge Sonia Sotomayor heard arguments in the case, but was elevated to the
Supreme Court pre-decision. Judge Peter W. Hall, who wrote the 139-page opinion, found there
was no need for the trial court to defer to the political branches and refrain
from hearing the suit until there is a definitive policy statement on global
warming from Congress and the president.
“A decision by a single federal court concerning a common law of nuisance
cause of action, brought by domestic plaintiffs against domestic companies for
domestic conduct, does not establish a national or international emissions
policy (assuming that emissions caps are even put into place),” Hall wrote. “Nor
could a court set across-the-board domestic emissions standards or require any
unilateral, mandatory emissions reductions over entities not party to the suit.”
Moreover, federal courts have “successfully adjudicated complex common law
nuisance cases for over a century,” and Judge Hall concluded that the court did
not “agree that there are no judicially discoverable and manageable standards
for resolving this case.”
The court also weighed in on standing issues, finding that the plaintiffs had
pled “concrete” injury by alleging that the melting of the California mountain
snowpack, which has resulted in flooding and property damage, was caused by
global warming; and that they had also properly alleged future injury by
attributing to global injury the possible lowering of the water level of the
great lakes, as well as a possible rise in sea level near New York City, among
other problems. More importantly, the court held that the plaintiffs had
sufficiently alleged that their injuries “are fairly traceable” to the
In addition, the court blessed the use of federal common law nuisance in the
global warming litigation context. Defendants set forth a number of arguments as
to why this legal theory should not apply, including that principles of
constitutional necessity should limit the scope of “transboundary nuisance
disputes between the states, and that federal common law nuisance is available
only to abate nuisances of ’the simple type’ that are ’so immediately harmful
and so readily traced to an out-of-state source that they would have justified
war at the time of the founding,’” but the court analyzed each argument and in
great detail explained why these arguments were unavailing.
The decision’s implications are substantial, and will unfold as other
jurisdictions, including the 5th and 4th Circuits, consider similar issues.
First, one 2nd Circuit panel has now determined that well-pleaded nuisance
claims alleging climate change by-product litigation will not be cut off at
pleadings stage by dispositive jurisdictional or procedural motions.
Second, one circuit has now signaled that its trial courts will have to
grapple with the procedural, evidentiary, and expert questions attendant to
discovering and proving specific versus general causation of
emissions-originated nuisances with regional, national and even worldwide
airborne inputs, and will have to deal with damage-apportionment issues as
expansive as the sources of emissions themselves.
Third, the decision creates exposure for a wider group of industrial emitters
to potentially expensive and long-lasting by-product liability litigation over
climate-impacting emissions, with the costs of this litigation ultimately borne
by shareholders and rate payers. This raises the specter of preemption or other
types of legislative relief working their way into pending debates over
Waxman-Markey, and competing cap and trade proposals in Congress.
We will follow this advisory with further analysis of this important issue.
For more information contact the authors.