This past Monday, the United States Court of Appeals for the Second Circuit finally released its decision in Connecticut v. AEP, a bellwether case involving whether carbon dioxide emissions from coal-fired power plants constitute a “public nuisance” subjecting emitters to common law tort liability. The first of four “global warming” cases brought under common law tort theories, the Second Circuit in Connecticut v. AEP permitted the case to proceed on a “public nuisance” theory. Assuming it holds up in the face of likely future legal proceedings, the decision is expected to have highly significant legal and economic consequences both for energy producing and consuming companies. The ruling may also have an immediate effect on the congressional debate on proper U.S. climate change policy and on EPA actions now unfolding to regulate greenhouse gases under the Clean Air Act (“CAA”).
Filed in the United States District Court for the Southern District of New York in New York City, the lawsuit was brought by eight states (Connecticut, New York, California, Iowa, New Jersey, Rhode Island, Vermont and Wisconsin), the City of New York and several environmental parties against five electric utilities (American Electric Power, Southern Company, Tennessee Valley Authority, Xcel Energy and Cinergy, now merged with Duke Energy). Modeled after similar “public nuisance” complaints to stop the sale of handguns, end tobacco use, and recover health costs associated with lead-based paint, the complaint in this case was very simple, containing only a nuisance count that alleged that the companies’ coal-fired plant emissions were a significant cause of global warming. Emissions from stations located in twenty states were at issue. Plaintiffs sought declaratory and injunctive relief requiring Defendants to cap and then reduce their emissions.
Reversing the District Court’s 2005 decision to dismiss the case, the Second Circuit concluded that the plaintiffs properly stated a cause of action for “public nuisance” and could proceed with their lawsuit to address climate change. After reviewing the scope of the CAA, and the remedy sought by the Plaintiffs, the Second Circuit rejected the District Court’s main holding that climate change was a “political question” not appropriate for judicial interpretation.
The Second Circuit also rejected other arguments raised by Defendants, including standing, failure to state a cause of action under nuisance law, and displacement of the cause of action by the CAA. In rejecting Defendants’ argument that CAA regulation of greenhouse gases displaced Plaintiffs’ federal common law nuisance claims, the Court relied on the fact that EPA has not yet regulated but has only made a proposed endangerment finding.
Undoubtedly, the Defendants in Connecticut v. AEP will pursue further legal avenues, including potentially a request for panel and/or en banc rehearing and a petition for certiorari to the Supreme Court.