Posted on June 20, 2011 by Theodore Garrett
Reversing the Second Circuit, the U.S. Supreme Court held that the Clean Air Act displaces any federal common-law right to seek abatement of carbon dioxide emissions from fossil-fuel fired power plants. American Electric Power Co., Inc., et al. v. Connecticut et al., (No. 10–174, June 20, 2011).
Two groups of plaintiffs including eight states filed complaints in a Federal District Court against five major electric power companies. The complaints alleged that the defendants are the largest emitters of carbon dioxide in the U.S. and that the defendants’ emissions substantially and unreasonably interfered with public rights by contributing to global warming, in violation of the federal common law of interstate nuisance. Plaintiffs sought for a decree setting carbon-dioxide emissions for each defendant. The District Court dismissed both suits as presenting nonjusticiable political questions, but the Second Circuit reversed and held that the plaintiffs had stated a claim under the “federal common law of nuisance” and that the Clean Air Act did not “displace” federal common law.
In a decision announced on June 20, 2011, the Supreme Court reversed. The court started from the proposition that, since Erie R. Co. v. Tompkins, a new federal common law has emerged for subjects of national concern, citing Milwaukee I. But recognition that a subject is proper to be governed by federal law does not necessarily mean that federal courts should create the controlling law.
The test for preemption by Federal legislation, the court held, is whether the statute “speak[s] directly to [the] question” at issue. Here, Massachusetts v. EPA made plain that emissions of carbon dioxide qualify as air pollution subject to regulation under the Clean Air Act. The Act directs EPA to establish emissions standards for categories of stationary sources that, “in [the Administrator’s] judgment,” “caus[e], or contribut[e] significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare.” Once EPA lists a category, it must establish performance standards for emission of pollutants from new or modified sources and existing sources within that category. The Act itself thus provides a means to impose the same relief plaintiffs seek by invoking federal common law.
The Court rejected the Second Circuit’s holding that federal common law is not displaced until EPA actually exercises its regulatory authority by setting emissions standards for the defendants’ plants. The relevant question for displacement purposes is “whether the field has been occupied, not whether it has been occupied in a particular manner.” Here, Congress delegated to EPA the decision whether and how to regulate carbon dioxide emissions from power plants.
Finally, the court stated that the Act’s prescribed order of decision making—first by the expert agency, and then by federal judges—is another reason to resist setting emissions standards by judicial decree under federal tort law. Echoing some of the comments during oral argument, the opinion states that the appropriate amount of regulation in a particular greenhouse gas producing sector requires informed assessment of competing interests. The expert agency is surely better equipped to do the job than federal judges, who lack the scientific, economic, and technological resources an agency can utilize in coping with such issues.
The Second Circuit did not decide plaintiffs’ claims under state nuisance law. Because none of the parties have briefed preemption or the availability of a claim under state nuisance law, the Supreme Court left that issue for consideration on remand.
Ginsburg, J., delivered the opinion of the Court, in which Roberts, J., and Scalia, Kennedy, Breyer, and Kagan, JJ., joined. Alito, J., filed an opinion concurring in part and concurring in the judgment, in which Thomas, J., joined. Sotomayor, J., took no part in the consideration or decision of the case.