Recent GHG Case Breaks from 2nd Circuit

In the case of Kivalina et al. v. Exxon Mobil Corp. et al., case number 4:08-cv-01138 (N.D. Cal. Sept. 30, 2009), the U.S. District Court for the Northern District of California dismissed a public nuisance lawsuit brought by the Alaskan village of Kivalina against 24 energy and utility companies, finding that the Eskimo village who brought the suit could not establish that the threat to its existence from rising sea levels was “fairly traceable” to the defendants’ greenhouse gas (GHG) emissions and thus lacked standing. Judge Saundra Brown Armstrong of the U.S. District Court for the Northern District of California further ruled that the plaintiffs’ federal common law nuisance suit touched on a political question properly reserved for the legislative or executive branch. This was a break from the current trend in the federal courts of holding companies liable for historic GHG emissions that contribute to global warming.  

In Connecticut v. American Electric Power Co., the Second Circuit revived a similar nuisance suit filed by a coalition of states and environmental groups against American Electric Power Co. Inc., the Tennessee Valley Authority, Xcel Energy Inc. and other power companies. The suit, brought under a federal common law claim of nuisance, alleged that by contributing to global warming, AEP and the other defendants were harming the environment, the states’ economies and public health. It was originally tossed by a district court, but then revived last month by a two-judge panel of the Second Circuit, which said the district court had wrongly read the plaintiffs’ claims as seeking a change in national policy rather than protection from immediate harm. 

“Nowhere in their complaints do plaintiffs ask the court to fashion a comprehensive and far-reaching solution to global climate change, a task that arguably falls within the purview of the political branches,” the judges said. “Instead, they seek to limit emissions from six domestic coal-fired electricity plants on the ground that such emissions constitute a public nuisance that they allege has caused, is causing and will continue to cause them injury.”  

“These decisions side by side I think show the great disagreements both in the law and in society about how to handle these claims,” said Steven F. Napolitano, a partner at Skadden Arps Slate Meagher & Flom LLP. “They are 180 degrees different.” 

The Kivalina case is one of the many recent public nuisance lawsuits brought against energy and utility companies. The Kivalina decision falls in line with prior decisions coming out of the district courts, whereas the Second Circuit’s decision is an outlying decision right now in the field of global warming. 

“The district court judges pretty consistently seem to be going with the view that these are difficult cases to entertain, that they run into problems of fundamentally political judgments,” added Ronald J. Tenpas, co-chair of the environmental practice at Morgan Lewis & Bockius LLP and a former assistant attorney general at the U.S. Department of Justice. “And now you have one court of appeals going in a different direction. So it definitely leaves things in a bit of a flux right now.” 

While the Second Circuit relied on comparisons to water pollution and air pollution nuisance cases, Judge Armstrong criticized the Second Circuit in the Kivalina decision, questioning whether water pollution and air pollution cases provided appropriate guidance in assessing global warming nuisance cases, pointing to the admitted and significant distinctions between a nuisance claim based on water or air pollution and one based on global warming.  

“While a water pollution claim typically involves a discrete, geographically definable waterway, plaintiffs’ global warming claim is based on the emission of greenhouse gases from innumerable sources located throughout the world and affecting the entire planet and its atmosphere,” Armstrong said. 

Armstrong further said that the nuisance claim required the judiciary to make a policy decision about who should bear the cost of global warming. “Though alleging that defendants are responsible for a ‘substantial portion’ of greenhouse gas emissions, plaintiffs also acknowledge that virtually everyone on Earth is responsible on some level for contributing to such emissions,” she said.” Yet, by pressing this lawsuit, plaintiffs are in effect asking this court to make a political judgment that the two dozen defendants named in this action should be the only ones to bear the cost of contributing to global warming.” 

In yet another similar case, a proposed class of property owners alleged that dozens of oil and chemical companies made Hurricane Katrina worse through their contributions to global warming, and that they were therefore liable for damages from the storm. In Comer v. Murphy Oil, the Fifth Circuit held that the plaintiffs had Article III standing to assert state law nuisance and trespass claims for the resulting damage to their property and that the political question doctrine did not apply to this “ordinary tort suit.” 

In contrast to Judge Armstrong’s criticism of the AEP decision, the Fifth circuit lauded AEP’s “careful analysis” of the political question doctrine and sharply criticized the AEP trial court’s “serious error of law.”  

“It’s clear that these cases are hardly the last word, that there will be continued litigation and that there are still plenty of … good arguments from the defendant’s perspective as to why the [cases don’t] withstand scrutiny and full proof,” Tenpas said in reference to the AEP and Kivalina cases. 

The green light given to the federal judiciary by the Second and Fifth Circuits, combined with the EPA’s recent steps to regulate GHGs under the Clean Air Act, could place additional pressure on Congress and the relevant stakeholders to pass comprehensive climate change law for fear of courts (and juries) being involved in the business of climate change regulation. 

This article was authored by Matthew S. Tyree, Jackson Kelly PLLC. For more information on the author see here.