Second Circuit Ruling Revives Climate Change Lawsuits
The U.S. Court of Appeals for the Second Circuit ruling reopens the door on public nuisance claims, putting all industries at risk, according to Houston attorney Richard O. Faulk of Gardere Wynne Sewell LLP.
[USPRwire, Tue Sep 29 2009] Climate change lawsuits have acquired a new and complex vitality as a result of a decision by the U.S. Court of Appeals for the Second Circuit, according to Houston attorney Richard O. Faulk, Chair of the Litigation Department at Gardere Wynne Sewell LLP. In its ruling, the court reversed the dismissal of public nuisance claims filed by various states, municipalities and private entities against operators of coal-fired power plants. State of Connecticut v. American Electric Power Co. Inc., 05-5104-cv (2d Cir., Sept. 21, 2009).
However, cautions Mr. Faulk, “The Second Circuit's decision is extraordinarily broad and entails major risks for all industries, not just the electric utilities. Any industry that generates greenhouse gas emissions is implicated, and that category includes virtually all businesses.”
The complex ruling warrants a detailed study, says Mr. Faulk, but he highlights several points that are especially significant.
* The court concluded that the claims did not involve "political questions" that were unsuitable for judicial decisions. Even though the case plainly concerned damages caused by global warming, the court characterized the case as an "ordinary tort case" concerning emissions from six power plants, he says.
“It concluded that the controversy involved nothing other than the localized activities described in the complaint – and held that the narrowed controversy entailed no overarching national or international issues,” says Mr. Faulk. “Since the case was therefore governed by ‘well-settled’ principles of tort and public nuisance, federal courts were fully competent to resolve it. This trivializes the significance and scope of the controversy and belittles the ultimate impact of the court’s holding – even though its ruling may well serve as a ‘bellwether determination’ for many controversies yet to arise.”
* The court applied reduced standing requirements. Previously, the Supreme Court held in Massachusetts v. EPA that states have "special solicitude" standing to pursue relief when challenging environmental regulatory issues. The Second Circuit has now held that municipalities, and even private nonprofit entities, have standing to sue based largely on the impact of global warming on properties they allegedly own.
“Contrary to the Restatement of Torts, which it professed to follow, the court did not require these injuries to be a ‘substantial interference.’ Instead, they need only be an ‘identifiable trifle’ involving ‘recreational’ or ‘aesthetic’ concerns,” says Mr. Faulk. “Apparently, the court decided to graft the standing requirements for statutory citizens suits onto the common law tort of public nuisance. Under this reasoning, it is difficult to imagine persons who lack standing to file nuisance claims regarding greenhouse gas emissions.”
* The court held that the federal public nuisance remedy was not "displaced" by the Clean Air Act or regulations issued pursuant to it.
“Until Congress or the EPA actually chooses to preempt federal common law, it remains available,” notes Mr. Faulk. “Here, the EPA has merely ‘proposed’ to regulate the area, and Congress is still deliberating whether to pass climate change legislation. In the absence of concrete action, the common law remedy remains viable.”
This decision presents business interests with a “Hobson's choice” scenario, he says. “So long as industries resist regulations and legislation, they risk public nuisance liability in the courts. Delaying regulation does not confer any advantages,” adds Mr. Faulk. “Indeed, it may be advantageous to accept comprehensive regulations and statutes that displace private tort remedies. If, however, the regulations and legislation are not sufficiently comprehensive, industries may still face lawsuits to the extent that claims are not completely preempted.”
According to Mr. Faulk, the ultimate resolution of these complex controversies is difficult to project. “It is ironic, however, that the phenomenon of public nuisance litigation, which so recently was 'on the ropes' after being rejected by the highest courts of several states, is now being reinvigorated by our federal judiciary.”
“The Second Circuit panel's decision will almost certainly be challenged by a motion for rehearing en banc. Whatever the result of that proceeding may be, an application for U.S. Supreme Court review seems inevitable,” he concludes. “The panel's decision may also influence proceedings on other federal public nuisance cases involving greenhouse gas emissions that are currently pending in other federal courts in the Fourth, Fifth and Ninth Circuits.”
Richard O. Faulk is the co-author of major papers including “The Mouse Roars!: Rhode Island High Court Rejects Expansion of Public Nuisance” and the Burton Award-winning “Alchemy in the Courtroom? The Transmutation of Public Nuisance Litigation.” He is scheduled to be a panelist at the Oct. 28 U.S. Chamber of Commerce Legal Reform Summit in Washington, D.C., discussing the topic “Climate Change: The New Mass Tort For the 21st Century.”
