Carbon Dioxide Emission Public Nuisance Cases

Executive Summary

In two very recent decisions, federal Circuit Courts of Appeal have let stand public nuisance claims predicated upon an assertion that a defendant’s emission of carbon dioxide had increased and will increase atmospheric temperatures and sea levels.¹ In neither case does the court sustain an actual judgment.  Additionally, neither case entirely disposes of all pre-trial legal defenses that might be raised in such actions.  Nevertheless, the two decisions represent a potentially “game changing” development in public nuisance law that raises the possibility of substantial additional litigation affecting a broad array of economic and business activities.  The central issue posed by these cases is whether the courts will use nuisance claims to assume a materially much greater role in regulating major elements of the nation’s economy by assigning to judges and juries the task of deciding major public policy issues.

For the reasons discussed in this memorandum, it is unlikely that these decisions will stand the test of time.  Either the EPA or Congress will regulate carbon dioxide emissions in a manner that will displace the courts’ role in the field, or the Supreme Court will eventually reject some of the central aspects of these holdings, either on direct review of one of these cases, or through the review of another, yet-to-be-decided case.  In the meantime, though, much mischief will ensue as litigants seek to rely on these holdings and courts grapple with implementing them.

How these holdings ultimately meet their likely demise makes a difference.  If they are effectively mooted or pre-empted by carbon dioxide emissions regulation, then their doctrinal expansion of public nuisance jurisprudence will remain available for use involving other pollutants or economic activity.  Conversely, if the Supreme Court were to review the issue on the merits, and reject central tenets or steps in the reasoning of these courts, then the use of these precedents in other areas will, to that extent, be undercut.

In the meantime, there should be no doubt that by stitching together narrowly and facially reasonable extensions of pre-existing standing and nuisance jurisprudence, these opinions arrive at a cumulative result that is quite revolutionary.  Prosser warned that nuisance law is “an impenetrable jungle” that "has meant all things to all people."² Like the trial court holding in the Lead Pigment Litigation in Rhode Island, these opinions would seem to prove Prosser correct.

Summary of the Holdings

A. Connecticut v. AEP

Three years in the making, breathtaking in its length and erudition, and audacious in its confidence in the judiciary, the Second Circuit’s decision reverses the trial court’s dismissal of a global warning-related nuisance lawsuit brought in federal court by several states, a municipality, and private land trusts.  The gist of the complaint is that the defendants’ emission of large amounts of CO₂  contributed to global warming, and that global warning in turn harmed the plaintiffs.  Rejecting essentially all of the principal legal bases for dismissing such a complaint, the two-judge panel³ held that:

1. The District Court Erred in finding that the claim presented a political question.
2. The states had standing under the doctrine of parens patriae, and the states, New York City, and the land trusts all had "proprietary" standing as property owners.
3. Plaintiffs had adequately alleged causation by alleging facts establishing that the harm of which they complained was "fairly traceable" to the defendants' emissions.
4. The challenged activity and the resulting harms fir well under the doctrine of federal common law public nuisance.
5. Public nuisance law in this area was not replaced by federal regulatory law because, ironically, the EPA had not chosen to regulate the CO₂ emissions in question.

B. Comer v. Murphy Oil U.S.A., Inc.

In Comer, a group of property owners on the Gulf Coast argued that the defendant energy companies contributed to climate change and that the climate change, in turn, increased the intensity of Hurricane Katrina, which in turn damaged their property.  The trial court had dismissed the complaint for lack of standing and in reliance on the political question doctrine.  Reversing, the Fifth Circuit panel found that the plaintiffs possessed standing because the defendants’ alleged actions were “fairly traceable” to the alleged harm.  The court also fully accepted the Second Circuit’s political question reasoning.

Comer is potentially the much more expansive of the two decisions.  The claims in Comer were based on state common law, rather than federal common law.  Therefore, EPA regulation is less likely to bar the claims in the future.  More importantly, the complaint included requests for compensatory and punitive damages purporting to link the harm caused by a specific hurricane to the emissions of the defendants.  One member of the three-judge panel, Judge Davis,  specially concurred to note that he would have affirmed dismissal of the complaint on its face for lack of proximate causation.  However, since the district court did not rely on a lack of causation, the three-judge panel did not exercise its discretion to decide the case on those grounds.  This failure to exercise the court’s admitted discretion to simply address the causation issue and leave it at that suggests that the panel was eager to weigh-in on the subject of climate change litigation.  This is especially so given that the concept of causation is in many respects very similar to the notion of standing that the court was required to address.  In many respects, it is difficult to see how anyone on the court could suggest that there was no causation, yet at the same time find that the alleged wrongdoing was “fairly traceable” to the alleged harm.

Analysis

A. Building Blocks for the Two Decisions 

Neither court purported to fashion a decision out of whole cloth.  Rather, each purported to be issuing a decision based on pre-existing precedent.  In this respect, each relied heavily and centrally on two building blocks.

1. Massachusetts v. EPA

First, each court relied on Massachusetts v. EPA⁴ where the U.S. Supreme Court found that the State of Massachusetts had standing to bring an action against the EPA in federal court asking the court to declare that the EPA had the authority and discretion to regulate carbon dioxide emissions as a pollutant and that the EPA had inadequately justified its decision not to exercise that authority.  The majority discussed at length the usual indicia of standing or lack of standing under Lujan v. Defenders of Wildlife.⁵  In so doing, the majority observed that the harms associated with climate change are serious and well-recognized, that the EPA did not dispute a causal connection between man-made greenhouse gas emissions and rising sea levels along the Massachusetts coast, that the merely incremental aspect of auto emissions was sufficient to constitute a harm, and that Massachusetts was able to show an actual and imminent risk of harm.  All these statements, however, were in the context of determining whether a state had standing under a statute which the Supreme Court found gave states the procedural right to challenge arbitrary and capricious EPA actions.  The majority thus noted that Congress’s express authorization for states to bring “this type of challenge to EPA action” was “of critical importance to the standing inquiry."⁶ Citing Justice Kennedy’s concurrence in Lujan, the majority noted that a litigant to whom Congress had accorded such procedural rights “can assert that right without meeting all the normal standards for addressability and immediacy.”⁷  “Given that procedural right and Massachusetts’s stake in protecting its quasi-sovereign interests, the Commonwealth is entitled to special solicitude in our standing analysis.”⁸

In view of the foregoing, it should be clear that the Circuit Courts in both Comer and Connecticut v. EPA substantially and materially went beyond what the Supreme Court held in its standing analysis in Massachusetts v. EPA.  No statute gave any plaintiff the right in either Circuit Court case to seek any review of agency action.  Indeed, neither case involved agency action.  And certainly the “special solicitude” accorded to the sovereign state in asserting a procedural right was entirely lacking in the action before the court in Comer, brought by private parties seeking damages.  In these important respects, the Fifth and Second Circuits effectively rejected the Supreme Court’s statement that the special procedural rights granted by Congress were of critical importance to the standing inquiry.  Rather, both Circuits have effectively held that the grant of such procedural rights was entirely unnecessary and of no more importance than any redundancy.  It is hard to imagine Justice Kennedy accepting such reasoning, and he was one of the five votes supporting the standing analysis in Massachusetts v. EPA.  For this reason alone, the standing analysis in both Comer and Connecticut v. AEP will be extremely vulnerable to eventual Supreme Court review, either in these cases or another.

2. Direct Contact Cases 

Each court also relied on prior nuisance cases involving remote polluters who emitted into the air or water a pollutant that could be shown to have settled in the air, water or land used or owned by the plaintiff; i.e., there was a direct impact felt by some but not all people.

Thus, the Second Circuit relied on the Supreme Court’s 1907 decision in Georgia v. Tenn. Copper Co.⁹  In that suit, the State of Georgia sued a Tennessee company seeking to enjoin the company from discharging noxious gases claimed to harm citizens and property in Georgia.  The Supreme Court found that Georgia had standing to bring such an action.  Similarly, the Fifth Circuit relied on, among other cases, another copper case, Friends of Earth, Inc. v. Gaston Copper Recycling Corp.¹⁰  As in Tennessee Copper, the allegation was that a defendant created a nuisance by emitting a pollutant that traveled to and impacted plaintiffs. 

Neither the Second Circuit nor the Fifth Circuit adequately addressed the obvious distinction that CO₂ emitted in Tennessee, for example, is not deposited in Connecticut or Mississippi, for example.  Rather, it affects the plaintiffs only indirectly, and affects the plaintiffs in a manner no different than it affects the rest of the planet. 

B. Effects of the Decisions

It is difficult to overstate the extent to which these decisions would result in chaos should they stand.  Generation of energy is central to the entire economy and to the public welfare.  At the same time, most scientists also believe that the world’s current rate of carbon dioxide emission poses a grave threat to the public welfare.  Hence, all use or generation of energy from carbon-based sources (that is, virtually all activity in modern civilization) poses a classic trade-off:  to what extent is the incremental cost of avoiding carbon dioxide emission worth the incremental benefit of the energy generated?  Many reasonable and thoughtful scientists, economists, and political leaders – as well as church leaders and ordinary citizens – consider finding the right answer to this question to be one of the great public policy challenges of our time.

Who then will answer this question?  The two Circuit panels hold, in effect, that unless and until Congress affirmatively says otherwise, the courts will answer this question.  Courts, however, are not equipped or designed to resolve such policy issues in any sensible manner.  Courts decide legal issues and they adjudicate specific disputes between affected parties where the nature of the dispute is of a type that courts are equipped to resolve.  The words “Cases” and “Controversies” in Article III of the U.S. Constitution “confine the business of federal courts to questions presented in an adversary context and in a form historically viewed as capable of resolution through judicial process.”¹¹  In both Comer and Connecticut, the courts failed to consider fully whether a federal trial court is viewed as capable of resolving the disputes presented.  This is the central flaw in each case.

Consider what would happen should six jurors or one trial court judge in Connecticut be called upon to decide whether a company that generates electricity for half a million homes in Tennessee should be shut down.  Suppose they decide that the company should not be shut down.  Because courts only decide the specific dispute before them, between the specific parties before them, another identical suit could be filed the next day in Montana.  A decision in any one suit decides only the event or case between those parties, and therefore generally does not bind plaintiffs in another case.  Since global warming affects the entire country, indeed the entire planet, the Tennessee energy generator could quite literally be sued seriatim one thousand times until it finally loses one case and is ordered to close, or is mulcted in damages forcing it to close.

The concepts of standing and causation each in their own way help differentiate between the adjudication of an issue and the adjudication of an event or dispute between two parties in which the issue may be raised but is itself not necessarily resolved.  Thus, for example, if a particular company’s smokestack emits a pollutant that heads downwind and touches a large group of homes, a court can adjudicate that event in a suit between that company and those people who are peculiarly affected.  With global warming, however, virtually every company and, in fact, virtually every person, is both affected by global warming and contributes to global warming by either emitting carbon dioxide or using energy.  Given this fact, on remand in the Connecticut v. AEP case the defendants should presumably be entitled to third party all co-tortfeasors, which would require them to join millions of third-party defendants (including dairy farmers, presumably).  AEP likely could not afford to do this and, if it could, the court certainly could not handle the filings or process the case.

More examples could be suggested.  The point is simply that by essentially eliminating any requirement that there be a more direct and peculiar causal nexus between the parties’ conduct and the harm, the courts in these cases have moved from case adjudication to issue resolution, and they are simply not designed to handle the latter.  Moreover, in a representative democracy, a good argument could be made that they should not do so, even if they could.

For these reasons, and many others, it is highly unlikely that these decisions will stand the test of time.  Until they are discredited, though, they will stand as an open invitation to all sorts of litigation, and not just in the global warming context either.  Many chemicals, including pharmaceuticals, find their way into the food supply or the oceans.  Plaintiffs could make similar analogous arguments in cases involving the generation or dispersal of such chemicals.  There would be no end of it.

Resources

1. Comer v. Murphy Oil U.S.A., Inc., __ F.3d __ (5h Cir. Oct. 16, 2009); Connecticut v. American Electric Power, __ F.3d __ (2d Cir. Sept. 21, 2009).

2. Keeton, et al., Prosser & Keeton on the Law of Torts, § 86, p. 616 (5th ed. 1984).

3. Judge Sotomayor was actually on the panel at the time argument was heard, but was confirmed for elevation to the Supreme Court prior to issuance of the opinion.

4. Massachusetts v. EPA, 549 U.S. 497 (2007).

5. Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992).

6. Slip Op. at 13.

7. Id at 14.

8. Id at 17.

9. Georgia v. Tenn. Copper Co., 206 U.S. 230 (1907).

10. Friends of Earth, Inc. v. Gaston Copper Recycling Corp., 204 F.3d 149, 161 (4th Cir. 2000).

11. Massachusetts v. EPA, 549 U.S. 497, 516 (2007). (quoting Flast v. Cohen, 392 U.S. 83, 85 (1968).