The federal common law of ­public nuisance, age 74, of Erie, Pa., passed away peacefully with his family at his side on September 21. He is survived by two daughters, the Clean Air Act and the Clean Water Act, both of Washington, and many grandchildren living across the nation. The cause of death was the U.S. Court of Appeals for the Ninth Circuit’s decision in Native Village of Kivalina v. ExxonMobil Corp., No. 09-17490, 2012 U.S. App. Lexis 19870 (9th Cir. Sept. 21, 2012).

In that decision, a three-judge panel affirmed the dismissal of a suit seeking monetary damages for a remote Alaskan village, Kivalina, threatened by climate change. The suit sought to hold numerous energy, oil and utility companies liable for their greenhouse gas emissions, alleging that they worsened the effects of climate change and led to the severe erosion and rising ocean that threatens Kivalina. The Ninth Circuit could have affirmed the trial court dismissal on any number of grounds, including standing, political question or proximate cause, but chose to do so pursuant to displacement, a rarely utilized doctrine similar to pre-emption that is applicable only to claims under federal common law.

By making that choice, the Ninth Circuit ended up issuing one of the most significant environmental law decisions in quite some time, one that has the potential to completely remake the way environmental law works. This is for two reasons.
DEATH OF FEDERAL COMMON LAW

First, as noted, it ended the life of federal common law, assuming the decision is not reversed either by the Ninth Circuit en banc or the U.S. Supreme Court (the plaintiffs filed a petition for rehearing en banc on October 4). This by itself is momentous — after all, it is not every day that lawyers are able to witness the dying throes of a tort. But it is the way in which the Ninth Circuit did so that is most significant — the Kivalina decision significantly expanded the displacement doctrine despite unsettled law on the issue.

Some may believe that the Kivalina decision was merely a reprise of the Supreme Court’s 2011 decision in AEP v. Connecticut, 131 S. Ct. 2527 (2011). It was not. The AEP decision held that federal common law was displaced in the climate-change context as to injunctive relief.

The Kivalina plaintiffs, on the other hand, sought monetary damages. Thus, the Kivalina court wrestled with the question of whether the Clean Air Act can speak directly to a money ­damages claim when there is no such remedy provided for in the statute. The Ninth Circuit said that it does, stating that “if a cause of action is displaced, displacement is extended to all remedies[,]” including those for money damages.

This outcome firmly shuts the door to federal common law claims that had been left slightly ajar by the AEP decision. The whole reason for the creation of the federal common law was to fill gaps in federal statutory law. But with the Kivalina decision, such gaps no longer exist. In the eyes of the Ninth Circuit, federal environmental statutes, like concrete, have oozed into every last crack of federal law. Thus, federal common law has gone the way of the dodo, and it is unlikely that we will ever see another meritorious federal common law case.

The second and most important implication of the Kivalina decision is not actually an outcome of the decision itself, but instead what it portends for the future of environmental common law more generally. If other courts follow the Kivalina decision, then federal common law will not be the only casualty of Kivalina — state environmental common law may soon follow it to the pearly gates.

This is because the Kivalina decision came very close to collapsing the distinction between displacement and pre-emption when it said that “[w]hen Congress has acted to occupy the entire field, that action displaces any previously available common law action.” By that measure, such a state common law action would also be pre-empted. By implying that Kivalina’s claims, even if under state common law, would be pre-empted, the Kivalina court embraced the similarities between pre-emption and displacement and hinted that displacement necessarily equates to pre-emption.

In addition, the Kivalina decision also collapsed the distinction between claims for injunctive relief and money damages in displacement, and by extension, pre-emption cases. The concurrence in Kivalina even went so far as to suggest that the lack of a remedy for money damages in the Clean Air Act means that Congress did not intend for such a remedy to exist and that permitting a plaintiff to pursue claims for money damages in a common law suit for air pollution would conflict with Congress’ chosen regulatory scheme. If adopted by other courts, this logic could represent the death knell for many environmental common law actions.

Thus, the Kivalina decision supports a much stronger pre-emption defense than most courts have previously applied. This alone is significant for corporate defendants that have rarely been able to use this defense in environmental common law suits for money damages in the past. And the Kivalina decision could end up being the first step in a seismic shift in environmental law — one away from common law and toward federal and state statutory law. In doing so, corporate defendants would likely enjoy more certainty in such litigation rather than being buffeted by the vagaries of inconsistent common law outcomes.

The Kivalina court in its decision, rather than resorting to easier and less consequential rationales for affirming the district court’s dismissal, instead chose to confront head-on one of the fundamental questions that has haunted environmental law for years: To what extent should any federal or state environmental common law tort claim be permitted when there is already a robust federal and state environmental statutory and regulatory framework that exists? In doing so, the Ninth Circuit’s articulation of a compelling rationale for a strong pre-emption/displacement defense may have sounded a clarion call that will resonate with other courts facing such issues and end up transforming how environmental law cases are litigated in the future.

R. Trent Taylor is a partner in the Richmond, Va., office of McGuireWoods who focuses on defending complex toxic tort and products liability cases.