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  A unanimous U.S. Supreme Court on Monday rejected an ambitious effort by a number of states and private land trusts to combat climate change through public nuisance lawsuits against major utilities. The Court, in an opinion by Justice Ruth Bader Ginsburg, held that the federal Clean Air Act and actions by the Environmental Protection Agency “displace” any federal common-law right to protect citizens from the public nuisance created by carbon-dioxide emissions from fossil-fuel fired power plants. (Justice Sonia Sotomayor did not participate in the case.) The question before the justices, said Ginsburg, was one of “who decides,” the federal agency to which Congress delegated authority in this area, or the courts. “The test for whether congressional legislation excludes the declaration of federal common law is whether the statute ‘speaks directly to the question’ at issue,” wrote Ginsburg. Referring to the Court’s landmark 2007 decision in Massachusetts v. EPA, she added, “Massachusetts made plain that emissions of carbon dioxide qualify as air pollution subject to regulation under the [Clean Air] Act. And we think it equally plain that the Act ‘speaks directly’ to emissions of carbon dioxide from the defendants’ plants.” Peter Keisler of Sidley Austin, who successfully argued the case on behalf of five utilities, said the decision “ensures that the public and private utilities named as defendants in this case, as well as other companies that provide vital services to the public, can continue to operate — in accordance with governing statutes and regulations — without the threat of federal `climate change tort litigation,’ and the substantial costs and risks to productivity these claims present.” However, Michael Gerrard, director of the Center for Climate Change Law at Columbia Law School, cautioned, “Since the opinion was based entirely on displacement by congressional designation of EPA as the decision-maker on greenhouse gas regulation, if Congress takes away EPA’s authority to regulate greenhouse gases but does not explicitly bar federal common law nuisance claims, these cases will come back.” EPA’s rulemaking efforts in this area have been attacked recently by a number of members in Congress and by lawsuits brought by the business community. The high court case — American Electric Power v. Connecticut — stemmed from a 2004 suit filed by eight states and New York City, and a parallel suit by three private land trusts, against the five largest emitters of carbon dioxide in the United States. The suits, which were consolidated, charged that the power plants’ emissions contribute to global warming — a public nuisance that is endangering the public’s health and welfare. They sought injunctive relief– not damages–to reduce the amount of carbon dioxide emissions. The states (Connecticut, New York, California, Iowa, Rhode Island, Vermont — two others dropped out) and New York City, were represented by New York Solicitor General Barbara Underwood, who argued the case on April 19. The land trusts’ counsel was Matthew Pawa of the Law Offices of Matthew F. Pawa in Newton Centre, Mass. The U.S. Court of Appeals for the 2d Circuit had rejected the utilities’ claims that the plaintiffs lacked standing to pursue the nuisance suits. The utilities and the Obama administration pressed those same arguments in the Supreme Court. The justices, however, divided 4-4 on the jurisdictional question, the result of which was to affirm the appellate court’s ruling that the case could go forward. And that affirmance, in turn, allowed the high court to reach the merits. Then-acting Solicitor General Neal Katyal had argued that EPA was moving forward with rulemaking to regulate greenhouse gases, and he had urged the justices to find that the agency’s actions displaced the common-law suits. But the states and trusts had countered that their suits were not displaced until EPA actually set standards governing emissions. Ginsburg, in her opinion, disagreed with the states’ argument, saying, even if EPA decided at the end of its rulemaking to decline to regulate carbon dioxide emissions, federal courts could not use the federal common-law of nuisance to change that decision. However, she added, EPA may not decline to regulate those emissions “if refusal to act would be `arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’” If the states are dissatisfied with the outcome of EPA’s actions, she said, they may seek appellate court review. Ginsburg wrote that it was “altogether fitting” for Congress to designate an expert agency to be the primary regulator of greenhouse gas emissions. “Federal judges lack the scientific, economic, and technological resources an agency can utilize in coping with issues of this order,” she said. Gregory Garre, head of the Supreme Court and appellate practice at Latham & Watkins, who filed an amicus brief supporting the utilities on behalf of the U.S. chamber of Commerce, said, “Perhaps most significant is that the ruling is unanimous. The ruling sends a strong signal that the Supreme Court does not view the federal courts as the appropriate battle ground over climate change initiatives. And it is good reminder that the justices often agree on the important issues before the Court, even in late June.” The Court and the 2d Circuit did not reach the merits of state law public nuisance claims also brought by the states and the land trusts. Ginsburg said the availability of suing under the law of each state where the utilities operate power plants will depend on whether the federal Clean Air Act preempts those claims. “Preemption, as the Court noted, requires a demonstration of `manifest intent’ by Congress to preempt state law,” said environmental scholar James May of Widener University School of Law who filed an amicus brief supporting the states. “This is a more exacting standard than federal displacement.” But moving forward with state law claims will prove difficult, predicted some defense attorneys, noting that the plaintiffs would face many of the same arguments made by the utilities in the high court, including a proximate cause requirement. “It is almost impossible to imagine that a Court that was uncomfortable with putting federal judges in the position of superintending the complex scientific issues surrounding climate change would be content to see such litigation go forward in state courts,” said Garre. Marcia Coyle can be contacted at [email protected].

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