Litigating Climate Change Via State Regulations, Federal Courts

New York Law Journal

April 28, 2006
by Stephen L. Kass and Jean McCarrol
With the Bush administration maintaining its refusal to participate in the world's efforts to slow the rate at which human activities are altering the Earth's climate, U.S. environmentalists have turned to two alternative forums — state regulation and the federal courts — to try to address what are essentially global issues. The principal state regulatory effort, known as the Regional Greenhouse Gas Initiative (or RGGI), is a coordinated program by a coalition of seven Northeastern states to establish a mandatory "cap and trade" regime for carbon dioxide akin to the Environmental Protection Agency's (EPA) successful sulfur dioxide trading regime for U.S. power plants. RGGI is still in its early drafting phase, with the next "stakeholder" meeting on draft model regulations planned for next month in Hartford, Conn. We plan a future column on the RGGI program after it has been further defined in the coming months. In the meantime, three separate federal courts have been asked to provide remedies for the failure of the executive and legislative branches of the federal government to address the issue of climate change. That issue, it is now clear, is going to affect significantly the lives of billions of people — and innumerable other species — over the next century. However, it is the very breadth and long-term consequences of global warming — impacts to be felt "then and there" as opposed to "here and now" — that make it possible for elected officials to limit their climate change efforts to lip service and to focus instead on issues of immediate concern to voters.

Environmentalists are therefore asking the courts to do for climate change what they did a generation ago for the democratic process through redistricting or for racial equality through desegregation, when both the legislative and executive branches of the government failed to act until prodded by the courts.

The Judicial Branch

Perhaps the boldest of these efforts to enlist the aid of the judicial branch is a pair of companion cases, Connecticut v. American Electric Power Co. and Open Space Institute v. American Electric Power Co., No. 04-5669 and No. 04-5670 (SDNY Sept. 16, 2005), both of which were dismissed by Judge Loretta Preska in September 2005 and are currently on appeal in the U.S. Court of Appeals for the Second Circuit.

In the Connecticut case, a coalition of states, including New York and California, brought a federal common-law nuisance action against American Electric Power, three other power companies and the Tennessee Valley Authority, which together were alleged to emit 25 percent of all carbon dioxide emissions from the U.S. power industry, which is itself responsible for 10 percent of mankind's worldwide carbon dioxide emissions. (The Open Space plaintiffs, nonprofit organizations from New York and New Hampshire, alleged essentially the same thing.) Thus, the defendants were alleged to contribute about 2.5 percent of human-induced carbon dioxide emissions, presumably enough to contribute at least measurably to global warming. The plaintiffs in both cases alleged that they and their respective citizens and members were already suffering individualized harm as a result of global warming and sought injunctive relief against the continuation of the defendants' contribution to that harm.

Judge Preska dismissed both complaints as raising political, rather than legal, questions. The nation's elected representatives, she noted, are accountable to the people, and it is they, not judges, who should decide whether and to what extent U.S. firms should be required to restrict greenhouse gas emissions as part of a global plan to slow climate change. That issue, she said, was simply not appropriate for resolution by unaccountable federal judges, particularly where both the executive and legislative branches of the government had declined to restrict the conduct that plaintiffs challenged and where, in her view, a judicial decree could interfere with U.S. relations with other countries. She did not reach either the merits of the cases or the various other defenses, including standing, raised by the power companies.

It will be interesting to see how the Second Circuit handles these two cases on appeal. In technical terms, the plaintiffs are not presenting the court with the difficult problem of fashioning relief against governmental bodies, as in the redistricting cases dismissed under the political question doctrine before Baker v. Carr. On the other hand, they do present the difficult question of how a court would decide what level of emissions by the defendants constitutes a nuisance (assuming the defendants are in compliance with applicable permitting requirements and EPA ambient air quality standards) and what the appropriate remedy is for that misconduct. While this could be seen as simply a problem of proof on the merits of the plaintiffs' nuisance claims, it could also be viewed (as Judge Preska suggested) as requiring the courts to perform an essentially legislative role without the benefit of the intuitive one-person, one-vote standard that the courts fashioned when the Supreme Court told them to take on redistricting cases.

A More Conventional Challenge

A third case, Massachusetts v. Environmental Protection Agency, 415 F3d 50 (D.C. Cir. 2005), reh'g en banc denied, 433 F3d 66 (D.C. Cir. 2005), is a more conventional challenge to the EPA's failure to list carbon dioxide as a "pollutant" under the Clean Air Act and to establish binding air quality standards for that pollutant, as it has done most recently for PM2.5 (fine particulate matter). Here, too, New York joined with a coalition of other states, but the goal in this action was to force EPA to perform an allegedly nondiscretionary duty in view of the increasingly clear evidence that greenhouse gases, particularly carbon dioxide, are contributing to climate change and that many coastal and other areas of the U.S. are likely to suffer flooding, beach erosion or other serious consequences from rising sea levels or more frequent or severe storm events. In addition to challenging the plaintiffs' standing on the ground that neither they nor their citizens were suffering any injury-in-fact (apart from that shared with the general public) from the EPA's inaction, the EPA took the position that it lacked authority to regulate carbon dioxide under the Clean Air Act and that, even if had the authority, it had permissibly chosen not to exercise it.

Unhelpful Circuit Decision

The U.S. Court of Appeals for the District of Columbia Circuit panel (Judges David B. Sentelle, A. Raymond Randolph and David S. Tatel) produced a decision that is best described as unhelpful to anyone seeking an understanding of these issues or of the U.S. judicial process. Judge Sentelle, no friend of the environment or citizens' suits, concluded that the plaintiffs lacked standing to assert their claims and he would have dismissed the cases without reaching the merits. Judge Randolph, after a lengthy analysis, held that the plaintiffs had established their standing and, apparently, the EPA's authority to regulate carbon dioxide, but that the EPA had reasonably exercised its discretion not to regulate it. Judge Tatel, whose opinion we find most persuasive, found that at least one plaintiff (Massachusetts) had clearly established standing, that the Clean Air Act gave the EPA the authority to define carbon dioxide as a pollutant (as two previous EPA general counsels had concluded) and that, in view of the mounting evidence that that pollutant was already contributing to adverse climate change, it was an abuse of discretion for the EPA to fail to regulate it as such.

The result of all this was that:

  1. a majority (Judges Randolph and Tatel) of the circuit court held that the plaintiffs had standing to assert their claims;
  2. the same majority apparently believed the EPA had authority to regulate carbon dioxide as a pollutant but disagreed as to whether the EPA had acted reasonably in declining to exercise that authority;
  3. one judge (Judge Sentelle) believed the court had no jurisdiction to decide the case because the plaintiffs lacked standing but nevertheless joined in forming a majority (with Judge Randolph) holding that the EPA had reasonably determined not to regulate carbon dioxide as a pollutant.

It remains to be seen whether the Supreme Court will decide to take this case and, if so, whether it will be more successful in coming to a consensus on these issues.

Attacking Via Other Agencies

In a fourth climate change case, the plaintiffs attempted to address global warming not by suing domestic emitters of carbon dioxide or by forcing the EPA to exercise its statutory authority responsibly, but by attacking the failure of two lesser-known federal agencies to consider the climate change implications of their international operations under the National Environmental Policy Act (NEPA). In Friends of the Earth, Inc. v. Watson, No. 02-4106, 2005 WL 2035596 (N.D. Cal. Aug. 23, 2005), two nonprofit organizations, the city of Boulder, Colo., and the California cities of Oakland, Santa Monica and Arcata sued the Overseas Private Investment Corp. (OPIC) and the Export-Import Bank (Ex-Im) alleging that the developing country projects supported by foreign assistance guarantees and loans from OPIC and Ex-Im were contributing to global warming and that both agencies were required to consider those consequences in assessing the environmental impacts of their actions under NEPA, which requires federal agencies to prepare environmental impact statements for all major federal actions significantly affecting the environment.

The defendants moved for summary judgment, challenging the plaintiffs' standing and asserting lack of finality in their actions. OPIC also claimed it is not subject to NEPA at all and that its organic statute precludes judicial review. District Court Judge Jeffrey S. White found that the plaintiffs had demonstrated injury-in-fact, and thus had standing, because: (1) where plaintiffs challenge an agency's failure to comply with applicable review procedures, they need not show that actual environmental harm is imminent since to do so would require them to conduct the very review they seek to have the agency undertake; and (2) the plaintiffs had introduced evidence showing that, together, OPIC and Ex-Im projects were directly or indirectly responsible for eight percent of global carbon dioxide emissions (equal to about one-third of total U.S. emissions annually) and that property owned or used by the plaintiffs would be affected by the global warming resulting from such emissions. While the defendants denied the plaintiffs' claims, those claims had to be accepted as true for purposes of the defendants' summary judgment motion. The court also noted that, while OPIC and Ex-Im claimed that the offending projects would have proceeded even without their participation, both agencies had reported publicly that their support was aimed at projects that would not have been possible without their assistance.

As to the merits, the court had little trouble concluding that OPIC's statute did not shield it from judicial review or exempt it from NEPA obligations to assess the cumulative environmental impacts of OPIC and Ex-Im projects abroad. The court therefore initially denied the defendants' summary judgment motion and, after a complex round of further skirmishing by the parties, held oral argument on the parties' cross-motions for summary judgment on April 14. If the court adheres to its preliminary views on NEPA, it would represent a real step forward in forcing U.S. agencies either to acknowledge the link between climate change and support for new emission sources in developing countries or to risk judicial invalidation of their projects because of incomplete NEPA reviews. Presumably a candid environmental impact statement would also explore feasible measures to mitigate the climate impacts of increased carbon dioxide emissions, through either OPIC and Ex-Im support for advanced controls, offsets or alternative energy investments.


Overall, these cases pending in the three federal courts illustrate how the U.S. environmental community, including environmentally conscious state attorneys general, has returned to the early building blocks of U.S. environmental law — common-law nuisance claims, NEPA actions, and challenges to agencies' refusal to use their rulemaking powers — to try to compensate for the failure of the federal executive and legislative branches to address an environmental challenge that will shape our world profoundly in the coming decades.

With both CBS News and Gallup polls reporting this week that very few individuals rank global warming as an important subject of personal concern (see The New York Times, April 23, "Week in Review," p. 14), it is unlikely that either the Bush administration or Congress will change its posture in the near future. The courts' willingness to entertain such climate-change actions, as Judge White has so far done in Friends of the Earth, will thus be an important factor in determining how, if at all, the U.S. confronts this urgent domestic and global challenge.

Stephen L. Kass and Jean M. McCarroll, together with Clifford P. Case III, direct the environmental practice group at Carter Ledyard & Milburn LLP.

Reprinted with permission from the April 28, 2006 edition of The New York Law Journal
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