The sweet taste of defeat: American Electric Power Co. v. Connecticut and federal greenhouse gas regulation.

• Author: Trisolini, Katherine A.

1. INTRODUCTION II. MASSACHUSETTS v. EPA AND ITS AFTERMATH A. The 2007 Opinion B. Regulatory Aftermath III. AMERICAN ELECTRIC POWER V. CONNECTICUT A. Impact on EPA's Clean Air Act Authority B. Potential Impact on Proposals to Amend Away EPA Authority IV. WHAT NEXT? REDUCING GREENHOUSE GASES THROUGH STATE PUBLIC NUISANCE ACTIONS V. CONCLUSION I. INTRODUCTION

   Despite increasingly dire warnings from scientists, the United States Congress has been unable to pass comprehensive legislation to reduce climate altering greenhouse gases. In the absence of new federal legislation, states, cities, and nonprofits have petitioned and sued administrative agencies to regulate pursuant to existing environmental laws. Under former President Bush, executive agencies largely rebuffed these efforts, prompting litigation by environmental plaintiffs. In response to judicial determinations and citizen petitions, as well as by virtue of its own policies, the Environmental Protection Agency under President Obama began regulating greenhouse gases pursuant to the Clean Air Act. Political and legal attacks followed swiftly, with opponents charging that the Agency had exceeded its mandate and politicians proposing legislation to incapacitate the Agency.

   Meanwhile, plaintiffs have also sued power producers in state and federal common law tort actions characterizing greenhouse gas emissions as a public nuisance. This cause of action--which creates liability for an "unreasonable interference with a right common to the general public" (1)--was used to abate pollution long before the advent of the administrative state. (2) Although public nuisance lawsuits are often viewed as a distinct predecessor to regulation under modern federal environmental statutes, this article argues that these common law actions can significantly influence development of a federal regulatory regime for greenhouse gases.

   In the midst of the battle over climate change regulation, the Supreme Court issued its 2011 decision in American Electric Power v. Connecticut (AEP) (3) holding that the federal common law public nuisance cause of action relied upon by the plaintiffs had been displaced by the Clean Air Act. Many headlines touted the decision as a win for utilities, highlighting the Court's rejection of states' and environmentalists' claims against the five largest electricity generators in the United States. (4)

   Yet, such attention to the formal outcome missed the real import of the case. By strongly reaffirming the Court's 2007 decision in Massachusetts v. EPA, Justice Ginsburg's brief opinion strengthened the Environmental Protection Agency's (EPA's) authority to regulate greenhouse gases under the Clean Air Act. Moreover, because the Court held that displacement of public nuisance claims under federal common law hinges on EPA's authority to regulate greenhouse gases, the decision impedes congressional Republicans' efforts to obstruct EPA's climate change efforts by amending the Act. Meanwhile, the Court did not decide whether or not the Clean Air Act preempts public nuisance actions brought under state law, leaving intact another possible tort avenue for plaintiffs. By bolstering EPA's nascent efforts to regulate greenhouse gases, the decision appreciably advances the development of a federal regulatory regime to address climate change.

   Other aspects of the case--less a focus of this discussion--support environmental plaintiffs more broadly. By affirming the Second Circuit on jurisdictional questions, the American Electric Power opinion solidified the Court's 2007 holding in Massachusetts v. EPA that the injuries caused by climate change and their incremental redress provide an appropriate basis for standing to sue. In addition, the affirmance undermined claims (beginning to gain traction in some courts) that the political question doctrine prevents courts from reaching the merits of climate change suits. All in all, this was not a shabby outcome for states and environmentalists.

   The decision could not have come at a better time for EPA. Since shouldering the task of greenhouse gas regulation, EPA had been under attack, on a largely (though not entirely) partisan basis. Members of Congress had introduced numerous bills to strip EPA of power to address climate change and every one of its final rules has been met with litigation. (5) Critics argue that EPA exceeded its authority under the Clean Air Act when it turned to greenhouse gas regulations because the statute was not designed to address climate change. The AEP decision, however, underscored the Court's prior holding in Massachusetts v. EPA that greenhouse gases fit squarely within the Clean Air Act's purview as does the Agency's power to regulate electric utilities.

   Thus, this article argues that the formal loss on states' and environmentalists' federal public nuisance action against the five largest power producers bolsters the development of federal regulations that apply nationwide. Further, assuming they survive preemption challenges, public nuisance actions under state law could advance federal greenhouse gas regulation in both tangible and intangible ways by serving as highly visible fora for discussing climate change impacts, generating political pressure, and prompting data collection, among other things.

   This article proceeds as follows: Section II reviews Massachusetts v. EPA and the regulatory actions that it prompted; Section III describes how AEP v. Connecticut reinforces EPA's underlying regulatory authority and undermines efforts to amend away this power'; Section IV addresses the questions left open by AEP v. Connecticut and proposes how state public nuisance actions could contribute to the development of federal climate change law. Section V briefly concludes.

2. MASSACHUSETTS V. EPA AND ITS AFTERMATH

   1. The 2007 Opinion

      The Court's decision in American Electric Power v. Connecticut came down amidst controversy over EPA's initial efforts to regulate greenhouse gases (GHGs) under the Clean Air Act (CAA or Act) pursuant to the Court's 2007 decision in Massachusetts v. EPA. (6) While many readers of this symposium issue will be quite familiar with Massachusetts v. EPA, a brief review of the decision and its aftermath provides a useful backdrop for highlighting AEP's implications.

      In 2003, EPA denied a petition to regulate vehicular GHG emissions under CAA section 202. (7) The section provides that the EPA Administrator "shall by regulation prescribe" emission standard for "any air pollutant" from new motor vehicles ... "which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare." (8) EPA claimed that it lacked authority under the Act to regulate GHG emissions because they did not meet the statute's definition of an "air pollutant." (9) The Agency further stated that even if GHGs fell within the Act's purview, EPA would decline to regulate for policy reasons. (10) Among other things, EPA argued that regulating GHGs under section 202 represented an "inefficient, piecemeal approach" that would undermine the Bush administration's "comprehensive" climate change policy. (11) Claiming that EPA had abdicated its statutory duties, Massachusetts sued, along twenty-nine other parties, including states, local governments, and environmental groups.

      In Massachusetts v. EPA, the Court rejected EPA's claim that it lacked authority to regulate GHG emissions from motor vehicles and underscored that a recalcitrant executive branch could not ignore the text of the Clean Air Act. The Court held that GHGs fit squarely within the Act's definition of "air pollutant." (12) As a result, EPA could not avoid regulating GHG emissions on the theory that it would exceed the Agency's statutory authority. The Court also rejected EPA's policy bases for refusing to regulate, finding that the Agency's discretion to deny the petition was limited to rationales provided within the text of the Act. (13)

      Although the Court remanded to EPA to reconsider, the decision left little room for the Agency to deny the petition again. The Court charged the Administrator with making the determinations required by CAA section 202: deciding if, "in his judgment," pollution from greenhouse gases "may reasonably be anticipated to endanger public health or welfare" and whether emissions from new motor vehicles "cause or contribute to this air pollution." (14) EPA could only decline to assess endangerment if it provided a "reasoned justification" grounded in the science of climate change. (15) As EPA's original rulemaking denying the petition had already acknowledged the risks from climate change, it had no scientific basis for refusing to find endangerment and to commence standard setting. (16)

   2. Regulatory Aftermath

      This section describes the regulatory aftermath of Massachusetts v. EPA, which by the CAA's terms inevitably extended beyond just setting motor vehicle standards. The endangerment criteria that trigger standard setting for mobile source under section 202 are virtually identical to language elsewhere in the Act that triggers regulation of stationary sources, such as power plants. (17) Moreover, certain permitting requirements apply to major stationary facilities for "each pollutant subject to regulation" under the Act, (18) meaning that creation of mobile source greenhouse gas standards would trigger these provisions as well. Indeed, one critic of proposals to regulate GHGs under the Act acknowledged in a case comment that the decision "gives the Agency little option but to regulate, and not just emissions from new motor vehicles." (19) Under President Obama the Agency has promulgated greenhouse gas rules that include the Reporting Rule, Endangerment Finding, PSD Rule, Tailpipe Rule, and the Tailoring Rule described below.

      In the wake of the 2007 decision, and pursuant to an executive order, EPA and the Department of Transportation began collaborating...