The Supreme Court Hears AEP v. Connecticut

By / 4.19.2011

Would that allow you to sue all those farmers . . . cow by cow, or at least farm by farm? – Justice Scalia

You’re going to put a $20 a ton tax on carbon, and lo and behold, you will discover that nuisance will be abated. And we bring in 15 economists. – Justice Breyer

In oral arguments for AEP v. Connecticut today the Supreme Court today seemed skeptical of Connecticut and other states’ argument that they should be allowed to pursue nuisance suits against major power companies for their GHG emissions. The transcript is available, and SCOTUSblog has a good overview of the arguments. Though making predictions based on oral arguments is dangerous, I will be very surprised if the court allows this case to proceed. But it is much less clear which of the available reasons for halting the case the court will choose. That decision will have implications that extend well beyond the legal details, and choosing one of the reasons—displacement—could even be beneficial for climate policy.

To recap for those of you that haven’t been following the case, the court has four separate plausible justifications for dismissing it. Very briefly but (hopefully) in plain English, the court could rule that the states can’t sue because:

a) any injury from climate change can’t be traced to the power companies, or courts can’t craft a remedy (Article III standing),

b) the harms of climate change are too generalized and better addressed by Congress (prudential standing),

c) climate change is a “political question” that courts can’t decide; or

d) the Clean Air Act and EPA “displace” federal common law suits like this one.

With four separate grounds available, all of them arguably applicable, the states were always on shaky ground. In fact, the only way I can see the court allowing the case to proceed is if the justices cannot agree on which rationale to choose. If there is no majority, the lower court decision (which favored the states) would stand. This is slightly more likely than normal since Justice Sotomayor has recused herself, making a 4-4 split possible. But this outcome is unlikely. The court will probably choose one (or more) of the rationales and dismiss the case.

The justices spent some time at arguments on each of the four rationales. The political question doctrine was discussed the least, but I can’t rule out any of the four. But it is interesting that two of the justices most likely to rule in the states’ favor—Justice Kagan and Justice Ginsburg—focused on the displacement issue. Each seemed to feel EPA moves to regulate GHGs were significant, and in tension with a nuisance suit: Ginsburg suggested that the suit would require courts to become a “super EPA” without the expertise for that role. If these justices favor dismissing on displacement grounds, that may be the compromise that emerges from the Court.

It helps that an opinion citing displacement almost writes itself—this case was filed, decided, and appealed at a time when EPA never looked like regulating GHGs. A lot has happened since then: Massachusetts v. EPA, the 2009 GHG endangerment finding, new vehicle emissions rules, and the late-2010 settlement agreement under which EPA committed to regulating emissions from exactly those facilities the states are pursuing: the electric power sector.

The states point out that these regulations aren’t in place yet, and though I don’t think that helps them avoid legal displacement, it illustrates why a court decision based on displacement would be so important. If you’ve been following Congress this year, you know EPA authority over GHGs is under threat. It narrowly survived the 2011 budget process, and is likely to be targeted again. But if this authority is all that stands between emitters and federal nuisance suits, it becomes much harder to get rid of. The power companies already acknowledge in their brief that EPA does have the authority to regulate GHGs from their plants (which should, by the way, finally end attempts to rhetorically relitigate Massachusetts v. EPA). If the Supreme Court rules that Congress displaced suits like Connecticut when it gave broad authority to the EPA under the Clean Air Act, legislators are much less likely to take that power away, at least not without putting something new in its place.

So while a loss for the states on displacement grounds might seem like an anti-environmental result, it would be just as accurate to view it as pro-EPA. Dismissal of the case on standing or political question grounds does not have this effect. This also illustrates why displacement is the narrowest grounds for dismissal—if the EPA fails to act or is disarmed by Congress, the Court can revisit the issue, and only then would it need to draw sweeping conclusions about the scope of broad legal doctrines.

The EPA, armed only with its current powers, is not the ideal architect for climate policy—but it is a far better venue than the courts, for both practical and philosophical reasons. The justices today seemed acutely aware of these limitations. Assuming my prediction is correct and this case is dismissed, I agree with others who argue that is the right result regardless of our views on climate policy. But it’s possible that in dismissing the case the Court will strengthen the EPA. If so, that’s good news for the climate too.