The Future of Climate Change Litigation
The fate of climate change litigation now rests in the hands of the United States Supreme Court. Electric utilities, having suffered a surprising defeat at the hands of the Second Circuit last year in American Electric Power Co. Inc. et al. vs. State of Connecticut, 582 F.3d 309 (2d Cir. 2009), rehearing denied (2d Cir. March 5, 2010) filed a petition for certiorari with the nation’s highest court on August 2, 2010 seeking reversal of the Second Circuit’s opinion reinstating the plaintiffs’ federal common law nuisance claims against the utilities for allegedly contributing to global warming. In their cert petition, American Electric, Duke Power, Xcel Energy and Southern Company argue that such a cause of action should not be implied under the common law and that these are political issues that are best left to the Congress to decide.
The utilities’ arguments found support from a surprising quarter last week when the Obama Administration weighed in on the side of the Petitioners. In an amicus brief filed on behalf of the Tennessee Valley Authority on August 24, U.S. Solicitor General Neal Katyal argued that the issue should not be resolved through the court system and asks that the matter be remanded to the Second Circuit so that the court can consider the Administration’s recent proposals that greenhouse gases be regulated under the federal Clean Air Act.
The Supreme Court will decide during the coming term whether to accept the case. Notwithstanding the Solicitor General’s support and the generally pro-business attitude of the court, the Court’s willingness to wade back into the climate change debate is far from certain, particularly given the sharp divide that was evident in the Court’s seminal Massachusetts v. EPA opinion. One factor that might potentially influence the court’s attitude is that Justice Sotomayor sat on the Second Circuit panel that heard the American Electric case (but was appointed to the Supreme Court before it was decided).
Climate change litigation has enjoyed a roller coaster ride in the year since American Electric was decided by the Second Circuit last September. A few weeks later, the Fifth Circuit ruled in Comer v. Murphy Oil that federal district court had erred in dismissing claims by Gulf property owners who claimed that the defendants’ emissions had increased the ferocity of Hurricane Katrina. Although the full Fifth Circuit subsequently agreed to hear en banc rehearing of Comer, so many of the justices recused themselves due to conflicts of interest that the court was left without a quorum. As the order granting rehearing had the effect of vacating the panel opinion, the dismissal of the appeal reinstated the District Court’s original opinion.
The Ninth Circuit is also now considering these issues in Native Village of Kivalina v. Exxon Mobil Oil Corp., a case in which a federal district court in San Francisco dismissed a climate change suit brought by Eskimo villagers who claim that emissions from oil, energy and utility companies have caused Arctic sea ice to recede, threatening their village. In contrast to the opinions of the Second and Fifth Circuits, the California District Court adopted the view that it should not entertain jurisdiction as the public nuisance claims present a non-justiciable political question that should be decided by Congress, not the courts.
Meanwhile, the issue of insurance coverage for climate change claims is moving to the fore. On August 2, 2010, the Virginia Supreme Court announced that it would agree to hear the insured’s appeal of a state trial court’s ruling AES was not entitled to coverage for the Kivalina plaintiff’s claims on the basis that they failed to seek recovery on account of an “occurrence” as the allegations of climate change were the foreseeable result of the insured’s routine discharge of millions of tons of carbon dioxide over the years. Waiting in the wings is the all important issue of whether such claims also involve the discharge of a “pollutant.”
