U.S. Supreme Court Signals Rejection of State Climate-Emissions Lawsuits

The U.S. Supreme Court signaled skepticism about a lawsuit by six states seeking to force five companies including American Electric Power Co. to cut their emissions of the gases that contribute to climate change.

Hearing arguments today in Washington, justices across the ideological spectrum said the Environmental Protection Agency was better equipped than a federal court to sort through the costs and benefits of reducing carbon emissions.

“Congress set up the EPA to promulgate standards for emissions,” Justice Ruth Bader Ginsburg told the lawyer representing the six suing states. “The relief you’re seeking seems to me to set up a district judge, who does not have the resources, the expertise, as a kind of super EPA.”

The Obama administration joined the power industry in urging rejection of the suit, along with a related one being pressed by three land trusts. The other defendants include Xcel Energy Inc. (XEL), Duke Energy Corp. (DUK) and Southern Co. (SO), and the government-owned Tennessee Valley Authority.

A ruling against the states would be a boost to companies beyond the power industry. Trade groups representing automakers, oil companies, farmers, mining companies, chemical companies and manufacturers all are urging the court to dismiss the suits, in some cases saying their members might face similar claims.

EPA Rules

The states, whose ranks include New York and California, sued in 2004, invoking both state and federal law. The Supreme Court case focuses on the federal law claim.

The states say the EPA still hasn’t taken action to reduce carbon emissions from the plants that are the subject of the suit. The EPA began regulating greenhouse gases from vehicles and industrial polluters in January. So far its rules affect only new and modified plants, not the existing ones targeted by the states.

“There is no federal statute or regulation that currently regulates the emission of greenhouse gases by existing unmodified power plants,” said Barbara Underwood, New York’s solicitor general.

She said the suit “rests on the longstanding, fundamental authority of the states to protect their land, their natural resources and their citizens from air pollution emitted in other states.”

Without Sotomayor

None of the eight justices hearing the case -- Justice Sonia Sotomayor isn’t taking part -- today gave any indication they agreed with her.

Ginsburg said the EPA could reasonably address climate change “incrementally.” Justice Elena Kagan said regulating emissions “sounds like the paradigmatic thing that administrative agencies do rather than courts.”

Several justices joined Ginsburg in questioning whether a trial judge would have the expertise to fashion an order addressing climate change.

“You have to determine how much you want to readjust the world economy to address global warming, and I think that’s a pretty big burden to impose on a district judge,” Chief Justice John Roberts said.

The Obama administration and the companies urged the court to reject the suit on a potentially broader ground that the states and land trusts lack the legal right, or standing, to sue. Acting U.S. Solicitor General Neal Katyal said the states can’t show enough of a connection between their interests and the actions of the five defendants.

Potential Victims

“There are billions of emitters of greenhouse gases on the planet and billions of potential victims as well,” Katyal said.

The companies’ lawyer, Peter Keisler, said the courts “are being asked to perform a legislative and regulatory function.”

Justice Antonin Scalia pointed to other possible contributors to global warming -- including cows, mobile telephones and people -- and asked Underwood whether they too would be subject to climate-change suits.

“Suppose you lump together all the cows in the country,” he said. “Would that allow you to sue all those farmers?”

When Underwood responded that courts often consider claims involving multiple polluters, Scalia then asked whether people could be sued for emitting carbon dioxide when they breathe.

The case marks the Supreme Court’s second foray into the debate over climate change. In a 2007 case decided 5-4, the court ordered the EPA to consider regulating greenhouse-gas emissions.

Public Nuisance

The states and land trusts contend that carbon emissions are a “public nuisance,” a legal theory more typically used in cases of localized pollution. In letting the suits proceed, a federal appeals court in New York overturned a judge who concluded the dispute belonged in the political arena, not the courts.

Should the Supreme Court side with the power companies, states and environmental advocates will press ahead with claims under state law, said David Doniger, a lawyer at the Natural Resources Defense Council, which is representing the three land trusts. He said global warming is “eating away at the coastal property” and “destroying our snow packs.”

The suits are part of a multifaceted battle over climate change. Opponents -- including businesses, Republicans and some Democrats -- say the EPA’s new carbon emission limits will destroy jobs and increase electricity bills without any environmental benefit.

The case is American Electric Power v. Connecticut, 10-174.

To contact the reporters on this story: Greg Stohr in Washington at gstohr@bloomberg.net; William McQuillen in Washington at bmcquillen@bloomberg.net.

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net.

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