Obama Joins Energy Industry to Fight Climate Change Suits Challenging EPA

In 2004, eight states decided they wouldn’t wait for President George W. Bush to take steps against climate change. They sued to force five power companies to cut plant emissions.

The Obama administration today will urge the U.S. Supreme Court to throw out the suit, arguing alongside American Electric Power Co., Xcel Energy Inc. (XEL), Duke Energy Corp. (DUK) and Southern Co. (SO) The administration contends the Environmental Protection Agency is already taking steps against climate change.

“In some respects, the case has already achieved its objective,” said Patrick Parenteau, a professor who specializes in climate-change law at Vermont Law School. “The whole point of filing this case back in the Bush administration was to get EPA off its duff to regulate greenhouse gases from coal-fired power plants, and they are.”

The states, now numbering six including New York and California, aim to keep the suit alive. They say the EPA still hasn’t taken action to reduce carbon dioxide emissions from the plants that are the subject of the suit.

“This case is all about the contribution of these five companies to the problem of global warming, and EPA is not addressing that contribution at all,” said Matthew Pawa, a lawyer representing three land trusts that also sued the power companies.

The suits also name the Tennessee Valley Authority, the government-owned corporation that has 59 coal-burning units.

Companies Involved

Trade groups representing automakers, oil companies, farmers, mining companies, chemical companies and manufacturers all urge rejection of the suits, in some cases saying their members might face similar claims. DuPont Co. and oil companies led by Chevron USA Inc. also filed a brief backing the power companies.

“The case will determine whether American energy policy, and to a great extent economic policy, is determined by juries in the context of the climate-change tort lawsuits, as opposed to the people’s elected representatives,” said Peter Glaser, a Washington lawyer who filed a brief on behalf of the American Farm Bureau Federation and the National Mining Association.

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.

Nuisance Alleged

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, the New York-based 2nd U.S. Circuit Court of Appeals overturned a judge who concluded the dispute belonged in the political arena, not the courts.

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 EPA began regulating greenhouse gases from vehicles and industrial polluters in January. The rules became President Barack Obama’s lever to limit carbon emissions after Congress failed to pass climate-change legislation last year.

Earlier this month, the House of Representatives -- facing a threatened Obama veto -- voted to repeal the agency’s authority, while the Senate rejected an identical measure.

Right to Sue

The states said in their 2004 lawsuit that carbon dioxide from the utilities involved in the case represents about 25 percent of emissions from U.S. power plants and 10 percent from all domestic sources. Vermont, Rhode Island, Iowa, Connecticut and New York City are also plaintiffs.

The companies say the states lacked the legal right, or standing, to sue because they can’t show that they were harmed by anything the utilities did or that they would benefit from a ruling against the power companies.

State officials say they have standing because a reduction in carbon dioxide emissions from the plants would ease climate change. They point to the 2007 Supreme Court decision, which allowed a state suit that sought to make the EPA regulate auto emissions.

In arguing for dismissal, the Obama administration is pointing to the EPA’s actions against climate change under the Clean Air Act. The government says those steps override the right of the states and land trusts to press a nuisance suit under federal law.

Speaking Directly

“EPA’s regulatory activities speak directly to the issue of greenhouse-gas emissions,” acting U.S. Solicitor General Neal Katyal argued.

The states and land trusts counter that the agency has begun imposing limits only on new and modified plants, not on the existing ones at issue in the lawsuits. Although the EPA is working on rules to govern existing plants, the administration said in court papers that the agency won’t necessarily limit emissions from those plants.

“They’ve promised to engage in a process that may come to something and may come to nothing,” Pawa said. “You can’t just assume that something is going to happen when this is an area that’s clearly in flux.”

Justice Sonia Sotomayor, who heard arguments in the case as a judge on the 2nd Circuit, isn’t taking part in deciding it now. The court probably will rule by the end of June.

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

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net.

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

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