It was reported on February 20, 2013, that President Obama appears to have selected federal air regulator, Gina McCarthy, to take over for Lisa Jackson as head of the EPA.  The news indicates that the executive branch intends to build upon the agency’s recently-validated efforts to regulate greenhouse gas (GHG) emissions, in the face of persistently anemic congressional action on the issue.

The likelihood of increased regulatory, as opposed to legislative, involvement is further evidenced by the reactions of various legislators who oppose GHG controls.  For example, Sen. David Vitter (R-La.) was quoted as saying, “[t]he administration should be looking for someone who will end the standard of ignoring congressional requests, undermining transparency and relying on flawed science…Instead, it looks like they may double down on that practice.”  “Obama Expected to Tap McCarthy for EPA, Moniz for DOE,” http://www.law360.com/articles/417045.

In other words, if President Obama is going to make climate change a legacy issue for his second term—which seems to be the case based upon statements made in his inaugural  and State of the Union addresses—he is going to have to revisit his previously-stated aversion to doing so primarily through top-down regulation.  But how is he going to go about doing that?  The issue of climate change was conspicuously absent from the topics discussed during the 2012 presidential campaign, and any increased attention it has received in recent months might deservedly be credited in significant part to Hurricane Sandy.  Nor does it help that the administration has offered up few, if any, real details about its future climate-change-related regulatory agenda (see, e.g., http://www.whitehouse.gov/energy/climate-change).

Until that plan is made public, outside observers must rely on a review of EPA’s past successes and ongoing initiatives in order to predict what the future has in store.  However, it seems clear that an emboldened EPA will likely pursue all or some of the following initiatives with increased vigor and political support in the coming months and years.

·         New Power Plants:  EPA is expected to finalize a rule, originally proposed in 2012, requiring new fossil-fuel-fired power plants to be constructed with carbon capture and sequestration technology.

·         Existing Power Plants:  Finalization of the rule governing CO₂ emissions from new power plants will force EPA to address the same issue with respect to existing facilities.  EPA is expected to address this by requiring each state to adopt its own emission standards pursuant to guidelines issued by the federal agency.

·         Refineries:  The terms of a 2010 settlement agreement required EPA to issue a GHG rule for refineries by November 2012.  The agency did not comply with that deadline and expected to act on the issue this year.

·         Oil & Gas Operations:  EPA finalized emission standards for oil and gas operations in 2012.  Several states subsequently filed a notice of intent to sue the agency for its failure to include provisions that directly regulate methane.  EPA has indicated that it will revise the final rule in 2013.

·         Mobil Sources:  EPA has proposed a rule designed to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel.

·         Climate Adaptation Plan:  EPA released its draft Climate Adaptation Plan this month, which discusses the impact of climate change on the agency’s ability to fulfill its mission and describes how EPA will factor climate change adaptation into new regulations.  The public comment period runs through April 9^th.

DRI’s Climate Change Task Force will continue to monitor developments in this evolving area of the law, and will submit regular blog postings and articles discussing relevant events.

TODAY at 2:00-3:30 pm EDT, DRI's Climate Change Litigation Task Force will present a webcast regarding Supreme Court arguments in the landmark public nuisance case American Electric Power, et al v Connecticut, et al (10-174) ("AEP").  Interested parties can register on the DRI website.

Summary of presentation:

On Tuesday, April 19, 2011, the United States Supreme Court heard arguments in American Electric Power, et al v Connecticut, et al (10-174) ("AEP"), a case filed by eight states, one city and three land trusts seeking an order requiring five of the nation's largest coal-fired power producers to reduce their emissions for at least a decade.  The suit claims that the defendants' carbon dioxide emissions constitute a public nuisance under federal common law because they contribute to global warming, which in turn causes the climate to change, which ultimately results in damage to the plaintiffs' land and endangers the public welfare. The case was originally dismissed as presenting a non-justiciable political question, but this decision was subsequently reversed on appeal.

On Tuesday, the power company petitioners - who were supported by dozens of amicus filers, including DRI - urged the Supreme Court to overturn the appellate decision, not only on political question grounds, but also matters of standing, displacement and common law. In sum, the Court was told that a decision affirming the circuit court holding would violate the separation of powers and result in a devastating new mass tort that would forever change the way energy is produced, priced and supplied in this country.  Oral arguments provided few hints about how the Court will rule.

This webcast will cover the history of the litigation, the context in which the case is being decided, arguments before the court, and potential outcomes. Anyone who is or represents a member of the energy and/or manufacturing industries is encouraged to attend.

In Connecticut v. American Power, 2009 WL 2996729 (2nd Cir. Sept. 21, 2009), the United States Court of Appeals for the Second Circuit held that a claim filed by eight states, one city and three private land trusts could proceed on the theory that greenhouse gases emitted by five power companies constitute a public nuisance because the emissions contribute to global warming, which in turn poses a past and ongoing threat to persons and property.  The court’s lengthy decision rejected the defendants’ attempts to avoid suit prior to discovery based upon the following key defenses: 

Political Question:  The court held that while this may be a case with political overtones, it does not present a non-justiciable political question.  That is, it does not involve an issue that was constitutionally committed to another branch of government; does not present matters that cannot be resolved through the application of federal common law; and does not require the court to make a decision that will conflict with or frustrate pronouncements made by Congress or the President. 

Standing:  The court held that all plaintiffs could sue in their proprietary capacity as property owners.  In addition, the states could sue parens patriae because they are more than nominal parties and have unique interests in safeguarding the health and well-being of their citizens.  Plaintiffs adequately plead the existence of current and future injuries by making reference to specific environmental changes (i.e. reduced mountain snow pack, coastal erosion) that are caused or contributed to by greenhouse gas emissions, result in damages (i.e. diminished property values, water shortages), and may be reduced or slowed by the relief sought (a cap on greenhouse gas emissions). 

Failure to State a Claim:  The court held that the plaintiffs successfully plead a claim for public nuisance under federal common law by setting forth, in a manner consistent with the Restatement (Second) of Torts, an unreasonable interference with public rights that is ongoing, likely to have a long-lasting effect, and is apparent to the defendants.  The court also held that the land trusts had the right to sue for public nuisance under federal common law because the magnitude of their property interests makes their damages different from those suffered by the general public. 

Displacement:  The court held that plaintiffs’ federal public nuisance claim has not been displaced by federal statutory law.  It rejected the defendants’ argument that the Clean Air Act and five other statutes prove that Congress has legislated comprehensively on the subject because the Clean Air Act does not regulate greenhouse gas emissions at present and the other statutes primarily require the study – but not the regulation – of greenhouse gas emissions.  And, if the EPA does issue final regulations under the Clean Air Act, they will only concern mobile emission sources (i.e. automobiles and light trucks). 

The decision in Connecticut is remarkable because it was the first to permit a climate change public nuisance claim to go forward.  Previously, every court that had heard such a case – including the lower court in Connecticut – dismissed the complaint prior to discovery.  This decision resolved the primary basis for those dismissals (the political question doctrine) as well as several others that appeared to be safe havens for defendants.  In doing so, it reminded defense counsel that the level of specificity required to maintain a claim is much lower at the pleadings stage, clarified federal public nuisance law in the context of pollution cases, applied recent legal and legislative developments to the climate change paradigm (i.e. Massachusetts v. EPA, 127 S. Ct. 1438 (2007)), and provided plaintiffs with guidance on how to frame their claims.  The overall effect was to make climate change public nuisance cases more viable (e.g. Comer v. Murphy Oil USA, Inc., No. 1:05-CV-00436LG (S.D. Miss. Aug. 30, 2007); and Native Village of Kivalina v. ExxonMobile Corp., Civ. No. 08-2095 (N.D. Cal.)).