Lawyers for the Department of Justice (DOJ) are preparing to respond on behalf of the Tennessee Valley Authority (TVA) to a high court petition from industry in a case that could decide whether utilities can be held liable under common law for climate change damages caused by their greenhouse gas (GHG) emissions. At least one attorney suggests the Obama administration may actually side with the plaintiffs -- against the government-owned utility’s position in the lower courts -- as a means of ratcheting up pressure on the power sector to support climate legislation.
DOJ spokesman Charles Miller says lawyers with the department’s solicitor general’s office will be “representing TVA in the Supreme Court” in American Electric Power [AEP] v. Connecticut, a case originally brought by a group of state attorneys general charging that some of the nation’s largest electric utilities, including TVA, are liable under tort law for damages caused by their GHG emissions.
DOJ’s arguments, expected in early October, will respond to an Aug. 2 petition filed by the investor-owned utility defendants asking the high court to review the case. TVA did not file a similar petition of its own, despite siding with the other defendants in the lower courts. DOJ, meanwhile, is refusing to divulge the arguments the department will make in the pending response.
The investor-owned utilities in their petition for a writ of certiorari to the Supreme Court say the dispute over whether they can be held liable for climate damages is of “extraordinary national importance,” arguing that the U.S. Court of Appeals for the 2nd Circuit Court erred in its March 5 decision granting plaintiffs standing to bring a climate nuisance case against the power sector. Responses to the petition are due Oct. 4, according to a lawyer for the petitioners who expects the Supreme Court to decide in November whether it will accept the case.
The case could inflame tensions between TVA and DOJ over who legally represents the utility that date back to the early 2000s, when EPA unsuccessfully sought to take enforcement action against it for alleged Clean Air Act violations.
While DOJ says it will represent TVA in the climate nuisance response to the high court, a TVA spokesman initially sent Carbon Control News a copy of the industry petition when asked for the utility’s position in the case. The spokesman subsequently referred all other inquiries to the solicitor general’s office.
Pressuring Industry
Jonathan Zasloff, an expert in tort and environmental law at the University of California-Los Angeles, suggests that DOJ did not join in the cert petition because the Obama administration may see some benefit in allowing tort claims against industry GHG emissions to prevail.
“The more that these lawsuits succeed, the more that puts pressure on the industry groups to support comprehensive climate legislation, or at least not oppose it,” Zasloff says.
The 2nd Circuit originally heard the case in 2006, he notes, when an administration opposed to regulating GHGs was in office. But because President Obama at least ostensibly supports comprehensive climate legislation, the administration may decide that allowing the tort suit to go forward could ultimately bolster support for a bill by spurring industry to embrace federal GHG regulation in lieu of a slew of tort claims.
Potentially complicating the matter is the fact that TVA in a 2008 Clean Air Act case asserted in a letter to the Supreme Court that, while the solicitor general may speak for “the federal government as a whole,” the utility possesses “independent litigating authority” that it may invoke “over the objection of the Department of Justice.”
In that case, National Parks Conservation Association v. TVA, environmentalists sued the utility over new source review permit violations that the TVA argued were subject to statute of limitations. Environmentalists picked up the case after EPA dropped out of the litigation following an 11th Circuit ruling that found the agency could not bring an administrative complaint against another branch of the federal government. In the letter to the high court, TVA claimed that “11th Circuit precedent” supported its position that it was entitled to independent legal representation.
In the current case, meanwhile, the industry defendants -- AEP, Southern Company, Xcel Energy and Cinergy Corp., a subsidiary of Duke Energy -- say the Supreme Court should review the 2nd Circuit’s ruling to address whether the plaintiffs “have standing to seek, and whether federal common law provides authority for courts to impose, a non-statutory, judicially-created regime for setting caps on greenhouse gas emissions based on ‘vague and indeterminate nuisance concepts.’”
Specifically, the industry petition argues the 2nd Circuit incorrectly ruled that the plaintiffs had standing to seek compensation for climate damages by citing the landmark ruling in Massachusetts v. EPA, which found the federal government had the right to regulate GHGs under the Clean Air Act and recognized that states held a special standing to bring the case that other plaintiffs might not have had.
But the industry petition argues that whatever similarities may exist between the two cases, “the court of appeals ignored the fundamental difference between the statutory cause of action to challenge agency decisions at issue in Massachusetts and the non-statutory cause of action asserted here.” In Massachusetts, plaintiffs challenged an agency denial of a rulemaking petition and “relied on a provision of the Clean Air Act that granted them an express ‘right to challenge agency action unlawfully withheld.’” But here, the attorney generals are seeking to win damages from utilities because there is no law mandating GHG reductions.
Industry Decries 2nd Circuit Ruling
The petitioners also claim that the original plaintiffs in the case -- eight states, New York City and several local environmental groups -- are seeking to create a “separate, parallel track” for GHG regulation from the Clean Air Act track the Supreme Court endorsed in Massachusetts.
The 2nd Circuit’s ruling, they argue, would enable “judges to decide how to regulate greenhouse gases under the most general and open-ended tort principles, at the behest of virtually any public or private plaintiff claiming injury relating to climate change.” Such a scenario would “affect the entire electricity generating industry,” the potential impact of which “alone would justify this court’s review of the lower court’s decision.”
In its ruling, however, the 2nd Circuit rejected industry arguments that the climate tort claims should be thrown out because EPA is preparing to regulate GHGs under the Clean Air Act. The agency has not yet begun to regulate all sources of carbon dioxide, the court noted, and its pending rules are subject to ongoing litigation, therefore making it difficult to determine whether such regulation would in fact displace the tort claims.
DOJ’s position in the case and the high court’s decision on whether to hear it could have significant ramifications for other pending tort cases.
For example, the 5th Circuit in June dismissed a climate tort case, Comer v. Murphy Oil, that sought compensation for damages caused by Hurricane Katrina, citing a lack of quorum. Plaintiffs in the case argued the extreme severity of the hurricane was caused by climate change induced by the defendant’s GHG emissions; they have not yet said whether they will appeal the decision to the Supreme Court.
Another tort case, Native Village of Kivalina v. ExxonMobil Corp., is on appeal in the 9th Circuit after a lower court dismissed the suit on the grounds that climate-related damages are a political issue.
In a related case, the 4th Circuit ruled July 26 in State of North Carolina v. TVA that a lower court wrongly sided with the plaintiffs in ruling that conventional air pollutants emitted from TVA power plants in Tennessee and Alabama constituted a common law public nuisance. The 4th Circuit said it is “difficult” to see how emissions permitted and regulated by EPA and states can be a public nuisance. -- Charles Davis