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Upcoming ruling on EPA regs could affect Supreme Court 'nuisance' case

An imminent federal appeals court ruling on whether to stay U.S. EPA greenhouse gas regulations could affect the Supreme Court's consideration of whether states can regulate emissions using common law, some legal experts say.

The Supreme Court announced yesterday that it would take up the common law case, American Electric Power v. Connecticut (Greenwire, Dec. 6).

The case will be argued in the spring, after the U.S. Circuit Court of Appeals for the District of Columbia decides whether to stay the four EPA regulations, parts of which are due to go into effect on Jan. 2. A ruling on the stay request is due at any time (Greenwire, Nov. 2).

The regulations are relevant to the Supreme Court's consideration of the case because it may reach its conclusion by ruling on whether efforts by EPA to regulate carbon emissions in recent years have effectively supplanted any federal common law that would give the states the right to claim that emissions are a "public nuisance."

The four rules under attack from industry groups are: the "timing" rule that requires new controls of greenhouse gas emissions from stationary sources would be triggered on Jan. 2, 2011, the day that new motor vehicle standards go into effect; the "tailoring" rule that interprets the Clean Air Act in such a way that only major polluters are required to obtain permits for greenhouse gas emissions; the "endangerment" rule focusing on EPA's initial decision in which it held that greenhouse gases are harmful; and the "tailpipe" rule, which adopts new standards for car and light-truck emissions.

The case before the Supreme Court was prompted by the combined efforts of eight states, New York City, and several land trusts to require utilities that operate fossil fuel-fired electric power plants to reduce emissions.

American Electric Power Co. Inc. and several other power companies responded that the Clean Air Act supplants the federal common law when it comes to greenhouse gas emissions. In 2009, the 2nd U.S. Circuit Court of Appeals ruled in favor of the states.

Obama admin stance is key

Potentially crucial to the case is the position of the Obama administration.

Acting Solicitor General Neal Katyal has argued that the Supreme Court should send the case back to the appeals court so it can decide "whether, in light of multiple actions that EPA has taken since the court of appeals issued its decision, any otherwise cognizable federal law claims have been displaced."

As some legal experts note, if the D.C. Circuit stays the rules -- which would send a signal that they could be legally vulnerable -- the Supreme Court could be persuaded that the common law still has a role to play.

If there is a stay, the states "may use that to argue that EPA regulation has not displaced the federal common law of nuisance," said Michael Gerrard, director of the Center for Climate Change Law at Columbia Law School.

Likewise, a stay "might undercut the solicitor general's argument that comprehensive federal regulation pre-empted the common law nuisance action," according to a lawyer familiar with the case who declined to be named because he is involved in the greenhouse gas litigation.

On the other hand, if the rules are not stayed, the Obama administration's argument will be stronger, the lawyer added, because it would "telegraph that the existing regulations are here to stay."

Sean Donahue of the Donahue & Goldberg law firm, who represents the Environmental Defense Fund in the D.C. Circuit litigation, said a stay "could undermine to some extent arguments that nuisance law has been displaced by the Clean Air Act" but he noted that stays are only provisional and the decision on the merits would not be issued until after the Supreme Court has ruled in the nuisance case.

Not everyone agrees that the Supreme Court will take that much interest in the D.C. Circuit case.

Raymond Ludwiszewski, a lawyer at the Gibson Dunn & Crutcher law firm, who has filed an amicus brief on behalf of the Association of International Automobile Manufacturers in the Supreme Court case, said justices may simply focus on whether Congress has acted in the area of emissions and conclude that the Clean Air Act is sufficient, regardless of what EPA has done.

"The question is, 'Has Congress spoken?'" he said. "If it has, then there is no room for the federal courts to make common law."