In a strongly worded and well-reasoned opinion by two Republican appointees, the Second Circuit Court of Appeals has held that federal courts have both the power and the obligation to hear lawsuits alleging that climate change creates a public nuisance. State of Connecticut et al. v. American Electric Power Company Inc. et al., 05-5104-cv, 05-5119-cv (2d Cir. Sept. 21, 2009) (“AEP“).    The district court had dismissed the case on the grounds that it presented a non-justiciable political question.  The Second Circuit rejected that conclusion, holding that when the other two coordinate branches of government have failed to act to address global warming, the federal courts must remain open to adjudicate claims, even if those claims raise difficult political issues.  The court then addressed a number of other issues raised by the litigants, holding that: (i) both the state plaintiffs and private land trusts have standing to assert that they are being harmed by global warming; (ii) currently there is no coherent federal law on global warming that can displace a federal common law nuisance claim;  and (iii) in the absence of federal regulations or statutes addressing the greenhouse gas emissions, the federal courts—which have been adjudicating environmental claims under federal common law for over 150 years–can and should continue to do so.

It remains to be seen whether this case is accepted for review by the Supreme Court, but review seems highly likely.  Interestingly, Justice Sonia Sotomayor, who was recently elevated from the Second Circuit to the Supreme Court, sat on the panel that heard the AEP appeal.  The Second Circuit’s opinion notes that she “did not participate” in the decision, leaving open the possibility that Justice Sotomayor could participate in a Supreme Court decision should it accept the case for review.   Given that the last decision from the Supreme Court on climate change (Massachusetts v. Environmental Protection Agency, 549 U.S. 497 (2007)) was decided by a 5-4 vote, Sotomayor’s vote could be significant.

The AEP decision raises the stakes in the ongoing debate about the need for climate change legislation and/or regulation of greenhouse gases by EPA.  Pursuant to a final rule issued by EPA yesterday, thousands of companies will be required to report their greenhouse gas emissions starting in 2010.  This information could be used by plaintiffs (along with other publicly-available information) to identify additional companies as targets for future litigation.  Industrial and other companies with large greehouse gas profiles could now face the risk of costly and protracted litigation, causing companies that have the ability to reduce their greenhouse gas footprints to take meaningful steps in that direction.

It is a certainty that greenhouse gas litigation would not result in uniform rules that companies could rely upon when they make long-term investments.  We believe that the AEP ruling will create greater pressure for Congress to act on the issue of climate change.  In that sense, the Second Circuit has sent a strong message to Congress:  Do your job or we will be forced to do ours.

• Access a copy of the decision here (pdf)
• Read more on legal issues surrounding global climate change