Stopping Electricity Generation: How Does that Encourage Growth?

From The New York Times, “States Can Sue Utilities Over Emission“:

A panel of the United States Court of Appeals for the Second Circuit, in New York, ruled that eight states — California, Connecticut, Iowa, New Jersey, New York, Rhode Island, Vermont and Wisconsin — as well as New York City and three land trusts could proceed with a suit against American Electric Power, Southern Corporation, the Tennessee Valley Authority, Xcel Energy and Cinergy Corporation, all large coal-burning utilities.

The case, brought in 2004, said the defendants were creating a “public nuisance” and sought reductions in emissions that scientists say are changing the climate.

The opinion from the Second Circuit in the case, Connecticut v. American Electric Power Co.,is available here. The National Association of Manufacturers had joined other business associations in filing an amicus brief in support of the utilities, which is available here.

This is a horrible decision, encouraging litigation to define activities essential to U.S. economic growth, jobs and government revenues as public nuisances. The ruling again places the judiciary in the constitutionally improper and anti-democratic role of policymaker.

As the brief argues:

Plaintiffs allege that emissions of CO2 contribute to global warming. CO2 is emitted principally from the combustion of fossil fuel to produce energy. Thus, if global warming nuisance suits were allowed, any human activity that involves combustion of fossil fuel would become a potential target of nuisance suits. Moreover, under plaintiffs’ theory, it would not matter where the emissions occur, because CO2 emissions from any location allegedly mix in the upper atmosphere with other CO2 emissions and allegedly contribute to warming worldwide. The result of plaintiffs’ theory would be that any person or organization alleging damage from global warming would be able bring a nuisance suit against any person, company, municipality or other entity, wherever located, that plaintiffs believe is using energy in an inefficient or excessive manner, or that plaintiffs believe to be capable of using a less carbon-intensive fuel or of reducing CO2 emissions in some other manner. The range of possible litigation targets is virtually endless, because combustion of fossil fuels, for both personal and business purposes, pervades American life.

Basically, what plaintiffs seek is nothing less than to have the judiciary decide how fossil fuel energy should be used in this country—a venture that would draw the judiciary deeply into difficult and contentious issues of national and international energy policy. The District Court correctly held that these issues of energy policy are political questions beyond the jurisdiction of the judiciary—questions that should be decided only after the kind of full debate and public participation that the political, legislative and administrative processes can provide. Congress and the President have recognized that global warming and energy policy are inextricably intertwined and should be addressed on a national and international basis. To address these issues in case-by-case litigation of nuisance suits can only lead to an unworkable patchwork of inconsistent and uncertain results, where no user of fossil fuel could be assured that its operation, even though compliant with existing law, could continue given the ever-present threat of a lawsuit—or perhaps multiple suits—seeking to control emissions.

The United States is only right now at the start of an economic recovery — perhaps. That recovery will require expanded energy production and business investment. But if you’re the head of a company that wants to invest for the future — in the process creating jobs and wealth — and you find that self-aggrandizing attorneys general and anti-growth environmentalists can simply litigate you into paralysis, well, the hell with it.

Yet that’s the situation as now exists in the states that comprise the Second Circuit.

  • Reuters, “U.S. court reinstates emissions suit vs. utilities
  • Point of Law, Michael Krauss, “2nd Circuit Revives ‘Federal Common Law of Nuisance’ Suit”. Krauss, a professor of law at George Mason, had the same reaction as we did (or vice versa, as he wrote first): “If this Circuit ruling stands, why should investors have confidence in industrial projects that have received all necessary legal permits to be built? A ‘federal nuisance suit’ filed by a ‘land trust’ or a state other than the permitting state could destroy profitability. Presumably investors would need all 50 states’ approval plus that of the ‘land trusts.’ Talk about a chill to job creation.”

Leave a Reply