On Public Nuisance Litigation, A Good Ruling, a Bad One

By July 27, 2010Briefly Legal

The U.S. Fourth Circuit Court of Appeals on Monday overturned a U.S. district judge’s ruling that required the Tennessee Valley Authority to move up its schedule of installing emissions-control equipment on its coal-fired power plants. (The ruling is here.)

Last year, U.S. District Judge Lacy H. Thornburg of Asheville, N.C., agreed with arguments made in a lawsuit against the TVA by North Carolina’s attorney general, declared the plants a “public nuisance” because they affected the air quality in western North Carolina, and instructed the TVA to invest additional money in pollution-control devices.

The ruling Monday by a three-judge panel of the Third Circuit is great for several important reasons: It helps restrain politically motivated attorneys general, sets limits on judicial overreach in which judges issue specific instructions to federal agencies, and finally, recognizes Congress ultimately as the policymaking branch of government responsible for setting national standards. From the opinion:

This [District Court] ruling was flawed for several reasons. If allowed to stand, the injunction would encourage courts to use vague public nuisance standards to scuttle the nation’s carefully created system for accommodating the need for energy production and the need for clean air. The result would be a balkanization of clean air regulations and a confused patchwork of standards, to the detriment of industry and the environment alike. Moreover, the injunction improperly applied home state law extraterritorially, in direct contradiction to the Supreme Court’s decision in International Paper Co. v. Ouellette, 479 U.S. 481 (1987). Finally, even if it could be assumed that the North Carolina district court did apply Alabama and Tennessee law, it is difficult to understand how an activity expressly permitted and extensively regulated by both federal and state government could somehow constitute a public nuisance. For these reasons, the judgment must be reversed.

The National Association of Manufacturers last year  joined in an amicus brief supporting the TVA with the  U.S. Chamber of Commerce, the American Petroleum Institute, the Public Nuisance Fairness Coalition, the Utility Air Regulatory Group, and the American Forest & Paper Association. That brief is here, and the summary of the case from the NAM’s Manufacturing Law Center is here.

Unfortunately, on the other side of the country, the California Supreme Court upheld the ability of local governments to hire contingency attorneys to carry out government lawsuits, including public nuisance suits, against business.  (County of Santa Clara v. Super. Ct S163681, opinion here.)

The NAM opposes such arrangements because private attorneys have pecuniary interests separate from those of the citizens, and contingency arrangements encourage local governments to engage in speculative litigation in the hopes of pressuring companies into settlements.

Suits such as the one begun by Santa Clara County and large Californian cities also distort the traditional meaning of public nuisance, meant to apply to identifiable, specific nuisances. In effect, the governments’ approach  turns public nuisance law into a second class of product liability law, with all the associated costs and abuses. (NAM amicus brief  and news release, April 2009.

Ted Frank at Point of Law explains the harm that comes from the court’s opinion, both the contingency aspect and its reaffirmation of expansive public nuisance law. From “California Supreme Court decides Santa Clara v. Superior Court“:

The good news is that the decision is narrowly drawn: the Court relied upon the fact that this was a lead-paint suit so there was no risk that an ongoing business practice would be enjoined, and used that fact pattern to distinguish Clancy. Which means that most other contingency-fee suits could still be challenged.

The bad news is that the Court spoke of an abusive lead-paint public-nuisance suit as if it was an entirely appropriate use of the public-nuisance doctrine, which is certain to lead to more regulation by litigation and empowerment of the attorney general’s office.

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