Writing at the Cato Institute’s blog, Cato@Liberty, Walter Olson gives us a single paragraph that captures why the Supreme Court should reject the Second Circuit’s ruling that Connecticut and other states could sue five electric utilities for contributing to global warming. From “AEP v. Connecticut: Global Warming as Political Question”:

By its nature, global warming is exactly the sort of policy question traditionally entrusted to the political branches: it is wholly unsuited to individualized justice based on links between particularized emissions and particularized effects, its proposed remedies are much disputed and likely to be the result of inevitably arbitrary compromise, sovereign negotiations with foreign actors play a crucial role, and so forth. As the courts have long recognized, one does not generate a case for judicial action simply by piling atop each other the propositions “something needs to be done” and “the political branches have not done it.” Indeed, the Obama administration itself has more or less invited the Supreme Court to dismiss the action on political-question grounds.

The media coverage of Tuesday’s oral arguments we read highlighted the Administration’s argument that the need for the public nuisance suit by the states and environmental groups had been obviated by the Environmental Protection Agency’s regulation of greenhouse gases. As Greenwire framed it: “[The] Obama administration maintains that U.S. EPA, through its recent efforts to regulate greenhouse gas emissions, has “spoken directly to the question plaintiffs ask the courts to resolve.” (continue reading…)

The Supreme Court heard oral arguments Tuesday in American Electric Power v. Connecticut, the appeal from the Second Circuit’s far-fetched ruling that states can sue electric utilities as a public nuisance for contributing to global warming through greenhouse gas emissions. It appears the court was … skeptical.

• Washington Post, “Supreme Court skeptical of allowing global-warming case to move forward“
• New York Times, “Justices Skeptical on Role of Courts in Setting Emissions Standards“
• Wall Street Journal (blog), “High Court Voices Skepticism Over States’ Global Warming Suits“
• MarketWatch, “Justices Skeptical in Emissions Case“

Well, of course the court was skeptical. “Aghast” or “driven to distraction” would have been beyond the norms of judicial temperament.

But the arguments the justices heard Tuesday in support of Second Circuit’s ruling were enough to warrant strong sentiments. The appellate court ruled that it was OK for states to sue the five electric utilities for creating a public nuisance under federal common law because of their power plants emit carbon dioxide. You know what else produces carbon dioxide? Power plants, and factories, and animals and people all over the world, and the Second Circuit believe it was OK for the U.S. judicial system to be arbiter of the science, politics, regulation and wealth distribution potentially involved with that reality.

Quentin Riegel, the NAM’s vice president for litigation, previewed the case in an interview on CBS Radio. As he explained: “If the courts get involved in the business of setting national energy policy, then virtually any business could face a lawsuit. Courts are not the right place to be coming up with those policies. That’s the role of the legislative and executive branches.”

For more, see the Scotusblog report, the National Association of Manufacturers Manufacturing Law Center case summary and the NAM’s amicus brief.

The U.S. Supreme Court this morning hears oral arguments in American Electric Power v. Connecticut, an appeal from the Second Circuit ruling that held five utilities could be sued for creating a public nuisance under federal common law because they had emitted greenhouse gases that contribute to global warming. Boiled down, the issue is: Should the courts have the ability to raise your electric rates. (This paragraph updated at 1:50 p.m. to more accurately characterize Appellate Court’s ruling.)

From the Scotusblog, “Argument preview: The courts and global warming”:

The Supreme Court will hold eighty minutes of oral argument at 10 a.m. Tuesday on a major challenge to the use of the judiciary to impose controls on “greenhouse gas” emissions that may contribute to climate change, such as global warming.  In American Electric Power Co., et al., v. Connecticut, et al. (10-174), the argument for the electric utilities facing “public nuisance” lawsuits will be made by Peter D. Keisler of the Washington, D.C., office of Sidley Austin.  Arguing for the federal government in support of the utilities will be Acting U.S. Solicitor General Neal K. Katyal, and for a group of states will be New York’s state Solicitor General, Barbara D. Underwood.  The time for argument has been expanded from the usual 60 minutes to 80; the utilities and the government will have 20 minutes each, and the states 40.

• National Association of Manufacturers Manufacturing Law Center case summary.
• National Association of Manufacturers amicus brief. Counsel of record is Richard O. Faulk of Gardere Wynne Sewell LLP.
• American Tort Reform Association, “ATRA Brief Urges Supreme Court to Dismiss Global-Warming as Public-Nuisance Case”
• Washington Legal Foundation, Legal Backgrounder, “AEP v. Connecticut: Will The Supreme Court Make Defendants Do “Their Share” To Mitigate Global Climate Change?”
• Natural Resources Defense Council, “The Sky Will Not Fall: Why the Supreme Court Should Let States Sue the …”
• National Journal, “The fight over climate-change policy may move to the judicial branch.” (May?)
• Bloomberg, “White House Joins AEP to Fight Climate Lawsuits With EPA ‘Off its Duff’”
• Journal and Courier (Indiana), “Court to decide whether states can sue utilities over greenhouse gases”
• Detroit News (editorial), “Editorial: Supreme Court should reject global warming case”
• Daily Caller, “Supreme Court to hear major climate change case”

The only thing worse than the Executive Branch replacing Congress in the setting of federal economic, environmental and energy policy would be the federal courts assuming that role. A case before the U.S. Supreme Court will determine whether the judiciary gains that authority.

The Supreme Court hears oral arguments Tuesday, April 19, in American Electric Power Company Inc. v. Connecticut, et al., the suit by several states and environmental groups against five electric utilities for creating a public nuisance by contributing to global warming. (Docket, questions presented)

If the Supreme Court upholds the Second Circuit Court of Appeal’s ruling against the utilities – which included the court setting emission limits as a remedy – the judicial branch will reaffirm its role as a super-legislature, determining political questions that Congress chooses not to address, and activist state attorneys general will be elevated yet again in the U.S. system of government. Speculative shakedown suits like Kivalina v. ExxonMobil would multiply, and energy costs would skyrocket.

The suit began with ueber-activist Connecticut Attorney General Richard Blumenthal, now U.S. Senator, and included state governments of California, Connecticut, Iowa, Rhode Island and Vermont, as well as New York City.  Named in the lawsuit are American Electric Power Co., Cinergy Corp., Southern Co., the Tennessee Valley Authority and Xcel Energy Inc. New Jersey and Wisconsin have dropped out of the lawsuit since the dispute started in 2004. Three land trusts, the Audubon Society of New Hampshire, Open Space Institute and Open Space Conservancy, also are suing the utilities. Justice Sonia Sotomayor is recused because she heard the case at the appellate level. The Scotusblog entry has the rulings and briefs. (continue reading…)

The U.S. Supreme Court this morning announced it would hear American Electric Power v. Connecticut, an appeal of the U.S. Second Circuit Court of Appeals’s ruling that states and environmental groups could sue under federal public nuisance law to force electric utilities to reduce greenhouse gas emissions. The court’s order granting cert is here.

Justice Sotomayor, who as a member of the Second Circuit ruled with the states, will recuse herself. (In this case, “ruled with the states” means ruled with the ambitious state attorneys general.)

The appellate court’s decision was an egregious intrusion of the judicial system into the policymaking role of government, which appropriately belongs with Congress. The National Association of Manufacturers had filed an amicus brief supporting Supreme Court review — available here — and our NAM Manufacturing Law Center entry summarizes:

The Supreme Court will review a very troubling decision by the U.S. Court of Appeals for the 2nd Circuit that allows 8 states to sue 6 major electric utility companies under a public nuisance theory. The theory is that each state is adversely affected by climate change caused in part by the utilities’ electricity-generating plants, and the courts should impose emissions limits.

The NAM and other business groups filed an amicus brief in the Supreme Court on Sept. 1 urging that court to review the case. We argued that only the political branches of government are equipped to resolve the complex and dynamic issues relating to climate change regulation, that the plaintiffs’ legal claims exceed the boundaries of public nuisance litigation, and that judges and juries are not empowered or competent to exercise extraordinary regulatory powers without clear boundaries and guiding principles. (continue reading…)

As reported below, Virginia Attorney General Ken Cuccinelli is the latest attorney general to hire private-sector attorneys to sue a company on a contingency basis. Unfortunately, it’s not only state attorneys general who allow profit-seeking trial lawyers to undertake the government’s business. City and county officials have done the same thing.

The most prominent example comes from the oft-bizarre government of Santa Clara County and its running mates in California. In 2000,  Santa Clara and nine other cities and counties retained Motley Rice and three other law firms to bring a lead pigment public nuisance action against a group of manufacturers. The retainer agreement specified that the government would “retain final authority over all aspects” of the litigation, an arrangement that is difficult to maintain in practice — “How’s the case going?” “Oh, good. I’ll fill you in later” — and deeply suspect on policy grounds. Indeed, the trial court held that a previous ruling in the well-known Clancy case (People ex rel. Clancy v. Superior Court, 39 Cal.3d 740) precluded the government from hiring lawyers on a contingency-fee basis.

The California Court of Appeal concluded otherwise, holding that the “control” language in the retainer agreements means that the outside lawyers are merely “assisting” the government in a subordinate role and lack any decision-making authority or control over the case. This July, the California Supreme Court upheld the appellate court’s ruling.

The manufacturers are now appealing the California ruling to the U.S. Supreme Court, and the National Association of Manufacturers and other business groups last week joined in an amicus brief in support of the appeal in Atlantic Richfield et al. vs. Santa Clara County et al. The amicus brief, available here, frames the discussion:

The Supreme Court of California held that govern-mental plaintiffs pursuing civil public nuisance prosecutions brought “in the name of the People of the State of California” may do so under a contin-gency fee retainer agreement with outside plaintiffs’ law firms in which the government entities agree to compensate the law firms by paying them 17 percent of any recovery. This brief addresses the following question:

1. Whether contingency fee agreements that give private prosecutors a direct, personal, and substantial pecuniary interest in the outcome of governmental prosecutions seeking to vindicate the sovereign’s interests in public nuisance cases violate the Due Process Clause of the Fourteenth Amendment of the U.S. Constitution.

Yes, yes they do.

Others joining the brief are the American Chemistry Council, American Coatings Association, National Petrochemical and Refiners Association, Property Casualty Insurers Association, and the Public Nuisance Fairness Coalition. Filing on our behalf is the Houston office of Gardere, Wynne, Sewell LLP. For more background, see the NAM’s Manufacturing Law Center’s entry. We’ve blogged previously on the issue here.

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.

• Raleigh News & Observer, “Appeals court reverses TVA emissions ruling
• AP, “4th Circuit reverses ruling on TVA emissions“

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.) (continue reading…)

Santa Clara County’s Board of Supervisors has been in the news lately because of its foolish meddling in areas outside a county government’s purview, that is, whether restaurants should be able to offer toys with meals. The three supervisors who voted to ban the toys decided their county was equipped to fight the scourge of child obesity, its budget crisis notwithstanding. The county is running a $223 million deficit, and its governing board is worried about toys in fast food meals?

Yet self-aggrandizing, anti-business posturing is a recurring theme for the Santa Clara supervisors. Today, the California Supreme Court will hear oral arguments in one such case, County of Santa Clara et al. v. Superior Court of Santa Clara Co. (S163681)

From The San Jose Mercury News, “State Supreme Court to rule on counties’ use of private attorneys“:

When Santa Clara County decided a decade ago to take on chemical companies for the cost of removing lead paint from public buildings, officials knew they would need extra legal muscle to carry the case through the courts. So they hired several law firms to handle an expected slugfest with the companies and their law firms.

Santa Clara County’s decision has turned into a legal free-for-all that has now reached the California Supreme Court. The justices will hear arguments today in a case that tests whether local governments such as Santa Clara County can hire private lawyers under contingency fee deals to press lawsuits under California’s public nuisance laws.

To “take on chemical companies” … “they would need extra legal muscle”… It sure reads as if the reporter accepts the county’s premise, that a lawsuit against the chemical companies was warranted and now it’s just the process that’s at issue.  That’s disputable. The National Association of Manufacturers regarded the lawsuit as an attempt to pervert well-established public nuisance law, creating a far-ranging new type of product liability law. Like the various and ultimately unsuccessful public nuisance lawsuits against paint manufacturers (Rhode Island, Ohio) for lead paint in buildings, the litigation was just an attempt to increase county revenues by shaking down businesses.

At issue in today’s oral arguments, however, is the question of the county hiring contingency fee lawyers to carry out its litigation. The NAM has long opposed this farming out of lawsuits to private trial lawyers,  whose pecuniary interests are inherently at odds with those of the governments and citizens they claim to represent.  

In the case of County of Santa Clara v. Superior Court, the NAM joined with the Coalition for Public Nuisance Fairness, the American Chemistry Council, and the Property Casualty Insurers Association of America in filing an amicus brief challenging the power of cities and counties to hire trial lawyers on a contingency-fee basis. As the entry in the NAM’s Manufacturing Law Center summarizes:

The NAM and the other amici support the argument that the private interests of contingent-fee counsel conflict with the public interest. Government attorneys owe a duty of neutrality to the public, and allowing them the potential to earn huge profits “creates a powerful incentive for private attorneys wielding the power of government to make decisions based on their own pecuniary interests, rather than the interest of justice.” The combination of temptations raised by extraordinary potential rewards with extraordinary power raise obvious appearances of impropriety.

In addition, the California legislature has already addressed lead poisoning, and the legislature is likely to strike a fairer and more effective balance between competing interests because it considers all pertinent issues in their entirety, rather than in the truncated form presented by litigants in court.

Here is the NAM brief filed in April 2009. The California Supreme Court also posts briefs from the parties directly involved in the litigation, which we’ve linked to below.

(continue reading…)

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.”

More coverage of a federal judge’s dismissal of the City of Cleveland’s lawsuit against large banks, claiming they had created a public nuisance by securitizing mortgages that went into default. Cleveland Plain Dealer, “Federal judge dismisses lawsuit blaming banks for foreclosure mess in Cleveland”

HousingWire.com, “In Cleveland, Facing Giants and Failing”

Judge Sarah Lioi’s ruling is available here as a .pdf file.