On June 20, 2011, Justice Ginsberg delivered the unanimous opinion of the U.S. Supreme Court in American Electric Power Company, Inc. v. Connecticut, holding that the Clean Air Act and EPA action under it displaced the federal common law nuisance claims against CO2 emitters that plaintiffs sought to pursue. Plaintiffs had sued four private power companies and the TVA, asking for a decree setting CO2 emission limitations at defendants’ power plants, with the limitations to be reduced annually.

The Court explained that following its decision in Massachusetts v. EPA, in which it had determined that CO2 and other greenhouse gases (GHG) qualify as air pollutants under the Act, EPA had undertaken GHG regulation, including phasing in requirements for new and modified major GHG emitting facilities to obtain permits and to use best available control technology.

The district court had dismissed the law suits, first brought in 2004, as presenting non-justiciable political issues, but the Second Circuit reversed, declining to find the claims non-justiciable and holding that the plaintiffs had adequately alleged Article III standing. On the merits, the Second Circuit held that all plaintiffs had stated a claim for federal common law nuisance and that the Act did not displace federal common law.

By an equally divided court, the Supreme Court upheld the Second Circuit’s exercise of jurisdiction. On the merits, however, the Court reversed, explaining that when Congress addresses a question previously governed by a decision that rested on federal common law, the need for such an unusual exercise of law-making by federal courts disappears. The burden of establishing legislative displacement of federal common law, the Court explained, does not require the same evidence of a clear and manifest congressional purpose demanded for preemption of state law, an issue not before the Court and which the Court expressly declined to address. The Court stated that the test for whether congressional legislation excludes the declaration of federal common law is simply whether the statute speaks directly to the question at issue.

In this case, the Court had no trouble finding that the Act – and the EPA actions it authorizes and that EPA undertook after Massachusetts v. EPA, “displace any federal common law right to seek abatement of [CO2] emissions from fossil-fuel fired power plants.” Looking at the rulemaking EPA had begun, the Court saw “no room for a parallel track,” even though the pertinent rulemaking was not yet complete. The Court explained that it was “altogether fitting that Congress designated an expert agency [EPA], as best suited to serve as primary regulator of [GHGs],” and that federal judges lacked the necessary scientific, economic, and technological resources an agency can utilize.

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