Climate Change Litigation

Virginia Supreme Court Stands Firm on Rehearing Climate Change Insurance Case: AES v. Steadfast is (Re-) Affirmed

April 20, 2012 14:12
by J. Wylie Donald
The Virginia Supreme Court surprised us today.  It issued its opinion (attached) on rehearing in AES Corp. v. Steadfast Insurance Co., hardly changed from its original decision finding that the allegations in Native Village of Kivalina v. ExxonMobil Corp. did not constitute an occurrence.  The concurrence, however, is substantially altered, and it is there that one can get a taste of the mischief to which this decision may lead. We have blogged this subject on several occasions.  In a nutshell, AES sought coverage for climate change liability claims asserted by claimant Inupiat Eskimos, who alleged that AES’s (and others’) carbon dioxide emissions were the cause of the excessive erosion of their community on a spit of land north of the Arctic Circle.  AES tendered the claim to Steadfast, who accepted the defense subject to a reservation of rights, and then filed a declaratory judgment action against AES in Virginia.  Following dueling motions for summary judgment, Steadfast prevailed before the trial court.  AES took an appeal to the Virginia Supreme Court.  Notwithstanding specific allegations of negligence by AES, the Court concluded:   “[e]ven if AES were negligent and did not intend to cause the damage that occurred, the gravamen of Kivalina’s nuisance claim is that the damages it sustained were the natural and probable consequences of AES’s intentional emissions.”    In sum, “If an insured knew or should have known that certain results would follow from his acts or omissions, there is no 'occurrence' within the meaning of a comprehensive general liability policy.”  Thus, the trial court was affirmed. AES sought rehearing because three authorities on which the Court relied established that there was no occurrence where the insured knew to a “substantial certainty” or “substantial probability” that injury would occur.  As the Kivalina plaintiffs made no such “substantial certainty” allegation, AES asserted the Court’s holding was in error. We learned today that the Court disagreed.  Well, actually, we don’t know if the Court disagreed.  There is no mention of “substantial certainty” or “substantial probability” although the Court continues to cite the exact same authorities.  One could just as reasonably conclude that the Court felt AES’s argument simply was not relevant.  Virginia law, according to the Court is as follows:  “For coverage to be precluded under a CGL policy because there was no occurrence, it must be alleged that the result of an insured’s intentional act was more than a possibility; it must be alleged that the insured subjectively intended or anticipated the result of its intentional act or that objectively, the result was a natural or probable consequence of the intentional act.“  The Kivalina plaintiffs did not allege that AES intended the erosion of the spit, so the allegations had to be read to demonstrate that the erosion in Alaska was a natural or probable consequence of the emissions of carbon dioxide from AES’s plants’ emissions somewhere in the lower 48.  From where we sit, there seems a great distance from the alleged damage in Alaska being a “substantial certainty” or being a “probable consequence.”  We note a trial court's recent ruling (attached) in another climate change liability case, Comer v. Murphy Oil:, where the Southern District of Mississippi dismissed the climate change claims:  The assertion that the defendants’ emissions combined over a period of decades or centuries with other natural and man-made gases to cause or strengthen a hurricane and damage personal property is precisely the type of remote, improbable, and extraordinary occurrence that is excluded from liability. So one court rules that allegations of climate change effects are extraordinary, improbable and remote, while another rules they are to be taken as stated.  Regardless, the Court's decision should resolve AES’s quest for coverage from Steadfast.  Other Kivalina defendants will take note and ensure that Virginia is struck from possible litigation venues for their coverage claims. Will this decision have major implications?  Yes, but probably not in the climate change space.  It is one decision, on one issue, on one set of facts.  We will be very surprised if future plaintiffs do not take note of the decision and ensure that their pleadings more adequately state negligence claims so as to bring insurance money to the table (assuming at some point they can get past motions to dismiss).  Other jurisdictions have their own jurisprudence on “occurrence” and they are not likely to mirror Virginia’s.  We feel that we can say that with some authority based on the statements made by Justice Mims in his concurrence.  Justice Mims felt that Virginia law left the Court with no option but to find there was no occurrence:  “under the reasoning of our precedents, allegations of negligence and allegations of accident must be mutually exclusive.  … Because “accident” is synonymous with “occurrence,” which is what these CGL policies cover, I concur with the majority that our precedents require us to conclude that they do not provide coverage for AES’s allegedly negligent acts.”  But that leads to a real problem:  “I also must acknowledge the broader effect that this conclusion, and the underlying case law that compels it, may have on other CGL policies in which the insured risk is defined as an “occurrence.  Our precedents may have painted us into a jurisprudential corner.”   Can it be that commercial general liability policies in Virginia do not cover negligence?  Stand by.  This is sure to be the subject of future litigation. 20120420 AES v. Steadfast (Va. Apr. 20, 2012).pdf (42.88 kb) 20120320 Comer v. Murphy Oil USA Inc., Order of Dismissal (S.D Miss).pdf (172.02 kb)

Carbon Emissions | Climate Change Litigation | Insurance

Dismissed Means Dismissed: Comer v. Murphy Oil, the First Climate Change Liability Damages Suit, Is Tossed Again

March 22, 2012 19:14
by J. Wylie Donald
In a case of surprising longevity, Comer v Murphy Oil USA, Inc., may finally have been laid to rest. In a decision filed Tuesday, Judge Louis Guirola, Jr., Chief Judge of the United States District Court for the Southern District of Mississippi, concluded that the plaintiffs in the first climate change liability damages suit were not entitled to a second bite at the apple. And even if they were, their case still failed. In the aftermath of Hurricane Katrina, numerous parties filed scores of lawsuits seeking to find some source to pay for the awful devastation. One suit, Comer, asserted through various amended complaints that electric utilities, coal companies, chemical companies and oil companies  were responsible for the increased ferocity of Hurricane Katrina because of their emissions of greenhouse gases and their alleged resultant contribution to global warming.   Following various iterations, plaintiffs ultimately alleged:  "Prior to striking the Mississippi Gulf Coast, Hurricane Katrina had developed into a cyclonic storm of unprecedented strength and destruction, fueled and intensified by the warm waters and warm environmental conditions present in the Atlantic Ocean, Caribbean Sea, and the Gulf of Mexico.  These high sea surface temperatures, which were a direct and proximate result of the defendants' green house gas emissions, increased the intensity and magnitude of Hurricane Katrina."   Amended Complaint, 1:11-cv-00220-LG-RHW, ¶ 17.  Plaintiffs also alleged risks of future harms as a result of effects of global warming. Motions to dismiss were filed, which ultimately led to judgment in favor of the defendants. Judge Guirola ruled that plaintiffs lacked standing and that the claims were non-justiciable under the political question doctrine.  2007 WL 6942285 (S.D. Miss. Aug. 30, 2007), Plaintiffs appealed and were initially successful before the Fifth Circuit, which reversed the district court and concluded:  "Like the district courts in [Connecticut v.] American Electric [Power Co., 406 F. Supp. 2d 265 (S.D.N.Y. 2005)] and [California v.] General Motors [, 2007 WL 2726871 (N.D. Cal. 2007)], the defendants begin with an assumption they cannot support, viz., that the adjudication of plaintiffs' claims will require the district court to fix and impose future emission standards upon defendants and all other emitters. Then, again in a fashion similar to those district courts, the defendants proclaim that it would be "impossible" for a court to perform such an obviously legislative or regulatory task so that the case must present a nonjusticiable political question. The defendants have failed to show how any of the issues inherent in the plaintiffs' nuisance, trespass, and negligence claims have been committed by the Constitution or federal laws "wholly and indivisibly" to a federal political branch."  Comer v. Murphy Oil USA, 585 F.3d 855, 879 (5th. Cir. 2009). That was the high water mark of the plaintiffs' bar's success in climate change liability cases. With the Second Circuit's decision in Connecticut v. American Electric Power Co., 582 F.3d 309 (2nd Cir. 2009), just one month earlier, the tide crested with the Fifth Circuit's decision in October.  Two federal courts of appeal had found standing for climate change liability plaintiffs, and rejected the political question doctrine.  Concurrently, however, a new climate change liability suit, Native Village of Kivalina v. ExxonMobil Corp., was dismissed at the end of September.  663 F. Supp. 2d 863 (N.D. Cal. 2009).  From the present perspective, Kivalina's dismissal marked the turning of the tide. The next dark moment for the plaintiffs occurred when the Fifth Circuit en banc accepted the appeal of Comer, automatically vacating the panel's decision. Then the en banc court's quorum dissolved, requiring the court to dismiss the appeal.  But with the panel decision already vacated, that meant the controlling law was Judge Guirola's 2007 dismissal. The Supreme Court refused to issue a mandamus order, which meant Comer was over.  It got darker.  The Supreme Court dismissed the plaintiffs' federal common law claims in American Electric Power; the gutted case was remanded to the Second Circuit (and plaintiffs ultimately dismissed voluntarily).  So as of June 2011 all the climate change liability suits had been disposed of. Well, not entirely.  Kivalina was pending on the Ninth Circuit's docket.  And the Comer plaintiffs refused to abandon the field and re-filed their claims, relying on a Mississippi statute purportedly permitting refiling. Judge Guirola, however, did not agree. Plaintiffs' claims were barred because the doctrines of res judicata and collateral estoppel applied. Slip op. at 12.   Plaintiffs had had a previous  opportunity to litigate their claims, which had been decided against them with prejudice.  Moreover, plaintiffs still lacked standing because they could not demonstrate that their alleged injuries were "fairly traceable" to the defendants' activities:  "As this Court stated in the first Comer lawsuit, the parties should not be permitted to engage in discovery that will likely cost millions of dollars, when the tenuous nature of the causation alleged is readily apparent at the pleadings stage of the litigation. The Court finds that the plaintiffs have not alleged injuries that are fairly traceable to the defendants’ conduct, and thus, the plaintiffs do not have standing to pursue this lawsuit."  Slip op. at 23.   In addition, the political question doctrine still applied:  " The Court finds that the claims presented by the plaintiffs constitute non-justiciable political questions, because there are nojudicially discoverable and manageable standards for resolving the issues presented, and because the case would require the Court to make initial policy determinations that have been entrusted to the EPA by Congress."  Slip op. at 29.   And just in case all that was not enough, Judge Guirola also ruled that 1) "the plaintiffs’ entire lawsuit is displaced by the Clean Air Act", slip op. at 30 (relying on American Electric Power); 2) the three-year statute of limitations applied to the Hurricane Katrina-based claims because the Mississippi "savings statute" did not apply, and the alleged continuing torts were not ripe, slip op. at 33; and 3) plaintiffs could not demonstrate proximate cause because "[t]he assertion that the defendants’ emissions combined over a period of decades or centuries with other natural and man-made gases to cause or strengthen a hurricane and damage personal property is precisely the type of remote, improbable, and extraordinary occurrence that is excluded from liability."  Slip op. at 35. Judge Guirola's decision is well-written and thorough.  Will it be enough? We expect so but we cannot be pollyana here.  A Fifth Circuit panel has wrestled with Judge Guirola's standing and political question analysis before, and reversed him.  This time, however, they will also need to avoid his res judicata, collateral estoppel, displacement, statute of limitations and proximate cause analyses.  That seems a tall order.  As for the the Second Circuit, its decision on standing is still valid law because that issue was not resolved by American Electric Power.  Indeed, the Supreme Court split 4-4 on the issue (Justice Sotomayor recused herself because of her participation in argument at the court of appeals).  Should Comer (or Kivalina) make it to the Court, the standing question could come out badly for the defense if Justice Sotomayor is the swing vote needed for a bare majority in favor of broader standing.  Last, we have Kivalina before the Ninth Circuit.  While undoubtedly the court will have read Judge Guirola's opinion, it will also have read the Fifth Circuit panel's decision.  Which will be more influential?  We'll make that decision then.

Carbon Dioxide | Climate Change Litigation

Connecticut Introduces Bill to Incorporate Climate Change Strategic Retreat into Coastal Zone Management Act

March 4, 2012 20:48
by J. Wylie Donald
Apocryphally, the emperor of the Eternal City took out his violin while the city was consumed in a conflagration. In lay terms, Nero fiddled while Rome burned.  Some would like to draw the analogy to climate change policy in the United States, held up based on principles, or partisanship, or grandstanding or blind denial.  Whatever the reason, the climate for making climate change policy has grown decidedly colder since the heady days of 2008 when even the Republican party was on board.    Nevertheless, some are not waiting until prediction becomes reality.  For example, lawmakers in Connecticut, which opened the 2012 legislative session on February 8, have the opportunity to address one of the issues caused by a changing climate:  rising sea levels. Two bills introduced in the General Assembly focus on the changing shore. The first, Raised Bill No. 5127, is at first glance an inconsequential revision to the definition of the high tide line. Currently, Connecticut defines mean high tide as "a line or mark left upon tide flats, beaches, or along shore objects that indicates the intersection of the land with the water's surface at the maximum height reached by a rising tide."  Conn. Gen. Stat. Section 22a-359(c).  It can be determined by, among other things, a line of oil, a line of scum, "a more or less continuous deposit of fine shell", vegetation lines or tidal gauge.  Id.  Some (including the authors of 5127) might conclude that for regulatory and enforcement purposes that is a little vague. So the proposed bill seeks something a little more rigorous. But if you thought it would be something simple like the Greenwhich Meridian or an atomic clock, you would be mistaken.  Under the proposed bill, Connecticut would look to the location of the topographical elevation of the highest predicted tide for the period  beginning in 1983 and ending in 2001, referenced to the most recent National Tidal Datum Epoch as published by the National Oceanographic and Atmospheric Administration (NOAA) and described in terms of feet of elevation above the North American Vertical Datum of 1988. Raised Bill No. 5127(c).  This elevation is specified for each municipality along the Connecticut littoral.  Id. While this change advances the science of seashore delineation and has been adopted by others, e.g., Fla. Stat. 177.27, other states are still content to rely on a subjective view of the beach.  E.g.,  Rev. Code Wash.  90.58.030(2)(c).  So what is driving the change in Connecticut? If one turns to the next Raised Bill before the General Assembly one will have the answer.  Raised Bill No. 5128 proposes revisions to the Coastal Zone Management Act.  Section 2 adds a new definition, "Rise in sea level," that is keyed to the North American Vertical Data.  The definition goes on to report that the rise in Connecticut coastal sea level is projected to occur "at an average rate of not less than 2.4 inches per decade, ..."  Id. "Rise in sea level" is important because 5128 makes clear why precise delineation is going to matter.  New subsection (b)(1)(K) to Conn. Gen. Stat. 22a-92 seeks "to encourage a fair and orderly legal process to foster strategic retreat of property ownership, over a period of several decades, for coastal lands that have a likelihood of being lost due to erosion and coastal lands that contain structures that are subject to repetitive damage."  Napoleon from Moscow.  Lee from Gettysburg.  The 21st Century's strategic retreat may last far longer and cost far more than anything in the history books.  The Delaware Department of Natural Resources and Environmental Control described "strategic retreat" as the "remov[al] of oceanfront buildings as the shoreline erodes to maintain a beach width or certain distance between buildings and the water. An effective strategic retreat plan would involve systematic removal of structures as the beach migrates inland and the buildings become threatened by waves and surf."  Jim Titus at EPA described it as "minimizing hazards and environmental impacts by removing development from the most vulnerable areas."  However one describes it, DNREC's further comment is worth noting:  "there are no easy solutions or clear implementation strategies to accompany the issue of strategic retreat while accomplishing the  management goal of preserving and maintaining recreational and protective beaches. Strategic retreat requires hard decisionmaking, funding, and firm commitment by the Administration and the Legislature if it is to succeed."  Accordingly, the Connecticut Legislature should take note:  this is not going to be a walk in the park.  Nevertheless, assuming the political hurdles can be overcome, strategic retreat will undoubtedly become part of the climate change response.  Kudos to Connecticut for not fiddling around. 

Climate Change | Climate Change Litigation | Legislation | Rising Sea Levels

Aronow v. Minnesota is Dismissed: Public Trust Doctrine Not Extended to the Atmosphere in Minnesota

February 4, 2012 18:58
by J. Wylie Donald
We blogged last May and again in December about the tidal wave of litigation set loose by Our Children's Trust (OCT), an Oregon environmental group that had orchestrated the filing of  a dozen suits asserting the defendant States and the United States had an obligation under the public trust doctrine to restrain carbon dioxide emissions, as well as regulatory petitions in about 40 jurisdictions.  One can find OCT on Facebook, Flickr, YouTube and Vimeo. It prepares "backgrounders" for the press (attached). It has even coined its own acronym, ATL (atmospheric trust litigation) for its legal assault.  OCT is media savvy. It has still not established that it is litigation savvy.  The petitions have not fared well.  OCT's website is not up-to-date but petitions have been denied in at least 27 jurisdictions (Arkansas, Connecticut, Florida, Georgia. Hawaii, Idaho, Illinois, Iowa, Louisiana, Maine, Maryland, Michigan, Missouri, Nevada, New Hampshire, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, and Wyoming and Washington, DC).   The denials have  prompted two more lawsuits (appeals) in Iowa and Texas.  On the litigation side, motions to dismiss have been the defendants' responses of choice.  The lawsuit against Montana filed in the Montana Supreme Court was dismissed almost immediately.  Montana has a rule permitting an original action before the Montana Supreme Court where there are no factual issues and the matter is urgent. The court rejected that position:  "This Court is ill equipped to resolve the factual assertions presented by Petitioners. We further conclude that Petitioners have not established urgency or emergency factors that would preclude litigation in a trial court followed by the normal appeal process."  Accordingly, the petition for original jurisdiction was denied. Fast forward to today, the tidal wave is starting to break.  New Mexico and Oregon had oral argument on their motions in January. Decisions have not been issued.  In the Oregon suit it was reported that, after argument, the judge remained undecided about whether to dismiss the case.  This month there are hearings in Alaska, Arizona and Washington.    And last Monday the first merits decision was handed down.  In Aronow v. Minnesota the Minnesota District Court dismissed the case with prejudice. Plaintiff's complaint (attached) lays out the threats posed by climate change in great detail.  It then explains the public trust doctrine, including legal authority for extending it to the atmosphere.  "The Public Trust Doctrine is a foundational aspect of sovereignty; it holds government responsible, as perpetual trustee, for the protection and preservation of resources necessary for the common welfare of all citizens, those living and those yet to be born. ... The atmosphere, because of the climate stability it makes possible, is a necessary resource protected by the public trust."  The doctrine is, according to the complaint, partially codified in the Minnesota Environmental Rights Act (MERA) (Minn. Stat. §§ 116B.01 - 13).  Plaintiff coffered two theories as the basis for relief:  one under the public trust doctrine and the other under MERA.  He sought a declaration that the atmosphere was protected by the public trust doctrine and that the defendants were in violation of the doctrine.  He also sought a declaration that defendants had violated MERA (without identifying what part of MERA was violated).  Last, plaintiff asked the court to "Compel Defendants to take the necessary steps to reduce the State's carbon dioxide output by at least 6% per year, from 2013 to 2050, in order to help stabilize and eventually reduce the amount of carbon dioxide in the atmosphere." The defendants, Minnesota, the governor and the Minnesota Pollution Control Agency, filed a motion to dismiss.  They succeeded.   In dismissing the claims, the court set down its opinion (attached) in three parts:  1. can the governor be sued (no); 2. does the public trust doctrine apply to the atmosphere (no); and 3) are there viable causes of action under MERA (no). As to the governor, he had no legislative authority or funding "to  implement the policies sought by plaintiff." Accordingly, he was not a proper party to the suit. As to the public trust doctrine, this ruling is arguably the most important part of the decision.  A ruling in OCT's favor would provide it ammunition in the imminent battles in other jurisdictions.  A ruling against it would supplement the arsenals of the defendants in those other cases.  Further, the court's decision was the first merits decision on the central tenet of OCT's raft of cases:  the public trust doctrine applies to the atmosphere.  The court's analysis is brief so we provide it in full:  Minnesota Courts have recognized the Public Trust Doctrine only as it applies to navigable waters. "Navigability and nonnavigability [sic] mark the distinction between public and private waters. The state, in its sovereign capacity, as trustee for the people, holds all navigable waters and the lands under them for public use." Nelson v DeLong, 7 N.W.2d 342, 346 (Minn. 1942) (emphasis added). The Nelson court ultimately held that a private citizen's riparian rights are subordinate to the State's needs as it manages the navigable waters that are held in the public trust. See also Pratt v. State, Dep't of Natural Resources, 309 N.W.2d 767, 771 (Minn. 1981).  In Larson v Sando, 508 N.W.2d 782 (Minn. Ct. App. 1993), rev. denied (Jan. 21, 1994), the court declined to extend the public trust doctrine beyond the state's management of waterways, partly because the cases cited by the parties applied only to waterways. Id. at 787 (declining to extend the doctrine to land). Similarly, this Court cannot locate, nor did counsel for either party supply, a Minnesota case supporting broadening the Public Trust Doctrine to include the atmosphere. This Court has no authority to recognize an entirely new common law cause of action through plaintiff's proposed extension of the Public Trust Doctrine.  That is it.  There is no analysis of whether the public trust doctrine should or should not apply to the atmosphere.  Instead, the court simply ruled it has not been done before in Minnesota and it will not be done by this district court here. Last, are the MERA claims.  The court went out of its way to consider a variety of ways that a MERA suit might be justified. We want to focus on the simplest: the statutory requirements. Under § 116B.03 a resident of Minnesota could bring suit in the name of the State "for the protection of the air ... from pollution impairment or destruction." A problem was that plaintiffs had not complied with the statutory requirements of giving notice, which was "fatal." Another problem was that plaintiff was required to sue on behalf of the State, which he did not.  A final problem was that the required "pollution, impairment or destruction" was defined by statute, and the statutory requirement, according to the court, was not met.  We have trouble with this conclusion, however.  To be sure the statutory definition required "conduct by any person which violates, or is likely to violate, any environmental quality standard, limitation, rule, order, license, stipulation agreement, or permit," but it also alternatively permitted a claimant to challenge "conduct which materially adversely affects or is likely to materially adversely affect the environment."  Minn. Stat. §  116B.02(5).  Plaintiff expansively alleged how carbon dioxide emissions lead to climate change which is causing numerous deleterious effects on humans and the environment.  And he alleged how Minnesota's state government's conduct (inaction) was materially adversely affecting the environment.  These allegations just don't seem to square with the court's conclusion that "the Complaint does not allege anything falling within the definition of 'pollution, impairment or destruction.'"  We wonder why the court ventured into this area when it had established the procedural bars. Alternatively, under Minn. Stat. § 116B.10 a Minnesota resident could "maintain a civil action .... for declaratory or equitable relief against the state ...where the nature of the action is a challenge to an environmental quality standard, limitation, rule, order, license, stipulation, agreement or permit promulgated or issued by the state ... for which the applicable statutory appeal period has lapsed."  Plaintiff's fundamental problem was that his complaint failed to "refer to or challenge a single environmental quality standard, limitation, [etc.]"  In other words, by its terms plaintiff's claim did not meet the statutory requirements. OCT is 0-27 in the regulatory arena.  It is now 0-2 in litigation.  Notwithstanding, we cannot see the future here.  Regulatory agencies cannot move into new areas without legislative authority.  We will not be surprised if OCT is 0-40 in the not too distant future.  But in the courts it may be a different story.   Montana's dismissal simply set the stage for re-filing in the trial court.  In Minnesota the court did not reject the concept of applying the public trust doctrine to the atmosphere; it simply was unwilling to plow new ground.   And the Oregon trial court is reportedly on the fence.  We still await thoughtful jurisprudence on whether the public trust doctrine applies to the atmosphere.  We note, however, that we expect a long wait for this to settle down; whatever happens in the immediate future, there are certain to be appeals. 20120130 Order of Dismissal, Aronow v. Minnesota (Our Children's Trust).pdf (960.57 kb) Aronow v. Minnesota Complaint (Our Children's Trust).pdf (247.79 kb) Our Children's Trust, National Backgrounder (ATL) 12-1-191.pdf (316.65 kb)

Carbon Dioxide | Climate Change | Climate Change Effects | Climate Change Litigation

Just When You Thought It Was Over, Rehearing is Granted in Steadfast v. AES

January 30, 2012 22:10
by J. Wylie Donald
The YogiBerraism "It ain't over till it's over" is overused. But just because it is overused does not mean it is wrong.  AES has stayed up late digesting the insights of one of baseball's greatest. Its homework has paid off. On January 17 the Virginia Supreme Court entered a terse order (attached) granting rehearing in Steadfast Insurance Co v AES Corp. Jump to the next paragraph if you are familiar with the case. For those unfamiliar, AES is a defendant in Native Village of Kivalina v ExxonMobil Corp., a lawsuit alleging that certain carbon dioxide emitters are responsible for global warming, which has melted arctic sea ice resulting in disastrous erosion of the plaintiffs' community.  (For our most recent blog on Kivalina, click here)   AES tendered the claim to Steadfast, who accepted the defense and then filed a declaratory judgment action seeking to avoid coverage. AES lost on summary judgment on whether there was an occurrence and then lost its appeal before the Virginia Supreme Court last September.  Or maybe not.  AES filed a petition for rehearing (attached) asserting that the Court "radically redefined 'accident' to exclude coverage in virtually all negligence cases." Petition at 1. Normally such hyperbole is a sign of weakness. Here, however, it is in large measure accurate. The Court held that "When the insured knows or should have known [as the Kivalina plaintiffs alleged] of the consequences of his actions, there is no occurrence and therefore no coverage." See Petition at 4. It relied on two treatises and an Eighth Circuit decision.  Id. Yet, as AES shows in its petition, each of those authorities requires that the insured should have known to a substantial probability or a substantial certainty. Id. at 4-6. Since plaintiffs made no such allegation, and the chain of causation was attenuated (to say the least, see Petition at 7-8), AES asserts the Court's decision was in error. And this was not something of little consequence. It potentially affected all general liability insurance. The quote from the Eighth Circuit's decision is worth repeating:  To adopt [the policy] that an injury is not caused by accident because the injury is reasonably foreseeable would mean that only in a rare instance would the comprehensive general liability policy be of any benefit to [the insured] .... Under [this] construction of the policy language if the damage was foreseeable then the insured is liable, but there is no coverage, and if the damage is not foreseeable, there is coverage, but the insured is not liable. This is not the law. The function of an insurance company is more than that of premium receiver. Petition at 10, quoting City of Carter Lake v. Aetna Cas. & Sur. Co., 604 F.3d 1052, 1058 (8th Cir. 1979).    What does it all mean?  We conducted an unscientific review of reported cases where the Court granted rehearing in the last 10 years. In all of them, the Court revised its opinion. See Tanner v. State Corp. Comm’n, 266 Va. 170 (2003); Jaynes v. Commonwealth, 276 Va. 443 (2008); Uniwest Const. v. Amtech Elev. Serv., Inc., No. 091495 (Apr. 21, 2011).  All of them.  If we were AES, we would be somewhat optimistic.  Yogi Berra also said: "You can observe a lot by watching."  Oral argument in Richmond in February is likely to demonstrate the truth of that rule as well. 20111017 Petition for Rehearing (by AES), AES Corp. v. Steadfast Ins. Co..pdf (453.91 kb) 20120117 Order (granting petition for rehearing), AES Corp. v. Steadfast Ins. Co..pdf (33.13 kb)

Carbon Dioxide | Climate Change Litigation | Insurance

2011: Notwithstanding Extreme Weather, US Climate Policy Does Not Move Forward

December 30, 2011 22:01
by J. Wylie Donald
NOAA reported that 2011 was one for the record books:  12 weather and climate-related disasters each causing over $1 billion in damage.  One might expect (or hope) that a national climate change policy would be coming into place to prevent repeating or setting a new record.  One would be disappointed.  U.S. climate policy is "uncertain," to quote Michael Morris, CEO of American Electric Power, "dysfunctional" is the word applied by Resources for the Future, "hamstrung" is how the chief UN climate change negotiator and Executive Secretary of the UNFCCC, Christiana Figueres, calls it.   We don't disagree with these viewpoints; they are accurate.  But if a response to climate change is the goal, it is worse than these commenters are acknowledging because not only has Congress shown that it is incapable of getting anything done, other avenues are not delivering either.  As the year expires we thought it might be helpful to sift through the year's detritus and assess  the status of attempts to reduce carbon dioxide emissions, distinct from overt attempts like passing laws and adopting regulations. 1. Tax emissions - Some will remember our blog on the federal lawsuit brought by Mirant Corp. against Montgomery County challenging the County's tax on carbon emissions which fell only on Mirant. The County challenged the federal court's jurisdiction and won before the federal district court. In June, however, the Fourth Circuit reversed.  With that Montgomery County folded its tent and abandoned its carbon tax. 2. Favor renewable energy - The inexorable scrutiny of the markets has proved the undoing of several former high-flying renewable energy ventures. Most well-known is the debacle with Solyndra LLC, whose well-publicized collapse generated scrutiny by the FBI and Congress. Others that have failed with less limelight in 2011 include numerous solar companies (Solar Millennium, Stirling Energy Systems, Evergreen Solar, Spectrawatt), as well as ventures in wind (Skycon), energy storage (Beacon Power), and biofulels (Range Fuels). 3. Impose liability for emissions of carbon dioxide - The results here are mixed.  Everyone points to American Electric Power v Connecticut for the principle that for greenhouse gas liability claims the federal common law of nuisance has been displaced by federal regulation. They could equally point to Connecticut v AEP before the Second Circuit for the principle that the political question doctrine does not bar these types of claims or to the Fifth Circuit panel in Comer v Murphy Oil USA that held similarly.  However, even if the cases are permitted to move forward, they face daunting problems in proof of causation. 4. Force state action to regulate carbon dioxide - We blogged last May and just this month about the tidal wave of litigation unleashed by Our Children's Trust, an Oregon environmental group that had orchestrated a dozen suits asserting the defendant States had an obligation under the public trust doctrine to restrain carbon dioxide emissions, as well as regulatory petitions in about 40 jurisdictions.  Time has not been good to OCT. First, its petitions have been denied by at least 23 agencies (Arkansas, Connecticut, Georgia. Hawaii, Idaho, Illinois, Iowa, Louisiana, Maine, Maryland, Michigan, Nevada, New Hampshire, North Dakota, Ohio, Oklahoma, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, and Wyoming).  Where OCT filed lawsuits, three states (Arkansas, Minnesota and New Mexico) responded with motions to dismiss.  The lawsuit against Montana was dismissed. In the federal lawsuit, the plaintiffs lost a motion to transfer. 5. Reach regional agreements - With great fanfare the Regional Greenhouse Gas Initiative was launched in 2005. Despite a recent study that claims significant economic benefit to the states in RGGI, its future success is unclear. New Jersey pulled out, New Hampshire tried to leave but the governor vetoed the bill. In New York, there is a court challenge.  6. Voluntarily trade carbon dioxide emissions credits - The only carbon exchange in North America came to an end in 2010 when the Chicago Climate Exchange closed its doors.  A shadow of its former self, the CCX now registers verified emission reductions based on a comprehensive set of established protocols. 7. Develop carbon capture and storage - The most prominent project in the US came to a halt in July when American Electric Power concluded not to build a full-scale CCS plant at its Mountaineer, West Virginia plant. As noted above, AEP explained its decision as based on the uncertainty of US climate policy.  The lack of direction in American climate change response hurts business. AEP walked away from a $300 million Department of Energy match.  It didn't help that the Virginia consumer advocate, in successfully arguing against including CCS costs in the rate base, asserted:  “Any potential benefit is speculative and outweighed by the enormous cost of the pilot project.” Some may think no policy is the best policy.  We think otherwise.  Climate change is happening.  There will be a response.  All will benefit if that response is choreographed over time, rather than rushed into when political consensus ultimately concludes that something must be done NOW.  Maybe in 2012?  Happy New Year. 

Carbon Dioxide | Carbon Emissions | Climate Change | Climate Change Litigation | Legislation | Regulation | Renewable Energy | Weather | Year in Review

Climate Change Litigation: The Second Wave - Our Children's Trust Goes to Washington

December 16, 2011 19:09
by J. Wylie Donald
2000 years ago all roads led to Rome.  Nowadays, as Our Children’s Trust recently found out, the road of a climate change lawsuit leads to Washington.  All are familiar with the path to Washington taken by Massachusetts v. EPA and American Electric Power v. Connecticut.  Last week a different path surfaced:  the trial court.  The District of the District of Columbia became the Washington venue of Alec L. v. Jackson when  the Northern District of California transferred the federal climate change suit instigated by Our Children’s Trust.    Our Children’s Trust (OCT) is an Oregon public interest group that is quarterbacking a set of lawsuits and regulatory petitions seeking to reinvigorate federal and state regulation to combat climate change.  OCT burst on the climate change litigation scene last May with suits or petitions in all 50 states, invoking the public trust doctrine as available to protect the atmosphere – a new twist on an old doctrine.  Besides a dozen lawsuits in state court, one was also brought in federal court in the Northern District of California (where another climate change lawsuit – Native Village of Kivalina v. ExxonMobil - was also filed).  Alec Loorz, a teen-aged environmental activist, and other youths, in company with Kids vs Global Warming and Wildearth Guardians, sued Lisa Jackson, Kenneth Salazar, Thomas Vilsack, Gary Locke, Steven Chu and Leon Panetta. You may recognize the defendants as the EPA Administrator and the Secretaries of Interior, Agriculture, Commerce, Energy and Defense, respectively. In the amended complaint, after explaining the plaintiffs’ circumstances (youths1 and an environmental group that will be harmed by the effects of climate change), the defendants’ alleged misfeasance (failure to act to restrain and reduce carbon dioxide emissions), the effects of climate change and the need to take action (among other reasons: “A failure to act soon will ensure the collapse of Earth’s natural systems resulting in a planet that is largely unfit for human life.”  Complaint ¶ 9.), a single cause of action is set forth. Plaintiffs allege, among other things:   143. The United States government is a co-tenant sovereign trustee of the atmosphere and shares a duty with other co-tenant sovereigns, including Tribal Nations, to protect the atmosphere as the trust asset and prevent its waste or harm for the benefit of the people, including Plaintiffs and future generations of citizens 146. Defendants, and each of them, have wasted and failed to preserve and protect the atmosphere Public Trust asset, and have caused and will continue to cause imminent injuries as described above, from increased greenhouse gas emissions, global heating, and adverse impacts to natural and other resources. 147. Defendants, and each of them, have injured Plaintiffs by failing to protect the atmosphere as a Public Trust asset. Needless to say, the government defendants don’t agree.  But instead of contesting the merits or challenging standing or asserting the political question defense in California, defendants sought something simple:  just a change of venue to Washington, D.C. Plaintiffs opposed.     The district court sided with the defendants in a nine-page opinion that addressed the relevant considerations point by point.  As set out by the Supreme Court, transfer is appropriate based upon an ‘individualized, case-by-case consideration of convenience and fairness.’  Opinion at 2 (citing Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)).  The relevant factors to be considered included:  (1) plaintiffs’ choice of forum, (2) convenience of the parties and witnesses, (3) ease of access to sources of proof; (4) local interest in the controversy; (5) familiarity of each forum with the  applicable law; and (6) relative congestion in each forum.  Opinion at 3 (citing Ctr. for Food Safety v. Vilsack, No. 11-00831 JSW, 2011 U.S. Dist. LEXIS 31688, at *18 (N.D. Cal. Mar. 17, 2011)). Without delving into each of the factors, a fair summary of the court’s view might be:  because the effects of global warming are felt equally by every citizen and the decisions directing the government’s response were made in Washington, there was no compelling reason to keep this case in California and there were good reasons to transfer the case to the District of Columbia.  It is not a very satisfactory analysis. While it is likely that climate change on the whole is bad, some will be advantaged by it (for example, farmers in Canada with longer growing seasons, or shippers that can use the Northwest Passage to the detriment of the Panama Canal); others will be disadvantaged (such as homeowners facing increased insurance premiums in hurricane-prone states, or asthmatics troubled by the particulate arising from more frequent wildfires caused by lack of rain).  To say that all will be affected equally seems plainly wrong. Nevertheless, the court made that point on several occasions to support its conclusion that the plaintiffs did not have an interest localized to the Northern District of California.  See Opinion at 4, 7, 8-9.   Conversely, to find out why the District of the District of Columbia was the proper forum, one needed to look at who the defendants were:  heads of regulatory bodies who resided in or near Washington and whose allegedly improper decisions were likely made there as well.  Opinion at 4, 5, 6, 7, 8.  This reasoning suggests that a plaintiff seeking to avoid transfer should assert his or her claim against the local representative of the federal agency or department.  Of course that would likely be met with a motion to dismiss for failure to join an indispensable party because an agency's local representative would not be the one making the decisions about responding to climate change.  Which further suggests that under this factor, a suit about federal government policies against the federal government is always most appropriate in Washington.  Such a rule sounds like a bad idea. But bad idea or not, the OCT plaintiffs are now in Washington.  Transfer has eliminated the possibility of an appeal to the relatively more liberal Ninth Circuit. Presumably, this was what inspired the motion to transfer. But it has also put the case into a more favorable news market offering better hours for prime time access to a decision.    A hearing date is not set but the case will be taken seriously. Already the National Association of Manufacturers has weighed in on the side of the government.  On the plaintiffs' side, they have drummed up support from nearly two dozen law professors and scholars to explain the application of the public trust doctrine. 1It may only be us but the youth plaintiffs do not appear terribly sympathetic. By the tender age of 16 they have the suffered the misfortunes of going hiking on Icelandic glaciers, visiting Patagonia in the company of Robert Kennedy, Jr. and traveling to Africa.  Complaint ¶¶ 30, 37, 45.

Climate Change Effects | Climate Change Litigation | Regulation

Oral Argument in Kivalina: Winds of Change or Climate Change Liability Suits Becalmed?

December 4, 2011 20:16
by J. Wylie Donald
On November 8-9, 2011 an Arctic gale bore down on the peninsulas, islands, salt marshes and beaches of the Alaska littoral.  Named the Bering Sea Superstorm it pounded Alaska with 8-10 foot storm surges, wind gusts up to 75 mph and blizzard conditions.  One small community was particularly fearful.  Many readers already know of whom we are speaking:  Kivalina.  The National Weather Service wrote:  "WIDESPREAD MAJOR COASTAL FLOODING AND SEVERE BEACH EROSION IS EXPECTED IN THE FOLLOWING AREAS: ... 4. THE CHUKCHI SEA COAST FROM CAPE KRUSENSTERN TO POINT HOPE. THIS INCLUDES THE VILLAGES OF NOME AND KIVALINA WHERE MAJOR DAMAGE FROM COASTAL FLOODING AND STRONG WINDS IS EXPECTED.  Fortunately, the seawall at Kivalina held. While unusual, this was one storm of thousands that have visited high winds and storm surge upon Alaska's shoreline over the millennia.  Last Monday a storm of a different sort broke. Although not even rated on the Saffir-Simpson scale, the verbal gusts exhaled before the Ninth Circuit Court of Appeals in Native Village of Kivalina v ExxonMobil Corp. may have substantially more effect than any Arctic storm.  Or they may not. (Click here for the video or audio link or oral argument.) Kudos must be extended to Matt Pawa (Appellant Kivalina) and Daniel Collins (Defendants/Appellees) for masterful argument.  Both were completely on top of their game, whether it was jousting with the Court or each other over the Restatement (Second) (and sometimes Third), laying out their key arguments or responding to pointed questions from Judges Thomas, Clifton or Pro (on temporary assignment from the District of Nevada). (For those to whom Kivalina is not familiar, in a nutshell, a native Alaskan village on the shores of the Chukchi Sea has brought suit against electric utilities, oil companies and one coal company.  The complaint asserts the defendants are responsible for excess emissions of greenhouse gases, which have led to global warming, which has resulted in delayed formation of arctic sea ice and early melting as well, which has accelerated the erosion caused by winter storms.  The plaintiffs seek damages for the cost of relocating their village.  The suit was dismissed on political question grounds by the District Court for the Northern  District of California; it is now on appeal to the Ninth Circuit.) Mr. Pawa opened his argument with the proposition that it is black letter law that no balancing of interests is needed where an intentionally caused nuisance is causing a claimant serious harm.  He cited numerous Restatement sections in support.  The Court seemed skeptical.  Judge Clifton asserted in his question that balancing was called for in the Restatement.  Judge Pro wanted to know what instructions Mr. Pawa would give to the jury.  Judge Clifton queried:  "Why is it so difficult to find a case that remotely resembles this one?"  Mr. Pawa pointed to People v. Gold Run Ditch & Mining Co., 66 Cal. 138, 4 P. 1152 (1884), which established, he said, that valid nuisance claims lie against all polluters of a common resource.  (We, of course, take strong exception to any referral to carbon dioxide as pollution in light of its ubiquity, natural presence, and lack of toxicity in the atmosphere.  The parallels to water vapor - the most prevalent greenhouse gas and in no one's estimation a pollutant - are striking.) Although  there was not enough time in argument to fully develop Gold Run Ditch, it is worth a moment to consider.  There the California Supreme Court was asked to enjoin hydraulic mining which was despoiling California's rivers and threatening agricultural interests.  In holding that an injunction against the hydraulic mining operator should issue, the Court wrote: But a legitimate private business, founded upon a local custom, may grow into a force to threaten the safety of the people, and destruction to public and private rights; and when it develops into that condition, the custom upon which it is founded becomes unreasonable, because dangerous to public and private rights, and cannot be invoked to justify the continuance of the business in an unlawful manner. Every business has its laws, and these require of those who are engaged in it to so conduct it as that it shall not violate the rights that belong to others. Accompanying the ownership of every species of property is a corresponding duty to so use it as that it shall not abuse the rights of other recognized owners ... Upon that underlying principle, neither State nor Federal legislatures could, by silent acquiescence, or by attempted legislation ... divest the people of the State of their rights in the navigable waters of the State for the use of a private business, however extensive or long continued .... As we have already said, the rights of the people in the navigable rivers of the State are paramount and controlling.  66 Cal. at 152. The effect of Gold Run Ditch and a parallel decision in federal court, Woodruff v. North Bloomfield Mining Co., 18 F. 753 (1884), effectively ended hydraulic mining in California.  Whether a similar ruling could be used against entities emitting carbon dioxide into the atmosphere remains to be seen. Another interesting argument broached by Mr. Pawa concerned what he referred to as trivial emitters.  Judge Thomas played into his hand with a question about whether his driving to work made him a defendant.   According to Mr. Pawa Section 36 of the Restatement  (Third) takes care of that issue and negates liability to trivial emitters.  That section provides:  "When an actor’s negligent conduct constitutes only a trivial contribution to a causal set that is a factual cause of physical harm under § 27, the harm is not within the scope of the actor’s liability."  Mr. Pawa would permit the defendants to demonstrate that they constitute trivial contributors to the global warming problem. In closing, Mr. Pawa cited the substantial precedent in his clients' favor.  The Second Circuit reversed the trial court and found standing for the plaintiffs in Connecticut v. AEP, 582 F.3d 309 (2d Cir. 2009), which was not reversed by the Supreme Court.  Likewise the appellate panel in Comer v. Murphy Oil USA, 585 F.3d 855 (5th Cir. 2009), also reversed the trial court and found standing for the climate change liability plaintiffs.  (Mr. Pawa acknowledged that the decision had been vacated and cited the decision for the panel's thinking, not as precedent.)  Last, in Massachusetts v. EPA, 127 S.Ct. 1438 (2007), the Supreme Court also found standing for an entity alleging damage from greenhouse gas emissions. Mr. Collins responded to Mr. Pawa's arguments and knocked down plaintiffs' claim that black letter law established that balancing was not required.  Mr. Collins pointed to comment e of section 821B of the Restatement (Second) which requires an assessment of reasonableness whether the allegation is an intentional, reckless or negligent nuisance.  Further, the balancing required by plaintiffs' claims is "utterly without precedent."  "But balancing is what courts do all the time," interjected Judge Pro.  "Nothing on this scale has ever been remitted to a court," rejoined Mr. Collins.  This is not a case about a discreet pollution site; it is a case of global dimensions and there is no traceability of the emitted carbon dioxide (as the plaintiffs conceded). The Court was not so easily put off and brought up AEP, where the Second Circuit had permitted plaintiffs to proceed with their greenhouse gas liability claim, and the Supreme Court had not reversed.  Mr. Collins had seen that softball coming:  AEP is different because some of the plaintiffs were sovereigns, which was not the case here. Mr. Collins closed with strong points on his clients' primary position:  displacement of the federal common law applies to both injunctive and damages remedies.  This was established in Middlesex County Sewerage Auth. v. Sea Clammers, 453 U.S. 1, 13 (1981).  The reason is simple.  When Congress crafted the regulatory framework establishing the Clean Air Act, which displaced injunctive remedies, see American Electric Power v. Connecticut, Congress did not provide for any compensatory relief to an aggrieved private party.  Accordingly, a damages remedy is also displaced and the plaintiffs' claim is barred.  As the Ninth Circuit had itself held in In re Exxon Valdez, 270 F.3d. 1215 (9th Cir. 2001):  "a nuisance theory would enable a federal district judge to substitute a different balancing of interests from the one made by the agency to which Congress assigned the job".  In our view the Court's decision is not likely to be the final curtain.  If it goes in favor of the plaintiffs, the defendants will certainly appeal.  And if the defendants prevail, the state law claims (dismissed by the federal district court without prejudice) are likely to be refilled, particularly with the invitation set forth in by the Supreme Court in AEP:  "None of the parties have briefed preemption or otherwise addressed the availability of a claim under state nuisance law. We therefore leave the matter open for consideration on remand."

Carbon Dioxide | Climate Change Litigation | Supreme Court

House Passes Bill Challenging Application of EU ETS to American Carriers - Will It Fly?

October 25, 2011 20:58
by J. Wylie Donald
When people bring up new climate change legislation today they aren't seeking to reinvent the Clean Air Act or implement the Kyoto Protocol.  Rather, the goal is to block responses to climate change. A case in point is a bill that passed the House of Representatives on a voice vote yesterday, H.R. 2594, the European Union Emissions Trading Scheme Prohibition Act of 2011. As its name implies, H.R. 2594 is not about a climate change fix. Instead it is all about getting in the way of a fix. Its operative provision provides:  "The Secretary of Transportation shall prohibit an operator of a civil aircraft of the United States from participating in any emissions trading scheme unilaterally established by the European Union."  We understand about the need for the government to interfere with business activities in rogue states, but this seems somewhat far afield. Nevertheless, this did not come out of the blue. In 2008 the European Union announced in Directive 2008/101 that all airlines flying in, into or out of European airspace would have to participate in the EU Emissions Trading Scheme. This meant that operators would have to surrender to regulators one "allowance" for every ton of carbon dioxide emitted on such journeys. Failure to obtain the requisite allowances would invoke fines, and the obligation to obtain the allowances would continue. Following a monitoring and verification period in 2010 and 2011, where baseline emissions were established, the ETS regime is scheduled to take off on January 1, 2012.  Based on their established baselines airlines will be allocated allowances, most of which will be distributed for free. However, to the extent an airline wishes to grow, or new entrants arrive, or efficiency requirements kick in, expenditures will be required. Standard & Poors estimates it could cost over one billion euros in the first year, and between 23 billion and 35 billion euros through 2020.   Numerous governments and domestic and international aviation officials are lined up attempting to block or divert the European program.  A resolution of the International Civil Aviation Organisation in October 2010, Resolution A37-19, set forth goals and advocated further study and cooperation, but imposed no obligations.  The ICAO asserts that airline carbon dioxide emissions should be left to its self-governance.  The Air Transport Association (and others) filed a lawsuit in 2009 which ultimately ended up at the European Court of Justice asserting that the EU was violating international law.  Specifically, the plaintiffs argued:  "As proposed, the EU ETS provisions would regulate an entire flight from across the United States to the EU, even though the flight would be in EU airspace for only a tiny fraction of the journey, ... If the EU ETS regime implemented an international agreement agreed by third countries, as well as by the EU, we would not be here today. ATA challenges EU ETS because it is a unilateral measure, which has not been agreed by countries outside the EU, yet nevertheless applies EU law to third country carriers in third country airspace."   In June 2011 the Obama administration demanded that U.S. airlines be exempted from the scheme.  And at the end of September 21 non-EU members of the ICAO issued a declaration at their New Delhi meeting rejecting the EU ETS program.  None of this has availed.  On October 6 an Advocate General of the European Court of Justice rendered her opinion and concluded, among other things: 145. As many of the governments and institutions involved in the proceedings have correctly concluded, Directive 2008/101 does not contain any extraterritorial provisions. The activities of airlines within the airspace of third countries or over the high seas are not made subject to any mandatory provisions of EU law by virtue of this directive. In particular, Directive 2008/101 does not give rise to any kind of obligation on airlines to fly their aircraft on certain routes, to observe specific speed limits or to comply with certain limits on fuel consumption and exhaust gases. 146. Directive 2008/101 is concerned solely with aircraft arrivals at and departures from aerodromes in the European Union, and it is only with regard to such arrivals and departures that any exercise of sovereignty over the airlines occurs: depending on the flight, these airlines have to surrender emission allowances in various amounts, (131) and if they fail to comply there is a threat of penalties, which might even extend to an operating ban. More succinctly, as set forth in the European Court of Justice's press release:  "EU legislation does not infringe the sovereignty of other States or the freedom of the high seas guaranteed under international law, and is compatible with the relevant international agreements."      Where is this all headed?  The ECJ itself should render its opinion by early 2012.  Unless it undoes Directive 2008/101, some are predicting a trade war.  Even if everyone grudgingly goes along with participation in the scheme, "carbon leakage" is likely to be a significant factor.  Long-haul flights that now stop in Europe may find it more cost-effective to stop over in the Middle East, which does not impose any charge for carbon dioxide emissions.  And of course, the traveler is likely to see higher fares. Will H.R. 2594 make any difference?  We think it unlikely.  In a time of budget cuts and market reliance, what is to be gained by establishing another bureaucracy when United Continental, Delta and American Airlines can find gates at Abu Dhabi, Doha and Dubai?

Carbon Emissions | Climate Change Litigation | Regulation

Connecticut v. AEP - The End Is Very Near

September 21, 2011 20:38
by J. Wylie Donald
Not with a bang, but with a whimper. So (we predict) will be the resolution of Connecticut v. American Electric Power, of Supreme Court provenance and now remanded to the Second Circuit. And it is not because we have inside information. Rather, it is because the plaintiffs have asked to be dismissed. On September 2 counsel for the State of New York, on behalf of all of the governmental and public interest group plaintiffs, wrote the clerk of the Second Circuit and requested:  "These appellants have decided to withdraw their complaints, ... and would like to request that the Court remand this case to the United States District Court for the Southern District of New York that they may do so." Plaintiffs assert that they may do so "as of right" because Defendants have not answered. Somehow, we do not think Defendants will raise an objection. This result was not difficult to foresee (although, to be candid, we did not). Combatting climate change is no longer a top priority with the public or with government. In a time of pinched government budgets, and where regulation of CO2 emissions is proceeding, plaintiffs could abandon their claims and declare victory. Defendants will claim victory on the merits, which is accurate but not the complete story.  The federal common law of nuisance will not be a basis for a successful climate change suit (notwithstanding creative arguments by the Kivalina plaintiffs before the Ninth Circuit that the Supreme Court's decision should be limited only to cases where injunctive relief is sought, not to damages cases). However, state public nuisance claims were not foreclosed, and the Second Circuit's ruling that the political question doctrine does not bar these claims still stands.  Remember also that while the Fifth Circuit Comer decision was vacated, that was on procedural grounds.  In other words, there is no merits based decision declaring that the appellate panel was wrong. It is anybody's guess where the next climate change liability damages suit will be filed, by whom, and under what theories.  Notwithstanding two climate change decisions by the Supreme Court, the legal landscape is not even close to finished. 20110902 Letter withdrawing by plaintiffs in AEP v Connecticut (American Electric Power).PDF (45.20 kb)

Climate Change Litigation


The business case for the development of renewable energy projects, from biodiesel and ethanol to wind, solar, and distributed generation, is more compelling than ever as tax and regulatory incentives combine to attract investments. Emerging issues in environmental law and increasingly recognized principles of corporate social responsibility are encouraging public companies to voluntarily reduce greenhouse gas emissions, install clean energy alternatives, and invest overseas in projects under the Kyoto Protocol to respond to climate change concerns.

Click here for more information and a list of our group members.


© 2019 McCarter & English, LLP. All Rights Reserved. disclaimer
navbottom image