Federal Court: Public Nuisance Suits Not the Way to Regulate Air Quality

A federal appeals court on Monday reversed a January 2009 ruling by a U.S. District Court that had declared emissions from the Tennessee Valley Authority’s (TVA’s) coal plants in eastern Tennessee and Alabama a public nuisance in North Carolina and ordered the nation’s largest public power provider to install expensive control technologies. The appeals court said the ruling was “flawed for several reasons.”

A three-judge panel for the U.S. Court of Appeals for the Fourth Circuit said that if the January 2009 decision were allowed to stand, it 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.”

Writing for the court, Circuit Judge Harvie Wilkinson said that “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.”

Wilkinson speculated that if courts across the nation were to use the “vagaries of public nuisance doctrine” to overturn “carefully enacted rules governing airborne emissions,” it would be difficult to determine what standards govern. “Energy policy cannot be set, and the environment cannot prosper, in this way,” he said.

“Finally, even if it could be assumed that the North Carolina district court did apply to 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,” he wrote.

A Complete Victory

U.S. District Judge Lacy Thornburg said in the court’s Jan. 13 opinion on North Carolina ex rel. Cooper v. Tennessee Valley Authority  that emissions from TVA’s three coal-fired plants in eastern Tennessee and one plant in Alabama contributed to “significant hurt, inconvenience [and] damage’’ in North Carolina. It made the finding even though the TVA’s plants were deemed compliant with Clean Air Act permits and were meeting emissions limits set by the states of Tennessee and Alabama.

Judge Thornburg ordered the TVA to upgrade or install scrubbers to reduce sulfur dioxide (SO2) and selective catalytic reduction (SCR) systems to reduce nitrogen oxide (NOx) at its Bull Run, Kingston, and John Sevier plants in eastern Tennessee and at Widows Creek in northern Alabama by 2013. The pollution controls would cost—at a minimum—about $1 billion, the District Court had estimated.

But TVA appealed the ruling in June 2009, saying that it had been doing more to reduce its SO2 and NOx emissions than any other major electric utility in the region. The federally owned utility said that after it was found in violation of the Clean Air Act in 1977, the company implemented an aggressive emission control program.

To date, it has invested more than $5.1 billion in equipment to reduce emissions and is in the process of installing another $400 million worth of controls by 2010, TVA reports. It also said it could spend from $3 billion to $3.7 billion during the next decade to further improve regional air quality.

The decision is a complete victory for the TVA, which is no longer required to meet the new emission standards that the federal district court in North Carolina dictated, said toxic tort and environmental attorney R. Trent Taylor.

“In addition, other coal-fired power plants in the vicinity of North Carolina are breathing a huge sigh of relief now that the State of North Carolina’s suit has been rejected as improper,” Taylor, a public nuisance case specialist at McGuireWoods LLP, told POWERnews.

Taylor said that the state of North Carolina will likely move for an en banc rehearing at the Fourth Circuit court, and if that fails, it could appeal to the U.S. Supreme Court. “While the U.S. Supreme Court only grants review in a small percentage of cases, it is a distinct possibility that it could agree to hear this case,” he said.

“That is because this case involves issues the Supreme Court has traditionally taken a great interest in—a dispute between neighboring states and the interplay between common law and federal statutes. Add in the fact that fully half of the states submitted to the Fourth Circuit an amicus brief supporting one side or the other, making it one of the most closely watched appellate cases in the nation, and I would not consider it a surprise if the U.S. Supreme Court agreed to hear this case. If the U.S. Supreme Court, however, refuses to hear the case, then the case is over.”

Climate-Related Public Nuisance Suits

Because of its significant legal implications, the case was being closely watched by a group of 16 state attorneys general that filed an amicus brief urging the court to affirm their right to use public nuisance claims in pollution lawsuits.

New York’s Andrew Cuomo and Maryland’s Doug Gansler led the group. Other states included California, Connecticut, Delaware, Illinois, Iowa, Maine, Massachusetts, Mississippi, New Hampshire, New Jersey, New Mexico, Oklahoma, Rhode Island, and Vermont.

Eight of those states are suing six companies that own coal plants—including TVA. The Second Circuit Court of Appeals in September rejected a variety of defenses in that case (Connecticut v. AEP)  that assert climate change–related damages raise “political questions” and are thus not suitable for judicial resolution.

On Monday, Justice Wilkinson addressed the role of public nuisance law in climate change litigation directly: “While public nuisance law doubtless encompasses environmental concerns, it does so at such a level of generality as to provide almost no standard of application,” he wrote.

 “If we are to regulate smokestack emissions by the same principles we use to regulate prostitution, obstacles in highways, and bullfights … we will be hard pressed to derive any manageable criteria.” Wilkinson also cited a comment made by U.S. Supreme Court Justice Blackmun in 1992: “one searches in vain … for anything resembling a principle in the common law of nuisance.”

But, according to Taylor, the ruling further complicates the issue. “The Fourth Circuit’s decision that basically found that public nuisance actions are preempted by the Clean Air Act and EPA regulations is at odds with the Second Circuit’s decision [in Connecticut v. AEP],” said Taylor. “Other courts (and perhaps the U.S. Supreme Court) will have to decide whether to permit common law claims such as nuisance to go forward in light of federal statutes and regulations that exist.”

He added, however, that the Fourth Circuit’s “well-reasoned and persuasive decision” will be difficult for other courts to ignore and could prove to be decisive in other similar suits, including climate change suits.

Sources: U.S. Court of Appeals for the Fourth Circuit, U.S. District Court, Western District of North Carolina, McGuireWoods LLP, POWERnews