|June 27, 2014|
Previously published on June 24, 2014
In its landmark 2011 decision in American Electric Power Co., Inc. v. Connecticut, et al., 131 S.Ct. 2527 (2011), the U.S. Supreme Court held that the Clean Air Act (CAA) and the actions by the U.S. Environmental Protection Agency (EPA) it authorized displace - that is, preempt - “any federal common law right to seek abatement of carbon-dioxide emissions from fossil-fuel fired plants.” Significantly, however, the American Electric Court expressly declined to extend its preemption holding to state common law nuisance suits. To date, only four reported decisions have addressed the state law preemption issue. Three have rejected preemption and one has embraced it.
Cases Rejecting State Law Preemption
The first case is In re: Methyl Tertiary Butyl Ether (MTBE) Products Liability Litigation, 725 F.3d 65 (2d Cir. 2013). Briefly, that suit arose from groundwater contamination allegedly stemming from the spillage and leakage from MTBE-treated gasoline stored in underground tanks. On the preemption issue, the defendant argued that amendments to the CAA enacted in 1990 requiring oxygenation of gasoline - with which the defendant complied by using MTBE - preempted any ensuing state law tort claims arising from groundwater contamination. The Second Circuit, however, rejected the argument.
The second case, Bell, et al. v. Cheswick Generating Station, et al., 42 ELR 20221, No. 2:12-cv-929, (W.D. Pa., 10/12/2012) involved a class action suit by property owners residing in the vicinity of a coal-fired power plant. In their complaint, the plaintiff class alleged that their properties had been contaminated by a variety of toxic substances emanating from the plant “on occasions to [sic] numerous to list.” The defendant plant owner moved to dismiss the suit on the ground that state tort liability was preempted by the CAA. The district court granted the motion, and on appeal the Third Circuit reversed, citing the “savings clause” language in the CAA preserving citizens’ rights to common law suits. In so ruling, the court highlighted the similarity between the savings clause language in the CAA and the Clean Water Act (CWA).
In the third and most recent case, the Supreme Court of Iowa rejected preemption in Freeman, et al. v. Grain Processing Corp., 2014 Iowa Sup. Lexis 72 (2014). Freeman arose from a state class action suit by homeowners residing in the vicinity of a corn wet-milling facility. They claimed that the facility’s operations caused “harmful pollutants and noxious odors to invade their land, thereby diminishing the full use and enjoyment of their properties.” The facility owner argued, in part, that the suit was preempted by the CAA. Echoing the district court in Cheswick, the defendant argued that “common law and statutory actions such as those brought by the plaintiffs interfere with both the goals and methods embraced by the CAA in regulating air pollution.” Continuing, the Court said: “... the citizens rights saving clause strongly suggests that Congress did not seek to preempt, but to preserve state law claims.” The Freeman court added: “The citizens rights savings clause expressly states that the ability to bring actions under the CAA does not preempt common law rights” (Citations omitted, emphasis added.)
Comer: The Lone Decision Endorsing Preemption
That brings us to Comer v. Murphy Oil USA, Inc., 839 F. Supp.2d 849 (S.D. Mi. 2012), in which the plaintiffs brought suit against a number of oil, coal, electric and chemical companies. They maintained that the greenhouse gas emissions produced by these entities created the conditions that formed Hurricane Katrina, which in turn damaged their property. Relying on American Electric, defendants argued that the CAA preempted the plaintiffs’ state common law suit. The plaintiffs countered that American Electric was not controlling because, by its terms, it was limited to federal common law and never addressed state-based tort claims.
The district court sided with defendants and held the suit was preempted. The subsequent procedural history of Comer is intriguing: On appeal, the district court ruling was reversed by a panel on the Fifth Circuit. Thereafter, however, a petition for rehearing en banc, vacating the district court ruling, was granted, but then dismissed for lack of a quorum. The practical effect of this was to restore the legal effect of the district court ruling.
A future ruling by the Supreme Court definitively answering the question it left open in American Electric - whether the CAA preempts state tort suits - is all but certain.
As for how the Court may rule, its recent decision in CTS Corp v. Waldburger may be an important indicator. In Waldburger, the Court held that the Comprehensive Environmental Response Compensation and Liability Act (CERCLA) preempts state statutes of limitation for environmental suits, but does not preempt state statutes of repose, which relieve a defendant of environmental liability after a certain period of time. In reaching this conclusion, the Waldburger court applied a “textual and structural” analysis to the relevant section of CERCLA governing preemption. If the Court were to apply this same analysis to the CAA, one could certainly foresee the Court holding that, as currently written, the CAA does not preempt state common law tort suits.