• Third Circuit Rejects Preemption Argument Asserted by Power Generator
  • October 21, 2013 | Author: Julian Harrell
  • Law Firm: Taft Stettinius & Hollister LLP - Indianapolis Office
  • The Third Circuit recently held that the Clean Air Act (“CAA”) does not preempt state common law actions against polluters. In Bell v. Cheswick Generating Station, GenOn Power Midwest, L.P., 2013 U.S. App. LEXIS 17283 (3rd Cir. 2013) (“Bell”), a class of residents living near a coal-fired electrical facility alleged that contaminants were settling on their property. The class plaintiffs brought suit against GenOn Power Midwest (“GenOn”) under state law tort theories of nuisance, negligence, trespass and strict liability. The district court ruled that state law tort actions were preempted by the CAA because the claims would undermine the comprehensive regulatory scheme provided for by the statute.

    The Third Circuit’s analysis began by noting that the CAA employs a “cooperative federalism” structure. Under this approach, federal regulations provide baseline regulatory standards for states to enforce, but states are allowed to employ more stringent standards than those provided for in the CAA.

    According to the Third Circuit, the two “savings clauses” of the CAA demonstrate Congress’ intent to retain state causes of action. The “citizen suit” provision of the CAA provides that nothing in the section “shall restrict any right which any person (or class of persons) may have under any statute or common law...” to enforce emission standards or limitations. Meanwhile, the “states’ rights” provision of the CAA provides that the law is not intended to “preclude or deny the right of any State or political subdivision thereof to adopt or enforce (1) any standard or limitation respecting emissions of air pollutants or (2) any requirement respecting control or abatement of air pollution. ...”

    Noting that the CAA’s savings clauses are nearly identical to those found in the Clean Water Act (“CWA”), the court turned to the Supreme Court’s interpretation of the CWA for guidance. In International Paper Co. v. Ouellette, 479 U.S. 481 (1987), the Supreme Court held that the CWA does not bar injured parties from bringing nuisance claims pursuant to state common law. Relying on the CWA’s savings clauses, the Ouellette Court concluded that a state’s right to impose higher standards than the CWA “may include the right to impose higher common-law as well as higher statutory restrictions.”

    GenOn primarily argued that the savings clauses of the CWA are broader than those of the CAA. After reviewing the text, the Third Circuit disagreed. Noting that “there is no meaningful difference” between the CWA and CAA savings clauses, the Bell court followed Ouellette and held that the class plaintiffs’ state law causes of action were not preempted.

    GenOn and amicus curiae Utility Air Regulatory Group also argued that allowing state tort claims would permit courts and juries to set emissions standards, thereby subjecting plant operators to inconsistencies in the law and uncertainty as to which regulations apply. The Third Circuit explained, however, that Ouellette squarely addressed this issue. Ouellette drew a distinction between allowing suits in the state where the pollution was discharged (“source state”) and the state where the injury occurred (“affected state”). The Ouellette majority found that “[a]n action brought ... under [source state] nuisance law would not frustrate the goals of the [CWA] as would a suit governed by [affected state] law.” Allowing suits based on affected state law might subject a plant to a multitude of regulations, but allowing suits under source state law only creates “a single additional authority, whose rules should be relatively predictable.” Therefore, according to Ouellette and Bell, allowing suits under the law of a source state will not create chaos for the plants being regulated.

    The Third Circuit’s ruling means that plant operators must take both state and federal law into account when regulating emissions. Compliance with the CAA will not always negate an operator’s liability for state law claims.