The Role of State Attorneys General in National Environmental Policy Global Warming Panel Part II James Tierney, Director, National State Attorneys General Program: It is now my great honor to introduce Professor Thomas Merrill. Tom is considered one of the seminal thinkers in the area of the interplay between litigation and governmental regulation. Long a Professor at Northwestern Law School, Tom joined us at Columbia in the Fall of 2003 and immediately became an essential part of the faculty. Tom's long record of academic accomplishment is found in the materials. He is a graduate of the University of Chicago and like General Blumenthal, clerked for United States Supreme Court Justice Harry Blackmun. Tom? Thomas Merrill, Professor of Law, Columbia Law School: I would like to thank you all for this second AG conference. The place was already buzzing after the last one and I am sure that we will get other interesting topics in the future too. I will not be taking about policy issues as I don t have any background. I will talk about the legal issues. Let me begin on behalf of all Environmental Law Professors. I would like to thank Richard Blumenthal and the other Attorneys General who brought this suit. Whatever else the suit eventually accomplishes, it provides ample material for environmental law examination questions for several years to come. Since creative exam questions are always in short supply, this is a real boon to my profession. There are so many interesting legal dimensions to this complaint that it is impossible to cover them all. Let me briefly list some of the issues I will not discuss (although the other panelists may want to take them on and I would be glad to field questions about them in the questions and answer period): One issue that I not going to address is whether the complaint alleges injury that satisfies traditional standing requirements; I will also not discuss whether the emission of greenhouse gases in one state that is alleged to contribute to global warming in another states a claim that falls within the scope of the federal common law of nuisance; I am not going to discuss whether the suit is preempted by the conferral of exclusive authority on the President and Congress over the conduct of U.S. foreign policy, given that the United States remains a party to the 1992 Framework Convention on Climate Change and the emissions challenged in the lawsuit could be the subject of future negotiated protocols restricting emissions of greenhouse gases; I am also not going to discuss what legal standard will be applied in determining whether causation has been established; I am further not going to discuss what legal standard should be applied in determining whether emissions of greenhouse gases constitutes a trans-boundary nuisance and whether the suit alleges a future nuisance, and if so what standard should apply in determining whether the court will enjoin a future nuisance; and lastly I am not going to discuss whether courts 1
are competent, either in a technical sense or in the sense of political legitimacy, to adjudicate a suit like this one on the frontiers of both science and international politics. These are some of the issues I will not address. Instead I will consider two other issues raised by the lawsuit, which seem to me to be especially interesting, intricate, and challenging. The first is whether the Attorneys General will have to survive a motion to dismiss based on traditional standing requirements, or whether they can somehow get around having to satisfy those requirements. As I noted at the outset, I am not going to discuss whether the suit satisfies traditional standing requirements, like injury in fact, redress ability and no generalized grievances. However, I am assuming that these traditional standing requirements would prove to be nettlesome, and hence that the Attorneys General would like to find some way to argue that they do not apply. Conversely, of course, the defendants will want to argue that they do apply. Now, it seems to me that the Attorneys General do have a general argument they can make as to why these traditional standing requirements ought not apply. The Supreme Court s complex standing doctrine has been developed in suits brought by private parties private attorneys general suing under citizen suit provisions. The Court has never suggested that public actions brought by duly appointed public officials representing the general public interest are subject to such limitations. For example, no one has suggested that U.S. Attorneys prosecuting individuals for criminal violations of environmental laws must show that the public suffered injury in fact, or that a conviction will redress some actual injury, or that the injury is not a generalized grievance shared by all members of society. The exception for public actions makes sense in terms of the ultimate rationale for standing limitations. Standing requirements are designed to confine Article III courts to the exercise of the judicial power as that has traditionally been understood. At the founding and at all times afterwards, the judicial power has been understood to include the adjudication of public actions like criminal prosecutions and public nuisance suits. So there is no basis for subjecting such public actions to standing requirements that apply to private litigants. So far so good. The defendants, however, can make a counter-argument, which might go like this. There is an implicit design principle running through our legal system that public actions should be brought in the public officer s own courts. The clearest example, again, is criminal enforcement. U.S. Attorneys bring federal criminal prosecutions in federal courts; states attorneys bring state criminal prosecutions in state court. A public nuisance suit is the civil analogue of a criminal prosecution. Again, public nuisance actions are nearly always brought in the courts of the sovereign in whose name the suit is instituted, meaning, in state court. The defendants can argue that this implicit design principle also forms part of the historical understanding about what is encompassed within the judicial power. The historical understanding, more precisely considered, has been the judicial power includes the power to hear public actions brought by officers of the sovereign government of 2
which the court is a component part. But the judicial power has not been understood to include the power to hear public actions brought by officers of some other sovereignty. Now to be sure, state attorneys general file suits in federal court antitrust actions for example. But the defendants could argue that this is unproblematic as long as state attorneys general are required to show that they satisfy the same standing limitations that would apply to a private party filing an action in federal court. The only officers who get a pass on standing limitations in federal court are federal public officials. The defendants could also doctor up this historical argument with a more general argument about accountability. Public actions like criminal prosecutions and public nuisance suits seek to vindicate governmental interests of the greatest importance and sensitivity. It is important that these interests be considered by courts that are accountable in some important degree to the people and to the government of the sovereign bringing the action. If the action is brought in some other court system, accountability will inevitably be compromised to some degree. This counter-argument has considerable intuitive force, and may give the court pause. The Attorneys General are not without a sur-rebuttal, in the form of an argument grounded in a very narrow subset of public nuisance actions. Specifically, in a series of original jurisdiction cases starting with Missouri v. Illinois in 1900, the U.S. Supreme Court has permitted State Attorneys General to appear before it and argue that pollution originating in one State is causing a public nuisance in another State. Although the Court stopped hearing interstate pollution disputes under its original jurisdiction in the late 1960s, it continued for at least another decade thereafter to allow such suits to be brought in federal district court. At no time during this history was it suggested that there was something inappropriate about federal courts hearing public nuisance suits brought by State Attorneys General challenging transboundary pollution. Indeed, at no time during this history was any suggestion made that State Attorneys General would have to satisfy standing limitations applicable to private litigants in order to bring such an action. This precedent, it seems to me, will cut strongly against the more general theoretical argument that it is inappropriate for federal courts to hear a public nuisance action brought by a state attorney general. The defendants will not necessarily be without further retort. They might argue that the suits in which state attorney general were allowed to proceed in federal court were ones in which traditional standing requirements clearly were satisfied. So there was no need to specify whether such requirements would or would not apply in such an action. But this characterization of the cases is debatable at best. In the absence of any language suggesting that standing requirements were applied in these cases, I think the attorneys general may have the upper hand on this particular issue. The second issue I will consider is whether the federal common law of nuisance, which forms the basis for the first count of the complaint, has been preempted by the Clean Air Act. I will not address the threshold issue of whether the emissions challenged in this case would be covered by the federal common law of nuisance absent the Clean Air Act. 3
Let me explain preliminarily why this issue is critical. The suit contains two counts, the first based on federal common law, the second on state common law. Federal common law and state common law are not cumulative causes of action, like pleading breach of contract and negligence in suit against a contractor. They are mutually exclusive. The public nuisance action is either governed by federal common law or by state common law, but not both. The Supreme Court said this explicitly in Milwaukee II, the leading case. The Court chastised Illinois and the district court for saying that both federal and state nuisance law applied to a case and said: If state law can be applied, there is no need for federal common law; if federal common law exists, it is because state law cannot be used. The logic behind this is straightforward. Federal common law is in effect a type of preemption of state law. Federal common law, on any conception, applies when important federal interests would be frustrated by the application of state law. When a court holds that a matter is governed by federal common law, state law is automatically preempted, and a federal rule of decision applies instead. Consequently, if the attorney general s suit is governed by federal common law, their state law count is a nullity. Conversely, if federal common law does not apply, because the federal common law has been preempted by the Clean Air Act, then the suit must be dismissed for want of jurisdiction. Jurisdiction over the federal common law count is based on the presence of a federal question the federal common law. Jurisdiction over the state public nuisance count is based on supplemental jurisdiction. If the federal common law count is dismissed before trial, then there would no longer be any basis for jurisdiction over the state count. Both the Supreme Court and the Second Circuit have indicated that in these circumstances, the claim based on supplemental jurisdiction should be dismissed. Before getting into the details of the preemption issue, at little history is necessary to put this issue in context. As already noted, the Supreme Court from time to time since the turn of the twentieth century has adjudicated interstate pollution disputes as part of its original jurisdiction. The first such case involved a suit by Missouri against Illinois for reversing the flow of the Chicago River and sending sewage down the Mississippi toward St. Louis. Other suits have involved air pollution along the Tennessee-Georgia border and garbage dumping and sewage dumping disputes between New York and New Jersey. The Supreme Court had to adopt some rule of decision to decide these cases. It was clearly inappropriate to adopt the law of either the source state or the affected state, since that would allow one of the litigants to adjust the rules so as to win the case. So the Court drew on the general law of nuisance without referring to the law of either state. Although the Court did not use the term federal common law, this was effectively what the Court adopted. In 1970, Illinois filed an original suit against Milwaukee, Wisconsin in the Supreme Court. Attorney General Scott sought an injunction against sewage overflows in Milwaukee, which were allegedly polluting the beaches and water supplies in Illinois. In a decision known as Milwaukee I, the Court confirmed that federal common law would 4
govern such a suit. But since it was not a State v. State suit where original jurisdiction is mandatory, but rather a State v. City suit where Supreme Court original jurisdiction is optional, the Court also decided that it would be better to have the action tried in the federal district court. So the Court remanded the case to be tried under the federal common law of nuisance. After an elaborate trial that imposed additional limits on Milwaukee sewage overflows, the case returned to the Supreme Court in 1981 and was reviewed again in a case called Milwaukee II. This time around, the Court held that the federal common law of water pollution had been eliminated by comprehensive amendments to the Clean Water Act adopted after the original suit was filed. The Supreme Court has never spoken about whether the federal common law of nuisance has been preempted in the context of interstate air pollution. The lower court decisions that have addressed the question fairly uniformly conclude that the federal common law has also been preempted in the air context. Nevertheless, the issue is not foreclosed. The Second Circuit has held that the federal common law is preempted to the extent that the Clean Air Act imposes a regulatory standard on a particular source and the plaintiff seeks to apply a more stringent standard. But the Second Circuit has left open the question whether the federal common law might survive with respect to a type of pollution not regulated under the Act. Unfortunately, Milwaukee II is ambiguous as to what the standard for preemption of federal common law should be. The dispute here is likely to boil down to two different readings of that decision. The defendants will argue that Milwaukee II adopts what amounts to a theory of field preemption; the Attorneys General will want to argue that Milwaukee II endorses what might be called a theory of conflict preemption. There is language in Milwaukee II to support either reading. On the one hand, the Court repeatedly stressed the comprehensive nature of the Clean Water Act amendments adopted after Milwaukee I, and suggesting that this new, more comprehensive version of the Act occupied the field of federal regulation of interstate pollution, to the exclusion of the common law. On the other hand, there are passages that stress that the new legislation specifically addressed the problem that the federal common law remedy adopted by the lower courts was designed to address --sewage overflows from a point source of water pollution subject to the federal permitting process -- implying that the federal common law remedy was preempted because it conflicted with these statutory mechanisms. Each of the two theories also has a plausible rationale. The rationale for field preemption might be that when Congress legislates comprehensively, its silence on an issue should not be construed to mean that Congress has left a gap to be filed with federal common law. Silence in the midst of comprehensiveness instead means that Congress intended to leave a subject unregulated, at least for the time being. Thus, absent some affirmative signal from Congress that courts should fill gaps with federal common law, comprehensive legislation should not be supplemented by federal common law. 5
The rationale for the conflict preemption theory might be that when Congress legislates against the background understanding that federal common law applies to certain kinds of disputes, and if Congress has not specifically addressed a particular kind of dispute, it should be presumed that it intended the federal common law remedy to remain available. Litigation brought by Attorneys General challenging transboundary air pollution was understood to be subject to federal common law before the Clean Air Act was adopted. Hence, the failure to regulate a particular type of transboundary pollution in the Air Act should be construed to mean Congress would have wanted federal common law to continue to apply. How should the preemption question be decided under these competing readings of Milwaukee II? If the field preemption theory is the correct reading, then I think the federal common law count in the instant suit is preempted. There is some suggestion in the case law that the Clean Air Act is less comprehensive than the Clean Water Act. Specifically, Judge Reinhardt, in a dissenting opinion in the Ninth Circuit, has opined that the Clean Air Act does not comprehensively regulate air pollution the same way the Clean Water Act does, because the air act does not impose federal emissions controls on all stationary sources of air pollution. Now, Judge Reinhardt may be the most frequently reversed court of appeals judge in America, but occasionally he gets it right. Unfortunately, this is not one of those times. It is impossible to say that the Clean Air Act is less comprehensive than the Water Act based on pages of legislation or volumes of regulations or economic activity affected or dollars of compliance costs. To be sure, the two acts have different regulatory strategies the Clean Air Act focusing on air quality and the Clean Water Act on point sources but I fail to see how this makes one comprehensive and the other not. Moreover, even if we grant the dubious premise that federal regulation of point sources is required for comprehensiveness, the Clean Air Act would have to be regarded as comprehensive, at least as applied to the sources operated by the defendants in these cases. Under the 1970 version of the Clean Air Act, all these sources operate under permits issued by state agencies under federal guidelines, and the state plans are reviewed and approved by EPA. After the 1977 amendments, these sources must comply with federal new source review standards if they qualify as new or modified sources, and existing plants must comply with Reasonably Available Control Technology standards if they operate in areas out of compliance with National Ambient Air Standards. After the 1990s amendments, these sources must obtain federal permits authorizing emissions of SO2 and NOx if they are regulated under the Acid Rain title of the Act. So if field preemption is the test, the Clean Air Act occupies the field. On the other hand, if the conflict preemption reading of Milwaukee II is correct, then I think the federal common law count in the instant case is most likely not preempted. The superficial way of looking at the preemption question from this perspective would be to say: the Clean Air Act does not currently regulate greenhouse gases, and EPA has chosen not to regulate greenhouse gases, therefore Congress has not spoken to the problem, therefore there is no conflict between the Act and a federal district court judgment by the federal common law to order abate greenhouse gases. 6
But there is a possible response to this. The States might have a remedy against greenhouse gases under the Clean Air Act. They could petition EPA for a rulemaking to list CO2 as an air pollutant that causes or contributes to air pollution which may reasonably be anticipated to endanger public health or welfare under Section 108 of the Act. If EPA agrees, and lists CO2 under Section 108, then EPA would have a nondiscretionary duty to issue national ambient air quality standards for CO2 under Section 109. This in turn would require all 50 States and the federal government to revise their implementation plans to force sources to reduce emissions of CO2. Among the sources so affected would be the plants operated by the defendants in this case. So it would appear that the Act contains a mechanism that addresses greenhouse gases after all at least potentially. Unfortunately for the defendants, and happily for the Attorneys General, EPA may have foreclosed this line of argument. A legal opinion issued by EPA General Counsel Robert E. Fabricant on August 28, 2003, concludes that EPA does not have authority to regulate CO2 under the Clean Air Act because CO2 does not fall within the Act s definition of an air pollutant. My view is that this legal opinion is wrong. The Act is written so broadly that just about anything, including water vapor, is an air pollutant. But, the Fabricant Memo obviously allows the Attorneys General to argue that any attempt to petition EPA to list CO2 as a criteria pollutant would be futile, because the agency would be obliged to reject such a petition, given the opinion of its general counsel that CO2 is not an air pollutant. With the listing option blocked, the Attorneys General truly have no remedy under the Clean Air Act. Hence there is no conflict between a federal common law judgment and the Air Act. Hence the federal common law is not preempted. The crucial question therefore is which reading of Milwaukee II is better field preemption or conflict preemption? This is a tough call, but for three reasons I would incline toward the field preemption reading being the one courts are more likely to adopt. First, Milwaukee II emphasized that the presumption against preemption that applies when a court confronts a question about whether state law is preempted does not apply when the question is whether federal common law is preempted. Instead, something of the opposite presumption is appropriate: [W]e start with the assumption that it is for Congress, not federal courts, to articulate the appropriate standards to be applied as a matter of federal law. The field preemption theory is more consistent with this presumption in favor of preemption than is conflict preemption.second, shortly after Milwaukee II, in the Sea Clammers decision, the Court restated its holding as follows: the federal common law of nuisance in the area of water pollution is entirely preempted by the more comprehensive scope of the [Federal Water Pollution Control Act]. This is just a line in a Supreme Court opinion. But lower courts are likely to pay close attention to it. It sounds more like field preemption than conflict preemption to me. Third, the recent history of the Clean Air Act suggests that, insofar as multijurisdictional air pollution problems are concerned, congressional silence means that the problem has remained unregulated until Congress has taken affirmative action. Three episodes in particular are consistent with this reading. 7
The first involves acid rain. Acid rain was the great transboundary pollution controversy of the 1970s. Northeastern states were pitted against Midwestern states. Efforts were made to get EPA to list acid rain as a criteria pollutant, and to restrict emissions of precursor gases under the transboundary provisions of the Clean Air Act. All these efforts failed, largely because of EPA s reluctance to take on an issue that intensely divided the States without clear congressional guidance. Congress finally addressed the problem with a comprehensive new regulatory program in the 1990 Amendments, a program that was superimposed on top of the existing Clean Air Act mechanisms. The second episode involves depletion of the ozone layer of the atmosphere by CFCs and halogen gases. This was a truly global issue, since all agreed that the ozone layer was being attacked by gases in the upper atmosphere emitted from sources all around the world. As with acid rain, the solution was not found by employing the existing provisions of the Clean Air Act. Instead, the United States entered into the Montreal Protocols, which called for rapid phaseout of CFCs and halogens, and Congress implemented the agreement by enacting a new regulatory program, again superimposed on the existing Clean Air Act mechanisms, to achieve this phaseout among domestic American sources. The third involves ground level ozone. A number of States along the eastern seaboard have complained bitterly for years that their ability to comply with National Ambient Air Quality Standards has been comprised by ground level ozone wafting in from downwind states to the west. Traditional mechanism designed to provide from consultation over interstate effects in drafting State Implementations Plans did no good. Litigation did no good. Then, in the 1990 amendments, Congress specifically ordered that an interstate ozone transport region among the affected states be established, and set deadlines for action. Only then did we begin to see some action on tackling the problem of transboundary ozone. These episodes of course present an is/ought dilemma. Even if the pattern has been that Congress must speak before anything gets done about multijurisdictional air pollution problems, it does not follow that prior congressional action is a normative requirement. But my guess is that courts will be strongly motivated by pragmatics in trying to determine whether they should play the role of first mover, or should await the blessing of Congress. If recent history suggests that nothing will happen without a congressional blessing, court will be inclined to interpret that law in a disputed area as requiring a congressional blessing. So, as to my second issue whether the federal common law of nuisance has been preempted by the Clean Air Act in the context of transboundary air pollution, my cautious answer is most like yes. If I am right, then the current suit will be dismissed, remitting the Attorneys General to file their action in one or more state courts under state public nuisance law. Where, by the way, Supreme Court authority suggests they will have to apply the public nuisance law of the source state not their own public nuisance law. But that is another issue I do not have time to address today. 8
William Sorrell, Attorney General of Vermont: Let s hear the reactions from the panel. D. Michael Grodhaus, Assistant Attorney General of Ohio: On behalf of Ohio Attorney General Jim Petro, who could not be here today, I would like to thank you for giving me the opportunity to speak to you on this important issue. Attorney General Petro is always encouraging our staff to be bold, to think outside the box. So if he were here today, on the one hand he would have commended the Attorneys General who brought this suit for thinking outside the box, for taking a novel approach to tackle this problem. This suit definitely presents a new and novel way of addressing the problem of global warming. However, despite our admiration for the novel thinking that led to the filing of this suit, we do have some serious reservations about it. In short, we are concerned about the selective nature of this suit. By selective, we mean that in a suit that was portrayed as doing something serious about a big problem like global warming, it ends up being a suit against only eight companies in but one industry. Before I explain this further, let me describe what the Ohio Attorney General's Office did since the press conference was held announcing the filing of this suit. As you can imagine, this suit was big news in Ohio. Two out of five defendant s corporate headquarters are located in Ohio. Further, a lot of raw materials involved in the production of electrical energy also come from Ohio. Within a day of the announcement, we received a letter from our State Senate asking that the Attorney General intervene in the suit on the plaintiffs side. As a result of that request, we carefully studied the complaint. We met with our Assistant Attorneys General who represent our state EPA and our state Public Utilities Commission. We also went through a lot of research from both environmental groups and utility trade associations on the issue of global warming and carbon dioxide. After getting all the information and sifting through it, we made a decision not to intervene on the plaintiffs side. (I should add that we also received a request asking us to intervene on defendants side, which we also declined to do.) In the end, our analysis of the factual issues related to this suit paralleled that of the Samuelson s article that appeared in the Washington Post, though we do not necessarily agree with the rather harsh tone nor the motives ascribed to Attorneys General in that piece. However, we agreed with Samuelson s math. If you start with a premise that the U.S. contributes 25% of the world CO2 emissions and these five defendants account for 10% of the U.S. total, then even if we shut down all these companies power plants tomorrow which is far more drastic than the relief requested in this suit -- we would realize only a temporary 2.5% reduction in world CO2 emissions. As Samuelson notes, that small reduction would be only temporary because worldwide CO2 emissions continue to grow by about 2% every year, mostly due to emissions from the still 9
developing countries. So the rest of the world would soon eat up this small 2.5% reduction. Another concern we have with the selective nature of this lawsuit is that the case only deals with one industry the electric utility industry. The suit does nothing to address the second leading cause of CO2 emissions in this country, the transportation industry. As part of our decision making on whether to intervene in this suit on the plaintiffs side, we spent a lot of time looking at air quality data on the U.S. EPA website. The EPA website has a chart of CO2 emissions by state and by source over the 11 year period 1990 through 2000. By looking at the EPA spreadsheet, we found that over this 11 period, electric utilities accounted for about 34.7% of U.S. CO2 emissions. Transportation sources accounted for about 31.9 %, only 2.8% less than the electric utility industry. If you look at the state-bystate information on the EPA web site, California, for example -- one of the plaintiff states in this suit -- emitted 2.9 billion metric tons of CO2 from transportation sources over that 11-year period, more than 3 times that of the Ohio transportation sector and about 75 % more than Ohio s entire utility industry. In the year 2000 alone, transportation sources in California accounted for 85% more CO2 emissions than Ohio s entire electric utility industry. Comparing all California and Ohio emission sources reveals that in 2000, California emitted 39% more CO2 than did Ohio. Based on this data, it would seem that the State of Ohio could use a similar common law nuisance theory to sue California for allowing so much CO2 from its transportation sector to be emitted into the atmosphere. However, we are not going to do that. The reason that we are not going to do that is because we believe that it is inappropriate for one state to use the court system to oppose a cost in essence, an unvoted tax on another state or another part of the country for something that is a national or global issue. If the plaintiff states succeed in this case, they will end up imposing an additional cost on the defendant utility companies that the companies undoubtedly would seek to pass on to their customers. I am one of those customers. I live in Columbus, Ohio, and my utility company is one of the defendants, AEP. Personally speaking, I would not mind paying a little more on my electric bill to help address environmental problems like global warming. But I would object to paying that premium if those of you here today from California, New York or any other of the plaintiff states are not paying it, too. If we are to impose additional costs on Americans to address national or global problems like this, then we should do so on a national scale, not on a state-by-state basis. The issue of global CO2 reduction is complex and involves many hard policy choices. For example, California recently enacted more stringent automobile CO2 emission policies, which is a great victory for the environment considering the huge amount of CO2 emissions from the transportation sector in California, as I mentioned earlier. The problem, however, is that experts estimate that this new emissions standard will add about a thousand dollars on average to the purchase price of a new car in California, thereby placing further out of the reach the ability of lower income Californians to buy a new car. 10
Another interesting policy choice that Samuelson notes in his Washington Post article is that we could eliminate many of these CO2 emissions problems by expanding the use of a technology that has been in use for years, is well known, and can supply us with electrical energy in the kinds of quantities that solar and wind power cannot. That technology is nuclear power. But how many environmental groups would be in favor of building 100 new nuclear power plants in this country? Because of the complex policy questions involved in reducing CO2 emissions, but still generating the energy this country needs to light our homes and business and drive our cars, this is inherently a political issue and should be a non-justiciable one. Precisely because of the hard policy choices that need to be made and the huge costs involved, the people s elected representatives the President and the Congress -- should be the ones to deal with the issue of reducing CO2 emissions. Several bills have been and are pending in Congress that deal with climate change issues. It is our position that it is in that arena, not the judicial arena, that those who seek to reduce or regulate CO2 emissions should devote their attention and efforts. So while we commend our friends and colleagues in the eight state Attorneys General offices for trying something novel in this area, and while we look forward to continuing to work with them on many other issues of importance to the states and our citizens, in the end we in Ohio decided that this suit was an approach with which we respectfully disagree. William Sorrell, Attorney General of Vermont: We have a respectful disagreement with Ohio. They mentioned the acid rain suit. Just to give you an idea: sulfur dioxide causes acid rain. In 1998 all sources from within Vermont emitted a total of 8,000 tons of SO2. During the same year from just from one American Electric plant in Ohio, it was 156,000 tons of SO2 emitted. If Maine is the nation s tailpipe, then Vermont is the muffler. J Kevin Healy, Partner, Bryan Cave LLP: When this case was filed, I was called by a reporter from the Bureau of National Affairs, who asked me to comment. I told the reporter that my immediate reaction to the filing of this case was that a lawsuit was inevitable. I felt this way because climate change has emerged as one of most pressing problems facing our society. When a problem so enormous arises and where no regulatory initiatives are developed to address it, something is going to give: there is going to be public nuisance lawsuit filed by somebody. If you look at the history of environmental law, public nuisance litigation is what it was all about, before the landmark legislation of the 1970s was enacted. One need only look at the allegations in the complaint in State of Connecticut v. AEP to get a feel for the enormity of the problem of climate change. The attorneys general are saying that there will be more heat waves, smog, death, asthma, sea levels rising, 11
flooding, damage to water supplies, severe storms, disruption of ecology, and damage to agriculture and fisheries as a result of the problem. This is an amazing and a troubling document to read. More troubling is that the allegations are not crazy; they are in line with what a majority of scientists are now predicting. In fact, there is a consensus among scientists that climate change is a very significant and pressing problem and that human activity is at least one of the factors that are causing it. It is fair to say that there is not much happening on a federal level in dealing with climate change. The President has decided not to seek ratification of the Kyoto Protocol, and is not seeking to reduce greenhouse gases by means of a mandatory program. Rather, the administration has decided to pursue voluntary initiatives in order to address the issue. The US has been seeking to reduce greenhouse gas emissions on a voluntary basis for 10 years, and NRDC reports that CO2 emissions have increased during that period by 25%. According to NRDC, over that same time period emissions of sulfur dioxide -- a regulated pollutant -- decreased by 20 to 25%. However, it is EPA s opinion that CO2 is not a regulated pollutant under the Clean Air Act. In a formal general counsel s opinion, Robert Fabricant stated that there is no indication that Congress intended the EPA to regulate in this area -- that climate change is a different issue than air pollution. The consequence of that position is that Congress did not intend the Clean Air Act to occupy the field, and that the federal common law with respect to climate change has not been preempted. One other observation on the question of preemption: when Milwaukee II was decided, federal law did touch on water pollution, as the court in that case observed. The same is true here. The Clean Air Act as it currently reads and other federal laws are not silent on the issue of climate change -- there are some provisions relating to research and voluntary initiatives. However, no comprehensive statute or regulatory scheme is in place. If the federal government is going to regulate greenhouse gas emissions, it will be through the enactment of an entirely new statute. This situation favors the AGs on the issue of preemption. But that does not mean that the States will necessarily prevail in this case because there is still the issue of what is a public nuisance. In order to win this case, the plaintiffs will have to show that there is harm to the general public, that the defendants conduct is contributing to that harm, and that such conduct is unreasonable. These first two elements aren t going to be such a big deal. As Peter Lehner observed at a conference I participated in several months ago, the law is OK with uncertainties -- plaintiffs only have to establish their case by a preponderance of the evidence. So I think that the issue will come down to whether the defendants conduct is unreasonable. I think that is fair to say that something unreasonable is going on with respect to climate change. As a societal issue, you could say that it is unreasonable not to respond vigorously to an issue that is as ominous as this one -- but are these particular defendants acting in an unreasonable way? Let s say that their emissions are in compliance with the law. David Hawkins said that some of the defendants are even taking steps voluntarily to reduce their greenhouse gas emissions. At the same time, their competitors are not doing 12
much if anything to address the problem. Keep in mind that every company on earth, and even every person on earth is contributing to greenhouse gas emissions. I know, you will say that the defendants in this case are major contributors, that you have got to start somewhere, but does that make them legally liable for contributing to a public nuisance? When you think about it, if the Court gets to the question of unreasonable conduct, it will be a landmark case -- a pronouncement from a federal court on what is and is not reasonable conduct with respect to climate change would be a very big deal. The plaintiffs will hit another problem if this case gets that far: that of a federal judge trying to decide whether to exercise a power of equity by enjoining the defendants to take affirmative steps to reduce greenhouse gas emissions. For example, she is going to wonder if singling out these five defendants is fair, while their competitors are not required by any legal mandate to do anything to address the issue. In balancing equities, the Court will confront other problems. For example, the states bringing the lawsuit don t themselves have mandatory programs for decreasing emissions. Moreover, burdens will be placed upon the defendants and their customers, by issuance of an injunction, and on the other side of the equation injunctive relief won t do much to redress the harms being alleged by the plaintiffs. There is also a question of judicial resources; if the judge were to grant injunctive relief, she would be diving into a global issue of massive proportions. Is she going to want to get into this, going to want to oversee the implementation of the decree? I think there is going to be a very serious issue there. I wonder whether if this case proceeds to discovery, the parties are going to want to settle. A settlement at that stage might be a good thing for the defendants, because enormous amounts of money are going to be spent on climate change. Even though these plaintiffs are not seeking money damages, if the court finds that the defendants conduct is unreasonable under the circumstances that would not be a good thing for them. From the perspective of future risk, I would be uncomfortable, if I were a corporate counsel, to have a federal judge saying, after fact-finding, that my client s conduct was unreasonable and contributing to the problem of climate change. In sum, from my perspective I believe that there is a potential for something good to come out of this case in the form of guidance for industry. The basic problem climate change poses to business leaders is uncertainty. It is like they see a train coming and don t know what to do about it. For that reason, I think that a judicial guidance on what sort of conduct is reasonable or unreasonable under the circumstances would be a good thing. This lawsuit may also turn out to be one of the pressures that cause the federal government to take action to address this issue, by enacting a well reasoned and deliberate regulatory program. 13
Q & A William Sorrell, Attorney General of Vermont: We are going to ask questions now. As moderator I am going to ask the first question. Professor, you did talk about what the lower courts are likely to do, but this might get to the Supreme Court. Given the issue of federal versus state s rights, liberal versus conservative, and the position on powers of the states taken by the Rehnquist court, what do you think that the Supreme Court would do on these preemption issues? Tom Merrill, Professor of Law, Columbia Law School: I have very little doubt that the Supreme Court would find the federal common law preempted. I think that it is the clear message in Milwaukee II, which I think sort of marks the beginning of the time period where the modern court is skeptical of idea of federal common law. There is a case, Boil v. Universal Technologies, where Justice Scalia recognized federal common law in a case involving the military. He told later generations of clerks that he should not have given in to the temptation to protect military contractors in this way. He s not going to be sympathetic to creating a right of action for the AG to go after utilities companies. James Milkey, Assistant Attorney General of Massachusetts: I find myself in an odd position. With due respect to the AG bringing suit, we chose not to be a part of the common law case. Massachusetts took the lead in the pending legislation under the Clean Air Act, and we do not expect to lose in reversing Fabricant opinion. In light of your views on the common law case, aren t you on the wrong side of the CO2 case? Michael Grodhaus: I can tell you that in terms of the case on the Fabricant opinion, there were other dynamics in terms of the state of Ohio that led us to make that decision. At times AG have freedom of action, at times you have clients whose views you wish to heed. And that s all I want to say on that question. Jeffrey Sachs, Director of the Columbia Earth Institute: I want to thank the law school and the AG for doing this. One of the things that I find as the head of the Earth Institute is that the huge amount of the debate in our country is about the facts, which is surprising. Some people read the Wall Street Journal and believe it. I was at a symposium that GE sponsored, National Conference on Utilities, with the heads of the industry there. These were heavy hitters who knew their subject, technology, but I was amazed that they actually knew very little about the science of this issue. One head was surprised that I said that the science was clear on this issue. The fact is that most people that are opposed to this issue do not realize how strong the scientific consensus really is. While one can always find a few scattered voices, this is no longer a really scientific debate about the seriousness of what may lie ahead. So, I think that the public education role is extremely important. I find shocking statements by our elected 14
representatives. The more the public learns about this, the easier it will be to confront these issues. I wanted to say a bit about the Earth Institute and describe one of our own attempts to contribute to public policy in this area. The Center for Climate Sciences, run by Professor Jenson, runs a big climate model, which has been documenting this for 20 years. It is a remarkable enterprise. The other is the Lamont-Dougherty Institute, and the basis message is that the Earth climate systems are highly nonlinear and unstable; that what we are doing could actually put us into a decades long abrupt climate change. If you have seen the movie, you know about the ocean conveyer belt. Let me say very briefly that if any of you would like scientific briefings, on behalf of my science colleagues, not only would we be delighted to help you, but I think this would be helpful to you. We are launching a roundtable, which is an attempt to bring global leaders together with the science. Even with people like CEOs of the utility companies, or of the auto companies, people with disparate interests, this could be very useful. My hope is that if you can put serious people in a room and not let them get away with nonsense, that we ll be able to narrow the differences and find some kind of policy consensus on this. I would be delighted if in some way the attorneys general find a part of this conference relevant. We would be happy to bring some representation to your side in doing that. Thanks for doing this and for the chance to say hello. 15