In the recent landmark US Supreme Court case, Massachusetts v. EPA, the Court ruled that EPA's decision not to regulate greenhouse gas emissions from automobiles was inconsistent with the federal Clean Air Act. The implications of this ruling are numerous, and range from new regulation under the Clean Air Act and other federal statutes, corporate environmental disclosure, and litigation alleging climate related damages. The implications that I observe are as follows:
- Symbolic or political significance: The symbolic or political significance of the case derives from the ruling of the highest court in the United States that “the harms associated with climate change are serious and well recognized.” The Court further agreed with Massachusetts that “A reduction in domestic emissions would slow the pace of global emissions increases, no matter what else happens.” Such a ruling of cause and effect by the US Supreme Court may significantly increase public support for congressional action to regulate greenhouse gas emissions and embolden members of Congress to enact climate change legislation. The Chief Justice chided the majority for stepping into this area that he believed should have been left for the political branches of government to resolve.
- Greenhouse gases are air pollutants and EPA has the authority to regulate them: The Court’s ruling that greenhouse gases are “air pollutants” under the Clean Air Act and the narrow room left to EPA not to regulate the emissions of these gases from automobiles puts the matter square in EPA’s hands to decide how it will address greenhouse gases. With the historical objection of the Bush Administration to mandatory restrictions on greenhouse gases and the multitude of greenhouse gas bills before Congress, it would not be surprising if, unless Congress acts, the Administration delayed deciding the issue before the current presidential term is up--leaving the issue to the next president.
- Effect on other vehicle-related greenhouse gas lawsuits: California, Vermont, and Rhode Island enacted their own limitations on vehicle emissions and these regulations were challenged by the automakers. The cases were stayed pending the decision in Massachusetts v. EPA. Based on the Court’s ruling, the challenges to the states greenhouse gas limits on cars appear less likely to succeed.
- Effect on challenges to EPA’s decision not to regulate greenhouse gases from power plants: In addition to the challenge of EPA’s decision not to regulate greenhouse gas emissions, ten states, including Massachusetts, three environmental groups, and two cities, have sued EPA for its refusal to regulate emissions from certain utility and industrial power plants in its promulgation of New Source Performance Standards under the Clean Air Act. In that case as well, EPA determined it did not have the authority to regulate greenhouse gas emissions under the Act.
- Effect on tort suits filed by individuals claiming damages from greenhouse gas emissions: A variety of tort suits have been filed claiming that the emissions of greenhouse gases have resulted in climate change that has damaged the plaintiffs in those cases. For example, in a case known as Comer v. Murphy Oil, filed in Mississippi by Hurricane Katrina victims against defendant classes of oil, coal, chemical and insurance companies, the plaintiffs claim that the emissions contributed to the force of Hurricane Katrina. In another case, eight states, the City of New York, and three land trusts have sued the utilities that are the five largest carbon dioxide largest emitters in the United States. The plaintiffs assert that the emissions of greenhouse gases constitute a nuisance. The perceived challenge in these cases is one of causation, which was a central issue Massachusetts v. EPA and the dissenting opinions—how do you connect certain emissions into a global atmosphere to injuries alleged by specific plaintiffs for a global warming effect. However, plaintiffs attorneys apparently considering the opportunities in this area for some time, may see the decision on standing in the Supreme Court’s climate change decision to open the door to new suits to argue the causation issue.
- Environmental financial disclosure by publicly-traded companies: With the ruling that greenhouse gases are air pollutants and the opinion’s potential to constrain the latitude of EPA in terms of regulation, the case raises the need for companies with significant greenhouse gas emissions, electricity usage, or that produce fossil fuels to review their disclosures in their filings with the Securities and Exchange Commission and perhaps make clarifications or additional disclosures. Combined with the numerous bills in Congress to regulate greenhouse gas emissions and international pressure being on the United States to take action, particularly after the issuance of the International Panel on Climate Change, the potential for regulation has never been greater.
- Broadening standing for States to challenge federal administrative agency action: The majority in Massachusetts v. EPA, adopted a new view of standing or the ability of states to challenge federal administrative action. Responding to this standing analysis, Chief Justice Roberts scathingly criticized the majority’s view in his dissent, joined by Justices Scalia, Alito, and Thomas—as exceeding any previous Supreme Court opinions. The degree to which this beginning of a reduced standard for state standing will thrive and prosper is unclear. The majority did not elucidate as to what it meant by this reduced standard. To the extent it develops in future Supreme Court cases, it could lead to a new level of state power in our federalist system.
