Environmental Law Alert – Climate Change Torts Thrown Out of Court

On June 20, 2011, the United States Supreme Court handed down its 8-0 decision in American Electric Power Co., Inc., et al. v. Connecticut, et al., No. 10-174. In an Opinion written by Justice Ginsburg, the Supreme Court decided that federal common law public nuisance claims could not be maintained against carbon-dioxide and greenhouse gas (GHG) emitting entities. The Court held that such claims were barred because the federal Clean Air Act (Act) displaces such common law nuisance claims. The Court found that Congress had entrusted the United States Environmental Protection Agency (EPA) to decide how GHGs should be regulated, and that federal courts are not entitled to issue their own rules.

The plaintiffs in this case (several states, New York City, and three private land trusts) had brought public nuisance claims against entities that emitted large amounts of carbon dioxide (four private power companies and the Tennessee Valley Authority). The plaintiffs had requested abatement of the alleged nuisance conditions by a decree setting carbon-dioxide emission limits for each defendant at an initial cap, to be further reduced annually.

The District Court had dismissed the suit as presenting a non-justiciable political question, but the Second Circuit had reversed, finding that the State plaintiffs had adequately alleged Article III standing and that the suits were not barred by the political question doctrine.

Initially, the Supreme Court affirmed the Second Circuit’s exercise of federal court jurisdiction by an equally divided court. Four members of the Court held that at least some plaintiffs have Article III standing under the Court’s prior holding in Massachusetts v. EPA, 549 U.S. 497 (2007), which permitted a State to challenge EPA’s refusal to regulate greenhouse gas emissions. The other four members of the Court held that none of the plaintiffs have Article III standing. Therefore, the Court affirmed the Second Circuit’s exercise of jurisdiction.

However, the Court then held unanimously that the plaintiffs could not state a federal common law claim for curtailment of GHG emissions because of their alleged contribution to global warming because the Act as implemented by EPA displaces any federal common law right to seek abatement of carbon dioxide emissions from fossil-fuel fired power plants. The Court noted that the test was whether the Act spoke directly to the question at issue. Here, the previous Massachusetts case made it clear that emissions of carbon dioxide are subject to regulation under the Act. Because the Act directs EPA to establish emissions standards and performance standards, and provides for enforcement of those standards, the Act itself provides a means to seek limits on emissions of carbon dioxide from domestic power plants – the same relief that the plaintiffs sought by invoking federal common law. Accordingly, the Court held that the Act displaced federal common law nuisance claims—at least where the relief requested is abatement.

In reversing the Second Circuit, the Supreme Court held that the federal common law claims had been replaced by the Clean Air Act despite the fact that EPA has not yet issued emission standards for GHGs. The Court reasoned that because the Act sets into place the procedures for EPA to promulgate GHG standards as well as the procedures for judicial coercion if EPA does not, is ample evidence that Congress has “occupied the field” and the use of federal common-law should be foreclosed. The Court further explained that courts setting emission standards with judicial decrees was inappropriate given that experts at EPA are more qualified to develop and promulgate standards given their knowledge of science, economics and technological resources. How this decision impacts Congress and EPA regulation of GHGs also will be very important to follow in the coming months.

As to the future of climate change-related litigation, some have speculated that the Supreme Court’s decision preventing the AEP case from going forward will put an end to climate change-related tort litigation. Others have opined that this outcome is only a temporary setback, and additional legal theories will be developed and tested. The Supreme Court specifically did not decide whether the Act preempts state public nuisance litigation over GHGs. Thus, some plaintiff groups likely will press state common law claims in the future, but may still be met with defenses of “political question” and “preemption” based on the AEP case and other precedent. The implications of this decision on other environmental “toxic tort” litigation where there are statutory programs addressing the contested conduct also will be important to watch.

U.S. Supreme Court: Federal Court Could Not Enjoin State Court from Addressing Class Certification Issue

In a decision with implications for companies facing class action litigation, the U.S. Supreme Court ruled unanimously that a federal district court, having rejected certification of a proposed class action, could not take the additional step of enjoining a state court from addressing a motion to certify the same class under state law. In an opinion authored by Justice Kagan, the Court in Smith v. Bayer Corp., No. 09-1205, 564 U.S. ____ (June 16, 2011), held that principles of stare decisis and comity should have governed whether the federal court’s ruling had a controlling or persuasive effect in the later case, and the state court should have had an opportunity to determine the precedential effect (if any) of the federal court ruling.

Facts of Bayer

In Bayer, a plaintiff sued in West Virginia state court alleging that Bayer’s pharmaceutical drug Baycol was defective. After removal to federal court, the plaintiff moved to certify the action as a class action on behalf of all West Virginia purchasers of Baycol. The federal court rejected class certification because proof of injury from Baycol would have required plaintiff-specific inquiries and therefore individual issues of fact predominated over common issues. It then dismissed the plaintiff’s claims on independent grounds.

A different plaintiff, who had been a putative class member in the first action and was represented by the same class counsel in the federal action, moved to certify the same class in West Virginia state court. Bayer sought an injunction from the federal court in the first case, arguing that the court’s rejection of the class bid should bar the plaintiff’s relitigation of the same class certification question in state court. The district court granted the injunction, and the Circuit Court affirmed.

The Supreme Court’s Decision

The issues before the Court were (i) the district court’s power to enjoin the later state-court class action to avoid relitigation of the previously decided class certification determination; and (ii) whether the federal court’s injunction complied with the Anti-Injunction Act, 28 U.S.C. § 2283, which permits a federal court to enjoin a state court action when necessary to “protect or effectuate its judgment.” The Court granted certiorari to resolve a circuit split concerning the application of the Anti-Injunction Act’s relitigation exception.

The Supreme Court overturned the injunction. It determined that enjoining the state court proceedings under the circumstances of the case was improperly “resorting to heavy artillery.” The Court noted that “[d]eciding whether and how prior litigation has preclusive effect is usually the bailiwick of the second court.” It observed that a federal court may under the relitigation exception to the Anti-Injunction Act enjoin a state court from relitigating an already decided issue-including whether to certify a case as a class action-when two conditions are met: “First, the issue the federal court decided must be the same as the one presented in the state tribunal. And second, [the party in the later case] must have been a party to the federal suit, or else must fall within one of a few discrete exceptions to the general rule against binding nonparties.” Notably, the Court commented that, in conducting this analysis, “every benefit of the doubt goes to the state court” being allowed to determined what effect the federal court’s prior ruling should be given.

The Court held that neither condition was met in Bayer. The issue of class certification under West Virginia’s Rule 23 (the language of which mirrored Federal Rule of Civil Procedure 23) was not “the same as” the issue decided by the federal court because the West Virginia Supreme Court had expressly disapproved of the approach to the “predominance” analysis adopted by federal courts interpreting the federal class action rule. In addition, the Court also held that unnamed persons in a proposed class action do not become parties to the case if the court declines to certify a class. By contrast, the Court affirmed the established rule that “a judgment in a properly entertained class action is binding on class members in any subsequent litigation.”

According to the Court, Bayer’s “strongest argument” centered on a policy concern that, after a class action is disapproved, plaintiff after plaintiff may relitigate the class certification issue in state courts if not enjoined by the original court. The Court suggested that these concerns were ameliorated by the Class Action Fairness Act of 2005, through which Congress gave defendants a right to remove to federal court any sizable class action involving minimal diversity of citizenship. The Court noted the availability of consolidating certain federal class actions to avoid inconsistent results and offered that the Class Action Fairness Act’s expanded federal jurisdiction should result in greater uniformity among class action decisions and in turn reduce serial relitigation of class action issues.

Implications of Bayer

Bayer exposes defendants to the potential for repetitive class action litigation by plaintiffs in state courts. Bayer does not alter existing standards for class certification, however, and its holding is a limited one: a defendant who has defeated class certification may not invoke the “heavy artillery” of an injunction against future state-court bids for class certification in a case raising the same legal theories unless that future bid is advanced by the same named plaintiff(s) (or a person who falls within one of the few discrete exceptions to the general rule against binding nonparties) and the defendant can establish that state standards for class certification are similar to Federal Rule 23. In this regard, the Court held that “[m]inor variations in the application of what is in essence the same legal standard do not defeat preclusion,” but if the state courts would apply a “significantly different analysis” than the federal court, an injunction will not be upheld. The Anti-Injunction Act analysis from Bayer applies directly only where the enjoining court is a federal court and the second court is a state court.

The Bayer opinion also highlights avenues for companies facing serial class actions to mitigate risk. The Court all but acknowledged that “class actions raise special problems of relitigation.” These relitigation problems in the class action context and beyond will remain after Bayer. But a number of strategic steps can be taken to reduce the burdens, expenses, and risks associated with multiple lawsuits. For example, the enactment of the Class Action Fairness Act provides expanded federal jurisdiction over many class actions and therefore permits enhanced removal opportunities for state court class actions. If subsequent class actions are filed and removed, the Court noted that multidistrict litigation proceedings may be available for coordination of pretrial proceedings to avoid repetitive litigation. Even if transfer and consolidation cannot be effectuated, the Court observed that “we would expect federal courts to apply principles of comity to each other’s class certification decisions when addressing a common dispute.”

Finally, the Court’s treatment of absent class members as nonparties to the class certification question in the first action may have significance to other issues in class actions, including often hotly disputed issues relating to communications with putative class members by the defendant before class certification.

What ICE’s Latest Memo on Prosecutorial Discretion Means for Future Immigration Cases

Last week, Director of Immigration and Customs Enforcement (ICE), John Morton, reminded ICE officials of their duty and obligation to use good judgment in the prosecution of immigration cases.  In a culture where many people still believe that “enforcing the law” and “removing people” are exactly the same, Morton’s new memo is likely to shake some things up. While the memo doesn’t change the law in any way or end controversial programs like Secure Communities, it does serve as a much-needed guide for ICE officials on how, when and why to exercise prosecutorial discretion in immigration cases.

In the memo, Morton reminds ICE officers and attorneys that they should never assume that they are powerless to affect the outcome of a case—instead, that authority rests with individual officers and attorneys to determine whether or not the positive factors in a given case outweigh the value of prosecuting that case.  In fact, ICE officials need to do this regardless of whether or not immigrants or their attorney have asked for an exercise of prosecutorial discretion. The memo reiterates the need to triage cases based on ICE priorities, emphasizing the goal of putting limited resources into cases and activities that protect the country by going after those who seek to do it harm.

While Morton started down this road last year with a memo on enforcement priorities, the circumstances of this memo are significantly different. First, rather than simply reiterate the memos of past immigration officials, this memo synthesizes what has come before, offering a more detailed discussion of the nature of prosecutorial discretion, when it can be exercised, and what kind of factors should be taken into account.  Second, the list of factors themselves is a more concrete framework for guiding decision-making. Government officials often like to couch admonishments to exercise good judgment in benign phrases like “totality of the circumstances” without giving concrete examples.

This time around, Morton lists 19 factors, ranging from age and when someone came to the country to community ties and likelihood of relief through a legal benefit in the future.  In addition to this non-exhaustive list, the memo emphasizes that some factors should be red flags in a case, indicating the need to look and think carefully about whether it makes sense to go forward.  These special factors include whether the person is a veteran or related to someone in the military, is a long time LPR, came to the United States at young age, is pregnant or nursing, has a serious physical or mental disability, is very young or very old, or has a serious health problem.

That’s a lot to take into account, but will likely have a profound impact on DREAM students (who fit into many of the categories listed), vulnerable populations caught up in the immigration system, and military families where family members are in removal proceedings even as a spouse or child is on active military duty.  None of these folks have any new form of relief, but under this memo, the direction is clear—these are important factors to take into account when exercising judgment.

So what does the memo mean for future immigration cases? While there are no categorical pronouncements that all DREAM act students shall receive deferred action or all Secure Communities cases will be halted, the Administration—by articulating the kinds of factors that should go into good decision-making—is signaling both what it finds important and what types of cases merit at least an individualized assessment.  This is a long overdue contribution to smart immigration enforcement.

People need clear direction but they also need clear authority to know that they have the power—the responsibility, actually—to consider every single case as an individual life rather than a tally mark. Discretion is a difficult thing to exercise, but it is even harder when you have no sense that anyone will stand behind you.  If ICE officials follow the guidance in this memo, they can take some comfort in knowing that individual discretion has been sanctioned from the top.

Admittedly, turning the latest Morton memo into reality will require a lot of hard work and monitoring both inside and outside the government. But government officials and advocates now have a new tool for doing the right thing—and wise use of it promises to improve our immigration system one case at a time.

Photo by ICE.gov.