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American Electric Power Company v. Connecticut, 131 S. CT. 2527 (2011) is a United States Supreme Court case decided 8-0 that corporations can not be sued for greenhouse gas emissions (GHG's) under federal common law because the Clean Air Act (CAA) delegates the management of carbon dioxide and GHG's to the Environmental Protection Agency (EPA).

Case Overview
Eight states, New York City, and three land trusts separately sued the same electric power corporations that owned and operated fossil-fuel-fired power plants in twenty states, seeking to cap and abate the defendants' GHG emissions and ongoing contributions to public nuisance of global warming. They alleged that the utilities are the largest emitters of GHG's in the United States, collectively emitting 650 million tons of carbon dioxide each year.

The United States District Court for the Southern District of New York, dismissed plaintiffs' federal common law nuisance claims as non-justiciable under the political question doctrine, and plaintiffs appealed. The United States Court of Appeals for the Second Circuit, vacated and remanded. The Circuit held that the lawsuits were not barred by the political questions and the plaintiffs had adequately alleged Article III standing. Certiorari was granted.

Plaintiffs
One group of plaintiffs was comprised of eight states (California, Connecticut, Iowa, New Jersey, New York, Rhode Island, Vermont, and Wisconsin) and New York City. However, New Jersey and Wisconsin withdrew from the case. The other group of plaintiffs included three nonprofit land trusts: The Open Space Institute, the Open Space Conservancy, and the Audubon Society of New Hampshire.

Defendants
The defendants were four private electric power companies (American Electric Power Co., Cinergy Co., Southern Co. Inc. of Georgia, and Xcel Energy Inc. of Minnesota) and the federal Tennessee Valley Authority.

Issues
1. Whether States, cities and private parties have standing to seek emissions caps on utilities for their alleged contribution to climate change.

2. Whether a cause of action to regulate carbon dioxide emissions can be inferred under federal common law even though the Clean Air Act designates authority for the regulation of emissions to the EPA.

Procedural History
United States District Court for the Southern District of New York

Using the precedence set in Baker v. Carr, the district court dismissed the Plaintiffs' suit as presenting non-jucticible political question. In Baker v. Carr the United States Supreme Court described 6 tests to determine whether a case is justiciable. The most relevant question to this case was, "the impossibility of deciding without an initial policy determination of a kind clearly for non-judicial discretion."

United States Court of Appeals for the Second Circuit

The Second Circuit reversed the judgement of the district court holding that the political question doctrine did not bar the Plaintiffs case from adjudication. The circuit court held that all of the Plaintiffs have standing; under the federal common law of nuisance. The court held that the CAA did not displace federal common law of nuisance. In a ruling in September 2009, the Second Circuit determined the EPA failed to publicize any regulations pertaining to GHG emissions and could not speculate whether the hypothetical regulation of greenhouse gasses under the CAA would pertain to the issues raised by the Plaintiffs. The Second Circuit denied Defendants' request for a rehearing. The Supreme Court granted certiorari on December 6, 2010.

Lower Court Arguments
United States District Court for the Southern District of New York

United States Court of Appeals for the Second Circuit

The Court of Appeals held that the plaintiffs met the threshold as they were not barred by the political question doctrine and had adequately alleged Article III standing. On the merits question, the Court of Appeals held that under the “federal common law of nuisance,” States and private parties may bring suit to abate pollution produced by States or by out-of-state industry (as in Illinois v. Milwaukee). The Second Circuit also held that the Clean Air Act did not displace federal common law (as in Milwaukee I).

The plaintiffs argued, as the Second Circuit held, that federal common law is not displaced until EPA invokes its regulatory authority and regulates greenhouse gas emissions. The Supreme Court disagreed, stating that unlike the courts, the EPA is tasked and equipped with the means to decide whether to regulate emissions and how to do so. In addition, the Supreme Court noted that EPA’s actions are subject to judicial review and EPA “may not decline to regulate carbon-dioxide emissions from power plants if refusal to act would be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”

Supreme Court Ruling
Justice Ginsburg delivered the opinion of the Court, which held that the Clean Air Act authorizes the EPA to regulate emissions and therefore displaces the federal common law right of action to seek abatement of carbon dioxide emissions, precluding the public nuisance claim of the plaintiffs.

The outcome was 8-0 in favor of American Electric Power Co.