It's hard to underestimate the potential business ramifications of the recent Second Circuit ruling in Connecticut v. American Electric Power Co. Over at Gardere's Environmental Practice Group, Richard O. Faulk calls the ruling "overly broad" and says it could have an extraordinary impact on any business that emits greenhouse gases like carbon dioxide far beyond the group of utilites named as defendants in the case.

While U.S. lawmakers are still trying to decide whether to regulate greenhouse emissions, the Second Circuit ruling allows a public nuisance lawsuit to move forward against a group of utilities with power plants in 20 states. Faulk says it's not a stretch to conclude that any business that produces greenhouse gasses could face similar legal exposure. "The decision entails major risks for all industries," he says. "Any industry that generates greenhouse gas emissions is implicated, and that category includes virtually all businesses." 

Faulk says the ruling presents businesses with a "Hobson's choice" scenario in which it may become more advantageous to accept comprehensive federal regulations and statues addressing greenhouse gas emissions rather than risk exposure to such private legal actions. "If, however, the regulations and legislation are not sufficiently comprehensive, industries may still face lawsuits to the extent that claims are not completely preempted." 

As the folks at the Environmental Law Prof Blog note: The case may go to the US Supreme Court and there is a chance that it could be reversed there.  Or it may not.  Also, the US Congress could (and almost certainly will) eliminate all such public nuisance lawsuits when it passes a comprehensive climate change law.  The industry will now be lobbying heavily, saying something like this to the Congress:  “Please regulate us (weakly, of course) so that the courts will stop doing so.” 

This is a classic situation where environmentalists win a big  environmental case based on an old, old legal concept and this gives them bargaining power in the legislative process.  This happened with cases against factories polluting the water without permits in the 1960s, a case against the Trans-Alaska oil pipeline in the early 1970s; a case against clearcutting in the National Forests in the mid 1970s.  In each of those three cases, the law that was involved was a statute that was around 100 years old.  The public nuisance cases cited by the Second Circuit are more than 100 years old today.  Now the bargaining will begin. 

The ruling's impact will be among the issues discussed at the Oct. 28 U.S. Chamber of Commerce Legal Reform Summit in Washington, D.C., where Faulk will serve as a "Climate Change: The New Mass Tort For the 21st Century?" panelist.