Recent Federal and State Court Decisions Cast Doubt on Whether State Nuisance Claims Are Preempted by the Clean Air Act
Kenneth A. Reich, Esq. Kenneth Reich Law, LLC
Recent Federal and State Court Decisions Hold that Sources with Clean Air Permits Mav Be Subiect to State Nuisance Law Claims
Hiding behind all of the buzz about President Obama’s rejection of the Keystone Pipeline project permit, the multiple appeals to the Clean Power Plan final rule and to the final EPA/ Corps of Engineers Rule defining “waters of the United States” are a series of recent federal and state court decisions that may have far more importance to the regulated community in the long term. These cases hold that state nuisance and other tort claims against power plants and other major sources of air emissions are not preempted by the federal Clean Air Act. This is an issue that the Supreme Court specifically left open in its 2011 decision in American Electric Power v. Conn. (“AEP”).
In AEP the Supreme Court held that the Clean Air Act displaces (preempts) claims under the federal common law of nuisance, but it expressly refused to decide whether state nuisance claims are also preempted. The Federal Court of Appeals for the 6th Circuit recently answered this question by holding that state nuisance and tort claims against sources of air emissions are not preempted by the federal Clean Air Act. Little v. Louisville Gas and Electric, decided November 2, 2015, 2015 WL 6646984 and Merrick v. Diageo Americas Supply, Inc., Nov. 2, 2015, 2015 WL 6646818. Little involved a power plant, Merrick involved a whisky distillery. In each case a group of homeowners brought state private and public nuisance actions against the sources alleging that dust and fumes from the plants was coating their properties, reducing the market value, threatening health, etc. The 6th Circuit, relying on the Supreme Court’s decision in Int’l Paper Co. v. Ouellette that source state nuisance remedies (as opposed to claims under the law of an affected state) were not preempted by the federal Clean Water Act and on identical language in each Act preserving state remedies, denied the defendants’ motions to dismiss.
In light of Ouellette and prior decisions by federal appeals courts from the second, third and filth circuits and the supreme court of Iowa that the Clean Air Act does not preempt state nuisance claims, the recent 6th Circuit decision is not surprising. However, as of the date of this blog, the Supreme Court has not answered its own question in AEP.
Another issue that has not been given much attention in the recent caselaw is the effect of the so-called permit shield under the Clean Air Act. The permit shield protects sources with federally enforceable Clean Air permits from suits brought under any federal and state laws that are listed in the permit. See 42 U.S.C. 7661c. It is difficult to reconcile the supposed protection of the permit shield with these recent non-preemption decisions.
The bottom line takeaway: Unless the Supreme Court reverses the recent lower court caselaw trend, sources of air emissions that hold federally enforceable Clean Air permits are not immune from state law nuisance and tort claims based on the law of the source state. However, bringing a suit and winning it are very different things. If the source has good controls to mitigate or eliminate odors, dust and other “nuisances” and/or if the source is located in an industrial area where it is difficult for the plaintiffs to prove that the source caused the alleged nuisance, the suits may ultimately fail. Unfortunately this is modest comfort to sources that have spent hundreds of millions of dollars to comply with their air permits and with new federal regulations.
Kenneth A. Reich of Kenneth Reich Law, LLC concentrates his practice in environmental law and energy law, including both transactions and litigation. He also provides strategic regulatory consulting. For more information, please see his website at www kennethreichlaw com.
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