Issue 1 - Virginia Law Review

Clean Air Act Preemption of State Common Law: Greenhouse Gas Nuisance Claims After AEP v. Connecticut

In American Electric Power Co. v. Connecticut (AEP), the Supreme Court held that the Clean Air Act displaces federal common law tort claims related to greenhouse gas emissions. This decision effectively signaled the end of a series of public nuisance lawsuits invoking the federal common law as a means of redressing the effects of global warming. While nuisance claims based on state common law could serve as a replacement, their viability depends on an important threshold question: whether, or to what extent, such claims are preempted by the Clean Air Act. This is an issue the Supreme Court raised, but declined to reach, in AEP, and it remains one of the most important questions for the future of greenhouse gas litigation.

This Note addresses that issue by arguing that the Clean Air Act preempts only one variety of state-law nuisance claims: those brought pursuant to the law of a state other than that where the relevant emissions source is located. Claims brought pursuant to the law of the source state, by contrast, should be able to proceed. As this Note demonstrates, this result is compelled by the structure, text, and purpose of the Clean Air Act, as well as by the Supreme Court’s 1987 decision in International Paper Co. v. Ouellette. At the same time, policy considerations generally counsel against using litigation as a means of regulating greenhouse gas emissions. For this reason, Congress should provide for preemption of all greenhouse-gas-related nuisance claims, regardless of which state’s law applies.

Persuasion Treaties

All treaties formalize promises made by national parties. Yet there is a fundamental difference between two kinds of treaty promise. This difference divides all treaties into two categories: treaties that govern the behavior of state parties and their agents fall in one category; treaties in the second category—those I call “persuasion” treaties—commit state parties to changing the behavior of non-state actors as well. The difference is important because the compliance problems for the two sets of treaties sharply diverge. Persuasion treaties merit our systematic attention because they are both theoretically and practically significant. In areas such as international environmental affairs, we simply cannot address critical global problems without them.

I use the term “persuasion” to communicate the observation that the success—and sometimes the very existence—of treaties in this class depends upon whether state parties can successfully enlist private sector support. The theory builds on recent scholarship that identifies the depth of regulatory interdependence between private and public sector actors. Business entities may choose either to cooperate with or to impede domestic regulatory regimes, and their decisions are not fully susceptible to legal control. The business choice is significant on the international stage: without a successful domestic regulatory regime, a state will not be able to keep corresponding international commitments. Moreover, many states do not commit to treaties they cannot implement or enforce. Thus, persuasion treaty regimes must attract the support of relevant business entities, either ex ante (to secure international agreement) or ex post (to achieve results).

The Hurricane Katrina Insurance Claims

The insurance issues that arise in connection with mass torts have been studied with some care. These issues most often involve corporate claims for coverage under Commercial General Liability (“CGL”) insurance policies. The insurance issues that arise in connection with what might be called “mass disasters,” however, have received less attention. These are natural and man-made disasters whose center of gravity is not tort, and therefore not liability insurance, but personal and property losses. The mass disaster that occurred on 9/11 did spawn a variety of non-liability insurance disputes. But even these disputes mostly involved different forms of corporate insurance, such as commercial property and business interruption coverage claims.

The losses that arose out of Hurricane Katrina in August 2005, in contrast, heavily involve individual insurance issues. In particular, tens of thousands of homeowners whose residences were damaged or destroyed by the hurricane had standard homeowners insurance. These policies insure the risk of direct physical loss to the policyholder’s home and other property, subject of course to certain exclusions from and limitations on coverage. The key exclusion in this instance precludes coverage of loss resulting from “flood.” The typical policy also contains an anti-concurrent causation clause, which provides that excluded losses (such as those caused by flood) are not covered “regardless of any other cause or event contributing concurrently or in any sequence to the loss.” Claims made for Katrina-related losses under these seemingly simple policy provisions have spawned widespread litigation and controversy. This Essay briefly surveys these issues and comments on their implications for the availability of insurance coverage in the future.

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