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2nd Circuit Revives "Federal Common Law of Nuisance" Suit

As the New York Law Journal reports, the 2nd Circuit has overturned a Southern District of New York Decision by Judge Loretta Preska, and revived a lawsuit by 8 states and three private land trusts against power companies, which lawsuit alleges that six power companies operate coal-fired power plants that add too much to the carbon footprint.

The case had been dismissed by Judge Preska as essentially arguing for a "federal common law of nuisance." The power plants operate in conformity with all laws, and as should be obvious, the lawsuit was really a means to enact public policy by the courts instead of the federal and state legislatures.

A rare two judge panel (composed of 2nd Circuit Judges Joseph M. McLaughlin and Peter W. Hall : Judge Sonia Sotomayor was also on the panel that heard oral arguments in the case in June 2006, but was elevated to the U.S. Supreme Court before the case was decided) decided that the 8 states and the three land trusts had standing to sue (the states as parens patriae, or in place of our parents...) and that a federal common law of nuisance was just fine to be adjudicated.

In a restrained understatement, Pat Hemlepp, a spokesman for one of the defendant companies, said,"Since this suit was filed, we have said that litigation is not the best way to address climate concerns," Hemlepp said. "It's a public policy issue and we have said there needs to be legislation. Congress is doing that now and we fully support the legislative approach."

Judge Hall turned aside the defendants' contention that private parties cannot bring federal nuisance common law actions. "Private parties and governmental entities that are not states may well have an equally strong claim to relief in circumstances invoking an overriding federal interest or where the controversy touches on federalism" he wrote.

If this Circuit ruling stands, why should investors have confidence in industrial projects that have received all necessary legal permits to be built? A "federal nuisance suit" filed by a "land trust" or a state other than the permitting state could destroy profitability. Presumably investors would need all 50 states' approval plus that of the "land trusts." Talk about a chill to job creation.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.