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Let us hope that cooler heads prevail...

Washington (Platts)--6Dec2010/604 pm EST/2304 GMT

The US Supreme Court Monday agreed to review a case involving American Electric Power and four other large coal-fired utilities in which an appeals court ruled that states and private parties can file lawsuits under federal common nuisance law to cap sources' levels of greenhouse gas emissions.

The nation's largest coal-fired utilities requested an immediate review of the ruling by the US Court of Appeals for the 2nd Circuit that they fear would allow district courts to set "the permissible level" of GHG emissions.

Justice Sonia Sotomayor "took no part in the consideration or decision" of the American Electric Power v Connecticut petition, the court said in its notice granting certiorari.

Sotomayor was a member of the original 2nd Circuit panel that heard the AEP case and she has recused herself in instances where the Supreme Court hears cases from that circuit.

The case began in 2004, when AEP, Southern Company, Tennessee Valley Authority, Xcel Energy and Cinergy, a subsidiary of Duke Energy, were sued under public nuisance law by Connecticut, New York, California, Iowa, New Jersey, Rhode Island, Vermont, Wisconsin and New York City for emitting greenhouse gases.

The states and city argued that the utilities, which operate across 20 states, were the five largest sources of carbon dioxide in the US and "among the largest in the world" that emit the greenhouse gas.

The utilities prevailed at the district court level, but on appeal, the 2nd Circuit concluded in September 2009 that the lower court erred in dismissing the complaints and that the states had standing to file their claims under the federal common law of nuisance and that their claims had not been displaced by federal action.

Energy and climate change law experts say that a decision on whether to review the 2nd Circuit ruling allowing GHG emissions claims under federal common law of nuisance will have important repercussions.

Legal experts expected the Supreme Court, led by conservative Chief Justice John Roberts, to grant certiorari to review the 2nd Circuit decision.

And they count at least four votes against the appeals court opinion that states have standing to pursue GHG limits against utilities through federal common law of nuisance.

More importantly, they said, the Supreme Court could use their review of the 2nd Circuit opinion as a means to weaken or even reverse its own 2007 Massachusetts v the Environmental Protection Agency watershed ruling that concluded the US Environmental Protection Agency has authority under the Clean Air Act to regulate GHG emissions.

"An ultimate ruling that this kind of litigation is appropriate could have significant implications for many kinds of stationary and mobile sources of air pollution," said Michael Gerrard, who teaches at Columbia Law School and directs its Center for Climate Change Law.
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