Why State Common Law Nuisance Claims Against Fossil Fuel Companies Are Not Preempted

Nuisance claims may not be a particularly effective way to address the problem of climate change, but federal law does not preempt state common law nuisance claims seeking compensatory damages.

Over the past several years, multiple municipalities have filed suit against fossil fuel producers seeking compensatory damages for the consequences of climate change. Because federal common law nuisance claims are displaced under AEP v. Connecticut, these suits all plead state common law claims, including public nuisance.

Much of the action in these cases has focused on whether they can or should be removed to federal court.  One case, BP P.L.C. v. Mayor and City Council of Baltimore, reached the Supreme Court on this question (or, more precisely, on the question of the scope of appellate review of removal claims). Most municipalities filed their claims in state court, but the fossil fuel defendants would prefer to have the cases in federal court, as both sides believe state courts will be less sympathetic to some of the fossil fuel companies' federal law-based defenses, and fighting over removal is one way for the defendants to delay adjudication of the merits.

One case that avoided jousting over removal is City of New York v. Chevron, which New York opted to file in federal court. As they were already in federal court, the fossil fuel defendants claimed the case should be dismissed on, among other things, political question and preemption grounds. The district court agreed, as did the U.S. Court of Appeals for the Second Circuit.

In my view, the Second Circuit got this case horribly wrong. As I explain in this new paper, "Displacement and Preemption of Climate Nuisance Claims," federal law does not preempt state-law-based nuisance claims for interstate air pollution or climate damages. In dismissing the suit, the Second Circuit marshals many powerful policy arguments against addressing climate change through nuisance claims brought by local governments, it misapplies existing preemption and displacement doctrine and premises its holding on a fundamental misconception of the relationship between federal and state environmental regulation.

There may be good reasons to prefer a broad national climate policy to piecemeal litigation, but whether to preempt such claims is a decision that must be made by legislators, not courts, and under existing law, Congress has done nothing to preempt or otherwise obstruct state-law-based nuisance claims concerning climate change (or air pollution more generally). Whatever legal problems the specific claims pled by New York City may face (potentially including personal jurisdiction and the dormant commerce clause, among others), preemption is not among them.

A draft of my paper, which was prepared for a Research Roundtable on Public Nuisance sponsored by the Law & Economics Center, is now up on SSRN. It will be published in a Journal of Law, Economics & Policy symposium. The abstract is below.

New York City and other municipalities have filed state-law-based nuisance suits against fossil fuel companies seeking compensatory damages for the consequences of climate change. Previous nuisance claims, filed under federal common law, were held to be displaced by federal environmental statutes. Defendants have argued that state-law-based claims should likewise be preempted. Yet while the enactment of federal regulatory statutes displaces federal common law actions for interstate pollution, such enactments do not necessarily preempt state common law actions, even where pollution crosses state boundaries, as it is more difficult to preempt state common law than it is to displace federal common law. In City of New York v. Chevron Corp., however, the U.S. Court of Appeals for the Second Circuit concluded the government plaintiffs may not "utilize state tort law to hold multinational oil companies liable for the damages caused by global greenhouse gas emissions." While there may be strong policy arguments for this result, the legal basis for this conclusion is weak. This article provides background on the use of common law suits to address pollution concerns and the history of state-level pollution control measures, before describing the current doctrines of displacement and preemption, and explaining why the legal arguments for preempting state-law-based climate suits are insufficient to justify dismissing these cases, even if equivalent federal common law actions would be properly displaced.