Is Climate Change Going Back to the Supreme Court? (Minnesota Edition) [UPDATED]

The justices are considering whether to grant certiorari in Minnesota's lawsuit against energy companies.

The Supreme Court was scheduled to consider a potentially significant climate-change case at its conference last Friday: American Petroleum Institute v. Minnesota. The case did not appear among the cert denials in today's order list, suggesting the justices may still be considering whether to grant the case.

API v. Minnesota is one of several cases filed by state and local governments against energy companies seeking recompense for the harms caused by climate change, including the expenses state and local governments must bear to improve and adapt infrastructure to account for a warmer world. Because the federal common law of interstate nuisance is entirely displaced by the Clean Air Act, nearly all of these suits have been filed in state courts. Seeking to argue these cases are preempted, the energy company defendants have sought--unsuccessfully--to have these cases removed to federal court. Their removal arguments have been rejected in the 1st, 3rd, 4th, 6th, 8th, and 9th Circuit Courts of Appeals and, thus far, the Supreme Court has shown little interest in reviewing these decisions.

The apparent relisting of API v. Minnesota suggests one or more justices may think this case is worth a second look, despite the lack of a meaningful circuit split. Justice Kavanaugh previously indicated his interest in hearing a similar case, so perhaps he is writing a dissent from denial of certiorari, or working to convince his colleagues this case is worthy of the justices' attention.

The primary issue in the case is whether there are grounds to remove Minnesota's suit to federal court. A unanimous panel of the U.S. Court of Appeals for the Eighth Circuit rejected the removal argument. For reasons I explained in this post (and addressed at longer length in this article) the Eighth Circuit was entirely correct.

Last week, former Attorney General William Barr and my friend Adam White of the American Enterprise Institute argued in the Wall Street Journal  that this case "belongs in federal court, not in a Ramsey County courtroom." Their article makes several strong policy arguments for preferring federal policymaking over state climate change litigation as a means of addressing climate change. What is lacking, however, is a legal basis for yanking these cases into federal court.

Write Barr and White:

The federal courts have jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States," according to the U.S. Code. When such cases are filed in state courts, they can be "removed" to the federal courts. . . .

Early on, Congress recognized the need to ensure that the federal judiciary remained firmly in control of interstate litigation and, eventually, of federal questions more broadly. A plaintiff may be the master of his own case in some ways, but a defendant is entitled to the protections of federal laws, including laws preserving a defendant's access to federal judicial review of genuinely federal issues. And the people—through their elected representatives—are entitled to the constitutional process for making the law. . . .

Choices about how to handle energy policy must be made through the Constitution's democratic processes, not by federal judges or administrative fiat—and certainly not by state and local judges. The Minnesota case belongs in federal court to ensure that federal law governs Mr. Ellison's gambit.

Barr and White are entirely correct that all defendants, even oil companies, are "entitled to the protections of federal laws." The problem here is that there are no federal laws divesting state courts of jurisdiction to hear these sorts of claims, let alone any federal laws that can be plausibly interpreted to preempt state-law causes of action for climate change. The "gambit" here is the effort by energy companies to convince the Supreme Court that the general rules of removal and preemption should be set aside in the context of climate change.

When the Supreme Court held unanimously that the federal Clean Air Act displaces the federal common law of interstate nuisance it expressly reaffirmed precedents holding that federal environmental laws do not preempt state law claims against polluters, provided they are based on the law of the source state. Further, because the federal common law of interstate nuisance has been displaced, it cannot preempt state law claims for interstate pollution either. These are points I make at length in the article linked above.

Barr and White are correct that "choices about how to handle energy policy must be made through the Constitution's democratic processes," but no one is suggesting otherwise. Nothing in the Minnesota lawsuit undermines the right of "the people—through their elected representatives" to enact laws governing climate change. Congress has unquestioned authority to enact laws governing greenhouse gas emissions and addressing the threats posed by climate change, and there is no doubt that should Congress choose to preempt state-law suits about climate change, such suits would be preempted. But Congress has yet to make any such choice.

In West Virginia v. EPA, the Supreme Court made clear that policy choices about "major questions," such as how federal energy policy should address the threat of climate change (if at all), must be made by the people's elected representatives in Congress. Even when the stakes are high, a federal agency like the EPA lacks the authority to rewrite federal laws to conform to its policy vision. Unelected regulators only have the power to regulate that has been delegated to them by Congress.

By the same principle, the economic or political importance of federal energy policy does not justify reconceiving federal environmental statutes or distorting federal law so as to remove state law claims to federal court, let alone to find such claims preempted, when Congress has not so provided. As in West Virginia v. EPA, the ultimate policy choice here is one to be made by the legislature. It can provide for removal or preemption of such claims should it choose to. But unless and until it does, federal courts should stay their hand. Six circuit courts of appeals have understood this. We will see if the justices do as well.

UPDATE: An amicus brief filed by William Barr on behalf of the American Free Enterprise Chamber of Commerce supplements the Barr-White op-ed's policy arguments, but they are no more availaing on the ultimate question.

First, the brief argues that the federal law of transboundary air pollution is "exclusive." This may well have been the case before the Supreme Court held that the enactment of federal pollution control legislation displaces the federal common law of interstate nuisance--and it may also be a good idea as a policy matter--but it is wrong as a matter of law. As noted in this prior post about the case and my longer article on the subject, the Supreme Court not only held in Milwaukee II that federal environmental statutes displaced the pre-existing federal common law governing interstate pollution, it further held in International Paper Co. v. Ouellette that state-law-based claims for interstate pollution may still be heard in state courts (albeit relying upon the substantive law of the source state), and that the only state-law-based claims that are preempted are those that are "incompatible" with those established by the relevant federal statute. Ouellette concerned the application of the federal Clean Water Act, but the Supreme Court made clear in AEP v. Connecticut that the exact same principles apply to the Clean Air Act. Curiously, Ouellette does not even merit a mention in Barr's brief.

The brief, like the op-ed, raises the reasonable fear that states may try to extra-territorialize their regualtory preferences and impose burdens on out-of-state activities. This is a legitimate concern, and one that may be addressed through other doctrines (such as Due Process or the Dormant Commerce Clause). It is not a justificiation for federal removal, however, let alone for preemption.

There is also a reasonable argument that the Supreme Court's entire displacement jurisprudence--from Milwaukee II to AEP--is off-base, having been invented so that the Court could extract itself from fact-intensive interstate pollution litigation. Under this argument, however, the defendants might find themsleves pulled from the frying pan and thrust into the fire, for were the federal common law of interstate nuisance not displaced, there would be no basis for barring such claims when brought under federal law, as there is no plausible argument that the Clean Air Act preempts such claims against most emitters. Is that really what Barr would like?

The amicus brief further argues that the Supreme Court took a wrong turn in 1894 (in Tennessee v. Union & Planters' Bank) in its interpretation of the federal statutes governing federal question jurisdiction and removal. Here again, the arguments may have merit as a matter of first principle, but it is quite a heavy lift to ask the courts to disregard over a century of consistent interpretations of rules that Congress enacted and could readily reform (particularly where, as here, the precedent concerns questions of statutory interpretation that Congress could readily fix and that the actual parties of the case have not brought into question).