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Both sides in 'nuisance' case claim an edge

Amanda Bronstad
The National Law Journal
May 2, 2007

The U.S. Supreme Court's recent decision involving the Environmental Protection Agency's authority to regulate greenhouse gas emissions has reignited a court battle between the state of California and the nation's top automakers.

On April 2, the Supreme Court, in a 5-4 decision, found that the Environmental Protection Agency has the authority to regulate greenhouse gas emissions of motor vehicles under the Clean Air Act. The plaintiff, the state of Massachusetts, and 11 other states had brought the court action against the Environmental Protection Agency, which claimed such authority did not exist. Massachusetts v. E.P.A., 127 S. Ct. 1438 (2007).

The California suit alleges that the top six U.S. and Japanese automobile manufacturers are responsible for greenhouse gases that have created a "public nuisance" by melting snowpacks and endangering wildlife in the state. California v. General Motors Corp., No. 3:06-cv-05755 (N.D. Calif.). The automakers have sought to dismiss the case on the ground that the state has no common law claim for damages.

Both sides said the Supreme Court's recent decision favors their arguments.

"It's not a surprise that both sides would try to spin this favorable to them," said Sean Hecht, executive director of the Environmental Law Center at the University of California at Los Angeles School of Law. He said there are "little bits and pieces of it both sides can seize on. And there are talented lawyers on both sides."

In a brief filed the day after the Supreme Court's decision, the automakers called the state's case full of "quintessentially political questions" that should be resolved by the executive and legislative branches of government, not the courts.

Theodore Boutrous Jr., a partner at Los Angeles-based Gibson, Dunn & Crutcher who represents the automakers, said the Supreme Court's decision negates the state's claims involving greenhouse gas emissions. "Because the Supreme Court has now held that the EPA has the power to regulate greenhouse gases under the Clean Air Act, that eliminates any need for recognizing a federal common law claim," he said.

The California attorney general said the automakers are trying "to put a positive spin on a case they lost," according to a brief filed days later.

Ken Alex, supervising deputy attorney general who is handling the case, said the Supreme Court's decision doesn't eliminate the state's right to make a claim for damages because the Environmental Protection Agency, while authorized to do so, still doesn't regulate greenhouse gas emissions.

"There is no regulation at all, as we speak, under the Clean Air Act, of greenhouse gas emissions from cars," he said, "and there is certainly no guarantee that a year from now or five years from now there will be regulation." Additionally, the state's case seeks damages. "We don't think that anything that the EPA might do in the future changes our claim for damages that have already occurred," he said.

Both sides have said they are open to settlement discussions.

"The best way to solve it is for the AG to drop this litigation and engage in a public debate and dialogue to get a comprehensive, federal solution -- the real key to addressing global warming," said Boutrous, who represents General Motors, Toyota Motor North America Inc., Ford Motor Co., Honda North America Inc., Nissan North America Inc. and an affiliate of DaimlerChrysler Motors Co.

"We're open at any time to a meeting with the automakers," Alex said. "It's up to them if they want to do that."

The Supreme Court's decision also revs up a related case in which several of the same automakers sued to overturn California's landmark regulations over tailpipe emissions. Central Valley Chrysler-Jeep v. Witherspoon, No. 1:04-cv-06663 (E.D. Calif.). A federal judge stayed that case several months ago pending the Supreme Court's decision.