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The push by the Trump
Administration away from climate regulation continues with the
repeal of the endangerment finding.
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It's what led the EPA to take action to
curb emissions on various pollutants,
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doing so under the Clean Air Act. But by making this determination,
it may actually open the door to
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potentially a wave of public nuisance
lawsuits against power plant owners. To discuss this, a pleasure to be
joined once again by Sarah Light,
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who's a Professor of Legal Studies and
Business Ethics here at the Wharton School.
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Sarah, great to catch up with you again.
How are you? I'm doing great, Dan.
Thanks so much for inviting me today.
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I'm always happy to chat with you. Thank you. What is it that the administration,
I guess let's start there, sees as a
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benefit by taking this action in the first
place? Great. So in order to answer that question,
if you'll permit me, I want to just give
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you a little bit of background about how
the Clean Air Act works. So the Clean Air Act, you know,
is a federal law that allows the
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government through the EPA to issue
regulations to address air pollutants, largely from stationary sources of
emissions, like power plants or industry,
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as well as from mobile sources like
vehicles, trucks, cars, SUVs. Certain pollutants were designated kind of
early on. You know, methane, carbon
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monoxide, nitrogen oxides, but the statute
gives the administration some degree of
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flexibility to determine later on,
you know, with more scientific knowledge, that a different substance
constitutes an air
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pollutant that endangers
public health and welfare. And before the EPA is allowed to issue any
regulations addressing that air pollutant,
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it must make what's called an endangerment
finding. So back in, you know, the 2000s,
under the Obama Administration,
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the EPA issued this endangerment finding
concluding that greenhouse gas emissions,
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the six greenhouse gases under the Kyoto
Protocol at the time, constituted air pollutants under the Clean
Air Act that cause or contribute
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to air pollution that endangers
public health and welfare. Okay, so the analogy that I like to give
is, have you ever been in a hotel room?
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And when you go into the hotel room,
you walk in, and you try to turn on the lights, and you can't
turn on the lights. You
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have to put your key
into a slot by the door. Right. And once you put your key into the slot,
then you can turn the lights on.
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- Right.
- Right. So the endangerment finding is the EPA
putting its key in the slot that then
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allows it to issue regulations to address
that air pollutant. So in 2009, the EPA issued the
endangerment finding, lots of scientific
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evidence demonstrating this, you know,
harm to human health and the environment.
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And then subsequently, the EPA issued
regulations to address greenhouse gas emissions from power plants, to address
greenhouse gas emissions from motor vehicles.
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Okay. So I realize I'm
going on for a while, but I hope this is helpful background.
- No, yeah.
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Feel free to interrupt me at any time. So subsequently, the
Obama Administration issues
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greenhouse gas regulations
for power plants and cars. Trump is elected. He leaves the endangerment
finding in place, but issues
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weaker regulations for
power plants and for cars. Biden comes into power, stronger
regulations for power plants and vehicles,
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and then Trump two comes in. And instead of just trying to repeal the
regulations that the Biden Administration
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adopted, they're going kind of for the nuclear option.
- Right. Which is taking the key out of that slot
by the door at the hotel.
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So if the endangerment finding repeal is
upheld by the courts, that essentially deprives the EPA the ability to issue
regulations.
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You can't turn on
the lights, you know, somewhere else in the
room, if that makes sense.
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So the Trump Administration has taken a
different approach this time. They are simultaneously
attempting to repeal
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the regulations, turning off the lights. Right. So they're taking both steps.
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If either one is successful, there will be
a loss of regulation. But if the endangerment finding is gone,
that basically means the EPA cannot issue
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greenhouse-gas-related limitations. And I'll just mention one other thing. The way that the Trump Administration has
tried to repeal the endangerment finding
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is by focusing on motor vehicles and motor
vehicle emissions. Right. - But if it's upheld— -
- In part, probably, because of the
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California standards, I would think. In part because of the California
standards, in part because of the
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potential for litigation over power plant
emissions and things like that. So— but that's— I think
the analogy of the key
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in the hotel room is very
helpful to understand. It's like, without this, you can't turn on
the regulations.
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But it sounds like, and I don't know if
this was intentional or not, but that the—
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one of the consequences is, from your
comments and the reporting about this, is that this does open the door to
potential legal challenges in the court
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system about what some of these electric companies and
power plant owners are doing, correct?
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That's right. So it's a little bit complicated, but I do
think that it raises the
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possibility of significant additional
litigation. So throughout this time period,
when there's been pressure from
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environmental groups for the EPA to
regulate greenhouse gas emissions and pressure from other groups not to regulate
greenhouse gas emissions, certain
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government entities like states,
cities, you know, the city of Hoboken, the state of— you know, the city of X.
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They have brought tort litigation against
power plants and other fossil fuel companies seeking damages, basically
saying you have contributed to climate
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change, our our infrastructure is eroding,
you profited, you owe us money. It's like any kind of standard tort
litigation. You've done me wrong.
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I need compensation. Relatively
straightforward. Okay. So because a case like this
went up to the Supreme Court and the
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Supreme Court basically said, "Look,
the Clean Air Act allows for the regulation of greenhouse gas emissions
nationwide as a system."
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And so we're not going to have these tort
suits being brought by, you know, the city of San Mateo, California and the
city of Hoboken, piecemeal around the
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country and have individual
judges tell power plants, you know, how much they need
to pay or what they need to do.
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So basically, because there's this
comprehensive statutory scheme, the Clean Air Act, which allows for the
regulation of greenhouse gas emissions,
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we're not going to allow these tort cases
to proceed, at least not under federal law.
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Right. After that, everyone tried— you know,
it's like a game of whack-a-mole.
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So the entities that were trying to
bring these suits started, "Okay, well, we'll bring them under state law.
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We'll bring them under California law, under Rhode Island law, Massachusetts law,"
etc.
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And it has— those cases have generally
proceeded. And they are proceeding
in the courts. There have not
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necessarily been judgments
against the fossil fuel producers. But the fossil fuel producers are making
the same argument.
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They're basically— they basically have been
saying, "Look, same deal under state law.
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The Clean Air Act allows for the,
you know, regulation of greenhouse gas emissions on a nationwide
scale, this shouldn't
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be a bunch of different
state tort cases." And the courts are kind of divided a
little bit on that.
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But if the Trump Administration is now
taking the position that the Clean Air Act
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does not cover greenhouse gas emissions,
they are not an air pollutant under the
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Clean Air Act, then we're in a different
universe with respect to these state tort
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cases, because there is
no comprehensive federal statute that deals with
this on a nationwide basis.
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And when there is no comprehensive
nationwide federal statute dealing with a particular issue, often tort law,
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and in this case
specifically, nuisance law, comes in as a kind of background system to
allow parties to address harms to them.
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So my view is that it is— that if you
repeal the endangerment finding, you open up the potential for tort
litigation.
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Right, right. And I guess, are we already starting to
hear of organizations lining up
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potentially to prepare suits against these
utility companies and power plant owners?
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Well, so there are already suits in play. That's the thing. There are already— there's literally
litigation happening right now.
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And so, you know, we don't even need new
additional suits to be filed to test this.
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But we'll see what happens, right? We'll see what happens. What do you expect then to see?
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What will we see play out here
potentially, in what sounds like it
could be months and years
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ahead with the litigation
we're going to see? Right.
So, I hope not years. I hope it's only months. But I do imagine
that there will be, you know, significant
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motions practice and, you know,
filings in the courts as they make the determination about whether to uphold the
repeal.
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Initially, that decision is being made at
the level of the court of appeals, but there's no question that whoever loses
is going to take it to the Supreme Court.
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Right. Exactly.
- And so— so, you know, that's going to—
that certainly won't happen this term.
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The term ends in June. They've already, you
know, taken all the cases, essentially, that they're
going to take this year.
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So that would be next year. And often the blockbuster cases are the ones
that get decided at the end of the term.
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So we could be looking at a full year. And how similar then could potentially
this kind of framework of litigation be to
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what we saw the Supreme Court rule on back
in, I guess it was 2011, correct? Yeah, absolutely right.
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Well, 2011 was Connecticut versus AEP,
right? So that was the case where the state of
Connecticut and other governments sued
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American Electric Power under the federal
common law of nuisance. And the Supreme Court said, you know,
"Too bad, so sad."
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The Supreme Court is considering a
nuisance case in the coming term. That may end up being a vehicle.
You know, unclear.
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I don't— I can't totally predict what the
timing is going to be, but that's the risk.
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- Right.
- That's the risk, I think. Sarah, always great to talk with you and
get some insight on this.
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And we will stay in touch as this develops
down the road. Thank you. Thanks, Dan.
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You got it. Sarah Light,
Professor of Legal Studies and Business Ethics here
at the Wharton School.