ACRU

Justices against Court-Imposed Cap-and-Trade

This column by ACRU Senior Legal Analyst Ken Klukowski was published April 19, 2011 on The Washington Examiner website.

It appeared yesterday during oral arguments in a case raising important constitutional and political issues that members of the U.S. Supreme Court doubt the wisdom of allowing federal judges the power to regulate carbon emissions.

The case was AEP v. Connecticut in which eight states sued American Electric Power and other electricity providers over carbon emissions. They allege that although there is no authorizing federal statute, that federal “common law” — centuries-old legal doctrines of practice and tradition — entitle them to have federal courts designate carbon emissions a “public nuisance” and devise a cap-and-trade type of regulatory regime. The 2nd Circuit federal appeals court bought into this idea.

All eight of the justices present yesterday seem opposed to this idea, though perhaps for different reasons (Justice Sonia Sotomayor having recused herself from the case).

New York Solicitor General Barbara Underwood had a very rough time of it, as she was both clearly outmatched by her opponents, Peter Keisler and acting U.S. Solicitor General Neal Katyal, and was thoroughly pummeled by the justices themselves.

Representing AEP, Keisler — President Bush’s former nominee to the D.C. Circuit federal appeals court who was filibustered by Senate Democrats — began, “This is a case in which the courts are being asked to perform a legislative and regulatory function in a manner in which the necessary balancing of contending policy interests is among the most complex, multifaceted, and consequential of any policy issue now before the country.” No federal court has ever been asked to do that in the entire 220-year history of the country, he said.

In contrast, Katyal likely supported AEP in this case because the Obama administration would like to centralize carbon regulations in the U.S. Environmental Protection Agency, instead of having federal judges do it free from presidential control.

The first question here is whether the states even have standing to bring this case in federal court. Article III of the Constitution only allows courts to hear cases where plaintiffs have standing, requiring a concrete injury caused by the defendants that a court can redress.

In 2007 the Supreme Court (wrongly, in my view) held that Massachusetts had standing to sue the EPA to force it to regulate carbon, and Connecticut tried to sneak in under this decision in the AEP case.

Predictably, Katyal didn’t want to argue for lack of Article III standing because the Left hails Massachusetts v. EPA as a victory. Instead, he argued that the court should hold Connecticut lacked “prudential standing,” a series of self-imposed limits on federal power. That way, the court could dismiss this case, but keep the precedent arising from the egregiously-wrong Massachusetts case on the books for future environmentalist lawsuits.

It looks like the justices were willing to find standing here — possibly by invoking Massachusetts v. EPA as precedent — so that they could reach the case’s merits.

Justice Ruth Bader Ginsburg said Connecticut would require judges to determine appropriate emission levels and social costs without expertise or data to make those decisions. This would transform the courts into a “super-EPA.”

Justice Samuel Alito agreed, asking, “How does a district judge decide what is reasonable and cost-effective?”

Underwood criticized current law for not regulating carbon without the EPA first declaring findings as a precursor to issuing regulations. Chief Justice John Roberts responded that, “there were reasons Congress adopted that approach, and your suit would override those determinations.”

The best Underwood could say was, if there were no EPA and no Clean Air Act, then states could assert a federal common-law right to sue. Justice Elena Kagan rejected that notion, saying, “we would be living in a different world. There is [an EPA]. There is a Clean Air Act.”

If Connecticut wins, it will give a breathtaking new scope of authority to federal courts, empowering them to regulate every emitter of carbon. That means everything that burns coal, oil, or gas, and every animal — including humans. It seems certain Connecticut will lose.

The only question is on what grounds the Supreme Court will reverse the lower court.