The Third Circuit Reinstates Nuisance Claims Against Cheswick Generating: Bad Idea

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On Wednesday, in Bell v. Cheswick Generating Station, the 3rd Circuit Court of Appeals revived class action nuisance claims brought by residential property owners living within one mile of GenOn’s Cheswick Generating Station.  (Full disclosure – this firm represents GenOn, now NRG, in various matters, though not this litigation.)  The District court had ruled that the claims were preempted by the Clean Air Act’s comprehensive regulatory scheme.  The 3rd Circuit disagreed, holding that the CAA’s savings clause preserved such nuisance claims.

While I understand the logic of the Court’s decision, it nonetheless seems not just wrong, but willfully wrong.  The 3rd Circuit relied on the Supreme Court decision in International Paper Co. v. Ouellette, which held that the savings clause in the Clean Water Act preserved at least some state law tort claims, as long as the plaintiffs only seek to apply the law of the source state.

In applying Ouellette to nuisance claims under the CAA, the 3rd Circuit relied on the 4th Circuit decision in North Carolina v. TVA.  The problem with the 3rd Circuit’s analysis is that it ignored most of the decision in North Carolina v. TVA.  It is true, as the court noted in Bell, that the 4th Circuit found that the TVA emissions were not public nuisances in the source states, but it is also true that most of the decision was an extensive discussion explaining why it is inappropriate to use state nuisance law – even of the source state – to regulate air emissions from facilities in compliance with their CAA permits.  For example, the TVA decision said that:

we cannot state categorically that the Ouellette Court intended a flat-out preemption of each and every conceivable suit under nuisance law. We can state, however, with assurance that Ouellette recognized the considerable potential mischief in those nuisance actions seeking to establish emissions standards different from federal and state regulatory law and created the strongest cautionary presumption against them.

In particular, it is essential that we respect the system that Congress, the EPA, and the states have collectively established.

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The difficulties with North Carolina’s approach in this litigation do not end with the prospect of multiplicitous decrees or vague and uncertain nuisance standards. In addition to envisioning a role for the states that the Clean Air Act did not contemplate, North Carolina’s approach would reorder the respective functions of courts and agencies.

While the 4th Circuit then noted that courts must apply the law of the source state, the point made was not to preserve source state nuisance claims, but only to note that, in “addition to the problems noted above, the district court” wrongly applied the law of the receiving state, rather than the source state.  Overall, it is impossible to read North Carolina v. TVA as an endorsement of source state common law nuisance claims against facilities in compliance with their Clean Air Act permits.

I also think that the decision in Bell brushes aside too quickly the import of AEP v. Connecticut and Kivalina on state nuisance claims.  It is true that those cases dealt with displacement of federal common law rather than preemption of state common law, but they remain of a piece with the lengthy discussion in North Carolina v. TVA regarding how the availability of nuisance claims would interfere with the carefully ordered regulatory scheme provided in the CAA and its implementing regulations.

I’m sorry, but there’s just no room for nuisance claims against facilities in compliance with CAA permits.  I hope that NRG seeks certiorari on this one.  I could imagine the Supreme Court taking it in order to clarify the reach of Ouellette.