On Monday, December 6, 2010, the Supreme Court granted certiorari in American Electric Power v. Connecticut, a case examining whether the electric utility industry may be held accountable in court for its alleged contributions to harms arising from climate change. The implications of the Court’s decision will not only affect the utilities industry, but will likely have wide-reaching impacts on other economic sectors—including automakers, agricultural and manufacturing interests, extractive industries, and chemical companies—which may find themselves embroiled in future legal battles over their greenhouse gas (“GHG”) emission outputs. Moreover, the case will set precedent for the standing of states and private parties that seek to regulate GHG emissions through common law tort actions, and the potential costs of compensating for the impact of climate change effects would likely be unprecedented.

In American Electric Power, utility companies American Electric Power, Duke Energy, Southern Co., Xcel Energy, and the Tennessee Valley Authority are challenging a U.S. Court of Appeals for the Second Circuit decision that enabled states and environmental groups to pursue a public nuisance lawsuit seeking to force power generators to slash their GHG emissions. A public nuisance is defined as an unreasonable interference with the public’s right to property, including conduct that interferes with public health and safety—in this case, carbon dioxide emissions that contribute to injury arising from climate change. Eight states, New York City, and environmental groups filed the initial lawsuit in 2004, asking a federal judge to order cuts in power plant emissions in 20 states. The district court initially dismissed the case, but last year the Second Circuit ruled that the case could proceed.