If States Can Successfully Use The Courts to Address CO2 Emissions, What Does This Mean For Your Company And For Your Insurance Company?

The United States Court of Appeals for the Second Circuit on September 21 reinstated a 2004 lawsuit by eight states and the city of New York against five of the largest U.S. coal-burning electric utilities over their carbon dioxide emissions. [State of Connecticut v. American Electric Power Co., Inc., 04-05669 (S.D.N.Y.)]

A two-judge panel of the Second Circuit, vacating and remanding the District Court judgment, held that “the district court erred in dismissing the complaints on political question grounds; that all of the Plaintiffs have standing; that the federal common law of nuisance governs their claims” and that such claims are not preempted by existing environmental law. This case has important implications for industries that may be viewed as having contributed significantly to anthropogenic atmospheric emissions. It also has insurance coverage implications and may be a harbinger of future litigation.

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