Supreme Court may shape future of climate change litigation

Property & Casualty 360: While the Obama administration and several conservative organizations oppose climate litigation, feeling that the elected branches are better positioned to provide a sustainable national energy strategy, the U.S. Supreme Court will have its chance to make a mark on the discussion beginning in April.

In an NU article, “Will The Insurance Industry Dodge Climate Nuisance Liability Bullet?” which appears in this week’s Specialty Markets Insight newsletter, William F. Stewart, a partner in the National Insurance Coverage Group of Nelson Levine de Luca & Horst in Blue Bell, Pa., writes about the case, Connecticut v. American Electric Power Co., et al, also called AEP. In the case, Mr. Stewart explains, “several states and environmental groups filed suit against power companies seeking an abatement of ‘the public nuisance of global warming.’”

Plaintiffs alleged that the utilities’ combustion of fossil fuels had contributed to elevated levels of atmospheric carbon dioxide, which led to conditions such as beach erosion, droughts and floods. Mr. Stewart notes that the case was dismissed by a New York Federal District Court, but the Second Circuit Court of Appeals reversed that decision.

…Mr. Stewart writes, “If affirmed, AEP threatens to open up a Pandora’s Box of global warming suits, as well as associated coverage litigation. Under the Second Circuit’s ruling, any entity with ‘special’ climate-related harm—harm that is different in kind or in scope from the general public—would have standing to pursue large [greenhouse gas] emitters.”

Calling it possibly the most important environmental case in a decade, Mr. Stewart says the AEP decision threatens to create a “highly undesirable balkanization of environmental regulation between one jurisdiction and the next.”…

Sculpure ornament of a judge adorning the walls of the Sterling Law Buildings at of the Yale Law School of Yale University. Picture by Henry Trotter, 2005