Limits to CERCLA'S Owner/Operator Liability
Owner During Cleanup is the "Current Owner" for Purposes of CERCLA, 9th Circuit Says

Fourth Circuit Says No to Interstate Nuisance Claim

Siros_Steven_COLORBy Steven M. Siros

 

On July 26, 2010, the Fourth Circuit overturned a January 2009 district court decision that had found that emissions from 11 coal-fired power plants located in Alabama, Kentucky and Tennessee that were allegedly impacting North Carolina constituted a public nuisance. North Carolina v. Tennessee Valley Authority, No. 06-2131 (4th Cir., July 26, 2010). In January 2009, the U.S. District Court for the Western District of North Carolina agreed that emissions from these plants constituted a public nuisance and ordered the Tennessee Valley Authority ("TVA"), which owned and operated these plants, to install pollution control technology that was estimated to cost in excess of $1 billion. (Click here to view the district court decision.)  The district court's ruling was somewhat surprising in that these plants were all properly permitted facilities and there were no allegations that these plants were operating in contravention of any applicable permit, rule or regulation.

The U.S. Court of Appeals for the Fourth Circuit disagreed with the district court's conclusions, stating that it is "difficult to understand how an activity that is expressly permitted and extensively regulated by both the federal and state government" would constitute a public nuisance. The court further noted that the application of nuisance standards to the operations of a properly permitted facility would create a "confused patchwork of standards" and would "scuttle the nation's carefully created system for accommodating the need for energy production and the need for clear air." The court was also concerned that the district court had erred in applying controls that might be required under North Carolina regulations to facilities located in other states.

It will be interesting to see what impact this decision will have on other similar nuisance cases pending in other circuits. More specifically, there are several lawsuits currently pending where plaintiffs have asserted nuisance claims with respect to greenhouse gas emissions from industrial facilities. The Fourth Circuit's decision highlights the difficulty the plaintiffs in these cases face in convincing the courts that are hearing their claims that granting the relief the plaintiffs seek will not "scuttle" the current balance the federal government has achieved between the nation's energy requirements and the risk impaired air quality poses to human health and the environment.