While the Obama administration continues to push federal regulation of greenhouse gases as "pollutants" that endanger human health, those seeking to impose civil liability on companies responsible for such emissions recently suffered a significant setback. In an unusual decision marked by significant controversy, the U.S. Court of Appeals for the 5th Circuit in Comer v. Murphy Oil refused to hear a case in which plaintiffs sought to recover damages from energy companies they claim exacerbated the effects of Hurricane Katrina by contributing to global warming.
The trial court presiding over the case dismissed the lawsuit as baseless. It held that plaintiffs' claims were simply too attenuated to proceed. However, a three-judge panel of the court of appeals reversed the trial court's decision. The full court then denied the energy companies' request for rehearing after numerous judges recused themselves based on potential conflicts.
In denying rehearing, the court of appeals vacated the panel's decision, thereby allowing the trial court's dismissal of the lawsuit to stand - a decision that prompted a strong dissent by the judges who had decided the initial appeal and held that the lawsuit should proceed. Judge James Dennis, for example, characterized the court's decision as "shockingly unwarranted . . . manifestly contrary to law" and "contrary to common sense and fairness." According to Judge Dennis, the court had "default[ed] on its absolute duty to hear and decide an appeal" and had dismissed the appeal "while turning a blind eye to several legally viable alternative courses of action."
This case and the ensuing controversy powerfully illustrate the extent to which the Obama administration's regulatory agenda and the agenda of the plaintiffs' bar are inextricably intertwined. As the Environmental Protection Agency (EPA) continues to pursue regulations that would categorize greenhouse gases as "pollutants" that contribute to global warming, the plaintiffs' bar continues to pursue litigation in which it hopes to extract vast sums from those companies it claims are responsible for such emissions. The regulatory agenda thus feeds potential litigation.
Moreover, while the legal theories underlying these lawsuits are tenuous at best, the Comer decision illustrates just how far such arguments have progressed in the federal courts. It was only by the narrowest of margins that the court of appeals allowed the trial court's dismissal of the lawsuit to stand. Future defendants may not be so fortunate.
The administration's regulatory agenda may therefore have profound ramifications. Not only may EPA regulations impose significant costs on industry that will be passed along to consumers, but they also may generate waves of litigation that will only add to this financial burden. Before such regulations are adopted, the full consequences should be considered.
Nonetheless, the EPA continues to rush forward with regulations based on dubious science without fully considering the potential effects. Most recently, it issued a finding that carbon dioxide is a "pollutant" that endangers human health in the face of recent revelations that the science on which its finding is based is subject to question. In justifying this decision, the EPA asserted flatly that the "science is settled" and that its critics are simply trying to "stall progress." As with many of the initiatives advanced by the Obama administration, the question arises: Can the country afford the consequences of the administration's agenda?
Douglas Smith is an adjunct scholar at AEI.