States can't invoke federal law to force utilities to cutgreenhouse-gas emissions, the U.S. Supreme Court ruled, shuttingoff one avenue for groups that advocate bolder steps againstclimate change.

The unanimous ruling is a victory for five companies — AmericanElectric Power Co., Duke Energy Corp., Southern Co. and thegovernment-owned Tennessee Valley Authority, based in Knoxville —that had been sued by six U.S. states, including California, andthe city of New York.

The states, which sought a cap on emissions, argued that carbondioxide spewed by the utilities is a public nuisance because itcauses climate change. The justices said the EnvironmentalProtection Agency was better equipped than federal judges to assessthe costs and benefits of reducing greenhouse gases.

“It is altogether fitting that Congress designated an expertagency, here, EPA, as best suited to serve as primary regulator ofgreenhouse-gas emissions,” Justice Ruth Bader Ginsburg said for thecourt. Justice Sonia Sotomayor didn't take part in the case.

Through the federal Clean Air Act, Congress has entrusted theEPA and state regulators to determine greenhouse-gas regulationsfor industries, according to the court.

The ruling bolsters EPA's position as the focal point forcurbing heat-trapping emissions from vehicles and industrialpolluters such as power plants, according to David Doniger, policydirector for the climate center at the Natural Resources DefenseCouncil, an environmental group based in New York.

'Spotlight on EPA'
“The court's decisionputs the spotlight squarely on EPA,” Doniger said today in astatement.

The states sued in 2004, invoking both state and federal law.The Supreme Court case focused on the federal law claim, and thejustices said they weren't ruling on the state question.

The states argued that the EPA still hasn't taken action toreduce carbon emissions from the plants named in the lawsuit.

The agency began a first phase of greenhouse-gas regulations forpower plants and oil refineries in January after Congress failed topass climate-change legislation. So far, the rules affect only newand modified plants, not the existing ones targeted by thestates.

The EPA, as part of a legal settlement reached last year withenvironmental groups and states, agreed to propose furthergreenhouse-gas-emissions rules for power plants and refinerieslater this year. This second round will affect existing plants andmay be more costly to industry, according to a Bloomberg GovernmentStudy released last week.

Authority to Regulate
Republicans and someDemocrats in Congress are pushing legislation that would strip theEPA of its authority to regulate carbon emissions under the CleanAir Act. Today's ruling reaffirms the agency's authority underfederal law, according to Doniger, who helped represent three landtrusts in a related suit that was also part of today's ruling.

“The decision comes at a useful time as we've seen efforts totake EPA's power away, and we know there will be further efforts,”Doniger said in an interview today.

The Edison Electric Institute, a Washington-based trade grouprepresenting utilities, also praised today's ruling.

“We welcome this significant decision, because it unanimouslyconfirms our industry's strongly held view that the courtsshouldn't be in the business of legislating U.S. greenhouse-gasemissions limits,” EEI President Tom Kuhn said in a statement.

“The Clean Air Act authorizes EPA to regulate greenhouse gases,a process it has initiated,” Kuhn said. “Today's decision wiselyremoves the threat of endless and multiple lawsuits with noenvironmental benefit.”

Obama Administration
The Obamaadministration joined the power industry in urging rejection of thesuit.

The ruling reverberates beyond the power industry. Trade groupsrepresenting automakers, oil companies, farmers, mining companies,chemical companies and manufacturers all urged the court to dismissthe suits, in some cases saying their members might face similarclaims.

The case marked the Supreme Court's second foray into the debateover climate change. In a 2007 case decided 5-4, the court orderedthe EPA to consider regulating greenhouse-gas emissions.

'Public Nuisance'
In arguing that carbonemissions are a public nuisance, the states and land trusts used alegal theory more typically invoked in cases of localizedpollution. A federal appeals court in New York had let the suit goforward.

The suits are part of a multifaceted battle over climate change.Opponents — including businesses, Republicans and some Democrats —say the EPA's new carbon-emission limits will destroy jobs andincrease electricity bills without benefiting the environment.

The Obama administration and the companies also argued that thestates and land trusts lack the legal right, or standing, to sue.The justices divided 4-4 on that question, leaving intact theappeals court's conclusion that the companies can do so.

The case is American Electric Power v. Connecticut, 10-174.

Bloomberg News

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.