On September 3, 2013, GenOn Power Midwest LP filed a Petition for Rehearing En Banc in response to last month’s decision by a panel of the the 3rd Circuit Court of Appeals in Bell v. Cheswick Generating Station, GenOn Power Midwest, L.P., finding that the Clean Air Act (CAA) does not preempt state law tort claims brought by private property owners against a source of pollution located in the state. Many commentators see the decision as allowing judges and juries to set emissions standards, even where the source is in full compliance with federal and state standards.

The suit was filed by a putative class of some 1500 individuals living in the vicinity of  GenOn’s Cheswick Generating Station, a 570 megawatt coal fired electric generating factory in Springdale, Pennsylvania.  The class sought compensatory and punitive damages as a result of odors and emissions from the GenOn facility under the theories of nuisance, negligence and trespass.  GenOn moved to dismissed on the basis that the facility was comprehensively regulated by the CAA and, as a result, owed no “extra” duty to the members of the class. The District Court dismissed the suit, finding that the claims were “inconsistent with the dictates of the Clean Air Act” and that the fact that a savings clause exists in the CAA did not alter that analysis.

On appeal, the 3rd Circuit panel found the U.S. Supreme Court had addressed this issue in the context of the Clean Water Act in International Paper Co. v. Ouellette, 479 U.S. 481 (1987).  In Oullette, the Supreme Court found that the CWA does not preempt state common law claims based on the law of the state where the source of the pollution is located.  The 3rd Circuit panel found no meaningful difference between the savings clauses in the CWA and the CAA and, therefore, held that the U.S. Supreme Court’s decision in Oullette controlled.  Since suit was brought by Pennsylvania residents under Pennsylvania law, the claims were not preempted.

The 3rd Circuit panel specifically rejected the argument that its decision would undermine the comprehensive regulatory program established by the CAA, citing Oullette for the proposition that the “cooperative federalism” structure of the CWA (and the similarly structured CAA) allow states to impose higher standards on their own sources of pollution and that state tort law is a permissible way of doing so.   As a result, the panel held that the class’s claims were not preempted, reversed the decision of the District Court, and remanded the case for further proceedings.

It its Petition for Rehearing En Banc, GenOn argues that the panel focused solely on whether plaintiffs’ state common law claims were expressly preempted by the CAA and failed to analyze whether the claims were preempted because they conflicted with, and would thereby be an obstacle to, the regulatory scheme established by Congress.  GenOn asserts that such analysis is required by the 3rd Circuit’s prior decision in Farina v. Nokia, 625 F 3d 97 (3rd Cir. 2010), and, as a result, the Panel’s decision conflicts with a prior decision of the 3rd Circuit, and the decisions of the 4th and 5th Circuits in North Carolina v. Tennessee Valley Authority, 615 F 3d 291 (4th Cir. 2010), and Comer v. Murphy Oil, Inc., 839 F. Supp 2d 849 (S.D. Miss 2012).  GenOn also argued that the panel erred in extending Ouellette insofar as the savings clauses in the CAA and the CWA are fundamentally different and that a careful reading of Ouellette does not support the panel’s holding.

As noted in an earlier frESH law blog post, the Supreme Court left open the question of whether state law nuisance claims for damages were viable in the face of the CAA in American Electric Power Co. v. Connecticut, 131 S. Ct. 2527 (2011).