Friday, February 01, 2008, 10:55 AM

Fourth Circuit Lets NC's Nuisance Suit Against TVA Go Forward

Yesterday in State of N.C. v. Tennessee Valley Authority the Fourth Circuit rejected TVA's sovereign immunity defense, thereby allowing NC's nuisance suit to go forward.

TVA operates coal-fired plants in Tennessee, Alabama, and Kentucky. NC brought this common-law nuisance action against TVA, contending that the plants emit pollutants which travel downwind through the atmosphere into NC's airspace, where they adversely affect human health and the environment. Even though such emissions are regulated by and in compliance with the federal Clean Air Act and State law at the location of the plants (i.e., TN, AL, and KY law), NC contends that the emissions, even if permitted under applicable statutory laws, nonetheless create a public nuisance under NC law. NC seeks an injunction prohibiting the TVA from operating its plants in a harmful manner and requireing it to abate the alleged nuisance. NC Solicitor General argued successfully in support of the State. The Fourth Circuit, in an opinion by Judge Shedd, rejected TVA's sovereign immunity defense.

Judge Niemeyer concurred in part and dissented in part. He concurred in the result because the Clean Air Act subjects TVA and other federal agencies to suits where the agency fails to meet federal or State "requirements . . . respecting the control and abatement of air polution." Insofar as NC's nuisance law imposes a "requirement" "respecting the control and abatement of air polution," he agreed that it would fall within the Act's waiver of immunity.

However, Judge Niemeyer disagreed with the majority on the alternative basis for finding a waiver of immunity: whether a waiver could arise from language in TVA's enabling statute stating that TVA "may sue and be sued in its corporate name."

Specifically, he argued that this language must be read in light of the Constitution's separation of powers doctrine, which prelcudes a suit challenging a governmetnal agency's exercise of its discretionary function. He argued that the emissions are a tradeoff inherent in Congress's having authorized TVA to employ available technology for power generating, including the coal-fired plants in question; it reflects a choice to provide benefits at the expense of some clean air. "If the old technology impliedly authorized by Congress from the beginning of the TVA can be updated or replaced to provide less pollution, the decision would have to be a federal decision based on a number of discretionary factors balancing the environmental risks with the economic viability of the program. But it cannot be for any one State to dictate to Congress or an agency that Congress creates how it must carry out its discretionary functions," he wrote.

Thus, he concluded, by allowing TVA to "sue or be sued," Congress didn't clearly intend to authorize a State suit "questioning the fundamental decisions of the federal government to create the TVA and build coal plants to provide energy and thereby inherently authorize some emissions that are within federal and state regulatory standards." The majority's contrary conclusion, he complained, "tends to stand the federal structure on its head, permitting States to disagree with federal policies and dismember projects undertaken by the federal government in accordance with federal authority."

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