UPDATE: US Appeals Court Reinstates Carbon Emissions Lawsuit

A U.S. appeals court on Monday reinstated global warming lawsuits brought by eight states, New York City and three land trusts against several large utility companies, seeking to limit their carbon-dioxide emissions.

In an order Monday, the Second Circuit Court of Appeals vacated a district judge's 2005 ruling tossing out the cases, saying the lower court erred in dismissing the complaints against utilities that operate fossil-fuel-fired electricity plants in 22 states.

The utilities had argued, in part, that allowing a court to unilaterally order emissions reductions would interfere with the President's efforts to induce other nations to reduce their emissions.

"A decision by a single federal court concerning a common law of nuisance cause of action, brought by domestic plaintiffs against domestic companies, does not establish a national or international emissions policy," U.S. Circuit Judge Peter W. Hall wrote. "Nor could a court set across-the-board domestic emissions standards or require any unilateral, mandatory emissions reductions over entities not party to the suit."

U.S. District Judge Loretta Preska in Manhattan dismissed the cases in 2005, saying the question of whether carbon-dioxide emissions should be reduced laid with Congress, not the courts.

The cases were seeking to limit and ultimately reduce carbon emissions at six domestic coal-fired electricity plants.

The utilities are American Electric Power Co. (AEP), Southern Co. (SO), Xcel Energy Inc. (XEL), the federal government-owned Tennessee Valley Authority and Cinergy Corp., which was acquired by Duke Energy Corp. (DUK) in 2006.

One of lawsuits reinstated was brought by the states of New York, Connecticut, California, Iowa, New Jersey, Rhode Island, Vermont, Wisconsin plus New York City. The other was brought by land trusts Open Space Institute Inc., Open Space Conservancy Inc. and the Audubon Society of New Hampshire.

The cases were remanded to Judge Preska for further proceedings.

-By Chad Bray, Dow Jones Newswires; 212-227-2017; [e-mail]