The Obama administration is calling on the Supreme Court to overturn a federal appeals court ruling that would allow fossil-fuel-burning plants, and potentially publicly owned power utilities, to be sued as contributors to climate change.

The lawsuit, brought by several states against a handful of power companies, could affect publicly owned power utilities that emit greenhouse gases, according to market participants.

The administration filed the brief last week. The ruling, issued last year by a two-judge panel of the Court of Appeals for the Second Circuit, reopened the door for lawsuits against power plants that ban fossil fuels on the basis that they are a “public nuisance” as contributors to climate change.

But the administration is arguing that federal regulators rather than the courts should wrestle with greenhouse gases and climate change. If that argument fails or the Supreme Court decides that “public nuisance” suits have merit, that could present problems for the public power sector.

“Anyone who has a coal plant should be concerned about this,” said Nick Braden, spokesman for the American Public Power Association.

Eight states, New York City, and three land trusts brought the lawsuit first in 2004 against the U.S. government-owned Tennessee Valley Authority and five other power companies. They alleged that the utilities substantially contribute to carbon dioxide emissions in 20 states, “amounting to 10% of such emissions.” As a result, they said, the utilities are liable for “creating, contributing to, or maintaining a public nuisance.”

The states, city, and land trusts asked that the utilities be required to cap their emissions and reduce them by a set percentage each year for at least a decade.

The U.S. District Court for the Southern District of New York decided in favor of the power companies. But in 2009, a two-judge appeals court panel reversed the ruling. The utilities asked the U.S. Supreme Court to reconsider the appeals court panel’s ruling, but the high court has yet to decide whether to take up the ruling.

The brief filed by the Justice Department says in essence that the Environmental Protection Agency is already on the job of emissions reduction. To decide such a matter in court would be “a less efficient, effective, and manageable means” of tackling greenhouse gases and climate change, the brief said.

The EPA last year claimed the authority to regulate greenhouse-gas emissions under the Clean Air Act, a decision that was opposed by some in Congress, as the Senate tried unsuccessfully to pass a comprehensive climate-change law.

In addition, as part of the Copenhagen Accord, the U.S. proposed an emissions reduction of about 17% from 2005 levels within the next decade, the brief noted.

The “representative branches” of the government are the most appropriate venue for addressing grievances like climate change, the administration argued.

“Plaintiffs’ common-law nuisance claims are quintessentially fit for political or regulatory — not judicial — resolution, because they simultaneously implicate many competing interests of almost unimaginably broad categories of both plaintiffs and defendants,” the brief said.

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