US ETS lawsuit likely headed to European Court of Justice

Washington DC
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North American airlines are awaiting a UK court hearing to have their legal challenge of the European Union's emissions trading scheme (ETS) moved to the European Court of Justice (ECJ), which has jurisdiction over all EU member states.

In December 2009 the Air Transport Association of America (ATA) and three of its member carriers-United Airlines, Continental Airlines and American Airlines-filed a lawsuit against the UK Secretary of State for Energy and Climate Change to reverse aviation's inclusion in the ETS. Flights within, to and from the EU will be folded into the EU cap and trade system from 2012.

United, Continental and American are named in the lawsuit because the UK is overseeing their ETS compliance. The lawsuit was filed with the UK Administrative Court of the High Court of Justice instead of the ECJ because private parties cannot have their case heard by the ECJ without the court of a specific EU member state directing the case there.

The UK government appears to agree with ATA and its member airlines that the ECJ is the appropriate venue for this lawsuit, and the hearing in which the UK court will send the case to the ECJ is expected in coming weeks, ATA vice president of environmental affairs Nancy Young says.

In the meantime, both IATA and the National Airlines Council of Canada have filed amicus briefs with the UK Administrative Court of the High Court of Justice.

"[W]e are deeply concerned by Europe's regional approach, which will distort competition and lead to carbon leakage," an IATA spokesman says. "Additionally, there is the fact that it does contravene the Chicago Convention. The brief will be an opportunity to make these concerns known to the court from the global perspective of IATA."