## Facts

- Diageo Americas Supply, Inc. operated whiskey distillation and aging warehouses in Louisville, Kentucky.
- The whiskey-aging process emitted large quantities of ethanol into the air.
- Nearby property owners and renters alleged ethanol drifted onto their properties and, when combined with moisture, promoted growth of “whiskey fungus” (Baudoinia compniacensis).
- Plaintiffs alleged the fungus caused unsightly staining, abnormal and costly cleaning and maintenance, early weathering of surfaces, and substantial interference with use and enjoyment of property.
- Diageo’s air emissions were regulated under the Clean Air Act (CAA) and a federally enforceable operating permit administered by the local air pollution control district.
- Plaintiffs brought Kentucky common law claims (including nuisance, trespass, and negligence) and sought compensatory and punitive damages plus an injunction requiring additional emissions-control technology.

## Issues

1. Whether the Clean Air Act preempts state common law tort claims brought under the law of the state where the emitting source operates, when the claims concern air emissions regulated under the CAA.
2. Whether the CAA preempts injunctive relief that would effectively require controls beyond those required by the facility’s CAA permit.

## Decision

- The Sixth Circuit affirmed the district court’s denial of Diageo’s motion to dismiss.
- The court held the CAA does not preempt source-state common law tort claims against an in-state emitter.
- The court concluded the savings clauses preserve state common law remedies “without regard to the relief sought,” allowing claims for both damages and injunctive relief.
- The case was remanded for further proceedings on the merits; the appeal resolved only the preemption question.

## Legal Principles

- CAA savings clauses preserve state authority to impose and enforce more stringent emissions limitations and to provide remedies through statute or common law. See 42 U.S.C. §§ 7416, 7604(e).
- Section 7604(e)’s protection of “any right … under any statute or common law … to seek any other relief” supports the availability of traditional tort remedies, including injunctions, alongside the CAA’s permitting regime.
- The CAA’s cooperative-federalism structure is consistent with allowing source-state common law claims to proceed rather than treating the federal program as occupying the field.
- Consistent with preemption principles reflected in environmental precedent, source-state law claims are materially different from attempts to apply another state’s law to regulate an in-state source.

## Conclusion

The Sixth Circuit held that the Clean Air Act does not preempt Kentucky common law claims by neighboring landowners against a Kentucky emissions source, even when the claims seek injunctive relief that could require emissions controls beyond those specified in the source’s CAA permit.


Merrick v. Diageo Ams. Supply, Inc., 805 F.3d 685 (6th Cir. 2015)