The Obama administration argued on behalf of the Tennessee Valley Authority, a federally owned corporation, on the side of the power companies. Acting Solicitor General Neal Katyal said the case should be dismissed because the issue is better handled by the political branches.
"There are billions of emitters of greenhouse gasses on the planet and billions of potential victims as well," he said.
The case is being carefully watched by environmentalists.
"The states recognize the unprecedented nature of the lawsuit, but they believe that the federal common law of nuisance is an important arrow in the quiver to pressure all branches of the federal government to come to terms with what is a significant threat to the health and welfare of the state's citizens," said Amanda C. Leiter, a professor at the Catholic University's Columbus School of Law, who wrote a brief supporting the states.
"The case is a way of putting pressure on the EPA to fully and appropriately implement what they are lawfully required to do under the Clean Air Act," said Douglas A. Kysar of Yale Law School, who also wrote a brief in support of the states.
Big business is also following the case with concerns that if a cause of action is recognized, businesses will be subject to more law suits.
The Chamber of Commerce filed a brief in support of the power companies, which include American Electric Power Company and Cinergy Corporation.
"The Chamber believes that common law suits such as this one, which seek to impose caps and reductions on carbon dioxide emissions in a piecemeal fashion on an arbitrary subset of U.S. industry are an especially ill-conceived and constitutionally illegitimate response," the brief said.
The court is expected to decide the case by this summer.