United States: New Wave Of Climate Change Related Litigation Focuses On Industry

Last Updated: September 26 2017
Article by Van P. Hilderbrand Jr and Marian C. Hwang

Climate change related cases are on the rise nationwide, just like sea water levels. In fact, according to a United Nations study released in May 2017, the U.S. has three times more climate change litigation cases than the rest of the world combined, and the number of countries with climate change cases has tripled since 2014. In conjunction with the increased number of cases, there has been an uptick in novel legal arguments lodged against governments, government officials, and industry to force each to address, mitigate, and adapt to the risks to human health and the environment posed by the earth's changing climate.

Notable U.S. Climate Change Cases

The two most notable U.S. cases both involve the Federal government's response to (or lack of response to) climate change impacts. The Supreme Court of the United States, in Massachusetts v. EPA, 549 U.S. 497 (2007), held that the U.S. Environmental Protection Agency (EPA) has an "affirmative statutory obligation to regulate greenhouse gases" under the Clean Air Act, 42 U.S.C. §§ 7401, et seq. This ruling has served as the backbone of many policy and regulatory decisions during the previous Obama Administration, such as the Clean Power Plan.

In pending litigation in the U.S. District Court for the District of Oregon, Juliana, et al. v. United States of America, et al. (Case No. 15-01517), a group of twenty-one (21) plaintiffs (ages 10-21) claim that the Federal government is violating the Constitution and the public trust doctrine by failing to reduce greenhouse gas emissions to protect future generations. The judge declined to dismiss the case and set a trial date of February 2018. The government, however, filed a petition for writ of mandamus in June 2017 asking the U.S. Court of Appeals for the Ninth Circuit to either direct the lower district court to dismiss the case or to stay proceedings in the district court until it decides on the merits of the petition. Several amicus curiae briefs were filed on September 5, 2017 in opposition to the case's dismissal. The court has not yet ruled on the extraordinary request. Although filed in 2015, this case will certainly apply pressure on the current administration's revised climate change positions.

As we endure severe weather events such as Hurricanes Harvey and Irma while at the same time the current administration continues to unravel many of the policy directives set during the Obama Administration aimed at curbing greenhouse gas emissions, including withdrawing from the Paris Climate Accord, environmental groups and concerned citizens are turning to the judiciary to address the risks of climate change. However, the question of whether industry and others that may have a duty of care must consider climate change in their decision-making and the scope of that consideration is still unchartered as lower courts have not had many opportunities to address this issue. Discussed below are a few pending actions that will potentially provide the courts that opportunity.

Several Lawsuits Have Been Filed Against Industry to Force Companies to Consider Impacts of Climate Change

CLF v. Shell Oil Products US, et al.

The latest citizen suit was filed on Monday, August 28, 2017 by the Conservation Law Foundation (CLF) against Shell Oil Products US, its parent Royal Dutch Shell PLC, and other company wholly-owned subsidiaries in the U.S. District Court for the District of Rhode Island. CLF v. Shell Oil Products US, et al. (Case No. 17-00396). Among other points, plaintiff CLF argues that the company failed to address the impacts of climate change – such as sea level rise, increased precipitation, and increased severity and frequency of storm events – in its Storm Water Pollution Prevention Plan (SWPPP) for its bulk storage and fuel terminal situated on the banks of the Providence River.

The SWPPP is required by the company's Rhode Island Pollutant Discharge Elimination System permit and the Clean Water Act (CWA), 33 U.S.C. §§ 1251, et seq., and requires permit holders to take all reasonable steps to minimize or prevent any discharge which has a reasonable likelihood of adversely affecting human health or the environment. Material handling and storage, equipment maintenance and cleaning, and other activities at industrial facilities are often exposed to storm water runoff generated from rain and flooding. Runoff that comes in contact with these activities can pick up pollutants, and transport them directly to a nearby river, lake, or coastal water or indirectly via a storm sewer and degrade water quality.

In the complaint, CLF claims the company knows that the impacts of climate change are occurring or will occur in the future. Further, CLF states that the "location, elevation, and lack of preventative infrastructure" makes the terminal "especially vulnerable to these risks" and that the company has not "implemented any actions to address, mitigate, or eliminate these vulnerabilities." In other words, CLF argues that Shell should take all reasonable steps to prevent a discharge of pollution into the Providence River that would occur if the facility were to be flooded, but has not done so to date.

This is not CLF's first time making this argument.  

CLF v. ExxonMobil Corp., et al

In late 2016, CLF filed a similar citizen suit against ExxonMobil Corporation in the U.S. District Court for the District of Massachusetts, alleging that the company had violated provisions of the CWA and the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. §§ 6901, et seq., by failing to plan for climate change impacts at an oil terminal near the Island End and Mystic Rivers in Massachusetts. CLF v. ExxonMobil Corp., et al (Case No. 16-11950).

Specifically, CLF alleged that ExxonMobil did not consider climate change and the increasing risk of severe weather events and floods when it developed and implemented its SWPPP and its Spill, Prevention, Control, and Countermeasures Plan (SPCCP) for the terminal as required in the facility's CWA National Pollutant Discharge Elimination System (NPDES) permit. Further, plaintiff alleged that under RCRA, the company failed to manage the risks of a discharge from the heavily contaminated facility that would be caused by flooding and severe weather. Finally, CLF alleged that the company failed to inform EPA of "relevant facts" regarding its pollution discharges because the company has known for decades about the effects of climate change and failed to disclose that information to the agency.

On September 13, 2017, the District Court ruled on ExxonMobil's pending motion to dismiss the case, finding that CLF could move the action forward. The Court stated that CLF had a "plausible claim that there is a 'substantial risk' that severe weather events, such as storm surges, heavy rainfall, or flooding, will cause the terminal to discharge pollutants into those areas in the near future and while the Permit is in effect." The Court also noted that CLF had well-plead facts sufficient to prove that the company was discharging pollutants causing harm to the aesthetic and recreational interests of CLF's members. The judge did dismiss CLF's claims for potential harms that were not "imminent" and would not occur until much later "in the far future, such as 2050 or 2100." The Court found that CLF lacked standing to bring those claims at this time.

Thus, the Court drew a line between the harms resulting from rising sea levels and severe weather events in the near future and those in the far future, finding that the later are not ripe for review.  All eyes are now on Judge Smith and the U.S. District Court for the District of Rhode Island to see if that court comes to the same conclusion.

California Lawsuits

Another eagerly watched action was recently filed in California state court. In July 2017, two coastal northern California counties and a southern California city each filed lawsuits against oil, gas, and coal companies alleging that the companies knowingly emitted greenhouse gases and knew that the emissions contributed to a wide range of "dire climate-related affects" that threaten their shorelines and communities. Further, the plaintiffs allege that the defendants concealed and denied this knowledge while promoting and profiting from their continued operations.

Fossil Fuel Industry Investigation by New York and Other State Attorney Generals

The argument that large fossil fuel industry companies knew about the impacts of climate change for decades is in line with New York State Attorney General Eric Schneiderman's and the U.S. Securities and Exchange Commission's ongoing investigation into whether these companies adequately accounted for the cost of climate change regulations and the possibility that they could create stranded and obsolete assets. Further, the investigation hopes to answer whether the companies continued to sell high-emitting fossil fuels despite knowing for years that their use exacerbates climate change. The result and findings of the investigation could provide more ammunition for plaintiffs.

Arkema Chemical Plant Experiences Safety Hazards as A Result of Flooding from Hurricane Harvey

Hurricane Harvey ravaged East Texas recently leaving behind high water and severe damage to homes, businesses, and to industrial facilities. The Arkema chemicals plant in Crosby, Texas experienced first-hand the dangers of perhaps not adequately considering flooding and extreme weather events.  Plant workers went to extraordinary measures to move liquid organic peroxide and other chemicals that potentially could ignite if not kept cool when the storm and severe flooding knocked out the plant's main power, backup generators, and refrigeration system. The plant also stores other hazardous chemicals whose release would have contaminated a wide area and affected more than a million residents in the area. Luckily, this did not happen.

According to a recent New York Times article, hurricane, flooding, and resulting power outages were identified as risks by Arkema management a decade ago after Hurricane Ike hit Texas in 2008. However, it is reported that the company did not update its contingency plans and chemical safety risk management plans (RMP) to protect against releases of hazardous chemicals into the environment as a result of these events. The current administration has delayed the implementation of more stringent chemical safety rules established during the Obama Administration. It remains to be seen if, in light of this event, EPA may reconsider its position. Either way, similar claims that companies must consider the potential impacts of climate change when developing their RMPs may be the next target of litigation.

What are the Ramifications and What Should Companies Do?

There are thousands of facilities that are subject to NPDES permits, either storm water (e.g., construction, industrial, municipal), industrial wastewater, municipal wastewater, animal feeding operations, etc. If the courts accept CLF's arguments, this could open the floodgate for environmental groups nationwide to file more actions, including similar claims that RMPs prepared under §112(r) of the Clean Air Act must also consider the potential impacts of climate change. If so and to minimize the potential of becoming a target of litigation, companies would need to develop and certify new SWPPPs or RMPs in order to account for the impacts of climate change.  

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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