United States: Industry Wins In Three Climate Change Tort Suits, But Other Governmental Entities Continue Filing Suits

Last Updated: August 8 2018
Article by Kevin Holewinski and Daniella A. Einik

Two federal courts, one in California (involving two suits) and the other in New York, recently sided with energy industry defendants by agreeing with them that the climate change suits filed against them by governmental plaintiffs lacked merit and should be dismissed.

The suits in California were filed by the cities of Oakland and San Francisco against five of the top producers of fossil fuels worldwide, which had claimed that the defendants marketed and produced fossil fuels with knowledge that combustion of those fuels would and did create a public nuisance by causing various environmental impacts, including sea-level rise. In February 2018, the court denied the plaintiffs' motions to remand the cases back to state court. See " Federal Court in California Denies Remand of Climate Change Litigation." The defendants then moved to dismiss the cases for failure to state a claim. In The People of the State of California v. BP P.L.C. (N.D. Cal.), the court granted the motions to dismiss.

As a preliminary matter, the court noted that the dispute in these cases is not over the science of climate change. Based on presentations made by both sides during a science tutorial, all of the parties agree that fossil fuels have and will continue to lead to global warming and sea level rise that will impact Oakland and San Francisco. Instead, the court framed the issue as a "legal" one—namely whether these defendants should be held responsible and pay for the anticipated harm.

The court explained the public nuisance standard under federal common law but noted that it need not go through the steps to analyze the claims because there was a more direct resolution to the matter, holding that the claims were foreclosed because they interfere with the separation of powers and involve foreign policy. In these cases, plaintiffs seek to impose liability on the defendants for the production and sale of fossil fuels globally. According to the court, these types of issues are best left to the executive or legislative branches. Nuisance suits trying to address worldwide conduct are not likely to solve the problem and may in fact interfere with foreign policy discussions and solutions. Ultimately, the court concluded that the problem requires a broader solution than an order by a district court judge or jury verdict on a public nuisance claim.

Less than a month later, the court in New York dismissed New York City's suit that sought to hold industry accountable for alleged climate change impacts but with slightly different reasoning than the California court. The New York court reasoned that because the claims sought damages for injuries and damages allegedly resulting from climate change, they were ultimately based on the "transboundary" emission of greenhouse gases that arose, if at all, under the federal common law, as the claims were not related to the production of fossil fuels in New York but instead related to the production of fossil fuels "worldwide." They thus were "interstate pollution" claims that could arise only under federal law and were barred under American Electric Power v. Connecticut (U.S. 2011) and Native Village of Kivalina v. Exxon Mobil Corp. (9th Cir. 2012).

The court also found that, to the extent the claims sought to hold the defendants liable for "foreign" greenhouse gas emissions, they were barred by the presumption against the extraterritoriality. Further, because the claims implicated countless foreign governments, including their laws, policies, and international agreements, allowing those claims would interfere with foreign policy and run afoul of the Political Question Doctrine.

Despite these recent industry wins, however, the wave of climate change suits filed by governmental plaintiffs continues. In May 2018, King County, Washington, filed suit seeking to hold energy-producing companies liable for climate change-related infrastructure damage under state law. That suit asserts public nuisance and trespass claims and alleges that the plaintiff's property has been and will be damaged by various climate change-related impacts for which they have spent, and will continue to be required to spend, substantial dollars to mitigate those impacts. The relief sought includes an abatement fund remedy, i.e., a court order requiring the defendants to pay money to fund costs to be incurred by the county to remedy climate change impacts.

In early July 2018, the State of Rhode Island followed suit, filing a case in state court against numerous energy producers for various alleged climate change impacts in the state and seeking compensatory damages, equitable relief, disgorgement of profits, and punitive damages under various state common law theories. Finally, on July 18, 2018, the City of Baltimore became the latest governmental unit to sue industry for alleged climate change impacts by filing suit against more than 20 energy companies. That suit asserts seven state common law causes of action and one consumer protection state statutory claim and seeks damages and other equitable relief similar to those sought by King County and Rhode Island in their suits.

Whether the wave of these suits will continue will likely depend on the final outcome of similar pending suits, including how the appellate courts decide these issues, as the recent cases in California and New York are likely to be appealed.

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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Kevin Holewinski
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