Court Decision May Chill Climate Lawsuits

A recent court win may have a chilling effect on the onslaught of litigation oil companies face in state courts for costs associated with climate change, although legal experts say that relief may be temporary. Recent years have seen a torrential increase in legal claims -- with mixed outcomes -- filed by Democrat-led cities and environmental groups looking to hold oil and natural gas companies accountable for costs associated with extreme weather events linked to climate change. But a high-profile appeals court decision from earlier this month could serve as at least a temporary deterrent to such suits being filed in state courts, according to attorneys and other law experts. Second Circuit The US Court of Appeals for the Second Circuit's ruling on Apr. 1 held that the federal Clean Air Act and US foreign policy doctrine are the appropriate legal tools for addressing greenhouse gas (GHG) emissions and their effects, rather than state tort claims (OD Apr.1'21). New York City had sought damages under state nuisance law claims from BP, Chevron, ConocoPhillips, Exxon Mobil and Royal Dutch Shell. But the court held that such a ruling would be untenable, given that the climate impacts of GHG emissions in "just about every jurisdiction on the planet" are too difficult to tie to any one state. By using state tort law claims like nuisance or trespass, the suits mark a legal trend in which the plaintiffs allege that the production and sale of oil and gas has created personal injury and therefore the companies are liable for costs like flood repairs and other climate mitigation. The Second Circuit's affirmation of a lower court dismissal found that "Artful pleading cannot transform the city's complaint into anything other than a suit over global [GHG] emissions," which means remedies under state-level nuisance claims are barred by federal law. Chilling Effect The Second Circuit's ruling court may tamp down new state nuisance filings, although court watchers note that the doctrine under which the court made its determination -- that the questions have more of a political remedy than a legal one -- is hardly new. "The court's rationale defeats any basis for climate change lawsuits being asserted under state law, including tort claims and those brought by state attorneys general under state consumer laws," says Theodore Boutrous, an attorney with Gibson Dunn, which represented industry in the litigation. He adds that the ruling helps affirm that state claims are not a "legally viable answer." But other attorneys have suggested that the ruling may not wholly stem the tide of such suits. Walter Olson, a senior fellow at the Cato Institute's Robert A. Levy Center for Constitutional Studies, told a George Mason Law & Economics Center discussion on Apr. 16 that the suits against oil companies are "part of a wider trend with creative uses of public nuisance law." Others suggested that federal courts might follow suit in discouraging such suits in a similar vein as the Second Circuit. "It seems too much to have these suits all over the country with significant obstacles," Mark DeLaQuil, an attorney with Baker Hostetler, said during the George Mason event, noting that the climate nuisance suits are different from other environmental pollution suits that have succeeded under state law. "It's not one cement plant, you have the Bakken, you have the Marcellus Shale," making it much trickier for a court to deliver an adequate remedy. Supreme Court The appeals ruling also comes as the Supreme Court is poised to rule on the question of whether a separate but similar lawsuit by the city of Baltimore and other pending state claims are the purview of the federal or state courts (OD Oct.2'20). The court is expected to rule shortly after hearing oral arguments in January and the Second Circuit ruling provides a potential avenue for the court to address the question of whether federal law bars such claims, along with the key jurisdictional question. Bridget DiCosmo, Washington