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2018 Saw Major Wins for Manufacturers, But Big Decisions Still to Come in 2019

Over the past two years, manufacturers have faced an onslaught of baseless litigation generated by trial lawyers seeking huge contingency fees and public officials who are putting politics above the law. In 2018, lawsuits targeting energy producers were filed by 14 municipalities, one state and a group of Pacific coast fishermen. Also, two state attorneys general continued to pursue unfounded investigations and litigation against these manufacturers. What has become clear is that there is no merit to any of these legal actions and the real motivation is some combination of monetary gain and political notoriety. Despite their repeated failures so far, these lawsuits put the jobs of manufacturing workers in America at risk, waste local taxpayer resources and undermine actual solutions to climate change.

As these suits drag on into 2019, key decisions over the next year could dictate the fate of this litigation.

  1. Appeals of Dismissed Suits

In 2018, federal judges in California and New York dismissed the climate change tort suits filed by San Francisco, Oakland and New York City, respectively. Both judges explained that selling oil and gas does not give rise to tort liability and that determining how to address climate change is an issue best left for legislatures and regulators, not the courts.

The cities have appealed those rulings, which will be heard in the U.S. Court of Appeals for the Ninth and Second Circuits, respectively. Briefing is just underway, and oral arguments will take place in the coming months. It is unclear when the circuit courts will rule on these two cases.

The losses in the federal district courts have thrown the plaintiffs’ lawyers into disarray, with San Francisco and Oakland firing their legal representation, Hagens Berman, and replacing them with Sher Edling, a rival firm. While their plaintiffs’ attorneys may differ, these cases’ merits do not. If the circuit courts follow the law, as first laid out by the U.S. Supreme Court in AEP v. Connecticut, the cases should remain dismissed. There is no legal support for these cases.

  1. Battle over Venue: State or Federal Court

A threshold question for many of the remaining suits is whether they should be heard in state or federal court. Many of the claims are being brought under state tort law, but in order to sue the multitude of national and international defendants over issues as global as climate change, the suits need to be heard in federal court and pursuant to federal law.

Typically, plaintiffs want their cases heard in state court. State judges are often elected and are believed to favor local plaintiffs, lawyers and politicians over out-of-state companies. They also may want to avoid federal court because the only cases heard so far—those filed by the cities of San Francisco, Oakland and New York City—have all been heard in federal courts and have all been dismissed. Judges presiding over the lawsuits filed by Baltimore, as well as municipalities in Colorado and the state of Rhode Island are set to make decisions on this issue soon.

Just to be clear, though, no climate change tort case has ever been successful, either in state or federal court. The last time a climate change tort suit was heard in state court was Comer v. Murphy Oil, and the Mississippi judge dismissed the claims as preempted under federal law. As the U.S. Supreme Court explained in AEP v. Connecticut, setting emission standards for carbon dioxide and making policy over the cost and availability of fossil fuels is a national legislative function, not one for state or federal courts. As Justice Ginsburg wrote for the Court, there is “no room for a parallel track” of climate change tort litigation. A patchwork of legal rulings from courts all across the U.S. is not a meaningful solution to the global problem of climate change.

  1. New York Attorney General’s Lawsuit

In 2018, the New York attorney general’s three-year climate change investigation into ExxonMobil culminated in a federal lawsuit against the manufacturer after a judge forced the hand of the New York attorney general’s office, saying it should put up or shut up: “You’ve been investigating for two years, so either you’re going to file a case, or you’re not going to file a case.”

The absurdity of this lawsuit stems not only from the fact that it was filed despite three years of investigation finding no evidence of malfeasance by the company, but also because it is based on the idea the company failed to accurately account for the potential impacts from future climate and related regulations. Allegations over climate change have been in the popular discourse since the 1960s and 1970s, and the regulations at issue have never materialized. More to the point, ExxonMobil has been an active supporter of climate change policies for years. The Wall Street Journal has called out the New York attorney general’s office for its abuse of the Martin Act and said that when the case gets out of the political arena, it “should be laughed out of court.”

The Martin Act is a concerning avenue for abuse. It is a New York law that empowers the AG to investigate and prosecute companies that mislead investors, even where the company never intended to defraud investors and the investors never relied on the alleged misstatements. Claiming that a company violated the Martin Act is serious business, and public officials should not use this law in a thinly veiled attempt to drive national energy dialogue.

If this lawsuit gains any traction, it could set a dangerous precedent for U.S. manufacturers, potentially leading to similarly frivolous and politically-motivated investigations and Martin Act suits against other industries. The case is scheduled to go to trial on October 23.

  1. Massachusetts Attorney General’s Investigation

Massachusetts Attorney General Maura Healey is following in New York’s footsteps, also pursuing an investigation of ExxonMobil. While the investigation seeks to determine what ExxonMobil knew about climate change and when, it bears repeating that climate change science has been a focal point of federal and international attention since the 1960s. This litigation is about national climate change politics, not the law or objective wrongdoing.

ExxonMobil took the longshot of trying to get the U.S. Supreme Court to stop the case, explaining that Attorney General Healey doesn’t have jurisdiction over this matter. But the Supreme Court declined to review the case. As a result, the attorney general can go ahead with the investigation.

There is little reason to believe that Attorney General Healey will find anything in the documents that justifies her inquiry. This is because many, if not all, of the documents she is seeking have already been produced and reviewed by the New York attorney general’s office. There simply is nothing here other than political bluster.

The New York and Massachusetts investigations are politically-motivated attacks on energy manufacturers, and ExxonMobil is their target. There are better ways to elevate one’s political profile.

On all these fronts, the MAP will continue to defend the livelihood of American manufacturing workers and work tirelessly to bring an end to these baseless and costly court battles in 2019. American manufacturers and manufacturing workers deserve better.