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U.S. Court of Appeals Hears NYC Climate Tort Case, Properly Identifies that Case is About Emissions and Asks Whether It Should be Preempted

New York, NY.  Phil Goldberg, Special Counsel to the Manufacturers’ Accountability Project, attended the oral argument in The City of New York v. BP P.L.C., which was held this morning at the Thurgood Marshall U.S. Courthouse in New York and issued the following observations:

The judges hearing this appeal were presented with clear arguments as to what this case is about. They heard the City’s counsel say that a New York state court—not Congress, or the Environmental Protection Agency—should be empowered to impose a worldwide penalty on the manufacturing and sale of oil and gas. As defense counsel Ted Boutrous of Gibson Dunn explained, though, various state courts “are not the place[s] to solve the problem” of climate change. Climate change presents complex federal and international public policy matters that must be balanced and decided at the direction of Congress.

The judges specifically identified the fallacies behind the City’s legal position. First, they observed that there is no “limiting principle” to such an assertion of power. They also expressed concern that it would target only the defendants the City chose to name in the case and not “others”—which would presumably include most people—who engage in activities that use oil and gas such as driving cars.

The City, in responding to these questions, was exposed for trying to argue contradictory positions. On one hand, it argued that the case was about the sale of oil and gas—not the emissions by consumers—when it comes to the conduct at issue in the case.  But, on the other hand, the City said the case was about the impact that consumer emissions was having on the City.  As one judge asked, isn’t the City “trying to have it both ways?” The judge appeared to conclude, “so this is an emissions case.”

The reason the City was twisting itself into such contradictions is simple. If this is an emissions case—if a finding for liability in the case would have a direct or indirect impact on the regulation of GHGs emissions—it would clearly be a federal issue and dismissed under the U.S. Supreme Court’s ruling in AEP v. Connecticut. As Boutrous explained, the purpose of tort liability is not merely compensatory, but to regulate conduct as unlawful. The only way to avoid the absolute liability sought here, one judge pointed out, would be to stop selling oil and gas. Banning the sale of oil and gas would clearly be a regulatory act, as would the initial determination of whether to impose a penalty on the production and sale of oil and gas and the direct and indirect impacts that such a penalty would have on the price and use of oil and gas.

In questioning Mr. Boutrous, the judges identified the legal concerns with allowing this case to proceed. As one judge asked, doesn’t the regulatory nature of this case “make this a political question” that is “non-justiciable?”  and, “Isn’t preemption the best path” for the court to dispose of this case?

Although it is impossible to determine how a court will rule based on oral arguments, the judges identified the key issues in this case and expressed healthy skepticism about the legal justifications the City offered for this lawsuit.