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National Law Journal: Climate Change Requires Collaboration, Not Courtroom Brawls

by Phil Goldberg

The U.S. Court of Appeals for the Third Circuit is about to hear climate lawsuits by Delaware and the city of Hoboken that could increase energy costs and take climate policy out of the hands of federal lawmakers. These cases are part of an effort by two dozen local and state governments to force energy companies to give them money for local climate impacts. If the lawsuits are successful, Americans, who already face elevated energy prices, will see prices go up even more.

The challenge for each of the governments suing is getting around a decade-old ruling by the U.S. Supreme Court that rejected attempts to impose liability on energy companies for climate change. In that case, American Electric Power v. Connecticut, the court said climate change policy is a federal and regulatory question—not one for the courts.

The Supreme Court understood that liability questions in climate cases are intertwined with national and international policies over the production and sale of energy, as well as emissions from sources around the globe over the past 150 years. The court explained that Congress and federal agencies are uniquely equipped to balance the factors that go into America’s energy policy, including energy independence and affordability, and using state law to determine any of these issues “would be inappropriate.”

The current wave of climate litigation plainly conflicts with these Supreme Court statements. And if these suits were to succeed, the implications would be troubling for American consumers and businesses. For example, these lawsuits could hinder the federal government’s ability to make energy-related decisions critical to our national security—issues that have taken on significant importance in the past few months.

These lawsuits would also lead to a rise in energy prices for American families and businesses. A lawyer representing some of the local governments has said a large part of the reason he and others are pushing these lawsuits is to hold “oil consumers responsible.” That’s code for creating a backdoor penalty on our energy use. They want to make it more expensive for us to put gas in our cars, heat and cool our homes and power our workplaces—even if we can’t afford it.

For their plan to work, the state and local governments crafted their complaints to try to avoid federal courts and hope a state court will ignore the Supreme Court’s caution signs. So they allege the energy companies violated state laws in developing and selling fossil fuels, leading to local climate damages. They have told the federal courts their cases have nothing to do with national or international energy production or carbon emissions.

Their own lawsuits, though, belie these assertions, something that has not escaped notice of federal judges in many of the hearings that have been held so far in this litigation.

For example, a judge sitting in the U.S. Court of Appeals for the Fourth Circuit noted that the climate case brought by Baltimore repeatedly mentioned fossil fuel “production.” He asked Baltimore’s lawyer: “Wouldn’t you be better off just to delete ‘production’ from your complaint?” But the inclusion of “production” is no typographical error. The lawsuits deliberately allege harm from the production and use of fossil fuels.

Similarly, there is no denying these cases are about global emissions. Although lawyers for the cities and states have insisted that their cases are not about fossil fuel emissions at all—again because regulating carbon emissions is the province of the federal government—they also repeatedly say the cases are about how defendants’ conduct has “exacerbated emissions.”

In one telling exchange, a judge on the U.S. Court of Appeals for the Eighth Circuit asked Minnesota’s lawyer: isn’t your entire theory of causation based on interstate carbon emissions? The attorney did everything he could to avoid the word causation, saying, carbon “emissions is the avenue of the source of injury.” Here, avenue is just another word for cause.

At least one federal appellate court has seen through this doublespeak: last year, the U.S. Court of Appeals for the Second Circuit affirmed the dismissal of New York City’s climate lawsuit. It said, “we are told that this is merely a local spat about the City’s eroding shoreline, which will have no appreciable effect on national energy or environmental policy. We disagree. Artful pleading cannot transform the City’s complaint into anything other than a suit over global greenhouse gas emissions.”

Ultimately, none of these lawsuits will help in the fight against climate change. There is no suing our way to the future, and pricing gas and electricity out of the reach of many Americans is not viable. Local and state governments should drop the lawsuits and work with the manufacturing community on the critical technologies that will drive the clean energy economy of the future.

Phil Goldberg is a special counsel to the Manufacturers’ Accountability Project and the office managing partner of Shook, Hardy & Bacon in Washington, D.C.

Read the full editorial here.

Capital Gazette Op-Ed: Earth Day should be about renewing call for climate innovations, not litigation

by Phil Goldberg

The theme of Earth Day 2022 is “Invest in Our Planet.” We all — businesses, governments, and citizens — are being called upon to “act boldly,” “innovate broadly” and “implement equitably.”

In today’s sensationalized political and media climate, it’s easy to lose sight of the meaningful work manufacturers are doing to address climate change.

This “act boldly” and “innovate broadly” approach has been working. The cost of wind and solar farms has fallen dramatically while output has soared. Cars, airplanes and factories have all become more efficient. And, over the past decade, manufacturers have increased productivity and reduced greenhouse gas emissions. This is just the beginning.

Instead of investing in these efforts to reduce emissions, some local officials and plaintiffs’ lawyers are engaging in a litigation campaign trying to blame climate change on the companies selling us the oil and gas we use every day. Baltimore was one of the first to file a climate lawsuit, and Annapolis and Anne Arundel County have joined this effort. This litigation, though, will do more harm than good in the fight against climate change.

The U.S. Supreme Court pointed out the problems with these types of lawsuits a decade ago: they try to make courts craft America’s energy policy, which is something the judiciary is ill-equipped to do. Oil and gas are necessary to our everyday lives, and courts do not have the tools to weigh the factors — from making sure energy is affordable for Americans to national security considerations — that must be part of figuring out how to address the changing climate.

Kathleen Curry, a former Democratic leader in the Colorado legislature, recently expressed similar concerns about Boulder’s climate lawsuit and what it means for Colorado families and businesses. “If these lawsuits mean gas will go to $7 or $10 a gallon” — as companies pass the lawsuits’ costs onto consumers — ”many people won’t be able to afford to even drive to work. That’s not a solution that is viable for, or fair to, hard-working Coloradans” — or Marylanders.

There are also national security concerns with these lawsuits. As Curry also pointed out, the lawsuits “target only American, Canadian and European energy companies” and give large state-owned fossil fuel companies in Russian, Saudi Arabia and other non-Western countries a free ride. Why would we sue ourselves? Wouldn’t that make us more dependent on foreign energy and less in control of our energy future?

Finally, and important to this year’s Earth Day themes, these lawsuits will hinder, not advance the effort to “innovate broadly.” As economist Wayne Winegarden wrote in Forbes recently, there is a disconnect between driving massive investment in new energy technologies and suing companies for selling us current energy technologies. The message to investors is: Beware! You will be sued as soon as your new technology is no longer good enough.

Indeed, the federal appellate court that dismissed New York City’s climate lawsuit said the litigation “ignores economic reality.” These lawsuits will also drive energy production to places with less of a commitment to the climate than we and our allies have. Selling us the energy we need simply should not be turned into a liability-inducing event.

Today’s climate litigation is not about investing in our planet. It’s about pointing fingers and playing climate politics. As this year’s Earth Day themes recognized, innovation — not litigation — is the better way to protect our future.

Phil Goldberg is special counsel to the Manufacturers’ Accountability Project and the office managing partner of Shook, Hardy & Bacon, LLP. He resides in Maryland.

Read the full column here.

Pennsylvania Capital-Star: Some cities, states say Big Oil should pay for climate damage

by Alex Brown

In the waning days of 2021, a grass fire broke out in Boulder County, Colorado. Fueled by extreme drought and high winds, the fire swept through the communities of Superior and Louisville. Within hours, it had destroyed more than a thousand structures—making the Marshall Fire the most destructive in the state’s history.

The December fire was an extraordinary event, but perhaps a preview of the new normal under the conditions caused by climate change. Late last month, another fire forced the evacuation of 18,000 residents in and around Boulder. Fortunate winds saved the city from catastrophic damage, but the near-miss—and the timing well outside of the region’s traditional fire season—was a warning sign of what’s to come.

“We’ve already experienced impacts [from climate change], but nowhere near the amount that we’re likely to experience in the coming decades,” said Aaron Brockett, Boulder’s mayor. “We have a lot of work to do to make our community more resilient.”

Boulder leaders are working to reduce fuel loads in the forests and open spaces owned by the city. They’re seeking to make the neighborhoods bordering those lands more fire resilient. They’re hoping to upgrade fire stations and equipment. And they’re planning projects to reduce flood risk from the severe storms that climate change is likely to bring.

That work will cost tens, if not hundreds, of millions of dollars. And local leaders think oil companies should pay for it.

In February, the city and county of Boulder, along with San Miguel County in western Colorado, scored a significant win in their legal fight against ExxonMobil and Suncor energy companies when a federal appeals court ruled that the case would remain in state court.

Local governments earned another win last week when a different federal appeals court ruled that Baltimore’s case against oil companies also belonged in state court.

The decisions were the first under new U.S. Supreme Court guidelines, established last May as part of Baltimore’s climate lawsuit, directing appeals courts to take a more expansive look at oil companies’ arguments that the cases belong in federal court. The rulings have been closely watched by the nearly two dozen states, cities and counties that have filed lawsuits likewise seeking payment from fossil fuel companies for the damages caused by climate change.

Oil companies, with the backing of some other states, have fought to move the cases to federal court, where they think national regulations around drilling, refining, emissions and air quality would invalidate the legal claims against them. The local governments that have sued say their cases rest on Big Oil’s deception about the harm its products would cause, giving them a foothold under state law to seek damages.

The jurisdictional battle, which more federal appeals courts are likely to rule on this year, will have massive implications for whether the climate lawsuits proceed to local jury trials. If they do, it would set up a high-stakes showdown over the still uncertain territory of legal accountability for climate change—with billions of dollars on the line.

Several states and industry groups have weighed in to support the oil companies, arguing that rulings against them could devastate the industry and make energy more expensive.

“If it’s in federal court, [the oil companies] win,” said Hannah Wiseman, a professor of law at Penn State University’s College of Earth and Mineral Sciences. “These cities are wise to the precedent, and they’ve made clear they’re raising issues of state tort law and not arguing for federal climate policy. They’re doing a good job of that, and it’s hard to predict how the courts will ultimately come out.”

Seeking Accountability

The governments suing the oil industry come from regions facing sea-level rise, wildfires, drought, flooding and severe weather. They cite extensive news reporting—including investigations from the Los Angeles TimesInside Climate News and The Guardian—that shows oil companies understood the dangers of climate change decades ago but led campaigns to undermine the scientific consensus that their products were contributing to a growing crisis.

“By the ‘70s, [oil companies] knew that a lack of action on moving away from fossil fuels would cause dramatic changes to the climate,” Brockett said. “Meanwhile, the burden for repairing the damage falls on local communities, and we don’t have the financial wherewithal to bear that burden.”

Backers of the lawsuits compare them to landmark cases against tobacco and opioid manufacturers, which resulted in multibillion-dollar settlements over the public health crises fueled by their products and business practices.

“They’re just saying, ‘You violated state law, because you deceived us about what you knew about your products in order to sell more of them,’” said Bob Percival, director of the University of Maryland’s environmental law program. “The oil companies are desperate to avoid a public trial that would focus attention on what they knew, when they knew it and how they tried to deceive the public.”

The cases mark an unprecedented attempt to assert legal accountability for climate change, a crisis with worldwide causes and consequences.

“The fact that it’s a global phenomenon is obviously the thing that distinguishes these tort actions from any case we’ve seen before,” said Pat Parenteau, a professor of environmental law at Vermont Law School, who also serves in an informal advisory group that supports some of the governments’ cases.

The oil companies named in the cases argue that federal energy and pollution policies should preempt state claims. ExxonMobil and Suncor have contended in court filings in the Colorado lawsuit that they followed federal regulations on drilling, refining and distributing fossil fuels. The companies also assert that the lawsuits are backdoor attempts to establish climate policy through the courts, since Congress has failed to take meaningful action.

“On jurisdictional matters, climate change is a national issue that requires a federal solution, not a patchwork of various state-based rulings,” said William Allison, spokesperson for Energy In Depth, a research and public outreach project of the Independent Petroleum Association of America, a trade group.

Major companies facing the lawsuits—BP, Chevron, ExxonMobil, Suncor, the American Petroleum Institute, Koch Industries and Shell—did not respond to Stateline’s requests for comment.

Supporters of the lawsuits say the cases aren’t about enforcing or enacting policies to reduce carbon emissions, but rather about seeking accountability for what they say are decades of dishonesty that contributed to political inaction on climate change.

State or Federal Court?

Many of the cases have been through years of legal wrangling, and the current battle centers on whether they should be heard in state or federal court. Those backing the lawsuits say local juries should hear the cases.

“These cases, which are fundamentally about local injuries to communities, should be heard in state court,” said Marco Simons, general counsel with EarthRights International, which is representing the Colorado communities. “Our cases are not about stopping climate change writ large or broader policy issues. They’re about paying for damages suffered by these communities.”

But some states have weighed in to argue that the cases belong in federal court. For example, Indiana has filed multiple amicus briefs in favor of oil companies, including a recent filing with 13 states in the case brought by Baltimore.

“These claims are displaced by the existing federal regulatory scheme, which tells us the limits in advance on extraction, refinement and use of fossil fuels,” Tom Fisher, Indiana’s solicitor general, said in an interview. “If a court in California decides that Exxon and Chevron are responsible under public nuisance theory for causing global climate change and that requires an injunction to limit their output, that’s obviously going to affect Indiana and other states.”

Some business groups, including the Manufacturers’ Accountability Project, an arm of the National Association of Manufacturers that fights climate litigation, also have urged federal courts to take jurisdiction.

“[C]limate policy is federal and regulatory in nature—not one that can be decided by state courts,” Phil Goldberg, the project’s special counsel, wrote in an email to Stateline.

The National League of Cities, which advocates for municipal governments, takes a different view.

“This is really about federalism principles and where cases should be heard if there’s a local harm,” said Carolyn Berndt, the group’s legislative director for sustainability. “The local harm in this case happens to be climate change, and the right court for this is state court.”

Although federal judges mostly have ruled that the cases belong in state court, a U.S. Supreme Court ruling last May forced federal appeals courts to reevaluate those decisions because they hadn’t considered all the energy companies’ arguments.

This February, the 10th U.S. Circuit Court of Appeals ruled that the case filed by the Colorado municipalities would remain in state court, the first decision under the new Supreme Court guidelines. Last week, the 4th Circuit ruled that Baltimore’s case against oil companies also belonged in state court.

Several other circuit courts have yet to rule under the new guidelines.

“This is an important year,” said Richard Wiles, president of the Center for Climate Integrity, a nonprofit that supports communities that are taking on oil companies. “If these cases end up in state court, that’s a really good sign. If one of the circuits goes [the oil companies’] way, that could create grounds for an appeal to the Supreme Court.”

Moving Ahead

While several federal appeals court decisions await, some cases are moving ahead. Last month, a Hawaii Circuit Court judge ruled that a lawsuit filed by Honolulu could proceed to trial even as the jurisdictional issues are still being settled. The case could be the first to reach the discovery phase, an outcome advocates say energy companies have fought tooth-and-nail to avoid.

“They absolutely do not want it to get that far,” said Tommy Waters, chair of the Honolulu City Council. “What are they hiding?”

Waters said Honolulu is facing billions in damages from sea-level rise alone, and it also requires expensive upgrades to its stormwater infrastructure to handle extreme precipitation.

“Our roads are falling into the ocean, homes are falling into the ocean, our beaches are disappearing,” he said. “We simply can’t afford it.”

Another case, filed by the state of Massachusetts against ExxonMobil, also is moving toward discovery. That lawsuit, like most of the cases brought by state attorneys general, focuses on consumer fraud violations. Such lawsuits seek civil penalties, rather than restitution for the costs of climate mitigation.

‘They All Go Bankrupt’

If the local governments prove their cases against the oil companies, the implications would be massive. Courts may have to determine the extent to which a given company is responsible for the climate damages in a particular region.

“Science has made great strides in being able to attribute what percentage of temperature rise and what impacts are associated with a particular company’s emissions,” said Percival, the University of Maryland professor. “There are now some really distinguished experts who can testify about how to apportion the harm.”

And if some cities and counties are successful, advocates expect a deluge of others to file suits.

“If these cases are ruled in favor of the plaintiffs, then every city in the country could follow suit,” said Wiles of the Center for Climate Integrity. “There isn’t a city budget out there that couldn’t use help from the oil companies for their climate-driven adaptation costs.”

Backers of the lawsuits acknowledge that the costs of dealing with climate change nationwide are far more than the oil companies could bear.

“If these cases all go to their logical extreme, [the oil companies] all go bankrupt,” said Parenteau, the Vermont Law School professor. “They should.”

Others argue that outcome is why the cases should be dropped.

“We choose to use energy, which is mostly fossil fuel, because it makes our lives better,” said Wayne Winegarden, a senior fellow at the Pacific Research Institute, a California-based think tank that advocates for free-market principles and is supported in part by oil industry-affiliated groups. “Imagine they win $100 billion in one of the suits. That becomes a per-barrel tax that gets passed on to consumers.”

Read the full article here.

E&E News: Court sides with Calif. cities in climate litigation fight

by Lesley Clark

A federal appeals court delivered a victory yesterday to several California cities and counties that are suing the oil and gas industry for the costs of climate change, with a ruling that the case should be heard in state court.

In a unanimous ruling, the 9th U.S. Circuit Court of Appeals rejected arguments from the industry to move the climate lawsuit — led by California’s San Mateo County — to federal court.

“Even if the complaints raise federal policy issues that are national and international in scope, implicate foreign affairs and negotiations with other nations, and require uniform standards, they do not ‘raise a substantial question of federal law for the purpose of determining whether there is jurisdiction,’” Judge Sandra Ikuta wrote for the court.

The ruling is the third win for local governments, following a Supreme Court decision last May that sent a host of climate liability cases back to the appellate level. Federal appeals courts in Baltimore earlier this month and in Colorado in February sided with the challengers, agreeing to keep the lawsuits before the state bench (Climatewire, April 8).

Ikuta, who was appointed by former President George W. Bush, and the two other judges rejected each of the arguments that the oil and gas companies have raised in a bid to move a flurry of similar cases to federal courts, where the companies believe they face better odds.

That included a pitch that the cases belong in federal court because some oil extraction occurs in “federal enclaves.”

The local governments, Ikuta wrote, are not saying that their claims are based on wrongful acts that took place on federal property.

“Rather,” she wrote, “their complaint raises state-law claims arising from injuries to real property and infrastructure within their local jurisdictions.”

For example, she wrote that San Mateo’s alleged injuries stem from a trespass claim —that the companies’ petroleum activities “ultimately led to a sea-level rise that caused water to enter San Mateo property in violation of trespass law and caused various damages and nuisances there, including the destruction of real property and infrastructure within its borders.”

Chevron Corp., the lead defendant in the case, said it “respectfully disagrees” with the decision.

“Plaintiffs’ claims are based on allegations about worldwide carbon emissions and address global climate change — national and international issues that can be governed only by federal, not state, law,” Chevron spokesperson Braden Reddall said in a statement. “Although the court has decided that plaintiffs’ claims for now can proceed past this preliminary stage, Chevron looks forward to additional challenges that should put an early end to this meritless lawsuit.”

The judges also turned down the companies’ attempt to claim federal jurisdiction by citing the Outer Continental Shelf Lands Act, saying it’s unrelated to the alleged damages.

“The counties’ claims focus on the defective nature of the energy companies’ fossil fuel products, the energy companies’ knowledge and awareness of the harmful effects of those products, and their ‘concerted campaign’ to prevent the public from recognizing those dangers,” the opinion says. “These allegations do not refer to actions taken on the Outer Continental Shelf.”

Ikuta was joined in the opinion by Judges Morgan Christen, an Obama appointee, and Kenneth Lee, a Trump appointee.

The lawsuit is a consolidation of cases brought nearly five years ago by San Mateo, Marin and Santa Cruz counties, as well as the cities of Imperial Beach, Richmond and Santa Cruz (Climatewire, July 18, 2017).

The California cases are among an array of lawsuits filed by mostly Democratic-led states, cities and counties that are suing the industry, accusing it of misleading consumers about the dangers of burning fossils.

Advocates for the climate litigation welcomed the ruling.

“This is another big, but not surprising, loss for the oil and gas majors,” said Richard Wiles, president of the Center for Climate Integrity. “Three federal appeals courts have now agreed that their arguments to escape accountability in state court do not pass muster.”

He called it a “major victory” for California communities “seeking their day in court against corporate polluters that spent decades lying about their products’ role in fueling the climate crisis.”

But Phil Goldberg, special counsel to the Manufacturers’ Accountability Project, an initiative of the National Association of Manufacturers that opposes the litigation, noted that the judges wrote that the case raises what is “no doubt an important policy question.”

That shows, he said, that there is “no escaping that the nature of climate change, this litigation and the remedies being sought are all inherently beyond the scope of any state court.”

Goldberg said he expected the climate liability cases to eventually end up at the Supreme Court.

“It makes no sense to spend years litigating climate cases in state courts when it is clear that climate change is global in nature, has many causes and requires broad-based policy solutions,” he said.

Read the full article here.

E&E News: Lawyers use Baltimore climate win to argue for state court

by Lesley Clark

Municipalities looking to hold oil and gas companies accountable for climate impacts are pointing to a ruling in Baltimore’s high-profile liability case to bolster their argument that the fights should proceed in state court.

In briefs filed last week, a lawyer for several California counties and Washington, D.C.’s top legal officer cited the April 7 ruling from the 4th U.S. Circuit Court of Appeals, which rejected every argument industry lawyers presented to move Baltimore’s case to federal court, where oil and gas companies may face better odds.

The 4th Circuit’s decision follows a Supreme Court ruling last year that said federal appeals courts could consider a broader set of arguments for challenging remand orders that had sent liability cases like Baltimore’s back to the state courts where they were originally filed.

In the ruling, three 4th Circuit judges unanimously and “resoundingly” agreed with Baltimore that the case did not raise federal issues (Climatewire, April 8).

The 4th Circuit said state court was the right place for Baltimore’s claims of climate deception, “rejecting many of the same removal arguments advanced by defendants here,” wrote D.C. Attorney General Karl Racine (D) in a filing last week in the U.S. District Court for the District of Columbia.

Attorneys for San Mateo County, Calif., also cited the 4th Circuit ruling in their own case seeking oil industry compensation for wildfires, flooding and other effects of a warming planet. There are dozens of similar cases playing out in courts across the country.

Racine in 2020 sued four oil companies for “systematically and intentionally” misleading consumers about the effects of fossil fuels on climate change (Climatewire, June 29, 2020).

In his brief last week, Racine pointed to five arguments that the 4th Circuit rejected, including the federal officer removal statute, which says cases involving federal officials generally belong in federal court.

The 4th Circuit ruling found that “the nexus between the defendants’ deceptive marketing and any government-controlled fossil-fuel production was ‘too tenuous to support removal,’“ Racine wrote.

The Baltimore ruling was the second win for states, cities and counties following the Supreme Court’s decision last May that sent a host of climate liability cases back to federal appellate judges who had previously largely agreed that the lawsuits belonged in state courts. The 10th U.S. Circuit Court of Appeals in February agreed to keep a Colorado lawsuit before a state bench — even after considering additional industry arguments for federal jurisdiction (Climatewire, Feb. 9).

The question of which courts should hear climate liability cases has stymied action on dozens of lawsuits by municipalities looking to force the oil and gas industry to pay for producing planet-warming emissions. Most of the suits were filed in state courts, but industry lawyers have sought to move the cases to federal benches, where judges could find that the municipalities’ claims are preempted by the Clean Air Act.

“At the end of the day, given that there’s going to be a broad look at these issues from a number of circuits, one would expect that the Supreme Court would probably want to weigh in again and make sure that everyone is aligned,” said Phil Goldberg, special counsel for the Manufacturers’ Accountability Project, an initiative of the National Association of Manufacturers that opposes the litigation.

He added that “it shouldn’t be lost” that climate liability challengers have chosen courts that appear likely to favor their arguments.

“They’re trying to cherry-pick the circuits they think they’re going to get the best results from,” Goldberg said, noting, for example, that no similar lawsuits have been filed in the historically conservative 5th U.S. Circuit Court of Appeals, which handles cases in Louisiana, Mississippi and Texas.

“If you had cases in other jurisdictions, they might look very different, which is what the Supreme Court has to consider,” he said.

Racine in February submitted the Colorado opinion to the D.C. District Court, writing that the 10th Circuit had “analyzed and rejected many of the same removal theories.”

The industry in a March filing countered that “contrary” to Racine’s assertions, the Colorado case does not undermine federal jurisdiction and that the 10th Circuit had “erred by rejecting removal jurisdiction based on the application of federal common law.”

Baltimore’s lawsuit is far from settled: Exxon Mobil Corp. on Friday asked for a two-week extension to file a petition for the case to be heard by the full slate of 4th Circuit judges. If the request is granted, Exxon would have until May 5 to file for rehearing.

“This appeal encompasses complex issues of federal jurisdiction including whether claims seeking redress for harms allegedly caused by global climate change necessarily arise under federal common law,” the filing notes.

Read the full article here.

E&E News: Court ‘resoundingly’ sides with Baltimore in climate lawsuit

by Lesley Clark

A federal appeals court sided with Baltimore yesterday in the city’s climate liability lawsuit against major oil and gas companies, saying the case should be heard in state court in a victory for cities and states that are seeking to force fossil fuel giants to pay for local climate impacts.

In a unanimous decision by the 4th U.S. Circuit Court of Appeals, judges rejected eight arguments that the oil and gas companies have raised in a bid to move a flurry of similar cases to federal courts, where the companies believe they face better odds.

The judges said they found no reason that Baltimore’s case should not be heard by a state court.

“The impacts of climate change undoubtedly have local, national, and international ramifications,” Judge Henry Floyd wrote for the court. “But those consequences do not necessarily confer jurisdiction upon federal courts, carte blanche.”

The ruling is the second win for states, cities and counties following a Supreme Court decision last May that sent a host of climate liability cases back to the appellate level. A federal appeals court in February agreed to keep a Colorado lawsuit before a state bench (Climatewire, Feb. 9).

The Baltimore and Colorado rulings come as a landmark U.N. climate report this week highlighted climate litigation in the United States and across the globe as a burgeoning trend that could influence “the outcome and ambition of climate governance.”

The 4th Circuit did not offer an opinion on the merits of the case, which claims that the oil and gas industry engaged in a disinformation campaign to deflect from what it knew were the dangers of burning fossil fuels.

But the judges said they “resoundingly agree with Baltimore” that the case does not raise federal issues. They added that they are “confident that Maryland courts can capably adjudicate claims arising under their own laws.”

Sara Gross, chief of the affirmative litigation division in the Baltimore City Department of Law, said the city welcomes what she called a “forceful rejection of defendants’ ongoing attempts to mischaracterize our case and avoid accountability for the costs and harms their deception has imposed on Baltimore.”

She called the decision a “big win for Baltimore’s residents, workers, businesses and taxpayers.”

But the ruling makes it more likely that the liability cases will wind up at the Supreme Court once again, where a 6-3 conservative majority has eyed climate lawsuits with skepticism, said Phil Goldberg, special counsel for the Manufacturers’ Accountability Project, an initiative of the National Association of Manufacturers that opposes the litigation.

“It makes no sense to spend years litigating climate cases in state courts when it is clear that climate change is global in nature, has many causes and requires broad-based policy solutions that only Congress has the ability to enact,” Goldberg said.

He said the ruling misses the real issue: “The nature of climate change, this litigation and the remedies they seek are all inherently beyond the scope of any state.”

BP PLC, the lead industry defendant in Baltimore’s case, did not reply to a request for comment yesterday.

Baltimore originally filed its climate liability lawsuit against BP, Exxon Mobil Corp. and 24 other oil companies in state court in 2018, but the energy companies moved the case to federal court.

The 4th Circuit in March 2020 rejected industry’s bid to move the case out of state court, but it reviewed the entire case again after the Supreme Court last year found that federal appellate judges should consider every argument that companies raise when deciding the proper venue for the climate liability cases.

‘Defies logic’

In yesterday’s decision, Floyd, who was appointed during the Obama administration, detailed in 93 pages why the 4th Circuit found that none of industry’s eight arguments proves that the case belongs in federal court.

He said Baltimore’s case is rooted not in federal common law but in state-level claims that BP and other oil firms misled the public about climate change.

The opinion several times chides the oil companies, saying at one point that they failed to point to any “significant conflict” between Maryland law and the companies’ federal interests — which Floyd called a “complete abdication” of the effort to get the case removed to federal court.

“Essentially, defendants believe that removal is proper based on federal common law even when the federal common law claim has been deemed displaced, extinguished, and rendered null by the Supreme Court,” Floyd wrote. “We believe that position defies logic.”

The opinion also says the companies’ argument, in part, is based on a “misunderstanding” of the city’s lawsuit.

“Baltimore essentially challenges the efficacy and safety of defendants’ fossil-fuel products and sales practices promoting them,” the opinion says. “The complaint is not solely about the initial act of fossil-fuel extraction, nor is it concerned with setting and regulating greenhouse-gas emissions.”

The opinion also rejects the argument that the case is preempted by the Clean Air Act, finding that the argument rests on a “fundamental confusion” about the city’s case.

“None of Baltimore’s claims concern emission standards, federal regulations about those standards, or pollution permits,” the opinion notes. “Their complaint is about defendants’ fossil-fuel products and extravagant misinformation campaign that contributed to its injuries.”

Floyd also rejected the argument that cited the companies’ operations on the outer continental shelf, saying their “marketing practices, which led to increased consumption of their fossil-fuel products and then climate change, are far removed” from those operations.

He also rejected the companies’ argument that the federal courts should hear the case because it is tied to the bankruptcy of a Chevron subsidiary, Texaco, in 1987.

The opinion notes that the companies “speculate that other corporate entities” may be operating under bankruptcy and filed a presentation that cites 134 bankruptcy filings from energy companies from 2015 to 2017.

But, the opinion notes, “defendants do not specify if any of those corporate entities are actually related to any of them, nor do they indicate if or when those bankruptcy cases were confirmed by federal courts. By failing to direct us to anything further, we find this is insufficient to carry any burden for bankruptcy removal and decline to do counsel’s work.”

Floyd was joined in the opinion by Chief Judge Roger Gregory, a Clinton and George W. Bush appointee, and Stephanie Thacker, an Obama appointee.

Read the full article here.

Bloomberg Law: Baltimore climate case against oil giants sent back to state

by Jennifer Hijazi

Baltimore’s climate liability suit against oil companies belongs in state court, an appellate panel ruled Thursday, despite reviewing a fuller suite of industry arguments. The decision comes after the Supreme Court last year granted a petition from BP Plc, Exxon Mobil Corp., and other companies asking that appellate courts re-examine the cases based on a broader array of industry claims…The decision “misses the real issue here,” Manufacturers’ Accountability Project special counsel Phil Goldberg said in a statement. “Baltimore’s case, which the court acknowledges is novel, may be creatively packaged under state law, but the nature of climate change, this litigation and the remedies they seek are all inherently beyond the scope of any state,” he said.

Read the full article here.

Real Clear Energy Op-ed: Exposing Baltimore’s Short-Sighted, Frivolous Climate Lawsuit against Energy Companies

For decades, Congress has been unable to pass effective climate legislation. Presidential administrations have tried to use the regulatory process to shape climate policy with limited results. Out of frustration with these legislative and regulatory shortcomings and an overzealous belief that they know best, some climate activists have tried to use the judicial system to impose their energy and climate policies on the American people—even if their ideas don’t make sense.

The climate activists are doing this by filing lawsuits against energy companies to try and make them pay for local climate change impacts.  These lawsuits want to use state laws to obtain compensation for damages related to sea level rise and extreme weather such as more intense hurricanes. It is faulty logic to suggest these companies “caused” climate change and should have to fix it. The effort to use state law is significant because federal courts have already said that there is no legal or factual foundation for these lawsuits.

One of the most prominent current lawsuits is from Baltimore. On January 25, the Court of Appeals for the Fourth Circuit will begin hearings on the venue and applicable law governing this, and by extension, many other such lawsuits.  Although technical legalities could determine the outcome of this hearing, the lawsuit raises issues that should not be ignored. 

First, climate change is a global phenomenon and we all, through our consumption, share responsibility for its creation and resolution. U.S. energy companies did what consumers and successive U.S. governments wanted them to do. They provided reliable and affordable energy to improve the lives of hundreds of millions of Americans over multiple generations. The lawsuits reveal a lack of concern for the immediate affordability, reliability, and security of America’s energy supply.

Second, the lawsuits are not about climate justice and will not do anything to solve climate change; they are about money—just ask the municipalities and their lawyers. For states and municipalities, potential revenue windfalls are a major incentive for participation. For trial attorneys, the Manufacturers’ Accountability Project has pointed out that attorneys working for the plaintiffs could get paid up to 25 percent of the potential damages; in other words, the plaintiffs’ lawyers stand to make millions or billions of dollars. 

For climate activists, the lawsuits are a backdoor way to cripple the U.S. energy industry and make energy too expensive for us to buy, thereby theoretically accelerating the transition to a lower carbon economy.  However, crippling the U.S. energy industry and putting the cost of energy out of reach of many Americans will create massive and dangerous energy shortages, shift energy market power back to OPEC and a very hostile Russia, and hurt us all.  If anyone doubts this, they should look at the largely self-inflicted and ongoing European energy disaster.

Third, making a few energy companies pay billions of dollars is completely arbitrary and discriminatory.  Climate change has many causes from farming, to energy use, to personal and community land use. Tens of thousands of companies from across multiple industries, in scores of countries, and over generations produced the carbon products that are now warming the globe. Unremarked upon by the plaintiffs is that the largest cumulative greenhouse gas (GHG) producers are not the corporations targeted in these lawsuits but state-owned or quasi state-owned energy companies. Why not sue them? 

Shall we sue meat producers or rice farmers?  How about companies supplying hospitals with anesthetic gases?  All of these companies make highly GHG emitting products.  Why not just sue every person who consumes any product that emitted GHG during its creations or consumption?

The truth is that activists and their local backers do not want you and me—motorists, meat or rice eaters, or people who received anesthesia while in hospital— to be directly punished for our energy use.  Doing so would create a political backlash ending activist efforts to stop fossil fuel consumption. It also would expose the logical flaws in their reasoning.  Hence, the next best strategy is to wage a legal war on the energy industry in the hopes of so damaging its business prospects that they can no longer operate.

Climate change is not the fault, either today or in the past, of the energy industry. If we are going to solve the climate problem, it will come through innovation, new technologies, and government-private sector collaboration, including with the energy industry. Local and state officials should not engage in meritless lawsuits that exacerbate our problems, and taxpayers certainly should not tolerate this activity.

Jonathan Chanis manages New Tide Asset Management, LLC, a Maryland-based company investing in commodities and listed equity. He formerly taught at Columbia University and worked at several financial firms, including Citigroup and Goldman Sachs. 

Read the full op-ed here.

E&E News: Baltimore, Big Oil to square off tomorrow in court

Attorneys for Baltimore and fossil fuel interests are scheduled to face off tomorrow in a closely watched climate litigation case that could signal which courts may ultimately hear allegations that the oil and gas industry misled the public about the dangers of global warming.

The oral arguments before a Virginia appeals court will be the first since a Supreme Court ruling in May found that appellate judges could consider a broader range of factors when deciding whether liability lawsuits should be heard in state or federal court (Greenwire, May 24, 2021).

The procedural ruling in Mayor and City Council of Baltimore v. BP PLC, was seen as a win for the companies, who argue that energy production is a federal issue and see the federal courts as a friendlier venue.

Baltimore, which originally filed its climate liability lawsuit against BP, Exxon Mobil Corp. and 24 other oil companies in state court in 2018, will argue that the cases — which seek damages for the costs of dealing with climate change effects such as sea-level rise and flooding — should be heard at the state level.

The outcome could influence other cases; nine similar climate litigation cases were sent back to the appellate level after the Supreme Court ruling. The 9th U.S. Circuit Court of Appeals in Hawaii is scheduled to hold arguments Feb. 18 in a similar case (Climatewire, Jan. 13).

“Judges look at other judges’ work,” said Georgetown Law professor William Buzbee. “Each time a court begins to explore and clarify what is tenable and what isn’t, it shifts the playing field, it narrows what the cases are about and begins to both illuminate arguments and introduce others.”

Attorneys watching the case suggested the companies are looking at the case as a way to convince the Supreme Court to wade into the merits of climate litigation.

“This is an important case,” said Bob Percival, director of the University of Maryland’s environmental law program. “I don’t think the companies realistically think they’re going to win … but what they’re hoping is to set up a vehicle to go to the Supreme Court and say ‘Now, you can be really aggressive and preempt all climate litigation.’”

Percival noted the high court last May made it clear that it was not accepting the industry’s invitation to decide the case on the merits.

“They want to get an activist Supreme Court to wipe out the biggest headache facing these oil companies, they desperately want to avoid a trial that would expose to the public what they knew about climate change,” he said.

Phil Goldberg, special counsel for the Manufacturers’ Accountability Project, an initiative of the National Association of Manufacturers that opposes the climate liability litigation, said the companies will argue that addressing climate change requires a coordinated federal approach.

“These are federal policy issues, and they need to be heard at the federal level and decided at the federal level,” Goldberg said. “It should not be decided by individual state judges on a state-by-state basis.”

In the association’s friend of the court brief filed in August, it argued that to resolve the various state and municipal climate change claims, state courts would need to “create new rules governing the international production, sale, promotion, and use of fossil fuels.”

That, the association said, would “undermine national energy objectives, including federal efforts on the climate, energy independence, the stability of the electric grid, and energy affordability.”

Read the full article here.

Washington Examiner: No one is above the law, not even the government

The D.C. Council this month passed legislation to allow the District of Columbia’s attorney general to sue individuals and businesses for political reasons without accountability. It did so under the “emergency” powers of the district, avoiding the checks and balances of the regular legislative process. This misuse of government power is unprecedented, undemocratic, and unnerving.

The legislation in question exempts the district from “anti-SLAPP” laws, which protect people from being sued in an effort to intimidate them from engaging in public policy debates. SLAPP stands for “strategic lawsuits against public participation,” and anti-SLAPP laws are widely supported by the American Civil Liberties Union, media organizations, and others as core safeguards protecting free speech.

So what is this all about? Climate change politics.

In a letter to the council, the attorney general said he wants to be exempt from anti-SLAPP accountability in order to maintain his lawsuit against energy manufacturers over their involvement in the climate change debate. Whatever one’s political persuasion or view on climate and energy, this litigation and the anti-SLAPP exemption are horrible ideas.

This litigation is not about whether climate change is a serious problem. It is. The only path forward is to innovate new ways for the world to source and use energy so it can do so sustainably.

However, developing such climate policies has proven difficult; they often present complex problems rife with regional and political differences. After all, they affect basic aspects of all of our lives: how we heat and cool our homes, fuel our cars, power our workplaces, and so much more. It is frustrating that partisan politics has paralyzed Washington over the past few years on lots of topics, let alone on critical, complicated issues such as climate change.

Scapegoating energy companies for Congress’s dysfunction, though, is no way to make climate policy, even if it makes for good politics in some circles. The Supreme Court already said so in response to a previous attempt at this litigation. In 2011, in a unanimous opinion written by Justice Ruth Bader Ginsburg, the court said balancing the competing interests involved in energy policy, including affordability, energy independence, and climate, is something only Congress can do.

Read the full op-ed here.