September 28, 2017

Global Warming Tort Litigation: Two Very Different Approaches



In the latest chapter of U.S. climate change litigation, San Francisco and Oakland sued five oil and gas companies (Chevron, Exxon, BP, Shell, and ConocoPhillips) last week, accusing them of contributing to a public nuisance – global warming-induced sea level rise. Filed simultaneously in state court, these (essentially identical) complaints seek an order requiring the defendants to pay for constructing sea walls and other infrastructure necessary to protect the cities from sea level rise, which threatens billions of dollars of coastal property.

These cases follow closely on the heels of three global warming tort lawsuits filed in July by two California counties and a municipality (San Mateo County, Marin County, and Imperial Beach) against numerous fossil-fuel companies for allegedly contributing to global warming. Those three cases filed in state court as well, also focus on sea level rise injuries.

What makes these two sets of cases noteworthy is that the legal claims are based on state, and not federal, law – a development long in the making. But the two sets of cases employ fundamentally different legal strategies, and there are several reasons why the San Francisco-Oakland approach may prove to be a far sounder strategy.

The basic difference between the two strategies is simplicity versus complexity. San Francisco and Oakland allege a single claim (public nuisance) against a manageable number of defendants, and seek an “abatement fund” to pay for the required adaptation. This is the same legal theory successfully employed by these cities (and other California cities and counties, including San Mateo County) against the lead paint industry, which resulted in a court order (now on appeal) establishing a billion-dollar abatement program to be funded by the lead paint industry. Environmental harm is a classic case of public nuisance, and simply requires demonstrating that the defendant contributed to a condition that constitutes an unreasonable interference with public rights.

In contrast, San Mateo et al. allege, in addition to public nuisance, a host of additional legal claims, including design defect, failure to warn, negligence, and trespass; they name 37 defendants from the fossil fuel industry; and they seek a broad array of relief, including compensatory and punitive damages, injunctive relief, and disgorgement of profits.

Normally, this sort of kitchen-sink approach to litigation is not a problem: Many years and many cases later, the legal process will winnow those claims down to the ones most effective at getting relief for the plaintiffs. But, to borrow Justice Stewart’s description of death-penalty cases, climate litigation “is different,” and this approach seems destined to play into the hands of the defendants.

First, the large number of defendants in the San Mateo et al. approach is going to greatly slow these cases down. Many of these defendants will assert unique defenses that will have to be litigated. The plethora of defendants already has created problems: The initial complaints named Statoil, the Norwegian oil company, as a defendant. But Statoil is majority-owned by the Norwegian government, and as a sovereign entity Statoil was entitled to move the case from state court to federal court – which is not where the plaintiffs want to be. And while the plaintiffs quickly dropped Statoil after filing their complaints, they still are suing defendants that have just emerged from bankruptcy court: Arch Coal and Peabody Energy. Sure enough, Arch and Peabody dragged the case into federal court and invoked the protection of bankruptcy law.

This “sue them all” approach is both unwise and unnecessary: A small number of oil and gas companies have dominated fossil fuel production for many years and could likely be held jointly liable for the injuries (as just occurred in the lead paint case), meaning they would be on the hook even for damages caused by other fossil fuel companies. Adding all of the extra parties does not seem to serve much purpose.

Most importantly, the numerous claims San Mateo et al. have put into play will create unnecessary legal difficulties. For example, one of their claims is that fossil fuels are a defective product which, in a case like this, requires the jury to find (as the plaintiffs repeatedly allege) that the risks of the product outweigh its benefits. From the defendant’s viewpoint, having a jury weigh all the global benefits of fossil fuels against their harms allows them to make some of their favorite arguments (such as the “political question” doctrine) that attack the very idea that global warming issues can be resolved in court rather than by legislative and executive branch action. (For legal wonks out there, this is why the fossil fuel industry – unsuccessfully – went to great lengths in the last global warming tort case, Kivalina v. ExxonMobil Corp., to convince the Ninth Circuit Court of Appeals that this risk-utility balancing test was mandatory in the federal public nuisance claim at issue there.)

If this claim that fossil fuels are defective ever went to trial, defendants would happily introduce mountains of evidence regarding the societal benefits of fossil fuels around the world over the past several decades as compared to the harms of global warming. In short, San Mateo et al. have now injected into global warming litigation a balancing test that defendants simply love.

Their failure-to-warn theory also spells trouble. First, it invites the defendants to put San Mateo and Marin counties and Imperial Beach on trial by focusing on what the plaintiffs knew about global warming and when they knew it. And, oddly, even as the plaintiffs accuse the fossil fuel industry of failing to issue warnings about global warming, they also allege that in 1965 President Lyndon Johnson stated in a message to Congress that “[t]his generation has altered the composition of the atmosphere on a global scale through . . . a steady increase in carbon dioxide from the burning of fossil fuels.” The plaintiffs go on to say that, by 1982, Exxon made public its internal findings about global warming through publications “in at least three peer-reviewed scientific papers.” These allegations would seem to undercut the plaintiffs’ own failure-to-warn theory.

The San Mateo plaintiffs also have volunteered to prove that fossil fuels could have been phased out decades ago, and thus have alleged that technologies such as fuel cell vehicles and carbon capture and storage were viable in the 1960s and ’70s. This is likely to be a major – and completely unnecessary – fight.

San Mateo et al. also allege, repeatedly, that the defendants deliberately deceived policymakers, and should be held liable for “affirmatively and knowingly campaigning against the regulation of their fossil fuel products.” This plays right into the fossil fuel industry’s theme that global warming litigation unfairly targets its Constitutional rights, including the right to petition the government, and is an open invitation to a First Amendment battle (based, for you wonks, on the Noerr-Pennington doctrine). To be sure, the First Amendment does not protect fraud, but trying to impose liability based upon lobbying will play into the fossil fuel industry’s defense strategy.

Taking a bold legal step requires a carefully calibrated approach. Unfortunately, the decision by San Mateo et al. to throw in the kitchen sink unthinkingly plays into the fossil fuel industry’s hands. In fact, these well-intentioned cases may end up setting back legal efforts to hold fossil fuel companies liable for global warming injuries.

By sticking to a single, straightforward legal claim and a handful of defendants, the San Francisco-Oakland approach avoids all these problems, and is thus significantly more likely to succeed.