Colorado Next To Join Anti-Fossil Fuel Lawsuit Effort
Plans by the City of Boulder to move forward on a possible climate change lawsuit against the state’s energy producers reflects a growing legal effort to file lawsuits at the municipal level in state courts, following the announcement of lawsuits in California and New York City in recent weeks.
“We’re not surprised,” Linda Kelly, Senior Vice President and General Counsel for the National Association of Manufacturers (NAM) told Western Wire. “That another suit is being filed seems to be part of a growing trend.”
Kelly is the Director for the Manufacturers’ Accountability Project, a project of NAM’s Center for Legal Action.
Addressing climate change through lawsuits is a “concerning trend,” Kelly said. “We don’t think it’s the way to deal with climate change.”
According to Kelly, the “business model” of these climate lawsuits is to seek out willing plaintiffs for a pre-packaged legal theory using state public nuisance laws, an approach she characterized as farfetched.
“It’s a pretty farfetched theory of liability that producing and selling a product that is critical for the economic function of the country is a public nuisance,” she said.
“The [plaintiffs’ attorneys] find a buyer, fill in the specifics, and then are off to the races,” Kelly said.
A race to the money and not alleviating climate change, according to Kelly.
“The lawsuits so far are all about the damages, and the reason they are all about the damages is because all those law firms who are shopping these lawsuits to the cities and counties, somewhere there is a contract that stipulates they get a percentage of any award, usually somewhere between 20 and 30 percent, and so that’s why it’s about damages and not any other remedy,” Kelly said. “That’s where the pay day comes for the lawyers.”
Climate Lawsuits Come To The West
The Boulder Daily Camera reported this week that Boulder’s City Council was exploring a partnership with an unnamed Washington, D.C. law firm seeking a plaintiff while shopping a case to be filed in state court under the state’s public nuisance laws. The unidentified firm would represent the City of Boulder pro bono along with other Colorado municipalities.
The lawsuit’s aim would be securing damages from fossil fuel producers in Colorado that are linked to greenhouse gas emissions. The possible list of companies to be sued is unknown.
“This is just the sort of cutting-edge, multi-pronged approach to the climate that we should be engaging in,” Mayor Suzanne Jones told the Daily Camera.
“We are facing real costs … and to be able to have attorneys who want to help us do this pro bono is something too good, I think, to pass up.”
Other members of the City Council were already enthusiastic about the possibility of a nuisance lawsuit.
“If we can get people who have profited from fossil fuel extraction to pay us back for some of the costs we’re bearing from some of those impacts, I don’t know why we’d pass it up,” Councilman Sam Weaver told the Daily Camera.
“[I]f we have pro bono attorneys who are coordinating other cities in Colorado to do this, I say full speed ahead,” Weaver said.
Kelly said that while the city would pay no upfront costs for the pro bono representation in the climate change lawsuit, the lawyers would get their cut from any potential successful legal settlement, calling it their “business model.”
Michael Burger, Executive Director of Columbia Law School’s Sabin Center for Climate Change Law, told the Wall Street Journal that cities have not been successful in lawsuits pursuing energy producers for climate change damages. Burger said that state laws have not precluded legal action.
Moving Forward Despite Past Failures
Recent lawsuits filed in California appear to be testing the state court approach Burger outlined. A host of law firms have filed climate lawsuits up and down California: Hagens Berman Sobel Shapiro in San Francisco, Oakland, and New York City and Sher Edling in Santa Cruz, San Mateo, Marin, and Imperial Beach (joined by McDougal, Love, Boehmer, Foley, Lyon & Canlas).
The lawsuits share more than just legal arguments, however, as New York City’s lawsuit lists two lawyers, Steve Berman and Matt Pawa, as “of counsel”—the same lawyers representing San Francisco and Oakland’s lawsuits.
Earlier this week, New York City Mayor Bill de Blasio announced that the city would seek billions in damages from five oil and gas companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Royal Dutch Shell—by filing a lawsuit blaming them for emissions that de Blasio argued helped produce the damage from Hurricane Sandy in 2012.
“It’s time for them to start paying for the damage they have done,” de Blasio said at a press conference yesterday. “It’s time for Big Oil to take responsibility for the devastation they have wrought.”
Berman, in an interview with VICE, laid out his vision for the climate change lawsuit end game.
“Imagine if I could get ten or 15 cities to all sue and put the same pressure on the oil companies that we did with tobacco companies and create some kind of massive settlement,” Berman said.
Berman should know. His efforts in the 1990s led to a $206 billion settlement with cigarette companies, the largest legal settlement in U.S. history.
De Blasio announced that the city will also move to divest its nearly $190 billion public pension investments from fossil fuels over the next five years, city officials announced.
Flanking de Blasio and other elected officials were anti-fossil fuel activists Naomi Klein, Greenpeace’s Naomi Ages, and Bill McKibben of 350.org, all of whom were repeatedly praised for their efforts to persuade the city to act.
“Today, the mightiest city on our planet takes on its most powerful industry, its richest and most powerful and most irresponsible industry,” McKibben said at the press conference.
A Chevron spokesman called the lawsuit “factually and legally meritless.”
“[The lawsuit] will do nothing to address the serious issue of climate change,” Chevron’s Braden Reddall told The Washington Times. “Reducing greenhouse gas emissions is a global issue that requires global engagement. Should this litigation proceed, it will only serve special interests at the expense of broader policy, regulatory and economic priorities.”
“The Supreme Court ruled that the federal common law of nuisance was preempted by the Clean Air Act even though the government had not done much with the Clean Air Act,” said C. Boyden Gray, former ambassador to the E.U. and a special envoy to the E.U. for energy issues, during a Federalist Society teleconference.
“It is still a PR effort more than a legal one,” Gray said, referring to the New York City lawsuit.
Headed To The States
NAM’s Kelly pointed to plaintiffs’ attorneys poor track record in the federal courts for the recent switch to state lawsuits.
“They’re trying to find a place where the claim will stick. The Supreme Court has already said that there is no common law public nuisance under federal law,” Kelly said. She said she was surprised New York City made a federal claim.
“The federal courts have been very clear they are not going to entertain that claim,” Kelly said. Moving the suits to state courts where the laws and the courts might be more favorable was not surprising, she continued.
Pawa also represented plaintiffs in two earlier failed cases, American Electric Power v. Connecticut and Kivalina v. ExxonMobil.
A unanimous 8-0 decision in American Electric Power v. Connecticut delivered by the United States Supreme Court in 2011 ruled that the eight states—and the City of New York—suing manufacturers on a claim of public nuisance for greenhouse gas emissions were preempted by the Clean Air Act. Authority to regulate greenhouse gas emissions fell to Congress and the Environmental Protection Agency, not the courts.
Similarly, Kivalina v. ExxonMobil Corp., a case that saw the town of Kivalina, Alaska sue energy producers for public nuisance violations, was not allowed to proceed. The District Court for the Northern District of California dismissed the case, ruling that the court did not have the authority to make a determination of an “acceptable limit on the level of greenhouse gases” emitted by the energy producers. That authority rested with the EPA, the court said. The Night Circuit Court of Appeals agreed, upholding the decision of the District Court, and the U.S. Supreme Court denied further review.
Tristan R. Brown, lawyer and Assistant Professor, State University of New York Syracuse, College of Environmental Science and Forestry, wrote in Seeking Alpha that the markets shrugged off the lawsuit, likely due to “their low immediate likelihood of success,” but cautioned investors and energy producers not to overlook the lawsuits either, as they are a new avenue for pushing an environmental agenda.
“While they [lawsuits] are unlikely to have a direct financial impact on their intended targets, it is becoming clear that the legal system is rapidly becoming the next front in the post-Paris Agreement push by environmental groups to limit fossil fuel production,” Brown wrote.
“While state courts can be friendlier jurisdictions for such lawsuits than federal courts have been, the lawsuits still face major challenges in proving damages, not least of which is the legal allocation of responsibility,” Brown told Western Wire via email. “Taken together, the targeted publicly-traded fossil fuel producers have been responsible for but a small fraction of the historical greenhouse gas emissions from oil and gas combustion, let alone those from all fossil fuel combustion or all sources of emissions overall.”
The coastal cities themselves aren’t entirely off the hook, according to Brown.
“Furthermore, many of the coastal municipalities involved have increased their exposure to climate change by allowing (and in some cases encouraging due to the high property values and subsequent property taxes) oceanside development,” Brown said. “It is one thing to say that fossil fuel combustion has contributed to climate change via greenhouse gas emissions but quite another to say that Exxon Mobil or Chevron is individually responsible for an exact dollar amount of climate change-related damages in a location.”
Brown told Western Wire that, while he was not speaking specifically about the intentions of the municipalities in the California, New York City and Colorado cases, “frequently lawsuits filed for difficult-to-calculate damages are intended to be the first step in a negotiation for a private settlement without actually ever making it to trial.”
In his op-ed, Brown said that, aside from possible legal headwinds, the lawsuits face a different set of factors than the cigarette lawsuits did in a straight up comparison, and the cities suing the energy producers have shortcomings of a different sort.
“A critical flaw of this comparison is that fossil fuel consumption, unlike smoking, has positive impacts on human well-being and can only be entirely avoided at great expense, if at all, greatly complicating legal efforts to obtain damages for past greenhouse gas emissions through the courts,” Brown wrote.
Brown also pointed to a recent rebuttal from one of the defendants in the New York City lawsuit. ExxonMobil challenged the California municipalities that appeared to equivocate on the impact of climate change between the lawsuits they filed and previous bond offerings made by the cities, which downplay or omits possible climate change effects for investor purposes.
“On a separate legal front, Exxon Mobil recently demonstrated a possible response to New York City’s lawsuit as well,” Brown continued. “Several California municipalities are suing the company (among other fossil fuel producers) for damages based on rising sea levels and expected future extreme weather events amplified by climate change. This week Exxon Mobil pushed back in federal court by pointing out that the very specific climate change-related damages presented by the municipalities stand in stark contrast to the same municipalities’ own bond offerings, which inform investors that climate change impacts are too uncertain to be accurately predicted or their material adverse effects assessed.”
Despite these obstacles, the cities themselves have a different calculus when it comes to filing these lawsuits, Brown concluded.
“The lawsuits being filed by municipalities against major fossil fuel producers can be seen as one response to the lack of national climate legislation in the U.S.,” Brown told Western Wire. “Under a carbon tax or carbon price (such as the one that was nearly passed by Congress in 2009) municipalities facing rising sea levels or other climate change impacts could have expected to receive some of the resulting new revenue stream to finance resiliency investments. The lack of such a revenue stream and relatively poor finances of many municipalities have caused these infrastructure upgrades to be partially unfunded, however, and the municipalities have identified large fossil fuel producers as a potential source of capital via these lawsuits for climate change-related damages.”