Enforcement and Inspection, Sustainability

Big Oil Seeks SCOTUS Relief from Climate Change Liability Lawsuits

Thirty Big Oil companies, including Chevron Corp., Citgo Petroleum Corp., Exxon Mobile Corp., and Shell Oil Products Co., have petitioned the U.S. Supreme Court (SCOTUS) to ask for its review of a combined group of climate change liability cases led by San Mateo County, California.

The question presented to SCOTUS “encompasses a threshold issue that has divided the circuits: whether claims seeking relief for harms allegedly caused by transboundary emissions are necessarily governed by federal law,” according to the petition.

Background

Dozens of U.S. state and local municipalities are seeking compensation from the fossil fuel industry for relief from the mounting costs of climate change-related damages. The suits allege the industry has been aware of the global damages caused by burning fossil fuels for decades and have sought to “sow public doubts that fossil fuel emissions were linked to climate change,” says Inside Climate News.

The suits, filed in state courts, accuse the fossil fuel defendants of greenwashing the impact of burning fossil fuels upon the environment and the public.

Damages sought center on consumer protection and cost recovery.

As an example, the State of New Jersey filed suit in October 2022 against 5 major oil companies and the American Petroleum Institute (API), seeking an injunction “to abate the ongoing nuisance their deceptive and tortious conduct has created in New Jersey” and compensation for monetary damages.

“It is also asking the court to impose unspecified monetary penalties for the loss of natural resources such as coastal wetlands that are shrinking as seas rise in response to the changing climate,” Inside Climate News adds.

“Casey Norton, a spokesperson for ExxonMobil, said the suit will do nothing to combat climate change,” according to the article. “Legal proceedings like this waste millions of dollars of taxpayer money and do nothing to advance meaningful actions that reduce the risk of climate change,” Norton said in a statement. “ExxonMobil will continue to invest in efforts to reduce greenhouse gas (GHG) emissions while meeting society’s growing demand for energy.”

In another example of climate change litigation, a group of Puerto Rican municipalities joined the fray in November 2022 when they filed suit against oil, coal, and other defendants.

“The towns say the companies coordinated a multibillion-dollar ‘fraudulent marketing scheme’ to convince consumers that fossil fuel products do not alter the climate. That campaign ran contrary to the companies’ own studies showing their products accelerate climate change, resulting in more deadly storms, the lawsuit said,” says Reuters. “The municipalities said the companies outlined a plan of deception in a joint memo that took aim at international climate negotiations in the 1990s. The coordinated deception spanning decades violates U.S. racketeering and antitrust laws among others, the suit claims.”

More than 1,000 new climate damages lawsuits have been filed worldwide since 2015, with most of the cases filed in the United States, according to the American Bar Association.

Legal questions

Plaintiffs in these cases claim public and private nuisance, failure to warn, and design defect.

The heart of these suits is basic product liability claims, although the Puerto Rican cases introduce a new angle with the racketeering and antitrust claims.

Product liability law is basically the concept that manufacturers or vendors of products are responsible for any harm that arises from the ordinary use of products or merchandise.

Under product liability law, there are four primary causes of action:

  • Negligence: the failure to exercise proper care
  • Breach of warranty: the failure of a seller to fulfill the claims made about the quality or type of product
  • Misrepresentation: providing consumers with false security about the safety in using a product
  • Strict liability: responsibility for all injuries caused by ordinary use of the product

Determining liability will involve hard-fought battles “over evidence, and the validity, the admissibility, of … various documents,” says Patrick Parenteau, emeritus professor and senior climate policy fellow at Vermont Law School, according to Yale Environment 360 (e360).

SCOTUS petition

Plaintiffs in these cases seek to hold the companies liable under state laws.  Meanwhile, defendants claim the deciding factor is whether their operations cause pollution that crosses state and county lines. If so, they contend, it is a matter for the federal courts.

“Fossil fuel companies have largely unsuccessfully pushed to have the lawsuits tried in federal court, rather than state courts, arguing that the issues under litigation are of national significance,” NPR notes. An August 17, 2021, ruling issued by the Philadelphia Circuit Court of Appeals “marked the fifth time that a federal appeals court has blocked the oil industry from moving such cases out of state courts, says Karen Sokol, a professor at the Loyola University New Orleans College of Law.”

The current petition before SCOTUS concerning the lawsuits brought by the California counties states:

“… global climate change, a phenomenon that, on respondents’ own theory, is the cumulative result of billions of individual decisions stretching back more than a century. If respondents’ unprecedented effort to transform state courts into global climate-change regulators succeeds, every state court in the Nation will be empowered to use state law to unilaterally impose its own view of energy and environmental policy nationwide and, indeed, worldwide. … The significance of these cases supports immediate review. Respondents’ claims expose the energy sector to vast, indeterminate monetary relief that will deter investment and employment across the industry and the broader economy, and cause disruption to the global economy. These cases will also disrupt and impede the political branches’ international climate change initiatives and negotiations. And these cases threaten to impose a patchwork of conflicting tort standards applicable to global production, marketing, and emissions under the laws of multiple States.  This Court should decide whether these cases are governed by federal law and removable to federal court.”

The current SCOTUS petition also mentions the 9th Circuit’s reasoning in remanding the case back to state court when it held that petitioners must satisfy the exception articulated in Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, which authorizes removal where a state-law claim necessarily implicates a substantial federal question.

In the case of the California counties lawsuit, the 9th Circuit held that respondents’ claims “do not require resolution of a substantial question of federal law because they do not require any interpretation of a federal statutory or constitutional issue, and are displaced by the Clean Air Act (CAA).”

The 9th Circuit also held that the complete-preemption doctrine must also be satisfied to remove the case to federal court because the fossil fuel industry’s argument did not involve a federal statute.

The fossil fuel industry petition argues that:

  1. “The Ninth Circuit’s decision deepens an existing conflict on the question whether federal jurisdiction under 28 U.S.C. § 1331 exists over claims necessarily and exclusively governed by federal law but pleaded under state law.”
  2. “The decision also implicates a circuit conflict on the question whether federal law necessarily and exclusively governs claims seeking redress for injuries allegedly caused by the effects of interstate and international (GHG) emissions.”

Condemning evidence

Many of the lawsuits claim the fossil fuel industry has been aware of the damages to the public and the environment for decades.

“The fossil-fuel industry knew as early as the 1950s that [GHGs] could warm the planet, the Honolulu lawsuit alleges, citing a nuclear physicist’s warning at an [API] event in 1959 that rising carbon dioxide levels could melt ice caps and submerge coastal cities,” says news organization Al Jazeera.

Another lesser-known document considered as evidence of the fossil fuel industry’s prior knowledge of the damages caused by burning fossil fuels is a 1968 paper commissioned by the API, which was written by Stanford Research Institute scientists Elmer Robinson and Bob Robbins, says e360.

In this paper, “the industry’s own experts had warned its largest trade organization … ‘that the science around climate change was clear, it was abundant, and that the best indications were that the risks were really substantial.’

“In stark terms, the decades-old paper explained that the world’s use of fossil fuels was releasing carbon that had been buried for millennia, and ‘it is likely that noticeable increases in temperature could occur,’ if that burning continued. That would mean warming oceans, melting ice caps, and sea levels that could rise by as much as four feet per decade, the report predicted. ‘There seems to be no doubt that the potential damage to our environment could be severe,’ the authors concluded. ‘The prospect for the future must be of serious concern.’”

In the 1970s, the API and several fossil fuel companies began doing more research into the impact of GHG emissions and created a task force to monitor climate research.

“By 1988, the industry ‘had amassed a compelling body of knowledge’ on how burning fossil fuels would warm the planet and cause climate chaos, including extreme rainfall, drought and heat waves,” Al Jazeera adds.

The Honolulu v. Sunoco climate damages case alleges “[Fossil fuel] Defendants embarked on a concerted public relations campaign to cast doubt on the science connecting global climate change to fossil fuel products and [GHG] emissions. …”

“‘Disinformation works best when we anchor it in just a teeny sliver of truth, and then you just warp it, and that’s what they did – raise uncertainty, raise doubt where there was none,’ Richard Wiles, president of the Center for Climate Integrity, told Al Jazeera. The campaign has been successful, he added.”

With so much monetary damage at stake, fossil fuel industry decision-makers are throwing significant resources at fighting these allegations, meaning any legal conclusions in these cases will not be reached anytime soon.

Many analysts compare these battles to the ones fought against the tobacco industry that resulted in a settlement of more than $200 billion and severe warnings being placed upon those products.

One thing is certain: These types of lawsuits will continue to increase in number as global temperatures rise, resulting in additional damages to the environment.

Meanwhile, the fossil fuel industry is lobbying for states to pass laws to block these types of lawsuits from municipalities.

“Since 2019, municipal litigation preemption bills have been introduced in Arizona, Florida, Ohio and Kansas, and one has passed in Texas, according to the Center for Climate Integrity,” a watchdog group, says NPR.

“These are multiple fronts to ensure that [cases] never get to the merits,” says Karen Sokol, a professor at the Loyola University New Orleans College of Law, “adding that the fossil fuel industry is looking for ‘blanket immunity’ from corporate accountability,” NPR adds.