Climate lawyers hope 'public nuisance' strategy reverses years of failure

By Daniel Fisher | Feb 13, 2018

SAN FRANCISCO (Legal Newsline) - First they tried suing the utility companies. Then they tried suing the automakers. They even tried suing oil companies on behalf of an Alaskan village in danger of being inundated by oil-fueled rising sea levels.

Each approach ended when courts said that the judiciary branch wasn’t the right place to address human-induced global warming, a problem so big it requires a coordinated international response that only legislators can implement.

Now private plaintiff lawyers and their allies in government are trying a new strategy: Suing under state-law theories of public nuisance. San Francisco and several other California cities and counties have sued five major oil companies including Chevron, ExxonMobil and Shell, claiming they knowingly sell products that, when burned, emit greenhouse gases. 

New York City filed its own lawsuit against those same companies on Jan. 10, saying they are “collectively responsible, through their production, marketing, and sale of fossil fuels, for over 11% of all the carbon and methane pollution from industrial sources that has accumulated in the atmosphere since the dawn of the Industrial Revolution.” 

Critical to these new lawsuits is a theory that seems to have been borrowed from other areas of tort law. To make the case that oil companies should pay for the flooding and other costs associated with global warming, the cities argue the oil companies knew the risks associated with their products and sold them anyway.

“The people who made this product should help pay for the consequences of its use, especially when they had superior knowledge,” said David Bookbinder, chief counsel at the Niskanen Center and consultant to private lawyers representing the cities in their lawsuits against the oil industry.

It’s the kind of argument plaintiff lawyers make when they’re suing drug companies or the manufacturers of defective products, under the theory a company is in the best position to understand the risks of its products and protect consumers against them.

But lawyers face a tougher sell with climate change. Oil companies can only be accused of having “made” their products to the extent they refine hydrocarbons produced by geologic processes millions of years ago. And even if their experts knew the risks of global warming, so did countless others. 

Scientists have been warning about human-induced climate change at least since 1896, when Svante Arrhenius, a Nobel-winning scientist, published calculations projecting the increase in global temperatures due to burning fossil fuels.

More importantly, the federal government has been paying attention to those warnings. In 1965, President Lyndon Johnson told Congress carbon dioxide has “altered the composition of the atmosphere.” And in 1978, Congress was concerned enough to establish a “national climate program,” to “understand and respond to natural and man-induced climate processes.” It followed up with the Global Climate Protection Act in 1987 and the Global Change Research Act in 1990.

When Congress has repeatedly addressed an issue, especially one that requires comprehensive national or even international regulation, courts often apply the doctrine of “field preemption.” Congress has “occupied the field,” in other words, leaving no room for courts to deliver alternative solutions.

The U.S. Supreme Court rejected a lawsuit by Connecticut and seven other states against American Electric Power in 2011, ruling in AEP v. Connecticut that global warming “is an undertaking for the political branches.”   

California’s lawsuit against GM and other five other automakers came to a similar end in 2007 when a federal court said it couldn’t deliver a remedy to global warming caused by vehicle emissions without first making an inherently political decision about whether it is reasonable to allow gasoline-fueled automobiles on the road at all.

The residents of Kivalina in Alaska also lost in 2009 when the U.S. Court of Appeals for the Ninth Circuit ruled the Clean Air Act preempted their lawsuit.

“There’s never been a public nuisance action for diffuse harms that’s gone through the judicial arm,” said Richard Epstein, a professor at NYU Law School and Hoover Institution fellow who advises the Manufacturers Accountability Project, a group fighting climate lawsuits. “It’s always gone through the administrative arm.” 

That’s not entirely true. San Francisco and several other California cities won a $1.2 billion verdict against paint and pigment manufacturers after accusing them of creating a public nuisance by marketing lead paint. The verdict hinged upon a judge’s finding that those companies had advertised their products in California until the 1950s at the same time they were aware of industry research showing lead was dangerous. 

That was hardly a secret, since lead has been known to be poisonous for centuries. But the judge found the paint companies liable anyway, citing embarrassing correspondence and other materials suggesting industry executives downplayed the risk. The case is headed to the California Supreme Court.

The same private lawyers who won the lead paint case are representing cities in the latest round of global warming cases, including Cohen Milstein and Hagens Berman. Hagens Berman partner Matthew Pawa is considered an architect of the public nuisance theory, having argued the Kivalina case and promoted judicial solutions to global warming for years. He didn’t respond to a request for comment.

Chevron described the lawsuits as “factually and legally meritless.”

“Reducing greenhouse gas emissions is a global issue that requires global engagement,” the company said in a prepared statement. “Should this litigation proceed, it will only serve special interests at the expense of broader policy, regulatory and economic priorities.”

The cities and their private lawyers are hoping they can elude the fate of previous lawsuits by using the state law of nuisance, which has never specifically been ruled out by courts in global warming suits. The U.S. Supreme Court left the question of state law for another day in AEP v. Connecticut, and California didn’t bother to appeal its loss to the automakers after Barack Obama won the presidency and promised stricter automotive emissions regulations. So plaintiff lawyers are hoping there is a narrow window for them to argue federal environmental law doesn’t preclude them from seeking their own remedy to global warming under state law.

Both sides are involved in a fierce battle now over whether the California case will return to state court, where the cities presumably would have a better chance of success. The oil companies removed the case to federal court last year, saying the lawsuit involves “long-established federal statutory, regulatory, and constitutional issues and frameworks.” In an additional effort to keep the case in federal court, they sought in December to add Statoil as a defendant, figuring the state-owned Norwegian oil producer would add an element of international diplomacy to the case.

The plaintiffs say they are simply seeking money damages for the harms oil and natural gas cause when people burn them in cars and power plants. Since they’re seeking cash instead of quasi-regulatory measures, the lawyers argue, they aren’t intruding upon EPA’s turf.

“The American tort system says if there are costs associated with the use of a product, try to find the party in the best position to avoid those costs,” said Bookbinder of Niskanen. “They can produce it as much as they want, this is a question of them paying for the externalities.”

Epstein said that approach is too cute by half. The Supreme Court has repeatedly ruled that when a court orders a financial penalty it can be the equivalent of regulation, and Congress with the Clean Air Act and other laws has occupied the field when it comes to regulating air pollution. 

He suspects the whole point of these lawsuits isn’t to actually win money – although the private lawyers representing the cities definitely need to win something to earn their contingency fees – but to try to convince Congress to write the laws they want to regulate greenhouse gas emissions.

Like other conservative academics, Epstein doesn’t think the courts should be used for this purpose.

“Generally speaking, in a democratic process if Congress doesn’t do it and its Congress’ job, you have to respect the negative judgment,” he said.

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Cohen Milstein Hagens Berman Sobol Shapiro, LLP U.S. Court of Appeals for the Ninth Circuit U.S. Supreme Court

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