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Sunday, January 26, 2020

Does it matter if oil is useful? Cities say no in climate lawsuit filings

By Daniel Fisher | Jun 1, 2018

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SAN FRANCISCO (Legal Newsline) – California cities suing five of the world’s biggest oil companies said in court filings Thursday that the question of whether fossil fuels are useful to society is irrelevant to whether the companies should pay billions of dollars in damages over climate change.

The federal judge in charge of the closely watched lawsuit by San Francisco and Oakland asked both sides to prepare memos on what may be the central legal issue in this case: Can two cities sue a collection of oil and gas companies for creating a “public nuisance” by producing fuels essential to the global economy?

ExxonMobil, BP, Chevron, Royal Dutch Shell and ConocoPhillips say no. In a combined brief submitted to U.S. District Judge William Alsup, the companies say the court must necessarily consider the utility of hydrocarbon fuels before it moves on to the question of whether they represent “an unreasonable interference with a right common to the general public.” That’s the definition of “public nuisance” under the Restatement (Second) of Torts, which judges typically use to define the legal boundaries of a specific tort.

Congress has already done this job, the oil companies say, and it would be improper for a court hearing a lawsuit by two cities to reverse decades of public policy established by the elected branch of government.

“To determine whether Defendants `unreasonably’ interfered with any public rights, this Court would have to engage in the traditional balancing analysis—second-guessing Congress in the process—by weighing the alleged harms suffered by Plaintiffs against the enormous social utility of Defendants’ lawful conduct,” they say in their 18-page brief.

The plaintiff cities, represented by the Seattle law firm Hagens Berman working under a contingency-fee contract awarding it about a quarter of any award, say there’s no reason for the court to consider utility because they aren’t trying to shut down the oil industry. The only thing they are seeking is money for an “abatement fund” to counteract the expected future costs of global warming, they say.

In a deft legal switch, they argue the test of reasonableness isn’t whether the benefits of oil and gas production outweigh the harms, but whether the global warming caused by the combustion of fossil fuels forces unreasonable costs on the plaintiffs. In other words, a public nuisance is “unreasonable,” they argue, if it produces costs the plaintiffs consider unreasonable.

And there’s no need for the court to provide the usual remedy for abating a public nuisance, which is a court order shutting down the nuisance, the cities argue. They say the court can allow the public nuisance to continue and simply award damages to the injured parties. They cite a brief 1939 U.S. Supreme Court opinion by Justice Louis Brandeis, City of Harrisonville v. Dickey Clay, in which the court allowed the payment of damages to a landowner instead of ordering a polluting municipal sewage plant to be shut down entirely.

“It may be reasonable to continue an important activity if payment is made for the harm it is causing, but unreasonable to continue it without paying,” the court ruled in that case.

The Restatement of Torts also includes comments suggesting there are alternative definitions of “unreasonable” under the law of public nuisance including payments if the harm is substantial and “the financial burden of compensating” plaintiffs “would not make the continuation of the conduct not feasible.”

The oil companies dismiss the cities’ arguments as a patchwork of court decisions that fail to overcome the central question of whether the production of fossil fuels used by hundreds of millions of people, explicitly encouraged by Congress, could still be unreasonable enough to require paying damages to anyone who feels at risk of global warming-related expenses.

Even under the comment cited by the cities from the Restatement, the oil companies say, the court must take into account the cost of compensating everyone claiming damages from global warming.

 “That would mean taking into consideration not only this one lawsuit – which involves two plaintiffs, each demanding billions of dollars – but also the cost of compensating every other plaintiff that has brought or could bring similar claims, including the plaintiffs in the eight other global warming-based nuisance cases pending in courts around the country against the same five defendants,” they say.

The briefs are the latest in a series of responses to questions Judge Alsup has put to the parties as he debates whether to dismiss the lawsuit or allow it to proceed to the discovery phase, where costs will escalate dramatically as the plaintiff cities seek millions of documents from the oil companies to prove they knew about the risks of global warming and did nothing to abate them. The companies cite two especially damaging decisions in their favor: The U.S. Supreme Court’s dismissal of global-warming lawsuits against the utility industry in AEP v. Connecticut in 2011, and the Ninth Circuit Court of Appeals’ dismissal of a similar case by Inuit villagers in 2012.

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Organizations in this Story

Chevron U.S.A.Royal Dutch ShellBritish PetroleumConocoPhillips