NEW YORK (Legal Newsline) - A clearly skeptical federal judge questioned the basic premise behind New York City’s lawsuit against five of the world’s biggest oil companies over climate change on Wednesday, asking whether the city was simply rehashing failed earlier attempts to sue companies over their emissions.
New York, represented by private lawyers who hope to collect a percentage of whatever they win, says it’s suing BP, ExxonMobil, Chevron, ConocoPhillips and Royal Dutch Shell for creating a “public nuisance” by producing and selling oil and natural gas. But U.S. District Judge John Keenan didn't seem to be buying it.
During a morning hearing over the oil companies’ motions to dismiss, Judge Keenan referred repeatedly to the frequent use of the word “emissions” in the city’s complaint – including four times in a single sentence – which could doom the lawsuit under a U.S. Supreme Court decision that held only the Environmental Protection Agency can regulate carbon dioxide emissions.
“This is an emissions case,” the judge told attorney Matt Pawa of Hagens Berman soon after Pawa launched into his arguments against dismissing the lawsuit. “Aren’t you trying to dress up a wolf in sheep’s clothing here?”
Pawa knows well the risk of losing this argument. He was also the lawyer behind Kivalina v. ExxonMobil, a climate-change lawsuit that was dismissed by the U.S. Court of Appeals for the Ninth Circuit in 2012, for the same reason that the Supreme Court rejected similar litigation by several states against the utility industry in the 2011 decision AEP v. Connecticut.
Judge Keenan also asked whether the city was approaching the case with unclean hands, since it burns a lot of the fossil fuels it says constitute a public nuisance. He asked Pawa how many cars and trucks the city owns, and in an awkward moment, asked whether the city invests in fossil fuel producers.
After huddling with city lawyers, Pawa said he didn’t know. The answer: The city plans to divest.
“I don’t think it’s hard to take judicial notice of the fact the city police department has a lot of cars, that the firehouse has trucks,” the judge said. “Isn’t the plaintiff using the product that is the subject of this lawsuit?”
Wednesday's hearing illustrated the uphill battle the City of New York faces in trying to win billions of dollars from the oil industry to pay for the expected costs of global warming. Pawa and Hagens Berman also represent San Francisco, Oakland and several other California cities, all of which are struggling to get around precedent rejecting “public nuisance” lawsuits over legal products whose harms are several steps removed from the companies that produce them.
New York’s highest court rejected a lawsuit against gun manufacturers, for example, and multiple federal appeals courts rejected lawsuits against cigarette manufacturers by insurers and health plans trying to recover costs associated with smoking.
Attorney Ted Boutrous with Gibson Dunn, arguing for Chevron and the other oil companies, said artful pleading doesn’t rescue New York’s case from the traps set by AEP, Kivalina and the tobacco and gun cases.
“This case doesn’t belong in court,” Boutrous said, because the real aim of the city is “regulating emissions around the globe.”
Pawa, in his counterargument, said the gun and tobacco cases had a “wrong plaintiff” problem, because the direct injuries were suffered by smokers and insurers could only make derivative claims based upon those injuries. In this case, he said, New York City will suffer direct financial harm from global warming as it is forced to invest billions of dollars in infrastructure to protect against rising sea levels.
The city’s lawyer didn’t help his case by repeatedly citing the Second Circuit decision in AEP that was ultimately overturned by the Supreme Court, however. Pawa cited it as “persuasive authority” but Judge Keenan cut him off, noting the Supreme Court ruled the other way.
The judge was equally critical toward Boutrous at times, criticizing the oil companies for including a quote from Mayor Bill De Blasio about how the city hopes to “bring the death knell to the industry.” The quote was gratuitous in a motion to dismiss, the judge said.
“You dirty the record when you do that,” Keenan said. “You create a whole thing – you get the judger mad.”
Boutrous apologized, but ran into trouble again when he repeatedly said the case represented issues that should be left to the legislature, not the courts. “OK,” the judge said, with a wave of a hand, cutting him off.
The judge said he’ll issue a decision later. The city argued the case should be decided based on New York state common law, not federal law, which could save it from the precedent set in AEP.
But the oil companies argue the case fails even under state law, since the city can’t prove one essential element of any tort case, which is that the actions of the defendant were the proximate cause of the plaintiff’s injuries.
In this case, the oil companies say, the connection between selling fossil fuels and global warming is filled with intervening causes, including the decisions of billions of consumers – including the City of New York – on which fuels to use and in what quantities.
They urged the judge to dismiss the case as a matter of law, while the city hopes he will keep it alive so a jury can decide the fact question of whether the mere sale of a legal product can be the proximate cause of global warming.