NEW YORK (Legal Newsline) - A federal appeals court upheld the dismissal of New York City’s climate lawsuit against ExxonMobil and four other major oil companies, saying the city’s “artful pleading” couldn’t hide the fact New York was trying to use state law to regulate international carbon emissions.
In a 51-page decision, the U.S. Court of Appeals for the Second Circuit said New York tried to frame its lawsuit as an attempt to recover the costs of the city’s preparations for global warming but in reality the case was about global energy policy. By citing only New York state law, the city and its contingency-fee private lawyers tried to avoid U.S. Supreme Court precedent holding that lawsuits over greenhouse gas emissions are preempted by federal law.
“We are told that this is merely a local spat about the City’s eroding shoreline, which will have no appreciable effect on national energy or environmental policy,” wrote Judge Richard Sullivan in the April 1 decision. “We disagree.”
The decision could represent a serious blow to contingency-fee lawyers at Hagens Berman and other firms, who have recruited states and cities around the country to sue oil companies over the “public nuisance” of global warming. They have scored some successes recently by convincing federal courts to shift those cases to state courts, which would presumably be more receptive to lawsuits seeking money from out-of-state corporations, but the reasoning in the Second Circuit’s decision could ultimately filter down to those courts as well.
The appeals court decision noted “numerous courts have bemoaned the `often …`vague’ and `indeterminate’ standards attached to nuisance law.”
Federal common law applies to claims that involve interstate or international pollution, the Second Circuit ruled, removing such questions from the realm of state law. But the Second Circuit didn’t stop there. Having decided that New York law didn’t apply to the claims the city was making, the appeals court said federal common law doesn’t either. Congress had given the job of regulating greenhouse gas emissions to the Environmental Protection Agency, the court ruled, preempting New York’s claims entirely.
New York’s lawyers had argued that if federal common law didn’t apply, that left a gap for state law to apply instead. The Second Circuit rejected that conclusion as legally absurd, however.
The Second Circuit acknowledged “a parade of recent opinions” holding that climate cases belong in state, not federal court. It said those remands hinged upon the narrow procedural question of whether the oil companies could effectively manufacturer a federal question by removing the cases to federal court, or whether it was for state courts to decide if the claims were valid.
New York filed its lawsuit in federal court, so that question wasn’t raised. State courts might ultimately decide they can’t hear public nuisance claims over greenhouse gas emissions either, the appeals court said, but it will be up to them to decide.
The Second Circuit decision deals mostly with the intersection of state and federal law and the tricky concept of federal common law, which exists only in specific areas including interstate pollution. The Constitution gives limited powers to the federal government and its courts, the Second Circuit noted, but deciding how to balance energy policy against the harm of emissions that drift around the globe is definitely one of them. Congress, in turn, “occupied the field” with the Clean Air Act, which set up a comprehensive scheme to regulate airborne emissions.
“Stripped to its essence, then, the question before us is whether a nuisance suit seeking to recover damages for the harms caused by global greenhouse gas emissions may proceed under New York law,” the court concluded. “Our answer is simple: no.”