The Eighth Circuit Court of Appeals is scheduled to hear arguments today on whether Minnesota can sue the oil industry over climate change in its own courts, or if the case belongs in federal court.
Minnesota Attorney General Keith Ellison sued ExxonMobil, Koch Industries and the American Petroleum Institute, accusing them of running a “decades-long campaign of denial and disinformation about the existence of climate change and their products’ direct role in causing it.” The state is represented by private law firm Sher Edling, with the support of lawyers funded by billionaire Mike Bloomberg.
The lawsuit represents the latest tactical approach by Sher Edling, which is working under a contingency-fee agreement that would grant it a share of any money Minnesota wins. Instead of suing over climate emissions themselves, Minnesota is suing the companies and their industry association under state consumer-protection laws. The state claims consumers were misled into consuming gasoline and other fuels, exacerbating the effects of climate change and causing economic damage to Minnesota.
The defendants argue Minnesota’s lawsuit is simply “artful pleading” designed to get around the fundamental fact that the state is seeking to regulate carbon emissions beyond its borders.
While Minnesota has tried to tailor its claims to rest entirely on state consumer protection law, the defendants cite a Second Circuit Court of Appeals decision dismissing New York’s climate lawsuit because carbon emissions are at the heart of any claims.
“As long as the complaint seeks redress for harms allegedly caused by interstate greenhouse- gas emissions, federal common law governs,” the defendants stated in response to Minnesota’s argument for remand.
Minnesota says its case is fundamentally different because it sued in state court while New York filed in federal court to begin with. The defendants say the same legal principles are involved, however. Any damages Minnesota wins “would effectively regulate” the oil companies far beyond state borders because carbon molecules flow effortlessly across state lines, the companies argue.
Both sides have court decisions to cite in their favor. The U.S. Supreme Court handed the oil industry a partial win last year when it ruled that appeals courts must consider all the reasons for removing climate lawsuits to federal court, in a case involving the city of Baltimore. Federal appeals courts in New York and California have also dismissed climate lawsuits as effectively preempted by federal laws and regulations.
But four appellate courts and seven district courts have remanded similar lawsuits to state court, ruling they can be tailored to avoid federal claims.
The oil companies’ appeal will be heard before Eighth Circuit judges L. Steven Grasz, David R. Stras and Jonathan A. Kobes.
Minnesota’s lawsuit has drawn fierce criticism from outside groups opposed to the involvement of third parties and private law firms in public litigation. Energy Policy Advocates, a Washington State nonprofit, sued Minnesota in 2019 to reveal information about coordination with out-of-state activists and AGs. At a hearing before the Minnesota Supreme Court earlier this year, one justice said the state’s argument for secrecy under a law protecting “private data on individuals,” “makes no sense to me, zero.”
In June 2021, a Minnesota Court of Appeals ruled that Ellison could not conceal his office’s communications with attorneys general in other states, rejecting arguments they were protected by the attorney-client privilege. Information shared with third parties must also be shared with the public, the court ruled.
The Minnesota Senate in February advanced a bill that would limit the AG Office’s power to hire outside attorneys and limiting how much they can be paid. Sher Edling stands to make hundreds of millions of dollars in fees from lawsuits in Minnesota and other states if their claims for billions of dollars in climate damages are upheld.