SAN FRANCISCO (Legal Newsline) – The U.S. Court of Appeals for the Ninth Circuit has unsurprisingly ruled Honolulu’s climate change lawsuit against Big Oil belongs in a state court instead of federal.
The Ninth Circuit had already ruled that cases brought by California cities and counties needed to be sent back to state court because plaintiff lawyers representing them on contingency fees crafted their complaints to avoid federal questions of law.
The cases would face longer odds for success in federal court, leading to a years-long battle over jurisdiction that has already gone to the U.S. Supreme Court once and will likely end up there again.
The Ninth Circuit rejected arguments that defendants like Exxon, Shell and Chevron operated as federal officers when they produced oil and gas during the Korean War and in the 1970s under the Defense Production Act.
Defendants also pointed at an oil field that was run jointly by the Navy and Standard Oil, a predecessor of Chevron.
“While one could read the language about the Navy’s ‘exclusive control’ as detailed supervision, what instead happened was the Navy could set an overall production level or define an exploration window, and Standard Oil could act at its discretion,” the decision says.
“The agreement gave Standard Oil general direction – not ‘unusually close’ supervision.”
Defendants are asking for a full roster of Ninth Circuit judges to rehear the California case and point to a Second Circuit ruling that said the litigation, though it makes claims under state law, has worldwide consequences.
Many public officials have teamed with private lawyers at Sher Edling to bring the lawsuits, which allege the defendants caused the “public nuisance” of climate change and seek to hold them accountable for costs cities, counties and states will incur to handle it.
The industry has expressed its intent to appeal the jurisdiction issue all the way to the U.S. Supreme Court, if it needs to, which it likely will.
In 2011, the U.S. Supreme Court rejected a case filed by the State of Connecticut against American Electric Power Co., ruling that state courts are not the proper venue for cases involving damages for climate change, rather that Congress and the Environmental Protection Agency (EPA) are more appropriate forums for those questions.
The companies also argue that having state courts decide issues of climate change fragments the process in a piecemeal way heeding their own state interests and narrow fact gathering, rather than a broad overall cohesive federal approach. They also contend the litigation is geared toward making gas and oil so expensive consumers will reduce their consumption.
Climate-change plaintiffs suffered early defeats when federal appeals courts in California and New York rejected their lawsuits as raising unjusticeable political questions.
They retooled their strategy in part to navigate around those decisions and in part to maintain their lawsuits in state courts, where they can reasonably expect to achieve better results, especially against out-of-state corporations they are asking to pay billions of dollars that would flow to local infrastructure projects.