While Americans continue to pay over $4 per gallon for gasoline on top of record inflation, a number of states are waging lawfare against the oil and gas companies, claiming that they must pay for the impact of climate change.
Rhode Island started the lawsuit charge in 2018 and were quickly joined by Massachusetts, Connecticut, and Minnesota with more states, cities and counties employing the same legal strategy – sue companies like Exxon Mobil, Chevron, BP, and the American Petroleum Institute in state courts using state statutes and common law tort claims.
The motivation for this strategy is clear – the Plaintiffs believe that they will get a more favorable outcome in state courts in liberal states. The problem, however, is that this would create a patchwork of legal standards that would directly impact national energy policy, which impacts not only domestic energy production but also foreign policy decisions.
That is why the energy companies are requesting that these cases be transferred to the appropriate forum – the federal court system. These are not mere tort lawsuits that should be tried in state courts; these are lawsuits that involve the lifeblood of the American economy – energy production.
To prove the national character of this issue, one need look no further than the recent actions from the Biden Administration. Biden himself may have railed against the fossil fuel industry during his campaign in 2019 when he said, “I guarantee you we’re going to end fossil fuel,” but now his administration is begging for its assistance to deal with record-high fuel prices that are devastating American families.
For example, on June 14, 2022 he issued a letter and called on the oil industry to increase production of fuel, despite his earlier pledges to progressive allies that he would “decarbonize” the economy. In that letter he stated: “[T]he shortage of refining capacity is a global challenge and a global concern” and that the industry should “take immediate action to increase the supply of gasoline, diesel, and other refined product you are producing and supplying to the United States market.” He went on to say that “my administration is prepared to use all reasonable and appropriate Federal government tools and emergency authorities to increase refinery capacity and output in the near term ***.”
Energy Secretary Jennifer Granholm echoed Biden, saying that he “has asked for all suppliers around the globe to increase production. That includes OPEC. That includes our domestic oil and gas producers. He is asking for an increase ***.”
President Biden has also acknowledged the obvious foreign policy implications of our national energy policies when he said: “Vladimir Putin’s war of aggression, and the bipartisan and global effort to counter it, has disrupted the global supply of oil and driven up the global price * * * I am working with allies and partners and countries from around the world to encourage global refinery capacity to come back online.”
Nevertheless, our energy industry is now caught between Scylla and Charybdis – they must meet national and international demands to produce more fuel, while at the same time face liability in dozens of state courts because of the emissions from that fuel.
The bottom line is that the energy industry is crucial to our economy and our national security. For those very clear reasons, it is crucial that litigation that involves such important and complex issues of a federal character be litigated in federal court. Otherwise, a state court in Rhode Island, Massachusetts, or Minnesota could issue a legally binding decision that would have a crippling impact on the entire global and domestic economy.
Our system of federalism must work both ways. States and their court systems should be the primary decision makers for issues primarily of state concern, but the federal court system must be the venue for cases that impact the whole country and beyond.
This has been the practice of our system of federalism since the establishment of our system of federal courts and to operate in any other manner would be destructive to the checks and balances that are foundational to our Constitutional republic.
Ian Prior is CEO of Headwaters Media and former deputy Director of Public Affairs at DOJ.