HONOLULU (Legal Newsline) - Honolulu’s lawsuit against the oil companies isn’t about halting fossil-fuel production or regulating greenhouse gas emissions but stopping the industry’s practice of lying to consumers, the Hawaii Supreme Court ruled.
Affirming a strategy developed by private lawyers hoping to earn large contingency fees by representing government plaintiffs, the state’s highest court said the City and County of Honolulu had successfully steered clear of federal pollution regulations by making public nuisance and false advertising claims under state law.
“Defendants knew about the dangers of using their fossil fuel products, failed to warn consumers about those known dangers, and engaged in a sophisticated disinformation campaign to increase fossil fuel consumption, all of which exacerbated the impacts of climate change in Honolulu,” the court ruled in an Oct. 31 decision.
Honolulu sued BP, ExxonMobil, Chevron, Sunoco and other oil companies in 2020, claiming they put out misleading information in the 1990s and 2000s intended to deceive consumers into thinking there was scientific dispute about the causes and effects of global warming. That information, including newspaper op-eds and research by private think tanks, supposedly led consumers to burn more fossil fuels than they otherwise would have.
The oil companies removed this lawsuit, like many others, to federal court, only to have it remanded to state court in Hawaii following a string of decisions by federal appeals courts that government plaintiffs could sue in their home courts by citing state law.
First Circuit Judge Jeffrey P. Crabtree rejected defense motions to dismiss based on the argument the lawsuit is really about interstate pollution, which is covered by the federal Clean Air Act. He also rejected the argument any damages award would be a de facto regulation of fossil fuel production that would affect consumers nationwide, saying that reasoning would intrude on any state lawsuit with interstate effects. He allowed the defendants to file an interlocutory appeal to the Hawaii Supreme Court, however, which upheld his decision.
The Supreme Court opinion by Chief Justice Mark Recktenwald dismissed the argument that the state was seeking billions of dollars in damages from a small group of companies for greenhouse gas emissions produced worldwide. Hawaii has about 0.02% of the world’s population and accounts for about 0.06% of global CO2 emissions, the oil companies argued.
“This suit does not seek to regulate emissions and does not seek damages for interstate emissions,” the judge wrote. “Rather, Plaintiffs’ complaint `clearly seeks to challenge the promotion and sale of fossil-fuel products without warning and abetted by a sophisticated disinformation campaign.’”
The oil companies argued Hawaii state courts didn’t have personal jurisdiction over them, since the damages the state is seeking were caused by out-of-state activities. The Supreme Court disagreed, saying the U.S. Supreme Court in cases involving Ford Motor Co. and others has ruled companies can be sued in state court over products they sold elsewhere if they maintain significant activities in that state. State supreme courts have taken those decisions to heart, including cases involving accidents that occurred across state lines.
“This case concerns torts committed in Hawaiʻi that caused alleged injuries in Hawaiʻi,” the Hawaii Supreme Court ruled.
The plaintiffs, represented by private law firm Sher Edling, claim the oil companies knew of the dangers of global warming because they belonged to the American Petroleum Institute, which was aware of fossil fuel-driven global warming since the 1950s.
A presidential scientific advisory committee warned about global warming in 1965 and the industry continued to “gather information on the climate change impacts of their products” after that, they claim. When governments worldwide began to discuss regulations on fossil fuels the industry supposedly “began a public relations campaign to cast doubt on the science connecting global climate change to their products,” by creating “a false sense of disagreement in the scientific community.”
The Hawaii Supreme Court dismissed defense arguments this lawsuit, like others, cites state public nuisance law but is really intended to curb fossil fuel production. The court said, however, that the oil companies “advertisements and promotional materials do not disclose the risks of their products, and they continue to ramp up fossil fuel production, including new fossil fuel development.”
“Plaintiffs’ references to emissions in its complaint `only serve to tell a broader story about how the unrestrained production and use of defendants’ fossil-fuel products contribute to greenhouse gas pollution,’” the court said.