The oil industry won a high-profile victory in New York this week, right on the heels of a bitter defeat as the U.S. Supreme Court refused to hear the appeal of a Hawaii Supreme Court ruling allowing a similar climate change case to proceed.
Climate litigation, pushed by contingency-fee lawyers who scored contracts with government officials, will likely continue on this path for a while as state courts hand down decisions in cases with multibillion-dollar implications while the the Supreme Court declines to intervene. While the court’s conservative judges are considered by many to be pro-business, they also adhere to federalist principles that caution them against infringing on the authority of state courts.
“I don't think this court is particularly interested in policing state tort-law claims,” said Jonathan Adler, professor of environmental law at Case Western Reserve Law School. “Thus it rarely accepts certiorari (review) in cases challenging massive tort judgments.”
The high court let stand a $2.1 billion Missouri talc verdict against Johnson & Johnson in 2021 and in 2009 conservative Justice Clarence Thomas joined the majority in refusing to overturn a Vermont state-court judgment holding a drug company liable for selling medicine that had been approved by the federal Food and Drug Administration.
Mutual respect, or comity, leads the Supreme Court to allow state court decisions to stand even when they appear to involve national or global questions, said Patrick Parenteau, an emeritus professor at Vermont Law School who studies climate litigation.
“I think they know they’ll have another shot at it, and it will on the basis of a full record,” said Parenteau.
The Hawaii case, for example, merely allowed the city of Honolulu and other government plaintiffs to proceed in state court on a theory the oil companies misled consumers into burning more fuel than they otherwise would, accelerating global warming. Those plaintiffs still have to convince a jury their theory makes sense and Honolulu was somehow damaged by it.
A New York judge decided New York City’s case wasn’t even worth putting in front of a jury, ruling the plaintiffs failed to state a claim. The industry has won similar rulings in Delaware and Baltimore, but faces dozens of common-law cases as private lawyers at firms like Sher Edling recruit cities and states to sue oil companies under state consumer-protection and fraud statutes.
Those cases have been carefully drafted to steer clear of federal pollution laws, which would allow defendants to drag them into federal court where they have had much greater success. They all rely on an as-yet unresolved question, however: Whether the federal Clean Air Act preempts these state claims.
The U.S. Supreme Court ruled the CAA preempts climate claims based on federal law but left open a narrow opening for cases claiming the oil industry misled consumers. This led to a long-running fight over where these cases should be heard, with the U.S. Supreme Court years ago sending them to state courts.
“Ultimately the question of federal preemption under the CAA has got to be resolved, and probably by the Supreme Court,” Parenteau said.
In the meantime, the state cases grind on. They are different enough that the Supreme Court’s conservatives have an excuse for refusing to intervene at this stage, Parenteau said.
Even in her dismissal ruling, New York Supreme Court judge Anar Rathod Patel noted New York law assumes consumers are “reasonable” and well-informed, and general corporate statements can’t be used as evidence they mislabeled products. The plaintiff may have fared better in Massachusetts or Vermont, where the laws are looser, the judge said.
Pending climate cases in state court “are all different,” Parenteau said, some citing consumer statutes, other relying on common law. Supreme Court justices “are a little more chary when it comes to in one stroke saying state courts are entirely stripped of authority in this area.”
The risk to the oil industry is that the state cases gain enough momentum, and potential damages, that they are forced to settle to avoid the risk of bankruptcy. As with lawsuits over tobacco and opioids, they can always pass the settlement costs through to consumers.
“I wouldn’t be surprised to see some of the defendants peel off and try to settle, because these cases will go on for years,” Parenteau said. But the richest companies may well fight on.
As the soon-to-be-replaced Solicitor General said in a brief urging the Supreme Court to reject the Hawaii appeal, the oil companies “have raised a lot of constitutional arguments, and they may win some of them,” Parenteau said.
The court faced a similar conflict between state and federal law in 2009 when it decided in Wyeth v. Levine to allow a Vermont Supreme Court decision stand, upholding a product-liability lawsuit over a drug that had been approved as safe and effective by the Food and Drug Administration.
Conservative Justice Clarence Thomas joined the liberals in that case, decrying what he thought was an excessive use of federal preemption to neuter state courts.
“The Court routinely invalidates state laws based on perceived conflicts with broad federal policy objectives, legislative history, or generalized notions of congressional purposes that are not embodied within the text of federal law,” Thomas wrote then.
Since then, the conservative majority has overturned the so-called Chevron doctrine that ordered federal courts to defer to agency interpretations of the law, further undermining preemption. Where that leaves climate litigation is anybody’s guess, but the court’s refusal to take up the Hawaii case indicates the conservatives didn’t have five votes to step in now.