New York Presses Climate Litigation Against Fossil Fuel Producers
Judge hears motion to dismiss as climate liability cases wind through courts
Justice John F. Keenan heard arguments today in the motion to dismiss a public nuisance complaint brought by New York City against the five largest fossil fuel producers: BP, Chevron, ConocoPhillips, ExxonMobil, and Shell. There are nearly a dozen such climate liability cases making their way through U.S. courts at the moment, and while there are slight legal differences in each depending on where they were filed, their success ultimately depends on the particular judge overhearing the case. In New York, that judge is an 89-year-old U.S. District Court justice who was appointed by Ronald Reagan in 1983.
Unlike justices William Alsup and Vince Chhabria, who presided over similar cases in California, Judge Keenan opted to table the question of personal jurisdiction—whether companies that do not produce oil in New York City can be sued by the city for damages—until the merits of the case in general can be decided. The sticking points for him seem to be whether this is an emissions case disguised as a product liability case, whether a decision in favor of the plaintiffs in this case would result in essentially applying U.S. law to foreign countries or otherwise embroil the courts in foreign affairs, and whether the Clean Air Act displaces any nuisance claim around climate change. These are questions that have come up in both past and current cases as well; so far no climate liability case has made it past motions to dismiss, all of which have centered on these questions as well as the jurisdictional issues.
The New York City case alleges an intentional nuisance (or “intentional tort” as Matt Pawa, a partner with Hagens Berman, lead counsel for the city, put it in today’s hearing): Since at least the 1980s, the fossil fuel companies knew, as is evident in various documents from ExxonMobil, Shell, and the American Petroleum Institute, that their product would cause increasing damage, and moved to hide that information from the public and undermine efforts to curb emissions, so are thus liable for the cost of the resulting damage.
Chevron attorney Ted Boutrous presented the defendants’ argument in New York. Boutrous, as with the California cases, opened his argument saying, “The plaintiffs have just repackaged old federal common law cases that the courts have already rejected, and they’re trying to avoid that problem by filing a state law claim. That gambit just doesn’t work.”
Boutrous said the city’s complaint has three key issues: It’s a federal claim no matter how much they try to argue that it’s a state case; federal common law doesn’t recognize this type of tort; New York state common law doesn’t recognize this type of tort either.
The Connecticut et al v. American Electric Power case came up multiple times, as it always does in these cases. Between the Second Circuit ruling on that suit, filed by several states against the country’s top power producer for climate nuisance, and the Supreme Court decision, there are precedents for both sides to draw from. The defendants claim that the AEP decisions clearly show that the Clean Air Act displaces any potential nuisance claims, while the plaintiffs point to the case as proof that the “political question” doesn’t apply in these cases. According to Michael Burger, director of the Sabin Center for Climate Law at Columbia University, both are right. “The Second Circuit Court of Appeals and the Supreme Court looked at that question and the Second Circuit said it doesn’t bar this type of case moving forward,” he said. “With the Supreme Court, I think the most accurate reading of that ruling is that five judges found the same thing as the Second Circuit, but of course that may have changed since 2011.”
The defendants also raised the question of “proximate cause,” which was argued by ConocoPhillips attorney John Savarice. The argument is essentially that there’s too much distance between the production of the product and the damage, and Savarice referenced various gun and tobacco cases as precedents (an interesting choice given the defendants’ ongoing arguments that their product is legal, beneficial, and safe). Pawa noted that while in the particular cases referenced, there was an intermediary person or activity between the product and the damage, in this case there is no such thing. “The links here are based on chemistry and physics,” he said. “And the use of the product was not, as the defendants paint it, the result of billions of individual choices over which they had no control. These were intended decisions. The defendants intended for people to use their product in this way.”
Pawa has been trying climate nuisance cases for more than a decade, and in fact argued some of the cases that were brought up as precedents in the hearing. He emphasized that, just as cases against chemical manufacturers like Dow and Monsanto have held them liable for manufacturing a dangerous product, not for groundwater pollution, so these cases are attempting to hold oil companies liable for knowingly making and distributing a dangerous product, not for emissions. “These are products that move in international commerce. Just like the cases on MTBE, Agent Orange, and asbestos cases, this is a product case, and product cases aren’t governed by federal common law,” he said.
Naomi Ages, Climate Liability Project Lead at Greenpeace USA, formerly worked at Boutrous’s firm Gibson Dunn. She says the product-or-emissions question is key for these cases. “And they really didn’t have an argument for that except to keep saying, ‘It doesn’t matter what they say; this is an emissions case, because we did Ctrl-F and found the word emissions X number of times in their complaint.”
Pawa also displayed a chart that showed how these cases flow from state to federal court and back again. “If the Clean Air Act displaces this complaint under federal common nuisance law, then we go right back to state court,” he said.
“So you want me to rule under state law?” Keenan asked.
“Yes!” Pawa said, noting that in the Kivalina case there were supplemental state law claims that were allowed to stand.
In his rebuttal, Boutrous tried to put this notion to rest, saying “it’s just wrong” to assume that a case could keep circling between federal and state court. “If federal common law is displaced that doesn’t mean there’s an endless merry-go-round back to the state court. It mean’s it’s a policy issue that should be left to the executive and legislative branches.”
The one New York–specific aspect of this case is the precedent of pari delicto, which loosely translates to “unclean hands” and says that if a plaintiff is involved in the same activity for which they are trying to make a nuisance claim, the claim is invalid. Defendants claim that New York City’s use of vehicles and previous investments in fossil fuel companies mean that its hands are also “unclean” in this instance. “Although I hate to use the word unclean because it implies that I agree that it’s a nuisance, which I do not,” Boutrous said.
“That argument can be easily debunked,” said Alyssa Johl, a lawyer and climate liability consultant and founder of the Climate Rights Collective. “New York City is taking every possible step it can to be a leader on climate, through its comprehensive assessment of climate impacts, its adaptation plan and measures, its decisions to divest, and its overall climate action plan. The city estimates it will cost $19.5 billion to adapt to climate change by 2030 and has already raised $15 billion through taxpayer funds. It’s simply asking the oil companies to pay their fair share.”
Johl added that really the city shouldn’t have to make an argument defending its use of fossil fuels. “The fossil fuel industry defendants effectively prevented other, cleaner choices from being available,” she said.
Keenan closed the hearing saying he would not be making a judgment on the motion to dismiss today. His decision will certainly come this year, but he may be deliberating for weeks or months. In the meantime, both sides are due back in San Francisco district court to argue similar points in front of Judge William Alsup in August.