Since the initiation of climate change litigation several years ago, various state governments and interest groups have filed lawsuits against fossil fuel companies and governing authorities. The current landscape consists of (1) two lawsuits brought by state governments against an oil and gas company alleging investor fraud; (2) numerous cities, counties, and other local governments seeking compensation from fossil fuel companies for climate change related damages; and (3) nine lawsuits brought by a non-profit law firm, through children, against governments for failing to protect them from fossil fuel emissions. Below we take a closer look at each category of lawsuits and provide an update on where they stand today.
Lawsuits against fossil fuel companies:
Investor Fraud Lawsuits:
The first category of climate change litigation alleges that oil and gas companies defrauded investors by falsely stating that the company had fully considered the risks of climate change regulation and had factored those risks into its business operations. The states of New York and Massachusetts, through their Attorney General, each filed a suit against Exxon Mobil Corporation asserting investor fraud related claims.
In the New York litigation, ExxonMobil successfully defended itself last month. The twelve-day bench trial was the first time a fossil fuel company addressed in court its understanding of climate change and the risks it poses to its business. The Supreme Court of New York (New York’s court of first impression) found that the Attorney General “failed to prove by a preponderance of the evidence that ExxonMobil violated [New York state law] in connection with its public disclosures concerning how ExxonMobil accounted for past, present and future climate change risks.” People by James v. Exxon Mobil Corp., 65 Misc. 3d 1233(A), 1 (N.Y. Sup. Ct. 2019). New York law required that the Attorney General prove that ExxonMobil made a misrepresentation of material facts that a reasonable investor would consider in deciding how to act. Id. at pp. 5-6. Notably, the law did not require proof of any intent to defraud on the part of ExxonMobil. The court found that “there was no proof offered at trial that established material misrepresentations or omissions contained in any of ExxonMobil’s public disclosures that satisfy the applicable legal standard.” Id at pp. 9-10 (emphasis in original). Instead, the court concluded that “the evidence at trial revealed that ExxonMobil executives and employees were uniformly committed to rigorously discharging their duties in the most comprehensive and meticulous manner possible. . . . . ExxonMobil has a culture of disciplined analysis, planning, accounting, and reporting.” Id. at p. 37. On January 10, 2020, the New York Attorney General’s Office stated that it will not appeal the trial court’s decision.
The Commonwealth of Massachusetts also filed a lawsuit against ExxonMobil. While the Massachusetts lawsuit largely echoes the lawsuit won by ExxonMobil in New York, it contains unique allegations of consumer fraud. Specifically, the Attorney General of Massachusetts alleges that ExxonMobil deceived consumers through the sale of products it marketed as environmentally friendly and failed to disclose their potential contribution toward climate change. ExxonMobil removed the case to federal court arguing that the lawsuit involves “complex federal statutory, regulatory, and constitutional issues and frameworks,” which should supplant Massachusetts’ interpretation of climate issues. Oral argument on Massachusetts’ motion to remand was held earlier this month, but the court has not ruled on the motion.
Cities, Counties, States, and Other Local Governments:
The second category of climate change litigation includes cases by cities and counties in California, New York City, municipalities in Colorado and Washington State, and the State of Rhode Island. The majority of these cases have been brought under state nuisance laws. Specifically, eight municipalities in California allege that the oil and gas companies have been “misleadingly promot[ing] their fossil-fuel products through ‘large scale, sophisticated advertising and communications campaigns to promote pervasive fossil fuel usage,’ including by deliberately concealing the known consequences of climate change on public infrastructure.” Plaintiffs-Appellants’ Consolidated Reply Brief at 2, City of Oakland, et al v. BP P.L.C., et al, No. 18-16663 (9th Cir. July 1, 2019). California federal district courts have treated the cases differently, though: one court exercised jurisdiction and dismissed the cases before it, while another found no jurisdiction and remanded the cases back to state court. The appeals from both California district courts have been consolidated before a single panel in the Ninth Circuit and remain pending.
Most of the other cases are pending in various United States Courts of Appeal. Plaintiffs have appealed trial court decisions dismissing the cases, while defendants have appealed federal district court orders remanding the cases to the state courts in which they were filed. Appeals are pending before the First, Second, Fourth and Tenth Circuit Courts of Appeal. Given the potential for a circuit split to emerge, these cases are likely headed to the Supreme Court.
Lawsuits against government:
The Children’s Climate Change Lawsuits:
A third category of climate change lawsuits involves the public trust doctrine. Plaintiffs allege that governments are trustees of the environment and, as such, have breached that trust by supporting fossil fuel development. Many of the lawsuits in this category have been brought or backed by Our Children’s Trust, “a non-profit public interest law firm that provides strategic, campaign-based legal services to youth from diverse backgrounds to secure their legal rights to safe climate.” Our Mission, Our Children’s Trust (last visited January 14, 2020), https://www.ourchildrenstrust.org/mission-statement.
While there have been nine cases brought so far by Our Children’s Trust, the 2015 case Juliana v. United States is at the forefront. Juliana v. United States, No. 6:15-cv-1517-AA, 2018 WL 6303774 (D. Or. Nov. 21, 2018), appeal docketed, No. 18-36082 (9th Cir. Dec. 27, 2018). The Juliana plaintiffs bring public trust claims, asserting that the federal government violated the young plaintiffs’ constitutional rights by allowing dangerous carbon dioxide concentrations to be emitted by fossil fuel companies. The plaintiffs ask the court to “order Defendants to cease their permitting, authorizing, and subsidizing of fossil fuels . . . swiftly phase out CO2 emissions, as well as take such other actions as necessary to ensure that atmospheric CO2 is no more concentrated than 350 [parts per million] by 2100.” First Amended Complaint for Declaratory and Injunctive Relief at 12, Juliana v. United States, No. 6:15-cv-1517-AA, 2018 WL 6303774 (D. Or. Nov. 21, 2018), ECF No. 7. Trial was set for October 2018, but the case was unexpectantly stayed after the court granted a pretrial appeal. Most recently, on June 4, 2019, three federal judges from the Ninth Circuit heard oral argument. The case is still pending before the Ninth Circuit.
Similar cases have been brought in the State of Washington, Alaska, and Florida. Like the Juliana plaintiffs’ claims against the federal government, these cases allege that state governments have not protected the plaintiffs’ climate-related rights. In addition to domestic litigation, comparable cases have also been brought abroad. Notably, on December 20, 2019, the Dutch Supreme Court found that the Dutch government had an obligation to “urgently and significantly reduce emissions in line with its human rights obligation.” The State of the Netherlands v. Urgenda Foundation, Supreme Court of the Netherlands (December. 20, 2019). This is the first case in which citizens established that a government had a duty to protect them from climate change. While the case has no binding effect on the U.S. cases, it is possible that the Dutch court’s reasoning will influence both domestic and foreign courts in Juliana-style cases pending around the world.
Update: On January 17, 2020, the Ninth Circuit reversed the district court’s findings in Juliana in a 2-1 decision, holding that the plaintiffs did not have standing. Ninth Circuit Judges Mary H. Murguia and Andrew D. Hurwitz stated that “it is beyond the power of an Article III court to order, design, supervise, or implement the plaintiffs’ requested remedial plan.” Consequently, the case was remanded to the district court with instructions to dismiss the case for lack of standing.
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