A compelling sticking point arose in the San Francisco and Oakland climate liability suits against the oil industry during U.S. District Judge William Alsup’s hearing two weeks ago: the judge wanted to know how to balance the need to continue using fossil fuels while potentially holding the companies producing them accountable for damages they cause. This week, he received briefs from both sides with their takes on that question.
The debate stems from the oil companies’ contention that the suits are aimed at shutting them down, which would take a massive toll on a society that still primarily relies on fossil fuels for energy. The cities’ attorneys, in response, explained to Alsup in the hearing that is not the case. Steve Berman, lead counsel for the cities, explained to Alsup that the case does not seek to end oil production but to ensure that the companies pay for the costs associated with the damages their product causes.
“Berman’s right,” said Marco Simons, regional program director and general counsel for EarthRights International. Simons is lead counsel for several Colorado communities bringing climate liability suits against ExxonMobil and Suncor. He said that while nuisance cases in the past often did require that the company or person stop doing whatever was creating the problem, the law has evolved.
“The courts have created some exceptions to say, ‘Well, as an alternative we’re going to let you continue, but you have to pay for the damage you caused.’ So, the question of public benefit is only really a question of whether you’re trying to shut down the activity or to make a company pay for the damage that it’s causing. If the benefits are outweighing costs, you can pay for the damage and still continue the activity.”
While Alsup repeatedly returned to the progress enabled by fossil fuel production—from the Industrial Revolution to present day technology—those pressing the suits say that concern over the benefits of fossil fuel production is a red herring.
“We’re not trying to shut down oil production or shut these companies down or even impose limits on emissions,” Simons said. “All we’re trying to do is what courts have done for hundreds of years, which is to say the people responsible for causing damage to people and property have to be responsible for their share of the cost of responding to those injuries. We’re not arguing that fossil fuels are in and of themselves a nuisance. The nuisance is climate change. And these companies that unquestionably played a role in creating the nuisance have to play a role in covering the cost of damages.”
The oil companies, however, are pressing the argument that the benefits they provide ought to count for something. Filing on behalf of all five companies named in the suit (BP, Chevron, ConocoPhillips, Exxon, and Shell), Chevron attorney Ted Boutrous wrote, “Under well-established nuisance law, Plaintiffs’ claims would require the Court to weigh the utility of Defendants’ fossil-fuel extraction against the alleged harms resulting from that activity in order to determine whether Defendants’ conduct is unreasonable. Absent such a finding of unreasonableness, there can be no public nuisance.”
The cities continued to argue in their brief that the court need not balance the benefits of fossil fuels with the harms caused because the companies would continue to operate.
Part of the issue, according to Simons, is also that oil companies for decades have failed to give consumers all of the information on their products, working to obscure their role in climate change.
“Regardless of their benefits, these products also have costs that the people who make the products need to pay for,” Simons said. “And they’ve also removed the choice from the public by keeping information from them for decades. It’s very similar to what happened with tobacco. The goal wasn’t to shut down the tobacco industry; it was to correct the harms those products had done, in part because of the misinformation tobacco companies had knowingly been spreading for years.”
Sharon Eubanks, the former Justice Department attorney who led the federal racketeering case against the tobacco industry, also emphasized the oil companies’ role in misleading the public.
“Beginning in 1988 when the U.S. and the world started moving toward policies that might reign in fossil fuels, the industry’s stance shifted from one of support of mainstream views to a very aggressive campaign designed to manufacture uncertainty and doubt in the science that really wasn’t there,” Eubanks said. “Oil and gas, like cigarettes, are products. Like any other products, the companies that produce, market, and sell them are liable for the damages that they cause, there’s nothing unique about that, especially under the circumstances here where they have misled the public about the product’s dangers.”
The other noteworthy development in Judge Alsup’s hearing was his order of discovery related to jurisdiction, allowing legal teams from both sides to conduct interviews and request documents on the question of whether the oil companies can be sued in California. That question is particularly thorny considering recent Supreme Court decisions limiting the jurisdiction of state courts, including the Bristol-Myers Squibb v. Superior Court of California decision last June.
Shell, BP, and ConocoPhillips filed motions arguing that because they do not have headquarters or general managers in the state of California, they cannot be sued there. Shell has since dropped one of its motions to dismiss (on the basis that the company was not properly served notice) and filed several statements attempting to restrict or eliminate discovery altogether. Discovery, however, is moving forward, and the judge has given both legal teams nine weeks to request information to argue their side of the jurisdictional issue.