By Karen Savage
First Circuit Court of Appeals judges were openly skeptical of oil company arguments that Rhode Island’s climate liability suit against them belongs in federal court.
In a hearing on Friday, Exxon, BP, Shell, Chevron, and ConocoPhillips tried to convince a three-judge panel of the court to reverse a lower court’s decision to send Rhode Island’s lawsuit back to state court, using two arguments already rejected by several other appeals courts across the country.
Chevron attorney Ted Boutrous, speaking for the defendants, tried to convince them the Supreme Court has previously ruled that climate change-related cases are governed by federal law, referring to A.E.P v Connecticut, and that because the companies operated as federal officers, the case belongs in federal court.
It was not an easy sell. Judge Juan R. Torruella quickly pointed out that Rhode Island’s suit is centered on the companies’ alleged deception of the public about climate change and the driving role of burning fossil fuels.
“This is a lawsuit for alleged misinformation, how does that fit into your two arguments?” Torruella asked.
“Your honor, that’s one small piece of the case,” Boutrous began.
“Excuse me, a small piece of the case, did you say?” Torruella questioned.
Boutrous argued that the extraction and production of oil and gas is a key feature in each of Rhode Island’s claims and central to the case.
“Without the oil and gas production, there’s no claim because the emissions from that caused global warming and caused Rhode Island’s injuries,” Boutrous said.
He was corrected by Judge O. Rogeriee Thompson.
“Rhode Island’s allegations focus on the misrepresentations and the cover up of that and how that specifically has caused harm to the citizens of Rhode Island,” Thompson said.
Rhode Island filed suit against the companies in 2018, alleging they knowingly contributed to climate change and failed to adequately warn Rhode Island citizens about the risks posed by their products. The suit asserts claims of public nuisance, strict liability for failure to warn, strict liability for design defect, negligent design defect, negligent failure to warn, trespass, impairment of public trust resources, and violations of the State Environmental Rights Act.
Vic Sher, an attorney with Sher, Edling LLC, who represented Rhode Island, said the case doesn’t challenge regulations, permits, emissions or international behavior and is seeking no relief outside the state’s jurisdiction.
Rhode Island “has asserted these well-established state-law claims based on a multidecadal campaign of deception and lies, attacks on science and scientists, all of which were intended by the industry to vastly increase their production, which lead to increased emissions, which lead to the injuries being suffered today,” Sher said, adding that all of the state’s claims stem from the alleged deception.
Following a pattern that has played out in most of the dozens of climate change-related suits filed by municipalities against fossil fuel companies across the country, the oil companies moved the case to federal court, where they think they’ll have better luck. A federal judge ruled in 2019 that the case belongs in state court, rejecting several arguments by the companies.
Those arguments are the same ones Boutrous continued to press on Friday. He referred to A.E.P v Connecticut, although that case, decided in 2011, directly addressed the companies’ emissions. He also pressed the federal officer removal argument, which other circuits have rejected.
“Rhode Island’s claims are removable under the Federal Officer Removal Statute because they related to defendants production of oil and gas acting under federal guidance and control to assist the United States in fulfilling its national security and other responsibilities regarding our country’s energy needs,” Boutrous said, adding that includes production activity on the outer continental shelf and on the Elk Hills Naval Reserve during World War II.
The companies’ appeal to the First Circuit is the latest attempt to keep this case and the others from proceeding in state courts. The appellate court declined to do so shortly after the case was remanded and the U.S. Supreme Court declined a few days later.
A state court magistrate in August agreed to delay consideration of Rhode Island’s motion to compel discovery and a motion to dismiss by the companies until the First Circuit rules. The court is also awaiting decisions by the Rhode Island Supreme Court and the U.S. Supreme Court in similar but unrelated cases involving jurisdiction. .
Beyond the question of whether federal officer removal applies, the First Circuit will also consider whether it is authorized to review only the companies’ federal officer argument or all of the companies arguments. Rhode Island believes only the former should be reviewed and the companies want all of their arguments considered.
“Congress determined because it’s so important to ensure that cases where federal officer activities involved should be appealed, that in those circumstances, the whole order can be reviewed, because once one issue’s up on appeal, there’s no reason for this court to say ‘there’s a really strong different argument, we’re not going to look at that argument, we’re only going to look at federal officer removal,’” Boutrous said.
That statement drew the immediate ire of Chief Judge Jeffrey R. Howard.
“There is a reason, counsel, and the reason is that Congress said those other basis are unreviewable,” Howard said.
Several other appellate courts, including the Ninth, Fourth and Tenth circuits in cases filed by several California communities, Baltimore and three Colorado communities respectively, have ruled that only the federal officer argument is eligible for review.
Throughout the hearing, Boutrous argued that the case involves allegations related to emissions and the extraction of fossil fuels. The appellate panel, however, continued to hone in on Rhode Island’s accusation that the companies engaged in disinformation campaigns.
“Rhode Island argues that the harms caused are not from the extraction of fossil fuels per say, but from your alleged efforts to mislead and promote your product by misinformation.” Torruella said.
“If you take out the production, your honor, there is no global warming,” Boutrous said. “You cannot decouple the misrepresentation claim from oil and gas production.”
“Well, they’re not saying that they’re objecting to the production, they’re saying they object to the disinformation,” Torruella said.
Boutrous pressed his contention that the disinformation was directly tied to the production and consumption of fossil fuels, adding that the suit alleges that the misinformation is causing more oil and gas to be produced.
“It’s all about the emissions,” Boutrous added, again appearing to exasperate the court.
“They’re not saying you can’t operate, they’re saying it impacted market forces and therefore the misrepresentations are what caused the harm,” Thompson said.
“I don’t think there’s any way to read this complaint other than that it seeks to punish oil and gas production,” Boutrous said. “It’s part and parcel of a claim that there’s too much oil and gas production and too many emissions that are causing global warming.”
The judges remained unconvinced.
“They’re not asking you to stop production, they’re asking you to stop misinformation,” Torruella said.
The court will consider the arguments and a decision is expected by early next year.