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Local Government Groups, Others Rally to Support Colorado Climate Suit in State Court

January 16, 2020 Filed Under: Colorado Lawsuit, Liability Litigation

By Karen Savage

Three U.S. government associations, a coalition of 31 local governments from across Colorado and two national environmental organizations have filed friend-of-the-court briefs in support of the three Colorado communities’ bid to keep their climate liability suit against ExxonMobil and Suncor in state court.

The companies are appealing a ruling by the U.S. District Court sending the case back to state court, where it was filed. The National League of Cities, the United States Conference of Mayors and the International Municipal Lawyers Association said the federal court appropriately ruled that it lacked jurisdiction over the claims. Those groups filed their brief filed earlier this month in the Tenth Circuit Court of Appeals in Denver.

Briefs in support of the communities were also filed by Public Citizen, the National Resources Defense Council, and Colorado Communities for Climate Action (CC4CA), a coalition of local Colorado governments.

Exxon and Suncor have received support from the U.S. Chamber of Commerce.

The city and county of Boulder and the county of San Miguel allege that Exxon and Suncor have known for decades that their products contribute to climate change, but deliberately downplayed that risk to policymakers and the public. The communities filed suit in 2018, asserting state law claims of public nuisance, private nuisance, trespass, unjust enrichment, violation of the Colorado Consumer Protection Act and civil conspiracy and are seeking to force the companies to help pay for the costs of climate change impacts.

Exxon and Suncor initially moved the case to federal court, but it was remanded back to state court in September. The companies have made several failed attempts to stop the proceedings, including multiple appeals to the Tenth Circuit and to the U.S. Supreme Court, which also denied applications by companies facing similar suits in Baltimore and Rhode Island.

The case is currently proceeding in state court pending the outcome of the companies’ appeal of the remand order.

Exxon and Suncor say the case belongs in federal court because the claims asserted injuries that were caused by nationwide greenhouse gas emissions, which is covered by federal, rather than state law.

In support of the oil companies, the U.S. Chamber of Commerce told the court that if allowed to go forward the case would open the door for the court to “impose massive retroactive liability” on American companies, while other companies around the world have also contributed to the alleged harms.

“Uniform legislative and executive action, not countless state-law tort suits, are the best solution to the challenges of global climate change,” wrote the Chamber.

The National League of Cities, the United States Conference of Mayors and the International Municipal Lawyers Association pushed back on that assertion.

“Uniform adjudication of the financial burdens local governments bear for climate change adaptation measures might or might not be desirable public policy, but it is neither necessary nor mandated by any federal law,” wrote the associations, adding that local governments must maintain their ability to hold companies accountable for damages suffered by their communities.

Climate liability cases are similar to cases filed by cities against “financial institutions for the consequences of the subprime mortgage crisis, against pharmaceutical companies to help carry the costs needed to address the opioid epidemic, and against Monsanto to compensate for harms from Polychlorinated Biphenyl (PCB) contamination,” the associations wrote, adding they are also similar to cases seeking damages from lead paint companies that knowingly sold a product they knew was toxic.

“All these cases involved claims under state law, and none saw a state-law claim judicially converted into a federal common law claim, much less converted into a federal claim for subject-matter jurisdiction purposes, only to then find the federal claim displaced by a federal statute,” wrote the associations, adding that there are no “uniquely federal interests” at stake in the case, nor is it about regulating greenhouse gas emissions.

Exxon and Suncor have echoed a common argument from the fossil fuel industry that claims these cases seek to regulate emissions and should be heard in federal court.

In its brief, the NRDC told the court that even if the case were about regulating emissions it does not belong in federal court because federal common law does not provide a means for addressing the alleged harms.

Further, the Clean Air Act “does not completely preempt all state law causes of action related to emissions or climate change,” wrote the NRDC, adding that the case belongs in state court because “the Act expressly preserves states’ broad authority to address air pollution under state law.”

Moving the case to federal court would “obliterate the critical divisions of responsibility our federal system establishes between state and federal government,” CC4CA wrote in its brief.

“The result would not only deprive Plaintiffs and other local governments like CC4CA’s member jurisdictions of traditional and critical tools to protect the health and welfare of their constituents, but also would strip state governments of the authority to develop and apply state law to address matters of local health, safety, and welfare,” CC4CA wrote.

Public Citizen pushed back on the contention by Suncor and Exxon that the case is subject to federal jurisdiction under the federal officer removal statute, citing a Supreme Court’s unanimous rejection of that argument in a suit filed against tobacco giant Philip Morris.

Like Exxon and Suncor, Philip Morris had argued the federal officer removal statute, which says a federal court has jurisdiction over a civil action that is directed at the United States or any federal official, requires the case be heard in federal court. The oil companies argue that because they sold or extracted fossil fuels under government contract, they operated as federal officers.

“The Supreme Court stated that ‘the statute authorized removal by private parties ‘only’ if they were ‘authorized to act with or for [federal officers or agents] in affirmatively executing duties under … federal law,’” Public Citizen wrote in its brief. “The Court therefore held that self-interested commercial entities that acted under compulsion of federal regulation but had been given no authority to act ‘on the Government agency’s behalf … were not entitled to invoke the statute.”

While awaiting a decision on the jurisdictional issue from the appellate court, the case is proceeding in Colorado state court.

“We’re thrilled to see this outpouring of support for the case, defending the principle that communities across the U.S. have the right to go to court—under state law—to seek remedies for climate harms,” said Marco Simons, general counsel for EarthRights, which is representing the municipalities.

“This is yet one more piece of evidence that the tide is turning on climate—our future depends on it.

2019: The Year Climate Litigation Hit High Gear

December 30, 2019 Filed Under: Baltimore Lawsuit, California Climate Lawsuits, Colorado Lawsuit, Featured, Liability Litigation, Mass. v. Exxon, New York City Lawsuit, Other Suits, Rhode Island Lawsuit

By Karen Savage

One of the busiest years yet for climate litigation, 2019 was highlighted by favorable decisions handed down by some of the world’s highest courts.

The U.S. Supreme Court kicked off 2019 by clearing the way in January for Massachusetts Attorney General Maura Healey to continue her investigation of Exxon, and she eventually filed a climate fraud lawsuit against the oil giant in October. The Dutch Supreme Court wrapped up the year in December by upholding the landmark ruling in Urgenda v. The Netherlands that said the government has a human rights duty to protect its citizens from climate change and must reduce the country’s emissions.

In between, Exxon stood trial for climate fraud and newly revealed documents showed how far the fossil fuel industry has gone—and continues to go—to deny and delay action on climate change. There was also an uptick in attempts by companies and their trade associations to control the climate narrative and some downright dirty tricks targeted attorneys involved in climate litigation.

There were also big jurisdictional wins for communities suing fossil fuel companies for climate damages, new research attributing specific climate damages to individual companies and a flurry of international climate and human rights-related litigation.

“The most important thing that happened this year was not one suit, but the progress that was made in suits across the country and around the world,” said Carroll Muffett, president of the Center for International Environmental Law.

A Loss for New York, Massachusetts Digs In

For much of 2019, all eyes were on the highly anticipated climate fraud lawsuit against Exxon in New York.

After a three week trial that offered a glimpse into the inner workings of the oil giant, New York Supreme Court Judge Barry Ostrager determined the AG did not prove that Exxon defrauded investors or misled them about climate risks to its business.

Ostrager, however, was clear: His ruling was related only to the fraud charges filed by the AG.

“Nothing in this opinion is intended to absolve ExxonMobil from responsibility for contributing to climate change through the emission of greenhouse gases in the production of its fossil fuel products. ExxonMobil does not dispute either that its operations produced greenhouse gases or that greenhouse gases contribute to climate change,” Ostrager wrote.

Meanwhile, Healey, who has doggedly spent the past three years investigating Exxon’s operations in her state and beating back its attempts to stop her, filed a lawsuit against the oil giant in October.

Healey’s suit alleges Exxon has long known its products drive climate change and has misled consumers with deceptive advertising, has failed to disclose climate-related risks to its investors and failed to disclose how catastrophic climate impacts from continued fossil fuel burning threatens the global economy.

“The implications of the Massachusetts case are far larger,” Muffett said, adding that the state’s ruling that it has jurisdiction based on language in Exxon’s franchise agreements indicates other states likely have jurisdiction over the company as well.

“In the Massachusetts case, you have not only the securities claims that we saw in New York but you also have elements of that Massachusetts case which are based on violations of consumer protection laws—and those consumer protection laws that Massachusetts is looking at are virtually identical to the consumer protection laws in a dozen other U.S. states.”

A Jurisdictional Winning Streak

All of the liability suits that have been filed by communities across the country against the oil industry have been embroiled in a battle over jurisdiction, with the municipalities trying to get the cases heard in state court under state laws and the industry fighting to put them in federal court, where past climate-related cases have been decided largely in its favor.

Several federal court judges have ruled against the companies this year, sending the cases back to state courts. Rhode Island, so far the only state to have filed a climate liability suit, was one of those cases.

Using a now-familiar pattern, the oil companies moved Rhode Island’s case to federal court, but a federal judge remanded the case back to state court in July. The companies pushed back and asked to halt proceedings until a decision on their appeal can be heard, but both the Court of Appeals and the Supreme Court denied those requests and the case is moving forward in state court.

The Supreme Court this year also refused to grant the companies’ requests to pause proceedings pending appeals in Baltimore’s case and a similar case filed in Colorado by the city and county of Boulder and the county of San Miguel. Both are proceeding in state courts.

The Ninth Circuit is considering the same jurisdictional issues in cases in California. Suits filed by Santa Cruz, Imperial Beach and the counties of Marin, San Mateo and Santa Cruz were remanded to state courts by one judge, while another ruled similar suits filed by San Francisco and Oakland belong in federal court.

The fossil fuel defendants relied on a “proverbial ‘laundry list’ of grounds for removal,” U.S. District Judge Ellen L. Hollander wrote in her decision on Baltimore’s case, explaining why she rejected each of those grounds in a detailed ruling. Hollander took particular pains to explain that the public nuisance claims the city is pursuing can only be decided in a state court and the city “nowhere even alleges that the defendants violated any federal statutes or regulations.”

Central to the jurisdictional question is whether appellate courts can review the entire remand order, a request the municipalities say is beyond the court’s jurisdiction. The companies argue the entire order is reviewable, while the plaintiffs contend that circuit courts have agreed that only the federal officer removal statute is reviewable.

Under the federal officer removal statute, a federal court has jurisdiction over a civil action that is directed at the United States or any federal official. The companies argue that because they sold or extracted fossil fuels under government contract, they operated as federal officers.

A California judge rejected that argument in July, characterizing the federal officer claim as “dubious.”

Jurisdiction decisions may prove pivotal not only in the fate of cases already filed, but could inspire the filing of new climate liability lawsuits in the coming year by communities in Hawaii and elsewhere.

“I think that’s one of the things that potential plaintiffs have been watching for very carefully and I would expect to see more cities and more states moving in state court, building on the precedent of those cases,” Muffett said.

A federal court judge in Louisiana also ruled in June that a suit filed by Plaquemines Parish—one of 42 filed by Louisiana parishes against oil and gas companies for damaging the coastal wetlands and increasing the state’s vulnerability to sea level rise and other climate impacts—belongs in state court.

Attribution Research Increases Pressure on Climate Polluters

Scientists in 2019 also sharpened the ability to attribute specific climate damages to individual fossil fuel companies, bolstering efforts by municipalities to hold those companies accountable.

More than one-third of all global carbon emissions since 1965 can be attributed to the 20 largest fossil fuel companies, according to research by Richard Heede, director of the Climate Accountability Institute.

Several companies facing climate liability suits in the U.S.—including Chevron, Exxon, BP, Shell, ConocoPhillips and Total—are among the most prolific carbon emitters, according to the research, which was released in October.

The data is the most complete to date because it includes emissions released when the fossil fuel companies’ products are used by consumers and incorporates the most recent emissions data. Emissions data reported by industry typically includes voluntary reporting of its operational emissions, but not emissions created by the use of its products.

The research covers the period from 1965—the point at which researchers say companies and governments were fully aware of the catastrophic affect carbon emissions have on the global climate—through 2017, the latest year for which data is available.

It shows that during this period, the companies not only continued to operate as usual, but increased their production, marketing and sales of fossil fuels. That, says Ann Carlson, co-director of the UCLA School of Law’s Emmett Institute on Climate Change and the Environment, stands out.

“What is most striking about the new data is that the period of time it covers—from 1965 to the present—is a period when fossil fuel companies knew that their products were contributing to climate change and yet not only did nothing to warn the public or to modify their production or products but actively sought to persuade the public that climate change wasn’t real,” said Carlson, who has provided pro-bono consulting for some of the municipalities that have filed climate liability suits.

“From a legal perspective, in many states that knowledge matters to liability,” Carlson said at the time. “In California, for example, one court explained that ‘liability is premised on defendant’s promotion [of its product] for use knowing of the hazards it would cause.’ And when you combine the knowledge with precise data about what each of the 20 major companies contributed to climate change, it helps courts — and juries — see that any individual company ‘created or assisted in creating’ a public nuisance. And collectively, contributing more than a third of the emissions over almost 55 years is giant.”

Heede’s recent research builds on his previous work, known as the Carbon Majors report. Released in 2017, the report found nearly 70 percent of all global emissions since 1751 are attributable to 103 companies and found that half of all carbon emissions by global fossil fuel and cement companies have been emitted since 1990.

The Carbon Majors report and other attribution studies have been widely cited in climate liability suits filed by municipalities and are considered strong evidence that the fossil fuel industry should be held accountable for climate change.

Also building on the Carbon Majors report is research released in December that found the same fossil fuel companies are responsible for more than one-fifth of the increase in ocean acidification between 1880 and 2015.

The research will likely boost climate liability suits filed by municipalities, as well as a suit filed by the Pacific Coast Federation of Fishermen’s Associations (PCFFA) last year against 30 fossil fuel companies, including Chevron, Exxon and Shell. The PCFFA alleges the companies were warned decades ago that that rising greenhouse gas emissions could result in the possibility of “wiping out the world’s present commercial fisheries.”

Urgenda’s Success, Madrid’s Failure Could Bring More Litigation

Internationally, there was no shortage of climate change and human rights-related litigation and legal declarations in 2019. The Netherlands’ Supreme Court decision upholding the landmark ruling in Urgenda v. the Netherlands was the most widely celebrated.

“Climate change is already severely damaging human rights – and that impact is growing fast,” United Nations high commissioner for human rights Michelle Bachelet said in a statement.

“The recognition by the highest Dutch court that the Netherlands’ human rights obligations provide a legal basis to compel stronger and more rapid action by the Government is vitally important,” Bachelet said. “This landmark ruling provides a clear path forward for concerned individuals in Europe—and around the world—to undertake climate litigation in order to protect human rights, and I pay tribute to the civil society groups which initiated this action.”

The Urgenda decision, which was released in mid-December, was made even more powerful by findings released a week earlier by the Philippines’ Commission on Human Rights, which concluded that the world’s largest polluters could be held legally liable for their contributions to climate change.

While not legally binding on any country, experts say the commission’s findings send a strong message to the fossil fuel industry and governments that support them. The commission also said there was evidence of criminal intent by the industry.

“It reflects is a growing recognition that the human rights impacts of climate change are real and urgent and not only any government, but any business that puts its business model at odds with a 1.5-degree target is risking not only current legal action, but long-term liability,” Muffett said.

“I think that what we will see in the coming year is that, the explosion of litigation that we thought that we were experiencing the last two years, is going to be dwarfed by what gets opened up in the wake of Urgenda and in the wake of the Philippines Human Rights Commission,” Muffett said.

“One of the first things I would expect to see coming out of this is a profusion of new and significant cases in the Philippines, as a test jurisdiction for the next wave of these cases,” he said.

Doug Kysar, a deputy dean and professor at Yale Law School, said the faltering outcome of the UN climate talks in Madrid could also result in an increase in climate litigation.

The highly anticipated talks, COP25, were widely considered a failure, ending without consensus on how to implement the Paris Climate Agreement. Perhaps most notably, delegates failed to address climate injustice. Countries that have emitted the least amount of greenhouse gases will continue to suffer the most from climate change-related disasters.

“That lack of progress will only enhance the importance of climate suits and the effort to engage courts in this struggle,” Kysar said. “The upholding of the Urgenda suit … will serve as a beacon for similar challenges to government apathy around the world.”

Globally, 2019 was already one of the biggest years yet for climate litigation.

In Germany, a suit filed against the government by three farming families and Greenpeace Germany was dismissed, but the court recognized that climate change causes harms could constitute human rights violations.

A group of young people in Canada filed a climate lawsuit against the province of Ontario, alleging that the government’s rollback of climate policies under violates their fundamental rights. Toronto, Ontario, and Richmond, B.C., are all exploring ways to hold the fossil fuel industry accountable for climate change.

In Poland, an environmental law organization filed a groundbreaking new lawsuit seeking to hold a coal plant operator–the largest single emitter of carbon dioxide in Europe—liable for environmental and climate harm. The Romanian government is facing a legal challenge for failing to consider the climate impacts of one of its most polluting coal-fired power plants.

A judge in Pakistan ordered that country’s government to uphold its laws and policies regarding climate change and the environment, ruling in favor of a group of citizens who challenged the government for violating their rights by allowing widespread deforestation and endangering the climate.

A case filed against the Irish government by an environmental organization was dismissed, but the group has vowed to appeal the decision all the way to Ireland’s Supreme Court.

Learning from Losses

As with tobacco or other large scale effort to hold companies accountable, Muffett said climate litigation is a learning experience and that losing cases is a part of that learning.

“I think it’s that recognition that puts like the outcome in the New York AG’s case in perspective. There are going to be individual decisions where the plaintiffs lose, but if you look over the history of the last year, or the last two years, that is not where the tide is running,” Muffett said.

“Even as the companies have tried to isolate and marginalize these cases, what we see is the number of cases are growing and the information is starting to work its way into public light. The number of jurisdictions where cases are being filed is expanding and I think that these companies are terrified—and I think they should be terrified.”

Exxon, Suncor Argue for Dismissal of Colorado Climate Suit

December 11, 2019 Filed Under: Colorado Lawsuit, Liability Litigation

By Dana Drugmand

Oil companies ExxonMobil and Suncor Energy are asking a Colorado court to dismiss a climate lawsuit filed against them last year by the counties of Boulder and San Miguel and the city of Boulder.

The companies filed a motion to dismiss the case late Monday in Boulder County District Court, where the case was initially filed in April 2018. As in other climate liability cases brought by municipal governments against fossil fuel companies, the companies are waging a jurisdictional battle to have the case heard in federal courts, where they have had success in getting similar cases dismissed. But over the past few months, several federal district judges, including in Colorado, have ordered the cases be sent back to state courts. The companies are appealing those orders while the cases proceed in state courts.

The four defendants in the Colorado case—Exxon, Suncor Energy USA, Suncor Energy Inc. and Suncor Energy Sales—filed four motions in the Boulder court. Exxon and Suncor Energy Inc. both filed motions to dismiss for lack of personal jurisdiction because the companies are headquartered outside of Colorado. Exxon is based in Texas while Suncor Energy, Inc. is a Canadian company. The three Suncor companies, two of which are based in Colorado, also filed a motion to transfer the case to Denver. All four defendants filed a joint motion to dismiss the lawsuit entirely.

The Colorado communities bringing the case want the companies to help pay for damages and costs associated with climate change, which are estimated to exceed $100 million by 2050. The case was brought under Colorado state law alleging claims of nuisance, trespass, unjust enrichment, civil conspiracy, and violation of the Colorado Consumer Protection Act. The communities say the companies not only significantly contributed to climate change, but misled the public on the consequences of using their products.

Exxon and Suncor pushed back against these claims with various defenses ranging from the notion that everyone is responsible for climate change and therefore no company can be held liable, to the idea that misleading advertising is speech protected by the First Amendment.

In its motion to dismiss for lack of personal jurisdiction, Exxon argued that anyone who uses fossil fuels is responsible for climate change. “Plaintiffs’ claims necessarily implicate innumerable third parties, including anyone who used automobiles, jets, ships, trains, power plants, heating systems, and factories since the dawn of the Industrial Revolution. As one federal judge considering similar claims recently recognized, ‘[e]veryone has contributed to the problem of global warming,’” Exxon attorneys wrote. The motion argues that as a Texas-based, multinational company incorporated in New Jersey, Exxon is not “at home” in Colorado.

Suncor Energy Inc., headquartered in Calgary, also filed a motion seeking to transfer the case to Denver County District Court, or alternatively to dismiss it altogether. Suncor argues that contracts between San Miguel County and Suncor governing the county’s purchase of petroleum products that come from Suncor’s Commerce City refinery stipulate that legal disputes be litigated in Denver. This motion for venue transfer was made while Suncor and Exxon are simultaneously arguing in the Tenth Circuit Court of Appeals that the case belongs in federal, not state, court. This apparent contradiction means Suncor is arguing state court in Denver is the proper venue while also saying the case should not be in state court.

Arguments for Dismissal

The joint motion to dismiss makes the familiar arguments that climate change is a worldwide phenomenon caused by countless actors, that federal common law governs the complaint, and that the allegations implicate and interfere with federal energy policy and foreign affairs. Defendants in other climate liability cases have made the same arguments.

Exxon and Suncor argue that the Colorado claims are both displaced and preempted by federal law. The companies point to previous climate change nuisance cases that courts have dismissed under federal common law. “Thus, as in AEP, Kivalina, Oakland, and New York, Plaintiffs’ claims are displaced by existing federal laws regulating GHG emissions,” the companies write.

They also repeat the assertion that these climate liability cases are about solving climate change, which the communities have vigorously denied. Such litigation, the companies argue, infringes on federal doctrines including federal foreign affairs power, separation of powers, the Commerce Clause, due process, and free speech. The free speech defense describes the issue of climate change as “controversial.” This argument ignores the fact that, outside of arguing these cases, the companies say they accept the overwhelming scientific consensus that fossil fuel burning is warming the atmosphere.

The companies argue that the communities cannot prove they caused climate change. They also say that “unreasonable conduct,” a key element of a nuisance claim, cannot apply to their conduct since fossil fuel production is not only legal but expressly encouraged by the federal government.

According to Exxon and Suncor, the Colorado plaintiffs’ fraud allegations under the state consumer protection statute are false because the alleged deception was not directed at consumers, there is no proof that statements made by industry groups like the American Petroleum Institute were attributable to defendants, and alleged deceptive statements are “protected commercial speech.”

The companies say there is no evidence that they acted with industry groups in a coordinated effort to mislead the public.

The Colorado plaintiffs have until February 6 to respond to the motion to dismiss. They also have until the end of this month to move for jurisdictional discovery.