June 28, 2018

Climate Change Litigation Update: Round One to the Fossil Fuel Industry

In a major setback for the cities and counties that have taken on the fossil fuel industry in a series of lawsuits seeking redress for costs associated with climate change – as well as for their environmentalist allies – a federal trial court judge in the Northern District of California has dismissed two such lawsuits, filed by the Cities of Oakland and San Francisco.

By order dated June 25th, Judge William Alsup granted the joint motion filed by the five major oil companies that Oakland and San Francisco had sued, thereby ending the most mature of the common law tort actions filed by various public entities against the fossil fuel industry.  In so doing, Judge Alsup – a 1999 Bill Clinton appointee – served notice to other climate change litigants that the road ahead is rockier and steeper than they might have imagined.      

Of the 11 climate change lawsuits filed in the U.S. in the past year against Big Oil and other fossil fuel manufacturers – eight in California – the Oakland and San Francisco suits are the first to receive substantive analysis by a court. Under carbon copy complaints, the two cities advanced a single cause of action, public nuisance, and sought a single remedy:  financial compensation for the billions of dollars that the two cities stand to incur in mitigating the predicted effects of sea level rise.  Following a detailed discussion of the history of climate science –Judge Alsup had earlier conducted a day-long hearing at which both sides presented a technical tutorial to the court on climate change – Judge Alsup’s 16-page decision wasted no time in getting to the heart of the matter:

The issue is not over science.  All parties agree that fossil fuels have led to global warming and ocean rise and will continue to do so . . .  The issue is a legal one – whether these producers of fossil fuels should pay for anticipated harm that will eventually flow from a rise in sea level.

While Judge Alsup perhaps overstated the degree to which the oil companies (and the U.S. government, appearing as a friend of the court in support of the oil companies) are in fact willing to concede that the science of climate change is beyond controversy, he echoed their arguments  in articulating the bases for his dismissal order:

Would it really be fair to now ignore our own responsibility in the use of fossil fuels and place the blame for global warming on those who supplied what we demanded?  Is it really fair, in light of those benefits, to say that the sale of fossil fuels was unreasonable?

The problem deserves a solution on a more vast scale than can be supplied by a district judge or jury in a public nuisance case.  While it remains true that our federal courts have authority to fashion common law remedies for claims based on global warming, courts must also respect and defer to the other co-equal branches of government when the problem at hand clearly deserves a solution best addressed by those branches.  The Court will stay its hand in favor of solutions by the legislative and executive branches.

Although Judge Alsup’s ruling ends the Oakland and San Francisco cases – at least at the trial court level – six cases brought by other California cities and counties continue, as do similar actions in Colorado, New York, and Washington.  None is yet poised for dispositive ruling.  Indeed, the other California cases are in procedural limbo, while the defendants in those matters (nearly 30 oil and other fossil fuel companies) appeal from another Northern District of California judge’s order remanding those cases to state court. 

But whatever the status of the remaining cases, Judge Alsup’s opinion will likely have an outsize influence on their future course.  For a trial court ruling which, strictly speaking, has no binding force on any other case, it is receiving uncommonly close scrutiny.

The plaintiffs undoubtedly are evaluating how to overcome the central tenet of Judge Alsup’s ruling:  that individual, localized lawsuits are a wildly inefficient mechanism for addressing and combatting climate change, inviting inconsistent results and potentially usurping the roles of the executive and legislative branches of our government.  (Of course, plaintiffs would no doubt argue that, insofar as addressing the crisis of climate change is concerned, the executive and legislative branches, as currently constituted, have utterly abdicated responsibility.)

The defendants predictably are plotting how to extend Judge Alsup’s reasoning to the far broader allegations and causes of action asserted in the other climate change actions.

And, as for the courts, while it’s possible that all other tribunals faced with these cases will adopt Judge Alsup’s articulation of the separation of powers among co-equal branches of government, it is equally possible that one or more courts will see a need to take affirmative action in the face of executive and legislative branch hostility to climate science. 

In the meantime, Judge Alsup’s ruling leaves a few key takeaways for fossil fuel defendants and their liability insurers:

  1. Vigorous defense pays off  
    Having attended a number of the hearings in the California cases, including the lengthy proceedings on defendants’ motion to dismiss before Judge Alsup, my own observation is that the companies’ investment in top-tier legal talent paid off.  On paper and in the courtroom, the plaintiffs were outclassed.  The defendants outspent the plaintiffs, exponentially, but that investment yielded dividends.
  2. Climate change cases aren’t over
    Despite the enormous setback for these plaintiffs, and those in other pending (and contemplated) cases, Judge Alsup’s ruling does not automatically dispose of any other case. In particular, the complaints in the remaining California cases are far broader than those in the Oakland and San Francisco suits; they include causes of action in public and private nuisance, negligence, and strict liability (notably including failure to warn). The complaints all allege that defendants breached their duty of care, not only by concealing from but by intentionally misleading the public regarding the dangers associated with fossil fuel production and use. Defendants may face greater challenges overcoming at least some of the contentions of these more detailed and imaginative complaints, while the plaintiffs can be expected to refine their arguments in light of Judge Alsup’s ruling.
  3. Judge Alsup’s decision will influence other tribunals
    Although Judge Alsup inspires strong feelings, pro and con, among those who appear before him, his intellect and industry are universally acknowledged and widely respected.  Other courts will treat Judge Alsup’s opinion as a benchmark in the arena of climate change litigation.

Whatever the future may hold, Round One goes to the defendants.  The uphill battle that the plaintiffs always faced in these cases just got a lot harder.