Climate Change Litigation Takes an Ominous Turn

By William Savitt, Anitha Reddy, Bita Assad (h/t to Felix Bronstein)

Wachtell, Lipton, Rosen & Katz

Last week witnessed a critical but largely unremarked advance for plaintiffs seeking to impose liability on major public companies for the social costs of climate change.

The Ninth Circuit’s ruling in City of Oakland v. BP PLC cleared the path for state-court litigation against corporate defendants on the theory that producing, distributing, using, or profiting from fossil fuels constitutes a “public nuisance.” The cities of Oakland and San Francisco sued large energy companies in California state court, seeking an order requiring them “to fund a climate change adaptation program for the cities.” The energy companies removed the case to federal court and moved to dismiss the complaint. The district court agreed with the energy companies that the cities’ state-law nuisance claim was governed by federal law.

“If ever a problem cried out for a uniform and comprehensive solution,” wrote the district judge, it is the “geophysical problem” of climate change. “A patchwork of fifty different answers to the same fundamental global issue would be unworkable.” Unpersuaded, the Ninth Circuit concluded that the cities’ claim neither presented a “substantial question of federal law” nor was completely preempted by the federal Clean Air Act.

The Ninth Circuit’s decision invites countless actions by states, municipalities, and private litigants in state courts all over the country. Absent a mechanism for uniform federal adjudication, public policy regarding climate change—as in past mass-tort litigation—will be made case-by-case in a “patchwork” of state court decisions. As we have previously noted, the liability risk extends across the economy, far beyond the energy sector. And the tort system, when confronted with civil litigation claiming broad social injury, is often indiscriminate in extracting enormous damages from corporate defendants—even those seemingly far afield from the alleged liability-creating conduct.

Corporations and directors can nevertheless manage their exposure by actively evaluating climate-related risk, considering sustainability initiatives, implementing appropriate operational and board monitoring procedures, and documenting all these efforts. But the time to act is now—when the climate-related liability and fiduciary risk for most companies is visible but not yet acute.

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88 thoughts on “Climate Change Litigation Takes an Ominous Turn

    • Agree, one stupid but plausible example, if the companies can be sued for the damages indirectly caused by their product then they should also be able to counter sue for those positive indirect benefits resulting from the use of their products for which they have not been fairly paid.

      So, you paid money to fill the car with gas. This didn’t just enable you to drive your car, but allowed you to make money that you would not have otherwise been able to make. Did you pay the oil company for that additional indirect benefit?

      Once you starting entertaining lawsuits with unicorns, then the pixies can also come and play.

      Between the BML riots, voter fraud, climate lawsuits, etc we are witnessing the total breakdown of law in the west.

      • Sounds to me like it’s time for a class action lawsuit against the Cities of San Francisco and Oakland for their creation/exacerbation of a Public Nuisance by utilizing (or allowing to be utilized) Fossil Fuels in their city vehicles
        Muni Busses
        City Utility maintenance vehicles
        City Officials Personal Vehicles
        City approved Taxis
        Etc…
        Good for the goose, good for the gander…

        • Oakland & SF and other coastal cities that are suing for damage due projected sea level rise have been developing the ports/low properties AND signing acknowledgements that the developments will safe from flooding.

          “In addition, we have determined that the land and any existing or proposed structures to be removed from the SFHA are or will be reasonably safe from flooding as defined in 44CFR 65.2(c), and that we have available upon request by DHS-FEMA, all analyses and documentation used to make this determination.”

          First thing to do is research how far back Oakland & SF “knew” that the FIRM maps were incorrect (because of CAGW and the Oil companies). Second thing to do is review all the Map Revisions (signed off on since then). Third thing to do is a class action suit against the City that includes all off the property owners included in the Map Revisions.

          Invert the language in the Cities’ lawsuit to be against the Cities, rather than Oil companies, and throw it back at them. If it came to it, use their defense language in defense of their suit against BP.

          Also reference the lies that the Cities have told with respect to the Bonds that they have sold.

    • What you get when you graduate more lawyers than engineers. Incompetent lawyers become incompetent Judges that know nothing about the real world.

  1. No one is forcing any petrochem company to stay, operate, locate etc in California.
    They (the petrochem co’s) can sell their interests within the state and ‘let them eat cake’ – in the very warm and…dark

    • Yes, California should waste away in the putrid green swamp that they’ve created around science that’s so wrong, anyone who considers themselves a scientist and who buys in to this crap should be embarassed.

  2. I observe that the Ninth Circuit is routinely idiotic in its rulings and usually overturned on appeal.

      • …Hussain had pulled something out of the closet on Roberts. Like many in those positions, they are there because the cabal owns them.

      • He wasn’t necessarily a coward. Remember he was appointed by George Bush, who like the rest of the family are not exactly paragons of conservatism. This was the George that had no problem pushing the so-called Patriot Act on us.

        He was very clever at promising to be a conservative president, but there is little that he did that was conservative. I think he chose Roberts because Roberts and he held similar liberal views. He fooled many Americans – and most Republicans. That included me.

  3. “…The Ninth Circuit’s decision invites countless actions by states, municipalities, and private litigants in state courts all over the country…”

    If he loses in November, I can easily foresee the day that Trump is going to sincerely regret not taking on the climate alarmists while in office and challenging the scientific credibility of their narrative. There is no shortage of science with which to do that. This thing can go on indefinitely and get much much worse if Biden wins in November.

    I pray that I am wrong.

  4. I highly recommend that BP instantly agree to quit creating a “public nuisance.” and quit selling its products in Oakland and encourage other producers to follow.

    Bet that’ll end the lawsuit in hours.

    Thanks
    JK

    • Exactly what I was thinking, Jim K.

      BP should immediately STOP producing, distributing, using, or profiting from fossil fuels in that region.

      Just stop it! Shut down. Walk away. Say, “Buh bye”. That’s it. We’re done here now. Moving on.

      • UV
        Inasmuch as the intent of the lawsuit is to put the FF companies out of business, they should preemptively shorten the time of bleeding, withdraw from the California market, and sell their products where they are more appreciated. It would make it obvious to the rest of the world how valuable fossil fuels are and how asinine it is to try to run a modern economy on unreliable power.

    • Pulling services out seems like an appropriate punishment for them, but in the process you nail all the little people involved in the supply chain. Then you get a bunch of reverse “Okies” moving to Texas.

      Better for all the oil companies to get together in a common lawsuit defense pact, then tack a “litigation surcharge” on all the products they sell in suing jurisdictions. Let the cities or counties pay for the expenses, then if there is any massive judgment, up the surcharge to pay for it.

      • tack a “litigation surcharge” on all the products they sell in suing jurisdictions.
        Wonderfull!!! *NOT*
        How does this work out?
        A) The State loses and has to pay.
        Well who really pays? “Hey, Tony Taxpayer, we have something for you. Another bill. Pay up sucker!”

        B) The Company loses and has to pay.
        They tack on a surcharge. “Hey, Tony Taxpayer, you have to work to pay all the State’s bills, here is another one. Pay up sucker!”

        I am not sure I like this.

        • I’m tempted to say it would prompt Californians to get rid of their “leadership”. But, they’ve been led by the nose for so long, there’s no hope for them.

    • Bingo!! And all their liberal heads will explode when they realize all their “renewable fuels” aren’t as predictable as they had thought they were!!

    • Jim,
      Most likely the city would then sue BP to force them to sell their products in Oakland. They don’t want to put BP out of business, they just want to extract as much cash from them as possible without killing the golden goose; just like the states did to the tobacco companies. This is a shake-down, pure and simple.

    • Rather than not selling, why not raise the price to cover the mythical social costs of CO2. $25 or $30/gal ought to help defray all that damage, no?

    • The problem with “quit selling their products” is that they have contracts to fulfill. I don’t think they would be allowed to walk away from those contracts.

    • Municipal bonds are permitted, and the interest paid on them is not taxable (someone can confirm). Rich people in the US of A invest heavily (%-wise) in municipal bonds because they rarely go bankrupt, and the income is tax-free (as a mechanism for keeping the cost down).

      This is why most rich people pay so little in taxes. They quietly make a lot of money on their money, but it is exempted by that particular regulation.

      It has been a while since I looked at this but if necessary someone can correct this impression and bring me up to date. The exemption was introduced a long time ago because no one trusted municipalities so interest was high.

      Toronto has to have a balanced budget, like other Canadian municipalities so the issue doesn’t arise, but the reason for that may be the same: no one would lend to them anyway. Ontario can have deficit spending and is so profoundly in per-capita debt it would astonish an American already shocked by their national per-capita obligation.

      • You are correct on the tax aversion given to municipal bonds. Safe, tax free. Not highest returns but when coupled with tax advantages become decent for longer term investment.

      • Tax free income is always nice. My understanding is the municipalities are issuing their bonds without bring up CAGW as a risk factor. Yet they are during companies for risks associated with CAGW. In my mind this constitutes fraud on the part of the municipalities.

      • There are many factors with income taxes in the United States. Some states do not even have income taxes. Rich people put X into muni bonds and Y into stocks. Y is much bigger than X which is usually the debt of citys. Y has had so much upside compared to X. Rich people have many different personal preferences. The tax treatment of muni bonds is not ‘the problem’.

      • Crispin in Waterloo posted: “This is why most rich people pay so little in taxes.”

        Ahh . . . that old meme is still fronted by so many, yet remains untrue.

        Here are the basic facts that disprove it (at least in the United States).
        For Federal Income Tax Year 2017 (i.e., tax returns filed in 2018):
        — the top 1 percent of earners (with incomes over $515,371) paid nearly 39 percent of all income taxes
        — the top 10 percent of earners paid about 70 percent of all income taxes
        — the top half of earners paid 97 percent of all Federal income tax revenue, while the bottom half paid just 3% of all income tax revenue.
        (source of above data: https://www.ntu.org/foundation/tax-page/who-pays-income-taxes )

        “There are none so blind as those who will not see.”— attributed to John Heywood (1546) as modification of the Biblical verse Jeremiah 5:21.

      • Municipal bonds are permitted, and the interest paid on them is not taxable. (someone can confirm)

        Yes and no. It rather depends on many things.
        1) Some munis are taxable because the money is for projects that the fed don’t see as a major benefit to the public so won’t give them tax-exempt status.
        2) Even with tax-exempt munis, while the fed won’t tax you on the interest, if you bought them from another state (IE you live in Texas and bought a NJ muni) your home state might tax you on the money you make from it.
        3) Even if it’s tax exempt and from your home state if you bought or sold it on the secondary market, you could be on the hook for capital gains taxes.

  5. Then sue the crap out of all of those municipalities for fraudulent assurances backing up their bonds.

  6. “The geophysical problem of climate change”. Someone please tell me wtf this is.

    • Beats me too; I don’t know either. But my guesses would be: Precession? Earth’s orbit around our Sun? Cosmic ray absorption on Earth? Volcanism? Ocean Currents and other Ocean Dynamics? Al Gore (snows wherever he goes; yeah I know, that’s weather)? Any who, you know, all the things that really effect climate, and which only God has control, and which no amount of lying and taxes can fix (besides, can’t fix what ain’t broke, anyway).

      • It snows where Al goes because of his singular immenseness and it’s gravity well effect

        • You may be on to something here…
          I recall that LIGO https://www.ligo.caltech.edu/ recently successfully detected an elusive gravitational wave. Perhaps it was caused by AlGore getting in close proximity of LIGO that resulted in the gravitational wave detection. If it also snowed there on that day, we can add gravitational impact to the AlGore Effect. And you get the credit – Nobel Prize in the offing?
          All 🙂

  7. Nothing will come of this. Some lawyers will line their pockets and some politicians will virtue signal their support until they’re reminded where their reelection money comes from. The whole concept of suing fossil fuel companies for CC damage is a giant exercise in futility and virtue signaling. Damages caused by fossil fuels will be a non starter.

  8. Lawsuit? Over something no one can really control? The “climate” doesn’t have a thermostat and can’t really be controlled by any human anywhere. This is simply a ridiculous attempt to get money out of BP that they can pocket.

  9. “Corporations and directors can nevertheless manage their exposure by actively evaluating climate-related risk, considering sustainability initiatives, implementing appropriate operational and board monitoring procedures, and documenting all these efforts. But the time to act is now—when the climate-related liability and fiduciary risk for most companies is visible but not yet acute.”

    Corporations could never do enough, defensively. The intent is to make them bleed, pocket the assets, and let them go out of existence. Now that the door is open to state-by-state litigation, the “death by a thousand cuts” begins. The process is the punishment.

  10. producing, distributing, using, or profiting from fossil fuels constitutes a “public nuisance.”

    Does tis not add all of us as being liable as we all use fossil fuels in many ways.

    There are also local/state/federal taxes added to fuel use. Is this ‘profiting’.

    • I like where you’re going John. I’m no lawyer and do watch with some amusement as America sues itself to death at times, but agree that if the governments are taxing them they must be profiting…
      I do think it would be great if oil simply left California and we could all sit back with popcorn and watch. It wouldn’t be very long before the greens got what they want- if complete anarchy and death of many is your desire. Try it in a cold climate. One week of winter should cure that incredible naivety.

      It’s all such a stupid waste of time and energy though. Hey all, can we please behave like adults- knowing full well the “GND” is a complete farce for the time being. When unreliables are ready everyone will embrace them willingly, simple. Until then let’s try to have an actual adult discussion…
      For now keep researching new ways to power things. Let’s actually solve some of the many problems within our power to solve and there are many. The farcical waste of time that is climate change enriches a few at the expense of the many and that’s pretty much all it accomplishes other than taking scarce resources from useful pursuits!
      Stop subsidizing stupidity (e.g. windmills)
      Keep researching
      Tell Al Gore and other money and power mad hypocrites to go pound sand
      Start curing cancer (pick your cause)
      Enjoy life – it’s all we have!
      Being miserable in order to enrich green tycoons (oil/ coal rich ones at that) is absolute madness.

      • The future be!songs to the how dare you generation. And the bulk of em have a giant chip on their shoulder, for some misbegotten gd reason!

    • It is tantamount to a court scene during a tobacco litigation case with the lawyers on both sides chain smoking, the judge puffing on a huge corona and the courtroom in a haze of tobacco smoke.

  11. Perfect. Since every green energy company profits from the use of fossil fuels (in manufacturing their products, distributing their products, and so on) then sue the pants off them. Make it a huge class action suit for billions of dollars.

  12. Sanity is why we have a Supreme Court – to overturn these clowns and their complete misuse of judicial power. Using their logic it means that everyone who breathes (well, that’s just the living I guess) should be considered a nuisance. Now if we could just label the Ninth Circuit as a nuisance, we would be making progress.

    And they thought people were leaving California before…this will just speed up the process. While Texas welcomes the sane people, I think it’s time to build a wall around California and keep the nut cases there.

  13. The article should have stopped at “City of Oakland.” Anything following that is drivel.

  14. I just scanned down the list of comments on the 9th circuit, it’s obvious I don’t need to comment as the above are doing a great job. Stay sane and safe.

  15. If a county wins a lawsuit the price of gas goes up. The oil companies lose nothing.

    I’m still waiting for decarbonated gasoline. We have lead free. High time we had the option to buy carbon-free at the pumps.

    Why do they need to add fizz to gasoline anyways? Does it make it taste better when siphoning?

  16. I should of studied law rather than engineering. Engineers have failed to design self propelled engines whereas Lawyers have designed self-propelled law suits. Engineering is just too hard. Schools should only teach law as they know what is best.

  17. The logic in this case can, and will be, used against any number of things liberals don’t approve of.
    Making and profiting from the manufacture of guns presents a public nuisance.
    Making and profiting from the manufacture of private cars presents a public nuisance.
    Making and profiting from the manufacture of alcohol presents a public nuisance.

    This case opens a pandoras box that can only result in the banning of pretty much everything.

  18. Don’t Oakland and the state of California profit from the sale of fossil fuels?
    They tax them enough.

  19. A simple solution to the idiot warmest policies all energy companies in California to shut down supply immediately no gas water electricity petrol nothing. Let’s see how long the court case lasts after that.

  20. Those cities that are suing are burning fossil fuels in their motor vehicle fleets, in their homes for cooking and heating. One of the court rulings should be that in order to sue, they must demonstrate that they are using no fossil fuels themselves. If they are, it should be tossed out forthwith.

  21. From the article: “The Ninth Circuit’s ruling in City of Oakland v. BP PLC cleared the path for state-court litigation against corporate defendants on the theory that producing, distributing, using, or profiting from fossil fuels constitutes a “public nuisance.”

    Oakland is going to have to prove fossil fuels are a public nusance, which means they will have to prove that human-caused climate change exists and is therefore an issue. All the Alarmists in the world cannot prove human-caused climate change is real, so I doubt Oakland will do any better.

    Oakland can’t show they have been damaged by human-caused climate change. One can’t be damaged by something that doesn’t exist. Only in the mind, and there seems to be a lot of that kind of damage in the world.

    Four more years of Trump and he will straighten that Ninth Circuit out. 🙂

    • Tom they only have to “prove it” to the courts satisfaction. There’s a lot of far left judges in Cali that will be satisfied with an assertion without any actual evidence as long as it fits their political views.

      • “Tom they only have to “prove it” to the courts satisfaction. There’s a lot of far left judges in Cali that will be satisfied with an assertion without any actual evidence as long as it fits their political views.”

        I realize that. That’s how we got here in the first place. But I would expect a higher court to overturn any such ruling which is based on nothing of substance, once the case is moved out of California.

        • Don’t forget that the ultimate proof for the Endangerment Finding was “The IPCC says so!”

  22. It’s only a procedural decision, whether federal or state common law applied.
    There is still the hurdle of proving the nuisance which as the Federal district judge found is pretty impossible.
    I can’t see the state common law hurdle being any easier and if they do will only apply in California. More taxes on California motorists will go down like lead ballons

  23. Have I got this correct?

    If the City of Oakland were to win against BP, then any company or entity producing, distributing, using, or profiting from fossil fuels will also be liable, so in theory the City of Oakland will have to take themselves to court because not only are they using fossil fuels, they are profiting from the use of fossil fuels through taxes.

  24. I wouldn’t mind seeing an actual court case with Climatologists vs Real Scientists but quite frankly when you see people like Judge Sullivan, I certainly wouldn’t trust the court with my life.

  25. So, absolutely everyone is a public nuisance and the City expects to collect. Gangster government.

  26. “But the time to act is now—when the climate-related liability and fiduciary risk for most companies is visible but not yet acute.”

    Or is it?

    Companies at risk of being targeted in this cynical ploy–that is to say, companies that furnished the products to the plaintiffs who willingly used them, and in many cases derived revenues by taxing their sale, might want to think twice before voluntarily performing meaningless gestures that accomplish nothing except to validate the corrupt premise alleged by the plaintiffs.

  27. Why, in all,our names, is climate change assigned to humans?
    Prove it. No one can
    Anyone connected to the judiciary that refuses to acknowledge this fact is corrupt.

  28. All States, Cities and counties have the ability to forbid the sale, or use, of fossil fuels within the boundaries of their jurisdiction. None have done so. The Judge that allowed this case to proceed is obviously partial and will be overturned.
    You gotta love the US and A’s lawyers.

  29. Is there precedence for successfully suing somebody for damages arising from something that hasn’t yet happened, and might not happen?

    Also, I would have thought that specific, quantifiable, damages need to be shown. How else can a court determine the amount of any award? This implies that the plaintiffs are effectively going to be suing over (growth-adjusted) weather related damage, which insurance companies already know to be not increasing as required for fulfillment of the climate fairy tales.

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