It has been a busy year for climate litigation and 2020 promises even more fireworks. The continuing saga of Juliana v. United States, the landmark securities fraud trial in New York against Exxon, and the proliferation of state nuisance cases against oil companies will put courts in the position to answer important questions on how they will handle climate issues.
Juliana is a path-breaking case brought by 21 youth plaintiffs seeking a constitutional right to a livable planet. Plaintiffs aim to hold the federal government accountable for worsening the dangers of climate change through increased reliance on fossil fuels and for breach of its fiduciary obligation to protect the atmosphere and oceans under the public trust doctrine. Plaintiffs want the court to order the government to produce a plan for reducing carbon pollution in line with what climate scientists have found necessary to achieve “net zero emissions” by mid-century. This will require radical overhaul of the nation’s energy and transportation systems and fundamental changes to agricultural production and the built environment.
The case, however, may not even get to trial. The Trump administration has waged a ferocious legal battle to have the case thrown out of court. Most recently, in June 2019, the Ninth Circuit heard oral arguments on the government’s motion to summarily dismiss the case on the grounds that the youth plaintiffs lack standing and have no constitutional basis for their claims. In essence, the government argues these are political questions only Congress and the Executive branch can address. There is no small irony in this argument given both branches are currently infamous for their animosity toward climate change.
Win or lose, Juliana is an historic case that has helped focus the public eye on the threats facing future generations and has galvanized the global climate youth movement. It has also inspired landmark decisions in climate protection on a global scale. In 2018, the Colombian Supreme Court ordered the government to protect the Colombian Amazon from deforestation after a youth-led case put the government on trial. The case was led by the advocacy organization Dejusticia and built with the help of the Juliana attorneys. In India, nine-year-old Ridhima Pandey brought suit against India for violation of the public trust doctrine – the same doctrine at the heart of Juliana. In October 2019, sixteen children filed the first legal complaint that their countries have violated their rights under the United Nations Convention on the Rights of the Child. Juliana continues to make waves throughout the country and the world, making it something to watch in 2020.
Exxon on Trial
Exxon has won the first lawsuit seeking to hold the oil industry accountable for misleading investors and the public about the dangers of climate change and continued investments in risky fossil fuel projects. On December 10, 2019 Judge Barry Ostrager of the Supreme Court of New York issued his much anticipated decision rejecting the claims brought by the New York Attorney General (“NYAG”) that Exxon had violated the Martin Act, the strongest securities fraud law in the nation. The NYAG alleged that Exxon gave false and misleading statements to investors that climate regulations did not pose a significant risk of stranded assets.
Exxon admits it uses two different methods for calculating the cost of carbon. Exxon uses a “proxy cost” of up to $80 per ton based on how it thinks carbon regulations will affect future global oil markets; it uses a “greenhouse gas” cost of approximately $40 per ton when making investment decisions on individual projects. The NYAG alleged that Exxon used the proxy cost in reports to shareholders but used the much lower greenhouse gas cost when making business decisions. The NYAG maintains that this approach misled institutional investors who had been calling for a more robust “stress testing” of the risks inherent in the company’s assets.
But Judge Ostrager ruled that the state had failed to prove by a preponderance of evidence that Exxon made any “material misrepresentations that would have been viewed by a reasonable investor as having significantly altered the ‘total mix’ of information made available.” Judge Ostrager said that nothing in his opinion was “intended to absolve Exxon from responsibility for contributing to climate change through the emission of greenhouse gases in the production of its fossil fuel projects.” But, said the judge, “this is a securities fraud case, not a climate change case.”
Public Nuisance Cases
There are over a dozen lawsuits pending in federal and state courts seeking compensation from the major oil companies to help fund adaptation to the consequences of climate change. Plaintiffs in these cases are municipal and state governments on the front lines of the climate emergency who face daunting costs to defend their communities from the onslaught of sea level rise, heat waves, floods, wildfires and other disasters. These cases are based on state common law theories of public nuisance, trespass, negligence, failure to warn and other torts. The common element is that the oil companies knew of the dangers posed by their products and failed to warn customers, in some cases actively downplaying the risks and deflecting the concerns of policy makers while there was still time to avoid the most serious consequences.
While discovery is underway in some of the cases, all are currently tied up in jurisdictional battles over whether they belong in state or federal court. The oil companies insist the cases belong in federal court, but so far only two courts have agreed while four have returned the cases to state court. All the cases are on appeal to federal circuit courts. Only one court has stayed proceedings pending the appeal, while courts have denied stays in four other cases. The Supreme Court has denied an emergency stay.
At some point, the Supreme Court will be called upon to decide whether federal law completely preempts any state remedy for climate change damage, but for now these cases bear watching to see if one of them reaches a jury. It could be a “tobacco moment” for climate change.
Climate cases are pushing the law and the courts in new directions. This strategy has good company in history. During the Civil Rights Movement, the National Association for the Advancement of Colored People – with great lawyers like Justice Thurgood Marshall – set the stage for Brown v. Board of Education by testing the “separate but equal” doctrine in carefully selected cases. Similarly, the American Civil Liberties Union Women’s Rights Project, under the leadership of Justice Ruth Bader Ginsburg, made gains in gender equality, demonstrating gender discrimination harms both men and women.
No matter what happens in the cases on today’s docket, the era of climate litigation is just beginning. In 2020 we are likely to see a number of rulings from the Circuit Courts on whether damage claims based on state common law are viable and in which courts – state or federal – they will be tried. Eventually the US Supreme Court will be called upon to determine whether the victims of climate change can find justice somewhere within the US judiciary.