Climate cases keep landing in state court. Why it matters

Source: By Jennifer Hijazi, E&E News reporter • Posted: Wednesday, June 3, 2020

Flooding at the Golden Gate National Recreation Area in San Francisco. Municipalities in California and other states claim that emissions from fossil fuel development are financially damaging. National Park Service

Judges across the country have now determined that climate lawsuits against oil and gas companies belong in state courts.

But while legal experts say that state judges may be more open to climate arguments lodged by U.S. states, counties and cities, the municipalities still face multiple hurdles in their quest to force Big Oil to pay for sea-level rise and other local impacts worsened by the continued use of fossil fuels.

“There’s no guarantee that even in states like California that the state courts ultimately will side with the plaintiffs,” said University of California, Berkeley, law professor Dan Farber.

“It’s a major expansion,” he continued. “There are some real legal issues involved where there are legitimate arguments, so we don’t really know what the California Supreme Court would ultimately rule.”

But one thing is clear: Under local judges, Farber said, “the states get a chance to give their opinion.”

Climate damages cases launched by U.S. cities, counties and one state to hold oil companies accountable for their products’ contributions to climate change have been stuck in prolonged legal debate over whether the disputes should land in state or federal court.

The localities that have sued say they’re using state tort law to target a campaign of deception by industry regarding the use of fossil fuel products — claims that have been successfully used against other industries in places like California.

Oil companies like Exxon Mobil Corp. and BP PLC have tried to convince judges that the cases actually raise federal common law questions because they seek to control emissions in the face of widespread climate change. If the cases were to land in federal court, a judge could decide that those arguments are preempted under the Clean Air Act.

Federal judges that have weighed venue questions in cases from Baltimore and California have disagreed, finding that the battles belong in state court.

But the question of whether state law is preempted by federal law is not dead in the water just because the cases are not in federal court.

Judges may have ruled against a “complete” preemption argument — the tactic that turns state claims into federal claims — but there are other types of “ordinary” preemptions that are still on the table, noted law professor Karen Sokol from Loyola University, New Orleans.

“That doesn’t mean that the defendants can’t — and they certainly will — raise [ordinary] preemption, which is how it’s normally raised in state court,” she said.

Oil companies, though, may face a tougher sell of their preemption claims in state courts, said Alice Kaswan, a law professor at the University of San Francisco.

“State courts are traditionally our common law courts,” she said, “and so they may be more protective of state common law when it comes to the preemption question than federal courts.”

‘Judge-made’ law

State courts are an appealing alternative to federal benches partly because of the fundamentally different ways in which they operate, Kaswan added.

Jurists on state benches, for example, are more adept at navigating “judge-made” laws that are established based on legal precedent, not simply what is written in a statute, she said. In this way, state courts could be more flexible with more novel claims like the ones presented in the climate cases.

“Federal courts are always interpreting the Constitution, or statutes or regulations,” said Kaswan. “State courts are more comfortable with judge-made law, with the courts themselves being able to come up with legal principles under which a defendant could be held liable for harming another.”

Federal courts are less likely to be creative in this way, Farber said, adding that state courts also have more experience with wrongdoing claims, or torts, like the climate cases.

But whether climate lawsuits constitute tort claims at all has been a major point of contention in and out of the courtroom.

Oil companies should not be targeted for doing lawful business, said American Tort Reform Association President Sherman “Tiger” Joyce.

“You’re talking about energy, you’re talking about companies in an industry … that is obviously national in scope,” he said. “To say that this is interstate commerce is an understatement.”

He argued that tort expansion — like what the climate litigants propose — creates liability after the fact that is especially unfair for an industry that is already heavily regulated.

“To hold someone responsible for something — whether it’s a criminal act or whether it’s civil liability — we believe that there should be notice in advance,” he said. “You should know what the rules of the road are.”

State tort law is not the one solution to the myriad global, national and local problems posed by climate change, Sokol said — but that’s not what the municipalities are asking for.

“They’re asking very traditional state common law claims for individual harms suffered as a result of misconduct,” she said, adding that state courts have a long track record of handling claims specifically related to national marketing and misinformation campaigns that had local impacts.

“Federal courts have been out of the business of those sort of claims forever,” Sokol added.

Hurdles ahead

Although municipalities have secured some recent victories in the climate damages cases, questions remain about the lawsuits’ durability in court.

The 9th U.S. Circuit Court of Appeals, for example, did not agree with a lower bench’s decision to dismiss a challenge led by Oakland, Calif., but the panel gave the case back to the district judge to decide whether there were any other valid arguments to keep the case in federal court.

As for other cases that currently sit on state dockets, Farber says some out-of-state oil companies will manage to pull free of these disputes if municipal challengers cannot establish jurisdiction.

From there, he added, the process of unearthing evidence for the climate damages cases will be lengthy and expensive.

Oil companies “have an awful lot of money to throw at these cases, and they also have a huge stake,” Farber said. “If the precedent is established that we can sue them even for restricted damages … you add that up around the world, that’s huge.”