Update: Honolulu Climate Shakedown vs Big Oil

As reported many places, a lawsuit against oil companies was allowed by Hawaii Supreme Court and the defendants (petitioners) have asked the US Supreme Court to hear their case by filing a Petition for a Writ of Certiorari.  Excerpts from the petition are in italics below with my bolds, the citations omitted but with pages noted. The red title is a link to the entire petition.

In the referenced case, at issue is a technical point concerning which court has jurisdiction to rule on the shakedown lawsuit. Defendants ask the Supremes to decide the question:

Whether federal law precludes state-law claims seeking redress for injuries allegedly caused by the effects of interstate and international greenhouse-gas emissions on the global climate. 

On the merits of the case, the petition summarizes this way:

Like many other state and local governments in similar cases across the country, respondents filed this action against petitioners in local state court, asserting claims purportedly arising under state law to recover for harms that respondents allege they have sustained (and will sustain) because of the physical effects of global climate change. (pg. 3)

The Hawaii Supreme Court further held that, despite the complaint’s focus on the physical effects of climate change, interstate and international emissions were not the source of respondents’ injuries; petitioners’ marketing and public statements were. The Hawaii Supreme Court’s decision was incorrect, and it provides this Court with the ideal opportunity to address whether the state-law claims asserted in this nationwide litigation are even allowable before the energy industry is threatened with potentially enormous judgments. (.pg. 4)

Objections:  Asserting Facts Not in Evidence

In recapping the judicial history of this case, defense lawyers quote multiple times judges and plaintiffs made assertions in the absence of evidence. Examples include:

In American Electric Power, supra, the Court addressed the effect of the Clean Air Act on the federal common law governing air pollution. The Court held that the Act displaced nuisance claims under federal common law seeking the abatement of greenhouse-gas emissions from another State. Because the Clean Air Act “ ‘speaks directly’ to emissions of carbon dioxide from the defendants’ plants,” the Court saw “no room for a parallel track” under federal common law. The Court left open the question whether “the law of each State where the defendants operate power plants” could be applied. (pg.6)

Petitioners in this case are 15 energy companies that extract, produce, distribute, or sell fossil fuels around the world. The plaintiff respondents are the City and County of Honolulu and the Honolulu Board of Water Supply. On March 9, 2020, the City and County of Honolulu filed a complaint against petitioners in Hawaii state court, alleging that petitioners have contributed to global climate change, which in turn has caused a variety of harms in Honolulu. The Honolulu Board of Water Supply later joined the case as a plaintiff.

Respondents allege that increased greenhouse-gas emissions around the globe have contributed to a wide range of climate-change-related effects.  In particular, respondents cite:

♦  “sea level rise and attendant flooding, erosion, and beach loss”;
♦ “increased frequency and intensity of extreme weather events”;
♦ “ocean warming and acidification that will injure or kill coral reefs”;
♦ “habitat loss of endemic species”;
♦ “diminished availability of freshwater resources”; and
♦ “cascading social, economic, and other consequences.”

Respondents allege that those effects have resulted in:

♦  property damage;
♦  “increased planning and preparation costs for community adaptation and resiliency”; and
♦  “decreased tax revenue” because of declines in tourism.

Respondents contend that “pollution from [petitioners’] fossil fuel products plays a direct and substantial role in the unprecedented rise in emissions of greenhouse gas pollution,” which is the “main driver” of global climate change. (pg. 9)

At the same time, respondents concede that “it is not possible to determine the source of any particular individual molecule of CO2 in the atmosphere attributable to anthropogenic sources because such greenhouse gas molecules do not bear markers that permit tracing them to their source, and because greenhouse gasses quickly diffuse and comingle in the atmosphere.”

Respondents assert state-law claims for public nuisance, private nuisance, strict liability, failure to warn, negligent failure to warn, and trespass. Each claim is premised on the same basic theory of liability: namely,

♦ that petitioners knew that their fossil-fuel products would cause an increase in greenhouse-gas emissions,
♦ yet failed to warn of that risk and instead,
♦ engaged in advertising and other speech to persuade governments and consumers not to take steps designed to reduce or regulate fossil fuel consumption,
♦ thereby causing increased emissions and climate change. (pg.10)

The Hawaii Supreme Court rejected petitioners’ argument that a sufficient connection between the claims and the forum did not exist because the use of petitioners’ products in Hawaii could not have injured respondents, as Hawaii accounts for only 0.06% of the world’s carbon-dioxide emissions per year. (pg.11)

Separately, the court concluded that, even if federal common law had not been displaced, it would not govern respondents’ claims. The court recognized that federal common law governs claims where “the source of the injury * * * is pollution traveling from one state to another,” but it asserted that the source of respondents’ alleged injury was petitioners’ “tortious marketing conduct,” not “pollution traveling from one state to another.” The court did not attempt to reconcile that characterization with its earlier recognition that respondents’ theory of liability depends upon petitioners’ conduct allegedly “dr[iving] consumption [of fossil fuels], and thus greenhouse gas pollution, and thus climate change,” resulting in alleged physical and economic effects in Honolulu. (pg.12-13)

In the Hawaii Supreme Court’s view, the inherently federal area of interstate pollution covers only claims where “the source of the injury * * * is pollution traveling from one state to another,” not “failure to warn and deceptive promotion.” But the complaint in City of New York likewise alleged that the defendants’ promotion and marketing of their products caused injury by increasing greenhouse gas emissions. The Second Circuit nevertheless concluded that the plaintiff was seeking relief “precisely because fossil fuels emit greenhouse gases” and thereby exacerbate climate change, and it thus declined to allow the plaintiff to “disavow[] any intent to address emissions” while “identifying such emissions” as the source of its harm. (pg.18)

Allowing the law of one State to govern disputes regarding pollution emanating from another State would violate the “cardinal” principle that “[e]ach [S]tate stands on the same level with all the rest,” by permitting one State to impose its law on other States and their citizens. Federal law must govern such controversies because they “touch[] basic interests of federalism” and implicate the “overriding federal interest in the need for a uniform rule of decision.” And because “borrowing the law of a particular State would be inappropriate” to resolve such interstate disputes, federal law must govern. (pg.23)

Respondents’ theory of liability is that petitioners’ fossil-fuel products are “hazardous” because they “cause or exacerbate global warming and related consequences,” and that petitioners acted wrongfully by promoting those products and allegedly taking actions to “conceal[] the[ir] hazards” and prevent “the[ir] regulation.” Respondents are seeking relief in the form of damages and equitable remedies for physical harms allegedly caused by global climate change, including “sea level rise, drought, extreme precipitation events, extreme heat events, and ocean acidification.” The “gravamen” of respondents’ complaint, is thus that petitioners’ conduct increased the world wide use of fossil fuels, resulting in increased global greenhouse-gas emissions, which contributed to global climate change and resulted in localized physical effects in Hawaii. (pg.24-25)

Respondents allege that their injuries are caused by the interstate and international emissions of greenhouse gases over many decades. Respondents’ requested relief—including damages—is designed not only to remedy injuries allegedly caused by those emissions but to regulate worldwide activities producing those emissions. Respondents are simply attempting to recover by moving up one step in the causal chain and suing the fuel producers rather than the emitters themselves (which include the vast majority of the world’s population). (pg.25)

Although the Clean Air Act has two saving clauses, they are materially identical to the Clean Water Act’s saving clauses and thus permit actions under state law only to the extent that the plaintiff is proceeding under the law of the State in which the source of the pollution is located. Of course, that is impossible here, where the alleged mechanism of respondents’ injuries is the combined effect of all greenhouse gas emissions worldwide. Federal law thus precludes respondents’ state-law claims. Indeed, in light of the breadth of the Clean Air Act’s governance of greenhouse gas emissions, respondents’ state-law claims would be foreclosed even if a presumption against preemption
applied. (pg.26)

Climate activists protesting outside the Supreme Court July 1, 2022 after the court announced its decision in West Virginia v. EPA. Francis Chung/E&E News/POLITICO

Because respondents seek relief for climate-change related harms, international emissions—which represent the overwhelming majority of total anthropogenic emissions—are the primary causal mechanism underlying their alleged injuries. “Greenhouse gases once emitted become well mixed in the atmosphere; emissions in New Jersey may contribute no more to flooding in New York than emissions in China.” (pg.27)

The complaint is candid on this point: respondents repeatedly allege that defendants’ conduct led to increased greenhouse-gas emissions worldwide, which caused or exacerbated global climate change and thereby caused localized harms in Hawaii. Respondents nowhere alleged harm from petitioners’ alleged deceptive conduct other than through the mechanisms of increased emissions and global climate change. When faced with the same argument, the Second Circuit rightly held that a plaintiff cannot “have it both ways” by “disavowing any intent to address emissions” when convenient while simultaneously “identifying such emissions as the singular source of the [alleged] harm.” (pg.30)

The approach adopted by the Hawaii Supreme Court not only contravenes this Court’s precedents but would also permit suits alleging injuries pertaining to global climate change to proceed under the laws of all 50 States—a blueprint for chaos. As the federal government explained in its brief in American Electric Power, “virtually every person, organization, company, or government across the globe * * * emits greenhouse gases, and virtually everyone will also sustain climate-change-related injuries,” giving rise to claims from “almost unimaginably broad categories of both potential plaintiffs and potential defendants.” Out-of-state actors (including the nonresident energy companies here) would quickly find themselves subject to a “variety” of “vague” and “indeterminate” state-law standards, and States would be empowered to “do indirectly what they could not do directly—regulate the conduct of out-of-state sources.” That could lead to “widely divergent results”—and potentially massive liability—if a patchwork of 50 different legal regimes applied. And that is especially true to the extent that a state court attempts to exercise jurisdiction expansively over any energy company that does business in the State.

Background Resource

Finally, a Legal Rebuttal on the Merits of Kids’ Climate Lawsuit

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4 comments

  1. budbromley's avatar
    budbromley · April 8, 2024

    Thanks Ron. Good analysis IMHO. I have shared this far and wide.

    Like

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