Environmental Lawsuits Against Energy Companies Are Not for Cities

The city of Baltimore is in a protracted legal battle with a slew of American energy companies and American subsidiaries of European energy companies over alleged harms caused by greenhouse gas emissions from their operations and production. Currently, they are engaged in a dispute over technicalities and formalities to determine if this case will be tried in a Maryland court or a federal court.

The U.S. Court of Appeals for the Fourth Circuit heard oral arguments on this issue on Jan. 25. Ironically, though, Baltimore has employed an argument that, should it succeed, would help undermine the very idea of climate change.

Baltimore filed suit against these energy companies in 2018. The defendants argue that the case should be heard in federal court, but the city wants it to stay in state court where it believes it will receive a more favorable consideration. The U.S. Supreme Court addressed this issue once, just last year, sending the case back to the Fourth Circuit with directions to expand its assessment and to reconsider its prior decision for the case to be in Maryland’s courts.

After the Supreme Court sent the case back to the Fourth Circuit, Baltimore claimed in its written arguments to the Fourth Circuit in September 2021 that it was bringing the case in state court, “to address localized harms flowing from the defendants’” actions. This is a gross misunderstanding of the theories behind climate change and, particularly, the role of global greenhouse gas emissions.

Any alleged harms from the release of greenhouse gases would not be localized specifically to Baltimore. The reality behind greenhouse gas emissions is that, like all gasses, they spread unabated around the globe.

The impact from greenhouse gas emissions is necessarily global in scope and affects the entire planet. Its impact is the antithesis of localized effects caused by specific companies.

As the Second Circuit said in an April 2021 decision dismissing New York City’s lawsuit, “global warming—as its name suggests—is a global problem that the United States cannot confront alone.” The decision also stated, “emissions in [New York or] New Jersey may contribute no more to flooding in New York than emissions in China.”

Moreover, “global warming is a uniquely international concern that touches upon issues of federalism and foreign policy. As a result, it calls for the application of federal common law, not state law.”

A Complex, Global Issue

Although acceptance of climate change doctrine is widespread, we are still learning how the complex interaction between energy production, greenhouse gases and global temperatures impact the planet’s climate. Yet, we do know that any harm is from the accumulation of the sum of activity, and it cannot be pinpointed to the actions of a select few.

The complexities surrounding climate change cannot be isolated to the activities of a select group of energy companies that Baltimore chose to sue—all American and American subsidiaries of European firms.

Furthermore, just as the alleged harms would not be localized in that part of Maryland, Baltimore is simultaneously affected by actions from around the globe. As Kannon Shanmugam, the attorney for the energy companies argued before the Fourth Circuit, “the complaint, by its terms, makes clear that whatever the theory of liability … the mechanism of harm is greenhouse gas emissions that take place worldwide.”

For example, the effects of oil refining in China are just as impactful for Baltimore as similar activity within the borders of Maryland. The effects of operations in the Middle East, or of operations in the United States by subsidiaries of Middle Eastern firms, are just as impactful for Baltimore.

This is a global issue and practically cannot be handled in local courts, even if Baltimore sues companies that it feels are more easily reached as opposed to, say energy companies in Asia, Africa, or South America. Curiously, Baltimore is not suing Russian, Chinese, or Middle Eastern energy producers.

As Shanmugam argued when this case was before the Supreme Court last year, “there is something profoundly counterintuitive about the notion that these cases which seek relief for injuries caused by worldwide greenhouse gas emissions should be litigated in state courts under the laws of different states.”

Climate Change Is for the Federal Government

Global warming cannot be divided by country, state, or city. To argue otherwise—as Baltimore is doing—undermines the idea of climate change itself. Perhaps it is relevant that in oral arguments on January 25, all parties referred to the threat to our environment as “global climate change.” First, Shanmugam used that term, but then the judges and even opposing counsel, Victor Sher, referred to the problem as “global.”

Only the federal government has the capacity to address issues related to climate change. Though the issues at hand are best left to Congress and delegated federal regulatory agencies, if this case is going to be heard in court, it should be in a federal courthouse.

This is not a local city issue. As the late Supreme Court Justice Ruth Bader Ginsburg wrote a decade ago in American Electric Power Co. v. Connecticut, when it comes to issues of energy and climate change, Congress and the federal regulatory bodies are “better equipped to do the job.”

This article does not necessarily reflect the opinion of The Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

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Ellen R. Wald is president of Transversal Consulting and a nonresident senior fellow at the Atlantic Council’s Global Energy Center. She is also the author of “Saudi, Inc.,” a history of the Saudi oil industry.