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Minnesota’s Claims in Climate Case Appeal Draw Skepticism

March 15, 2022, 4:27 PM

A federal appellate panel on Tuesday honed in on the true source of injury in Minnesota’s climate liability lawsuit against oil industry giants.

Judges Leonard Steven Grasz, David R. Stras, and Jonathan A. Kobes of the U.S. Court of Appeals for the Eight Circuit spent much of oral arguments parsing out whether global emissions or misinformation were the main crux of injuries in Minnesota v. American Petroleum Institute.

Answering that question is at the heart of a long-running battle over whether climate liability cases belong in federal courts, where industry has a distinct advantage.

Minnesota Attorney General Keith Ellison (D) sued the American Petroleum Institute, Exxon Mobil Corp., Koch Industries, and others in 2019, claiming that they had mislead Minnesota consumers over the role fossil fuels plays in causing catastrophic climate impacts like flooding and sea level rise. Federal judges have largely held that climate liability cases like Minnesota’s from other states, cities, and counties belong under state jurisdiction.

Policy Influence?

It “couldn’t be clearer” that Minnesota seeks to influence greenhouse gas emission policy, according to energy industry attorney Kannon Shanmugam of Paul, Weiss Rifkind, Wharton & Garrison LLP.

“If these sorts of cases are allowed to proceed in state court, what states are going to be doing is using state law, again, to regulate activity, not just nationwide, but internationally,” he told the panel.

Sher Edling LLP’s Vic Sher, representing Minnesota, balked at the idea the case rested on anything other than alleged misrepresentations made by the defendants and damage within the state.

“The idea that we’re seeking recovery for climate change generally—not true,” Sher told judges.

“The only impacts that matter here are impacts to the state of Minnesota, and those support the only damages analysis that would occur,” he continued.

Not A Federal Concern

Stras was skeptical that this was “a carefully crafted complaint.” He peppered Sher with questions over whether the cause of Minnesota’s injury was actually tied to interstate emissions.

The complaint “mentions the words ‘greenhouse gas,’ ‘air pollution,’ ‘emissions,’ and ‘climate change’ more than 300 times, while at the same time, they’re at least from what I can tell, there’s only a single alleged misstatement from David Koch supporting the claims,” he said.

Sher provided examples of the misinformation allegations at the heart of the complaint, and insisted that no “federal elements” or challenge to actual emissions exist on the face of Minnesota’s case.

“There is no federal interest in lying or failing to warn, that’s just not part of the Clean Air Act or any other statute that applies here, those are state common law duties,” Sher said.

‘Circuit Split’

One judge questioned whether the panel would create a “circuit split” with the U.S. Court of Appeals for the Tenth Circuit if it was to rule in favor of industry here.

A split already exists in a similar case from New York—though that lawsuit was never filed in state court. Other cases are still working through other circuit courts, according to Shanmugam.

“Exxon Mobil intends to seek Supreme Court review from the 10th Circuit’s decision, and so in some sense, this Court will be weighing in on an issue on which in our view, there already is a circuit conflict,” Shanmugam said.

The case is Minnesota v. American Petroleum Institute, 8th Cir., No. 21-01752, oral argument 3/15/22

To contact the reporter on this story: Jennifer Hijazi in Washington at jhijazi@bloombergindustry.com

To contact the editor responsible for this story: Zachary Sherwood at zsherwood@bgov.com