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Oil Giants Wage ‘Endless’ Disputes Before Climate Case Trials

March 21, 2022, 9:30 AM

A potentially landmark trial among a slate of national climate misinformation lawsuits is inching closer to reality in a Hawaii state court, if it can overcome the last obstacles left in the energy industry’s legal arsenal.

A Hawaii judge last month tossed bids by Exxon Mobil Corp., Sunoco LP and other companies to dismiss a case brought by Honolulu, a first for nearly two dozen similar cases trying to move ahead in state and local courts. According to many of these complaints, energy supermajors have known about fossil fuels’ role in catastrophic global warming—and lied to consumers about it—for decades.

Honolulu’s case now leads the pack, but the discovery process that could reveal a trove of energy company inner communications is still a ways off, lawyers say.

“I’m not sure that we are green light to go to the discovery phase in Hawaii,” Yale Law School professor Doug Kysar told Bloomberg Law. “There might be quite a bit of procedural and preliminary wrangling that the oil industry can continue to throw out there.”

Long Battle

The companies have been waging technical jurisdictional battles in these cases for more than five years, claiming the suits raise national issues of climate policy that are outside the scope of individual state laws.

If companies can keep the lawsuits in federal courts, they’re more likely to be dismissed under federal laws such as the Clean Air Act.

That long-fought battle over the appropriate venue is evidence of the lengths companies will go to in throwing up hurdles before trial, Lewis & Clark Law School professor Lisa Benjamin said.

“The disclosure of deceptive information and misinformation will be one of the most reputational damaging parts of this litigation, even if the cases themselves are not successful, so I think companies will be very sensitive to that,” Benjamin said.

Next Steps

Honolulu’s case is poised to be the first climate misinformation suit to move beyond the mire of jurisdictional battles, but an interlocutory appeal and debate over the discovery process itself lie ahead.

The city and county of Honolulu and the Honolulu Board of Water supply sued energy companies in 2020, claiming the industry giants had lied about the effects of fossil fuels on the climate. The case was sent back to state court, where it was allowed to proceed while companies appealed in the U.S. Court of Appeals for the Ninth Circuit.

Hawaii First Circuit Judge Jeffrey Crabtree issued four rulings in February, rejecting multiple industry attempts to dismiss Honolulu’s state-level case. Crabtree’s final ruling, issued on Feb. 28, affirmed that state court is an appropriate venue to hear the case, despite energy company efforts to cast it as full of interstate issues better suited for federal benches.

“Plaintiffs do not ask this court to limit, cap, or enjoin the production and sale of fossil fuels,” Crabtree wrote in his Feb. 22 opinion. “Defendants’ liability in this case, if any, results from alleged tortious conduct, and not on lawful conduct in producing and selling fossil fuels.”

An upcoming interlocutory appeal will weigh in “sooner rather than later” on whether these motions to dismiss were handled correctly, according to Manufacturers’ Accountability Project special counsel Phil Goldberg, who believes the cases are a misuse of tort law.

Crabtree, the first circuit’s designated senior environmental court judge, was presiding over the case by “special designation,” Kysar said, meaning he was a substitute brought in while the normal judge was pulled to sit on a criminal case.

The case will now move back to its original judge from Crabtree, which could be another avenue where oil companies push for a dismissal.

Defendants can also petition the state Supreme Court for a substantive dismissal, something that Kysar says he “fully expects” companies to try next.

‘Friendly’ Judge

Once companies run out of motions and parties start asking questions about what evidence can be put on the table, it “becomes a much more specific battle,” according to Schiff Hardin LLP partner Jane Montgomery.

“The parties now have to take stock and look at, specifically, what they’re trying to claim,” Montgomery said. “So Hawaii will have to produce documents and information that really focuses in on the tort harm they’re claiming that climate change is causing.”

But even at the discovery stage, courts will still see “endless disputes” over what kind of information can be brought before a judge, Montgomery noted.

Still, the language of Crabtree’s rulings was “very friendly” to Honolulu plaintiffs, something that Benjamin said got advocates for the case excited about its potential for trial.

“This is an unprecedented case for any court, let alone a state court trial judge,” Crabtree wrote in one opinion. “But it is still a tort case. It is based exclusively on state law causes of action.”

The case is City and County of Honolulu vs. Sunoco LP, Haw. Dist. Ct., No. 1CCV-20-0000380, Docket 3/16/22

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