Oil Industry Faces Skeptical Judges in Baltimore Climate Case

A panel of federal appeals court judges seemed skeptical of energy company claims on Tuesday during a second round of arguments in Baltimore’s climate liability case.

Attorneys for the city and oil supermajors faced off again at the U.S. Court of Appeals for the Fourth Circuit, after the U.S. Supreme Court last year ordered appellate judges to look at a fuller suite of industry arguments over whether Baltimore’s case—and others like it—should be heard in state or federal courts.

What the panel decides on this examination could determine how other judges rule on which venue more than a dozen similar climate liability suits over alleged climate deception from the oil industry will ultimately be heard.

Federal common law provides the “exclusive source” of law for Baltimore’s claims, according to energy industry attorney Kannon Shanmugam of Paul, Weiss Rifkind, Wharton & Garrison LLP.

But Judge Stephanie Thacker took issue with the “circular argument” that Baltimore’s case is both governed by federal common law and displaced by the Clean Air Act.

“That, at least for me, defies logic,” she said.

‘Defendant in Charge’

Thacker added that it seemed the plaintiffs would be preempted under sweeping energy claims no matter what was in their complaint according to company arguments.

“That puts the defendant in charge of what plaintiff’s claims really are, and does sweep as broadly as it sounds to me like you’re arguing,” she said.

But as long as plaintiffs case centers around the production of fossil fuels worldwide, it doesn’t matter what causes of action they pursue, the issue is still of federal importance, Shanmugam responded.

“Baltimore can’t plead around the body of case law applying federal common law to similar claims simply by labeling its claims as state law claims,” he argued.

Deception Claims

Claims from Baltimore and other cities, states, and counties would “sadly not address global climate change” as defendants suggest, according to the rebuttal by Sher Edling’s Vic Sher, an attorney for Baltimore.

Rather, plaintiffs in these cases want damages from past harms, which include misinformation over the role of fossil fuel production and use in climate change.

“This complaint rests on defendants lack of warnings and abetted by a sophisticated disinformation campaign and that that set of allegations which permeate the complaint in every cause of action provide a purely state law claim,” Sher said.

Senior Judge Henry Floyd asked whether the use of “production” in the Baltimore gave Sher pause, since companies argue that the case is really about stemming the production of fossil fuels, including production at the Outer Continental Shelf.

But those arguments misunderstand what Baltimore is arguing, and Outer Continental Shelf connections are “too remote,” Sher argued.

“Our burden and trial leaders show that the failures to warn and the deception campaign subs were substantial factors in in exacerbating emissions, making them greater and thereby exacerbating the harms,” he countered.

Reactions

The climate cases have evolved and taken on new claims in the last five years, and recently appeared before the Supreme Court over a narrow jurisdictional question on how many claims appeals courts need to consider.

Justices granted industry a win in that case, prompting Tuesday’s arguments. Lower court judges have largely held, however, that these cases belong under state jurisdiction.

“Judges so far have consistently rejected Big Oil’s efforts to mischaracterize these cases, and it was clear again today that the Fourth Circuit panel was skeptical of the companies’ arguments,” Center for Climate Integrity president Richard Wiles said in a statement.

Critics of these lawsuits, like the Manufacturers’ Accountability Project, insist that they are trying to undermine legal fossil fuel production by forcing climate regulation improperly through the courts.

“Baltimore’s claims may be creatively packaged under state law, but the nature of climate change, this litigation and the remedies they seek are all inherently beyond the scope of any state,” project special counsel Phil Goldberg said in a statement.

The case is: Baltimore v. BP PLC, 4th Cir., No. 19-1644, oral arguments 1/25/22