Bloomberg Law
Free Newsletter Sign Up
Bloomberg Law
Welcome
Go
Free Newsletter Sign Up

High Court Ruling on Jurisdiction Thaws Some Climate Cases (1)

March 25, 2021, 8:30 PMUpdated: March 25, 2021, 8:59 PM

The U.S. Supreme Court’s resolution of a Ford Motor Co. product liability case clears a hurdle for a group of idled climate lawsuits.

The high court on Thursday sided with plaintiffs in a jurisdictional dispute over state courts’ ability to decide cases involving out-of-state defendants with certain in-state ties. The justices ruled that Montana and Minnesota courts had jurisdiction over local vehicle crash lawsuits even though the vehicles involved were sold elsewhere.

Lawsuits targeting oil companies for their role in climate change have been on pause for months in Maryland, Rhode Island, and Washington state pending the outcome of Ford Motor Co. v. Mont. Eighth Judicial Dist. Ct.. Lawyers representing BP Plc and other companies told courts the jurisdictional question was a “central issue” in their efforts to get the climate cases tossed.

“If this case had come out the other way, I think it would have created very serious problems for the lawsuits against the oil companies,” said Daniel Farber, faculty director for the Center for Law, Energy, and the Environment at the University of California, Berkeley. “So the fact that it came out in favor the plaintiffs was certainly good news for them.”

Proceedings in the climate cases are now closer to restarting, though each case faces additional legal obstacles.

‘Averted Disaster’

The Ford case focused on whether the accident-related product liability claims “arise out of or relate to” the automaker’s activity in the states, establishing what’s called “specific personal jurisdiction.”

“When a company like Ford serves a market for a product in a State and that product causes injury in the State to one of its residents, the State’s courts may entertain the resulting suit,” Justice Elena Kagan wrote in the Ford decision.

Andrew Bradt, also a UC Berkeley law professor, said the ruling didn’t move the law in a plaintiff-friendly direction but rather “averted disaster” for plaintiffs in general.

“It would have been disastrous had the court adopted the defendant’s line of thinking,” said Bradt, who signed on to an amicus brief supporting the plaintiffs in the Ford case. “It would have forced plaintiffs into such inconvenient courts that they likely wouldn’t have filed their lawsuits in the first place.”

That’s a relief for cities and states pursuing climate accountability claims against fossil fuel producers because jurisdictional arguments were “probably the easiest way for them to get kicked out of court,” Farber said.

He added, however, that judges will have to apply the standard in the Ford ruling to the facts in the climate litigation, and it’s too soon to tell how that analysis will come out. Climate-related claims involve global consequences, more responsible parties, and less direct harm than the product liability issues at play in the Supreme Court case.

A ruling for Ford would have given oil companies strong ammunition against wave of climate litigation from cities and states nationwide, but the companies still have effective arguments against state jurisdiction under the Ford standard because their actions are “global in nature,” and not specific to the plaintiffs, said Phil Goldberg, special counsel to the industry-aligned Manufacturers’ Accountability Project.

Patterson Belknap Webb & Tyler LLP attorney Jonah M. Knobler agreed, saying the climate plaintiffs would likely face a “much more skeptical court” because of the differences in their claims and the car accidents at issue in Thursday’s ruling.

“The underlying dispute in those cases does not concern an isolated event localized to the forum state, like the in-state product malfunction in Ford,” he said in an email. “Rather, the underlying dispute concerns a borderless crisis caused by the accumulation of carbon dioxide in the atmosphere around the globe, which affects nearly everyone on Earth.”

Affected Cases

Still, the ruling will help thaw a trio of climate cases that were put on ice last year, in part because of the Ford case.

In a lawsuit from King County, Wash., for example, Exxon Mobil Corp. argued that its ownership of a refinery, storage of fuel, and branding of service stations in the state weren’t enough to establish specific jurisdiction. The U.S. District Court for the Western District of Washington froze proceedings last year, citing the Ford case and a climate-related petition at the Supreme Court.

A state court in Maryland likewise paused Baltimore’s climate case against oil companies pending the outcome of both Ford and the city’s own Supreme Court battle over the scope of appellate jurisdiction in its case.

A state court in Rhode Island did the same, saying it wanted to hold off on weighing the state’s climate claims against Chevron Corp. and other companies until the U.S. Supreme Court established a standard in the Ford case, and the Rhode Island Supreme Court resolved a similar question under state law.

“Justice Kagan’s opinion for a unanimous Court reinforces what we have been saying all along,” Kristy dosReis, spokesperson for the Rhode Island attorney general’s office, said in an email. “When a company ‘serves a market for a product in a State and that product causes injury in the State to one of its residents, the State’s courts may entertain the resulting suit.’ We look forward to the opportunity to litigate our case in state court.”

Lawyers for King County and Baltimore didn’t respond to requests for comment on the impact of Thursday’s ruling on their cases.

(Adds Rhode Island comment in 19th paragraph.)

To contact the reporter on this story: Ellen M. Gilmer in Washington at egilmer@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com