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Why Big Oil Is Desperate to Avoid Climate Cases in State Courts

Dec. 15, 2022, 9:00 AM

When corporations sell a harmful product and lie to consumers about that harm—think tobacco and opioids—communities have successfully turned to state courts to hold them accountable for damage they have caused.

Twenty-seven states and municipalities are continuing this tradition by holding major oil and gas corporations accountable for perhaps the most consequential fraud in history: a decades-long, ongoing campaign to lie to the public and policymakers about the central role fossil fuel products play in our worsening climate crisis.

From Rhode Island and South Carolina to California and Hawaii, officials have filed local and state law claims in state courts to stop oil giants like ExxonMobil, Chevron, BP, and Shell from engaging in deceptive behavior. Plaintiffs are seeking to make those companies and other polluters pay their fair share of the astronomical bills communities now face from rising seas, extreme heat, and other fossil-fueled climate damages.

Big Oil defendants are terrified that these cases will reach trial in state courts, where juries would be shown the long trail of evidence of their climate deception, and the companies would face — in their own words from US Supreme Court petitions—“massive monetary liability.”

That is why the defendants so desperately want these cases moved to federal court, and why they and their front groups are now urging the Supreme Court to wade into this issue in multiple cases—in hopes of escaping accountability. Phil Goldberg of the Manufacturers Accountability Project did so, while failing to disclose that representatives from defendants Exxon, BP, Shell, and ConocoPhillips all sit on the board of his employer, the National Association of Manufacturers.

There’s just one problem: Fossil fuel companies can’t point to a single judge in the entire country who has agreed with them on this important jurisdictional question. Despite repeated claims by industry lawyers and front groups, there is no circuit split that would require the Supreme Court to intervene, or even a single dissenting opinion.

Circuit Courts Agree
Seventeen circuit court judges and 13 district court judges nominated by every president from Ronald Reagan to Donald Trump all agreed that climate accountability lawsuits filed in state court should proceed in state court.

Two—a Massachusetts consumer fraud lawsuit against Exxon, and Honolulu’s damages case against Exxon and other oil majors—have already defeated the companies’ motions to dismiss and are actively in pretrial discovery. Big Oil’s efforts have failed spectacularly because, to quote federal district court Judge John Tunheim in a ruling in Minnesota, the industry’s arguments are a “caricature” of the plaintiffs’ actual pleadings.

Industry lawyers deliberately mischaracterize these liability cases as an attempt to solve climate change through the courts, which is like saying that tobacco lawsuits were an attempt to cure lung cancer through litigation. To the contrary, the cases are premised on standard-issue common law and consumer fraud claims designed to hold bad corporate actors accountable for the costs of lying to consumers.

Judge Derrick Watson similarly found that Big Oil’s arguments for federal jurisdiction “misconstrue” claims made in lawsuits from Honolulu and Maui, which focus, he wrote, on “alleged concealment of the dangers of fossil fuels, rather than the acts of extracting, processing, and delivering those fuels.”

No Need for Federal Review
Now, after hitting what Watson described as a batting average of .000, the oil companies are engaging in a last-ditch effort to get relief from the highest court in the land. They are currently asking the Supreme Court to review rulings against them in Colorado, Baltimore, Rhode Island, and Hawaii, with more petitions sure to follow.

The justices had earlier opportunities to address the jurisdiction issue in these cases, but they left it instead for lower courts. In its 2021 ruling in BP P.L.C. v. Mayor and City Council of Baltimore, the court declined the fossil fuel industry’s request to decide the jurisdictional question.

In a 7-1 ruling, the justices ordered the Fourth Circuit and others to consider additional industry arguments for federal jurisdiction. More than a year later, six panels across five circuits have done just that. Every time—in the First, Third, Fourth, Ninth, Ninth again, and Tenth circuits— the panels ruled unanimously against the defendants that plaintiffs’ cases could proceed in state court.

Undeterred, industry lawyers and front groups disingenuously seek to create the impression of a circuit split by citing a Second Circuit decision against a New York City climate lawsuit filed in federal court, where crucially, jurisdiction was never an issue.

The Second Circuit will soon clarify this matter in Connecticut v. ExxonMobil, a consumer fraud lawsuit filed in state court. One of the Second Circuit judges on that case is Judge Richard J. Sullivan, who dismissed New York City’s federal suit in 2018.

During oral arguments in September, Sullivan and his colleagues were clearly skeptical when Exxon tried to link New York City’s federal case with Connecticut’s state law claims. “We’re not dumb,” Sullivan, a Trump appointee, said. “We understand what’s going on here.”

After four years of failing to persuade a single judge that climate accountability lawsuits filed in state court, under state law, somehow belong in federal court, oil company lawyers are now making removal arguments in bad faith.

At some point, the ethics of these endless, nakedly disingenuous arguments needs to be addressed head on. In the meantime, the people of these communities have waited long enough for their day in state court. The Supreme Court shouldn’t delay it further.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

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Richard Wiles is president of the Center for Climate Integrity.