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Will Cities Get Their Day in Court to Litigate Climate Change Harms?

May 10, 2021, 8:01 AM

For decades, fossil fuel companies knew about the dangers of climate change but denied the existence of the problem while continuing to market their products to meet consumers’ energy needs. Whether and to what extent they should now be liable for their role in warming the planet is an urgent question facing courts across the country.

Several cities have sued major fossil fuel corporations seeking damages to help pay for adaptation costs, with some initial successes but also a few notable setbacks.

The U.S. Court of Appeals for the Second Circuit on April 1 dismissed one of these lawsuits, which had been brought by New York City. The case faced an uphill battle in the courts for many reasons, but perhaps especially because of the political and international nature of climate change.

In similar cases filed throughout the U.S., judges have expressed concerns about involving the judiciary in a problem that touches on difficult issues of foreign policy and energy production. Yet the way the Second Circuit panel chose to dismiss New York City’s claims might close the door to future litigation over pollution and other harmful products.

New York City’s lawsuit, and others like it across the country, was ultimately about holding fossil fuel companies responsible under tort law for selling a product they knew to be dangerous. Tort cases have been vital in remedying some of the most important instances of corporate malfeasance in U.S. history, ranging from the infamous tobacco cases to recent litigation over the opioid epidemic.

Nuisance suits have also played an important part in resolving disputes over environmental harms, including widespread air and water pollution affecting residents in multiple states.

Congress can, of course, override state law through federal legislation by preempting state regulations, common law tort actions, or both. And in several areas, Congress has opted to explicitly preempt state law to create uniform national standards.

A prime example in environmental law is car emission standards, where federal statutes prevent states from issuing their own regulations (the law grants only a partial exception in the form of California’s waiver). Aside from vehicle pollution, however, Congress has generally seen state regulations and tort law as complements to federal environmental action.

Transboundary Pollution Disputes

After Congress passed the Clean Air Act (CAA) and Clean Water Act (CWA) in the early 1970s, courts were faced with the question of whether these statutes preempted state tort suits specifically over transboundary environmental pollution. In 1987, the Supreme Court firmly held that they did not in the case International Paper Co. v. Ouellette, with some important stipulations about which particular state’s law should apply if a suit implicated certain aspects of the federal scheme.

In part, the court wanted to preserve state law remedies because it had previously decided that federal common law, a rarely used body of decisions by federal judges, was no longer available for transboundary pollution claims now that Congress had passed a multitude of environmental statutes. Without state remedies, the judiciary would be giving up any role in adjudicating transboundary pollution disputes.

The Supreme Court also wanted to respect Congress’ decision to preserve state law. Both the CAA and CWA include a “savings clause” stipulating that Congress intended to preserve state tort remedies notwithstanding the passage of federal legislation. For decades, this precedent has governed lawsuits over transboundary pollution.

In the recent Second Circuit opinion on New York City’s lawsuit against fossil fuel companies, Judge Richard Sullivan ignored this precedent and boldly claimed that the city’s suit could not be brought under state law. He asserted that for more than a “century, a mostly unbroken string of cases has applied federal law to disputes involving interstate air or water pollution.” That is incorrect.

Sullivan cites Ouellette for this statement, even though the Supreme Court held precisely the opposite in that case. Since the Ouellette decision, judges have repeatedly affirmed that transboundary pollution suits can be brought under state tort law.

There are a number of complicated questions about how to apply the Supreme Court’s precedents on transboundary pollution to climate change litigation, such as what state’s law should govern the claims. But there is no doubt that state law is available for pollution suits that implicate national policy concerns, so long as they do not obstruct the implementation of federal legislation.

Not Limited to Climate Change Litigation

Besides getting the law wrong, the Second Circuit’s decision has the potential to thwart litigation that seeks to hold major companies responsible for the external harms they inflict on society, which often do not respect state lines. By finding that state law is simply unavailable for certain tort suits related to activities with interjurisdictional consequences, and then subsequently deciding that these problems necessitate a political solution rather than the application of federal common law, federal judges could prevent injured plaintiffs from obtaining any remedy from the courts. The opinion is thus not limited to climate change litigation.

For instance, there are toxic chemical compounds that can travel long distances in the atmosphere and harm citizens far beyond their sources of emission. Under the Second Circuit’s reasoning, injured parties could not sue polluters in state court since these substances create interjurisdictional impacts and could be subject to federal regulation.

The Biden administration has made important commitments to addressing climate change, recently pledging to halve greenhouse gas emissions by 2030. Admittedly, this political, national solution is likely to be most important in addressing the problem.

That does not mean state tort suits against fossil fuel companies should be dismissed out of hand. The law is clear that cities like New York, and other parties injured by transboundary pollution, should have their day in court.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

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Rachel Rothschild is a legal fellow at the Institute for Policy Integrity at NYU School of Law. Her article on cities’ climate change lawsuits was published in the NYU Environmental Law Journal in 2019.