Climate Change Litigation Accelerates As New Decisions Build Book of Case Law Say Pillsbury Attorneys

HOUSTON & WASHINGTON--(BUSINESS WIRE)--Two starkly different decisions handed down in the past few days by the federal courts illustrate how the courts are addressing the complicated and controversial issues regarding climate change litigation.

“While each case must be evaluated on the merits of evidence on a individual basis, the decision in Kivalina is more in keeping with how courts have traditionally ruled--often dismissing these types of cases as “nuisance suits”

On Friday, October 16, 2009, the United States Court of Appeals for the Fifth Circuit held that the complaint of the class action plaintiffs in the case of Ned Comer v. Murphy Oil USA, et. al., Case No. 07-60756, could proceed. Reversing the lower federal court, the court ruled that the plaintiffs, residents and owners of land and property along the Mississippi Gulf Coast had standing to assert their claims that the defendants' operation of energy, fossil fuels and chemical industries in the United States caused the emission of greenhouse gases, which contributed to global warming, which in turn caused a rise in sea levels and added to the ferocity of Hurricane Katrina, which destroyed their property. Moreover, the court held that this complaint did not assert a non-justiciable political question.

The plaintiffs sought compensatory and punitive damages based on Mississippi common law precedent and the provisions of the Mississippi Constitution, and they argued they had standing to litigate these claims based on the 2007 decision of the United States Supreme Court in Massachusetts v. EPA. The Court held that the states had standing to seek review of a decision by the EPA not to regulate carbon dioxide emissions, and that CO2 is a pollutant as defined by the Clean Air Act, and could be regulated as such provided that EPA makes the appropriate finding that its emissions are an "endangerment" under the law, and there was a plausible link between man-made emissions of greenhouse gases and global warming. While allowing the claims based on private and public nuisance, negligence and trespass to continue, the Appeals Court dismissed the claims based on allegations of unjust enrichment, fraudulent misrepresentation and civil conspiracy.

The Appeals Court not only overturned the brief dismissal order issued by the U.S. District Court for the Southern District of Mississippi, but also harshly criticized the lower court decisions in California v. General Motors Corporation and the first American Electric Power case decided in the Southern District of New York. However, the court noted that the Second Circuit recently reversed the American Electric Power case, using a footnote to remark that "the Second Circuit's reasoning is fully consistent with ours, particularly in its careful analysis of whether the case requires the court to address any specific issue that is constitutionally committed to another branch of government."

“The U.S. Supreme Court ruling to classify carbon emissions as pollutants was an important turning point,” said environmental lawyer Anthony Cavender, who is based in Pillsbury’s Houston office. “Given that the Obama Administration has already advocated for tighter regulations related to the environment as a whole, and in particular, for tougher policies governing carbon emissions, many plaintiffs may now feel that the time is right to file such suits, hoping that that both state and federal courts will be equally sympathetic. That tactic paid off in Comer given the unanimous ruling for the plaintiffs.”

On the other hand, in Native Village of Kivalina v. ExxonMobil Corporation, et al., Case No. C 08-1138 SBA, decided September 30, 2009, the U.S. District Court for the Northern District of California dismissed a federal common law nuisance claim filed by the plaintiffs, members of the Inupiat Eskimos living in a village near the Arctic Circle. The plaintiffs alleged that the defendants, 24 oil, energy, and utility companies, contributed to the excessive emissions of carbon dioxide and other greenhouse gases which caused global warming and consequently diminished the Arctic sea ice that protects their village from winter storms, and that the resulting erosion and destruction will require their relocation.

Here the court ruled that the complaint must be dismissed as a non-justiciable claim under the political question doctrine of the Supreme Court's 1962 decision in Baker v. Carr. In doing so, the court took issue with a contrary ruling of the Second Circuit Court of Appeals in Connecticut v. American Electric Power, decided on September 21, 2009. In addition, the court held that the plaintiffs failed to adequately establish that they have standing to pursue these claims, failing to show that there was any connection between their alleged damages and the defendants' conduct.

“While each case must be evaluated on the merits of evidence on a individual basis, the decision in Kivalina is more in keeping with how courts have traditionally ruled--often dismissing these types of cases as “nuisance suits” filed by plaintiffs for no other purpose than to cause headaches for companies they politically or personally disagree with,” said partner Sheila Harvey, head of Pillsbury’s Climate Change & Sustainability team. “But as more carbon emission cases go to trial, testing case law or reinterpreting it differently as happened here when both cases cited Connecticut v. American Electric Power, companies may find themselves increasingly facing potential liability if they can’t demonstrate that every effort has been made to reduce or limit carbon emissions as part of the standard cost of doing business.”

Pillsbury’s Climate Change & Sustainability team assists clients in funding, supporting, and building technologies, facilities or products that help reduce the world’s carbon footprint. Pillsbury’s experience advising energy clients on carbon emissions-related matters dates back more than 20 years when the State of California first began mandating specific rules related to reducing greenhouse gases (GHGs). Our team members have advised on more than 100 climate change matters in the past five years, including negotiating at the international level under the Framework Convention on Climate Change and on the EU’s GHG cap-and-trade program; legislative activity at the U.S. federal and state level, and GHG-related litigation. Pillsbury also serves clients in the area of financing projects aimed at securing GHG-emission reduction credits. We also have significant experience assisting cleantech start ups to secure financing and patent new technologies designed to burn cleaner fuels or reduce greenhouse gases. For more visit, www.pillsburylaw.com/climatechange.