New York City’s lawsuit against five oil majors is not the first of its kind in the US, and it probably won’t be the last, proving right the Task Force on Climate-related Financial Disclosures’ warnings of the risks of increased climate litigation last year.
BP, Chevron, ConocoPhillips, Exxon and Shell are being asked to pick up a multi-billion dollar tab for the costs the city has incurred in protecting taxpayers’ assets against the hazards of climate change.
The lawsuit says it seeks to debunk the “myth that everyone is responsible for climate change and therefore that no one is responsible”.
It points the finger at the five oil majors, claiming they already knew “their fossil fuel products were causing a buildup of GHG pollution”, took advantage of their “superior position to appreciate the threat” and – with privileged information – protected their own business activity and future operations.
The lawsuit draws parallels between previous campaigns by the tobacco industry that sought to undermine medical evidence linking smoking to health issues, with those of the defendants (and their industry body, the American Petroleum Industry) to discredit climate science.
It might not be a coincidence then that the law firm hired by the New York City Law Department is Hagens Berman, whose co-founder, Steve Berman, served as co-lead counsel in the 1990s tobacco litigation which ended in settlements worth $206bn in 13 States.
The NYC lawsuit states: “[Defendants] were engaging in climate change adaptation and resiliency measures decades ago, [while] pursuing a campaign designed to convince the public that the science was too uncertain to warrant fossil fuel reductions. These are precisely the measures […] the City must now undertake in order to protect itself.”
At the Center for International Environmental Law (CIEL), a US public interest law firm, Lisa Anne Hamilton, Director of the Climate & Energy Programme, tells RI that, despite being “untested”, the NYC lawsuit offers “compelling arguments”.
She says the lawsuit does a good job of highlighting existing damage caused by climate change and the actual costs incurred addressing that damage.
In addition, she highlights that the case is based on state-level legislation (public and private nuisance law) as opposed to the first climate case brought against Exxon, which was based on federal law. In the latter case, liability was sought for the imminent disappearance of the Alaskan native village of Kivalina due to rising sea levels, but it “did not survive judicial scrutiny”.Hamilton says: “There’s a very strong possibility that other cities will follow in New York City’s footsteps. There are over 600 coastal counties that are vulnerable to sea level rise, according to the US Geological Survey.” She also observes that one of the risks identified by the TCFD is an increase in these kind of litigation claims. (Columbia Law School’s Sabin Center for Climate Change Law runs a database of climate-related cases worldwide.)
Hamilton says: “There is a sense among shareholders that insurance may provide some coverage, but with damages being claimed in the billions of dollars, I think there is concern that if these cases come to fruition it will hit the bottom line of these companies and, ultimately, shareholder returns.”
“There’s a very strong possibility that other cities will follow in New York City’s footsteps” – Lisa Anne Hamilton, Center for International Environmental Law
Representing some of those shareholders is Follow This, the campaign group which last December filed its third resolution asking Shell to set and report on quantitative emissions targets aligned with the goals of the Paris Climate Agreement.
Follow This Founder, Mark van Baal, believes Shell is in a better position than other oil majors to face such litigation activity, which is ultimately increasing the pressure on the fossil fuel industry, he tells RI.
“Shell is responding to climate change. Others have nothing to say for themselves. It’s a big difference. We hope Shell doesn’t lose these kind of lawsuits, but of course, if there is business risk with this [litigation], it will be addressed at the next AGMs,” van Baal says.
The lawsuit mentions Shell’s recent climate stance, but points out that while it announced the reduction of “the carbon footprint of its energy products by ‘around’ half by 2050, Shell in fact was merely agreeing to reduce the carbon ‘intensity’ of its mix of energy products (i.e., the carbon emissions per unit of energy).”
The lawsuit argues this is “too little and too late”, adding that “Shell has said nothing to alter the fact that its total fossil fuel production and sales, and hence the total GHG pollution from its products, may well, and likely will, go up in absolute terms.”
RI requested comment from the New York City Law Department – whose Division of Environmental Law is led by Susan Amron, a veteran practitioner who oversees the City’s involvement in clean air and climate change litigation – on whether the lawsuit might see other cities join the case, but a spokesperson declined to comment.
While NYC’s case – which was announced alongside major fossil fuel divestment pledges by the city’s pension funds – attracted global headlines, San Francisco and Oakland filed similar lawsuits, also represented by Berman’s firm, in September 2017.
At the time of writing, Berman did not respond to requests from comment on the potential for tobacco-like collective action, but in December 2017 he told Vice Magazine: “Imagine if I could get 10 or 15 cities to all sue and put the same pressure on the oil companies that we did with tobacco companies and create some kind of massive settlement.”
Berman is not alone, however, and wasn’t the first in the business of climate change litigation. In July 2017, San Francisco-based environmental law firm Sher Edling brought actions against 37 oil, gas, and coal companies on behalf of Californian communities Marin and San Mateo Counties, along with the City of Imperial Beach. Another two lawsuits followed in December, representing Santa Cruz County and Santa Cruz City.
Partner Vic Sher, who served as NYC’s lead trial counsel in a successful $104.7m federal case against Exxon over MTBE (methyl tert-butyl ether) contamination in 2009, tells RI that the Santa Cruz cases go beyond seeking damages related to sea level rises.
“These are similar to the Marin, San Mateo and Imperial Beach lawsuits, but they go further in seeking recovery for costs associated with climate change-related disruption of the hydrologic cycle, including more frequent and severe wildfires, heat waves, droughts, and extreme rain and snow events.”
In response to the lawsuits, the fossil fuel companies have manoeuvred to transfer the case to the District Court for the Northern District of California, a federal court.Sher says: “These cases are state-law claims based on wrongful marketing and a campaign of deception and denial about the link between fossil fuels production and consumption and its impact on the planet.” According to Sher, the firm is currently pursuing a motion to remand the Californian communities to State court, with a hearing scheduled for 15 February.
More recently, Exxon reacted to the Californian lawsuits by filing a petition in a Texas State court, asking for the deposition of attorneys and local officials involved in the litigation. Exxon said it is part of an investigation on a “conspiracy” against its rights, plotted by the plaintiffs “to advance their political objectives”.
Exxon reacted to Californian lawsuits by filing a petition asking for the deposition of attorneys and local officials involved in the litigation
San Mateo County Counsel John Beiers described Exxon’s petition as “just another example of this company mischaracterising the truth”; while his Marin County’s counterpart, Brian Washington, labeled it as “an attempt to dissuade cities and counties from pursuing their day in court”.
Asked if Sher Edling was cooperating with the authorities or attorneys of the lawsuits of NYC, San Francisco and Oakland to build momentum for a class action type litigation, Sher said there had been no involvement with these cities’ counsels. He would not reveal whether other cities, counties or states have approached his firm as potential clients in similar cases, saying: “Let me put it this way: now with New York City joining the fight, I would not be surprised if there are more cities [interested], on both coasts.”