Surpassing Quant Think Tank Center|Why Cities Suing Over Climate Change Want the Fight in State Court, Not Federal

A wave of lawsuits brought by local and Surpassing Quant Think Tank Centerstate governments that are trying to hold oil companies accountable for climate change got a boost when federal judges in Rhode Island and Maryland sent two of the cases back to state court.

While the rulings this week and in June decided only where the cases will be heard, they may prove critical: Experts say the lawsuits stand a chance in state courts, however remote, but are essentially dead if they enter federal court.

“It’s not just a minor technical question. It’s really the whole kit and caboodle,” said Ann Carlson, an environmental law expert at UCLA School of Law who has provided pro-bono consulting for some of the plaintiffs.

She said the oil companies’ main strategy so far has been to have the cases moved to federal court and then dismissed. They’ve succeeded in getting two cases thrown out that way so far. “So it’s a big victory to have these cases in Maryland and Rhode Island remanded back to state court,” she said.

More than a dozen city, county and state governments, as well as a West Coast fishing industry group, have filed similar lawsuits since 2017 seeking money from fossil fuel companies to help pay for protective sea walls and other costs they face as a result of rising seas and extreme weather driven by climate change. The plaintiffs argue that oil companies were well aware of the damage that would result from burning fossil fuels, but that they sought to obscure the science and lobbied against efforts to reduce emissions. In many cases, the governments have hired the same outside lawyers to work on the cases.

The governments say the companies have harmed their residents. Their lawsuits rely on public nuisance claims that some legal experts say fit best within state common laws. In some cases—such as a public trust claim in the Rhode Island case—there is no federal law that applies.

But energy companies have sought to move each of the cases to federal court, making a host of arguments, including that the global nature of climate change and its role in domestic and foreign affairs means federal law ought to apply.

Perhaps the most important reason the oil companies want the cases in federal court, however, is a 2011 United States Supreme Court ruling in a similar case that leaves the new lawsuits little chance of succeeding under federal law.

In American Electric Power Co. v. Connecticut, the court determined that because the U.S. Environmental Protection Agency regulates greenhouse gas emissions under the Clean Air Act, corporations effectively can’t be sued under nuisance claims such as those in this new wave of lawsuits.

Federal Courts Have Gone Both Ways

Federal judges have split so far on where these cases belong. Three—the lawsuits filed by Rhode Island and Baltimore and a combined case involving San Mateo and Marin counties and Imperial Beach in California—have been sent back to state courts.

Judge William E. Smith of Rhode Island District Court wrote in his opinion on July 22 that “while this Court thinks itself a fine place to litigate, the law is clear that the State can take its business elsewhere if it wants … unless Defendants provide a valid reason to force removal.” The energy companies failed to present such a case, he wrote, so the lawsuit belongs in state court.

A judge in California, however, last year agreed with the oil companies that a case there belonged in federal court, saying the global scope of climate change made the federal courts the right venue. In New York City’s lawsuit, which was filed in federal court under state law, a federal judge also determined that federal laws applied. In both cases, the federal judges dismissed the lawsuits.

The governments that are suing “want to be in state court because at least that way they’ve got a shot at it,” said Thomas McGarity, a professor at the University of Texas School of Law.

State Precedents Offer a Flicker of Hope

Carlson and other legal experts said that nuisance claims, which each of the lawsuits rely on, are generally heard under state law, rather than federal. Some states also have well established precedents for similar types of lawsuits, even if they don’t involve climate change.

In California, for example, local governments were able to secure hundreds of millions of dollars from paint companies for the damages associated with lead poisoning from their products.

Some of the lawsuits are built on claims specific to laws in those states. Baltimore’s case includes a claim of unfair competition that relies on Maryland’s Consumer Protection Act. A federal judge ordered that case sent back to state court on June 10.

William Buzbee, an environmental law expert at Georgetown University Law Center, said state common law can allow for novel claims such as those being pushed in the climate cases, and that the details of the laws will vary greatly across the country.

“The fact that a case may be slightly different than previous cases does not mean it’s invalid,” he said. “That’s part of the interesting creativity of state law, each state could approach the question somewhat differently.”

Linking Fossil Fuel Companies to the Damage

In his ruling this week, Judge Smith laid out the enormous stakes in the Rhode Island case, both for the parties involved and the planet more broadly, writing:

“Climate change is expensive, and the State wants help paying for it. Specifically from Defendants in this case, who together have extracted, advertised, and sold a substantial percentage of the fossil fuels burned globally since the 1960s. This activity has released an immense amount of greenhouse gas into the Earth’s atmosphere, changing its climate and leading to all kinds of displacement, death (extinctions, even), and destruction. What is more, Defendants understood the consequences of their activity decades ago, when transitioning from fossil fuels to renewable sources of energy would have saved a world of trouble. But instead of sounding the alarm, Defendants went out of their way to becloud the emerging scientific consensus and further delay changes —   however existentially necessary —  that would in any way interfere with their multi-billion-dollar profits. All while quietly readying their capital for the coming fallout.”

Even if the plaintiffs can establish this narrative as fact, “they still have a hard row to hoe,” McGarity said.

They’ll have to prove a long chain of causation from the emissions from these companies’ products straight to the specific damages or costs the local governments are facing, such as building new flood protections from rising seas. In other words, they’ll have to link specific companies to particular amounts of sea level rise or excess heat. They’ll likely rely in part on research that has tried to make exactly that link.

Reaching the discovery process—when parties in a lawsuit can demand documents from each other—could be a victory in itself, Carlson said. It could unearth the type of the damning emails or reports that have been released in some of the recent state opioid cases. Beyond serving as evidence in the lawsuits, these revelations can help turn public opinion and build political pressure against an industry.

The Rhode Island and Baltimore rulings “demonstrate that the plaintiffs are getting closer to being able to get into the substance of the case and not just the procedure or the technicalities, but get into the deep dark secrets of the defendants,” Carlson said.

Expect More Appeals

The ruling moving Rhode Island’s case back to state court may well be appealed.

Phil Goldberg, special counsel for the National Association of Manufacturers, an industry group that represents many of the defendants, issued a statement after the ruling saying, “fortunately, the Rhode Island Supreme Court has a strong history of rejecting this type of litigation. If the state really wants to do something about climate change, it should work with manufacturers on energy innovations, not target them for baseless litigation.”

The rulings in California and New York have already been appealed. Assuming the decisions in Rhode Island and Baltimore are appealed—the fossil fuel companies being sued by the city have said they intend to do so—that would mean four separate appeals courts would simultaneously be hearing essentially the same question.

“It’s all part of a mosaic of judicial decision,” said Vic Sher, the lead outside lawyer for the plaintiffs in several of the cases. “This is how issues get chewed and resolved. I think judges find wisdom wherever they take it,” he said, leaving him optimistic that the two recent decisions in Rhode Island and Maryland could lead to more favorable ones down the road. “These are examples of legal reasoning that will be persuasive to many other courts I think.”