Kivalina and AEP Strike Again – Oakland and San Francisco Climate Change Suits Dismissed

By Order dated June 25, 2018, the United States District Court for the Northern District of California dismissed the lawsuits filed by the cities of San Francisco and Oakland seeking compensation from five of the world’s largest energy producers for the costs of adapting to climate change allegedly caused in part by these companies’ sale of fossil fuels. This dismissal brings to an end, at least temporarily, to two of the fourteen second-generation climate change lawsuits that have been filed by various cities and counties across the country.

These recent suits generally have tried to address the climate change issue in a manner that avoids the fate suffered by the plaintiffs in the first generation of climate change lawsuits – Am. Elec. Power Co., Inc. v. Connecticut, 564 U.S. 410 (2011) (AEP) and Native Village of Kivalina v. ExxonMobile Corp., 696 F.3d 849 (9th Cir. 2012) (Kivalina). In these earlier cases, the plaintiffs had sought a remedy based on the defendants’ emissions of carbon dioxide, but these courts held, respectively, that the Clean Air Act preempted federal common law in regards to carbon dioxide emissions (AEP) and damages caused by global warming (Kivalina). The San Francisco and Oakland suits, in contrast, focused on the defendants’ production of fossil fuels, initially asserting causes of action that narrowly focused on public and private nuisance, first put forward under state law and then, in response to the court’s February 28, 2017 ruling on remand, recast under both federal common law and state law.

Despite the novel approach, the San Francisco and Oakland suits fell victim to the same reasoning that governed the outcomes in the AEP and Kivalina suits – preemption – essentially punting the issue back to a federal government that shows very little interest in addressing climate change. Ultimately it appears from the words in the order, justifiably or not, that the judge, while recognizing the enormity of the climate change issue, could not make a decision with equally enormous implications. This conclusion can be drawn from the reasoning employed by Judge Alsup in reaching his decision.

Initially, the judge noted that “the issue is not over science” but “is a legal one — whether these producers of fossil fuels should pay for anticipated harm that will eventually flow from a rise in sea level.” Order, pg. 6. From this framing the court recognized the magnitude of the issue before it, stating, “[t]he scope of plaintiffs’ theory is breathtaking. It would reach the sale of fossil fuels anywhere in the world, including all past and otherwise lawful sales, where the seller knew that the combustion of fossil fuels contributed to the phenomenon of global warming.” Id. 

To decide whether the suits should be dismissed, the court first examined whether the common law tort of nuisance could be applied in the climate change context, looking to Section 821B of the Restatement of Torts, which provides three tests to determine whether an interference with a public right is unreasonable. Id. As applied, the court recast the issue as one of “fairness”:

With respect to balancing the social utility against the gravity of the anticipated harm, it is true that carbon dioxide released from fossil fuels has caused (and will continue to cause) global warming. But against that negative, we must weigh this positive: our industrial revolution and the development of our modern world has literally been fueled by oil and coal. Without those fuels, virtually all of our monumental progress would have been impossible. All of us have benefitted. Having reaped the benefit of that historic progress, would it really be fair to now ignore our own responsibility in the use of fossil fuels and place the blame for global warming on those who supplied what we demanded? Is it really fair, in light of those benefits, to say that the sale of fossil fuels was unreasonable?

Id. pg. 8.

The court then focused on the level of preemption in the Kivalina and AEP decisions, questioning whether the distinction between the emission of fossil fuels and the production, as noted above, is “enough to avoid displacement under AEP and Kivalina?” Id. The court recognized, however, that the San Francisco and Oakland suits “added another dimension not addressed in AEP or Kivalina, namely that the conduct and emissions contributing to the nuisance arise outside the United States, although their ill effects reach within the United States.” Id. Nevertheless, the Court decided that, “[t]hese claims are foreclosed by the need for federal courts to defer to the legislative and executive branches when it comes to such international problems.” Id. Continuing, the judge invoked the “the presumption against extraterritoriality,” stating that,

[M]any foreign governments actively support the very activities targeted by plaintiffs’ claims (USA Amicus Br. at 18). Nevertheless, plaintiffs would have a single judge or jury in California impose an abatement fund as a result of such overseas behavior. Because this relief would effectively allow plaintiffs to govern conduct and control energy policy on foreign soil, we must exercise great caution. Id. pg. 11.

But questions of how to appropriately balance these worldwide negatives against the worldwide positives of the energy itself, and of how to allocate the pluses and minuses among the nations of the world, demand the expertise of our environmental agencies, our diplomats, our Executive, and at least the Senate. Nuisance suits in various United States judicial districts regarding conduct worldwide are far less likely to solve the problem and, indeed, could interfere with reaching a worldwide consensus. Id., pg. 12.

In sum, this order accepts the science behind global warming. So do both sides. The dangers raised in the complaints are very real. But those dangers are worldwide. Their causes are worldwide. The benefits of fossil fuels are worldwide. The problem deserves a solution on a more vast scale than can be supplied by a district judge or jury in a public nuisance case. Id. pg. 15.

Judge Alsup is correct that the issues raised in the San Francisco and Oakland suits (as well as the other climate change suits) address issues international in their scope. His reliance on the Executive and Legislative branches to provide the sole remedy, however, given the current makeup, essentially continues to abdicate a needed engagement by the judiciary. His decision likely will be appealed, so the last word on these suits has yet to be written.

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