On April 1, 2021, the U.S. Court of Appeals for the Second Circuit—in a unanimous decision—affirmed the dismissal of the City of New York’s climate change lawsuit filed against a number of global oil manufacturers that sought climate change-related infrastructure damages. The issue resolved by the federal appellate court was whether municipalities could seek to hold multinational companies liable for damages caused by global greenhouse emissions under state common law. Given the nature of the harm and the existence of a complex web of federal and international environmental laws regulating such emissions, the court held these claims are more appropriately addressed by federal law and displaced by the Clean Air Act.
New York argued before the lower court that the defendants knew the production and sale of fossil fuels would pose a severe risk to the planet’s climate, and that despite this knowledge, the defendants downplayed the risks and continued to sell fossil fuels to the public. New York also argued that New York City is exceptionally vulnerable to the effects of global warming, and that its taxpayers should not have to shoulder the burden of financing the city’s preparations to mitigate such effects. Although the appellate court recognized that global warming is one of the greatest challenges facing humanity today, it presents a unique international problem of national concern, and is therefore not well suited to the application of state common law to this type of tort claim.
The decision will certainly bolster the energy companies’ position that the Supreme Court of the United States (SCOTUS) should broadly rule that climate torts belong in federal court, with the First, Fourth, Ninth, and Tenth Circuits remanding similar cases to state court. In fact, SCOTUS heard oral arguments in January 2021 over an appeal of the Fourth Circuit’s decision to send the City of Baltimore’s climate change lawsuit back to state court, although it is anticipated that in resolving the Baltimore litigation, SCOTUS will limit its ruling to the narrow issue of whether a federal court of appeals has the statutory authority to review any issue encompassed in a district court’s remand order. The energy industry certainly hopes the new Second Circuit decision will sway SCOTUS to address the broader jurisdictional issue. However, the Second Circuit made sure to distinguish its decision from the other circuit court rulings because New York City commenced its suit in federal court in an effort to avoid the initial removal issue.
Nevertheless, the Second Circuit’s decision will be relied upon by the energy industry defendants to argue that climate change and greenhouse gas emissions are a global problem to be addressed by federal law and the Clean Air Act. Yet, for new municipalities looking to get in on the climate change fight, the Ninth Circuit has held that the Clean Air Act does not cover nuisance claims against the energy companies Therefore, future complaints will have to be mindful of the particular causes of action levied to remain in state courts, at least for the time being, if and until SCOTUS definitely addresses the jurisdictional issue.