Big Oil’s Global Warming Case Could Hinge on Jurisdiction

SAN FRANCISCO (CN) — The fate of five lawsuits seeking to hold the world’s biggest oil companies liable for global climate change hinges on a murky jurisdictional question that could get some cases booted out of federal court.

For the past eight days, attorneys for more than a dozen oil companies urged two federal judges not to send lawsuits against them back to state court, where five California cities and counties sued Big Oil last year.

“The extraordinary nature of these claims encompasses conduct across the globe,” the oil companies’ attorney Theodore Boutrous said in court Thursday. “We think the federal courts need to hear this, because it’s uniquely federal.”

Borrowing from the playbook that won multibillion-dollar awards against Big Tobacco, five California cities and counties sued the oil giants last year, claiming they deceived the public for decades about the dangers of fossil fuel production.

San Mateo and Marin Counties, along with the city of Imperial Beach in San Diego County, were the first localities to sue the oil giants in July 2017. Oakland and San Francisco followed up in September 2017, suing the oil giants on behalf of the people of California. The lawsuits were removed from state court to federal court last year.

The defendants include BP, Chevron, ConocoPhillips, Exxon Mobil and Royal Dutch Shell and others.

Oakland and San Francisco last week asked U.S. District Judge William Alsup to send their lawsuits back to state court. The cities and counties say the cases belong in a state venue because only state law claims, primarily public nuisance, are alleged in their complaints.

On Thursday, another federal judge, Vince Chhabria, heard the same arguments from San Mateo, Marin and Imperial Beach.

During both hearings, Boutrous argued that because the oil companies’ alleged misconduct is national and international in scope, the cases belong in federal court.

“They’re seeking to regulate national and international speech,” Boutrous told Alsup on Feb. 7. “California cannot do that. State law cannot do that. That’s why federal law, if anything, would govern the alleged misrepresentations.”

Boutrous said the state law claims are preempted by federal common law and federal statutes, such as the Clean Air Act.

But Victor Sher, representing the municipalities, said the plaintiffs are not trying to regulate speech or emissions. Rather, they want compensation to cover the costs of sea walls and other projects needed to combat the consequences of climate change.

“These are not cases that seek to regulate emissions,” Sher said in court Thursday.

When asked in an interview why the oil companies are so determined to keep these cases out of state court, University of San Francisco law professor Alice Kaswan suggested the oil giants probably believe a federal judge is more likely to rule in their favor on federal preemption.

“It’s possible the oil companies think it’s more likely the federal courts will find state law is preempted or find another reason the courts don’t have jurisdiction over the case,” Kaswan said.

She added that state court judges tend to be more familiar with state common law claims, including public nuisance claims. State judges might be viewed as more willing to wade into the intricacies of state common law, which is based on judicial precedent rather than written statutes, she said.

“Federal courts may be more resistant to making determinations based purely on judge-made law,” Kaswan said. “State courts may be somewhat more comfortable playing that role, and perhaps less likely to boot the cases out of court.”

The 2011 Supreme Court ruling in American Electric Power Company v. Connecticut held that corporations cannot be sued for greenhouse gas emissions under federal common law because the Clean Air Act preempts federal common law claims.

But that ruling left open the question of whether the Clean Air Act also preempts state common law claims for harms caused by greenhouse gas emissions, Kaswan said.

On the issue of state versus federal jurisdiction, the two federal judges grappling with that question hinted that they could issue divergent opinions on the subject.

Last week, Alsup suggested that remanding the cases to state court could lead to a hodgepodge of litigation with vastly different outcomes, depending on each state’s public nuisance law.

“I have a concern,” Alsup said. “If we allow this case to go to state court, then all 50 states could have their own version of this case, and the results might be different from state to state, depending on how their law is written for nuisance.”

But Chhabria said Thursday that the oil companies’ argument was based on the seemingly unsupported position that state court judges cannot resolve questions of federal preemption.

“The big part of your presentation is an assumption that the state court system is not capable of fairly adjudicating a question of federal preemption,” Chhabria said.

If the litigation does advance beyond issues of jurisdiction and federal preemption, Kaswan said, the plaintiffs will face another daunting challenge: proving that the oil companies’ conduct caused or substantially contributed to climate change and rising sea levels.

“I do think there will be a lot of interesting questions about causation and proximate causation — if there’s some link, and if it’s enough of a link in that context,” Kaswan said. “Those will be very difficult questions.”

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