(CN) — A Ninth Circuit panel on Monday cleared the way for San Francisco and Oakland to pursue their pubic nuisance claims against five major oil and gas companies in state court rather than in federal court.
The panel in an unsigned decision Monday affirmed the 2022 ruling by a lower court judge who sent the two lawsuits back to the state courts where they were first filed in 2017.
It's the second time the federal appellate court has concluded that the lawsuits, which seek to hold the energy companies liable for the effects of global warming under state law, don't belong in federal court. In 2020, the Ninth Circuit overturned the trial court's denial of the cities' request to remand their cases to state court, but it allowed the oil companies another chance to argue that federal jurisdiction applied.
Citing two rulings in two other appeals where municipalities have sued fossil fuel corporations claiming public nuisance, the panel in Monday's ruling rejected the argument that these companies belonged in federal court because they somehow were acting under the direction of federal officers during World War II and pursuant to ongoing specialized fuel contracts.
"As to the World War II claims, the evidence supplied by the energy companies merely confirms their compliance with the law while executing arms-length business agreements to supply fuel and build fuel infrastructure," the panel wrote. "Simply put, the specialized fuel contracts here are no more than 'arms-length business agreements,' and accordingly, the energy companies were not 'acting under' federal officers."
The three-judge panel was compromised of Senior U.S. Circuit Judge Sidney Thomas, a Bill Clinton appointee, U.S. Circuit Judge Danielle Forrest, a Donald Trump appointee, and U.S. Circuit Judge Salvador Mendoza Jr., a Joe Biden appointee.
Oakland and San Francisco sued BP, Chevron, ConocoPhillips, Exxon Mobil, and Shell in 2017, claiming they should cover the costs of sea walls and other projects needed to protect the cities from the consequences of climate change.
They accused the companies of organizing massive disinformation campaigns to deceive the public about the dangers fossil fuel production poses to the planet.
According to both suits, which were filed in Alameda County and San Francisco County superior courts, the companies have known about the perils of fossil fuel-driven climate change since at least 1968, when a scientist working as a consultant for the American Petroleum Institute warned that carbon dioxide emissions were "almost certain" to cause an increase in temperatures and rise in sea levels.
The companies swiftly removed the lawsuits to federal court in San Francisco, arguing the claims came under federal jurisdiction.
In general, defendants prefer to litigate lawsuits in federal court where, unlike in California state court, juries in civil cases need return a unanimous verdict. Since state court juries don't need to be unanimous, it increases the defendants' risk of an adverse verdict and gives the plaintiffs more leverage in settlement negotiations.
“We are pleased with the Ninth Circuit’s decision, which is aligned with several other recent decisions that agree our case should move forward in earnest in state court," said Jen Kwart, communications director for San Francisco City Attorney David Chiu. "These fossil fuel companies need to be held accountable for the damage their deception about the harms from their products has done to our communities.”
Oakland City Attorney Barbara J. Parker agreed, noting, "As we witness climate catastrophes every day, it is imperative that fossil fuel companies ('Big Oil') be held accountable for the damages their misrepresentations have caused.”
ConocoPhillips declined to comment on pending litigation. Representatives of BP, Chevron, and Shell didn't immediately respond to requests for comment, and Exxon Mobil couldn't be reached for comment.
The state of California was the has also taken on some of the world’s largest fossil fuel companies, claiming in a lawsuit filed this past September that decades of deliberate disinformation have exacerbated climate change and caused major environmental, public health and economic damage in the state.
In its 135-page suit, filed in state court in San Francisco, California said the companies caused harm in the state by promoting their products and downplaying the negative effects of greenhouse gases on the environment.
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