Manufacturing Association Maintains Climate Litigation Is Federal Matter Not One For States

The Shell Norco manufacturing facility is flooded after Hurricane Ida pummeled Norco, La., on Aug. 30, 2021. Devika Krishna Kumar/Reuters

The Manufacturers’ Accountability Project (MAP) has criticized the United States 4th Circuit Court of Appeals’ April 6 ruling that remanded a climate change lawsuit—lodged by Baltimore against multinational oil companies—to state rather than federal courts for resolution.

The unanimous ruling by a three-judge panel “misses the real issue here,” MAP special counsel Phil Goldberg said in a statement.

“Baltimore’s case, which the court acknowledges is novel, may be creatively packaged under state law, but the nature of climate change—this litigation and the remedies they seek—are all inherently beyond the scope of any state.”

The accountability project is an initiative sponsored by the National Association of Manufacturers (NAM) legal center. NAM is the largest manufacturing association in the nation, representing small and large producers in every industrial sector and in all 50 states.

‘Baseless and Without Merit’

Goldberg said while the 21 defendants are multinational oil companies and include ExxonMobil, Chevron, Shell, and BP America, the wave in “climate litigation” affects all segments of the economy, especially manufacturers.

“Figuring out how to address climate change and its impacts around the country is a major national and international priority that cannot be decided piecemeal by state judges based on a narrow set of politically motivated allegations,” Goldberg said.

In its 93-page ruling, the three-judge federal appellate panel “resoundingly” rejected the oil companies’ arguments that Baltimore’s 2018 lawsuit filed in state court is “inherently” a federal case because defendants are being held liable for the production and sale of oil and gas abroad.

During April 4 arguments before the panel in Richmond, Virginia, ExxonMobil attorney Kannon Shanmugam said the U.S. Clean Air Act preempts state law as the “exclusive vehicle” to regulate greenhouse gas emissions with “a uniform body” of federal law.

Granting Baltimore’s request to try the case in state court could lead to “50 states each applying their own state laws” to combat global climate change, he said.

Infrastructure Investments

After the ruling, Shanmugam called the claims “baseless and without merit” and said ExxonMobil and the other 20 defendants were evaluating the next steps.

Baltimore’s 137-page 2018 lawsuit—Mayor and City Council of Baltimore v. BP—claims fossil fuel companies knowingly contributed to climate change, and that the city would have to spend more on infrastructure such as flood-control measures to combat climate change’s effects including sea-level rise.

The April 6 ruling marks the second time the 4th Circuit Court has remanded the case to Maryland rather than federal courts. A panel in the same circuit court issued a similar ruling in 2020 that was challenged before the U.S. Supreme Court.

In May, the Supreme Court agreed with oil companies.

In a 7-1 ruling, it sent the case back to the 4th Circuit to reconsider the defendants’ jurisdictional arguments.

But in the ruling, Chief 4th U.S. Circuit Judge Roger Gregory said Baltimore’s lawsuit is about infrastructure investments and other costs incurred by the city, county, and state, noting the oil companies failed to show there is “significant conflict existing between Maryland law and their purported federal interests.

Supreme Court-Bound

“The impacts of climate change undoubtedly have local, national, and international ramifications,” he continued in authoring the panel’s ruling. “But those consequences do not necessarily confer jurisdiction upon federal courts carte blanche.

“In this case, a municipality has decided to exclusively rely upon state-law claims to remedy its own climate-change injuries, which it perceives were caused, at least in part, by defendants’ fossil-fuel products and strategic misinformation campaign. These claims do not belong in federal court.”

MAP’s Goldberg disagreed with that assessment and predicted the matter will again go before the U.S. Supreme Court.

“The U.S. Supreme Court already cautioned against climate litigation, which is why this ruling increases the likelihood the Supreme Court will ultimately hear these cases again,” he said.

“It makes no sense to spend years litigating climate cases in state courts when it is clear that climate change is global in nature, has many causes, and requires broad-based policy solutions that only Congress has the ability to enact.”

Baltimore’s lawsuit is part of a growing “climate litigation” trend in which municipalities file lawsuits against the energy industry for costs they say they incur because of climate change allegedly fostered by fossil fuel producers.

Similar legal actions are underway in Connecticut, Massachusetts, Minnesota, Delaware, and the District of Columbia, with cities such as Annapolis, Charleston, New York, and Honolulu among municipalities suing oil companies.

According to a Climate Litigation Chart maintained by the Sabin Center for Climate Change Law at Columbia Law School in New York City, there are currently 1,400 “climate litigation” cases lodged in U.S. courts and 553 “climate litigation” cases being heard in courts across more than 40 countries.

‘Poses a Dangerous Risk’

MAP’s 2019 report, “Beyond the Courtroom: Climate Liability Litigation in the United States“ traces the roots of “climate liability litigation” over a 20-year span, identifies key players, and “the multifaceted operation that continues to generate and support these lawsuits,” including “a new wave of lawsuits against energy manufacturers hitting America’s courtrooms since 2017” that “poses a dangerous risk to all of the country’s manufacturing sectors.”

The report explores how a “litigation campaign” has grown into a well-funded and well-organized group of nonprofits and law firms, many of which stand to benefit from protracted fundraising campaigns even if they ultimately lose the lawsuits.

“All the while, they try to leverage their ability to recruit plaintiffs to file these lawsuits in their effort to drive national energy policy and a potential settlement, even if their claims have no legal merit.”

After several states sued utilities seeking to impose penalties and restrictions for greenhouse gas emissions, in 2011 the United States Supreme Court—in an opinion written by Justice Ruth Bader Ginsburg—unanimously rejected the concept of “climate litigation” lawsuits in its American Electric Power (AEP) v. Connecticut ruling.

The court determined Congress and federal agencies are “better equipped” than lawsuits and judges to address climate change.

In 2012, according to MAP’s report, “environmentalists and lawyers convened in La Jolla, California, to come up with new ideas for suing the energy industry over climate change. The fundamentals of the litigation remain the same, but they have tried in several ways to distinguish these lawsuits” from the AEP action.

“For example, the plaintiffs sued energy manufacturers instead of utilities, filed their lawsuits under state [not federal] tort law, and told judges that they were not trying to stop manufacturers from promoting, producing, or selling their energy products.

“Instead, they claim these lawsuits are only about making energy companies pay for [the] impacts of climate change.

“To date,” the report continues, “courts have found that these are differences without legal distinctions and that selling, just like using, energy does not make one liable for global climate change.”

Apparently, the 4th Circuit Court now disagrees with that assessment in a ruling that doesn’t make sense, especially in the context of current events, Goldman said.

“At a time when our energy security is at risk, Americans are facing rising prices and the federal government is working to encourage more domestic production, we can hardly afford to subject federal energy policy to a patchwork of approaches from a multitude of state courts,” he said.

“State and local governments should work with manufacturers of all kinds to continue developing the technologies that will allow us to source and use energy more efficiently, protect our environment and ensure our energy security.”