A California bill that would allow insurers and victims of natural disasters to file lawsuits against oil and gas companies failed at its first committee hearing April 8.
With five votes of yes, shy of the seven votes needed out of its 13 members, the California State Senate judiciary committee rejected SB 222, the Affordable Insurance and Climate Recovery Act, which would have been the first of its kind in the nation if passed.
The authors alleged in the bill text that “major fossil fuel companies have known for decades that their products cause global warming and increase the frequency and severity of climate disasters,” and said that the bill creates “a cause of action” for those harmed.
The bill would allow individuals with a total loss of over $10,000 in what it called a “climate disaster” to file a lawsuit against oil and gas companies for compensation within 3 years after the disaster occurred.
According to the bill, climate disasters include wildfire, heatwave, drought, windstorm, hurricane, tornado, and other extreme weather events, events attributable to climate, or events triggering the declaration of a state of emergency or local emergency.
“This Bill is really about making sure that as these horrific catastrophes happen, that it’s not just on taxpayers and victims and policyholders, and that we’re not the ones left holding the bag and that these victims are not left holding the bag,” Wiener said at the Apr. 8 committee hearing.
Some Democrats on the committee said they support Wiener’s assessment of the problem, but are concerned about the outcome of the bill. They worry that the bill would drive up gas prices and bring excessive lawsuits.
“I don’t disagree with the statement of the problem,” said Sen. Angelique Ashby, a Sacramento Democrat, “I just disagree with what the outcome would be.”
“This will absolutely drive up the cost of gas even farther in the State of California. I fundamentally believe that,” she said.
She also said that, although the bill is intended to promote accountability and the legal system is supposed to facilitate that, “sometimes that mechanism of accountability can get turned upside down, and it costs so much that it becomes a part of the issue.”
“I truly believe that this bill would drive us to that space,” she said.
“I think in the end, this bill for me is too much about a private right of action and a litigation strategy and is too much money spent on lawyers and courts.”
State Sen. Roger Niello, one of the two Republican committee members, said at the hearing that it is not reasonable to blame oil companies for natural disasters, and the bill would result in high gas prices and hurt oil companies.
“We are in a global airstream,” Niello said, “California accounts for 1 percent of greenhouse gas emissions in the world. China, just with their coal-fired utility plants account for more greenhouse gas emissions than the entire U.S. economy.”
“It would be very difficult to hold the oil companies in California responsible, solely responsible for that,” he said.
The Sacramento lawmaker also said that if the bill were to pass, “the result would be much higher gas prices.” And with California’s laws controlling the price and supply of gasoline, he said the bill would probably “put oil companies out of business.”
