Fifth Circuit reverses Comer, joins Second Circuit in approving tort-based climate litigation
In a long-awaited appellate decision in Comer v Murphy Oil, the United States Court of Appeals for the Fifth Circuit on Friday found that tort-based global warming litigation against insurance, oil, coal and chemical companies presents justiciable claims. The Fifth Circuit reversed the district court’s ruling from the bench that plaintiffs lacked Article III standing to bring such claims, and that the tort claims presented non-justiciable political questions. The Fifth Circuit only reversed in part, however, agreeing that plaintiffs’ “unjust enrichment, fraudulent misrepresentation, and civil conspiracy claims must be dismissed for prudential standing reasons.”
On Article III standing, the Fifth Circuit ruled that – for standing purposes – plaintiffs alleged an injury that was sufficiently traceable to alleged conduct of the defendants. The Court noted that Article III traceability is a liberal standard that does not equate to proximate causation (“an indirect causal relationship will suffice”). That distinction is important, because the court’s description of plaintiffs’ claim highlights the significant causation issues that loom on the merits:
“The plaintiffs allege that defendants’ operation of energy, fossil fuels, and chemical industries in the United States caused the emission of greenhouse gasses that contributed to global warming, viz., the increase in global surface air and water temperatures, that in turn caused a rise in sea levels and added to the ferocity of Hurricane Katrina, which combined to destroy the plaintiffs’ private property, as well as public property useful to them.”
The high hurdle that remains on causation was clear from Judge Davis’s special concurrence:
"The defendants argued an alternative basis for dismissal to the district court – that the plaintiffs failed to state a claim under common law. Specifically, the defendants argued to the district court that the plaintiffs failed to allege facts that could establish that the defendant’s actions were a proximate cause of the plaintiffs’ alleged injuries. If it were up to me, I would affirm the district court on this alternative ground."
On the political question doctrine, the Fifth Circuit reversed the district court, finding that “defendants have failed to articulate how any material issue is exclusively committed by the Constitution or federal laws to the federal political branches.” The court effectively treated “exclusive commitment” as a threshold issue, rendering application of the remaining Baker v. Carr standards for identifying non-justiciable political questions unnecessary. Following that conclusion, the court, in a conclusory paragraph, stated that the remaining Baker “formulations do not make the defendants’ arguments for nonjusticiability any more persuasive.”
But the Fifth Circuit’s spare discussion of the remaining Baker factors raises questions given the language of Baker, which does not treat exclusive commitment to the political branches as a threshold factor, just one of many that should be considered. The Kivalina court described the Baker factors as “six independent factors,” and the language of Baker appears to support that analysis (emphasis added):
"It is apparent that several formulations which vary slightly according to the settings in which the questions arise may describe a political question, although each has one or more elements which identify it as essentially a function of the separation of powers. Prominent on the surface of any case held to involve a political question is found a textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack of judicially discoverable and manageable standards for resolving it; or the impossibility of deciding without an initial policy determination of a kind clearly for non judicial discretion; or the impossibility of a court's undertaking independent resolution without expressing lack of the respect due coordinate branches of government; or an unusual need for unquestioning adherence to a political decision already made; or the potentiality of embarrassment from multifarious pronouncements by various departments on one question.
Unless one of these formulations is inextricable from the case at bar, there should be no dismissal for nonjusticiability on the ground of a political question's presence.
For trend-watchers, note that every district court that has considered claims like those in Comer has dismissed those claims as non-justiciable. See Connecticut v. AEP (recently reversed), California v. General Motors (appeal withdrawn), and, most recently, Native Village of Kivalina v. ExxonMobil et al.. The two appellate decisions have reversed. In essence, the judges who would resolve tort-based climate cases do not believe there are judicially manageable standards to reach principled and rational decisions concerning the purported historical duties to emit lower amounts of unregulated greenhouse gases. Yet two appellate courts are saying – without much in the way of specifics – that these claims are judicially manageable.
In Kivalina, the district court directly responded to the Second Circuit ruling in AEP:
"Despite the admitted and significant distinctions between a nuisance claim based on water or air pollution and one, such as the present, based on global warming, neither Plaintiffs nor AEP offers any guidance as to precisely what judicially discoverable and manageable standards are to be employed in resolving the claims at issue. Although federal courts undoubtedly are well suited to resolve new and complex issues and cases, the Court is not persuaded that this is such a case. Plaintiffs’ global warming nuisance claim seeks to impose liability and damages on a scale unlike any prior environmental pollution case cited by Plaintiffs. Those cases do not provide guidance that would enable the Court to reach a resolution of this case in any “reasoned” manner."
We now await the next steps in AEP and Comer and a likely appeal to the Ninth Circuit in Kivalina.
Kivalina global warming litigation dismissed on political question grounds
In a carefully watched case in the Northern District of California, Judge Saundra Brown Armstrong has issued a ruling dismissing the Kivalina climate change lawsuit on grounds that: (1) it raises a non-justiciable political question, and (2) plaintiffs lack Article III standing. In so doing, Judge Brown rejected the recent Second Circuit analysis in Connecticut v. American Electric Power Co., which held that the political question doctrine did not bar nuisance claims against major greenhouse gas emitters.
In the Kivalina case, the Native Village of Kivalina, Alaska filed suit against two dozen energy companies, attempting to recover at least $400 million in damages for public nuisance related to emissions of greenhouse gases that Plaintiffs alleged contributed to global warming and caused the sea level to rise, destroying parts of the village. In addition to the public nuisance claim, Plaintiffs also included novel conspiracy allegations, claiming that the defendants conspired to mislead the public about the causes and effects of global warming through industry-sponsored trade groups.
The Village of Kivalina, located in northwest Alaska, comprises about 1.9 miles and has approximately 399 residents. In this lawsuit, the villagers alleged that global warming caused the melting of Arctic sea ice which formerly protected the village from winter storms, and that the increased pace of the melting ice has caused erosion. The plaintiffs contend that, "if the entire village is not relocated soon, the village will be destroyed." Their complaint alleged that 24 oil, gas and power companies substantially caused this global warming and the resulting damage to the village. Plaintiffs sought hundreds of millions of dollars in damages to compensate the villagers and relocate the village.
On the political question issue, the Court considered the Second Circuit’s recent decision in AEP, which reversed a district court opinion dismissing a similar climate change suit on political grounds. The Second Circuit concluded that political question doctrine did not bar nuisance-based climate change litigation, given the judiciary’s history of dealing with “new and complex problems.” In the Kivalina decision, Judge Armstrong bluntly responded: “This court is not so sanguine. While such principles may provide sufficient guidance in some novel cases, this is not one of them.”
The Kivalina Court went carefully through each of the factors set forth in Baker v Carr, 369 U.S. 186 (1962), which establishes the standard for determining when an issue presents a non-justiciable “political question” that is best left to the executive and/or legislative branches of government.
The Court noted that the cases relied on to support plaintiffs’ claims involved a “discrete number of ‘polluters’ that were identified as causing a specific injury to a specific area.” In contrast, the Kivalina “global warming claim is based on the emission of greenhouse gases from innumerable sources located throughout the world and affecting the entire planet and its atmosphere.” (Emphasis in original.)
The Court also distinguished global warming claims from other nuisance claims based on the long chain of disconnected events from emission to alleged harm (a chain of events that would pose a significant hurdle for plaintiffs on causation where, as in AEP, the initial claims survive a motion to dismiss):
“[T]he harm from global warming involves a series of events disconnected from the discharge itself. In a global warming scenario, emitted greenhouse gases combine with other gases in the atmosphere which in turn results in the planet retaining heat, which in turn causes the ice caps to melt and the oceans to rise, which in turn causes the Arctic sea ice to melt, which in turn allegedly renders Kivalina vulnerable to erosion and deterioration resulting from winter storms.”
At bottom, the Court was unable to discern “judicially discoverable and manageable standards” to apply to plaintiffs’ claims, and noted that AEP, despite its holding, provided no guidance in this area. The Court concluded that “the allocation of fault—and cost—of global warming is a matter appropriately left for determination by the executive or legislative branch in the first instance.”
The Court separately found that plaintiffs lacked Article III standing given the “attenuated sequence of events” alleged in the complaint, and the inability to trace harm to a particular defendant’s emissions. The Court reasoned that, in this context, a discharge standing alone is insufficient to create a fairly traceable injury for Article III purposes.
The decision will likely be appealed to the Ninth Circuit Court of Appeals. Meanwhile, we still await a Fifth Circuit ruling in the appeal of the dismissal on justiciability grounds in Comer v. Murphy Oil, as well as the next steps in the AEP case following the Second Circuit’s reversal.
Center for Biological Diversity to devote $17 million to climate litigation and advocacy over five years
The Center for Biological Diversity (CBD) today announced the launch of its San Francisco-based Climate Law Institute. The stated mission of the Institute is to bring a strong climate focus to the Center’s five program areas -- Biodiversity, Public Lands, Oceans, Urban Wildlands, and International – in what the Center calls a “coordinated strategy to protect species and ecosystems from the sweeping and potentially catastrophic effects of warming.” The Center states that it is “dedicating” $17 million to this effort over the next five years.
What does the Center mean by a “coordinated strategy”? Apparently more climate-based litigation, and more administrative and regulatory action designed to serve as bases for additional climate-based litigation. The Institute states it will accomplish its mission through: strategic, creative litigation; scientific petitions to protect species; administrative and policy advocacy; and public education and outreach.
This announcement leaves no doubt that litigation is the Institute’s primary focus. The Institute’s Advisory Board includes:
- Luke Cole, Director of the Center for Race Poverty and the Environment, who often represents plaintiffs in citizen-based environmental actions including the Kivalina Relocation Planning Committee in the Kivalina climate litigation;
- Patrick A. Parenteau, Professor of Law at Vermont Law School (where he teaches a course entitled Climate Litigation), and Senior Counsel at its Natural Resources Law Clinic; and
- Deborah Sivas, an environmental litigator and Professor of Law at Stanford where she directs Stanford’s Environmental Law Clinic.
Coal is a major target of the Institute, which lists as one of its goals: “Prevent the construction of new coal-fired power plants and coal mines while quickly phasing out existing coal-fired power plants.” The Institute also says it intends to “[p]revent the creation of an oil-shale or tar sands energy sector.”
Insurers facing climate change coverage litigation, creating climate change policies
While insurers are bracing for potentially significant climate change coverage litigation (see, e.g., Kivalina) under past and current policies, insurers are simultaneously beginning to develop insurance products for risks associated with technologies designed to address climate change issues.
Some of the insurance industry effort will likely be geared towards shaping public policy on these issues through the sponsorship of studies, such as the Catlin Group’s $6 million Artic Survey. Other insurers, such as Zurich, have created “climate initiatives,” which include internal “climate offices” and “climate change advisory councils.”
While insurance industry efforts to fund research and studies are laudable, even if ultimately designed to create markets for new insurance products, policyholders should be wary that insurers do not use those insurance industry-funded efforts in a self-serving way to develop “evidence” to defeat coverage claims by policyholders for these risks under past and current policies.
Kivalina climate change litigation presents new context for familiar legal questions
The latest in the growing number of climate change lawsuits is Native Village of Kivalina, Alaska v. ExxonMobil, et al., Case No. CV-08-1138, in the United States District Court for the Northern District of California. Previous tort-based climate change lawsuits have largely been dismissed on political question grounds in which the courts have resisted taking on the issue of global warming before global warming legislation and regulations have been implemented by the political branches of government. While the Kivalina case raises additional and novel theories of civil conspiracy that must be watched closely, one of the key issues in the case will be the familiar question of the appropriate role of regulatory findings in establishing causation in tort litigation.
The Village of Kivalina, located in northwest Alaska, comprises about 1.9 miles and has approximately 399 residents. In this lawsuit, the villagers allege that global warming has caused the melting of Arctic sea ice which formerly protected the village from winter storms, and that the increased pace of the melting ice has caused erosion and contends that, "if the entire village is not relocated soon, the village will be destroyed." Specifically, the villagers have alleged that 24 oil, gas and power companies have substantially caused this global warming and the damage to the village. Plaintiffs are seeking hundreds of millions of dollars in damages to compensate the villagers and relocate the village. The Kivalina lawsuit is at an early stage and will be watched closely.
Kivalina is only the latest lawsuit to raise the complex question of what role regulatory findings and conclusions should have in resolving the question of specific causation in tort based climate change litigation where companies are being alleged to have caused or contributed to property damage and personal injury from their greenhouse gas emissions. Regulatory determinations that carry a government seal of approval and appear to be reached by significant research and study can be very persuasive and influential for jurors asked to resolve complex questions of science. In the climate change area, for example, the Intergovernmental Panel on Climate Change's recent "conclusion" that the emission of greenhouse gases from human activities has resulted in a measurable increase in temperature, which in turn has significant local, national and global health and environmental effects, could carry significant weight with most jurors. But should this type of conclusion be admissible as evidence in a courtroom?
In many tort cases, information and data that provide a basis for forward-looking regulatory action will not be reliable courtroom evidence. The questions presented in regulatory and tort arenas are quite different. A tort plaintiff must establish that an agent is capable of causing, and more likely than not, did cause the harm at issue in the case. It is insufficient simply to establish that an agent could cause a particular harm, or sometimes causes a particular harm. Rather, in a tort case, a defendant is not liable unless the plaintiff establishes that it is more likely than not that the defendant caused the specific injury alleged by the plaintiff. In contrast, regulators are not in the business of making individual determinations of cause and effect. Instead, they have a forward-looking mission to reduce risks to the public. In implementing this responsibility, regulators typically have a much lower threshold for action. A lawyer who understands the difference between regulatory science and courtroom science will be well-equipped to use regulatory information effectively and to challenge the use of regulatory information that does not pass the judicial threshold for admissibility.
Insurer seeks to avoid climate change claim coverage obligations
Sometimes great storms announce themselves with a simple breeze and the same can be said about litigation that is likely to ensue between corporate policyholders and insurers as they begin to grapple with difficult insurance coverage issues surrounding climate change. A recent case filed in Virginia by Steadfast Insurance Company seeking to avoid any coverage obligations relating to allegations in the Native Village of Kivalina v. ExxonMobil Corp., et al. litigation reveals some of the arguments the insurance industry is likely to make in this arena.
The Kivalina litigation involves allegations that various energy companies have contributed to global warming which will, in turn, require an Inupiat village to incur hundreds of millions in expenses to abandon and relocate its village. One of the defendants, AES Corporation, tendered the Kivalina lawsuit to its insurer, Steadfast, who promptly proceeded to sue AES seeking a declaration from a Virginia court that it had no obligation to defend or indemnify AES.
This case is being closely watched by the insurance industry and their lawyers, and may well be viewed as a test case by the industry. In the coverage litigation, Steadfast claims that emission of carbon dioxide is a “pollutant” and thus excluded under its policy even though carbon dioxide is not specifically referenced in its exclusion language. Steadfast also argues in its complaint that any damage claimed by the Kivalina plaintiffs is not the result of an “accident” and that because some of the alleged damage to the village may have occurred prior to Steadfast’s policy period, it is not required to cover any of the loss.
Many of these coverage issues have been extensively litigated in other contexts, particularly in the hundreds of environmental and asbestos coverage cases over the past three decades. Despite many prior decisions finding in favor of coverage under factual circumstances nearly identical to the Kivalina facts, it is clear that the insurance industry is preparing to litigate these yet again.
Civil conspiracy claim targets political question defense in public nuisance climate suit
While three nuisance-based climate lawsuits have been dismissed by federal district courts because, among other reasons, they raised non-justiciable political questions, plaintiffs in the latest public nuisance case believe that the addition of a civil conspiracy claim will overcome the political question defense.
In a recent radio interview, Steve Susman was asked about the Kivalina litigation, in which he represents plaintiffs alleging that the Alaskan village of Kivalina is sinking as a result of climate change allegedly caused by defendant oil, power and coal companies. The Susman interview supports the conclusion that the conspiracy allegation -- that defendants conspired to mislead the public on the causes and effects of global warming -- was intended to overcome a political question defense: “we are the only case that has a conspiracy allegation, and we think that makes our case different, because courts all the time—there are criminal trials going on throughout this country every week about whether someone participated in a criminal conspiracy. So that's the stuff of which courts are made, to decide whether there was a conspiracy, and did it harm someone.”
Likewise, Matt Pawa, whose firm filed the first climate-based public nuisance claim against power plants, noted that Kivalina “includes a claim that certain defendants conspired to mislead the public about global warming. There were no such conspiracy claims in the other cases. Courts routinely decide such conspiracy claims.”
But the inclusion of a civil conspiracy claim may not be a silver bullet against a political question defense. If the public nuisance claims are non-justiciable (as three district court’s have concluded, all now on appeal), there is a real question of whether the court can decide a stand-alone conspiracy claim. For example, in the public nuisance cases brought by the state of Rhode Island against former manufacturers of lead pigment, the district court dismissed the civil conspiracy claim finding that it “cannot stand in isolation” without an “underlying intentional tort theory.” Rhode Island v. Lead Industries Association, Inc.
