New Municipal Lawsuits Filed Against Fossil Fuel Producers: Will They Succeed?

In a fight to protect resources, property, and people from the effects of climate change, where should the primary contests occur? Should these fights take place in the halls of congress and in the ways our laws are written and struck down? Or should they take place in local, state, and federal courts?

As cities and municipalities in California and New York face the rising sea levels and steep costs incurred by a rapidly changing climate, several have reacted by filing lawsuits against those who have been identified as primary contributors. “Human activity” can’t be taken to court and pushed to change its behavior, and legislative action moves too slowly to protect these coastal areas from immediate threats. But since the highest percentage of greenhouse gas emissions can be linked to a short list of specific fossil fuel companies (including Exxon Mobil and Suncor), lawsuits against these companies have provided a possible point of leverage in the pursuit of swift and measurable change.

Lawsuits filed by communities were, and are, expected to generate aggressive pushback from the defendant companies, and the ensuing contest—which may last for decades or longer—is only entering its earliest stages. Exxon Mobil has responded to the charges by predictably arguing that these issues should be resolved by the legislature, not by the courts. And as we’ve mentioned in previous blogs, the company has fought to introduce evidence proving that city and county municipal bonds have omitted statements about climate change that could impact their value.

Recently, the municipalities taking on Exxon and its allies have moved inland. While coastal communities face the threat of rising sea levels, the city of Boulder, Colorado as well as the state’s Boulder County and San Miguel County, have filed lawsuits against Exxon and Suncor Energy. The suits have been filed in state court and claim that the defendant companies have contributed to wildfires, drought, and severe storms that have caused harm to agriculture and tourism and have placed burdens on taxpayers that should be carried by the responsible companies. 

As Exxon pushes back against action in from coastal communities, it will now prepare its defense against these new inland challenges as well. Here are a few focal points that may contribute to the outcome:

Nuisance doctrine and property rights: The doctrine related to nuisance under common law holds parties accountable for actions that interfere with the use of public property. But according to a 2011 Supreme Court ruling, the federal common law of nuisance no longer applies, since it has been replaced by the Clean Air Act, the enforcement of which falls to the EPA. Nuisance doctrine may or may not still apply at the state level; therefore, plaintiffs would like to keep nuisance cases at the state level and Exxon would like to have them moved to Federal courts.

First amendment issues: Exxon would like to argue that these cases are an assault on its first amendment rights to participate in a debate about “climate change and climate policy.”

Enlisting the support of allies: Scientific communities, industry groups, and political action groups are and will continue to choose sides, lending their weight to municipalities or to Exxon depending on which party aligns with their goals and interests. The pro-fossil-fuel National Association of Manufacturers, for example, is launching its own campaign against the Colorado communities and in favor of Exxon. A libertarian policy group in Washington called The Niskanen Center has sided with the communities.

Settlements and compromises: Even if the municipalities do not succeed with court action at the state or federal level, the resulting pressure could lead to settlements that change how Exxon operates. For example, the company could agree to carbon tax structure that could offset the cost of damage to these communities.

Win or lose, these lawsuits are not likely to be resolved quickly. But ideally, a growing number of inland communities will increase the pressure on fossil fuel companies by leveling their own charges, enlisting additional allies, and generating locally specific cases that increase the likelihood of overall success. Please join us as we monitor these cases closely.