Should Manufacturers and Big Industry Fear Climate Change Lawsuits?

May 28, 2010
Whatever damage may have been caused to the world's atmosphere from the emission of greenhouse gases is an international and social problem that should be dealt with by governments.

Global warming has been an environmental issue for decades. Now it's a legal one. Should large manufacturers and major industry worry about lawsuits from damage due to climate change? The short answer is "no."

Climate change is a complex phenomenon, not a specific event such as BP's massive oil leak in the Gulf of Mexico. Liability for that leak may be limited to just a few firms. Because of its intricate nature, finding a culprit for global warming is much more difficult because more industries and manufacturers may be involved.

Here's an example of a court case that manufacturers should understand. The lawsuit is critical for the manufacturing and industrial base as it names the world's top energy providers, largest oil companies and utility companies as defendants.

In Alaska, the dissipation of glaciers prompted 400 residents of Kivalina, a village 80 miles from the Arctic Circle, to sue 24 oil, energy and utility companies for $400 million in federal court in Northern California. That is not the only lawsuit. Crafty plaintiff lawyers have filed class action lawsuits against large industrial firms seeking billions of dollars for property damage they claim was caused by emission of greenhouse gases that exacerbated global warming. Late last year, some federal courts concluded that such cases could proceed, while in 2010 some judges said other branches of government should decide. Who's right?

In Alaska, natives claim that industrial companies caused, or contributed to, global warming in the Arctic sea ice that protects the Kivalina coast from winter storms that has eroded. Last fall, the federal court in Northern California dismissed the Kivalina case finding the claim of global warming was essentially a "political question," meaning that it requires a policy decision about who should bear the cost of global warming.

The District Court noted that the U.S. Supreme Court has held that the Constitution requires that political questions be handled by the political branches of the government. The Court concluded "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 Plaintiffs in Kivalina have appealed the dismissal of their case to the Ninth Circuit Court of Appeals.

In Mississippi, Comer v. Murphy Oil case pitted residents and property owners along the Mississippi Gulf Coast in a class action against companies in the energy, fossil fuels and chemical industries, claiming property damage as a result of Hurricane Katrina. Plaintiffs claim the emission of greenhouse gases over time caused an increase in global surface air and water temperatures, which then caused a rise in sea levels and added to the ferocity of Katrina, resulting in devastation to their land and property.

The District Court in Comer dismissed the case finding, as did the Kivalina court, that the claims presented political questions that were best left to the other branches of government. However, late last year, the 5th Circuit Court of Appeals in Comer reversed the District Court's ruling and reinstated the case. The Circuit Court held that the Plaintiffs' claims for damages were legal issues, because they have not been explicitly addressed by either the executive or legislative branches.

Did the Circuit Court intend to send a message when it said: "Until Congress, the president, or a federal agency" enact laws or adopt regulations to "comprehensively govern greenhouse gas emissions" and thereby preempt Mississippi's state law, the courts are not precluded from dealing with these issues in litigation. The defendants in Comer have asked the 5th Circuit Court to reconsider its decision to reinstate the case. Regardless of the 5th Circuit's decision, this issue will likely be ultimately answered by the U.S. Supreme Court.

The real problem with climate change litigation is not that a plaintiff cannot prove his property was damaged by a hurricane, melting glaciers or some other weather change phenomenon. Rather, how can the plaintiff prove that the global warming that damaged his property was caused by one of any multitude of industries or manufacturers or governments, or that global warming was caused by the emission of greenhouse gases, and not some natural, progressive warming of the earth?

The second problem is how to allocate responsibility for global warming. The judge in Kivalina noted that "to the extent that the combustion of fossil fuels is causing global warming, it is evidence that any person, entity or industry which uses or consumes such fuels bears at least some responsibility for Plaintiffs' harm." Stated another way, each time we fill up our car's gas tank, ride a bus or fly a plane, we share responsibility for the emission of greenhouse gases.

Without a specific law or regulation governing climate change liability, can a judge or jury really decide who is at fault, and for how much?

At the end of the day, whatever damage may have been caused to the world's atmosphere from the emission of greenhouse gases is an international and social problem that should be dealt with by governments. Legislators and regulators should determine how to address emissions of greenhouse gases by passing laws to protect the environment. The judiciary is there to determine violations of the law and assess damage under the law -- not to legislate it or solve social and political issues.

James E. Fitzgerald is a partner with Stroock & Stroock & Lavan LLP and has a practice in commercial and business litigation in Los Angeles.

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