How to sue Big Oil for money and win . . . maybe

Photo of judges hammer and money
Image: from NY Post

Last year (Jan 2018) New York City sued five major Oil & Gas companies — ExxonMobil, BP, SheIl, Chevron, and Conoco Phillips — for contributing to global warming and the resulting physical damage to city property. It asked the court to hold the oil companies liable for the damage they’ve caused, and award the city monitory compensation. But on July 20, 2018, the court dismissed the lawsuit in favour of the oil companies.

In dismissing the lawsuit, U.S. District Court Judge John F. Keenan, ruled that the city’s claims come under federal law involving greenhouse gas emissions that cross state lines, thus putting them under the jurisdiction of the Environmental Protection Agency (EPA). Problems associated with climate change, the judge said, should be tackled by Congress and the executive branch. In its brief to the Second Circuit Court of Appeals November 12, 2018, the city claims that Judge Keenan misunderstood the lawsuit. The appeal argues that the city did not ask the court to regulate emissions but, rather, to award the city damages on the basis of Public Nuisance, Private Nuisance, and Trespass, which, to a non lawyer, sounds pretty mild.

If Judge Keenan misunderstood the city’s lawsuit it’s because the city framed its 67 page brief around global warming as an international threat instead of what was intended, a limited and local demand for compensation. The titles of sections IV thru VIII in the brief give the flavour of the thing:

IV. Climate Change Impacts on New York City
V. Fossil Fuels Are the Primary Cause of Climate Change
VI. Defendants Have Produced Massive Quantities of Fossil Fuels—and Have Continued to Do So Even as Climate Change Has Become Gravely Dangerous
VII. Defendants Had Full Knowledge that Fossil Fuels Would Cause Catastrophic Harm
VIII. Despite Their Early Knowledge that Climate Change Posed Grave Threats, Defendants Promoted Fossil Fuels for Pervasive Use, While Denying or Downplaying These Threats

Within the brief, ‘greenhouse gas’ is mentioned 29 times, ‘emissions’ 46 times, ‘global warming’ 48 times, ‘climate change’ 100 times. On the other hand, the word ‘damages’ appears in the brief only 7 times. The impression given is that the city is afraid that the judge might not understand the situation unless provided with multiple reminders that global warming exists and that it’s a serious problem.

The fact is, the judge understands the issue very well. New York City framed its complaint in terms of global warming, an international problem that requires an international solution. The judge ruled accordingly. Fossil fuel companies are happy to defend themselves at the national or international level. They know how slow and ineffective national efforts to limit global warming are. They know how to influence those efforts so as to slow them down to a crawl. They even go so far as to promote placing taxes on CO2 emissions, knowing that that distances the production of fossil fuels from the possibility of direct control. It’s a tactic that also gets others to pay what  the oil companies should be paying.

If New York City’s lawsuit fails on appeal, it will show that the Nuisance and Trespass laws are not sufficient. What then? How can any city structure it’s climate lawsuits in such a way that the trans-boundary issue is sidelined?

Here’s my contribution to solving the puzzle:

1. The science linking fossil fuels to global warming , climate change, increasing damage from storms, drought, sea level rise, etc., is settled. Global Warming is happening now. The judges know it. The Oil & Gas companies do not deny it. They most certainly do not want to wind up in court fighting the science. They would lose. Instead, when sued for climate damages, oil companies fight back by attacking the lawsuit’s legal right to stand. There’s no need to stress the existence and effects of global warming when suing oil companies.

2. Even though oil companies have known for decades about the dangerous effects that result from the use of their products, they deliberately kept the knowledge to themselves.

3. New Yorkers generate pollution while engaged in manufacturing, transportation, electricity generation, day to day living, etc. The energy used in these activities includes fuels purchased from the oil companies. New York takes responsibility for the pollution it generates and is working to abate it.

4. As New Yorkers use fossil fuels purchased from the oil companies, carbon dioxide (CO2) molecules are released into the atmosphere. All of those CO2 molecules released by New York to date, remain in the atmosphere and will remain there indefinitely, doing their part in causing the atmosphere to heat up. Once in the atmosphere, those molecules that originated in New York cannot be controlled or regulated by any agency. 

5. The CO2 molecules released by New York from the fossil fuels supplied by the oil companies, add to the burden of CO2 molecules that have built up in the atmosphere over time from other sources. It follows that the atmospheric heating and consequent damage has increased by some measure due to New York’s use of those fossil fuels. To put it another way, if New York had not used any of those fossil fuels, the amount of damage inflicted on New York would be less by some measure (see item 7).

6. The oil companies learned in the 1980’s or earlier about the dangers posed by their products.  Had they behaved honestly and, at that time, informed New Yorkers about the dangers, it’s reasonable to assume that the city would have acted earlier to reduce its dependence on fossil fuels by at least 50% of what it is today. The oil companies should pay the costs flowing from that failure to tell the truth.

7. According to the U.S. Government Accounting Office (report dated Oct. 24, 2017), damage from Climate Change has cost U.S. taxpayers $350 billion over the past decade (2007 to 2017). When adjusted for population size, New Yorkers’ share of that cost was 2.6% or $9.1 billion. 

Considering all the above, how much money should the oil companies pay New York in damage compensation?

For the period 2007 to 2017 (see item 7), 50% of $9.1 billion = $4.55  billion in the form of a lump sum payment.

Since climate damage is ongoing, annual costs following 2017 will be one tenth of $9.1 billion = $0.91 billion per year (see item 7). Oil companies should therefor pay 50% of 0.91 = $0.455 billion per year starting in 2018. For how many years should the oil companies pay that annual amount. Idefinitely or until they go bust.

Photo of Verrazano bridge taken Oct 2012 during Hurricane Sandy
Verrazano bridge from Brooklyn waterfront, NYC, during Hurricane Sandy Oct. 29, 2012. Image credit: Carlos Ayala

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