Please note: this is not meant as a legal discussion of the issue. Do not take this information as legal advice. Speak to a legal professional.

In only the last couple of years there has been a major increase in lawsuits against businesses involved in the oil & gas or related industries for the consequences of climate change, including disastrous impacts. Many of these lawsuits have been brought by municipal officials seeking huge amounts of money for use to develop climate change resiliency programs, although, undoubtedly some funds are likely used by government overall coffers. In general, these lawsuits are founded on the claim of public nuisance or lost income due to events they feel was contributed to by these companies. Such lawsuits began in the early part of this decade were dismissed before going to trial. A key case was American Electric Power Company v. Connecticut where 8 states, New York City and three land trusts sued 6 electric power companies, alleging a public nuisance, and seeking an immediate cap and future reductions in greenhouse gas (GHG) emissions plus damages. Initially dismissed as “political”, the matter was decided by the U.S. Supreme Court who ruled that the plaintiffs had standing to make a claim of nuisance under federal law, but that in this case they could not because of exemptions of this in the Clean Air Act. In subsequent cases, nuisance claims were dismissed, but plaintiffs had the right to sue for direct damages.

The next issue to come up was whether plaintiffs can sue for nuisance under their state law. However, legal opinion discouraged this due to the interstate (and global) transport of GHGs, that the federal Clean Air Act provisions took precedent over state law, and different states define “nuisance” in different ways.

More recent climate change cases that are currently pending against businesses cover nuisance, but also seek damages based on calculated physical damage and costs and defendants’ production and promotion of fossil fuels. Several cases are currently being appealed based on decisions similar to those described above earlier in the decade. None have been concluded yet and rulings in federal district courts so far mixed. If any succeed, it is likely that more such lawsuits will be filed using the arguments and strategies of the successful ones.

Another type of climate change litigation has picked up steam recently, “public trust” claims where citizen groups bring suit against governments for enacting policies promoting fossil fuel use causing them to lose business, be displaced or suffer other hardships. In one case, Juliana v. United States, the federal government is being sued. A court hearing was held June 2019. One other category of climate change cases concerns alleged violations of state or federal securities laws, such as misrepresenting climate change information or disclosures in public documents, such as a lawsuit brought on by the State of New York against Exxon.

Given this increase in climate change litigation and the likelihood that it will continue so for some time, the insurance industry is beginning to offer policies to minimize risk of such lawsuits and payouts.

The information is presented here by an engineer and is not meant to be a strict legal interpretation of events. For more information and before implementing any policies, speak to a legal professional. This information here should not be taken as legal advice.

CCES has the technical experts to help your firm determine your carbon footprint, your emissions of GHGs and determine ways to reduce them reliably and economically with minimal impact on operations. We do not provide legal advice. Contact us today at 914-584-6720 or at karell@CCESworld.com.