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Here are highlights of this month's climate litigation update. The full update is available here:
Fossil Fuel Companies Asked U.S. Supreme Court to Consider Viability of Honolulu’s State-Law Climate Change Claims
On February 28, 2024, fossil fuel companies filed a petition for writ of certiorari in the U.S. Supreme Court seeking review of the Hawai‘i Supreme Court’s October 2023 decision allowing the City and County of Honolulu and the local water utility board (Honolulu) to proceed with state common law claims based on the companies’ alleged misrepresentations and concealment of their products’ contributions to climate change. The companies’ petition presented a single question: “Whether federal law precludes state-law claims seeking redress for injuries allegedly caused by the effects of interstate and international greenhouse-gas emissions on the global climate.” The companies contended that the case presented the Court with “its only foreseeable opportunity in the near future to decide a dispositive question that is arising in every climate-change case.” They characterized the question as one “of extraordinary importance to the energy industry, which is facing dozens of lawsuits seeking billions of dollars in damages for the alleged effects of global climate change.” They argued that the Hawai‘i Supreme Court’s decision conflicted with the Second Circuit’s decision in City of New York v. BP p.l.c.—which held that federal law precluded similar claims by New York City—and also could not be reconciled with other federal circuit of appeals decisions regarding the application of state law to interstate pollution. The companies also argued that the Hawai‘i Supreme Court’s decision conflicted with U.S. Supreme Court precedent, which the companies summarized as providing that “regulation of interstate pollution is an inherently federal area necessarily governed by federal law, and Congress has not permitted—and indeed has preempted—resort to state law except for claims seeking redress for harms caused by in-state emissions.” The companies also argued that the Hawai‘i Supreme Court’s conclusion that Honolulu’s claims “did not fall within the inherently federal area of interstate pollution” was based on “a false dichotomy” between injury caused by failure to warn and deceptive promotion and injury caused by interstate and international emissions. The companies contended that the Supreme Court’s review was warranted because “[t]he stakes could not be higher”; they stated that the more than two dozen cases filed by states and municipalities against fossil fuel companies “present a serious threat to one of the Nation’s most vital industries.” They argued that allowing cases to proceed under state law was “a blueprint for chaos” and that Honolulu’s case was a “suitable vehicle” for reviewing the question presented. Sunoco LP v. City & County of Honolulu, No. 23-947 (U.S. Feb. 28, 2024)
Shell plc and two of its subsidiaries filed a separate petition for writ of certiorari. The petition presented two questions: (1) “Whether claims seeking damages for the effects of interstate and international emissions on the global climate are beyond the limits of state law and thus preempted under the federal Constitution,” and (2) “Whether the Clean Air Act preempts state-law claims predicated on damaging interstate emissions.” Shell plc v. City & County of Honolulu, No. 23-952 (U.S. Feb. 28, 2024)
New Zealand: Māori Leader’s Suit Against Seven Largest Greenhouse Gas Emitters Allowed to Go to Trial
Michael Smith brought tort claims against New Zealand’s seven largest greenhouse gas (GHG) emitters, collectively responsible for one-third of all New Zealand’s GHGs. He argued their activities amount to torts of public nuisance, negligence, and a novel climate duty. Smith further argued that these emissions affect him personally. As a Māori leader with an interest in customary land, Smith argued that the defendants’ actions would harm him through impacts related to rising sea levels, loss of sites of cultural and spiritual significance, damage to fisheries, and adverse health impacts. Smith asked the Court to issue declarations against the defendants, and to require them to reduce emissions. Notably, Smith did not seek damages.
Two of Smith’s arguments were struck out by the trial court, though the third claim—the novel climate duty—was allowed to go to trial. New Zealand’s Court of Appeal, however, struck out all three claims, meaning that Smith would not receive his day in court. In this most recent ruling, the Supreme Court unanimously reversed that decision. All three of Smith’s claims will now proceed to what may be the first full climate tort claim in a common law jurisdiction.
In February 2024, the Supreme Court released its strike out decision. Rather than ruling on the merits of Smith’s argument, the Court considered whether the claims should be struck out before they even reached trial. Under New Zealand law, such arguments should be struck out only if they “disclose[] no reasonably arguable cause of action.” This is a high threshold, and surviving a strike out challenge is no guarantee of success at trial. The decision ultimately concerns whether Smith’s main claim in public nuisance amounts to a “reasonably arguable cause of action.” The Court clarified that a person is liable in public nuisance where they either (a) do an act not warranted by law, or (b) omit to discharge a legal duty; and further, where “the effect of the action or omission is to endanger the life, health, property or comfort of the public or to obstruct the public in the exercise or enjoyment of rights common to all Her Majesty’s subjects.” In other words, a public nuisance is something that endangers public interests or public rights.
First, the Court analyzed whether Smith had plausibly identified public rights that were being interfered with. The Court found that he had—the impacts of climate change would indeed engage rights that fit within the categories identified in existing case law. Secondly, the Court affirmed the appellate court’s finding that public nuisance need not involve otherwise illegal activity. In other words, the fact that the defendants’ GHG emissions were not illegal was not a basis for striking out the claim. Third, the court considered the “special damage” rule. This is a standing rule which requires that public nuisance claims only be brought by plaintiffs who are harmed in a way that is different from the general public. The Court queried whether this rule should remain part of the law; and even if it did, Smith’s material and cultural interests as a Māori coastal landowner were at least plausibly “special” enough to meet the rule’s requirements.
Finally, the Court considered causation. Demonstrating a specific causal chain between a defendant’s emissions and the plaintiff’s harm is extremely challenging. No single emitter is the cause of any person’s harm. Instead, any emitter’s GHG emissions mix with the emissions of millions of others, contributing to a global problem. How does one differentiate the defendants’ actions from those of any other, particularly given New Zealand’s globally small (though per capita large) contribution to GHG emissions?
The Court found that Smith had done enough for these questions to proceed to trial. Notably, the Supreme Court found that the causation problems presented by Smith’s claims were fundamentally similar to other public nuisances involving multiple contributors, such as Industrial Revolution-era air and water pollution cases. “Climate change,” the Court concluded, “engages comparable complexities, albeit at a quantum leap scale of enlargement.” “Cumulative causation” problems climate change presents should at least receive “evidence and policy analysis.” They should proceed to a full trial: “the common law must develop, if at all, in the fertile fields of trial, not on the barren rocks of a strike out application.”
Having found that Smith had done enough to show a reasonable public nuisance case, the Court permitted the two remaining causes of action—negligence and the proposed novel duty—to also progress to trial. The Court also rejected arguments that the common law claims were displaced by New Zealand’s statutory regime for climate torts. (Smith v. Fonterra, High Court of New Zealand, New Zealand)
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