Biden administration sides with climate lawsuit against fossil fuel companies

Biden administration sides with climate lawsuit against fossil fuel companies

DoJ brief argues Colorado case against energy giants ExxonMobil and Suncor should be heard in state court instead of federal.

The US Department of Justice filed a legal brief Thursday in support of local governments in Colorado that are part of a growing wave of local and state governments pursuing climate litigation against fossil fuel companies.

In the brief, the DoJ argued that the Colorado case against the Canadian energy giant Suncor should be heard in state court, which is considered more favourable than federal court for plaintiffs who are suing oil companies over climate change. ExxonMobile is also a defendant in the case.

Experts say the DoJ brief is an action by the administration in support of climate litigation, fulfilling a campaign promise by President Joe Biden. “They’ve definitely come out on the side that the climate advocates wanted,” said Dan Farber, law professor at the University of California, Berkeley.

State and local governments across the country have filed lawsuits in recent years alleging that energy giants, including Exxon, Chevron, Shell and BP, failed to warn the public about the harms of fossil fuels and engaged in deception or misrepresentation about their products, resulting in devastating climate emergencies in those jurisdictions. In court filings, fossil fuel companies have argued that media coverage of climate change extends back to the 1950s but local governments continued to promote and encourage production and use of oil and gas.

Supporters of the wave of climate lawsuits have compared them to cases against Big Tobacco in the 1990s that resulted in settlements of more than $200bn against cigarette companies. If the lawsuits are successful, they could change how firms do business, compel companies to pay for climate adaptation, and reinforce banking industry concerns that fossil fuels are a risky investment.

Since the first lawsuits were filed in California in 2017, oil companies have removed them to federal court, which they see as friendlier to their arguments. But the plaintiffs have maintained that the cases belong in state court.

In 2018, local governments in Colorado sued fossil fuel companies seeking damages for the companies’ role in causing climate change. The local governments said they incurred heavy costs from worsening heat waves, wildfires, droughts and floods, and that ExxonMobil Corporation and Suncor Energy Inc. According to the US Energy Information Administration, Colorado has abundant fossil fuel reserves, and two operating petroleum refineries located in Denver – one of them operated by Suncor.

The lawsuit claims the companies “knowingly and substantially contributed to the climate crisis by producing, promoting and selling a substantial portion of the fossil fuels that are causing and exacerbating climate change, while concealing and misrepresenting the dangers associated with their intended use.”

The case made It up to the tenth circuit appeals court, which agreed with the plaintiffs that the case should be heard in state court. The supreme court, now dominated by conservative judges, will weigh in on that issue.

To aid in that decision, the supreme court invited Solicitor General Elizabeth Prelogar to file a brief expressing the views of the United States government on whether the case belongs in federal court. Prelogar had the option to support the state court argument by the Colorado counties, which she did in a filing on Thursday.

Asked whether a Colorado case should be removed to federal court, Prelogar argued that the petition should be denied. “Respondents brought this suit in state court, alleging only state-law claims,” she wrote. “Under the well-pleaded complaint rule, respondents’ claims do not present a federal question, and petitioners have identified no sound basis for re-characterizing those claims.”

The attorney for Suncor Energy did not immediately respond to request for comment.

Farber said the brief is “laser-focused” on the question of whether the cases should be in federal court, and does not make any broader arguments about the climate litigation.

The supreme Court now has two options – it can either decline to hear the case, or it can take up the case. If it declines to hear the case, then the lower court decision stands, and the lawsuit goes back to state court – a win for the plaintiffs that would have a ripple effect on other climate litigation, and all the cases would be heard in state court, Farber said.

If the supreme court decides to hear the case, oral arguments could happen in the fall and the court could issue a decision in 2024. In that scenario, all the climate cases before the courts would be on pause until the decision comes down, he said.

“There could be some complicated issues about how to handle some of the individual cases, but I think basically the result would be that things would more or less stand still until the court either decides to hear this case or decides not to hear it,” Farber said.

Richard Wiles, president for the Center for Climate Integrity, was delighted by the federal government’s brief. “We’re obviously very pleased with this decision,” he said over the phone. “The DoJ came down on the side of every other federal judge that has looked at this.” He said there is consensus in the courts and the legal community is that the cases belong in state court.

As for the Biden administration, he said, “You can definitely say they made good on their promise to strategically support these cases.”