Posted on March 12, 2018 by Seth Jaffe
Earlier this week, Judge William Alsup denied a motion by Oakland and San Francisco to remand their public nuisance claims against some of the world’s largest fossil fuel producers to state court. However, I’m not sure that this is a victory for the oil companies. This might be more of a “be careful what you wish for” scenario.
After the Supreme Court decision in AEP v. Connecticut and subsequent decisions, such as Native Village of Kivalina, it seemed pretty clear that the federal Clean Air Act had displaced federal common law, leaving only potential state law claims in its place.
Judge Alsup had a different idea. The cities’ claims were only brought against fossil fuel producers, not electric generators. The claims were based on the allegations concerning the companies’ conduct in selling fossil fuels into the stream of commerce, while at the same time allegedly making misrepresentations concerning the risks of climate change.
Judge Alsup concluded that this was a distinction with a difference. The Clean Air Act displaces federal common law regulating operations that emit GHGs. The Clean Air Act, however, does not regulate the sale of fossil fuels. Thus, it does not displace the type of public nuisance action at issue in this case. (Of course, this leads to the odd result that the companies’ sale of fossil fuels is subject to public nuisance claims, even though methane emissions from oil wells and refineries are not, because those are subject to regulation under the CAA!)
Having made this critical distinction, the rest of the decision was relatively easy. As Judge Alsup noted:
If ever a problem cried out for a uniform and comprehensive solution, it is the geophysical problem described by the complaints, a problem centuries in the making. The range of consequences is likewise universal. Taking the complaints at face value, the scope of the worldwide predicament demands the most comprehensive view available, which in our American court system means our federal courts and our federal common law. A patchwork of fifty different answers to the same fundamental global issue would be unworkable. This is not to say that the ultimate answer under our federal common law will favor judicial relief. But it is to say that the extent of any judicial relief should be uniform across our nation.
I’m not sure that Judge Alsup is right, though I appreciate his creativity. And if appellate courts decide he is right, the defendants may come to regret removing the action from state courts.