ExxonMobil

Climate Lawsuits Against Big Oil Are Likely a Useless Distraction

Funny: These cities didn't disclose any concerns about climate change in their bond issues.

|

ExxonTimBinghamDreamstime
Tim Bingham/Dreamstime

New York City has joined seven California jurisdictions in filing public nuisance lawsuits against five major oil companies. The suit says BP, Chevron, Conoco-Phillips, ExxonMobil, and Royal Dutch Shell are responsible for 11 percent of the greenhouse gases that have accumulated in the atmosphere. The plaintiffs want to "shift the costs of protecting the City from climate change impacts back onto the companies that have done nearly all they could to create this existential threat."

New York specifically cites the costs of protecting its citizens against future sea level rise that will result chiefly from melting glaciers draining into the oceans and storms worsened by rising temperatures. "To deal with what the future will inevitably bring, the City must build sea walls, levees, dunes, and other coastal armament, and elevate and harden a vast array of City-owned structures, properties, and parks along its coastline," the suit says. "The costs of these largely unfunded projects run to many billions of dollars and far exceed the City's resources."

Turning the tables on its municipal antagonists, ExxonMobil has filed a countersuit in a Texas court that aims to call out the hypocrisy of the California jurisdictions for issuing bonds without themselves mentioning any risks from climate change or sea level rise. "Notwithstanding their claims of imminent, allegedly near-certain harm," the lawsuit argues,

none of the municipalities disclosed to investors such risks in their respective bond offerings, which collectively netted over $8 billion for these local governments over the last 27 years.

To the contrary, some of the disclosures affirmatively denied any ability to measure those risks; the others virtually ignored them. At least two municipal governments reassured investors that they were "unable to predict whether sea-level rise or other impacts of climate change or flooding from a major storm will occur, when they may occur, and if any such events occur, whether they will have a material adverse effect…."

The stark and irreconcilable conflict between what these municipal governments alleged in their respective complaints and what they disclosed to investors in their bond offerings indicates that the allegations in the complaints are not honestly held and were not made in good faith. It is reasonable to infer that the municipalities brought these lawsuits not because of a bona fide belief in any tortious conduct by the defendants or actual damage to their jurisdictions, but instead to coerce ExxonMobil and others operating in the Texas energy sector to adopt policies aligned with those favored by local politicians in California.

ExxonMobil seeks to depose various officials from the California cities and counties suing the company, to "investigate potential claims of abuse of process, civil conspiracy, and constitutional violations." Naturally, the cities are outraged that the honesty and integrity of their civil servants are being questioned. The San Francisco Chronicle reports:

"It is repugnant that oil companies might sue public servants personally in an attempt to intimidate them from protecting their communities and environment," said John Beiers, county counsel for San Mateo County. "We will not be intimidated."

Assuming that the emissions from the products sold by the oil companies are contributing significantly to the costs of adapting to climate change, are public nuisance lawsuits an effective remedy to the problem?

Not really, suggests Case Western University law professor Jonathan Adler in his 2011 analysis of American Electric Power vs. Connecticut. In that case, several states and environmental groups sued five major power companies for the damages allegedly caused by their emissions of greenhouse gases from the generation of electricity. The dispute reached the U.S. Supreme Court, which narrowly decided that the fact that the Environmental Protection Agency was promulgating carbon dioxide regulations precluded the lawsuit.

Adler observes:

Libertarians and others have argued that using the common law to address environmental pollution concerns is better than resorting to decision-making by centralized administrative agencies. While global climate change is anything but a typical environmental pollution concern, even a modest warming could produce the sorts of harms common-law nuisance actions have addressed. The common law has long recognized actions that cause the flooding of a neighbor's land as a trespass or nuisance, and even so-called skeptics recognize global warming could produce a measurable increase in sea level.

Yet opening the door to climate-based nuisance suits could unleash a torrent of litigation. Given the ubiquity of GHG [greenhouse gas] emissions, allowing suits against one set of firms inevitably opens the door to suits against others—without any prospect of addressing the underlying concern. Given the global nature of the problem, climate change can only be mitigated or averted on a global scale. Reducing emissions from the 5, 50, or 500 largest GHG emitters within the United States will have no appreciable effect on the accumulation of GHGs in the broader atmosphere.

Adler consequently concludes that "such questions lie far beyond the capability of common-law courts. For better or worse, then, we have to leave climate change in the hands of the political process, to be addressed—if at all—by legislative and (duly authorized) administrative action."

Disclosure: I have not yet divested my minor stock holdings in oil company stocks (which I purchased with my own funds).

Advertisement

NEXT: Trump Trades Blows with Canada

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Ah, if only political hypocrisy were a crime which barred one from political office and all government-funded employment!

    1. Political hypocrisy is a muchness. Only one word is needed.

  2. I would like Reason/Cato et al to do a study on how much tax payer money is incinerated by government agencies ,and non-profits who receive government dollars, spend on suing each other in perpetuity.
    How much money do private law firms bilk off of the taxpayer every year over the environmental lobby’s scams?

  3. Tony approves.

    1. You two get a room already.

      1. Can I watch and take movies?!?!? I ***PROMISE*** not to put them on the inter-lubed inter-tubes!!!

  4. “Assuming that the emissions from the products sold by the oil companies are contributing significantly to the costs of adapting to climate change, are public nuisance lawsuits an effective remedy to the problem?”

    The alleged CO2 “pollution” isn’t being produced by the oil companies – it’s being produced by drivers who choose to buy and use those products.

    Let’s see those lefty government grandstanders try suing every single driver in the country and see how that works for them.

    1. Hear, hear! It’s absurd to blame the oil companies or power companies for the emissions. The responsibility rightly belongs with the users. This sort of thing is just part of the usual lawyer’s strategy of suing the person or company with deep pockets rather than the one(s) actually responsible.

      1. You kidding? Users aren’t responsible. Users are just pawns who respond to prices. Oil companies and power companies unfairly sell their products at prices that are cheaper than the environmentally responsible alternatives. That’s not the fault of the users. It’s the fault of the corporations. Duh. Get with the program.

        1. I know, just today I was thinking about not filling up my tank and a corporate storm trooper forced me to the side of the road, then got in and put a gun to my head till I filled up my car.

        2. I know sarcasmic is being sarcastic, but utility company prices are set by the state regulating agencies.

          Oil companies set their prices _in theory_, but whenever the price of gasoline rises, politicians start looking for “excess profits” and punishing any oil company that makes more than they think it should. That not only discourages them from cranking up the price to reduce use (as if that were possible when your competitors keep their prices low), but it also helps keep a boom-and-bust cycle going in oil availability and prices. That is, they keep their prices so low that exploration and development of new sources would lose money until there’s a shortage, then jump the prices very high andgo into a flurry of drilling new wells, followed by a glut and a price drop, and the cycle repeats. The first “oil shortage” and panic was in the 1920’s, so this cycle has been going on for over 90 years. One would think that an oil company could make huge profits by looking ahead of the current phase of the cycle and having a bunch of new wells ready to come on line when there’s a shortage and the price jumps – but in the past those that did show some foresight were punished for “profiteering”. E.g., Jimmy Carter required companies with more oil or lower cost oil to share it with their competitors…

    2. Better yet: let’s see ExxonMobile name every registered motor vehicle owner in NYC, starting with Mayor William Wilhelm, a/k/a Bill DeBlassio, as Third Party Defendants, and allege that they are jointly and severally liable for any damages that may have been caused by auto omissions – and if ExxonMobile is found liable, they can seek indemnity from each and every motor vehicle owner.

      1. Also all owners of plastics that are derived from petroleum!

        1. You could include those who eat food:

          “Fertilizer is a substance added to soil to improve plants’ growth and yield. First used by ancient farmers, fertilizer technology developed significantly as the chemical needs of growing plants were discovered. Modern synthetic fertilizers are composed mainly of nitrogen, phosphorous, and potassium compounds with secondary nutrients added. The use of synthetic fertilizers has significantly improved the quality and quantity of the food available today, although their long-term use is debated by environmentalists.”
          Read more: http://www.madehow.com/Volume-…..z53uPBF86o

          And, yep, those ‘environmentalists’ are the same, tired romantics hoping for the pristine world where you are dead by age 35.

          1. Ironic coming from someone who wants to roll back civilization to a time before any of its most important components existed.

            1. Huh so civilization has only existed for, what, 70 years or so by your count?

              1. Modern civilization certainly.

        2. food does not get put on the table without fuel to grow, pick, transport and provide for consumption without it. especially if they want people living in mega cities

  5. “To deal with what the future will inevitably bring, the City must build sea walls, levees, dunes, and other coastal armament, and elevate and harden a vast array of City-owned structures, properties, and parks along its coastline,” the suit says.

    LOL.

    I don’t think stuffing billions of dollars into retired teachers’ and cops’ pockets counts as any of… that.

    1. Indeed.

      This reminds me of the state government lawsuits against “Big Tobacco” where they sued for the supposed cost of smoking to the taxpayers.

      The resulting tobacco settlement money was supposed to go toward efforts to reduce smoking.

      Of course when those governments started getting those payments, they used it for anything and everything that had nothing to with reducing smoking.

      1. This reminds me of the state government lawsuits against “Big Tobacco” where they sued for the supposed cost of smoking to the taxpayers.

        It should. Al Gore spearheaded both efforts.

        1. “It should. Al Gore spearheaded both efforts.”

          “Matthew 7:16-20King James Version (KJV)
          16 Ye shall know them by their fruits. Do men gather grapes of thorns, or figs of thistles?

          17 Even so every good tree bringeth forth good fruit; but a corrupt tree bringeth forth evil fruit.

          18 A good tree cannot bring forth evil fruit, neither can a corrupt tree bring forth good fruit.

          19 Every tree that bringeth not forth good fruit is hewn down, and cast into the fire.

          20 Wherefore by their fruits ye shall know them.”

          1. 19 Every tree that bringeth not forth good fruit is hewn down, and cast into the fire woodchipper.

            I have a newer translation.

          2. 20 Wherefore by their fruits ye shall know them.

            I’m not going to lie, knowing Al Gore’s daughters in order to know him definitely has its pros and cons.

    2. “the City must build sea walls, levees, dunes, and other coastal armament,”

      Or they could move like all civilizations in the past or are they to stupid to get out of the way

      1. I would be curious to know if simply building a New New York would be cheaper than making the one we already have survive being literally under water.

  6. “It is repugnant that oil companies might sue public servants personally in an attempt to intimidate them from protecting their communities and environment,” said John Beiers, county counsel for San Mateo County.”

    What is repugnant is that those scumbags try to pass themselves off as “public servants”.

  7. Disclosure: I have not yet divested my minor stock holdings in oil company stocks (which I purchased with my own funds).

    Check out Big Oil Bailey!

  8. I wish people were more concerned about these lawsuits for two reasons:

    Exhibit 1) Big Tobacco:

    “Buttressed by the lawsuits of 40 state attorneys general, triggered the fall of Big Tobacco. Fearful of bankruptcy, the tobacco barons agreed last summer to settle the suits at a cost of $368.5 billion. Now they must convince persuade skeptical [sic] lawmakers to accept the broad legal protections included in the deal.

    But the tobacco companies know that getting congressional Republicans and Democrats to agree to a complicated deal means substantial input from the White House. And that means their fate could well be back in the hands of Al Gore in the next weeks.

    Whether distracted by the Whitewater investigation or merely eager to bolster Gore’s prospects in 2000, Clinton has increasingly deferred to his vice president on the subject of smoking. In many ways, Gore has become so closely associated with the push for reform that he embodies its conflicts.

    —-Washington Post, 1998

    Al Gore subsequently led the government takeover of the tobacco industry, and the whole thing was about state attorneys general going after the tobacco industry for false advertising, the tobacco industry knowing that smoking caused cancer, costs for caring for smokers, etc.

    It seemed so ridiculous in the beginning.

    In the end, their best option was to settle for $368.5 billion, forgo their rights–and beg for protection from lawsuits.

    1. Link for Washington Post:

      https://tinyurl.com/y7lr2455

    2. I guess people like myself see these 2 situations as different. It’s apparent that the government doesn’t, and that is frightening.

      1. Well, take it into consideration along with Exhibit 2 below.

        Al Gore did the same thing to the tobacco industry, and that’s not me saying it. That’s straight from him!

        This is all about Al Gore’s efforts. He’s organized this. He’s been working on it for years. If Hillary were in the White House, she’d be on this case, too, already.

        I don’t think this should be laughed off. If the drug war taught us anything, isn’t it that there is no government policy so costly and so ineffective that the government won’t spend trillions on it over the course of decades?

        I think reasonable people and scientists think this stuff is laughable, but sometimes scientific types lose sight of the fact that our society is not run by scientists. It’s run by government bureaucrats and the politicians that answer to them, and it’s run for their benefit–not according to what is rational. Rational people are outsiders.

        Try not to think about it too much or you won’t be able to sleep at night.

  9. “none of the municipalities disclosed to investors such risks in their respective bond offerings, which collectively netted over $8 billion for these local governments over the last 27 years.”

    Hold on here!

    Aren’t the AG’s of California and New York pursuing securities fraud claims against ExxonMobile for alleging failing to tell investors that Climate Change poses a risk to company profits? WELL NOW, if those municipalities failed to disclose to investors they face imminent, near certain harm from global warning, they also engaged in securities fraud! In fact, they are worse. ExxonMobile denies that risk exists. The municipalities admit they face risk but intentionally failed to disclose it to investors.

    Any of you out there who own a government bond fund that invests in California municipal bonds or NYC bonds should consider a securities fraud action. You’ve been lied to.

    Seriously…didn’t these cities realize they were walking into this?

  10. Exhibit 2) Al Gore and his Climate Reality Project

    “Former US Vice President and Chairman of The Climate Reality Project Al Gore joined New York State Attorney General Eric Schneiderman in New York March 29, to announce a coalition aimed at aggressively protecting the recent progress the US has made in combatting climate change. Lauded by Vice President Gore as “the best, most hopeful step in years” in this effort, the AGs United for Clean Power coalition brings together attorneys general from 25 states, territories, cities and counties to explore ways to jointly support the fight against climate change.

    One such tactic includes facilitating ongoing and potential joint investigations into whether fossil fuel companies and industry groups mislead the public about the dangers of climate change or the viability of renewable energy resources.

    “What these attorneys general are doing is extremely important. These brave members of this coalition are doing their job like they did in the tobacco case,” said Vice President Gore, comparing fossil fuel companies to the tobacco companies of the 1990s that fell under intense scrutiny over misstatements about cancer and heart disease risks.

    —-The Climate Reality Project

    Al Gore is bragging that he’s going to do the same thing to the oil industry that he did to tobacco.

    1. Link for Al Gore’s Climate Reality Project quote:

      https://tinyurl.com/jpfkg39

    2. “If you like your gallon of gas, you can keep your gallon of gas. It will just cost you five times as much.”

      1. It would be difficult for them to kill off oil completely–especially once it became a source of government revenue.

        But, yeah, they’d make it as prohibitively expensive as keeping the tax revenue flooding in would allow.

        1. And people will pay it, too. What else are they going to do?

          Another similarity with smoking.

          1. A significant amount of them will quit–just not so many that it would threaten the gold mine in tax revenue. That’s the game with cigarette taxes. Make ’em high enough so that new people won’t start but low enough so that smokers won’t quit and stop giving us their money.

            People will respond to price signals by substituting away when things get more expensive, and there are substitutes for oil–like moving within walking distance to work, using more blankets at night, etc.

            They’ll just raise the cost of oil high enough that people who need use it the most will pay through the nose for it and those that don’t will install geothermal heat pump systems and solar. Eventually people get used to it. Hardly anyone complains about not being able to smoke in restaurants anymore.

            1. Except, notably, cigarettes are not one of the most basic economic inputs in the world and raising the price of cigarettes didn’t raise the cost of literally every other consumer product in the market.

              So while Al Gore might ‘believe’ they are the same, he is absolutely wrong and the devastation such a course would wreck would be impossible to ignore for any man, woman, or child in these United States let alone the world.

              1. And, to whit, gasoline or it’s derivative or related fossil fuel options are mandatory for transporting goods and there is no way whatsoever to get around the requirement to ship goods from place to place. None. That is, unless you seriously think we’re going back to sail boats and horses.

                None of the so-called ‘renewable’ energy sources are either renewable or able to produce the amount of power needed to transport said goods. Unless, again, you murder a significant portion of humanity in order to reduce the demand side of the equation.

                1. There are substitutes for oil. They’re simply prohibitively expensive relative to oil.

                  The object of this exercise is to make oil prohibitively expensive for its substitutes.

                  Not overnight.

                  It’ll work like it did with tobacco.

                  I remember when cigarettes first went to a dollar a pack. What, are the $5 a pack now?

                  1. And my point is that, as you note, it doesn’t make one iota of difference what you use since the method of transport becoming more expensive increases the costs of all goods that need transport by default. Ergo they are not the same other than they are both things that you can buy, but their actual utility is so different that they are apples and oranges.

                    I’m not saying that Al Gore isn’t that crazy, he very well might be. This isn’t going to go their way though. Your average person will notice that everything they buy just because far more expensive.

                    There are other ways to try and mitigate that cost increase, say higher taxation and subsidy among many other options but regardless that money will come from individuals and it will be a noticeable increase to everyone.

                    1. Shorter version is simply this: a massive tax imposition on something unpopular (smoking) is orders of magnitude more political possible than a massive tax on a good everyone uses either directly or indirectly in virtually every facet of their lives (energy).

  11. I’m curious how they intend to quantify damages. Using acccepted damage theory one can only claim actual damages incurred, not potential future damages. Potential future damages are considered to be speculative and would be tossed immediately.
    If they claim their damages are the infrastructure projects they are undertaking to protect their respective cities, they would further be mistaken. those projects would be considered mitigation at best, but those costs would not be recoverable until the actual damages occurred.
    I hope the government officials behind these suits are slapped with civil rights suits, so they face personal repercussions, otherwise crap like this will continue to occur. Government using the civil courts to achieve likely unconstitutional political goals is an insult to the principles of our society.

    1. “Potential future damages are considered to be speculative and would be tossed immediately.”
      As is the proper way to deal with the A’sG BS.

    2. I think it’s just like the tobacco lawsuits.

      It’s hard to quantify who would have acquired lung cancer or emphysema despite not smoking, too. They just looked at how much they spent on Medicaid for smoking related illnesses.

      Not only was it hard to quantify the damage breast implants did to those who sued for damages, I don’t believe they ever found any evidence that breast implants caused the problems they were found guilty of causing in court.

      Didn’t Dow Corning end up being owned by the plaintiff’s attorneys anyway?

      A trial isn’t a scientific conference. It’s seven out of twelve, majority wins. And the tobacco industry capitulated rather than continue to face that in court. That’s all they have to do is make the oil companies capitulate. It isn’t about being right or wrong on the facts.

      1. Yeah, most shake-downs do end in out-of-court settlements.

    3. I think they should be forced to pay the difference between damages incurred and benefits accrued. If that turns out to be the opposite sign of what they are expecting, then I think the defendants should get paid.

  12. The plaintiffs want to “shift the costs of protecting the City from climate change impacts back onto the companies that have done nearly all they could to create this existential threat.”

    Climate change is natural. And what these asshats want is un-quantifiable.

  13. Specific to where New York city is sitting, which has changed the environment more – greenhouse gases, or paving and covering every square inch with something man made?

    1. By building and maintaining roads, highways, bridges and tunnels for motor vehicles to travel on, NYC contributed to the harms it is complaining of. ExxonMobile should counterclaim for contributory negligence.

  14. The suit says BP, Chevron, Conoco-Phillips, ExxonMobil, and Royal Dutch Shell are responsible for 11 percent of the greenhouse gases”

    No they did not force anyone to use fuel we the public and the suers choose to us it ourselves. much like water the world does not evolve or even survive beyond subsistence levels without it

    1. I’d ask those cumquats who produces the other 89% of those gases and why they’re going after the minority of those creating these so-called ‘pollutants’.


  15. The plaintiffs want to “shift the costs of protecting the City from climate change impacts back onto the companies that have done nearly all they could to create this existential threat.”

    It’s such an existential threat that they’re talking about the movements of little pieces of green paper over dismantling all of Western society which is the only ‘final solution’ there is that would ‘work’ for their explicit ends.

    Of course, we will need to annihilate all other nations on Earth with our super weapons before we destroy ourselves because all other nations must be brought to heel and their populace killed in service of Gaia since, otherwise, we might not be able to force them to suicide for the betterment of Gaia’s health.


    1. Yet opening the door to climate-based nuisance suits could unleash a torrent of litigation. Given the ubiquity of GHG [greenhouse gas] emissions, allowing suits against one set of firms inevitably opens the door to suits against others…

      Indeed. Please note how free speech releases CO2 into the environment. In fact, this is another piece of supporting evidence for why every living thing that produces CO2 on this Earth should be killed. It’s the only solution to make them stop producing CO2.

      At the very least, we must curb free speech to protect Gaia. In fact, speech will be entirely outlawed as will breathing. You will only be allowed to gesture before your execution. Of course, the Government that will be needed to kill you will kill themselves last since, otherwise, there will be no one to do this necessary and proper cleansing of the Human virus.

  16. All of this is moot if Global Warming is a bust. In earth’s long history, CO2 has often been a good deal higher in parts per million than it is now. The mesozoic era concentrations were perhaps four times what we have now. Also, there are strong indications that we may, in fact, be moving into a ‘little ice age’. I’m not saying FOR SURE that man made global warming does not exist, but there are indications that the issue AS SOLD TO THE PUBLIC is bushwa.

    And it doesn’t help that so many of thr ‘solutions’ pushed don’t add up overall. Electric cars? Where do we get the electricity? Variable sources like solar and wind will not support a grid, amd have their own environmental impacts, which have been grossly understated. Burning wood pellets to generate electricity? Really? Whose bright idea was that? That creates more greenhouse gas than coal.

    The lawsuits are simply an attempt at government piracy.

  17. It is, of course, the government that builds the roads…

Please to post comments

Comments are closed.