May 07, 2020

How and why state and local governments are suing the fossil-fuel industry for the costs of adapting to climate change

Matthew J. Sanders

In article after article, in study after study, we learn that climate change and its impacts are much worse than we expect them to be. The United Nations Environment Programme (UNEP) reported in 2019 that greenhouse-gas emissions, far from falling or even stabilizing, have risen by 1.5 percent per year in the last decade and reached a record high in 2018. In another report issued last year, UNEP and five other climate research organizations warned that we are now on track to burn 50 percent more fossil fuels than the amount that would limit global warming to 2°C. The effects will be (and already are) devastating. The New York Times reports that, in 2018, the United Nations Intergovernmental Panel on Climate Change (IPCC) estimated that by 2100 seas will rise between 1.8 and 3.2 feet, leading to frequent and severe erosion and flooding. The U.S. National Oceanic and Atmospheric Administration puts the estimates at 5 and 8.2 feet, with even more dire consequences. In 2019, the IPCC warned that warmer oceans, combined with rising sea levels, are threatening local and global food supplies and generating unprecedented flooding and storms.

Adaptation is currently the principal defense that communities around the world have against the climate crisis, and it is and will be immensely expensive. Indeed, even if the world completely stopped emitting greenhouse gases today, we would still face the massive costs of adapting to the climate-change–related damage that is already underway. In coastal areas, this will mean assessing risks, retrofitting or moving structures, installing sea walls and monitoring systems, and converting vulnerable land uses to parks and wetlands. The New York Times reports that, in 2012, Hurricane Sandy cost the New York City subway system $5 billion in water damage. In 2017 it was Hurricane Harvey that cost Houston and its surrounding areas $125 billion. According to a 2019 IPCC report, future coastal adaptation across the United States will cost tens to hundreds of billions of dollars a year. These are just the adaptation costs associated with sea-level rise, to say nothing of how much it will cost to live with warmer temperatures, more frequent and destructive wildfires, dwindling drinking water, and the like.

As we start to grasp the scale of these costs, we are forced to ask: who should pay them? So far it has been mostly all of us, through our taxes and insurance, but is that appropriate, or even possible? A growing number of local and state governments think it isn’t. They believe that those who bear substantial responsibility for getting us into this mess should pay for a substantial portion of the costs of living with it. And so, in the last five years, at least 13 city, county, and state governments have filed lawsuits against large fossil-fuel companies, seeking damages for the companies’ outsized contributions to climate change. (The Sabin Center for Climate Change Law at Columbia Law School maintains databases of these and other domestic and international lawsuits.) The suits vary in their particulars but all advance a mix of state common-law theories of liability, including public and private nuisance, trespass, product liability, negligence, and failure to warn. Thus far, most of the suits have been hung up on the issue of whether they belong in federal or state court (i.e., whether federal law preempts or displaces the state-law claims), but at least some of them are likely to be litigated on their merits in state court. At that point, one fight will be about whether it is appropriate to use public-tort litigation to recover the public costs of climate change from private companies.

Specifically, the courts will consider whether the governments may seek damages against fossil-fuel companies under common-law theories of public nuisance, trespass, product liability, negligence, and failure to warn. Though the sheer scale of climate change and its adaptation costs may be unprecedented, these theories are not. To the contrary, they borrow from precedents that have been or are being established in other litigation contexts—lead paint, opioids, MTBE-contaminated drinking water, herbicides, and asbestos, to name a few.

Most controversial (and most promising for the governments) might be the public-nuisance doctrine, which at least eight of the governments assert as a cause of action in their complaints. A public nuisance is an unreasonable interference with rights held in common by the general public. Restatement (Second) of Torts § 821B (1979). Some states, including California and Oklahoma, have especially broad public-nuisance statutes, and it is no accident that public-nuisance litigation has been most successful in those states. See Cal. Code Civ. Proc. §§ 731, 3479, 3480; Okla. Stat. tit. 50, § 1 et seq. In California, for example, Santa Clara County and other counties and cities reached in 2019 a $305 million settlement with three lead-paint manufacturers to pay for lead-paint abatement in residential housing. The settlement followed an appellate decision ruling the manufacturers’ activities to be a public nuisance. People of California v. ConAgra, 17 Cal. App. 5th 51 (2017); see also Cty. of Santa Clara v. Atl. Richfield Co., 137 Cal. App. 4th 292 (2006). Meanwhile, in Oklahoma v. Purdue Pharma L.P., an Oklahoma trial court found in 2019 that drug maker Johnson & Johnson contributed to the public nuisance of overdose deaths resulting from opioids, and awarded the state $465 million for opioid treatment programs.

Like any tort, public nuisance requires duty, causation, and harm. Each of these elements presents novel issues in the climate-change context (though made somewhat less novel by their treatment in other public-nuisance contexts). But what is not at all novel is the claim by the local governments that oil companies aggressively and deceptively marketed their products—i.e., that they knew the dangers that fossil fuels posed for the climate but sold them anyway. That argument was crucial in the plaintiffs’ success in the lead-paint, opioid, and other public-nuisance litigation. For example, in the lead-paint litigation, the California Court of Appeal found that the defendant lead-paint manufacturers “knew at that time” that they sold lead paints that their paints produced lead dust, and knew that “lead dust was poisonous,” but “marketed,” “advertised,” and “promoted” their lead paints all the same. ConAgra, 17 Cal. App. 5th at 70–73.

Similarly, in the Oklahoma opioid litigation, the trial court found that the defendant drug makers “marketed, promoted and sold opioid drugs” in a “false, deceptive and misleading” way, emphasizing the drugs’ benefits while underplaying their dangers. See Final Judgment After Non-Jury Trial, at 4, 16, Oklahoma v. Purdue Pharma L.P., Dist. Ct. (Cleveland County) No. CJ-2017-816 (filed Nov. 15, 2019). If the local government climate-change suits reach the merits, the defendants’ similar knowledge of the dangers posed by their products, and their decision to advertise and sell them nonetheless, may well be the deciding factor (for the governments) in at least some of those suits.

Skeptical lawyers, judges, and scholars have raised many objections to public-tort suits, especially public-nuisance claims. Many object that it is unfair to hold companies liable for harms associated with selling lawful products. Others object that the remedy for public nuisance traditionally has been, and should be, injunctive relief, not damages. And still others argue that public nuisance is not a tort, but more like a criminal offense. However, state legislatures have arguably addressed these critiques by adopting broad public-nuisance statutes, and these critiques tend to be weaker in cases where the defendants knew of the risks of their products or conduct. These critiques seem to be carrying less weight in recent years; the courts, initially skeptical of traditional product-liability claims asserted as public nuisances, have been increasingly (though not uniformly) receptive to them.

That still leaves the most common objection to public-nuisance claims: that they are inappropriate tools for remedying social harms, especially harms as complex and widespread as climate change and sea-level rise. Those who raise this objection argue that legislatures and administrative agencies are better equipped than courts to address such “controversial” social harms, at least until a legislature specifically deems them a public nuisance. But tort cases, on the one hand, and legislation and regulation on the other, serve different functions; the former address past wrongful behavior and seek relief for particular injured parties, while the latter set broadly applicable, forward-looking policies. Thus, local governments are not using their lawsuits to tackle climate change; they’re instead trying to recoup some of the staggering losses that result from it. Without a ready source of funds from the federal government, and with no global body empowered to assess and award climate-change-related costs, local governments and the citizens they serve have little other recourse. They literally can no longer afford to wait.

Matthew J. Sanders

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Matthew J. Sanders is a clinical supervising attorney and lecturer at Stanford Law School, where he teaches environmental law and advanced legal writing. He is editor-in-chief of Trends.