Cities and Climate Change: Can A Locality Sue Fossil Fuel Producers under State Tort Law?

By Evan Neustater*

The effects of climate change are felt at global, national, and local levels. Despite climate change’s wide-reaching impact, however, the purview of litigation over its effects has generally been limited to actions in federal court.[i]Local entities have been mostly precluded from suing the leading producers of greenhouse gasses –fossil fuel companies –for injuries sustained from climate change. If cities hope to win suits for compensatory damages, I argue their best avenue would be to bring a cause of action arising under state tort law. A recent case from New York City provides an excellent case study of these circumstances.

On July 19, 2018, a U.S. District Judge dismissed a lawsuit under Rule 12(b)(1) and 12(b)(6) from the City of New York against the companies BP, Chevron, ConocoPhillips, Exxon Mobil, and Shell.[ii]In the complaint, New York alleged the oil companies created a public nuisance by actively promoting the use of fossil fuels for decades, despite being aware of the significant adverse effects that could result from anthropogenic climate change.[iii]Proof that the companies knew of these effects was exemplified by the fact that Exxon and other major oil and gas companies took actions to protect their own assets from climate change, including “raising the decks of offshore platforms, protecting pipelines from coastal erosion, and designing helipads, pipelines, and roads in the warming Arctic.”[iv]

The City claimed the defendants were collectively responsible for over eleven percent of all carbon and methane pollution from industrial sources that have accumulated in the atmosphere since the Industrial Revolution.[v]Neither the defendant companies nor the federal judge disputed the effects of climate change but did argue that the court lacked subject-matter jurisdiction to hear the case.

In the judge’s view, the interstate nature of climate change made the dispute inappropriate for resolution under state law.[vi]Furthermore, the Clean Air Act directs the EPA Administrator to establish standards of performance for emission of pollutants from stationary sources, and to regulate existing stationary sources and issue emission guidelines.[vii]The Clean Air Act also enables the EPA to impose “administrative penalties for noncompliance” and to commence “civil actions against polluters in federal court.”[viii]Thus, Congress occupied the field of greenhouse gas emissions regulation, and preempted federal common law, through passage of the Clean Air Act.[ix]

The Supreme Court has recognized the need for federal courts to address such issues. Where “the interstate or international nature of the controversy makes it inappropriate for state law to control . . . our federal system does not permit the controversy to be resolved under state law.”[x]The Court has also previously held that “the control of interstate pollution is primarily a matter of federal law.”[xi]

Despite the wealth of common law and statutory precedent for climate change being a federal issue, the City of New York announced its intention to appeal.[xii]Although it will be difficult to win on appeal, New York’s best chance of winning may rest in state tort law.

The City agrees that federal common law typically applies to direct emitters of interstate pollution. However, it contends that its claims are not governed by federal common law because “the City bases liability on defendants’ production and sale of fossil fuels—not defendants’ direct emissions of [greenhouse gases].”[xiii]The City is trying to circumvent that lower court’s holding by claiming their real cause of action stems from companies’ tortious conduct in marketing, not in polluting itself, since they advertised their product without disclosing its harmful effects. However, the City’s amended complaint makes it clear that they are seeking damages for global-warming related injuries, not just the production of the defendant’s fossil fuels.[xiv]

Furthermore, another U.S. city has attempted and failed in a similar suit. Kivalina, Alaska, brought a public nuisance action against multiple oil, energy, and utility companies alleging that “emissions of large quantities of greenhouse gases” had resulted in global-warming related damages, including sea-level rise and severe erosion.[xv]Kivalina, like New York, sought compensatory damages.[xvi]There, the Ninth Circuit held that the Clean Air Act displaced the plaintiff’s federal common law claim, as the Clean Air Act already provides a means to regulate carbon dioxide emissions from domestic power plants.[xvii]Here, New York will face the same obstacle: preemption by the Clean Air Act.

Does the City of New York stand a chance in appeal? In American Electric Power Co. v. Connecticut (2011), the Court noted that because the Clean Air Act displaced claims brought against domestic emitters for transboundary pollution, federal common law was preempted.[xviii]In the final paragraph of her opinion, however, Justice Ginsburg noted that the Court had previously held that a similar provision in the Clean Water Act did not preempt state common law claims.[xix]Justice Ginsburg explicitly suggested that a suit could succeed under state nuisance law.[xx]

Since then, several plaintiffs have been successful in bringing state law claims under the Clean Air Act. In Bell v. Cheswick Generating Station, for example, the Third Circuit held that the Clean Air Act did not preempt state common law claims based on the law of the state where the source of the pollution was located.[xxi]A similar decision was reached in Freeman v. Grain Processing Corp.[xxii]Now, New York City’s best chance of victory may rest in their claims of trespass and nuisance. To determine liability for trespass and nuisance, factfinders would have to consider whether emissions resulting from the combustion of Defendants’ fossil fuels created an “unreasonable interference” or an “unlawful invasion” on City property.[xxiii]

Contrary to the defendants’ arguments, imposing these tort damages on a fossil fuel producer may not upset any federal interest in providing a uniform system of regulating greenhouse emissions.[xxiv]The defendants here have not explained how compensatory awards against fossil fuel producers subject those producers to inconsistent pollution standards across states. Imposing damages liability does not necessarily create a dire separation of powers or federalism conundrum; it merely requires tortfeasors to pay for injuries caused by their products. Whether or not their products are used for some benefit here is irrelevant; they do plausibly cause a tangible harm. Even if the benefit of fossil fuels outweighs the harm in the social arena, bearing the costs of any injuries caused is simply part of any functioning marketplace. Companies that provide benefit to some but cause harm to others are subject to product liability. Perhaps fossil fuel producers should be as well. Without some sort of legal check on the fossil fuel industry stemming from outside the direct control of the federal executive branch (which has declared its aversion to regulating fossil fuel production),[xxv]the defendants will continue to reap the benefits of producing fossil fuels while cities and localities essentially subsidize the cost.

Evan Neustater is a Junior Editor on MJEAL. He can be reached at evann@umich.edu


The views and opinions expressed in this blog are those of the authors only and do not reflect the official policy or position of the Michigan Journal of Environmental and Administrative Law or the University of Michigan.

[i]See, e.g., Kivalina v. Exxon Mobil, 696 F.3d 849 (9th Cir. 2012); Int’l Paper Co. v. Ouellette, 479 U.S. 481, 492 (1987) (noting that in the absence of federal regulation, “the control of interstate pollution is primarily a matter of federal law”).

[ii]City of New York v. BP, 325 F.Supp. 3d 466 (S.D.N.Y. 2018).

[iii]Id.at 470.

[iv]Id.at 469.

[v]Id.at 471.

[vi]Id.

[vii]42 U.S.C. § 7411 (2012).

[viii]Am. Elec. Power Co. v. Connecticut, 564 U.S. 410, 425 (2011).

[ix]City of New York,325 F. Supp. 3d at 472.

[x]Tex. Indus. Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 641 (1981).

[xi]Int’l Paper Co. v. Ouellette, 479 U.S. 481, 492 (1987).

[xii]Notice of Appeal, City of New York v. BP, Case No. 18-cv-182-JFK (2018).

[xiii]325 F. Supp. 3d at 471.

[xiv]  Id., at 471-72.

[xv]Kivalina v. Exxon Mobil, 696 F.3d 849, 854 (9th Cir. 2012).

[xvi]Id. at 857.

[xvii]Id. at 856-58.

[xviii]Am. Elec. Power Co. v. Connecticut, 564 U.S. 410, 429 (2011).

[xix]Id., at 429

[xx]See Id.(“None of the parties have briefed preemption or otherwise addressed the availability of a claim under state nuisance law. We therefore leave the matter open for consideration on remand.”).

[xxi]Bell v. Cheswick Generating Station, 734 F.3d 188, 198 (3rd Cir. 2013)

[xxii]Freeman v. Grain Processing Corp, 848 N.W.2d 58, 84 (Iowa 2014).

[xxiii]Milwaukee v. Illinois, 451 U.S. 304, 348 (1981); In re Methyl Tertiary Butyl Ether (MTBE) Prod. Liab. Litig., 725 F.3d 65, 119 (2nd Cir. 2013).

[xxiv]SeeBrief Amicus Curiae of Niskanen Center in Support of Plaintiff City of New York at 2, City of New York v. BP, Case No. 18 Civ. 182 (JFK) (2018).

[xxv]See e.g.Exec. Order No. 13,783, Promoting Energy Independence and Economic Growth, 82 Fed. Reg. 16,093 (Mar. 28, 2017).

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