Climate Change Litigation: Ripe for Growth?

For some time, the U.S. energy industry has feared the prospect of large-scale climate change litigation (CCL) that seeks to link emissions of greenhouse gases (GHG) to global warming. Thus far though, only a handful of such suits have been filed, and none has yielded any judgments against the energy industry. This begs the question of whether the energy industry can now stop worrying about CCL.

The answer is a resounding "No!" The CCL threat is far from over. The current state of CCL is akin to that of a toxic mold spore lying dormant in a basement. While harmless in its dormant state, if more favorable conditions are introduced, it can activate and experience explosive growth in a very short period. So it is with CCL.

CCL has the potential to explode out of its dormancy.

Current Major Lawsuits

Currently, three major federal climate change lawsuits are pending. Two cases, Connecticut v. American Electric Power (AEP) and Comer v. Murphy Oil USA, Inc., were dismissed at the trial court level on political question grounds and now are on appeal. The AEP case involves public nuisance claims brought by eight states against electric power companies based on their emissions. The Comer case is a class action lawsuit in which the plaintiffs allege that emissions from energy companies magnified weather events, including Hurricane Katrina. The third case, Native Village of Kivalina v. ExxonMobil Corp., is at the motion to dismiss stage in a California federal court. The plaintiff is an Alaskan village alleging that emissions from energy companies have contributed to global warming, resulting in erosion and threatening the village’s existence.

Signs of Rampant Growth Ahead

Without question, these suits have met with little success thus far. But there are signs that more favorable conditions are on the horizon and that when they arrive, CCL has the potential to explode out of its dormancy and present a serious threat to the energy industry. Here are some of the signs:

  • The AEP and Comer suits are still pending in appellate courts. Inexplicably, the AEP suit has been pending for almost four years and the Comer case for almost two. A cynic would claim that the longer it takes these appellate courts to issue decisions, the more likely it is that they will reverse the trial courts’ dismissals, given that the political atmosphere and the science have changed quite a bit since these cases first arose. The same is true with regard to Kivalina, which contains a conspiracy count that counsel for the plaintiffs believe will inoculate their suit against dismissal on political question grounds.

  • Though it is not a true climate change suit, the decision in the recent case of State of North Carolina v. Tennessee Valley Authority (TVA) provides a boost to CCL. The court’s ruling declared that TVA’s emissions are a public nuisance, despite compliance with all applicable regulations, and ordered the TVA to install $1 billion in pollution controls. In particular, the court found that air emissions contributed to significant negative impacts on human health and the environment. Some of these impacts are not that different from the environmental harms alleged in AEP, Comer, and Kivalina. This case could be the model of what CCL will look like in the near future.

  • A 2009 report issued by insurer Swiss Re compared CCL to asbestos litigation and noted that asbestos claims were routinely dismissed in the 1950s, but by the late 1960s, they had become successful. The report stated that "[w]e expect… climate-change-related liability will develop more quickly than asbestos-related claims, and believe the frequency and sustainability of climate change-related litigation could become a significant issue within the next couple of years."

  • In April 2009, the Environmental Protection Agency (EPA) issued a proposed endangerment finding that would allow the regulation of carbon dioxide. This finding stated that GHG emissions from motor vehicles "cause or contribute" to air pollution, which "may reasonably be anticipated to endanger public health or welfare." More importantly, it recognizes that GHG pollution does not endanger health directly, but that it causes indirect harm and that this is enough to result in "endangerment." Many predict that this proposed finding, if enacted, will be used in countless lawsuits going forward, and that it represents only the tip of the iceberg as far as additional administration actions to come.

  • The U.S. Supreme Court’s 2007 decision in Massachusetts v. EPA held that even an agency’s refusal to take a "small incremental step" that would result in only a modest reduction in worldwide GHG emissions can be challenged in a lawsuit. This has caused many to take CCL much more seriously.

The Need for Awareness

It would be a mistake for the energy industry to ignore the threat posed by CCL. As the Swiss Re report notes, it is not a matter of if CCL will cease to be dormant, it is only a question of when. Given that the conditions are quickly becoming ripe for growth, the toxic CCL spore could activate at any time and become a menace in very short order.

—R. Trent Taylor (rtaylor@mcguirewoods.com) is a partner in the toxic tort and environmental litigation department as well as the climate change practice group in the law office of McGuire Woods LLP in Richmond, Va.