Ninth Circuit Displaces Kivalina v. ExxonMobil Climate Change Liability Case

by McCarter & English: Climate Change & Renewable Energy
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[author: J. Wylie Donald]

In litigation concerning liability for the emission of greenhouse gases, the federal common law of nuisance is displaced by the Clean Air Act.  This is not news.  It was established by the Supreme Court over a year ago in American Electric Power v. Connecticut, 131 S. Ct. 2527 (2011). This morning, the Ninth Circuit Court of Appeals acknowledged the rule and applied it to the plaintiffs in Native Village of Kivalina v. ExxonMobil Corp. ("Opinion") and affirmed the dismissal by the Northern District of California.  See Native Vill. of Kivalina v. ExxonMobil Corp., 663 F. Supp. 2d 863 (N.D. Cal. 2009).

In a nutshell, a native Alaskan village on the shores of the Chukchi Sea brought suit against electric utilities, oil companies and one coal company.  The complaint asserted the defendants are responsible for excess emissions of greenhouse gases, which have led to global warming, which has resulted in delayed formation of arctic sea ice and early melting of the ice, which has accelerated the erosion caused by winter storms.  The plaintiffs sought damages for the cost of relocating their village.  See Opinion 11648-49. 

The Court of Appeals dutifully explained the federal common law of nuisance and the doctrine of displacement.  Plaintiffs had hoped to avoid the application of American Electric Power by arguing that it was a case about injunctive relief.  Kivalina was different:  the plaintiffs there sought damages.  The Court was unmoved.  It stated simply:  “under current Supreme Court jurisprudence, if a cause of action is displaced, displacement is extended to all remedies.”  Opinion at 11655.  It did not matter that EPA had not acted before the damage was incurred; "Congressional action, not executive action, is the touchstone of displacement analysis.”  Opinion at 11656.  Nor did it matter that the Court’s decision would be applied retroactively.  Id

The concurrence (Judge Pro of the District of Nevada, sitting by designation) was not as unequivocal as the Court, and explicated a tension between the Supreme Court’s rulings in Middlesex County Sewerage Authority v. National Sea Clammers Ass’n., 453 U.S. 1, 4 (1981), and Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008).  Middlesex expressly stated that “where a federal common law nuisance claim for injunctive relief is displaced, a federal common law nuisance claim for damages claim likewise is displaced”, but, according to Judge Pro, Exxon’s “overall holding suggests that severing rights and remedies is appropriate as between damages and injunctive relief in some circumstances.” Opinion at 11663, 11665. In the end, however, Judge Pro agreed that the doctrine of displacement shuts the door on federal common law claims for nuisances allegedly caused by greenhouse gas emissions whatever remedy is sought.

More interesting and of more moment we think are two points made by the concurrence; the first will give heart to greenhouse gas plaintiffs, while the second may empty their sails.

Judge Pro acknowledged that the Supreme Court’s decision and the 9th Circuit’s decision did nothing to affect the plaintiffs’ state law nuisance claims.  He wrote:

Once federal common law is displaced, state nuisance law becomes an available option to the extent it is not preempted by federal law. AEP, 131 S. Ct. at 2540 (“In light of our holding that the Clean Air Act displaces federal common law, the availability vel non of a state lawsuit depends, inter alia, on the preemptive effect of the federal Act.”). The district court below dismissed Kivalina’s state law nuisance claim without prejudice to refiling it in state court, and Kivalina may pursue whatever remedies it may have under state law to the extent their claims are not preempted.  Opinion at 11671.

We predicted this next phase when the case was argued back in November of last year.  Accordingly, the Kivalina case is not dead yet.

However, judicial skepticism of climate change plaintiffs’ current liability theories is expanding.  Judge Guirola, in Comer v. Murphy Oil USA Inc in the Southern District of Mississippi, was dubious of the causation story:  “the tenuous nature of the causation alleged is readily apparent at the pleadings stage.”  Judge Pro went one further:

Kivalina has not met the burden of alleging facts showing Kivalina plausibly can trace their injuries to Appellees. By Kivalina’s own factual allegations, global warming has been occurring for hundreds of years and is the result of a vast multitude of emitters worldwide whose emissions mix quickly, stay in the atmosphere for centuries, and, as a result, are undifferentiated in the global atmosphere. Further, Kivalina’s allegations of their injury and traceability to Appellees’ activities is not bounded in time. Kivalina does not identify when their injury occurred nor tie it to Appellees’ activities within this vast time frame. Kivalina nevertheless seeks to hold these particular Appellees, out of all the greenhouse gas emitters who ever have emitted greenhouse gases over hundreds of years, liable for their injuries.  Opinion at 11675. 

To be sure, the Supreme Court approved an action by various States to challenge EPA’s failure to regulate greenhouse gases.  See Massachusetts v. EPA, 549 U.S. 497 (2007).  But “[i]t is quite another [thing] to hold that a private party has standing to pick and choose amongst all the greenhouse gas emitters throughout history to hold liable for millions of dollars in damages.”  Opinion at 11676. Judge Pro would have dismissed the case on standing grounds as well.

Finally, notwithstanding our foresight above, it is rarely worth getting out the crystal ball to predict the outcome of a case or cases.  If we could do that with any reliability, we wouldn’t be sitting at this keyboard.  So rather than a prediction, we think offering some context is appropriate.  Will states be receptive to climate change liability suits as currently cast?  We are skeptical.  The environmental organization, Our Children’s Trust, orchestrated over a dozen lawsuits seeking to force state regulators to address greenhouse gas emissions.  With only one exception (New Mexico), those cases have been dismissed in jurisdiction after jurisdiction (Alaska, Arizona, Colorado. Minnesota, Montana, Oregon, Texas, Washington and the District of Columbia).  And even in the case that is moving forward, all the court permitted was an action to pursue whatever recourse was in place under current law, which is no more than the Supreme Court ruled in Massachusetts v. EPA.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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