Minn. Big Oil Climate Suit Follows Big Tobacco Blueprint

Zelle LLP

Zelle  LLP

January 4, 2022

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When Minnesota's Attorney General Keith Ellison announced in June 2020
that his office had filed a climate change lawsuit, the litigation strategy he
described was relatively novel for a climate change case.

Rather than suing the petroleum industry for causing climate change,
Minnesota sued the American Petroleum Institute, ExxonMobil Corp. and
three Koch Industries entities for allegedly engaging in a campaign to
deceive Minnesotans about the links between climate change and fossil

The theory behind Minnesota v. American Petroleum Institute is that the
petroleum industry has known since the 1950s, based on research by its
own scientists, that the use of fossil fuels was causing climate change.

But rather than alerting the public about the dangers of using their
products, the defendants — and particularly the API, which is the largest
oil and gas trade association in the U.S. — buried the evidence and
mounted a public relations and marketing campaign to undermine the
science of climate change and persuade consumers to dismiss concerns
about the use of fossil fuels.

The complaint includes excerpts from statements by the industry's own
scientists warning that the unabated use of petroleum products would cause dramatic environmental impacts. It also includes images from industry advertisements casting doubt on those predications, including one with a cartoon image of a beleaguered chicken under the caption, "Who told you the earth was warming ... Chicken Little?"

The state filed its lawsuit in Ramsey County District Court, asserting claims based entirely on state law — specifically, on Minnesota statutes prohibiting consumer fraud, deceptive trade practices, false statements in advertising and Minnesota common law.

The state's complaint asked the court to enjoin further violations of Minnesota law, order the defendants to pay restitution for harms allegedly suffered by Minnesotans because of past violations, and order the defendants to fund a public education campaign to correct misunderstandings about climate change allegedly caused by their marketing and public relations efforts.

Since the case was filed it has been snarled in procedural issues. The defendants immediately removed the case from state court to the U.S. District Court for the District of Minnesota, presumably because federal courts are widely perceived as more friendly to oil and gas interests.

But in March 2021, the federal court rejected all the defendants' arguments that the case should be heard in federal court, and remanded it to state court. The defendants appealed, and asked the federal judge to stay his remand order while the appeal was pending. In August 2021, the judge granted that request.

The result of the stay is that the case is in limbo until the U.S. Court of Appeals for the Eighth Circuit decides which court should hear it. The parties have not yet reached any of the substantive issues in the case, and there's no telling when they might get the chance to do so, because the timeline for the appeal is uncertain — so uncertain, in fact, that the district court said it would reevaluate the stay if the appeal is not resolved within 12 months.

While the litigation in Minnesota v. API may be on hold, the strategy behind the lawsuit is gaining traction elsewhere. In September 2021, the state of Vermont brought a lawsuit under Vermont's consumer protection laws, alleging that the petroleum industry's marketing deceived Vermont consumers about the climate impacts of fossil fuel use.

Congress has also taken up this line of inquiry. On Oct. 28, 2021, two congressional committees held a joint hearing to examine the fossil fuel industry's campaign to spread disinformation about the role of fossil fuels in causing global warming. The hearing was a follow-up to letters requesting internal documents relating to the industry's public relations efforts, to which the industry responded by providing documents already available to the public.

Lawmakers were clearly not satisfied. Following the hearing, Rep. Carolyn Maloney, D-N.Y., chair of the House Committee on Oversight and Reform, announced that her committee would step up the pressure by issuing subpoenas demanding the production of internal documents not previously provided.

Minnesota's lawsuit has also drawn comparisons to the landmark tobacco litigation of the 1990s. The state's 1994 lawsuit against the tobacco industry in Ramsey County District Court, Minnesota v. Philip Morris, alleged a 50 year conspiracy to defraud Minnesotans about the hazards of smoking, and sought money for, among other things, a corrective public relations effort. It was the only state case against the tobacco industry that went to trial.

The state succeeded in getting access to 35 million pages of previously secret tobacco industry documents, and prevailed over the defendants after a 15 week trial. The case eventually led to the $206 billion master settlement between major tobacco companies, 46 U.S. states, the District of Columbia and five U.S. territories, which is still the largest legal settlement in history.

Rep. Ro Khanna, D-Calif., chair of the House Oversight Committee on the Environment, compared the questioning of oil industry executives before his committee to the 1994 interrogation of tobacco executives about the addictive characteristics of their products. Tobacco executives denied knowing that nicotine was addictive — despite the industry's internal research showing the opposite — fueling a backlash that helped contribute to the eventual settlement.

Minnesota insiders who worked on the tobacco case have recognized the parallels, and Ellison has been vocal about them as well. In October 2019, a year before the filing of Minnesota v. API, at an event at the University of Minnesota Law School, Ellison recalled Minnesota's successful tobacco litigation, and suggested that climate change litigation could follow the same pattern.

Placed in context, Minnesota v. API is another creative attempt by motivated plaintiffs to broadly hold carbon majors accountable through litigation. Like Massachusetts v. ExxonMobil, first filed in Massachusetts Superior Court in 2019, which added a viable state securities angle to climate change lawsuits, it opens another litigation front — greenwashing and deception — against carbon majors.

These two new angles follow the more traditional nuisance lawsuits, which have stalled as the parties await the outcome of the U.S. Court of Appeals for the Fourth Circuit's Baltimore v. BP PLC remand decision.

The skirmishing around whether climate change lawsuits will be heard in federal or state court — years after the lawsuits commenced — confirms the high stakes in these cases, and the gravity of the lawsuits. That these lawsuits have not been dismissed for standing like the first wave climate change lawsuits, including Comer v. Murphy Oil USA Inc. and Kivalina v. ExxonMobil, is also significant.

Clearing the obstacle posed by Federal Rule of Civil Procedure 12(b)(6) may represent confirmation of the widely held belief that it is only a matter of time before one of these lawsuits is successful. It also confirms that improved attribution science supporting the lawsuits narrows the likelihood of motion practice success by defendants.

As attribution science continues to advance, other substantive defenses may be limited, and new causes of action may also become viable. The trend must also be seen in the context of evolving public opinion, and an increased call for accountability and climate justice.

Lawsuits like these will continue and evolve until there is a policy solution to climate change. The danger of creating policy through litigation may have unforeseen consequences for carbon majors and their liability insurers.

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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