California cities and counties can sue oil companies in state court, under federal appeals court rules

Local governments in California can sue major oil companies in state court for contributing to climate change by selling fossil fuel products and allegedly misleading the public about their harmful effects, a lawsuit ruled on Tuesday. federal appeals court.

The lawsuits, filed in 2017, seek substantial damages from more than 30 companies that profit from products contributing to rising temperatures and sea levels, which cities and counties say forces them to spend more for dykes and other protections. The plaintiffs are the counties of San Mateo, Marin and Santa Cruz and the cities of Richmond, Santa Cruz and Imperial Beach (county of San Diego).

Local governments sued in state court under California law allowing damages for “public nuisance,” private actions that harm public health. The companies want the case to be heard in federal court, where judges can review state laws, but are generally less receptive to such laws than state courts and are more likely to dismiss such lawsuits.

U.S. District Judge Vince Chhabria of San Francisco and the U.S. Ninth Circuit Court of Appeals initially ruled that the lawsuits raised no issues of federal law and belonged in state court. Last year, the Supreme Court asked the appeals court to reconsider its decision after ordering another court to consider possible federal issues in a similar lawsuit brought by the city of Baltimore. On Tuesday, the Ninth Circuit panel said it reviewed all applicable federal laws and came to the same conclusion.

The lawsuits allege that “the unlawful conduct of oil companies in the production, sale and marketing of fossil fuels contributes to global warming and sea level rise, which has resulted in property damage and other injuries.” in cities and counties, Judge Sandra Ikuta said in the 3-0 decision. While the companies produced some of the oil as federal government contractors or on federal lands, Ikuta said, they did not carry out government orders or policies, and none of their actions involved the federal laws.

A similar suit brought by San Francisco and Oakland was dismissed in 2018 by U.S. District Judge William Alsup of San Francisco, who dismissed state law enforcement and said regulation of fuel production was a question for policymakers, not federal judges. The same appeals court panel reinstated the case in 2020, the Supreme Court dismissed the companies’ appeal review and the suit is back in front of Alsup.

According to plaintiffs and environmental groups, every other federal court that has considered the issue, including two other appeals courts, has come to the same conclusion: that local governments are not trying to regulate oil companies, but only to recover compensation for actions that violate state laws and harm the public.

“It is time to go to court to hold these defendants accountable for misleading consumers about the harms associated with the use of their products, and to protect our taxpayers from having to bear the enormous costs resulting from this deception.” , said a statement from Marin. and the counties of Santa Cruz and the cities of Santa Cruz and Imperial Beach.

Richard Wiles, president of the nonprofit Center for Climate Integrity, said the decision was “a major victory for these California communities seeking to take legal action against polluting companies that have spent decades lying about the role of their products in fueling the climate crisis”.

Chevron, the main defendant, criticized the decision.

“The plaintiffs’ claims are based on allegations about global carbon emissions and address global climate change – domestic and international issues that can only be regulated by federal, not state, law,” said Braden Reddall, gatekeeper. -word of the oil giant based in San Ramon. “Although the court has decided that plaintiffs’ claims at this time can go beyond this preliminary stage, Chevron looks forward to additional challenges that should bring this meritless lawsuit to a speedy conclusion.”

Arguing that the case involved federal laws and could be heard by a federal judge, the companies noted that some of their drilling was taking place on the outer continental shelf, federally regulated coastal waters. But the court said the local governments did not claim any damage to the plateau or its land, just damage caused by the products of the drilling.

The companies also said some of their actions were at the direction of federal officers, like Navy officials who contracted with CITGO to supply oil to 40 naval facilities, and set the terms of a 1994 agreement with Standard Oil Co. for petroleum distribution. products from the Elk Hills Oil Field in Kern County. But Ikuta said the companies are engaged in an “arm’s length business relationship” that does not place them under government control or subject them to federal law.

Citing a 1934 Supreme Court decision, she said, “Respect for the legitimate independence of state governments means that remand laws (transferring cases to the Federal Court) must be interpreted strictly.

Bob Egelko is a writer for the San Francisco Chronicle. Email: [email protected]: @BobEgelko

Bernard P. Love