Western Wire

Former Interior Secretary and Colorado Attorney General Gale Norton said the national campaign for climate litigation would likely follow in the footsteps of previous tobacco litigation, with states revising their laws and lowering the standards for finding harm, in comments delivered at an energy forum last week in Denver.

Last week at a forum hosted by the Western Caucus Foundation, Norton called the recent climate litigation hypocritical, saying the contingency-fee led lawsuits are a “recipe” for even more legal action.

“Climate change litigation has moved into the Rocky Mountains,” Norton said. “Climate change debates are nothing new, but aspects of this litigation are significant.”

The climate lawsuits have been filed by cities and counties in California, New York City, Boulder and San Miguel counties and the City of Boulder in Colorado, and King County, Washington against companies such as BP, Chevron, ExxonMobil, Royal Dutch Shell, and ConocoPhillips for alleged current and future impacts due to climate change.

After her remarks, Norton spoke with Western Wire, referencing a commentary piece published in Texas Lawyer in early March that linked emerging climate litigation with precedents established in the tobacco litigation of preceding decades.

“Florida passed a law that lowered the standard that a plaintiff needed to prove to show that tobacco had injured them,” Norton said.

“The game changer for the plaintiffs in the tobacco litigation was Florida’s revision of its tort laws to lower the hurdles for individual plaintiffs to prevail in lawsuits against tobacco companies,” wrote David McCullough and Garrett A. Gibson. “Numerous states quickly followed Florida’s lead and enacted similar statutes, and within a matter of months, nearly all state attorneys general joined forces to launch a litigation campaign to recoup the rising health care costs associated with smoking.”

A federal judge in California threw out a lawsuit filed by Oakland and San Francisco last week. The municipalities were among the first to bring litigation for climate change issues.

Setbacks like the dismissed lawsuit may point advocates toward the state legislatures, according to McCullough and Gibson.

“To overcome these conventional legal hurdles, climate change plaintiffs may take a page from the tobacco litigation playbook by attempting to persuade state legislatures to enact lower causation standards,” they wrote. “Indeed, model “climate compensation acts” have already been written. These statutes are designed to allow for “aggregation” causation theories, permit lower evidentiary standards, and allow for the allocation of liability based on market-share.”

“Make no mistake, such legal changes could be a game-changer for climate change litigation just as they were for tobacco litigation. Energy companies should be vigilant of any such attempts to rewrite state tort laws,” the authors warn.

Norton said the new litigation did not simply point to alleged violations of specific statutes, such as the National Environmental Policy Act (NEPA), for example, or target the Interior Department and Bureau of Land Management. Instead, they relied on “amorphous concepts of common law, nuisance law, trespass, and negligence, things that are not passed by Congress,” according to the former attorney general of Colorado.

“Even more ominously, the financial calculus has changed dramatically,” Norton said. “The potential attorneys’ fees in the new variety of suits can be measured in the billions, not nationwide, but by city and by law firm.”

Basing climate litigation on a contingency fee model, such as the Colorado lawsuit, “enhance[s] the motivation for attorneys to file climate change suits.”

“There’s a certain hypocrisy in these lawsuits, since the cities pin all the blame on a few oil companies, while ignoring the emissions from their own bus systems and power plants,” Norton said. “But their hypocrisy is most clearly demonstrated when the cities say in the litigation in comparison with what they’ve said in their own municipal bond disclosures.”

Norton said that securities require a high degree of accuracy in their disclosures of risk.

“You have to fully disclose and be very accurate in what you’re saying in presenting those securities,” Norton said.

In February the Competitive Enterprise Institute, a think tank, filed a complaint with the Securities Exchange Commission alleging that California cities and counties may have misled potential municipal bond investors by failing to disclose or offering a different assessment of potential risk than what they allege in their lawsuits against oil and gas companies.

“How one calculates the cost of repairs 80 years from now, I don’t know,” Norton said of claims made by the City of Oakland in its lawsuit. Predictions of “Biblical flooding” abounds in the lawsuits, Norton said, while the municipality’s bond language discloses no such concerns.

“Even if flooding does happen, there’s no way to reasonably predict its economic consequences,” Norton said, quoting the bonds’ language.

The same is true for San Mateo County’s claims of catastrophic impacts in its lawsuit that is not reflected by the wording in the county’s bond offerings.

The county is “‘unable to predict whether sea-level rise or other impacts of climate change or flooding from a major storm will occur,’” Norton read, quoting the county itself.

“In many cases, it is the same public official that has signed off on both documents,” Norton said.

Courts Are Wrong Venue

“The clearest danger of climate change lawsuits is that it puts decision-making into the courtroom, instead of the state and federal executive branches,” Norton said.

“However, the courts have recognized this problem. The good news is that many lawsuits like this have been dismissed, over time and even very recently,” she continued, pointing to the recent dismissal in Oakland and San Francisco.

Norton hailed Judge William Alsup’s decision that said the matter should be addressed by the nation’s “political branches, not by our judiciary.”

Alsup’s assessment acknowledged concerns over emissions, but then cut to the heart of the question of responsibility.

“But against that negative, we must weigh this positive: our industrial revolution and the development of our modern world has literally been fueled by oil and coal. Without those fuels, virtually all of our monumental progress would have been impossible. All of us have benefitted,” Alsup wrote.

“Having reaped the benefit of that historic progress, would it really be fair to now ignore our own responsibility in the use of fossil fuels and place the blame for global warming on those who supplied what we demanded? Is it really fair, in light of those benefits, to say that the sale of fossil fuels was unreasonable?” Alsup asked in his decision.

Despite the decision by Alsup in the pair of California cases, Norton said she remained troubled by the prospect of the other climate lawsuits, given her experience with the earlier tobacco lawsuits.

Norton described her work as Colorado’s attorney general from 1991 to 1999, where nearly 2 years of her tenure dealt with tobacco lawsuit settlement negotiations. Motivation for the lawsuits came

“Many of the states, the attorneys general who were involved with that litigation, signed up for contingent fee agreements, and out of those agreements, those plaintiffs’ attorneys obtained billions of dollars,” Norton said. Colorado did not go that route, she said, using in-house counsel.

“We were not going to pay those kinds of contingent fees,” Norton said.

“One of the law firms involved in that litigation was Hagens-Berman,” Norton said. Hagens-Berman Sobel Shapiro is representing San Francisco and Oakland’s lawsuit, and is also representing New York City in its ongoing climate litigation.

“The guy from Hagens-Berman only talked if the issue was attorneys’ fees. He never contributed anything else,” Norton said.

Motivation in the lawsuits matters, Norton argued.

“If you think about how many lawsuits are filed today by environmental groups, think about those lawsuits being fueled by attorneys who have the opportunity to gain billions of dollars,” Norton said.

“They represented Oakland and San Francisco, not too successfully, but they had an over 20 percent contingent fee contract with those jurisdictions,” she added.

“The lawsuits went on and on and on. There were decades and decades of litigation” before the tobacco settlement. The same is true in the climate change lawsuits despite an initial lack of success.

“They are keeping up the drumbeat, they are signing up more and more local communities,” Norton warned. She said the promise of large financial windfalls as a result of successful litigation down the road, with no upfront costs, so the plaintiffs’ attorneys argue, is a real selling point to the communities. The possibility that the municipalities or counties may still be on the hook if the lawsuits fail, however, is not always acknowledged.

“That’s a great recipe for lots and lots of litigation,” Norton concluded.