Litigation Update: Climate Lawsuits and Status at the U.S. Supreme Court

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Ryan Lacey:  Hello, and welcome to this Federalist Society Webinar. This afternoon, Wednesday, April 24, we have "A Litigation Update on Climate Lawsuits and their Status at the U.S. Supreme Court." My name is Ryan Lacey, and I'm an Associate Director of the In-House Counsel Network at The Federalist Society. As always, please note that all expressions of opinion are those of our expert on today's call.

 

      Today, we are fortunate to have an excellent speaker in Theodore Boutrous, who I will introduce very briefly. Ted is a partner in the Los Angeles and D.C. offices of Gibson, Dunn & Crutcher, and is co-chair of the firm's Appellate and Constitutional Law Group, its Crisis Management Group, and the Transnational Litigation and Foreign Judgements Group. He is a member of the firm's Executive and Management Committees. He received his law degree from the University of San Diego and his bachelor's from Arizona State University.

 

      After our speaker gives his opening remarks, we will turn to you, the audience, for questions. If you have a question, please enter it into the Q&A feature at the bottom of your screen and we will handle your questions as we can towards the end of this afternoon's program. With that, thank you for being with us today. Ted, the floor is yours.

 

Theodore J. Boutrous Jr.  Thanks so much, Ryan. It's great to be with you to talk about these important issues. As you mentioned, I've been handling these climate change cases, representing Chevron in the cases, but also playing a leading role in arguing the key motions in legal questions. And we now have a cert petition pending in the Supreme Court. I'm going to go into detail on that in a second. But I thought it would be helpful to set the stage a bit with a little of the history behind these climate change cases and how we got to where we are. 

 

The climate change tort movement is not new. It really started almost 20 years ago. And plaintiff's lawyers for states and municipalities and some private individuals started bringing cases in federal court, arguing that there should be a federal common law tort claim for climate change damages that cascade, allegedly, from the greenhouse gas emissions. One of the first cases was the General Motors case filed in the Northern District of California, a case I handled back in the early 2000s, so I've been at this a while. 

 

It was a case brought by the State of California against all major automakers. And the district court there rejected the claims, finding that they were political questions. They were unmanageable. They raised questions of policy, seeking to hold the automakers liable for climate change and the effects of climate change, based on greenhouse gas emissions around the world. The court said that's just not something the courts should be tackling, nor can they, in any rational way. 

 

There was the Kivalina case, which was percolating around the same time, against the energy companies, including many of the companies who are now being sued in this latest round of litigation, again, in federal court.  The district court and the Ninth Circuit rejected the claims on various grounds, including Political Question, and including the grounds that federal common law could not be applied here. And it relied on the AEP case, the American Electric Power case, from the Supreme Court, which was the case against the five power plants brought by a number of states and municipalities. 

 

And in the Supreme Court, Justice Ginsburg wrote, for a unanimous Court, that this was an area of federal law, but it's an area of federal law that Congress, via the Clean Air Act, has given the EPA authority over. And the Court emphatically said that judges — there, they were talking about federal judges, but focused on the fact that judges can't engage in these important policy questions that include science questions, complex technological questions, the fact that one judge would be, basically, determining how high emissions can and should be, how much oil and gas should be used, how much power should be generated.

 

And the Court said these are issues of complex balancing and international and national issues of policy and they're committed to the EPA under the Clean Air Act and rejected the claims in that case. They were seeking an injunction. And in Kivalina, they sought damages. The Ninth Circuit came out the same way. And so, once the AEP case was decided in 2011, it took quite a while for the plaintiff's bar to come up with a new theory. But they did. They had a meeting in La Jolla, California, a nice locale, where they came up with the idea of filing in state court under state law, making state law claims of nuisance, trespass, negligence, failure to warn, and the like.

 

But it took them a while. I think it was about seven or eight years before they launched this effort, but they launched it with a vengeance. And so, we saw the first few cases filed in California. And then it spread like wildfire through the country with cases filed around the country. We're now up to, I think, 34 cases brought by cities, counties, and states, from Hoboken to San Francisco to New York City, which I'll come back to in a second. So, it's a barrage of lawsuits, all seeking to impose damages for the same thing, all seeking to impose damages for injuries allegedly caused by the effects of interstate and international greenhouse gas emissions on the global climate.

 

So, it's a truly global case. And we originally tried to remove the cases to federal court on the theory that this is an area of exclusive federal domain when you're talking about interstate and international pollution of water and gas. And that's what the EPA has called "greenhouse gas emissions." And the courts ultimately rejected those efforts. There's still a couple of removal issues percolating along. But, right now, we're back in state court around the country, litigating the merits of these issues. And it's refreshing to get to the merits because every time a court in the federal system has looked at these issues, from one angle or another, state or federal, they've rejected these claims.

 

There's one outlier. And that is the Hawaii Supreme Court and the Hawaii Trial Court. So, that's where we are. On the merits, the Second Circuit, in the City of New York case several years ago, in one of the early cases filed in this round of litigation, filed in federal court under diversity jurisdiction, so we didn't have the removal issues. In the district court, and in the Second Circuit, we prevailed. The district court, Judge Keenan, and the Second Circuit both held that even though the claims that New York brought were labeled under state law — nuisance, trespass, and the like — federal law governs the area of interstate and international air and water pollution, so that federal law was the only potential source for their claim.

 

The court noted that the Supreme Court, in a virtually unbroken string of cases, had held that where we’re talking about air and water and interstate and ambient state, that's an area that only federal law can govern. There's a uniquely federal interest. There's a series of cases: Milwaukee I, Milwaukee II, and the Ouellette case, which is a preemption case under the Clean Water Act, where the Supreme Court has said, over and over again, this is a unique area because, for example, air is traveling across state boundaries. 

 

I don't think the Court, until AEP, envisioned that someone would bring a case seeking damages for air around the globe and alleged emissions around the globe mixing and heating the atmosphere and then causing damage back in their particular jurisdiction. But that's what these cases are. The Second Circuit found that if there's a source of law for that kind of claim, it's federal. And the Clean Air Act had displaced federal common law claims. That's what the Supreme Court held in AEP.

 

And then, the Court also said that the international focus of the claims made the claims still subject to common law, if anything, but that federal courts could not, consistent with the separation of powers, start making tort claims that would have an impact on foreign policy, foreign relations, and foreign countries. And so, the court rejected those claims squarely in City of New York. State law cannot be used, the court held. And let me stop there to explain the substance of the claims, because it's really interesting how they've evolved.

 

In the early litigation that I mentioned, the federal litigation, the focus was first on the emitter, so, the power plants in the northeast. Then, when those claims were rejected, there was another wave of cases. I mentioned the automakers. So, they were being sued because they manufactured vehicles that people would buy and then put gasoline in them and then consume the gasoline, creating emissions around the country and around the world, heating the atmosphere and causing damage back in California.

 

The energy companies, the oil and gas companies, were sued under a similar theory that they sold this product. It caused this harm. There were emissions that flowed from it. When we went into the removal battle, the plaintiffs, I think, knew that the more they focused on production and straight-up the activities that generated the emissions, shifted their theory to say, "Oh, we're not trying to regulate emissions. We're only focusing on alleged misrepresentation and deceit in marketing oil and gas and failure to warn."

 

We still don't know exactly what they mean by "failure to warn." But the closest I can tell is they think there should be a label on the gas pump that tells a consumer "Consuming this gas will contribute to climate change and climate change will have these effects." It's never been very clear. But they've steadily narrowed down the liability basis of their thinking to focus on this notion, that oil and gas companies knew for decades that the consumption of fossil fuels can contribute to climate change and is the "main driver," in their words, of climate change.

 

I'm accepting all their allegations are true for this webinar as if it's a motion to dismiss hearing, since we've been having a lot of those, and that the companies didn't warn the public or governments or other countries or people around the world, and, at the same time, they committed the cardinal sin of engaging in free speech by marketing their products, trying to persuade people to buy them. And, also, more importantly, their complaints are filled with allegations. And the complaints are basically all the same, at this point.

 

The claim is that there were misstatements and false depictions of climate change and its effects, in public, meant to influence the public and, in turn, to derail regulation, to derail treaties, and to stop legislation and public policy actions that would have curtailed consumption of fossil fuels and curtailed climate change. So, those are the complaints. For example, with Chevron, they never point to a single false statement that Chevron has made anywhere. It's all very generic. 

 

But it raises significant First Amendment issues because the Noerr-Pennington doctrine, for example, provides absolute protection for public speech meant to influence Congress or policymakers. We haven't quite got to a real First Amendment ruling in the case. But we're starting to really delve into the merits of those issues in the motions we're arguing. But the theory is — I think it's outlandish — that under state law, whatever the labels, they have nuisance, trespass. Whoever heard of trespass by speech? No case has ever held it. The state law cases they're relying on don't really come close to recognizing the kind of torts they're seeking.

 

But the theory is that these companies — plus API, the American Petroleum Institute, which was the main lobbying arm for the industry — increased the levels of consumption around the United States and around the globe, based on their speech or based on their failure to warn, around the United States and around the world, to levels that, for example, New Jersey, where we just had arguments on the motions to dismiss in Trenton, beyond levels of emissions that New Jersey thinks would be reasonable.

 

And so, it really is a classic example of New Jersey seeking to apply its tort law on failure to warn, on the trespass and nuisance, in a way that would, first of all, regulate emissions around the globe. Because their theory is that this speech has increased emissions to unreasonable levels. And they're saying that the failure to warn law — which we don't think gives them a cause of action under New Jersey law — should be interpreted to mean that New Jersey can basically control and regulate the speech of these companies around the globe, require them to give warnings around the United States and around the globe. 

 

So that's their theory. The only case that has come close to recognizing that that's a viable role for state courts is the Hawaii Supreme Court. It rejected our arguments. It squarely rejected the City of New York case. It said, "this is just a case about misrepresentation and deceit. It's not about emissions." It said that on the one hand. But then, in the next breath, it noted that the damages that Honolulu is seeking is based on global emissions and their effect on the atmosphere and the effects of climate change on Honolulu and the citizens of Hawaii.

 

Their claims there, like City of New York, claimed deceit and deception increased emissions somehow, and that these companies should therefore be held liable for all the consequences of climate change that they say flowed to Hawaii and to Honolulu. And I should say all these jurisdictions are massive consumers of the very products they're suing over. Oil and gasoline and fuel for jets, all those things, are super important to Honolulu and to Hawaii. And it's the same thing with the others who were suing. They're significant participants in the activities that they say are creating a nuisance.

 

And they're also entities that had full knowledge, based on the science from the IPCC, the U.N. body of scientists who, since 1990, had been putting out reports about climate change. The federal government has been announcing and dealing with climate change since the '60s. Lyndon Johnson made a proclamation. He had a science council that talked about the very dangers and risks that the plaintiffs say were being secretly withheld by the energy companies.

 

But the Hawaii Supreme Court found that, because it was a deception case, and because the Clean Air Act had displaced federal common law, that meant there was room for state law. And, therefore, there could be state causes of action along the lines that I just mentioned. And it said it disagreed with the City of New York case, that the Second Circuit was wrong, that when the Second Circuit held state law doesn't spring back to life when the federal government passes a statute that regulates the very activities that the state cause of action and the federal common law cause of action would have targeted. And so, the Second Circuit got it wrong.

 

So, we have a clear split between the Hawaii Supreme Court and the Second Circuit on these important issues. And, just to pause there on the Clean Air Act, it's really crucial to our point here — and I think for all of you who want to look at these issues more closely — we're not arguing that individual states have no role in climate change and climate change regulation. And the Clean Air Act itself says states have a role. It's very clear, just like the Clean Water Act.

 

The Clean Air Act says that the states should play a role in regulating and dealing with pollution and greenhouse gas emissions within their borders, so, emissions that emanate, say, from Delaware. Delaware can seek to restrict emissions. It can impose stricter standards than the Clean Air Act, under certain circumstances. Moreover, under the Clean Water Act and the Clean Air Act, the Supreme Court has indicated, and courts have held, that one state — say, Delaware — could sue under New York law for emissions that are happening in New York and causing damage in Delaware.

 

So, this is where the federalism principles come in. Because the Second Circuit focused on federalism issues. The Supreme Court, in AEP, and in Milwaukee I and Milwaukee II, focused on federalism issues because, as I mentioned, when Hawaii seeks to impose obligations to warn and to restrict speech in every other state, it's intruding on the interests of those other states. We have twenty states, I believe, have filed an amicus brief in support of our cert petition, along with nine other very compelling amicus briefs that are advocating cert. And they're real federalism issues. 

 

One of the cases we use for our merits argument — and it's in our cert petition — is the Franchise Board v. Hyatt, where Justice Thomas, for the Supreme Court, wrote a very, I think, helpful opinion for us, saying that the Constitution implicitly restricts the power of one state to do things, either to another state or to take actions that would intrude on the prerogatives of another state. We all know that when the states decided to band together into a federal system, they each gave up some power. And Hyatt said that's implicitly baked into our constitutional structure.

 

The Supreme Court, in AEP, said that the basic scheme of the Constitution says that states really shouldn't be trying to regulate this, international and interstate emissions, and pollution. That's an area for "meat for federal governance," in the words of Justice Ginsburg. And that doesn't mean that there's a federal cause of action. It just means that if there's going to be a law, or going to be a rule, it's uniquely federal, and it has to emanate from the federal government.

 

So, we have this split. It's very clean. In our cert petition we argue that now is the time for the Supreme Court to weigh in, because there are more than 30 of these cases that have been filed up and down the United States, across the United States, in Hawaii. And it's the sort of chaotic situation that the Supreme Court has warned of. I mentioned the Ouelette case, which was a Clean Water Act nuisance case.

 

And the Supreme Court said that one state can't apply its own law to pollution coming in from a different source state, because that could intrude on the source state's establishment of emissions standards and the like. And the Supreme Court, in Ouellette, and in many other cases, including BMW v. Gore, has said that civil damage awards, compensatory and punitive damages, have a regulatory effect. They are meant to change behavior.

 

And, here, the plaintiffs resist the notion, but it's absolutely clear that their lawsuits — even taking them at their word that it's about the speech and the marketing and the failure to warn — they are seeking to either stop speech or require speech, around the United States and around the globe, in order to reduce emissions levels that each of these municipalities, under their own state law, say are too high. And they're doing that in a way that intrudes on, say, the interest of the 20 states that filed an amicus brief in support of us.

 

And if North Dakota thinks there should be no warnings on oil and gas — which there aren't, anywhere — if they think that production is important, that wouldn't matter. New Jersey's law would apply to require these companies to give warnings, to change their speech, in those jurisdictions like North Dakota. So, it's a real graphic example of where state law cannot be used. And the Supreme Court, in cases that we cite like Texas Industries and the pollution cases, make this very point.

 

It's not so much that federal common law creates the cause of action. It's that our constitutional structure says that state law just cannot be used to seek damages based on the same activities, over and over again, that are international and interstate in nature. So, we are asking the Supreme Court to take these cases — this case, the Honolulu case — before there are years and years and decades of litigation on these issues. And now is the perfect time. There's a conflict. The issues are clearly important. The lawsuits flout and contradict federal energy policy. The Biden administration has been very strong, encouraging production.

 

We have to, for our national security needs, for our economy, to live our daily lives, we need to keep producing energy while policies are developed to address climate change. It's an important issue. But it's not something that the courts are equipped to address. And so, the cert petition says now is the time. We've got great amicus support. We believe the Hawaii Supreme Court decision is just a complete outlier. For those of you who are interested, you should check out the dissent from the Hawaii Supreme Court. It's sort of a gratuitous dissent — it actually was a concurrence, so, really gratuitous — that really attacked the U.S. Supreme Court justices for supposedly not adhering to precedent, just out of the blue. 

 

And the court in Hawaii rejected the personal jurisdiction arguments. But the concurrence focused on personal jurisdiction in a pretty ad hominem opinion. So, we also point to the fact that -- maybe I’ll just make a footnote here. It's really ironic because, in these cases, the argument is, these energy companies — private companies producing lawful products that are vital to modern life — supposedly had this secret knowledge, and they were the only ones who knew this information. And, if they had just been warning, then climate change would have been reduced. More statutes would have been passed.

 

There's another set of lawsuits suing the federal government for the same arguments, that the federal government had all this information, and it didn't do enough. And so, it really is, I think, a mess of novel tort theories, outlandish tort theories that intrude on interests of federalism and clash with the Clean Air Act, clash with the federal powers in this area. And we think it's really ripe for Supreme Court review. We also do have other cases percolating in the system, but they're just farther back. The Delaware trial judge ruled in our favor several months ago and found that all the claims there that were based on damages allegedly flowing from out of state emissions and out of country emissions were dismissed. And the plaintiff there in Delaware is asking the Delaware Supreme Court to weigh in.

 

So, courts really focused on the merits and understand the extreme nature of these claims, the baselessness under state law. It's really pretty interesting because I've been enjoying arguing the state law pieces because the doctrine doesn't come close in nuisance doctrine, for example, where state courts have said we can't expand it beyond what we all think of as a nuisance. Someone's doing something on their property next door to me. They create a mess, and it comes over and injures me.

 

But they're trying to take that kind of tort and say misrepresentations around the world caused the atmosphere to warm. And we don't know where the emissions came from. They admit that. So, it could be emissions in China— and the Supreme Court said this in AEP — that caused their damages, having no relationship to people in California consuming oil and gas products. They're trying to take the nuisance tort, which is a vague tort, and just create this monster, which the New Jersey Supreme Court, in a different circumstance, called "a monster that would swallow our tort law."

 

Plus, it's clashing with federal constitutional interests and our constitutional structure in a way we think warrants Supreme Court review. So, Ryan, maybe I'll pause there and see if you'd like me to go into more detail, or if you've got a question. And I can talk about this all day, so, I'm here for it. I know, thankfully, you've capped my time. But I'm ready.

 

Ryan Lacey:  Well, thank you very much for that very in-depth exposé on the case and where it stands. I'm interested — and I'm not asking you to get too speculative — but now that it's going up to the Supreme Court, how do you think this will shake out with arguments and the decision with the Court being what it is now?

 

Theodore J. Boutrous Jr.  So, it's really interesting. Justice Kavanaugh dissented from the denial of cert on the federal jurisdiction questions. And in the federal jurisdiction questions, there are sort of cross currents that I think led the court not to grant review there, the notion that "let state claims be dealt with in state court." We strongly believe that we had arising under jurisdiction, we had federal officer removal jurisdiction. But the courts just wouldn't go there. But Justice Kavanaugh, I think, clearly thought that it was an important issue the court should take.

 

      And I think, if you look at the way our cert petition is drafted and the way we've pitched the matter, we've got a great team of lawyers from all different firms. Kannon is counsel of record on the cert petition. But it's just a great group of lawyers collaborating and really trying to just really lay this out in a way that undeniably cries out for review. And I think we've done that, because — I mentioned the Hyatt decision that Justice Thomas authored that talked about these very concepts of our constitutional structure — our argument is the argument that respects federalism and the prerogatives of each state.

 

Our argument is the one that respects the role of the federal government on these interstate and international issues. Our argument is consistent with what the Biden administration says, what the Obama administration said. In AEP, the Obama administration wrote a great amicus brief that said this would be insane. Everybody in the world would have a cause of action. But everyone in the world is participating in creating climate change. Federal courts can't be in this business. 

 

And so, you see, really, policymaker unanimity. You see the Biden administration, the Secretary of State, calling for energy production to protect our country. So, I think, when you look at the doctrines we're relying on, the extraordinary nature of these cases, it really is a play for private lawyers, funded by various foundations and the like, working with municipalities and states to seize control of federal energy policy and to change how we consume energy.

 

And that interferes — as the Second Circuit said, as AEP says — with this complex balancing of our national security needs, economic needs, all of those things, and to do it at the same time. So, it's, like, 34 states would all be saying the same things, the same activities around the country and around the world: "Those are torts under our law. And we think emissions should be at a different level." They deny that. They say, "Oh, we're not trying to control emissions." They clearly are, because the whole premise of their suit is "Stop debating climate change, oil companies. Stop talking about solutions."

 

You'll love this. The newest generation is to say the companies should be held liable because they recognize the issues of climate change and the dangers and the need to have cleaner energy, that that should be a tort too. So, you can't win with these plaintiff's lawyers. But it really intrudes on both the federal government, and then the separation of powers within the states, where it really should be Congress and the executive branch at the federal level.

 

And then, the mayors, instead of filing lawsuits, they really should be working to address climate change through policy means. And the same with the state legislature. So, I think we've really written a cert petition here that can appeal across the ideological and doctrinal approaches on the Court now.

 

Ryan Lacey:  Understood. And a reminder to our audience that if you have a question, you can enter it into the Q&A feature at the bottom of your screen, and I will get that question to Ted. Kind of following up on what you were saying about all these cases seem to be coming out of states and municipalities, and you mentioned that the Biden administration has been pushing for energy production but, at the same time, the Biden administration has had a stake in talking about climate change and all that. Has there been a reaction from the administration to this case or cases like it?

 

Theodore J. Boutrous Jr.  There have been reports that the lawyers and the groups that have been the motivators and the participants in these lawsuits have been seeking to get the Biden administration to weigh in on our cases. They have not succeeded. As I said, the federal government is subject to basically the same type of claims. There's a case called Juliana, for example. Very similar claims, slightly different relief they were seeking. The Ninth Circuit rejected those claims once, and now I think they're sort of being recast a bit. So, the federal government is subject to the same types of claims that are being asserted here. 

 

And they've been making arguments that are very similar to ours, that you're interfering with the federal government, and this is not the kind of thing that courts should be engaged in. And, yes, the Biden administration has been focused on climate, but through legislation, through regulation. And we can debate how much regulation is needed, what type of statutes should be enacted, and the like. But that's the way the system is supposed to function, especially when we're talking about this area that the Supreme Court has said "state law cannot be used," because it's purely interstate and international.

 

I keep challenging the plaintiff's lawyers to say, "Oh, we're only talking about activities in the state, and misstatements in the state that caused emissions to go up in the state." And they not only won't say that, they say the opposite: "No, we're talking about global activity. We're talking about global emissions." And, to me, that's game, set, match. You just can't have one state, let alone thirty-four states, all imposing damages for extra-territorial, out-of-state emissions and activities, the same ones. And they can't even identify which activities, by which companies, by which people, and which country caused the emissions that caused their harm.

 

And, so, it's really far-fetched to me. But that's why we think it's key for the Supreme Court of the United States to weigh in and stop the potential madness of all this happening for many, many years, around the country. I feel like I'm on a tour of a barn-storming minor-league baseball team. We're traveling to so many different places, and it's really interesting, but it's really no way to deal with climate change. It's really counter-productive, I think, and not a solution.

 

Ryan Lacey:  Well, you mentioned that these emissions are global. So, looking internationally, have arguments like this and cases like this been brought, talking about public nuisance? Have cases along these lines been brought up in other countries, say, like in the European Union? And what effect, if those cases do exist, could they have? These companies — like Chevron and Exxon — they're international companies. So, regulation and court cases and decisions from other parts of the world could have an effect on how they act in America.

 

Theodore J. Boutrous Jr.  There have been cases. And they're in Europe and they're percolating along. And this international action can have an effect on U.S.-based companies and companies around the world. And so, we're definitely closely watching those cases and also laws in other jurisdictions. It is a global problem. So, we get that. But it will be very harmful to everyone if courts — international tribunals and the like — seek to take action, which causes the same problems that I'm referencing with respect to state law claims here seeking to, essentially, regulate what's happening in the United States and saying that you've got to stop doing what you're doing in the United States because it's having an effect in Europe.

 

And so, it's a very, very complicated mosaic. But courts and tribunals that adjudicate rights are not the place to go. And it's taking litigation concepts to past the breaking point. And, again, in AEP — it was a remarkably forceful and unanimous opinion — Justice Ginsberg talked about these issues. These are really difficult, complex issues. Justice Alito in the National Review v. Mann defamation case, said, in a dissent from the denial of cert, climate change is, if not the most, one of the most important issues and topics of discussion and debate in the world right now. And so, we need free discussion, free debate.

 

These suits are seeking to muzzle these companies that have a First Amendment right to speak, under Citizens United and many other cases, on issues of great public concern. And they're bringing these torts here, but you're seeing it in other countries. And so, we can't have lawsuits and courts and tribunals doing the same thing that we're complaining about here. So, we're definitely keeping an eye on that.

 

Ryan Lacey:  Looking at some of our audience questions, we have one that asks, "In the Hawaii case, City and County of Honolulu v. Sunoco, there was a standing issue. To your point about the global nature of alleged harm, do you think that that's a challenge to other municipalities' standing, and to bring similar lawsuits?"

 

Theodore J. Boutrous Jr.  There really are standing and jurisdictional issues that, in federal court, there would have been even better arguments, once we got to that. But I think it's very hard. There was a personal jurisdiction issue there too. And they're very similar. They're closely related, in the sense that if Honolulu can't point to anything that an oil company did in Honolulu, or in Hawaii, that caused concrete, directly traceable injury, there's a standing problem in the case. And they can't do that. And there also are the personal jurisdiction issues that I mentioned in these cases.

 

So, yes, these lawsuits, on every measure, fail the most basic tests. Normally, you'd have to go in and say, "You, company A, did this, and it hurt me." And they don't do that. It's, like, 25 leaps, and by the time they're done leaping, they're just saying the earth's atmosphere is getting warmer and that's having these effects. But they floated — like in our last hearing in Trenton a couple of weeks ago — that they have an attribution theory. But that's just a crude measure of how much oil and gas, for example, a company sold. And then they divide it up.

 

That doesn't tell you anything about anything, whether someone was harmed by something you did. So, I think there's standing problems. There are all sorts of just fundamental flaws in these cases. But I think it's a pretty transparent gambit — I can't help but use that word — to sort of pretend these are like tobacco cases or opioid cases. But the analogies just fall apart with any sort of close look and, again, the bizarre notion that Honolulu can sue for activities that it engages in, itself, that it depends on for its economy to run, with respect to claims of misrepresentation about information that has been widely known by Hawaii itself.

 

Some of the earliest research on climate change, famous research projects, took place in Hawaii back in the late '50s. And if they can bring a claim based on activities happening all around the nation, all around the world, and not want to stop it because they need it for their economy and for life to go on, it really is something extraordinary that is being replicated in all these other jurisdictions. We really need the Supreme Court to weigh in and say, "This cannot stand. Our constitutional structure doesn't allow it."

 

Ryan Lacey:  And what sort of relief is being requested here in these cases? Is it just money? Or is it injunctive relief of some kind?

 

Theodore J. Boutrous Jr.  It's the kitchen sink. But they disclaim, "We're not trying to regulate emissions." But they want compensatory damages, punitive damages, abatement damages. And I said to the judge in Trenton the other day, "They want you to be the abatement czar. You're going to be figuring out how much it's going to cost to put reinforcement on the shoreline or do other things in the locale." They want abatement damages, they say, so some sort of fund.

 

They want punitive damages to punish these companies for their speech and for their alleged failure to disclose, to stop them, and to regulate or to cause them to start speaking. And they sometimes suggest they want even more, that they want some sort of injunction to force production to cease. The complaints sound like that. But then, when they're in court, they sort of back away from that. But however you cut it, it's extraordinary if it would have the real effect of both regulating speech but also regulating emissions outside of each state in a way that clashes with our federalism and basic constitutional principles.

 

Ryan Lacey:  Next question: "Does the pending cert petition in the U.S. Supreme Court potentially impact all pending state court climate change cases? I know there are California cases that have been remanded to state court. Are those there to stay?"

 

Theodore J. Boutrous Jr.  Most of them, maybe all of them, are in state court to stay. But the issues we're now — and I should make clear because it gets confusing, particularly because the way the plaintiff's lawyers now are seeking to rely on the removal decisions — our case pending now on cert is on the merits. And it's on the merits of whether state law, applied by state courts, can be used to impose damages based on global greenhouse gas emissions. And if the Court takes the case and decides it, it will have an immediate direct impact in every one of the pending cases because they all are premised on the same theories. Most of them are brought by the same law firms.

 

      We do have a case in Puerto Rico that actually has a RICO claim in it. But it's in federal court. That's got some other twists and turns. But it would still be taken off the boards. If we can persuade the Supreme Court to grant cert here and look at the merits, and if we prevail, that's why we think it's such an important case. And so, it's not just this case. It's the classic type of case that the Supreme Court is there to decide: one that will have widespread impact on an important issue where the courts are divided and that it will have a huge effect on our economy and on our national security.

 

      In one of the amicus briefs, several former joint chiefs weighed in on the national security issues here that are implicated by these lawsuits that seek to meddle with, interfere with, and constrain energy production in the United States. So, the bottom line is this would have a significant effect on all the pending cases. And that's why we think it's so important that the Court takes the case.

 

Ryan Lacey:  Our next question: "If the Supreme Court refuses cert, what are the strongest defenses to consumer fraud claims? Have similar municipal claims failed in other litigation?"

 

Theodore J. Boutrous Jr.  So, on the merits, on consumer fraud, we have a lot of arguments. One, that First Amendment argument I was mentioning. In some instances, they're challenging truthful speech. In others, they're saying it was misrepresentation. But they can't identify a single statement that, for example, Chevron made, that was false. They have the problem, in consumer deception cases, that — if they're seeking to bring consumer deception cases for speech and consumer interaction outside the state — we'd still have, on the merits, all of these arguments.

 

If the court doesn't take the case, all of the arguments that I'm making today and that we've been making, it means we're going to keep making them in all these different states. We've, I think, had four or five of the motions to dismiss argued so far. That leaves, probably, thirty. And so, we'll keep making these arguments, including on consumer deception, where you've got First Amendment arguments, you've got just the sort of statutory interpretation. Most of the consumer deception statutes are meant for what you and I would think of as a consumer deception case.

 

I say to you "Buy this car from me. It's got a 500-horsepower engine." You buy it, and it turns out it's got a 100-horsepower engine. A merchant sells a product to someone and lies to them or deceives them. And it's just not what these cases are. They’re not claiming that people didn't get what they paid for. They're claiming that they got what they paid for. They used it. Others got what they paid for. They used it. And it caused this atmospheric effect that then came back and somehow had an effect on them.

 

And so, if the courts really drill down on the merits -- and, as I mentioned, in arguing in the various jurisdictions, under state law, state law is very helpful to us. California, where I'm based, we have statutes that affirmatively establish a policy that oil and gas production should be encouraged, in a wise manner, but to the maximum extent possible. And so, they're bringing claims that really counter that state policy. The state of California is bringing them. They filed a suit now.

 

So, we've got, I think, very strong arguments under state law, as well, that should doom these cases. But the courts really shouldn't have to get there because, out of the starting gate, the lack of state power to be used to seek damages and, thereby, regulate interstate and international emissions, cuts off these claims right there.

 

Ryan Lacey:  You had mentioned how this would represent a huge expansion of tort claims. On another side of this issue, could we see, after this tort claim, particularly if Honolulu got its way, of people who use oil and natural gas and other fossils to heat their home and drive their cars, could we see torts against these municipalities that are regulating fossil fuels?

 

Theodore J. Boutrous Jr.  I think so. I think that the claims that they're making, as I mentioned, the federal government is facing claims like this. But claims could be brought. So, I think you're suggesting, if the prices go up, maybe you can sue for the lawsuit being brought that caused the prices to go up, and some sort of action. It really unleashes all sorts of possibilities that we don't want to have realized because, A, they're the lawsuits that could be brought against different sectors of the economy.

 

They're lawsuits, technically, that could be brought against the municipalities and the states themselves for some of the same things they're suing about. And then, there is the fact that these governmental entities are doing things with these lawsuits that really are going to be detrimental to their citizens. So, it creates this whole collateral set of possibilities for more litigation, which I don't think we need. It doesn't solve the problem.

 

When pressed, the plaintiff's lawyers, basically — you asked me about the remedy — they basically admit it's just about money. In Hawaii, during the argument, one of the justices asked the lawyer arguing on the other side if he wanted warnings. And he said, "No." I don't want to quote him because I can't remember exactly what he said. But the gist of it was, no, it's basically we just want money.

 

And so, that's not going to help slow climate change, other than, their theory is, the imposition of damages will change behavior of these companies and reduce oil and gas consumption and reduce emission levels. That's unconstitutional. States can't use their tort damages to do things like that that intrude on the prerogatives of other states in the federal government.

 

Ryan Lacey:  Time for a couple more questions here. If there are 34 cases around the country, it seems like a big beneficiary are the trial attorneys bringing these lawsuits. Can you speak to their role in these cases? And, if cert is denied, what would be the role of the plaintiff's bar moving forward?

 

Theodore J. Boutrous Jr.  It is a potential plaintiff's bar boondoggle that they've got these cases. They're making the same arguments around the country. And, as I mentioned, the funding is coming from foundations there. To my mind, there are real, serious problems where they're also linking up with governmental entities, so they're sort of getting the benefits of being a government entity. For example, in some states, the statute of limitations doesn't apply to the state.

 

So, the private lawyers -- and, again, I commend them for their creativity and entrepreneurial skill. But it is weird when we're all flying around the country to these cases to talk about how there should be less fossil fuel consumption. It's ironic. And so, I think that there's going to be more and more litigation. And more and more plaintiff's-side lawyers will be attracted to it if it looks like it's just going to go on and on and there could be some reward at the end. I think some of them are being compensated now, but there are some, I'm sure, on contingency fee arrangements. 

 

So, in addition to everything else, it's sort of a tort reform. I think the American tort reform association filed an amicus brief in support of us. But it's a tort reform lawsuit nightmare, of the kind we will never have seen. It's everywhere, everything, all at once, in litigation. And none of it is allowed by the Constitution. It's just beyond the scope of state power to even be embroiled in this in the first place. That kind of goes to your question about what is the state doing paying these private lawyers? They have lawyers. The state of California has excellent people who work at the Attorney General's office. So, I'll leave it there.

 

Ryan Lacey:  One last question: when and how do you imagine this litigation concluding? As you mentioned, it has been proceeding for many years. But it doesn't appear that a conclusory adjudication or settlement is coming soon. What do you predict?

 

Theodore J. Boutrous Jr.  This round, as well -- as I mentioned I was involved in that GM case. That's going on 20 years ago. And here we are, in 2024. The first round of these cases were in the state court, state law cases. The first batch was filed in 2017. We think the first potential resolution comes with the Supreme Court granting cert in this case that's pending, finding that Hawaii was wrong, that state law cannot be used to allow damage awards or any other relief, based on global emissions. That, I think, would effectively end all of these cases.

 

It's a great question because, in Delaware, as I mentioned, the trial judge said all claims based on out-of-state emissions are dismissed because state law cannot be used. The Clean Air Act preempts them. And it's beyond state power. The court relied on City of New York. And Delaware, then, went to the Delaware Supreme Court saying "This basically guts our case. It ends our case." And so, if other courts even just go that far, because the trial judge didn't dismiss all the claims, but they were narrowed down to in-state type claims that will fail because the whole theory of the complaint is that it's the global out-of-state emissions that cause their harm.

 

So, we're very hopeful the Supreme Court will take this case. It's important. There's a square conflict. It's recurring. It's recurring right now. It's got all the features that support cert. It will have a widespread effect if the Court rules on these issues. And that's why we think it's just the classic case for Supreme Court review.

 

Ryan Lacey:  Any closing thoughts before we end the program today?

 

Theodore J. Boutrous Jr.  I'll finish with this. First, thanks for having us, and having me. And, as I said, our position has been, since the first set of cases we filed in 2017, is that climate change is an important issue. We need to grapple with it from a policy perspective. But lawsuits are not the road to do it. The Supreme Court, in AEP, said that, under the federal system.

 

And if federal judges aren't equipped to do it — where it's an inherently federal area, where uniquely federal interests require federal rules — then how can it possibly be that dozens and dozens of state court judges can be in the business of creating torts that are meant to affect and regulate emissions and, thereby, address climate change? It just doesn't hang together. And we're hoping the Supreme Court takes the case and makes that very clear.

 

Ryan Lacey:  Well, thank you so much, Ted. And on behalf of The Federalist Society and the In-house Counsel Network, I would like to thank you for the benefit of your valuable time and expertise today. And I would like to thank our audience for joining and for participating with those great questions.

 

We welcome all listener feedback by email at [email protected]. And, as always, please keep an eye on our website and your emails for announcements about upcoming webinars and other events, including our In-House Counsel Network Conference, which will be held in Dallas on May 17 of this year. So, registration is open. Thank you all for joining us today. We are adjourned.