Fifth Circuit Reverses Dismissal of Climate Change Class Action Brought by Private Plaintiffs Who Blame Hurricane Katrina on Global Warming
Dust off your old property texts and grab your briefcases, ladies and gentlemen! We're off to the races in private party climate change class action litigation!
Yesterday the U.S. Court of Appeals for the Fifth Circuit became the second federal appeals court in less than a month to reverse a trial court decision that had thrown out a climate change lawsuit for presenting a nonjusticiable political question. See Comer v. Murphy Oil USA, 2009 WL 3321493 (5th Cir. Oct. 16, 2009).
(The Second Circuit previously had held that in the absence of comprehensive federal legislation regulating greenhouse gas emissions, states, municipalities and certain private organizations had standing to bring viable federal common law nuisance claims to impose caps on certain companies' greenhouse gas emissions. See Connecticut v. American Elec. Power Co., 2009 WL 2996729 (2d Cir. Sept. 21, 2009. A good description of that opinion can be found here.)
Comer is particularly important because it is a private class action for compensatory and punitive damages, not a suit brought by states or municipalities for injunctive relief. And that means contingency fees. And thus the promise of copycat lawsuits.
The plaintiffs in Comer were property owners on Mississippi's Gulf Coast who had suffered property damage in Hurricane Katrina. Their causation theory sounds a little like the litigator's equivalent to the game "Six Degrees of Kevin Bacon." Plaintiffs sued a melange of energy, fossil fuel, and chemical companies, alleging that their greenhouse gas ("GHG") emissions contributed to an increase in air and water temperatures, causing a rise in sea levels and adding to the ferocity of Hurricane Katrina, which blew water and debris onto plaintiffs' property, thereby causing property damage. Plaintiffs asserted a variety of theories under Mississippi common law, including public nuisance, private nuisance, trespass, negligence, unjust enrichment, fraudulent misrepresentation, and civil conspiracy.
The Fifth Circuit held that plaintiffs lacked standing to bring their claims for unjust enrichment, fraudulent misrepresentation, and civil conspiracy, but that they had standing to assert their claims for public and private nuisance, trespass and negligence. The court further held that this latter group of claims did not present a non-justiciable political question.
The panel was comprised of two Clinton appointees and one Reagan appointee. The Hon. James L. Dennis wrote the opinion, and Judges Carl E. Stewart and W. Eugene Davis joined in it. However, Judge Davis (a Reagan appointee) noted separately that the defendants below also had moved to dismiss the claims for lack of proximate cause, and that he would have affirmed the dismissal on that ground. Nevertheless, because the panel chose not to address grounds that the district court had not relied upon, Judge Davis joined in the panel opinion. Nevertheless, Judge Davis's statement should give some hope to defendants who worried that the Fifth Circuit's determination that there was enough of a causal connection for standing might preclude successful motion practice in the district court on the issue of proximate cause. Plaintiffs still have a very tough case to make on causation.
On the issue of the political question doctrine, the Fifth Circuit applied the standard test articulated in Baker v. Carr, concluding that the case did not involve issues: (i) constitutionally committed to another branch of government, or (ii) that lack judicially discoverable standards for resolution, or (iii) that are impossible to decide without an initial policy decision being made that is not of a judicial character, or (iv) that require adherence to a previously-made political decision. The Fifth Circuit said that the district court erred by relying on other district court decisions -- including the lower court decision in Connecticut v. American Electric Power -- that had interpreted the Supreme Court's decision in Chevron as requiring federal courts in air pollution cases to balance social and economic interests like a legislative body. The Fifth Circuit reasoned that such an approach would make all air pollution cases non-justiciable political questions and would be contrary to how transboundary water disputes are determined. It also would be contrary to the "long line of cases" holding that the Clean Air Act and Clean Water Act do not preempt state common law claims, the court said.
The Comer Court locked arms with the Second Circuit -- at least on the political question doctrine -- explaining:
Although we arrived at our own decision independently, the Second Circuit's reasoning [in Connecticut v. American Power] is fully consistent with ours, particularly in its careful analysis of whether the case requires the court to address any specific issue that is constitutionally committed to another branch of government.
On the issue of standing, the court divided plaintiffs' causes of action into 2 groups: those that relied on a causal link between GHG emissions and Hurricane Katrina, and those that did not. As to the first group, which included public and private nuisance, trespass and negligence, the only real standing element in dispute was whether plaintiffs' alleged injury was fairly traceable to the defendants' actions. The court was careful to explain that the fact that the complaint may not adequately plead a cause of action under state law does not destroy jurisdiction, and that the Article III "fairly traceable" standard is not the equivalent of proximate cause under state law. Clearly, the court was leaving open the very real possibility that, on remand, the district court would hold that plaintiffs' complaint fails to state a claim under state law.
In reaching the decision that the "fairly traceable" standard had been met by plaintiffs' convoluted causation theory, the Fifth Circuit clearly felt constrained by the Supreme Court's decision in Massachusetts v. EPA, which seemed to accept "as plausible the link between greenhouse gas emissions and global warming" and the fact that "rising ocean temperatures may contribute to the ferocity of hurricanes." Comer Slip op. As the Comer court concluded, "the [Supreme] Court accepted a causal chain virtually identical in part to that alleged by plaintiffs" when it held in Massachusetts v. EPA that to meet the "fairly traceable" standard, the states merely had to show a contributing cause, not the primary cause, of their injuries. Id.
As for standing in the Comer plaintiffs' second group of causes of action -- fraudulent concealment, unjust enrichment, and civil conspiracy -- the court employed the doctrine of "prudential standing" to conclude that plaintiffs lacked standing to bring these claims. Plaintiffs' unjust enrichment claim was premised on the petrochemical companies artificially inflating the price of petrochemicals, impacting the public at large. The fraudulent concealment theory was premised on the defendants knowing about global warming, but issuing misinformation to decrease public awareness of the phenomenon. And the civil conspiracy claim was premised on the defendants misleading the government into not regulating GHG emissions. Each of these theories had at its core a "generalized grievance more properly dealt with by representative branches [of government] and common to all consumers of petrochemicals and the American public," the Comer court observed. In this way, these causes of action were very different from private claims for property damage. As such, the court concluded that, for the second set of claims, plaintiffs lack standing under the doctrine of prudential standing, which:
encompasses "the general prohibition on a litigant raising another person's legal rights, the rule barring adjudication of generalized grievances more appropriately addressed in representative branches, and the requirement that a plaintiff's complaint fall within the zone of interests protected by the law invoked."
Comer Slip op. (citation omitted).
It seems clear that the Comer decision will provide some encouragement to plaintiffs' lawyers who dream of scoring a lucrative victory in climate change litigation. But when one examines the opinion closely, it is clear that such cases still are plagued with significant causation problems that will present early and frequent opportunities for defendants to move for dismissal or summary judgment. Neither Comer nor the Second Circuit's decision in Connecticut v. American Electric Power solve these fundamental causation problems for plaintiffs.
Yesterday I also received the district court decision in Native Village of Kivalina v. ExxonMobil Corporation, Case No. C 08-1138 SBA, Slip op. (N.D. Cal. Sept. 30, 2009), in which the court held that the village's federal common law claim for nuisance failed for lack of Article III standing and was barred under the political question doctrine. Point of Law describes the decision here. If I have any thoughts to add after comparing Comer and Kivalina, I'll post them later this weekend.