Outgoing Biden administration supporting climate lawsuits that threaten American energy

The U.S. Supreme Court is considering whether or not to take up two challenges to climate litigation seeking to extract billions of dollars from oil companies and other large emitters for allegedly causing great harm from climate change. 

Last summer, the Supreme Court asked the Justice Department to weigh in on the matter. Solicitor General Elizabeth Prelogar submitted briefs last week, arguing that the justices should reject the appeal from energy companies and allow the cases to play out in state courts before the high court reviews them. 

Should the high court reject the appeals, the cases are expected to go in favor of the anti-fossil fuel plaintiffs. With numerous such cases being filed across the country, companies may find it easier to settle, the costs of which will be passed down to consumers, impacting all goods and services. Likewise, large emitters — including oil companies, utilities, automobile manufacturers and other heavy industries — will be forced to implement expensive reductions in emissions or shut down altogether. 

Feds backing activist firms

In 2020, the City of Honolulu, Hawaii, filed a lawsuit against oil companies under the state’s public nuisance laws. The city argues that greenhouse gas emissions are causing climate change and harming Hawaiians, and that the companies misled the public about the dangers. 

In February, the companies asked the Supreme Court to review a 2023 decision by the Hawaii Supreme Court, which rejected the companies’ argument that by seeking to regulate emissions, the lawsuit effectively regulated interstate commerce, which is the jurisdiction of the federal government. 

In May, a 19-state coalition of attorneys general, led by Alabama Attorney General Steve Marshall, filed a constitutional challenge to similar cases filed by California, Connecticut, Minnesota, New Jersey and Rhode Island. 

O.H. Skinner, executive director of the Alliance for Consumers, a nonprofit consumer advocacy organization, told Just the News that Prelogar’s arguments are a departure from what you’d typically expect the federal government to argue. When state or local litigation affects the entire nation or assumes authority over what a federal agency does — for example, the EPA regulating emissions — the solicitor general has historically protected federal authority. Yet, in the case of climate lawsuits, the Biden-Harris administration is arguing the lawsuits aren’t ready for high court review. 

“It looks like they're motivated by allegiance to the dark money backers behind these cases,” Skinner said. 

The firms taking up these cases, including San Francisco-based Sher Edling, have been accused of being funded by a dark money campaign by anti-fossil fuel activists seeking to advance policies through the U.S. court system that wouldn’t succeed in legislatures. 

The House Committee on Oversight and Accountability last year launched an investigation into Sher Edling, seeking more information on the “wealthy liberals” who are funding the lawsuits “aimed at bankrupting oil and gas companies.” In their response, the firm explained that bankrupting the companies wouldn’t be in their interest, since the companies wouldn’t be able to pay the settlements. The firm also argued that their clients are not seeking damages for all the effects of climate change, but only the ones allegedly caused by the companies’ alleged deception.

Risky fight

Should the high court follow the solicitor general’s advice and let the cases percolate through state courts, Skinner said the cases will present a large risk to oil companies. Multnomah County, Oregon, for example, is suing oil companies and a natural gas utility company, asking for $51.55 billion for allegedly causing a heat wave in 2021. 

While the event brought high temperatures for several days and is linked to 72 deaths in Multnomah County, it didn’t break the state’s record, which was 119 degrees set in 1898, long before large amounts of fossil fuels were being consumed. The connection between the heat wave and use of fossil fuels has not been determined as a matter of legal fact. 

Skinner said, with a wave of similar suits hitting companies all at once, it’s possible that companies will decide it’s not worth fighting them in court. 

“I think that's part of what you're seeing here. The Biden administration is thinking, ‘Maybe if we force them to go to trial, they'll settle. Maybe we won't get 50 billion, but maybe we'll get 3 billion.’ That's the other risk. The longer this goes, it's whack-a-mole. Every little city and county will bring one of these cases if any one of them wins,” Skinner said. 

Besides the settlement costs, which consumers will ultimately pay for, when a judgement goes against a company in a nuisance case, they are required to abate that nuisance. For example, in 2014, the city of Irwindale, California, sued Huy Fong Foods, maker of the popular Sriracha hot sauce, over spicy odors coming from one of the company’s factories. Residents complained the odors caused headaches, heartburn and watering eyes. The company addressed the problem, and the city voted to drop its lawsuit in 2017. 

Should companies facing waves of climate lawsuits lose in court or settle, they’ll have to abate emissions. That means either stopping production or implementing emissions control technologies, such a carbon capture, which are unproven technologies that can be cost prohibitive. Skinner said the overall effect of all these cases will in effect be passing the Green New Deal through court orders instead of the legislative process. 

“What they're really driving at is a court order that would force the energy companies to stop global climate change, because it's global. It's not just a spill in a bay or something. And so what they do if they were to win? It's not a patchwork. It's a racket. Every case they win forces the companies to stop producing or selling oil in other parts of the country,” Skinner explained. 

There’s nothing about the cases that would be limited to oil companies, and the financial incentives will spur more lawsuits and new targets. Any large company producing large amounts of emissions would be vulnerable, including utilities, automakers, steel factories and cement producers. 

Other possibilities 

Should the high court decline to review the cases, they may ultimately fail as a result of underlying constitutional issues, something Pregolar posited in her briefs. 

“To be sure, petitioners may ultimately prevail on their contention that respondents’ claims are barred by the Constitution … to the extent the claims rely on conduct occurring outside Hawaii,” Pregolar brief admitted. 

Another possible bastion against anti-fossil fuel lawfare is the incoming administration’s stance on the climate lawsuits. It’s anyone’s guess how much consideration the justices will give a lame-duck administration’s arguments, but President-elect Donald Trump has promised to block “the wave of frivolous lawsuits from environmental extremists.”