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NorthAmOil COMMENTARY NorthAmOil
the new regulations the phenomenon is expected to spur. However, it has been noted, including by Ostrager, that this case centred on securities fraud and the question of investors being misled, rather than on climate change itself.
Indeed, a wave of further litigation – based on different legal arguments, and focusing on responsibility for climate change – is looming and threatens to drag ExxonMobil and other energy producers into the courts for a long time.
And as the Martin Act was so relevant to the New York case, the outcome may have no bear- ing on any of these pending cases.
One is similar to the New York case, in that it is a fraud case filed by Massachusetts Attorney General Maura Healey. That lawsuit is broader, however, accusing the super-major of mislead- ing consumers as well as shareholders.
The other cases, meanwhile, are largely filed by cities and counties, accusing international oil companies (IOCs) of creating a “public nuisance” by selling products they knew would have an impact on human health and the environment.
The plaintiffs want oil companies to shoulder some of the costs related to mitigating climate change, for example by building seawalls to pro- tect coastal communities from rising sea levels.
Public nuisance cases have had mixed success thus far, as the companies being accused fight to move them from state to federal courts, where they often have more favourable treatment. But judges have recently rejected attempts by oil companies to block a handful of such lawsuits, allowing them instead to move ahead. And local governments have won rulings in California, a state renowned for taking a particularly tough line on climate change issues. A federal judge in California recently moved a climate change lawsuit brought by the City of Imperial Beach and San Mateo and Marin counties back to state court.
Plaintiffs have lost public nuisance cases as well, with several lawsuits brought by cities in
New York and California being thrown out by judges. There are appeals pending in these cases, though.
A Royal Dutch Shell spokesman told Bloomberg last month that the company did not “believe the courtroom is the right venue to address climate change”. States and cities maintain, however, that the courts are the only avenue left open to them, given a federal govern- ment that does not prioritise climate change. The administration of US President Donald Trump is on a continued push to loosen environmental regulations, and took the country out of the Paris Agreement on reducing global emissions.
The continued fight over state jurisdiction will be crucial to the fate of nuisance lawsuits, a staff lawyer at Harvard Law School’s Environ- mental and Energy Law Program, Hana Viz- carra, told Bloomberg recently. “If they survive the fights over venue, there will be a continued appetite to bring these cases,” Vizcarra said.
Meanwhile, an activist group is ramping up pressure on super-majors in both the US and Europe – a group comprising ExxonMobil, Chevron, Shell, BP and Equinor – to meet Paris Agreement climate targets and cut emissions. The Dutch group Follow This owns minority stakes in the companies, which enables it to file shareholder resolutions ahead of the next round of annual general meetings (AGMs) at the firms.
The group’s resolutions have always been opposed by the companies’ boards and have never won majority support, but they have often led to debates during AGMs. And in the US, companies are allowed to request regulators to bar shareholder resolutions, so it is unclear how much success the efforts will have.
Nonetheless, ExxonMobil may be celebrat- ing a victory in the New York case, but as far as broader climate change issues go, pressure on the super-major – and other oil companies – may well increase over the coming months and years.™
Public nuisance cases have had mixed success thus far, as the companies being accused fight to move them from state to federal courts.
The office of New
York Attorney General Letitia James did not succeed in proving that ExxonMobil had misled investors.
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