A California federal court will soon hear oral arguments from San Francisco and Oakland that assert five major oil companies should pay huge sums of money for contributing to man-made global warming.
A ruling against oil companies could not only have tremendous consequences for the U.S. legal system but could also mean a sizable payday for the class action firms representing cities suing over global warming.
Class action firm Hagens Berman Sobol Shapiro LLP is handling lawsuits for San Francisco, Oakland and New York City, on a contingency fee basis. Cities pay law firms no upfront cost in exchange for a percentage of any winnings or settlement.
Hagens Berman stands to earn millions, possibly billions, of dollars in contingency fees depending on the total winnings, should San Francisco, Oakland or New York City win their global warming suits against oil companies. All told, these three cities are asking oil companies to hand over many billions of dollars.
The firm is entitled to 23.5 percent of any winnings from its cases with San Francisco and Oakland, according to previous reports. NYC Law Department spokesman Nicholas Paolucci also confirmed Hagens Berman was working on a contingency fee basis.
“We’re engaging the firm on a contingency fee basis,” Paolucci told TheDCNF regarding Hagens Berman. “We are currently working out all the details in a contract.”
The city wants five major oil companies, including Exxon Mobil and BP, to pay for current and future damages from alleged man-made warming allegedly wrought. The “cost of needed resiliency projects runs to many billions of dollars” and currently has plans for $19 billion to mitigate global warming, NYC’s complaint claims.
The firm is looking at a potential $4.5 billion payout if Hagens Berman strikes a fee deal with NYC that’s comparable to San Francisco and Oakland. Hagens Berman attorneys did not respond to TheDCNF’s requests for comment.
The firm, Seeger Weiss, is also handling NYC’s suit, but founding partner Christopher Seeger did not return TheDCNF’s request for comment.
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Another firm, Sher Edling, is handling global warming lawsuits for six California cities and counties against dozens of oil, gas, and coal companies over the alleged damages from sea level rise and other supposed impacts of global warming.
These local governments argue fossil fuel companies, including Exxon and Chevron, knew greenhouse gases from its products would cause the world to warm but “concealed the dangers, sought to undermine public support for greenhouse gas regulation, and engaged in massive campaigns” to promote their products.
Localities’ legal complaints lay out hundreds of millions of dollars, possibly more, worth of potential damages from future sea level rise and other global warming impacts. Sher Edling could see a huge payday from any settlement or favorable court ruling.
At least one locality explicitly disclosed Sher Edling was handling their legal battle on a contingency fee basis, but responses from others suggest they’ve reached similar agreements with the class action firm.
“Sher Edling is representing San Mateo County on a contingency fee basis, as is true for most attorneys in cases like this,” San Mateo County deputy counsel Margaret Tides said.
The “agreement and its terms are confidential under California law,” Tides told TheDCNF. Tides did not disclose what percentage of any winnings they agreed to hand over to Sher Edling.
Information on Sher Edling’s contract was covered by attorney client privilege, Santa Cruz told TheDCNF. Three other California municipalities lawyers gave TheDCNF the same canned response when asked about their arrangement with Sher Edling.
“Sher Edling will be paid the same way most attorneys are paid in cases like these: if and when we are successful,” Richmond mayor’s Chief of Staff Alex Knox told TheDCNF.
“The defendants in these cases are among the biggest companies in the world, with the largest law firms on their side and virtually unlimited war chests,” Knox said. “Our taxpayers are not being asked to front the costs or bear the risks of this lawsuit. But right now, our taxpayers are on the hook for all the damages being caused by these oil, gas and coal companies. And that’s exactly why the lawsuits were filed.”
Imperial Beach counsel Jennifer Lyon and Marin County deputy counsel Brian Case gave similar responses: “Sher Edling will be paid the same way most attorneys are paid in cases like these: if and when we are successful.” Any details of the agreement were privileged under state law, both lawyers said.
Future sea level rise could cause upwards of $178 million worth of damage to properties, including damage to infrastructure and hazardous material sites, Imperial Beach’s complaint claims.
Sher Edling attorneys did not return TheDCNF’s requests for comment.
Cities’ climate lawsuits build on past legal efforts from states attorneys general looking to punish Exxon for allegedly covering up global warming.
It’s largely based on reporting from the liberal InsideClimate News and Columbia University purporting to show Exxon had been studying climate science for decades, internally worried about it but publicly funding groups opposed to climate regulations. Liberal anti-fossil-fuel foundations funded the reporting.
State prosecutors, with New York Attorney General Eric Schneiderman in lead, have been engaged in a legal battle with Exxon for years, arguing InsideClimate’s reporting shows Exxon has been lying to investors and deceiving the public.
Exxon pushed back against Schneiderman and his allies, and is also fighting the new wave of city lawsuits.
Exxon showed in legal filings how California cities did not disclose said risks in bond offerings to investors when they started suing the company over future global warming damages. CEI attorneys pointed out this discrepancy in a letter sent to the Securities Exchange Commission sent in February.
“A number of California cities and counties have recently filed lawsuits against several oil and gas companies, claiming that these companies failed to disclose the alleged risks of climate change,” CEI attorneys wrote.
“However, in these lawsuits, the plaintiff cities and counties apparently describe these climate risks in ways that are far different than how they described them in their own bond offerings. In our view, this inconsistency raises serious questions of municipal bond fraud,” the attorneys added.