Supreme Court Hears Oral Arguments In Case That Could Determine The Future Of Suits Against Energy Companies

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Varun Hukeri General Assignment & Analysis Reporter
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The Supreme Court heard oral arguments Tuesday on a climate case that could determine the future of climate litigation against energy companies within the federal court system.

The argument in BP P.L.C. v. Mayor and City Council of Baltimore considers whether energy companies should be held accountable for the impact of climate change. The lawsuit was filed in 2018 by the City of Baltimore and argues that 26 companies should be held liable for environmental damages in the city — including coastal flooding and rising temperatures.

But the Supreme Court will not rule whether energy companies should pay for environmental damages. Instead, the justices will decide whether the case should be ruled on by a federal court or a state court. How the Court rules on this jurisdictional question would impact at least 19 other cases where local governments are suing the energy industry, according to SCOTUSBlog.

The lawsuit was initially filed in a state court, with the city arguing that litigation focused on environmental damage in Baltimore specifically, according to The Baltimore Sun. But the energy companies argued the lawsuit should be determined by federal courts given that the impact of fossil fuel emissions is not solely limited to Baltimore.

The Fourth Circuit Court of Appeals determined in a ruling last March that the case should be heard in state courts. But the energy companies appealed the decision to the Supreme Court, which agreed to take up the case in October.

Kannon Shanmugam, representing the energy companies, said during Tuesday’s oral arguments it would be “appropriate” for federal courts to resolve the dispute. “The answer to that question is clear because this court for more than a century has applied federal common law to claims seeking redress for interstate pollution,” he said.

Victor Sher, representing Baltimore, argued otherwise. “The conduct complained of is: fraud, deception, denial and disinformation, and those are traditional state foci,” he told the justices.

The energy companies are arguing for federal jurisdiction because the Baltimore case — and others like it — are more likely to be dismissed due to established precedent, a source familiar with the case told the Daily Caller. The city of Baltimore, on the other hand, would have a stronger chance of winning the case under state jurisdiction.

The number of climate lawsuits from environmental groups and local governments has increased considerably over the past two decades. But a report from the Manufacturers’ Accountability Project (MAP) argues that climate litigation is mostly a political tactic to penalize fossil fuel production or extract financial concessions from energy companies. (RELATED: Climate Experts Sound The Alarm On Biden’s $2 Trillion Climate Plan)

Baltimore’s outside counsel Sher previously admitted during a 2018 conference that climate cases “are not about stalling climate change” but rather about getting energy companies to pay for environmental damages in local communities.

Recent polling data from Axis Research suggests that American voters do not support climate litigation targeting energy companies. 54% of respondents said it is “not important” to sue manufacturers over climate change allegations. 47% of respondents said they “strongly agree” it is unfair to blame one company or industry for climate change.

MAP, an industry group representing manufacturers, also filed an amicus brief in November encouraging the Supreme Court to reverse the Fourth Circuit’s decision. MAP special counsel Phil Goldberg said in a Jan. 12 statement that a ruling in favor of the energy companies would allow climate policy to be appropriately decided by lawmakers and regulators.

“Developing national energy policy is a legislative and regulatory matter and should not be driven by a number of state court judges across the country based only on a narrow set of allegations,” he said. “We are confident the Court will find … that climate change requires a comprehensive response from policymakers, not a liability ruling from state or federal courts.”