Last month we reported that a federal appeals court ruled that environmental groups had standing to sue energy companies under tort and public nuisance claims for their alleged contribution to global warming. This month a federal district court came to opposite conclusion. Judge Saundra Brown Armstrong of the U.S. District Court for the Northern District of California, issued an order granting the defendants’ - a number of oil and energy companies - motion to dismiss the case based on the plaintiffs’ lack of standing.  

Unlike the Second Circuit Court of Appeals, the U.S. District Court judge in Native Village of Kivalina v. Exxon Mobil Corp. expressly ruled that it is not the judiciary’s role to determine whether companies can be held liable for global warming.

According to Judge Armstrong:

“Based on the judiciary’s history of addressing ‘new and complex problems,’ including those concerning environmental pollution, the [2^nd Circuit] court concluded that ‘[w]ell-settled principles of tort and public nuisance law provide appropriate guidance to the district court in assessing Plaintiffs’ claims and federal courts are competent to deal with these issues’ such that their global warming can ‘be addressed through principled adjudication.’”  

Judge Armstrong further wrote:

“Though the alleging defendants are responsible for a ’substantial portion of greenhouse gas emissions, plaintiffs also acknowledge that virtually everyone on Earth is responsible on some level for contributing to such emissions. Yet, by pressing this lawsuit, plaintiffs are in effect asking this court to make a political judgment that the two dozen defendants named in this action should be the only ones to bear the cost of contributing to global warming.”

While the U.S. District Court in California dismissed this global warming lawsuit, the 5^th Circuit Court of Appeals in New Orleans this week allowed a class action lawsuit to proceed against a number of insurance, oil, coal and chemical companies for property damages resulting from Hurricane Katrina. The order cited the Second Circuit court case [Connecticut v. American Electric Power Company] in allowing the case to proceed.

In Comer v. Murphy Oil Co., Judge James Dennis wrote:

“Although we arrived at our decision independently, the Second Circuit’s reasoning [in Connecticut v. American Electric Power Co.] 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.”

While two of the three courts discussed above allowed the cases to proceed, the courts did not ultimately rule whether the energy companies are indeed liable based on tort and public nuisance claims. Instead, the cases merely allowed the cases to proceed on procedural grounds. Hamilton Consulting will continue to follow these cases as they wind through the judicial system.