The State of Delaware just filed a lawsuit against various big oil companies for their alleged malfeasance in bringing about the climate crisis. You can find the actual complaint here: https://attorneygeneral.delaware.gov/wp-content/uploads/sites/50/2020/09/2020-09-09-Final-Complaint.pdf.
Despite whatever else I may say, I’m excited about this development because it shines a spotlight on some of the strategies and tactics of giant corporations, and it brings a certain mainstream legitimacy to the thesis that what is happening in our environment today is indeed the result of human activity – and that some of that activity, at least, was legally wrong, and much of it was knowingly harmful.
Some are claiming that this is big oil’s “big tobacco moment.” About that I’m not so sure. The issues presented in the environmental litigation are significantly different, and I’m not convinced Delaware’s lawsuit has much of a chance of winning.
The Claims
It is striking that none of the claims in the 220 page Delaware complaint (“the Suit”) are based upon environmental law. Instead, they bring claims for Negligent Failure to Warn, Trespass, Nuisance, and misrepresentation under Consumer Protection law. I believe that is significant because it highlights the fact that there is not a clear legislative statement of public policy against what the oil companies have done to the environment. Instead, negligent failure to warn, trespass and nuisance are ancient common law claims not really addressing the sale of non-defective goods to willing consumers.
I will discuss what needs to be proved (the “elements” of the claims) below. The consumer claim may be more flexible, but I believe there are significant issues about whether it will apply as well. Notably absent from the claims are claims of conspiracy or corruption – given the facts pleaded, I would have expected claims under common law conspiracy and the Racketeering Influence Corrupt Organizations Act (RICO), but there are none.
The Parties
The parties in this suit, besides the state of Delaware as plaintiff, are numerous oil companies and associations. Strikingly absent from the list of defendants are a host of “unindicted coconspirators.” These include the entire automobile industry which has always worked to oppose relevant environmental regulation and, much more significantly, the coal industry and its users. Coal is a fossil fuel; it’s “dirtier” than oil and is used in notoriously “dirty” factory generators. How can you sue anybody for carbon-related environmental damage without including the coal miners, utilities, or the factories using coal? I suspect this will be a large issue.
One might, if he or she were sufficiently naïve, expect some politicians or lobbyists to be among the defendants. After all, they have played a very significant role in what has happened. Not one has been named, however, and this, I believe, points to a legal issue that will probably be fatal to at least the nuisance and failure to warn claims. And that is that our country has, with arguably fair notice of the hazards, favored the fossil fuel industry as a matter of public policy. It continues to do so.
Procedurally, when significant players who should be involved in litigation are not named in a suit, either party can bring them in by a process known as “joinder.” I expect the defendants in this case may seek to join the entities I have named. I will add this caveat, however – I have not fully analyzed either the facts or laws here, and there could be a reason of which I am not currently aware for not bringing them into the suit. I would strongly consider it, however, at a minimum, as I would want a judge to consider whether public policy destroys the plaintiff’s case and to highlight the comparative impact of coal versus oil.
We’ll see if they do.
Now to the claims.
Negligent Failure to Warn
Failure to warn is a principle of product liability based on the fact that some products, while not defective, are inherently dangerous even if used for the purpose intended in the way recommended. A car, for example, is very dangerous, and its danger comes from the factors that make it useful: it can move and carry things – thus harmful collisions obviously will occur. Where a product has such risks that are NOT obvious but are known to the manufacturer, there arises a duty to warn the consumer of those risks.
Of great significance in Delaware’s case, then, will be (1) how obvious the risk was; and (2) when did the oil industry “know” them. But there are other issues lurking: who must be warned, and how much damage must occur to be “cognizable” (considered significant by the law). And how much of the damage must be attributable to the defendant and its failure to warn. Hence the significance of all those omitted defendants. What if the amount of undisclosed damage caused by carbon emissions from oil is much less that coal has caused? To what extent should big oil have known that its role in pollution would be significant? And how do you apportion liability?
And what about those politicians? At what point did the risk become sufficiently obvious that they were on notice (ending the need for labeling)? Litigating these issues may make a lot of lawyers rich, but I don’t like the chances of winning.
The Delaware suit alleges (see, e.g., Paras 9 and 152), as it must, that the failure to warn “harmed” it, and it does so by alleging (without any real detail) that it would have minimized harm if it had only known about it, and (in much greater detail) defendants should have taken action to minimize the harm – including regulation of use and emissions. Of course the impact of these hypothetical efforts to mitigate harm is speculative from a legal standpoint and dubious from a practical one given our nation’s love affair with the auto. It also raises some very troublesome first amendment questions: to what extent is a person legally able to advocate (by lobbyists) against legislation that would be beneficial to society? To what extent must one make disclosures that might cause an increase in regulation? And to what extent is legislative “horse-trading” to prevent legislation constitutionally protected?[1]
For a fuller discussion of failure to warn: https://www.justia.com/products-liability/types-of-products-liability-claims/failure-to-warn/
Trespass
A claim of trespass is basically a claim that the defendant did something to harm the plaintiff’s property. In this case, Delaware alleges that it owns property that was harmed, among other things, by rising sea levels. It alleges the defendants caused the harm and that it was without any permission or license. (See, pp 203-5 of the Complaint).
This may be the strongest of the common law claims, but it appears vulnerable to me. First, it is in the context of product liability. It isn’t “you came onto my property and damaged it” (standard trespass); it’s “you sold somebody a product. They used it, and a byproduct of that use caused the globe to warm, which caused the sea levels to rise, which damaged my property.” Each of these things must be established as the “proximate cause” of the next thing, must be quantified and apportioned, and legally wrong (in this situation at least). Ultimately, the court would have to decide that the oil companies (and not the coal companies, for example) caused the sea level to rise by a specific number of feet causing a specific amount of damage.
That is a very tough row to hoe, though perhaps it can be done. Certainly the state won’t lack resources.
Nuisance
“Nuisance” in law has some of its lay meaning – it does refer to something obnoxious – but it requires a certain balancing act between the utility of the action challenged and the harm it causes, including the location and identity of the persons harmed. In this case, the allegations basically mirror the trespass allegations with the additional arguments that the defendants, by controlling the information available to the public (and not sharing it) caused the obnoxiousness to be worse than necessary.
That is very possibly true, but I think it requires a belief (i.e., admissible evidence) that either the public or government would have modified their actions if they had received more knowledge. And this whole “you didn’t tell me what you should have” does raise, especially in the legislative arena, significant first amendment issues. And the utility of the product – refined gasoline – is obviously very high in our economy.
Consumer Law Complaint
Count Four of the Suit is basically a consumer fraud or deceptive marketing (willful misrepresentation of facts or suppression of information amounting to deceit). There is a mountain of evidence of willful misrepresentation or suppression of facts, apparently, but here the issue is one of “harm.”
In a typical deceptive marketing claim, a plaintiff alleges the defendant sold him a product that turned out to be different than represented. This makes the product worth less to the purchaser. The harm, in other words, is measured in the value of the product sold versus the value as claimed. What is the difference in value – to the customer – of a product that harms the environment versus one that does not? I do not believe the appropriate measure of damages is the tangible (though yet unknown and unknowable) harm to the environment. It is the much more abstract question of how much that damage (to others, mind you) affects the value of the product sold to the consumer. Critically, the person harmed by consumer fraud is normally the consumer. The harm in this case is to Delaware citizens, a different category of persons. Thus it would appear that consumer law would not apply.
Delaware almost seems to alleging something, to speak metaphorically, more like this: “you told me it was a toy gun, but I pulled the trigger and a real bullet came out.” The problem as I see it with this formulation is that the bullet hit someone else beside the consumer.
Thus we cycle back to a variation of the first claim, a product liability claim. In this variation of the product liability claim (harm to third persons), there may actually be strict liability (no possible justification allowed for the harm occurring to the third person). I would suggest that Delaware should add exactly this sort of strict liability product claim, as it does not appear the complaint intends to do that. I have not looked at Delaware’s consumer law so don’t know if this would fly under that law (it does not seem to be the intention of the allegation, though). In this formulation, Delaware would not be stepping into the shoes of the consumer but those of an innocent third party citizen. It would appear the consumer legislation does not stretch that far, but product liability law surely would.
Conclusion
I am glad to see Delaware’s global warming lawsuit against the oil companies. I believe it would be strengthened by joining the coal companies (at least) and adding a strict liability products liability claim. I believe the facts pleaded support both a civil conspiracy and RICO claim, and quite possibly a criminal RICO claim. I would think the civil claims should probably be added. In any event, however, it does not appear to me that the laws used naturally apply to the wrong Delaware (and all of us) suffered. I don’t like the suit’s chances.
[1] See Para. 162: “Instead of widely disseminating this information, reducing their pollution, and transitioning to non-polluting products, Defendants placed profits over people. In connection with selling gasoline and other fossil fuel products to consumers in Delaware, Defendants have failed to inform or warn those consumers about the foreseeable effects of their fossil fuel products in causing and accelerating the climate crisis.”
This seems to assume that consumers, if aware of environmental harms from greenhouse gases, would change their purchases or habits. I don’t believe that is going to be legally sustainable.