The Ninth Circuit Court of Appeal recently ruled that six lawsuits brought by cities and counties in California are to be remanded, or returned, to state court from federal court, while a seventh lawsuit was remanded back to district court to see if there is any subject-matter jurisdiction in the case. As a result, the majority of the California cities and counties who have filed lawsuits against major fossil fuel companies can now pursue their claims in state court, while the other government entities in the seventh case may be able to continue their fight to get their case returned to state court. In order to understand the significance of these decisions, first one needs to understand the basics of the cases themselves.
Why Are California Cities and Counties Suing the Fossil Fuel Industry?
Although there are seven lawsuits, the claims for each lawsuit and the reasons behind the filing of each lawsuit are very similar. All of the lawsuits were initiated to seek financial compensation for global warming effects impacting various California cities and counties, such as infrastructure and property damage caused by rising sea levels, and money to cover the cost of implementing safeguards to protect against the global warming effects. The lawsuits are centered around public nuisance claims arising from global warming allegedly worsened by the extraction/production of fossil fuel products, promotion of fossil fuel products, the concealment of the hazards associated with the use of fossil fuel products, and sale of fossil fuel products by oil companies, as well as an alleged failure by the oil companies to pursue less hazardous alternatives available to the companies.
Who Is Suing Whom?
The City of Oakland and the City and County of San Francisco joined forces to file a lawsuit against well-known oil companies, some of whom have operations in the San Francisco Bay Area, including Chevron and Shell. The County of Santa Cruz, the City of Santa Cruz, and the City of Richmond filed individual lawsuits against several oil companies and a number of their subsidiaries. The County of San Mateo, the City of Imperial Beach, and the County of Marin filed their own lawsuits against not only major oil companies, but also against a number of large coal companies, such as Rio Tinto and Total, as well as a number of subsidiaries.
How Did They Get to the Ninth Circuit?
All of these lawsuits were initially filed in state court in California. The lawsuit filed jointly by Oakland and San Francisco was removed to federal court by the oil companies under the theory that the claim was more properly suited for federal court, after the oil companies identified seven reasons why the lawsuit should be decided under federal law. Although Oakland and San Francisco amended their complaint to include a federal nuisance claim, the federal district court dismissed the complaint for failing to state a claim and dismissed the named defendants for lack of personal jurisdiction. Oakland and San Francisco then appealed the dismissal.
The defendants named in the lawsuits filed individually by the Cities of Santa Cruz, Richmond, and Imperial Beach; and the Counties of Santa Cruz, San Mateo, and Marin removed all of the lawsuits to federal court. However, the plaintiffs in all six lawsuits successfully moved to remand the lawsuits to state court, with the district court rejecting all of the grounds that the defendants submitted in support of removing the lawsuits to federal court. The named defendants in the six lawsuits appealed the decision to remand the lawsuits back to state court.
Why Do the Ninth Circuit Decisions Matter?
The reason why these two decisions matter is because they may open an opportunity for the cities and counties of California to have their claims against major companies in the fossil fuel industries decided by California state law instead of federal law. Under California Civil Code §§ 3479-3480, government bodies are allowed to file public nuisance lawsuits in California where a person or a company engages in actions that are harmful to health, offensive, or negatively impact the enjoyment of property or free passage of public property or public waterways in a manner that affects a significant number of people all at the same time. Under federal law, government bodies can only file a public nuisance lawsuit where there is an unreasonable interference with a right common to the general public in a way that impacts government property or public property or is harmful to the health and general welfare of their citizens. While the California codified law and the federal common law governing public nuisances may appear similar, the California state law does not require for the interference caused by a public nuisance to be unreasonable, just that it causes harm or a negative impact. This means that California state law has a lower threshold than federal common law for what may constitute actionable harm in the form of a public nuisance. Furthermore, federal common law governing public nuisances stemming from climate change is frequently preempted by the Clean Air Act, meaning that any complaint based on the causation of climate change should be brought up as violation of the Clean Air Act instead of a public nuisance claim in court.
Therefore, the remand of the lawsuits filed by the Cities of Santa Cruz, Richmond, and Imperial Beach; and the Counties of Santa Cruz, San Mateo, and Marin from federal court to state court in California will give the cities and counties a better opportunity to have their cases actually brought to trial. This is due to the lower threshold for having grounds for a formal complaint and the lack of a preemption by a federal statute designed to prevent such behavior such as the Clean Air Act. As for the lawsuit filed by Oakland and San Francisco, their remand to the district court means that they have another chance to litigate the case after it was dismissed for failing to state a claim, and possibly also get their case remanded to state court.