Will Big Oil Be Forced to Pay for Climate Damages

Will Big Oil Be Forced to Pay for Climate Damages

The U.S. Department of Justice sided with Colorado’s local governments, which is the most recent case of a growing wave of governments pushing for lawsuits against the big oil companies, demanding them to pay for their climate damages.

Climate Litigation against Big Oil Companies

Oil giants have known the dangers of burning fossil fuels for decades. With their persistent efforts to block action that will control carbon pollution, they were able to also deny that the science behind the claim was not clear. 

But since the world knew that the big oil companies are aware of the damages their products make to the climate, a wave of lawsuits from counties, cities, and states came forward. These climate litigations, reaching almost 2 dozen now, seek to place fossil fuel companies on trial for deceiving the public.  

However, not a single one of them made it to trial. They’ve been bouncing around between state and federal courts, with oil giants in control to delay any decision. 

The DoJ brief on the Colorado case, Suncor v. Boulder County, against two oil companies – Suncor and Exxon – might soon end the inaction. The brief argued that the case should be heard in state court, not federal, which is favorable to the plaintiffs.

The Colorado case started in 2018 when the city and county of Boulder sued Suncor Energy as well as Exxon. They seek millions of dollars to improve their infrastructure to cope with climate change. 

The Colorado government claimed that the oil giants are violating the state’s consumer protection laws by selling fossil fuels in the state. That’s despite the fact that these oil companies definitely know that their products would damage the climate. 

Burning of fossil fuels can result in more damaging disasters such as wildfires, floods, droughts, and more fatal heat waves, which is what the state is witnessing today. 

Experts noted that the DoJ brief on the Colorado case is an action by the Biden administration supporting the climate lawsuits. A law professor said that the governments are now siding with climate advocates. 

When the Supreme Court reviews this case, it can be a turning point for climate litigation against oil companies.

Other Climate Lawsuits Filed

State governments across the US have filed lawsuits claiming that oil giants, namely Exxon, Shell, Chevron, and BP, deceived the public about the damage of their products, which caused devastating climate disasters.  

In 2017, California cities and counties began the trend by suing plenty of fossil fuel companies for deceptive marketing. The plaintiffs use the state’s tort laws that protect the public from misleading advertising. 

Attorneys general in other states followed suit. 

In 2018, Rhode Island also filed a similar lawsuit against big oil companies for deceiving people about the dangers of climate change. 

A year after that, the New York state accused Exxon of misleading shareholders about climate change. But a judge ruled that the state attorney general failed to show enough evidence against the oil giant. 

In 2020, another climate lawsuit was filed in Hawaii. The city and county of Honolulu were after the oil companies, pushing them to pay for their climate damages. The big oil defendants include Exxon, Sunoco, and Chevron. 

Despite an ongoing appeal from the fossil fuel industry, a Hawaii judge ordered that a discovery process begins. It is a pre-trial step in which both parties collect pieces of evidence from documents and witnesses.

Amidst the progress of the lawsuits, oil companies continue to argue that the case isn’t really about deceptive marketing. It’s more about the broader question of climate change, which should be moved to the federal courts.

A law professor at the University of Hawaii commented on this, saying:

“The fossil fuel companies are afraid of state courts… They are petrified of state courts who are closer to the problem, closer to the issues, and absolutely terrified of going in front of juries of real people.”

The oil companies also argue that local governments have been encouraging the production and use of oil and gas. 

Proponents of climate lawsuits against fossil fuel companies likened the litigation to cases against big tobacco companies in the 1990s. Cigarette companies were ordered to settle damages of over $240 billion after decades of denying that smoking can cause cancer. 

Tobacco companies agreed to pay annual sums of money to the states to compensate for healthcare costs related to smoking.

So, if the climate lawsuits ended up favoring the plaintiffs, they would compel oil companies to also pay for climate damages. It will also make the banking sector think that investing in fossil fuels is a risky business. 

Judges have repeatedly rejected oil companies’ line of reasoning and the plaintiffs maintained that the lawsuits belong in state court. It’s now up to the Supreme Court to weigh on the case.

Supreme Court Decision: federal vs. state court

The Supreme Court turned to the solicitor general for help to decide on where the Colorado case belongs. The official said that the case should not be removed to federal court but remain in the state court.

There are two options for the Supreme Court to push these climate lawsuits forward. It can agree to hear the case or it can take it up. Either way, the lawsuit will proceed back in the state court. 

In that case, it will impact other pending climate lawsuits, with all the cases being heard in state courts.   

If the SC decides to hear the case, the trial can happen in the fall and the court can decide next year. In this case, all other similar cases would be on hold until the final decision comes down.

Once the climate lawsuits proceed to trial, juries would most likely see a decades-long trail of evidence showing how oil companies deceived the public about climate change like the “Exxon Knew” controversy. 

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