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Environment & Energy Report

Boulder Climate Lawsuit Against Exxon, Others Advances (2)

July 7, 2020, 7:52 PMUpdated: July 7, 2020, 10:14 PM

Local governments in Colorado can pursue a high-stakes climate lawsuit against the fossil fuel industry in state court, judges ruled Tuesday in a setback for Exxon Mobil Corp. and other companies.

The U.S. Court of Appeals for the Tenth Circuit rejected industry lawyers’ claims that a lawsuit from Boulder, Boulder County, and San Miguel County belongs in federal court.

The ruling is the latest procedural victory for local governments attempting to hold fossil fuel producers liable for local harms linked to climate change.

Federal appellate courts fielding cases from Baltimore and several California municipalities reached similar conclusions earlier this year.

The venue dispute—whether climate cases belong in federal or state court—has dominated climate liability litigation for two years, sometimes keeping the plaintiffs from getting to the actual merits of their claims: whether the industry should pay for their role in global temperature rises. Federal courts are considered a more favorable venue for the industry.

Boulder and its partners filed their case in state court in 2018 against Exxon, Suncor Energy Inc., and other companies. Company lawyers pushed the case to a federal district court, which sent it back to the state level. Exxon appealed, and the Tenth Circuit heard oral arguments in May.

“Sooner or later the oil industry is going to get the message that their attempts to game the federal courts into hearing issues that belong only in state courts is a losing strategy,” said Niskanen Center attorney David Bookbinder, who helped represent the local governments. “No matter how many times they run it up the flagpole, no one is saluting.”

An Exxon spokesman said Tuesday the company is reviewing the decision and “evaluating next steps.” Suncor didn’t immediately respond to a request for comment.

The Colorado local governments argued that their case involves traditional state common law claims focused on local harms, including increased risks of floods, droughts, and wildfires. Exxon countered during arguments that the case involves “reshaping national and, indeed, global energy policy.”

The state court litigation has been proceeding concurrently with the appeal. The Boulder County District Court held a hearing in the case last month.

“We look forward to its pending decision on whether the case can proceed towards trial,” EarthRights International General Counsel Marco Simons, also on Boulder’s legal team, said in a statement.

Federal Officers

The Tenth Circuit debate focused, in part, on whether the judges could review the full district court order that sent the Boulder case back to state court, or only one part of it.

Industry lawyers cited “federal officer” grounds when they pushed Boulder’s case to federal court, saying it met the bar for transfer from state court because federal government officials were involved. But under legal precedent for the federal officer doctrine, many circuit courts say they can only review that single issue on appeal and can’t consider additional arguments for why a case belongs in federal court.

The Tenth Circuit agreed, confining its review to that issue and ultimately ruling against Exxon on the question.

“And because we conclude ExxonMobil failed to establish grounds for federal officer removal, we affirm the district court’s order on that basis and dismiss the remainder of this appeal,” the court said Tuesday, rejecting the company’s arguments that its federal offshore leases mean the case belongs in federal court.

Lawyers for BP Plc, Exxon, and other companies fending off a climate liability case from Baltimore are asking the Supreme Court to review that federal officer question.

Phil Goldberg, special counsel to the industry-aligned Manufacturers’ Accountability Project, said in a statement that the Tenth Circuit’s ruling makes Supreme Court review even more pressing.

“The Supreme Court should hear the climate tort cases now and resolve them once and for all,” he said in a statement.

The case is Bd. of Cty. Comm’rs v. Suncor Energy, 10th Cir., No. 19-01330, 7/7/20.

(Adds comment from EarthRights International, Manufacturers' Accountability Project.)

To contact the reporter on this story: Ellen M. Gilmer in Washington at egilmer@bloombergindustry.com

To contact the editors responsible for this story: Gregory Henderson at ghenderson@bloombergindustry.com; Anna Yukhananov at ayukhananov@bloombergindustry.com

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