Climate Law Blog

Each month, Arnold & Porter and the Sabin Center for Climate Change Law collect and summarize developments in climate-related litigation, which we also add to our U.S. and non-U.S. climate litigation charts.  If you know of any cases we have missed, please email us at columbiaclimate@gmail.com.

HERE ARE THE ADDITIONS TO THE CLIMATE CASE CHART SINCE UPDATE # 113.

FEATURED CASE

Texas Federal Court Allowed Securities Fraud Suit to Proceed Against Exxon

The federal district court for the Northern District of Texas found that investors in Exxon Mobil Corporation (Exxon) had sufficiently pleaded claims that Exxon and certain Exxon officials made material misstatements concerning the company’s use of proxy costs for carbon in business and investment decisions. Exxon argued that the investors’ allegations that it stated a different proxy cost in public statements than it used in internal calculations were based on the investors’ confusing of two separate proxy costs—one for carbon and one for greenhouse gases—as the same proxy cost. The court concluded, however, that “[w]hether the two differing proxy cost values represent two different costs or the same cost with different values applied internally than publicly purported to be applied is a factual dispute and cannot be determined at this motion to dismiss stage.” The court also noted that the complaint alleged that Exxon had indicated to investors that it used only one proxy cost across all business units. The court also found that the plaintiffs had alleged sufficient facts to plead other material misstatements related to the condition of certain specific businesses. The court further ruled that the plaintiffs had adequately pleaded loss causation and had met the heightened scienter standard for all defendants except for Exxon’s vice president of investor relations. The allegations supporting the court’s finding that the scienter standard was met included allegations that Exxon’s management committee regularly received detailed information on carbon-related risks and proxy costs, allegations that Exxon was particularly motivated to maintain its AAA credit rating in advance of a $12 billion public debt offering, and allegations that three of the defendants signed documents filed with the Securities and Exchange Commission that allegedly contained materially misleading information. Ramirez v. Exxon Mobil Corp., No. 3:16-CV-3111 (N.D. Tex. Aug. 14, 2018).

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Today, the Sabin Center filed a motion on behalf of a nationwide local government coalition for leave to participate as amici curiae in the lawsuit challenging the first action undertaken by the Trump administration to roll back the greenhouse gas emission and fuel economy standards established for light duty vehicles (“clean car standards”). If the motion is granted, the petitioners will be able to file an amicus brief detailing why these standards are critical for cities and local governments to reduce emissions from the transportation sector and help avert the harmful impacts of climate change.

Members of the coalition include the U.S. Conference of Mayors (USCM), the National League of Cities (NLC), The City of New York, NY; Los Angeles, CA; Chicago, IL; King County, WA; Santa Clara County, CA; San Francisco, CA; Baltimore, MD; Oakland, CA; Minneapolis, MN; Boulder County, CO; Pittsburgh, PA; Ann Arbor, MI; West Palm Beach, FL; Santa Monica, CA; Coral Gables, FL; and Clarkston, GA.

This coalition of local governments is representative of the diverse communities affected by the proposed roll back of the clean car standards. The NLC represents over 19,000 cities and towns and USCM is the official non-partisan organization of cities with populations of 30,000 or more. The individual cities and counties that have signed onto the motion are home to more than 22 million people, and include New York, Los Angeles, and Chicago, the three largest cities in the Untied States.

“Local governments have been leaders in the fight against climate change for decades, and given the Trump administration’s denial of the problem, they have doubled down on their climate commitments,” said Michael Burger, author of the motion, executive director of the Sabin Center  and special counsel at the law school’s Environmental Law Clinic. “They’re working hard to reduce emissions from the transportation sector, but local measures can only go so far. Vehicle emission standards are the most effective tool for controlling transportation-related emissions, and local governments lack the authority to create their own standards. So the federal standards are of critical importance.”

Read Motion Here

By Jessica Wentz

On Tuesday, August 21, EPA published a proposed rule to replace the Clean Power Plan. The proposal, entitled the “Affordable Clean Energy Rule,” would establish a framework for controlling CO₂ emissions from existing power plants which is significantly less effective and environmentally protective than its predecessor. Here are six important things to know about the proposed rule:

1. The Proposal Sets a Very Low Bar for Emission Reductions. The Clean Air Act mandates that he performance standards established for existing sources under Section 111(d) must reflect the “best system of emissions reduction” (BSER) for the pollutant and source category being regulated. EPA is proposing to define the BSER for greenhouse gas (GHG) emissions from existing power plants as on-site, heat-rate efficiency improvements. In other words, the performance standards established for power plants would only reflect those emission reductions that can be achieved through making the existing plants more efficient – they would not reflect the much larger reductions that could be achieved by switching to cleaner energy sources and improving demand-side energy efficiency (often referred to as measures “outside the fence line” of power plants). As a result, the standards will be considerably less stringent.

The standards may also fail to ensure emissions reductions at all insofar as there may be a “rebound effect” wherein plants that implement heat-rate improvements may be called upon to run more hours, thus increasing the total amount of CO₂ generated (while still complying with performance standards). EPA explicitly recognizes the potential for such a rebound effect in the proposal without providing any recommendation for mitigating the effect.

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By Dena Adler

New research from the Sabin Center for Climate Change Law and the Natural Resources Defense Council (NRDC) reveals that nearly half of states do not have regulatory or statutory requirements for sellers to disclose a property’s history of flood damages to a homebuyer. As a consequence, many homeowners may never learn their home is vulnerable to flooding until after they find their homes quite literally underwater —a risk that is increasing alongside sea level rise and more frequent and intense extreme weather events. Ironically enough this information may be readily available either from the seller or from the Federal Emergency Management Agency (FEMA), which keeps a record of flooding in all properties which receive insurance through its National Flood Insurance Program (NFIP).

Is your state one of the many that keep homebuyers in the dark about whether their new property is susceptible to flooding? The Sabin Center and NRDC reviewed all 50 states’ real estate disclosure laws to put together this interactive map identifying the robustness of each state’s requirements.

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By Susan Biniaz*

United Nations General Assembly (UNGA) Resolution 72/277,[1] at least on paper, appears to rectify one of the flaws in the original French proposal for a new international environmental agreement, or “Global Pact for the Environment.” France’s draft agreement, which did not provide a compelling link between its approach and a particular environmental problem, left many readers confused and concerned.  In contrast, the Resolution sets out a linear methodological approach.  It asks a working group to consider whether there are possible “gaps” in existing environmental law and policy and, if so, to discuss possible options for addressing them.  These might include one or more new international instruments. States should take advantage of this opportunity to consider the issues systematically and non-politically, in the hopes of focusing global effort on key areas in need of strengthened international attention.

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By Romany Webb and Lauren Kurtz

As of August 14, the federal government has attempted to censor, misrepresent, and otherwise stifle science over 150 times. We know this because, in January, the Sabin Center and Climate Science Legal Defense Fund launched the Silencing Science Tracker (SST). As its name suggests, the SST records federal government action to “silence science,” for example by restricting scientific research or the publication of scientific information, since the November 2016 election. When the SST was launched, we had 96 entries, meaning that there had been almost two attempts to silence science each week during the fourteen months after President Trump was elected. Since then, the Trump administration’s attacks on science have accelerated, with the SST now containing 155 entries.

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By Jose F. Pinto-Bazurco*

Last month the United Nations Security Council (UNSC) met to discuss the implications that climate change has on peace and security, marking the third time the Council convened to formally discuss this issue. (Similar discussions took place in 2007 and 2011.) I was fortunate to attend last month’s session.

As a general matter, members of the Security Council agree that climate change presents significant threats to global peace and security – in particular relating to impacts associated with sea-level rise, drought, food and water security. The July meeting featured several invited speakers who highlighted the security threats climate change poses to people in the developing world, in particular in the Lake Chad Basin, West Africa, the Sahel and the Horn of Africa. (Interestingly enough, the U.S. representative, consistent with the Trump administration’s current policy stance, mentioned the consequences of climate change but did not recognize the concept of climate change itself.) However, though they agree on the threat the nations can’t seem to agree whether the topic of climate change lies within the competencies of the Security Council. Read more »

Each month, Arnold & Porter and the Sabin Center for Climate Change Law collect and summarize developments in climate-related litigation, which we also add to our U.S. and non-U.S. climate litigation charts.  If you know of any cases we have missed, please email us at columbiaclimate@gmail.com.

HERE ARE THE ADDITIONS TO THE CLIMATE CASE CHART SINCE UPDATE # 112.

FEATURED CASE

Supreme Court, Ninth Circuit Declined Federal Government’s Requests to Halt Kids’ Climate Lawsuit

On July 30, 2018, the U.S. Supreme Court denied the federal government’s application for a stay of the young people’s climate change lawsuit pending in the federal district court for the District of Oregon, which is scheduled for trial beginning on October 29, 2018. The federal government filed its stay application after the Ninth Circuit Court of Appeals denied the government’s emergency motion for a stay pending consideration of a second petition for a writ of mandamus filed by the government on July 5, 2018. The federal government asked the Supreme Court for a stay pending the Ninth Circuit’s consideration of the mandamus petition and any further proceedings in the Supreme Court, and also requested an administrative stay pending the Court’s ruling on the stay application. Alternatively, the federal government suggested that the Supreme Court could construe its application as a petition for writ of mandamus or petition for writ of certiorari from the Ninth Circuit’s March 2018 decision denying mandamus and directly order dismissal of the action or a stay pending the resolution of the federal government’s pending dispositive motions. After the Ninth Circuit denied the government’s second mandamus petition on July 20, the federal government indicated in a letter to the Supreme Court that this alternative course of action was “even more warranted” because “nothing relevant remains to be done in the lower courts.”

The Supreme Court’s order denying the stay application said the request for relief was premature and denied the request without prejudice. The Court also noted that “[t]he breadth of respondents’ claims is striking, however, and the justiciability of those claims presents substantial grounds for difference of opinion.” The Court said the district court “should take these concerns into account in assessing the burdens of discovery and trial, as well as the desirability of a prompt ruling on the Government’s pending dispositive motions.” After the Supreme Court denied the stay, the government filed a notice with the district court suggesting that the Court’s order had two implications for the case. First, the government said the Court’s order was relevant to its requests that the district court certify for interlocutory appeal any denial of its dispositive motions because the Court’s order indicated that the “substantial grounds for difference of opinion” factor for interlocutory appeal was met. Second, the government said the district court should make the “prompt ruling” on the dispositive motions to which the Supreme Court referred. United States v. U.S. District Court for the District of Oregon, No. 18A65 (U.S. July 30, 2018); Juliana v. United States, No. 6:15-cv-1517 (D. Or. notice filed Aug. 1, 2018).

In its opinion denying the second petition for writ of mandamus without prejudice, the Ninth Circuit found that no new circumstances justified the second petition. The Ninth Circuit said the government had not satisfied the five factors for mandamus at this stage of the proceedings, and stated: “It remains the case that the issues that the government raises in its petition are better addressed through the ordinary course of litigation.” The Ninth Circuit rejected, among other arguments, the government’s contention that it would be prejudiced in a way not correctable on appeal because agency officials would have to answer questions on the topic of climate change. The Ninth Circuit characterized the government as arguing that answering such questions could constitute “agency decisionmaking,” which would require adherence to the requirements of the Administrative Procedure Act (APA). The Ninth Circuit said the government “cites no authority for the proposition that agency officials’ routine responses to discovery requests in civil litigation can constitute agency decisionmaking that would be subject to the APA.” The Ninth Circuit also again rejected the argument that proceeding with discovery and trial would violate separation of powers. The Ninth Circuit indicated that the federal government could challenge “any specific discovery order that it believes would be unduly burdensome or would threaten the separation of powers” but that “[p]reemptively seeking a broad protective order barring all discovery does not exhaust the government’s avenues of relief.” United States v. U.S. District Court for the District of Oregon, No. 18-71928 (9th Cir. emergency stay denied July 16, 2018; mandamus denied July 20, 2018).

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By Romany Webb

On Thursday, August 2, the U.S. Environmental Protection Agency (EPA) and Department of Transportation (DOT) jointly issued the Safer Affordable Fuel-Efficient Vehicle Rule (SAFE Vehicle Rule). The SAFE Vehicle Rule proposes changes to EPA’s greenhouse gas emissions standards and DOT’s Corporate Average Fuel Economy (CAFE) standards for light duty vehicles in model years (MY) 2021 through 2025. In short, whereas both EPA and DOT had previously adopted standards that would become more stringent over time, they are now proposing to freeze their standards after MY2020. (Other proposals have also been put forward, but this is the agencies’ preferred approach).

The SAFE Vehicle Rule has, unsurprisingly, generated a lot of controversy. To inform the ongoing debate about the rule, this blog discusses five key points relating to its operation and likely effect.

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By Romany Webb

The U.S. is currently in the midst of a natural gas boom, with production growing dramatically in recent years. The resulting glut of natural gas has led to a decline in prices which has, in turn, prompted increased gas use in electricity generation and other applications. Many see this as a positive development because the combustion of natural gas results in fewer climate-damaging greenhouse gas emissions than coal and oil (per unit of energy produced). Others, however, have expressed concern about emission during natural gas production. Recent studies indicate that natural gas production emits significant methane, which is a highly potent greenhouse gas, with approximately eighty-four times the climate impacts of carbon dioxide (on a pound-for-pound basis, over a twenty-year time horizon). Achieving long-term climate change goals may, therefore, require the phasing out of natural gas use.

A new Sabin Center working paper, published online today, explores how technology can be used to promote more efficient natural gas use. The focus is on advanced metering infrastructure (AMI), consisting of state-of-the-art gas meters capable of recording natural gas use hourly or daily, and transmitting the data to customers in real-time via a wireless network. This is likely to encourage customers to conserve natural gas, with research suggesting that residential and commercial gas use could decline by up to four percent, leading to a reduction in greenhouse gas emissions. Further emissions reductions may also occur due to improved management of the natural gas pipeline system. For example, the wireless communication networks deployed with AMI can be used to collect data from methane and other pipeline sensors, enabling natural gas leaks to be detected and repaired more quickly.

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