Each month, Arnold & Porter Kaye Scholer LLP 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 at gmail dot com.
HERE ARE THE ADDITIONS TO THE CLIMATE CASE CHART SINCE UPDATE # 98.
FEATURED CASE
Environmental Groups Challenged President Trump’s Reversal of Prohibition on Future Oil and Gas Leases in Arctic and Atlantic Ocean Areas
Ten environmental groups filed a lawsuit in the federal district court for the District of Alaska challenging the portions of President Trump’s executive order of April 28, 2017 on “Implementing an America-First Offshore Energy Strategy” that purported to eliminate protections for lands in the Arctic and Atlantic Oceans. President Obama withdrew the lands from future oil and gas leasing in January 2015 and December 2016 pursuant to presidential authority under the Outer Continental Shelf Lands Act (OCSLA). The complaint noted that in withdrawing the lands, President Obama and the White House had cited a number of factors supporting the withdrawal, including the need to make a transition from fossil fuels to address climate change, stresses to Arctic species resulting from climate change, and the contribution of withdrawn Atlantic Ocean canyons to climate stability as well as threats to the canyons from climate change. In their complaint, the environmental groups asserted that President Trump’s executive order exceeded his constitutional authority and intruded on congressional authority under the Property Clause of the Constitution in violation of the separation of powers doctrine. They also asserted that his actions exceeded authority granted by OCSLA, which they argued did not authorize presidents to re-open lands for disposition once they had been withdrawn. League of Conservation Voters v. Trump, No. 3:17-cv-00101 (D. Alaska, filed May 3, 2017).
DECISIONS AND SETTLEMENTS
D.C. Circuit Granted EPA Request to Hold Challenges to Oil and Gas Methane Standards in Abeyance
On May 18, 2017, the D.C. Circuit Court of Appeals granted a request by the U.S. Environmental Protection Agency (EPA) to hold cases challenging methane emissions standards for sources in the oil and natural gas sector in abeyance while EPA reviewed the regulations pursuant to President Trump’s executive order on “Promoting Energy Independence and Economic Growth.” EPA must file status reports with the court every 60 days. After EPA requested that the cases be held in abeyance in early April, the agency also sent a letter on April 18 indicating that it would convene a proceeding for reconsideration of two issues related to fugitive emissions in the final standards published in June 2016. On June 5, EPA published notice in the Federal Register that it was granting reconsideration of two additional elements of the June 2016 standards—the standards for well site pneumatic pumps and the requirements for certification by a professional engineer. EPA also stayed implementation of those aspects of the regulations for 90 days pending reconsideration. American Petroleum Institute v. EPA, Nos. 13-1108 et al. (D.C. Cir. May 18, 2017).
Oral Argument Postponed in Industry Challenge to 2013 Waiver for California Nonroad Vehicle Standards
The Ninth Circuit Court of Appeals granted EPA’s request to postpone oral argument in a proceeding challenging EPA’s September 2013 authorization of California standards for in-use nonroad diesel fleet vehicles such as tractors, lawnmowers, bulldozers, cranes, locomotives, and marine craft. Oral argument had been scheduled to take place on May 18. EPA indicated in its motion to continue oral argument that newly appointed EPA officials needed time to review the “significant legal and policy issues” raised by EPA’s decision to grant the waiver for California’s more stringent standards. The California Air Resources Board opposed the delay, arguing that the matter was “long overdue for adjudication” and suggesting that if EPA believed it had authority to review the 2013 determination it should initiate its review independent of the Ninth Circuit’s resolution of the pending challenge. Dalton Trucking, Inc. v. EPA, No. 13-74019 (9th Cir. order May 10, 2017; CARB response May 8, 2017; EPA motion May 5, 2017).
Georgia Federal Court Transferred Forest-Products Companies’ RICO Lawsuit Against Greenpeace to California
The federal district court for the Southern District of Georgia transferred forest-products companies’ lawsuit alleging federal and state Racketeer Influenced and Corrupt Organizations Act (RICO) claims against Greenpeace International and other organizations (Greenpeace) to the Northern District of California. The forest-products companies asserted that the defendants illegally attacked their forestry practices, including by suggesting that the companies created climate change risks by harvesting the Boreal forest. The Georgia federal court found that the companies’ alleged loss of Georgia customers had not occurred in its district and that a trip by the defendants to the district did not give rise to the plaintiffs’ claims. Because two Greenpeace employees who were integral to the plaintiffs’ forestry campaign were based in San Francisco, the court concluded that that a substantial part of events giving rise to the plaintiffs’ claims occurred in the Northern District of California and that venue was therefore proper there. Resolute Forest Products, Inc. v. Greenpeace International, No. CV 116-71 (S.D. Ga. May 16, 2017).
California Federal Court Rejected Challenge to Riverside County Highway Project
The federal district court for the Central District of California entered judgment for the Federal Highway Administration (FHWA) in a lawsuit challenging a highway project in Riverside County. Four environmental groups had alleged violations of the National Environmental Policy Act, as well as violations of Section 4(f) of the Department of Transportation Act. The court ruled that the plaintiffs had failed to exhaust administrative remedies for all but two of their arguments. One of the two remaining arguments concerned whether FHWA and the other defendants had considered a reasonable range of alternatives, including transit and high-occupancy vehicle lane options that could result in reduced greenhouse gas emissions. The court said that the plaintiffs had made incorrect assertions about the defendants’ consideration of alternatives and that the defendants had engaged in “a lengthy and detailed consideration of alternatives” and had given reasons for why alternatives that combined transit, HOV, and roadway upgrades were not viable. Center for Biological Diversity v. Federal Highway Administration, No. 5:16-cv-00133 (C.D. Cal. May 11, 2017).
New York Appellate Court Affirmed That Exxon’s Accounting Firm Had to Comply with Attorney General’s Subpoena in Climate Investigation
The New York Appellate Division affirmed a trial court order requiring Exxon Mobil Corporation’s (Exxon’s) accounting firm to comply with a subpoena from the New York State Attorney General in its investigation into Exxon’s climate change-related disclosures. The Appellate Division ruled that the court below had properly found that New York law on privilege applied and did not recognize an accountant-client privilege. The appellate court rejected Exxon’s contention that courts should apply an “interest-balancing analysis” to decide whether New York or Texas choice of law should govern the evidentiary privilege. People of State of New York v. PriceWaterhouseCoopers, LLP, No. 3685N (N.Y. App. Div. May 23, 2017). See discussion below in “New Cases, Motions, and Notices” for additional developments in this case.
California Court Rejected Claims That Greenhouse Gas Emissions Associated with High-Speed Rail Delays Invalidated Scoping Plan Update for Achieving AB 32 Goals
A California Superior Court dismissed a lawsuit challenging the California Air Resources Board’s (CARB’s) Scoping Plan Update prepared in 2014 pursuant to the Global Warming Solutions Act (AB 32) and the environmental analysis conducted for the 2014 Update pursuant to the California Environmental Quality Act (CEQA). The court ruled that the petitioner, Transportation Solutions Defense and Education Fund (TRANSDEF), had not exhausted its administrative remedies because it had not raised certain comments related to an increase in greenhouse gas emissions that would result from changes to and delays in California’s high-speed rail project, one of the emissions reduction measures relied upon in the Scoping Plan to achieve AB 32’s goals. The court found, moreover, that TRANSDEF had not shown the existence of a significant impact associated with the delay in construction. The court said that TRANSDEF had made “very little attempt” to quantify the increase in greenhouse gas emissions associated with the delay. The court also noted that high-speed rail was only one of many measures CARB proposed in the Scoping Plan update to reduce greenhouse gas emissions. The court also found that TRANSDEF had not established that CARB abused its discretion by not responding to comments. In addition, the court concluded that CARB’s approval of the Scoping Plan Update did not violate AB 32, even if the high-speed rail component of the plan would result in a short-term increase in greenhouse gas emissions during its construction while delays in construction meant that emissions reductions from the operations of high-speed rail would not offset the temporary increase by 2020. Transportation Solutions Defense & Education Fund, No. 34-2014-80001974 (Cal. Super. Ct. May 16, 2017).
Washington Court Ruled Again That Necessity Defense Was Not Available to Climate Activist
A Washington Superior Court ruled for a second time that a climate change activist who entered a pipeline facility and turned off a valve to stop the flow of oil could not present a necessity defense at trial. The court initially ruled that the defendant could not rely on the necessity defense in January 2017; the defendant’s first trial subsequently ended in a mistrial. The defendant—charged in the second trial with sabotage and burglary—asked for reconsideration, arguing that the court had erred by incorporating an “imminence” element into the defense, requiring the potential for immediate harm. The defendant further argued, however, that if given the opportunity he could establish the imminence of harm from climate change. The defendant also argued that the court erred in ruling that he had reasonable legal alternatives and that he had not actually avoided or minimized the targeted harm. In opposing the motion for reconsideration, the State of Washington said that given the defendant’s “grandiose depiction of impending doom, it seems we are indeed fortunate to still be alive to argue the matter further more than six months after the defendants’ actions.” The State also said that the defendant’s actions had not avoided any harm and that he could not qualify for the necessity defense because his actions were planned ahead of time. The trial was scheduled to begin on June 5, 2017. People v. Ward, No. 16-1-01001-5 (Wash. Super. Ct. May 10, 2017; state response May 5, 2017; motion for reconsideration Apr. 27, 2017).
New York Court Awarded Attorney Fees to Competitive Enterprise Institute in FOIL Lawsuit Against Attorney General
The New York Supreme Court awarded more than $20,000 in attorney fees and litigation costs to the Competitive Enterprise Institute (CEI), which brought a lawsuit against the New York Attorney General under the New York Freedom of Information Law (FOIL). CEI filed the proceeding after the Attorney General denied its FOIL request for common interest agreements with private parties and other state attorneys general regarding climate change investigations. In awarding fees to CEI, the court cited its November 2016 decision in favor of CEI and said that law of the case precluded further examination of the Attorney General’s arguments that CEI had not substantially prevailed or had not met statutory requirements for eligibility for fees. The court said that the Attorney General had “stonewalled” rather than provide the “straightforward response” to which CEI was entitled and that an award of substantial attorney fees was “particularly appropriate” to promote FOIL’s purpose and policy. Competitive Enterprise Institute v. Attorney General of New York, No. 5050-16 (N.Y. Sup. Ct. Apr. 19, 2017).
NEW CASES, MOTIONS, AND NOTICES
After Agreeing to Reconsider Landfill Emission Standards and Guidelines, EPA Asked D.C. Circuit to Hold Challenges to Standards in Abeyance
On May 5, 2017, EPA notified parties that had requested reconsideration of EPA’s new source performance standards and emission guidelines and compliance times for municipal solid waste landfills that it was granting reconsideration of six topics. The regulations chiefly targeted methane emissions from landfills. EPA also said it would issue a 90-day stay of the regulations in their entirety because the six topics were integral to both rules. On May 26, EPA filed a motion in the D.C. Circuit Court of Appeals asking the court to hold the case challenging the landfill regulations in abeyance for 90 days. National Waste & Recycling Association v. EPA, Nos. 16-1371 & 16-1374 (D.C. Cir. May 26, 2017).
EPA Asked D.C. Circuit to Continue Hold on Clean Power Plan Cases; Intervenors Said Court Should Remand
In a supplemental brief, EPA urged the D.C. Circuit Court of Appeals to continue to hold challenges to the Clean Power Plan in abeyance while it reviewed the regulations and considered its next steps. In a status report submitted two weeks later, EPA indicated that it “may be prepared to begin the interagency review process of a … proposed regulatory action in the near future” and that the cases should remain in abeyance pending the conclusion of EPA’s review and any resulting rulemaking. EPA submitted its supplemental brief in response to the D.C. Circuit’s request that the parties address whether the cases should be remanded rather than held in abeyance. EPA said continuing to hold the cases in abeyance would “better preserve the status quo, conserve judicial resources, and allow the new Administration to focus squarely on completing its current review … as expeditiously as possible.” EPA indicated that a remand order “would raise substantial questions” regarding the status of the Supreme Court’s stay of the Clean Power Plan. The petitioners and petitioner-intervenors supported EPA’s view, arguing that holding the cases in abeyance would best protect their rights to judicial review and the court’s ability to resolve challenges to the Clean Power Plan if EPA decided not to revise or rescind the rule. The petitioners and petitioner-intervenors also argued that holding the cases in abeyance would be consistent with the D.C. Circuit’s established practices, while remand would jeopardize the Supreme Court’s stay. Parties that intervened as respondents to defend the Clean Power Plan—including environmental and public health groups, power companies, and states and municipalities—argued against continuing the hold. The environmental and public groups asserted that doing so would “convert temporary enforcement relief pending judicial review into a long-term suspension of the Clean Power Plan, without any court having issued a decision on its legal merits and without following the administrative steps necessary to amend, suspend, or withdraw a regulation.” While they said that remand would be a more appropriate solution, they also urged the D.C. Circuit to issue a decision on the merits. The state and municipal respondent-intervenors likewise argued for a decision on the merits but said that remand would be “less detrimental” than an open-ended abeyance. They urged the court to limit the duration of the abeyance period to six months. The power companies also indicated that in the event the court did not issue a merits decision, remand would be the “sounder” alternative. The parties submitted similar arguments to the D.C. Circuit in the proceedings challenging EPA’s new source performance standards for carbon emissions from power plants. West Virginia v. EPA, Nos. 15-1363 et al. (D.C. Cir. EPA status report May 30, 2017; EPA supp. briefs May 15, 2017); North Dakota v. EPA, Nos. 15-1381 et al. (D.C. Cir. supp. briefs May 15, 2017).
D.C. Circuit Paused Challenges to Greenhouse Gas Standards for Heavy-Duty Vehicles for EPA Review of Request for Reconsideration
The D.C. Circuit granted EPA’s motion to hold the cases challenging its greenhouse gas emissions and fuel efficiency standards for new large and heavy-duty vehicles in abeyance while EPA considered a request for reconsideration of the standards from one of the petitioners. The court ordered that the cases be held in abeyance pending further order of the court and directed the parties to file motions to govern further proceedings by July 20, 2017. The court said it would not address a request to defer deadlines in the standards because the stay factors had not been addressed in the request. Truck Trailer Manufacturers Association, Inc. v. EPA, Nos. 16-1430 & 16-1447 (D.C. Cir. May 8, 2017).
EPA Told West Virginia Federal Court How It Would Attempt Evaluation of Facility-Level Employment Impacts of Clean Air Act
On May 15, 2017, EPA submitted its initial filing in compliance with the order of the federal district court for the Northern District of West Virginia requiring EPA to prepare a study of the employment impacts of the Clean Air Act. EPA’s filing came six days after the Fourth Circuit Court of Appeals heard oral arguments in EPA’s appeal, which EPA hopes will moot its obligation to complete the work described in this initial compliance filing. EPA must file its employment evaluation by July 1 to meet the district court’s deadline. In the initial filing, EPA indicated that it had assembled a workgroup of 80 EPA employees to develop the evaluation and that it would use as guidance the Economic Dislocation Early Warning System (EDEWS), a program jointly administered by EPA and the U.S. Department of Labor in the 1970s that tracked information on facility closures for which environmental regulation was alleged to be a significant factor. EPA cautioned, however, that it had “serious concerns about the analytical challenges associated with facility-level evaluations generally” and believed that resuming EDEWS would result in enormous costs with little gain in reliable information. EPA indicated that time constraints would prevent it from gathering information on plant closures and employment reductions through state and local governments and the firms themselves and that it was instead undertaking “a significant data-gathering effort by utilizing publicly available information on facilities in the coal-mining and coal-fired-generation industries, compiling that information, and then conducting a qualitative assessment of the factors that may have contributed to actual or potential closures or reductions in employment.” Because of the limitations of facility-level analysis, EPA said it also would include sector-level overviews to provide context. To comply with the district court’s requirement that it adopt measures by December 2017 to continuously evaluate losses and shifts in employment, EPA said it was assembling another workgroup and developing a work plan that would involve development of a system to collect facility-level information, development of a process for compiling and evaluating the information, and determining how to make the information publicly available. Murray Energy Corp. v. Pruitt, No. 5:14-CV-00039 (N.D. W. Va. May 15, 2017).
Industry Groups Sought to Withdraw from Young People’s Climate Lawsuit Against Federal Government as Court Weighed Magistrate’s Recommendation Not to Certify Appeal of Denial of Motion to Dismiss
Three trade groups moved to withdraw from the federal lawsuit in which young people alleged that the United States, the president, and other federal defendants had violated their constitutional rights by allowing greenhouse gases to accumulate in the atmosphere. The federal district court for the District of Oregon granted the three groups—National Association of Manufacturers (NAM), American Petroleum Institute (API), and American Fuel & Petrochemical Manufacturers (AFPM)—permission to intervene as defendants in January 2016, over the plaintiffs’ opposition. In their motions to withdraw, NAM, API, and AFPM indicated that just as a plaintiff retains rights to decide not to pursue particular claims, so could an intervenor decide that “it no longer wishes to pursue currently the particular interests and rights that led to intervention in a particular case.” Noting that the plaintiffs had opposed their intervention in the first place, the groups asserted that withdrawal would serve judicial economy and would not prejudice remaining parties. On June 5, the plaintiffs filed a response to NAM’s motion to withdraw, saying that while they did not “outright oppose” the motion, they believed it should only be granted with conditions, including that the withdrawal be with prejudice and that NAM be required to pay plaintiffs’ attorneys’ fees and costs attributable to NAM’s participation in the case.”
The trade groups’ motions to withdraw were filed less than a month after a federal magistrate judge recommended rejecting a request for immediate appeal of the district court’s denial of the defendants’ and intervenor-defendants’ motions to dismiss the lawsuit, and after the federal defendants and the intervenor-defendants filed objections to the magistrate’s recommendation. The federal defendants contended that the magistrate judge’s recommendation was primarily based on “an incorrect perception that additional fact-finding is necessary, while largely ignoring the purely legal Constitutional, jurisdictional, and separation-of-powers issues that make continued litigation improper.” The federal defendants also objected to and asked for reconsideration of the magistrate judge’s denial of a motion to stay the litigation. The intervenor-defendants—who argued that the case “checks all of the boxes for immediate review”—focused their objections on the issue of whether the plaintiffs’ claims raised a nonjusticiable political question, an issue that the federal defendants did not identify for certification, focusing instead on standing and the validity of the plaintiffs’ due process and public trust claims. The plaintiffs’ responses to the objections to magistrate judge’s findings and recommendations argued that the magistrate judge had properly concluded that no controlling questions of law were present and that there were no substantial grounds for differences of opinion on the plaintiffs’ standing, their due process rights, or their public trust claim. (The plaintiffs also asserted that the intervenors’ withdrawal would “obviate” the need for review of their objections.) The plaintiffs also defended the denial of a stay; they asserted that the federal defendants’ only evidence of prejudice resulting from moving forward with the litigation was “general grievances about the normal rigors of responding to discovery” and that, on the other hand, plaintiffs would be irreparably injured because carbon dioxide levels increased with each passing day. Juliana v. United States, No. 6:15-cv-01517-TC (D. Or. API motion and AFPM motion May 25, 2017; plaintiffs’ response to opposition to denial of stay May 23, 2017; NAM motion May 22, 2017; intervenor-defendants’ objections and federal defendants’ objections to denial of stay May 9, 2017; federal defendants’ objections May 5, 2017).
Colorado Oil and Gas Conservation Commission Sought Colorado Supreme Court Review of Appellate Division That Reversed Denial of Youth Activists’ Rulemaking Petition
The Colorado Oil and Gas Conservation Commission (COGCC) asked the Colorado Supreme Court to review an intermediate appellate court’s decision holding that COGCC had wrongly denied a rulemaking petition on the grounds that the requested COGCC to take action outside its statutory authority. The rulemaking petition, which was submitted by a group of young people, sought to bar issuance of permits for oil and gas drilling unless best available science demonstrated that there would not be adverse impacts to the environment or human health or a contribution to climate change. COGCC said that the appellate court’s interpretation of the Oil and Gas Conservation Act improperly required the agency to prioritize environmental concerns over other policy considerations that the Act required COGCC to take into account. COGCC said this “novel interpretation” conflicted with Supreme Court and other appellate court precedent, was at odds with the Act’s actual language, and implicitly endorsed the public trust doctrine, which had not been adopted in Colorado. The particular issue COGCC asked the court to consider was whether, “[w]hen the Commission engages in rulemaking, is it permitted to disregard the Act’s policy of fostering oil and gas development in Colorado?” COGCC and the Colorado Attorney General decided to pursue the appeal despite objections by Governor John W. Hickenlooper. In response to a request from the governor’s office not to pursue the appeal, the attorney general sent a letter asserting that the governor did not have authority to direct COGCC’s decision-making and that the attorney general had independently determined that the issues raised in the case should be determined by the Colorado Supreme Court. Colorado Oil & Gas Conservation Commission v. Martinez, No. 17 SC 297 (Colo. petition and letter May 18, 2017).
Conservation Groups Sought to Restart Appeal of Dismissal of Challenge to Federal Coal Leasing Program
Western Organization of Resource Councils and Friends of the Earth asked the D.C. Circuit Court of Appeals to reactivate their appeal of a district court August 2015 decision dismissing their action alleging that federal agencies failed to conduct an adequate analysis of the environmental effects—including climate change-related effects—of the federal coal leasing program. In January 2016, Secretary of the Interior Sally Jewell directed the U.S. Bureau of Land Management to prepare a programmatic environmental impact statement (PEIS) and paused issuance of new coal leases until the PEIS was completed. In June 2016, the D.C. Circuit granted a joint request by the two conservation groups and the federal defendants to hold the groups’ appeal in abeyance while the PEIS was prepared. On March 29, 2017, Secretary of the Interior Ryan Zinke revoked Secretary Jewell’s order. The conservation groups said that Secretary Zinke’s action restored the federal coal leasing program to its status at the time of the district court decision and their noticing of the appeal. They therefore asked the D.C. Circuit to end the abeyance, establish a briefing schedule, and calendar the case for oral argument. Western Organization of Resource Councils v. Zinke, No. 15-5294 (D.C. Cir. May 26, 2017).
States Challenged Restarting of Federal Coal Leasing Program
California, New Mexico, New York, and Washington sued Secretary of the Interior Ryan Zinke, the U.S. Bureau of Land Management, and the U.S. Department of the Interior in the federal district court for the District of Montana, seeking to stop the defendants from restarting the federal coal leasing program. The states asked the court to set aside Secretarial Order 3348, in which Secretary Zinke revoked a secretarial order issued by his predecessor Sally Jewell that ordered a programmatic environmental impact review of the coal leasing program and placed a moratorium on new coal leases pending the completion of the review. The states alleged that the defendants had failed to comply with the National Environmental Policy Act, the Mineral Leasing Act, the Federal Land Policy and Management Act, and the Administrative Procedure Act. The states asserted that they had been leaders in working to reduce greenhouse gas emissions and to impede climate change and that they had a significant interest in ensuring that the federal coal leasing program did not undermine these efforts. The states also alleged that they had experienced and would continue to experience the adverse impacts of climate change. They asserted that previously conducted environmental reviews of the coal leasing program did not consider and evaluate the program’s climate change impacts. On May 31, 2017, the states’ action was consolidated with a lawsuit brought by the Northern Cheyenne Tribe and environmental groups. California v. Zinke, No. 4:17-cv-00042 (D. Mont. consolidation order June 2, 2017; motion to consolidate May 31, 2017; filed May 9, 2017).
Plaintiffs Alleged Endangered Species Act Violation in Keystone XL Pipeline Challenge
Six environmental organizations challenging the Trump administration’s approval of the Keystone XL pipeline in Montana federal court added an Endangered Species Act claim to their complaint. The organizations contended that the federal defendants had not adequately considered the pipeline’s impacts on whooping cranes, interior least terns, and piping plovers, which are listed as endangered or threatened species under the Endangered Species Act. Northern Plains Resource Council, No. 4:17-cv-00031 (D. Mont. May 24, 2017).
Center for Biological Diversity Filed FOIA Lawsuit Against Federal Agencies Seeking Records on Removal of Climate Change from Agency Communications
The Center for Biological Diversity filed a Freedom of Information Act (FOIA) lawsuit against the U.S. Department of the Interior, EPA, the U.S. Department of Energy, and the U.S. Department of State in the federal district court for the District of Columbia seeking to compel the agencies to provide records of any directives or communications barring or removing climate change-related words or phrases from formal communications. The Center for Biological Diversity also sought production of information, including webpages, that had allegedly been removed at the direction of the Trump administration. The Center submitted its FOIA requests in late March and early April 2017. Center for Biological Diversity v. U.S. Department of Interior, No. 1:17-cv-0974 (D.D.C. filed May 23, 2017).
New York and Massachusetts Attorneys General Asked Federal Court to Dismiss Exxon Action
New York Attorney General Eric Schneiderman and Massachusetts Attorney General Maura Healey asked the federal district court for the Southern District of New York to dismiss Exxon Mobil Corporation’s (Exxon’s) action seeking to block their investigations into Exxon’s climate change-related disclosures. Healey argued that a January 2017 decision in her favor by the Massachusetts Superior Court precluded Exxon from litigating its claims in federal court; that abstention was warranted under the Colorado River doctrine; and that Exxon’s claims were not ripe because Exxon had—and was pursuing—an avenue for relief in state court. Healey also said that the New York federal court did not have personal jurisdiction over her. Schneiderman’s motion to dismiss relied on the absence of ripe claims and the Colorado River abstention doctrine. Schneiderman contended that there was no ripe injury because his office’s subpoena was not self-executing and Exxon had purported to have voluntarily complied with the subpoena. He also argued that the federal court should defer to the parallel state proceeding rather than allow Exxon to assert some objections to the investigation in federal court and others in state court. Exxon Mobil Corp. v. Schneiderman, No. 1:17-cv-02301 (S.D.N.Y. May 19, 2017).
Exxon Sought to Quash New Subpoenas from New York Attorney General; Attorney General Filed Cross-Motion to Compel
On May 8, 2017, the Office of the New York State Attorney General served 10 subpoenas on Exxon Mobil Corporation (Exxon) in its investigation of Exxon’s climate change-related disclosures. One subpoena sought information and documents related to oil, gas, and other hydrocarbon projects approved, deferred, or declined by Exxon and “proxy costs” associated with those projects to reflect policies to stem greenhouse gas emissions. The subpoena also demanded information related to Exxon’s decisions regarding impairment or write-downs for oil and gas projects and Exxon’s estimates of its oil and gas reserves. In addition, the subpoena sought more recent documents responsive to the Attorney General’s November 2015 subpoena and documents provided to the U.S. Securities and Exchange Commission in its climate change investigation of Exxon. The other nine subpoenas were testimonial subpoenas. On May 19, 2017, Exxon filed an order to show cause seeking to quash the document subpoena and four testimonial subpoenas that related to past subpoena compliance. Exxon argued that the Attorney General had not provided a factual basis to justify the demand for additional records and, moreover, that the Attorney General had impermissibly demanded that Exxon review and synthesize information and compile spreadsheets and summaries not already in existence. Exxon also contended that the Attorney General was probing areas foreclosed from state inquiry by federal regulation. On June 2, 2017, the Attorney General filed papers defending the subpoenas and cross-moving to compel. The Attorney General said in a brief and affirmation that the investigation had uncovered evidence of potentially false and misleading statements regarding Exxon’s application of the proxy cost of greenhouse gases in its decision-making. The Attorney General argued that the new subpoenas were necessary to fill in gaps in Exxon’s production of documents related to the company’s risk-management practices, and that the testimonial subpoenas were also reasonably related to the investigation. The Attorney General disputed Exxon’s characterization of the subpoenas as unduly burdensome and as making improper demands for information. The Attorney General also argued that its prospective enforcement actions under New York’s anti-fraud statutes were not subject to federal preemption. People of State of New York v. PricewaterhouseCoopers LLP, No. 451962/2016 (Sup. Ct. New York County May 23, 2017).
Environmental Groups Charged That Oil and Gas Leasing Authorizations in Ohio Did Not Comply with NEPA
Four environmental organizations filed a lawsuit in the federal district court for the Southern District of Ohio alleging that the U.S. Forest Service and U.S. Bureau of Land Management failed to comply with the National Environmental Policy Act (NEPA) when they authorized oil and gas leasing in the Wayne National Forest. The plaintiffs contended that the agencies relied on outdated analyses that did not take into account significant new information about climate change and other issues. In particular, they alleged that the documents upon which the agencies relied did not consider climate change effects on the forest or on species protected under the Endangered Species Act. Center for Biological Diversity v. U.S. Forest Service, No. 2:17-cv-00372 (S.D. Ohio, filed May 2, 2017).
Parties Sought California Supreme Court Review of Decision Upholding Greenhouse Gas Cap-and-Trade Program
Three petitions were filed in the California Supreme Court seeking review of the California Court of Appeal decision that upheld the state’s cap-and-trade program for greenhouse gas emissions. The lead parties for the petitions were the California Chamber of Commerce, the National Association of Manufacturers, and Morning Star Packing Company. All three petitions asked the Supreme Court to review the question of whether the auction of greenhouse gas emissions constituted a “tax” that would need the approval of two-thirds of the California legislature under Proposition 13. The California Chamber of Commerce also asked the Supreme Court to review whether the California Air Resources Board’s design of the cap-and-trade system was outside the authority granted to it by AB 32, the Global Warming Solutions Act. California Chamber of Commerce v. State Air Resources Board, No. S241948 (Cal. NAM petition and Morning Star petition May 16, 2017; Cal. Chamber of Comm. petition May 15, 2017).
EPA Received Second Petition Seeking Undoing of 2009 Endangerment Finding
Six companies and an individual represented by the Texas Public Policy Foundation submitted a petition to EPA requesting that the agency reconsider its 2009 endangerment finding for greenhouse gases. The petition referred to the endangerment finding as “the product of serious legal, scientific, evidentiary, and procedural errors” that resulted from the Obama administration’s “rush to judgment, which was spurred by political expediency.” The petition focused on an alleged “glaring statutory violation”—that EPA issued the endangerment finding without seeking peer review from the Science Advisory Board. A separate petition for new rulemaking on the endangerment finding was submitted by the Competitive Enterprise Institute and the Science and Environmental Policy Project was submitted in February 2017. Petition to Reconsider Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act (May 1, 2017).
HERE IS A RECENT ADDITION TO THE NON-U.S. CLIMATE LITIGATION CHART.
Complaint Alleged That Kinder Morgan Canada Ignored Climate-Related Financial Risks
Citing provisions of the Securities Acts of Alberta and Ontario that require public companies to disclose all material facts about their operations and business model, Greenpeace has requested a freeze, pending review, of Kinder Morgan Canada’s initial public offering (IPO) based on alleged deficiencies in its IPO prospectus. That prospectus, Greenpeace alleges, misleads potential investors regarding prospective oil demand and regulatory and environmental risks related to climate change. Specifically, Greenpeace criticizes Kinder Morgan’s reliance on outmoded projections of Chinese demand for oil generally, its omission of any mention of decarbonization targets in numerous large economies, and its omission of the fact that markets tend to discount oil sourced from Canadian tar sands. Greenpeace also notes that Kinder Morgan’s general references to climate change fall far short of an evaluation of the climate change-related financial risks identified by the G20’s Financial Stability Board, the Bank of Canada, and (though its review of these issues was still underway as of May 2017) the Canadian Securities Administrator. In re Amended and Restated Preliminary Prospectus of Kinder Morgan Canada Limited’s Initial Public Offering (Alberta Securities Commission, May 16, 2017).
