{"id":21035,"date":"2024-02-12T09:55:30","date_gmt":"2024-02-12T14:55:30","guid":{"rendered":"https:\/\/blogs.law.columbia.edu\/climatechange\/?p=21035"},"modified":"2024-03-05T11:57:58","modified_gmt":"2024-03-05T16:57:58","slug":"smith-v-fonterra-a-common-law-climate-litigation-breakthrough","status":"publish","type":"post","link":"https:\/\/blogs.law.columbia.edu\/climatechange\/2024\/02\/12\/smith-v-fonterra-a-common-law-climate-litigation-breakthrough\/","title":{"rendered":"Smith v Fonterra: A Common Law Climate Litigation Breakthrough"},"content":{"rendered":"
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Litigation against major corporate greenhouse gas (GHG) emitters has proven extremely tough. Even as successful cases against governments have blossomed, private suits face significant barriers. A civil law breakthrough came in 2021, with the ruling of a Dutch court against Shell<\/a>. In Smith v Fonterra<\/em><\/a>, decided by New Zealand\u2019s Supreme Court this week, we have perhaps the biggest common law breakthrough.<\/p>\n

Michael Smith brought tort claims against New Zealand\u2019s seven largest GHG emitters, which are collectively responsible for one-third of all New Zealand GHG emissions. He argued the defendants\u2019 activities amount to torts of public nuisance and negligence, and also raised a novel claim asserting that the defendants have a climate duty. Smith further argued that the defendants\u2019 emissions affect him personally. As a M\u0101ori leader with an interest in customary land, Smith argued that the defendants\u2019 actions would harm him through impacts related to rising sea levels, loss of sites of cultural and spiritual significance, damage to fisheries, and adverse health impacts. Smith asked the Supreme Court to permit him to seek declarations that the defendants had \u201cunlawfully either breached a duty owed to him or caused or contributed to be a public nuisance, and have caused or will cause him loss through their activities\u201d; and to require them to reduce emissions. Notably, Smith did not seek damages.<\/p>\n

Two of Smith\u2019s arguments were struck out by the trial court<\/a>, though the third claim \u2013 the novel climate duty \u2013 was allowed to go to trial. New Zealand\u2019s Court of Appeal, however, struck out<\/a> all three claims, meaning that Smith would not receive his day in court. Smith appealed. In this most recent ruling, the Supreme Court unanimously reversed the Court of Appeal\u2019s decision. All three of Smith\u2019s claims will now proceed to what may the be first full climate tort claim in a common law jurisdiction.<\/p>\n

In this post, I summarize the Smith <\/em>case and, in particular, the Court\u2019s approach to public nuisance. I then preview the significant barriers that Smith still faces. Finally, I consider what courts and lawyers in other jurisdictions might learn from the Smith decision.<\/p>\n

What did the Supreme Court decide in Smith<\/em>?<\/strong><\/h3>\n

The Supreme Court\u2019s 7 February 2024 decision is a preliminary one. Rather than ruling on the merits of Smith\u2019s argument, the Court considered whether the claims should be struck out<\/em> before even reaching trial. Under New Zealand law,<\/a> such arguments should be struck out only if they \u201cdisclose[] no reasonably arguable cause of action\u201d. This is a high threshold, and surviving a strikeout challenge is no guarantee of success at trial.<\/p>\n

The decision ultimately concerns whether Smith\u2019s main claim in public nuisance amounts to a \u201creasonably arguable cause of action\u201d. The Court clarified that a person is liable in public nuisance where they either (a) do an act not warranted by law or (b) omit to discharge a legal duty and further, where \u201cthe effect of the action or omission is to endanger the life, health, property or comfort of the public or to obstruct the public in the exercise or enjoyment of rights common to all Her Majesty\u2019s subjects\u201d (para. 109, quoting R v Rimmington<\/em> [2005] UKHL 63, [2006] 1 AC 459. In other words, a public nuisance is something that endangers public interests or public rights. As this open-ended definition suggests, public nuisance is a slippery tort. Following the lead of the appellate court, the Supreme Court identified four specific questions to better identify whether the claim could reasonably succeed.<\/p>\n

First, the Court analyzed whether Smith had plausibly identified public rights that were being interfered with. The Court found that he had \u2013 the impacts of climate change would indeed engage rights that fit within the categories identified in existing case law. Secondly, the Court affirmed the appellate court\u2019s finding that public nuisance need not involve otherwise illegal activity. In other words, the fact that the defendants\u2019 GHG emissions were not illegal <\/em>(for example, under an express statutory regime) was not a basis for striking out the claim. Third, the court considered the \u201cspecial damage\u201d rule. This is a standing rule that requires that public nuisance claims only be brought by plaintiffs who are harmed in a way that is different from the general public. The Court queried whether this rule should remain part of the law, and even if it did, Smith\u2019s material and cultural interests as a M\u0101ori coastal landowner were at least plausibly \u201cspecial\u201d enough to meet the rule\u2019s requirements.<\/p>\n

Finally, the Court considered causation. Demonstrating a specific causal chain between a defendant\u2019s emissions and the plaintiff\u2019s harms is extremely challenging. No single emitter is the cause of any person\u2019s harm. Instead, any emitter\u2019s GHG emissions mix with the emissions of millions of others, contributing to a global problem. How does one differentiate the defendants\u2019 actions from those of any other, particularly given New Zealand\u2019s globally small (though per capita large) contribution to GHG emissions?<\/p>\n

The Court found that Smith had done enough for these questions to proceed to trial. Importantly, the Supreme Court found that the causation problems presented by Smith\u2019s claims were fundamentally similar to other public nuisances involving multiple contributors, such as Industrial Revolution-era air and water pollution cases. \u201cClimate change,\u201d the Court concluded, \u201cengages comparable complexities, albeit at a quantum leap scale of enlargement\u201d (at para. 157). \u201cCumulative causation\u201d problems presented by climate change should at least receive \u201cevidence and policy analysis,\u201d (at para. 166) and should proceed to a full trial: \u201cthe common law must develop, if at all, in the fertile fields of trial, not on the barren rocks of a strike out application\u201d (at para. 173).<\/p>\n

Having found that Smith had done enough to show a reasonable public nuisance case, the Court permitted the two remaining causes of action \u2013 negligence and the proposed novel climate duty \u2013 to also progress to trial. The Court also rejected arguments that New Zealand\u2019s statutory regime for climate torts displaced the common law claims.<\/p>\n

What challenges will Smith face at trial?<\/strong><\/h3>\n

Smith still has many obstacles ahead of him. The Court\u2019s decision doesn\u2019t resolve the matter: it only means it will proceed to a lengthy and complex trial.<\/p>\n

Two of Smith\u2019s problems might be thought of<\/a> as the \u201cdefendant problem\u201d and the \u201cplaintiff problem\u201d. First, why should these seven defendants be singled out? And secondly, why is Smith so special that he <\/em>should bring the claim, rather than anyone else?<\/p>\n

Under New Zealand law, a party is liable in public nuisance only when their activities \u201csubstantially and unreasonably interfere with public rights\u201d (at para. 111). And it\u2019s not clear that even the activities of the seven defendants, representing a third of New Zealand\u2019s overall GHG emissions, amount to a \u201csubstantial\u201d interference. As the Court noted, \u201c[t]he respondents are not responsible for at least 99.8 per cent of global emissions\u201d (at para. 138). This problem, sometimes referred to as a \u201cdrop in the ocean\u201d problem<\/a>, is pervasive in climate litigation, and has sometimes (though not always) been fatal<\/a>. A related problem is one of line-drawing. If these defendants are liable, isn\u2019t everyone liable for the impacts of their even modest emissions?<\/p>\n

The Court dropped some hints about what Smith might have to prove to meet the \u201csubstantially and unreasonably\u201d threshold. At minimum, the Court accepted that the defendants\u2019 activities can be distinguished from \u201c[p]atently, ordinary domestic activities involving individuals travelling, warming their houses and cooking food, [which will not meet the threshold] and may be de minimis<\/em>\u201d (at para. 168). Only some emitters will cross the threshold from de minimis<\/em> to substantial, an evaluation which involves (at least) normative policy questions; consideration of tikanga M\u0101ori (Indigenous customary law, which forms part of New Zealand\u2019s common law); and the country\u2019s domestic and international human rights obligations (at para. 169). Although public nuisance is a strict liability tort (meaning that the defendants\u2019 mental states are irrelevant), the defendants\u2019 knowledge of their emissions and their foreseeability of harm will also likely be very relevant to Smith\u2019s claim in negligence.<\/p>\n

The second problem for Smith will be to show why he is special. As noted above, to bring a public nuisance suit, plaintiffs have traditionally had to show \u201cspecial damage\u201d \u2013 that is, the defendant\u2019s interference with a public right has harmed them in some unique way. Smith might argue that this rule should be abandoned altogether, a view which the Supreme Court seemed sympathetic to. If the rule is retained, Smith will likely rely on his unique position as a M\u0101ori elder with an interest in coastal property. As he argued, both coastal populations, and M\u0101ori generally, are at greater risk of harm from climate change. The Supreme Court recognized that this was at least a plausible basis for claiming special damage: Smith brought the claim not as \u201can alleged proprietor who has suffered loss, but as a kaitiaki [guardian] acting on behalf of the whenua [land], wai [water] and moana [ocean].\u201d The Court also expressly stated that the special damage requirement must be considered through the lens of tikanga M\u0101ori as a source of common law. Smith identified a range of tikanga M\u0101ori principles which may well be important at trial.<\/p>\n

What is the Significance of the Decision?<\/strong><\/h3>\n

Public nuisance tests are broadly similar across the common law world. Climate nuisance suits are proliferating, with over 30 such suits pending<\/a> against private companies in the United States alone.[1]<\/a> The Supreme Court\u2019s decision signals that there need not be any absolute barrier to such suits. Climate change is a complex problem, but its features of policy conflicts, multiple contributors, and counter-intuitive causation are issues that the common law has grappled with before. It is significant that, in Smith\u2019s case, the Supreme Court relied extensively on 19th<\/sup> century pollution cases, drawing on a heritage common to many countries. The decision may give judges elsewhere the tools to at least let such claims progress to trial.<\/p>\n

On a more abstract level, the decision may provide a model for judicial engagement in both common and civil law countries. Smith had lost at the Court of Appeal largely because the Court felt that climate change was a matter for regulators, rather than the judiciary. But the Supreme Court rightly identified that even an extensive scheme of regulation might leave gaps and problems for other legal tools to fill. The Court demonstrated that engaging with climate claims need not require extensive supervisory remedies, or the construction of a rival scheme of regulation. Indeed, the Court frankly acknowledged that the plaintiff was hoping the claim would catalyze further private and regulatory action, rather than inserting the Court as an ongoing regulator itself (at para. 58). The Court suggested (at para. 173) that even purely declaratory<\/em> relief might have this effect.<\/p>\n

There is still a long way to go. But the case should, at least, provide judges with the tools to take private law claims against major emitters seriously. And it should put corporations on notice: failing to reduce GHG emissions is a legal risk. The best way to avoid it is by cutting emissions, drastically.<\/p>\n

 <\/p>\n

[1]<\/a> See Common Law Claims, <\/em>Sabin Center Climate Change Litigation Database (accessed Feb. 7, 2024) https:\/\/climatecasechart.com\/case-category\/common-law-claims\/<\/a>.<\/p>\n

 <\/p>\n

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