Municipalities Suing Energy Companies Could Get Burned By Their Own Lawyers

The municipalities suing energy companies for the effects of climate change may ultimately see only a “pittance” of any potential reward or settlement from their suits, according to a new report by the American Tort Reform Association (ATRA).

The report warns that the rest of the money would be sucked up by the trial lawyers representing the municipalities in their lawsuits.

Citing the climate liability lawsuits and the attorneys who are driving them, ATRA outlines how this litigation is motivated by a desire for big-dollar awards and settlements, rather than rectifying the purported public nuisance.

The report also suggests the litigation is a distraction from real solutions, with real consequences for taxpayers and employers alike.

Plaintiffs’ firms frequently pitch attorneys general on opportunities to bring massive public nuisance lawsuits against entire industries, hoping to score a huge settlement or payout for themselves in the end.

In the early days of the #ExxonKnew campaign, plaintiffs’ firm Cohen Milstein was hired by the U.S. Virgin Islands attorney general to do exactly that, although that investigation imploded shortly after it began.

In response to this practice, several states have passed “sunshine” laws that require greater transparency between state attorneys general and plaintiffs’ firms, while also restraining the amount of money these firms can receive.

Plaintiffs’ firms have turned their attention elsewhere in pursuit of financial windfalls, pitching local governments on public nuisance lawsuits like those targeting energy companies.

Although framed as being in the public’s interest, the localized climate liability litigation is another tool used by a coordinated network of activists and deep-pocketed donors.

The process allows activists to circumvent American voters and regulators to pursue what polling suggests is an unpopular anti-fossil fuel agenda.

For the private contingency-fee lawyers, specifically Sher Edling, LLP, the hope is that climate change could be the new Big Tobacco, meaning massive settlements and huge payouts for the firm.

This point is echoed by Gale Norton, the former U.S. Secretary of the Interior and Colorado’s attorney general in the 1990s:

“In the climate change litigation, you have traded environmental plaintiffs’ attorneys, who were primarily focused on public policy, for an increasing number interested in financial gain.” (emphasis added)

Additionally, while the inherent premise of climate liability litigation is presented as a means to combat climate change, the reality is that these local lawsuits do nothing to actually provide solutions to the alleged issues that sparked their filing in the first place.

When U.S. District Judge William Alsup dismissed Oakland’s and San Francisco’s case in 2018, he made this point clear:

“Having reaped the benefit of that historic progress, would it really be fair to now ignore our own responsibility in the use of fossil fuels and place the blame for global warming on those who supplied what we demanded? The problem [of global warming] deserves a solution on a more vast scale than can be supplied by a district judge or jury in a public nuisance case… The court will stay its hand in favor of solutions by the legislative and executive branches.” (emphasis added)

U.S. District Judge John Keenan in Manhattan reiterated the same rationale when he dismissed New York City’s climate liability lawsuits:

“Climate change is a fact of life, as is not contested by Defendants…But the serious problems caused thereby are not for the judiciary to ameliorate. Global warming and solutions thereto must be addressed by the two other branches of government.” (emphasis added)

The dismissal of both cases strongly suggests climate litigation brought on behalf of local governments by private contingency-fee lawyers may not be in the public’s best interest and could even be detrimental in the long run. As ATRA highlights in its report,

“Experience has proven that lawsuits motivated and brought by contingency-fee lawyers on behalf of government entities will not solve these complex public policy issues. Rather, a significant portion of any money obtained will simply line the pockets of plaintiffs’ lawyers. In fact, the litigation may make the situation worse, as duplicative lawsuits filed by cities, towns, and other local entities around the country drain resources, hurt employers, and complicate the ability to reach any resolution.” (emphasis added)

Undaunted, trial lawyers are still racing to sign up new clients, no doubt promising to deliver a massive settlement for these communities.

However, if history is any guide, even if these climate lawsuits were to succeed, San Francisco, New York City, and others could all be left with significantly less than they imagined.

The ATRA report looks at what happened to the $246 billion awarded in the tobacco industry settlement, the largest ever of its kind:

“Recent reports have found that only a ‘pittance’ of [the tobacco] money actually went towards combatting tobacco use. Instead, a large chunk went to the plaintiff’s lawyers…” (emphasis added)

Those lawyers that pocketed a large sum of the tobacco settlement include Steve Berman, the plaintiffs’ attorney representing New York City and King County, and until recently San Francisco and Oakland, in their climate lawsuits.

Berman was clear about his motivations for pursuing climate litigation when he spoke to VICE in 2017:

“As our interview came to a close I asked Berman to describe the best-case scenario for all this. ‘Imagine if I could get ten or 15 cities to all sue and put the same pressure on the oil companies that we did with tobacco companies and create some kind of massive settlement,’ he said. He acted as if it was the first time he’d thought of the idea. But I got the feeling it wasn’t.” (emphasis added)

Although presented as a way to give power back to local governments and the people, it is important to remember that the activists and trial lawyers driving climate litigation campaign have very different goals – and may be motivated more by the potential for private gain than what’s in the public interest.

Read more at EID Climate