Lack of Supreme Court review doesn’t settle where big oil lawsuit will be fought

The U.S. Supreme Court took a step Monday toward allowing San Francisco and Oakland to sue major oil companies in state court for their role in emissions that increase global warming.

The companies will have another chance, however, to try to keep the cases in federal court, where they are more likely to be dismissed than if they were returned to the state courts where they were filed.

The suits, filed in 2017, seek billions of dollars in damages against five oil giants: Chevron, BP, ConocoPhillips, ExxonMobil and Shell. The cities, and local and state governments that later filed similar cases, say the companies have profited from products they knew were causing dangerous rises in temperatures and sea levels, forcing higher government expenditures on sea walls and other protections.

The critical issue at this stage of the proceedings is whether the cities can sue in state court, where they rely on California’s law against “public nuisances,” private actions that cause public harm.

After the oil companies transferred the suits to federal court, U.S. District Judge William Alsup rejected the cities’ request in 2018 to return them to state court, saying any attempt to limit air pollution affects other states and nations and therefore is subject to nationwide regulation under federal law. He then dismissed the suits, saying emissions controls were up to policymakers, not judges.

But the Ninth U.S. Circuit Court of Appeals in San Francisco ruled in May 2020 that the cities’ public nuisance claim was unrelated to federal air pollution laws and could be pursued in state court. The court said the cities were not accusing the oil companies of violating federal law, only of harming local governments and residents with their practices.

The court said Alsup could reconsider the case and decide whether there were any other grounds to hear it in federal court, which could allow him to dismiss the suits for a second time. But first, the companies asked the Supreme Court to overturn the Ninth Circuit ruling, saying it endangered national energy development and regulation.

“A patchwork of conflicting state-law tort rules would inevitably result” if a state’s courts could decide the issue, the companies’ lawyers told the high court. “California’s courts would thus use California law to make energy policy for, and impose liability for conduct occurring in, the other 49 states and many foreign nations.”

But the court denied review in a one-line order Monday. Justice Samuel Alito did not participate in the case, for unstated reasons.

Although the appeals court ruling is now final, the issue is far from resolved.

Last month, the Supreme Court ordered another San Francisco federal judge, Vince Chhabria, to reconsider a challenge by oil companies to separate suits filed by the counties of San Mateo, Marin and Santa Cruz and the cities of Richmond, Santa Cruz and Imperial Beach (San Diego County).

Chhabria had ruled, and the Ninth Circuit court agreed, that the local governments had sued under state laws unrelated to federal pollution control. But the Supreme Court ordered reconsideration based on its ruling earlier last month allowing oil companies to present additional arguments against a similar suit in Baltimore.

But the two Bay Area cities in Monday’s case applauded the high court’s latest order.

In a joint statement, city attorneys Barbara Parker of Oakland and Dennis Herrera of San Francisco said, “It is now past time to move the cases forward on behalf of our residents and taxpayers to hold these fossil fuel companies accountable for their decades of deception and disinformation.”