A Chance for California to Lead Us Back from the Brink on Frivolous Climate Suits

Theresa Harvey
President & CEO of the North Orange County Chamber of Commerce

A little over a year ago, the city and county of Santa Cruz filed suit against several energy companies seeking money for property damage allegedly linked to climate change. They jumped on the bandwagon with San Francisco and other California cities alleging these companies should be financially responsible for coastal property damage caused by rising sea levels along with destruction from major storms, wildfires and drought. New York City, Rhode Island and other municipalities have filed similar suits since then. But federal judges sharply disagree with the claim that energy companies should be hauled into court over this global problem.

U.S. District Judges William Alsup (California) and John Keenan (New York) pointed out that a small sample of energy industry players cannot reasonably be forced to shoulder climate change-related costs local and state governments could incur down the road. They noted that the daily needs of the world’s nearly eight billion people depends on the products these energy companies provide. Effective strategies to confront this global challenge need to come from state and federal legislatures and executive branch agencies, not court-sanctioned shakedowns of a small of group of companies.

That is common sense and consistent with precedent in the new field of climate litigation but Oakland and San Francisco have changed law firms and are pressing ahead with appeals. The cities replaced their lawyers, the firm of Hagens Berman based in Seattle and partner Matt Pawa, with Sher Edling, another high-profile litigation shop. The two firms have a history of working in concert in suits against industry.

The financial stakes in this spate of suits is enormous, which explains why these lawyers have been shopping around for clients and courts hoping to strike gold. Most recently, a group of Pacific coast fishermen have taken energy companies to court.  The lawyers in these suits are working on a contingency basis so they don’t get paid until one of the cities or counties wins or reaches a settlement. But should that happen, tens of millions of dollars await them so they will keep pressing ahead with their already repudiated legal theory.

Let’s hope they fall short. The fact that some 200 countries recently participated in a climate summit in Poland underscores that shifts in climate patterns have many causes and many solutions, all of them complicated.  Misdirected lawsuits are surely not an effective way of addressing problems towns and cities could face as a result of climate change. Fortunately, some California public officials, such as Huntington Beach Mayor Mike Posey, recognize that hitting manufacturers with nuisance suits is the wrong way to spur economic development and job creation.

The state is home to some 30,000 manufacturers. With abundant supplies of crude, sunshine, geothermal resources, and hydropower electricity generation, California is literally an energy production powerhouse. Unfortunately, as many as 10,000 employers have left the state in recent years, most them manufacturers. Frivolous climate lawsuits could exacerbate this trend. Targeted attacks on companies that are central to our state’s economic success will certainly not address the state’s many challenges, such as unfunded pension obligations, affordable housing, water resources, and the age-old vulnerability to drought and natural disasters.

Californians take pride that the state has long been a world-class innovator and a magnet for talent but there is no pride in being at the vanguard of a litigation war that is hostile to business. Pitting California cities against manufacturers who produce and consume energy will not do nothing to address climate change. But it is good business development for trial lawyers.

California has the regrettable distinction of kicking off this legal assault against energy manufacturing. It would be a far better profile to be the first state to sound the retreat.

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