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Zacks: Climate Crusaders vs. Big Oil: Who Will Win the Legal Row?

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The U.S. Court of Appeals for the Ninth Circuit rejected the petition of oil supermajors and ruled that state courts are more suitable to impartially adjudicate climate change lawsuits against oil and gas companies instead of federal venues that are suspected to be bias to the energy industry.

The lawsuits, filed by the cities of San Francisco and Oakland, hold five Big Oil majors, namely ExxonMobil XOM, Chevron CVX, ConocoPhillips COP, BP plc BP and Royal Dutch Shell RDS.A accountable for misleading the public by wrongly promoting their work to be environmentally friendly when in reality, they were aware of their hazardous contribution to climate change. By alleging the companies to be financially responsible for this menace, they demand the oil giants to cough up billions for the damages caused due to intensified carbon footprint and help construct a protective infrastructure to prevent the rise in sea-level and other problems cropping up from global warming.

The unanimous verdict by a three-judge panel of the Ninth Circuit, Judge Sandra Ikuta, a George W. Bush appointee along with judges Morgen Christen and Kenneth Lee overturned the decision of judge William Alsup, who had earlier dismissed the Oakland and San Francisco litigation in 2018. He opined that court cases were not the best solution to address the damages induced by fossil fuels or global warming and consequently, moved the case to the federal court where two judges failed to reach a consensus.

In another ruling by the Ninth Circuit, Judge Vincent Chhabria determined that a separate climate lawsuit slapped by three California municipalities, namely San Mateo County, Marin County and Imperial Beach — targeting 37 fossil fuel companies — could be forwarded to the state court.

Local Residents and Green Activists Welcome the Move

The decisions were lapped up by regional officials of the California cities and environmental groups.

“We’re pleased that we can proceed with this case to protect our residents, workers and businesses from the costs and damage these fossil fuel companies knowingly imposed on our communities,” reckons Dennis Herrera, city attorney of San Francisco. “It is time for these companies to pay their fair share. They should not be able to stick taxpayers with the bill for the damage they knew they were causing. We will continue to hold these companies accountable for their decades-long campaign of public deception about climate change and its consequences.”

The cities and counties “live another day to put forth their claims and argue their case,” said Hana Vizcarra, staff attorney, Harvard Law School’s Environmental and Energy Law Program.

Decrees Weigh on Energy Industry

Unsurprisingly, the rulings were criticized by industry advocates and energy players.

Phil Goldberg, special counsel for the Manufacturers’ Accountability Project, an industry advocacy group, considers climate change a policy issue for executive or legislative bodies instead of legal courts. ExxonMobil is reviewing the order and contemplating its next step. Chevron spokesperson Sean Comey believes that these factually and legally-unsupported lawsuits will do little to address the issues emanating from climate change.


Both lawsuits aiming to make energy companies indulge in a damage-control exercise and cover up for climate change are now inching closer to state court proceedings. Although the rulings do not guarantee that the plaintiffs will win eventually but the entire process will allow them to have an edge over their opponents with stronger points of argument in the court of law. And if they finally succeed in the legal battle, it could evoke more such litigations nationally or even globally.


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