Panel mulls whether oil nuisance suit belongs in state or federal court

Attorneys for Bay Area cities and several oil industry titans presented starkly different framing of a climate change-related suit to 9th U.S. Circuit Court of Appeals judges during an argument session Wednesday in Pasadena.

Counsel for Oakland and San Francisco described the public nuisance suit against BP PLC, Chevron Corporation, Exxon Mobil Corporation and other defendants as a local matter seeking to remedy harms fossil fuel burning has caused the cities over recent decades, like rising sea levels and degraded air quality.

Attorneys supporting the companies -- including one from the U.S. Department of Justice -- argued the lawsuit was a grandiose, unreasonable effort to regulate carbon emissions far beyond California.

Michael Rubin, of Altshuler Berzon LLP, stressed the public nuisance theory Oakland and San Francisco put forth only allows for a narrow variety of relief -- abatement -- and only in relation to concrete harms the cities have felt as a result of fossil fuel use.

"The only relief in these cases that is sought is equitable abatement and only for localized harm," he said. "That is the extent of the local government's authority in pursuing a public nuisance case: only abatement, no damages, no restitution, and only to abate the localized harm."

Arguing for the defendant companies Gibson Dunn & Crutcher partner Theodore J. Boutrous, Jr. said the cities' claim implicated decades of national and global emissions, meaning a state law cause of action was inappropriate.

"State law cannot apply to these claims; they're not claiming in-state emissions," he said. "It's everything, everywhere around the globe, so the only possible source of law is federal."

The cities' suit was first filed in state court before being removed to the Northern District courtroom of Judge William H. Alsup, who granted the defendants' motion to dismiss after agreeing the plaintiffs' sought relief was too broad in scope.

On Wednesday Rubin argued the case should have been sent back to state court, so California judges could rule on the state common law legal theory.

"What we're being deprived of here is the right to have our state law claims determined as a matter of state law," Rubin said, after analogizing the cities' claims to a comparably large-scale nuisance action against lead paint manufacturers California courts resolved last year.

Rubin emphasized the defendant companies acted in bad faith by promoting fossil fuel use while knowing for decades that carbon emissions would particularly endanger communities like Oakland and San Francisco.

"These private companies engaged in a large-scale, sophisticated advertising and communications campaign to promote the use of their products and massive levels ... although the defendants, according to the complaint, have known since the early 1970s that global warming threatened severe and even catastrophic harms to coastal cities," Rubin said.

Boutrous focused on the potential patchwork of legal regimes that could result if nuisance claims over fossil fuels were addressed by state courts rather than under federal law.

"Because of the interstate or international nature of the claim, state law can't apply; we'd have a war among the states," Boutrous said.

Circuit Judge Sandra S. Ikuta pressed Boutrous to cite case law supporting his argument, which she suggested seemed more premised on logical thinking than precedent.

"What worries me is you're using reasoning," the judge said with a chuckle. "You're not giving me the case or the statute that would control my decision."

Arguing for the government in support of the defendant companies, Department of Justice attorney Jonathan D. Brightbill seconded Boutrous' argument that federal law and policy -- like the Clean Air Act -- was enacted specifically to ensure a uniform legal regime governing carbon emissions.

Brightbill cited the "significant federal interest in having the federal government, and specifically political branches of the government -- Congress, the president, and executive agencies -- set the national policy in this country relating to complex questions relating to greenhouse gas emissions."