European rulings show new approach to climate change cases

Addressing climate change is no longer a matter of international agreements and government policies, untouchable in litigation as a political question. Recent litigation across Western Europe has forced the hand of governments and culminated in Vereniging Milieudefensie's successful tort action against Royal Dutch Shell plc. Climate change litigation is percolating in the United States, too; the Dutch judgment tells us we need to prepare for new developments in enforcing emissions reductions in the courts.

Deploying the Dutch Civil Code's unwritten standard of care, Senior Judge Larisa Alwin of The Hague District Court set off shock waves last week when she ordered Royal Dutch Shell to reduce its CO2 emissions to 45% below Shell's 2019 levels by 2030 and declined to stay her order pending appeal. Vereniging Milieudefensie et al. v. Royal Dutch Shell PLC, ECLI:NL:RBDHA:2021:5337 (Rechtbank Den Haag, May 26, 2021).

The Dutch judgment follows the German Constitutional Court's March 24 decision finding climate targets and allowable CO2 emissions set by Germany's 2019 Climate Change Act unconstitutional as "incompatible with fundamental rights[.]" See Press Release, Federal Constitutional Court, "Constitutional complaints against the Federal Climate Change Act partially successful" (April 21, 2021).

Like the Dutch judgment, the German opinion takes issue with the "kick-the-can" approach to tackling climate change, holding that the provisions offloading "major emissions reduction burdens onto periods after 2030" "violate the freedoms of the complainants." It too required concrete action to solve the current law's unconstitutional burden on later generations.

Before the highest German court made its decision, a French trial court ruled on a petition (recours en carence fautive) by four NGOs against the French state for its failure to act on climate change, and ordered the government to report back on steps it is taking to address climate change. Tribunal administratif Paris, 1st Chamber, Feb. 3, 2021, 1904967.

This trifecta of climate change rulings -- finding standing in NGOs and individuals against contributors to climate change and governments -- present new thinking on duty, the standard of care, causation and the levers available to protect the planet. Each reveals impatience with the old go-tos: We don't know enough; we cannot predict the future; if we act, that act will change things, so we shouldn't act; how climate change will manifest is uncertain; and we cannot be responsible individually when the whole of society contributes to global warming. The age of excuses appears to be drawing to a close.

To understand how the French, German and Dutch rulings -- emanating from civil law systems -- are relevant here, we need a little translation. The French Administrative Court action is similar to the writs and receivers departments in superior court and certain original jurisdiction actions in federal Courts of Appeals. See, e.g., A Community Voice v. U.S. Environmental Protection Agency, 2021 DJDAR 4647 (9th Cir. 2021). The German high court opinion is comparable to constitutional claims in the U.S. Supreme Court and parallels the efforts of the plaintiffs in the District of Oregon and the 9th Circuit in Juliana v. United States, 947 F.3d 1159 (9th Cir. 2020). And the Dutch judgment reflects a straightforward tort claim against an entity that emits more CO2 into the atmosphere than many countries, including the Netherlands.

Duty: The German and Dutch decisions hone in on duty. The German court found no constitutional duty running to the plaintiff environmental associations, but did find a duty to individual complainants. In contrast, the Dutch court found duties running to six of seven NGOs and to Vereniging Milieudefensie, as the representative ad litem of more than 17,000 Dutch individuals. In Germany, the duties were grounded in its constitution, which requires the government to "safeguard the freedom guaranteed by fundamental rights." The Dutch court applied the Dutch Civil Code's standard of care, which encompasses human rights, "specifically the right to life and the right to respect for private and family life," as well as "soft law" arising from the European Convention, the United Nations Human Rights Committee, and other international agreements, all of which apply to Royal Dutch Shell.

It appears the Dutch court applied international conventions and agreements to Royal Dutch Shell in part because Royal Dutch Shell itself touted its commitment to the Paris Agreement and other multilateral climate change agreements. Indeed, Royal Dutch Shell reports its emissions based on the World Resources Institute Green House Gas Protocol Scope 1, 2, and 3 categories. Scope 1 emissions are direct emissions, Scope 2 emissions are indirect emissions acquired from third-party sources, while Scope 3 emissions are all other indirect emissions in an entity's value chain, including the emissions of customers. And, when the Netherlands enacted its Climate Agreement in 2019, Shell Nederland signed on. The 2019 Dutch Climate Agreement arose from previous litigation which culminated in an order requiring the Dutch state to reduce greenhouse gas emissions by late 2020. Royal Dutch Shell assumed a duty when it engaged in decades of greenwashing and signed on to the 2019 Dutch Climate Agreement.

Causation: Article III causation requires a concrete and particularized injury caused by the challenged conduct. Juliana, 947 F.3d at 1168 (citations omitted). Indeed, the Juliana court rejected the same argument advanced by the U.S. EPA that Royal Dutch Shell also promoted -- that no climate change injury can be particularized because climate change affects everyone. Compare Juliana at 1168 with the Dutch judgment at ¶4.4.7.

Remedy: The Western European rulings highlight the limits redressability poses to advancing climate policy through the courts in the United States. Juliana founders on redressability. Neither the French nor the German decision translates here because they are grounded in specific climate change laws enacted in those countries, directed to those governments' approach to implementation and enforcement of those laws. The Dutch judgment is different. The Dutch court found not only that Royal Dutch Shell owed a duty to the Netherlands-focused NGOs and the 17,000-plus Dutch citizens represented by Vereniging Milieudefensie, but that if it reduced its CO2 emissions, it could redress the claimants' injuries.

Scope Challenges: Climate Change expert Robert Kay, Ph.D., deputy director of consulting firm ICF's Climate Center, commented on the breadth of the Dutch judgment: "In finding strategies to make the deep emission cuts this judgment requires, energy producers like Royal Dutch Shell face unique and daunting challenges in addressing their own operational emissions (Scope 1 and 2) but also the largest source of their emissions -- those associated with end-use of its products (Scope 3). The ruling requires Shell to reduce emissions across all three of these Scopes, including a 'best efforts obligation' with respect to its entire supply chain (Scope 3), including customers. Fossil energy producing companies thus will need to apply advanced emissions accounting and climate risk assessment techniques, and develop robust GHG emission reduction strategies, that are tailored to their products, markets, and customer characteristics."

Shareholder Activism: As the Royal Dutch Shell ruling landed, oil and gas businesses also faced shareholder activism on climate change. Exxon Mobil spent $35 million in vain to block the seating of three new board members focused on fighting climate change. And, Chevron's shareholders voted to cut Scope 3 emissions.

Change is coming to carbon emissions, climate change regulation, enforcement and, ultimately the oil & gas industry. As with the development of organic and non-GMO foods, Western Europe is again lighting the way. 