Why is Big Oil afraid of state courts?

Oil companies have been trying to avoid climate-change lawsuits for more than five year by filing appeals that would move cases from state to federal courts. The US Supreme Court ruled on Monday (April 24, 2018) that these lawsuits must remain in state courts.

Three considerations to make before you take a stand as a company

More than 20 cities and states have sued oil companies in recent years for their role in misleading the public regarding the effects of fossil fuels burning on climate change. Climate law experts see this week's ruling as a win for plaintiffs as it removes a major obstacle to the cases moving forward.

ExxonMobil Suncor Energy and Chevron filed the latest appeal at the Supreme Court, asking for a venue change for lawsuits brought by the state and municipalities of Rhode Island, Colorado, Maryland and California. These cases are based on consumer fraud claims, which aim to hold companies responsible for misleading consumers. In this case, the argument was that oil giants were aware of the harmful effects of burning fossil fuels but did not disclose them.

Companies are being sued by the states and cities to pay for costs associated with climate change, including rising seas, extreme temperatures, and other impacts.

The companies dismissed the lawsuits, calling them wasteful. They argued that climate policy was something that should be handled at the federal level. This argument has been rejected by multiple federal courts as well as the Department of Justice.

The oil companies' push is not primarily about jurisdiction. It's more of a strategy in a war against attrition. The fossil fuel companies use all the procedural tools available to them in order to slow down these cases and make them costlier, said Korey Silberman-Roati. Climate law fellow at Columbia University’s Sabin Center for Climate Change Law.

The oil companies might have also calculated that these cases would be dismissed by federal courts because they were attempting to regulate national emission and override the Clean Air Act. Silverman-Roati explained that the cases are about whether oil companies marketed their products deceptively, despite knowing they were dangerous, and could harm local communities. These are common-law claims that are heard by state courts.

There is a good chance that the oil companies will be brought to trial once they are in state court.

Richard Wiles of the Center for Climate Integrity said that the oil companies were desperate to avoid state court trials, where they would be forced to defend climate lies before juries.

While the decisions of a state do not bind another, they can use them to help inform their own. Oil companies could face lawsuits after lawsuits as more states or municipalities seek monetary compensation.

The oil companies will not suffer immediate financial consequences. Next, the oil companies will file motions for dismissal in state courts. The cases may juggle through the system for many years before they are brought to trial.

Silverman-Roati stated that if some of the over 20 cases filed against oil companies in state court are successful, "you can imagine more cases being brought as more communities suffer climate damage and pay billions to repair climate harms," she said.

The oil companies' petition to the Supreme Court stated that mounting lawsuits could lead to "massive financial liabilities" in an increasingly warming world.