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Federal Judge Hearing San Francisco and Oakland Complaint Against Climate Change Exxon Mobil (XOM) and its competitors BP (BP), Chevron (CLC), ConocoPhillips (COP), and Royal Dutch Shell (RDS.A) (RDS.B) granted the request of the accused of dismissal Monday. While the unprecedented grounds of the trial have always made his victory unlikely, the decision of Judge William Alsup, a Clinton administration candidate who asked both parties to provide him with a "climate change tutoring" earlier this year is vast. While this does not directly affect similar lawsuits against Exxon Mobil by other municipalities, its general conclusion opens the door to any remedy that may reach the US Supreme Court in the event where the other federal district court judges arrive at other conclusions.
Originally, some legal observers and journalists were waiting for the California municipalities' lawsuit to result in a restrictive decision in favor of oil and gas companies for earlier reasons related to a Supreme Court decision. United States in favor of great powers plants. This earlier decision concluded that the federal lawsuits for nuisance against the major emitters of greenhouse gases hindered, or had been "displaced" in the legal nomenclature, authority of the Congress (subsequently entrusted to the federal executive) under the Clean Air Act. To circumvent this precedent, the plaintiffs took the unusual step of pursuing Exxon Mobil and its peers as sequestered carbon extractors rather than as greenhouse gas emitters (corporate customers being the entities that burn fuels emissions). In addition, municipalities also argued that defendants should be held accountable because of their past statements doubting the science of climate change, although this was downgraded later to a mere "plus factor" behavioral.
The first indication that Judge Alsup had a broader decision came when he asked both parties to provide the court with a tutorial on climate change. This was followed by several requests to both parties for more information, including questions about the legal ramifications of a finding for the plaintiffs and how the court should balance the damage from the greenhouse gas emissions. against the benefits of burning fossil fuels.
The answers to these questionnaires were decisive and, in the case of the municipalities, they showed up their own firecrackers when they were combined with the unorthodox cause of action of their lawsuit. The Oakland and San Francisco lawyers claimed that, by focusing solely on the largest fossil fuel extractors that had also "promoted the allegedly false science" on climate change, the impact of their discovery on the economy would be limited. Judge Alsup said nothing about it, and his decision qualified the scope of the plaintiffs' legal theory of "staggering" before saying that it "rests on the radical proposition that fossil fuel sales that greenhouse gas emissions cause an increase in temperatures, constitute a public nuisance. "
Judge Alsup did not stop there, although he could have done it. He also emphasized the responses that both parties have made to the Court's previous question on weighting the benefits and costs of fossil fuel consumption, writing that "to determine whether the gravity of the energy consumption of fossil infringement of the public right prevails over it is necessary to consider … the social value that the law attaches to it. "The following paragraph deserves to be quoted in full:
With respect to the balance between social utility and the severity of anticipated harm, it is true that carbon dioxide released by fossil fuels has caused (and will continue to cause) global warming. But in the face of this negative, we must weigh this positive: our industrial revolution and the development of our modern world have literally been fueled by oil and coal. Without these fuels, virtually all our monumental progress would have been impossible. We all benefited. "
The last two sentences of this paragraph are critical. First, Alsup J. shredded the plaintiffs' argument, which was adopted by both New York and other municipalities against Exxon Mobil and the Attorneys General of New York State and New York. other states ("AGs United for Clean Power") that oil and gas extractors did the same kind of harm to humanity as tobacco producers (and therefore deserved the same massive financial penalty received in the United States in the 1990s and 2000s). While the other trials and inquiries are not directly related to the judgment of Justice Alsup, the rejection of this comparison now has legal weight.
Second, the statement that "we all benefited" is clearly intended to send a message to the court hearing the New York lawsuit against Exxon Mobil and other major oil and gas producers. The judge who heard this case questioned, at the beginning of the month, the suitability of the lawsuit because of the substantial use of fossil fuels by the city (and, by extension, the reduction of gas emissions Greenhouse effect). The answer of Judge Alsup is clear: in his opinion, this use should be taken into account in view of the advantages that flow from it for the city of New York.
Alsup JA finally concluded that San Francisco and Oakland had failed to avoid a legal precedent despite the unorthodox nature of their main argument. First, he found that the focus of municipalities on carbon extraction rather than on carbon dioxide emissions was a question of semantics, writing that "if an oil producer can not be sued under the federal common law for its own emissions, a fortiori they can not be sued for someone else. Second, he argued that the courts are not the right place to address these issues:
But the questions on how to balance these negatives around the world against the positive effects of energy and to spread the pros and cons among the nations of the world require the expertise of our environmental agencies , our diplomats, our executive and at least the Senate. "
Again, Justice Alsup's decision has no immediate impact on the climate change lawsuits against Exxon Mobil in other jurisdictions, let alone state investigations. on the company's contribution to climate change. This week's decision is an unequivocal victory for Exxon Mobil in the sense that Justice Alsup loudly rejected each of the arguments that Oakland and San Francisco used against him, not just those that are needed to reject the complaint. At a minimum for the company, the scope of the decision has thus paved the way for an appellate confrontation and possibly the US Supreme Court in the event that another federal district judge rules against Exxon Mobil.
Disclosure: I am / we are long XLE.
I wrote this article myself, and it expresses my own opinions. I do not receive compensation for this (other than Seeking Alpha). I do not have any business relationship with a company whose stock is mentioned in this article.
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