Conservation Law Foundation v. Shell Oil Co.

In Conservation Law Foundation’s (CLF’s) citizen suit asserting that the owners and operators of a bulk fuel storage terminal in New Haven, Connecticut failed to prepare the facility for the impacts of climate change, the federal district court for the District of Connecticut denied the defendants’ motion to stay proceedings pending finalization of a new Connecticut general stormwater permit. The defendants argued that the Connecticut Department of Energy and Environmental Protection’s (CT DEEP) 2024 draft permit introduced “Resilience Measures” as a “new” and “significant” climate consideration, thereby confirming that the prior permits never required the inclusion of climate risks in stormwater pollution prevention plans (SWPPPs). They claimed this regulatory development resolved the central dispute in CLF’s claims and warranted a pause in discovery to avoid unnecessary litigation costs. The court rejected this reasoning, holding that the draft permit and its fact sheets did not indicate an overwhelming likelihood of success. The court highlighted that fact sheets are not the usual example of agency actions that are afforded deference. Moreover, the court emphasized that litigation costs alone do not constitute substantial prejudice sufficient to justify a stay, and that discovery was nearing completion with summary judgment briefing on the horizon. The court also found that Shell’s yearlong delay in seeking a stay—despite having access to the relevant draft language since early 2024—weighed against granting relief. Additionally, the court denied as procedurally improper Shell’s omnibus motion to strike portions of CLF’s expert reports. The court also vacated a magistrate judge’s prior oral ruling denying Rule 37 discovery sanctions related to the defendants’ delayed disclosure of certain documents. The court said further record development was required to determine whether sanctions were warranted.

Defendants filed a memorandum in support of their motion to stay discovery and proceedings on all “climate change” allegations. The defendants argued that the central factual and legal dispute in Counts I–IX of CLF’s complaint—whether they were required under the current Connecticut General Stormwater Permit to consider climate change risks like sea-level rise and storm surge—has been rendered moot by a draft permit issued by Connecticut’s Department of Energy and Environmental Protection (CT DEEP). That draft permit, released in March 2024 and revised in December 2024, included for the first time an express requirement that permittees evaluate climate resiliency factors in their stormwater pollution prevention plans (SWPPPs). CT DEEP characterized these provisions as “new” and “significant changes” from prior permit language. Defendants argued that this regulatory update confirms that the permit in force at the time of the alleged violations never required consideration of climate change, directly undermining CLF’s claims and making further litigation unnecessary since the draft permit conclusively resolved the issue. Consequently, there was no longer any dispute of material fact. Defendants maintained that a stay would conserve judicial and party resources, as expert discovery would otherwise proceed on issues likely to be legally foreclosed in the coming months once the draft permit is finalized. They claimed that they would suffer irreparable injury and expense if forced to undergo expert discovery on already resolved claims. The motion noted that CLF refused to agree to a joint stay, leading to defendants’ unilateral request. The defendants argued that under controlling precedent and the standards for discretionary stays, the court should pause litigation on the climate-related counts until CT DEEP completed its permitting process.

The parties on February 11, 2025 stipulated to dismissal of two Shell entities from the suit with prejudice, with three companies remaining as defendants as owners and operators in control of the New Haven facility at issue in the case. CLF also agreed to “irrevocably withdraw” its subpoena to Shell Pipeline Company LP and not to file any motion to amend its complaint to add this entity as a party. The parties also agreed to a plan for depositions and agreed that the parties to the Rhode Island and Connecticut lawsuits could use all discovery produced in the other case.