City of New York v. Chevron Corp.

On May 24, 2021, the mandate issued for the Second Circuit’s judgment affirming dismissal of New York City’s tort law-based case against fossil fuel companies.

The Second Circuit Court of Appeals affirmed the dismissal of New York City’s lawsuit seeking climate change damages from oil companies. The Second Circuit’s decision largely followed the reasoning of the district court’s 2018 decision. First, the Second Circuit held that federal common law displaced the City’s state-law public nuisance, private nuisance, and trespass claims because the lawsuit would regulate cross-border greenhouse gas emissions, albeit “in an indirect and roundabout manner,” and because state law claims “would further risk upsetting the careful balance that has been struck between the prevention of global warming, a project that necessarily requires national standards and global participation, on the one hand, and energy production, economic growth, foreign policy, and national security, on the other.” The Second Circuit then held that the Clean Air Act, in turn, displaced federal common law claims related to domestic emissions. The Second Circuit cited American Electric Power Co. v. Connecticut, 564 U.S. 410 (2011), as establishing “beyond cavil” that the Clean Air Act displaced federal common law nuisance suits to abate domestic transboundary greenhouse gas emissions, and found that Native Village of Kivalina v. ExxonMobil Corp., 696 F.3d 849 (9th Cir. 2012), provided “sound reasoning” for determining that the Clean Air Act also displaced federal common law damages claims. The Second Circuit also rejected New York City’s contention that the Clean Air Act’s displacement of federal common law claims resuscitated its state law common law claims. Finally, the Second Circuit held that although the Clean Air Act did not displace New York’s federal common law claims addressing emissions outside the United States, foreign policy concerns foreclosed such claims. The Second Circuit said holding the oil companies liable for “purely foreign activity” would “sow confusion and needlessly complicate the nation’s foreign policy, while clearly infringing on the prerogatives of the political branches.”

U.S.-based energy companies filed their brief in the Second Circuit Court of Appeals in support of affirmance of the Southern District of New York’s dismissal of New York City’s lawsuit seeking to hold them liable under state tort law for climate change harms. The companies said the district court had properly determined that federal common law governed the City’s claims because they involved transboundary pollution. The companies also urged the Second Circuit to affirm the district court’s determination that no federal common law claim was pleaded. The companies argued that any claim based on domestic greenhouse gas emissions was displaced by the Clean Air Act and also that federal common law had never been applied “to hold manufacturers of lawful products liable merely because the users of those products create interstate pollution” or to supply “a remedy where the causal chain connecting the defendant’s conduct to the alleged harms extends back several decades, includes billions of intervening actors, and depends on complex phenomena that scientists continue to study.” The defendants also contended that the City did not state viable state law claims because causation requirements were not satisfied and because the doctrine of in pari delicto barred the City’s claims since the City and its resident “have long consumed Defendants’ products and have thus willingly contributed to” the emissions that allegedly caused the City’s injuries. Finally, the companies argued that the claims were preempted by the foreign affairs doctrine and the Clean Air Act and were barred by Commerce Clause, Due Process, and Takings Clauses.

Local government associations filed a brief arguing that state law claims were available to address local climate change harms.

A group of conflict of laws and foreign relations law scholars contended that the district court had erred in applying the “presumption against territoriality” to common law claims; they asserted that the applicable conflict-of-laws rules would call for application of New York law. The legal scholars also argued that “judicial caution” did not provide a basis for limiting the geographic scope of New York law and that foreign affairs preemption did not apply.

Environmental justice groups based in New York City submitted a brief to demonstrate to the court “that climate change, while experienced globally, is a problem with very local effects, especially on the City’s low-income communities and communities of color.”

A professor with expertise in the areas of torts, products liability, and administrative law filed a brief arguing that the application of nuisance law in this case was “nothing extraordinary” but instead represented “a natural extension of longstanding theoretical and doctrinal principles of tort law.”

New York State, seven other states, and the District of Columbia submitted a brief asserting that the district court’s reasoning was inconsistent with states’ authority to address environmental harms; the brief described state and local climate mitigation and adaptation efforts. The states’ brief also echoed the City’s arguments that the City’s claims were not displaced by federal common law or barred by the Clean Air Act.

New York City filed its opening brief urging the Second Circuit Court of Appeals to reverse the dismissal of the City’s lawsuit seeking to hold oil and gas companies liable for the adverse impacts of climate change. New York City argued that “long-established” common law causes of action under New York law provided a means of reallocating the costs imposed by the companies’ lawful economic activity. New York City also argued that its allegations did not present “one of the extraordinary cases where state law must be displaced by federal common law”; that the Clean Air Act did not bar the City’s common law claims; and that the district court’s concerns regarding separation of powers and the president’s ability to conduct foreign policy in the area of climate were “misplaced.” Five amicus briefs were filed in support of New York City. The defendants-appellees’ brief is due on February 7, 2019.