Federal Appeals Court Rejects New York City Climate Change Case Against Major Oil Companies

The U.S. Court of Appeals for the Second Circuit unanimously ruled that New York City’s climate change lawsuit against the major oil companies and other energy producers should be dismissed.

The Court ruled that municipalities, like New York City, cannot utilize State law to hold multinational oil companies responsible for the damages caused by global greenhouse gas emissions.

The Court recognized that global warming is an international concern that cannot be regulated by the law of one or more states, and that the responsibility for global warming cannot be shifted to energy producers when “every single person who uses gas and electricity contributes to global warming.”

The Court’s ruling could have a significant impact on the many other climate change cases brought by cities around the country, including Baltimore, Maryland, Oakland, California, Charleston, South Carolina, and Honolulu, Hawaii, which were instituted in various State court systems.

State courts are considered more hospitable to global warming claims brought by States and municipalities, and federal courts are considered much more likely to dismiss global warming cases on grounds similar to the ones invoked by the Second Circuit Court of Appeals in New York.

The Court of appeals held that global warming is a matter that can only be addressed by federal common law, in a federal court. Where federal common law applies, state law is preempted, and cases brought in State courts, based on State law, must be dismissed.

Thus far, most of the litigation in these cases has centered on whether the State courts have jurisdiction to hear the cases or whether exclusive jurisdiction resides in the federal courts.

Petitions have been filed with the U.S. Supreme Court to resolve the federal versus State law issues, and the decision by the federal court of appeals in New York could be influential with the Supreme Court.

In order to keep the cases in the state court systems, certain municipalities have resorted to suing local branded petroleum marketers who are members of EMA’s constituent State associations.

By joining local defendants in the cases, the municipalities are able to defeat claims of federal jurisdiction based on diversity of citizenship.

EMA has an interest in the federal courts assuming exclusive jurisdiction in these cases, and it is considering filing an amicus brief with the United States Supreme Court if and when the Supreme Court decides to address the federal versus State court issue.

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