Center for Property Rights

Fr⁠i⁠volous cl⁠i⁠ma⁠t⁠e change lawsu⁠i⁠⁠t⁠s could leave c⁠i⁠⁠t⁠⁠i⁠es ⁠i⁠n ru⁠i⁠n

By: Dr. J. Robert McClure / August 1, 2018

By: Dr. Bob McClure

As much as we hear nowadays about making America great again, it’s worth asking what made America great in the first place Whenever asked, I point to two often overlooked pieces of the puzzle: Our foundation of private property rights, and a strong rule of law to support them.

After all, if government can arbitrarily take your property, how can one build wealth or plan for the future? Unfortunately, this very thing is happening right now.

Trial lawyers and liberal activists are recruiting cities from California to New York to sign up for litigation against the oil and gas industry. They hope to find a court that will hold the industry solely responsible for “projected damages from climate change” — the key word here being “projected.”

We can debate climate change and what sorts of effects it may or may not have. But lured by promises of big payouts, the municipalities signing on to sue Big Oil are exposing their constituents to much more immediate potential costs that could force tax increases and local budget cuts for essential services such as fire and police departments.

Take Boulder, Colo., which became a climate change plaintiff in April. The agreement between the city and its law firms states that if the plaintiffs lose the case, the court can force the city to pay the cost of the Fortune 500’s expensive corporate attorneys. The language also states that if the municipalities lose, the taxpayers of those cities may also have to pay a penalty.

That risk went up exponentially when a U.S. district court in Northern California threw out Oakland’s lawsuit against the oil companies. Judge William Alsup concluded that the problem of climate change “deserves a solution on a more vast scale than can be supplied by a district judge in a public nuisance case.”

The shaky premise of these public nuisance lawsuits is becoming more tenuous by the day as new facts emerge that expose cities to charges of hypocrisy and perhaps even perjury.

Consider Oakland’s now-defunct claims to be able to pinpoint sea level rise by the year 2100. The city claims the sea will rise 66 inches, causing exactly $38 billion in damages. San Francisco says a $5 billion seawall is needed to protect low-lying areas along its coastline. Likewise, Santa Cruz and San Mateo County are projecting similar future crisis scenarios.

By their own admission to bond holders, however, this is science fiction, not science.

Oakland admits in its municipal bond disclosures that it is unable to predict when sea level rise will occur. San Francisco expresses similar doubts in its projection abilities, while San Mateo County says it is “unable to predict whether sea-level rise or other impacts of climate change or flooding from a major storm will occur.”

One must wonder whether similar issues will arise in Florida, where Miami Beach brought in experts to estimate the costs of fighting sea level rise at $500 million.

Another reason why these lawsuits are a horrible gamble is their basic premise of singling out specific companies to blame for climate change.

In California, Judge Alsup observed that “… the development of our modern world has literally been fueled by oil and coal.” He went on to say, “Having reaped the benefit of that historic progress, would it really be fair to now ignore our own responsibility in the use of fossil fuels and place the blame for global warming on those who supplied what we demanded?”

The risk that municipal plaintiffs will have to pay defendants’ cost of the trial, plus a penalty, depends on whether courts find the lawsuits to be frivolous. The decision of Judge Alsup to throw out Oakland’s case on such commonsense grounds elevates the risk that other judges will follow and hand the bill to these cities.

These lawsuits also threaten to harm municipal economies. Lest you think the impact will only be in “oil states” like Texas, Florida’s oil and gas industry supports 266,800 Florida jobs, with 77,000 of those direct industry positions. The total economic impact of this industry exceeds $22 billion and sustains $12 billion in wages.

In the end, lawsuits will do nothing to address climate change. But they will threaten taxpayers, jobs, and livelihoods. Local leaders would be better off focusing their efforts on constructive solutions to problems, as opposed to frivolous litigation chasing after the next jackpot.

Dr. Bob McClure is president and CEO of the James Madison Institute, a non-partisan think tank based in Tallahassee devoted to research and education on public policy issues.