Kivalina Case Dismissal Breaks With 2nd Circ.

By Jesse Greenspan

Law360, New York (October 16, 2009) -- A federal judge has dismissed a public nuisance lawsuit brought by the tiny Alaskan village of Kivalina against 24 energy and utility giants, breaking from a federal appeals court's take on whether companies can be held liable for historic greenhouse gas emissions that contribute to global warming.

Judge Saundra Brown Armstrong of the U.S. District Court for the Northern District of California ruled that the Kivalina suit touched on a political question properly reserved for the legislative or executive branch, and that the plaintiffs did not show causation between their injuries and the actions of the defendants.

But her decision, reached Sept. 30 and not docketed until Thursday, put her at odds with a Sept. 23 ruling from the U.S. Court of Appeals for the Second Circuit, which revived a similar nuisance suit filed by a coalition of states and environmental groups against American Electric Power Co. Inc., the Tennessee Valley Authority, Xcel Energy Inc. and other power companies.

“These decisions side by side I think show the great disagreements both in the law and in society about how to handle these claims,” said Steven F. Napolitano, a partner at Skadden Arps Slate Meagher & Flom LLP. “They are 180 degrees different.”

He said Armstrong's decision was very much in line with prior decisions coming out of the district courts, whereas the Second Circuit's decision “really is an outlying decision right now in the field of global warming.”

“The district court judges pretty consistently seem to be going with the view that these are difficult cases to entertain, that they run you into problems of fundamentally political judgments,” added Ronald J. Tenpas, co-chair of the environmental practice at Morgan Lewis & Bockius LLP and a former assistant attorney general at the U.S. Department of Justice. “And now you have one court of appeals going in a different direction. So it definitely leaves things in a bit of flux right now.”

In fact, Judge Armstrong criticized the Second Circuit case in her decision, saying she was not so “sanguine” as to believe water pollution and air pollution nuisance cases provided appropriate guidance in assessing global warming nuisance cases.

“Despite the admitted and significant distinctions between a nuisance claim based on water or air pollution and one, such as the present, based on global warming, neither plaintiffs nor AEP offers any guidance as to precisely what judicially discoverable and manageable standards are to be employed in resolving the claims at issue,” Armstrong said.

“While a water pollution claim typically involves a discrete, geographically definable waterway, plaintiffs’ global warming claim is based on the emission of greenhouse gases from innumerable sources located throughout the world and affecting the entire planet and its atmosphere,” she added.

Armstrong further said that the nuisance claim required the judiciary to make a policy decision about who should bear the cost of global warming.

“Though alleging that defendants are responsible for a 'substantial portion' of greenhouse gas emissions, plaintiffs also acknowledge that virtually everyone on Earth is responsible on some level for contributing to such emissions,” she said. “Yet, by pressing this lawsuit, plaintiffs are in effect asking this court to make a political judgment that the two dozen defendants named in this action should be the only ones to bear the cost of contributing to global warming.”

The defendants in the case include Exxon Mobil Corp., BP PLC, Peabody Energy Corp., American Electric Power Co. Inc., Duke Energy Corp., ConocoPhillips Co., Xcel Energy Inc., Chevron Corp. and Shell Oil Co.

Kivalina, an Inupiat Eskimo village of about 400 people, alleged that greenhouse gas emissions from the defendants had left the town uninhabitable by eroding the sea ice that protected it from fall and winter storms. It asked for monetary damages of up to $400 million that would allow the inhabitants to move forward with a relocation project.

A spokesman for Peabody Energy said the company supported the district court's decision and fully expected it to be upheld on appeal.

By contrast, an attorney for Kivalina said he believed that, on review, the U.S. Court of Appeals for the Ninth Circuit would allow the case to move forward.

“While we were disappointed with the ruling by the U.S. district court in San Francisco dismissing our case filed by the residents of Kivalina against the nation’s largest carbon dioxide-emitting companies, we are very optimistic of our chances on appeal,” the attorney, Steve Berman, said in a statement. “Late last month, the Second U.S. Court of Appeals reversed the dismissal of another case filed that shares many common aspects of our case’s arguments.”

That Second Circuit case was first filed in 2004 by California, Connecticut, Iowa, New Jersey, New York, Rhode Island, Vermont and Wisconsin, along with New York City. Three land trusts — Open Space Institute Inc., Open Space Conservancy Inc. and the Audubon Society of New Hampshire — filed a similar suit, and the two were consolidated.

The suits, brought under a federal common law claim of nuisance, alleged that by contributing to global warming, AEP and the other defendants were harming the environment, the states' economies and public health. It was originally tossed by a district court, but then revived last month by a two-judge panel of the Second Circuit, which said the district court had wrongly read the plaintiffs' claims as seeking a change in national policy rather than protection from immediate harm.

“Nowhere in their complaints do plaintiffs ask the court to fashion a comprehensive and far-reaching solution to global climate change, a task that arguably falls within the purview of the political branches,” the judges said. “Instead, they seek to limit emissions from six domestic coal-fired electricity plants on the ground that such emissions constitute a public nuisance that they allege has caused, is causing and will continue to cause them injury.”

In yet another similar case, a proposed class of property owners alleged that dozens of oil and chemical companies made Hurricane Katrina worse through their contributions to global warming, and that they were therefore liable for damages from the storm.

That case, Comer v. Murphy Oil USA, was dismissed by a district court in August 2007 and subsequently appealed to the U.S. Court of Appeals for the Fifth Circuit, where it is still pending.

A fourth case, filed by former California Attorney General Bill Lockyer, claimed that greenhouse gases emitted from auto makers’ vehicles were contributing to global warming and costing the state hundreds of millions of dollars in damages. That case was also dismissed by a district court and then voluntarily dropped before an appeals court could rule on it.

“It's clear that these cases are hardly the last word, that there will be continued litigation and that there are still plenty of ... good arguments from the defendants' perspective as to why the [cases don't] withstand scrutiny and full proof,” Tenpas said in reference to the two recent decisions.

Howard E. Shapiro, a member of Van Ness Feldman, pointed out that these cases could all be rendered moot if Congress passed comprehensive climate change legislation or if the U.S. Environmental Protection Agency began regulating greenhouse gas emissions.

For that reason, some companies are “caught between a rock and a hard place,” according to Shapiro.

“If they fight EPA and congressional efforts to regulate greenhouse gas emissions, they may be open to federal common law suits based on nuisance law, which might be worse for them if damage remedies are allowed or maybe even if only injunction remedies are allowed,” he said.

Kivalina is represented in the matter by the Center on Race, Poverty and the Environment and the Native America Rights Fund, along with a number of law firms including Hagens Berman Sobol Shapiro LLP.

The 24 defendants are represented by a plethora of firms, including O'Melveny & Myers LLP and Arnold & Porter LLP.

The case is Native Village of Kivalina et al. v. Exxon Mobil Corp. et al., case number 4:08-cv-01138, in the U.S. District Court for the Northern District of California.