NY climate lawsuit is one of many designed to let states abuse the courts to do what they have failed to do otherwise — massively restrict energy production. They should fail.
In an attempt to commit legislative thievery, New York Democrat Governor Kathy Hochul signed a bill into law on December 26 dubbed the “climate superfund” law.
The new state law assigns a handful of energy producers sole blame for climate change and imposes corresponding financial responsibility for damages alleged to have resulted from it in the past, or which may occur in the future. It compels the oil and gas companies to pay a shared $75 billion fine into a so-called “climate superfund.” New York was the second state to launch such a superfund. Vermont did so last July, and it is battling a legal challenge to its law filed on December 30.
A civil lawsuit challenging the New York law has also been filed in federal court on February 6 by state attorneys general, representing 22 states that will be harmed if New York’s law can extraterritorially limit energy production in those states. The states persuasively allege multiple counts of unconstitutional overreach.
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These climate superfund laws are, in effect, blue states’ attempt to find a new way to legislatively do what they’ve been prohibited from doing in court. Blue states and blue municipalities have been trying to convince courts that they have the power to invent new liabilities under the guise of public nuisance or consumer fraud based on contrived theories that torture the foundational limits of tort law. But they’re floundering in that arena. One by one, the courts are increasingly dismissing the adventure.
For example, on February 5, a New Jersey Superior Court dismissed New Jersey’s climate lawsuit against ExxonMobil, Chevron, ConocoPhillips, Phillips 66, Shell and the American Petroleum Institute, ruling that climate change claims are preempted by federal common law.
This adds to the downward momentum of climate change suits. Cases initiated by Baltimore, San Francisco/Oakland, New York City, and many others have been similarly dismissed. And scheduled for March 20, a District of Columbia suit against the energy companies will be heard in the D.C. Superior Court, considering the defendants’ motion to dismiss.
Don’t bet on the legislative efforts by New York, Vermont, and others following the climate superfund legislative model faring any better.
Like the failed climate cases, the superfund law is New York’s attempt to carve out climate policy that, under the Clean Air Act, is ground claimed by the federal government to the exclusion of the states. Federal law preempts attempts for the states to get involved in controlling transboundary pollution. On that basis alone, courts can enjoin state efforts when they meddle in an area preempted by federal legislation.
But there are plenty of other defects too. It’s easy to see the climate superfund law as cash-strapped New York’s blatant attempt to pick a select few out-of-state pockets to pay for a problem with innumerable contributors. Compelling a few energy producers to cough up hundreds of millions if not billions of dollars in what amount to fines, no matter how the fees are stylized, is quite simply excessive. And the Constitution’s Eighth Amendment prohibits the imposition of “excessive fines” and the U.S. Supreme Court has recently shown a propensity to give that clause real meaning and enforcement.
Fairness problems also come into play with these laws because they are retroactive — choosing the fund contributors based on past market share as a way to punish them for being successful at lawfully keeping our lights on, our homes warm and our economy running.
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The Fourteenth Amendment demands that state law shall not “deprive any person of life, liberty or property without due process of law,” and the courts make clear that due process does not exist when laws apply retroactively and punish past lawful conduct. These laws violate that guarantee precisely because they impose a penalty for activities that were perfectly legal.
Indeed, they remain legal today. New York has not chosen to outlaw energy production. It couldn’t get away with that. But it is perversely trying to have its cake and eat it too. Energy production is legal, you’ll just be fined if you continue to do it.
Yet another legal infirmity that dooms these new climate superfund laws is that they dispense with the obligation to prove causation – another requirement before liability can attach if due process is to be maintained. Normally, a plaintiff has a burden to prove that the defendant committed a wrong and that the wrong is the proximate cause of the injury. And, the defendant’s liability is limited to that portion of an adverse effect that they caused and no more.
A few cannot be held responsible for the emissions of the world even assuming the state overcomes the first hurdle of proving that even these few had an illegal effect on the climate. You cannot simply legislate away fundamental fairness, reflected in our causation requirements, by imposing a penalty through the legislature that you could not impose through the justice system.
Courts adjudicating the challenges to the New York and Vermont laws, and other courts that will undoubtedly receive cases from the laws other follower states are bound to adopt, should stand firm on constitutional principles and invalidate these laws. Fleecing has never been a legitimate end of the state.
