New York City’s Curious Jurisdictional Choice in its Fight Against “Big Oil”

New York City’s Curious Jurisdictional Choice in its Fight Against “Big Oil”

By Hilary Schein, Staff Contributor 

On January 9, 2018, New York City became the first municipality outside of California to bring an action against “Big Oil.”[1] Relying on state common law claims of public nuisance, private nuisance, and trespass, New York City aims to hold five defendant oil companies– BP, Chevron, ConocoPhillips, Exxon, and Shell– accountable for the effects of climate change.[2] New York City seeks compensatory damages for the costs it has incurred, and those it may incur in the future, in its efforts to protect its infrastructure, residents, and visitors from the effects of climate change.[3] New York City’s complaint largely resembles those of its California counterparts.[4] There is substantial overlap among the named defendants, causes of action, and form of relief sought.

However, there is one significant procedural distinction between the New York City and California cases: each of the California cities filed in state court, whereas New York City filed in federal district court under diversity jurisdiction.[5] In the California actions, the defendants removed the cases to federal court and the plaintiffs have fought to remand them to state court.[6] Given that jurisdiction has been a major point of contention in the California cases, this raises the question of why New York City would go against the grain and file in federal court, which is clearly the preferred choice of the defendants.[7]

While New York City has not revealed the strategy behind its choice of forum, there are several possible explanations. First, New York City’s suit may be for purposes of appearance, rather than a serious effort to recover from the defendants. The same day New York City filed suit, Mayor Bill de Blasio also announced it would divest city pension funds from companies involved in the fossil fuel industry. This “two-pronged attack” on the fossil fuel industry could be viewed as an attempt by Mayor Bill de Blasio as an attempt “to position himself as a national leader against climate change,” and thus the underlying motivation of the suit could be to improve the image of New York City and its leaders.[8]

Alternatively, New York City’s endgame could be a settlement, rather than a guilty verdict. Steve Berman, founder of class action firm Hagens Berman, which is advising  New York City, Oakland, and San Francisco in their respective suits against oil companies, believes the “best-case” scenario would be to get ten or 15 cities to sue and put pressure on the oil companies.[9] Berman, who previously was involved in similar lawsuits and settlement negotiations against Big Tobacco in the 1990s, speculates that a multi-city suit of that scale would ultimately result in a “massive settlement.”[10] Therefore, New York City’s decision to sue could signal to other cities that climate change is not solely a California issue and that they should join the movement. This which would likely increase the pressure felt by defendants and lead to settlement, which would make choice of forum largely irrelevant because New York City does not intend to be in court for the long haul.

Other explanations for New York City’s choice may be that it believes filing in federal court will save it time and resources by avoiding a procedural fight over forum; that California state courts are thought to be more receptive to climate change suits, whereas New York state courts may be equally as unwelcoming as federal courts for such claims; or that New York City was concerned the complaint would be outright dismissed in state court for a lack of personal jurisdiction, and thought it might have a better chance of survival in federal court.

As the litigation proceeds, the reasoning behind this jurisdictional choice will likely come to light. It will not only be interesting to see the effects forum choice will have on New York City’s suit, and if this will lead to a different outcome than in the California cases, but also how it may influence where other cities bring their actions if they follow the trend of suing Big Oil.

Update: As this piece went to publication, Judge William Alsup of the United States District Court for the Northern District of California denied Oakland and San Francisco’s motions to remand their related actions to California state court.[11]

 

 

[1] Complaint at 1, City of New York v. BP, No. 18-cv-182 (S.D.N.Y. 2018); William Neuman, To Fight Climate Change, New York City Takes on Oil Companies, N.Y. Times (Jan. 10, 2018), https://www.nytimes.com/2018/01/10/nyregion/new-york-city-fossil-fuel-divestment.html?_r=0.

[2] Complaint, supra note 1, at 1-2.

[3] Id. at 1-2, 63.

[4] See generally Oliver Milman, New York City Plans to Divest $5bn from Fossil Fuels and Sue Oil Companies, The Guardian (Jan. 10, 2018), https://www.theguardian.com/us-news/2018/jan/10/new-york-city-plans-to-divest-5bn-from-fossil-fuels-and-sue-oil-companies; Kimberly Willis, Taking on the Fossil Fuel Industry: Why California’s Public Nuisance Lawsuit May Succeed Where Others Have Failed, Hastings Env. L.J. Blog (Oct. 16, 2017), http://sites.uchastings.edu/helj/2017/10/16/taking-on-the-fossil-fuel-industry-why-californias-public-nuisance-lawsuits-may-succeed-where-others-have-failed-by-kimberly-willis/; Complaint, supra note 1.

[5] See, e.g., County of San Mateo v. Chevron, No. 17-CIV-03222 (Cal. Super. Ct. 2017).

[6] See generally Nicholas Iovino, Big Oil’s Global Warming Case Could Hinge on Jurisdiction, Courthouse News (Feb. 16, 2018), https://www.courthousenews.com/irony-big-oils-global-warming-case-could-hinge-on-jurisdiction/.

[7] Id.

[8] See Neuman, supra note 1.

[9] Geoff Dembicki, Meet the Lawyer Trying to Make Big Oil Pay for Climate Change, Vice (Dec. 22, 2017, 12:00 A.M.), https://www.vice.com/en_us/article/43qw3j/meet-the-lawyer-trying-to-make-big-oil-pay-for-climate-change.

[10] Id.; New York City Sues 5 Oil Companies Over Climate Change, Lexis Legal News (Jan. 11, 2018, 10:44 A.M.), https://www.lexislegalnews.com/articles/23378/new-york-city-sues-5-oil-companies-over-climate-change.

[11] California v. BP No. C 17-06012-WHA, order denying motion to remand, (N.D. Cal. Feb. 27, 2018).

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