Posts Tagged ‘oil industry’

“That huge opioid verdict? Watch out — the energy industry is next”

Can the lawful sale of products be retrospectively declared a “public nuisance” and tagged with enormous damages, based on theories that the products caused harm after being used by third parties not in court? Before such theories succeeded in an Oklahoma courtroom against Johnson & Johnson over its promotion of opioid painkillers, they had been unsuccessfully deployed against the makers of guns used in crime, while another set of recent lawsuits attempts to deploy them in hopes of making the sellers of fossil fuels pay for the harms of climate change. Scott Keller, Houston Chronicle/Texans for Lawsuit Reform:

Public nuisance claims traditionally have been limited to conduct interfering with truly public rights. For example, courts for decades have recognized public nuisance claims brought by governments to remove impediments from their public highways or waterways. Even then, courts generally did not recognize such claims where a legislature or administrative agency had already regulated an industry. After all, if the political branches of government regulated an industry, then they were telling courts what did and did not qualify as an unlawful “nuisance.”

But a series of recent lawsuits wants courts to ignore these limits on public nuisance claims and obliterate entire industries. These lawsuits seek to massively expand what counts as a public right, and they want courts to destroy companies that are already complying with existing regulations.

Similarly: “’A loss on the public nuisance theory in the Oklahoma opioid public nuisance theory would have been a potentially devastating state court precedent for the climate change public nuisance cases now pending in state courts,’ said Richard Lazarus, a professor of environmental law at Harvard.” [Dino Grandoni, Washington Post]

Which raises a question: when trial lawyers were pitching Oklahoma politicos on the large sums to be gained by pursuing strained public nuisance theories against opioid makers, do you think they mentioned that the theories if embraced might work to shut down the locally popular oil and gas business?

Supreme Court roundup

  • Nice little Supreme Court you got there, be a shame if anyone came around to mess it up, say Sens. Whitehouse, Blumenthal, Gillibrand, Hirono, and Durbin in incendiary “enemy-of-the-court” brief [Robert Barnes, Washington Post/Laredo Morning Times; David French, National Review; James Huffman, Inside Sources]
  • Cato podcast triple-header, all with Caleb Brown: Trevor Burrus and Ilya Shapiro on Gundy v. U.S. and the limits of Congressional delegation, Ilya Shapiro and Clark Neily on the aftermath of double-jeopardy case Gamble v. U.S., and Trevor Burrus on the First Amendment case Manhattan Community Access Corporation v. Halleck (cable public access channel not a state actor);
  • Criminal forfeiture, where used, should track lines of individual owner and asset responsibility, not the loose all-for-one joint-and-several-liability standards of some civil litigation [Trevor Burrus on Cato certiorari petition in Peithman v. U.S.]
  • Federalist Society National Student Symposium panel on “The Original Understanding of the Privileges and Immunities Clause” with Randy Barnett, Rebecca Zietlow, Kurt Lash, Ilan Wurman, and moderated by Judge Amul Thapar;
  • On the independence of administrative law judges, issues left over from Lucia v. U.S. are now coming back up in SEC proceedings [William Yeatman on Cato Fifth Circuit amicus brief in Cochran v. U.S.]
  • Take-land-now, pay-later procedures may get pipelines built faster but at the expense of property owners’ rights. SCOTUS should act to assure just and timely compensation [Ilya Shapiro on Cato certiorari petition in Givens v. Mountain Valley Pipeline]

Energy and climate roundup

Now you’re (not) cooking with gas

A New York utility says the politically arranged blockage of a pipeline project may mean an end to new gas hookups for residential and commercial customers [Bernadette Hogan and Ben Feuerherd, New York Post]

A demand for “no new fossil fuel infrastructure” seems to be rapidly emerging from the green wing of world politics (Seattle, IEA, Vermont, Maryland, New York, earlier), making clear that its objection is not to a particular pipeline or fracking project or oilfield development or export terminal but to any and all of them, period.

I wonder whether the demand, if taken seriously, would also entail disallowing new gasoline stations.

More/related: strangling the New York power grid [Robert Bryce, Crain’s New York Business]

Banking and finance roundup

  • “In the banking world, with which I am familiar, the general belief has been that you disobey supervisory guidance at your peril. That sounds like law and regulation, but without the open process and accountability. Over many years it has certainly felt that way.” [Wayne A. Abernathy, Federalist Society commentary]
  • Some House Democrats use hearings to badger banks into cutting off clients in industry areas like guns, pipeline construction [Zachary Warmbrodt, Politico]
  • New U.S. Chamber Institute for Legal Reform papers on reforming securities litigation: “Risk and Reward: The Securities Fraud Class Action Lottery” [Stephen J. Choi, Jessica Erickson, Adam C. Pritchard]; “Containing the Contagion: Proposals to Reform the Broken Securities Class Action System” [Andrew J. Pincus]
  • “A pot banking bill is headed to House markup with bipartisan support” [Jim Saksa, Roll Call]
  • Your periodic reminder that corporate law *is* a form of public interest law [Stephen Bainbridge quoting Hester Peirce]
  • “History Shows Forcing Companies to Put Workers on Boards Is a Bad Idea” [Ryan Bourne, UK Telegraph/Cato, earlier on Elizabeth Warren proposals]

Biofuels mandate: a renewable road to ruin

“A decade ago, the U.S. mandated the use of vegetable oil in biofuels, leading to industrial-scale deforestation — and a huge spike in carbon emissions.” A New York Times/ProPublica investigation by Abrahm Lustgarten. Excerpt:

In the mid-2000s, Western nations, led by the United States, began drafting environmental laws that encouraged the use of vegetable oil in fuels — an ambitious move to reduce carbon dioxide and curb global warming. But these laws were drawn up based on an incomplete accounting of the true environmental costs. Despite warnings that the policies could have the opposite of their intended effect, they were implemented anyway, producing what now appears to be a calamity with global consequences.

The tropical rain forests of Indonesia, and in particular the peatland regions of Borneo, have large amounts of carbon trapped within their trees and soil. Slashing and burning the existing forests to make way for oil-palm cultivation had a perverse effect: It released more carbon. A lot more carbon.

Environment roundup

No duty for gas station to paint pavement grooves

“Woman catches her shoe in groove in pavement at Tewksbury, Mass. gas station; she falls, is injured. Woman: The station had a duty to warn me of the danger, perhaps by painting the grooves (which are mandated by state law to contain spills) brightly. First Circuit: There is no such duty. But here’s a Judge Selya vocab quiz for your trouble: pellucid, behoof, animadversions, and rescript.” [John Kenneth Ross, Short Circuit on Potvin v. Speedway LLC]

Environment roundup

  • Organized efforts mount to blockade, shut down, and ban oil and gas infrastructure [David Roberts/Vox; Kevon Paynter] My two cents on Baltimore’s ban on new or expanded crude oil terminals, which follows moves against fuel infrastructure in Oakland and Portland [Free State Notes] Massachusetts judge approves “necessity defense” raised by protesters who blocked work on pipeline [Erin Mundahl, Inside Sources]
  • Related: calls to ban hydrocarbon (even gas) utility generation stir backlash among some Democrats [Amy Harder, Axios] And not illogically given the distributional effects [Ronald Bailey, Reason]
  • “$18 Billion Prize,” new stage play about Chevron/Ecuador case by Phelim McAleer and Jonathan Leaf, ruffles some Bay Area feathers [Daniel Kennard, National Review]
  • Questions about curious study of GMO safety [Dan Vergano, BuzzFeed]
  • “Creative Regulators and Environmental Protection,” Federalist Society panel video with C. Boyden Gray, Adam White, Robert Glicksman, Nathan Richardson, Caroline Cecot;
  • Europe optimizes its train system for passengers, while U.S. optimizes its for freight. Which is the greener choice? [Coyote]

Andrew Grossman on municipal climate suits

 

In a recent Cato Daily Podcast with Caleb Brown, Cato adjunct scholar Andrew Grossman of Baker & Hostetler discusses the “legally aggressive” new round of climate change litigation, in which municipalities in California and Colorado, as well as New York City, have sued energy producers and distributors seeking to recover damages over the release of carbon dioxide into the atmosphere.

As Grossman notes, the idea of suing over the role of carbon emissions in climate change has by this point been tried many times. The most obvious approach would be to sue large industrial emitters of carbon, which is what some state governments did in one of the most prominent cases, filed against electric utilities. In its 2011 AEP v. Connecticut decision, however, the Supreme Court ruled that such outputs were regulated comprehensively and exclusively at the federal level through enactments like the Clean Air Act, and were not subject to an additional level of state regulation through public nuisance claims. Suits on other theories, such as Comer v. Murphy Oilfrom the Fifth Circuit and the Kivalina case in the Northern District of California, have been launched “to enormous bombast and press attention and they have all bombed out…. Those cases were the low-hanging fruit. Those were the more obvious legal theories if you were going to try to bring this kind of case,” he says.

Now the question is whether litigants can accomplish an end run by instead attacking upstream, pre-emissions activity, specifically the extraction and distribution of fossil fuels destined to be burned. Ambitiously, some of the new suits attempt to apply state common law to activities occurring around the world – to the doings of worldwide corporations such as Royal Dutch-Shell, for example, and to oil production from places like the coast of Norway and its subsequent use by European motorists. Needless to say, many of these processes are comprehensively regulated by the laws of the European Union and its member countries. Doctrinally, then, the new efforts get into even deeper water (so to speak) than strictly domestic claims. From the podcast:

If a court in California is going to go around telling Norway what to do, well, gosh, Norway may not really like that. And what do you do in that instance? It’s not apparent to me how this works. How does the court figure out what Norway’s regulations are and what Norway is doing about this? Who’s going to tell them? I don’t know. What if Norway disagrees with whatever it is that the court decides needs to be done in this case? Does Norway complain to the court? Do they send an ambassador to file a brief or something? I don’t know. This has never happened before. And what if Norway decides that they don’t like whatever it is the court is doing and they’re going to impose, say, reciprocal trade tariffs, or something like that, against the United States on the basis of one of these rulings? Does the court hold them in contempt?

Listen to the whole thing here (cross-posted from Cato at Liberty).