The energy industry has scored early court wins in the emerging mass-tort area of “Earth litigation.” To date, this area includes litigation in three categories: climate change, earthquakes and land loss.

While each has nuances, they share a distinctive, common thread: claims by individuals, environmental groups or governmental entities that energy companies—by their existence as explorers, producers and providers of energy—have caused a change to the environment that allegedly merits compensatory damages or other relief.

The history of other mass-tort campaigns—e.g., asbestos, tobacco, concussions—indicates that, despite the industry’s early wins, Earth litigation is not likely going away soon. Given the stakes and the industry’s opponents, energy companies at all levels—upstream, midstream, downstream—and their stakeholders should be preparing to win more battles to withstand waves of likely litigation in coming years.

Early victories

Climate-change litigation. In 2017, the city of Oakland, Calif., brought one of the earliest climate-change lawsuits against so-called “Big Oil,” which it identified as five large producers of “fossil fuels for combustion.” Oakland’s central allegation is that “carbon dioxide from fossil fuels” is the “culprit” behind “dramatic planetary warming” because, “due primarily to the combustion of fossil fuels,” the “atmospheric level of carbon dioxide” is “likely higher than any level in millions of years.”

To try to make global warming actionable, Oakland claims the harm to Earth is “catastrophic sea level rise.” It alleges that fossil-fuel-generated global warming “causes accelerated sea-level rise through thermal expansion of ocean water and melting of land-based ice.” The cause of action Oakland invokes is “public nuisance,” which has catch-all qualities and has been defined as an “unreasonable interference with a right common to the general public.”

Oakland claims defendants are liable because their production and “promotion of … fossil fuels’ pervasive use has caused … sea-level rise.” It alleges defendants “promoted fossil fuels for unlimited use in massive quantities with knowledge of the hazard that such use would create.” It demands an “abatement fund” to “provide for infrastructure” to “adapt to global-warming impacts such as sea-level rise.” It also seeks attorneys’ fees.

A federal court in California dismissed the suit in 2018, ruling the matter was too “vast” for “a judge or jury in a public-nuisance case” and “ought to be left to Congress or diplomacy.” The court’s chief concern: the claim’s global reach, “through which” Oakland requests “billions” to “abate the localized effects of an inherently global phenomenon.”

As Oakland seeks “to impose liability” for “production and sale of fossil fuels worldwide,” it reasoned, “this relief would effectively allow [Oakland] to govern conduct and control energy policy on foreign soil.” Oakland—alongside the city of San Francisco in tandem suits—is appealing.

Earthquake litigation. In 2017, Oklahoma property owners, based on nuisance and other claims, filed a putative class action, claiming several energy companies caused earthquakes. The alleged Earth change is an “unprecedented rise” in seismic activity. They claim there is “a single culprit for Oklahoma’s earthquake epidemic: the oil and gas industry.”

Plaintiffs allege the defendants’ produced-water injection underground “contribute[s] to changes in the underground stress regime that are transmitted to fault lines, causing earthquakes.” They alleged the defendants “directly caused” an “earthquake swarm.”

To try to make earthquakes actionable, they claim that, “as a direct and foreseeable result” of the defendants’ conduct, the plaintiffs were “forced to purchase earthquake insurance” and the cost of that insurance “spiked.” In addition to compensatory damages, they also seek punitive damages, claiming the defendants “knowingly caus[ed] seismic activity.” They also seek attorneys’ fees.

A federal court in Oklahoma dismissed the suit in 2018—the plaintiffs are appealing—and did not side with the defendants completely. It ruled the plaintiffs had standing to bring such a suit, finding their allegations were “sufficient to show that plaintiffs’ injury-in-fact is fairly traceable” to the defendants’ “alleged misconduct.”

Yet, it rejected the substance of the plaintiffs’ claims, ruling that “a viable cause of action” requires “materialization” of a “risk in the form of some tangible harm” and the plaintiffs’ claims failed because “the risk of earthquake damage … has not materialized.”

Land-loss litigation. In 2017, the U.S. Supreme Court ended the first land-loss lawsuit, which was based on nuisance and other claims. It started with a governmental entity, the Southeast Louisiana Flood Protection Authority–East (SLFPA), suing nearly 100 energy companies over the “disappearance” of “coastal lands.” The alleged Earth harm is loss of a “buffer zone” between communities and “violent wave action and storm surge.”

SLFPA claimed this “natural protective buffer took 6,000 years to form” but “has been brought to the brink of destruction over the course of a single human lifetime,” and what remains “is slipping into the Gulf of Mexico.”

SLFPA blamed the industry, purporting “lands that once protected South Louisiana are now gone as a result of oil and gas industry activities.” It claimed that, by “dredg[ing], drill[ing] and extract[ing] in coastal Louisiana,” the industry “ravaged” and “scarred Louisiana’s coast with an extensive network … [of] access and pipeline canals,” which constitutes an “expanding system of ecological destruction that injects seawater … into interior coastal lands, killing vegetation and carrying away mountains of soil.”

It alleged “removal of fluid from beneath coastal lands is causing subsidence” and “sea-level rise.” It claims defendants “knew” or “should have known” of these “catastrophic effects.”

To try to make this actionable, SLFPA posited that it “faces not only exponentially increased costs of providing flood protection, but also the … possibility that it will be incapable of providing the flood protection” and “communities will vanish into the sea.”

Besides damages, it sought an injunction for “abatement and restoration of the coastal land loss.” It also sought attorneys’ fees.

A Louisiana federal court dismissed the case, and an appellate court affirmed in 2017. Both ruled SLFPA’s claim failed because defendants had no duty “to protect [SLFPA] from increased flood-protection costs that arise out of the coastal erosion allegedly caused by defendants.”

The Supreme Court denied review. That, however, has not been the end of the story because, as discussed below, multiple Louisiana parishes have brought additional, different, land-loss suits.

Likely a long road

Mass-tort history indicates that, despite early wins, the industry likely faces a long road ahead. There are at least three reasons: plaintiff-side experience, opportunities and incentives.

Experience. The Earth-litigation movement is rooted in deep mass-tort experience. Firms behind the examples above, for instance, litigated mass actions against asbestos, pharmaceutical and investment companies and involving toxic torts, spills (e.g., Deepwater Horizon, Exxon Valdez), and sports (e.g., student-athlete compensation, concussions). Oakland’s counsel, for one, reportedly recovered $206 billion from the tobacco industry. These firms are not alone.

The track record indicates that Earth-litigation counsel know first-hand what works and have a readily replicable playbook from decades of mass-tort litigation. It also indicates they have resources (from prior verdicts/settlements) to invest in long-lasting campaigns.

Oakland, moreover, telegraphed the model’s repeat nature, likening “Big Oil” to “Big Tobacco” and alleging the former “stole a page from the Big Tobacco playbook” and “propaganda campaign to deceive the public.”

Watch for a redux of strategies/tactics used against tobacco and others. This is likely to include inflammatory rhetoric to seize upon popular beliefs about corporate intentions and science to try to villainize the industry for allegedly knowing bad acts to put “profits over people” and such.

Oakland’s complaint, for example, alleged “people of color, low-income groups and certain immigrant groups are … potentially more vulnerable to climate change.” Beyond courtrooms, it is also likely to include attempts to bring collateral pressure via boardrooms, legislatures, regulators, prosecutors, media and special-interest groups.

Opportunities. Opportunities exist for Earth-litigation counsel to view early results as setbacks, not defeats. Appeals are one reason; new lawsuits, another. The landscape is such that they can keep trying combinations of plaintiffs, defendants, facts, science, law, claims, damages theories, states, jury pools and courts. And, if they find an alignment that breaks through, they will try to exploit it.

Prior mass-tort campaigns saw this death-by-a-thousand-cuts dynamic, and Earth litigation is following suit.

Earthquake suits provide the clearest example. Before the Oklahoma property owners brought the suit cited above, the Sierra Club filed a different earthquake suit, and the same federal court rejected it. Yet, a different set of Oklahoma property owners filed a third earthquake suit, and, in 2018, a different Oklahoma state court allowed it to proceed as a class action.

Clearing that hurdle is significant for that case; more broadly, it illustrates the try-try-again approach.

Similarly, while the Supreme Court ended SLFPA’s case, multiple Louisiana parishes have filed some 40 other land-loss lawsuits, switching from nuisance to permit-related claims. Also, cities and counties beyond Oakland have filed copycat climate-change suits in at least California, Colorado, Maryland, New York, Rhode Island and Washington state.

Other climate-change plaintiffs to date include children, investors and attorney generals. Further, earthquake and land-loss cases have gone beyond downstream firms to target midstream and upstream defendants. Opportunities exist for the variety and volume of Earth litigation to expand.

Incentives. The stakes are high. The Oakland court observed that “billions” are at issue and successful suits “would make the continuation of defendants’ fossil-fuel production not feasible.” True or not, perceptions can create leverage and drive plaintiffs and contingency-fee-focused counsel to hunt high-dollar payouts, especially settlements (e.g., tobacco, concussions).

Such litigation against presumed “deep pockets” has become a business model; financial incentive is big reason Earth litigation is unlikely to end soon.

Preparedness

Smart, strategic defendants have withstood prior mass-tort litigation. Preparedness is key. Below are five preparedness ideas for energy companies and their stakeholders to consider before a possible first/next Earth-litigation suit.

1. Assess. Conduct an Earth-litigation risk assessment by counsel. Knowledge can be powerful preparedness.

2. Plan. Don’t be caught flatfooted. Having a litigation-management plan before a suit is filed generally improves a defendant’s chances of success. Such plans can help with knowing who to call, fact-gathering, effective communication and other items to defuse/manage risk.

3. Coordinate. Explore common-interest/joint-defense opportunities to collaborate with others facing Earth-litigation risk, and consider national coordinating counsel. Plaintiffs coordinate; defendants can too. Coordination can be beneficial.

4. Transfer. Evaluate possible insurance, indemnity or other options to transfer/share risk. Notably, a defendant in the Oakland case filed a third-party complaint for indemnity and contribution against another company.

5. Stay current. This article should not be your last Earth-litigation update. Staying current helps you plan and respond quickly. For complex landscapes like this, consider designating a person (counsel) to monitor and periodically report on significant developments.

There is, of course, no one-size-fits-all approach; consult counsel. The takeaway is that being prepared helps in being better positioned to withstand such litigation.

Michael J. Nelson is a partner in the law firm of Jenner & Block LLP. He is licensed in Illinois and Texas. His practice focuses on complex litigation, particularly energy and environmental disputes.

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