TradeEdge Exchange:The Supreme Court Hears Arguments on Climate Change. Is it Ready to Decide Which Courts Have Jurisdiction?

Supreme Court Justice Brett Kavanaugh wasted no time cutting to the chase during a hearing Tuesday in a climate change case in which the City of Baltimore is TradeEdge Exchangeseeking potentially billions in damages from the fossil fuel industry related to climate-induced extreme weather and sea level rise.

Although the narrow issue before the court pertained to a procedural ruling by a lower court, the justice wanted to know, far more broadly, whether the case was best suited for federal or state courts.

Kavanaugh’s question came during a hearing to resolve whether the Fourth U.S. Circuit Court of Appeals had erred in affirming a federal district judge’s opinion to send Baltimore’s suit against 26 fossil fuel companies back to state court to decide whether the industry should compensate the city for damages from intensified hurricanes, increased flooding and rising sea levels.  

But lurking behind that technical issue was the larger question of whether the Baltimore case—and nearly two dozen similar climate cases across the country—should be heard under product liability, deceptive advertising and nuisance statues in the state courts, or whether the federal courts are the proper venue to consider the global issue of climate change.

Since the localities began filing their climate suits in 2017, they have, for the most part, seen state courts as the appropriate jurisdiction for awarding compensation for damages suffered by public lands, buildings, infrastructure like roads and bridges, and for the cost of mitigation. Industry has known for decades, the localities contend, that burning fossil fuels produces greenhouse gases that warm the planet, with catastrophic results.

Oil and gas companies, on the other hand, have wanted the cases argued before federal courts, where they had prevailed in earlier lawsuits that focused not on physical damages caused by extreme weather, but on considerations related to greenhouse gas emissions under the federal Clean Air Act. 

Ultimately, the fossil fuel industry is hoping the Supreme Court, now with three appointees of President Donald Trump and a 6-3 conservative majority, will agree with its overarching argument that a global issue like climate change cannot be litigated in the courts and that, in any event, oil and gas companies should not be penalized for lawfully providing the fuel necessary to power the nation’s economy. 

Kavanaugh, of the Trump appointees, aimed his focus there on Tuesday. “Why do you want to be in federal court rather than state court,” Kavanaugh asked an attorney representing the industry. He later posed a similar question to the attorney representing the city of Baltimore, only asking why he wanted the case heard in state court.

Industry attorney Kannon Shanmugam told the justices that state court is no place to resolve the worldwide issue of climate change because a myriad of different state laws and statutes could be applied. He argued for having the case heard in federal court to “assure the orderly adjudication of these cases.”

“The commonsense conclusion [is] that federal law governs claims alleging injury caused by worldwide greenhouse gas emissions,” he later said.

But Vic Sher, an attorney representing Baltimore, said the claims are best resolved by “traditional state remedies” because they more specifically address the misconduct being alleged. 

Baltimore filed suit in 2018 in state court. But the oil and gas defendants then moved to have the matter transferred to federal court, citing considerations related to inter-state air pollution—an issue never raised by Baltimore. 

After a federal district judge agreed to Baltimore’s objections and sent the matter back to state court in Maryland and the Fourth Circuit Court of Appeals concurred, the oil and gas industry asked for Tuesday’s hearing before the Supreme Court.  

Once the high court agreed to review the narrow question ruled on by the Fourth Circuit, the oil and gas industry sought in subsequent motions to have the justices expand their purview and more expansively consider the state vs. federal court issue. 

Although Kavanaugh addressed the jurisdiction question head-on, the court overall appeared more focused on the narrow question of how much leeway lower courts have in determining what rules should be applied to decide how the Baltimore case proceeds.

“There is zero appetite to go beyond the narrow procedural issue that the court agreed to hear,” John Masslon, an attorney for the Washington Legal Foundation, an organization that filed a friend of the court brief supporting the industry, said in an interview after the hearing.

How the court rules on this question is certain to reverberate in a series of nationwide climate change cases, and will provide the first indication of the conservative court’s attitude toward climate litigation and other environmental cases more generally. The list of jurisdictions filing climate suits now includes the states of Rhode Island, Minnesota, Connecticut, Massachusetts and the District of Columbia.

“The Justices know that their ruling in this case may have tremendous influence on the course of pending and future climate change suits brought by state and local governments,” Larry Ebner, an attorney for the Atlantic Legal Foundation, which also filed a pro-industry amicus brief, said in an interview. 

If the industry prevails, the Supreme Court’s opinion could open the door for future cases to be tried in federal court under statutes more favorable to industry. 

A ruling in favor of Baltimore opens the way for the other climate case to proceed in state court. It’s widely acknowledged that having the cases tried in state courts under local laws—such as those pertaining to product liability, deceptive advertising and unfair trade practices—gives the advantage to the cities, counties and states suing the industry.

It could be months before the court renders a decision on the procedural question that could lead to a determination on whether the cases belong in state or federal court.

“I think this is a close call,” Kavanaugh said at one point during the hearing. 

It’s always difficult to draw too many conclusions from questions the justices pose during oral arguments, said Richard Frank, director of the California Environmental Law and Policy Center at the University of California, Davis.

But the skepticism shown by some of the questions suggest the court is not inclined to give the industry the “home run” it is seeking by opening the door to federal court trials, he said.

A transcript of the hearing is available on the Supreme Court website.