Vice, Dec 2017
When you want to sue the largest, most powerful companies on the planet, Steve Berman is the guy you call. He forced Jack-in-the-Box to pay $12 million for causing an E. coli outbreak that killed four children. He won a $215 million settlement against Enron for defrauding investors and wiping out employee retirement accounts. He represented auto dealers in a $1.6 billion lawsuit against Volkswagen for cheating on diesel emissions.
But Berman is now working on a lawsuit that could be even bigger: He is suing five of the world’s most powerful oil companies for causing climate change. He represents Oakland and San Francisco in a lawsuit filed last September demanding that Exxon, Shell, Chevron, ConocoPhillips, and BP pay billions for sea walls and other defenses against ocean rise.
Just like with tobacco, the case could hinge on whether these companies lied to the public about the dangers of their business model. Berman has evidence that companies like Exxon knew burning oil causes climate change as early as the 1950s. Internally, oil companies took steps to protect their offshore oil rigs and Arctic pipelines from global warming while publicly they denied the science—the same way cigarette makers did research into cancer while denying their product was harmful. “Defendants stole a page from the Big Tobacco playbook,” the lawsuit alleges.
Legally speaking, that argument might not be such a stretch. “The parallels to tobacco are quite clear,” Carroll Muffett, the president of the Washington, DC–based Center for International Environmental Law, told me. Still, nobody has won a lawsuit like this and the oil companies I contacted didn’t seem to think Berman’s would be any different. “Should this litigation proceed,” a spokesperson for Chevron wrote in an email, “it will only serve special interests at the expense of broader policy, regulatory, and economic priorities.” Other, less biased observers also have doubts. “I’m not that sure actually,” said Martin Olszynski, a University of Calgary law professor who has researched the parallels between oil and tobacco. “It seems obvious that at some point the defendants will say, ‘But look, there was demand for our product.’”
Berman himself failed to win a similar lawsuit in 2012, when a court dismissed his attempt to hold Exxon and about two dozen other fossil fuel producers responsible for the sea rise swallowing an Alaskan village. But a lot has changed since then. Science linking individual corporations to climate change is more sophisticated. Incriminating oil company documents are surfacing. New court decisions—especially a recent ruling against lead paint companies—are removing legal barriers. Suing big oil could be one way to win real environmental gains in the Trump era. “We have the federal government claiming there’s no climate change, we have the EPA rolling back,” Berman told me in an interview from his office on the 33rd floor of a Seattle high-rise. “[We can] use the law to accomplish what politicians won’t do.”
The stakes are even higher in his big oil lawsuit. Berman is not just trying to get oil companies to pay for seawalls in the Bay Area. In a broader sense he’s attempting to hold them responsible for endangering all human life on earth. “This is different in kind from anything else,” Timothy Crosland, the director of a UK-based climate law group called Plan B, told me. “Once you get started, you get one case that goes through, this is an avalanche. It’s got the potential really to bring down the fossil fuel companies.”
For insight into Berman’s worldview it helps to go back to his 1960s upbringing in Highland Park, a Chicago suburb. “It was a really evolutionary time,” he said. “I grew up with a mother who was one of the first women to burn her bra.” His dad wanted to be a career Army officer but grew disillusioned by the Vietnam War and ended up running an insurance company. “He kind of became liberal himself,” Berman said.
Berman went to law school and moved out to Seattle, where he got hired by a firm that mostly did defense work for companies in industries like insurance. Berman was part of a smaller team at the firm that sued companies instead. In 1993, he met with a parent whose child had lost a kidney after eating at Jack in the Box and getting food poisoning. “I remember sitting in the room thinking, ‘This could have been my kid,’” he said. “I was so choked up I could barely talk.” His superiors at the firm didn’t want to take the case. “So I said, ‘I’m out of here.”
Berman and a colleague Carl Hagens formed their own firm, Hagens Berman. He’d wanted to set out on his own for some time and here was the perfect excuse. Two years later they settled with Jack in the Box for $12 million.
It was a legitimate concern. By then hundreds of tobacco lawsuits had failed. Cigarette makers argued smoking was a personal choice. They pointed to research—often funded by the tobacco industry —casting doubt on the link between cigarettes and cancer. But several factors aligned to make the industry vulnerable to litigation. A series of whistleblowers revealed that tobacco companies knew smoking is addictive and causes cancer. Secret corporate documents showed companies did market research on how to target children with ads and branding. Mississippi Attorney General Mike Moore filed a lawsuit demanding tobacco companies pay the healthcare costs of smokers who’d become sick. And by 1998, 46 states were demanding the same.
How can you prove that oil dug out of the ground by Exxon is causing a tiny Alaskan village to disappear?
Berman now had a game plan for defeating powerful industries: Accuse them of misleading the public to protect revenues, then find plaintiffs who are suffering the consequences. In the late 2000s, he heard about a coastal village in Alaska called Kivalina that would have to be relocated because of rising oceans. The move could cost up to $400 million, according to his lawsuit, and the Army Corps of Engineers said climate change is to blame. Berman sued Exxon, Chevron, BP, ConocoPhillips, and 20 other fossil fuel producers on behalf of the villagers, arguing these companies spread doubt and confusion about climate change knowing communities such as Kivalina are in danger. Exxon, for instance, had run full-page New York Times ads about “unsettled science.”
Berman flew to Kivalina at one point. The village is built on an island off the west coast of Alaska. Its 400 or so indigenous residents had watched helplessly as shoreline disappeared, winter storms got fiercer, and waves lapped closer to the school. There was a pervasive feeling of despair. “The island is sad, sad that it’s going away,” he said. The magnitude of climate change hit him on the flight home. “You could see acres of dying trees from the pine bark beetle,” he said. “That was really striking.” A federal court dismissed the lawsuit, deciding that who’s to blame for climate change is a job best left to entities like Congress or the White House. But the real issue was causation. How can you prove that oil dug out of the ground by Exxon is causing a tiny Alaskan village to disappear?
“There is no realistic possibility of tracing any particular alleged effect of global warming to any particular emissions by any specific person, entity, group at any particular point in time,” wrote US District Judge Saundra Brown Armstrong. It’s a tough obstacle to surmount. “In climate change there’s a lot of diffuse actors,” said the University of Calgary’s Olszynski. “It’s not just the oil companies.”
But there are several reasons Berman’s new lawsuit against big oil could be more successful. Whereas Kivalina was filed in federal court, he wants to represent the cities of San Francisco and Oakland in California state court, which he thinks may be less likely to decide the case raises political questions outside of its jurisdiction. And, he added, “Some people believe that there are more conservative judges on the federal bench.” The defense team for big oil is fighting to get the suit heard federally. The case was “going to be mired down for the next three or four months in a procedural battle,” Berman predicted.
Financial damages from climate change are also more quantifiable. San Francisco estimates sea-level rise could threaten $49 billion in property. “The major coastal cities in America and abroad have people worried about this,” he said. “That’s a big advancement since the Kivalina case.”
Incriminating oil industry documents, meanwhile, continue to surface. A report released in mid-November by the Center for International Environmental Law has new evidence that big oil was warned about the risks of global temperature rise nearly 50 years ago. “There seems to be no doubt that the potential damage to our environment could be severe,” explains a 1969 study prepared for the American Petroleum Institute by two Stanford scientists. This wasn’t a one-off thing.
“From the late 1960s onwards up into the 80s those warnings from their own scientists grew more and more urgent,” Muffett, the November report’s co-author, told me. An internal Exxon memo from 1981 states that carbon emissions could “produce effects which will indeed be catastrophic—at least for a substantial fraction of the earth’s population.” By then the company had calculated that reducing its carbon footprint would hurt revenues. Internally, the industry began to protect itself from climate change. Companies designed taller offshore oilrigs and pipelines able to withstand melting permafrost. “[They] had a responsibility to warn the public,” Muffett said. Instead, Exxon, BP, Chevron and Shell formed a group known as the Global Climate Coalition that argued climate science “is not well understood” into the 90s.
That’s how the law has traditionally viewed things. Yet a recent ruling in California against lead paint companies suggests the law’s view on causation is evolving. “This may not sound like it has anything to do with climate change,” Olszynski told me, “but it does.” For 17 years, three paint companies—ConAgra, NL Industries, and Sherwin-Williams—argued in court that the lead paint they manufactured couldn’t be linked to specific houses where people got sick. But last month the California Court of Appeals ruled that their marketing “implied lead paint was safe,” even though the companies knew it was not. “That’s a really important point,” Olszynski explained. It could mean there’s a stronger case that oil companies are legally responsible for sea-rise damage in San Francisco and Oakland. They marketed and sold a product that they knew is causing climate change.
As far as Berman is concerned the story isn’t over. On climate change he thinks it’s just getting started. If a judge decides his case can be heard—a big if, considering that no lawsuit against big oil has made it to that stage—then Berman can call on Exxon, BP, Shell, ConocoPhillips and Chevron to make internal reports and research into climate change available. “[I’m] dying to get to those documents,” he said. “I’m convinced they’re going to be smoking hot.”
As our interview came to a close I asked Berman to describe the best-case scenario for all this. “Imagine if I could get ten or 15 cities to all sue and put the same pressure on the oil companies that we did with tobacco companies and create some kind of massive settlement,” he said. He acted as if it was the first time he’d thought of the idea. But I got the feeling it wasn’t.
Geoff Dembicki is the author of Are We Screwed? How a New Generation is Fighting to Survive Climate Change. Follow him on Twitter.
Research Commented On: “From Smokes to Smokestacks: Lessons from Tobacco for the Future of Climate Change Liability” (2017) Geo Envtl L Rev (forthcoming)
A few years ago, the Canadian Press reported that environmental groups were “taking inspiration from the legal fight against tobacco to fire warning shots at major energy companies over their alleged role in funding climate change denial and blocking climate-friendly legislation.” The next day, an editorial in the Calgary Herald suggested that “the comparison doesn’t stand up to even cursory examination. One is a product that is always hazardous to human health when consumed, the other is a staple of the modern world.” Setting aside for a moment the fact that tobacco wasn’t always understood as hazardous to human health (back in the 1950s, almost one in every two Americans smoked, and cigarettes were ubiquitous in homes, places of work, universities, restaurants and bars), the past few years have seen an increasing number of comparisons made between the fossil-fuel industry’s potential liability for climate change and “Big Tobacco’s” liability for tobacco-related disease. Very few of these comparisons, however, have considered the legally relevant similarities and differences between these two contexts in detail. In our most recent paper, recently accepted for publication in the Georgetown Environmental Law Review, we set out to do just that.
What We Found
Our research began with the unprecedented story of tobacco litigation and liability, and specifically the decision by several U.S. states (followed shortly thereafter by most Canadian provinces) to sue the tobacco industry directly for the public – as opposed to private – healthcare costs of tobacco-related disease. Not only did they sue the tobacco industry, but they also passed legislation to remove some of the legal hurdles that private plaintiffs had encountered in seeking compensation for tobacco-related harms in previous waves of unsuccessful tobacco litigation. As one example, these laws allowed the provincial plaintiffs to rely on statistical and epidemiological data to establish the necessary links between smoking, tobacco-related disease, and the province’s healthcare costs. In the U.S., the industry went from never losing a case to settling for US $240 billion as part of what is known as the Master Settlement Agreement.
We then asked ourselves whether similar developments might be possible in the future if, as a result of society’s failure to adequately address the climate change problem, governments of all levels are faced with unprecedented public costs to remediate the resulting damage (e.g. damage from increased floods, droughts, fires, etc.) and to adapt to new climatic regimes (some of which are described here). We conclude that while there are some important differences between these two contexts, from a legal perspective the comparison is actually quite apt. Both contexts involve products (tobacco and fossil-fuels) initially considered harmless but increasingly understood as posing significant risks, not just to their direct consumers but to the broader public as well. Probably the single most important factor in our analysis, however, is the public nature of the costs incurred in both contexts: public healthcare costs as a result of tobacco-related disease, and the various public remedial and adaptation costs that are expected to arise as a result of climate change. Other similarities include well-documented campaigns of denial in the face of mounting scientific evidence in both contexts.
Based on recent developments (see e.g. the big auto-makers’ letter to the new EPA administration requesting the postponement of tougher fuel-economy standards), it appears that the fossil-fuel industry is focusing exclusively on current regulatory regimes as constraining their decision-making, ignoring the traditional role of tort law – and the potential for civil liability in particular – in providing a “floor” for reasonable conduct, including the avoidance of reasonably foreseeable risks.
This regulatory focus is perhaps not so surprising in light of the current difficulties being encountered in what we describe as the first wave of current climate litigation. However, and without foreclosing the viability of these early efforts (and recognizing that this first wave of climate litigation is still building in Canada, see here for example), our analysis suggests that these difficulties are not immutable and may be overcome by future legislatures motivated to find funding for significant public costs that will otherwise be borne by the tax-paying public.
More concretely, this means that it may not be in auto-makers’ best interest to postpone more stringent emissions standards, irrespective of the regulatory landscape, as this may be seen in hindsight as not meeting the applicable standard of care. Gasoline retailers and auto-makers may also want to start warning the public more explicitly about the risks of fossil-fuel consumption. As the costs of electric vehicles continue to come down, auto-makers may also want to re-think their marketing strategies with respect to high emissions vehicles, sales of which are apparently at an all-time high. Oil and gas producers may want to scrutinize their operations to ensure that best available technologies are being adopted wherever possible, that climate risk is minimized, and that R & D funding is directed towards low-, no- and negative-emissions technologies.
We, too, have further research to do. Although our paper should not be considered preliminary, we are fully aware that some aspects require further analysis and discussion – including with industry. We welcome those discussions as we move forward with this project.
Martin Olszynski, Sharon Mascher, & Meinhard Doelle “Do Comparisons Between Tobacco and Climate Change Liability Withstand Scrutiny?” (26 April, 2017), online: ABlawg, https://ablawg.ca/wp-content/uploads/2017/04/Blog_MO_SD_MD_Tobacco_Climate.pdf