A Case Study of BP P.L.C. v. Mayor & City Council of Baltimore and Its Potential Impact on Other Climate Lawsuits

By Jeffrey Karp, Senior Counsel, and Edward Mahaffey, Legal Research and Writing Attorney

Over the past few years, several state and local governments have filed lawsuits against fossil fuel companies, seeking money damages for the effects of climate change on their jurisdictions.[1] These lawsuits serve multiple potential functions; for example, in addition to the award of damages if successful, they may reveal new information about the companies’ decision-making via the discovery process that may lead to further litigation, and may affect the public perception of climate-related issues.[2]

For the most part, thus far the courts have not had a chance to address the substantive issues because of the lengthy procedural battles that have first occurred concerning whether the lawsuits should be pursued in state or federal courts. The case this article focuses on will therefore be an ongoing one, Mayor & City Council of Baltimore v. BP P.L.C. The procedural questions in this case have resulted in a US Supreme Court decision that has affected other climate change cases recently.[3] But the significance of Baltimore for our purposes is the substantive issues raised in the complaint, the motions to dismiss, and the responses to the motions. They provide a case study of a relatively typical municipal lawsuit against fossil fuel companies, in which both sides have articulated an array of arguments demonstrating the wide range of legal issues involved.

The Initial Complaint

On July 20, 2018, the Mayor and City Council of Baltimore (Baltimore) filed suit in Maryland state court against 26 fossil fuel companies,[4] seeking "to ensure that the parties who have profited from externalizing the responsibility for…results of the changing hydrologic regime caused by increasing temperatures, and associated consequences of those physical and environmental changes, bear the costs of those impacts on the City."[5] The causes of action alleged were public and private nuisance, product liability (strict liability failure to warn, strict liability for design defect, negligent design defect, and negligent failure to warn), trespass, and violation of Maryland’s Consumer Protection Act.[6]

The complaint’s factual allegations began with a general explanation of global warming and its effects. Drawing on scientific reports, Baltimore pointed out that "ocean and atmospheric warming is overwhelmingly caused by anthropogenic greenhouse gas emissions," which are "largely byproducts" of the use of fossil fuels.[7] The effects of global warming discussed included sea level rise, heat waves, and disruption to the water cycle (including flooding and drought).[8] These phenomena have impacted Baltimore and will do so even more in the future, including increased "[f]looding and property damage associated with tropical storms,"[9] and "public health impacts…including, but not limited to, impacts associated with extreme weather, extreme heat, decreased air quality, and vector-borne illnesses," which Baltimore "has incurred and will continue to incur expenses in planning and preparing for, and treating."[10]

As Baltimore saw it, the responsibility of the defendants for these problems went beyond simply producing fossil fuels; they also knew better, or should have known better. The industry had studied the atmospheric effects of fossil fuels since 1958, and concern about "anthropogenic greenhouse gas emissions reached the highest level of the United States’ scientific community" by 1965.[11] Nevertheless, according to the complaint, the defendants failed to make "reasonable warnings to consumers, the public, and regulators," or to take "reasonable steps to limit the potential greenhouse gas emissions arising out of their fossil fuel products."[12] Moreover, the complaint accused the fossil fuel companies of "a decades-long campaign to maximize continued dependence on their products and undermine national and international efforts to rein in greenhouse gas emissions," including by "concealing, discrediting, and/or misrepresenting information."[13]

The relief Baltimore sought was primarily monetary, including compensatory damages, punitive damages, and disgorgement of profits. It also, however, sought "[e]quitable relief, including abatement of the nuisances complained of herein"[14] and "an order that…enjoins Defendants from creating future common law nuisances."[15] Exactly what such abatement would involve is somewhat unclear.

The "failure to warn" and "design defect" types of legal claims against fossil fuel companies were first made in a lawsuit by California municipalities in 2017, although the "public nuisance" claims had been made (without being resolved on the merits) in earlier cases.[16] The case, County of San Mateo v. Chevron Corp., is still ongoing.[17]

State or Federal Court?

On July 31, 2018, two related parties, Chevron Corporation and Chevron U.S.A., Inc., removed the Baltimore case to federal court. They argued for federal jurisdiction on various grounds, including that the plaintiff’s claims "implicate uniquely federal interests" and that the case was removable under the federal officer removal statute, 28 U.S.C. § 1442, because the defendants had "engaged in activities pursuant to the directions of federal officers that, assuming the truth of Plaintiff’s allegations, have a causal nexus to Plaintiff’s claims." For example, they had "acted pursuant to government mandates and contracts, performed functions for the U.S. military, and engaged in activities on federal lands pursuant to federal leases."[18]

Baltimore moved to remand the case to state court, and the federal district court assented on June 10, 2019. The defendants appealed the remand order, but the Fourth Circuit upheld the order on March 6, 2020. It held that "[b]ecause 28 U.S.C. § 1447(d) confines our appellate jurisdiction, the narrow question before us is whether removal of this lawsuit is proper under 28 U.S.C. § 1442, commonly referred to as the federal officer removal statute,"[19] and that removal was not proper under § 1442 because even the incidents in which the defendants were truly acting under federal officers were insufficiently related to Baltimore’s claims.[20]

The defendants appealed to the Supreme Court, which ruled on May 17, 2021 that the Fourth Circuit had misinterpreted § 1447(d). Appellate review under that section extended to the entire remand order, not just the issues directly arising under § 1442 and § 1443, so long as at least one of those sections was one of the legal authorities for the remand order. The Court did not itself rule on the grounds for removal, however, instead remanding the issue to the Fourth Circuit.[21] The Fourth Circuit held oral arguments on the jurisdictional issue on January 25, 2022,[22] and has not yet issued a ruling.

The Motions to Dismiss

For part of the time in which the parties fought over the remand order, they continued to argue the underlying case in state court. On February 7, 2020, most of the defendants filed two motions to dismiss, one for failure to state a claim upon which relief can be granted and one for lack of personal jurisdiction.[23] The former motion argues that the nuisance claim should be rejected because the defendants’ "commercial activities are lawful, and indeed are promoted and encouraged by multiple federal and state statutes," that the products liabilities claims are "far beyond the scope of products liability law in Maryland," and that the "Plaintiff cannot establish causation for any of its tort claims."[24] This motion also asserts that Baltimore’s claims are barred by federal law: they are "displaced" and thus preempted by the Clean Air Act and federal energy law, they would usurp the federal government’s authority over foreign affairs and interstate and international commerce, they would impose "extraordinary extraterritorial and retroactive liability on lawful, government-encouraged conduct" in violation of the Due Process Clause, and the parts of the claims focusing on fossil fuel industry propaganda campaigns violate the First Amendment.[25]

The latter motion argues that the Maryland court has no personal jurisdiction over the defendants due to the global nature of climate change and the defendants’ contributions to it; the defendants assert that their contacts with Maryland play a very limited role in the claims against them.[26]

Baltimore’s Response

Baltimore filed its opposition to the first motion to dismiss on March 15, 2020.[27] To the defendants’ arguments against the nuisance claims, it responded that although fossil fuels are not illegal in themselves, "No law authorizes a company to produce and promote fossil fuels at levels they knew would be harmful," nor does it authorize "misleading and deceptive marketing of products" or "a multi-decade campaign of deceit to undermine public confidence in climate-related science to prolong or increase the use of the companies’ products at the expense of other, safer alternatives."[28]

Baltimore asserted that it had pleaded all necessary elements of its product liability claims under Maryland law, and that the defendants’ arguments against the product liability claims raised issues that "cannot be resolved on a motion to dismiss."[29] In reply to the argument that responsibility for climate change is too diffuse to establish causation for Baltimore’s tort claims, Baltimore quoted the Restatement (Second) of Torts: "the fact that other persons contribute to a nuisance is not a bar to the defendant’s liability for his own contribution."[30]

Baltimore also had counterarguments to the defendants’ assertions regarding federal law. Baltimore’s "claims arise under state law, and for that reason alone cannot have been ‘displaced’ by the Clean Air Act," as federal preemption of state common law requires a "clear and manifest purpose to do so" by Congress.[31] Baltimore made similar arguments regarding federal energy laws.[32]

Baltimore opposed the defendants’ Commerce Clause and other federalism arguments because it was not seeking "regulatory relief," and any potential large-scale effects of the lawsuit were merely the type of "upstream impacts on companies and their consumers" that "may result in many lawsuits against large corporate defendants."[33] As for the Due Process Clause, "there is simply no general due process problem when a court assigns tort liability ‘retroactively’ to a defendant before it."[34] In Baltimore’s view, the defendants’ actions are also unprotected by the First Amendment because they are misleading commercial speech.[35]

Baltimore also filed an opposition to the motion to dismiss for lack of personal jurisdiction.[36]

Amicus Briefs

The United States filed an amicus brief, written by attorneys for the Department of Justice’s Environment and Natural Resources Division, on March 20, 2020.[37] It agreed with the defendants’ arguments regarding federal law, noting that "[t]hree federal courts of appeal

have addressed whether the [Clean Air Act] preempts state common law claims attempting to

impose liability on air emissions," with all three "holding that state common law would be preempted to the extent the emissions in question originated out-of-state."[38] The United States similarly argued that Baltimore’s claims intruded on federal power because of their potential effects on foreign countries’ energy production.[39]

A group of former US diplomats and other former US government officials, however, filed an amicus brief of their own on April 7, 2020, "to answer Defendants’ assertion that" Baltimore’s "claims will disrupt U.S. climate diplomacy and foreign policy," an assertion that "reflects a factual misunderstanding of U.S. climate diplomacy."[40]

On April 23, 2020, the Attorney General of Maryland filed an amicus brief in opposition to the defendants’ motion to dismiss for failure to state a claim, arguing that tort liability under the circumstances "is unremarkable and does not raise constitutional concerns."[41]

Conclusion

The implications of the case, and others of a similar nature, are potentially momentous; in addition to the fossil fuel companies’ potential liability with its potential effects on the industry, the lawsuits raise broader issues involving the role of courts in the response to climate change. The cases touch, moreover, on a wide array of legal issues, from product liability to federalism to the scope of "materiality" in connection with the disclosure of climate-related impacts on fossil-fuel businesses. In addition to their potential precedential importance across a variety of legal areas, the complex interactions of these issues make the outcome difficult to predict.

[1] http://climatecasechart.com/climate-change-litigation/case-category/actions-seeking-money-damages-for-losses/ (but note that not all cases collected there are of this type).

[2] https://www.vox.com/energy-and-environment/2019/2/22/17140166/climate-change-lawsuit-exxon-juliana-liability-kids.

[3] On February 8, 2022, a panel of the United States Court of Appeals for the Tenth Circuit, applying Baltimore, ruled in Board of County Commissioners of Boulder County v. Suncor Energy (U.S.A.), Inc. that one such case, filed by Colorado municipalities against Exxon Mobil Corp as well as Suncor, should be remanded from federal to state court, as the plaintiffs sought. See https://www.reuters.com/legal/litigation/10th-circuit-hands-boulders-climate-lawsuit-home-court-advantage-2022-02-08/. On February 17, 2022, in City & County of Honolulu v. Sunoco LP, the Ninth Circuit heard oral arguments in which oil companies sought to overturn a federal district court’s remand of similar lawsuits by Hawaii municipalities to state court. See https://www.law360.com/appellate/articles/1466255.

[4] Complaint, ii-iii, available at http://climatecasechart.com/climate-change-litigation/wp-content/uploads/sites/16/case-documents/2018/20180720_docket-24-C-18-004219_complaint.pdf.

[5] Id. at 5.

[6] Id. at iv-v.

[7] Id. at 30.

[8] Id. at 33-46.

[9] Id. at 44.

[10] Id. at 46.

[11] Id. at 50-52.

[12] Id. at 70.

[13] Id. at 73.

[14] Id. at 130.

[15] Id. at 111.

[16] https://insideclimatenews.org/news/18072017/oil-gas-coal-companies-exxon-shell-sued-coastal-california-city-counties-sea-level-rise/.

[17] http://climatecasechart.com/climate-change-litigation/case/county-san-mateo-v-chevron-corp/.

[18] Notice of Removal, 34, available at http://climatecasechart.com/climate-change-litigation/wp-content/uploads/sites/16/case-documents/2018/20180731_docket-118-cv-02357_notice-1.pdf.

[19] Mayor of Baltimore v. BP P.L.C., 952 F.3d 452, 457 (4th Cir. 2020). Section 1447(d) states, "An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise, except that an order remanding a case to the State court from which it was removed pursuant to section 1442 or 1443 of this title shall be reviewable by appeal or otherwise."

[20] Id. at 463.

[21] BP P.L.C. v. Mayor of Baltimore, 141 S. Ct. 1532, 1543. (2021).

[22] Notification, available at http://climatecasechart.com/climate-change-litigation/wp-content/uploads/sites/16/case-documents/2021/20211216_docket-19-1644_notification.pdf.

[23] Motion to dismiss for failure to state a claim upon which relief can be granted, available at http://climatecasechart.com/climate-change-litigation/wp-content/uploads/sites/16/case-documents/2020/20200207_docket-24-C-18-004219_motion-to-dismiss-2.pdf; motion to dismiss for lack of personal jurisdiction, available at http://climatecasechart.com/climate-change-litigation/wp-content/uploads/sites/16/case-documents/2020/20200207_docket-24-C-18-004219_motion-to-dismiss.pdf.

[24] Motion to dismiss for failure to state a claim, 1-3.

[25] Id. at 37-52.

[26] Motion to dismiss for lack of personal jurisdiction, 1-3.

[27] Opposition to defendants’ motion to dismiss for failure to state a claim, http://climatecasechart.com/climate-change-litigation/wp-content/uploads/sites/16/case-documents/2020/20200315_docket-24-C-18-004219_opposition.pdf.

[28] Id. at 2-3.

[29] Id. at 19 and 30.

[30] Id. at 41, quoting Rest. § 840E.

[31] Id. at 48-49, quoting American Electric Power Co. v. Connecticut, 564 U.S. 410, 423 (2011).