EnergyJudicialTexas Oil Company and California Cities Face Off in Climate Change Spat Before the State Supreme Court

A Texas-based company is suing California municipalities in the Texas Supreme Court over litigation efforts filed in other states.
February 18, 2022
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An oil and gas giant, the City of San Francisco, and a Massachusetts attorney walk into the Texas Supreme Court — a case before Texas’ highest court alleges a coordinated litigation effort to force compliance with a climate change agenda.

ExxonMobil, one of the world’s largest fossil fuel companies, is suing a bevy of California cities and Massachusetts attorney Matthew Pawa in the State of Texas.

Exxon argues that the defendants are employing the “Big Tobacco playbook” in “using law-enforcement power and tort litigation to suppress the speech” of ExxonMobil and other Texas companies.

The petition alleges that Pawa and other climate activists formulated the plan at a 2012 meeting. That strategy, as Exxon lays out, is to coordinate litigation against the fossil fuel company from a group of Democratic states over the company’s “communications concerning climate and energy policies” and then initiate a barrage of tort litigation against the oil and gas industry from local governments.

Exxon’s case hinges on several issues: first, whether the Texas courts are an appropriate venue for a Texas-based company to countersue governments in another state for legal actions taken against them outside of Texas; second, the first issue being assuaged, whether the barrage of lawsuits constitutes a coordinated effort; and third, whether that effort chills the speech and violates the First Amendment rights of the companies and the individuals it employs.

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The California cities of San Francisco, Oakland, and San Mateo each filed public nuisance suits against Exxon and other companies like Texas-based ConocoPhillips. Those suits allege that the oil and gas companies mislead the public about the effects of fossil fuel use on the climate and the public at large.

A centerpiece of the cities’ suits is that Exxon and its fossil fuel competitors are selling a bill of goods to the public on the externalities of their product — and, thus, that the companies owe billions of dollars to those localities for mitigation efforts.

The outcome of those cases is yet to be determined. Those various cases were folded into San Mateo’s which is currently before the 9th Circuit Court of Appeals.

“Just like BIG TOBACCO, BIG OIL knew the truth [about climate change] long ago and peddled misinformation to con their customers and the American public,” a press release read from the City of Oakland announcing the suit.

Tort litigation is the branch of civil law that considers personal injury and property damage claims.

The “Big Tobacco” comparison refers to tobacco manufacturers’ counter-messaging in the 1950s to the then-growing body of medical evidence that smoking, and the use of other tobacco products, causes health problems.

But in this case, those alleging malpractice are not examining the individual health implications of a personal habit — rather, that society’s use of and reliance on most forms of thermal energy poses a threat to future generations.

Climate activists allege the use of fossil fuels causes property damage through rising sea levels swallowing up habitable land on the coasts.

On that dissimilarity, Exxon’s petition cites San Mateo County’s 2014 and 2016 climate-focused bond propositions that stated, “The County is unable to predict whether sea-level rise or other impacts of climate change or flooding from a major storm will occur.”

This effort, the company alleges, is aimed at forcing fossil fuel companies’ compliance with climate activists’ demands to transition away from thermal energy and toward renewables.

An amicus brief filed by the transparency-focused organization Energy Policy Advocates states, “This Court should not bar the use of [Texas’] judicial system from examining the use of out-of-state courts to target Texas businesses in an organized effort to coerce these businesses into supporting national legislative change or into settling to escape coordinated, vexatious multi-front litigation.”

“Exxon’s petition for review does not lack for boldness,” the cities’ petition reads. “It makes the breathtaking argument that California state court lawsuits filed by California cities and counties under California state law must be treated as lawsuits against the State of Texas itself for purposes of specific personal jurisdiction, simply because Exxon and several of its co-defendants in those California lawsuits operate in an industry Exxon characterizes as ‘vital to Texas’s economic well-being.’”

In his own brief, Pawa makes a similar case that the suit should be dismissed.

A frequent strategy in these civil cases is to attack the relator’s standing to even bring the suit — one that is deployed by figures and groups of all political stripes and interests. It also is an important obstacle to clear, serving as a barrier to frivolous lawsuits from legally uninterested parties.

The 2nd District Court of Appeals invalidated the trial court’s ruling that sided with Exxon, deciding that the out-of-state parties lacked personal jurisdiction in Texas courts.

But the court further criticized the municipalities’ coordinated front of lawsuits.

 “Lawfare is an ugly tool by which to seek the environmental policy changes the California Parties desire, enlisting the judiciary to do the work that the other two branches of government cannot or will not do to persuade their constituents that anthropogenic climate change (a) has been conclusively proved and (b) must be remedied by crippling the energy industry.”

Various others have filed amicus briefs or letters in Exxon’s support such as Governor Greg Abbott, the Texas Oil and Gas Association, and Texans for Lawsuit Reform.

ExxonMobil is one of many oil and gas companies that have crafted quite the public display, ramping up their commitments to renewable energy investments — which environmentalists say doesn’t go far enough.

The case holds serious implications for cross-boundary litigation. The California municipalities are, in the same breath, alleging that fossil fuel use damage expands beyond state lines and that implications from the litigation and public pressure effort do not. Exxon, meanwhile, is trying to find relief in a court whose jurisdiction generally ends 1,000 miles away from the origins of the litigation.

Update: The Texas Supreme Court denied Exxon’s petition for review of the case.

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Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.