Sue Big Oil Over Global Warming? Court Tells Katrina Victims, Yes You Can!

Last Updated Oct 21, 2009 3:44 PM EDT

Landowners along the Mississippi Gulf Coast are blaming a mishmosh of oil, coal and chemical companies for property damage caused by Hurricane Katrina as a result of global warming. Yes, that's right, the specter of global warming lawsuits has come to call and thanks to a recent federal appeals ruling, the plaintiffs have earned their day in court.

The plaintiffs argument in Comer v. Murphy Oil USA goes like this. Fossil fuel and chemical companies emitted greenhouse gases that contributed to an increase in air and water temperatures, which caused sea levels to rise and as a result created a more powerful and damaging Hurricane Katrina. We know what happened next: massive property damage caused by hurricane-force winds and water.

The U.S. Court of Appeals for the Fifth Circuit in New Orleans issued a favorable ruling and reversed an earlier decision to dismiss the case. The three-judge panel said the plaintiffs have standing to bring forward a number of claims, including public and private nuisance, trespass and negligence.

This is the second decision by a federal appeals court in recent weeks to reverse trial court dismissals involving global warming claims.

Last month, the Second Circuit Court reversed an earlier dismissal of the Connecticut v. AEP case and ruled in favor of eight states, NYC and some environmental organizations that sued six major power companies on the basis that their greenhouse gas emissions were a public nuisance, the Warming Law blog reported.

This latest decision by the Fifth comes down two words: fairly traceable. This means the plaintiffs provided enough detail in their claims to demonstrate a link between the defendant's actions and the resulting damage.

But it's far from a slamdunk for the plaintiffs. The Fifth Circuit has only ruled the plaintiffs provided a detailed enough claim to earn their day in court. The plaintiffs still have to prove causation.

This leaves me with nagging question about how far this could all go. I'll offer up an extreme scenario. Can I sue the auto industry or certain car companies whose inventory is dominated by SUVs? For that matter, can I sue my Hummer-driving neighbor for global warming?

It's one thing to sue an oil company for a leak that taints the water supply. Direct cause and effect. But how do you isolate only the greenhouse gases emitted by fossil fuel companies in the area to the cause of global warming?

At the very least, it does open a door the energy industry prefers would remain firmly closed and we will likely see more of these cases filed.

Russell Jackson, a Skadden Arps partner and mass tort litigation specialist, says exactly that in his own writeup on the issue and in the WSJ's Law blog.

Here's why. The Comer case is a private class action for compensatory and punitive damages, not a suit brought by states or municipalities for injunctive relief, Jackson writes.

This means contingency fees. Translatation: an opportunity that can not be missed, and even more of these lawsuits to look forward to.

Many environmentalists may be cheering these recent rulings. But they tread a risky path. If the U.S. Supreme Court were to take the case -- if it got that far -- and reversed the previous ruling (so against the environmentalists), it would set a new precedent in global-warming lawsuits.

A couple of other notes:

The defendants in the case are a who's who in the fossil fuel industry. ExxonMobil, Chevron, Hess, Total, BP, ConocoPhillips -- the list goes on for several pages. I thought it was interesting that the American Petroleum Institute was included. Technically, the organization lobbies and advocates for fossil fuel companies. It doesn't actually emit the levels of greenhouse gases the plaintiffs lay out in their case.

Here's another tidbit worth noting. Both circuit courts -- the Fifth and Second -- are considered conservative. As the Warming Law blog notes, both judges on the panel for the Second circuit are Bush appointees.

Image of house in Mississippi damaged by Hurricane Katrina by Flickr user Ely Online, CC 2.0