Tag Archives: Suncor Energy

No Supreme Ruling on Deadbeat Cities‘ Climate Lawsuits

From Science Matters

by Ron Clutz

Denver Business Journal reports US Supreme Court rejects Boulder’s $100M climate lawsuit against Suncor, Exxon.  That headline is misleading in that SCOTUS declined to rule on the motion to restrict such lawsuits to federal courts.  Excerpts in italics with my bolds.

The United State Supreme Court on Monday declined to take up a lawsuit Boulder and two other local governments filed against oil refiners Suncor Energy and ExxonMobil and deemed similar climate change-related lawsuits matters for state courts.

The nation’s highest court issued orders Monday rejecting oil companies’ request to take up the Boulder case and similar lawsuits filed against other oil industry giants such as BP, Sunoco and Shell by the governments of Baltimore, Maryland; San Mateo County, California; and Honolulu, Hawaii.

Boulder city and county governments and San Miguel County, home to Telluride, joined together in 2018 and sued Calgary-based Suncor Energy and Irving, Texas-based ExxonMobil. The plaintiffs argued the communities face at least $100 million in costs over 30 years “to deal with the impacts of climate change caused by the use of fossil fuel products like those made and sold by Suncor and Exxon.”

Oil companies and local governments bringing similar legal cases have been jostling over whether state courts or the federal bench should have jurisdiction. Monday’s denial by the Supreme Court settles the jurisdictional matter, but doesn’t end the cases.

We will continue to fight these suits, which are a waste of time and resources and do nothing to address climate change,” said Todd Spitler, a spokesperson for ExxonMobil. “Today’s decision does not impact our intention to invest billions of dollars to lead the way in a thoughtful energy transition that takes the world to net zero carbon emissions.“

Justice Samuel Alito took no part in the consideration and decision, while Justice Brett Kavanaugh would’ve taken up Boulder’s case at the Supreme Court, the order noted.

Suncor owns the three oil refineries in Commerce City, the only refineries in Colorado.  A jurisdictional fight arose about which level of court — state or federal — is appropriate for such cases.

Local governments and the U.S. Department of Justice argued the cases belonged in state courts.  Oil companies asked the U.S. Supreme Court to take up the Boulder case and settle issues the companies said are common among more than a dozen lawsuits working their way through lower courts.

Allies of the oil and gas industry expressed disappointment at the Supreme Court’s decision.  Having state courts handle the cases could lead to a patchwork approach to policy questions that are inherently federal or international in scope, said Phil Goldberg, special counsel for the Manufacturers’ Accountability Project, in a statement issued Monday.

The good news is that state courts likely will, after the substance of the liability claims is heard, dismiss them like a New York City lawsuit against Exxon was two years ago, he said.

“The challenge of our time is developing technologies and public policies so that the world can produce and use energy in ways that are affordable for people and sustainable for the planet,” Goldberg said.

“It should not be figuring out how to creatively plead lawsuits that seek
to monetize climate change and provide no solutions.”

The Boulder and San Miguel County case was called a stunt by the state oil and gas industry when it was first filed.  Companies shouldn’t face legal liability for “doing nothing more than engaging in the act of commerce while adhering to our already stringent state and federal laws,” said Dan Haley, president and CEO of the Colorado Oil and Gas Association, at the time.

But supporters of community claims point to evidence that’s shown oil companies understood but did not publicly disclose the potential ramifications of carbon dioxide pollution in the atmosphere. [There is again the lie of labelling the harmless trace gas plant food as “pollution.”]

They argue that climate-change-inducing emissions are at the root of incidents like the unusual, deadly deluges of September 2013, and out-of-season wildfires, like those that destroyed over 1,000 Superior and Louisville-area homes on New Year’s Eve, 2021, and have forced communities to bear the costs of responding to such disasters .[Yet in the UN report they say there is virtually no evidence of a relationship between extreme events and climate change.]

Q:  Why These Lawsuits?  A: Deep Pockets

Background Previous Post: Supremes Will Soon Rule on Deadbeat Cities’ Climate Lawsuits

Caleb Johnson writes at New York Post The Supreme Court will soon decide on cities pushing an extreme climate agenda.  Excerpts in italics with my bolds and added images.  H\T John Ray

On one hand, cities are suing oil and gas companies for alleged climate-related damages.
On the other, the same cities write in their municipal-bond disclosures
they cannot attest to the effects of climate change.

This makes Friday’s Supreme Court conference on Suncor v. Boulder critical. The nation’s highest court will decide if it will take up the case to rule on whether these climate suits should be heard in state or federal court.

No matter where they proceed, these cases not only lack merit but deserve greater scrutiny given the plaintiffs’ companion bond disclosures.  Municipalities like Boulder, San Francisco and Baltimore, among others, have been filing claims against oil and gas companies, seeking damages they allege are directly attributable to the firms’ actions.

But holders of these cities’ bonds could be forgiven for being surprised by these lawsuits.  Because the ambiguous claims these cities made to their bondholders belie the specific nature of the claims they later made to courts.   

In their bond disclosures, these cities all acknowledge they’re unable to forecast
with any degree of certainty climate change’s adverse effects
and the science underlying their assumptions is evolving.

Fair enough. But contrast this with the incredibly specific claims in these cities’ lawsuits.  In 2017, San Francisco’s city attorney, Dennis Herrera, filed a lawsuit in state court against five energy companies, alleging they are responsible for very specific effects of climate change and should pay for infrastructure such as sea walls to deal with its ongoing and future consequences.

The lawsuit’s claim about predicting the effects of climate change comes into serious question when the city attorney’s bond-issuing employer has stated it cannot accurately determine the extent of climate change for its investors.

In a 2018 petition in Texas state court, Exxon alleged the “stark and irreconcilable conflict” between the municipalities’ allegations in the lawsuits and their disclosures in bond offerings indicated the suits were brought “not because of a bona fide belief in any tortious conduct by the defendants or actual damage to their jurisdictions, but instead to coerce ExxonMobil and others operating in the Texas energy sector to adopt policies aligned with those favored by local politicians in California.”

Its petition was denied, but the concern about the “stark and irreconcilable conflict”
has quietly simmered ever since — and for good reason.

Disclosures in other areas have been a source of angst for muni bondholders.  In 2016, the Securities and Exchange Commission issued a cease and desist order against the City of Boulder for misstating that it had complied with prior agreements to provide continuing disclosure to its investors.

What prompted renewed interest in this issue was not just the reexamination of bond risks after Credit Suisse’s failure but also the solicitor general’s recent recommendation to the Supreme Court, urging the justices to reject ExxonMobil and Suncor’s petition for their case to be heard in federal rather than state court.

Credit Suisse’s AT1 investors have reason to be upset but not necessarily all that surprised.  After all, those bonds were yielding 9.75%, suggesting the risks were high.  For comparison, the average yield on ostensibly much safer 10-year muni bonds is about 2.49%.

But what if, in addition to the risks laid out in disclosure documents, Credit Suisse had been aware of other material risks it had failed to disclose to its bondholders?  Well, that would be securities fraud.

Might the same hold true for these municipalities doing the bidding
of trial lawyers pushing an extreme climate agenda?

To the extent that these cities have a much greater degree of certainty about the risks they face, have those risks been adequately described to all audiences, investors and the courts alike?

The question remains.  And while these lawsuits seem meritless, one hopes the Supreme Court concludes at least that they ought to remain in federal court — where they belong.