By Karen Savage
Proposed legislation in Kansas, backed by a top business lobby, could make it harder for local communities to sue fossil fuel companies for the costs of protecting their residents and infrastructure from the increasing effects of climate change.
The bill, if enacted, would require local governments, including cities, counties, school boards, and other local or regional entities, to get the approval of the state attorney general before hiring law firms on a contingency fee basis.
“If a company, or industry has truly caused collective harm to residents of our state, the attorney general should be the lone voice in acting against those companies,” Eric Stafford of the Kansas Chamber of Commerce said in January testimony in support of the legislation to the Kansas House of Representatives.
The proposal echoes two reports in favor of outlawing municipal liability lawsuits issued last year by the U.S. Chamber of Commerce’s Institute for Legal Reform, which has filed friend-of-the-court briefs in support of fossil fuel companies facing climate liability lawsuits. According to the Chamber, such suits undermine “the state’s power, by displacing the role of the legislature in regulating activities, as well as the role of the attorney general in determining and representing the interests of the state’s residents in litigation.”
Changing state laws to hamper municipalities’ power to sue corporations for damages would be “the most direct means of preventing or reducing municipal litigation,” according to one of the group's reports.
Municipalities often contract with outside law firms when seeking compensation for harms created by large corporations, from opioid addiction and vaping to the fossil fuel emissions driving climate change. These arrangements allow municipalities to tap into specialized legal expertise, and assist municipal attorneys who are also handling day-to-day legal matters. Under contingency fee contracts, the firms only receive fees if they win the case.
A Push To Limit Local Power
In the past few years, several counties and cities across the country have sued major fossil fuel firms, seeking damages for the costs of dealing with climate change impacts like sea level rise, intensifying wildfires, and increased flooding.
At the same time, efforts to make such lawsuits impossible are picking up momentum among some trade associations and other organizations aligned with Big Oil. Lawmakers in Florida are expected to soon introduce a bill similar to the Kansas legislation, and have already introduced bills to limit the amount of contingency fees trial attorneys can collect.
Several Florida communities, from the city of Tampa to the Seminole Tribe, have filed suits seeking millions of dollars in compensation from drug firms for the costs of dealing with the opioid epidemic. So far none have filed climate liability suits, even though many are already grappling with sea level rise, rising temperatures, and more extreme storms. But that could change as municipalities face the daunting task of preparing for even more severe climate impacts in the future.
"For all of us that are impacted by climate change and sea level rise, the costs of mitigating our impact, but equally important, adapting to sea level rise and climate change, is going to be in the billions of dollars,” said Rick Kriseman, the mayor of St. Petersburg, Fla. “If you take that away from us, the ability to recover those resources, that means our taxpayers are going to be the ones who have to pay.
“Basically, you're putting it on the taxpayers to pay for bad behavior of corporations,” Kriseman said.
Some states, like Louisiana, have already imposed limitations on litigation by state agencies. In 2013, the Southeast Louisiana Flood Protection Authority–East, a levee board that oversees flood control, filed suit in state court against nearly 200 oil and gas companies, demanding they pay to restore wetlands damaged by dredging, drilling, and by running pipelines.
Then-governor Bobby Jindal opposed the suit, and signed legislation in 2014 that retroactively forbid the board from filing it.
“When you have a multiple number of lawsuits and great numbers, like we've seen the opioid matter, literally in the thousands by the local governments in addition to the attorneys' general, it makes it very difficult to reach resolution, to reach finality, to get settlements, to get these big companies to agree,” said former Florida attorney general Bill McCollum.
McCollum, now a partner the global law firm Dentons, whose clients have included BP, the French oil firm Total, and pipeline company Enbridge, urged Florida lawmakers at the January meeting to pass laws limiting the ability of local governments to hire trial attorneys for liability lawsuits, as well as the amount of money the attorneys could collect from any damages awarded.
McCollum said that while U.S. Chamber’s Institute of Legal Reform has been his client for a number of years, his comments to the Florida House members represented only his own views as a former attorney general.
While states should have precedence over local governments in filing civil suits on behalf of state residents, McCollum added, any new law would need to allow local governments to take on such lawsuits if the attorney general declined to do so.
It is yet to be seen if the proposed Florida legislation will include such a mechanism, while the Kansas bill includes no such provision.
Sending a Dangerous Message
Kriseman said that local governments will be hard-pressed to bring any actions to hold corporations accountable for knowingly worsening problems like climate change, or the opioid epidemic, if they are forced to seek approval from a state attorney general.
“Unfortunately in Florida, we don't really have an attorney general whose main focus is on protecting the residents and citizens of our state from bad actors,” Kriseman said. "The reason the suits have been brought is to try and not only recover the costs that we've spent to date, but to provide us with the resources to continue to deal with the impacts going forward,” and “also hopefully to help change the behavior of these corporations that are not acting in the best interests of the population."
Marco Simons, general counsel for EarthRights International, a non-profit human rights and environmental organization, said contingency fee agreements are by far the best way for local communities to proceed with such suits, because they don’t waste taxpayer dollars on what could turn out to be a doomed legal strategy.
“Corporations never like contingent-fee litigators because the reality is that such arrangements are the only way that many poor people and less-wealthy communities can marshal the resources necessary to challenge a major corporation,” said Simons, who represents three Colorado communities suing ExxonMobil and Suncor for climate damages.
“What they always fail to mention in their screeds against greedy trial lawyers is that the lawyers get nothing if they lose, and so they are only making money if they prove that the corporations are legally responsible."
Taking away the ability to hold companies accountable for damages endangers local communities and sends a dangerous message to companies, said Kriseman, particularly amid the Trump administration’s current drive to roll back environmental and climate regulations.
“If you're going to limit lawsuits, if you're going to limit contingency fees, if you're going to limit access to the courts, you can't also deregulate,” said Kriseman. “Then you're basically telling corporations, 'you're free to do whatever you want, behave however you want, and there's no ramifications or penalties for doing so.’”