Climate Lawsuits by California Cities, Counties Transferred to State Court in Victory Over Oil Companies

The sun rises over an oil field over the Monterey Shale formation where gas and oil extraction using hydraulic fracturing, or fracking, is conducted on March 24, 2014, near Lost Hills, California.  (David McNew/Getty Images)

A panel of federal judges on the 9th U.S. Circuit Court of Appeals in Pasadena handed major fossil fuel companies a setback in two climate-related cases brought by California cities and counties.

The two unanimous rulings by the three-judge panel move the cases back to state court, where they were initially filed, clearing a major hurdle for the litigation following a string of setbacks that included the transfer of the cases to federal court.

The lawsuits, one brought by the the counties of San Mateo, Marin and Santa Cruz and the cities of Richmond and Imperial Beach, and the other brought by Oakland and San Francisco, seek billions of dollars in damages from oil and gas companies to pay for the effects of climate change.

The lawsuits argue that fossil fuel companies are responsible for the remediation costs and property damage from increasingly severe wildfires, rising sea levels and intense storms that batter coastal communities.

In the latest decision, the judges affirmed a 9th Circuit ruling that municipalities can pursue climate cases in state court and applying state law, seeking damages from 30 oil and gas companies including Chevron, ExxonMobil and Phillips 66.

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The judges also revived the case brought by San Francisco and Oakland against BP, Chevron, and three other oil companies; a U.S. District court judge dismissed that lawsuit in 2018, saying the scope of the case required a global solution beyond the purview of the court.

“San Francisco and Oakland taxpayers are already incurring the costs of dealing with the damage these fossil fuel companies knowingly caused,” San Francisco City Attorney Dennis Herrera said Tuesday in an email. “It is time for these companies to pay their fair share. They should not be able to stick taxpayers with the bill for the damage they knew they were causing.”

Sean Comey, senior adviser for external affairs at Chevron, wrote in an email that the cities are trying to "penalize the production of affordable, reliable and ever cleaner energy, which for decades has been authorized and encouraged by law and government policy makers."

The company has argued in legal briefs that the cities are trying to use state courts to regulate global energy policy.

"Chevron believes the cases belong in federal court," Comey said. "They present substantial issues of national law and policy which makes them inappropriate for state law."

Despite the rulings in favor of the California communities, a final decision in the cases is still months or even years away.

Associated Press contributed to this report.