The trial lawyers bringing climate liability lawsuits against energy producers in California and New York City may have contributed to those locations topping the list of “judicial hellholes,” according to the American Tort Reform Foundation’s (ATRF) 2018-2019 Judicial Hellhole report. ATRF’s annual report identifies the states, cities, and courts with the most “unfair and unbalanced” laws and procedures in the country. California and New York City were crowned the worst and third worst, respectively, while Florida earned the number two spot, coming amid media reports of Sher Edling LLP and EarthRights International pitching their climate lawsuits to several South Florida communities.

New York Attorney General Uses Power for Political Gain

In addition to a litigation environment described as “brazenly plaintiff-favoring” where defendants are “entering the batter’s box with two strikes already called,” the ATRF cites the New York Attorney General’s climate lawsuit against ExxonMobil as a particularly salient reason for the city’s Judicial Hellhole ranking. Under Eric Schneiderman’s tenure, the Office of the Attorney General became increasingly politicized. Using the Martin Act – a unique New York law from 1921 which grants the Attorney General extensive powers to investigate suspected financial fraud – Schneiderman began investigating ExxonMobil, claiming that the company misled investors about climate change.

After Schneiderman’s sudden resignation due to allegations of physical abuse, Barbara Underwood sustained her predecessor’s flawed investigation into ExxonMobil, suing the company in October over purported inconsistencies in disclosures to investors about the effects of still-hypothetical climate change regulations on its business. However, as EID has previously reported, it was clear from the beginning that New York’s investigation of ExxonMobil was politically motivated, designed to garner headlines rather than uncover any actual legal violations.#Exxon

The actions of Eric Schneiderman and Barbara Underwood – expanding and enhancing the powers of the Office of the Attorney General for political gain – represent a concerning trend in New York’s legal system, according to the ATRF.

California’s ‘Abusive’ Legal System Hurts Citizens

The climate lawsuits in California are central to the state’s low ranking by the ATRF, which said that litigation burdens not only California courts but also consumers in the state. In 2018, the cost of living in California jumped from the third to the second highest in the United States, due in large part to lawsuit abuse and excessive state regulations driving up housing, food, and energy prices. In fact, a Perryman Group study released in September quantified the estimated impact of excessive tort on California’s economy, finding it costs $11.6 billion in annual direct costs and 197,776 lost jobs.

Despite their Hellhole status, judges in California and New York have bucked the trend and dismissed some of the climate lawsuits brought against major oil companies. In both of their respective motions to dismiss, U.S. District Judge William Alsup and U.S. District Judge John Keenan noted that the judiciary is not the appropriate venue to address a global, political issue such as climate change. The ATRF report echoes this sentiment:

“One topic that should not be in dispute, however, is the role of litigation in this area. Courts are appropriate for settling legal disputes, not setting environmental policy that has a profound impact on countless aspects of our daily lives and the continuing prospects for a strong and vibrant economy”

Florida’s Race to the Bottom

Florida was ranked the second-worst hellhole in ATRF’s report this year, but a new batch of climate lawsuits may give California a run for worst overall. The Washington Free Beacon recently reported on Sher Edling’s efforts to pitch Miami and Miami Beach on filing climate liability lawsuits on a contingency fee basis, meaning the trial lawyers stand to make hundreds of millions of dollars should they win. EarthRights International, which is representing Boulder, Colo., in its climate lawsuit, has also approached Ft. Lauderdale and other municipalities in Florida about getting involved.

Despite these aggressive efforts, which include a PR campaign that has expanded to include billboards, a “news” site, and a podcast, Florida officials have refused to join the fray. There is no shortage of climate litigation critics in the state, including the former attorney general and U.S. congressman Bill McCollum, who said the lawsuits are “not a constructive way to address the issue.” These lawsuits are just another example of out-of-state trial lawyers looking for an easy target by, say, targeting a “judicial hellhole.” McCollum continued:

“Large, national trial firms looking to make a big contingency fee killing are the driving force behind the recent proliferation of public nuisance lawsuits being filed by localities…They’re looking for the next tobacco case and are not content just to deal with state attorneys general as in the past or rely on traditional class actions.”

Climate Litigation Part of Broader Anti-Energy Campaign

The ATRF report confirms what EID has previously reported – that the recent boom in climate litigation is part of a larger campaign to attack energy companies. In respect to California and New York City, the coordinated network of trial attorneys, activists, and deep-pocketed donors driving the broader climate litigation campaign have found a safe harbor and set up shop in California and New York City.

Ultimately, if these lawsuits are successful, it would have a significant and far-reaching economic impact. By manipulating the court system to act as a quasi-regulator, the climate lawsuit movement would be leaving taxpayers to shoulder the inevitably enormous financial burden. Looking down the road, ATRF offers a stark warning of the consequences of this campaign:

“This type of litigation has a profound and significant negative economic impact and should be called out for the sham that it is. State attorneys general must remain focused on protecting the interest of the public and serving their communities, and rebuff the advances of opportunistic plaintiffs’ attorneys. If allowed to continue unchecked, the costs will not be restricted to the companies so arbitrarily pursued. Rather, taxpayers will foot the bill and the trial bar will move on to another scapegoat to line its pockets.” (emphasis added)