Insurance and Climate Change column

Youths’ Climate Change Suit Has Potential Impact on a Historic Scale for Insurance

By | March 29, 2018

A three-year-old lawsuit by a group of youths against the U.S. over climate change, which looks to now get a new trial date at some point this year, has the potential to open up lawsuits on a historic scale, according to some experts.

For a good handle on the magnitude of the potential litigation, think asbestos or other major environmental lability lawsuits, explained Daniel J. Struck, a policyholder attorney, who is a partner in the Chicago, Ill. office of Culhane Meadows PLLC.

Struck believes the case of Juliana v. United States, brought by 21 youths and supported by advocacy group Our Children’s Trust, should be one that the insurance community should definitely watching closely.

“This has the potential to be a sort of a repetition of the kind of insurance experience that happened with toxic torts like asbestos, and some of the long-tail environmental liabilities that were the subjects of litigations back in the 80s and 90s,” Struck said.

Numerous climate change lawsuits have been popping up since the youths filed their suit.

Worldwide, there are nearly 900 lawsuits on climate change in 25 countries, according to a U.N. study. Five of the world’s biggest energy producers were put on the spot by a federal judge last week about climate change science as part of a lawsuit filed by Democratic Party politicians accusing the companies of misleading the public for years about their role in global warming.

The initial complaint in Juliana was filed in the U.S. District Court District of Oregon Eugene Division in August 2015. It alleges that for more than 50 years, the U.S. has known that carbon dioxide pollution from burning fossil fuels was causing climate change, and that continuing to burn fossil fuels would destabilize the climate system on which present and future generations nation depend for their survival.

Attorneys for the plaintiffs boiled down what the youths are seeking to four main points: 1: A declaration that their rights have been infringed. 2: a consumption-based inventory conducted by the defendants regarding CO2 emissions. 3: the defendants will, for court approval, develop a climate recovery plan based on best available climate science. 4: the defendants, once the plan is approved by the court, will promptly implement the plan.

The trial was supposed to begin last month, however the U.S. government in June petitioned the Ninth Circuit Court of Appeals in San Francisco seeking dismissal because the process of discovery would be burdensome and threaten the separation of powers.

The judges denied that petition, and now it looks like the next phase of the suit should begin soon, per a status conference on Monday between the judge and the parties.

“The judge indicated that we’re going to get a trial date before the end 2018,” said Philip L. Gregory with Gregory Law Group, one of the attorneys representing those who filed the suit.

U.S. District Judge Ann Aiken, presiding in a district court in Oregon, also set a schedule for disclosure of expert witnesses and reports, according to Gregory.

Beside the Ninth Circuit decision, the biggest victory handed to the plaintiffs – who seem to so far be in a great spot – came in a Nov. 10, 2016 ruling in which Aiken denied an earlier motion from the government to dismiss.

Aiken in her ruling wrote: “A deep resistance to change runs through defendants’ and intervenors’ arguments for dismissal: they contend a decision recognizing plaintiffs’ standing to sue, deeming the controversy justiciable, and recognizing a federal public trust and a fundamental right to climate system capable of sustaining human life would be unprecedented, as though that alone requires its dismissal. This lawsuit may be groundbreaking, but that fact does not alter the legal standards governing the motions to dismiss. Indeed, the seriousness of plaintiffs’ allegations underscores how vitally important it is for this Court to apply those standards carefully and correctly.”

Gregory believes the stage is now set for this case to be heard based primarily on science, and not whether the plaintiffs have standing – which he explained that they do, because climate change will impact them, as they will be living in a future where effects of global warming will be more pronounced – or other merits.

“We believe this case will come down to the importance of expert testimony on the best available science,” Gregory said.

He described their case and why he has a great deal of confidence in prevailing against the U.S. government.

“Our case is based on expert testimony from the experts who are the top in their respective fields who will represent the best available science that these plaintiffs are being harmed and will suffer greater harm in the future as a result of the affirmative acts of the federal government,” he said. “The federal government has yet to come forward with any evidence that is based on the best available science to contradict any of those points. Until we see the federal government’s evidence, we are confident that the court will make the appropriate findings.”

Struck, while he thinks Gregory has very good reason for being confident, said the case is far from being a slam dunk.

“I think we’re a long ways a way still from having jurisdictional issues in claims like Juliana,” he said. “It’s cleared an important hurdle, but the plaintiffs are a long way from reaching home base yet.”

Despite the distance the case has to go, when or if the suit prevails, the implications for other lawsuits and the entire insurance community are worth paying attention to now, he added.

The case has the ability within general liability policies to reach back to when contamination or the environmental discharges took place many years ago, if they are shown to contribute to global warming or to changes in climate. At that point, expect to see no shortage of private claimants arguing that policies were in effecting during a particular historic period, he said.

In short, a ski resort owner can sue the oil industry for a drop in the number of skiers and snowboarders due to consecutive poor snow seasons. Don’t stop there. Consider possible suits from the likes of the commercial fishing industry, businesses with ocean-proximate real estate, agricultural concerns, and on and on.

Struck foresees a “wide pool of potential defendants in those kind of claims,” should plaintiffs in Juliana or other similar cases prevail.

Such suits could easily reach back to before accidental pollution exclusions of the 1970s, he said.

“We’re potentially talking about discharges taking place before the pollution exclusions were in place,” he added.

Juliana‘s broad, almost global market view, is part of a key reason a new landscape of climate change suits will be possible.

“It’s the potential for some pretty radical responsibility shifting here for who’s responsible for these kind of developments,” he said. “The insurance companies with deep insurance pockets are a logical place to look.”

Hugo Alvarez, a shareholder with Becker & Poliakoff, whose practice focuses on litigation and real estate, drew a parallel between the potential of Juliana and other climate suits and the civil rights movement, when during the 1940s and 50s, numerous court decisions initially paved the way for changes and the then lawmakers in Congress followed.

“The judiciary is going play some role as it related to climate change here and it’s not unprecedented,” Alvarez said.

He was speaking on the phone from the Miami Beach area, where government action has already been required to deal with high tides that coincide with phases of the moon.

“Every 90 days or so you get a real special high high-tide,” he said. “When that happens here in Miami Beach, there is a certain part of the city that goes under water.”

The government was forced to deal with that by spending a great deal of money to build a high tech pumping system.

That’s how the result of a successful suit like Juliana will play out in his mind: as sea levels rise, more and more people will take to the courts to look for relief from the effects of climate change.

“The way everything is headed right now, and in this current landscape, such a turn of events wouldn’t surprise me,” he said.

Alvarez also wouldn’t be surprised if the plaintiffs prevail in the lower courts, and for the matter to eventually reach the U.S. Supreme Court.

“The trial court in that case has certainly written opinions that are very plaintiff friendly,” he said.

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